Is it legal for a company to create a wholly-owned subsidiary and call it a "small business" to have it bid on "small business" government set-aside contracts?
The overhead of this type business is lower than what true small businesses have. These businesses could be structured conveniently by the owning business make it look profitable and independent on paper. The small "business" could share a lease, use the same I.T. infrastructure, accounting and personnel departments. Why would any business ever not bid on a small business government set-aside contract? Would it be due to its lack for foresight to incubate a "small business" for this purpose?
If it is illegal to circumvent the intent of the regulations, who investigates this if the contracts are from the Federal government?