Eagle Eye takes aim at ASBL challenge

Market research firm Eagle Eye Publishers has taken up the cause of the Small Business Administration in a dispute over small-business contracting dollars.

The latest battle began last week when the American Small Business League offered $10,000 to anyone who could come up with a list of vendors coded as small businesses. Such a list is necessary to verify SBA's claim that $79.6 billion in prime contract dollars went to small firms in fiscal 2005, said ASBL President Lloyd Chapman.

But Eagle Eye, which regularly crunches data provided by the government's Federal Procurement Data System – Next Generation, says SBA's numbers add up.

Murphy said in an open letter today that, based on extensively revised figures from the General Services Administration, Eagle Eye calculates that government procurement spending with small firms amounted to $83 billion in fiscal 2005, an increase compared with original $65 billion calculation in March.

“After incorporating hundreds of thousands of correction and change records into our existing contract database, we found that the overall, reported federal spending total for FY 2005 increased to $383.9 billion and the reported small-business contract total grew to $82.9 billion,” he said. “This makes the overall small-business share for FY 2005 approximately 21.6 percent, 4.2 percentage points higher than our previous measure. As you know, Eagle Eye does not perform the SBA’s exclusions process to the overall data, which we believe gives a more accurate picture of small-business procurement spending.”

“What seems clear from [Eagle Eye’s] revised October spending numbers is that over the last several months, GSA has reclassified around $15 billion in procurement spending as going to small firms,” he said. “Note that the revised, overall procurement total only rises by $7 billion ($377 billion to $384 billion) while small-business spending grows $18 billion ($65 billion to $83 billion). Given the number of large firms appearing in the new small-business ranking, the issue of whether businesses were categorized accurately as small firms remains open to question.”

The letter includes Eagle Eye’s Top 100 Small Business Table. Based on the revised calculations, the table shows large firms such as L-3 Communications, Science Applications International Corp., Lockheed Martin, BAE Systems, IBM and ITT prominently ranked in the top 25, Murphy said.