Agencies slip up on contract classification

Lockheed Martin Corp., General Dynamics Corp. and CACI International Inc. are among the large businesses that won federal awards but had those awards counted as small business contracts by federal agencies,
reports the Washington Post.

U.S. government agencies made at least $5 billion in mistakes in their recent reports of contracts awarded to small businesses, with many claiming credit for awards to companies that long ago outgrew the designation or never qualified in the first place.

The newspaper said it examined a sampling of the $89 billion in contracts that agencies awarded to companies classified as small business. It found agencies counted Lockheed and its subsidiaries as small businesses on 207 contracts worth $143 million. Dell Inc. won $89 million worth of contracts as a small business.

In addition, the Navy awarded General Dynamics' Digital Systems Resources division $60 million in contracts one year after agencies were told that DSR did not qualify as a small business. The Veterans Affairs Department said a computer glitch caused it to claim a $29 million payment to defense security giant CACI as a small-business award.

Government officials acknowledged that mistakes are a long-standing problem, leading to exaggerated claims about the amount of federal work directed to a growing sector of the economy.

A spokesman for the Small Business Administration, which annually reports agencies' performance, told the newspaper that SBA thinks many agency mistakes have been corrected in a long-delayed report it plans to release today.

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