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Fairness in Contracting

On May 10, 2007, the House passed the Small Business Fairness in Contracting Act (H.R. 1873), which will put small businesses on a level playing field with big corporations by increasing their access to federal contracts.

Small businesses make up nearly 99.7 percent of companies, yet they continue to face numerous challenges that prevent them from receiving their fair share of the $340 billion dollar federal marketplace. In addition to increasing small business access to federal contracts, this legislation will:

  • Make “contract bundling”--the practice of grouping small government contracts together and awarding them as one large contract--more difficult by forcing government agencies to justify why they have bundled contracts in the first place
  • Require the Small Business Administration to reach out to small businesses regarding opportunities for earning government contracts
  • Mandate stricter oversight of government agencies to ensure that these agencies are making progress toward awarding contracts to small businesses

Though the federal marketplace continues to grow at record rates, small businesses' contracting opportunities are dwindling. For the past six years, the federal government has failed to meet its 23 percent contracting goal - costing small businesses nearly $4.5 billion in lost contracting opportunity last year alone.  Small firms also face challenges as the government continues to combine work into contracts that are too large for entrepreneurs to bid on, making the work less accessible to small businesses.  Over the past few years, small businesses have also lost out on opportunities as contracts intended for them were awarded to large corporations.  These factors have all resulted in lost contracting opportunities for this nation's small firms.   

This legislation tackles the major problems driving agencies' low achievement by making changes to ensure more contracts are available to small firms, raise the federal small business government-wide contracting goal from 23 to 30 percent, and fight fraud in the contracting process. The Small Business Fairness in Contracting Act also expands contracting opportunities for small businesses by opening up opportunities overseas and increasing enforcement on subcontracting goals.

This legislation is good for small businesses in America, because when government contracts are bundled together into billion-dollar super contracts, small businesses cannot compete on a level playing field.  By making it harder for government agencies to create these super-contracts, more small businesses will have the opportunity to benefit from earning government business.  Furthermore, this bill requires the Small Business Administration to keep small businesses informed about the opportunities to compete for government contracts.  At the end of the day, that means more opportunities for American entrepreneurs running small businesses and contributing to the growth of our nation's economy.