Why the SBA Wants to Redefine “Small,” And Why It Doesn’t Matter

Authored by Jeff White

Originally published on GovWin

I set a personal best in the bench press this weekend. All I had to do was count every half pound as one pound, and next thing you know, I was lifting more than I had at 18. A cheap trick? Sure. But playing with definitions in a meaningless way is a fantastic method for faking progress. It’s also a great way to start an argument to distract everyone.

Just ask the Small Business Administration.

The SBA last week proposed new size standards for 36 industries – a redefinition of exactly what constitutes a “small business” in fields like Information Technology, Engineering and Consulting Services.

The changes would allow more businesses to qualify as small by increasing the revenue ceilings for each industry – some drastically, some by small increments. They might even bring the government closer to meeting its small business contracting goals, with wordplay alone.

Predictably, the fights have already begun.

Roger Jordan, Vice President of the Professional Services Council (PSC), told the Washington Post that his group backs the changes, arguing that “It’s easy as a small business to graduate from your small-business set-asides because of being awarded one federal contract. You want to have the size standards large enough so small businesses can actually develop themselves.”

On the other hand, the National Federal Contractors Association (NFCA) released a statement blasting the move, saying that the move “entirely fails to address the particular challenges of competition in the federal marketplace and does little to promote the creation of jobs in that sector of the market.”

Maybe one side is right. Maybe the other. I’m not sure, because it doesn’t matter at all. You see, the Small Business Act [PDF] states that all small businesses should have the maximum practicable opportunity to participate in providing goods and services to the government. To ensure that small businesses get their fair share, the SBA negotiates annual procurement preference goals with each Federal agency and reviews each agency’s results. The SBA is responsible for ensuring that the statutory government-wide goals are met in the aggregate.

They never have been. Not once.

According to the most recent available data [PDF], in 2009, the federal government missed its own targets for small business contracting and small business subcontracting, and hit just one of five targets for the various socio-economic small business set-asides. Each individual department missed its target as well – just as they always have.

And the consequences for agencies that miss the targets they themselves agree to?

Nothing.

They all missed even while giving themselves credit for things they didn’t do. An American Small Business League investigation of the numbers [PDF] found that “more than 65 percent of the total volume of contract dollars coded as going to small businesses actually went to large businesses that would not currently qualify as small businesses and in some cases went to Fortune 500 firms.”

The consequences for fudging the numbers?

You’ve already guessed them, I’m sure

Which is why, in the end, I can’t bring myself to care much about whether the PSC’s argument is right, or the NFCA’s. Until we change the fact that the government has interpreted the law as though it is an admirable goal and not a statutory requirement, the definition of “small” doesn’t really matter at all does it?

The government might actually hit its small business contracting goals by redefining the word “small.” Or it might not. It won’t matter at all, because there are no consequences for failure and no rewards for success.

So, sure, let’s redefine the meaning of the word “pound,” and make ourselves sound like we’ve done something more impressive in the gym. Nevermind that it won’t make anyone any stronger.

Oh, I almost forgot – the proposed rule change is just that at this point…a proposal. The SBA will be accepting comments on it until May 16. To send them your thoughts, just go to the proposed rule at regulations.gov and click on “submit a comment.” You can argue with them over whether the proposed changes make sense or not. I see good arguments on both sides. But whatever side you take, consider adding a comment telling them to ask Congress for an enforcement mechanism, or it’s all just word games, anyway.

Jeff White is the founder of GovWin.com, the network that helps government contractors win new business every day. He can be reached at [email protected], or follow him on Twitter @Jeff_White1347.