Small-business numbers questioned

The Small Business Administration may have overstated the percentage of federal contracts going to small businesses in a recently released report, according to outside experts.

An SBA report released this week states that small businesses were awarded $69.23 billion worth of prime federal contracts in fiscal 2004, just over the minimum 23 percent statutory requirement.

But the percentage calculations exclude a slew of agency procurements, including contracts performed outside the United States and those funded by a number of agencies such as the Transportation Security Administration and the U.S. Postal Service.

“If you included the money that’s excluded right now, the percentage would go down a couple points,” said Paul Murphy, president of Eagle Eye Publishers, a government market intelligence firm.

Why some contract dollars were excluded from the study baseline is unclear, Murphy said. “It needs to be demonstrated, to validate the methodology. Otherwise, it just looks like they are artificially inflating the small-business share.”

Rep. Nydia Velázquez (D-N.Y.), ranking member of the House Small Business Committee, also attacked the numbers. SBA “continues to inflate, manipulate and misrepresent contracting data with the goal of hiding the true picture of what agencies are doing, which only masks the problems facing small firms today,” she said in a written statement.

Excluded contracts could add 10 percent to the approximately $300 billion worth of prime contracts awarded in 2004, said Raul Cisneros, an SBA spokesman. As a matter of agency policy, the baseline against which small-business wins are measured includes contracts funded with appropriated money that are covered by the Federal Acquisition Regulation, an agency document states.

“We anticipate following the same procedure when we next update the goaling guidelines,” Cisneros added.

The agency’s report marks the first time SBA has used the Federal Procurement Data System-Next Generation (FPDS-NG) as the source for the small-business report. Critics complain that the revamped federal database contains errors. The SBA report said that transitioning to FPDS-NG has created a number of data challenges but said the business impact of most of those challenges is minimal.

Evaluating impact is a matter of perspective, said Timothy Yeaney, Eagle Eye’s vice president. “With 1.7 billion records and only tens of thousands of errors, I guess you could call it minimal,” he said.

Yeaney said that vendor information transferred from another database into FPDS-NG introduced numerous errors because “they basically opened the floodgates and turned off all error checking.”

About the Author

David Perera is a special contributor to Defense Systems.

The Fed 100

Read the profiles of all this year's winners.

Featured

  • Then-presidential candidate Donald Trump at a 2016 campaign event. Image: Shutterstock

    'Buy American' order puts procurement in the spotlight

    Some IT contractors are worried that the "buy American" executive order from President Trump could squeeze key innovators out of the market.

  • OMB chief Mick Mulvaney, shown here in as a member of Congress in 2013. (Photo credit Gage Skidmore/Flickr)

    White House taps old policies for new government makeover

    New guidance from OMB advises agencies to use shared services, GWACs and federal schedules for acquisition, and to leverage IT wherever possible in restructuring plans.

  • Shutterstock image (by Everett Historical): aerial of the Pentagon.

    What DOD's next CIO will have to deal with

    It could be months before the Defense Department has a new CIO, and he or she will face a host of organizational and operational challenges from Day One

  • USAF Gen. John Hyten

    General: Cyber Command needs new platform before NSA split

    U.S. Cyber Command should be elevated to a full combatant command as soon as possible, the head of Strategic Command told Congress, but it cannot be separated from the NSA until it has its own cyber platform.

  • Image from Shutterstock.

    DLA goes virtual

    The Defense Logistics Agency is in the midst of an ambitious campaign to eliminate its IT infrastructure and transition to using exclusively shared, hosted and virtual services.

  • Fed 100 logo

    The 2017 Federal 100

    The women and men who make up this year's Fed 100 are proof positive of what one person can make possibile in federal IT. Read on to learn more about each and every winner's accomplishments.

Reader comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group