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Small Business Contracting Opportunities In The Federal Procurement Arena

STATEMENT OF JAMES C. HANDLEY
REGIONAL ADMINISTRATOR
GREAT LAKES REGION
GENERAL SERVICES ADMINISTRATION
BEFORE THE
COMMITTEE ON SMALL BUSINESS
U.S. HOUSE OF REPRESENTATIVES
FEBRUARY 17, 2004
 
 

Mr. Chairman and Members of the Committee, thank you for the opportunity to appear before you today to discuss small business contracting opportunities in the federal procurement arena.  I am James Handley, Regional Administrator for the General Services Administration’s (GSA's) Great Lakes Region (Region 5), and I am pleased to be here this morning.

Let me begin by saying that this administration is extremely concerned about the health of our nation’s small businesses.  The prosperity of the nation’s 25 million – and the region’s nearly 700,000 – small businesses is a top priority.  To this end, increasing the procurement opportunities for small businesses is a major initiative of the Bush administration. 

Background of GSA and Region 5

As you are aware, GSA is a federal procurement and property management agency created to improve government efficiency and help federal agencies better serve the public.  The United States is the world’s largest marketplace, and GSA is the government’s chief acquisition agency.  GSA’s 13,000 associates provide services and solutions for the workplace operations of more than one million federal workers located in 8,000 government-owned and leased buildings in more than 2,000 U.S. communities and overseas.

In Region 5, GSA serves federal agencies throughout Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin.  The region’s nearly 1,000 associates support more than 90,000 federal employees located in more than 1,000 government-owned and leased buildings comprising 35 million square feet of office space.  We accomplish this by acquiring office space, equipment, supplies, telecommunications and information technology on behalf of our federal clients.

GSA’s Small Business Programs

As mandated by federal law, GSA works hard to ensure that opportunities to participate in the federal procurement process are afforded to small businesses, including those that are owned by minorities, women, veterans and small businesses located in HUB-Zones.  As an agency, we exceed what the law requires. 

Preliminary figures show that in fiscal year 2003, $6 billion of the $15 billion GSA spent in procuring goods and services went to small businesses.  This meets our internal agency goal of 40 percent and nearly doubles the government-wide goal of 23 percent.  In Region 5, contracts representing over $271 million worth of goods and services were awarded to small businesses in fiscal year 2003.  These figures do not represent contracts going to subcontractors, which would increase these numbers.

FY 2003 Prime Contracts to Small Business
(Preliminary Figures)

Category Number of Actions Dollars
Total Small Business 120,059 6,174,887,188
Woman-Owned 11,925 613,338,424
HUB-Zone 284 23,371,373
Service-Disabled Veterans 1,094 43,385,185
8(a) 7,959 708,692,690
Small Disadvantaged 20,544 1,626,071,062

As Felipe Mendoza, GSA’s Associate Administrator in the Office of Small Business Utilization, told this Committee last May, “GSA aims high in its goals and achievements, because we want everyone in the agency to know that we recognize the statutorily mandated goals to be the floor – not the ceiling.”

Joint Efforts With Other Agencies

Mr. Chairman, GSA, the Small Business Administration (SBA), Department of Defense (DoD) and Office of Management and Budget have taken steps to simplify the federal contracting process by creating an integrated database of small businesses that want to do business with the government.  The integration of SBA’s PRO-Net and DoD’s Central Contractor Registration databases is creating one portal for entering and searching small business sources.  This integration will assist small businesses with marketing their goods and services to the federal government.

Multiple Award Schedules Program

In addition to our agency-specific procurement opportunities, GSA manages the Multiple Award Schedules Program in which contracts are established with commercial firms for commonly used supplies and services.  The program offers a broad range of products and services at prices that have been negotiated by GSA and meet accepted levels of expertise, performance and value.  For federal agencies, this program represents a much more simplified procurement process.

The schedules also offer small businesses a new avenue of potential work with the federal government.  Of the over 14,700 contracts currently on the GSA schedules, over 11,700 – approximately 80 percent – have been awarded to small businesses.  We have several aggressive initiatives in place under this program that target small businesses, and we are constantly working with SBA to increase the opportunities for all categories of small businesses through our program.

Small Business Outreach

GSA’s small business programs are geared toward increasing competition to promote the acquisition of high quality products and services at a fair and reasonable price to the American taxpayer.  Various national and regional outreach programs established by GSA, SBA and other agencies enable the small business community to meet key contracting officials and receive one-on-one counseling from a team of business specialists. 

In fiscal year 2003, Region 5 conducted 21 outreach events, including one in the 16th District – the Subcontracting Outreach for the New Rockford Courthouse – and two right here in the 7th District – the 2003 Business Procurement Expo and the 7th District Town Hall Meeting.  These events drew over 8,500 participants.  Of special note was the Chicago Business Matchmaking Event held in June 2003 and jointly sponsored by the U.S. Chamber of Commerce.  This event, which was attended by over 1,300 small business representatives, aimed to line up small businesses with counselors and potential customers. 

The region’s Office of Business and Congressional Services assists small businesses by answering the many questions that are submitted by phone, e-mail, letters and in person.  We counsel most companies over the phone; however, we also conduct one-on-one counseling sessions to assist companies understand and participate in the procurement process.  Many companies visit our office for information.  We also attend procurement conferences to conduct workshops that teach small business owners how to do business with GSA.  We are available to answer questions throughout the week and encourage businesses to come in to talk with our contracting officers regarding possible opportunities with our agency.  These meetings are usually arranged in advance and permit companies to discuss what they are looking to do with GSA and allow contracting officers to find out about the companies’ capabilities. 

GSA has many resources available to help small businesses and provide them with useful information.  One such resource is our Doing Business with GSA booklet, which is geared toward new and prospective contractors.  It explains the process, offers practical advice, and lists helpful websites, including the redesigned www.gsa.gov.  We also distribute a local procurement directory and a list of toll-free telephone numbers so small businesses can contact us if they have any questions. 

Our website also provides links to better help small businesses understand how to get started with government contracts.  It provides them with points of contact and keeps them informed of upcoming conferences in which we will be participating.

The Federal Procurement Data System is designed to be a central repository of statistical information on federal contracting that seeks to identify detailed information on contract actions over $25,000 and offers summary data on procurements less than $25,000.  The system can identify who bought what, from whom, for how much, when and where and can be accessed at www.fpdc.gov.  The replacement system (FPDS-NG) is coming online for fiscal year 2004 and beyond.  It can be accessed at www.fpds.gov.

GSA also lists federal and military procurement opportunities worth more than $25,000 on www.fedbizopps.gov.

Regional Successes

There are five construction projects in the Great Lakes Region that epitomize small business procurement success. 

  • Of the $54.6 million in contracts for the renovation of the 536 South Clark federal building in Chicago, over $10.9 million is targeted to small businesses;
  • Of the $30 million in contracts for the renovation of the Howard M. Metzenbaum Courthouse in Cleveland, $9 million is for small businesses;
  • Of the $36 million for construction of the new courthouse in Rockford, the contractor plans to award over $8 million in subcontracts to small businesses;
  • Of the $90.6 million in contracts for the renovation of the Major General Emmett J. Bean Federal Center in Indianapolis, over $32 million went to small businesses; and
  • Of the $47.8 million in contracts for Phase II of the Carl B. Stokes Courthouse in Cleveland, over $9.5 million went to small businesses.

One regional small business success story is Flannery Construction; a small business headquartered in St. Paul, Minnesota, that has contracted with GSA for space renovation construction work.  In 1997, they bid on and procured a contract with GSA.  The state-of-the art daycare and playground at the Bishop Henry Whipple Federal Buildings is just one of the GSA landmark projects that highlight Flannery Construction’s abilities.  They have also been awarded an Indefinite Delivery Indefinite Quantity contract as they continue to thrive.

Innovative Procurement Ideas and Concepts

In our experiences with small business procurement, we have developed a few programs and designed a number of concepts that we believe could be used to improve the procurement process, and we are looking at them more closely to determine their viability.  One initiative we are most proud of involves altering the payment date from the normal 23 days to within 14 days of completion.  Potentially, this alteration allows contractors to have more capital on hand for other projects.

Other ideas include:

  • Encouraging small contractors who lack resources to join in a mentor program, utilizing the mentor’s experience and financial resources;
  • Dissecting each prospectus project we embark on to see what fraction of work can be contracted out to small businesses; and
  • Placing a small architectural and engineering firm under separate contract to perform some vital fraction of the design (cafeteria, landscaping, daycare) with the overall project architectural and engineering contractor serving as part of the board to approve the selection.

Closing

Mr. Chairman and Members of the Committee, the General Services Administration, and more specifically the Great Lakes Region that I oversee, is proud of its relationship with small businesses.  We share President Bush’s view that small businesses are the backbone of our economy.  A healthy small business community contributes mightily to the health of our national economy.  Although we are pleased with our efforts to promote the region’s small businesses, we are never satisfied.

Thank you again for this opportunity, Mr. Chairman, to speak with you this morning.  I will be happy to answer any questions from you or the other Members of the Committee.