SBA cuts out contracting middleman

Federal agencies may now contract directly with socially and economically disadvantaged firms in the Small Business Administration 8(a) program, according to an agreement SBA signed May 4 with 25 other agencies.

Until now, agencies that wanted to hire 8(a) firms had to have their contracts approved by SBA, adding a step to the procurement process. SBA hopes simplifying the process will give a boost to the 8(a) business, which may have lost some appeal as governmentwide procurement reform has kicked in.

As long as other acquisition methods were more cumbersome, agencies still found hiring 8(a) firms for sole-source deals to be easier than competing small contracts. But SBA Administrator Aida Alvarez said that as it became easier for agencies to buy from the General Services Administration multiple-award schedule contracts and multiple-award procurements, 8(a) contracts became less competitive.

Calvin Jenkins, deputy to the SBA associate deputy administrator for government contracting and minority enterprise development, said the move would allow 60 SBA contracting officers around the country to dedicate their time to training 8(a) business owners in management, marketing and other skills.

According to SBA statistics, federal funds committed to 8(a) contracts increased from $5.3 billion in fiscal 1994, the year procurement reform laws were enacted, to $6.4 billion the next year, remaining steady ever since. During the same period, 8(a) firms captured a larger share of federal contracting dollars, up from 2.7 percent to 3.4 percent, because overall spending on goods and services declined.