Unintended Outcomes of Small Business Legislation & Policy: Opportunities for Improvement

Abstract

The Federal Government's spent over $440B on procurement in FY 2014, with over $280B just for the Department of Defense (DoD). This spending creates opportunities for implementing selected national policies. As part of these, the Small Business Act of 1953 established the Small Business Administration (SBA) and small business set-asides to help maintain the health of the industrial base(defense and others), to facilitate greater competition, to create more opportunity for businesses to succeed in the public sector, to create jobs, and to encourage innovation(for the nation's economic competitiveness). However, the pursuit of admirable social goals can create problems and introduce inefficiencies into the procurement process. This report will focus primarily on the implementation of small business set-asides within the DoD, which, by far, buys the most goods and services.To that end, it reviews previous and current small business initiatives and discusses the related challenges and how they can be overcome; as well as the benefits that can be realized.