Puerto Rico's Resident Commissioner in Washington, Pablo José Hernández, introduced legislation in the U.S. House of Representatives this week that would allow audits of whether companies receiving federal contracts meet legal requirements to offer opportunities to small businesses. The bill, numbered 10622, would direct the Small Business Administration (SBA) to review at least 10% of contracts to confirm compliance.
Hernández filed it Monday together with Democratic colleague Gilberto Cisneros of California. Hernández noted that firms receiving contracts above $900,000 usually must submit a small-business subcontracting plan. He said his bill increases audits so small businesses receive the opportunities they are owed by law, adding that in Puerto Rico this means knowing whether local small firms have a real chance to participate in work generated by federal contracts.
Cisneros, a former Undersecretary of Defense for Personnel and Readiness, said the goal is for small businesses to have the chance to win federal contracts. Carmen Cortés Ramos, founder and chief officer of Legal PM Partners, said the commissioner is responding to small business owners' experiences. Currently, contractors are judged on whether they make a "good faith effort" to meet statutory goals.
In U.S. fiscal year 2022, over $400 billion in federal contracts required subcontracting plans, per the Government Accountability Office, yet the SBA conducted only six compliance reviews that year, which is estimated to have deprived small businesses of about $1.5 billion in additional contracts.