DICK TOBIN STRUGGLED IN VAIN for years to win a defense contract for Tobitron Inc., of East Hampstead, N.H. He finally prevailed, using a small-business setaside program to wrest a contract for electronic cables from a much larger competitor.
Now Tobin and thousands of small companies that sell to the government could lose their favored status. Proposed changes in procurement could reduce the number of contracts set aside by 50%, or $15.6 billion by 1984 standards.
The so-called Rule of Two now allows federal contract officers to set aside contracts for competition among small companies if the officer believes at least two small businesses will bid "offering reasonable prices." To increase competition, though, the Office of Management and Budget proposes that set-asides apply only when the officers conclude that a "sufficient number" of small companies can fill the need "at the lowest reasonable cost."
The change would place a bigger burden on contract officers before they could trigger the set-aside program. "It's easier to argue there's not a 'sufficient number' [of potential small-company bidders] to ensure the lowest price," admits Gene W. Cornish, director of the contracts division at the Long Beach Naval Regional Contracting Center.
Adoption of the new guidelines has been slowed by interagency disputes, but set-asides are clearly in trouble. The Reagan Administration's attempt to dismantle the SBA would undermine the agency's federal procurement-advocacy program. And a draft report by the U.S. Civil Rights Commission calls for termination of the set-aside program for minorities, which critics say is ineffective and corruption riddled.