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Research Question

  1. What improvements could be made to the Air Force's Small-Business Performance Expectations Methodology to help the Air Force meet its small-business goals?

The Air Force is trying to increase small-business use and identify industries that have the most potential for increasing small-business utilization. This report examines the Air Force Small-Business Performance Expectations Methodology with the goal of improving it to identify small-business opportunities. The report recommends that efforts to increase small-business spending should take into account differences between the Air Force's and other services' buying requirements as well as the importance of budget categories, using industry/Product or Service code/budget-category combinations to identify small businesses. Changing certain market definitions to identify areas with more or less small-business saturation would improve the methodology. Additionally, industry small-business size standards should be considered. A larger amount of data, including the last two to three years of data, would help monitor and refine accuracy.

Key Findings

  • Air Force purchases differ from those of other services; purchases should be compared to the Navy and perhaps the Army, not the Department of Defense as a whole.
  • Considering budget categories, as well as industry and Product or Service codes, helps identify possible small-business contracts.
  • Extant data is useful but limited. A larger amount of data (two to three financial years) would refine accuracy.
  • Changing certain market definitions to identify areas with more or less small-business saturation would improve the methodology.

Recommendations

  • Efforts to increase small-business spending should take into account differences between the Air Force and other services.
  • The methodology should use industry/Product or Service codes/budget-category combinations and consider industry size standards to help identify small businesses.
  • More data should be used to increase methodology accuracy.
  • Defining markets as "More Accessible" and "Less Accessible," as well as defining "Consolidated Markets," would improve accuracy.

Table of Contents

  • Chapter One

    Introduction

  • Chapter Two

    Current Performance Expectations Methodology

  • Chapter Three

    Air Force Small-Business Spending by MAJCOM and PEO

  • Chapter Four

    Air Force Small-Business Spending by Budget Category and Industry

  • Chapter Five

    Refining the Performance Expectations Methodology

  • Chapter Six

    Conclusions

Research conducted by

The research described in this report was prepared for the Air Force Office of Small Business Programs and conducted by the Resource Management Program within RAND Project AIR FORCE.

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