The Pew Research Center, in a recent survey on “trust in government”, has not only confirmed the fact that the Federal government is not trusted, but that bureaucrats have neglected small businesses, which was viewed as having a positive impact on the county. President Obama recently issued an unprecedented Memorandum to all agency heads making contracting with small and disadvantaged businesses a major priority. Will bureaucrats follow through? Most advocates, although delighted by the President’s actions, are very skeptical.
The reason for the skepticism: the Small Business Administration Inspector General (IG) found that “large businesses are receiving small business procurement awards and agencies are receiving credit for these awards.” The Small Business Administration (SBA) had offered to change the format of its Small Business Scorecard as a “solution” to what their agency’s IG has acknowledged is “One of the most important challenges facing the [SBA] and the entire Federal Government.” Too often, federal agencies are involved in the endemic practice of taking credit for small business contracts awarded to large or ineligible businesses (ineligible firms have even poached contracts reserved for service disable Vets) resulting in the appearance that agencies are meeting their statutory and socio-economic small business contracting goals.
Changing the format of the Scorecard to reflect grades as opposed to colors, however, is not going to impact on the results agencies have been submitting since the Scorecard appeared in 2005. Garbage in, garbage out! Consequences for agencies and contractors, on the other hand, should be used, alongside transparency, to force agencies to eliminate the barriers created by their own dysfunctional procurement culture as reported through congressional testimony.
There is already an existing vehicle in place which can stop federal agencies from continuing to misrepresent their results in contracting with small and disadvantaged businesses and its name is the “Data Quality Act” or DQA.
DQA is an obscure section of the Paperwork Reduction Act, a 29-year-old law that the Obama Administration wants to revive, which would rely on OMB to “ensure that information disseminated by federal agencies is both accurate and reliable.”
The Fairness in Procurement Alliance has recommended that either Congress or the Obama Administration (or both) demand that the Office of Federal Procurement Policy (OFPP) at OMB require the data submitted by federal agencies to SBA be both audited and scrubbed before it is submitted for the Scorecard, and that if such data continues to misrepresent the actual results, the agencies be obliged into tripling the amount of actual contracts they had projected to award small and disadvantaged businesses on their goals.
To further advance transparency in the reporting of small business contracts, the Fairness in Procurement Alliance is also exploring the feasibility of establishing a new public database Dashboard focused strictly on eliminating the bureaucratic barriers against the small business reservation. The Dashboard will be similar to the POGO’s Federal Contractor Misconduct Database and would identify, among other things, which departments were caught—after their DQA audit—misreporting their small business contracting results; the large businesses that were awarded small business contracts; and the large businesses which have lost size protests because of “misrepresentation of their size.” Transparency demands reports on the integrity and accuracy of the federal agencies in meeting their statutory and socio-economic goals and the identification of businesses which abuse the rules that protect the small business reservation. These out-of-the-box solutions deserve very serious consideration because the threat of repercussions and lawsuits, alone, will stop the contracting abuse on its track and “level the playing field.”
Raul Espinosa is the founder of the Fairness in Procurement Alliance (FPA), a coalition of small and disadvantaged business organizations. FPA operates a think tank at the University of North Florida (UNF) whose flagship is The Umbrella Initiative. The Initiative’s mission is "to double the number of small businesses contracting with the Government by the year 2020."