The proposed rule published by GSA March 4^th is getting strong push back from industry over the increased costs the requirement to track and report every Schedule sale would create.  That these costs would disproportionately fall on small firms is not in doubt.  Here’s the “so what” for government, though, and one that GSA should think about carefully before it proceeds. 

The GSA Schedules program is the one of the very best contract vehicles for small firms.  For over 20 years small firms have been responsible for anywhere from 30-33% of all Schedule sales.  This easily blows away the 23% government-wide small business goal and shows that small businesses thrive on the Schedules program.  The government must have programs that exceed small business goals if it is to meet the overall goal of small business use.  After all, many programs fall well-short of the 23% mandate.

Drive small businesses out of the Schedules program and watch the government miss its small business targets.  See, too, small firms go out of business, as they did when GSA shifted to strategic sourcing for office products.  The witness chair in front of the House and Small Business Committees awaits GSA leaders to explain this new assault on small firms.

Can’t other programs make up for the small business loss here?  Not easily, and perhaps not at all.  Using the rough estimate that total GSA Schedule sales in 2014 were $35 billion, small business Schedule contract holders would have received about $11.5 billion in task orders.  No other federal IDIQ comes close to that amount – even for total sales.  Simply put, there is no way possible that existing contracts could pick up the small business slack.  Even if a new program were started today, experience shows that it would be at least three years, and probably closer to 5, before it could be launched.  Even then, how would you generate $11.5 billion through such a vehicle?

GSA sees itself as the steward for federal acquisition.  Part of that mission, though, is ensuring that socio-economic mandates are met, not just for itself, but for its customer agencies.  If the agency adopts policies that drive down small business participation, it should, at the very least, let those customers know so that they, in turn, can make other acquisition plans and find other ways to meet small business goals.  None would want to end up seated next to GSA at the next small business oversight hearing.