Regulatory Race to the Finish

By: Debbie Kobrin, WIPP Government Relations

With the party conventions right around the corner, and a few months to a new President, you might think the current administration would be slowing down. But things are moving in the opposite direction. The Administration is churning out plenty of new contracting rules, and shows no signs of stopping anytime.  

In June, SBA finalized a new subcontracting rule which will help WOSBs with subcontracting requirements, by easing the “50 percent rule” to allow a WOSB to do less than 50 percent of the work on a contract, as long as the WOSB subcontracts to other WOSBs. The rule also shifts the limitations on subcontracting from requiring a prime to perform at least 50 percent of the labor on the contract, to requiring a prime perform at least 50 percent of the dollar amount of the contract. The rule also contains changes to subcontracting plans, roles for Procurement Center Representatives (PCR), Joint Ventures and more.

Also last month, the GSA finalized a new regulation requiring contractors to report transaction or task order level data on goods and services to GSA. Under the transactional data rule, businesses are required to tell GSA what federal agencies purchase through GSA. This rule applies to GSA contracts including the Federal Supply Schedule (FSS) and Government-wide Acquisition Contracts (GWAC).

Last week, the FAR Council finalized a rule strengthening subcontracting regulations by finalizing the “ list us, use us” requiring for prime contractors to make a good faith effort to utilize small subcontractors to the same degree as listed in the bid or proposal. WIPP has supported this change for a number of years, and testified on its value to women business owners. The rule also requires prime contractors to assign NAICS codes to subcontracts, and restricts prime contractors from prohibiting a subcontractor from discussing payment issues with the contracting officer.

In addition to what we have seen over the past several months, SBA is expected to release a new Mentor-Protégé Program for all-small-businesses any day now. The SBA is also expected to work on rules associated with lower-tier subcontracting credit, WOSB certification, and the WBC program.  

The FAR Council continues to work through its back-log and plans to release new rules that include creating a government-wide definition for consolidation and bundling, providing subcontractors with additional payment protections, and implementing the Department of Labor Fair Pay, Safe Workplaces Executive Order.

As we enter the home stretch of the Obama Administration, there is a clear impetus to do as much as possible over the next several months. As new information about rules becomes available, WIPP is committed to keeping you informed.  

Ten Things Candidates Need to Know About Women Entrepreneurs

Are Millennials Missing The Entrepreneurial Spirit?

By: Aaron Richards, Intern 

“Millennials are on track to be the least entrepreneurial generation in recent history,” Dane Stangler, the Vice President of the Kauffman Foundation testified last week to the U.S. Senate. Stangler pointed out that the decline in entrepreneurship represents a national crisis requiring immediate attention from policy makers. As a millennial myself, I find this to be alarming.

The Small Business Administration reported that in 2015, less than 2 percent of millennials reported self-employment, compared with 7.6 percent for Generation X (born 1963 to 1981).  Moreover, over the past 20 years, the United States has experienced a steady decline in business startups. Trends suggest that entrepreneurship amongst millennials will remain low for decades.

American entrepreneurship is a comprised of a multi-dimensional group of people. Americans of various socioeconomic backgrounds start companies in different industries in different parts of the country.

This “startup deficit” has contributed to the sluggish employment recovery after the recession. A lower level of business creation has also dragged down the overall fluidity of the U.S. economy.

While American entrepreneurship has slowed, there are steps that lawmakers can take to remedy the decline. To rectify the headwinds and renew entrepreneurial growth in this country, Mr. Stangler suggest lawmakers address the following steps:

(1) Scrutinize existing programs: There are 45 different federal government      programs that aim to help entrepreneurs. Congress and administrative agencies should devote resources to understanding their effectiveness and where cuts might be possible. Lowering costs of entrepreneurial experimentation promises to foster more entrepreneurship than another government program.

(2) Reduce regulatory complexity: This would not only help entrepreneurs but American firms. While there are already special regulatory provisions that apply to small businesses, Congress should consider revisiting regulations that may have reduced the volume of lending to young people attempting to start firms.

(3) Invest in data collect: The best way to monitor the health of American entrepreneurship is through data. Additional resources should be considered to augment and expand these efforts.

Entrepreneurship is vital to the American economy and democracy. At AEO, we believe America’s best entrepreneurial days are still to come. In our Linking Young Adults To Microbusiness report, we provide new pathways to economic opportunity to the youth by exploring all available options. This vision however will not become reality without the help and support of public policy. An economy that thrives from millennial entrepreneurship is a dream worth propelling.

   

Redefining Patriotism

By: Ann Sullivan, WIPP's Chief Advocate

Recently, my family attended a Nationals game that just happened to be the night the Nats honor the US Army. A general threw out the first pitch, the Army Secretary handed the ball to the pitcher and the whole stadium stood in silence to hear the Army Singing Sergeants sing the “Star Spangled Banner” and watch the presentation of the Colors.  Soldiers in crisp military dress lined the field in rows straighter than mere mortals could ever replicate. This show of patriotism never gets old.  It serves to remind us of the respect we have for our country and those who defend it.

But there is a different kind of patriotism that, while not as showy, happens in business meetings and dinner tables. Take for example, the session at the WBENC conference in Orlando a few weeks ago sponsored by WIPP/WE Decide 2016. For an hour and a half, we went over the Presidential and Congressional elections. We talked about what candidates were or were not saying and how the business community has been largely left on the sidelines. The participants in the room did not know each other but started coming up with ideas on how to change party rules, gerrymandered Districts and making a difference in upcoming elections. Yes, we talked about politics without getting snarky. Long after I finished presenting, groups of people around tables kept the discussion going. That’s patriotism.

Polls suggest that politics is “off the table” right now. The Presidential election survey data show that the majority of voters in the Republican Party choose “someone else” instead of their presumptive nominee. And the one segment (those that held no degrees) that selected Trump did so with the slightest of margins. On the Democratic side, the news isn’t much better. According to Public Policy Polling, Clinton's favorability is 39/54, and Trump is even worse off at 35/58.

Congressional candidates don’t fare much better. As of June, 80% of the voters surveyed by Gallop disapprove of the job Congress is doing, but yet a very high percentage of incumbents will return to Congress. That means to me that voter apathy has put discussion of policies and politics “off the table.”

The definition of patriotism is “love or devotion to one’s country.” That’s what the room of people at the WBENC session were expressing while talking about change. Sure waving a flag can denote love for the USA, but so does engaging in the political process. It can be as simple as casting a vote or canvassing for the candidate you support. It can mean being a delegate to the Democratic or Republican national convention or looking into your state’s decision-making, which determines the electoral map. An interesting resource in figuring that one out is run by a professor at Loyola Law School – “All About Redistricting—Who Draws the Lines”.

Promoting change is patriotic. So, why don’t we get back to discussing economic issues with our friends, family and colleagues? Discussions centered on solving problems in our country should be on the table. The easy way out is to complain, declare our dissatisfaction and opt out of the democratic process upon which our country was founded. Elected officials have been eager to feed into that pessimism by declaring that Washington is broken, even when they are in a position to fix it.

I was struck by a scene described in the Washington Post about the Fourth of July celebration on the National Mall in Washington:

Richard Palmer stood outside the White House and forgot for a moment the sense of foreboding he said he has felt about his country as the contentious 2016 presidential race has unfolded.

Instead, he marveled at the diversity of the large crowd coming and going in front of Washington’s most famous address on the morning of the Fourth of July: a California couple in American flag T-shirts volunteering to photograph an Asian family; a schoolteacher from Florida reveling in the idea that he was standing where Abraham Lincoln once lived; a British couple wearing crowns matching the one atop the Statue of Liberty.

“It gives you a renewed sense of hope,” said Palmer, 51, a salesman visiting from West Virginia with his family. “It’s a scary time. I hate what’s going on. But coming down the street here and seeing all this, I thought, ‘Maybe everything will be good.’ There are so many nationalities here, and people seem to care about things.

It’s time to think of participation in the political process as patriotism.  To quote President Kennedy: “Change is the law of life. And those who look only to the past or present are certain to miss the future.”

Are Regulations Discouraging Entrepreneurship?

By: Jake Clabaugh, WIPP Government Relations

Is the federal regulatory process stacked against entrepreneurs? The Joint Economic Committee sought to answer this question during a hearing entitled “Encouraging Entrepreneurship: Building Business, Not Bureaucracy.” The Committee’s Vice-Chair, Pat Tiberi (R-OH) opened the hearing with this direct question to witnesses: Is the thicket of government bureaucracy strangling private initiative?

Before taking on the Vice-Chair’s question, the witnesses began by framing the landscape. Entrepreneurship – the birth of new firms – has been trending downward since President Jimmy Carter’s Administration in the 1970’s. Dr. Tim Kane, a Research Fellow at Stanford University’s Hoover Institution, highlighted the decline in the number of startup firms from 16% of total firms in the U.S. in 1977 to just 8% today.

Despite the decline in overall start-ups, National Women’s Business Council (NWBC) Chair Carla Harris lauded the growth in women-owned businesses. Since 2002, the number of women-owned firms has leaped from 6.5 million to 10 million. Women are creating businesses at 2 -1/2 times the national average. The progress made by women business owners provided a bright spot in otherwise gloomy testimony on the outlook for entrepreneurs.

When the witnesses were asked what regulations were causing the most headaches, the Affordable Care Act (ACA) was the most commonly cited culprit. Specifically, the ACA defines a full-time employee as an individual working thirty hours a week instead of the traditional forty. This definition determines whether a business is exempt from the employer mandate. The witnesses echoed the experiences of many WIPP members who have found the thirty-hour workweek definition detrimental.

To tackle this and other regulatory challenges, WIPP partnered with the National Association of Manufacturers, Small Business & Entrepreneurship Council and International Franchise Association to launch Rethink Red Tape.  As part of this initiative, WIPP will be calling on policymakers to produce better, fairer rules. In the opinion of the Joint Economic Committee and WIPP Members alike, regulatory reform will be a win for entrepreneurship.