A bill to amend the Small Business Act to eliminate certain requirements relating to the award of construction subcontracts within the county or State of performance.
- Sponsor
- Sen. Sullivan, Dan [R-AK]
- Committees
- Small Business and Entrepreneurship Committee (primary)
- Last action
- Mar 12, 2025
Bottom line
This bill eliminates a geographical preference for construction subcontracts under the Small Business Act's 8(a) program, aiming to increase flexibility for prime contractors in selecting subcontractors.
What it actually does
This bill proposes to repeal paragraph (11) of section 8(a) of the Small Business Act. This specific paragraph currently mandates that construction subcontracts awarded under the 8(a) program must, to the maximum extent practicable, be performed by small businesses located within the county or State where the construction work is being carried out. The repeal would remove this geographical restriction, allowing 8(a) prime contractors to select subcontractors without a local residency preference.
Proponents argue
Supporters argue that eliminating this geographical requirement will enhance efficiency and competition within the 8(a) program by allowing prime contractors to choose the most qualified and cost-effective subcontractors, regardless of their location. This flexibility could lead to better project outcomes, greater value for taxpayers, and expanded opportunities for a broader range of specialized small businesses to participate in federal contracting.
Opponents contend
Critics might contend that the existing provision was designed to ensure federal construction projects directly benefit local economies and create jobs within the communities where the work is performed. Removing this local preference could divert subcontracting opportunities away from local small businesses, potentially undermining local economic development goals and favoring larger, non-local firms.
The bill text is exceptionally brief and can be read in a matter of seconds, making it highly accessible for immediate understanding of its direct impact.
Section 1
Elimination of Geographical Subcontracting Requirement
This section repeals paragraph (11) of section 8(a) of the Small Business Act. This paragraph currently requires that construction subcontracts awarded under the 8(a) program, when feasible, be performed by small businesses located within the county or State where the construction work is being done. The repeal removes this specific geographical preference, allowing 8(a) prime contractors to award subcontracts without this local residency constraint.
Supporters argue
Supporters argue that this repeal will enhance efficiency and competitiveness within the 8(a) program by allowing prime contractors to select the most qualified and cost-effective subcontractors regardless of their location. This fosters a more merit-based system, potentially leading to higher quality work and better value for taxpayers.
Critics contend
Opponents might argue that the existing provision was crucial for ensuring that federal dollars invested in local construction projects directly benefited the local small business community and workforce. Removing it could undermine local economic development efforts and make it harder for small, local firms to secure subcontracting work against out-of-state competitors.
Tradeoffs
The provision balances the desire for increased efficiency and broader competition in federal contracting against the goal of supporting local economic development and ensuring that federal funds directly benefit the communities where projects are situated.