Officials say the government kept its promise to small businesses. Did it really?

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Officials say the government kept its promise to small businesses. Did it really?

The numbers don't tend to stand the test of time.

By J.D. Harrison
The Washington Post
August 4, 2014

By J.D.Harrison August 4

It'sofficial. The federal government has for the first time in nearly a decadeupheld its promise to award nearly a quarter of all contracting dollars tosmall businesses, according to a report released Friday.

"When wehit our small business procurement target, it's a win," Maria Contreras-Sweet,head of the Small Business Administration, said while making the announcement.

Did theyreally, though? Did the government actually hit the target?

Only timewill tell, but there's ample room for skepticism. Here's why.

Once everyyear, the U.S. Small Business Administration pulls data from a federal databasemanaged by the General Services Administration and issues a report indicatingwhat percentage of eligible government contracting dollars went to small businessesduring the previous year. By law, federal agencies are collectively supposed to commit 23 percent of all prime contractingdollars to small companies.

On Monday,SBA officials reported that the government eclipsed that mark last year,funneling 23.39 percent of all federal work to small businesses. It's the firsttime the government has hit the target since 2005. Or rather, itwould be.

In thefine print at the bottom of the federal database, however, GSA officials notethat the SBA's annual reports are "generated by taking a snapshot of data fromthe Federal Procurement Data System (FPDS) on a certain date." They also pointout that "FPDS is a dynamic database, and agencies can change historicalinformation if the details of a contract have changed."

However, unlike the government's reports on,say, job growth and gross domestic product, which reflect revisions whennecessary to previously issued estimates, the SBA does not go back and updateits future reports to reflect any changes in the numbers.

Question is, do those initial snapshots stand the test of time?

Without exception, the answer is no.

A comparison of the SBA's reports and thefederal database reveal a disparity every year dating back to 2006, the firstyear the agency started publishing its small-business contracting scorecards online. Moreimportantly, the variation follows a consistent pattern; that is, for everyyear since 2006, the updated database numbers show that a smaller share ofgovernment work actually went to small firms than what was originally reported.

Moreover, the gap between what was initiallyreported by the SBA and what the updated numbers show widens over time. In2012, for instance, the SBA reported that small businesses claimed 22.25percent of work, based on the snapshot of the moment. Now two years later, thedatabase shows they claimed 22.17 percent, a 0.08 swing.

Going back a year earlier, the difference inwhat was originally reported in 2011 (21.65 percent) and what the database nowshows for that year (21.54 percent) stands at 0.11 percent. The patterncontinues for other years, going back to 2006, when what SBA first reported(22.83 percent) is now more than percentage point higher than what the databasenow shows was actually awarded to small firms (21.73 percent).

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