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Critics question SBA’s list of top 100 small-business contractors

By Elise Castelli
Federal Times
December 4, 2007

Critics are accusing the Small Business Administration of trying to hide the fact that large companies are winning billions of federal contracting dollars meant for small businesses.
The agency last week released a list of its top 100 small-business contractors. Not on the list were numerous behemoths that typically dominate similar reports: SAIC, Lockheed Martin, General Dynamics, GTSI and SI International, among others.
In 2006, for instance, SAIC ranked third among companies receiving the most federal contracting dollars targeted for small businesses, according to Eagle Eye Publishing, a private market research firm. General Dynamics was 13th, Lockheed Martin 26th.
None of them are on the SBA’s list of top small-business contract recipients for that same year.
An advocacy group representing small businesses says that’s because the agency is trying to deceive the public.
“This is an attempt by the SBA to do what they have always done: to cover up the fact that Fortune 500 corporations are actually the recipients of most small business contracts,” Lloyd Chapman, president of the American Small Business League said in a Dec. 3 statement. His group, which represents companies having fewer than 100 employees, intends to sue the SBA because the agency denied a recent Freedom of Information Act request for the data used by the agency in compiling the agency’s top 100 list.
Arthur Collins, SBA’s director for contracting, said tracking large businesses receiving small awards was not the intent of the new list.
“We looked at firms considered small and receiving large chunks of money under federal contracts,” Collins said. “It’s a different research question” from what the private companies have assessed in the past.
SBA removed $4.6 billion in contracts from its database on grounds that those contracts were incorrectly coded as being for small business. Still, it was conceivable that big firms might still be found getting small business awards, Collins said, so he was encouraged to see that by SBA’s research the larger firms didn’t break into the top 100.
“Releasing this list is part of SBA’s ongoing effort to increase the transparency, accuracy and integrity of government small business contracting data,” SBA Administrator Steve Preston said in the Nov. 30 statement.
He said all but one of the SBA’s top 100 firms were properly classified as small at the time they won their contracts. The one exception was DynCorp.
The SBA noted on its top 100 list that some small businesses listed were acquired by larger firms before fiscal 2006 and continued to receive small-business dollars. SBA did not explain why the data was listed by subsidiary, rather than the parent company that ultimately received the funds.
In all, 26 small firms on the list have either outgrown their small-business status or were purchased by large firms, like Lockheed Martin and General Dynamics, according to the SBA’s statement accompanying the list.