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.”