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Wednesday, April 21, 2010

Size matters in set aside provision

Transparency missing, and badly needed, in Small Business contracting
The Small Business Administration has announced a change to the format of its Small Business Scorecard as a "solution" to what the agency's Inspector General has acknowledged on its Report 5-15 as being “one of the two SBA biggest challenges.” I’m speaking about federal agencies' endemic practice of taking credit for small business contracts awarded to large businesses to appear as if the agencies are meeting their statutory and socio-economic goals.

To help level the playing field in government contracting, Congress requires that federal agencies spend 23 percent of their contracts on small businesses. To meet such a mandate, agencies – without fear of consequences - establish goals and report their alleged results, which are then published on the SBA Scorecard. As you might have guessed, agencies have NEVER met their goals since the SBA Scorecard program started in 2005.

Congressional transparency allowed the FPA Think Tank at UNF last year to identify 48 multinationals, in Fiscal Year 2008, which were illegally awarded $4.1B in small business contracts. Thanks to this transparency, advocates have charged that, in total, large businesses were awarded $31.1B which would have put the agencies' actual statutory total at less than 18 percent, as opposed to the 21.5 percent reported on the latest SBA Scorecard.

But that is not all. The General Services Administration (GSA) has now proposed to discontinue the current transparency in the government's central contracting database, called the Federal Procurement Data System, which would prevent advocates and the media to identify large businesses which misrepresent their size and are awarded small business contracts.

There is already an existing vehicle in place which can stop federal agencies from continuing to misrepresent their results in contracting with small and disadvantaged businesses and its name is the “Data Quality Act” or DQA.

DQA is an obscure section of the Paperwork Reduction Act, a 29-year-old law which the Obama Administration wants to revive, which would rely on OMB “to ensure that information disseminated by federal agencies is both accurate and reliable.”

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