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Small Business/Socioeconomic Programs

Why we have small business programs:

It is Policy.

Current National Policy
FAR 19.201(a)

“It is the policy of the Government to provide maximum practicable opportunities in its acquisitions to small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, and women-owned small business concerns. Such concerns shall also have the maximum practicable opportunity to participate as subcontractors in thecontracts awarded by any executive agency, consistent with efficient contract performance. The Small Business Administration (SBA) counsels and assists small business concerns and assists contracting personnel to ensure that a fair proportion of contracts for supplies and services is placed with small business.”

DoD Policy
DoD Directive 4205.1C

“It is DoD policy that a fair proportion of DoD total purchases, contracts, subcontracts and other and services, and sales of property be placed with small business concerns, small disadvantaged business concerns, women-owned small business concerns, and historically black colleges and universities and minority institutions in accordance with 10 U.S.C. 2323 and 15 U.S.C., 631‑656 (references (b) and (c) .”

It is Law.

Small Business Mobilization Act of 1942
In 1942, Congress recognized that business concerns operating small plants may not have the “economies of scale” necessary to compete with large plants, and that a price differential might be required to keep such plants mobilized. Keeping these small businesses in operation was critical to maintaining the Industrial Base. ….BUT, ONLY FOR WAR EFFORTS!
Armed Services Procurement Act of 1947
In 1947, Congress declared the policy that: “ .. A fair proportion of total Federal purchases and contracts be placed with small business concerns. The intent of Congress was to: “…Continue in peacetime the policy which prompted enactment of the “Small Business Mobilization Act” in 1942.
Defense Production Act of 1950
The Korean War provided more emphasis for small business. Congress determined that preservation of small business mobilization capability was of utmost importance, and that, again, awards could be made to small businesses at other than the lowest possible price.
Quote From the 82nd Congress in 1951:
“In the early years of World War II, 100 large corporations received 67 percent of Federal prime contracts.”
“…During this same period, one-sixth of the Nation’s Small Businesses closed their doors!”
“…This mistake must not be repeated. Our mobilization program must extend down into the small plants because they are the major source of our productive strength.”
Small Business Act of 1953 (Public Law 83-163 and 85-536)
  • Created the Small Business Administration (SBA) as an independent agency within the Executive Branch. Authorized SBA to make direct and “guaranteed” loans to small businesses.
  • Directed SBA to provide technical and management assistance to small business concerns.
  • Authorized SBA to enter into contracts with Federal agencies, and then sublet those contracts to minority firms under Section 8(a) of the Act.
  • Directed SBA to assist small businesses in obtaining government contracts.
  • Directed inclusion of small business subcontracting clauses in all contracts over $10,000.
  • Required Federal agencies to publicize in the Commerce Business Daily (CBD) all procurements over the small purchase threshold and those with subcontract potential.
Revision to the Small Business Act of 1953 (Public Law 95-507)(1978)
  • Redefined minority firms as Socially and Economically Disadvantaged Small Business Concerns (SDBs)
  • Required Federal agencies to establish small business goals and explain to Congress when goals were not met.
  • Required small and small disadvantaged business subcontracting goals for major contracts awarded to large businesses.
  • Reserved all awards under $25,000 for small business.
  • Required establishment of the Office of Small and Disadvantaged Business Utilization
  • Director appointed by Head of Agency or Deputy
National Defense Authorization Act (Public Law 99-661)
Passed in 1987, This Act established the Small Disadvantaged Business Program and the 5% minority owned business goal. Emphasizes contracting with Historically Black Colleges and Universities/Minority Institutions.
Federal Acquisition Streamlining Act of 1994 (Public Law 103-355)
Replaced the term “small purchases”, established “micro-purchases” at $2,500 or less, and established the Simplified Acquisition Threshold at $100,000. Automatic Small Business Reservation became $2,500 to $100,000 and the Act added women-owned small businesses to subcontracting plans
HUBZones Empowerment (Public Law 104-135)
The HUBZone Empowerment Contracting Program, which is included in the Small Business Reauthorization Act of 1997, stimulates economic development and creates jobs in urban and rural communities by providing contracting preferences to small businesses – that are located in a HUBZone and that hire employees who live in a HUBZone.
Veterans Entrepreneurship and Small Business Development Act of 1999 (Public Law 106-50)
The Veterans Entrepreneurship and Small Business Development Act recognizes that veterans of the United States Armed Forces have been and continue to be vital to the small business enterprises of the United States. It also recognizes that the United States must provide additional assistance and support to veterans to better equip them to form and expand small business enterprises, thereby enabling them to realize the American dream that they fought to protect.

It is the right thing to do, for our Nation and for the economy.

The applicable Small Business and Socioeconomic Programs are: