The number of small businesses winning federal contracts is declining. Many attribute the decrease to the growing practice of using large “multiple awards contracts” or MACs, which pick 10-100 businesses to compete for billions of dollars of work. The government has called this effort a number of names over the last two decades – Federal Supply Schedules, Strategic Sourcing, Category Management – all reflecting the same buying philosophy.
The rationale driving these changes is buying smarter; it is the taxpayer’s money after all. The problem, however, is that these policy proposals limit the ability of women-owned businesses and all businesses to compete for and win government contracts.
It is for that reason that last week, WIPP submitted public comments on a proposed rule that will encourage federal agencies to do more strategic sourcing. For years, WIPP has consistently raised concerns around categorizing diverse solutions into narrow groups under the Federal Strategic Sourcing Initiative (FSSI), Category Management, or any other policy that limits the ability for women-owned businesses to bring their innovations and services to the federal market
As WIPP member Gloria Larkin informed the House Small Business Committee in 2013, “WIPP opposes the implementation of Strategic Sourcing methods without adequate consideration and protection of small business concerns. We recognize that increased consolidation and bundling of contracts are symptomatic of this Strategic Sourcing initiative.”
This proposed rule would require contracting officers when purchasing services or supplies offered under FSSI, but when FSSI is not used, to document on the contract file why FSSI has not been utilized. The documentation must include a comparative value analysis of price and non-price factors between the supplies and services offered under the FSSI, and what has been offered from the outside source being used for the purchase.
While the rule does not require use of FSSI, requiring an overworked contracting officer to to produce additional documentation is not in their best interest. Therefore, the clear result of this rule will be much broader use of strategic sourcing and will have an even more harmful impact on the small business community, including the women entrepreneurial community, than it already has.
Acquisition policies like FSSI and Category Management risk eroding our nation’s small business industrial base by maximizing short-term savings through large contract vehicles. Actions taken over the past several years to consolidate contracting have decreased the number of small businesses engaging in federal contracting. While a select few small business benefit from these large contract vehicles, it comes at a high price.
Women entrepreneurs continue to struggle with access to federal markets and greater use of strategic sourcing will set women business owners back, by making it harder to compete. WIPP is committed to working against broader strategic sourcing and the full comments can be found here.