A bill in the Senate calls for the Small Business Administration to develop a new classification system to close loopholes that allow large companies to win small business contracts.
The proposal by Sen. Claire McCaskill (D-Mo.) would establish no more than 20 industries as categories and size standards based on the current Economic Census. SBA currently defines size standards for more than 1,200 industries.
McCaskill outlined a couple examples of the current loopholes. In one instance, a company that was the subsidiary of a larger company won small business set-aside contracts. In another, a company that fell under a small business classification when it won the contract later grew so much that it would no longer qualified for a small business contract.