Small steps taken to boost small business

This article is another in a series from Robert O'Harrow Jr. in the Washington Post discussing the goings on in the US Federal Small Business Administration's set-aside program, and government contracting more widely.

Small Business Administration changes rules for set-aside contracting program

The Small Business Administration has overhauled the rules for its main set-aside contracting program, including minor administrative matters and substantial particulars such as defining for the first time how much money an individual can have and still be considered economically disadvantaged.

The changes also clarify the rules for joint ventures between small and large businesses, requiring the small firms to do at least 40 percent of the work. Until now, the government did not specify how much work had to be done. The rules also will prohibit consultants and non-disadvantaged managers of 8(a) companies from receiving pay based on a percentage of gross revenue.

For years, the SBA's 8(a) Business Development program has been vulnerable to abuses as large companies and non-disadvantaged entrepreneurs have taken advantage of the rules.

The government sometimes has done little to enforce the rules. The rules remain complex, and, under the current system, it will be up to procurement officials at other agencies to enforce them. Government audits have found that procurement officials often do not understand the rules or choose to ignore them.