Small business gets help

The General Services Administration and the Small Business Administration are fixing government databases that incorrectly classify many large federal contractors as small businesses. The fixes come following complaints from Congress and some small businesses that federal agencies, which use the databases to identify companies for small-business set-aside contracts, have awarded such work to large companies listed in the databases.Governmentwide, 23 percent of prime contract dollars are congressionally mandated to go to small businesses. Democratic members of the House Small Business Committee reported June 25 that the 21 federal agencies that spend 96 percent of federal contracting dollars sent 22.6 percent of their prime contract dollars to small businesses in 2002, missing the 23 percent goal set by Congress for the third straight year. As a result, small businesses lost out on $900 million in contracting opportunities, the Democrats said.But because government uses unreliable databases to track these numbers, the actual percentage of small-business prime contracts may be even lower than reported."Some percentage of what we reported as small-business contracts will turn out not to be small," said David Drabkin, GSA's deputy associate administrator for acquisition policy. "It may turn out that we only did 19.3 percent [of prime contract dollars to small business] this year." The GSA has nine people -- its entire Federal Procurement Data System staff -- working on a software program that will check for misrepresentations of business size in the current data, and identify data containing misrepresentations as it is entered into FPDS, Drabkin said.FPDS is the central repository of statistical information on federal contracting. It contains detailed information on contract actions of more than $25,000 and summary data on procurements of less than $25,000. A May 7 General Accounting Office report found that errors by contracting officers resulted in inaccurate reporting of small-business contract awards in FPDS. "We're trying to figure out what happened that caused large businesses to be reported as small in our database," Drabkin said. "What we are trying to verify is that the business properly represented itself as other than small when submitting its offer and that somehow, in the process of reporting the award, the person responsible for keying in data made an error, or the system overrode the size status."GAO reviewed 131 contracts that were listed as small-business awards in FPDS but were, in fact, awarded to five large companies. Investigators found 114 contracts listed as small-business awards because federal regulations permitted the companies -- former small businesses -- to retain their small-business size status over the life of the contract, which sometimes can be as long as 20 years. However, in 17 other cases, contracting officers erred in reporting the companies' size, the report said.SBA contractors are working to modify the agency's PRO-Net database so that it will not accept entries from businesses that are not small, said Steve Galvan, SBA's chief information officer. After receiving complaints that the database is riddled with large companies, agency staff deleted hundreds of firms that do not meet the agency's criteria. About 170,000 businesses have listed themselves in the PRO-Net; agency contracting personnel use the database to find companies that can help them meet their small-business contracting goals.Businesses that enter erroneous data will likely receive an alert that the information is invalid, Galvan said. "We'll try to correct it at the source as opposed to us having to purge it [later]," he said.Galvan said about $100,000 will be spent to delete large businesses from the database, develop an application to ensure data entry is accurate, and allow PRO-Net's small-business data to be transferred to the Central Contractor Registration, the central repository of information about Defense Department contractors. Some of the money will come from the SBA budget; some will come from the budget for Integrated Acquisition Environment, a cross-agency e-government project, he said.SBA's contractors on the job are Contemporary Technology Inc. of Rockville, Md., Base Technologies Inc. of McLean, Va., and ITS Services of Springfield, Va., said Sue Hensley, an agency spokeswoman. "We feel confident the software is going to make sure the list is clean," Hensley said.Global Computer Enterprises Inc. of Gaithersburg, Md., is developing a next-generation Federal Procurement Data System under a $24 million contract awarded by GSA. The new system, set to deploy in October, should help prevent data-entry errors, Drabkin said.Current federal procurement systems rely on batch interfaces to provide data to the FPDS. The new system, FPDS-NG, will integrate with every government procurement system in real time, cutting down on manual data entry.GSA started working to fix the problem with the current FPDS "so we can start the new system with a solution," Drabkin said. Thirty-four million transactions accounting for more than $260 billion in purchases were logged into FPDS in 2002, he said.