GOVERNMENT CONTRACTS

“Mid-Sized Businesses: Too Big to be Small and Too Small to be Big” House Small Business Committee Press Release, November 14, 2017. Retrieved from smallbusiness.house.gov

The House Committee on Small Business held a bipartisan roundtable to hear from advanced small and mid-tier businesses and industry experts on the challenges to growth and success.

“After a small business has proven its success by growing out of its small size standard, it exists in a murky limbo – it is too large to benefit from small business set-asides, yet is too small to compete with billion dollar firms,” said Chairman Steve Chabot. “Our goal is to learn more about what is happening to advanced small—or mid-tier—businesses.”

The roundtable provided a forum for Members to learn about this middle market and the disparities from small to mid-tier business owners, academia, trade organizations, and subject-matter experts.

Data on these mid-tier companies is minimal, but preliminary evidence shows these firms are limited to a few options: relegate themselves to subcontracting opportunities; sell the company to a larger firm; or try to compete in full and open markets.

“Defense Authorization Bill Allows Pilot Program on Curbing Bid Protests” Government Executive, November 9, 2017. Retrieved from govexec.com

The $700 billion fiscal 2018 National Defense Authorization bill that House-Senate conferees unveiled on Wednesday is a compromise on disputed language aimed at reducing the number of time-consuming contractor bid protests.

Contractors, contracting officers, and staff of the Government Accountability Office—which adjudicates the protests filed by companies that lose out on an award—had been awaiting the fate of language in the Senate version that would have required companies larger than $100 million in the previous year’s revenues that protest unsuccessfully to pay the costs of processing the protest at the Department of Defense (DOD) and GAO.

In a compromise spelled out in the House-Senate report on the NDAA, that provision will be put into effect as a three-year pilot at DOD, with the threshold for companies affected being raised from the original $100 million in revenues to $250 million. The three-year pilot would begin two years after the law’s enactment, with results reported to the Armed Services committees within 90 days. The House version of the bill had contained no such language. 

“Small Business Activist Wins Interim Victory Against Pentagon, Sikorsky” Government Executive, November 16, 2017. Retrieved from govexec.com

The small, but vocal, American Small Business League has argued for years that large federal contractors mislead agencies and the public by overstating their use of small businesses as subcontractors to meet statutory goals. 

The US District Court in San Francisco managed to unveil previously non-public names of suppliers and subcontractors used by Sikorsky Aircraft Corp. The helicopter maker had joined with the Defense and Justice departments in seeking to withhold such information as proprietary when submitted to the Pentagon under its 27-year-old Comprehensive Subcontracting Plan Test Program, designed to measure corporate potential for increasing small business opportunities in subcontracting.

After several rounds of negotiations attempting to get the names and documents without redactions, the District Judge released versions of the documents with fewer redactions, however, after examining the documents, small business booster Lloyd Chapman told Government Executive this week he found them “indecipherable,” though just getting the new document made him feel he’d “struck gold.” 

Chapman’s lawyers will be requesting the names of all of Sikorsky’s suppliers and contractors. And in the near future,” Chapman added, he will be requesting the names of all the suppliers and subcontractors in Pentagon programs. “The significance is that contractors that participate in the Comprehensive Subcontracting Plan Test Program cannot withhold the names of subcontractors. It shows the Pentagon was right when it said that small business contracts have plummeted as result of the program.”

“Trump Admin Tells Agencies to Strip Contract Provisions Guarding Against Wage Theft” Government Executive, November 6, 2017. Retrieved from govexec.com

Federal contractors will not face requirements aimed at protecting employees from wage theft and unsafe working conditions under a rule the Trump administration finalized on Monday. The rule follows a resolution Republican lawmakers passed and President Trump signed in March under the Congressional Review Act, which voided an Obama administration push for more transparent compliance with workplace laws for employees working on federal contracts.

President Obama pushed a rule known as “paycheck transparency,” which required contractors to provide detailed statements on their hours worked and compensation earned. That provision was never enjoined in court, meaning some federal contracts signed in 2017 with an estimated value of more than $500,000 may have already included the requirement. The goal of the provision was to ensure employees were protected against wage theft by their employer. The Defense Department, NASA, and General Services Administration all agreed that the provision was “unenforceable,” and stated “the final rule providing the death knell to Fair Pay and Safe Workplaces was “long overdue.”

Obama’s 2016 rule would have required employers bidding on federal contracts to disclose violations and alleged violations of 14 federal labor laws and similar state labor laws. Many contractors and Republican lawmakers resisted the plan as a burdensome form of “blacklisting” that penalized companies for unproven violations. Amit Narang, a regulatory policy expert for Public Citizen, said the repeal was a win for "unscrupulous contractors," stating that the decision would allow the “best contractors to contract with our government.”

CAPITOL HILL

“Velázquez Seeks Speedier Disaster Assistance for Small Businesses” House Small Business Committee – Democrats, November 15, 2017. Retrieved from democrats-smallbusiness.house.gov

On November 15th, Small Business Committee Ranking Member Rep. Nydia M. Velázquez unveiled a new initiative to encourage private lenders to assist small business disaster recovery. After Hurricanes Irma, Harvey, and Maria devastated local economies, Velázquez’s bill, the Small Business Emergency Disaster Bridge Loan Act of 2017, would offer small companies a new avenue to fund their recovery process. Under the bill, while these firms wait for their Small Business Administration disaster loan applications to be processed, they could receive a “bridge loan,” a public-private immediate low-interest loan of up to $50,000 to help replace damaged property.

GAO

RECENT BID PROTEST DECISIONS