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WIPP’s Two Cents on Contracting Rules

Friday, April 17, 2015  
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Giving WIPP’s Two Cents on Contracting Rules

By John Stanford

WIPP recently submitted comments to the Small Business Administration (SBA) on significant changes proposed for subcontracting. This blog accompanies those comments to help explain our thinking.

The policymaking process is divided between the glitzy world of passing legislation and the often behind-the-scenes work of writing regulations. An important step in that process is the comment period, allowing the public, including the business community, to weigh in on the proposed regulations and – believe it or not – make changes.

WIPP comments on regulations affecting women entrepreneurs, including recent proposed rules to change subcontracting for federal contractors. WIPP generally supports the SBA’s implementation of contracting changes with comments in each section, some of which are described below. An important reminder, these are changes required by law already passed by Congress – this is not the SBA electing to make changes on their own, but instead the details of how those changes will be made. 

The comments are carefully written to be clear to all readers – not just policy wonks. Should you want to know more about WIPP’s positions, I encourage you to look at the comments in their entirety.  


New Limitations on Subcontracting

The rule would simplify the calculation of how much of a small business set-aside (including WOSB set-asides) can be subcontracted. Currently, it is 50% of the labor cost. The rule would make it 50% of the contract award.

While WIPP supports this change, we are definitely aware of specific industries for which this change may not make sense. We support those industries reaching out to the SBA about their specific issues, which the SBA has said they will take into consideration. WIPP also asks a few clarifying questions, common to regulation comments.


Similarly Situated Entities

The rule allows an exception to the 50% described above: companies don’t count work subcontracted to similar companies (i.e. other small businesses, or WOSBs or HUBZones, depending on the set-aside) toward the 50%. This gives small businesses a great reason to work together on larger projects, one of the reasons WIPP testified in favor of this change.


Other Provisions

The rule deals with other changes – updating joint venture requirements, exempting the smallest of contracts from certain rules, additional roles for procurement center representatives (PCRs), and others – all of which WIPP supports. In those cases, our comments are included to explain the provision to other readers, and give reasoning behind WIPP’s support.

For many business owners, poring through regulations is not high on the priority list. Responding to proposed rules is a time consuming task – one that takes a lot of attention from WIPP’s Government Relations team. We are always looking for WIPP members’ views on regulation. By signing up for a WIPP committee that interests you or affects your business, you can stay informed on both legislative and regulatory changes. Remaining aware and being vocal about how your company may be impacted by any regulation is a key part of long-term success.


As they say, the devil is in the details.

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