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Chief Visionary's Blog, FEATURED ARTICLES, Industry News, Op-Ed/Blog, Simplified Acquisitions

$500K Proposal to Increase Simplified Acquisition Threshold is Doomed

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:

27080785_ml keep it simpleWhat’s that mean?

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 iStock_000015943882Medium stinksthreshold 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:

32323643_l slice of american dollar pie‘Acquisitions of supplies or services that have an anticipated dollar value exceeding
$3,000 but not exceeding $150,000 are set-aside exclusively for small business concerns.’

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.

Peace!

Guy Timberlake, The Chief Visionary
http://www.theasbc.org/visionary

“The person who says it cannot be done should not interrupt the person doing it.”

About Editor-in-Chief Visionary

Guy Timberlake is the Editor-in-Chief Visionary of GovConChannel and oversees the creation and curation of relevant and timely 'News And Information That Matters To Small Government Contractors.'

Discussion

7 thoughts on “$500K Proposal to Increase Simplified Acquisition Threshold is Doomed

  1. Reblogged this on GovConChannel and commented:

    Interesting turn of events regarding the U.S. House proposal to increase the Simplified Acquisition Threshold to $500K (currently $150K). I had a conversation with a senior procurement official about why I believe the prop will die and how Congress could salvage it to provide some benefit to small federal contractors. They agreed with me that larger companies will try to fight the attempt to move some of their cheese, but also informed me there are other forces at work here which could quash those efforts. What ‘forces’ could shut down the lobbying machine of the big guys and gals? The need for increased efficiency. That’s one of the reasons Simplified Acquisition Procedures exist, and according to my friend in procurement, the streamlined aspects of these type purchases could be enough to carry it across the goal line.

    THIS is going to be interesting!

    Peace!

    Guy Timberlake
    The Chief Visionary

    Like

    Posted by govconchannelchief | June 10, 2015, 16:33
  2. For anyone interested, here’s the language from H.R. 1735:

    SEC. 854. Amendments to certain acquisition thresholds.

    (a) Simplified acquisition threshold generally.—Section 134 of title 41, United States Code, is amended by striking “$100,000” and inserting “$500,000”.

    (b) Micro-purchase threshold.—Section 1902(a) of title 41, United States Code, is amended by striking “$3,000” and inserting “$5,000”.

    (c) Special emergency procurement authority.—Section 1903(b)(2) of title 41, United States Code, is amended—

    (1) in subparagraph (A), by striking “$250,000” and inserting “$750,000”; and

    (2) in subparagraph (B), by striking “$1,000,000” and inserting “$1,500,000”.

    (d) Small business concern reservation.—Section 15(j)(1) of the Small Business Act (15 U.S.C. 644(j)(1)) is amended by striking “$100,000” and inserting “$500,000”.

    The good news is the proposed increase includes the ‘reservation’ for small business concerns.

    Like

    Posted by govconchannelchief | May 11, 2015, 20:53

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