Issue Areas

NACA closely monitors legislative initiatives on Capitol Hill and informs our member organizations of legislation which may interest them.

Small Business Administration Regulations

On February 11, 2011, the SBA issued final regulations that provided significant reform to the 8(a) program that address concerns that have been raised by some in Congress and the media about the program. The SBA regulations will be effective March 14, 2011. These regulations are a product of years of work, including numerous Tribal consultations held nationwide in 2007, and 2009-2010. In addition to changes to the program overall, the final regulations will increase oversight of Native 8(a) firms, significantly changing how ANCs, Tribes, and Native Hawaiian Organizations participate in the program, and increasing reporting and transparency. The following highlights the most significant changes that will have long-lasting impacts on Native enterprises.

Parity

September, 27, 2010: President Obama signed legislation that re-establishes equality among each of the small business subcategories that compete for government contracts. View article here.

Prior decisions by the Government Accountability Office have misinterpreted Congress’s long-standing intent with regard to the operation of the current laws governing these programs. The decisions stated that the HUBZone program had preference over all other small business contracting programs. The decisions were also relied upon in a February 2010 opinion issued by a judge of the Court of Federal Claims, in a case called Mission Critical Solutions v. United States and more recently in DGR Associates, Inc., v. United States. These decisions have upset the balanced approach contracting officers use when determining how to set-aside a contract.

The Mission Critical decision overturned long-standing SBA policy that federal contracting officers may choose among SBA's business development and contracting programs in order to meet their small business procurement goals. The SBA promotes parity among the following programs: 8(a), HUB-Zone, Service Disabled Veteran-Owned Small Businesses (SDVOSBs) and Women-Owned Small Businesses (WOSBs).

The ruling in the Mission Critical decision hinged on the statutory underpinnings that created HUBZones, which used the word “shall” and not “may,” requiring contracting officers to give preference to HUB-Zone firms on any procurement opportunity that meets the HUB-Zone criteria (which occurs whenever two or more HUBZone firms are available to perform the contract at a fair price). The Office of Management and Budget and the Department of Justice disagree with the decision and have directed federal contracting officers that the decision applies only in the specific case.

The entire small business community is united in seeking a legislative remedy to restore program parity beyond question. A two-line bill has been introduced in both the House and Senate (S.3190 and H.R. 3729) that would change the HUBZone statute from “shall” to “may” thus ensuring the HUBZone program and the other small business programs are treated with parity. This legislation reaffirms Congress’s intent that contracting officers have discretion to choose among any of the small business development and contracting programs when deciding to make a contract award.

Link to Opinions:

Articles on the HUBZone parity issue:

Insourcing

NACA has joined with other members of the small business contracting community urging the Federal government to stop insourcing (converting work currently performed by private sector contractor firms to performance by Federal government employees). Insourcing forces small business to compete with the federal government and hinders small businesses ability to obtain a contract.

Organization Letters to Administration on Insourcing

Articles on Insourcing