On Tuesday, January 2, 2013, President Obama signed the military spending budget, which isgood news for small businesses selling to the Federal government. The goal is for Federal agencies to have 23% of awarded contracts go to small businesses, which has been a problem for the Federal government.
The biggest change to the goal is for senior agency officials. The new law will tie bonuses and promotions to meeting the goal. The reason for the change is for the last 11 years the Federal government has missed this goal. While previously proposed legislation did not pass, some of the ideas were to cut agency budgets or senior level compensations, in the next fiscal year for agencies that did not meet the goal. Rep. Sam Graves (R-Mo.) said in a statement, that he expects the changes to “help small businesses compete in the Federal marketplace, bring efficiency and cost-savings to the taxpayer, and create jobs while doing it.”
The new changes were introduced a year ago by the House Small Business Committee. Another change in the law is to the subcontracting rules, which allows small firms to partner with other small firms for large contracts, and discourages the practice of grouping projects together, known as contract bundling. Another provision requires the SBA to define size standards for each individual industry rather than lumping sectors together. GSA has a new program to help small technology companies enter into the Federal contracting market and restructure the procurement process. The program is called the National Information Technology Commodity Program (NITC), which has 43 newly awarded large contracts to small businesses, including women- and veteran-owned companies.
This new small business legislation comes just in time due to the recent fiscal cliff compromise, which delayed sequestration. It appears that congress and the president are finally living up to the small business promises they made on the campaign trail.