04/04/2005
Small business holds onto its government contracts
More than 5,000 small-business owners and groups have told the Small Business Administration that they will not allow big businesses to steal small business’ government contracts.
Today marked the last day of the comment period for the SBA’s suggested “grandfathering proposal.”
In December 2004, after putting forward and later withdrawing a proposal to change the size standard of a small business back to its pre-1986 definition of 100 employees or fewer, the SBA suggested a "grandfathering proposal" that would allow big corporations to keep their existing small-business contracts even if size standards are reduced in the future. Since 1986, a small business has been defined as one that has 500 or fewer employees.
NFIB voiced its concerns in a letter to the SBA.
"Were SBA to do this, it would undercut one of the primary reasons for engaging in a review of the existing size standards: access to government contracts for legitimate small businesses," the letter from Bruce Phillips, senior fellow at the NFIB Research Foundation and Andrew Langer, NFIB's manager of regulatory policy said. "NFIB does not support “grandfathering."
Federal law mandates that 23 percent of government contracts be awarded to small business, but this is not always met as it should be.
In its December 2004 report, Analysis of Type of Business Coding for the Top 1,000 Contractors Receiving Small Business Awards in FY 2002, the SBA Office of Advocacy reported that 44 of the top 1,000 small business contractors were not, in fact, small businesses. These businesses accounted for $2 billion worth of contracts that were said to have gone to small business.
NFIB works hard to make sure that small businesses have a fair shot at government contracts. Most recently, small business scored a big victory with the president's signing of the fiscal 2005 omnibus spending bill; now, small businesses can compete fairly with Federal Prison Industries for all federal contracts.
