Small Business Committee Unanimously Adopts Rep. Chu Bill and Amendment to Ensure Equal Access to Federal Contracts

Washington, D.C. – Today, the House Small Business Committee held a markup of H.R. 4341, the Defending America’s Contractors Act of 2016. H.R. 4341, which passed the committee with bipartisan support, included language from legislation that Rep. Judy Chu (CA-27) and Rep. Trent Kelly (MS-01) introduced last week. The Defending America’s Contractors Act reforms and strengthens rules in the Small Business Act that help small businesses and other disadvantaged firms compete in the federal contracting marketplace.

The committee also adopted an amendment introduced by Rep. Chu to create new categories under the North American Industry Classification System (NAICS). The Small Business Administration (SBA) uses NAICS to determine small business classification codes. But as NAICS codes have been consolidated over the years, it has become harder for small businesses to compete in these larger categories. The amendment would help more small businesses compete for federal contracts under the new categories. Following passage of the bill and amendment, Rep. Chu released the following statement:

“I am thrilled that my legislation to help small businesses win federal contracts was included in H.R. 4341, which passed with overwhelming bipartisan support. Federal contracts are significant and dependable sources of income, which, for small businesses, can mean more job creation in our communities. Yet last year alone, small businesses missed out on at least $16 billion in contracting dollars due primarily to the exclusion of overseas contracts from small business eligible contracting dollars. This is unnecessary and harmful, but we are now one step closer to fixing this loophole.

“Additionally, the NAICS code has an enormous impact on small businesses that are already contracting, or hoping to contract with the federal government, which is why it is critical that these size standards accurately reflect the makeup of the industries they are defining. My common-sense amendment authorizes the Small Business Administration (SBA) to create additional industry groups to more accurately reflect the manner in which the federal government buys. This would allow SBA size standards to accurately reflect changes in the marketplace, ensuring that small businesses are able to compete on a fair playing field for the contracting dollars they deserve. I am pleased that the committee could work bipartisanly to adopt this change and I hope to see these important changes become law.”

H.R. 4341, the Defending America’s Contractors Act of 2016, was passed unanimously by the House Small Business Committee on January 13, 2016. The text of this legislation can be found here.

H.R. 4341 included language from the Chu/Kelly bill, H.R. 4329, the Transparency in Small Business Goaling Act. Their bill removes certain exclusions, such as the exclusion of overseas contracts, in the consideration of eligible small business contracting dollars. These exclusions allow for an over-inflation of small business participation in the federal marketplace. The Chu/Kelly bill would force federal agencies to increase contracting to small businesses in order to achieve their agency goals.