Small-biz goals raised 3 percent

After an internal debate was leaked to Congress contractors and the media the Clinton administration has agreed that federal goals for contracting with small businesses should be increased.

In a compromise reached last week among Small Business Administration head Aida Alvarez Office of Federal Procurement Policy administrator Steven Kelman and others officials agreed to press for higher small-business contracting goals increasing the target from 20 to 23 percent by 2000. Alvarez had proposed an increase to 25 percent but Kelman disagreed and said in a memo to the White House that goal would be too hard for agencies to meet.

Though federal agencies are largely meeting their small business contracting goals small companies fear that recent procurement reforms - which have encouraged agencies to make more bulk purchasing deals - will result in fewer contracts for them. Jody Olmer director of domestic policy with the U.S. Chamber of Commerce said the administration has admitted that "new buying strategies threaten small business market share."

In his memo Kelman said "changes in the economy and in government buying strategies" are making it harder for agencies to maintain current small business contracting levels and that among other reasons makes increasing the target "unrealistic." Instead he recommended that agencies pay more attention to encouraging subcontracts.

Kelman would not comment on his memo. Jim O'Connor procurement policy advocate with the Small Business Administration said "we've looked across the board at various industries and we feel that based on where the agencies are today it makes sense to give them a higher target."