NAGC Supports Increasing Government-Wide Contract Goals

Washington, D.C. -- The National Association of Government Contractors (NAGC) supports legislation increasing federal agency small business contracting goals from 23 percent up to 25 percent.

"Increasing the goals is only the first step toward small businesses getting their fair share of government contracts," Said NAGC President, J.R. Claeys. "Enforcing these goals with real incentives or penalties for agencies that have consistently missed these targets is a necessary second step."

In a hearing before the Senate Small Business and Entrepreneurship Committee Wednesday, senators and witnesses discussed the lack of enforcement in the required 23% of contracts federal agencies are supposed to be awarding to small firms.

Witnesses pointed out that the lack of any real measures to hold agencies accountable for meeting these goals is the biggest problem facing small business in a marketplace where the bundling of contracts into large agreements already puts them at a severe disadvantage.

The current statutes, which earmark 23 percent of all federal contract dollars to be spent with small businesses, have no real teeth. This lack of recourse coupled with reports collected from contentious data by The Small Business Administration, estimating agencies awarded 25.4 percent of fiscal 2005 contract dollars to small businesses.

There are is currently no enforcement for agencies that are clearly not meeting the 23 percent goal, such as the Energy and Education departments who are admittedly not coming close to the goal.

"I asked a small business representative from one of the major agencies what happens to you if you don't meet your goal," said Magdalah Silva, a small business owner who represented the group Women Impacting Public Policy. "He told me he gives himself a stern talking to. We have objectives, but nobody's enforcing it."

While some agencies plainly are not taking the goals seriously, others are suspected of inaccurate reporting while some huge pieces of the federal contracting dollars are slipping through some very large cracks.

The Defense Department, which awards more contracts than any other agency, claims to meet the small business goal. But as Todd McCracken, president of the National Small Business Association, points out these numbers are very misleading because defense dollars spent overseas are not figured in.

"There have been a lot of doubts about those numbers," said Kathryn Seck, spokeswoman for the committee. "There might be some creative math involved in reaching those goals."

New legislation might up the targeted percentage again. A House bill introduced in April, H.R. 1873, would change the small business requirement to 30 percent of all contract dollars. Again no measures would be included to enforce the guidelines nor a clearly defined system to monitor accurate data collection.

"Accountability, accountability, seems to be leaping out here," said Sen. John Kerry, D-Mass., chairman of the committee. "We're going to do something that is measured and that has a chance to succeed. It won't be perfect, but it will be a good start."

The hearing while doing little to resolve a clearly lacking system and enforce any type of federal accountability may have at least brought the concerns to the forefront.

"Senator Kerry wants to get to the bottom of this accountability issue," Seck said. "We'll see what steps we can take in legislation that would put teeth into law."

She added that the solution might not be entirely legislative. "I don't know how far we can go in that direction," she said. "Part of it might not be changing the law but making the agencies comply with the law."

NAGC is hopeful that, in these questions being asked, we are starting down a road to having them answered. Another raise in the percentage from 23 to 30 without any enforcement would do little to solve the problem. For the federal agencies reliant on the efforts of the contractors who serve them, it’s time to show some accountability in return.

About NAGC: The National Association of Government Contractors (NAGC) is the home of America's procurement professionals. Thousands of business owners and executives working with government agencies, universities and private corporations trust NAGC as a professional resource for their procurement needs.