As Congress continues to consider measures to spur job growth, a recent hearing in the House Committee on Small Business suggested that procurement reform may be necessary to ensure that the Federal Government is doing all it can to get smaller firms hiring again.

Entrepreneurs who testified at the hearing noted that despite major increases in federal spending over the last decade, many small companies still struggle to win their fair share of federal contracts. Committee Chairwoman Nydia Velázquez (D-NY) noted that this is especially troubling since the overwhelming majority of jobs created are created in the small business sector.

"When large corporations win federal contracts, their existing workforces take on the project, but when small firms get the work, they hire people," she noted. "Making the contracting system work for entrepreneurs is not just a small business priority, it is a jobs issue."

Although federal spending in FY 2009 hit $528 billion, continued audits have shown that small businesses are still being locked out of the federal marketplace. In the same period, federal agencies missed their contracting goals by $10 billion. "If that $10 billion went to small firms, they could use those funds to expand their operations and bring on new employees," said Velázquez.

Witnesses in the hearing criticized the procurement system, which they said consists of a series of obstacles and pitfalls that prevent small businesses from winning contracts. They also noted that agency practices, such as bundling contracts together so that only larger corporations can compete for them, and a thinly-stretched acquisition work force also keep smaller firms from getting the federal work to which they're legally entitled.

"For small firms trying to navigate this process, it would be hard not to conclude that the procurement system is broken," Velázquez added. "It is time to ensure that federal agencies start living up to their small business contracting obligations and allow entrepreneurs to win their share of federal work."

Jacob Barron, NACM staff writer


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