A bill designed to expand small-business opportunities for federal work could instead have the opposite effect, according to leading trade groups.

The bill, introduced earlier this month by the Democratic and Republican leaders of the Senate Small Business and Entrepreneurship Committee, would among other things require agencies to reserve some prime contracts for small businesses.

The provision would apply to solicitations through the Federal Supply Schedule, Government Wide Acquisition Contracts and similar multiple-award contracting vehicles.

Larry Allen, president of the Coalition for Government Procurement, which represents Federal Supply Schedule vendors, said small businesses already do quite well under those contracting programs. They currently receive between 30 percent and 35 percent of all Federal Supply Schedule business, for example, which is well above the government's 23 percent small-business contracting goal.

By requiring small-business set-asides in the schedules program, some federal buyers could find it more difficult to use the schedules and could end up using other contracting methods that have less participation by small businesses, Allen said.

"If you have a special requirement for the schedules program you don't have for other programs, that's more of a hassle and I might go with another program," Allen said in an interview.

The Professional Services Council agrees that the set-aside requirements could limit opportunities for small businesses. If an agency carves out some work for veteran-owned companies or businesses in disadvantaged areas, then it may exclude other small businesses from competing, said Alan Chvotkin, executive vice president.

"By further segmenting the marketplace ... I'm not sure that that is the most advantageous way for increasing small-business participation," Chvotkin said.

Allen on Feb. 8 sent a letter outlining his concerns to the bill sponsors, Committee Chairwoman Mary Landrieu, D-La., and ranking member Olympia Snowe, R-Maine. He said he's scheduled to meet with committee staffers Thursday to discuss the bill.

The bill, S 2989, was scheduled to be voted on by the committee Thursday, but the vote was postponed because senators instead will be participating in President Obama's televised forum on the health care bill.

Chvotkin said he likes some aspects of the bill, including a provision that would make it harder for agencies to bundle contracts into a single procurement. Bundling often shuts small businesses out of government competitions because it makes projects too large for small businesses to handle.

The bill would prohibit agencies outside the Defense Department from combining requirements for contracts worth more than $2 million unless the chief acquisition officer can show that bundling would save the government money, improve the quality of what is purchased, and shorten delivery time. Savings on personnel and administrative costs alone would no longer justify bundling. A similar provision already applies to the Defense Department.

However, Allen said lawmakers could have a problem reconciling the anti-bundling provision with the Obama administration's push to combine contracts for small-ticket items such as office supplies and computers, under a method called strategic sourcing.

"It does seem that the Senate, through this bill, would be promoting a policy that's inherently at conflict with the one being promoted by the administration," Allen said.