SBA to include overseas contracts in rating agencies

Original Article: Washington Business Journal


The Small Business Administration will begin to include overseas contracts as part of the baseline used to rate agency performance against small business contracting goals.

Currently about $100 billion a year in federal contracts — including contracts that support overseas projects — aren’t considered when the agency calculates small businesses’ share of procurement dollars annually. It’s been a bone of contention among the small business community, which argues that all awarded contracts should factor into individual ratings, as well as the overall goal of federal government to allocate 23 percent of contracts to small businesses.

“Overseas contracts, we couldn’t find a justification to continue to exclude that,” said John Shoraka, associate administrator of government contracting and business development at the SBA, during a keynote session at a procurement conference hosted by the Montgomery County Chamber of Commerce. “So coming into 2016, we’re working with the Office of Federal Procurement Policy, Defense, USAID and State on including those contracts in the base.”

Foreign military sales will be an exception, given that they’re not competed but rather awarded by the Pentagon as a result of a procurement request by a foreign ally.

SBA, which was instructed to review all exclusions by Congress, is currently working on a memo to share with the administration that lays out the new policy and is finalizing the guidance to deliver to the Federal Acquisition Regulation Council. In the meantime, the agency will include overseas contracts in its baseline this summer, as it determines agency goals for 2016.

Shoraka warned, however, that the change will likely result in a hit to government performance against the small business contracting goals. He estimated a hit of as much as 2 percent.

“But what I will say though is it will encourage agencies to look at their overseas acquisitions and see if there are opportunities to incorporate small businesses further,” he said.

The SBA was planning to announce how agencies performed against their small business contracting goals at a press briefing a week ago, but canceled the event the day before, citing “unforeseen scheduling conflicts.”

Beyond the change to how goals are calculated, the SBA is in the process of looking at existing regulations for its small business contracting programs to decide whether requirements can be eased to enable more companies to participate.

“We’re looking at regulations and asking, what are we requiring? And is it tied to regulation, or did we develop these asks because of a GAO or IG report? And has it become overly burdensome?” Shoraka said, pointing to the SBA’s 8(a) program for small disadvantaged businesses, which has seen regulations pile to combat instances of fraud. “How can we say we’re serving the underserved, when they have to hire a consultant for $20,000 to [figure out how to] get into the 8(a) program? We tend to swing the pendulum drastically. We say we need to do XYZ, because otherwise we’ll get called to the Hill. But we have to defend our program and support the 99.9 percent of good actors.”

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