Audit Report 5-16: Review of Selected Small Business Procurements
Date Issued: Tuesday, March 8, 2005
Report Number: 5-16

On March 8, 2005, the OIG issued Audit Report 5-16, Review of Selected Small Business Procurements.  The objectives of this review were to determine if certain large companies 1) were improperly awarded new small business set-aside contracts, and 2) met the small business size standards when they were originally awarded multiple award contracts (MACs).  This review was initiated as a result of complaints made by a member of the small business community who stated that four companies were obtaining contracts intended for small businesses.  From October 1, 2000 through June 30, 2002, two of the four companies were awarded seven new small business set-aside contracts.  Additionally, the four companies collectively received orders under seven MACs.  A subsequent complaint received during the course of the audit focused on a MAC awarded to a fifth company.  All five companies were large businesses at the time of the complaints. 

The OIG found that one small business set-aside contract was improperly awarded, and multiple award contracts were issued based on improper certifications (see Audit Report 5-14, SBA Small Business Procurement Awards are Not Always Going to Small Businesses).  Although Federal Procurement Data System (FPDS) information identified seven new small business set-aside contracts awarded to two of the four companies, the OIG could only document that one was actually a new small business set-aide contract.  For this contract, the company was improperly certified as a small business.  For the remaining six contracts, FPDS data was inaccurate or could not be confirmed because the procuring agency no longer had complete records.