As a result of the impact of the gigantic national defense and war programs on our American economy, small business enterprise in the United States is facing bankruptcy and chaos along a wide front. The administrators of these war programs, drawn almost exclusively from the ranks of big business, have signally failed in giving recognition to the small businessman of this country…
The report shows that 56 of America’s 184,230 manufacturing establishments have been awarded over 75 percent’of Army and Navy contracts. The remaining fragment of tile defense program is distributed along about 6,000 prime contractors.’ Of the concerns no included In the’ defense program directly, about 4,000 hold subcontracts. Over 174,000 manufacturing establishments lave not been couched in the mobilization of the Nation’s industrial resources.
… One-third of the “defense” contracts awarded prior to September 1941 have ‘been for totally new facilities… Furthermore, although $13,000,000,000 have been spent or allocated for plant -expansion In the creation of new facilities for big business, no consideration has been given to expanding the facilities of little business.
Mr. Ringer, from Minneapolis, had worked out a plan for manufacturing mess kits out of steel and plastics, in order to displace the use of aluminum. He appeared before the procurement officers of the Navy and presented his plans and the, mess kit which he could manufacturer, which would avoid the use of aluminum. They recognized it as a device which should be substituted for the aluminum device which they had been using and they told him they were greatly impressed with his sample and plans and indicated to him they would undertake to give it their consideration. He went away and returned a few weeks later and found, instead of giving him the contract for this thing he had already worked out completely, they had given contracts to some large concern for $4,000,000 worth of these mess kits and left him out in the cold. That is an example of the difficulties these smaller concerns had in getting contracts from the procurement offices.
That was from a 1942 hearing, “Conversion of Small Business Enterprises to War Production.” Hearings before the Committee on Banking and Currency, House, 77th Congress, 2nd Session, on S. 2250 and HR 6975.
In other words, 75 percent of contract dollars went to 0.003% of the companies. Eventually, war production was able to engage small businesses. But sending contracts to large concerns which have a backlog and can’t perform anyway is a major inefficiency. So is only providing facilities, equipment, and loans to large concerns and not to small. I think the experience demonstrates the requirement for government contracting officers to write small contracts quickly to engage all of industry. Modular contracting isn’t just a best practice for engineering complex systems, it is a mobilization imperative.
Leave a Reply