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Large businesses want to earn money just as much as small businesses do. And they know that in order to win federal government contracts, their proposal must show how they plan to award 23% (or more) of those contracts to small business partners who will act as sub-contractors. Unfortunately, large businesses don’t always follow through with actually delivering the work to small business sub-contractors. The STAR Act attempts to fix that problem.

The first piece is that when a large business hides behind a small business simply to win a contract, right now it is difficult to track down whether the small business is really doing the work. This bill will make that easier.

Next, this bill allows multiple small businesses to share work as a team, something which has been difficult up until now. For agencies and contracting officers, a group of small businesses had always seemed more risky, and these types of joint ventures would often be passed over.

This bill gives joint ventures that are made up of multiple small businesses more control and a better standing with the FAR (Federal Acquisition Regulation), and allows them to be considered equivalent to a larger business. Instead of seeing 2 x $25 million businesses who have teamed together, for example, government evaluators will see the group as one $50 million business – because one person is in control.

The last part of this bill deals with insourcing. In previous administrations, increasing amounts of work were being outsourced to contractors like you and I. The Obama administration sought to reverse that trend by defining more tasks that must be done by government employees and not by contractors.

For large businesses, this wasn’t really a problem – if their government contract got insourced, they would just move their people around to other jobs. They always have multiple opportunities and contracts on the go. But for small businesses, government insourcing meant significant loss of revenue.

The STAR act creates transparency by requiring agencies to publish their insourcing processes and allowing small business contractors to challenge those decisions in a protest action.

This bill was sponsored by Subcommittee on Contracting and Workforce Chairman Rep. Mick Mulvaney (R-SC).

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