- The Washington Times - Wednesday, March 19, 2003

Changes in federal contracting have not helped small businesses win valuable awards, lawmakers and government officials said yesterday.
In particular, the effort to eliminate contract bundling the process of lumping several jobs under one large contract, often handled by a large company has not worked, said Sen. Olympia J. Snowe, Maine Republican and chairman of the Senate Small Business and Entrepreneurship Committee.
"The contract reforms of the 1990s paved the way for contract bundling, which has kept a growing number of small businesses out of the procurement process," Mrs. Snowe said.
Mrs. Snowe said agencies have been slow to comply or have not complied with new contract-unbundling regulations, prompting the hearing. Lawmakers examined other incentives for addressing the problem yesterday.
Contract bundling reduced the number of small businesses winning new contracts from 26,000 in 1991 to 11,600 in 2000, when the government awarded about $230 billion in contracts to private businesses, according to the Office of Management and Budget.
Under a March 2002 regulation, federal agencies must actively incorporate more small businesses into their contract-bidding pool as part of an earlier initiative to hold contractors accountable, close regulatory loopholes and lessen the frequency of contract bundling.
To keep score, each agency is required to provide a quarterly report to the OMB detailing its contracting decisions and actions.
The goal of the report and other regulations is to synchronize agencies with a set contracting process to encourage more small companies to participate, said Angela Styles, administrator for federal procurement policy at OMB.
"Much of our initial changes have varied from agency to agency, but the ultimate goal is an efficient system that moves offices away from the mind-set of bundling contracts because it's easier and faster," Ms. Styles said.
She said the report is also a way of holding lower-level agency employees and senior officials accountable for their decisions.
But the General Accounting Office and State, Justice, Commerce, Education, and Health and Human Services departments, among others, have not met the Jan. 31 deadline for the first-quarter report.
The Small Business Administration proposed having its contract consultants take on additional responsibilities of monitoring and enforcing small-business policies at major contracting agencies, such as military bases.
But other government officials said the new regulations might put additional strain on agencies already feeling a budget crunch.
"These expanded requirements will likely burden SBA's small-business contracting work force, which we have found is already struggling to accomplish their missions," said David Cooper, director for acquisition and sourcing management at the General Accounting Office.

SBA Administrator Hector Barreto, said the agency would increase training and technical support to the agency's 46 procurement advisers to absorb the extra work.

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