NEWSRELEASE

For Release: December 28, 2004
Contact: Jody Wharton, (202) 205-6933
alice.wharton@sba.gov
SBA Number: 04-41 ADVO
Press Kit

Large Federal Contractors Miscoded As Small Businesses

Over $2 Billion In FY 2002 Mistakenly Assigned To Small Business

WASHINGTON, D.C. - Some large federal contractors have been miscoded as small businesses, resulting in skewed procurement statistics according to a report issued today by the Office of Advocacy of the U.S. Small Business Administration. The report found that in Fiscal Year 2002 $2 billion in federal contracts were miscoded as going to small rather than large businesses.

“This report clearly shows that there are problems with the federal procurement system,” said Thomas M. Sullivan, Chief Counsel for Advocacy. “We now have hard data, and not just anecdotes, from across federal agencies that shows contracts meant for small businesses were going to larger firms. What’s needed is more transparency in the contracting system and timely public access to user-friendly procurement data so that mistakes and other problems can quickly be corrected.”

The study examined the contracts given to the 1,000 largest (in dollar volume) federal small business contractors in FY 2002. Information from the federal government’s Individual Contract Action Report (ICAR) was merged with the author’s proprietary data on parent firms and with other commercial and federal databases. The report found that 44 of the top 1,000 small business contractors were not, in fact, small businesses. Their contracts coded as small business contracts totaled $2 billion.

Eagle Eye Publishers wrote the report, entitled Analysis of Type of Business Coding for the Top 1,000 Contractors Receiving Small Business Awards in FY 2002, with funding from the Office of Advocacy.

The Office of Advocacy, the “small business watchdog” of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.

For more information, visit the Office of Advocacy website at www.sba.gov/advo.

###

Created by Congress in 1976, the Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. Appointed by the President and confirmed by the U.S. Senate, the Chief Counsel for Advocacy directs the office. The Chief Counsel advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policy makers. Economic research, policy analyses, and small business outreach help identify issues of concern. Regional Advocates and an office in Washington, DC, support the Chief Counsel’s efforts. For more information on the Office of Advocacy, visit www.sba.gov/advo, or call (202) 205-6533.