Now, with the government poised to reduce spending, a counter view is emerging of programs that favor groups such as the disabled and prisoners: It holds that such set-asides are unfair to companies seeking government work.
“We’re slowly seeing ourselves squeezed out of the game,” said Kurt Wilson, vice president of business development and government affairs at Selma, Ala.-based American Apparel, one of the largest military uniform companies, with about $100 million in annual revenue.
As the Pentagon reduces the number of troops, for-profit uniform suppliers may see a greater share of the market exempted from regular competition because of set-asides. Qualifying suppliers receive about half the contracting dollars in the almost-$2-billion-a-year military uniform industry.
The biggest share of orders awarded without competition goes to AbilityOne, the program that benefits workers at the plant near Baltimore, run by Blind Industries and Services of Maryland. AbilityOne received $557 million in uniform orders in 2010, or 31 percent of the $1.82 billion the Defense Department spent that year, according to federal procurement data.
Begun as an effort to boost employment among the blind, the program now known as AbilityOne expanded in 1971 to include those with other disabilities. It employs about 47,000 people, compared with 7,500 in 1980, according to its Web site.
Total AbilityOne contract revenue, for services like janitorial work and products such as ballpoint pens and uniforms, rose 6.4 percent, to $2.8 billion, in fiscal 2010 from the previous year, even as total government contract spending declined. The government’s fiscal year begins Oct. 1.
AbilityOne is not the only beneficiary of the set-asides. Federal Prison Industries, a rehabilitation program run by the Justice Department that also dates to the 1930s, received orders for military uniforms valued at $132 million in fiscal 2010, according to the organization’s annual report.
An additional $221 million in uniform orders was set aside for small businesses, defined as those with no more than 500 employees. That left about $907 million, or 49.9 percent, available for unrestricted competition, according to data compiled by Bloomberg.
The squeeze on private uniform makers was evident in Alabama on Jan. 9, when American Apparel, which isn’t related to the publicly traded clothing retailer of the same name, announced plans to close its Fort Deposit plant and eliminate about 175 jobs.
That meant Rachel Proveaux, 30, mother of an 8-week-old boy, returned from maternity leave to find herself out of a job.
“I’m sending out résumés anywhere I can find,’’ she said in an interview. “They should not set aside so many contracts for small business. To me, that’s not fair.”