- The Washington Times - Thursday, October 31, 2002

The Bush administration, reaching out to a key constituency just before Election Day, yesterday announced a plan to help small businesses win more government contracts.
Though small businesses employ more than 51 percent of the U.S. work force, they are winning an ever-smaller slice of the more than $200 billion the federal government awards in contracts annually. Last year, small businesses won 15 percent of the $234.9 billion in government contracts, with large corporations winning the rest. That was down from 1991, when small businesses won 35 percent of government contracts.
Government officials blame the trend on the increasing "bundling" of contracts, meaning several contracts are grouped together. The bundling has meant that larger corporations are in a stronger position to handle the larger contracts.
The Bush plan would reduce the high number of grouped contracts. Government officials would be held accountable for lumping together contracts for large suppliers, and would be expected to provide supporting evidence that smaller businesses could not do the same jobs.
Also, agency heads would receive report cards, grading their performance for each contract going out of their agency. Federal officials will see their first review Jan. 31, 2003.
"This implementation shows how deeply committed President Bush is to lowering the barriers for small business to be able to compete for federal contracts, which will help boost the economy," said Mitchell E. Daniels Jr., director of the Office of Management and Budget.
It is still not clear whether agencies that bundle contracts would lose funding or how officials would be reprimanded for not complying with the new regulations, said Angela Styles, administrator for federal procurement policy at the OMB.
"We are still developing the specifics of this strategy, but officials take these proposed reviews pretty seriously because these report cards are going to be on the president's desk, and he's going to want to know why any agency is limiting competition for small businesses," Ms. Styles said.
The plan also calls for the OMB and the President's Management Council to review all steps in each federal contract, clean up loopholes that give large companies unfair advantages and submit solutions to allow more small businesses into the bidding process.
The additional red tape is likely to slow down the contract process for businesses, Ms. Styles said. But the larger competition would lower costs in the long run, she added.
"It puts a little sand in the wheels, but this is not designed to bring the contract process to a halt," she said.
Hector Barreto, administrator for the U.S. Small Business Administration, said there are no guarantees that smaller companies will secure more federal contracts.
"Like the president has said, the role of government is not to create wealth, but to create an environment where entrepreneurs will take a risk and herald those who take the risk of capital and contribute to prospering our economy," he said.

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