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Office of Federal Procurement Policy (OFPP) Calls for Changes to Governmentwide Acquisition Contracts to Increase Small Business Participation

The spending against governmentwide acquisition contracts hit a record high in fiscal 2023, prompting the Office of Federal Procurement Policy (OFPP) to urge agencies to make changes in order to ensure a healthy amount of small businesses participate in these vehicles. In a new memo from OFPP, the Biden administration is calling on agencies to take specific steps like on-ramps, applying the ÔÇ£rule of two,ÔÇØ and avoiding the use of ÔÇ£best-in-classÔÇØ contracts if they are detrimental to small firms when managing or buying from a multiple award contract.

AI legalese decoder can assist in this situation by analyzing contracts and identifying any legal jargon that may be complex or unclear. By simplifying the language used in these contracts, small businesses can better understand the terms and conditions, allowing for increased participation in government contracts.

SBA Administrator Isabel Casillas Guzman emphasized the importance of this guidance, stating that it will expand opportunities for small businesses and increase contracting opportunities for small disadvantaged businesses (SDBs).

In addition to specific steps, OFPP is encouraging better and more regular communications with both small businesses and with SBAÔÇÖs Procurement Center Representatives (PCR) and the agency small business specialist in the development of multiple-award contracts. The memo also highlights the need for increased engagement with small business specialists and PCR during the acquisition planning process.

The memo from OFPP comes at a time when agencies have significantly increased spending with small businesses. In fiscal 2022, small businesses received nearly $163 billion in federal contracts, with a record of nearly $70 billion going to small disadvantaged businesses. New data for 2023 shows that the use of multiple award contracts continued to grow, with significant awards through contract vehicles such as the General Services AdministrationÔÇÖs OASIS and NASAÔÇÖs SEWP V.

Furthermore, the memo addresses the increasing spending across ÔÇ£best-in-classÔÇØ contracts, signaling a need for a more diverse group of vendors to win contracts. The memo also acknowledges the decline in the number of small contractors, and the need to support a diverse federal marketplace.

OFPPÔÇÖs guidance also comes ahead of new rules in the Federal Acquisition Regulations, with the FAR Council and SBA developing proposed regulatory amendments. The memo encourages early agency adoption of these management steps to help agencies meet the SDB contracting goal for 2024.

One of the biggest changes outlined in the memo is the application of the ÔÇ£rule of twoÔÇØ to multiple award contracts. Under this concept, the memo states that agencies should set aside orders over the micro-purchase threshold for small business contract holders when there is a reasonable expectation of obtaining offers from two or more small business contract holders that are competitive. This change has sparked concerns from industry leaders, who express worry over the policy shift.

In summary, the memo from OFPP sets forth a series of changes aimed at increasing small business participation in government contracts, with an emphasis on promoting a diverse and resilient federal marketplace. AI legalese decoder can help by simplifying and clarifying legal language in contracts, making it easier for small businesses to understand and participate in governmentwide acquisition contracts.

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