Anti-bundling and HUBZone provisions give small businesses an
edge in a recently signed bill.
By Stephen Barlas
For those of you hoping to sink your teeth into a federal
contract, there's good news. A few key measures were included
in the SBA Reauthorization Act of 1997 signed by President Clinton
December 2.
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Two provisions of note: one dealing with incentives to
discourage federal contract "bundling" and another
dealing with HUBZones (areas that are smaller than counties and
have high poverty rates). The anti-bundling provision attempts to
keep for small businesses federal contracts thathave historically
gone to the small and medium guys. More and more, bite-sized
federal contracts have been grouped together foradministrative
reasons so that only a Fortune 1000 company could get its jaws
around the bid.
For the first time, federal procurement officials will award
extra "points" to a large contractor whose bid for a
federal government contract, be it from the DOD, NASA or any other
agency, includes small companies that would get some of the work,
especially the portions of a "bundled" contract that had
in the past gone to smaller companies.
The anti-bundling provision doesn't have very sharp teeth.
It simply creates an incentive, which may or may not turn out to be
worth anything. This uncertainty was reflected in a lukewarm
endorsement from Jere Glover, chief counsel in the SBA Office of
Advocacy, who calls the provision "a step toward addressing
some small-businessconcerns."
But Felix Martinez, director of procurement programs for the
American Consulting Engineers Council, 85 percent of whose members
are small-business owners, calls the provision a "good
compromise."
As for the HUBZone measure, call it a Gold Rush for
entrepreneurs, who will be stampeding to HUBZones in the months to
come. Starting October 1, 1 percent of all federal contracts will
be reserved for small HUBZonebusinesses for a total of about $2
billion. The percentage increases bit by bit, but only until it
hits 3 percent in 2003.
To bid for a part of that pot, a small business must be located
in acensus tract where at least half the households have an income
of less than 60 percent of the Area Median Gross Income. The
business must also hireat least 35 percent of its employees from
that or surrounding HUBZones.
Wondering if you'll qualify? You'll have to sit tight
for now. While there are some estimates for certain states on the
number of tracts that will qualify, there is no national count
yet.
Stephen Barlas is a freelance business reporter who covers
the Washington beat for 15 magazines.