The 2006 Small Business Act reauthorization bill has some interesting provisions to expand the percentage of contract dollars going to small businesses:

1.  Penalize misrepresentation as small business.  The bill would make it easier for the government to prosecute, suspend and debar large companies that obtain government contracts by misrepresenting themselves as small businesses.

2.  Subcontracting practices will be scrutinized.  To prevent “bait and switch” tactics offerors must certify they will acquire goods and services from small businesses in the amount and quantity used in their proposals unless the small businesses cannot meet  quantity, quality or delivery standards and they will have to submit a certified report showing attainment of their subcontracting plans.  In addition, (1) failure to make timely payments to small business subcontractors will be considered to be a material breach of the prime contract and (2) pilot programs to provide incentives to prime contractors who exceed their subcontracting plan goals will be encouraged.

3.  Multiple awards targeted.  Federal agencies will have to establish criteria that (a) sets aside part of multiple award contracts to small businesses (b) sets aside multiple award contracts for subcategories of small businesses (e.g. disadvantaged, women-owned, disabled, etc.) and (c) reserves one or more contract awards for small businesses under full and open competition.

4.  Greater share of awards for emergency relief and recovery contracts. Expand the current requirements that small businesses be given a priority to perform a “substantial portion” of contracts in emergency relief contracts to include contractual set-asides, incentives and penalties to increase small business participation.

5.  Expand HUBZone eligible areas. Included are qualified suburban areas of villages, towns, cities and other units of a local government that is in an urban county provided these areas meet the income or unemployment requirements.

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