Not so small after all

Steve LeSueur

The Bush administration appears determined to make good on its promise to help small businesses. Earlier this month, Angela Styles, administrator of the Office of Federal Procurement Policy, announced a proposal that would eliminate a procurement loophole that allows large companies to win contracts reserved for small businesses.

The problem Styles intends to fix is this: When a company wins a place on a governmentwide acquisition contract as a small business, it retains that status throughout the life of the contract, regardless of how large the company grows during that period.

Under the new White House proposal, companies would have to recertify annually their status as small businesses. When they grow beyond the small-business size limit, they would no longer be eligible to win work under contracts set aside for small businesses.

In a separate but related development, the U.S. attorney general, the General Accounting Office and the Small Business Administration are each investigating whether large companies are misrepresenting themselves as small businesses in order to win federal contracts. To a large degree, their investigations were spurred by Lloyd Chapman, president of the Microcomputer Industry Suppliers Association, who has been crusading on behalf of small businesses.

While it's impossible to find anyone who proclaims himself opposed to small business, it's not a black-and-white issue. As Staff Writer Gail Repsher Emery found in her own investigation, some experts are questioning whether annual recertification, as opposed to recertifying every three to five years, unfairly punishes companies for being successful. And forcing companies out of the small-business program too quickly could undermine their progress. Gail's stories, which begin on the front page, have the details.

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