House lawmaker slams small business contracting report

The ranking Democrat on the House Small Business Committee said this week that new government figures on small business contracting are misleading.

Rep. Nydia M. Velazquez (D-N.Y.) questioned a report from the Small Business Administration that suggests federal contracting awards for small businesses were exceeding their objectives.

"This is yet another year that the federal government has failed to meet their small business contracting goal?costing small businesses billions of dollars in lost opportunity," Velazquez said.

The SBA reported that small businesses had been awarded $69.2 billion in contracts, representing 23.1 percent of all federal contracting dollars in 2004. The government's goal is to award at least 23 percent of its contracts to small businesses.

But Velazquez charged that the SBA miscoded large businesses as small businesses, and did not properly monitor bundling practices. In a statement, Velazquez charges that these practices cost small businesses at least $1.75 billion in 2004.

Velazquez further asserted that the Defense Department cost small businesses $1.5 billion, or up to $2.9 billion factoring in misrepresented contracts, by not offering enough opportunities to smaller companies. The congresswoman also was troubled by the exclusion of the Federal Aviation Administration and the Transportation Security Administration from the report, which she said adds to the inaccuracy of the SBA's data.

Velazquez also noted that women-owned businesses and veteran-owned businesses did not meet the 5 percent and 3 percent goals for contract value awarded in 2004, with 3 percent and 0.3 percent, respectively.

The American Small Business League also questioned the SBA's report, suggesting that it represented billions of dollars of contracts awarded to large firms as going to small businesses.

The SBA did not return a message requesting comment.