On July 19th, the Federal Acquisition Regulation (FAR) Council proposed a surprising new rule: Government contractors must use plastic drinking straws.
Yes, you read that right. If a business wants to receive a federal contract, it will now have to certify that it doesn’t promote paper straws, doesn’t penalize the use of plastic ones, won’t use or provide paper straws in the performance of a contract and that any straws it does use meet the strength and durability of a plastic straw.
This new mandate is curious as it comes at the same time the FAR Council is leading a sweeping rewrite of the federal contracting rulebook — the so-called “Revolutionary FAR Overhaul” — aimed at eliminating unnecessary requirements. The overhaul stems from an April 15 executive order that declared: “Removing undue barriers, such as unnecessary regulations … is paramount.”
So which is it? Is the Trump administration cutting red tape or micromanaging what kind of straws contractors can use?
During my tenure on the Small Business Committee, I have seen the number and complexity of contracting rules grow, especially for small firms. Many small business owners would welcome real efforts to simplify the process. But I have also seen so-called reforms that ended up hurting the very businesses they were supposed to help. Too often, those outcomes could have been avoided if small businesses had been included in the conversation.
That mistake is happening once again.
So far, the FAR Overhaul has been driven by a small group of Trump administration officials without input from the small firms that fuel our economy and support our industrial base. Already, key safeguards that gave small businesses a fair shot have been removed, clearing the way for large corporations to dominate.
For example, the new FAR Part 10 on market research stripped out all references to small business considerations. It eliminated requirements for contracting officers to conduct market research to determine whether small firms could perform the work or whether contracts should be set aside for small business competitions.
And there is growing concern among small business government contractors about what comes next.
There is a real fear that the administration will throw out a key policy that has allowed them to enter, compete and have success in the federal marketplace: the Rule of Two. For many years, the Rule of Two has helped level the playing field for small businesses. It requires federal agencies to reserve contracts for small business-only competition if at least two qualified small firms can do the work at a fair price. It is one of the most important tools we have to ensure small businesses can compete.
The fate of the Rule of Two appears to be in the hands of a few Trump administration officials, making decisions outside of the normal regulatory process that will take effect almost immediately.
To mandate plastic straws, the government is using the congressionally-directed process that allows Americans and industries affected by rulemaking to have their voices heard, and helps ensure government officials are making informed decisions. Accordingly, the proposal is publicly available and impacted industries have 60 days to review and provide comments that must be addressed by the government prior to the changes taking effect.
The FAR changes, on the other hand, are being implemented via “class deviation.” While there is a check-the-box exercise for public comments that may or may not be considered by the government “as appropriate” at a later date, the process is not transparent, open or fair. Small businesses have not even seen the new rules that are reshaping their ability to compete for federal contracts, let alone have the chance to provide feedback, prior to having to adhere to them.
And the impact of these changes will be significant. Last year, $183.5 billion in federal contracts were awarded to small businesses. Nearly two-thirds of small business dollars are awarded through small business only competitions, totaling well over $100 billion annually. At a minimum, changes affecting this level of federal spending should be subject to the same transparency and accountability as the rules about straws.
This administration and I may disagree about whether regulating straws is “essential to sound procurement,” but I hope we can agree that maintaining a healthy industrial base is. There is still time to protect the policies that have helped small firms succeed in the federal marketplace, but that window is rapidly closing. Will the administration protect the Rule of Two, or did small businesses draw the short straw?
Rep. Nydia M. Velázquez represents New York’s 7th Congressional District and serves as ranking member of the Small Business Committee.
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