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Support for small businesses has been a bipartisan effort promoted by policymakers for more than a century. The Department of Defense (DoD) has had mixed results in meeting some of its mandated small business goals, exceeding them in some industries while falling short in others. Part of the challenge may be due to the nature of the different industries with which DoD works and these industries' conduciveness to small business. Another part of the challenge may be attributable, in some measure, to the bewildering array of criteria for what constitutes a "small" business. In any event, overall, there is little evidence of the effectiveness of small business policies, but supporting such policies is likely to remain a concern of DoD for many years to come. The authors of this report research the general evolution of federal small business policy and how this has affected DoD, the challenges that evolving procurement needs pose to efforts by DoD to fulfill small business policy goals, and what the current practices of large private-sector firms toward small businesses suggest about the feasibility of DoD small business policies.

Table of Contents

  • Chapter One

    Military Procurement and Small Businesses

  • Chapter Two

    Past and Present Small Business Policies

  • Chapter Three

    Defense Planning Needs and Small Business Utilization

  • Chapter Four

    Challenges to Small Business Utilization Goals and Responses to Them

  • Chapter Five

    Conclusions

  • Appendix

    Notable Dates Regarding Small Business Policy Initiatives

The research described in this report was prepared for the Office of the Secretary of Defense (OSD). The research was conducted in the RAND National Defense Research Institute, a federally funded research and development center sponsored by the Office of the Secretary of Defense, the Joint Staff, the Unified Combatant Commands, the Department of the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

This report is part of the RAND Corporation monograph series. RAND monographs present major research findings that address the challenges facing the public and private sectors. All RAND monographs undergo rigorous peer review to ensure high standards for research quality and objectivity.

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