GAO finds mixed signals for small biz

"Small Business: Trends in Federal Procurement in the 1990s"

Procurement reform has had a negative impact on small businesses' ability to contract with the federal government, according to a General Accounting Office report. But GAO also found positive signs that in recent years reform has helped increase the share of federal commerce conducted with small companies.

Advocacy groups and members of Congress have expressed concern that the reforms put in place by the Federal Acquisition Streamlining Act and other legislation in the mid-1990s have cut back on small businesses' ability to compete in the federal market.

The GAO study of data from the Small Business Administration and the Federal Procurement Data System found support for these concerns, but it also found clear evidence that new opportunities have sprouted for small businesses.

The report, which came at the request of Reps. Stephen Horn (R-Calif.) and Tom Davis (R-Va.), found that for information technology products and services, the percentage of contract dollars going to small businesses rose. The percentage of money going to small businesses for all products decreased from 50 percent in fiscal 1993 to 48 percent in fiscal 1999. But during the same period, dollars going to small businesses for IT services increased from 33 percent to 49 percent.

Preliminary data gathered by SBA for fiscal 2000 shows that agencies are having trouble meeting the mandated goal of awarding 23 percent of the value of prime contracts to small businesses.

Additionally, the FPDS is being reworked to better reflect the socio-economic contracting practices put in place since the system opened in 1987. But not enough information exists yet to accurately determine the small-business impact in every contracting area, according to the report.