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Just days after Rep. Nydia M. Velázquez (D-NY) was appointed Chairwoman of the House Committee on Small Business for the 116th Congress, the House has passed two Velázquez bills to strengthen protections and opportunities for small firms that do business with the federal government. 

“In the new Democratic House Majority, we are wasting no time in getting to work for America’s entrepreneurial sector,” said Velázquez. “My bills passed in the House this week will make important strides towards ensuring small firms are given a fair shot at accessing the federal contracting marketplace and that small business subcontractors are paid in a timely manner.” 

Clarity on Small Business Participation in Category Management Act (H.R. 226) 

This bill seeks to address the growing use of “category management,” a federal contracting practice which has been criticized for consolidating contracts and shutting small businesses out of the process. Committee hearings have previously found that category management, while billed as lowering costs for contracting agencies, often does the opposite. As the Trump Administration increases the number of agencies pursuing this concept, Velázquez’s bill would gather the data needed to determine the scope of this problem. 

“When small firms are given opportunities to participate in the $500 billion-a-year federal marketplace, they create new jobs and spur economic growth,” said Velázquez. “However, I am deeply concerned that the use of category management may be resulting in fewer contracts awarded to deserving small firms.”

Incentivizing Fairness in Subcontracting Act (H.R. 227)

This bill would allow federal agencies in certain instances to count dollars spent by prime contractors on subcontractors toward agencies’ statutory small business contracting goals. It further includes provisions to ensure prompt payment to subcontractors when work is completed.  

“Small businesses are increasingly involved in the federal marketplace as subcontractors, rather than as vendors dealing directly with a federal agency,” Velázquez noted. “My bill is a commonsense reform that caters to this growing reality by creating incentives for larger companies to employ small firms as they deliver goods and services to the federal government. Moreover, this bill will help ensure small companies are paid on time, addressing a recurring and widespread problem the Committee has heard about frequently from entrepreneurs working in the federal sector.”

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