Reforms Deliver Wins for Small Businesses.

Author:Smith, Christopher
Position:NDIA Policy Points

By some metrics, 2017 was a banner year for small business federal contractors. In May 2018, the Small Business Administration announced that, for the first time, the federal government exceeded $ 100 billion in prime contract awards to small businesses in fiscal year 2017.

Despite reaching this milestone, small business federal contracting still has room for improvement. For example, the SBA's data also show that the percentage of total federal contracting dollars earned by small businesses declined for the second year in a row, falling to 23.8 percent from a historic high of 25.7 percent for fiscal year 2015.

Given these mixed results, is there a case for near-term optimism for the small business contracting community? Recent changes to federal caps on the use of micro-purchasing and simplified acquisition methods hold the promise of more agile acquisition, benefitting small businesses.

Indicative of the big changes forthcoming is a June 2018 White House Office of Management and Budget memo streamlining small business contractors' access to federal contracting opportunities. Memo-18-18, "Implementing Statutory Changes to the Micro-Purchase and the Simplified Acquisition Thresholds for Financial Assistance," takes steps to accelerate implementation of increases in the thresholds for micro-purchases and of simplified acquisitions, which Congress mandated in the 2017 and 2018 National Defense Authorization Acts.

Conducted mostly using government purchase cards, micro-purchases occupy the lowest-cost, but most commercially open end of the spectrum of federal acquisitions.

Acquisitions that fall under the simplified acquisition threshold yet exceed the micro-purchase threshold are eligible for streamlined, but still competitive bidding-based contracting procedures. Although the memo did not apply to Defense Department contracts, its raising of the micro-purchase threshold and simplified acquisition threshold--to $10,000 and $250,000, respectively--for nonprofit research federal grant recipients signals similar government-wide increases expected later this year.

The department also has taken steps to streamline small-dollar procurements. It implemented its own smaller micro-purchase threshold increase in 2017. It followed up in April by raising the contract value trigger at which contractors are required to provide cost and pricing data for certification, from $750,000 to $2 million. This change will give contracting officers the discretion to...

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