WASHINGTON – U.S. Senator Ben Cardin (D-Md.), Chair of the Senate Small Business and Entrepreneurship Committee, praised Senate approval of key contracting provisions that will bolster small businesses in Maryland and nationwide as part of the National Defense Authorization Act of 2024 (NDAA). Thanks to an amendment Senator Cardin authored, the bill increases the size of defense contracts available to firms that are socially-and-economically disadvantaged; certified to be owned by women, veterans, or service-disabled veterans; or located in HUBZones. His NDAA amendment also ensures that contract size limits are raised every five years to reflect inflation. Once enacted into law, new thresholds would rise from $4.5 million to $8 million for non-manufacturing contracts and $7 million to $10 million for manufacturing contracts. By giving sole source recipients access to larger contracts, Senator Cardin has helped provide Maryland small businesses greater opportunity to perform work for the government’s largest contracting agency.
“Small businesses are the lifeblood of the U.S. economy, yet they only receive 26.5 percent of federal contracts. We need to do better, especially for our small businesses from underserved communities,” said Senator Cardin. “Contracting changes may not be the flashiest of legislative fixes in NDAA, but these technical changes will make a substantial difference for the small business owners providing innovative products and services to the DOD and other agencies across the federal government.”
In addition to the contract size changes, through a separate amendment included in the NDAA, Senator Cardin advanced legislation that would give small businesses a true seat at the table when federal contracting policy is made by placing the Small Business Administration (SBA) on the Federal Acquisition Regulation (FAR) Council. This important, but little-known body oversees government-wide procurement regulations and plays a huge role in determining how small businesses compete for federal contracts. By adding SBA to the FAR Council, Senator Cardin has ensured that the voice of small businesses will always be heard when federal contracting rules are put into place.
“Having a knowledgeable voice for small businesses at the table when procurement regulations are being determined will be instrumental in increasing utilization of small businesses by agencies,” said Senator Cardin, “I’m proud to fight for small businesses, so that the they have an even playing field in providing services and goods to the largest purchaser in America, the federal government.”
Sole Source Increases
The current sole source thresholds are $4.5 million non-manufacturing contracts and $7 million for and manufacturing contracts. The value of DoD contracts has increased steadily over several years, many times exceeding the existing sole-source thresholds subject for each set-aside business group. Increasing the sole source thresholds to $8 million for non-manufacturing contracts and $10 million for manufacturing contracts within DoD and tying future increases to inflationary adjustments implemented by the FAR Council every five years, will provide Maryland small businesses greater opportunity to win contracts with the government’s largest contracting agency.
Adding SBA as voting member the FAR Council
SBA would join the Department of Defense, NASA, General Services Administration, and the Office of Federal Procurement Policy as a voting member on the Federal Acquisition Regulation (FAR) Council. This council determines agency-wide procurement regulations that govern small businesses’ ability to compete for Federal contracts. The FAR Council has the authority to make decisions regarding double counting, contract bundling, category management, and small business utilization in contracts. Though SBA implements its own regulatory policy on small business contracting, the agency routinely expresses concerns that other agencies defer to what exists in FAR regulations. This limits the enforcement of SBA’s regulatory policy. Installing the SBA as a voting member on the FAR Council would be a significant victory for small businesses as the SBA will have a greater influence in determining regulatory contracting policy across all agencies that impact small businesses. For example, the SBA will be able to advocate for small businesses in situations such as misinterpretation or noncompliance of regulatory policy by agencies’ contracting officers. This provision gives small businesses a true seat at the table in federal contracting decisions.
