Federal Contracting System: Small versus Large Businesses

Imagine you made your hobby of building model airplanes into a small business that produces very small remote control aircrafts capable of long sustained flights. You are ready to expand your business by competing for Department of Homeland Security contracts.

Write a two to three (2-3) page paper in which you:

  1. Analyze how the federal act supports and favors your business over large multinational organizations that build aircrafts (e.g., Mitsubishi Aircraft Corporation).

The US federal law renders more support to startup and small businesses building aircrafts than the large businesses competing with them for contracts. The law makes the federal government come off as unfairly supporting the startup and small businesses. In some instances, the law makes the government as operating under a business size-centered industrial policy hinged on crony capitalism persuasions (United States, 1990). From the 1950s, the federal economic policy has favored small businesses, including those building aircrafts, over multinationals. For instance, the policy exempts small businesses from many of the regulations that large businesses have to comply with (Atkinson, 2014). Unlike the large businesses, the small businesses are taxed less by the government and are given priority when businesses are being considered for the awarding of government contracts.

Besides, unlike the large businesses, the small ones have had a federal agency provided from them, the SBA (Small Business Administration). The SBA originally operated as the RFC (Reconstruction Finance Corporation) up to the 1950s. The agency’s Office of Advocacy is charged with making non-legislative, as well as legislative, proposals to the federal government for the elimination of any unnecessary or excessive regulations or rules affecting small business operations. Notably, large businesses as well have some of their operations hampered by particular regulations or rules (Atkinson, 2014). There have been calls for the reforming of the RFA (Regulatory Flexibility Act) to appraise the effects of given regulations on small businesses that are less than 24 months old and exempting them from more regulations than is the case at present.

In federal procurement programs, small businesses have legally defined set-asides unlike the large businesses. That means that commonly, small businesses win particular contracts even when their value bids for the same fall way below the value bids of large businesses. Notably, the set-asides make federal contracting rules rather complex, to the detriment of especially the large businesses’ interests. There are various research programs for supporting businesses that support small businesses exclusively. Such programs include the SBIRP (Small Business Innovation Research Program). The SBIRP awards small businesses limited research grants when they apply for them. Notably, there have been growing calls by large businesses to have such programs redesigned to ensure that all businesses can access them their sizes notwithstanding according to the submissions made by Atkinson (2014). The federal government comes off as rather inattentive to the calls, possibly owing to the spirit of the business size-centered industrial policy.

  1. Create an organizational chart that would best support working within the federal contracting system and explain the value of each position (i.e., internal contracting officer) to your proposed business.

The following organizational chart would offer the best support to a small business building aircrafts within the US federal contracting system. The federal contracting agency officer is charged with helping in the design of projects, identifying the outcomes expected out of particular contracting processes and executing market research to establish how the outcomes can be attained most effectively. The federal contracting agency officer is responsible for informing the public and interested parties of the agency’s intention to pursue particular acquisitions via agency business forecasts. Any interested business expects its internal contracting officer to be on the look out for the forecasts (United States, 1990).

The federal contracting agency officer solicits for a proposal or quotation from the interested business’ internal contracting officer. The two officers participate in the evaluation of the proposal or quotation against other proposals or quotations. The federal contracting agency officer may invite the internal contracting officer for negotiations if his or her business’ proposal or quotation is considered for the attendant award. If the federal contracting agency, through its officer, is satisfied with the proposal or quotation, it awards the contract to the business.

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