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LEGAL ISSUES

Feds Short on Contract Target

Only three federal agencies met all their small-business contracting goals last year, the SBA reports.
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For the second year in a row, the federal government fell short of its small-business contracting goals in 2007, including targets on contracts for women, veterans and businesses in low-income communities, the Small Business Administration reported this week.

Last year, federal agencies awarded $83.2 billion in prime contracts to small businesses, accounting for 22 percent of all government contract dollars, the report said.

By congressional mandate, the government aims to award 23 percent of all contract dollars across all agencies to small businesses every year.

While 17 agencies achieved that broad goal last year, only Veterans Affairs, the Department of Energy and the Small Business Administration met targets in all five contract categories, awarding at least five percent of all contracting dollars to small disadvantaged businesses, five percent to women, three percent to service-disabled vets, and three percent to so-called HUBZone businesses  located in low-income communities.

The government hasn't met its small-business contracting goal since 2005, when a number of large corporations were mistakenly included in the SBA's annual government-wide tally.

SBA Acting Administrator Sandy Baruah said this year's totals reflect stricter oversight measures meant to strip out bad data from the federal contracting database and ensure companies receiving small-business contracts fit the definition of "small."

"This is good news for small businesses, because it means the government will need to work harder to get federal contracts into the hands of small businesses," Baruah said in a statement.

In recent years, federal lawmakers and watchdog groups have attacked the agency for turning a blind eye to miscoded contracts, awarding billions of dollars set aside for smaller firms to Wal-Mart, Coca-Cola and other corporate giants.

In July 2007, the SBA enacted new regulations that required small-business contractors to recertify the size of their businesses every five years and inform the government if they're bought by a larger firm.

Despite those changes, many critics say the numbers still can't be trusted.

"Eight years of budget cuts and lax oversight show that the Bush Administration thinks small equals less important," Sen. John Kerry (D-Mass.), the chairman of the Senate Committee on Small Business and Entrepreneurship, said in a statement.

Last updated: Oct 23, 2008




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