To feds, large can be small
News
To feds, large can be small
By Larry Margasak
Sun Herald
July 11, 2003
July 11, 2003 WASHINGTON They are among America's larger companies: Verizon Communications, AT&T Wireless, Barnes & Noble booksellers and Dole Food Co. But in the government's contractor database they are listed as small businesses.
The mistaken designations, contained in records obtained by The Associated Press, mean the government has overstated the contract dollars that are going to small business at a time when the Bush administration has been pressing to give smaller firms as much federal work as possible.
"The numbers are inflated, we just don't know the extent," said David Drabkin, senior procurement officer for the General Services Administration.
Drabkin, whose agency maintains the records entered by contracting officials across the government, said the GSA is working to ensure accurate entries in the future .
Once a company's status is mischaracterized, it stays that way through the life of a contract, which can be 20 years. That means smaller firms that the administration intended to help may be frozen out from new business by the bigger companies with the incorrect designations.
One small businessman who is pushing to have the listings corrected says workers are paying in lost jobs.
"Most Americans work for small businesses and most of all the new jobs are created by small businesses. This certainly has a dramatic impact on job creation," said Lloyd Chapman, who formed the California-based Microcomputer Industry Suppliers Association.
The government defines a small business as one that is independently owned and operated and is not dominant in its field. Size standards change from one industry to another, based on the number of employees or revenue.
The Bush administration has set a goal of providing small business with 23 percent of all federal contracts, but has fallen about 3 percentage points short after awarding $53 billion to small companies.
Small businesses are significant political players. The political action committee of the National Federation of Independent Business, which calls itself the voice of small business, contributed more than $762,000 to federal candidates in the 2002 election cycle, with 97 percent going to Republicans.
Investigators from Congress' General Accounting Office found no evidence that large companies had tried to manipulate the designations found in the database.
Large companies said they never intended to be listed as small businesses.
"We work with a variety of small businesses in going after federal business. We hope that businesses are properly categorized in accordance with federal regulations," said Kevin Irland, a spokesman for Verizon.
AT&T Wireless spokeswoman Rochelle Cohen voiced similar support for small business, adding the company was unaware that it was mischaracterized on the database.
The SBA said it refers companies to the agency's inspector general whenever it finds suspected fraudulent misrepresentation.
One company the SBA said it referred is GTSI Corp., of Chantilly, Va., a computer equipment company whose business with the federal government accounts for about three-quarters of its sales. The company has noted in its filing with the Securities and Exchange Commission that it lost its "small" designation in February 1998, but continues to have some 80 federal contracts.
Charles DeLeon, acting general counsel for the company, said the firm "has always provided the government with accurate and truthful information." He said the company has a major contract that began when the company was a small business and continues to provide information technology products under that contract.