Senators, SBA dispute accuracy of small-business credit
- By Matthew Weigelt
- Jul 26, 2011
Senators pressed a Small Business Administration official on July 26
about when an agency should stop getting credit towards its
small-business contracting goals if a contracting company grows large.
Sen. Claire McCaskill (D-Mo.), chairwoman of the Homeland Security
and Governmental Affairs Committee’s Contracting Oversight Subcommittee,
and Sen. Rob Portman (R-Ohio), the pane's ranking member, said agencies
should stop getting the credit when a company outgrows the small
business size status; the credit should stop, even before the contract
However that isn’t the way the credits are counted currently, and as a
result, the senators said it makes the percentage of contracts going to
small business misleading.
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SBA reported June 24 that the government awarded $97.95 billion in
federal contracts to small businesses, or 22.7 percent of eligible
contracting dollars in fiscal 2010, less than the 23 percent goal.
Disagreeing with the numbers, McCaskill said, “Clearly, we didn’t do 22.7 percent.”
Joe Jordan, associate administrator of government contracting and
business development at SBA, said the numbers are accurate based on
current rules and their intent.
Under the rules, a contract is recorded as a small-business set-aside
contract, if the winning company was small at the time of the award. An
agency gets credit toward its various small business contracting goals
for the life of the contract, even if the company grows into a large
company during the contract.
Current SBA rules and the Federal Acquisition Regulation require a
firm to recertify as a small business before the sixth year of any
long-term contract. In addition, a firm must now recertify in 30 days
when it merges with another company or is acquired.
The rules, as they stand, are intended the persuade agencies to
contract with small businesses and then help them grow successfully,
It would penalize a contracting officer and agency by not giving them
credit throughout the contract, “because they did such a good job
finding these small businesses that those small businesses grew and
exceeded those size standards,” he said.
However, those rules don’t give a clear picture of what the government is doing with small businesses, McCaskill said.
Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.