Fiscal Year 2018 NDAA Includes Key Provision for Government Contractors

By Gloria Larkin

 

On November 16, 2017 Congress passed the 2018 National Defense Authorization Act (NDAA) which includes a provision directing the Small Business Administration (SBA) to study small business participation on Multiple Award Contracts. The SBA study is in response to a Women Impacting Public Policy (WIPP) study revealing that women small business owners are being shut out of large government contracts.

The NDAA legislation will now be sent to the president to sign into law.

The NDAA provision directs the SBA to address concerns that women-owned small business participation is underrepresented in Multiple Award Contracts (MACs), the kind of contracts many federal agencies favor because they create a pre-approved list of businesses that can supply unlimited goods or services during a specified period, usually between five to ten years. The SBA study also will examine the participation of all other socio-economic categories of small businesses, including service-disabled veteran-owned small businesses, those participating in the Historically Underutilized Business Zones (HUBZone) program and participants in the 8(a) program.

“This is a big win for women small business owners. It will help them get into the game and win some of the government’s largest and most lucrative contracts by helping us fully understand the issue, which is the first step in finding a solution,” said WIPP President Jane Campbell. “We urge the president to sign this into law immediately.”

A report WIPP released in October 2016, Do Not Enter: Women Being Shut Out of U.S. Government’s Biggest Contracts, analyzed 19 of the government’s largest and most lucrative contracts and found that 12 have requirements that ensure certain socio-economic groups have access to the contracts. But only quarter have such requirements for women-owned firms. Furthermore, a 2015 Department of Commerce report shows that the odds of a woman-owned small business winning a federal contract are 21 percent lower than those of their counterparts.

WIPP has made solving this problem a top priority and worked with Sens. Joni Ernst and Kirsten Gillibrand, who originally introduced the legislation, to more fully understand the issue.

“We already know the country has a lot to gain by unleashing the economic potential of women entrepreneurs,” said Lisa Firestone, WIPP Board Chairwoman and owner of Managed Care Advisors, a government contractor based in Bethesda. “Women own 10 million U.S. businesses, generate more than $1.4 trillion in revenues and employ 8.4 million people. Imagine what they could do when competing on a level playing field.”

Since its inception in 2001, Women Impacting Public Policy (WIPP) has led the charge to ensure the women-owned contracting program had the same tools that support other small business contracting programs. WIPP has spent the past 15 years educating and advocating on behalf of the nation’s women entrepreneurs, with a laser focus on federal procurement policy. WIPP has successfully advocated for expanding the North American Industry Classification System (NAICS) codes in the WOSB program, removing the caps on the dollar amounts of contracts awarded under the WOSB program as originally written, and most recently, inclusion of sole source contract authority in the program.

Over the past several years, as government spending has shrunk, these large multiple award contracts have grown to 21% of federal spend, with a growth rate of over $100 million between fiscal years 2013 and 2014. In fiscal year 2017, 17 of the 20 largest federal contract opportunities are MACs.

This trend runs counter to a renewed interest of Congress in the use of a diverse group of small businesses from across the socio-economic spectrum. SBA established the WOSB procurement program, and other set-aside programs including 8(a) Business Development Program, Historically Underutilized Business Zone (HUBZone), and Service-Disabled Veteran-Owned Small Businesses (SDVOSB), to allow agencies to work directly with small, underrepresented businesses. The incorporation of that priority with MACs has left each agency to determine how to best ensure all groups have an opportunity to compete.

Importantly, both the U.S. Department of Justice and Congress have been clear in directing that no individual group have preference over another. Although agencies are not required to include socio-economic groups in these large contracts, exclusion of any of these groups, including women owned companies, would represent significant federal spending that is now inaccessible.

The nomenclature for MACs is diverse. Certain industries have unique acronyms (e.g. GWACs serve only IT-industries), while individual agencies use disparate but ultimately synonymic terms. The alphabet soup of IDIQs, BPAs, IDVs, IDCs, MATOCs, etc. all point toward the key idea of two phase contracting: initially awarding one contract to multiple companies, and second, allowing the pre-selected firms to compete for certain requirements called task orders.

The size of these contracts vary from a hundred million into the billions of dollars for the life of the contract.

For additional information regarding the NDAA and the WIPP Do Not Enter report visit www.WIPP.org.

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