Thursday, May 16, 2013

GSA Stiffs 1,334 Small Businesses

A Congressional investigation report released today by the House Small Business Committee demonstrates that Government Services Administration small business contractors in the Multiple Awards Schedules program were underpaid more than $3 million because the agency failed to honor the minimum payments provisions of GSA's own contracts with these vendors.  GSA's MAS program encourages small businesses to offer products and services to locally based federal agencies at fixed prices for relatively small quantities. In order to qualify for the program, each small business most endure an expensive and arduous vetting process, and promise to sell $25,000.00 in products or services to federal purchasers during the first two years of participation, and a minimum of $25,000.00 each year after that. 

Those businesses which qualify, but fail to meet the sales quotas, are eliminated from the program. GSA's own contract form imposes on itself an obligation to make a minimum payment of $2,500.00 to eliminated sellers who failed to get awards of that amount before they are dumped. House Small Business Committee Chairman Sam Graves (R-Mo.) acknowledged that the MAS program is supposed to promote government efficiency and encourage small business participation. "But when federal agencies don't live up to their end of the bargain, small businesses are discouraged from competing, and taxpayers lose the benefits of government efficiency," Graves said in announcing the findings of his investigation.

Apparently, for the last ten years, no one at GSA was responsible for making the minimum payments to terminated MAS contractors, though GSA wrote the form of contract each small business was required to sign to get in on the program. 
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