Business
Abstract
This research paper will focus on government contracting and it strives to maximize opportunities in its acquisition to small business. The law that will be applied for the study is the Federal Acquisition Regulations or FAR part 19, on small business programs as well as the respective roles of executive agencies and the Small Business Administration (SBA) in implementing the programs. At the same time, there will be an extensive discussion on the coordination that will support the growth of small business, and how the efforts of Small Business Administrations or the SBA help boost the economy of the community. The will also be a clear presentation on the aspect of “concern”, which literally refer to any business entity organized for profit or an entity that is owned and operated for nonprofit purposes that located in the United States and which makes a significant contribution to the American economy by paying proper taxes and patronage of American products and labor. The term “concern” under FAR part 19 shall refer to individual, partnership, corporation, joint venture, association, or cooperative.
Keywords: government contracting, Small Business Administrations, executive agencies, federal acquisition regulations and concern.
In the recent study of Compton (2009), it was revealed that the small business program is the least understood component of the federal government acquisition system. This program is mandated by multifaceted laws and regulations since the persons concerned for the program do not usually join the planning stages of the actions on acquisitions. As a result, there is hardly a coordination that takes place between the acquisition professionals and the small business professionals. It is recommended that a more enhanced coordination between small business and acquisition offices must be implemented within every government agency. In addition, small business professionals should become a part of the acquisition team. In this manner, it will ensure that every party shall be given fair treatment and equal opportunities to partake in the federal contract. Such being the case, there will an assurance that policies and procedures that will be implemented will guarantee the fair awards to small businesses.
Purpose of the Small Business Program
The primary purpose for the implementation of the Small Business Preference Program is to ensure that small business companies received fair share of contracts and subcontracts for federal government supplies and services. The main consideration is to afford the small business programs the opportunity to receive a fair share of property offered for sale by the government and to strengthen the American economy. Compton (2009) stated that small businesses represent 99.7 percent of all the companies in the U.S. In the year 2006 alone, the records have shown that there was an approximate number of 2.8 million of small businesses in America. This is a manifestation that these small businesses make a valuable contribution to the U.S. economy by providing more jobs for the people which in effect decrease the unemployment rate. In addition, the small business programs develop American products and technologies by making substantial contributions to tax revenues and at the same time advocate free competition among other business owners (Compton, 2009, p.84).
Small Business Concerns and Federal Acquisitions
According to Compton (2009, p.84), the Small Business Act (SBA) has provided the definition a small business concern as a business that is ran and owned independently and is not prevailing in its field operation. The intention of Congress in creating the U.S. SBA as an independent federal agency through the enactment of the Small Business Act in 1953 is to afford assistance to small business within various states of the country. Such provision initially appeared in the 15 USC 631 (a) in the Declaration of Policy. This law was further strengthened in the Competition in Contracting Act of 1984, particularly in 41 USC 252(b) which relates to small business concerns or share of business (Compton, 2009).
The literal meaning of “concern” refers to any business entity whether has been organized for profit or a nonprofit entity, having a place of business in America through the collection of taxes, patronage of American products and labor. The word “Concern” shall cover and is not limited to individual, partnership, corporation, joint venture, association, or cooperative (SBA, part 19).
Role of the Small Businesses in the U.S. Economy
Based on the report of the Office of the Budget Management of the White House (2013), the role of the small businesses is to promote job growth in the U.S. economy. The 2013 U.S. Budget was aimed to guarantee that the small businesses will propagate and produce more jobs for the people. The move of the U.S. government is to improve the access of the small businesses to avail of credit to ensure that they will cultivate. The U.S. Office of the Budget Management has allowed the amount of $16 billion for the SBA to grant loan guarantees that will support the objectives of the small businesses and promote their expansion. There is an approximate amount of $14 billion allocated for loans and another $2 billion to be used as the revolving fund for credit. The budget aims to enhance another $46 billion of economic activity that will be collected from repayments for the existence of the guarantee (Office of the Budget Management, 2013). This is a clear manifestation that the SBA has served its purpose to generate growth in the economy of the country. In fact, the government has allocated $6 billion to be offered for small businesses for commercial real estate development purposes and purchase of heavy machineries. According to the report of the Office of the Budget Management (2013), there is a $4 billion allocation for the Small Business Investment Company (SBIC) debentures which targets to create new jobs and support the small business financing. In addition, another $18 million was allocated by the government to be used for direct loans and to provide business opportunities for new entrepreneurs. Such opportunity was also offered to other borrowers who were not afforded the same opportunities by other institutions. It bears stressing that the Department of the Treasury strives to execute vital programs to produce capital to local banks in order to encourage small business programs within the communities to serve supplementary lending.
Government Contracting
The Office of Government Contracting (GC) was established for the purpose of setting a place to maximize opportunities for the minute, underprivileged or woman-operated businesses in federal government contract by allowing them to participate by giving them support in the form of awards and subcontract awards. The office of the GC was created to promote the welfare of small businesses in the federal procurement environment.
According to Alexander (2011), part 19 of the Federal Acquisition Regulations (FAR) is the policy of the federal government to provide maximum practicable opportunities in its acquisitions for small business concerns, that also includes various categories, including service-disabled veteran-owned small business and businesses owned and managed by women. Part 19 of the FAR has also established that it shall be the policy of the federal government for small businesses to be given the maximum practicable opportunity to be allowed to participate as subcontractors (Alexander, 2011). The SBA promotes small businesses to promote the achievement of socio-economic goals.
Small Business Opportunities
Companies get federal government contracting through SBA’s special contracting opportunities. The process of federal government contracting is the SBA has procurement center representatives to work with federal agencies to determine the prime contracting opportunities, provide small business sources to federal buying agencies and to counsel small firms. The federal government contracting strives to maximize opportunities in its acquisition to small business to support programs including service-disabled veteran-owned small business, veteran-owned small business and woman-owned small business (Rumbaugh, 2010, p. 66).
For the service-disabled veteran-owned small business, the government has established procurement opportunities for service-disabled veterans. The presence of certain conditions, the contracting officers have the option to award and set aside a contract to small businesses owned and controlled by a service-disabled veteran. In the case of veteran-owned small business, the requirement is that such business must be 51 percent owned and controlled by one or more veterans. For the publicly-owned businesses, 51 percent of the stock is owned by one or more veterans. In order to be qualified to a contract, the company must be able to comply with the definition of veteran-owned and self-certify such fact on the proposal of the contract. Lastly, the government has established to participation of small businesses that are owned and operated by women (Rumbaugh, 2010, p. 66). In order to qualify, the woman who manages and controls the business should be at least 51 percent owned and controlled by one or more women. In the case of publicly-owned business, at least 51 percent owned and controlled by one or more women. In addition, the SBA also grants loans to HUBZone-certified firms. The federal government has intended to promote the achievement of socio-economic goals by maximizing opportunities in its acquisition to small business to support these programs. As a result, these small businesses will be able to secure a fair share of government procurement through various programs and services.
Assistance received by small business firms under the SBA program
The SBA provides disaster assistance where it shall serve as the Federal disaster bank for non-farm and private sector losses. The SBA loans money to help the victims of disaster for repairs and to replace damaged properties of small business owners. The SBA awards direct loans with minimal interests in order to assist individuals, homeowners, businesses of all sizes and nonprofit organizations (Office of the Federal Register, 2011).
The SBA also guarantees loans or grants financial assistance to lending institutions and certified development companies to be able to take-out loans for working capital and to finance the acquisition of lands and buildings, construction, conversion and expansion of facilities and to buy heavy equipment and machineries (Office of the Federal Register U.S., 2011).
Growth of the U.S. Economy
According to Craig, Jackson, and Thomson (2005), the substance of the American economic system of private enterprise is to advocate free competition. This is precisely the role of the Small Business Administration (SBA) by allowing the small enterprises to access full and free competition in free markets, which gives them the free entry into business, and opportunities for expansion and growth of their own initiative to using individual judgment. In effect, the expansion and maintenance of free competition among these enterprises guarantee the economic welfare and security of country. It is believed that the American security and well-being will be accomplished successfully by providing support to small businesses and develop their capabilities. Craig et al. (2005) argued that it is the duty of the Congress to assist, counsel, secure and protect the potential interests of small-business concerns in the country by maintaining free competitive operations by making sure that there will be equal opportunities that are proportionate to the contracts for services supplied by the state offered to small-business enterprises, to enhance and preserve the U.S. economy in the present and prospectively. It is believed that the expanded political support for such programs, tax holidays, and other subsidizations will enhance the progress and evolution of small business within America and across the globe (Craig et al., 2005). . For the past decade, the standard of living in the U.S. has significantly declined and that the present government has empowered the younger generation to resolve the pressing problems Although it is a common knowledge that the economic system of America needs to be overhauled, there is a positive perception the country’s employment level will begin to improve by providing more jobs and to see growth in the American financial system.
Positive Effect of the SBA on the U.S. Economy
The intervention of the government had enhanced the private market’s distribution of loans to small enterprises through the Small Business Administration (SBA) lending program. For the past ten years, the SBA loan grants have become stable and continuous to enhance in frequency. History had shown that there were 20 million small businesses who have benefitted from the loan programs of the SBA after is has started in the 1953 in the U.S. (Craig et al.., 2005). The present business loan portfolio having at least 219,000 loans is equated to additional $45 billion support from the government and has been transformed to become the solo financial backer of small businesses which aims to expand. It bears stressing that for the period covering 1991 to 2000, there had been 435,000 small businesses which were given financial backing of approximately $94.6 billion in loans (Craig et al., 2005). Such volume of loans is the biggest throughout the past history of the SBA prior to 1991 since it is a relatively new in the business of granting financial backing to small business through loans and micro-financing.
Conclusion
The SBA loan guarantees opened doors for greater opportunities to access to credit with the help of modernized computer and communications, the government was able to minimize the costs for information services. It can be concluded that technological advancements innovation has enhanced and secured the information efficiency for the benefit of small businesses in the U.S. This can be illustrated by loans or grants financial assistance to lending institutions and certified development of small business companies to has an access to working capital and to finance the acquisition of lands and buildings, construction, conversion and expansion of facilities and to buy heavy equipment and machineries
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