Last week my friend and Government Contracts Attorney Steven Koprince included in his SmallGovCon blog an article about recent activity by the U.S. House of Representatives seeking to raise the threshold for Simplified Acquisitions. Given this is one of my favorite topics in government contracting because of my experience winning business this way, helping others to win business this way and the economic impact these buys have on small business concerns, most would expect me to be excited about this development.
But I’m not.
If you’re asking why, it’s not because it wouldn’t be significant and beneficial to thousands if not tens of thousands of small federal contractors, I just don’t see it going anywhere. The primary reason is because it represents too much money affecting too many ‘stakeholders’ of federal contracting. For that reason, it will face major hurdles from certain constituencies and lobbyists, especially those representing mid-tier and large businesses.
So if the folks in the House are truly interested in meaningful change to assist American Small Businesses, my advice is to:
Based on current use of Simplified Acquisitions by Uncle Sam, let’s say FY14 for example, these buys represented $19 billion of the $443 billion reported to FPDS-NG. That’s based on the current threshold coupled with use of the threshold exception. Taking that number to $500,000 could potentially raise the Simplified Acquisition share of the federal spend from $19 billion to more than $50 billion, which would definitely put a crimp in the lifestyle of lots of companies (bigger ones) who would end up looking in from the outside of a lot of business if this occurred. Which means they will fight it.
Here’s the other issue.
Small federal contractors are not doing too well supporting agencies in helping them leverage the ‘rule of two,’ the preference that creates a ‘reservation’ for small business when it comes to buys under the current threshold. For this reason, increasing the threshold won’t make that much of a difference. Bottom line, if we (small business concerns) don’t show up or make ourselves known through deliberate and effective marketing and relationship development, that inherent preference doesn’t mean squat!
What would change that for me? If the House and ultimately Congress made Simplified Acquisitions a set-aside versus a reservation under whichever threshold they opt to use.
I say don’t raise the threshold and eliminate the challenges that will come. This approach would face fewer challenges in my opinion. Just make a little change to FAR Part 13 so it says:
That change alone could carve out a bigger piece of Uncle Sam’s pie by putting at least $5 billion in the coffers of American Small Businesses (which is another change I would like to see put in place, but that’s another conversation).
I don’t mean to look a Congressional gift horse in the mouth, but keeping it simple could help get something on the books.
Guy Timberlake, The Chief Visionary
“The person who says it cannot be done should not interrupt the person doing it.”