Small business that become "large" complain about no preferences

[Updated on Feb. 6, 2007- The SBA has decided to re-look the size standards for IT manufacturers. This should take care of the complainers for now. I don't know about you but a $23 million company is pretty big. If our store made that much money you would be reading about the health benefits of dark chocolate written by me from some resort somewhere.]

This article bemoans the reality that when small businesses grow too large, they lose their preferences and must compete against other large businesses. One company says,

If you have a company that has just won a new contract and its revenue is
over $23 million, then SBA believes that [the company] can compete on the
same level as multibillion international companies,” said Matt Hoffman, vice
president and corporate counsel for Maryland-based IT provider CNSI. “The
difference between $23 million and $5 billion is enormous.

Maybe I am getting cold and cruel in my old age, but small business preferences in government contracting should not replace the marketplace nor create an endless supply of business to companies. Instead, they should allow small businesses to get their feet under themselves and become competitive and dynamic organizations. Yes, they will face competition. That is life in business. Yes, they may have compete against really big companies. They will have to compete against small ones, too (who will have preferences in the government marketplace).

However, those companies that have a viable business concept- a real market-based reason for existence- will be helped by the small business program and be ready for success when they graduate. They will identify their particular niche in the marketplace and find ways to exploit it.

They may even wish to graduate faster because success is measured in how much business you do, not the number of government contracts you have.

That is what the role of the Small Business Administration and its programs should be.