[Comments on Proposed Amendment to Small Business Act]

B-221101: Published: Dec 26, 1985. Publicly Released: Dec 26, 1985.

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GAO commented on H.R. 3482, a proposed amendment to the Small Business Act, which provides that any small business that the Small Business Administration (SBA) selects to perform a contract shall, when practicable, participate in negotiating its terms and conditions. The cost of any resulting contract is not to exceed the estimated current fair market price of the work to be performed based on reasonable costs under normal competitive conditions. GAO had concerns about one section of the amendment which: (1) entitles a small business to request a written statement describing the method used to estimate the current fair market price and permits it to protest to GAO if it believes that the method violates the statute; (2) provides that the Comptroller General must consider the protest and issue a decision within 10 working days of receipt of the protest; and (3) states that the agency that is the subject of the protest must consider the decision conclusive. GAO believes that: (1) SBA is the most appropriate agency to resolve small business complaints concerning the methods used to compute fair market prices since it has experience in negotiating contracts and has access to business development expense funds; (2) if it were to consider the protests, the 10 working-day period for deciding a complaint of this nature is not feasible and should be expanded to the 90 working-day period allowed to decide bid protests; and (3) the contracting agency should be allowed to present its position with an opportunity for the protester to respond.

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