Recent Policies and Legislation Expand Small Business Opportunities

Key Takeaways:

• The new administration’s Buy American executive order stipulates agencies utilize the Hollings Manufacturing Extension Partnership program to connect to domestic suppliers, particularly small businesses, for needed products.
• The Consolidated Appropriations Act of 2021 extends 8(a) program graduates’ completion dates for one year in response to hardships caused by the COVID-19 pandemic and economic downturn.
• Recent small business assistance preface Biden’s plans to equalize small business contracting and expand small disadvantaged programs.

Small businesses in federal procurements are receiving some attention in recent government measures, namely responding to the nationwide disaster declaration, and aligning with the new administration’s national priorities.  

The primary goal of the Executive Order (EO) on Ensuring the Future Is Made in All of America by All of America’s Workers (a.k.a., the Buy American EO) is to ensure government purchase of American products supporting American jobs. However, small businesses play a role in the EO; Section 7 directs agencies to utilize supplier-scouting sources, such as the Hollings Manufacturing Extension Partnership (MEP), to identify and connect with domestic manufacturing suppliers, particularly small- and medium-sized businesses.

The National Institute of Standards and Technology (NIST) at Commerce funds MEP, whose centers are located in all 50 states and Puerto Rico, acting as liaisons between agencies and small and medium-sized manufacturers. Specifically, MEP centers provide services to small and mid-sized manufacturers to improve technological capabilities ad production processes, and facilitate product innovation. Current MEP focus areas include cybersecurity, supply chain optimization, commercialization and exporting. Previously, the Trump administration repeatedly requested MEP’s elimination; nonetheless, Congress has continually appropriated the program. In his statement on the EO, President Biden regards the MEP as “a critical piece of building our economy back better and including everyone in the deal this time, especially small businesses that are badly hurting in this economy.”

The EO further shines a spotlight on small businesses. Waivers seeking to purchase foreign parts, thought to be unavailable in the U.S., will be publicly posted. The transparency of the waivers, the administration hopes, will help small businesses identify potential competitive opportunities in the government market they did not know even existed.

Moreover, the recent appropriations bill for FY 2021 provides another opportunity in the 8(a) small business program. Section 330 of the Appropriations Act directs the Small Business Administration to extend 8(a) program participants, set to graduate between March 13, 2020 and January 13, 2021, by one year from the end of program term date. The purpose of the extension is to ease transition into the marketplace after graduating from the 8(a) program due to the U.S. disaster declaration last March. Qualified firms must note that the extension will end on the one-year anniversary of original program end date vs. one year from when the legislation passed in December.   

The latest directive on the 8(a) program is similar to one of Biden’s campaign trail promises to extend the maximum length of participation and provide graduate off-ramp transition support for the 8(a) program. The new administration has yet to set anything to play regarding this goal.

Indeed, small businesses are likely to continue seeing further changes as the new administration settles in. Among some of the small business goals shared in his presidential campaign, Biden aims to target program expansions for socially or economically disadvantaged business. These goals include launching a new Federal Procurement Center to help minority-owned firms win federal contracts, increasing the standing of the Minority Business Develop Agency, and tripling small disadvantaged business goals to 15% of all federal procurement dollars by 2025.

The Buy American EO looks to be contributing to Biden’s campaign promise to design a $400B “Build Back Better” recovery plan to support small business and address inequalities. However, the administration has also promised to implement a small business contract strategy that includes formula-based awards, supplying small business outreach and counseling, and promoting contract award transparency. Needless to say, the recent expansion of federal contract opportunities to small businesses is not over yet.