Earlier this month the Yahoo! Small Business Advisor Profit Minded Blog reported hereon an apparently momentous achievement the Small Business Administration hadannounced: "For the first time in eight years, the federal government hasachieved its goal to award at least 23 percent of all federal contracts tosmall businesses ... Just over 23 percent of contracts, accounting for $83.1billion, were awarded to small businesses in 2013. Of 24 federal agencies, only4 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 thegovernment actually hit the target? Only time will tell. But there's ample roomfor skepticism."

Harrison points out that General ServicesAdministration fine print notes that "SBA's annual reports are generatedby taking a snapshot of data from the Federal Procurement Data System on acertain date." But the database is "dynamic" with changes andupdates continually being made by the federal agencies. And Harrison says thosesnapshots reported to the public do not "stand the test of time" whenreviewed later. For instance, Harrison reports:

"In 2012 SBA reported that small businessesclaimed 22.25 percent of work, based on the snapshot of the moment. Now, twoyears later, the database shows they claimed 22.17 percent."

A 0.08 percent difference seems trivial, until youput it into dollars: even such a slight reduction in the $83.1 billion that SBAclaims was awarded in 2013 would translate to a loss of more than $66 millionfor 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 thegovernment of fraudulently awarding contracts meant for small businesses tolarge corporations and says the 2013 record is no different. "The ASBLbelieves that small businesses got only one-tenth of what the SBA says they didand will be moving forward with inquiries on that subject," Chapman announced on the ASBLwebsite. "The most recent information from the Federal ProcurementData System indicates that 175 Fortune 500 firms and their subsidiariesreceived small business contracts in FY 2013," he says.

Chapman alsopoints to a 2013 statement by CharlesTeifer, a University of Baltimore Law School Professor of GovernmentContracts, who says that "large contractors wrongfully hold small businesscontracts," and that "vast sums of Federal payments to businessesshould 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 largecontractors hold the contracts, but excuses the practice by explaining that itis a result of large companies acquiring the contracted small business, or ofcontractors expanding beyond the small business category during the contractterm.

In the trade publication Government Executive last week, reporter Charles S. Clarkasked an SBA official to respond to the ASBL's argument. Associateadministrator for government contracting and business development John Shorakatold Clark:

"This occurs for a variety of reasons, includingthe 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 adatabase as an award to a small business does not mean that the contract wastaken away from a small business or that small businesses suffered. Unless acontract was set aside for a small business, the designation as a smallbusiness does not benefit that business in receiving the award. The designationcould be a result of a mistake on the part of the contracting officer, whoactually enters the designation in the database, or the firm when filing itsrepresentation for that contract."

Like Harrison reported at the Washington Post,"only time will tell" if the 2013 contracting record was actuallysomething to celebrate.

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