Hearing of the Contracting and the Workforce Subcommittee of the House Small Business Committee - Opening Statement of Rep. Murphy, Hearing on GAO Audit Reveals Half-Measures Taken by Small Business Advocates

Hearing

Thank you, Mr. Chairman.

Each year, the federal government procures more than $400 billion in goods and services from businesses around the country through government contracts.

The Small Business Act established a government-wide goal of awarding at least 23 percent of prime federal contracts to small businesses to ensure that they receive their fair share of federal contracting opportunities. Additionally, Offices of Small and Disadvantaged Business Utilization--or OSDBUs--were created at every federal agency to increase small business participation in the federal procurement marketplace.

OSDBUs promote small business inclusion within an individual agency's mandate and ensure that small firms are treated fairly and equitably in the contracting process. In this capacity, OSDBUs serve as one of the primary advocates for small firms and offer them information and guidance on contracting opportunities, both for prime contract awards and subcontract awards. Additionally, they work with SBA and other agency officials to determine contracting goals for their agency.

Overall, OSDBUs serve a critical role in the procurement process because they are well-positioned to help small businesses compete more successfully for federal government contracts.

To ensure that these Offices are fulfilling their mission, the GAO has reviewed each agency's compliance with their statutorily mandated functions. This hearing will address the most recent report on efforts to encourage agencies to voluntarily comply with reporting structure requirements for the OSDBU director.

The GAO concluded that several agencies failed to comply with the statute in a variety of ways, which may have interfered with their ability to fully advocate for small businesses as Congress intended. Findings like these leave us all concerned about the lack of assistance for small contractors, many of whom rely on OSDBUs.

With the recent growth in federal contract spending, small firms should be receiving opportunities commensurate with this increase. However, the dollars and actions awarded to small businesses have been somewhat stagnant since Fiscal Year 2005. Moreover, small business contracting programs are vastly underutilized as only 25 percent of these actions were awarded through a small business set-aside or sole source contract.

Pursuant to statutory requirements, OSDBUs must work with small businesses to ensure that they receive the maximum practicable opportunity to compete for contracts. This Committee shares that priority and, therefore, must hold OSDBUs who do not meet these statutory requirements accountable for their shortcomings. Today's hearing will provide the background and ideas needed to guide the Committee as we draft legislation to address this problem.

I thank the witnesses for being here and look forward to gaining more insight as to how we can make OSDBUs more effective in meeting their mission.

Thank you and I yield back.

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