It's a Big MACs World

By Ann Sullivan

Earlier this month, WIPP submitted comments on a proposed rule changing the rules related to small business participation on multiple award contracts, also known as MACs.

The FAR Council, which oversees federal acquisition regulations, sought to clarify the use of set-asides, reserves, and orders placed against MACs. As contactors already know, use of these large contracts is steadily growing. Ensuring all socioeconomic groups, including WOSB’s have access to these opportunities, is a top priority for WIPP.

The rule adds coverage for the new concept of a “reserve.” A reserve would be used on MACs where a partial set-aside is not feasible, but where agencies still want small businesses to participate as prime contractors. This “reserve” concept is very similar to the tracks outlined in WIPP’s Do Not Enter report, which shows how agencies have utilized certain socio-economic set-asides, and discriminated against women-owned firms.

While the proposal provides clarity for contracting officers, it falls short by including an out-of-date policy regarding the limitations on subcontracting. In May 2016, SBA finalized a rule change that substantially revised the limitations on subcontracting by making it easier for women-owned firms to comply. The new rule focuses on the percentage of the award amount that has been subcontracted, not the percentage of work. The rule also provides an exemption for similarly situated entities, so WOSBs subcontracting to other WOSBs does not count against the percentage of the award subcontracted. This new policy is a win-win for small businesses, but the FAR Council does not acknowledge the new policy in its rule. If one of the purposes of the rule is to clarify small business authorities for contracting officers, the FAR should use the most up-to-date performance of work requirements.

WIPP appreciates the interest of the FAR Council in providing greater flexibility and clarity for the role of small businesses in multiple award contracts. But this proposed rule does not do enough. Without additional small business protections, this rule could hurt our nation’s biggest job creators- small businesses.