Small, Minority and Women-Owned Business Advocates Demand Contracting Reform; Unfair Government Regulations Has Limited Their Access For More Than A Decade to More than $20 Billion a Year in Government Contracts

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The Fairness in Set-Aside Procurement Coalition (FSAPC) To Advance the Procurement Priorities of All Small, Women and Minority-Owned Business Trade Groups. Coalition Now Represents the Government Contracting Interests of More than 10 Million Businesses Accessing in Excess of $75 Billion in Federal Contracts Efforts To Include Making 'Foreign' & 'Federal Supply Schedule' Buys Subject to the 'Set-Aside' Provisions of the Small Business Act Which is What Congress Intended. FSAPC to Ask for Senate Procurement Reform Bills S.680 and S.606 to Address their Concerns

The Fairness in Set-Aside Procurement Coalition (FSAPC), at the urging of leading small and minority advocates, has agreed to advance the procurement priorities of all affinity groups representing the interests of small, minority, women, native Americans and disabled veterans. The action followed a meeting on February 19th of more than 100 advocacy leaders called by the Minority Business Round Table (MBRT). The group had come together to develop a national strategy aimed at affecting reforms in procurement regulations and new legislation.

MBRT President and CEO, Roger Campos had called for the organizations representing small, minority and socio-economic groups, including women, to join their efforts to reform government contracting regulations and practices, which discriminate and abuse their constituencies.

"Small and minority trade groups can best advance their government contracting priorities by combining their efforts under an umbrella coalition which focuses on the nuts and bolts of contracting." Campos added, "FSAPC has done an excellent job by identifying and challenging unfair regulations and practices; winning 'test cases' in Federal Court, educating the procurement community about our concerns and by offering out of the box solutions to our issues."

FSAPC first came together in 2005 as a loose group of 14 advocacy organizations to support a size protest¹ test case (SIZ-2005-05-09-22) which demonstrated the need to reform the government 'size protest system' because it did not deliver justice to small and minority businesses when they won their cases. This meaningful win inspired initiatives aimed at adequately compensating small businesses being abused by the system.


Currently FSAPC is involved with another 'test case' by challenging DOD and the FAR Council to abide by the intend of Congress and restrict ALL federal procurements to the Small Business Act's Set-Aside provisions. These provisions were included to benefit small, minority, women, native Americans and disabled veteran businesses. FAR 19.502-2 does require that ALL procurements under $100,000 be set-aside exclusively for small businesses. "An excess of $20 billion in annual procurements, however, is currently being excluded from the 'set-aside' provisions because of the way the FAR Council has interpreted the Small Business Act and by the way contracting officials are using a subsection of the regulation to circunvent the wishes of Congress," said Raul Espinosa, founder and spokesperson for FSAPC.

"The intend of Congress, as detailed by Sen. Olympia Snowe, on her January 12th, 2005 letter to Secretary of State Powell, was to restrict - as set-asides - ALL federal procurements, including 'foreign' of less than $100,000," said Espinosa. In that letter, Sen. Snowe said, "Executive Departments (and this would includes the FAR Council) do not have the discretion to interpret the law in a matter inconsistent with its plain language." Sen. Snowe further added, "we urge the State Department to clearly commit to compliance with the Small Business Act in all procurements regardless of the place of award and to modify its regulations accordingly."

Espinosa is now relying on another 'test case' (Sol # HE1260-T-2002 ) for an unrestricted 'foreign' procurement from the Department of Defense Dependents Schools (DoDDS) in Japan to drive home the will of Congress. "The only way government regulators and Federal Agencies, specially DOD would understand how damaging an interpretation can be, is by publicizing and drawing attention to the abuse," Espinosa said. "Bureaucracies do react to public scrutiny." Espinosa's previous attempt to drive home the same point on an Army procurement from the ARCENT USA Central Command in Kuwait (Sol # W912D1-07-T-0035) got nowhere when it went through the system and as a result, small and minority businesses were not given the opportunity Congress intended them to have.

"The FAR Council must repeal FAR 8.404(a) which attempts to exempt products on the Federal Supply Schedule from the reach of the Small Business Act's 'set aside' mandate," said Lloyd Chapman, President of the American Small Business League (ASBL), an advocacy leader in the Coalition. "The FAR Council cannot be allowed to interpret the will of Congress so abusively," said Anthony Robinson, MBELDEF President and another Coalition leader. "Our constituency of 10 million businesses demand that the Office of Federal Procurement Polity (OFPP), the Government's Office of Advocacy and the SBA Office of Government Contracting take immediate steps to protect and safeguard our rights to more than $20 Billion in additiional contracts," said Espinosa.

FSAPC has taken steps to widen its influence to reform obstructing regulations and abusive practices in order to improve the access to all public set-aside contracts including those from public educational institutions, all the 50 states and from all municipalities. Experts estimate that these set-aside contracts dwarf the $75+ Billion the Federal Government is already spending.

"I am delighted to have started a trend to more effectively influence set-aide contracting reform of public procurements at all levels to meaningfully benefit more than 10 million small, minority, women and disabled veterans businesses," said Espinosa. "There has been a lot of lip service, abusive practices, unlawful interpretations and failures in the enforcement of the regulations which have hurt our businesses. A coalition which speaks for the contracting priorities of all will definitely make a big difference in this space."

FSAPC wishes to acknowledge the 110th Congress for proposing two separate procurement reform bills, so quickly on their session, however, the Coalition was disappointed, nevertheless, because both bills - as currently proposed - appear to ignore waste, fraud and abuse issues which affect small, minority, women and disabled veteran businesses. "FSAPC intends to brief the staff of both Senator Susan Collins (R- ND) author of S.680 and Senator Byron Dorgan (D-ND) author of S.606 about incorporating amendments with some of our priorities," said Espinosa.

FSAPC has published (see attachment) an initial list of 20 procurement priorities from small, minority, women and disabled veterans. The organization intends to work closely with Congress, the Office of Federal Procurement Policy (OFPP), the Government's Office of Advocacy, the FAR Council and the National Institute of Government Procurement (NIGP) to advance procurement reforms which affect in excess of $75 Billion (at the federal level alone) and more than 10 million businesses.

About the Fairness in Set-Aside Procurement Coalition (FSAPC):

FSAPC is a coalition which represents the government contracting priorities of all the small, minority, women, native Americans and disabled veterans trade groups in the country The mission of the organization is to bring attention to contracting abuse on set-aside solicitations; to educate the procurement community about issues of concern and to make recommendations that will strengthen 'set-aside programs so they can achieve their intended results. The Coalition advances the rights of more than 10 million businesses to access in excess of $75 Billion in Federal Contracts alone..

About the Minority Business RoundTable (MBRT):

MBRT is a membership organization for CEOs of the nation's leading African-American, Asian-American, Hispanic-American, Native-American and other minority-owned businesses. Its members analyze and help formulate effective public policies that impact minority-owned business.

MBRT firms earned gross sales from $53 million to more than $5 billion per company, and these firms each employ between 80 and 4,000 people.


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