Bonus Buster Becomes Law

Photograph by Alex Brandon/AP Photo

Senate Armed Services Committee Chairman Sen. Carl Levin during a news conference on Capitol Hill in Washington to discuss the National Defense Authorization Act.

Senior federal employees risk losing bonuses if their agencies fail to meet government goals of awarding 23 percent of eligible contract funds to small businesses.

The bonus-busting measure is part of the defense bill signed into law today by President Barack Obama.

While some federal agencies have met the target of awarding 23 percent of eligible prime, or direct, contracts to small businesses, the U.S. government as a whole has missed the goal
for at least 11 straight years.

The National Defense Authorization Act requires that meeting small business goals be considered during senior staff reviews and bonus discussions.

The law also gives immunity to small businesses if they break procurement rules after acting on guidance from federal advisory offices, according to a press release from the House Small Business Committee, chaired by Representative Sam Graves, a Missouri Republican. It penalizes companies that violate limits on how much  work can be subcontracted to other vendors.

“The federal government marketplace is full of great opportunities for small businesses to succeed, if only we give them the chance,” Graves said.

The bill is H.R. 4310.

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