Small Businesses Have First Dibs on Some Federal Contracts WASHINGTON, D.C. - The U.S. Small Business Administration is making it easier for very small businesses to win federal contracts.
Some federal contracts worth up to $50,000 will be set aside for businesses with fewer than 15 employees and with annual revenue of less than $1 million. Only companies meeting these requirements would be eligible to compete.
Whenever a "reasonable expectation" exists that at least two responsible qualifying small businesses will submit competitive bids, larger firms will be excluded.
The SBA is offering the program on a trial basis in Louisiana, Massachusetts, Michigan and New Mexico, and in portions of California, Ohio, Pennsylvania and Texas. Two years from now, Congress will consider whether or not to make the program nationwide and permanent.
Small businesses currently have a poor shot at winning even modest-sized contracts, according to SBA officials. "This new program gives them a foothold in the federal procurement arena" with the expectation that they can grow enough to compete for larger contracts, says Judith Roussel, SBA associate administrator for government contracting.
Nearly 250,000 federal contracts - about 2 percent of all U.S. purchasing agreements - were each worth less than $50,000 in the fiscal year ended September 30, 1997.
The most common small businesses to receive contracts were service-oriented: consultants and trainers. Firms in construction and manufacturing also did well, the SBA says.
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