WASHINGTON – Increasingly, the federal government is linking together small contracts in a manner that makes it more likely that only a large firm can win the work – a trend that rankles U.S. Sen. Olympia J. Snowe of Maine.

There is currently an estimated $13 billion in federal contracts that could be available for competitive bidding by small businesses that have been bundled in this manner, Snowe said at a hearing by the Senate Small Business and Entrepreneurship Committee Tuesday. For every 100 bundled contracts, about 60 percent of them would have been previously won by small firms, she said.

“That’s not pocket change,” said Snowe spokesman Dave Lackey.

Snowe, who chairs the panel, would like to find a way to revise the federal law that now allows government contracting officers to bundle two or more contracts together if they deem it more efficient.

Snowe illustrated Tuesday how a Maine company had lost business because of the practice. She explained how Treadstone 71, a small technology company in Scarborough, was trying to help the government through risk assessment and information security solutions.

The smaller contracts that Treadstone 71 had been seeking were linked to other, larger awards – including some that the Scarborough firm couldn’t handle.

“To make matters worse, Treadstone 71 has been repeatedly shut out of related subcontracting opportunities,” Snowe said.

The issue is complex, because the government moved away from quotas and hard-number set-asides, although there are a plethora of programs that give small businesses, women-owned businesses, 8(a) firms (those that are disadvantaged), and even veterans a preference in certain circumstances.

Under the current policy, small businesses are supposed to have a contract set aside for them if it is valued at under $100,000 – with certain exceptions. But reforms that came about a decade ago tugged against that goal by making it a government goal to seek efficiency in the contracting process, and that evolved into bundling.

“Despite the fact that over the past several years Congress and the administration have focused on concrete measures and legislation to increase access to federal procurement opportunities, we have seen a disturbing trend in the opposite direction for small businesses,” Snowe said at the hearing. “The bottom line is that America’s small businesses continue to lose contracting jobs by the bundle, up to an estimated $13 billion, rather than benefiting from the growth in buying by federal agencies. In addition, when small firms lose contracts, the economy loses a vital source for job growth.”

SBA Administrator Hector V. Barreto told the subcommittee that the issue is near the top of the concerns regularly aired by small firms angling to work with federal agencies.

“Firms that previously operated in the government arena are no longer able to do so,” Barreto said. “This is an indication that acquisition reform has unintentionally reduced the number of existing and potential firms available to the government.”

Snowe strategists say that, for now, the course of the legislation that she will draft is uncertain, although there were – according to one analyst – “many ideas that were brought forward” at the hearing. One course that is unlikely to be followed is to push for quotas or new benchmark set-aside levels.

Spokesman Lackey said the likely solution is to fine-tune the standards that contracting officers have to use, and to tighten the requirements to make sure the government is getting the “best bang for the buck” but taking into consideration the need to broaden the contractor base to anyone who wants to participate with an eligible product.