Just in time for Tax Day, Congress is considering two bills that could dramatically alter the landscape for government contracting firms. One bill would help firms, while the other could harm them.
First, the harmful bill: “
The Contracting and Tax Accountability Act of 2011,” introduced by Rep. Jason Chaffetz, R-Utah, and approved by the
House Oversight and Government Reform Committee on April 13. While PSC doesn’t want to see serious tax delinquents obtaining government contracts, the legislation removes suspension and debarment officials’ ability to exercise their professional judgment to determine whether the facts surrounding a tax delinquency merit such harsh treatment. In addition, it fails to include any minimum threshold, which means a contractor would be suspended or debarred for even the most insignificant of tax deficiencies.
It is unclear if and when the bill will be considered by the full House, but PSC continues to educate Congress about the consequences of the bill.
Now for the potentially good news: companies who play fair and follow the rules could be one step closer to a reprieve from the
onerous, mandatory
3 percent withholding on their contract payments, which is scheduled to go into effect on Jan. 1, 2012. Sen. Scott Brown, R-Mass., and others have offered an amendment to the Small Business Innovative Research (SBIR) reauthorization bill to repeal the withholding.
In a
letter to all senators, PSC urged support for Brown’s amendment. PSC also signed on to a
letter from the
Government Withholding Relief Coalition, of which PSC is a member, further urging repeal. It is unclear whether the Senate will consider this amendment during the SBIR bill debate, which has been delayed due to unrelated issues.
Other senators and a bipartisan group of House members have also introduced repeal legislation. In late March, the
Office of Management and Budget voiced support for a delay in the implementation date.
