Posted on 06/26/2007 4:17:23 PM PDT by anymouse
NASA to Use Fortune 1000 Firms to Hit Small Business Goal With New SBA Policy, Says American Small Business League
The following is a statement by the American Small Business League:
A new Small Business Administration policy set to take effect on June 30th will allow NASA to continue to count contracts to Fortune 1000 firms towards their federally mandated 23 percent small business contracting goal.
In February of 2006, NASA lost a federal lawsuit to the American Small Business League, which was filed under the Freedom of Information Act. NASA was forced to disclose information that indicated that they had included billions of dollars in contracts to many of the nation's largest defense and aerospace firms towards their small business contracting goal.
Under the new SBA policy, NASA can continue to include awards to firms such as Boeing and Lockheed Martin in their small business contracting statistics until the year 2012.
The SBA originally proposed a "grandfathering" policy in November of 2004, after a series of federal investigations found the SBA had included billons of dollars in contracts to Fortune 1000 firms and hundreds of other large businesses towards the federal government's 23 percent small business procurement goal. It would have allowed the SBA to continue to claim that the government had met their small business-contracting goal by continuing to count contract awards to large businesses as small business contract awards. The SBA was forced to shelve the grandfathering policy after receiving more than 6000 objections to the proposed policy.
New SBA Administrator Steven Preston resurrected the unpopular grandfathering policy shortly after he was appointed to office, renaming it "five-year re-certification." Like the grandfathering policy, the five-year re-certification policy will allow NASA and all other federal agencies to include existing small business contracts to Fortune 1000 firms and other large businesses towards their small business contracting goals for five more years.
The Senate is expected to propose legislation to remove Fortune 1000 firms and all large businesses from federal small business contracting programs before the end of 2007.
Contact:
Lloyd Chapman President American Small Business League (707) 789-9575
This one’s kinda hard to follow: NASA, small business, FOIA lawsuit, Fortune 1000 companies counting as small business, politics of space. That ought to cover any search keywords that I use trying to remember this article in the future.
The article and lawsuit are misleading. NASA and other fed agencies achieve their small biz goals by counting the SUBCONTRACTS let by the big aerospace contractors instead of only counting PRIME CONTRACTS made directly to small businesses. Can you imagine how many thousands more civil servants would be required to select and manage tens of thousands of very small contracts to small companies? The cost alone would be enormous. How would you cut out small Statements of Work for such small contracts? Don’t forget insuring the safety of space vehicles. NASA is not a space vehicle integrator; that’s a very special capability that only a few large aerospace companies have developed over the last 50 years.
We have not had any true “cost plus” contracts in a decade or more. I learned years ago that fixed price contracts are VERY dangerous for the government. What if they want changes (which is ALWAYS)? The contractor has the feds by the short hairs when there are change orders to a fixed price contract on a multi-billion dollar job. Most contracts now have a grading system that sets performance, cost, and schedule goals that translate into set amounts of profit. For example, the B1-B program had a huge profit bonus if the work came in ahead of schedule and under budget. Rockwell did just that and collected the big check.
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