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Today, Democrats of the House Small Business Subcommittee on Contracting and the Workforce convened in front of a key panel to examine damaging shortcomings out of federal Offices of Small and Disadvantaged Business Utilization (OSDBU). Reports from the Government Accountability Office (GAO) have exposed that for an initiative designed to increase small business procurement, OSDBUs have been plagued with mismanagement and non-compliance.   

“Despite spending hundreds of billions of dollars on federal contracts each year, our country’s small firms are too often an afterthought in this process,” said Subcommittee Ranking Member Stephanie Murphy (D-FL). “Reports of noncompliance are deeply disturbing considering the pivotal role that small and disadvantaged businesses play in bolstering our local economies.” 

In order to promote small firms in the federal contracting arena, OSDBUs were created under the Small Business Act and currently exist within every federal agency. The Act placed a government-wide goal of awarding at least 23 percent of prime federal contracts to small firms. Furthermore, OSDBUs not only exist to promote small firms, but set goals for awarding 5 percent of federal contracts to disadvantaged and women-owned businesses, and 3 percent for HUBZone, service-disabled and veteran-owned businesses. 

Working collaboratively with the Small Business Administration (SBA) and within their own government agency, OSDBUs are often the primary advocate for small firms in the federal procurement process. However, GAO reports discovered that out of the 16 agencies reviewed, 7 had reporting structures which failed to be in compliance with standards set by the Act. 

“OSDBUs must work with small businesses to ensure that they receive the maximum practicable opportunity to compete for contracts,” said Murphy. “Findings like the GAO report leave us all concerned about the lack of assistance for small contractors, many of whom rely on OSDBUs.” 

Despite a recent growth in federal contract spending, small firms are not receiving opportunities in line with this increase. OSDBUs are a crucial tool that when utilized properly, can help small and disadvantaged firms compete in the federal procurement arena. By failing to correct their organizational and reporting structure, non-compliant agencies have refused to prioritize awarding contracts to small firms. Today, Democrats pressed panelists on necessary reforms and potential Congressional action to hold agencies accountable and to make OSDBUs more effective in meeting their mission.