The Washington Post business section (rarely read in this one-industry town) had a piece yesterday on the extraordinary failure of the federal government to comply with a 1999 law requiring the government to award 3% of its contracts to firms owned by disabled veterans.
As you might expect, not a single department has even come close to complying – with two of the worst offenders (and biggest contract granters) being The Pentagon and The Veterans Administration! – languishing at .18 and .41 percent respectively.
I’m all for the free market myself in government contracting, but think that the one class of citizen who is truly disadvantaged by selfless service is the disabled veteran – who should benefit from this small bending of market forces to recognize their sacrifices.
Untold by the Post though, is the story of the other protected categories of firms which get much better compliance with the law. Women-owned, minority-owned businesses, and small businesses in general also get special “set-asides” which are much more stringently enforced than the disabled Veteran’s preference. In one government contracting business I ran – which used many smaller contractors for these set-aside awards, a squad of government Stasi enforcers descended one year to inspect our compliance with the women-owned rules in particular. No concern (as one can see from the Post’s statistics) about meeting the disabled Veteran’s requirement.
It’s a system that gets gamed often. Ironically, even South Asian Indians (who are among the savviest and most well-funded technology entrepreneurs in the DC area) can qualify for minority set-aside contracts. But the one that took the cake for me was one WASPY woman in town who found a way to document her 1/16th Lumbee Indian heritage in starting her “American-Indian owned firm” and won a multi-million dollar technology contract soon after. Smart business, bad policy. How about we take care of the veterans as smartly?