Help to mid-tiers may backfire

Panel sees pros & cons in aid to mid-sized govt vendors

      Mid-tier federal contractors are too big to win small business set-asides and too small to compete against the big contractors. So what should Congress do?

      Perhaps it’s best to do nothing, a House Small Business subcommittee memo recently recommended, after considering the risks of legislating changes that might backfire and hurt small business contractors.

      The Subcommittee on Contracting and the Workforce examined the possibility of passing legislation to amend the Small Business Act to allow small business contractors that experience rapid growth in revenue--typically by winning a large contract--to remain small for a “transitional period” while they adjust to their new not-small status, according to a staff memo from Subcommittee Chair Steve Knight, R-CA, dated April 26.

      “A change in the calculation of size would help these firms sustain revenue levels under the small size threshold, allowing them the ability to develop their business plan and infrastructure to transition to mid-size more successfully,” the memo stated.

      However, the memo noted that if Congress did pass such a law, it could increase competition and reduce awards for those firms that are truly small.

      Knight’s memo concluded by saying that the subcommittee’s priority, in weighing any legislation, must be to avoid harm to existing small businesses that qualify for federal contracts.

More information: Subcommittee memo: https://bit.ly/2wmQnom

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