[Congressional Record Volume 146, Number 112 (Wednesday, September 20, 2000)]
[House]
[Pages H7876-H7885]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS COMPETITION PRESERVATION ACT OF 2000
Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I
call up House Resolution 582 and ask for its immediate consideration.
The Clerk read the resolution, as follows:
H. Res. 582
Resolved, That at any time after the adoption of this
resolution the Speaker may, pursuant to clause 2(b) of rule
XVIII, declare the House resolved into the Committee of the
Whole House on the state of the Union for consideration of
the bill (H.R. 4945) to amend the Small Business Act to
strengthen existing protections for small business
participation in the Federal procurement contracting process,
and for other purposes. The first reading of the bill shall
be dispensed with. Points of order against consideration of
the bill for failure to comply with clause 4(a) of rule XIII
are waived. General debate shall be confined to the bill and
shall not exceed one hour equally divided and controlled by
the chairman and ranking minority member of the Committee on
Small Business. After general debate the bill shall be
considered for amendment under the five-minute rule. The bill
shall be considered as read. During consideration of the bill
for amendment, the Chairman of the Committee of the Whole may
accord priority in recognition on the basis of whether the
Member offering an amendment has caused it to be printed in
the portion of the Congressional Record designated for that
purpose in clause 8 of rule XVIII. Amendments so printed
shall be considered as read. The Chairman of the Committee of
the Whole may: (1) postpone until a time during further
consideration in the Committee of the Whole a request for a
recorded vote on any amendment; and (2) reduce to five
minutes the minimum time for electronic voting on any
postponed question that follows another electronic vote
without intervening business, provided that the minimum time
for electronic voting on the first in any series of questions
shall be 15 minutes. At the conclusion of consideration of
the bill for amendment the Committee shall rise and report
the bill to the House with such amendments as may have been
adopted. The previous question shall be considered as ordered
on the bill and amendments thereto to final passage without
intervening motion except one motion to recommit with or
without instructions.
The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is
recognized for 1 hour.
Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield
the customary 30 minutes to the gentleman from Ohio (Mr. Hall), my
colleague and my good friend, pending which I yield myself such time as
I may consume. During consideration of this resolution, all time is
yielded for the purposes of debate only.
Mr. Speaker, the legislation before us today is an open rule
providing for consideration of H.R. 4945, the Small Business
Competition Preservation Act of 2000.
This open rule waives clause 4(a) of rule XIII against the
consideration of the bill, which requires a 3-day availability of the
committee report. The rule provides one hour of general debate to be
equally divided among the chairman and the ranking minority member of
the Committee on Small Business. The rule provides that the bill shall
be open to amendment at any point.
The rule authorizes the Chair to accord priority in recognition to
Members who have preprinted their amendments in the Congressional
Record.
The rule allows the Chairman of the Committee of the Whole to
postpone votes during consideration of the bill and to reduce to 5
minutes on a postponed question if the vote follows a 15-minute vote.
Finally, the rule provides one motion to recommit with or without
instructions.
Mr. Speaker, it is often said that small business is the engine that
drives the American economy. Statistics confirm this. Small businesses
employ 53 percent of the private workforce and are responsible for 50
percent of the private gross domestic product.
I am proud of these facts. I am proud of small businesses and what
their employees produce for America to keep us strong.
Small business is a literal powerhouse of job creation. They
represent 99 percent of all employers and create 80 percent of the new
jobs in America.
Small businesses are also more innovative than larger businesses. The
airplane, audio tape recorder, heart valve, pacemaker, and the personal
computer are among the important innovations by small firms in the 20th
century.
{time} 1030
Looking ahead, we have got to make sure that small businesses have
the needed resources and capital to move forward so that America and
Americans have the best of what small businesses produce. Looking out
for the family farm, ranch or store on Main Street is something this
Congress strongly supports.
With this in mind, Republicans in Congress have focused on scheduling
and passing legislation to further help and aid small businesses. For
example, Congress passed legislation that would help small businesses
better prepare for the millennium computer bug. We remember that as the
Y2K bug. Congress also passed the Paperwork Elimination Act of 1999 to
minimize burdens of Federal paperwork on small businesses by employing
new technology such as digital signatures. Because small businesses are
in dire need for more affordable health insurance, Congress passed
legislation to allow small firms to band together to purchase insurance
which lowers the cost. Small businesses also stood to benefit a great
deal from legislation to repeal the death tax, legislation that was
passed by Congress but vetoed by President Clinton. Had this
legislation been signed into law, many small businesses would be able
to stay in the family when the owner dies rather than being sold to pay
a debt to the IRS.
Mr. Speaker, with passage of this rule, Congress will once again
consider important legislation to help small business. The underlying
legislation, the Small Business Competition Preservation Act of 2000,
is important to strengthen existing protections for small business
participating in the Federal procurement contracting process. The
Federal Government has failed in its goal to spend at least 20 percent
of their procurement dollars with small businesses, in part because of
the Federal agencies' practice of bundling individual contracts into
packages that are too large for small businesses to handle. Federal
agencies contend that contract bundling saves taxpayers money while
improving the quality of products and the services provided by the
government. However, none of this has been substantiated.
The database, analyses, and reporting requirements in H.R. 4945 will
ensure that adequate data exists concerning the benefits of contract
bundling, thus allowing Congress to make better decisions and to better
assess the small business and the needs that they have. Bundling is one
of the most
[[Page H7877]]
important issues facing small businesses today. The ultimate cost of
bundling is passed on to the taxpayers in the form of lower quality
goods and services and higher taxes.
Mr. Speaker, the rule before us is a fair and open rule. It allows
any Member to offer an amendment at any time. This rule, which was
reported out of the Committee on Rules last night by a voice vote, will
enable the House to consider this fair and bipartisan legislation.
I urge my colleagues to support this rule.
Mr. Speaker, I reserve the balance of my time.
Mr. HALL of Ohio. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I thank the gentleman from Texas (Mr. Sessions) for
yielding me this time and his work on this bill and certainly on the
rule. It is an open rule. It is the kind of rule that the minority
likes. It will allow consideration of the Small Business Competition
Preservation Act of 2000.
As my colleague has described, this rule provides for 1 hour of
general debate to be equally divided and controlled by the chairman and
ranking minority member of the Committee on Small Business. The rule
permits amendments under the 5-minute rule, which is the normal
amending process in the House. All Members on both sides of the aisle
will have the opportunity to offer germane amendments.
In recent years, the Federal Government often bundles together
separate small contracts into one larger contract. This is because in
some cases it might be cheaper and more efficient to let one larger
contract instead of several smaller ones. However, there is some
evidence that bundling is not always the best deal for taxpayers. There
is also some concern that small businesses are shut out of the process
when contracts are bundled.
The bill requires the Small Business Administration to collect,
analyze and report information about bundling so that the
administration and Congress can better evaluate this practice. Wright
Patterson Air Force Base, which is located partially in my district,
handles more contracts than any other Federal agency in the State of
Ohio. Therefore, I am particularly concerned about the efficiency of
the process and the fairness to small businesses. The Dayton Area
Chamber of Commerce, which has set up an innovative electronic program
that notifies small businesses which contracts are available, is also
monitoring the effects of bundling contracts.
Mr. Speaker, it has long been the policy of the Federal Government to
encourage small businesses because of their enormous potential to
increase economic growth. This bill takes an important step towards
protecting small businesses and improving government contracting
operations. This is an open rule. I urge its adoption.
Mr. Speaker, I yield back the balance of my time.
Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
I would like to echo the words of the gentleman from Ohio (Mr. Hall).
His State not unlike my State of Texas and not unlike many States
around this country depend upon small businesses who depend upon
employees, good, hardworking employees to show up for work every day
and produce a product that makes America stronger and better. We
concur. This is bipartisan. It is an opportunity to begin the process
so that we can know the facts and figures in an orderly process. We
believe it is the right thing to do. I applaud my colleague for his
opportunity to once again work together.
Mr. Speaker, we believe this is a fair and open rule and would ask
that our colleagues support this rule.
Mr. Speaker, I yield back the balance of my time, and I move the
previous question on the resolution.
The previous question was ordered.
The resolution was agreed to.
A motion to reconsider was laid on the table.
The SPEAKER pro tempore (Mr. Sessions). Pursuant to House Resolution
582 and rule XVIII, the Chair declares the House in the Committee of
the Whole House on the State of the Union for the consideration of the
bill, H.R. 4945.
{time} 1038
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the State of the Union for the consideration of the bill
(H.R. 4945) to amend the Small Business Act to strengthen existing
protections for small business participation in the Federal procurement
contracting process, and for other purposes, with Mr. Cooksey in the
chair.
The Clerk read the title of the bill.
The CHAIRMAN. Pursuant to the rule, the bill is considered as having
been read the first time.
Under the rule, the gentleman from Missouri (Mr. Talent) and the
gentlewoman from New York (Ms. Velazquez) each will control 30 minutes.
The Chair recognizes the gentleman from Missouri (Mr. Talent).
Mr. TALENT. Mr. Chairman, I yield myself such time as I may consume.
I want to thank the Committee on Rules for giving us an hour on a
bipartisan basis under an open rule to discuss a very important
subject, H.R. 4945.
The purpose of the bill, Mr. Chairman, is very simple. It is to
ensure that the Small Business Administration has sufficient
information concerning the impact of contract consolidation, or
bundling, on small businesses. H.R. 4945 mandates that the
administrator of the Small Business Administration develop a database
of these consolidated, or bundled, contracts.
Mr. Chairman, contract bundling is one of the most important issues
facing small business today. The Federal Government spends almost $200
billion a year procuring goods and services. Congress has mandated a
goal for Federal agencies to spend at least 20 percent of those dollars
with small businesses. We do that, both because we believe in small
business as an avenue for opportunity and economic growth for our
citizens and because we believe that competition among small businesses
is presumptively to the benefit of the taxpayer both in terms of cost
and quality. Yet the Federal Government fails routinely to meet that
goal of 20 percent.
At present, Federal procurement policies evidently place a greater
premium on presumed efficiencies and easing the workload of contracting
officials than on the goals of including small business and ensuring a
diverse and competitive industrial base. In this scenario, the ultimate
loser is the taxpayer who faces the long-term prospect of their
government buying lower-quality goods and services at higher prices.
Other losers are the small business community and particularly minority
small businesspeople who are always disproportionately affected when
the government withdraws business from small businesses.
How does a contract bundle work, Mr. Chairman? Here is how it works.
The government takes contracts which have typically in the past been
bid out on a smaller basis. So, for example, a base, a military base
may need food services for its mess hall so it bids those out routinely
and typically to local food service providers which are typically small
businesses and they win the contract and then go in and provide the
food service. A bundled contract is a contract that puts a bunch of
those bids together, if you will, in a bundle; and it could do it on a
geographic basis so it may require that you be able to provide the
service to a whole region of the United States, or it may do it on a
functional basis, so that, for example, for a construction contract
that bids out not only electrical services but it bids out electrical
and carpentry services and plumbing services, and in either case, Mr.
Chairman, the colleagues can see how this would eliminate radically
small businesses from participating, because they cannot deliver the
services on a regional basis and they are often organized along
specialized lines, so they cannot deliver all the different
construction trade requirements. And so only big businesses can bid.
Typically the government will say, this will lower cost, it will
improve quality. We have found in our hearings over and over again that
quality suffers as one would expect when you eliminate competition from
small businesses. Even costs are not saved because when you force out
small businesses from a market and then you have to rebid these bundled
contracts after a year or two, there is much less competition and the
costs go way up.
[[Page H7878]]
Here is what we want to do. We want to at least get a handle on how
big the problem is. Under this bill the SBA will be required to assess
whether these contracts have achieved the savings or improvements in
quality that the procuring agency anticipated when it initially
consolidated the contract. We want to know whether these bundled
contracts have the savings that the agencies always claim for them,
because they say they get great savings and improved quality. Then when
we go back and try to investigate it, they cannot provide the
information. H.R. 4945 will also provide information so the SBA can
effectively negotiate with Federal agencies and determine whether they
should adjust their procurement strategies in order to meet the small
business participation goals established in the Small Business Act, and
then all this information will be reported to the House and Senate
small business committees so we can do our job effectively of
overseeing these requirements that we have placed into the law.
Mr. Chairman, I do not want to take time away from other Members. Let
me just give a couple of examples so Members can understand what I am
talking about. These are real-life bundles. I expect that Members have
been approached by small business constituents back home over the last
several years complaining about this. Let me give Members an example.
Right now military bases when they bid out their travel agency services
typically bid out the business end of the travel services, so somebody
traveling on business, that is bid out and bid on by particular travel
agencies and then they separately bid out the holiday or the leisure
travel, the holiday or the leisure business, and those two things are
bid separately. The proposal is now to bundle those, so they will
bundle together holiday business and business travel. Typically small
businesses, therefore, will not be able to bid on the contract because
they are usually organized either to handle holiday, personal, leisure
travel or business travel, and the two ends of the business are very
different. So the department is proposing to bundle all these contracts
together.
One excuse they often give for bundling is that that way they will
ape the market, they will do what private companies do. Mr. Chairman,
private companies do not bundle together business travel and holiday
travel. They do it separately. That is why travel agencies are
typically organized along those lines because the two lines of business
are very different. The effect of it would be to withdraw the $20 to
$25 billion worth of government travel business from competition from
small business, which would increase the costs and decrease the quality
available to our servicemen and women.
One other example I will give. Right now in the Marine Corps when
they have a need for food service on a base or in a commissary, they
bid it out to local food service businesses. The proposal is to
regionalize that so that you have to be able to bid on all the business
in a region which will mean only the big businesses will be able to
bid. Here is how the food will then be provided in the future. They
will cook it up in central kitchens, they will chill it, and then they
will bring it on base and heat it up. So now in the name of efficiency,
and we have no idea whether it will actually save any money in the long
run, we are going to be serving our servicemen and women, in effect,
airline food rather than bidding this thing out the way it has
traditionally been done so that small food service preparation
businesses can bid on it.
I could go on and on. I mean that, Mr. Chairman. As the chairman of
the Committee on Small Business, I have encountered this over and over
and over again. We have worked with the agencies to try and do
something about it. The ranking member and I have worked together on
this. We are united as a committee on this. Members will see this today
in the debate. We are absolutely committed to stopping this practice or
at least requiring that it be justified. That is the purpose for this
bill.
Let me just say the bill is supported by all the small business
groups, NFIB, the Chamber, and it is supported by minority small
business groups like the Black Chamber and the National Small and
Disadvantaged Business Association. Right now we have no certain
definition of what bundling is, we have no information about the number
of bundles, we have no information about whether they are a success
even on their own terms within the agencies.
{time} 1045
Mr. Chairman, that needs to stop for the sake of small business
opportunity, for the sake of our entrepreneurs for the sake of
advancing participation by minorities and the economy and for the sake
of the taxpayers, and that is why this bill is offered. That is why I
have unburdened myself so much on the subject of it.
Mr. Chairman, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may
consume.
Mr. Chairman, I rise today in support of H.R. 4945, the Small
Business Competition Preservation Act of 2000. Mr. Chairman, we
continue to talk about what a strong economy we have and how our
Nation's small businesses are largely responsible for this. In fact, it
has become almost cliche to say that small businesses are the backbone
of our Nation's economy. Everywhere we turn we see them as the
innovators and cutting edge leaders of every industry from construction
to technology, everywhere except the Federal Government.
Indeed, we are seeing an alarming downward trend in the number of
Federal prime contracts awarded to small businesses. For example, from
1997 to 1999, the number of contracts offered to small business by the
Department of Defense dropped by over 34 percent. In response to
concerns from small business, the Democrats commissioned a study on the
poor state of contracting for small businesses.
The result was even worse than we feared. Our results showed the
Federal Government failing small businesses in every conceivable way,
with the worst offender being the Department of Defense. The number of
contracts awarded to minority-owned firms has decreased by over 25
percent, and most dramatically the number of contracts awarded to
women-owned businesses has decreased by over 38 percent.
The reality is, that the Federal Government thinks it can put these
big contracts together to reduce costs and increase quality. Well, Mr.
Chairman, the committee has had a number of hearings on this issue.
There is not one documented case in which a contract bundle has
actually saved money and increased quality, not one.
This legislation begins the process of making common sense changes to
the caring of contract bundling statute while requiring the SBA to file
a report with Congress which will provide much more information on the
scope of the bundling issue.
In addition to requiring further information on contract bundling,
this bill requires the Small Business Administration to develop a
database. This database will provide us the missing link of information
to assist us in tracking critical information on bundled contracts. We
will now be able to learn what happens to firms who are displaced by
bundling, do these firms become subcontractors? Do they go out of
business?
One of the most egregious examples of contract bundling is the Air
Force FAST contract. This bill will help to provide reliable data on
contracts such as this. In a hearing before the Committee on Small
Business in November of last year, the Department of Defense agreed to
commission a study of contract bundling. Within 3 months, it became
evident that the Department has no data to conduct an accurate and
comprehensive bundling study. With the passage of this bill today,
agencies can no longer plead ignorance on the issue of contract
bundling.
We are all aware that Federal agencies are operating in a do-more-
with less environment, and operating an efficient Federal system.
However, we must also ensure that the Federal marketplace is inclusive
of our country's small businesses. We must take steps right here and
right now to ensure that our small businesses are not streamlined out
of the process.
I am not opposed to the Federal Government streamlining its processes
as long as small businesses are not left behind in the wake, and as
long as the quality of services remains at least
[[Page H7879]]
equal to what was provided prior to the bundle. And make no mistake,
because I want this to be clearly understood, the passage of this bill
serves as both a message and a warning to those who believe contract
bundling is a good idea.
We are watching you closely.
Let me conclude by commending the gentleman from Missouri (Chairman
Talent) for introducing this bill and providing further protection for
our Nation's small businesses.
Mr. Chairman, I yield 3 minutes to the gentleman from Illinois (Mr.
Davis).
Mr. DAVIS of Illinois. Mr. Chairman, first of all, I want to thank
the gentleman from Missouri (Chairman Talent) and the gentlewoman from
New York (Ms. Velazquez), the ranking member, for this very important
legislation, as well as for their overall effectiveness and the
bipartisan manner in which this committee has operated during the last
session.
Mr. Chairman, last year the Small Business Committee conducted
hearings on Federal Government procurement policies. In that hearing we
found what many of us already knew, that small and minority-owned
businesses have serious difficulty contracting with the Federal
Government. As a result, the Small Business Committee with the
leadership of the gentlewoman from New York (Ms. Velazquez), our
ranking member, and the gentleman from Missouri (Chairman Talent)
conducted a study to reveal which agencies were implementing and
reaching their federally mandated goals.
This study known as the scorecard revealed that because of contract
bundling, many agencies conducted little, if any, business with small
and minority-owned businesses. Mr. Chairman, contract bundling is
disheartening and devastating to small businesses while and at the same
time showing no measurable savings to the American taxpayer.
These are now exciting times for small businesses. On the private
side of business, we are witnessing a revolution, a complete
transformation of how businesses operate. Today our Nation's 22 million
businesses are using innovative ways to hire, train and create better
products and make extraordinary profits.
The easy good ole boy network of doing business is becoming outdated,
outmoded, and obsolete in the private sector; therefore, it should be
obsolete in our government. Therefore, for us to see Departments like
Energy, Education and Labor to be named the worst Federal agencies in
small business procurement, and our Nation's Department of Defense to
have virtually no 8A goal for minority and small businesses is an
embarrassment.
It is time to change. It is time to innovate. No longer should these
Departments be allowed to posture and pose as friends of small
businesses when their actions show something totally different. It is
time for us to work together to preserve and expand our small
businesses.
H.R. 4945 takes the first step, and I urge my colleagues to join with
me in passing this greatly needed legislation.
Ms. VELAZQUEZ. Mr. Chairman, I yield 3 minutes to the gentleman from
New Jersey (Mr. Pascrell).
Mr. PASCRELL. Mr. Chairman, I thank the gentlewoman from New York
(Ms. Velazquez) for yielding me the time.
Mr. Chairman, I am pleased to rise today in support of the passage of
H.R. 4945. This important bipartisan legislation introduced by the
gentleman from Missouri (Chairman Talent) and the gentlewoman from New
York (Ms. Velazquez), our ranking members, seeks to correct the way
many Federal agencies set their contracting criteria that excludes
small businesses.
If I may, Mr. Chairman, I want to commend both the gentleman from
Missouri (Chairman Talent) and the gentlewoman from New York (Ms.
Velazquez), the ranking member, for making bipartisanship a reality not
just empty words. That is important in this House.
The Small Business Committee has conducted several hearings on the
issue of contract bundling. Bundling is defined simply as the combining
of several smaller contracts into one large contract, which is awarded
to and performed by a large government contractor.
In recent years, Federal Government contracting with small businesses
has been falling far short of expectations. Most Federal agencies have
not been held accountable for contract bundling. They are just doing
whatever they please. This report, which the gentleman from Illinois
(Mr. Davis) just referred to, speaks for itself. It grades every agency
in the Federal Government as to whether it is responsive to small
businesses or not. Most are not. The best we could come up with is a C
minus report card. That is not acceptable to any of us.
In July of last year, this report card was very clearly presented.
Agencies are giving multiple contracts to one large contractor at the
expense of millions of small businesses. This report also showed that
the number of contracts being awarded to small businesses has decreased
over the last 3 years by 23 percent.
Minority- and women-owned businesses have suffered greatly, with
nearly every Federal agency failing to meet the negotiated small
business goals. We all know and recognize that small businesses are the
backbone of the Nation. Every speaker refers to it today.
H.R. 4945 responds to the lack of empirical data available on the
impact of contract bundling we heard the gentlewoman from New York (Ms.
Velazquez), the ranking member, talk about. We cannot even get
statistics because data is not held by each of these agencies, and
obviously for the very specific reason, they do not want us to know.
Those of us who have been elected, those of us who are really on the
front lines, they do not want us to know how they let those contracts
out there.
But now this legislation will call them up. It puts everything on top
of the table where it should be. This is taxpayers' dollars that are
being spent here. We are trying to protect those dollars, and we are
trying to also preserve the bulk of business in this country which is
small business.
While this bill helps to correct the problems associated with
contract bundling, there is more that must be done to help these firms
succeed in the Federal procurement arena. It is appropriate, Mr.
Chairman, for Congress to require better accountability from Federal
agencies on procurement goals, that is why I support H.R. 4945 as a
member of the committee, but also as a good American and a good
congressman, I hope.
Ms. VELAZQUEZ. Mr. Chairman, I reserve the balance of my time.
Mr. TALENT. Mr. Chairman, I yield myself 30 seconds to say that I
appreciate the words of the gentleman from New Jersey (Mr. Pascrell).
The gentleman is a good American and a good congressman. He is not
overstating the case. We want Members of Congress to know what the
trends that are going on here. This is as much a question of whether
the will of this body is to prevail in light of the mandates we have
put in the statutes or whether these agencies are going to continue
going to do what they want to do regardless of the will of Congress.
Mr. Chairman, I yield 3 minutes to the gentleman from Pennsylvania
(Mr. English), my friend, to speak on this subject.
Mr. ENGLISH. Mr. Chairman, I would also like to salute the gentleman
from Missouri (Chairman Talent) and the gentlewoman from New York (Ms.
Velazquez), the ranking member, of the Small Business Committee for
bringing forward this legislation now and on a bipartisan basis.
Mr. Chairman, America's 23 million small businesses employ more than
50 percent of the private workforce and they generate more than half of
the Nation's gross domestic product. They are the principal source of
new jobs in the U.S. economy and the primary source of dynamism in the
U.S. economy. But no matter how they shape our economy, small
businesses in general, and notably women-owned businesses, still face
an uphill battle when it comes to obtaining Federal contracts, that is
why I rise in strong support of this legislation, the Small Business
Competition Preservation Act of 2000.
Mr. Chairman, small businesses have an inherent disadvantage of scale
because of their size and resources.
{time} 1100
It is difficult for them to compete in a procurement landscape
dominated by
[[Page H7880]]
big business. Congress has, as the gentleman noted, enacted goals for
Federal agencies that give small businesses a fighting chance in a
playing field slanted toward the big boys. One goal calls for small
business to be awarded just 20 percent of Federal contracts; but, Mr.
Chairman, not a single Federal agency, not one, has met that goal.
Federal agencies, and particularly the Department of Defense, have
ignored these goals and instead instituted procurement policies more
focused on alleged efficiencies in the procurement system. By
consolidating numerous jobs into one contract, Federal agencies erect a
barrier to participation by small business. Small businesses have
limited resources to draw on and work at a disadvantage when it comes
to bidding on a bundled Federal contract.
I have heard from many small business and women-owned business owners
who have expressed their concerns and shared their stories of the
quality services that they could offer the Federal Government but are
unable to do so because a Federal agency chooses a bundling process
with contracts instead of a series of small contracts. After all, how
can a small business grow and expand if the Federal Government
consistently penalizes them for their size by only offering bundled
contracts, which are often too large for a single small business to
handle?
That slants the playing field toward big business, making it
impossible for smaller players to compete.
I hope my colleagues will join me in support of H.R. 4945. After all,
the Federal Government should be fostering the dreams that this Nation
was built on, which is what this legislation is intended to do.
Ms. VELAZQUEZ. Mr. Chairman, I yield 3 minutes to the gentlewoman
from the Virgin Islands (Mrs. Christensen).
Mrs. CHRISTENSEN. Mr. Chairman, I rise today to join my colleagues on
both sides of the aisle in support of H.R. 4945, the Small Business
Competitive Preservation Act. During the past two congressional terms,
my colleagues and I from the Committee on Small Business, under the
distinguished and very effective leadership of the gentleman from
Missouri (Mr. Talent) and the gentlewoman from New York (Ms.
Velazquez), the ranking member, have devoted many hours to conducting
hearings on contract bundling and the negative impact that this
practice has had on small business.
From these hearings, we have clearly seen that there is no direct
evidence which shows that bundling has saved the government money or
that a higher quality of product was delivered by larger companies.
Just before our summer recess, our ranking member, the gentlewoman
from New York (Ms. Velazquez), and the Democratic members of the
Committee on Small Business released a contracting study, which we have
heard about, known as a ``score card,'' which showed that a number of
Federal agencies, in particular the Department of Defense, rely on
contract bundling. This study further showed that minority- and women-
owned businesses have felt the hardest impact from contract bundling
and that nearly every Federal agency failed to meet the negotiated
small business goals for fiscal year 1999.
Perhaps the most revealing evidence that has been produced from the
hearings on contract bundling is that there is no hard data on the
impact of this practice. There is no way to track exactly what is
happening or to hold anyone accountable; most importantly, no way to
develop a remedy.
Mr. Chairman, we have had enough hearings. Now it is time to act, and
we are doing so in H.R. 4945. H.R. 4945 imposes the establishment of a
record-keeping mechanism that would allow the Small Business
Administration to keep track, among other things, of whether the
measurably substantial benefits alleged by the Federal agencies in
support of contract bundling are actually achieved. It requires
specific reporting to Congress and it further closes loopholes which
have allowed this procedure to continue to grow and to bypass mandates
of law.
Mr. Chairman, small businesses and minority-owned businesses have
suffered tremendously under bundling. I urge my colleagues to preserve
the integrity of the Federal Government and the survival of small
businesses by voting in support of H.R. 4945.
Mr. TALENT. Mr. Chairman, I yield 3 minutes to the gentlewoman from
New York (Mrs. Kelly).
Mrs. KELLY. Mr. Chairman, I rise in support of H.R. 4945, the Small
Business Competition Preservation Act of 2000. Small businesses are a
key factor in the growth of the American economy, and women-owned
businesses are a vital element. Nevertheless, there remains one sector
of the American economy in which small businesses in general and women-
owned businesses face difficulty entering: the provision of goods and
services to the Federal Government. Congress has enacted goals for
small business participation of 20 percent and for women-owned
businesses 5 percent. Not one Federal agency has met either of these
goals.
Despite the goals, Federal agencies and, in particular the Department
of Defense, have instituted procurement policies that are more focused
on alleged efficiencies in the procurement system than in meeting the
statutory goals. By putting together and bundling a number of
requirements into one contract, the Federal agencies erect a barrier to
participation by small businesses.
I have cosponsored H.R. 4945 because I believe it is a necessary step
in eliminating unnecessary contract bundling. I sat in committee
hearings listening to both Federal bureaucrats and small businesses
disagree over the impact of the same contract. Obviously, each side has
their own slant on whether the contract will benefit or detract from
small businesses; but, of course, intuitively it makes sense that the
larger the requirements for a contract the less likely that a small
business will have the resources to win that contract.
H.R. 4945 provides Congress and the Federal Government with the
necessary data to properly assess contract bundling. H.R. 4945 requires
the SBA to maintain a database of bundled contracts, determine how many
small businesses are displaced as prime contractors and analyze bundled
contracts to determine whether real savings or other benefits have
accrued to the Federal Government.
It seems very sensible to me. Even though the Small Business
Reauthorization Act of 1997 requires procuring agencies to perform such
studies, we all know that the agencies can clearly bias their
analytical information to support the result they wish it to be, in a
regulation or specific contracting action.
In the same way that the Truth in Regulating Act gives the Government
Accounting Office the authority to provide Congress with information
about regulations, H.R. 4945 authorizes the Small Business
Administration to provide unbiased information to Congress on the
effects of contract bundling on small businesses.
Once we have this data, Congress will then be able to sensibly
consider what changes are needed to Federal Government procurement
statutes to ensure that small businesses, especially women-owned
businesses, are not excluded from providing goods and services to the
Federal Government. I urge the Members to support H.R. 4945 and bring
to light the Federal Government's procurement practices that hinder
small business participation, reduce competition and ultimately cost
the American taxpayer.
Ms. VELAZQUEZ. Mr. Chairman, I yield 3 minutes to the gentlewoman
from California (Ms. Millender-McDonald).
Ms. MILLENDER-McDONALD. Mr. Chairman, I would like to thank the
chairman and the ranking member for their leadership and for bringing
this much-needed legislation to this body.
Mr. Chairman, as the ranking member of the Subcommittee on
Empowerment of the Committee on Small Business, I rise in strong
support of the Small Business Competition Preservation Act. America's
hard-working small business owners, entrepreneurs and employees are the
bedrock of our Nation's unprecedented economic growth. Small businesses
represent over 99 percent of all employers and employ 52 percent of the
private workers; 61 percent of the private workers on public
assistance; and employ 38 percent of the private workers in high-tech
companies. They provide 51 percent of the private sector output and
[[Page H7881]]
represent 96 percent of all exporters of goods. These hard-working
businessmen and women need us to pass the Small Business Competition
Preservation Act to assess the effectiveness of contract bundling,
which has dominated the Federal procurement market for years.
This legislation would require the administrator of the SBA to
determine whether bundling contracts actually achieves the savings that
Federal agencies assume. The bill will also require the administrator
to maintain a database that would track the number of small businesses
who are displaced as prime contractors as a result of contract
bundling.
Currently, there is no data available which shows contract bundling
is effectively cutting costs. However, our Federal agencies have
insisted on bundling most of its procurement contracts. This has shut
out too many qualified small businesses, especially women- and
minority-owned businesses, which are growing at the fastest rates. The
number of African American-owned businesses soared by 46 percent from
1987 to 1992. Hispanic-owned businesses are among the fastest growing
segments of the U.S. business population, with 82.9 percent rate of
growth during the same period. Businesses owned by Asian Americans,
American Indians and other minorities increased by 87.2 percent during
this same period.
This same success has been achieved by women-owned businesses. In
1992, there were just over 400,000 women-owned businesses. Today, they
total 8.5 million and represent one-third of all U.S. companies. Women-
owned businesses generate $3.1 trillion in revenue, an increase of 209
percent between 1987 and 1997 after adjusting for inflation. This
resounding rate of growth has outpaced all other business growth in
each of the 50 States.
I urge my colleagues, Mr. Chairman, to join the gentleman from
Missouri (Mr. Talent), the gentlewoman from New York (Ms. Velazquez),
and me in voting for America's small businesses by voting for the Small
Business Competition Preservation Act. We cannot give them anything
less.
Ms. VELAZQUEZ. Mr. Chairman, I yield 2 minutes to the gentlewoman
from Ohio (Mrs. Jones).
Mrs. JONES of Ohio. Mr. Chairman, I would like to thank the chairman
of the Committee on Small Business, the gentleman from Missouri (Mr.
Talent), and my ranking member, the gentlewoman from New York (Ms.
Velazquez), for their hard work on the Committee on Small Business.
During my first term in Congress, I have had an opportunity to work
very hard with each of them in trying to preserve the small businesses
in our country. I also succeeded my good colleague, the gentleman from
Maryland (Mr. Wynn), who has been working very hard on behalf of the
Congressional Black Caucus on this issue of bundling.
I will not be repetitive, Mr. Chairman, in my remarks. My colleagues
have put on the record very important information about the impact that
bundling has had on small business. The businesses from the 11th
Congressional District of Ohio, which I represent, which is Cleveland
and the surrounding suburbs, have come to me on more than one occasion
saying, this bundling is keeping us from having an opportunity to do
business with the United States Government. What can you do about it?
What can you do about it?
I am pleased to be supportive of my colleagues on this issue. I kind
of think of it sometimes as an impact of a business in my own
community, where they say I have been making this ice cream for 100
years in my community but the larger companies keep making ice cream.
My ice cream is as good. It tastes as good, but I cannot competitively
offer the same price. Give me a chance to get to the table. Give me a
smaller contract where I can do business with my people, so the people
in my community can eat, send their kids to school, live in a nice
house. So what we are just saying is we need the opportunity.
What this bill will do will prove what we are saying. It will show
that small businesses in our country have been displaced and basically
put out of business as a result of not having access to government
contracts. The bundling has killed their opportunity to be competitive,
and we want them to be competitive once again.
So I am going to stop at this point and just say that I am glad to be
a part of a committee, the Committee on Small Business, that gets to
issues, passes partisanship, and gets to issues that are important to
the small businesses of our community.
Mr. TALENT. Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, we do not have any more speakers over here. I notice
the gentlewoman has some; and if she needs some extra time, I am more
than happy to yield. I appreciated very much the comments of the last
two speakers, the gentlewoman from Ohio (Mrs. Jones), and the
gentlewoman from California (Ms. Millender-McDonald). I appreciate
their contribution to the committee on this and other issues.
The gentlewoman from California (Ms. Millender-McDonald) made the
point very strongly about the impact of this bundling on minority
participation in particular, and she is absolutely correct. The small
business growth in the minority community and among women is tremendous
and we have not seen that reflected among the agencies, and bundling is
one of the reasons. It has a disproportionate impact on these kinds of
entrepreneurs; and this is ironic, given the fact that periodically we
see somebody in one of the agencies with some huge photo op about how
they are trying to help minority small businesspeople and then they
will bundle contracts which automatically yanks away a lot of business
from them.
One of the ways they do this, Mr. Chairman, is through something they
called IDIQ contracts, which is indefinite delivery, indefinite
quantity contracts. So they will take a particular line of business
which they have been contracting out, maybe ordering paper for the
copier, and they have been contracting that out as just straight
contracts. Small businesses have been participating in bidding; and
usually when they bid, they win because they are more efficient and
they provide better quality. So then what they will do is they will
say, oh, no, what we need is you have to be able to provide as much
paper as we want on a moment's notice. It is an indefinite delivery and
indefinite quantity.
{time} 1115
Well, this, of course, makes it more difficult for small business
people. They do not maintain the kinds of staff and the kind of
reserves that bigger businesses do, and then they will expand that and
they will say, now it has to be all office supplies you have to be able
to provide.
Then, when the small businesses complain and they come to us, as they
came to the gentlewoman from Ohio and she complains, and the committee
complains, the Committee on Small Business complains and the Small
Business Administration complains, if we do it long enough and strong
enough, eventually they will say okay, well, here, we will set aside a
contract, an IDIQ contract for a minority businessperson, so yes, we
have them on the schedule now and then they never order anything from
them, or they do not get any business that way, either.
As we can see, Mr. Chairman, and as the House can see, we are tired
of it. We have been living with this on the committee for several years
and it is time for the agencies and the government to pay attention to
it.
I will give another example, Mr. Chairman. The GSA, for years,
contracted out elevator repair in Federal buildings on a building-by-
building basis and then they bundled it into eight regional contracts.
So while before it used to be on a building basis or a city-wide basis
so that small elevator repair firms could do it and now they cannot,
and it makes it virtually impossible for small businesses to compete
logistically or financially. And then, again and again, the
justification is it helps the taxpayer or we get better quality, and
then when we investigate to try and find out how it helps the taxpayer
or to get better quality, they cannot even justify it on their own
terms. This bill is designed to make sure that they do at least that.
So I want to thank the gentlewoman from New York for her leadership
on this issue, as well as her assistance on this bill.
Mr. Chairman, I reserve the balance of my time.
[[Page H7882]]
Ms. VELAZQUEZ. Mr. Chairman, I yield 5 minutes to the gentleman from
Maryland (Mr.Wynn).
Mr. WYNN. Mr. Chairman, let me begin by thanking first the gentleman
from Missouri (Mr. Talent), the chairman of the Committee on Small
Business for his keen insight, hard work and dedication on this issue.
He has worked very hard and I am most impressed, and I thank him for
his leadership. I also thank the gentlewoman from New York (Ms.
Velazquez), the ranking member, for her tenacity and determination for
bringing this bill to the floor, the result of which is a bipartisan
piece of legislation that will help the small business community in
America.
Mr. Chairman, I rise in strong support of this legislation. As we
have heard, small businesses are the engine of growth in America. Small
businesses are a source of important competition in America, and small
businesses are a source of diversity in America, as women-owned
businesses, African American-owned businesses, Hispanic-owned
businesses and Asian-owned businesses and others are coming to the
American workplace offering their goods and services to the United
States Government. The sad fact, however, is that bundling has begun to
displace these businesses, has squeezed many of these businesses out,
and I believe that is wrong, unfair, and not good for this country.
In 1995, the White House held a conference on small business and one
of the major recommendations from that conference was that we limit and
restrict bundling because it was displacing small business.
Now, the response from the other side is that we need this bundling
because it is more efficient. The problem is, they have never been able
to prove that. What has happened, however, is that big companies have
gotten these contracts to the disadvantage of small businesses.
Let me tell my colleagues what happens, and it is really an
unfortunate situation. A contract where we may have had 10 or 12
competitors competing to offer the government the best price are now
squeezed out because that contract is now consolidated into one huge
contract. So the big company with very little or no competition gets
this huge regional contract and then, with no competition from the
little guys, does not necessarily give the Government the best price.
What they do, however, is skim off the profit margin from that contract
and then subcontract back out the contract to small businesses, leaving
them with no profitability. That is one of the perhaps lesser known
problems with the contract bundling.
Unfortunately, bundling is proliferating. There are currently four
major contracts within DOD alone projected to surpass $25 billion. The
Navy Internet contract, the Air Force FAST contract, the Marine food
service contract, and the Navy janitorial contract in San Diego. In
each instance, analysis shows these contracts can be performed by small
businesses, and that there is no national security threat that would
justify bidding these contracts on a bundled basis.
What has been the result of this pattern? Well, although DOD
procurement has increased from $109 billion to $116 billion from 1998
to 1999, we have had a decrease of 34 percent in the number of small
business prime contractors, a decrease of 25 percent in the number of
minority-owned firms, and a decrease of 38 percent in the number of
women-owned businesses.
To be brief, we are losing our small businesses, they are being
squeezed out, displaced, or they are having their profitability denied
because of the practice of contract bundling, and we need to stop it.
We need to demand that if the taxpayers are going to be served by
bundling, that the people doing the bundling document and prove it.
That is what this bill requires, and that is why I think it is so
important.
One final note. It is important that small businesses not be just
subcontractors, that they be prime contractors, because one of the
requirements of bids is that one has experience as a prime contract, so
not only does bundling deny small businesses, it precludes their
growing into larger, more profitable companies. We have an excellent
bill here, it is a bipartisan bill, it will enable us to find out
whether bundling is good for America or bad for America, and it will
give, ultimately, small businesses a fair chance.
Mr. Chairman, I urge passage of the bill, and I thank both the
chairman and the ranking member for their leadership.
Mr. TALENT. Mr. Chairman, I yield myself such time as I may consume.
Before the gentleman from Maryland leaves, if he would just engage in
a little colloquy with me on my time, because he raised a point in
closing, and I know he did not have enough time to elaborate, but it is
an excellent point, so on my time if the gentleman would elaborate with
me a little bit.
He made the point about how important it is that small business
people be prime contractors as well as subcontractors, and the
gentleman is right. I wonder if he has had this experience that I have
had.
Small businesses come to me and say, well, okay, they will say, it is
okay because you are a subcontractor, and I have had a lot of minority
small businesses in particular tell me this, so that we get listed as a
subcontractor by the prime contractor, and then when it comes time for
the prime contractor to do the contract, they never give us any
business, so they are not a prime contractor or a subcontractor.
Mr. Chairman, I would ask the gentleman if he has had that
experience.
Mr. WYNN. Mr. Chairman, will the gentleman yield?
Mr. TALENT. I yield to the gentleman from Maryland.
Mr. WYNN. Mr. Chairman, I absolutely have had that experience, and I
thank the chairman for raising that point. As a matter of fact, I
introduced legislation, I do not think it is going anywhere this
session, which would say that if an agency lists a subcontractor, they
have to use that subcontractor or justify in some legitimate way, for
some legitimate reason, not using that contractor; otherwise, it is
essentially fraud, it is a fraud on the public, it is a disservice to
the contractor. So I think the chairman's point is certainly very well
taken.
Mr. TALENT. Mr. Chairman, I thank the gentleman, and I will reclaim
my time and just say, if that bill gets assigned to my committee, it is
going to go some place, I will tell my colleague that.
The problem here, and the House needs to know this, is that these
bills sometimes get sequential referrals and get caught up in the
process. In this case we have jurisdiction, so we were able to get this
one out.
I really want to thank the gentleman for his work and efforts in this
area, and his expertise as well.
Mr. Chairman, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Chairman, I yield 2 minutes to the gentleman from
Texas (Mr. Ortiz).
(Mr. ORTIZ asked and was given permission to revise and extend his
remarks.)
Mr. ORTIZ. Mr. Chairman, I rise in support of the Small Business
Preservation Competition Act, and thank the gentlewoman from New York
(Ms. Velazquez) for her leadership on this issue that affects so many
businesses across the country, particularly in rural areas such as the
one I represent in south Texas.
Every time I go home, I see a small businessman or businesswoman in
my travels around town. They tell me about how the contracts that were
once part of the healthy competition in the area are finding more and
more that they are edged out of business by the mega corporations that
can afford to combine a function and underbid for a multitude of
services.
Many times, to compete for contracts that are over hundreds of
millions of dollars, small businesses just do not have the financial
resources. Now, they have the experience, they have the skills, but it
is the financing resources or bonding capacity to compete for these
contracts. We have to realize, Mr. Chairman, that the small business
community happens to be the backbone of our economy. It is small
businesses that are bigger than General Motors, but slowly and surely,
we are leaving them out of the process.
As a member of the Committee on Armed Services and the ranking member
on the Subcommittee on Military Readiness, I have seen this happen all
the time. I am concerned about one of the issues that is happening in
my district about trying to regionalize and
[[Page H7883]]
getting several bases together. Sometimes we are wondering whether they
are doing this because if a small businessperson comes with a contract
of $700,000 and then there is another contract more or less similar at
the other base, they combine them, and the small businessperson cannot
compete for that project.
This is why this is so, so important.
Mr. Chairman, I appreciate the fact that many of my colleagues are
convinced that contracting out services of the Federal Government would
save money. As a member of the Committee on Armed Services, in many
instances, I have seen that this is just the opposite. We need to be
able to give the small business people the opportunity for them to
compete, and I favor this piece of legislation.
Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may
consume.
I would like to close by again encouraging full support for this very
important piece of legislation, H.R. 4945.
Mr. Chairman, this legislation, the Small Business Competition
Preservation Act of 2000, is an excellent starting point for making
common sense changes to the contract bundling statute. During this
Congress and the last, we have heard a lot of talk about
accountability. We have asked accountability for everyone from welfare
recipients to teachers. It is time also for Federal agencies to be
accountable for their actions, and that is what this bill is really
about.
As the Committee on Small Business has so often heard, data is just
not currently being collected on these mega contracts barring from
gauging the true impact bundling is having on small businesses who want
to do business with our government.
Mr. Chairman, H.R. 4945 will set up a database to track not only all
bundled contracts, but also the small businesses displaced by
consolidations. It also requires analysis and directs the SBA to file a
report with Congress aimed at providing greater information about the
scope of contract consolidations within the Federal marketplace.
Mr. Chairman, this legislation focuses on the need for greater equity
in Federal procurement for our Nation's small businesses and the
adverse effect of increased contract size. Federal agencies are relying
on combining contracts in an effort to streamline government and
increase its efficiency.
While these are laudable goals, in not one instance has a Federal
agency come before the committee and pointed to an instance where
taxpayer dollars were saved and the government received better quality
from a large business. They are not proving cost savings and small
businesses are being shut out of the Federal marketplace. This bill
gives us the ability to collect the one commodity that will help us
make real changes. That commodity is information. That information can
then be turned into common sense solutions to solve the problem of
bundling.
Mr. Chairman, I strongly encourage the passage of H.R. 4945.
Mr. Chairman, I yield back the balance of my time.
Mr. TALENT. Mr. Chairman, I yield myself such time as I may consume.
In closing, I thank the gentlewoman for her comments and her
leadership on this issue.
Mr. Chairman, one of the responsibilities of the Committee on Small
Business is to inform the Members of the House when its will regarding
opportunity for small business is not being carried out within the
Federal agencies; specifically, as we have heard today, most
predominantly within the Department of Defense. I appreciated very much
the comments of the gentleman from Texas (Mr. Ortiz), who sits on the
Committee on Armed Services with me and sees this constant flouting of
our will regarding small business over and over again from that
perspective as well. This is not just partisanship for small business.
I think that would be appropriate, Mr. Chairman. Not only is small
business the backbone of the economy, as Members have said so
eloquently today, but it is increasingly the backbone of opportunity.
{time} 1130
It may be the only source of opportunity for so many people in our
country: for single moms, who will not have an opportunity to get a
postgraduate education; or for people reentering the workforce after
raising kids; or people coming from distressed neighborhoods or
disadvantaged backgrounds. They do not have the same kind of
opportunities that other people may have, but they can start a small
business. And we have had evidences of that and testimonies of that
over and over again before the Committee on Small Business.
We think the government ought to favor small business. Certainly it
ought not to disadvantage them. And that is what is at stake here. This
is a question of fairness for our entrepreneurs around the country. We
have given numerous examples. We could give more of them, but I do not
think it is necessary.
This bill simply allows us to find out what is going on. It has a
unitary definition of bundling. It establishes a database, instructs
the Committee on Small Business to operate that database and tell us
what is going on, and then analyze whether any of these contracts
actually save money, as they say it will, or produce higher quality, as
they say it will. We have not found any evidence of that, and we have
looked pretty hard for the last year and a half.
So it is up to the Members to decide what they want to do. I am going
to get a rollcall vote on this issue, Mr. Chairman. I hope Members do
not mind. As the gentlewoman from New York said, one of the reasons for
this bill is to send a message, if the House wants to send it,
regarding contracting and procurement for small businesses. We just
have to decide. Do we want to vote for opportunity for small business
people, or convenience or the latest trend in procurement within the
Federal bureaucracy? Do we want to vote for continued excuses and
evasions when we ask the agencies to justify what they are doing, or do
we want to vote to enforce and send a message about the will of this
body regarding opportunities for small entrepreneurs around this
country?
I know how I am going to vote, Mr. Chairman. I suspect that I know
how the Members of the House are going to vote.
Mr. HINOJOSA. Mr. Chairman, I rise today to help try to right a
grievous wrong that America's small businesses have suffered far too
long. Time and time again, we talk about how small businesses are the
backbone of America. Why then, does it seem as if small businesses are
constantly fighting an uphill battle? Take for example, the issue
before us today, contract bundling. What could be more unfair? I am
glad that as a body, we are taking a united stand today to try and
change this practice and to hold Federal agencies that fail to provide
a fair and competitive market for small businesses accountable for
their actions. This is long overdue.
You are going to hear numerous facts from my colleagues documenting
why this practice is so abhorrent, but the point I want to make is--
wrong is wrong. We should all be starting from a level playing field.
The Federal Government took on this responsibility when it promised
small businesses would receive a fair opportunity to compete for
Federal contracts. It has fallen short of meeting this promise.
However, we don't know to what degree this has occurred. We do know
that relying on contract bundling devastates small businesses and shows
no measurable savings to American taxpayers. We do know that the
Government awarded $200 billion in Federal contracts but small
businesses only received $43 billion in contract dollars. We do know
that this is clearly not a level playing field.
The Small Business Competitive Preservation Act of 2000 will allow
for us to provide the Small Business Administration with the tools to
right the wrongs of contract bundling. It will broaden the definition
of contract bundling, it will also require the SBA Administrator to
maintain a contract bundling database, and it will inform the House
Small Business Committee as to whether or not there are measurable and
substantial benefits to contract bundling. Through the passage of this
legislation, we will mend the promise broken by meaningless words. We
will not only claim that small businesses are the foundation for
America's continued prosperity, but we will show them that we mean it.
Mr. UDALL of Colorado. Mr. Chairman, I rise in support of H.R. 4945,
the Small Business Competition Preservation Act of 2000 (SBCPA) and
urge its adoption.
H.R. 4945 is a response to the lack of empirical data available on
the issue of bundling. This legislation will provide a number of
different methods of collecting information on the how, what, when,
where and why of contract bundling. For example, SBCPA requires the
Small Business Administration (SBA) to develop and maintain a database
of these contracts within the federal government. This
[[Page H7884]]
database not only will track agency bundled contracts but it will also
maintains statistical information on the tangible effects of bundling
on smaller companies and in particular industries of the small business
community.
SBCPA also calls for the SBA to analyze renewable bundled to
contracts to determine whether they have achieved the savings and
benefits used to justify consolidation in the first place. In addition,
the SBA would then be required to evaluate whether those savings and
benefits would continue if the contract remains bundled. Once this
information is fully analyzed, the SBA Administrator would then be
asked to put together an annual report.
The numbers tell the whole story. The federal government awarded
almost $200 billion in federal contracts in 1999, yet small businesses
suffered a significant drop in the number of available contracts. Small
businesses received only 4.9 million contracts which totaled $43
billion in total contract dollars. This represents almost a 23 percent
drop in a three-year period (1997-1999).
Minority and women-owned businesses have been particularly effected,
with nearly every federal agency failing to meet their negotiated small
business goals. In addition, some agencies have simply ignored these
goals and declared them ``not legally binding.''
I believe this bill takes an important step towards protect
contracting opportunities for small business in the federal
marketplace. I urge my colleagues to support this bill.
Mrs. McCARTHY of New York. Mr. Chairman, I rise in support of the
Small Business Preservation Competition Act. This important legislation
will keep track of bundled contracts and their impact on small
businesses.
A recent Contracting Study, also known as the ``Scorecard'', released
by the House Small Business Committee shows a number of federal
agencies, particularly the Department of Defense, are relying on
contracting bundling which is devastating small businesses while
showing no measurable savings to the American taxpayer.
This study also concluded that the federal government awarded almost
$200 billion in federal contracts in 1999, but small businesses
suffered a significant drop in the number of available contracts. Of
that, small businesses received only 4.9 million contracts which
totaled $43 billion in total contract dollars. This represents almost a
23 percent drop in a three-year period (1997-1999).
And with the decreasing number of federal prime contracts available
small businesses stand to be shut out of a multi-billion dollar
marketplace. Unfortunately, with a lack of available data, the ability
to obtain critical information about bundled contracts is severely
hampered.
This bill is a response to the lack of empirical data available on
the impact of contract bundling. SBPCA allows Congress to get a handle
on the effects and bring agency justification for these bundling
contracts into public view. In addition, the bill calls for agency
accountability of the cost savings of each bundled contract.
We all know that small business provides the very foundation for
America's continued prosperity. And while SBPCA helps to correct the
problems associated with contract bundling, there is more that must be
done to help these firms succeed in the federal procurement arena.
I urge my colleagues to support this important legislation.
Mr. TALENT. Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the bill is considered as having been read for
amendment under the 5-minute rule.
The text of the bill is as follows:
H.R. 4945
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) Short Title.--This Act may be cited as the ``Small
Business Competition Preservation Act of 2000''.
SEC. 2. DATABASE, ANALYSIS, AND ANNUAL REPORT WITH RESPECT TO
BUNDLED CONTRACTS.
Section 15 of the Small Business Act (15 U.S.C. 644) is
amended by adding at the end the following new subsection:
``(p) Database, Analysis, and Annual Report With Respect to
Bundled Contracts.--
``(1) Bundled contract defined.--In this subsection, the
term `bundled contract' includes--
``(A) each contract that meets the definition set forth in
section 3(o) regardless of whether the contracting agency has
conducted a study of the effects of the solicitation for the
contract on civilian or military personnel of the United
States; and
``(B) each new procurement requirement that permits the
consolidation of 2 or more procurement requirements.
``(2) Database.--
``(A) In general.--Not later than 180 days after the date
of enactment of this subsection, the Administrator of the
Small Business Administration shall develop and shall
thereafter maintain a database containing data and
information regarding--
``(i) each bundled contract awarded by a Federal agency;
and
``(ii) each small business concern that has been displaced
as a prime contractor as a result of the award of such a
contract.
``(3) Analysis.--For each bundled contract that is to be
recompeted as a bundled contract, the Administrator shall
determine--
``(A) the amount of savings and benefits (in accordance
with subsection (e)) achieved under the bundling of contract
requirements; and
``(B) whether such savings and benefits will continue to be
realized if the contract remains bundled, and whether such
savings and benefits would be greater if the procurement
requirements were divided into separate solicitations
suitable for award to small business concerns.
``(4) Annual report on contract bundling.--
``(A) In general.--Not later than 1 year after the date of
enactment of this paragraph, and annually in March
thereafter, the Administration shall transmit a report on
contract bundling to the Committees on Small Business of the
House of Representatives and the Senate.
``(B) Contents.--Each report transmitted under subparagraph
(A) shall include--
``(i) data on the number, arranged by industrial
classification, of small business concerns displaced as prime
contractors as a result of the award of bundled contracts by
Federal agencies; and
``(ii) a description of the activities with respect to
previously bundled contracts of each Federal agency during
the preceding year, including--
``(I) data on the number and total dollar amount of all
contract requirements that were bundled; and
``(II) with respect to each bundled contract, data or
information on--
``(aa) the justification for the bundling of contract
requirements;
``(bb) the cost savings realized by bundling the contract
requirements over the life of the contract;
``(cc) the extent to which maintaining the bundled status
of contract requirements is projected to result in continued
cost savings;
``(dd) the extent to which the bundling of contract
requirements complied with the contracting agency's small
business subcontracting plan, including the total dollar
value awarded to small business concerns as subcontractors
and the total dollar value previously awarded to small
business concerns as prime contractors; and
``(ee) the impact of the bundling of contract requirements
on small business concerns unable to compete as prime
contractors for the consolidated requirements and on the
industries of such small business concerns, including a
description of any changes to the proportion of any such
industry that is composed of small business concerns.''.
The CHAIRMAN. During consideration of the bill for amendment, the
Chair may accord priority in recognition to a Member offering an
amendment that he has printed in the designated place in the
Congressional Record. Those amendments will be considered read.
The Chairman of the Committee of the Whole may postpone a demand for
a recorded vote on any amendment and may reduce to a minimum of 5
minutes the time for voting on any postponed question that immediately
follows another vote, provided that the time for voting on the first
question shall be a minimum of 15 minutes.
Are there any amendments to the bill?
If not, under the rule, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Largent) having assumed the chair, Mr. Cooksey, Chairman of the
Committee of the Whole House on the State of the Union, reported that
that Committee, having had under consideration the bill (H.R. 4945) to
amend the Small Business Act to strengthen existing protections for
small business participation in the Federal procurement contracting
process, and for other purposes, pursuant to House Resolution 582, he
reported the bill back to the House.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. TALENT. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the
[[Page H7885]]
point of order that a quorum is not present.
The SPEAKER pro tempore. Evidently a quorum is not present.
The Sergeant at Arms will notify absent Members.
The vote was taken by electronic device, and there were--yeas 422,
nays 0, not voting 11, as follows:
[Roll No. 482]
YEAS--422
Abercrombie
Ackerman
Aderholt
Allen
Andrews
Archer
Armey
Baca
Bachus
Baird
Baker
Baldacci
Baldwin
Ballenger
Barcia
Barr
Barrett (NE)
Barrett (WI)
Bartlett
Barton
Bass
Becerra
Bentsen
Bereuter
Berkley
Berman
Berry
Biggert
Bilbray
Bilirakis
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Canady
Cannon
Capps
Capuano
Cardin
Carson
Castle
Chabot
Chambliss
Chenoweth-Hage
Clay
Clayton
Clement
Clyburn
Coble
Coburn
Collins
Combest
Condit
Conyers
Cook
Cooksey
Costello
Cox
Coyne
Cramer
Crane
Crowley
Cubin
Cummings
Cunningham
Danner
Davis (FL)
Davis (IL)
Davis (VA)
Deal
DeFazio
DeGette
Delahunt
DeLauro
DeLay
DeMint
Deutsch
Dickey
Dicks
Dingell
Dixon
Doggett
Dooley
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Everett
Ewing
Farr
Fattah
Filner
Fletcher
Foley
Forbes
Ford
Fossella
Fowler
Frank (MA)
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Ganske
Gejdenson
Gekas
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Goodling
Gordon
Goss
Graham
Granger
Green (TX)
Greenwood
Gutierrez
Gutknecht
Hall (OH)
Hall (TX)
Hansen
Hastings (FL)
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (IN)
Hill (MT)
Hilleary
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Hooley
Horn
Hostettler
Houghton
Hoyer
Hulshof
Hunter
Hutchinson
Hyde
Inslee
Isakson
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kanjorski
Kaptur
Kasich
Kelly
Kennedy
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kleczka
Knollenberg
Kolbe
Kucinich
Kuykendall
LaFalce
LaHood
Lampson
Lantos
Largent
Larson
Latham
LaTourette
Leach
Lee
Levin
Lewis (CA)
Lewis (GA)
Lewis (KY)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Lucas (OK)
Luther
Maloney (CT)
Maloney (NY)
Manzullo
Markey
Martinez
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McCollum
McCrery
McDermott
McGovern
McHugh
McInnis
McIntyre
McKeon
McKinney
McNulty
Meehan
Meeks (NY)
Menendez
Metcalf
Mica
Millender-McDonald
Miller (FL)
Miller, Gary
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Moran (KS)
Moran (VA)
Morella
Murtha
Myrick
Nadler
Napolitano
Neal
Ney
Northup
Norwood
Nussle
Oberstar
Obey
Olver
Ortiz
Ose
Owens
Oxley
Packard
Pallone
Pascrell
Pastor
Paul
Payne
Pease
Pelosi
Peterson (MN)
Peterson (PA)
Petri
Phelps
Pickering
Pickett
Pitts
Pombo
Pomeroy
Porter
Portman
Price (NC)
Pryce (OH)
Quinn
Radanovich
Rahall
Ramstad
Rangel
Regula
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Rothman
Roukema
Roybal-Allard
Royce
Rush
Ryan (WI)
Ryun (KS)
Sabo
Salmon
Sanchez
Sanders
Sandlin
Sanford
Sawyer
Saxton
Scarborough
Schaffer
Schakowsky
Scott
Sensenbrenner
Serrano
Sessions
Shadegg
Shaw
Shays
Sherman
Sherwood
Shimkus
Shows
Shuster
Simpson
Sisisky
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Souder
Spence
Spratt
Stabenow
Stark
Stearns
Stenholm
Strickland
Stump
Stupak
Sununu
Sweeney
Talent
Tancredo
Tanner
Tauscher
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thompson (CA)
Thompson (MS)
Thornberry
Thune
Thurman
Tiahrt
Tierney
Toomey
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Vitter
Walden
Walsh
Wamp
Waters
Watkins
Watt (NC)
Watts (OK)
Waxman
Weiner
Weldon (FL)
Weldon (PA)
Weller
Wexler
Weygand
Whitfield
Wicker
Wilson
Wolf
Woolsey
Wu
Wynn
Young (AK)
Young (FL)
NOT VOTING--11
Brady (TX)
Campbell
Diaz-Balart
Green (WI)
Klink
Lazio
McIntosh
Meek (FL)
Nethercutt
Vento
Wise
{time} 1156
Mr. METCALF changed his vote from ``nay'' to ``yea.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
Stated for:
Mr. GREEN of Wisconsin. Mr. Speaker, on rollcall No. 482, had I been
present, I would have voted ``yea.''
Mr. DIAZ-BALART. Mr. Speaker, on rollcall No. 482, had I been
present, I would have voted ``yea.''
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