Large Federal Contractors Miscoded as Small Businesses

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.
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.