Rep. Scholten Introduces Bill to Ensure Defense Spending Supports Small Businesses and Strengthens National Security

WASHINGTON, DC- Today, U.S. Congresswoman Hillary Scholten (MI-03) introduced the Small Business Defense Contract Protection Actto ensure that Department of Defense (DoD) contracts intended for small businesses are actually reaching small defense contractors to strengthen both America's national security and our small business economy.

"With growing global tensions and supply chains under pressure, we cannot afford to sideline small businesses that are ready to contribute," said Rep. Scholten."As a member of the House Small Business Committee, I have seen firsthand how small defense contractors rely on lower-dollar contracts to grow, hire workers, and build the experience needed to compete for larger projects. This bill will help level the playing field, support entrepreneurs, and strengthen our national security."

Under federal law, most defense contracts valued at or below the Simplified Acquisition Threshold-currently $350,000-are supposed to be set aside for small business competition. These smaller contracts often serve as an entry point for entrepreneurs looking to break into the defense marketplace. However, recent reports from the Department of Defense show that more than a quarter of spending below this threshold has gone to businesses that do not qualify as small.

Rep. Scholten's bill would require the Department of Defense to review how these contracts are being awarded and provide Congress with clear information on when and why small business set-aside rules are not being followed. This added transparency will allow Congress to conduct proper oversight to protect small businesses.

A small business from West Michigan testifiedbefore the House Small Business Committee in September 2025 on the importance of these contracts, describing them as essential for both emerging companies and established firms seeking stability and predictability. For newer companies, small defense contracts often represent their first step into the federal marketplace. For more established firms, they provide steady work that helps keep employees on payroll while they pursue larger, more complex contracts.

"Small businesses bring innovation, flexibility, and enthusiasm to federal agencies. Honoring the intent of the small business contracting programs-including awarding purchase orders under the Simplified Acquisition Threshold to small contractors-encourages continued involvement from us. Federal agencies benefit from this larger pool of contractors," said Sue Schweim Tellier, President and Owner of JetCo Federal, who testified before the House Small Business Committee.

A more diverse and competitive defense industrial base will help lower costs, increase resilience, and strengthen national security by expanding the pool of trusted suppliers. In 2025, the House unanimously passed this text sponsored by Rep. Scholten as an amendment. This bill builds on that momentum.

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