Government procurement is big business — more than $180 billion is spent annually for products and services. Figure 1 identifies the largest procuring agencies of the federal government in terms of dollars. Now is a good time to get in on the action in the federal marketplace. While competition has long been recognized as a prudent business practice, there is renewed emphasis, today, on competition within the federal government.
In 1994, the Federal Acquisition Streamlining Act (P.L. 103-355) was signed by President Clinton. This landmark legislation calls for major revisions in the federal procurement laws for all civilian and defense agencies. The legislation significantly changes the way the government does business. The most significant provisions of the new law include:
- Establishing a new 5 percent government-wide procurement goal for women-owned businesses.
- Encouraging agencies to rely on off-the-shelf commercial products instead of those specifically designed to comply with government-unique requirements.
- Streamlining acquisition procedures through an increased small purchase dollar threshold.
- Implementing a government-wide electronic commerce system which will allow computers to exchange business data in a standard format.
- Amending several current procurement laws to provide uniform treatment of both Department of Defense and civilian agency procurements.
- Authorizing the Office of Federal Procurement Policy to test alternative procurement techniques in 13 pilot acquisition programs.
- Improving contract protest and oversight procedures.
New Opportunities for Women-Owned Businesses
The legislation establishes a new 5 percent government-wide procurement goal for women-owned businesses. This includes a 5 percent goal for prime contract awards and a 5 percent goal for subcontract awards. A woman-owned business is defined as a small business that is at least 51 percent owned by one or more women, or in the case of any publicly owned business, at least 51 percent of the stock is owned by one or more women and the management and daily business operations are controlled by one or more women.
Although the new legislation makes it clear that government agencies are expected to expand contract opportunities for women, this does not mean that contracts will be set-aside solely for women-owned firms. Rather, agencies will have a strong incentive to look for qualified women-owned businesses when trying to fill contractual needs. It is still up to women business owners themselves to market their products and services to the government.
Emphasizing the Acquisition of Commercial Items
The bill encourages agencies to rely on commercial items and components that are readily available and simplifies the procedures for buying those items. The scope of products and services that qualify for treatment as commercial items has been significantly expanded to include:
- Products of a type customarily used by the general public that have been offered for sale in the commercial market place.
- Products that have been developed from existing commercial items through advances in technology or performance, even if not yet available in the commercial market place.
- Commercial items which need only minor modifications to meet federal requirements.
- Installation, maintenance, repair and training services, if procured in support of a commercial product under terms and conditions available to the general public.
- Commercial services offered and sold competitively in the business arena.
- Items previously developed for government use if (a) they were developed at private expense and (b) they have been widely sold on a competitive basis, to state and local governments.
These changes represent a common sense approach to government procurement and eliminate many burdensome paperwork, record keeping and certification requirements.
Simplified Acquisition Procedures
Nearly all restrictions on purchases of less than $100,000 are removed. This dollar amount replaces the previous small purchase threshold of $25,000. It means that instead of full and open competition, agencies can now use simplified procedures for soliciting and evaluating bids up to $100,000.
Simplified procedures require fewer administrative details, lower approval levels and less documentation. New procurement reform legislation requires all federal purchases above $2,500 but under the $100,000 threshold to be reserved for small businesses, unless the contracting officer cannot obtain offers from two or more small firms that are competitive on price, quality and delivery.
Government purchases up to $2,500 are now classified as “micro-purchases” and can be made without obtaining competitive quotes if the contracting officer determines that the price is reasonable. These purchases are no longer reserved for small businesses. They are also not subject to the Buy American Act.
Uniformity in the Procurement Process
The Act amends several procurement laws to create a uniform procurement system in which civilian and defense agencies are governed by the same statutes. Both civilian and defense agencies are now required to focus on performance-based management concepts for major acquisitions.
Protests and Oversight Procedures
In FY 1994, about 4,000 bid protests were filed with the General Accounting Office, the General Services Administration’s Board of Contract Appeals (GSBCA), the district courts and the Court of Federal Claims. The new legislation streamlines and simplifies the contract administration processes. It establishes an accelerated notice, debriefing and protest schedule and authorizes the payment of consulting and expert witness fees (up to $150 per hour). It also authorizes GSBCA to dismiss a protest that is frivolous, brought in bad faith or that does not state a valid reason for protest. The Act also gives GSBCA exclusive jurisdiction over objections concerning termination or cancellation of contract awards.
This new legislation will markedly increase business opportunities for all small businesses, particularly women-owned firms, that aggressively market their products and services to the federal government. The Small Business Administration offers a bulletin board that electronically publishes a variety of information of interest to small firms. Included in this bulletin board is a sub-board that focuses exclusively on procurement (regulatory and legislative) issues. It can be reached with a computer and modem (9600, n, 8, 1) by dialing SBA Online, at (800) 697-4636 (in Washington, D.C. call (202) 401-9600). Once you have logged on to the Main Menu, choose (2) Services Available and then select (7) Advocacy-Small Business Services. You should also check out the SBA homepage at http://www.sba.gov/. The SBA Office of Government Contracting has its own page at
This simplified procurement process offers new opportunities for women-owned businesses. your ability to benefit from it depends on how well prepared you are.
In addition to this new legislation, there are other laws and organizations that promote competition and act as advocates for small and women-owned businesses. For example, the Competition in Contracting Act of 1984 restricts the use of non-competitive practices and establishes an advocate for competition in each executive agency and in each procuring activity within the agency. The advocates for competition are responsible for challenging barriers to and promoting full and open competition in their agency’s procurement system.
Furthermore, the SBA Office of Government Contracting annually negotiates with federal agencies and departments to increase prime contracting and subcontracting goals for women-owned businesses. Now is indeed a good time to get a slice of government business.
Every businesswoman has a potential share in government contracting business because contracting offices buy just about everything offered in the marketplace — supplies to stock the shelves of supermarkets for its military members; janitorial and maintenance services for its buildings; cafeteria services; management consulting; multi-media production; architectural and engineering services; computer systems; sophisticated air, sea, land and outer space machines and the research to make them more effective and efficient; and, of course, a multitude of paper and other office supplies. The list of products and services is endless — and so are the opportunities.
Pilot Programs
The new law authorizes the Office of Federal Procurement Policy (OFPP) to conduct 13 pilot acquisition programs in which alternative procurement ideas can be tested. Agencies may apply any of the new law’s provisions concerning commercial products to non-commercial products procured under the pilot. Several regulations concerning matters such as pre-screening of eligible sources and notice of contracting opportunities are waived in the OFPP test programs.
In addition, SBA has established the Women-Owned Business Procurement Pilot Program to expand the pool of women-owned firms receiving federal contract awards. SBA has identified twelve federal agencies to participate in the Pilot. Each agency has designated a women-owned business advocate to provide outreach, training, and marketing assistance to women-owned businesses. The SBA and the federal agencies co-sponsor on-site procurement conferences at major buying centers around the country. The Pilot uses the results of an SBA analysis of the federal government’s buying patterns to determine the industry categories and geographical areas that offer the greatest opportunity for increasing contract awards to women.
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