Elimination of Anti-Small Business Policies

Priority Issue Briefs
Elimination of Anti-Small Business Policies

Anti-small business policies cost small businesses hundreds of millions each year in government contract opportunities. Through these harmful policies small businesses are being shut out of the process.

Rewriting the law: Even though Congress passed legislation mandating that all federal acquisitions between $25,000 and $100,000 be exclusively set aside for small businesses, the SBA and the OMB have adopted a policy that has effectively repealed this legislation. The SBA and the OMB exempted any federal acquisition from this mandatory set-aside that is currently on the GSA Schedule. Since 99 percent of what the government buys is on this schedule, what the SBA and OMB have done is overturn a law designed to help small businesses.

Allowing exceptions: The SBA and the OMB have adopted a policy that allows a small business acquired by a large business to continue to claim its small business status for up to 20 years. This policy has forced thousands of legitimate small businesses out of business when they are forced to compete with large businesses around the world for small business set-asides.

Discouraging protests: A small business filing a protest against a set-aside contract that was awarded to a large company frequently is informed that the contract was not really a set-aside and there is no grounds for a protest. For the last few years the SBA has dismissed hundreds of legitimate protests from small businesses against by saying the contract was not a set-aside acquisition.

Avoiding prosecution: Another policy that hurts legitimate small businesses prevents a large corporation from being prosecuted for small business contract fraud unless it can be shown that the firm intended to commit fraud.

Delaying notification: Large companies that win small business contracts are protected from legitimate protest challenges by some federal agencies that withhold the name of the winning supplier until the time frame for filing a protest has expired. This technique is preventing legitimate small businesses from filing protests against fraudulent firms.

The National Association of Government Contractors opposes policies that deny small businesses access to prime contracting opportunities.

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