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High and Dry?

A new federal contract program may not be an oasis after all.

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This story appears in the April 2004 issue of Entrepreneur. Subscribe »

The federal contract fields have been dry these past few years, except for defense and now the Department of Homeland Security (DHS), which has made an uneven effort to entice small business. Charles McQueary, DHS undersecretary for science and technology, put out a Small Business Innovation Research Program (SBIR) solicitation in November urging businesses to submit research proposals addressing high-priority technology areas. The Homeland Security Advanced Research Projects Agency (HSARPA) will award the contracts. (Visit www.dhs.gov, go to "Research and Technology," then scroll down to "DHS HSARPA SBIR Solicitations.")

But after the DHS announced this program, the SBA's Office of Advocacy questioned DHS procurement rules. In a January letter, Thomas M. Sullivan, SBA chief counsel for Advocacy, singled out incentives for large prime contractors to participate in the DHS mentor-protégé program. "Large prime contractors' efforts to provide subcontracting opportunities to small businesses should be based on subcontract awards and not credits earned through the mentor-protégé program," Sullivan wrote. The DHS' willingness to address the concerns will dictate how bountiful the DHS harvest will be for small business.

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