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Statement

of

Representative Mark Takai, Ranking Member

Subcommittee on Contracting and Workforce

Hearing on GSA’s Proposed Rule on Transactional Data and its Effect on Small Businesses

June 25, 2015

Thank you, Mr. Chairman.   The federal procurement marketplace provides an important customer base for small businesses.  For many firms, getting listed on the General Services Administration – or GSA – Schedules provides an efficient way to ensure their products and services are considered when agencies are making purchases. 

Purchases made by agencies off the Schedules account for more than $32 billion, or approximately 10 percent of all federal procurement dollars.   In FY2014, 35 percent, or $11 billion, went to small businesses through these orders.  That is a significant infusion into the small business economy, helping entrepreneurs grow their enterprises, retain staff, and even create new jobs. 

The GSA Schedules have a number of benefits for both vendors and purchasing agencies -- most notably, it creates a simpler system that allows contracting officers direct access to the products and services of numerous firms’ without the need for issuing multiple solicitations for every requirement. 

For small companies with limited resources and relative inexperience navigating the procurement process, landing on the GSA Schedules can be an important first step toward securing the federal government as a customer.  Despite these advantages, there are a number of concerns from the small business perspective with how the GSA Schedule system functions – and whether small firms fully benefit from how it operates. 

For instance, many entrepreneurs have previously presented testimony to the Committee detailing how the adoption of Federal Strategic Sourcing Initiatives has negatively harmed their sales and even caused layoffs.   As this type of vehicle is expanded to additional industries and products through the government’s new Category Management initiative, there are continued reservations among small businesses.  

Likewise, small firms have expressed similar concerns regarding GSA’s proposed rule on transactional data. The rule requires that firms that hold Schedule contracts or other government-wide acquisition contracts to report transactional data through an electronic system.  While it appears that much of this data is already available to GSA, the new rule increases the frequency of reporting and expands what information firms are required to provide.  For small businesses, this could mean significant new burdens and perhaps a decline in their GSA Schedule participation.

It is important that, as GSA moves forward with finalizing the rule, a more in-depth analysis is conducted to determine how it impacts small companies and their ability to do important work for the federal government. In particular, I hope that GSA is paying attention to the testimony that will be provided today as it can shed some insight into the real burden small businesses will face as a result of the rule.  

Mr. Chairman, Congress has long recognized that when small businesses provide services or products to the federal government it results in a “win-win.” Agencies and taxpayers benefit from quality products that are provided at competitive prices, while small businesses are afforded the chance to grow.  As GSA continues seeking efficiencies, it is important that maintaining transparency in procurement process is not achieved at the expense of small business participation.  I hope we can all work together to ensure that these two factors are properly balanced.

With that, I would thank the witnesses for testifying today and yield back.