Small Businesses Lose Again…and Again

Small businesses received two pieces of bad news in recent days.  The Small Business Administration (SBA) announced that the federal government missed its 23 percent small business contracting goal, awarding 22 percent ($83.2 billion) to small businesses in FY 2007.  Although the award total was higher than in FY 2006, few agencies met their small business goals, and the overall goal was missed.  The scorecard shows that many agencies, including DOD, NASA, Education, Justice, and USAID, fell well short in numerous categories.

To make matters worse, recent reports have suggested that these numbers might not be very reliable.  The Washington Post did an analysis showing that many agencies made "mistakes" by categorizing large companies as small companies in federal contracting reports.  In fact, small business data has been a problem for many years, with the SBA often at the forefront of the debate and questions raised about manipulation of the numbers to increase small business totals.

In the data analyzed by the Post:

...federal agencies counted Lockheed Martin and its subsidiaries as 'small' on 207 contracts worth $143 million.  Dell Computer, a Fortune 500 company, was listed as a small business on $89 million in contracts.... 

...Government officials questioned by The Post acknowledged that mistakes are a long-standing problem, leading to exaggerated claims about the amount of federal work directed to a growing sector of the economy.  The Small Business Administration, which annually reports on how agencies performed, said it thinks that many agency mistakes, including some The Post identified, have been corrected in a long-delayed report it plans to release today.  The SBA has worked with agencies in the past several weeks to scrub errors from the data.

Another example of the designation problem involved the Department of Interior (DOI).  The DOI IG released a report entitled Interior Misstated Achievement of Small Business Goals by Including Fortune 500 Companies, finding that the agency awarded $5.7 million in small business contracts in fiscal years 2006-2007 to companies that are anything but small, including Dell, Home Depot, John Deere and Xerox.

The American Small Business League is trying to get to the bottom of the problem, but the SBA continues to appeal the release of small business information to the group.

Given the recent economic crisis, it might be time to turn more attention to small businesses and the benefits that they offer the government and consumers.

-- Scott Amey

Comments

[Posted on: Oct 24, 2008 at 10:56 AM]

Sen. Kerry, Chair of the Senate Committee on Small Business, and POGO think alike:

http://sbc.senate.gov/press/record.cfm?id=304494