U.S. and E.U. SME Subcontracting Policy and Practice Trends: Towards a Transatlantic Accountability Consensus
Abstract
U.S. and E.U. public and defense procurement rules require large
prime contractors to promote subcontracts to small businesses, a.k.a. small
and medium enterprises (SMEs). Under the U.S. Small Business Act, large
firms encourage subcontracting through publicity, subcontracting plans, and
“good faith” efforts to achieve subcontracting goals. However, process-oriented
measures failed to guarantee definitive results. In contrast, E.U.
and member governments can hold large firms accountable to stricter
subcontracting standards (often sweetened by incentives). With the Small
Business Jobs Act of 2010, the U.S. is trying accountability measures now.
Therefore, large contractors must plan for definitive subcontracting
commitments in both markets.
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