Small Businesses and Defense Contracts

The Washington Post recently conducted an analysis of contract awards to small businesses by the US Department of Defense. As reported they found that many contracts were awarded to companies that were characterized as small. Congress has set requirements for the Department to award a certain percentage of their contracts to small business. The general gist as to why this is happening is that the government is lazy and looking for the path of least resistance in awarding the contracts. Many times they companies were subsidiaries of bigger companies.

In a related article, WashingtonTechnology.com, writes of a study conducted by RAND about the requirements to award to small businesses and ways to make it easier. RAND is a Federally Funded Research and Development Center (FFRDC) that does a lot of work for the Air Force. One of their major recommendations is that the definition of a small company be raised to allow bigger companies. One of the things that the Washington Post did point out is that their is no consistent definition of what is a small business in the Federal Government; so coming up with a consistent one would perhaps would be a better first step. Obviously Congress’ goal in this is so that a few large companies don’t dominate the contracts awarded. More on this to come I am sure.