Web extra: Disadvantaged firms may gain from budget crunch

Companies that fit into socioeconomic categories singled out for contracting advantages may find the lean fiscal 2007 budget conditions to be helpful, said Larry Allen, executive vice president of the Coalition for Government Procurement.

Larger firms will be more eager to form partnerships with disadvantaged firms if it means they could win contracts that might otherwise be closed to them.

Allen said that such an arrangement helps larger companies and the disadvantaged ones for which the programs were created. “A rising tide lifts all ships,” he said. The disadvantaged firms gain stronger allies and the partner firms get more revenue. The government also gets to “check off a box,” he added, and can count a contract with a disadvantaged firm toward its contracting goal in a particular category.