Accuses agency of inaccurate statistics

•  ‘The government must ensure that small business data is accurate and timely.

A coalition of 25 small business advocates, trade organizations, businesses and non-profit organizations led by the American Small Business League says the Small Business Administration is putting out bad statistics.

The coalition has sent letters to the Small Business Administration, Office of Federal Procurement Policy and the Office of Management and Budget requesting greater transparency in federal small business contracting.

The SBA has not yet responded to a request for comment.

The letters are going out just as the SBA gets ready to release its annual “Small Business Procurement Scorecard,” which the coalition members say is “known for overstating the percentage of contract dollars awarded to small businesses.”

“The government must ensure that small business data is accurate and timely -- small businesses and the public deserve to know whether the government is actually close to small business contracting goals,” says Scott Amey, general counsel at the Project on Government Oversight.

The federal government has a statutory goal of awarding 23 percent of the total value of all prime contract dollars to legitimate small businesses, but the American Small Business League of Petaluma has long argued that the government has never accomplished this goal.

The SBA overstates the percentage of contracts awarded to small businesses by dramatically understating the federal acquisitions budget, including classified and unclassified contracts, the coalition says.

“It is important to accurately report federal agencies’ priorities and performance levels in meeting the 23 percent small business goal set by Congress in 1997 that goes unmet year after year,” says Roger Campos, president and CEO of the Minority Business Round Table. “Failing to meet these goals has cost America’s small and minority businesses billions in lost opportunities.”

Since 2003, more than a dozen federal investigations have found billions of dollars in federal small business contracts flowing into the hands of corporate giants, the ASBL says.

Following fiscal year 2011, which ended in September, the SBA Office of Inspector General named the fact that procurement flaws allow large firms to obtain small business awards and agencies to count contracts performed by large firms towards their small business goals as the SBA’s top management challenge for the seventh consecutive year.

“During his campaign, President Obama promised to end the diversion of federal small business contracts to corporate giants,” says Lloyd Chapman, president of the ASBL. “It is time for President Obama to force the SBA to stop fabricating these numbers. They need to tell the truth, which is that small businesses get a small fraction of what the SBA says they do.”

Central Valley Business Times

June 7, 2012

Accuses agency of inaccurate statistics

•  ‘The government must ensure that small business data is accurate and timely.

A coalition of 25 small business advocates, trade organizations, businesses and non-profit organizations led by the American Small Business League says the Small Business Administration is putting out bad statistics.

The coalition has sent letters to the Small Business Administration, Office of Federal Procurement Policy and the Office of Management and Budget requesting greater transparency in federal small business contracting.

The SBA has not yet responded to a request for comment.

The letters are going out just as the SBA gets ready to release its annual “Small Business Procurement Scorecard,” which the coalition members say is “known for overstating the percentage of contract dollars awarded to small businesses.”

“The government must ensure that small business data is accurate and timely -- small businesses and the public deserve to know whether the government is actually close to small business contracting goals,” says Scott Amey, general counsel at the Project on Government Oversight.

The federal government has a statutory goal of awarding 23 percent of the total value of all prime contract dollars to legitimate small businesses, but the American Small Business League of Petaluma has long argued that the government has never accomplished this goal.

The SBA overstates the percentage of contracts awarded to small businesses by dramatically understating the federal acquisitions budget, including classified and unclassified contracts, the coalition says.

“It is important to accurately report federal agencies’ priorities and performance levels in meeting the 23 percent small business goal set by Congress in 1997 that goes unmet year after year,” says Roger Campos, president and CEO of the Minority Business Round Table. “Failing to meet these goals has cost America’s small and minority businesses billions in lost opportunities.”

Since 2003, more than a dozen federal investigations have found billions of dollars in federal small business contracts flowing into the hands of corporate giants, the ASBL says.

Following fiscal year 2011, which ended in September, the SBA Office of Inspector General named the fact that procurement flaws allow large firms to obtain small business awards and agencies to count contracts performed by large firms towards their small business goals as the SBA’s top management challenge for the seventh consecutive year.

“During his campaign, President Obama promised to end the diversion of federal small business contracts to corporate giants,” says Lloyd Chapman, president of the ASBL. “It is time for President Obama to force the SBA to stop fabricating these numbers. They need to tell the truth, which is that small businesses get a small fraction of what the SBA says they do.”

In anticipation of the government’s annual small business procurement scorecard this summer, a group of small business advocates and watchdog  groups has asked top federal procurement officials to stop practices that inaccurately reflect how close agencies have come to meeting their goals.

The scorecard measures the percent of federal prime and subcontract dollars awarded to small businesses, including women owned small businesses, small disadvantaged businesses, service disabled veteran-­â€owned small businesses and small businesses operating in Historically Underutilized Business Zones. The federal government’s goal is to award 23 percent of its contract dollars to small businesses each year.

During fiscal 2010, the federal  government spent more than $540 billion on goods and services, which means small businesses should have been awardedat least $124 billion worth of federal prime contracts, the group — which includes the Project on Government Oversight, Minority Business Round Table, Public Citizen and more than a dozen chambers of commerce  — said in a June 7 letter to SBA Administrator Karen Mills, Office of Management and Budget Acting Director Jeffrey Zients and Office of Federal Procurement Policy Administrator Joseph Jordan.

Instead, SBA reported that the government narrowly missed its 23 percent goal with $98 billion in small business awards.

The American Small Business League, which led the effort, found instances where contracts awarded to large corporations, such as  General Electric, Lockheed Martin and AT&T, and their subsidiaries have been incorrectly classified as small.  

The group said it also considers past scorecards  to be inaccurate because SBA does not include all federal contracting dollars when calculating the percentage. Instead, the agency uses an amount called “small business eligible,” which omits certain contracts, such as contracts for work performed overseas.

“During his campaign, President Obama promised to end the diversion of federal small business contracts to corporate giants,” said Lloyd Chapman, president of the American Small Business League. “It is time for President Obama to force the SBA to stop fabricating these numbers. They need to tell the truth, which is that small businesses get a small fraction of what the SBA says they do.”

 A U.S. congressional committee weakened a proposal that would have automatically eliminated the bonuses of top federal executives whose agencies missed targets for awarding contracts to small businesses.
 
The bonus-busting measure was proposed in January by Representative Sam Graves, a Missouri Republican who asked that it be incorporated in the House defense authorization bill.
 
The $554 billion military package approved yesterday by the House Armed Services Committee excluded the penalty. It instead incorporated a measure urging agencies to award 25 percent of all direct contracts to small companies, an increase from 23 percent. Executives would be evaluated based on their efforts to meet the target.
 
“We compromised on how to hold senior executives accountable,” Graves, chairman of the House Small Business Committee, said in an e-mailed statement.
 
The defense authorization bill requires that senior executives involved in acquisition be evaluated partly on how well they communicate “the importance of achieving the agency’s small business contracting goals.”
 
That language is “just as vague as everything else when it comes to small business programs,” said Brian Reeder, a spokesman for the Petaluma, California-based American Small Business League.
 
Missed Goals
 
Reeder said he was disappointed the defense panel didn’t include the bonus provision.
 
“We thought that docking bonuses for executives in the government was a perfect way to get them to really hit their goal,” he said in a telephone interview. “The problem with small business programs is no one is really held accountable for their goals and that’s why they don’t work.”
 
The U.S. government has missed its small business contracting goal each year for at least the past decade. Eleven of 24 agencies didn’t meet their goals in fiscal 2010, according to the Small Business Administration.
 
The Professional Services Council, an Arlington, Virginia-based group that represents about 350 contractors, said in a March letter that it opposed the bonus-eliminating bill.
 
Graves’ bill would prevent all senior government executives, even those who aren’t involved in acquisition, from receiving bonuses the year after their agencies miss targets for small-business contracting.
 
“It would be the equivalent of you not getting a bonus because one of your other colleagues wasn’t doing a very good job,” Roger Jordan, vice president of government relations at the Professional Services Council, said in a March interview.
 
Top Executives
 
The group also opposed raising the small business goal because it said the government doesn’t yet have a clear picture of how much work small businesses actually do for federal agencies, the organization said in its letter.
 
There were 7,893 senior executives in the federal government as of December 2010, according to a Congressional Research Service report published in April 2011. They include chief information officers and strategic advisers for intelligence and space programs.
 
The executives, who act as links between political appointees who lead federal agencies and the civil servants who staff them, earn between $119,554 and $179,700 a year and may be eligible for performance bonuses of as much as 20 percent of their salary.
 
A top-earning executive would be eligible for performance pay as high as $35,940. The maximum annual amount an executive is permitted to receive, including special recognition such as a Presidential award, is $230,700, according to the CRS report.
 
The full House will consider the defense legislation as early as next week.
 
The defense authorization bill is H.R. 4310. Graves’ bill is H.R. 3850.