President, OMB boost small biz

Fact sheet on executive order

A new executive order reinforces agencies' small business contracting responsibilities

by providing a gentle reminder of the president's interest and by putting

the Office of Management and Budget into the review process.

The executive order focuses on the small, disadvantaged and 8(a) businesses

that make up a good portion of the federal small business information technology

contracting market.

As a base, the order states that agencies should establish the following

goals: No less than 5 percent of business should go to small, disadvantaged

businesses (SDBs) as prime contractors and another 5 percent should go to

those businesses as subcontractors.

While the order covers all federal contracting activities, IT is highlighted

as one of the key areas in which agencies should be focusing to get more

SDBs involved.

"IT is a growing part of our budget each year," said Sally Katzen, deputy

director for management at OMB. Because of this and the fact that the IT

market is much more open to entrepreneurs, "we're encouraging agencies to

really think hard and focus their attention on that area," she said.

Agencies will also have to designate a deputy secretary or similar official

to oversee the implementation of the order, including putting in place specific

training for their contracting personnel.

OMB's involvement comes after many years of agencies and industry complaining

that the Small Business Administration does not have the authority to enforce

the small-business goals. One specific complaint recently has been that

large prime contractors promise agencies that small business subcontractors

will be involved in a contract, but once the contract is awarded, the small

businesses do not see any work, Katzen said.

Agencies will have to develop long-term plans and submit them to OMB

by Jan. 3. They will also have to perform an annual assessment of their

efforts by April 30 each year and provide those assessments to SBA. The

director of OMB will then perform a review of the SBA assessments.

"The inclusion of OMB as the reviewer of the plans speaks volumes,"

Katzen said. While SBA will still be involved and Katzen would not confirm

outright the meaning of this involvement, the general implication is that

OMB will use its authority over agencies' budgets as the enforcement stick

that SBA lacks.

"OMB's involvement means that an agency will take this even more seriously

than if it were SBA alone," Katzen said.