Legislative and Other Changes That Could Affect the Ability of Small Businesses to Obtain Federal Contracts

The federal procurement process underwent many legislative and  administrative changes during the 1990s, some of which have the potential  to affect the ability of small businesses to obtain federal contracts. In addition, reforms have modified the  dollar range of contracts that are reserved for small businesses and  encouraged the use of purchase cards, which are similar to corporate  credit cards, for the use of certain purchases. Federal agencies combine existing contracts into fewer contracts as a  means of streamlining as well as reducing procurement and contract  administration costs, a practice generally referred to as “contract  consolidation.” A subset of consolidated contracts is “bundled contracts”  that the Small Business Reauthorization Act of 1997 defines as the  consolidation of two or more procurement requirements for goods or  services previously provided or performed under separate, smaller  contracts into a solicitation of offers for a single contract that is likely to be  unsuitable for award to a small business concern due to  the diversity, size, or specialized nature of the elements of the   the aggregate dollar value of the anticipated award;  the geographic dispersion of contract performance sites; or  any combination of these three criteria. Some organizations that represent  small businesses believe that the purchase card makes it easier for  government personnel to make purchases from sources other than small  businesses because that may be more convenient for the purchaser. Federal Government Is Meeting Small Business Procurement Goal

SBA and FPDC data indicate that federal agencies, as a whole, have met  their annual governmentwide small business procurement goal from fiscal  years 1993 to 1999. Some organizations that represent small businesses have expressed  concerns that small businesses are at a disadvantage when competing for  new federal contracts. We  examined the Federal Acquisition Streamlining Act of 1994 (FASA), the  Clinger-Cohen Act of 1996, the Small Business Reauthorization Act of 1997,  and the Federal Acquisition Regulation.
Why GAO Did This Study

This report focuses on the trends in federal procurement for small businesses during the 1990s.

What GAO Found

Some organizations that represent small businesses and others have expressed concerns over acquisition reforms in the mid-1990s that may have reduced the opportunities for small businesses to compete for federal government contracts. These reforms sought to streamline acquisition processes to help government acquire goods and services more efficiently. The reforms included provisions to facilitate greater use of some types of contracts. However, small business representatives believe that some of these reforms could make it difficult for small businesses to compete for federal contracts. For example, the Clinger-Cohen Act authorizes the use of multiagency contracts. These contracts could potentially consolidate agencies' requirements, which small businesses may not be able to meet. At the same time, some procurement reforms have benefited small businesses. The Federal Acquisition Streamlining Act, for example, increased the value of contracts set aside exclusively for small business participation. In addition, the Small Business Reauthorization Act of 1997 increased the percentage of federal contracts to be awarded to small businesses to 23 percent. Small Business Administration data indicate that federal agencies met the legislative goal for procurement from small businesses from fiscal years 1993 to 1999.