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Press Release

May 7, 2009

House Panel Passes Amendment by Rep. Susan Davis to Help Small Business

Proposal aims to increase competition in defense contracting

WASHINGTON – The bundling of contracts is a practice used by the Department of Defense (DOD) for ease, convenience and to control costs.  However, the process tends to benefit larger companies leading to small businesses being left out in the cold.

Rep. Susan Davis (D-San Diego) offered an amendment to include the unbundling of contracts as a method of enhancing competition for major weapon systems procurement contracts.  Her amendment was approved by the House Armed Services Committee.

“The goal of this amendment is to not only to give small businesses greater opportunity, but create cost savings from increased competition.” said Davis, a member of the committee.

In 2005, the House Small Business Committee issued a report giving DOD a “D” in achieving its goals for contracts for women and minority owned businesses. 

Congress in 1997 established the government-wide goal of awarding 23 percent of its work to small businesses because they play an increasingly critical role in driving the economy.

In 2007, small businesses obtained $83.2 billion in federal contracts, which is about 18.9% of the $440 billion spent during that year, according to a 2007 report by the Department of Commerce.

“Clearly, Congress is falling far short of the goal it set for itself more than 10 years ago,” Davis said. “I know from talking to women, minority, and veteran-owned small businesses in my district that smaller firms are hurt when only a select number of companies are able to compete.”

Davis’ amendment was included in the WASTE-TKO Act (H.R. 2101) designed to rein in out of control cost growth in the development of major weapons programs.

The bill, which was approved by the committee, would designate an official at the DOD as its principal expert on performance assessment in acquisitions.  Weapons systems not meeting the standards set in the legislation would get additional annual reviews.  It also requires a new system be set up to track the cost growth.

H.R. 2101 is part of a larger effort by Congress and the Obama White House to make weapons systems acquisition more efficient and cost effective.

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