Service Provider Opportunity Clarification Act of 2015

Floor Speech

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Mr. Speaker, I yield myself such time as I may consume.

I rise in support of H.R. 4284, the Service Provider Opportunity Clarification Act of 2015. It has long been the policy of Congress to ensure that a fair proportion of Federal contracts, prime contracts or subcontracts, be awarded to small businesses. In some areas there has been success in advancing this goal. In fiscal year 2015, small prime contractors received over $90 billion, amounting to over 25 percent of contracting dollars. As a result, the government, again, met its prime small business contracting goal.

However, prime contracting is only one part of the equation. For many small businesses, subcontracts are just as vital. These opportunities serve as an entry point for firms to the Federal marketplace.

Subcontracts are a way for firms to increase their capacity and prepare to eventually become prime contractors. Subcontracts also help entrepreneurs gain valuable insight into what is required when the Federal Government is your client.

Recognizing the importance of subcontracts, the Small Business Act requires that prime contractors submit subcontracting plans for contracts valued at certain levels and SBA to set goals for subcontracting dollars awarded to small businesses.

Yet, throughout the course of this Congress, our committee has heard testimony of countless witnesses indicating that not only are prime contractors not reporting their subcontracting dollars, but also that contracting officers are not holding these firms accountable for their subcontracting goals.
Even more egregious is the fact that some primes have been awarded contracts without a subcontracting plan at all. This is simply unacceptable.

The Service Provider Opportunity Clarification Act of 2015, introduced by Mr. Curbelo and Ms. Clarke, seeks to rectify this problem by making the failure to submit the required subcontracting report a material breach, thus providing remedial options to agencies.

Procurement center representatives will also be allowed to review subcontracting plans and place a 30-day hold on the plan if they found that it did not adequately provide small businesses subcontracting opportunities.

Additionally, the bill requires that SBA update its regulations to give contracting personnel better examples of when prime contractors have acted in good faith compliance with the subcontracting plans.

These provisions will provide necessary oversight to ensure that prime contractors are adhering to subcontracting regulations and that small businesses are afforded maximum opportunity to participate in the Federal marketplace as a subcontractor.

I, therefore, ask my fellow Members to support this bill.

I reserve the balance of my time.

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Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, small firms continue expressing concern that it is increasingly difficult to find subcontracting opportunities as primes take on more of the work themselves. Agencies and contracting officers must do better to ensure that small businesses have access to these opportunities.

The government-wide subcontracting goal has continually been lowered, from 36 percent in the 2012 and 2013 fiscal years, to just over 34 percent in fiscal year 2014. Despite this decrease, the goal is not being met, with only 33 percent of subcontracting dollars awarded to small firms.

But even these numbers are deceiving, as the percentage is based only on the subcontracting dollars reported. It is estimated that as many as 40 percent of prime contractors are not submitting subcontracting reports.

The changes in H.R. 4284 will ensure that this no longer occurs and that there are real consequences to those companies that try and evade their subcontracting obligations.

I once again urge my colleagues to support this measure.

I yield back the balance of my time.

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