Earlier this month the Yahoo! Small Business Advisor Profit Minded Blog reported here

on an apparently momentous achievement the Small Business Administration had

announced: "For the first time in eight years, the federal government has

achieved its goal to award at least 23 percent of all federal contracts to

small businesses ... Just over 23 percent of contracts, accounting for $83.1

billion, were awarded to small businesses in 2013. Of 24 federal agencies, only

4 failed to meet their agency-specific goal."

But some have since challenged the SBA's claims.

Washington Post digital editor J.D. Harrison reported on the milestone, but asked, "Did the

government actually hit the target? Only time will tell. But there's ample room

for skepticism."

Harrison points out that General Services

Administration fine print notes that "SBA's annual reports are generated

by taking a snapshot of data from the Federal Procurement Data System on a

certain date." But the database is "dynamic" with changes and

updates continually being made by the federal agencies. And Harrison says those

snapshots reported to the public do not "stand the test of time" when

reviewed later. For instance, Harrison reports:

"In 2012 SBA reported that small businesses

claimed 22.25 percent of work, based on the snapshot of the moment. Now, two

years later, the database shows they claimed 22.17 percent."

A 0.08 percent difference seems trivial, until you

put it into dollars: even such a slight reduction in the $83.1 billion that SBA

claims was awarded in 2013 would translate to a loss of more than $66 million

for small business.

Lloyd Chapman,

the outspoken founder of the American Small Business League in Petaluma,

Calif., thinks the discrepancy is even greater. He has long accused the

government of fraudulently awarding contracts meant for small businesses to

large corporations and says the 2013 record is no different. "The ASBL

believes that small businesses got only one-tenth of what the SBA says they did

and will be moving forward with inquiries on that subject," Chapman announced on the ASBL

website. "The most recent information from the Federal Procurement

Data System indicates that 175 Fortune 500 firms and their subsidiaries

received small business contracts in FY 2013," he says.

Chapman also

points to a 2013 statement by Charles

Teifer, a University of Baltimore Law School Professor of Government

Contracts, who says that "large contractors wrongfully hold small business

contracts," and that "vast sums of Federal payments to businesses

should be, but are not, counted when figuring the 23 percent goal for small business."

Teifer says that the Small Business Administration does not deny that large

contractors hold the contracts, but excuses the practice by explaining that it

is a result of large companies acquiring the contracted small business, or of

contractors expanding beyond the small business category during the contract

term.

In the trade publication Government Executive last week, reporter Charles S. Clark

asked an SBA official to respond to the ASBL's argument. Associate

administrator for government contracting and business development John Shoraka

told Clark:

"This occurs for a variety of reasons, including

the growth of a business, mergers and acquisitions, or human data entry error.

 ... The fact that a contract awarded to a large business is coded in a

database as an award to a small business does not mean that the contract was

taken away from a small business or that small businesses suffered. Unless a

contract was set aside for a small business, the designation as a small

business does not benefit that business in receiving the award. The designation

could be a result of a mistake on the part of the contracting officer, who

actually enters the designation in the database, or the firm when filing its

representation for that contract."

Like Harrison reported at the Washington Post,

"only time will tell" if the 2013 contracting record was actually

something to celebrate.

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