[Senate Hearing 106-812]
[From the U.S. Government Publishing Office]
S. Hrg. 106-812
WHAT IS CONTRACT BUNDLING?
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ROUNDTABLE
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES SENATE
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 13, 2000
Printed for the Committee on Small Business
______
U.S. GOVERNMENT PRINTING OFFICE
68-451 WASHINGTON : 2001
_______________________________________________________________________
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC
20402
COMMITTEE ON SMALL BUSINESS
ONE HUNDRED SIXTH CONGRESS
CHRISTOPHER S. BOND, Missouri, Chairman
CONRAD BURNS, Montana JOHN F. KERRY, Massachusetts
ROBERT F. BENNETT, Utah CARL LEVIN, Michigan
OLYMPIA J. SNOWE, Maine TOM HARKIN, Iowa
MICHAEL ENZI, Wyoming JOSEPH I. LIEBERMAN, Connecticut
PETER G. FITZGERALD, Illinois PAUL D. WELLSTONE, Minnesota
MIKE CRAPO, Idaho MAX CLELAND, Georgia
GEORGE V. VOINOVICH, Ohio MARY LANDRIEU, Louisiana
SPENCER ABRAHAM, Michigan JOHN EDWARDS, North Carolina
VACANCY
Emilia DiSanto, Staff Director
Paul Cooksey, Chief Counsel
Patricia R. Forbes, Democratic Staff Director
C O N T E N T S
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Opening Statements
Page
Bond, The Honorable Christopher S., Chairman, Senate Committee on
Small Business, and a United States Senator from Missouri...... 1
Cleland, The Honorable Max, a United States Senator from Georgia. 21
Committee Staff
Smith, Cordell, Professional Staff, Majority Staff............... *
Forbes, Patty, Staff Director and Chief Counsel, Minority Staff.. *
Participants
Aguilera, Esther, Director, Office of Small and Disadvantaged
Business Utilization, Department of Energy, Washington, D.C.... *
App, Steven, Deputy Chief Financial Officer and Acting Deputy
Assistant for Secretary for Management Operations, U.S.
Department of the Treasury, Washington, D.C.................... *
Ashley, Ivan R., Director, Office of Small and Disadvantaged
Business Utilization, Agency for International Development,
Washington, D.C................................................ *
Bonkowski, Casimir, Director, Office of Small and Disadvantaged
Business Utilization, Department of Housing and Urban
Development, Washington, D.C................................... *
Boshears, Kevin, Director, Office of Small Business Development,
U.S. Department of the Treasury, Washington, D.C............... *
Brown, Jeanette L., Director, Office of Small and Disadvantaged
Business Utilization, Environmental Protection Agency,
Washington, D.C................................................ *
Bryan, Ken, Director, Office of Small and Disadvantaged Business
Utilization, Department of Justice, Washington, D.C............ *
Capuano, Joseph A., Acting Director, Department of
Transportation, Washington, D.C................................ *
DeLuca, Anthony, Director, Office of Small and Disadvantaged
Business Utilization, Department of the Air Force, Washington,
D.C............................................................ *
Denniston, Scott, Director, Office of Small and Disadvantaged
Business Utilization, Department of Veterans Affairs,
Washington, D.C................................................ *
Faithful, Robert, Director, Office of Small and Disadvantaged
Business Utilization, Department of the Interior, Washington,
D.C............................................................ *
Foreman, Tim, Deputy Director, Office of Small and Disadvantage
Business Utilization, Department of Defense, Arlington,
Virginia....................................................... *
Gerich, Michael, Deputy Associate Administrator, Office of
Federal Procurement Policy, Washington, D.C.................... *
Gisondi, Frank, Business and Procurement Specialist, Office of
Small and Disadvantaged Business Utilization, Department of the
Interior, Washington, D.C...................................... *
Green, Mike, Deputy Director, Office of Small and Disadvantaged
Business Utilization, Department of Agriculture, Washington,
D.C............................................................ *
Harris, Sharron, Director, Office of Small and Disadvantaged
Business Utilization, Department of Agriculture, Washington,
D.C............................................................ *
Hopewell, Luz A., Director, Office of Small and Disadvantaged
Business Utilization, Department of Transportation, Washington,
D.C............................................................ *
Jackson, Mirinda, Deputy Associate Administrator, Office of
Enterprise Development, General Services Administration,
Washington, D.C................................................ *
Jaramillo, Vi, Director, Office of Small and Disadvantaged
Business Utilization, Department of Education, Washington, D.C. *
Jones, Ramona, Procurement Analyst, U.S. Department of Commerce,
Washington, D.C................................................ *
King, Lynn Sheri, Program Manager, National Women's Business
Council, Washington, D.C....................................... *
Kuders, Anthony J., Deputy Director, Small and Disadvantaged
Business Utilization, Defense Logistics Agency, Fort Belvoir,
Virginia....................................................... *
Martin, Arthuretta, Deputy Director, Office of Small and
Disadvantaged Business Utilization, Department of Health and
Human Services, Washington, D.C................................ *
McCall, Stan, Small Business Specialist, National Aeronautics and
Space Administration, Washington, D.C.......................... *
McNabb, Dale, Deputy Director, Office of Small and Disadvantaged
Business Utilization, Department of the Air Force, Washington,
D.C............................................................ *
Mukitarian, Diana, Chief, Small Business Program, National
Institutes of Health, Rockville, Maryland...................... *
Murfree-Fleming, Valda, Contract Specialist, Library of Congress,
Washington, D.C................................................ *
Murphy, Debra, Chief, Contracts and Logistics Service, Library of
Congress, Washington, D.C...................................... *
Neal, Robert, Jr., Director, Office of Small and Disadvantaged
Business Utilization, Department of Defense, Washington, D.C... *
Oscar, Ken, Acting Deputy Administrator, Office of Federal
Procurement Policy, Washington, D.C............................ *
Pinson, Tracey L., Director, Small and Disadvantaged Business
Utilization, Department of the Army, Washington, D.C........... *
Quiros, Raul, Director, Office of Small and Disadvantaged
Business Utilization, Minority Business Development Agency,
Washington, D.C................................................ *
Robinson, Jackie, Associate Administrator, Office of Enterprise
Development, General Services Administration, Washington, D.C.. *
Robinson, June M., Director, Office of Small Business Programs,
Department of Labor, Washington, D.C........................... *
Saji, Ben, Program Manager, National Park Service, Washington,
D.C............................................................ *
Senich, Donald, Senior Advisor, Small Business Procurement
Policy, National Science Foundation, Arlington, Virginia....... *
Tarrant, Nancy, Director, Small and Disadvantaged Business
Utilization, Department of the Navy, Washington, D.C........... *
Trakowski, Frederick, Special Assistant to June Robinson,
Department of Labor, Washington, D.C........................... *
Tychan, Terrence J., Director, Office of Small and Disadvantaged
Business Utilization, Department of Health and Human Services,
Washington, D.C................................................ *
Vera, Mauricio, SDBU Program Manager, Smithsonian Institution,
Washington, D.C................................................ *
White, Durie, Director, Office of Small and Disadvantaged
Business Utilization, Department of State, Washington, D.C..... *
Wiggins, Elois, Small Business Program Manager, Nuclear
Regulatory Commission, Washington, D.C......................... *
Williams, Linda G., Associate Administrator, Office of Government
Contracting and Minority Enterprise Development, Small Business
Administration, Washington, D.C................................ *
*Comments (if any) at various points throughout the roundtable.
WHAT IS CONTRACT BUNDLING?
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WEDNESDAY, SEPTEMBER 13, 2000
United States Senate,
Committee on Small Business,
Washington, D.C.
The Committee met, pursuant to notice, at 9:30 a.m., in
room SR-428A, Russell Senate Office Building, The Honorable
Christopher S. Bond (Chairman of the Committee) presiding.
Present: Senators Bond and Cleland.
OPENING STATEMENT OF THE HONORABLE CHRISTOPHER S. BOND,
CHAIRMAN, SENATE COMMITTEE ON SMALL BUSINESS, AND A UNITED
STATES SENATOR FROM MISSOURI
Chairman Bond. Good morning and welcome to another one of
our Small Business roundtables. I am pleased once again to be
able to welcome the directors of the various Offices of Small
and Disadvantaged Business Utilization, or OSDBUs. We had an
OSDBU roundtable last November. It was a great success. We
learned a lot from it. We thought we would try it again and we
hope to learn and to share information with you as we did
before.
I apologize, I have to leave to go to a VA/HUD markup in
subcommittee this morning. For any of you whose agencies are
independent agencies, you probably would like to know: we think
we have got the money to keep the Government running in the VA/
HUD agencies area, but it is close. It is always interesting.
Today's roundtable has a particular focus, the problem of
contract bundling. We have heard from small business owners
that it is the No. 1 problem. I had a women's small business
conference in Kansas City in June of this year and contract
bundling was really an overwhelming problem for women small
business owners, as well as all other small business owners.
The Small Business Act challenges the OSDBUs to ensure that
small business has ``the maximum practicable opportunity to
participate'' in agency procurements. You know how difficult
this is, however, when agencies take discrete, small contracts,
and roll them into massive procurements that are too large for
small businesses to handle.
That is why the Small Business Reauthorization Act of 1997
directed OSDBUs to help identify instances of such bundling and
to recommend alternative approaches to ensure small business
participation. The law also enhanced the SBA's ability to
identify and challenge bundling. That is what we will focus on
today. The SBA recently published its final rules to implement
the 1997 law, and we would like to hear from you today in
detail about how those rules work, could work, should work, and
will work in the real world.
Last year, the Federal Government engaged in over 10.5
million contract actions worth a total of $199 billion. On
average, that means almost 20 contract actions every single
minute of every single day of the last year. Every minute the
Government purchased an average of $377,000 of goods and
services. We, the Congress, could not review all those actions.
We depend upon you to help make sure that the appropriate share
goes to small disadvantaged businesses.
We reserve the right to review and oversee any of the
actions as circumstances warrant it, but we know it will be
more productive to have a sound agency review process in place.
Solid anti-bundling regulations will allow those close to the
action to intervene in time to make a difference. I think that
the SBA's long-overdue publication of those rules is a step in
the right direction. Again, we welcome your comments.
Publication of these final rules also permits the Federal
Procurement Data Center to make software revisions to collect
data on bundling. A study I requested from the General
Accounting Office indicated that publication of those final
rules was the last hold up in getting that data collection
started. We cannot simply wait for those data to accumulate so
that we have a statistically useful sample. By that time, it
may be too late.
Someone out there has the information. That is one reason
we are coming to you--as the advocates for small business at
your agencies. What have you observed in the contracts you have
seen? The SBA's rules provide thresholds to determine when a
bundling provides ``measurably substantial'' benefits that may
make bundling ``necessary and justified'' under the law. But we
ask you the question, ``How do these thresholds compare to the
size of the contracts you see at your agencies?''
Finally, the SBA rules do not expressly mention the OSDBUs
as part of the process. The SBA envisions a vigorous role for
the Procurement Center Representatives or PCRs. How sure are we
that PCRs will even find out about proposed bundlings? Can you
find out about them in time to take remedial action?
These are questions we would like to have you discuss
today. We hope to learn from your personal experiences. We
appreciate very much the hard work you do. It sometimes seems
like a thankless job, but I can tell you it means a great deal
to the women and the men who are out there trying to make small
businesses work, and we want to see them get their share of
contracts.
We, at the Committee, hope to develop a closer relationship
with you. We want to learn from your experiences and we
appreciate your coming to share them with us.
I am off to an appropriations hearing. My colleague, good
friend and Ranking Member, Senator Kerry will be joining us
before long. Obviously, we have the staff here, and the staff
for all the Committee will be paying a great deal of attention.
We thank you for your time and wish you well and look forward
to the guidance that you can give us today. Thanks very much.
Mr. Smith. Good morning. Thanks to everyone for being here.
Let me just say a couple of quick words about how this works.
Most of you were here last year so you already know, but we
will go over the ground rules just for a quick refresher.
Generally, we have found it works very well that if you
have something that you want to say, just take your name tent
and turn it up prominently so that I can see it from over here,
and I will be happy to get to you just as quickly as possible.
That has proven to be the best way to let us know when you have
something to say.
Obviously, it is not a confrontational setting of any kind
so it is a chance for you to throw something out if you have
something you would like to say on these issues. If not, if you
have nothing to say on the subject at hand, that is fine. It
will help us to stay on time. So that is good, too.
We are not really going to try to look so much at specific
contract actions that are out there that people are concerned
with. Most of those are hideously complex and we will not
resolve this morning whether they are good or bad for small
business or good or bad in terms of the bundling regulations.
Our hope here is to focus on the process rather than on
individual procurements. Now, individual contracts may come up
to the extent that they illustrate the process; however, the
hope here this morning is to focus on the process.
We are not really out to attack the regulation. When we
wrote our law 3 years ago, we took a stab at this issue and
tried to come up with something that works, and the SBA has
done the same thing and taken a stab at it. We are all going to
learn from this experience, and hearing about that experience
is what we are trying to do here today.
So, that is all that I had for opening. Patty, did you want
to say a couple of quick words?
Ms. Forbes. Thank you all for coming. It is really a very
impressive group. I did not realize there were quite so many of
you but I am glad you could make it today.
This is obviously a very important issue for small
businesses. We are trying to struggle, this Committee is trying
to struggle with the conflicts of streamlining and reserving
contracts for small businesses or making sure there are
contracting opportunities for small business. We do have
concern that if there is too much streamlining there will not
be enough competition when, in fact, we need competition in the
future.
Senator Kerry is going to try to come. He has a scheduling
conflict at this time which is why he could not be here to open
the roundtable with Senator Bond but he will be very interested
in all your comments. So thank you very much for coming.
Mr. Smith. Thank you, Patty. Also just one quick reminder
as you see us trading the microphones back and forth, please
feel free to do the same so that our court reporter is able to
get a good record of what is going on and to generate a useful
transcript. It helps also if, when you are speaking, and given
the size of the group, if you will identify yourself and the
agency that you are from.
I want to start just a little bit with the question--the
title of the roundtable is ``What is Contract Bundling?'' and
you see that statement is written a little farther down on the
agenda. I want to start with the broader question of who
decides.
I have a chart here, and you have copies in your packets.
If you look, there is one that reads, ``Does Procuring Activity
Need to Supply Documentation To PCR for Buying Activity?''
[GRAPHIC] [TIFF OMITTED] T8451.001
Mr. Smith. That issue is what gets the whole ball rolling
on this regulation: when a proposed contracting strategy is
underway that needs the attention of small business advocates
at the agencies and at SBA. This chart here illustrates that
there are four basic screens that proposed strategies have to
go through to determine if requirements need documentation
submitted to the PCR.
The first screen tests whether it is something that is
currently being performed by a small business. This is a
relatively objective thing. You can see whether there is a
current contract that small business is doing. You can
determine that.
Is participation likely or unlikely by small business? That
is a little bit on the subjective side.
Does it package discrete construction projects? Again,
objective.
And then we have the contract bundling definition itself as
the last screen.
If you get past all four of those screens, no documentation
is required to the PCR or the SBA Office of Government
Contracting.
So my question to you, based on your experience in dealing
with these problems at your agencies, is: will the SBA's PCR
ever get documentation about a proposed bundling action to get
the chance to review it in the first place? Will the
documentation go to the people who need to see it and will PCRs
even know that something is in the process that needs their
attention? What have you observed in your agencies with this
regulation?
Mr. Denniston.
Mr. Denniston. Somebody has to start this off. Scott
Denniston, Department of Veterans Affairs.
For a minute forget the definition of significant bundling,
the $75 million, but just look in terms of consolidation, if
you will, of discrete opportunities. The answer to your
question, as it relates to the Department of Veterans Affairs,
is no.
The reason I say that is because we have got 200 buying
centers around the country, but we have PCRs that are assigned
to less than a dozen of those 200 facilities. So just by those
sheer numbers, most of the facilities that we have do not have
PCRs covering them.
Mr. Smith. How does that compare to other people's
experiences?
Mr. McCall.
Mr. McCall. Stan McCall, NASA.
We have about 10 buying centers. Any requirement, not
necessarily based upon the $75 million dollar range, should
face some mechanism to involve the PCR in anything of this
magnitude. The normal process should provide some involvement
with the PCR to determine the impact the contract is going to
have on small business.
Normally, if you have got a relationship going, there is a
dialog on the overall program and anything of that significance
will just automatically be discussed.
Mr. Smith. That is actually one thing I definitely want to
focus on, because I want to know, in places where PCRs have
been assigned, are they part of the acquisition team to begin
with? Do they know what is happening? Are they part of the
sessions as the strategy is being prepared, or do they simply
have to hope that they can find out about it as things go
along?
Mr. Bryan.
Mr. Bryan. Ken Bryan, Department of Justice. I think one of
the significant things that you just talked about was the
presence of the PCRs themselves. Again, we are not slamming
anyone, here. But because of the cutbacks of the PCRs
themselves, there are not that many to go around to be able
even to review the contracts you are talking about.
At the Department of Justice I cannot remember the last
time that our PCR may have reviewed a consolidated contract, or
any contract for that matter. And it is not because they do not
want to but, again, it is because of the scarcity of the PCRs.
Mr. Smith. Ms. Brown.
Ms. Brown. Jeanette Brown, EPA OSDBU. The same thing here
for the EPA. We are in contact with the PCR. We talk when we
need to, but my PCR is assigned to four agencies and as a small
agency we do not get that kind of attention.
Mr. Smith. Ms. Pinson.
Ms. Pinson. Yes. Tracey Pinson, Department of the Army.
We experienced the same problem in terms of coverage of
PCRs. We have over 200 buying activities and some PCRs are
assigned there on a resident basis, and some are roaming which
means they get there if they can. But we do have our small
business advisors there, small business specialists there at
all of our contracting activities that do review all the
acquisition plans that come out of contract.
In fact, there is a Form 2579 in the Defense Department
that basically requires the SADBU to concur on the acquisition
strategy.
Mr. Smith. So there is a place for you and your office to
sign off?
Ms. Pinson. Not my office but, yes, at the contracting
office level.
Mr. Smith. Right. Someone in your office at some level to
sign off that they have seen it?
Ms. Pinson. SADBU. Right.
Mr. Smith. And that way it gets routed past----
Ms. Pinson. And if there is a PCR assigned, then that PCR
would also have to sign off on that 2579 as well.
Mr. Smith. I see.
Ms. Williams.
Ms. Williams. In conjunction with the number of PCRs we are
the first to admit that there are not enough. We have tried to
get coverage where it is possible and we have hired an
additional 13 PCRs to try to expand our coverage but our
regulations also say that when there is not an applicable PCR,
the documentation should come into the area office that has
responsibility for that activity. As Ms. Pinson mentioned,
agencies have small business specialists, and our PCRs work
with them in order to review these requirements.
I mean if there were not bundling regulations the PCRs
would still have a role to play in looking at opportunities
that should be set aside for small businesses. So all of this
is still within the normal responsibility of the small business
specialists and the PCRs.
Mr. Smith. That is an excellent point to make. One thing
that I wanted to ask regarding the SBA Government Contracting
area office, when notification comes in, is there a person in
that office who is asked to do something with the documentation
when it arrives? Is there someone at each area office that is
the substitute PCR for this office? One of the charts in your
packet describes this situation.
[The chart follows:]
[GRAPHIC] [TIFF OMITTED] T8451.002
Ms. Williams. We try to funnel it to the appropriate person
to handle.
Mr. Smith. Is it possible to cover all the workload?
Because I could see an area office covering a lot of
contracting activities and getting a lot of material that is
more than one person can handle. What is the word you are
hearing on how that is working?
Ms. Hopewell. My name is Luz Hopewell. I am the Associate
Administrator for Government Contracting at the SBA. We do have
a very large workload. I just started with the SBA 2 months
ago.
I have been evaluating everything that is going on. The
workload on the PCRs is really significant. The number of PCRs
that we have across the country is very limited. I know the SBA
has taken corrective action and we have actually hired 13 new
ones that we are training at the end of this month. Then for
2002 we will be getting 15 more. But I think in terms of the
requirements, we do need more coverage.
Mr. Smith. So it would be helpful to have more staff. It
would also be helpful to make sure you have a process--
something like the Army has--where people actually get
something routed past them to make sure that it actually gets
seen?
Ms. Hopewell. That is correct.
Mr. Smith. That actually raises another question. Is there
some place where acquisitions, before they end up in Commerce
Business Daily, are printed or some sort of information is out
there that is a resource where people who are small business
advocates can look to find out about stuff that is happening,
or is it just kind of a game to see if we can get the
acquisition out the door before the small business people find
out about it?
I thought I saw that Mirinda Jackson had a comment, I am
sorry, a moment ago.
Ms. Jackson. I was going to comment on a previous question.
I am Mirinda Jackson with the GSA.
We have a process in place that allows the PCR to sign off
on all of the GSA's procurements that are not set aside for
small businesses. We have a form that is called a GSA Form 89.
Mr. Smith. I see. So some agencies have various forms that
do allow the routing. Some do not, but some do, is the
impression that I am getting; is that about right?
Stan McCall.
Mr. McCall. We call it an acquisition forecast.
Mr. Smith. Right.
Mr. McCall. And anything of this magnitude would probably
be caught in the acquisition forecast. We probably would give
some kind of indication that it would be a bundling-type
activity.
Mr. Smith. I see. And that is OSDBU that puts that out?
Does everyone put out the forecast from OSDBU or is that other
places? It looks like we got a lot of yeses there.
Let me look at a couple of specific questions on this. I am
sorry, Ms. White, you had something?
Ms. White. In addition to the forecast I know some of the
agencies also publish an inventory of active recurring
contracts that kind of cues people that, next year, a
particular contract is coming up. We also have on our website
at the State Department our Information Resource Management
(IRM) strategic plan, which high-tech companies can read to see
what is coming up.
Mr. Smith. I see. Let us go ahead and look at a couple of
points on the specific tests here that are on this chart.
Again, you have a copy in your handouts.
[The chart follows:]
[GRAPHIC] [TIFF OMITTED] T8451.003
Mr. Smith. This kind of raises a question that I had when I
was going through the regulation. There were two pieces of it I
was not sure how they fit together.
One of those was the requirement to perform market
research. The market research seems to end up with the judgment
of whether the benefits are measurably substantial and then you
can make a judgment whether the bundling is necessary and
justified. It seems to me that if you get all the way down to
the test here, the last diamond of the chart that asks, ``Is
the acquisition strategy a bundled requirement?''--then the
Agency has to submit a written statement stating that the
bundling is necessary and justified. Then obviously, at that
point, they need to have the market research done in order to
be able to make that statement and supply that documentation.
As part of the market research process, it says that the
acquisition team should consult with the PCR, or the Office of
Government Contracting. It does not say that they must but that
they should.
Have you all run into some examples of the market research
and how that is working? There is one instance that I know of
with the Air Force, but I am not aware of other instances in
the market research process and how that works yet. Mr.
Capuano, you had something on the previous issue I think?
Mr. Capuano. Joe Capuano, Department of Transportation.
I wanted to mention on the PCR issue--of course, we commend
the SBA for getting additional PCRs. We are very fortunate at
Transportation. We feel we have one of the best in Reggie
Holloway. He is resident in our headquarters building. We have
been very fortunate.
I also think the issue of establishing relationships with
the small business specialists throughout the department and
with our procurement officers is very important. Reggie
Holloway does that. We include him in all of our monthly
meetings. We include him in our major decisionmaking and he is
very helpful to us in that respect. So, I think it is important
to establish the balance, especially on large procurements.
The second point is on the procurement forecast. Many of us
publish it electronically on our website. Transportation has
one of the better websites in the Government. We are very
pleased with it.
But again in working with the PCR it is very important to
involve them even as you get into your procurement planning
processes. And that is, I think, where the issues are because
they are so drained in terms of other responsibilities and
other programs. The key issue is how to develop the priorities
for the PCR working together? I think that is extremely key.
Mr. Smith. Thank you.
Ms. Pinson.
Ms. Pinson. On the issue of market research, we found that
it is very easy to just say we will put something in the
Commerce Business Daily to ascertain the interest in the small
business community and if we do not get any interest, so be it.
But we found that we have had to go one step further and work
with the SBA, ask them to give us firms and also hold forums
with the small businesses that may be interested in the
procurement, because invariably on some procurements the Small
Business Administration might appeal us. We want to demonstrate
that we did adequate market research and that is not just
putting a notice in the Commerce Business Daily because for
whatever reason we do not always get a good response.
Mr. Smith. Does the likelihood that the SBA might appeal
become, basically, a club that can be used to say this is a
reason why you should get the PCRs in early to avoid delay at
the end of the cycle?
Ms. Pinson. I think so. Yes.
Mr. Smith. Ms. King.
Ms. King. If I could just follow-up on what Mr. Capuano is
talking about in regard to the PCRs and the procurement
forecast from the perspective of business owners: How do they
know about these PCRs? How do they know where they are? How do
they know they can get in touch with them? And things like that
because relationships should be developed both on the PCRs
extending outreach to small businesses and vice versa.
Small businesses need to be proactive with these PCRs but
they need to know who they are and how to get in touch with
them.
The second point is on the forecast. There are still some
agencies that do not put their forecast on their web page.
Whatever the agencies and OSDBUs can do to deal with that, it
is necessary. It really needs to be, in the information age, on
the web pages.
Mr. Smith. Thank you.
Mr. Bryan.
Mr. Bryan. To follow with what Tracey Pinson was saying, I
think the Commerce Business Daily (CBD) is an important tool
that all the agencies use. I know at the Department of Justice
even though it is, in fact, a part of the market survey, many
times that is a copout. One of the things that I have heard
many small business representatives say is that they do not
actually take it seriously because many times they think that
by the time it hits the Commerce Business Daily it is already
``awarded'' to someone anyway.
So I think this may be one of the reasons why some of the
smaller businesses are not necessarily responding to the
Commerce Business Daily--because they do not necessarily take
it that seriously.
Mr. Smith. Ms. Jackson.
Ms. Jackson. We use the CBD but we also use some of the
small business media. We use the Set-Aside Alert. We use the
Minorities In Business Insider. We post all of our major
acquisitions on our home page. Whenever we have a major
acquisition we do what we call a networking session. We try to
bring together potential prime contractors and potential small
businesses so that they can consider partnering or doing a
joint venture. And that has worked for us.
Mr. Smith. Jeanette Brown.
Ms. Brown. Even after it is publicized in the CBD I know
there is a tendency--because we have to make a recommendation
as to whether or not there is a small business community out
there that can, in fact, do the work. The program offices are
really sharp in coming up with ways of saying that they are
technically not qualified.
A lot of times when the small businesses respond they give
us a general response in terms of what their overall
capabilities are. Often that is to their disadvantage because
they do not speak directly to the requirement that is at hand
and they may or may not have enough information to give us at
that time because it is a brief synopsis of what the
requirement is. That also is a barrier to the small businesses
participating. That is what we have seen at the EPA.
Mr. Smith. Would it be useful, and I have not seen one of
these notices in Commerce Business Daily or in the various
other media on this--is there usually a phone number where if
people do not understand they should call and develop a
relationship and ask questions about what the information is
that you are seeking and how they can be responsive? Or how
does that work?
Ms. Brown. There is a phone number and a point of contact
and we also solicit information over the Internet.
However, when the paperwork comes in what we have seen in
the past is that it is not detailed enough to make a valid
determination as to whether or not a small business, in a lot
of instances, is really qualified for the work.
Mr. Smith. Let us go ahead and move on to the next phase
here. Thank you for your input on this question.
We will look at the main focus here on ``What is contract
bundling?'' You will recall that the last screen before we
decide whether documentation is required for the PCR or the
Office of Government Contracting is, ``Is the acquisition
strategy a bundled requirement under the definition in the Code
of Federal Regulations?''
I think some of you saw the definition as you came in the
front door here this morning. We put it out on the little
poster there. It is quite an involved little definition. There
are a lot of implications to some of the word choices and all
those other good things.
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Mr. Smith. I have actually something a little more basic to
ask and that is what is a ``contract'' and how does that differ
from a ``contract action?'' I understand ``contract action''
takes in something a little bit broader but what constitutes a
``contract'' as used in the bundling definition? And I can see
that there would be a number of things that might happen that
people would say, ``Well, that is not really a contract so,
therefore, it cannot be a bundling.''
What are you observing on that question? What constitutes a
contract for the purpose of this definition? I have a specific
question if no one volunteers.
Actually, the following question I guess is on the question
of Indefinite Delivery/Indefinite Quantity contracts (IDIQs). I
have to say I am not sure exactly which one is the broad
categorical term. I have seen IDIQs. I have seen multiple award
contracts. I have seen Blanket Purchase Agreements (BPAs). I
have seen Government-wide Acquisition Contracts (GWACs). I am
not sure what the broad-basket term is for all of those. I
would be interested in some discussion of how those differ from
each other.
The impression that I have is if you have a contract that
is a standing arrangement to buy from somebody and various
agencies come to it and buy off of it, they do not consider
those additional orders to be contracts. They consider them to
be orders, and, therefore, they are not contracts, and even
though you are coming from several different agencies it does
not constitute a bundling. What are you observing on that
score?
Mr. Gerich. First of all, I am Mike Gerich from the Office
of Federal Procurement Policy. Because you have a little
problem, I guess, on the definition of contract, I will take a
shot and I will hope that individuals will come in. Now as far
as experiences you are going to have to look to the agencies
and their actions there.
But the regulatory definition of contract, procurement
contract, et cetera versus the general legal definition of
contract--procurement contract obviously involves something the
Government is buying as opposed to giving something away as far
as grants.
As far as contractual actions we have a procurement
contract where you actually sign a contract, a contract
document, that is generally the procurement contract. The
Government is buying something. A contract action might be
something like a contract modification as opposed to a
beginning contract. You also might have orders under a contract
where you already have a contractual document in place.
It gets a little sketchier when you come to multiple-award
contracts and orders under those, whether an order might be a
contract per se for one purpose versus a contract for other
purposes.
Generally when you fund something, an order under a
contract you are adding additional funding. That traditionally
is considered another contract. Whether that is a contract for
the purposes of contract bundling I do not know. I think that
is probably where you are driving at. That is where we need to
probably flesh it out a little bit.
Mr. Smith. Right.
Mr. Gerich. But that is just the general definition.
Mr. Smith. Are there differences for this purpose between
the BPAs and the GWACs and the IDIQs and various other things
that seem to be variations on the theme here or are they pretty
much all the same thing at least on this particular question?
Mr. Gerich. My understanding is that some agencies are
issuing supplemental regulations to the FAR, the Federal
Acquisition Regulation, to provide more specific guidance on
how to handle those orders. So there are some agencies that
have gotten more specific in that area and how to handle this
for bundling.
Mr. Green. Mike Green with USDA.
When we talk about contracts--anything that we use to buy
goods and services is a contract. I think a lot gets confused
with the FAR in using contract procedures.
We have contracting procedures and we have got simplified
acquisition procedures where, in fact, the question has to be
raised: Is a simplified acquisition a contract? The answer is
yes because we are buying a good or service. When people,
companies, and government employees use the term contract they
are typically talking about a document to buy goods and
services even where different types of procedures were used to
buy that product. And that is what we have a contract for.
Now these IDIQs, these BPAs, these GWACs, are all basically
the same. One is a contract and one can be a simplified
acquisition with zero dollars in it and you issue task orders
on an as-needed basis whereas an IDIQ typically is relegated to
the use of that Federal agency.
A GWAC contract can be a huge contract with maybe a
stipulated amount, over the contract amount for the original
buying agency, where other agencies can also buy off that by
issuing task orders. For all intents and purposes I would think
any GWAC contract would be a bundled contract if it is going to
be that big.
Any IDIQ contract, if it does not go to a small business, I
think we can consider a bundled requirement because when you
start lumping all these things together and giving Contract
Line Item Numbers (CLINs) and all this, you have one contract
where anybody can buy from that one source. If you are buying
services, hardware, software from that one source, you are
cutting the potential for other small businesses and other
businesses who compete with that product.
Mr. Smith. So if you have an arrangement in which different
agencies can buy off of that same instrument, those probably
would have been separate contracts from each agency previously.
And now, you have a standing arrangement where they can all buy
off of the same thing and it becomes a de facto bundling even
if technically it is not.
Mr. Green. Government-wide bundling is what that is.
Mr. Smith. OK.
Mr. Green. And then IDIQs are more of a localized agency
bundling.
Mr. Smith. Esther Aguilera, you had some thoughts?
Ms. Aguilera. Yes, thanks. Cordell, I agree with Mike Green
there. At the Department of Energy, we recently had to issue
some guidance from our procurement head, as well as our Deputy
Secretary, to clarify that GWACs are covered within the
contract bundling definition because when we had the lawyers
look at it they could not make a clear determination whether
that was the case or not.
So we just decided to go ahead and make it and send the
word out that that is the case. One thing that is happening is,
in a GWAC where you have a company chosen off of a schedule and
that schedule only has large businesses in it, they are setting
some of these up to then add more contracts and requirements
later on.
So they build on that vehicle and that I think is how the
GWACs are being used.
Mr. Smith. So you modify it down the road and basically it
is the camel's nose under the tent and then you can modify it
subsequently and it just gets worse.
Ms. Aguilera. Right.
Mr. Smith. And if the modification is a contract action,
not a whole new contract, it would never come under these
rules?
Ms. Aguilera. Right. Well, what we did clarify at DOE is
that for new contracts, subsequent modifications would come
under the rules. We would have to review them for potential
small business impact. But if that clarification were not in
place, they would be able to go through the process of bringing
modifications under that larger contract without our review. So
we were able to catch it and have a process in place to have
that review. But it is a potential danger there.
Mr. Smith. Lynn King, you have had your card up for some
time.
Ms. King. I am actually here also representing Patricia
Stout who is a council member, National Women's Business
Council, and unfortunately she was unable to make it. Patricia
owns the Alamo Travel Group in San Antonio, Texas. She is a
small business owner.
She prepared a definition of contract bundling that she was
going to offer and I think it is a good perspective from the
small business owner on what her perception is of contract
bundling. And I will just read her words.
The bundling of government contracts is a consolidation of
requirements that may provide obstacles to participation by small
businesses. The contracts are so large that it limits the potential
prime contractors to a few giant companies.
In fact, the potential contracts are so large they even limit the
ability of medium-sized companies to bid. Bundling creates offerings
that exceed the capability of small- and medium-sized businesses and
reduces participation in these types of contracts to a mere fraction of
the available competition. This runs contrary to every principle of
competitive procurement.
Mr. Smith. Mr. Foreman.
Mr. Foreman. Tim Foreman from the Department of Defense. In
regards to the IDIQs, BPAs and GWACs I think the important
issue from a small business standpoint is the new environment
that we are operating under in procurement, as a result of the
Federal Acquisition Streamlining Act (FASA) and the Federal
Acquisition Reform Act (FARA) and pressures on personnel
reductions in the Department of Defense we have gone from about
460,000 personnel involved in procurement down to 280,000.
These are convenient tools and methodologies to get
contracts out quicker. I do not know if I can say better,
faster, cheaper but quicker is the key word, less
administrative cost. And it is a new environment and does have
a tremendous effect on small businesses. It does have a
tremendous effect on our ability to meet the various statutory
goals now that we negotiate with the SBA. So it is a critical
issue.
Do I want to turn the clock back? I do not know that I do.
I have also, I think, learned a lot. And I think I have learned
a lot in terms of small businesses that can perform other
things in the commercial arena and also have been somewhat
successful in these other arenas. So that is just food for
thought, more than describing what they are.
By the way, the largest of the group is probably the
Federal Supply Schedule, which we did not really talk to but
that is a huge and growing arena.
Mr. Smith. Right. Actually I was hoping that someone would
discuss all the different flavors of this thing. I had some
questions on the Federal Supply Schedule that I wanted to do as
follow-up but no one took the bait. Terry or Terrence, which do
you prefer?
Mr. Tychan. Yes, Terry Tychan.
Mr. Smith. Nice to have you here.
Mr. Tychan. I am from HHS and currently I am acting OSDBU
while we are replacing ours. I have had a chance to have some
conversations with all of our contracting officers and small
business specialists because I have gotten a lot more
interested in all of these issues and how we are achieving or
not achieving our goals.
I just wanted to mention and kind of echo the last remarks
that the idea of GWACs and Federal Supply Schedules and all
these larger-type contracts even transcend the questions of
bundling, the issues of bundling. It is just as was described.
It is all the reforms. They are good, they are very good in
a way, but they present a very general problem. And that is:
How do we meet our small business goals and ensure that we
foster the capacity of small business and still take advantage
of sensible economies of scale and so on? And I think that is
where our department is really struggling, to see how can we do
this. There have been a lot of good things that agencies have
done in setting up those contracts.
I think that is probably a key area where we want to do
more and where we should look at how one sets up these
government-wide contracts to make sure that small businesses
are able to compete well. So just a general comment that that
is a problem across the board.
Mr. Smith. Mr. Neal.
Mr. Neal. I am Robert Neal with the Department of Defense.
I have got a couple issues with the description that IDIQs are
just consolidation. We go through an extensive process of
competing to select firms for IDIQs.
We are in the process now that we have looked at a select
number of case studies and what we have found is that a large
number of those IDIQ awards have gone to small businesses with
a substantial increase in the amount of contract opportunity
that results in awards to small businesses. So to make the
general statement that an IDIQ keeps out a small business I
think is inaccurate.
I think we need to recognize that there is a balance that
has to be struck here. We have competing pressures. The most
difficult task in looking at all of this is trying to strike
that balance, being able to understand that we have pressures
that are pushing all of our departments, with reduced
personnel, to be more efficient and more effective and at the
same time provide the same opportunities to small businesses.
IDIQs in and of themselves do not preclude small businesses
from winning. GWACs do not preclude small businesses from
winning. The strategies that we employ in selecting the firms
are the key here. When we have reserves that are set aside for
small businesses it results in substantial improvement and
opportunities for small business.
We have a number of major bundle opportunities here where
we have gone to the Nth degree to assure that small businesses
get good opportunities. That means that the management has to
be committed. It is not the tool, it is the management of the
process that I think we really ought to start focusing on and
stop throwing rocks at the tools because the tools are only
effective in the hands of the individuals that are using them.
Mr. Smith. Ms. White.
Ms. White. I would just like to talk a little bit more
about that segue with your comments, Mr. Neal.
Oversight is a major problem with the GWACs as well.
Whether an IDIQ and a GWAC and so forth constitute a contract
is almost secondary to whether the OSDBUs and/or the PCR even
know what is going on. We have no ability to influence whether
something is going to go to a small business or not if a
program officer decides to use a GWAC or another agency
contract of some sort.
A lot of people are using them to circumvent the small
business program in my opinion. I also think it is going to
create a problem in measuring how all the streamlining is--
well, for example, Federal Supply Service (FSS) does allow the
funding agency to take credit for an award, but for all the
other non-FSS GWACs it is a matter of the discretion of the
agency and whether the agency pushes that award and whether it
is Commerce or Federal Technology Service (FTS). If we push to
get the credit for it, then yes, but if not, there is no
uniformity.
So we do not even know. Our measurement is sporadic as well
because sometimes an FTS contract is credited to GSA, sometimes
it is credited to State. So we do not know if we are getting a
good measure.
Mr. Smith. Thank you. Senator Cleland of Georgia has joined
us. Senator, if you would like to say a few words, please feel
free.
OPENING STATEMENT OF THE HONORABLE MAX CLELAND,
A UNITED STATES SENATOR FROM GEORGIA
Senator Cleland. Thank you very much. I would like to
congratulate the Chairman for convening this roundtable. May I
say that the issue of contract bundling is an important one to
many small business owners in this era of mega-mergers, global
economics, and e-commerce. Small businesses still remain the
backbone of our Nation's economy despite all the factors
stacked against them.
All too often government contracts are being bundled to
create a single contract that is simply unattainable for many
small businesses and I appreciate the Chairman convening this
meeting. I am a Member of the Small Business Committee, and I
am interested in your input here.
In my own home State of Georgia there is a bundling issue
that exemplifies the difficulties and the relationship between
the Federal Government and small businesses. The heated debate
over the Air Force's Flexible Acquisition and Sustainment Tool,
or FAST Program, at Robins Air Force Base is just one example
of many similar cases across the country.
Certainly, as a friend of the Air Force, I find myself in
the difficult position of wanting to do whatever I can to help
Robins Air Force Base save money in a time of increasing
responsibilities and extremely tight military budgets. The Air
Force believes that this program, which also is under
consideration at the other Air Force depots in Oklahoma and
Utah, would conserve tax dollars and increase efficiency, two
objectives which I share.
However, I have always considered myself a champion of
small businesses and I know how important it is for the small
business person to have access to government contracts, both
prime contracts and subcontracts.
The concern, that some small businesses in Warner Robins
and Macon have not had access to these contracts, is something
I am closely monitoring. I have written to Secretary Cohen
regarding this issue and I am pleased that the SBA is also
focusing on trying to protect the interest of small businesses
in such cases. As I mentioned earlier this is just an example
of the difficulties faced by both the Federal Government and
small businesses.
I hope today's roundtable will help cast some light on some
of these difficult questions so that both the Federal
Government and small businesses can operate efficiently and
effectively. Unfortunately, I have got to go to another
Committee meeting. I am unable to stay for the entire
roundtable but my staff will be here monitoring the testimony
and I welcome any comments from the representatives of the Air
Force or the SBA who may want to make a statement for the
record.
Thank you all for coming here today and I appreciate your
participation in this roundtable. I appreciate your interests
in the expansion and development of our small businesses. Thank
you all very much.
Mr. Smith. Thank you, Senator. Mr. DeLuca, would you like
to say something quickly?
Mr. DeLuca. I am Tony DeLuca and I am Director of Small
Business for the Air Force and thank you for the segue, Sir.
I appreciate that, to talk about what we have done in
Warner Robins and what we intend to do with FAST. By way of
background for those who are not aware of what we are
attempting to do, we are attempting to go ahead and put a tool
in place, as Robert Neal indicated, that would provide the Air
Force an opportunity to do three things.
First, it would give us an opportunity to go ahead and
obtain rare spares, rare repairs in a very timely fashion.
Second, it would be able to save the Air Force, we estimate,
over $100 million a year. And third, it would increase total
small business utilization by more than double the prime
contract awards and probably more than triple the
subcontracting awards.
We talked earlier about the issue of the involvement of
PCRs and the type of contracts that we look at. FAST and our
work on FAST has been going on for at least 18 months that I
know of in trying to work through that.
If there is a lesson to be learned here, and I would share
this with the entire group, it is that in the beginning when
you stop working through things and you are really unsure of
what to do, certain individuals will come out and make the
pronouncements that something is a fait accompli when in
reality it was not.
That was one of the difficulties we ran into at FAST. There
were things that were put out that were assumed to be the way
we were headed, which indeed was not that way at all.
When we first got into FAST, really the whole focus was
originally just on large business as prime contractors because
the work was thought to be so involved and so complex that
small businesses could not do it. The infrastructure required
in terms of being able to support payroll and so forth was
fairly heavy.
As we went through that we took a look at the work involved
itself. And there was a real concern that what we were doing
was going to take work away from existing small businesses down
at Warner Robins and throughout the United States. We found
that the work we were talking about was work that would be
added to the work already being done at Warner Robins.
What I mean by that, it was work that we had MIPRed
(Military Inter-departmental Purchase Request) in most cases to
the Army. The reason is that the Army had a vehicle that was
good for us, that we could get to quickly and that would be
able to satisfy the program manager's needs.
I think, for all small business people, we have to look at
ourselves and say what are we going to do? Are we going to put
our heads in the sand and say, ``Gee, that is no good'' or are
we going to provide the customer--in this case, the program
manager--an opportunity to have a vehicle that can at minimum
compete with something else that is out there? And that is what
FAST has done.
What we evolved into was a strategy that will have six
contracts in place, two of which will be awarded to small
businesses. We also address the area of bait-and-switch. This
was another concern that small businesses have raised where
they are part of a team when the contract is awarded, but guess
what, they do not get any work afterward.
We have addressed that through the incorporation of a
matrix which identifies the team members as well as the
Standard Industrial Classification (SIC) codes assigned to
those team members and the type of work they will do. So, when
those tasks are levied on the contractor, they must go to those
companies and if they do not, they have to come back to the
contracting officer before they can go to anyone else.
The other thing that we have done is we have assigned a 23-
percent total contract value to the subcontracting portion and
we intend to enforce that by measuring past performance in the
utilization of task orders. The other thing that we have done
is we have put in place an oversight board at the senior
headquarters in the Air Force, and we have invited the SBA to
join us on that senior oversight board.
We want to ensure that what we tell people we are going to
do, in reality we will end up doing. It is our sincere belief,
and it is my sincere belief--and I will tell you, Senator
Cleland, I have been in this job 10 years, I have been in
Federal work for 32 years, I was a former competition advocate
of the Air Force--this is a good deal for small business. And I
would not say that if I did not believe it. We have worked
through it hard and over.
What it comes down to is how do you balance the need to
ensure effectiveness and efficiency with the assurances that
small businesses need to play. We have letters that come to us
from small business teams that said, ``Hey, we believe in what
you are doing. Let us get on with it.'' And that is what we are
attempting to do.
I think when all is said and done, hopefully we will get a
contract in place, and we will be able to come down and sit
with this group and really go through, wholesale, the lessons
learned. I think from a standpoint of knowledge management,
which is a new buzz word everybody is throwing around, about
how one uses intellectual capital to ensure continued
improvement, we will be able to share that intellectual capital
with everyone. I hope that in the process we can all benefit
from what we are doing.
So, Senator Cleland, I want to assure you from an Air Force
perspective we understand your concerns. We feel that we have
addressed them, and we are willing to do whatever it takes to
ensure that people understand that.
Senator Cleland. Tony, a question. Andrew Carnegie once
said to put all your eggs in one basket and then watch that
basket. We are going to be watching your basket. OK?
Mr. DeLuca. Yes, Sir.
Senator Cleland. Thank you all very much.
Mr. Smith. Thank you. Luz Hopewell, would you like to take
a few minutes to comment because the SBA prepared the appeal on
this. Then we need to move on to our regular agenda. However, I
do want to get everyone's perspective on the record as long as
the issue has been broached.
Ms. Hopewell. As you know, we did submit an appeal to the
Air Force on the FAST contract. We did look at it very
carefully and we wanted to make certain that we were able to
balance the requirements of the Air Force as well as the
requirements for small businesses.
We know that when you develop a strategy early on, and take
into consideration the inclusion of small businesses in the
process, it can work. I just came from the Department of
Transportation and in Transportation we put in place two major
GWAC contracts: ITOP I and ITOP II (Information Technology
Omnibus Procurement). I am very proud to say that we had over
40 percent participation by small businesses as primes. They
were able to compete against large businesses for every task
order.
So it can be done, but the key to the whole thing is to
have an open dialog at the very beginning when you start to
develop the strategy that you are going to use for that
acquisition. I feel that the sooner the OSDBU directors as well
as the PCRs and the acquisition workforce come together and do
that development and that planning, the sooner you will be able
to succeed.
I would like to put in the record the three points that we
used in the appeal to the Air Force. One of them is that we
felt that the statement of work was too broad. Because it was
so broad it was difficult to point to small business
participation. The contracting office did not provide
information or complete the steps required to justify the
contract bundling in accordance with the contract bundling
regulations.
The other major point is that an inappropriate Standard
Industrial Classification code was utilized, resulting in an
assigned size standard of over 1,500 employees and that really
does not represent the majority of the work that is performed
by small businesses.
Mr. Smith. In the interest of moving on, if you, Luz and
Tony, would submit clean copies of your appeal letter and your
response letter, we will insert both of them into the record
and we will let readers of the transcript decide for
themselves. That way we can then proceed. Is that agreeable?
Mr. DeLuca. I agree because obviously we do not agree with
my good friend, Luz on this.
Mr. Smith. Unfortunately, I think we could spend the next 3
hours on this one.
Mr. DeLuca. Right. I agree. We have been spending 18
months; what is another 3 hours?
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Mr. Smith. Let us move on then to the next segment on the
specific standards and terms that are used in the regulation. I
apologize for those of you who had additional comments but I am
afraid we want to try to keep on track so the OSDBU council can
meet on time after this is over. The one thing that caught my
attention is one of the phrases that is used in the law and
which appeared in the SBA's regulation--the term ``measurably
substantial.''
In order to determine whether a bundling is necessary and
justified we look to see whether the benefits from it are
measurably substantial. Both words are important because I
thought the SBA seized on a very valid point in the
regulations. The term ``measurable'' implies quantifiable. If
you are going to measure it, you have to be able to put a
number to it and there is certain logic to that.
What I wanted to ask you was, how would non-monetary
benefits be calculated? Especially since the thresholds in the
regulation are expressed in terms of dollars. There are some
thresholds such as quality improvements, reduction in
acquisition cycle times, and better terms and conditions that
do not automatically come to mind with a specific price tag
associated with them.
I wonder how well we know how to translate those non-
monetary benefits into a monetary standard.
While someone is thinking of what to say on that, I will
give the reason why I have a concern with this. I used to be a
lot more thrilled with estimates of cost savings until I
submitted an amendment once to the Congressional Budget Office
(CBO) for an estimate. They came back with an estimate of $12
million plus or minus $2.5 million, which was about an error
margin of about 17 percent either way. I was kind of impressed
at the level of arbitrariness in these estimates, so that
concerns me.
Stan McCall.
Mr. McCall. I think Bob Neal said something earlier about
there being opportunities within bundled contracts for small
business participation. I think measuring the cost of doing
this is really what we need to be looking at. I think we are
paying a bigger cost than we realize.
My observation has been that bundling is wreaking havoc
with the development of new businesses. It is not only from the
aspect of creating bundled contracts that large businesses win.
We are also bundling within the set-aside programs themselves,
in that small businesses and 8(a) firms are putting them
together to make larger requirements. Once these instruments
are in place they tend to soak up every new opportunity that
comes along.
Now I feel that over time the smaller requirements that
were out there were developing the American small business
base, which was building up the tax base. That is where the
jobs are being created. It was also building competition, which
was giving us better prices. I can point to many examples of
small businesses that got their first small opportunity, grew,
and then they were able to compete against the large companies,
resulting in much better prices. But those opportunities have
been soaked up not only by large businesses but other small
businesses and 8(a) set-asides that grant these huge
requirements that the little start-up company does not have
access to anymore.
How do you measure that impact? You cannot but I know it is
there. And despite a 10-percent savings we might be getting up
front, we are paying a bigger cost with less competition, less
building of the tax base down the way. So where do we draw the
boundary of where you measure the cost.
Mr. Smith. So perhaps there needs to be a cost component to
the definition somehow. Although in that case the costs are so
wide you would be hard to attribute it to any particular
contract but I think that is a very important concern.
Mr. Robinson. Quick question. Based on the strength of his
argument----
Mr. Smith. Mr. Robinson.
Mr. Robinson. Yes, I am sorry, Jackie Robinson from GSA.
Based on the strength of your argument, Mr. McCall, what is
your recommendation?
Mr. McCall. I think one thing we have got to do is put more
than just a cost definition on a particular bundle. Other
additional approaches that we must analyze are, we must try to
define what we put to this test, including contract
consolidation, new requirements, a lot of things that are
really bundling but they are not called that.
Like I said we are even doing it within set-aside programs
but it is not subject to any tests when we are doing it there.
It is a start. Those are some of the things I think we could
address.
Mr. Smith. There was something that Charlie Alderman
mentioned to me some months ago before he moved on to bigger
and better things. And that was that there had been a study in
the early 1960's about the effect of contracting in the, I
guess it was at the Defense Department, and that before a lot
of the small business program was well-developed, things had
become so consolidated that a contractor was essentially able
to name a price. Does that ring a bell with anyone?
I have not been able to track down that study. I sure would
be interested in knowing where that is or if anyone knows who
produced it.
Mr. Neal. What we are in the process of doing now is what
we have gone through, as a commitment to the House Small
Business Committee, of performing a bundling study in which we
have invited several advocates to sit on our oversight review
board for the study. What we are finding--we did not find that
particular study because we did do a historical search and we
were not able to locate it--but what we are finding as we go
through the process is that the point that Stan McCall is
making is one that many of us in procurement positions have not
come to grips with.
With the economies of scale that we are asking folks to
look at, inherently we are looking for firms that have
capabilities that are not present in emerging firms. You cannot
ask us to serve the mature small business community and the
emerging population at the same time and reduce our resources.
You are having us at odds with ourselves.
When we consolidate and when we go for efficiencies you
have a tendency to look at mature firms with past performance,
with history, that you have less difficulty and you spend fewer
of your resources assisting. We do not have the people so we
are looking for mature firms that can hit the ground running
and do the job and we never have to look at them again. As we
look at all of our consolidations at whatever level, the study
is coming back to us and pointing out that we are having this
schism occur.
And so those are our preliminary results saying that we are
focusing now on mature firms at the expense of emerging firms.
Now we have a lot of programs that are out there for emerging
firms, but do we have contracts that would allow the emerging
firms to gain the experience? That is where we really have the
difficulty in the agencies. Because if I have a choice as a
program manager, I am not going to risk my program on an
emerging firm when I know that there are mature small
businesses that will give me a check in the check box and
satisfy my oversight committees if I use a mature firm.
So we are going to need some help in assisting our
leadership as we come up with innovative strategies to try to
enhance the opportunities for emerging firms. However, we are
going to need some tools in order to assist the emerging firms.
Now we used the Mentor-Protege program as one of the tools to
assist an emerging firm. But it requires a commitment on the
part of the commercial sector, requiring our prime contractors
to invest their resources along with the resources that we have
available. There is very strong sentiment that there should not
be a Mentor-Protege program where we offset the cost. If that
happens, then emerging firms are going to be dead in the
Federal marketplace.
One other point I want to make on this cost-benefit
analysis piece, when you ask the question of whether or not we
should have cost-benefit analysis, we have got to recognize
that we went through a long, painful process with the Office of
Management and Budget (OMB) Circular A-76 process to finally
get to the point where we feel we have a cost-benefit tool that
is useful. We have just begun to scratch the surface in small
business and looking at consolidations and recognizing that we
need a cost-benefit analysis tool that is useful.
Now that we have recognized that, we can benefit from
looking at what took place in the A-76 process and maybe
appropriate that cost-benefit analysis tool that took years to
develop, and also be able to use it in the area of
understanding, what are the costs and the benefits of doing a
consolidation. That is going to take us a little time. That is
something--as some of the preliminary indications that we have
gotten from our consolidation study show--that there is a great
demand for us to have clear, concise, detailed guidance to
everyone that is involved in the process on how to perform a
cost-benefit analysis as it relates to consolidations.
Because, as it is right now, we are throwing out very raw
generalizations to our contract folks and we are expecting them
to come back with A-76-type cost-benefit analyses and that is
not what we are getting from them. What we are getting is the
best that they have available to them at that particular point
in time and within their abilities. But we are not getting the
kind of detail that you would like to have, that we would like
to have in order to make informed decisions and help our
leaders make informed decisions on consolidations.
It is one area that we are going to have to spend a
considerable amount of resources, and when I say resources I
mean money, in insuring that we have a good cost-benefit tool
because that A-76 tool cost us considerable amount of resources
over a number of years.
Mr. Smith. And if we have already invented the wheel, there
is not a lot to be gained by reinventing it. Do you recall how
A-76 handles some of the non-monetary things like reduction in
acquisition cycle times and terms and conditions and the non-
monetary things? Does it have a process that has already been
thrashed out on how to translate those into dollar figures?
Mr. Neal. They have tried to thrash out many of those
areas. I would like to submit for the record copies of the
cost-benefit analysis that is utilized by the OMB as the
beginning where we can start to look and see where it may be
tweaked to be more appropriate for what we use in the
procurement field.
Mr. Smith. If you will submit that to us, we will make that
a part of the record. Thank you.
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Mr. Smith. Sharron Harris, you have been waiting very
patiently.
Ms. Harris. I would say that I recognize San McCall's
concerns and I agree with what Bob Neal is saying. Part of it
is looking at the tools that we have now that we are working
with and making determinations for how this bundling will
affect small businesses. There may be many small businesses
that participate if we are making multiple awards for a
requirement. That is a major opportunity if multiple small
business partners get an opportunity at their varying levels of
capability to perform. So we are still looking at the tools.
Mentor-Protege is one of those tools that can help us with
this. Subcontracting is another one of those tools if we are
looking at large business as prime contractors in the bundling.
And that is an area that we have got to do a lot of work in
strengthening how we manage subcontracting. There are a lot of
weaknesses in the tools that we have under subcontracting to
make it work effectively.
Ms. Williams. I just want to echo also what Bob Neal is
saying. When we put the rules together and looked at the
literal words of the statute, trying to do the measurably
substantial benefit analysis and testing cost was grouped
together as one factor. When we looked at trying to craft the
rule we said agencies can look at costs as well as the other
factors individually or in the aggregate to come up with their
analysis. But, we certainly do need help in trying to come up
with best practices that we can share with our PCRs as well as
with the agencies to come up with a good model for trying to
conduct these analyses. So we tried to craft the rule looking
at benefits and recognizing that cost is one of those benefits
that must be achieved.
Mr. Smith. As an offset to benefits, right.
Ms. Williams. Right.
Mr. Smith. Ms. Aguilera.
Ms. Aguilera. Thanks. I guess one of the key words that we
found was balance in here and from what Stan McCall was saying
there is clearly a role for the Federal Government to play to
ensure we have a strong small business community. But we also
have extraordinary tools through our contracting to help do
that.
The question becomes the tools and how we could promote
programs within our program office. If I were able to go to a
program manager and say, ``Listen, you do not need to worry, we
have got some extra resources here to do some business
development in that particular area of scientific work that
they are doing,'' they would get excited about it. Right now we
do not have that extra tool for business development.
I do think that the subcontracting area is a huge area that
is underutilized. I agree that prime contracting needs to
continue to have a very strong push, but we should consider
subcontracting as one of the ways where we can develop some of
the smaller firms and things of that nature. There are
weaknesses in subcontracting but that is a key tool.
Right now we do not have a particular goal and we do not
measure subcontracting and how much we do. There is a ton of
opportunity there. So there might be a balance in looking at
how we could leverage some of these opportunities.
Mr. Smith. Tracey Pinson.
Ms. Pinson. One benefit that I think that we have a
tendency to overlook, that we probably should be trying to
assess, is the extent to which small businesses will benefit
from the bundled contract. Invariably we may take 20 or 30
contracts and consolidate them down to one or two, but can we
package those contracts in such a way that small businesses
will still participate as prime contracts?
I think that is what, since we are kind of accepting the
fact that bundling is here to stay--I do not know whether we
want to say that publicly or not, but I think that is a
reality--but we want to make sure that small businesses can
still play at the prime contracting level.
So bundling is not always negative for small business. Now
it may be negative for that small business that is being
consolidated out of the process and may not be that one or two
that gets the contract but again, our objective is if we have
to live with the bundled contract, we want to make sure that
the small business can play at the prime contracting level. I
think that is a benefit that we have to take a look at, and a
reality.
Mr. Smith. Mike Green.
Mr. Green. Just a little follow-up on the subcontracting
aspect of bundled contracts. When you are talking about
subcontracting plans, $500,000 or a million dollars, you have
got these things called commercial plans that somebody puts
together for all business and one agency accepts it so that is
the plan that everybody accepts.
The way subcontracting is currently structured, there is
really no way to ensure that those companies, excluded from
government opportunities by a huge bundled contract, would have
an opportunity to participate as subcontractors instead.
The Government does not have a right to direct prime
contractors to consider specific firms for their
subcontracting. Prime contractors do that themselves. But it
would be kind of interesting to see if we are, in fact, losing
numbers of small businesses in the prime contracting game.
There is something to be done about commercial plans,
something to be done for each contract that we issue. For a
huge contract that the potential small contractors that have
been weeded out, at least give them the opportunity to compete
with that big prime for the requirements to become
subcontractors. Nine times out of ten the big prime will
already have their subcontractors in place and companies that
are doing business with the agencies do not have such an
opportunity to compete at all.
Mr. Smith. Jeanette Brown.
Ms. Brown. One of the other things, going to what Tracey
Pinson was saying, I think we also need to look at and strongly
encourage the small businesses to team together and do the
joint venturing so that they can go after these large
contracts. We do not see enough of that and I think it is our
job to work with them to get them in that position. If contract
bundling is here to stay and this is a factor that we have to
live with, a lot of times they can team together to go after
these contracts and win. But I think the onus is on us in the
small business community to work more with them and the SBA to
get them to that point.
Mr. Smith. Michael Gerich.
Mr. Gerich. If you will let me, I would like to just
backtrack a little bit. This conversation started on the
question of measurably substantial benefits, the statutory and
regulatory definitions, the SBA regulation, et cetera. In
defense of the SBA and also the Administration it did, in fact,
yes, take a long time to come up with those regulations in
interim and in final form. But I think that reflects the
difficulty in balancing these situations.
We have got competing, compelling interests on the part
of--and DOD has given you examples of the reductions in
manpower. We have to deal with these situations. Nevertheless,
we all are committed to small business participation. It has
only been since, I believe, July 26 that both the final
regulations on contract bundling, SBA's and the Federal
Acquisition Regulation (FAR) were put in place.
The difficulty, I think, in arriving at those regulations
reflects the fact that we have to balance these concerns: the
small business interest, the bundling interest, and the
procurement reform efforts that often reflect the reduced
resources we have. I would hope that before we delve into
mandatory changes in the statutory and regulatory definitions
of measurably substantial benefits, et cetera, we give some
time to operate for our agencies to experience these
regulations and find out what is necessary. You see examples
here where perhaps we need more best practices.
We need to develop more practices using these regulations.
Again, these may not be perfect but again, there was difficulty
at arriving at those regulations. That reflects the various
interests here: the interest of the major procuring agencies,
the SBA and all involved. So I am hoping that we will have a
little more time with those regulations and operations and
agency experiences with those regulations.
Mr. Smith. That is a very worthwhile comment. We are not
wanting to use this as a chance to throw rocks at anybody at
the SBA or the OFPP or anybody. This is just simply to get a
temperature check to see how people understand the regulations
as they currently are written and what they are beginning to
see as it starts getting underway. So it is really intended to
be more of an information session. So that is kind of what we
are shooting for here. Ben Saji, you had a comment?
Mr. Saji. Bundling, to me, seems to be really a return to
business as usual with the potential for monopolistic
practices. It was just a few years ago that we were using
strategies on how to break out some of those big dollar
contracts so that small businesses could participate. We did
that because there was no real savings to the Government in the
first place with what looked like monopolistic practices.
Now I do not see any promise of government benefit and what
we now say is we must have bundling procedures in order to help
the Government. Whether or not it is hurting the small
businesses seem to be clearly evident as they are screaming at
the top of their voices that they are being hurt. I do not see
how anyone is being helped by it.
Mr. Smith. Let me make one quick statement and raise
something for everyone and then move to you so that we can be
thinking about the next thought. One of the tiers that the SBA
came up with in its regulations was the $75-million threshold
of looking at measurably substantial benefits at a two-tiered
level, and trying to figure out when those benefits should be
reckoned as a different figure above a certain threshold. The
figure they used was $75 million.
The regulations--the explanation and justification I think
they called it--the SBA maintains records on the value of
bundled contracts and over the past 4 years they determined
that the majority of bundled contracts fell within a range of
$50 million to $75 million and that is kind of the origin of
that. And that is looking I guess at a government-wide basis,
just collecting from all over. I was curious though about some
of you.
Some of you have smaller budgets than others, and I was
wondering how you look at that $75-million threshold and how
that applies to your agency. Is it very high for your agency?
Is it very low for your agency? Or what is your experience?
Lynn King, if you want to go ahead and comment, but if everyone
would please be thinking about that.
Ms. King. This will sort of tie in a little bit. Again,
these are the words of my council member, Patricia Stout, and
this is her experience, not to throw stones but to just provide
information to the directors here from a small business owner.
Last year, the GSA issued multiple-award contracts for
travel services. That included a good number of set-asides to
small business. The GSA included multiple awards for nationwide
travel services whereby government agencies could select a
single travel contractor to provide services to all those
government agency's locations nationwide. This was done to
allow the greatest flexibility possible to the various
government agencies.
The sheer size of the GSA contract line item for the
nationwide coverage limited the competitors to the very few,
very large travel companies. Through this practice the small
business set-asides were not enforced. Just to give an example,
the travel contract for the Department of the Interior was
recently awarded to a nationwide single contractor for a total
of $49 million and that again, ties with the threshold $50
million to $75 million and has effectively removed its
purchases from the small business set-aside. The INS, the GSA,
and the SBA are a few of these agencies that are adopting this
practice and this just happened this year.
So I mean the issue of the $50 million to $75 million does,
I think, depend on the agencies because obviously DOD for their
contracting numbers that is all right, but smaller agencies and
independent agencies might not have that threshold level of the
$50 million to $75 million, maybe $49 million and under.
Mr. Smith. Tony DeLuca.
Mr. DeLuca. Just a couple of comments I guess. First of
all, I would caution us all that we do not take something out
of here as a given when indeed it has yet to be proven. What I
mean by that is, we are going through a study in DOD now
looking at what is happening in bundling and what is not.
So I would hate to have everyone leave the room thinking
that bundling is bad and we are bundling every contract we have
and that small businesses cannot play because that is not true.
We do not really know the answer to that yet. I think that is
something that we have to find out.
With respect to the teaming issue, I think that is a very
good point. The SBA changed the affiliation rule and I co-
authored a letter with the head of contracting in the Air Force
encouraging all contracting officers to take advantage of that.
We have done that. At Brooks Air Force Base we awarded a
contract to a team of two women-owned businesses for $100
million. Individually they could not have done that. So I would
note here again that is an opportunity that should be taken
advantage of.
The issues of tools and bundling and break-out reps--
reminded me of years back when I was competition advocate and
being there we had to fight toilet seats and hammers. The way
we did that is we introduced competition. Competition is
nothing more than the phenomena of the marketplace. We have a
cycle going now. And we see that cycle in large businesses.
I saw this statistic and it was in the Democratic platform,
and I am not saying I am for one or the other, but it stated
that of the 22-million jobs created in the last 8 years, 90
percent came from small businesses. So, are we bundling? Yes.
Is it affecting small businesses? Well, if job growth is really
there, I am not sure.
I think the other thing we have to look at, Cordell, is
that within the context of this overall 23-percent fandango, we
have got so many subgoals it is like, which one am I pushing
today? And oh, by the way, we in DOD have lost one of the
biggest tools we had, which was our small disadvantaged
business set-aside, because it was determined that we could not
do that anymore.
So I think as we go forth on this, yes, balance is to be
achieved, but I think we need to take a look at what is
happening in the environment out there. What does the economy
look like? Sometimes we have to step back and say, ``If we are
really going to make a difference, if the Federal Government is
really going to step in and do something, then we have to
understand that the role needs to be effectiveness, not always
efficiency.'' Effectiveness sometimes runs right smack against
efficiency, and that is something that we run into everyday.
Mr. Smith. Sharron Harris.
Ms. Harris. I agree with Tony DeLuca's comments but what I
was also going to say was that as we look at that $75-million
threshold for some agencies--and Agriculture is a large agency
that is still in the higher scale for industry specific
thresholds, and I know that creates a ton of confusion when you
are looking at industry-specific thresholds--but that $75
million is a large volume.
We do a lot of food commodity acquisition. Mike Green and I
were thinking. We cannot recall when we have done a food
commodity acquisition at that threshold and we are struggling
for small business participation in those industries. So that
is a substantial threshold. It may not be for DOD, we recognize
that there are agency uniquenesses but for some of the larger
agencies that is a significant threshold, especially when you
are looking at a rural constituency like the community we
serve.
Mr. Smith. Debra Murphy.
Ms. Murphy. Debra Murphy with the Library of Congress. Our
budget approaches basically $250 million a year so a $75-
million threshold is pretty high relative to our budget. But
what we do have is a commitment. We are averaging roughly about
60 percent of our awards going to small businesses. In the
context of individual development, individual Indefinite
Delivery Type Contracts (IDTCs) and multi-awards and all of the
different types of contractual instruments that we have, many
of them as Tracey Pinson has indicated, are going to small
businesses.
We are in the process of implementing a supplier diversity
program where we plan on encouraging small business
participation by way of teaming for a lot more of our more
sophisticated projects for our exhibits. But I just wanted to
say that while $75 million is a tremendous threshold, it
certainly does not diminish the challenge that we all have in
terms of balancing contributions and participation on the part
of the small business community with the needs of our program
managers.
Mr. Smith. Thank you. I apologize to the rest of you. I
think in order to stay on time we are going to have to move on
to the next segment. So I apologize for moving on before
everyone has had a chance to comment.
Now, I want to go ahead and raise the issue of where OSDBUS
fit into this process because that is obviously something that
you all know better than I do and anyone else for that matter.
I put up the chart over here of what it says is in section
15(k). You have this also in your packet if you cannot see the
large chart.
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Mr. Smith. It is from the Small Business Act on OSDBUs--or
SADBUs as the case may be--of identifying proposed
solicitations and trying to find ways for small business to get
into the process and work with reforming solicitations to make
them better and so forth.
We raised a question earlier, in the context of the
procurement center representatives, about how they find out
about potential bundlings. It looked like in some cases
agencies had learned that it was in their best interest, in
order to get an acquisition out the door, to work with the PCRs
early on rather than wait until late in the game and having to
go through an appeal process. Some of you had, I think, Joe
Capuano, you were the one who mentioned about a PCR with whom
you had very good working relationship and brought him into the
process very early on.
What is your experience as OSDBUs? The regulation itself
does not mention OSDBUs in particular, it just mentions the
PCRs. My supposition is that a lot of contracting probably
occurs by rushing to try to get it out the door before you hear
about it. How do you hear about procurements that are happening
in your agency? When do you get the opportunity to intervene?
How much of what your agency does do you actually get to see?
Ms. Harris.
Ms. Harris. At one time at the USDA we had a threshold that
any requirement over $100,000 needed clearance through the
OSDBU office if the acquisition strategy had not been to set
the requirement aside.
Now we have run into fierce competition among our
procurement council members because part of what they do is
negotiate. Part of what the small business reps in our
different bureaus would do is negotiate when they can get an
award set aside but some they would have to give up. So right
now we suspended that strategy because of the challenges that
we were getting and went to a more cooperative effort to
encourage the business reps to reach their goals and then be
given a waiver.
So we are in a resting stage for that but that was one of
the ways we tried to identify requirements that were not
targeted for set-aside. And we set a threshold to do so. Now
what has happened, though, is a number of agencies utilize
instruments that will allow them to circumvent even making that
requirement available. They may use a GWAC instrument. They may
use a Federal Supply Schedule instrument or an interagency
agreement of some type so that when they have requirements,
another agency is going to procure for them. So it is a tug-of-
war to really get a strategy in place that works effectively.
Mr. Smith. Scott Denniston.
Mr. Denniston. A couple of things. I have been sort of
quiet today because, after my first comment and hearing all the
rest of how great the PCRs are, I did not want to put a
negative tone on this meeting. But I would suggest to you that
Tony DeLuca's comment about small business job growth--I cannot
dispute that. Yet the SBA tells us we have 20-million small
businesses in the United States, but if we look at the Federal
Procurement Data System (FPDS) statistics, we have only have
about 5,000 small businesses on a yearly basis that do business
with the Government.
So my point is, we are looking at a small universe compared
to the 20 million. I think that is a problem. If we look at
FPDS statistics over the last 6 years, even though we know that
the percentage of the total procurement going to small
businesses stayed about the same, the number of actions that
have gone to small businesses in any category--whether it be
small, SDB, women, 8(a)--has been cut in half.
I would suggest that that gets back to Stan McCall's
questions about what are we doing for the smaller businesses
and some of these issues that we have been addressing. They are
tough issues. I do not know that any of us have an answer. One
of the biggest problems I have, though, is knowing what is
going on. We have processes in place, like some of the other
agencies where anything over $100,000 is not going to be bought
through a small business program.
It is supposed to come in to us to review but again we have
got a staff of 10 people. We have got 200 buying offices. Quite
frankly, the way we find out about what is going on is we
review the CBD every day. That is how we know what actions are
going on within the agencies, within the Veterans Affairs
anyway.
As an example, we have a brand new opportunity where the
Office of Management and Budget (OMB) is telling us we have got
to get out of the business of managing home loans. The private
sector can do that better than we can. We are doing it under A-
76. We think a regional strategy would be excellent for small
business but I am told that OMB is saying ``no,'' the only way
we can do a fair cost comparison is we have got to do it
nationwide. That is going to cut out opportunities for small
business.
Our folks are getting very creative at using GWACs. We have
a major push on for Federal Supply Schedules. Even though we
are the largest healthcare provider in the United States, we
are only about 5 percent of the total contracting dollars that
are spent on healthcare in the United States.
Quite frankly, we do not have the kind of leverage that I
think a lot of folks think we have to impose strong
subcontracting goals.
We go to a pharmaceutical company and we say we want a
subcontracting plan. They say, ``Hey, we are the only game in
town. You take what we have got or you do not buy our
product.'' When it is healthcare, you know we are going to buy
the product.
We have the same problem when we spend a tremendous amount
of dollars every year with our affiliated teaching
institutions, those medical schools around the country that we
use. In some instances, depending on the strength of the local
management, people will say that the healthcare schools run the
VA. We say to them, ``We want a subcontracting plan with
opportunities for small business.'' They say, ``Hey, we are not
going to play.''
And it is very difficult sometimes to impose some of these
requirements. When we do find out about them, do we get
involved? Sure, we all do but the dilemma is that as we have
new contracting strategies to use it gets more and more
difficult for us to get some of that basic information that we
are talking about in order to do our jobs.
Mr. Smith. When your offices put out the forecast, does it
specify a contracting approach or does it just say this is what
we expect to buy?
Mr. Denniston. Each agency does it a little bit
differently. From our standpoint, most of our anticipated
requirements we put out with no contracting strategy. The
reason we do that is, for instance, we want to make sure
everybody has an opportunity. If you find something in our
forecast that you think you have the capability to perform, we
want to hear from you.
So we do not want to say this is going to be a HUBZone, for
instance, or this is going to be an 8(a) or this is going to be
a small business set-aside because in a lot of instances,
especially with the 8(a) program and the HUBZone program, we do
not know enough about the capabilities of the firms to make
those types of determinations if they do not come to market us.
Mr. Smith. The reason I ask that is, obviously for you to
prepare the forecast, someone has to let you know what the
agency expects to buy. But do they let you know a timetable? Do
you have an idea of, well, that in November we will probably
buy widgets, therefore I should probably contact this
contracting officer to see what is happening or whether they
are going to go buy it off the schedule without telling me? How
much information does that forecast generate for you in terms
of----
Mr. Denniston. For those types of products and services
that we buy on a recurring basis, the forecast is pretty
accurate because we know when contracts are going to expire. We
know what we are going to be competing for. The dilemma that we
have is that many times when we put the forecast together the
actual budget has not been approved.
So when we are talking about new, unique things, especially
in the IT world, it is very, very difficult to get people to
tell us what they want to do. This is especially because the IT
procurement people have all these other contracting vehicles;
therefore, they do not need to go through the normal,
traditional procurement process.
So, quite frankly, not only don't they want us to know,
they do not want our contracting people to know where they
intend to spend their money because they want total autonomy to
make those decisions. Those decisions are made based on who
markets them and just because of economies small businesses do
not market the same way some of the big guys in the industry
do.
Mr. Smith. Joe Capuano.
Mr. Capuano. I would like to offer a comment on the
question of access to information. Please excuse me, I am
struggling with a cold. One of the things which--why don't I
pass and then come back to me?
Mr. Smith. Linda, you have been waiting for quite awhile.
Why don't you go?
Ms. Williams. I just wanted to clarify a point you raised
earlier, Cordell, as to the mention of the OSDBU directors and
the regulations.
As you well know most of the OSDBU directors are
headquarters-located. We put the responsibilities in the regs
on the small business specialists because they are the people
that are in the field offices that actually work with the PCRs
and the procuring officials to determine the strategies. So
that is why we did not mention the OSDBU directors. Instead, we
mentioned small business specialists, but they are covered.
Mr. Smith. Mr. Neal, I cut you off earlier so why don't you
go next and then we will go back to Joe Capuano?
Mr. Neal. Very quickly, one of the things that was slighted
when you talk about small businesses and our effort, and again
this is from our preliminary results from our consolidation
study, what we found is from 1994 to 1999 we had an increase in
the number of small businesses that DOD does business with. We
went from 3,900 small businesses that we would--I am sorry,
small disadvantaged businesses that we were doing business with
to 4,600 small disadvantaged businesses. And in the area of
small businesses we went from 16,000 small businesses to 18,000
small businesses that we are doing business with. Those numbers
are from 1994 to 1999.
When you look at numbers like that, it gives you results
that are counter-intuitive to a lot of the concerns about
harming small business. So it gets back to this balance that
everyone is trying to strike. There are some things that we are
doing very well and maybe there are some areas that we are not
doing as well.
What I would encourage folks to start looking at is to sit
down and really identify what principles we are operating under
in terms of acquisition reform and acquisition efficiency, and
what principles we are operating under for small business. Then
sit down and work out a strategy that melds those two sets of
principles together. But that requires a lot of heavy lifting
and a lot of work on a number of levels.
In particular with the leadership at all of the agencies it
is going to be absolutely imperative--and I am talking senior
leadership, not SADBUs. We do not sign any contracting
documents. We do not make the commitments. The people that are
making the commitments for the agencies have to be held
accountable. That is where all of this is ultimately going to
end up.
I mean, although the numbers are going up, the balance has
to be struck. But the people that are signing on the dotted
lines are the ones that have to strike the balance because we
are merely their consciences on their shoulders talking in
their ears.
Mr. Smith. Mr. Capuano, would you like to try again?
Mr. Capuano. Yes. As a matter of fact, Bob Neal gives a
good lead-in to this. One of the things which is really
important on access to information and on contracts is to
really have a good partnership. With Secretary of
Transportation, Rodney Slater and Deputy Security of
Transportation, Moritimer Downey, one of the things we started
in 1995 with our former Director, Luz Hopewell, was to have the
small business focus in our strategic plan. It was actually
identified in our economic growth outcome. It is equally
important in our new plan, but has been refined and has looked
at some of the new areas that we need to focus on.
The other key point that Mr. Neal mentioned was that the
Procurement Center Representatives are very important. However,
the procurement management council at DOT has access to those
procurements across the department, and that is important in a
$50 billion department, 100,000 employees, with a national
focus. The relationship that I hope we have at DOT with our
procurement management council as a result of the leadership of
Luz and others has been excellent. We are actually a member of
the council.
So with that strategy which was started in 1997 we actually
started to move forward anticipating where this was going. Now,
we have a long way to go. Like many agencies we are struggling
with some of the new requirements coming out, the lack of tools
that was mentioned, the rule of one. Those tools at the
operational level are critical for small business specialists
and procurement officials on the big contracts out there. Those
tools may be five times as valuable on the smaller contracts or
those that are not being bundled.
And so the balance that we look at is a combination of
that, but the leadership that Bob mentioned is absolutely
critical. I think that is essential across the board.
Mr. Smith. Arthuretta Martin and then Esther Aguilera?
Ms. Martin. Thank you. I am Arthuretta Martin. I am from
the Department of Health and Human Services.
I just wanted to respond to the question that was posed
here and that was the OSDBU involvement in bundling. At the
Department of Health and Human Services we have a process in
which procurements are reviewed by both a PCR--we do have a PCR
onsite--and also the small business managers.
As far as the OSDBU's office involvement in that process,
we are only as involved as the small business managers inform
us. A small business manager's involvement is only as good as
their ability to find out about the requirement. We have had a
number of different OSDBU offices, and I hope that you have
heard this repeatedly, say we even as small business managers
do not always have access to the requirements.
I think also what was said, and we need to really hear this
is: Even the procurement community does not always have access
to the requirements.
We, as a community, do not have as much control over
Federal dollars as we did once upon a time. I think that there
is a lot of competition within the procurement community. They
are competing from one procurement activity to another to make
sure that they get work to do so that they will not become a
part of an
A-76 study. I think that also within the dollars available, the
program officials do have a job to do and they do not want
obstacles hindering them from being able to accomplish that. So
if they can go to a GSA schedule or another agency's contract
to meet their goal, they are going to do it.
We have too many competing things going on in this
environment to be able to do the job that we have been put here
to do. Those contracting officers, when they get a requirement
if the program official agrees and is willing to work with him,
we can do a lot of work for small business. But it is important
that you understand and that the deciding people understand
that the person or the individuals that have the most control
over this process are the program officials. We need their
support. We need their buy-in in order to make this work.
Mr. Smith. Esther.
Ms. Aguilera. We have a process in our agency where we
review contracts of $3 million and above. We are making some
changes to that, but what we found is that we are getting them
at the end of the process only when some of the key decisions
have been made and they want to move with it quickly. So we
have been meeting with all the program managers and offices to
talk about plans for getting involved in the acquisition
planning early on. I think that will make a big difference.
But specifically on the role of OSDBUs and this bundling
area I am concerned that this has not been mentioned. I think
the important thing is, while the Small Business Act does place
small business specialists in each of the procuring agencies
and offices, the Department of Energy is in 23 States across
the country. It is important to understand the role of these
offices; how they are empowered or not and our role with them.
They report to that program manager. They do not report to
me. We do have monthly calls with them. We are constantly
involved and engaged with the small business program managers
in the field but it is important to understand the role.
We had a couple of cases where the field office was
involved in a procurement and the SBA and the PCRs contacted
the local office to raise some objections and it went forward
anyway. We did not find out about it until it was too late, the
11th hour. We could make a bigger difference if we are somehow
tied in and we are in the loop. Granted, I think that we have
very good PCRs that work with us.
Our small business program managers are very committed but
they have managers that they report to as well. And unless we
want to have some kind of more direct oversight, again in terms
of our relationship with them, then I think it is a problem. I
think OSDBUs want to help on some of these bundling issues, but
we are not involved early enough. What we are looking to
consider doing at DOE is try to figure out a way to make sure
that my office is alerted about some of these things early on
because it is not in the reg. It is not something that
automatically happens.
Mr. Smith. One quick question. Because the one time when
the OSDBUs do get some information at some point is apparently
in preparing the forecast. So that does give you some idea of
what is coming up. How is that information compiled? Does your
office happen to know what you expect because of contracts that
are expiring over the next year or do program offices contact
you? How does the OSDBU get involved before the forecast is
actually developed?
Ms. Aguilera. As I mentioned, actually we have two
processes. One is the review of the contracts of three million
and above. For our forecast we send out a notification asking
specific questions of information we need to get to put
together the forecast.
We do ask about the acquisition method, and when it is
going to be procured. And we get a very good response. The
forecast has quite a few requirements in it but it does not
represent the entire universe of what is happening out there.
Our forecast contains maybe opportunities of about $3 billion
over 3 years, which is a lot of money both in the prime area
and the subcontract area, but it still does not capture
everything that is happening out there.
There are, I would say, two or three times more activities
happening out there than what we capture in the forecast and
others.
Mr. Smith. We will put a pause on this discussion, on the
role of the OSDBUs, because I had a couple of requests that I
agreed to honor in terms of a few folks wanting to talk about
some miscellaneous issues. So we put some miscellany on the
agenda, and then if everyone decides that we wrap that up, we
will go back and take some of the additional comments that we
have not gotten to hear yet. Mr. Neal, I know you had some
things you wanted to call to our attention so please proceed.
Mr. Neal. There are two issues that I wanted to bring to
the attention of the Committee and to the Members of the Small
Business Committee. First of all, I have spent a great deal of
time talking about the preliminary results that we are starting
to see from our consolidation study. That study--we are
expecting to wrap it up and to have a final report this month
that will be available and it reveals some things that
surprised us as advocates for small business and also it
confirmed some things for us.
As we go through the process we think it will be very
instructive for Members of the Committee and for members of the
small business community to take a look at this study and to
take into consideration that this is one of the first times
that we have actually had any organization spend the time and
the money to develop some statistical measures of what is
actually going on with respect to consolidation. It is very
insightful for us.
As we have looked at it we see some things that are
indicating that small businesses are faring very well with
consolidations. Then there are some other things that are of
concern to us. Those are the types of things that we think we
need to start focusing on in addressing the issues where the
gaps exist, where we need to devote more resources and to
devote our focus to, for example, cost-benefit analysis--being
able to do a good job of not only performing the initial cost-
benefit analysis but to follow-up on things to find out if the
cost savings that were projected were actually achieved. I mean
we have that problem across the board whenever we use cost-
benefit analysis.
Second, I wanted to bring to the attention of everyone here
that, in looking at the issues that we are looking at today, we
came to realize that we really needed to pull together a team
to focus on how we get top level senior management involvement
and accountability at every level. Not only is it important for
our base commanders who are responsible for executing at the
individual bases, but it is also important to have the senior
leadership in the secretary's office and the secretary involved
in these sort of things.
Now when you have agencies that are very large and have
very diverse interests, it is not always possible to put those
types of things in front of the secretary and get them to spend
a consistent amount of time focusing and reminding the
management structure of how to do it. What we have come to
recognize is that through a rapid improvement team that has met
over the last 2 weeks, we have got some very concrete
strategies that we are looking at utilizing within the
Department of Defense to help focus our management attention
and more importantly focus on accountability.
We, as SADBUs and small business specialists, do not sign
the documents. We do not make the commitments. In order to
ensure that people are committed they have to recognize that
that is one of the key parts of their jobs as program managers
and contracting officers. What we spent the bulk of our time
looking at is, how do we ensure that those individuals
understand that it is a key function of their responsibility to
ensure that small business opportunities are available? As soon
as we are able to clear the review process within the Pentagon,
we will be very happy to share that with anyone and to talk
about how we arrived at those conclusions.
We do feel that we are on the right track, that the grades
that were handed out by the House Small Business Committee were
a wake-up call. Not that we would agree with them in total, but
we do believe that it pointed out to us that we could do more
as an agency and we are committed to doing more. So the results
that you will see as part of our consolidation study and as
part of the report of our rapid improvement team will show that
the Department of Defense has taken this task on and that we
believe that we are going to be very successful.
As Tony DeLuca pointed out in looking at the FAST, we are
going to be very aggressive in how we address consolidations
and insuring that small businesses receive great opportunities
as a result of our efforts to consolidate.
Mr. Smith. We will look forward to hearing the results of
what you are putting together there. I think we are very
interested and excited about the way that you have tackled this
study. I think you are onto something. There is a lot of--the
folks at the top may be aware of the goals and the agency as a
whole is responsible for achieving them, but if everyone is
responsible, no one is responsible. You need to find a way to
get that down to the level of people that are making the day-
to-day decisions. So, I think we will be very interested in
what you have on that. Mr. Robinson, you had something for us?
Mr. Robinson. Yes. In reference to Bob Neal's statement
about senior level management involvement and their support, at
the GSA we are a part of the leadership; therefore, issues such
as these, we have brought the record to the attention of the
leadership and we get feedback, direct feedback.
One of the questions that I had is, and it may have been
addressed prior to my arrival, what do you expect to take place
as a result of the things that you are hearing today with this
roundtable? In addition to that, what is the timetable
involved?
Mr. Smith. As to the timetable, I can tackle that first
because there are 440 Members of the House and 100 Members of
the Senate who feel free to disagree with me on timing. I have
never quite been able to understand that. But obviously,
realistically we are probably pretty much out of time in terms
of doing anything this year.
In terms of how we can improve the goaling process or what
improvements, if any, should be made to the contract bundling
regulation, I think Michael Gerich raised some valid points
about waiting and seeing for a little bit longer. On the other
hand, if there are some obvious loopholes they might be worth
closing. Those will all be things that we will be looking at
very early in the 107th Congress which would be in January
2001.
As far as just exactly what we would do, that is going to
depend on what we hear about what is actually happening. That
is one of the things that this roundtable is designed to help
us with and that is to get that information. I did make the
commitment very early on that we would not ask you to help us
write a new definition for bundling because you are not
legislative--your legislative offices probably would not be too
happy if I asked you to do that.
But the information that you relate to us gives us some
idea on how the real world looks at these terms and defines
them and maybe gives us some ideas on how to go about making
improvements.
Mr. Robinson. A follow-up question. The report that you
will draft, will that report be brought to the attention of the
Committee Members or to this group that is here?
Mr. Smith. You mean of this meeting?
Mr. Robinson. Yes.
Mr. Smith. There will be a transcript prepared and we will
be happy to send that to you as soon as it has been published.
Allow about 5 to 6 months for that. I mean it is a matter of
going back and forth between the GPO and proofreading and
typesetting and all that stuff.
Mr. Robinson. I want to make sure I am clear on my
question. Not the minutes from the proceeding but what will be
the next step, the recommendations, et cetera.
Mr. Smith. From this?
Mr. Robinson. Yes.
Mr. Smith. I do not envision that we would actually issue a
report per se based on this meeting. It would just be the same
as any of our Committee meetings. We come away with information
that we would use when we start looking at legislation. I would
think the work product would ideally be legislation. But there
are more people involved in that question than just me.
Ms. Forbes. Basically, I agree with Cordell that we are
pretty much out of time. The bills that are going to get done
this year are primarily Appropriations bills. There may be some
others. We are hoping at least SBA's Reauthorization bill will
get done, but it is not going to be anything involving bundling
at this point.
It is far too late in this year but what this roundtable
will do is enable us to decide, when we are planning and
discussing with our Senators and our Committee, what do they
want for the legislative agenda for next year. This is a very
timely date to have this roundtable so that information can be
factored in. That is what I see. Also, it would not be
concluded in January. We will start working on it in January.
As I am sure you know, the Armed Services Committee and the
Governmental Affairs Committee are very interested whenever we
start focusing on bundling or anything that affects their work.
It is a very complicated process.
Mr. Smith. Mr. Faithful, you had something for us?
Mr. Faithful. I am Bob Faithful, the Director of the
Interior Department's OSDBU office. I wanted to come back to a
point that Lynn King had made in her reading and I think that
as a short-timer among the OSDBUs it has become evident to me
that there are actually two government activities here.
I think you were right to ask about the level of commitment
that was set up. DOD, NASA, GSA and Energy are 4 out of the top
20 organizations that do more than $5 billion a year in
business. So you have got 16 of the organizations sitting
around here that basically do about $31 billion.
However, out of those 16, almost all of them met the 23
percent goal for small business last year. The GSA in
particular, if you are looking for a best practices among the
larger organizations, was in the top five, I think, in almost
every category in terms of looking for how accountability is
handled.
Also starting with the Departments of Transportation,
Interior and State, they led with at least 50 percent of their
organization's procurements going to small businesses. Is
bundling the same type of issue? Are the standards that are set
up correct? The answer is probably ``No'' in terms of what we
do. In terms of the threshold of $75 million those are not
realistic standards for the majority of Federal agencies that
are out here.
If you are looking for how small businesses will make
contact, it is not always with NASA or, because of the need for
security clearances, the Defense Department or with the Energy
Department's contractors. The GSA, like I said, is doing a good
job so you cannot say anything about the GSA. They are on top
of their percentages. The reality is that most small businesses
are going to come into contact with the rest of the Federal
Government.
Oftentimes the regulations are written to handle the large
amounts of money, the $152 billion that go through those four
Federal agencies. Somehow there has got to be a way to
differentiate between the majority of Federal agencies that are
sitting here and the rules that we also are trying to work
under. Interior has a partnership with our procurement
community. We need to talk with them. We have a meeting
tomorrow.
The reality is that with the smaller organizations maybe
there is more flexibility, maybe we are different, you know.
Maybe we do not have some of the same issues, but I think there
has to be a look, by both the House and the Senate, at the real
differences between those groups, and the fact that the
majority of the Federal Government has been successful in
meeting its goals on many of the areas.
Women-owned businesses is another area that again we are
going to have to take a look at, and find ways to have
strategies that are successful such as some of the best
practices whether by the State Department or the other
organizations.
Mr. Smith. In addition to women-owned businesses I would
also add HUBZones, which is a major concern for Senator Bond.
That is his program and some of you have heard from us lately
on this issue. We are very concerned that that program is not
getting off the ground as well as we would like. Some people
have done really well and some have not done as well as we
would like. So it is a mixed bag but we are hoping to make it
more on the good side than on the bad side eventually.
Lynn King.
Ms. King. I would just like to put on my general National
Women's Business Council hat. Actually, we do commend the GSA
for their efforts on behalf of women businesses. In fact, on
Monday we recognized Mirinda Jackson, seated at this table, for
her efforts and the GSA's efforts in outreach to women-owned
businesses. In terms of tools and in terms of accountability
the Small Business Administration has a number of Memoranda of
Understandings (MOUs) with Federal departments and agencies for
increasing business and contracts to women-owned businesses.
There are Federal departments and agencies, Cordell, at this
table that have not signed their MOUs. They are out there.
Perhaps maybe the Senate Small Business Committee could
encourage the Federal departments and agencies to enter into
and sign off on those MOUs with the SBA. Of the MOUs that are
in place, the only agency has an accountability measure in it,
and that at the Department of Transportation. It is not for
lack of effort at the SBA trying to get that accountability in
there, it is just a lack of people agreeing to sign off and
this is, of course, a negotiable instrument. The Department of
Transportation is the only one that would sign off on
accountability. There are tools that can assist in this
outreach and perhaps the Senate Small Business Committee could
encourage the use of some of those tools.
The final thought that I had was on the GAO report that was
issued a couple months ago on contract bundling. It stated that
it was unable at that point to determine if the contract
bundling had an effect on small businesses. Is there going to
be follow-up GAO report requested by the Senate Small Business
Committee? Because I hear from the small business community
that it does affect them and I hear from a lot of people at the
table that it does not and the GAO is in the middle saying we
do not know.
Mr. Smith. I do not have a letter drafted to commission
such a study right now. One of the things we did discover in
that report is FPDS needed to make its changes to its computer
system to start collecting the data, and they needed the final
rules in place to do that and the final rules are out now.
Now FPDS can go to work and obviously we would want to be
at a point where there are enough data to be useful before we
actually commission a study of that. But let me put it in a
more general way. Contract bundling is a continuing concern
here and it is a continuing concern of Senator Bond. I have got
to tell you that of the phone calls I receive, I have not heard
anyone say anything good about contract bundling yet.
I understand the argument being made and obviously the
calls I get are going to be from those who are injured or are
perceived to be injured. So obviously, there is concern out
there. And if there is a concern out there, then obviously we
are concerned, too.
Ms. King. On December 8, the GAO will be submitting to
Congress their report on women-owned businesses and the
barriers that do exist.
Mr. Smith. Yes. We like to keep the GAO busy.
Tony DeLuca.
Mr. DeLuca. I guess just a couple of final thoughts here. I
would hope that the Committee just does not get hung up on
bundling, that there are other issues that need to be looked
at. I mean, if you look at opportunity dollars that we have,
opportunity dollars to us are much different than opportunity
dollars made with other agencies in terms of the major systems
that we procure. If the Congress gives the Department of
Defense more dollars for major systems, that is fewer dollars
that we could award at the prime contract level.
Subcontracting is an issue we need to look at, I agree, but
I think Scott's point should be well taken. If the marketplace
does not support competition at the prime contract level and
you only have one or two large businesses, then our ability to
influence subcontracting is going to be very, very difficult. I
think that point needs to be made.
The other thing I think we cannot lose sight of is what the
IMPAC card and credit cards have done to us. When Steve Kelman
and OFPP came out and said, ``Let us go ahead and use credit
cards,'' everybody said that is really good and everybody likes
it. The fact of the matter is last year the Air Force did well
over a billion dollars in credit card buys and we do not have
any visibility where those dollars go.
So one could argue that those dollars should all be small
business dollars and we will credit the agencies as if they all
are. I will tell you that DOD went well beyond 23 percent. So I
think that is another issue that we need to look at.
So I guess the message I would give you, Cordell, is that
bundling is one of those things that is high interest right
now. Should it be the only interest? No.
Mr. Smith. I will agree with you on that. It is far from
our only interest, and I will say again as long as Senator Bond
is Chairman, the HUBZone program is another one--
Mr. DeLuca. And we obviously support him, too.
Mr. Smith. Mike Green.
Mr. Green. Just one very quick comment. You know if you
really want to improve small business numbers--the SBA is
concerned about all the numbers, it seems like everybody is
concerned about all the numbers, when it might be more
contracts going to small businesses but fewer dollars--at least
those are the numbers I have seen.
If we are concerned about bundling and other issues, I
think one major stumbling block that we have is that the OSDBU
can recommend a lot of things but they do not have any teeth at
all. If in the bundling arena, if I did not do anything, I
would require the concurrence of the Director of the Small
Business Office for every contract that is bundled. If you do
not get that concurrence, then you do not go forward, other
than just making a recommendation.
Mr. Smith. Other thoughts?
Ms. King. I support that.
Ms. Brown. Just one more. I think it is important when Bob
Neal said that we have a mission to support the small
businesses and we try to do that as the OSDBU offices, but
again you have to go back to the program offices and the
contracting people.
Until you recognize that and have that accountability we
can serve as advocates all we want but it is not going to
happen. We need to look at how we hold that sector accountable
to this type of program. They cannot just give us lip service.
I had this conversation just this morning with the Deputy
Chief of Staff at the EPA. We have problems and we are doing
everything we can with outreach and all of those things, but
the bottom line is the contracting officer is signing off. The
program manager is ultimately making the decision in terms of
where those funds are going to go. Until we have a mechanism in
place--one of the things that we were talking about was adding
performance standards and accountability to the small business
program. I think that is something that you really need to
consider.
Ms. Harris. Sharron Harris, the OSDBU Director of USDA. I
will add to that, going back to Bob Neal's comment. The
leadership commitment is key because that is going to influence
the program manager's strategy for how they are going to put
pressure on that contracting officer to support the program.
Most of the time they lead to the larger business constituency.
They have concern that their project requirement is
successful. They do not tend to have the faith or the trust in
the small business constituency so they steer that contracting
officer's decision as best they can. The leadership support is
the critical piece. That is going to affect positively
everything.
Mr. Smith. Luz Hopewell, then Mirinda Jackson, then Ramona
Jones, and then I think we will have to wrap it up.
Ms. Hopewell. I echo everybody's comments. It all really
comes down to accountability and support from the very top. At
DOT, just like Joe Capuano mentioned, the small business
program is part of the strategic plan of the whole agency.
Because of that, the Secretary is on top of the issues.
Everybody's performance plan has criteria for small business
participation within each agency. Each buying activity commits
to it. Each program person commits to it.
So it makes the job of the small business people a lot more
manageable because those offices are really very understaffed
and they cannot cover every activity. Until we are able to get
small business participation as part of a department strategic
plan, we are going to continue to have a fight.
Mr. Smith. Mirinda.
Ms. Jackson. I would like to say that we should hold the
procurement executives accountable as well because they play a
major role in the procurement world and also they are
responsible for the contracting workforce.
Mr. Smith. And Ramona.
Ms. Jones. At Commerce, part of the evaluations for the
chief financial officers is meeting small business goals. They
are starting to pay attention.
Mr. Smith. I would like to thank everybody again for your
participation. I have gotten a note that there are two rollcall
votes on the Floor, and I think we are only halfway through the
first one so Senator Bond is not going to be able to come back
for probably another half-hour to 45 minutes, so we will go
ahead and wrap things up.
I would like to thank everybody for a very helpful and
insightful exchange and for taking time out to visit with us. I
look forward to doing this again and I hope we will stay in
touch. Your congressional liaisons always hate it when I say
this but feel free to call me. I am always happy to talk on an
off-the-record basis. So with that this roundtable is
adjourned.
[Whereupon, at 11:40 a.m. the Committee was adjourned.]