Are small-business set-asides helping?
- By Anne Armstrong
- Sep 10, 2012
The story of a small business begun in a garage or a spare bedroom growing into a global juggernaut is the stuff of legends — and policy.
The government wants to encourage the growth of small businesses because they create jobs and, when successful, help grow the economy. Congress, as it often does, dealt with that desire by passing a law requiring that a certain percentage of federal government spending be directed to small businesses in a variety of categories and flavors: minority owned, woman owned, Alaska native owned, to name only a few. In this issue, we look at how that plan has been working. It is a politically charged discussion with fervent supporters and detractors on each side. And, as usual, government executives are caught in the middle.
As a number of consultants have pointed out, whenever there is a bucket of money set aside, it will attract not only legitimate and qualified companies but also those that want to game the system for the reward.
From government, we hear of concerns about the capabilities of small companies to perform some of the work that has been set aside for them. And as the bar in contracting tilts back toward low price, we hear concerns about how small business can deliver those required low prices without the volume buys available to large companies.
There is no question that this is a delicate balance as government seeks to infuse capital into one market segment without damaging the other. Large businesses have spent millions in bid and proposal funds to secure a place on agency contracts only to find in this election year that most of the task orders are designated for small business.
None of this is to suggest that America’s entrepreneurs should not be a vital part of the federal technology ecosystem. But after nearly 35 years of small-business contracting goals, it’s worth asking how the set-asides are doing in delivering the intended results. FCW reporter Matthew Weigelt takes that on in our feature, "Do small-business preferences make the grade?"
Anne Armstrong is president and chief content officer of 1105 Government Information Group.