Tell Us Why Small Businesses Can't Get Contracts, Pentagon Asks

Defense officials are seeking input by October 25 on how they can make the department’s contracting opportunities more attractive to small businesses. 

“The participation of dynamic, resilient, and innovative small businesses in the defense industrial base is critical to the United States' efforts to maintain its technological superiority, military readiness, and warfighting advantage,” said a request for comments in the Federal Register on Sept. 8. “The department seeks public input on the barriers that small businesses face in working with the department. This input will be used to update the department's Small Business Strategy led by the DoD Office of Small Business Programs.” 

The department would like insight in order to further President Biden’s executive orders on bolstering the domestic supply chain; advancing racial equity and supporting underserved communities through the federal government; and promoting American competition. Some of the specific topics officials would like to explore are:

• What are regulations and/or business practices that might hinder the relationship between the department and small businesses?
• What is the impact of the department’s initiatives to support small business? (The Mentor-Protégé Program, Indian Incentive Program, Procurement Technical Assistance Centers, the Rapid Innovation Fund, Small Business Innovation Research and Small Business Technology Transfer)
• How do contracting timelines impact small businesses?
• What is the availability of skilled workforces to “sustain a competitive small business ecosystem?”
• How has the coronavirus pandemic impacted small businesses in the defense industrial base? 

Defense Deputy Secretary Kathleen Hicks noted during remarks at the 30th annual Pennsylvania Showcase on Commerce that the Defense Department received an “A” grade on the Small Businesses Administration's annual scorecard about contracting with small businesses in 2020. The department has met its contracting goals for seven straight years, she added. 

“Yet, over the past decade, small businesses in the defense industrial base shrunk by over 40%,” Hicks said. “The data shows that if we continue along the same trend, we could lose an additional 15,000 suppliers over the next 10 years.” The department is committed to making it easier for small businesses to receive contracts, however, she added, referencing the upcoming notice in the Federal Register. 

The notice also cites the results of a recent survey of small businesses conducted by the National Defense Industrial Association that found about four in five businesses (77.3%) were impacted by the pandemic. Of that 85% said it was a negative impact. 

The industry association is encouraging members and non-members to respond to the request for comments. 

“We’re delighted DoD is reaching out to better understand barriers to entry,” said Ally Veres, vice chair of the association’s small-business division, in a statement last week. “This is a great opportunity for us to provide insight into where well-meaning efforts may have inadvertently brought about unintended consequences for small-business entry and ongoing engagement in the defense industrial base.”

Sept. 12-18 is National Small Business Week. The Biden administration is “committed to nurturing small businesses that have faced historic barriers in rural and urban America, including businesses owned by veterans, women, and people of color—especially Black, Latino, and Asian American businesses,” the president said in a proclamation for the week. Biden also noted he is seeking to double the share of federal contracts that go to small, disadvantaged businesses over the next few years as part of his administration’s goal to narrow the racial wealth gap.