Department of Defense Appropriations Act, 2005

DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2005 -- (House of Representatives - June 22, 2004)
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Ms. VELÁZQUEZ. Mr. Chairman, I would like to thank Chairman LEWIS and Ranking Member MURTHA for agreeing to include my amendment in the Managers Amendment.

Today, we are considering the $418 billion Department of Defense appropriations bill that is solely funded by American taxpayers. It is estimated that between $200 to $225 billion of this funding will be spent on Federal contracts, and at least $20 billion will be allocated for contracts performed overseas. Unfortunately, there are no requirements to ensure that American small businesses have an opportunity to compete for these overseas contracts.

The amendment I am offering today will give small businesses this chance. It will simply require that large companies submit a subcontracting plan prior to being awarded a DoD contract for work overseas-which they are currently required to do for domestic contracts.

Throughout our Nation's history, small businesses have been systematically shut out of the Federal procurement process. Government agencies continue to fail to meet statutory goals designed to ensure fair and equitable small business participation in the Federal marketplace-costing small firms billions of dollars in lost contracting opportunities.

The size of Federal contracts keeps increasing as small jobs are combined into large procurement packages, where only big corporations are capable of meeting all of the product and service requirements. As a result, small businesses that can provide some of these services cannot compete for the contract, even if they offer greater savings to the American taxpayer.

Nowhere is this more apparent than at the Defense Department, which accounts for 65 percent of the entire Federal procurement market. DoD has substantially increased its contract volume over the last several years, yet the number of small businesses receiving these contracts has significantly declined. In FR 2003, the top ten corporations receiving DoD contracts were awarded nearly half of the agency's entire procurement budget.

Clearly, small companies already face difficult obstacles when trying to do business with the DoD. And now, we are considering a multi-billion spending bill that makes it almost impossible for small businesses to have a shot at winning any part of the billions of dollars in contracts for overseas work.

We have more than 700 overseas military bases in over 40 countries across the globe. Whether providing medical equipment to Ramstein Air Force Base in Germany, office supplies for the Marine Corp's Camp Butler in Japan, designing security technology for new military installations in the Middle East and Central Asia, or planning and constructing possible new bases in West Africa and Eastern Europe-U.S. small businesses have products and services to offer and should have that opportunity.

My amendment gives small businesses access to this expanding market by ensuring that large corporations are subject to the same subcontracting requirements for international contracts, as they are for contracts here at home.
Under current law, large contractors in the U.S. are required to have a plan in place on how they will use small businesses prior to receiving contract awards. In these plans, a contractor must simply identify small business goals and demonstrate that they made every practical effort to offer subcontracts to small companies.

By providing subcontracting opportunities, we ensure that the company that can do the work for the lowest price wins the contract-whether a multinational conglomerate or a small U.S. business.

Small businesses are the backbone of our Nation's economy. They account for 97 percent of all companies, provide three-quarters of all new jobs, and make up half of our GDP. Unlike their corporate counterparts that benefit from cheap foreign labor, we can count on small businesses to create jobs in our communities.

Our small businesses are more than capable of providing services and products in the global market. In fact, 97 percent of U.S. merchandise exporters are small- and medium-sized companies.

Whether domestic projects or overseas work, our Nation's small businesses deserve access to these Federal contracting opportunities. There should be no double standard.

Again, I thank Chairman LEWIS and Ranking Member MURTHA for agreeing to include this critical provision in the Managers Amendment. I look forward to continuing to work with the Committee to ensure that small businesses have the opportunity to grow and expand our national economy.

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