SBA responds to critics of small business report

Small Business Administration officials answered charges this week that their report on federal contracting in 2004 was misleading.

The SBA reported last week that small businesses had been awarded $69.2 billion in contracts, representing 23.1 percent of all federal contracting dollars in 2004.

But Rep. Nydia M. Velazquez (D-N.Y.) alleged Aug. 30 that the SBA improperly reported data and had cost small businesses billions of dollars.

Allegra McCullough, SBA associate deputy administrator for government contracting and business development, said the congresswoman's allegation that the agency had miscoded large businesses as small, thereby inflating contract award figures, was false.

"Each federal agency is responsible for entering its own contract actions, and SBA reports the numbers as collected by the General Services Administration," McCullough said. "So when [Velazquez] says that we miscode, that's totally inaccurate because we don't enter any other data than our own."

Whether contract award data entered by other agencies was miscoded, or whether GSA guidelines need improving, McCullough could not say.

Velazquez also charged that contract bundling cost small businesses $1.75 billion. McCullough responded that many people misunderstand the definition of contract bundling, which she defined as a contract action awarded to a small business to which other requirements are later added.

"A lot of people, including the congresswoman, look at any large contract as being bundled, but that's not the true definition," McCullough said. "We take contract bundling very, very seriously, and we are very vigilant in terms of looking at what we consider to be bundling."

McCullough also took issue with the congresswoman being "troubled" by the exclusion of contracts with the Federal Aviation Administration and the Transportation Security Administration. The SBA's goaling program and prime contracting report applies only to agencies that are subject to Federal Acquisition Regulations, and both the FAA and TSA are exempt. The U.S. Mint and U.S. Postal Service also are exempt.

The SBA lists exemptions on its website.