May 17, 2016
The mid-tier paradox: too small to compete, too large to survive
Source: Bloomberg Government, Tonya Sanders, May 13, 2016
Many “small” businesses listed in Federal Procurement Data Systems find themselves in a paradox—they’re at once too small to compete with large contractors, but also too large to benefit from small business set-asides. These growing firms have achieved what every small business owner hopes for—start small, gain market traction and grow. But when a firm graduates from the benefits of small business set-asides, they enter the “mid-tier”—a murky limbo that can leave them vulnerable and, potentially, unable to compete.
The government should, as a matter of policy, continue to support and foster the growth of firms that enter the mid-tier. Research suggests maturing small businesses produce more jobs than established companies or startups. But today, these mid-tier firms have nowhere to “grow” in the federal marketplace. It’s a double edged sword that’s not good for the economy or the federal agencies that rely on relationships with maturing small businesses.
Size Does Matter…
When it comes to professional services, mid-tier contractors simply cannot compete with the large contractors that dominate the space. Larger firms have several competitive advantages that make true competition between mid-tier firms and the largest firms illusory. READ MORE….
Is your small business growing? Contact your nearest PTAC to learn strategies to continue to be effective government contractors.
For help with Government Contracting: contact your nearest Procurement Technical Assistance Center (PTAC). Funded through Cooperative Agreements between the U.S. Department of Defense and state and local governments/institutions, PTACs provide free and low-cost assistance in virtually all areas of government contracting.