Congressional Record, Volume 165 Issue 3 (Tuesday, January 8, 2019)

[Congressional Record Volume 165, Number 3 (Tuesday, January 8, 2019)]
[House]
[Pages H270-H271]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

CLARITY ON SMALL BUSINESS PARTICIPATION IN CATEGORY MANAGEMENT ACT OF
2019

Ms. VELAZQUEZ. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 226) to amend the Small Business Act to include best in
class designations in the annual report on small business goals
prepared by the Administrator of the Small Business Administration, and
for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 226

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Clarity on Small Business
Participation in Category Management Act of 2019''.

SEC. 2. INCLUSION OF BEST IN CLASS DESIGNATIONS IN ANNUAL
REPORT ON SMALL BUSINESS GOALS.

Section 15(h) of the Small Business Act (15 U.S.C. 644(h))
is amended by adding at the end the following new paragraph:
``(4) Best in class small business participation
reporting.--
``(A) Addendum.--The Administrator, in addition to the
requirements under paragraph (2), shall include in the report
required by such paragraph, for each best in class
designation--
``(i) the total amount of spending Governmentwide in such
designation;
``(ii) the number of small business concerns awarded
contracts and the dollar amount of such contracts awarded
within each such designation to each of the following--

``(I) qualified HUBZone small business concerns;
``(II) small business concerns owned and controlled by
women;
``(III) small business concerns owned and controlled by
service-disabled veterans; and
``(IV) small business concerns owned and controlled by
socially and economically disadvantaged individuals.

``(B) Best in class defined.--The term `best in class' has
the meaning given such term by the Director of the Office of
Management and Budget.
``(C) Effective date.--The Administrator shall report on
the information described by subparagraph (A) beginning on
the date that such information is available in the Federal
Procurement Data System, the System for Award Management, or
any successor to such systems.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
New York (Ms. Velazquez) and the gentleman from Ohio (Mr. Chabot) each
will control 20 minutes.
The Chair recognizes the gentlewoman from New York.

General Leave

Ms. VELAZQUEZ. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days to revise and extend their remarks and include
extraneous material on the measure under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from New York?
There was no objection.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support of my bill, H.R. 226, the Clarity on
Small Business Participation in Category Management Act of 2019.
Let me begin by welcoming back Ranking Member Chabot to this new
Congress. I have been privileged to serve on the Small Business
Committee for two decades and appreciate the relationship the ranking
member and I have cultivated. I look forward to working with him on
this bill and others as we remain steadfast in our efforts to ensure
small businesses have the resources to thrive now and in the future.
Our committee has long acknowledged small businesses' critical role
in the $500 billion a year Federal marketplace. When small firms are
awarded Federal contracts, the result is a win-win.
Category management is believed by some to be the best strategy to
get agencies the lowest price, but my committee has heard otherwise,
and the data backs this up. Small contractors on the multiple award
schedule consistently provide lower prices to agencies than those
offered through category management.
Despite this, agencies have increased the use of category management,
which not just increases costs to the Federal Government but also
limits contracts to small vendors. In our committee hearings last year,
we heard that more and more contracts are being consolidated and put
out of the reach of small businesses as a result of category
management.
This bill is a commonsense first step to address the need of small
vendors, particularly minority-, women-, and veteran-owned small
businesses, to remain competitors in the Federal marketplace. By
requiring that contracting activity under this new regime of category
management be reported in the annual goaling report from agencies to
Congress, today's bill protects the industrial base by creating a
mechanism for much-needed accountability.
H.R. 226 gives us the ability to analyze the data so that we can
truly understand the role category management is playing in the
marketplace and make changes accordingly.
Mr. Speaker, I am proud to offer this bill to provide accountability
to the category management regime. I urge Members to support this
legislation, and I reserve the balance of my time.
Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 226, the Clarity on Small
Business Participation in Category Management Act of 2019.
I thank Chairwoman Velazquez for working with us in a bipartisan
manner on this bill, as we have done over the years on a whole range of
other bills, whether the Democrats are in the majority or the
Republicans are in the majority. On this committee, Ms. Velazquez and I
have been able to work in a bipartisan manner, and we appreciate that
very much on this bill and many other things as well.
Category management is a procurement initiative that is being adopted
across the Federal Government. If implemented properly, it can be a
beneficial tool, allowing the government to better understand its
purchasing habits and identify cost savings, where appropriate.
However, as we discovered in a full committee hearing that we held on
this topic last Congress, setting mandatory targets to manage agency
spending may result in unintended consequences that could impact the
small business industrial base.
Specifically, this initiative may inadvertently reduce competition to
only a few vendors and may discourage new and emerging small businesses
from entering the Federal marketplace.
As a result, we may see a decrease in competition and an exodus of
small businesses from the Federal contracting base. We should ensure
that maximum opportunities are given to small businesses as we continue
to pursue cost savings across the Federal Government.
While I applaud the administration's efforts to reduce waste and
identify areas where savings could be achieved, when we do so, we
should try to avoid harming small businesses whenever possible.
H.R. 226 takes a first step toward assessing the impacts of category
management on small businesses by requiring the Small Business
Administration to report exactly how much is awarded to small
businesses through the best in class contracts. Establishing this
baseline and regularly monitoring these numbers is critical.
Mr. Speaker, I urge my colleagues to support this bill, and I reserve
the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield 3 minutes to the gentleman from
Mississippi (Mr. Thompson), the chairman of the Committee on Homeland
Security.
Mr. THOMPSON of Mississippi. Mr. Speaker, I thank my friend, Ms.
Velazquez, for yielding me the time.
Mr. Speaker, we are currently on the 18th day of President Trump's
government shutdown. On a daily basis, the economic harm of the
shutdown is being felt more acutely by small businesses in the Federal
marketplace than their larger competitors. In contrast to large firms,
small firms often rely on just a few contracts to provide a large
portion of their annual revenue. As such, many report that, during the
shutdown, they may have to lay off staff

[[Page H271]]

Small firms are projected to lose out on nearly $301 million daily in
new contract work because agencies cannot enter into new contracts
during the shutdown.
I urge the President to put America first and agree to reopen the
government.
Mr. Speaker, I rise in support of H.R. 226, the Clarity on Small
Business Participation and Category Management Act of 2019. H.R. 226
seeks to improve reporting on small business participation in Federal
contracting.
This legislation requires the Small Business Administration to report
to Congress on the number of small businesses awarded best in class
contracts and the dollar amount of such contracts. This information
should help us get answers regarding how category management impacts
the participation of small businesses, including minority-owned, women-
owned, and veteran-owned companies, in the Federal marketplace.
Market research has shown that past contract consolidation efforts by
the Federal Government have decreased the number of small prime
contracting opportunities in the Federal workplace. In fiscal year
2017, the percentage of contracting dollars that went to small
businesses was 24 percent, down from 26 percent in fiscal year 2015. As
such, concerns about the impact of category management on small
businesses are understandable.
As a longtime advocate for small businesses, I am pleased to
cosponsor this legislation, and I thank the gentlewoman from New York
for bringing this bill forward.
Mr. Speaker, I urge my colleagues to support small businesses by
voting in favor of this legislation.
Mr. CHABOT. Mr. Speaker, before I address just some final points
about this bill, I have to respond a bit to the gentleman from
Mississippi relative to the shutdown, which we all hope will be
resolved as soon as possible.
I don't think anybody in this body wants portions of the government
to shut down and people not to be paid during that period of time.
Hopefully, they will be paid in the future, but we don't necessarily
want to pay people for not working, because we don't want them not to
be working in the first place. So we need to get the government back
open.
That being said, at this point, there is a standoff because the
President and many Members in this body and in the other body believe
that it is time for us to enhance our border security, and that is one
of the principal issues right now and why the government is not open
completely. Most of the government is open. It is a relatively small
portion. However, any portion of the government that is closed is too
much.
But we do have folks who have been coming across illegally at our
southern border, and many believe that we do need to enhance the
security at that border. Part of that is a wall, or barrier, or
substantial fencing, or one thing or another--whatever you want to call
it--and we need do that. We owe it to the American people to do that.
So with that being said, I will just leave it there.
Mr. Speaker, I do believe that we ought to be looking to save
taxpayer dollars in the procurement process, and category management
may be a tool to do just that. However, we must maintain a vibrant
industrial base that has a healthy and growing population of small
firms to increase competition, spur innovation, and drive down costs.
This commonsense bill increases oversight on the administration's
efforts to streamline the procurement process and aims to ensure small
firms are not harmed in that process.
Mr. Speaker, I urge my colleagues to support this bipartisan
legislation, and I yield back the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, let me just respond to the gentleman's
comment regarding the shutdown. The fact of the matter is that the
President campaigned and told the American people that he will build a
wall and that it will be paid for by the Government of Mexico, and that
is not what he is telling us now.
Besides, this is the President's shutdown, and he was very proud when
he made that comment to Speaker Pelosi and the minority leader, Chuck
Schumer.
Mr. Speaker, I am proud of this important legislation to provide
much-needed oversight of small business participation in the
streamlined acquisition strategy known as category management.

{time} 1715

H.R. 226 requires that contracting activity under this new regime be
reported in the annual goaling report from agencies to Congress. This
data would allow us to better understand how small firms fare under
this new system and make adjustments if needed to guarantee an
equitable playing field.
This bill protects the small business industrial base by giving a
mechanism for much-needed accountability. It is supported by the
National Small Business Association, the U.S. Chamber of Commerce, and
the National Electrical Contractors Association, which is the voice of
the $171 billion electrical construction industry.
I thank the ranking member for his support of H.R. 226, and I remain
committed to ensuring small firms are competitive within the Federal
marketplace.
Mr. Speaker, I urge Members to support this bill, and I yield back
the balance of my time.
Ms. JACKSON LEE. Mr. Speaker, I rise in support of H.R. 226, the
``Clarity on Small Business Participation in Category Management,''
which amends the Small Business Act.
This act would require the Administrator of the Small Business
Administration to provide in its business goal report information as to
how many small businesses are participating in the ``best in class''
vehicles so Congress can ascertain the effectiveness of such
contracting vehicles for small firms.
H.R. 226 amends ``the Small Business Act to include best in class
designations in the annual report on small business goals prepared by
the Administrator of the Small Business Administration, and for other
purposes.''
The report is to include among other things, the number of small
business concerns awarded contracts and the dollar amount of such
contracts awarded within each such designation to qualified HUBZone
small business concerns, small business concerns owned and controlled
by women, small business concerns owned and controlled by service-
disabled veterans, and small business concerns owned and controlled by
social and economically disadvantaged individuals.
Mr. Speaker, 99.9 percent of women-owned businesses are small
businesses, whereas the majority of male- and female-owned employer
businesses have fewer than five employees, more male-owned small
businesses employ five or more employees.
Of the 30 million small businesses nationwide, 8 million are owned by
minorities.
Between 2007 and 2012 minority owned small businesses increased in
volume by around 38 percent.
Small businesses ``are the engines of job creation in the United
States.''
Small businesses contribute to growth and vitality in many important
areas of economic and socioeconomic development.
Small businesses create jobs and job opportunities, spark innovation,
and provide opportunities for women and minorities to achieve financial
success and independence.
For these reasons, I ask my colleagues to join me in supporting H.R.
226.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from New York (Ms. Velazquez) that the House suspend the
rules and pass the bill, H.R. 226.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Ms. VELAZQUEZ. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.

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