Mid-tier companies occupy a unique position in the federal marketplace. Too big to qualify for small-business preferences and lacking the resources to compete with larger contractors, MCCC released its midsize initiative: Building Growth Beyond Small.
Businesses larger than $38.5 million in revenues or 1,500 employees must compete with the largest businesses, with over $500 million in revenue for contract opportunities, thus putting many contracts out of reach.
According to the Bloomberg Government study, “The Mid-Tier Paradox: Too Small To Compete, Too Large to Survive,” despite some mid-tier successes and seemingly strong performance data, evidence is emerging that certain government acquisition practices may lead mid-size company growth to slow or stall, causing a drop in average revenues.
MCCC recommends three initial steps to address this problem:
1. Agency: Bring Multiple Award Contracts (MAC) requirements in line with the capabilities of midsize firms.
2. Regulatory: Require a five-year look-back for the purpose of Small Business Administration (SBA) size determination.
3. Legislative: Deduct research and development (R&D) expenses and expenditures from total revenue for size determination.
Hosted by Bloomberg Government, midsize contractors will convene to review these initiatives, scope the market and discuss implementation.