Rules Hurt Small Biz

Small businesses continue to receive their mandated share of government purchases, but federal procurement policies and procedures may be causing an overall reduction in the percentage of federal contracts going to small businesses, according to a new General Accounting Office report.

Drawing on Small Business Administration data, the GAO found that while federal agencies collectively met the legislative goal for procurement from small businesses between fiscal years 1993 and 1999, there was a slight decrease in the percentage of contract expenditures going to small businesses in the last three years.

From fiscal 1993 to 1997, when the goal was 20 percent, small businesses received between 24 percent and 25 percent of total federal contract dollars. In fiscal 1998 and 1999, when the goal was 23 percent, small businesses received 23 percent of federal expenditures.

The chief operating officer of the SBA reported to GAO that preliminary data from fiscal 2000 show that federal agencies are having a harder time meeting the 23 percent target.

Among the reasons for small business difficulties, GAO cited acquisition reforms made in the 1990s, a decline in the total amount of government purchasing, shrinkage of the government acquisition work force and a trend toward micropurchases under $2,500 that are not reserved for small businesses.