Set-asides may be a ‘perverse incentive’ to stay small: report

81% to 94% of small contractors that survived 10 years in the federal gov’t market remained small, CSIS says

     Only a small percentage of small business federal contractors grow out of their “small” designation, according to a new study by the Center for Strategic and International Studies (CSIS).

      In recent years, the vast majority of the small contractors that survived for 10 years in the federal market have remained small, the study found.

      The failure of most firms to “graduate”--to grow large enough to exceed their industry’s definition of “small”--suggests that the government’s strategy of utilizing set-asides to promote small business expansion may be backfiring, the CSIS authors say.

      “The low graduation rates of small businesses that survived for 10 years rings alarm bells over the efficacy of small business set-aside programs...more....