An Overview Of Small Business Contracting

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An Overview of Small Business ContractingUpdated January 18, 2022Congressional Research Servicehttps://crsreports.congress.govR45576

SUMMARYAn Overview of Small Business ContractingCongress has broad authority to impose requirements upon the federal procurementprocess, that is, the process whereby agencies obtain goods and services from the privatesector. One way in which Congress has exercised this authority is by adopting measuresto promote contracting and subcontracting between “small businesses” and federalagencies.R45576January 18, 2022Robert Jay DilgerSenior Specialist inAmerican NationalGovernmentThese measures, among other things, are designed to ensure that a “fair proportion” offederal contract and subcontract dollars is awarded to small businesses; establishgovernment-wide and agency-specific goals for the percentage of federal contract and subcontract dollarsawarded to small businesses; establish an annual Small Business Goaling Report to measure progress in meetingthese goals; generally require federal agencies, under specified circumstances, to reserve contracts that have ananticipated value greater than the micro-purchase threshold (currently 10,000), but not greater than the simplifiedacquisition threshold (currently 250,000) exclusively for small businesses; authorize federal agencies, underspecified circumstances, to set aside contracts that have an anticipated value greater than the simplifiedacquisition threshold exclusively for small businesses; authorize federal agencies to make sole-source awards tosmall businesses when the award could not otherwise be made (e.g., only a single source is available, under urgentand compelling circumstances); authorize federal agencies to set aside contracts for, or grant other contractingpreference to, specific types of small businesses (e.g., 8(a) small businesses, HUBZone small businesses, womenowned small businesses (WOSBs), and service-disabled veteran-owned small businesses (SDVOSBs)); and taskthe Small Business Administration (SBA) and other federal procurement officers with reviewing and restructuringproposed procurements to maximize opportunities for small business participation.Small business contracting programs generally have strong bipartisan support. However, that does not mean thatthese programs face no opposition, or that issues have not been raised concerning the impact and operations ofspecific programs. For example, small business advocates note that implementing regulations in the FederalAcquisition Regulation (FAR) narrow the reach (and impact) of some small business contracting preferences byexcluding specific types of contracts, such as those listed in the Federal Supply Schedules, from FARrequirements pertaining to small business contracting. Advocates want the federal government to enact policiesthat reduce or eliminate such exclusions. Critics have questioned some of these programs’ effectiveness, in termsof both promoting small business opportunities to win federal contracts and promoting a more diversified, robusteconomy.Many observers judge the relative success or failure of federal efforts to enhance small business contractingopportunities by whether the federal government and individual federal agencies meet the predeterminedprocurement goals in the annual Small Business Goaling Report. In recent years, the federal government hasgenerally succeeded in meeting the government-wide goals of awarding 23% of the total value of all smallbusiness eligible prime contract awards to small businesses, 5% to small disadvantaged businesses (SDBs), and3% to SDVOSBs. It has had difficulty meeting the goals of 5% to WOSBs and 3% to HUBZone small businesses.The Small Business Goaling Report is the most convenient measure available to compare federal small businesscontracting performance over time, but it has limitations. For example, the SBA excludes some contracts from thereport in its determination of what is “small business eligible” and some federal procurement activities are notincluded because they are not recorded in the Federal Procurement Data System—Next Generation. It also doesnot evaluate the effect these contracts have on small businesses, industry competitiveness, or the overall economy.Congressional Research Service

An Overview of Small Business ContractingContentsIntroduction . 1Basic Contracting Requirements . 4Federal Contractors . 4Federal Agencies . 6The Pre-Award Process . 7Federal Agency Requirements . 7The Role of SBA Procurement Center Representatives . 9The Role of the Office of Small and Disadvantaged Business Utilization . 10The Roles of Other Procurement Officers and Offices . 11Set-Asides and Sole-Source Awards. 14SBA Contracting Programs . 15Prime Contracting Programs . 158(a) Program . 15Historically Underutilized Business Zone Program. 17Service-Disabled Veteran-Owned Small Business Procurement Program . 18Women-Owned Small Business Program . 19Subcontracting Programs . 20Other Federal Agency Contracting Programs . 20Department of Transportation and Environmental Protection Agency DisadvantagedBusiness Enterprise Programs . 20Contracting Preferences for Indian Tribes and Native American-Owned and Controlled Businesses . 24Subcontracting Programs for Small Disadvantaged Businesses . 24Other Small Business Programs of Interest . 25The SBA 7(j) Management and Technical Assistance Program . 25SBA Surety Bond Guarantee Program . 25Small Business Mentor-Protégé Programs . 26Small Business Procurement Goals . 27Certificate of Competency Program . 31Post-Award Requirements . 31Small Business Subcontracting Plan Reviews .

Nov 17, 2021 · business eligible prime contract awards to small businesses, 5% to small disadvantaged businesses (SDBs), and 3% to SDVOSBs. It has had difficulty meeting the goals of 5% to WOSBs and 3% to HUBZone small businesses. The Small Business Goaling Report is the most convenient measure available to compare federal small business

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