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In Spend Matters global research into public sector procurement in the US and Europe, we’re continually struck by how, especially in the UK, it is front-page news when government organizations (e.g., Transport for London) make it a true priority to spend more with small businesses. It’s not just policy lip service, but something far more that also includes accelerating early payment with SMBs which are capital constrained compared with larger firms.

In many cases in the US, the spirit of supplier diversity programs at the federal and state/local levels seem more about meeting reporting suggestions (or requirements) than making a difference. One need do no more than walk around a government building in our headquarters (Chicago) and see contractors walking around with T-shirts advertising the diversity status of their businesses and fighting for contract scraps versus competing more strategically for contracts and embedding themselves in local contracting processes and frameworks.

There are so many reasons that increasing government spending with small businesses makes sense (no need to rehash that here) on both macro- and microeconomic levels. I personally find it a shame my country takes the economic side of the argument much less seriously than the set-aside one. But regardless, there are some bright spots around small business spending on the federal level, and the DoD is one of them.

This should not be a surprise, however, given the interest of seeing veteran-owned business (disabled or otherwise) play on a more equal footing with larger organizations which either can afford expensive lobbying or know all the secrets of playing by rules where tenders are engineered in their favor. 

The U.S. Department of Defense (DoD) obviously has a particular interest in working with its own – including those that have sacrificed for their country. But the general ethos the DoD has shown in increasing small business spending appears representative of something far more than standard diversity policy lip service. Rather it appears as if the DoD is embracing a belief structure in changing contracting that is closer to the same type of embedded thinking we see in some efforts outside the US, especially in areas within the UK public sector.


Image Courtesy of Alexas_Fotos

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