Attendees to the Navy Forum for Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) Transition (FST), held at the Tsongas Center at the University of Massachusetts Lowell, explore an exhibit floor featuring 107 vendors. (U.S. Navy photo by John F. Williams)

PERSPECTIVE: Section 809 Report Is a Wake-Up Call for Small Businesses

I am the owner of a consulting firm in Northern Virginia, which is a small business that performs business development services, strategic alliance development training and capture management services for government contractors and federal government agencies.

For the past 12 of the 30-plus years of my professional experience as a service provider to this market, I have been watching the paradigm shift in the federal market and it is quite disturbing to see the struggles, hurdles and negative perceptions toward the successful federal set-aside programs – most recently, the suggestions in the DoD Section 809 report. If the recommendations of the committee referencing small business were to come to fruition, they would cripple and stiffen or even eliminate the growth and/or the existence of small business. Yes, small business as we know it today is under extreme scrutiny that literally threatens its continued existence. How can anyone think that this would be good for our economy and our national security?

The federal market is a unique, dynamic, and cumbersome place with regulations, policies and public laws that protect and preserve the integrity of those agencies and companies who want to participate in it, Truly, it is unlike any other business environment in the world. It has been the spawning pool for the growth of many businesses, large and small. And has kept our economy strong.

Many of our cities, towns, states and our international neighbors have benefited from the activity that takes place in this dynamic market and small businesses have been a key and critical part of it. They have provided innovation, professional service and engineering support to agencies that were desperate for solutions necessary to carry out their missions and support the needs of its citizens by providing support in ways that would allow it to be competitive and timely in working with global partners.

Three years ago, Congress commissioned a panel to study and make recommendations on Streamlining and Codifying DoD Acquisition Regulations. The committee was formed and was called the DoD Section 809 Panel. One would think that this was a great idea since the DFARS and the FAR have been around since 1974. But the acquisition processes, policies, public laws and their amendments that were created 45 years ago to make it easy to do business with the government have become cumbersome, inefficient and less cost-effective due to the diminished   human resources base that existed when the acquisition processes were first put in place. But now we are hamstrung, and the current system impedes the ability of the government to respond in a “modernization”-like way today. Make no mistake, it is time to overhaul and streamline the acquisition processes of the federal government. But in doing so we can’t destroy a key element of our commerce – small business – to accomplish it. We must maintain the integrity and the spirit of the Small Business Act.

A majority of the government contracting community are in favor of modernizing the federal acquisition process and believe it is an idea that is long overdue. Since we are living in a time of change and the current climate in the government market is “modernization,” which is founded on efficiency, simplicity, speed and cost-effectiveness and is described in the dictionary as a verb meaning to “make modern, to give a new modern character or appearance to modernize one’s ideas or thinking, processes,” it is not rocket science. And based on the longevity and tenure of the FAR and DFARS, this movement is very timely and justifiable. The world is on an extremely competitive stage where change is constant and rapid. If we do not upgrade our technologies, information and processes we will lose any competitive advantages we have and put our national security at stake.

The DoD Section 809 Panel took three years to study and make recommendations on how to modernize the DoD acquisition community. The study was complex and comprehensive and covered several critical areas in the acquisition community. Their work culminated in a three-volume, 6,000-page report that suggested 98 recommendations to the congressional committee on how to make the acquisition process more streamlined, more efficient, more cost-effective to the government and supposedly easier for the vendor community to participate and government to manage with fewer resources. However, with that said, the most disturbing aspect of the study mentioned in the report was all of this would and could be at the expense of the small business community, i.e.,

  1. Recommending eliminating small business set-asides in exchange for 5 percent price preference to be adopted by the Department of Defense.
  2. Recommendation 80 proposes “’goods that are readily available’ could be purchased on a fixed-price basis up to $15 million or higher with senior official approval via direct solicitations or price quotes.”
  3. Contracting officials would not be required to publicly advertise their requirements and would not have to set-aside those requirements for small businesses, thus eroding the ability of the nation’s industrial base to compete or access the federal market.
  4. Preventing small companies from growing out of their NACIS codes.

These are just a few of the recommendations that are of concern and extremely critical to the viability of small-business growth. This appears to suggest that the study is anti-small business.

The current set aside programs were established to incentivize and support growth, not stifle it. By making all set-aside procurements under a certain dollar threshold we are not supporting their ability to grow. Have they forgotten that all of the major government contractors were small business at one time and had government-provided subsidies that helped them grow? We cannot allow these recommendations to be put in to place.

These recommendations are not keeping the spirit of the Small Business Act of 1953 and Public Law 95-507, 1978. Laws were put into place to help support small-business growth. We should be improving on the percentage share of government contracts to small business.

There are more than 51,000 small businesses doing business with the federal government. They must share 23 percent of the federal contract dollars allocated by the government.

Because of the innovative contributions, engineering and professional service support they provide, they should be receiving a much higher percentage of the federal contracting set-aside dollars (30 percent).

We must support their growth. This study and report I’m sure was well intended, but overall it misses the mark of modernization as it relates to small business and as stated in the earlier definition. Small businesses are the backbone and lifeline of our nation. They are vital to our national security and economic growth and are a stabilizer to our communities.

The federal market space is currently void of constructive leadership; it is chaotic, full of turmoil, and currently presents an abyss where small businesses are being consumed. If this continues, the perfect storm will devastate our nation.

The DoD Section 809 Panel and commission was tasked with a very complex, compound study. The report is a superb, comprehensive assessment of the acquisition market as it is today, and their overall recommendations suggest designing and executing a process that will be tailor-made for the modern acquisition environment of today. I commend them and thank them for their great work.

But to all the small businesses out there, let’s not be caught sleeping. This is serious, and we must provide the input to our congressional leaders to let them know how this could affect our nation on multiple fronts.

 

The views expressed here are the writer’s and are not necessarily endorsed by Homeland Security Today, which welcomes a broad range of viewpoints in support of securing our homeland. To submit a piece for consideration, email HSTodayMag@gtscoalition.com. Our editorial guidelines can be found here.

Earl Holland is CEO and president of Growth Strategy Consultants. In 2017, Holland stepped up to take leadership over the Emerging Small Business Group of GTSC, focusing the group on important topics, relationship-building with critical government officials, and educating very small contracting firms on their path to success. After more than 20 years of working in corporate and government business development, senior management, marketing and sales, and more than a decade of computer technical systems experience, Holland is a highly regarded authority on achieving success. Prior to founding his own firm eight years ago, he was the vice president of Synova, Inc., where he led commercial corporate development within the Fortune 500 and 1000 business community. Holland also possesses a thorough knowledge of government contract vehicles and the procurement process, and has experience selling to the Defense Information Systems Agency and the departments of Defense, Health and Human Services, Homeland Security, Transportation, Housing and Urban Development, Justice, Agriculture and Commerce.

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