On October 30, 2007, the House passed the Small Business Contracting Improvements Act, H.R. 3867.  The bill brings Small Business Administration’s contracting initiatives into the 21st century, by raising the profile of veteran entrepreneurs and rooting out fraud and taxpayer waste in SBA’s contracting programs. 

Small businesses are big business in this country.  They are the engine of America's economy, representing more than 99 percent of all employers, creating half of our gross domestic product, and creating up to 80 percent of the new jobs nationwide. The Democratic-led House is working to open up the $410 billion federal marketplace to small businesses, including veteran- and minority-owned firms, across the country to bring about strong economic growth and create jobs.  This bipartisan bill makes critical changes to SBA’s federal contracting programs that will open up new opportunities for small businesses.  It will lead to a more competitive procurement marketplace and ultimately a better value for our taxpayers -- reducing waste and fraud in SBA’s contracting initiatives.

Following are highlights of the bill:

Give Small Businesses of Service-Disabled Veterans a Real Opportunity for Government Contracts.  The bill places veteran small business owners at the top of the list for receiving federal contracts.  This will eliminate the barriers that veterans face in receiving non-competitive contracts. Service-disabled veteran-owned businesses currently receive less than 1 percent of federal contracts (a 3 percent goal was established in 1999).  Further, the bill requires the SBA to fulfill its obligations under Executive Order 13360 – which will give veterans access to procurement assistance.  Further, it creates penalties for misrepresentation of a service-disabled veteran owned business classification.

Protect Taxpayers Dollars – Reducing Waste, Fraud, and Abuse.  To combat fraud and taxpayer waste, the legislation takes several steps. Safeguards and business integrity standards are incorporated that will make sure criminals are not squandering taxpayer dollars. To better promote self-policing, any small business can challenge a contract award. Further, the bill requires SBA to verify eligibility for the HUBZone program.

Standardize SBA’s contracting programs.  Under the bill, all procurement initiatives will have both prime and subcontracting goals. Further, the bill increases the size of federal contracts available to small businesses to keep pace with the growth in the federal marketplace.  This will ensure that small businesses, including service-disabled veterans, have access to higher dollar contracts.

Expand Opportunities for Women Entrepreneurs.  The bill sets out requirements for the SBA to implement the Women’s Procurement Program -- to help level the playing field for women-owned businesses in federal contracting -- immediately.  Women have been waiting nearly seven years for the SBA to implement this program, while losing tens of billions of dollars in contracting opportunities.  Less than 4 percent of 3.3 percent of federal prime contracting was done with women-owned firms in 2005.  [Federal Procurement Data System]

Strengthen Community Development.  The bill strengthens the HUBZone program – which promotes business in historically underutilized urban and rural areas with lower-than-average incomes -- by verifying that small businesses receiving contracts under its authority are qualified.  It further specifies that only local companies can get HUBZone construction contracts.

Modernize the 8(a) Program.  The bill modernizes the 8(a) program, which expands opportunities for minority-owned small businesses.  The program has not been modernized in 20 years and so the bill includes provisions to make it viable for businesses operating in the current environment. Foremost, the bill updates the current economic eligibility standards for businesses (consistent with inflation) so that we do not penalize companies for success. 

Bipartisan Bill with Broad Support.  This legislation has bipartisan support and broad support on this legislation, ranging from the National Federation of Independent Business to the National Black Chamber of Commerce and the Associated General Contractors of America. Also supporting the legislation are the American Legion, the Veterans of Foreign Wars, and AMVETS. The United States Hispanic Chamber of Commerce, the U.S. Women’s Chamber of Commerce, the National Defense Industrial Association, Aerospace Industries Association, and the International Franchise Association also support this bill.