Senate passes bill with HUBZone change

Bill deals with small-business equality issue


The Senate has passed its fiscal 2010 National Defense Authorization Act (S. 1390) with a provision that would remove the “shall” in the law that some government attorneys say gives small businesses in historically underutilized business zones (HUBZones) first preference when a contracting officer considers setting aside a contract for small businesses.

The mandatory “shall” would become a “may,” which would give the officers more discretion in awarding the contracts.

Since May, the Government Accountability Office, the Small Business Administration and the Office of Management and Budget have been debating whether HUBZone businesses should get priority over service-disabled veteran-owned small businesses and firms in SBA's 8(a) program. Read the story. The Senate passed the legislation July 23.

Rep. Roscoe Bartlett (R-Md.), co-chairman of the HUBZone Caucus, today said he supports the statutory change.

“Small-business owners from these three categories endure different types of disadvantages, but they all create invaluable opportunities and magnified benefits in our communities. They deserve equal priority consideration for federal government small-business contracts,” he said.

The Senate passed the legislation July 23.

Also regarding acquisition reforms, the bill would require a Defense Department contracting officer to justify why a contract worth more than $20 million should be awarded on a sole-source basis. For example, the officer would have to show that the anticipated costs are fair and reasonable. The bill would also tighten restrictions on public/private competitions for government work. The competitions pit the two sectors against each other to see who can do the work best for the lowest price.

The House passed its version of the bill in June. A conference committee of senators and House members will work out the differences before sending the legislation to the president.

Read the story: FCW.com News - Senate passes bill with HUBZone change

Senate deal will level small-business contract preferences

HUBZone companies would not get priority over 8(a) companies and service-disabled veteran business owners

Senate leaders have agreed to include a provision in the next defense authorization bill to do away with the current debate over which categories of small businesses should be given priority in federal contracting.

The amendment, introduced by Sen. Mary Landrieu (D-La.), would remove the special preference given to small businesses in historically underutilized business zones (HUBZones), putting those firms on a par with companies owned by service-disabled veterans and those in the Small Business Administration’s 8(a) program.

“All small businesses should be given an equal opportunity to succeed,” said Landrieu, chairwoman of the Small Business and Entrepreneurship Committee.

The Senate is currently considering the fiscal 2010 National Defense Authorization Act ( S. 1390 ). The House passed its version in June.

Landrieu said her amendment is in response to a May ruling by the Government Accountability Office that HUBZone companies had to be considered before other categories of business when conducting a set-aside procurement. She said the ruling has caused contractors to pull back business from 8(a) and service-disabled veterans programs.

In its decision, GAO said the Army made a mistake when it didn’t consider whether at least two HUBZone businesses would bid on an information technology contract. Mission Critical Solutions, a HUBZone company, protested the award after the Army awarded a one-year, $3.45 million sole-source contract to Copper River Information Technology, a company owned by Alaska Natives.

SBA and administration officials also object to GAO’s decision. They say it conflicts with SBA's long-standing regulations and its view that 8(a) companies and those owned by service-disabled veterans and HUBZone companies are all equals. On July 10, OMB told agencies to disregard GAO’s decision.

“If agencies were to follow the GAO decisions, the federal government’s efforts to procure goods and services from 8(a) small businesses and from [service-disabled, veteran-owned small businesses] through the other statutory programs may be negatively impacted,” Office of Management and Budget Director Peter Orszag wrote on July 10.

Read the story: WashingtonTechnology.com News - Senate deal will level small-business contract preferences

DOD’s use of services contracts gets congressional scrutiny

The House version of the 2010 National Defense Authorization Act would require the Defense Department to hire an outside organization to assess its use and oversight of services contracts.

The House Armed Services Committee believes DOD doesn't have a strategic approach to managing its service contracts, according to the committee’s June 18 report on the authorization bill (H.R. 2637).

As a result, “the department is at risk of being unable to identify and correct poor contractor performance in a timely manner and is at risk of paying contractors more than the value of the services they performed,” the committee wrote.

The House passed the bill June 25 by a vote of 389-22. The Senate committee has marked up its version of the bill, but the committee has yet to approve it.

Under the House bill, the assessment would be conducted by a federally funded research and development center. The center would look at the guidance DOD provides its acquisition workforce on how to develop a services contract, including how to define requirements and the associated performance metrics.

The center also would look at whether or not DOD has enough people in its acquisition workforce to do the work appropriately. The report would be due in March 2010.

Rep. Ike Skelton (D-Mo.), chairman of the House Armed Services Committee, said the legislation supports the Defense Secretary Robert Gates' plan to increase the civilian acquisition workforce’s size and to reduce DOD’s reliance on contractors for critical acquisition duties. DOD officials want to hire 9,000 new government employees and convert 11,000 contractor jobs to DOD civilian personnel.

“Defense acquisition reform is a top priority for our committee,” Skelton said in statement June 17 after his committee approved the legislation.

In another acquisition reform, the committee wants to find ways for DOD to buy IT more quickly.

IT systems require regular updates, because of changes in technology, which affects critical parts of the DOD infrastructure. But DOD’s process for buying IT makes it difficult for the department to keep up, according to a DOD task force.

The acquisition process is time-consuming and cumbersome, the task force wrote in a March report. "The process should be agile and geared to delivering meaningful increments of capability in approximately 18 months or less."

The House bill would allow DOD to pick 10 IT programs every year in which to test new procurement processes.Acquisition reforms in the House's fiscal 2010 National Defense Authorization Act concentrate on oversight of service contracts and buying information technology quickly.

Read the story: FCW.com News - DOD’s use of services contracts gets congressional scrutiny