[Senate Report 107-251]
[From the U.S. Government Publishing Office]
Calendar No. 561
107th Congress Report
SENATE
2d Session 107-251
======================================================================
SMALL BUSINESS PROCUREMENT OMBUDSMAN ACT OF 2002
_______
September 3, 2002.--Ordered to be printed
_______
Mr. Kerry, from the Committee on Small Business and Entrepreneurship,
submitted the following
R E P O R T
[To accompany S. 2753]
The Committee on Small Business and Entrepreneurship, to
which was referred the bill (S. 2753), having considered the
same, reports favorably thereon with an amendment and
recommends that the bill (as amended) do pass.
On July 24, 2002, the Committee on Small Business and
Entrepreneurship considered S. 2753, the ``Small Business
Procurement Ombudsman Act of 2002'' originally introduced as
the ``Small and Disadvantaged Business Ombudsman Act.'' The
Committee adopted by unanimous voice vote a substitute
amendment offered by the Chairman, Senator John F. Kerry, and
the Ranking Republican, Senator Christopher S. Bond. As
amended, S. 2753 would create a statutory position housed in
the U.S. Small Business Administration's Office of Advocacy
called the Small Business Procurement Ombudsman, make
improvements to the Office of Small and Disadvantaged Business
Utilization at each Federal agency, and increase the Federal
government's governmentwide small business prime contracting
goal to 30 percent. Having considered S. 2753, as amended, the
Committee reports favorably thereon without further amendment
and recommends that the bill do pass.
I. INTRODUCTION
Small businesses play a critical role in providing
competition and bringing innovation to our Federal procurement
system. A major reason for the creation of the Small Business
Administration (SBA) was to ensure an adequate private-sector
base for the Department of Defense, as it was deemed in our
national security interests to have a thriving small business
sector. The Committee believes that a thriving small business
sector is more important than ever, not just to our national
security, but to our economic security as well.
The Federal government, through the Small Business Act and
other legislation, has in place programs designed to promote
small business participation in the Federal procurement
marketplace. The 8(a) Business Development program, the Small
and Disadvantaged Business (SDB) program, the Historically
Underutilized Business Zone (HUBZone) program, the woman-owned
business procurement program, the disabled veteran-owned small
business program, and the general small business set-aside all
play a decisive role in providing fair access to the Federal
marketplace for small businesses. However, these programs must
be implemented fully and faithfully if small businesses are to
receive their fair share of the Federal procurement
marketplace.
In addition to these programs, and in an effort to ensure
small businesses are participating in Federal procurement at
appropriate levels, Congress enacted legislation establishing
statutory governmentwide goals for contracting dollars to be
awarded to various types of small business: SDB, 5 percent;
HUBZone, 3 percent (beginning in FY 2003); women-owned
business, 5 percent; disabled veteran-owned, 3 percent; and all
small businesses, 23 percent.
Table 1 demonstrates the Federal government's small
business prime contracting goal achievement for the previous
four fiscal years and highlights when the Federal government
failed to achieve a statutory small business goal. The table
also demonstrates that the Federal government, for fiscal years
1998, 1999, 2000 and 2001 achieved slightly below or slightly
above the statutory, 23 percent governmentwide small business
prime contracting goal.
TABLE 1
SMALL BUSINESS
----------------------------------------------------------------------------------------------------------------
Year Billion Goal percent Actual percent SB loss
----------------------------------------------------------------------------------------------------------------
1998............................ $181.7 23.00 23.39
1999............................ 185.7 23.00 23.10
2000............................ 200.9 23.00 22.26 $1.5 billion
2001............................ 219.6 23.00 22.81 417 million
----------------------------------------------------------------------------------------------------------------
WOMEN-OWNED
----------------------------------------------------------------------------------------------------------------
Year Billion Goal percent Actual percent WOB loss
----------------------------------------------------------------------------------------------------------------
1998............................ $181.7 5.00 2.21 $5.1 billion
1999............................ 185.7 5.00 2.50 4.6 billion
2000............................ 200.9 5.00 2.28 5.5 billion
2001............................ 219.6 5.00 2.49 5.5 billion
----------------------------------------------------------------------------------------------------------------
HUBZONE \1\
----------------------------------------------------------------------------------------------------------------
Year Billion Goal percent Actual percent HZ loss
----------------------------------------------------------------------------------------------------------------
1998............................ $181.7 \2\ N/R N/R
1999............................ 185.7 1.00 N/A $1.9 billion
2000............................ 200.9 1.50 0.33 2.4 billion
2001............................ 219.6 2.00 0.72 2.8 billion
----------------------------------------------------------------------------------------------------------------
\1\ HUBZone = Historically Underutilized Business Zone.
\2\ N/R = not yet required by law.
DISABLED VETERAN-OWNED
----------------------------------------------------------------------------------------------------------------
Year Billion Goal percent Actual percent DV loss
----------------------------------------------------------------------------------------------------------------
1998............................ $181.7 \1\ N/R N/R
1999............................ 185.7 N/R N/R
2000............................ 200.9 3.00 N/A $6.0 billion
2001............................ 219.6 3.00 0.25 6.0 billion
----------------------------------------------------------------------------------------------------------------
\1\ N/R = not yet required by law.
8(a)
----------------------------------------------------------------------------------------------------------------
Percent change
Year Billion Goal percent Actual percent from 1998
----------------------------------------------------------------------------------------------------------------
1998.................................... $181.7 \1\ N/G 3.57
1999.................................... 185.7 N/G 3.40 -4.76
2000.................................... 200.9 N/G 2.88 -19.33
2001.................................... 219.6 N/G 2.86 -19.89
----------------------------------------------------------------------------------------------------------------
\1\ N/G = no statutory goal.
ALL SDB \1\
----------------------------------------------------------------------------------------------------------------
Year Billion Goal percent Actual percent SDB loss
----------------------------------------------------------------------------------------------------------------
1998............................ $181.7 5.00 6.48
1999............................ 185.7 5.00 6.70
2000............................ 200.9 5.00 6.49
2001............................ 219.6 5.00 7.12
----------------------------------------------------------------------------------------------------------------
\1\ SDB = Small Disadvantaged Business.
According to the Federal government's own data, as
presented in Table 1, small business participation in Federal
procurement has failed to achieve the statutory goal of 23
percent for the past two years, 8(a) participation has steadily
declined, the HUBZone and disabled veteran-owned small business
procurement programs have fallen well short of goal attainment,
and women-owned small business participation in government
procurement has failed to achieve any noticeable increase,
despite passage of a targeted procurement program to assist
these firms.
The Committee believes that a major cause of this decline
has its roots in the new procurement environment created by
reforms in the mid-1990s (such as passage of the Federal
Acquisition Streamlining Act and the Federal Acquisition Reform
Act, and the regulatory changes to procurement programs in
response to the Adarand Constructors Inc. v. Pena decision),
and reductions in the acquisition workforce. Additionally, a
procurement culture that favors expediency and short-term cost
savings has relegated small business participation in Federal
procurement to secondary status.
Until the Federal government, at all levels, realizes the
importance of doing business with small business, these
negative trends will continue. Our nation will not have access
to a wide range of small business suppliers, and small
businesses across the country will continue to lose billions of
dollars in contract opportunities year after year.
While no single piece of legislation alone can ever solve
the complex problems faced by small businesses in today's
Federal procurement environment, the Committee believes that
the creation of an advocate, such as an ombudsman for small
business procurement, to assist small business owners and
ensure they are treated fairly in the procurement process will
be of great benefit.
For example, small businesses frequently contact the
Committee to report problems they are having with a prime
contractor or a contracting agency. Too often, these businesses
are afraid to come forward and make an official complaint for
fear of being black-balled and denied future contracting
opportunities. A small business procurement ombudsman would
provide one solution for these small businesses who fear
retaliation, by allowing them to submit confidential
complaints. A small business procurement ombudsman would also
work to change the culture at Federal procuring agencies by
tracking the training of procurement personnel and working to
ensure that this training not only includes the ``how to'' of
small business participation, but the ``why'' of small business
participation--their crucial role in agency success and the
national economy.
The Committee also believes that strengthening the role
played by the Office of Small and Disadvantaged Business
Utilization at each Federal agency will have a positive impact
on small business participation in the Federal procurement
system and serve as a necessary corollary to creating a
governmentwide advocate for small business procurement.
The Committee has heard statements that the governmentwide
small business prime contracting goal should be raised to
provide small businesses an increased share of the over $200
billion in goods and services purchased yearly by the Federal
government. Some advocates have requested a level as high as 40
percent, given that small businesses make up an overwhelming
percentage of Federal contractors. However, given the current
level of small business participation, the Committee has
supported a goal of 30 percent. By raising the Federal
governmentwide small business prime contracting goal,
opportunities for all small businesses should increase and the
diversified network of small business suppliers needed to meet
the Federal government's procurement needs should be enhanced.
The Committee believes S. 2753 will help ensure small
businesses are treated fairly in the Federal procurement
process and enhance small business participation in the Federal
procurement system.
II. LEGISLATIVE HISTORY
S. 2753, the ``Small and Disadvantaged Business Ombudsman
Act,'' was officially introduced by Senator John F. Kerry on
July 18, 2002. Senators Christopher S. Bond, Max Cleland, Maria
Cantwell, Jeff Bingaman, Jean Carnahan and Mary L. Landrieu are
cosponsors of the legislation. The Committee held a roundtable
on June 19, 2002 titled, ``Are Government Purchasing Policies
Hurting Small Business?'' During the roundtable, the bill's
predecessor, a discussion draft of the Small and Disadvantaged
Ombudsman bill, was a topic of deliberation. The draft included
provisions to establish a small business ombudsman to help
ensure small businesses are treated fairly in the procurement
process and to report to the Congress on Federal procurement
activities as they relate to small business. The draft also
contained an increase in the statutory, governmentwide small
business prime contracting goal from 23 percent to 30 percent.
Many small business advocates that participated in the
Roundtable supported the creation of a small business
procurement ombudsman and supported the increase in the small
business prime contracting goal. Suggestions were made to
include provisions to improve the Office of Small and
Disadvantaged Business Utilization (OSDBU) at each Federal
agency and give the ombudsman the authority to rectify small
business complaints as well. Suggestions were also made to
change the name of the ombudsman to be more reflective of all
small business concerns.
During consideration of S. 2753, the Committee adopted a
substitute amendment proposed by Senators Kerry and Bond, which
changed the name of the ombudsman from the Small and
Disadvantaged Business Ombudsman for Procurement to the Small
Business Procurement Ombudsman, transferred the position from
the Small Business Administration (SBA) to the SBA's Office of
Advocacy, and required the Chief Counsel for Advocacy to
appoint the ombudsman. The substitute also transferred the
authority to work on the goal attainment plan required under
the legislation from the ombudsman to the SBA program managers
and made a number of technical improvements to the section
regarding the OSDBU at each Federal agency.
The amendment also changed the short title of the
legislation from the Small and Disadvantaged Business Ombudsman
Act to the Small Business Procurement Ombudsman Act of 2002.
The substitute amendment was the result of a compromise
agreement reached between the Chairman and the Committee's
Ranking Republican. It also reflects issues and suggestions
raised at the June 19, 2002, Committee roundtable.
III. ANALYSIS OF S. 2753, THE ``SMALL BUSINESS PROCUREMENT OMBUDSMAN
ACT OF 2002,'' AS AMENDED
Purpose
S. 2753, the Small Business Procurement Ombudsman Act of
2002, will establish a Small Business Procurement Ombudsman
(Procurement Ombudsman) at the U.S. Small Business
Administration's (SBA) Office of Advocacy and strengthen the
Office of Small and Disadvantaged Business Utilization (OSDBU)
at each Federal agency. The legislation will also raise the
Federal governmentwide procurement goal for small business
prime contracting by 7 percentage points, over a period of
three years, culminating with a governmentwide goal of 30
percent in FY 2006 and thereafter.
The substitute amendment offered by Senators Kerry and Bond
changed the short-title of the legislation and the title of the
ombudsman position. As introduced, the legislation's short-
title was the ``Small and Disadvantaged Business Ombudsman
Act,'' and the Procurement Ombudsman was known as the Small and
Disadvantaged Business Ombudsman for Procurement (SDB
Ombudsman).
Major Federal agencies
A major Federal agency for purposes of the legislation
means an agency that has procured over $200 million in goods
and services in the previous fiscal year.
Establishment of a Small Business Procurement Ombudsman
The legislation requires that the Chief Counsel for the
SBA's Office of Advocacy appoint a Procurement Ombudsman,
looking to existing Federal employees to the extent
practicable. The Procurement Ombudsman is required to be highly
qualified, with experience assisting small business concerns
with Federal procurement, and would receive compensation based
on the Senior Executive Service pay scale. The Procurement
Ombudsman will report to the Chief Counsel.
The Committee strongly believes that the Chief Counsel
should make every effort to promptly appoint a Procurement
Ombudsman from existing personnel within the Federal government
and that the Procurement Ombudsman should have extensive years
of experience in the Federal procurement process, pre-dating
the procurement reforms of the 1990s and continuing through the
acquisition reform period, if at all possible. Additionally,
the Committee believes that experience assisting small business
concerns with the Federal procurement process at a major
Federal agency and knowledge of and experience with the
legislative process and congressional stakeholders are
necessary and critical attributes for the Procurement Ombudsman
to possess.
During the Committee roundtable on June 19, 2002,
participants strongly supported the concept of the discussion
draft legislation to create an ombudsman to deal with small
business procurement problems. However, no consensus was
reached as to where the ombudsman should be located.
The substitute amendment adopted in Committee moved the
Procurement Ombudsman from the SBA to the Office of Advocacy
and placed responsibility for appointing the Procurement
Ombudsman with the Chief Counsel. As introduced, the SBA
Administrator was responsible for the appointment. This
transfer represented a compromise reached between the Chairman
and the Ranking Republican about the use of SBA resources.
Duties of the Small Business Procurement Ombudsman
The Procurement Ombudsman shall work with each Federal
agency with procurement authority to ensure small business
concerns are treated fairly in the procurement process, serve
as a focal point within the Federal government to track and
rectify complaints received from small business firms regarding
their treatment by Federal procuring agencies and non-small
business prime contractors, and complete an annual report.
The discussion draft of the legislation did not provide
authority for the ombudsman to rectify small business problems.
The ombudsman was merely to collect data and report on trends
in small business procurement. During the Committee roundtable
on June 19, 2002, participants expressed strong support for
providing authority to the ombudsman to rectify complaints. The
legislation as introduced provided this authority.
The substitute amendment adopted in Committee added this
provision after concerns were raised that the Office of
Advocacy at the SBA might receive pressure to add the
Procurement Ombudsman's duties to an existing position. It is
the Committee's intention that the Procurement Ombudsman should
be a new position and receive sufficient resources to carry out
the duties under the legislation.
The substitute amendment also removed the authority of the
new position to negotiate goal attainment plans with Federal
agencies. This was in response to concerns raised by the
Ranking Republican that this was inherently a policy function
and should rest with the Office of Government Contracting and
Business Development at the SBA. However, the responsibility
for evaluating the goal attainment plan remains with the
Procurement Ombudsman.
Due to the important nature of the Procurement Ombudsman's
responsibilities, the legislation bars the Procurement
Ombudsman from having other significant job duties beyond those
in the Act.
Annual report
The Procurement Ombudsman shall annually report to Congress
on each Federal agency's success or failure in meeting its
small business goals, including subcontracting data, an overall
score for each agency, and an evaluation of any required goal
attainment plans; the treatment of small businesses by all
Federal agencies; the training of contracting personnel at
major Federal agencies to ensure knowledge of small business
procurement programs and their importance to the Federal
government and the economy; each major Federal agency's
outreach activities to small business contractors; each Federal
agency's compliance with the Small Business Act's provision
establishing an OSDBU at each agency; and any discrimination
faced by small businesses based on their status as a small
business concern, qualified HUBZone small business concern,
small business concern owned and controlled by disabled
veterans, or the gender or social or economic status of their
owner.
Federal agencies are given an opportunity to comment in
writing on the annual report before its submission.
The Procurement Ombudsman must keep confidential all
information that could potentially expose a small business to
retaliation from the Federal government or a non-small business
prime contractor, unless a written waiver is obtained. The
confidentiality clause extends to information received by any
OSDBU employee that could expose the employee to retaliation
from a Federal agency.
Administrative resources
The legislation requires the SBA to provide the Procurement
Ombudsman with sufficient personnel, office space and dedicated
financial resources, which shall be specifically identified in
the annual SBA budget.
Although this provision should need no explanation, the
Committee is concerned that the SBA will not provide sufficient
resources for the Procurement Ombudsman, given the lack of
resources requested for many key functions in recent budget
submissions. The Committee strongly urges the SBA to provide
the needed resources for the Procurement Ombudsman to carry out
the duties under the legislation and serve as an effective
advocate on behalf of the small business Federal contracting
community.
Effect on other agencies
None of the authority or duties given to the Procurement
Ombudsman is intended to limit the role of the OSDBU at any
Federal agency.
The Committee strongly supports the OSDBU provisions of the
Small Business Act and views these offices as critical links
for small businesses in the Federal marketplace. The Committee
strongly believes that the Procurement Ombudsman and each OSDBU
should work together to advocate on behalf of small businesses,
with the Procurement Ombudsman acting as a governmentwide
advocate and each OSDBU serving as an advocate at its
respective Federal agency.
Improvements to the Offices of Small and Disadvantaged Business
Utilization
S. 2753 makes several improvements to the director's
position at each OSDBU. The legislation requires OSDBU
Directors to receive pay up to GS-15 (major Federal agencies
set at a minimum GS-15); requires OSDBU Directors to be well-
qualified at assisting small businesses with procurement
matters; bars senior procurement executives from simultaneously
serving as OSDBU Directors; requires OSDBU Directors at major
Federal agencies to attend OSDBU Council meetings to the extent
practicable; clarifies the underlying legislation by stating
that the OSDBU Director is responsible to the head or deputy
head of an agency for all matters; requires OSDBU Directors to
assist the Procurement Ombudsman; and states that the OSDBU
Director at a major Federal agency shall have no other
substantial job duties beyond those stated in the Small
Business Act.
The Committee expects the OSDBU Director's position at each
Federal agency to be filled by career personnel to the extent
practicable. The Committee believes that the use of career
personnel will provide continuing expertise and experience,
which will better serve the small business government
contracting community.
The legislation also makes statutory the OSDBU Council,
requiring it to meet at least once every two months. The
membership of the Council shall consist of all OSDBU Directors,
and requires the Procurement Ombudsman and the SBA's Associate
Deputy Administrator for Government Contracting and Business
Development to serve as non-voting, ex officio members. The
Council will be headed by an elected chairperson, who shall
serve a one-year renewable term, and consider issues such as
personnel matters, barriers to small business participation in
the Federal marketplace, agency compliance with provisions of
the Small Business Act and any other matter within its mission
scope. The legislation bars the SBA from providing financial
assistance to the Council.
The discussion draft of the Small and Disadvantaged
Business Ombudsman Act did not contain provisions to strengthen
the OSDBUs. During the Committee Roundtable on June 19, 2002,
participants urged the Committee to consider strengthening the
OSDBUs. The legislation as introduced by Senator Kerry
contained provisions in response to the suggestions discussed
at the roundtable.
The Committee believes strongly in the need to strengthen
the OSDBU Director's role at each Federal agency. Although it
is the Committee's position that these additions to Section
15(k) of the Small Business Act were a part of the
legislation's original intent, Federal agencies have
consistently thwarted its provisions, especially the
requirement that OSDBU Directors report to the head or deputy
head of their agency. The Committee has received information in
writing from several agencies, and through verbal
communications, that have led the Committee to conclude that
the majority of Federal agencies are in violation of Section
15(k) of the Small Business Act. It is the Committee's hope
that by clearly stating that the OSDBU Director shall report to
the head or deputy head of his or her agency, Federal agencies
will seek to comply with the law rather than explore possible
loopholes.
The Committee understands that a successful OSDBU Director
is one with access to the highest level of his or her agency
and that a successful OSDBU Director is necessary for a
successful small business procurement program. The Committee
strongly urges all Federal agencies to comply with the letter
and spirit of Section 15(k) of the Small Business Act and allow
the OSDBU Director to play a key role in acquisition policies.
The Committee also urges all Federal agencies to have their
OSDBU Director report to the head of the agency, as opposed to
the deputy head.
The Committee feels strongly that OSDBU Directors should
have no substantial job responsibilities beyond those in the
Small Business Act; however, budgetary constraints at non-major
Federal agencies may make that difficult to achieve. As a
result, the legislation includes a provision to bar an OSDBU
Director from simultaneously serving as the senior procurement
executive. The Committee believes that the role of the OSDBU
Director is incompatible with that of a senior procurement
executive because the role of the OSDBU Director is one of
advocacy on behalf of small businesses, while the senior
procurement executive must serve the entire contracting
community. Moreover, the OSDBU Director is intended to
influence contracting decisions by the procurement staff, and
making that position superior to the OSDBU Director (or merged
with the OSDBU) is incompatible with that supervisory function.
The Committee intends ``to the maximum practical extent,''
with regard to Council meeting attendance, to mean that OSDBU
personally should take the fullest possible advantage of
Council meetings as an opportunity for exchange of ideas,
training, and professional development.
The substitute amendment adopted in Committee set the basic
pay for an OSDBU Director at a major Federal agency at a
minimum rate of 15 on the General Schedule. However the
Committee intends for an OSDBU Director at a major Federal
agency to receive basic pay at a rate equal to that of the
senior procurement executive at his or her agency.
The substitute amendment also made minor changes to other
OSDBU provisions, but kept intact the original intent of the
introduced version.
Goal attainment plan
The legislation requires each major Federal agency that
fails to meet a small business goal to submit a detailed report
to the SBA as to why the agency failed to achieve a goal and a
plan for attaining future goals. The Committee directs that the
goal attainment plan be submitted to the Associate Deputy
Administrator (ADA) for Government Contracting and Business
Development, or any successor position, and that the ADA shall
play a consultative role in establishing the plan.
The substitute amendment adopted by the Committee
transferred authority for negotiating this plan from the
Procurement Ombudsman to the SBA.
Increase in the governmentwide goal
The legislation increases the Federal government's
statutory governmentwide procurement goal for small business
prime contracting by 7 percentage points over a three-year
period. The new governmentwide goal would be 30 percent. The
goal increase would be phased in over three years: 26 percent
in FY 2004, 28 percent in FY 2005, and 30 percent in FY 2006
and thereafter.
During the Committee roundtable on June 19, 2002, the
Committee heard testimony that the Federal government could
achieve 30 percent small business participation if it properly
implemented small business programs. One participant even
suggested a goal of 40 percent small business participation.
However, concerns were raised that the Federal government does
not meet the current statutory goal of 23 percent small
business participation, and that such an increase might serve
to discourage Federal agencies from striving to meet their
goal. However, evidence at the roundtable suggested that the
Federal government, when firmly targeting a goal of 23 percent,
has usually come very close to achieving this percentage, some
years slightly more, some less. The Committee believes that
some agencies may treat the 23 percent goal as a ceiling,
rather than a minimum level of acceptable small business
participation. The goal increase reflects the Federal
government's insistence on targeting a specific number, as
opposed to striving to surpass that number.
IV. COMMITTEE VOTE
In compliance with rule XXVI(7)(b) of the Standing Rules of
the Senate, the following votes were recorded on July 24, 2002.
A motion by Senator Kerry to adopt a substitute amendment by
Senators Kerry and Bond concerning a compromise agreement on
the legislation passed by unanimous voice vote. A motion by
Senator Kerry to adopt S. 2753, the ``Small and Disadvantaged
Business Ombudsman Act,'' as amended, was approved by a 19-0
recorded vote, with the following Senators voting in the
affirmative: Kerry, Bond, Levin, Harkin, Lieberman, Wellstone,
Cleland, Landrieu, Edwards, Cantwell, Carnahan, Burns, Bennett,
Snowe, Enzi, Fitzgerald, Crapo, Allen and Ensign. No Senator
voted in the negative.
V. EVALUATION OF REGULATORY IMPACT
In compliance with rule XXVI(11)(b) of the Standing Rules
of the Senate, it is the opinion of the Committee that no
significant additional regulatory impact will be incurred in
carrying out the provisions of this legislation. There will be
no additional impact on the personal privacy of companies or
individuals who use the services provided.
VI. CHANGES IN EXISTING LAW
In the opinion of the Committee, it is necessary to
dispense with the requirement of rule XXVI(12) of the Standing
Rules of the Senate in order to expedite the business of the
Senate.
VII. COST ESTIMATE
In compliance with rule XXVI(11)(a)(1) of the Standing
Rules of the Senate, the Committee estimates the cost of the
legislation will be equal to the amounts indicated by the
Congressional Budget Office in the following letter.
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 31, 2002.
Hon. John F. Kerry,
Chairman, Committee on Small Business and Entrepreneurship,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 2753, the Small
Business Procurement Ombudsman Act of 2002.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Ken Johnson
and Matthew Pickford.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
S. 2753--Small Business Procurement Ombudsman Act of 2002
S. 2753 would create a new Procurement Ombudsman within the
Small Business Administration (SBA). The Ombudsman would
address concerns raised by small businesses participating in
the federal procurement process and annually report to the
Congress. The bill would make technical changes to the Offices
of Small and Disadvantaged Business Utilization within each
federal agency exercising procurement authority. Finally, S.
2753 would raise the statutory goal for the value of federal
contracts awarded to minority and women-owned businesses.
CBO estimates that implementing S. 2753 would cost about $1
million a year, subject to the availability of appropriated
funds. The bill would not affect direct spending or receipts;
therefore, pay-as-you-go procedures would not apply.
S. 2753 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
Based on information from SBA, CBO expects that the office
of the Procurement Ombudsman that would be established under S.
2753 would be similar in size to the office of the agency's
Regulatory Enforcement Ombudsman. Therefore, CBO estimates that
creating the office of the Procurement Ombudsman would cost
about $500,000 a year, assuming the appropriation of the
necessary amounts.
Additionally, the Offices of Small and Disadvantaged
Business Utilization within each agency with procurement
authority could incur additional costs to implement new
management practices and reporting requirements related to the
contracting goals for minority and women-owned businesses. CBO
estimates these requirements would cost less than $500,000 a
year.
The CBO staff contacts for this estimate are Ken Johnson
and Matthew Pickford. This estimate was approved by Peter H.
Fontaine, Deputy Assistant Director for Budget Analysis.
VIII. SECTION-BY-SECTION ANALYSIS OF S. 2753, AS AMENDED
Section 1. Short-title
Titles the Act as the ``Small Business Procurement
Ombudsman Act of 2002.''
Section 2
Amends Section 15 of the Small Business Act to include a
new subsection (q), which establishes the Small Business
Procurement Ombudsman at the SBA's Office of Advocacy and
spells out the duties of the position.
Section 3
Amends Section 15(k) of the Small Business Act to add the
improvements to the Office of Small and Disadvantaged Business
Utilization (OSDBU) at each Federal agency contained within the
legislation, and establishes the OSDBU Council.
Section 4
(a) Amends Section 15(g) of the Small Business Act by
adding paragraph (3) establishing the requirement for a goal
attainment plan.
(b) Amends Section 15(g)(1) of the Small Business Act by
raising the statutory governmentwide small business prime
contracting goal to 26 percent in FY 2004, 28 percent in FY
2005, and 30 percent in FY 2006 and thereafter.