First off, I have a bit of experience in this, 20 years of operational (AF Wing and below) contracting experience although I did retire a few years ago. I am one hundred percent in favor of small business programs. Competed small business programs have been proven time and time again to be the absolute best value available to the government for a huge percentage of the buys the government is involved with.
I do believe however that this substack article is unclear. Federal government small business procurement is covered under FAR Part 19 (https://www.acquisition.gov/far/part-19) and includes several subcategories that while still relate to small businesses are not 8(a) programs. These include the aforementioned 8(a) program, HUBZone, Women Owned Small Business, and Service Disabled Veteran Owned Small Business.
With an 8(a) contract the government is not actually contracting with an individual small business it is government contracting letting a contract to the Small Business Administration and the SBA guarantees, with a large number of caveats, the 8(a) business's performance. The Small Business Administration also has a huge amount of say in whether or not the 8(a) company's price is fair and reasonable. Essentially you have one branch of the government arguing with another branch of the federal government and a lot of times that doesn't equate to anything like best value. Part of the reason why is that Congress establishes goals where certain percentages of acquisitions must be to 8(a), a different percentage to HUBZone, yet a different percentage o WOSB or SDVOSB. Since contracting units and the SBA are rated on how well the government contracting organizations meet those goals there is a large incentive to reach those goals regardless of whether the price is fair and reasonable or not.
With HUBZone, WOSB, and SDVOSB the government actually does contract with an individual small business and there is a much better chance of actually getting a fair and reasonable cost for a good or service.
This is a convoluted subject that is, in my opinion, mostly drive by Congress layering one set of preferential treatment over another and I do apologize for the 50 thousand foot overview. I didn't even got into ay of the exceptions.
Yes, I read almost the entire FAR, because depression makes me that much of a masochist. With regard to the analysis I did, all that is available on USASpending.gov is what I had to go on. I was specifically thinking about and analyzing the 8(a)program, but I will edit the article to add a clarification. In 2023, changes were made specifically to make it easier for SDVOSB and others to *become* 8(a), so there is definitely some overlap there. So I agree that the federal qualifications and rules are in some cases unclear, which is why I went strictly by what was available on USASpending.gov. That's a big part of the problem of any multi-agency-involved analysis like this one -- there's overlap and ambiguity in definitions between agencies. That's why the first thing I did was validate the SBA's numbers, to make sure I had a reasonable grasp of things. I allowed for the exceptions I knew about, in detail. But there are of course likely other exceptions -- reference my comments on the multi-headed hydra only a deity could fully understand, LOL.
Thank you for this -- I'm going to close the comments soon, but not because of you. I had a bad night and am very, very tired. Need to conserve my energy.
Yes, you made the right decision to publish quickly rather than waiting for further testing. It is hard to overemphasize the primary point: this particular procurement program has been administratively efficient over several years, especially as compared to traditional procurement methods, implying that it is structured in a way that it will remain administratively efficient whether procurement levels increase or decrease, or whether the kinds of things obtained change.
The best rationale for the program is resiliency, not some aesthetic preference for smallness or novelty. Having many possible suppliers is less risky than being locked in to one big one. There is a secondary rationale of compassion, but “disadvantaged” has a broader meaning than, say, “diverse”. If resiliency can also be more efficient than alternatives it makes sense to keep the program. It is not just dumping money on, or for the benefit of, political supporters. Support for this program need not imply support for anything else SBA does.
Comments are turned off now; I'm just very busy and tired today, sorry.
First off, I have a bit of experience in this, 20 years of operational (AF Wing and below) contracting experience although I did retire a few years ago. I am one hundred percent in favor of small business programs. Competed small business programs have been proven time and time again to be the absolute best value available to the government for a huge percentage of the buys the government is involved with.
I do believe however that this substack article is unclear. Federal government small business procurement is covered under FAR Part 19 (https://www.acquisition.gov/far/part-19) and includes several subcategories that while still relate to small businesses are not 8(a) programs. These include the aforementioned 8(a) program, HUBZone, Women Owned Small Business, and Service Disabled Veteran Owned Small Business.
With an 8(a) contract the government is not actually contracting with an individual small business it is government contracting letting a contract to the Small Business Administration and the SBA guarantees, with a large number of caveats, the 8(a) business's performance. The Small Business Administration also has a huge amount of say in whether or not the 8(a) company's price is fair and reasonable. Essentially you have one branch of the government arguing with another branch of the federal government and a lot of times that doesn't equate to anything like best value. Part of the reason why is that Congress establishes goals where certain percentages of acquisitions must be to 8(a), a different percentage to HUBZone, yet a different percentage o WOSB or SDVOSB. Since contracting units and the SBA are rated on how well the government contracting organizations meet those goals there is a large incentive to reach those goals regardless of whether the price is fair and reasonable or not.
With HUBZone, WOSB, and SDVOSB the government actually does contract with an individual small business and there is a much better chance of actually getting a fair and reasonable cost for a good or service.
This is a convoluted subject that is, in my opinion, mostly drive by Congress layering one set of preferential treatment over another and I do apologize for the 50 thousand foot overview. I didn't even got into ay of the exceptions.
Yes, I read almost the entire FAR, because depression makes me that much of a masochist. With regard to the analysis I did, all that is available on USASpending.gov is what I had to go on. I was specifically thinking about and analyzing the 8(a)program, but I will edit the article to add a clarification. In 2023, changes were made specifically to make it easier for SDVOSB and others to *become* 8(a), so there is definitely some overlap there. So I agree that the federal qualifications and rules are in some cases unclear, which is why I went strictly by what was available on USASpending.gov. That's a big part of the problem of any multi-agency-involved analysis like this one -- there's overlap and ambiguity in definitions between agencies. That's why the first thing I did was validate the SBA's numbers, to make sure I had a reasonable grasp of things. I allowed for the exceptions I knew about, in detail. But there are of course likely other exceptions -- reference my comments on the multi-headed hydra only a deity could fully understand, LOL.
Thank you for this -- I'm going to close the comments soon, but not because of you. I had a bad night and am very, very tired. Need to conserve my energy.
Thanks for your analysis of this program.Hope that things improve for you soon.
Yes, you made the right decision to publish quickly rather than waiting for further testing. It is hard to overemphasize the primary point: this particular procurement program has been administratively efficient over several years, especially as compared to traditional procurement methods, implying that it is structured in a way that it will remain administratively efficient whether procurement levels increase or decrease, or whether the kinds of things obtained change.
The best rationale for the program is resiliency, not some aesthetic preference for smallness or novelty. Having many possible suppliers is less risky than being locked in to one big one. There is a secondary rationale of compassion, but “disadvantaged” has a broader meaning than, say, “diverse”. If resiliency can also be more efficient than alternatives it makes sense to keep the program. It is not just dumping money on, or for the benefit of, political supporters. Support for this program need not imply support for anything else SBA does.