Subcommittee Hearings
Subcommittee on Contracting and Workforce
October 6, 2011
Subpar Subcontracting: Challenges for Small Businesses Contractors
The hearing addressed challenges small businesses face with subcontracting, both when the small business is the prime contractor and when it is the subcontractor. Specifically, the Subcommittee looked at three issues: problems with laws intended to prevent pass-through contracts, the issue of large prime contractors not fulfilling their subcontracting plans, and finally problems with the systems designed to track subcontracting. Pass-through contracts are violations of the limitation on subcontracting provisions in the Small Business Act, and result from large businesses hiding behind small prime contractors and then performing the majority of the work. This denies opportunities to legitimate small businesses, but the current rules and systems create both compliance and enforcement challenges. With subcontracting plans, large businesses are required to provide opportunities for small businesses as subcontractors on government contracts, but again there are enforcement and compliance problems which translate to lost opportunities for small businesses. In both cases, the Subcommittee examined whether the underlying computer systems – ESRS and FSRS – are failing to adequately address compliance and fraud issues. Opening Statement:Chairman Mick Mulvaney (R-SC)Witnesses and Testimony:Panel 1
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