THE HOUSE is scheduled to take action todayon a bill to award small business something that it cannot secure through the competitive procurement process--a guaranteed share of federal research and development funds. Another impediment to competition is the last thing Congress should be pushing at this time, but a similar bill has already passed the Senate, and small business advocates are pushing hard for passage in the House.
The proponents of the Small Business Innovation Act do not, of course, advertise their bill as an anti- competition measure. They argue that because of defects in federal procurement policy, small business doesn't get its fair share of government contract money and that this deprives the taxpayer of the benefits of the innovative talents of small firms.
It is true that the federal procurement process needs improvement and that awards are frequently made in the form of noncompetitive grants and contracts when a more open process could produce a better product or a lower price. But guaranteeing one set of contractors a fixed piece of the action is likely to make matters worse, not better.
There is no better illustration of the likely outcome of a massive set-aside program than the already existing small business and minority enterprise low-cost loan programs. A recent Wall Street Journal expos,e of abuse in those programs has prompted the Senate to announce hearings on the subject (and also heightened pressure to enact the new program promptly). The new program is supposed to include administrative safeguards to prevent money from being wasted, but the dwindling staffs of most research agencies already have their hands full managing regular research.
Sponsors of the House bill have tried to cut off mounting opposition by amending their earlier bill to reduce the amount of money that would be reserved for small business. But the change has not satisfied chairmen of the authorizing committees that control most federal R&D. They will offer amendments that would exempt from the program all research under the jurisdiction of the Armed Services, Energy and Commerce, Science and Technology and Intelligence committees--in other words just about all the innovative type of research that the program is supposed to promote.
If the House really wants to promote small business technology--and not just give a handout to small businesses, most of which have nothing at all to do with high technology--it will send the bill back to committee with instructions to develop a small-scale, closely monitored program. The program would be limited to carefully selected areas of research and development in which there is clear reason to expect a unique contribution from expanded participation by small business.