Small Businesses Struggle Against Government Contract Fraud

Some believe firms must expand to combat abuse

“The desire was to build firms that could handle larger contracts and that hasn’t happened,” he says. “People don’t understand that small has to be a lot larger than it used to be.” And the ones that are ready to compete are hindered by the government’s industry size standards, which prohibit them from going after bigger contracts.

Robinson agrees that the size standards unfairly and unnecessarily restrict the path to competitive viability for minorities who must already deal with such issues as larger corporations’ market dominance and, in some cases, outright discrimination.

New York Rep. Edolphous Towns, chair of the House Oversight and Government Reform Committee, suggests that the government needs to build a bridge between the 8(a) and other small business assistance programs and big corporations.

“We have companies graduate that are too big to stay in the program but not big enough to compete with the big guys. Without a bridge, once they come out, they won’t be able to make it,” he says. “If we don’t have a hearing we will have our staff looking into it and making suggestions.”

Hinson says the MBDA is focused on creating a new generation of $100 million minority-owned firms. “To achieve this growth—moving from startup and small companies—we need to change the way minority entrepreneurs think about growth. It’s not just organic growth, but being prepared to enter into strategic alliances, joint ventures, and making acquisitions.”

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