Congress Focuses on Small Businesses in Recent Actions

A set of proposed small business bills hit the House floor last week, all passing and heading to the Senate. In general, the proposed legislation targets increased small business participation in the federal marketplace. The legislation is noteworthy, given the challenges in federal small business contracting lately with the decline in the number of small businesses despite an overall increase in federal contract spending. Here are the recent House bills small business contractors should be mindful of:

H.R.4669: DOE and SBA Research Act

Establishes a memorandum of understanding between the Department of Energy and the Small Business Administration for research and development activities reflecting both agencies’ missions and priorities.

H.R.3511: Service-Disabled Veteran Opportunities in Small Business Act

Requires training, guidance, and best practices by the Office of Veterans Business Development to increase contract awards to service-disabled veteran-owned small businesses (SDVOSBs), particularly to agencies that fail to meet established SDVOSB goals.

H.R.5265: Small Business Administration Rural Performance Report Act

Directs the Small Business Administration to submit a report on efforts promoting small businesses and agricultural economies in rural areas, specifically the financial assistance offered to small businesses in rural areas.

H.R.7128: The WOSB Integrity Act of 2024

Amends existing regulation to ensure federal awards made to women-owned small businesses (WOSBs) meet the small business size standards, requiring the SBA and/or a third party to certify WOSBs, and limiting risk in the self-certification process.

For its part, the Senate is also working on legislation to boost small business participation in the federal marketplace. Specifically, Senator Joni Ernst is pushing for two bills to assist small businesses in competitions. The first, the Conforming Procedures for Federal Task and Delivery Order Contracts Act of 2024 (S.3626), shifts agency review of cost to the task order level and allows small businesses to bid on opportunities according to skill/expertise. The other, the Accountability and Clarity in Contracts to Engage Small Suppliers and Small Businesses Act (S.2720), requires an increase in plain language requirements in solicitations, and implements measures for accurate assessment of the small business industrial base with a focus on new entrants. Both Senate bills have been referred to their respective committees.

Another area top of mind for small businesses and Congress is the reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Waiting until the last minute, Congress extended the programs, with added national security and performance requirement provisions, in September 2022 for another three years until September 30, 2025. In an interview with Federal News Network, Senator Ernst expressed her reservations on the programs, stating that awards tend to go to the same set of known small businesses, allowing little room for new ones to participate. A recent GAO report found that agencies lack data and clarity on eligibility of small businesses owned by venture capital firms, hedge funds or private equity firms. It is likely upon reauthorization of the programs in 2025 that Congress will seek to change parameters surrounding SBIRs and STTRs.

Needless to say, small businesses in the federal industrial base must stay abreast of the latest and legislation and upcoming movements within Congress and other authoritative bodies. While Congressional attention favors increased small business participation, it may also garner added regulations and mandates for small entities – the very thing which turns these types of businesses away from federal contracting.