Federal Agencies Plan to Increase No-Bid Contracting Opportunities for Small Businesses in 2013

In an effort to improve small business contracting opportunities the Office of Budget and Management has issued a recommendation to all federal agencies to analyze their no-bid contracting process. No-bid contracting opportunities dropped 4% this past year while large prime vendor profits continued to rise. U.S. Congressman Sam Graves (R-Mo.), the chairman of the House Small Business Committee has spoken out in response to the decline stating, “It is unacceptable that noncompetitive awards grew by $9 billion while small business awards shrunk.” Federal agencies awarded $115.2 billion in 2012 to prime government contractors all under a no-bid contract status. Eric Knellinger, President of US Federal Contractor Registration, the world’s largest third party registration firm stated, “Congressman Graves is absolutely right and this must change. But small businesses must be proactive in getting registered for government contracting. One of the main issues is that there are not enough small businesses involved in government contracting.”

Knellinger and Graves are definite advocates of small businesses. While Congressman Graves is urging agency officials to start contracting more small business services. Mr. Knellinger of US Federal Contractor Registration is marketing to small businesses and showing them the benefits of government contracting. Graves and Knellinger are both very outspoken about the sheer lack of attention that small businesses have been given in no-bid contracting. Congressman Graves went on to quote in an email, “It will require more work from senior agency officials, and possibly the White House, but more must be done.” Contracting for the United States Government mandates a mandatory registration for every business bidding or being awarded government contracts and set-asides. This mandatory procurement database is called System for Award Management(SAM).

“These non-completive contracts make it easy for agencies to hire businesses for desperate and time sensitive government projects. No-bid contracting is enacted more frequently in times of natural disaster,” said Knellinger. Once a business has been registered in SAM, that business has the opportunity to accept no-bid contracts from government agencies. When Hurricane Sandy destroyed most of the coasts of New Jersey and New York, the Federal Emergency Management Agency, or better known as FEMA enacted no-bid contracting to receive help in the relief efforts immediately on site.

According to the New York Times, of the 20 million small businesses in the United States only a little over 500,000 are registered and get to accept federal contracts and set-asides. These small business set-asides and no bid contracts are between $3,000 and $150,000. Mr. Knellinger continued to state that, “Out of the 500,000 small businesses that are registered, only a portion of those are active and compliant. It is imperative that small businesses become registered and registered properly in System for Award Management (SAM) in order to be eligible for no-bid contracting. When Hurricane Sandy recently happened we had thousands of businesses calling us requesting SAM registration services. Some were even saying they were registered and wanted government contracting work. It was disheartening to see that only a handful of these businesses we looked at would be considered in compliance with federal regulations. We worked around the clock getting these noncompliant businesses compliant and ready for government contracts. The time to register in SAM is now. Not tomorrow, not in a month, but right now.”