Unintended Outcomes of Small Business Legislation & Policy: Opportunities For Improvement
By: Jinee Burdg, Jacques Gansler, William Lucyshyn
The Federal Government's spent over $440B on procurement in FY 2014, with over $280B just for DoD. This spending creates opportunities for implementing selected national policies. As part of these, the Small Business Act of 1953 established the Small Business Administration (SBA) and small business set-asides to help maintain the health of the industrial base (defense and others), to facilitate greater competition, to create more opportunity for businesses to succeed in the public sector, to create jobs, and to encourage innovation (for the nation’s economic competitiveness). However, the pursuit of admirable social goals can create problems and introduce inefficiencies into the procurement process. This report will focus primarily on the implementation of small business set-asides within the DoD, which, by far, buys the most goods and services. To that end, it reviews previous and current small business initiatives and discusses the related challenges and how they can be overcome; as well as the benefits that can be realized.
In addition to a review of existing literature on the effectiveness of the small business set-aside program, we met with senior executives (they ranged from managers and directors to vice presidents and CEOs, and included individuals from small, medium, and large businesses) from a variety of companies, as well as current and former government officials (they varied from base- level contracting officials to senior political appointees). The results of our research and interviews were analyzed and combined to inform the findings and recommendations.