Carrot or stick?

Having a small-business subcontracting plan is one thing, but adhering to it is quite another.

What's the solution? Contractors may be hit with liquidated damages for failing to make a good-faith effort to meet their small-business objectives. But performance-based contracting offers an alternative — a financial carrot rather than a statutory stick.

Under a performance-based contract, an agency may link the award fee to the contractor's ability to reach small-business goals. "We have an award-fee contract, and one criterion for the award fee is our progress on small-business subcontracts," said Ellen Glover, president of Impact Innovations Group LLC's Impact Washington, D.C., division. She is also industry liaison and vice chairwoman of the Industry Advisory Council. "So of course we are paying attention to it."

"We, quite frankly, like the concept of performance-based contracting," said Andrew Robinson, executive vice president of Exeter Government Services LLC and chairman of IAC's Small, Minority and Woman-Owned Business Shared Interest Group. The financial incentive has "a lot of teeth in it," he added.

Some forward-thinking prime contractors, meanwhile, are including small-business goals as a performance measure in their program management plans, said Kathy Conrad, a vice president at Jefferson Consulting Group LLC.

Overall, motivation rather than punishment is the way to go, said Ira Kirsch, president of Unisys Corp.'s U.S. Federal Government Group. "The best thing to do is incentives."


  • 2018 Fed 100

    The 2018 Federal 100

    This year's Fed 100 winners show just how much committed and talented individuals can accomplish in federal IT. Read their profiles to learn more!

  • Census
    How tech can save money for 2020 census

    Trump campaign taps census question as a fund-raising tool

    A fundraising email for the Trump-Pence reelection campaign is trying to get supporters behind a controversial change to the census -- asking respondents whether or not they are U.S. citizens.

  • Cloud
    DOD cloud

    DOD's latest cloud moves leave plenty of questions

    Speculation is still swirling about the implications of the draft solicitation for JEDI -- and about why a separate agreement for cloud-migration services was scaled back so dramatically.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.