Sen. John Kerry Introduces Small Business Federal Contractor Safeguard Act

5/7/2002

From: Dayna Hanson of the Senate Committee on Small Business and Entrepreneurship, 202-224-8482, e-mail: Dayna(underscore)[email protected]

WASHINGTON, May 7 -- Sen. John Kerry, chairman of the Senate Committee on Small Business and Entrepreneurship, today introduced legislation to end policies that unfairly handicap small businesses competing for federal contracts. The "Small Business Federal Contractor Safeguard Act" will stop federal procurement contracts from being combined in a way that puts America's small businesses at a disadvantage.

"The federal government should be putting America's small businesses to work rather than stacking the deck against them," said Kerry. "Janitorial contracts on a military base in California should not be combined with janitorial contracts on a base in Texas, unless your goal is to prevent small businesses in communities like Sacramento and San Antonio from competing for those contracts. I hope that's not the Administration's aim, and to prove it, they should embrace the reforms I propose in this legislation. These reforms are urgently needed: If we don't pass my Small Business Federal Contractor Safeguard Act, small businesses will be driven right out of the federal marketplace as prime contractors, and that's an outcome I'm unwilling to accept," said Kerry.

Although Federal agencies are required to conduct economic research to determine if a bundled contract will actually result in a real cost savings for the Federal government beyond mere administrative costs, loopholes in the current definition of a bundled contract allow them to skirt this law. This has resulted in a boom in bundled contracts for reasons of administrative expediency, which has driven once profitable small businesses, employing workers in local communities, right out of the federal marketplace.

Sen. Kerry's legislation tightens the definition of a bundled contract, includes multiple award contracts and any combination of procurement requirements, old, new or existing, in the definition. This new universe of contacts is called a consolidated contract.

The Kerry bill requires any consolidated contract over $2 million to be justified and accompanied by a statement of benefits, and if over $5 million, economic research would also be required to justify the consolidation.

"My legislation should be all the prodding needed to force federal agencies to follow the law and keep faith with America's small businesses," the Senator continued. "But if the government continues to drive small businesses out of the competition for federal contracts, I will support additional efforts that bring down the hammer and leave no wiggle room for resistant bureaucracies -- we will not allow competition to be smothered by government red tape."

Sen. Kerry was joined by Sen. Kit Bond (R-Mo.), ranking member of the Committee on Small Business and Entrepreneurship, Sen. Jean Carnahan (D-Mo.) and Sen. Susan Collins (R-Maine), in introducing the Small Business Federal Contractor Safeguard Act.