HispanicBusiness

The Impact of H.R. 1873 which the House passed on May 10th to increase the small business set-aside ceiling on all contracts to 30 % will mean nothing unless the ‘exemptions’ are eliminated

Saint Augustine, FL--(HISPANIC PRWIRE)--May 14 2007--The Fairness in Set Aside Procurement Coalition (“FSAPC”) which represents the procurement priorities of 10 million small businesses, including but not limited to, businesses owned by minorities, women, veterans, Native Americans, and service-disabled veterans (8a and Hub Zones included.) has charged that the Federal Acquisition Regulations (FAR) fails to implement the mandates of the Small Business Act, (Act) which governs all Federal procurements.

According to Raul Espinosa, Founder and Spokesperson for the Coalition, "The results of the regulations' misinterpretation of the Act is the deprivation of our access to more than $64 Billion in federal contracts each year (20 Billion in ‘foreign’ contracts and $44 Billion in Federal Supply Schedule (FSS) awards. "

Roger Campos, President of the Minority Business Round Table (MBRT) said, “the impact of H.R. 1873 which increased the set-aside ceilings to 30% will mean nothing unless the exemptions are eliminated.” Anthony Robinson, President of MBELDEF, added, “The set-aside exemptions in the regulations will continue to exclude our access to those contracts.”

The Small Business Act mandates that small business concerns, owned and controlled by socially and economically disadvantaged individuals, veterans, service-disabled veterans, including women, shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems. 15 USC 637(d)(1).

Further, the Small Business Act mandates that each contract for the purchase of goods and services that has an anticipated value greater than $2,500, but not greater than $100,000 shall be reserved exclusively for small business concerns unless the contracting officer is unable to obtain offers from two or more small business concerns that are competitive with market prices. 15 USC 644(j)(1).

Notwithstanding these clear statutory mandates, the FAR exempt ‘foreign’ purchases from the ‘set-aside’ mandate of the Act. FAR 19.000(b) – whose origins pre-dates the FAR - provides that Part 19 [which includes the regulations implementing the Act, including the 'set-aside mandates' apply only in the United States or its outlying areas.

According to Congressional sources, this exemption is outdated and has resulted in the exclusion of more than $20 Billion in yearly procurements – for over a decade – from the reaches of our small business constituency and the oversight of the SBA’s Government Contracting Office and its Procurement Center Representatives (PCR).

Further, FAR 8.404, provides yet another example where the FAR fails to adhere to the mandates of the Act. FAR8.404 also exempts all Federal Supply Schedule (FSS) purchases (the bread and butter of the procurement system) from the mandates of the Act.

In direct contradiction of the Act's mandate, FAR 8.404(a) provides that the small business set-aside procedures and policies do not apply to Blanket Purchase Agreements (BPA) and orders placed against schedules using Part 8 procedures. FAR 8.405-5 goes even further to emphasize that the mandatory preference programs of Part 19 - also in a contradictory manner to the Act's mandate - do not apply to orders placed against schedule contracts and indicates only that agencies should consider (but are not required to do so) the socio-economic status when identifying contractor(s) for consideration or competition for award of an order or BPA. Espinosa claims, "This additional exemption deprives our constituency of more than $44 Billion dollars in contracts.”