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34–828 PDF 2007

FULL COMMITTEE MARKUP OF H.R. 1873,

THE SMALL BUSINESS FAIRNESS IN

CONTRACTING ACT

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF 

REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

April 24, 2007

Serial Number 110-16

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

JUANITA MILLENDER-McDONALD, 

California 

WILLIAM JEFFERSON, Louisiana 

HEATH SHULER, North Carolina 

CHARLIE GONZA ́ LEZ, Texas 

RICK LARSEN, Washington 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

HENRY CUELLAR, Texas 

DAN LIPINSKI, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

BRUCE BRALEY, Iowa 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

STEVE CHABOT, Ohio, Ranking Member 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

STEVE KING, Iowa 

JEFF FORTENBERRY, Nebraska 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio 

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KEVIN FITZPATRICK, Minority Staff Director

STANDING SUBCOMMITTEES 

Subcommittee on Finance and Tax

MELISSA BEAN, Illinois, Chairwoman 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

DEAN HELLER, Nevada, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Contracting and Technology

BRUCE BRALEY, IOWA, Chairman 

WILLIAM JEFFERSON, Louisiana 

HENRY CUELLAR, Texas 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

JOE SESTAK, Pennsylvania 

DAVID DAVIS, Tennessee, Ranking 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

MARY FALLIN, Oklahoma

(II) 

Subcommittee on Regulations, Health Care and Trade

CHARLES GONZA ́ LEZ, Texas, Chairman 

WILLIAM JEFFERSON, Louisiana 

RICK LARSEN, Washington 

DAN LIPINSKI, Illinois 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

LYNN WESTMORELAND, Georgia, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

MARILYN MUSGRAVE, Colorado 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Urban and Rural Entrepreneurship

HEATH SHULER, North Carolina, Chairman 

RICK LARSEN, Washington 

MICHAEL MICHAUD, Maine 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JEFF FORTENBERRY, Nebraska, Ranking 

ROSCOE BARTLETT, Maryland 

MARILYN MUSGRAVE, Colorado 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee

Subcommittee on Investigations and Oversight

JASON ALTMIRE, PENNSYLVANIA, Chairman 

JUANITA MILLENDER-McDONALD, 

California 

CHARLIE GONZA ́ LEZ, Texas 

RAUL GRIJALVA, Arizona 

LOUIE GOHMERT, Texas, Ranking 

LYNN WESTMORELAND, Georgia

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1

Chabot, Hon. Steve .................................................................................................. 2

Braley, Hon. Bruce .................................................................................................. 3

APPENDIX 

Prepared Statements: 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 5

Chabot, Hon. Steve .................................................................................................. 7

Braley, Hon. Bruce .................................................................................................. 8

(V) 

(1)

FULL COMMITTEE MARKUP OF H.R. 1873, 

′′THE SMALL BUSINESS FAIRNESS IN 

CONTRACTING ACT′′

TUESDAY, APRIL 24, 2007

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:00 p.m., in Room 

2360, Rayburn House Office Building, Hon. Nydia Vela ́zquez 

[Chairwoman of the Committee] presiding. 

Present: Representatives Shuler, Gonza ́lez, Michaud, Cuellar, 

Braley, Sestak, Chabot, Graves, Davis, Fallin, Buchanan and Jordan. 

OPENING STATEMENT OF CHAIRWOMAN VELA ́ ZQUEZ 

Chairwoman VELA ́ ZQUEZ. Good morning. Before we begin, I 

would like to remember our colleague and fellow Committee Member Representative Millender-McDonald. So many times we forget 

the great people we work with day in and day out, and Juanita 

Millender-McDonald was one of those people. I would like us to recognize her and to honor her by taking a moment of silence. 

[A moment of silence was observed.] 

Chairwoman VELA ́ ZQUEZ. I call this markup to order on H.R. 

1873, ‘‘The Small Business Fairness in Contracting Act’’. We are 

here today to consider H.R. 1873, a bill introduced by Mr. Braley. 

The Chairman’s amendment in the nature of the substitute will 

serve as the bill to be considered before the Committee today as 

base text for purposes of amendment. 

Chairwoman VELA ́ ZQUEZ. I am very proud of this bipartisan legislation, and I want to recognize both, Committee staff from the 

Democratic and the Republican side. We all work together. We 

have extensive discussions. And many members from both sides of 

the aisle had input into this legislation. Last year the Federal Government spent $340 billion on goods 

and services. Our goal is make sure small businesses get their fair 

share of Government contracts. 

In recent years, this Committee has held a number of hearings 

on federal procurement. During this Congress we have already held 

three hearings on the issue and we continue to find the same problems over and over again. 

Although the government is spending more, fewer contracts are 

being awarded. Individual contracts are being bundled together 

into mega-contracts. While this may be more convenient for the 

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contracting officers, barring small businesses from the marketplace 

reduces competition. This often results in higher costs to the taxpayers and decreased value for the government. 

Another problem is that federal agencies are not taking small 

businesses’ requirements seriously. Small business participation accomplishments reported by agencies is nowhere near the maximum 

extent possible, disappointing levels of small businesses participation are often inflated due to misquoted data. H.R. 1873 addresses 

all of these problems. 

The Small Business Fairness in Contracting Act will help to ensure that mega-contracts are being identified and subjected to review. The bill expands the definition of contract bundling and 

makes the appeals process more accessible by allowing trade associations to advocate on behalf of their members. The definition will 

also be expanded to include construction on new work. 

In addition, the bill provides for third party review of bundling 

decisions, which will provide a neutral forum for resolution. The 

Manager’s Amendment includes a few changes to insure the definition is codified so that only contracts that are likely to be bundled 

have to be reviewed. It also provides that the legislation would be 

implemented into the rules the contracting officers consult when 

making awards. 

H.R. 1873 will provide more opportunities for small businesses, 

like raising the small business contracting goal to 30 percent and 

expand it to overseas contracts. 

Finally, The Small Business Fairness in Contracting Act will ensure that only small business contracts are being counted toward 

small-business achievement. H.R. 1873 aims to clean up federal 

contracting databases so that when agencies release the small business accomplishments their numbers are accurate. 

Right now, large businesses are identifying themselves as small 

in the central contract registry. Government agencies are recording 

large-business contracts as small business awards in the federal 

procurement data system. When contracts are awarded to large 

businesses and counted toward small business achievements, agencies have less incentive to create additional small business opportunity. 

I urge you all to consider these barriers that small businesses 

face and offer your support to this important legislation. I now 

yield to Mr. Chabot for his opening statement. 

OPENING STATEMENT OF MR. CHABOT 

Mr. CHABOT. Thank you, Madam Chair. And I want to thank 

you, Madam, for holding this markup today and for pushing for 

this important legislation. 

H.R. 1873, The Small Business Fairness in Contracting Act in 

my view is a good bill that should be reported out of this Committee favorably. This is important legislation, and it would expand 

small-business opportunities in the federal marketplace and take 

necessary steps to help ensure that federal agencies meet their 

small business procurement requirements. 

Specifically, H.R. 1873 would expand the definition of contract 

bundling. Contract bundling remains a problem, and this bill would 

require additional information from agencies to justify bundling. 

3

The bill would also enhance the review process agencies must undergo when issuing a bundling decision. 

This bill would also increase the government-wide small-business 

goal from 23 percent—lower than the government-wide goal. It will 

also require the SBA to establish standards for reviewing subcontracting plans. And finally the bill will strengthen the review and 

reporting process to better identify who is a small business and 

who is not. 

The Small Business Fairness in Contracting Act makes important changes to help small businesses in the federal procurement 

process, and I urge its adoption. 

Once again, I thank the chairwoman for her continued leadership 

on this issue and yield back the balance of my time. 

Chairwoman VELA ́ ZQUEZ. I now yield to Mr. Braley for his statement on this legislation. 

OPENING STATEMENT OF MR. BRALEY 

Mr. BRALEY. Thank you, Madam Chairwoman, for holding this 

markup and thank you for those remarks, Ranking Member 

Chabot. I really appreciate your support. I also want to echo your 

condolences to the family, friends and colleagues of Congresswoman Millender-McDonald. She will be sorely missed in this Congress. 

Last week, the Small Business Committee held a hearing on expanding the small business’s access to federal contracts. I was 

pleased we were able to have a meaningful discussion, hearing 

from small-business owners and representatives that want a fair 

opportunity to compete for and to win federal contracts. 

Over the past five years, government agencies have greatly increased contract bundling, often combining work small businesses 

could perform into giant packages that exceed small firms’ ability 

to compete for the work. During the same time, total government 

contracting has increased by 60 percent while small-business contracts have decreased by 55 percent. 

Last Friday President Bush proclaimed this week as National 

Small Business Week. That is why it’s so appropriate that today 

we’ll be marking up H.R. 1873, The Small Business Fairness in 

Contracting Act, sending a message to small businesses that this 

Committee is serious about leveling the playing field for them by 

improving their opportunities to compete for federal contracts. 

Small businesses are the number one job creators in this country, 

and we need to ensure that this engine not only remains healthy 

but has the support it needs to grow. It’s essential to help remove 

the barriers blocking small businesses from entering the nearly 

$400 billion per year federal marketplace. 

As I mentioned in the hearing last week, Iowa ranks near the 

bottom in terms of government contracting dollars awarded to 

small businesses, yet these small businesses play such an important role in all of our districts that allowing them a fair opportunity to bid on federal contracts will bring economic vitality to our 

respective towns and cities. 

I’m particularly pleased that this bill has received such strong bipartisan support from members of the Small Business Committee. 

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And I thank you, Madam Chairwoman, and all of my colleagues 

who join me in standing up for the interests of small businesses. 

Chairwoman VELA ́ ZQUEZ. Thank you, and it was important work 

that you did on this legislation. 

Are there any other members who wish to be recognized on this 

bill? 

[No response.] 

Chairwoman VELA ́ ZQUEZ. The bill shall now be considered open 

for amendment at any time. Does any member seek recognition for 

the purpose of offering an amendment? 

Seeing no amendments, the question is on reporting H.R. 1873 

with amendment. All those in favor say aye. 

[Chorus of ayes.] 

Chairman VELA ́ ZQUEZ. Those opposed, say no. 

[No response.] 

Chairman VELA ́ ZQUEZ. The ayes have it. The bill is adopted and 

reported. I ask unanimous consent that the clerk be authorized to 

correct section numbers, punctuation and cross references and to 

make all the necessary technical and conforming corrections. Without objection, so ordered. 

That concludes the markup, and we are now adjourned. Thank 

you. 

[Whereupon, at 2:20 p.m., the Committee was adjourned.]

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