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Level Playing Field

The SBA evens the odds for smaller businesses seeking to win contracts.
Magazine Contributor
2 min read

This story appears in the February 2004 issue of Entrepreneur. Subscribe »

The SBA has handed sledge hammers to federal contracting officials and told them to "break 'em up." That admonition, provided by the SBA in the form of new rules, is meant to force contracting officers to think twice before bundling small contracts, which could go to small businesses, into jumbo contracts meant for large primes. The new rules finalized by the SBA implement recommendations published in October 2002 by the Office of Federal Procurement Policy.

The new rules impose requirements on federal contracting officials. If contracts are over a certain dollar amount (varying by agency), the agency must coordinate its acquisition strategy with its Small Business Specialist no later than 30 days before the issuance of the solicitation. Part of that coordination requires the agency to identify alternatives to reduce or minimize bundling.

To address the problem from another angle, the SBA will allow contracting officials to give "significant weight" to a big-company bidder that has met subcontracting goals on previous contracts, so past performance could help when a big business bids for a new federal contract. But that extra credit won't be mandatory. In a related action, the SBA issued a proposed rule providing a list of factors to consider in evaluating a prime contractor's performance and good-faith efforts to achieve requirements in its subcontracting plan.

Class Dismissed?

Groups like the U.S. Chamber of Commerce vowed to redouble their efforts to get enough senators to back the Class Action Fairness Act, which fell to a filibuster last October. The bill, which had already passed the House, would ensure that large and complex class actions, involving plaintiffs and defendants from around the country, could be heard in federal courts. Plaintiffs' attorneys sometimes shop for state court venues, which seem more likely to award large damages, regardless of the merits of a particular class action lawsuit.

Stephen Barlas is a freelance business reporter who covers the Washington beat for 15 magazines.

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