Neal Fox | See GSA to meet small-business goals

IT Contracting

Neal Fox

The federal government has missed its annual small-business contracting goal for seven years straight. That's not a record to be proud of. Granted, the 23 percent goal is tough ' and subcontract dollars are not counted, which distorts the picture ' but the goals are congressional mandates. Information technology would seem to provide a great opportunity to close the gap because of the large dollars and multitude of small, high-quality IT services vendors available, but federal agencies have not taken full advantage of this opportunity.

So what's the problem?

Agencies generally like to earn small business points where there is the least risk. That is why many agencies retreat to buying office supplies, facility services and other low-risk products and services from small businesses. If they fail, no great harm is done. But these products and services are not where the real dollars are, which is why the goals are not being met. The only way to meet the goals is to buy higher-value products, such as IT services, from small businesses.

So where can agencies find small IT services companies that have been vetted for quality past performance and therefore should be relatively low-risk?

The answer is the General Services Administration, which has been providing small-business governmentwide acquisition contracts for more than a decade. GSA truly excels in this area, and it provides agencies with a broad range of easy-to-use contracts with vetted companies. The GSA IT schedule also has more than 6,000 vendors, 80 percent of which are small businesses. GSA GWACs include 8(a) vendors on the STARS contract, HUBZone vendors and service-disabled veteran vendors on the new VETS GWAC.

For instance, STARS has been used by agencies to buy $725 million worth of IT services in it first three years of operation. GSA has put its own money where its mouth is by recently outsourcing its own IT services, valued at more than $200 million, to an 8(a) vendor through STARS. That's what I would call leading by example.

The Defense Department has historically been a big user of GSA small-business GWACs and schedules vendors. The new VETS GWAC has been endorsed by high-level officials at DOD and the Veterans Affairs Department. And DOD contracting officers find the GSA GWACs are easy to obtain waivers for using a contract outside DOD.

Also, the Small Business Administration has recently addressed regulatory guidance that allowed many large businesses to claim small-business status. They clarified rules, allowing small businesses to retain their size status on multiyear IT contracts for as long as five years. This allows vendors to obtain large IT contracts without being thrown off the GWAC the next year, providing stability for the contract. At the same time, the business will need to compete as large on shorter-term contracts, which is fair to small businesses. Kudos to SBA for taking a balanced approach.

The federal small-business goal is not going to get any lower in the near term, and missing the goal year after year has created the need for a new approach. Federal agencies should take a hard look at putting their IT dollars to work with vetted small businesses. The GSA small-business GWACs, the 8(a) STARS, HUBZone and the new VETS GWAC are a great place to start.

Neal Fox is former assistant commissioner for commercial acquisition at GSA and leads Neal Fox Consulting (e-mail: nfox@usa.com).

About the Author

Neil Fox is the former assistant commissioner for commercial acquisition at GSA's Federal Supply Service, and is now principal at Neal Fox Consulting.

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