[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
FULL COMMITTEE MARKUP OF H.R. 1873,
THE SMALL BUSINESS FAIRNESS IN
CONTRACTING ACT
=======================================================================
COMMITTEE ON SMALL BUSINESS
UNITED STATES HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
April 24, 2007
__________
Serial Number 110-16
__________
Printed for the use of the Committee on Small Business
Available via the World Wide Web: http://www.access.gpo.gov/congress/
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA M. VELAZQUEZ, New York, Chairwoman
JUANITA MILLENDER-McDONALD, STEVE CHABOT, Ohio, Ranking Member
California ROSCOE BARTLETT, Maryland
WILLIAM JEFFERSON, Louisiana SAM GRAVES, Missouri
HEATH SHULER, North Carolina TODD AKIN, Missouri
CHARLIE GONZALEZ, Texas BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington MARILYN MUSGRAVE, Colorado
RAUL GRIJALVA, Arizona STEVE KING, Iowa
MICHAEL MICHAUD, Maine JEFF FORTENBERRY, Nebraska
MELISSA BEAN, Illinois LYNN WESTMORELAND, Georgia
HENRY CUELLAR, Texas LOUIE GOHMERT, Texas
DAN LIPINSKI, Illinois DEAN HELLER, Nevada
GWEN MOORE, Wisconsin DAVID DAVIS, Tennessee
JASON ALTMIRE, Pennsylvania MARY FALLIN, Oklahoma
BRUCE BRALEY, Iowa VERN BUCHANAN, Florida
YVETTE CLARKE, New York JIM JORDAN, Ohio
BRAD ELLSWORTH, Indiana
HANK JOHNSON, Georgia
JOE SESTAK, Pennsylvania
Michael Day, Majority Staff Director
Adam Minehardt, Deputy Staff Director
Tim Slattery, Chief Counsel
Kevin Fitzpatrick, Minority Staff Director
______
STANDING SUBCOMMITTEES
Subcommittee on Finance and Tax
MELISSA BEAN, Illinois, Chairwoman
RAUL GRIJALVA, Arizona DEAN HELLER, Nevada, Ranking
MICHAEL MICHAUD, Maine BILL SHUSTER, Pennsylvania
BRAD ELLSWORTH, Indiana STEVE KING, Iowa
HANK JOHNSON, Georgia VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania JIM JORDAN, Ohio
______
Subcommittee on Contracting and Technology
BRUCE BRALEY, IOWA, Chairman
WILLIAM JEFFERSON, Louisiana DAVID DAVIS, Tennessee, Ranking
HENRY CUELLAR, Texas ROSCOE BARTLETT, Maryland
GWEN MOORE, Wisconsin SAM GRAVES, Missouri
YVETTE CLARKE, New York TODD AKIN, Missouri
JOE SESTAK, Pennsylvania MARY FALLIN, Oklahoma
(ii)
Subcommittee on Regulations, Health Care and Trade
CHARLES GONZALEZ, Texas, Chairman
WILLIAM JEFFERSON, Louisiana LYNN WESTMORELAND, Georgia,
RICK LARSEN, Washington Ranking
DAN LIPINSKI, Illinois BILL SHUSTER, Pennsylvania
MELISSA BEAN, Illinois STEVE KING, Iowa
GWEN MOORE, Wisconsin MARILYN MUSGRAVE, Colorado
JASON ALTMIRE, Pennsylvania MARY FALLIN, Oklahoma
JOE SESTAK, Pennsylvania VERN BUCHANAN, Florida
JIM JORDAN, Ohio
______
Subcommittee on Urban and Rural Entrepreneurship
HEATH SHULER, North Carolina, Chairman
RICK LARSEN, Washington JEFF FORTENBERRY, Nebraska,
MICHAEL MICHAUD, Maine Ranking
GWEN MOORE, Wisconsin ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York MARILYN MUSGRAVE, Colorado
BRAD ELLSWORTH, Indiana DEAN HELLER, Nevada
HANK JOHNSON, Georgia DAVID DAVIS, Tennessee
______
Subcommittee on Investigations and Oversight
JASON ALTMIRE, PENNSYLVANIA, Chairman
JUANITA MILLENDER-McDONALD, LOUIE GOHMERT, Texas, Ranking
California LYNN WESTMORELAND, Georgia
CHARLIE GONZALEZ, Texas
RAUL GRIJALVA, Arizona
(iii)
C O N T E N T S
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OPENING STATEMENTS
Page
Velazquez, Hon. Nydia M.......................................... 1
Chabot, Hon. Steve............................................... 2
Braley, Hon. Bruce............................................... 3
APPENDIX
Prepared Statements:
Velazquez, Hon. Nydia M.......................................... 5
Chabot, Hon. Steve............................................... 7
Braley, Hon. Bruce............................................... 8
(v)
FULL COMMITTEE MARKUP OF H.R. 1873,
"THE SMALL BUSINESS FAIRNESS IN
CONTRACTING ACT"
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TUESDAY, APRIL 24, 2007
U.S. House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to notice, at 2:00 p.m., in
Room 2360, Rayburn House Office Building, Hon. Nydia Velazquez
[Chairwoman of the Committee] presiding.
Present: Representatives Shuler, Gonzalez, Michaud,
Cuellar, Braley, Sestak, Chabot, Graves, Davis, Fallin,
Buchanan and Jordan.
OPENING STATEMENT OF CHAIRWOMAN VELAZQUEZ
Chairwoman Velazquez. Good morning. Before we begin, I
would like to remember our colleague and fellow Committee
Member Representative Millender-McDonald. So many times we
forget the great people we work with day in and day out, and
Juanita Millender-McDonald was one of those people. I would
like us to recognize her and to honor her by taking a moment of
silence.
[A moment of silence was observed.]
Chairwoman Velazquez. I call this markup to order on H.R.
1873, ``The Small Business Fairness in Contracting Act''. We
are here today to consider H.R. 1873, a bill introduced by Mr.
Braley. The Chairman's amendment in the nature of the
substitute will serve as the bill to be considered before the
Committee today as base text for purposes of amendment.
Chairwoman Velazquez. I am very proud of this bipartisan
legislation, and I want to recognize both, Committee staff from
the Democratic and the Republican side. We all work together.
We have extensive discussions. And many members from both sides
of the aisle had input into this legislation.
Last year the Federal Government spent $340 billion on
goods and services. Our goal is make sure small businesses get
their fair share of Government contracts.
In recent years, this Committee has held a number of
hearings on federal procurement. During this Congress we have
already held three hearings on the issue and we continue to
find the same problems over and over again.
Although the government is spending more, fewer contracts
are being awarded. Individual contracts are being bundled
together into mega-contracts. While this may be more convenient
for the contracting officers, barring small businesses from the
marketplace reduces competition. This often results in higher
costs to the taxpayers and decreased value for the government.
Another problem is that federal agencies are not taking
small businesses' requirements seriously. Small business
participation accomplishments reported by agencies is nowhere
near the maximum extent possible, disappointing levels of small
businesses participation are often inflated due to misquoted
data. H.R. 1873 addresses all of these problems.
The Small Business Fairness in Contracting Act will help to
ensure that mega-contracts are being identified and subjected
to review. The bill expands the definition of contract bundling
and makes the appeals process more accessible by allowing trade
associations to advocate on behalf of their members. The
definition will also be expanded to include construction on new
work.
In addition, the bill provides for third party review of
bundling decisions, which will provide a neutral forum for
resolution. The Manager's Amendment includes a few changes to
insure the definition is codified so that only contracts that
are likely to be bundled have to be reviewed. It also provides
that the legislation would be implemented into the rules the
contracting officers consult when making awards.
H.R. 1873 will provide more opportunities for small
businesses, like raising the small business contracting goal to
30 percent and expand it to overseas contracts.
Finally, The Small Business Fairness in Contracting Act
will ensure that only small business contracts are being
counted toward small-business achievement. H.R. 1873 aims to
clean up federal contracting databases so that when agencies
release the small business accomplishments their numbers are
accurate.
Right now, large businesses are identifying themselves as
small in the central contract registry. Government agencies are
recording large-business contracts as small business awards in
the federal procurement data system. When contracts are awarded
to large businesses and counted toward small business
achievements, agencies have less incentive to create additional
small business opportunity.
I urge you all to consider these barriers that small
businesses face and offer your support to this important
legislation. I now yield to Mr. Chabot for his opening
statement.
OPENING STATEMENT OF MR. CHABOT
Mr. Chabot. Thank you, Madam Chair. And I want to thank
you, Madam, for holding this markup today and for pushing for
this important legislation.
H.R. 1873, The Small Business Fairness in Contracting Act
in my view is a good bill that should be reported out of this
Committee favorably. This is important legislation, and it
would expand small-business opportunities in the federal
marketplace and take necessary steps to help ensure that
federal agencies meet their small business procurement
requirements.
Specifically, H.R. 1873 would expand the definition of
contract bundling. Contract bundling remains a problem, and
this bill would require additional information from agencies to
justify bundling. The bill would also enhance the review
process agencies must undergo when issuing a bundling decision.
This bill would also increase the government-wide small-
business goal from 23 percent--lower than the government-wide
goal. It will also require the SBA to establish standards for
reviewing subcontracting plans. And finally the bill will
strengthen the review and reporting process to better identify
who is a small business and who is not.
The Small Business Fairness in Contracting Act makes
important changes to help small businesses in the federal
procurement process, and I urge its adoption.
Once again, I thank the chairwoman for her continued
leadership on this issue and yield back the balance of my time.
Chairwoman Velazquez. I now yield to Mr. Braley for his
statement on this legislation.
OPENING STATEMENT OF MR. BRALEY
Mr. Braley. Thank you, Madam Chairwoman, for holding this
markup and thank you for those remarks, Ranking Member Chabot.
I really appreciate your support. I also want to echo your
condolences to the family, friends and colleagues of
Congresswoman Millender-McDonald. She will be sorely missed in
this Congress.
Last week, the Small Business Committee held a hearing on
expanding the small business's access to federal contracts. I
was pleased we were able to have a meaningful discussion,
hearing from small-business owners and representatives that
want a fair opportunity to compete for and to win federal
contracts.
Over the past five years, government agencies have greatly
increased contract bundling, often combining work small
businesses could perform into giant packages that exceed small
firms' ability to compete for the work. During the same time,
total government contracting has increased by 60 percent while
small-business contracts have decreased by 55 percent.
Last Friday President Bush proclaimed this week as National
Small Business Week. That is why it's so appropriate that today
we'll be marking up H.R. 1873, The Small Business Fairness in
Contracting Act, sending a message to small businesses that
this Committee is serious about leveling the playing field for
them by improving their opportunities to compete for federal
contracts.
Small businesses are the number one job creators in this
country, and we need to ensure that this engine not only
remains healthy but has the support it needs to grow. It's
essential to help remove the barriers blocking small businesses
from entering the nearly $400 billion per year federal
marketplace.
As I mentioned in the hearing last week, Iowa ranks near
the bottom in terms of government contracting dollars awarded
to small businesses, yet these small businesses play such an
important role in all of our districts that allowing them a
fair opportunity to bid on federal contracts will bring
economic vitality to our respective towns and cities.
I'm particularly pleased that this bill has received such
strong bipartisan support from members of the Small Business
Committee. And I thank you, Madam Chairwoman, and all of my
colleagues who join me in standing up for the interests of
small businesses.
Chairwoman Velazquez. Thank you, and it was important work
that you did on this legislation.
Are there any other members who wish to be recognized on
this bill?
[No response.]
Chairwoman Velazquez. The bill shall now be considered open
for amendment at any time. Does any member seek recognition for
the purpose of offering an amendment?
Seeing no amendments, the question is on reporting H.R.
1873 with amendment. All those in favor say aye.
[Chorus of ayes.]
Chairman Velazquez. Those opposed, say no.
[No response.]
Chairman Velazquez. The ayes have it. The bill is adopted
and reported. I ask unanimous consent that the clerk be
authorized to correct section numbers, punctuation and cross
references and to make all the necessary technical and
conforming corrections. Without objection, so ordered.
That concludes the markup, and we are now adjourned. Thank
you.
[Whereupon, at 2:20 p.m., the Committee was adjourned.]
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