A bill introduced in the House aims to increase the transparency of subcontracts and prevent pass-through contracts to large companies.
The Subcontracting Transparency and Reliability Act of 2012 increases reporting requirements for subcontracts. Specifically, no later than 180 days after subcontractor work begins, the prime contractor must submit a report that describes the subcontracting activities. The contractor would also have to submit a subcontractor report every three months until the contract ends.
The proposal gives the Small Business Administration the role of ensuring that these reports are submitted.
“Small business contracting and subcontracting is a great way to support local businesses who are more than capable of providing a great product or service for the federal government in an efficient manner. But there are many unfair roadblocks that exist for small businesses who perform federal contracting work,” said bill sponsor Rep. Mick Mulvaney (R-S.C.), chairman of the House Small Business Subcommittee on Contracting and Workforce.
He added, “The STAR Act will help provide an even playing field for many small contractors who otherwise would not have the resources to fight deceitful subcontracting and unjustified insourcing within the federal procurement system.”
According to a release by Mulvaney’s office, the bill also:
“Allows for more small businesses to team with other small businesses to complete federal contracts.
Makes it easier to catch bad actors and ensures real subcontracting opportunities for small businesses by easing the detection and punishment of large businesses that fail to file the mandatory reports on the use of small business subcontractors.”