Agency Says Small Businesses Get Close to a Quarter of U.S. Contracts

WASHINGTON — The Small Business Administration, assessing the government’s success in awarding contracts to small businesses, said Wednesday that $83.2 billion went to those companies in the last fiscal year, a record amount. And it said that the government was close to complying with a law requiring that nearly a quarter of federal contracts go to small businesses.
But critics quickly responded that the figures failed to reflect the full picture of federal contracting.
They argued that small businesses were still not getting their fair share of government contracts. Senator Olympia J. Snowe, Republican of Maine and the ranking minority member of the Senate Committee on Small Business and Entrepreneurship, was among the critics.
“As small businesses represent 99 percent of all firms nationwide and will be vital in leading economic recovery effort,” she said, “it is crucial that these enterprises receive every job-creating and capital-generating opportunity in the federal contracting marketplace.”
The S.B.A.’s lack of effective oversight, she said, has been “indefensible.” Only three of the 24 government agencies met all their contracting goals for five categories of small businesses, including service-disabled veterans and women.
Representative Nydia M. Velázquez, the New York Democrat who heads the House Small Business Committee, questioned the accuracy of the contracting figures and said, “Small firms lost out in nearly $4 billion in opportunities.”
The agency’s acting administrator, Santanu K. Baruah, who began the job in August, emphasized that the S.B.A. relied mostly on information provided by the agencies like the Defense Department, which actually award the contracts and track them.
Mr. Baruah noted that the S.B.A. had made an effort to “scrub the data” of flawed coding and other problems that have led to large companies being listed as small businesses. The agency adopted new rules, as of July 1, 2007, that require more frequent certification to keep corporate subsidiaries from masquerading as small firms.
Mr. Baruah conceded that some $5 billion in contracts had been miscoded as having been awarded to small businesses, a figure reported Wednesday in The Washington Post.
Even so, he noted that “$5 billion represents a 6 percent error rate,” a figure which he defended as “within the realm of reasonable, although that does not mean we should excuse errors.”
The S.B.A.’s statistical scorecard was started last year to measure governmentwide compliance with the Small Business Reauthorization Act. The 1997 law requires the government to award 23 percent of federal contracts to small businesses, which are defined in several ways, including employing fewer than 500 workers. The S.B.A.’s scorecard said 22 percent had been awarded.
---New York Times