Just seven of 24 federal agencies met their small-business contracting goals last year, knocking government-wide totals below a legislated target of 23 percent of all federal contracts, the Small Business Administration reported Friday.
In its inaugural Small Business Goaling Report, the agency said $77.7 billion in federal contracts were awarded to small businesses in 2006, accounting for 22.8 percent of total federal contract dollars. It also revised its 2005 figures downward by $4.6 billion, reducing government-wide totals from 25.4 percent to 23.4 percent.
The changes were the result of efforts to eliminate miscoding in the agency's contracting database, among other initiatives, according to SBA Administrator Steven Preston.
"Almost $5 billion in misreported contracts have been cleaned out of the small business database," Preston said Friday. "To meet their goals in 2007 and beyond, federal agencies know they will have to place more new contracts with small business."
In the past, critics have accused the agency of inflating its annual contracting figures, largely by turning a blind eye to the number of small-business contracts awarded to large corporations, including Wal-Mart, Microsoft, and Coca Cola.
In June, the agency enacted new regulations that require small-business contract holders to recertify their size every five years, or whenever a contract is renewed. Under the regulations, small-business contract holders acquired by large corporations no longer count towards government-wide small-business contracting goals, the agency said.
Despite those changes, federal officials said the figures released Friday showed a number of obstacles clearly remained for smaller firms.
"It's critical that we continue to improve the reporting system and count all contracts in calculations so we know the reality on the ground," Sen. John Kerry (D-Mass.), the chairman of the Senate Committee on Small Business and Entrepreneurship, said in a statement.
According to Kerry, the federal contracting budget rose by some $20 billion last year, while the percentage going to small businesses declined.
"While some efforts have been made to be more candid regarding the contracts small businesses are receiving, we need to move beyond this and address the heart of the problem -- the lack of opportunity in the federal marketplace for small businesses," Rep. Nydia Velazquez (D-N.Y.), the chairwoman of the House Small Business Committee, said in a statement.