Buying reforms hurt small businesses, experts say

Buying reforms hurt small businesses, experts say

Procurement reforms have let agencies buy information technology faster and cheaper, but many experts concede that the government's buying changes have been tough on small businesses.

'It's clear that small business has been hurt by reform,' Robert Welch, the Commerce Department's senior procurement'executive, said during a recent Federation of Government Information Processing Councils conference in Falls Church, Va. 'The numbers speak for themselves.'

Large companies command a 71 percent share of federal IT dollars, according to a recent report by Federal Sources Inc. of McLean, Va., and the market share for small and disadvantaged businesses has dropped from an average of 30 percent to 15 percent.

But there is debate on whether the numbers represent a market shakeout or whether the reforms have made it more difficult for small businesses to compete for federal IT work.

Procurement reforms have given agencies access to a wide selection of contracting vehicles and have cut the time it takes to conduct a purchase, said Charles 'Chip' Mather, senior vice president for Acquisition Solutions Inc. of Chantilly, Va., and a former Air Force procurement executive.

Set-asides set aside

Before the reforms, small and disadvantaged businesses had some protections, he said. There were set-aside contracts that guaranteed those companies a certain amount of business.

Also, agencies no longer have to list as many planned buys in Commerce Business Daily as they once did, so companies have had to increase their sales staffs to track deals such as blanket purchasing agreements and task orders through governmentwide contracts, Mather said.

After the procurement reforms became law, 'everybody expected the bottom to drop out' for small businesses because agencies were released from procurement restrictions, said Judith Roussel, associate administrator for government contracting at the Small Business Administration. It has taken some time for the changes to take hold, she said.

The present procurement environment requires that vendors focus on forging relationships and providing results, the speakers at the conference said.

Valerie Perlowitz, president of Reliable Integration Services Inc., a women-owned small business in Dunn Loring, Va., said small businesses can provide niche knowledge and services that agencies can't get from bigger companies.

In most cases, it is nearly impossible for a small business to win a governmentwide acquisition contract award and the resulting task orders, she said.

SBA has also rolled out programs to help small and disadvantaged businesses. Most recently, SBA established rules requiring that agencies justify contract bundling.

Agencies must show the impact that the bundling of contracts would have on small businesses and how the agency would deal with that impact. The rules will also require agencies to show how bundling benefits government, Roussel said.

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