Small Business in Government Contracting

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Assignment 3: Encouragement of Small Business

Diana ALTOFT

Professor Whitney Davis

LEG440

11/13/2012

Government contracting can be a very lucrative endeavor for the small business owner, especially if you fall in one of the minority groups supported by the government’s socioeconomic programs. The encouragement of small business is an important goal of the government that is addressed by the Federal Acquisition Regulations. As stated in Feldman (2012), although the government’s primary interest in procuring goods and services is to obtain them on a competitive, best value basis, the government has also implemented through the procurement process policies to ensure that various basic socioeconomic objectives are met. Because of this, programs have been created which provide specific contracting and sub-contracting preferences to small businesses, small disadvantaged businesses, woman- and veteran- owned small businesses and small businesses located in historically underutilized business zones (HUBZones). The most common method by which the government gives preference in its procurements to small business concerns is by “setting aside” proposed contracts; i.e., reserving, all or part of a proposed procurement for exclusive participation by small business only. In order to qualify for these preferential programs, your small business must meet certain requirements and criteria to be eligible, but we’ll get to those requirements in a moment. So, if you’re a small business owner, interested in becoming involved in government contracting, and perhaps even fall into one of the preferred small business groups, you owe it to yourself to learn more about how to get involved in the government acquisition process.

First, let’s talk more about the preferred contracting groups. To begin with, you must be sure you qualify as a small business so you can take advantage of valuable government contracting opportunities reserved for small businesses concerns. To be eligible as a small business concern, your business must satisfy the Small Business Administration’s (SBA) size standard for your industry, be operated for profit, be independently owned and operated, and be based in the U.S., making significant contributions to the U.S. economy. The SBA has a comprehensive website with a tool to help you make that determination. They also have local offices that are a wealth of knowledge with free assistance regarding government contracting guidance, recommendations and the step-by-step instructions on how to get started. Once you’ve determined you meet the size requirements to be a small business, let’s see if your business falls into any of the preferred contractor criteria. If you are a qualified small business concern who is 51% or more owned and controlled by socially and economically disadvantaged individuals , and are under the control of such individuals for its management and daily business operations, this is commonly known as a small disadvantaged business (SDB). Some of the advantages available to SDBs are: a price evaluation adjustment, a participation evaluation factor and a monetary subcontracting incentive. One of the best advantages available to an SDB contractor is the right to participate in the SBA’s “8(a) program”. Now, for women-owned small businesses, there is a government-wide goal to award at least 5% of all federal prime contracts and subcontracts each fiscal year to women-owned small businesses. The criteria for women-owned small businesses is similar to the SDB in that they must be 51% or more owned and operated by one or more women, or, if the firm is publicly owned, one or more women must own 51% of the firm’s stock. Daily operation and management of the firm must be controlled by one or more of the women. Similarly for veterans, the Veterans Entrepreneurship and Small Business Development Act of 1999 has a goal to expand existing veterans assistance programs, especially for those with...
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