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Small-business concerns raised over DPA deployment and supply-chain bottlenecks
Summary
Members and GAO witnesses discussed how large prime contractors and priority ratings can shift burdens to small suppliers, and explored reforms to protect small businesses and streamline federal processes during emergencies.
Members of the House and GAO witnesses focused on how DPA implementation affects small businesses that supply parts or services to larger contractors when priority-rated orders are invoked.
Rep. Jake Auchincloss (chairman of the House Small Business Committee in transcript referenced as 'chairman of the Small Business Committee') said large prime contractors often pass costs and rapid production demands to small firms that lack the resources to ramp up quickly. William Russell recommended expanding and clarifying the DPA’s existing small-business preferences under title 7 and improving outreach and education for sub-tier suppliers about responsibilities when rated orders are issued. "One of the biggest complaints I hear from small business owners ... is that when a national emergency hits, the federal process slows them down," the member said during questioning.
The nut graf: GAO recommended better use of title 7 preferences, improved coordination to reconcile competing rated orders, and proactive education and outreach so sub-tier suppliers can respond without becoming overwhelmed or unfairly penalized.
Witnesses recounted that during COVID-19 some fabric suppliers for N95 masks were overwhelmed by competing rated orders and that coordination was needed to reconcile priorities in supply chains. GAO suggested FEMA, as the government-wide coordinator, should use lessons from DOD’s extensive title 3 experience and activate coordination groups to resolve bottlenecks quickly. Members asked for reforms to paperwork, guidance clarity, and faster approval processes so small firms are not left with uncompensated costs or excessive compliance burdens.
Ending: Members urged that reauthorization include explicit protections and streamlined processes for small suppliers, expanded title 7 authorities and clearer guidance on responsibilities under priority ratings to reduce risk to essential supply-chain nodes.
