WASHINGTON — U.S. Sen. Joni Ernst, a veteran who has a hand in federal defense policy, says she wants to ensure vendor contracts procured by the Pentagon are open to small businesses.

That’s why the Iowa Republican is highlighting a provision she secured in the National Defense Authorization Act, or NDAA, for fiscal 2024 that aims to examine barriers small businesses may face when trying to break into the federal marketplace.

Ernst’s provision would push the Department of Defense to study the contracting process for small businesses.

According to Ernst’s office, 945 Iowa small businesses were participating in federal contracting as vendors in 2009, but that dropped to 336 by 2022, representing nearly a 65% loss. 

“It is critical that Iowa continue to lead the way in providing for our nation’s defense,” Ernst told States Newsroom in a statement Tuesday. 

“I’m proud to include my work in this year’s defense bill to streamline and increase competition for defense contracts and unlock more opportunities for Iowans,” said Ernst, ranking member of the Senate Committee on Small Business and Entrepreneurship.

Contractor universe shrinking

The U.S. Defense Industrial Base, as it’s called in defense and policy circles, ranges from large firms to not-for-profit universities that offer sophisticated weapons and technology, routine services, and general commercial products, like laptops or other supplies.

Overall, the number of contractors in business with the Defense Department has been shrinking and consolidating since the early post-Cold War era.

Ernst criticized the trend as “simply irresponsible for the government to rely on just a few major developers and manufacturers to uphold our security.”

“By reforming the contracting landscape and making it more accessible, we can promote job creation and ensure that our country’s security is upheld by many American businesses rather than dependent on a few,” said Ernst, who also sits on the Senate Committee on Armed Services.

Pentagon officials maintain the department is “engaged in a broad and sustained effort to build the kind of robust, resilient and innovative defense industrial and technological base we need to support our National Defense Strategy and global mission.”

Small business focus

Defense Secretary Lloyd Austin has said small businesses “keep [U.S.] military forces combat ready with critical parts, cutting edge technology, and top-notch services, and fortify (U.S.) defense supply chains in times of crisis.” 

“It is imperative for the Department to focus on small business,” Austin continued in the department’s Small Business Strategy report released in January.

A department spokesperson said Wednesday that the strategy is being implemented.

The report maintains that small businesses make up “over 70% of the companies that do business with the Department.”

While they constitute a majority of defense contractors, they collectively receive a minority of the department’s contract obligations, according to department figures.

The Ernst provision requires Austin to submit findings regarding barriers to small businesses to Congress 180 days after the NDAA’s enactment.

Congress passed the massive $884 billion NDAA on Dec. 14. President Joe Biden has not yet signed it.

Ernst’s current term ends in January 2027.