How Section 1611 Will Level the Playing Field for Advanced Small Businesses

“Emerging small firms have done what we all want to do. They began small, became seasoned, and grew. The government should as a matter of policy, support and foster such growth since data from Christopher Yukins and other researchers suggest that maturing small businesses produce more jobs than either very large or new companies.” – From “A Growth Path for Emerging Small Businesses

So how can the government support and foster the growth of small businesses who have advanced beyond the size standards of their NAICS code? They can support the ASB (Advanced Small Business) Pilot Project, which is Section 1611 of the National Defense Authorization Act (HR 4310).

With this pilot project in place, there would be a new path for mid-tier businesses, where they’re competing only with similar new grads, rather than the multi-billion-dollar enterprises they’re forced to compete against now.

From a public policy standpoint, we’ve agreed that we’re going to try to aid small businesses in their early stage growth by setting aside work for them and sheltering them from having to compete with large businesses who have more resources. Yet at same time, we don’t give them a true path to sustainability, as discussed at last month’s Small Business Sustainability Conference in Washington, D.C.

The purpose of Section 1611 and similar advocacy efforts for mid-tier businesses is to make small businesses sustainable so that a company can grow beyond their graduation from their NAICS codes size standards – the point where they’ve become too big to be small.

A theme of this blog is that the fish don’t jump in the boat – we have to go out and find customers. And when it comes to the federal government, that means having people in place who are literally walking the halls of the government agency or agencies that you want to do business with, actively identifying new opportunities.

This is one of the major areas where businesses who have newly graduated from their size standards simply can’t compete with the industry giants. All of your people are busy working on client projects. You don’t have the infrastructure in place to be doing this level of lead generating. That’s why this isn’t a fair competition.

There have been a lot of misunderstandings about Section 1611 and the Advanced Small Business Pilot. Here are three important things to note:

  1. This project will not affect the set-aside for small business – any jobs held for these mid-tier companies are coming out of the large business share, not the small business set-aside share.
  2. This is just a pilot – a test that will last for three years.
  3. While some people have defined the mid-tier to include businesses earning up to $3 billion (still much less than the industry giants), the focus on this pilot will be a limited mid-tier set – the smallest of the mid-tier companies.

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