Small-biz data may be unreliable

The government came close to meeting its governmentwide small-business contracting goal of 23 percent in fiscal 2007, missing by less than 1 percent. However, Small Business Administration officials said the percentage is based on error-filled data, making it difficult to know whether the failure was real or illusory, and what the real numbers might be.

Sandy Baruah, acting SBA administrator, said SBA doesn’t directly control how thoroughly agencies clean their past small-business data in the Federal Procurement Data System, or how much emphasis agencies put on getting good data. SBA has no way to check up on the quality of agencies’ data, he said.

“We provide the summary of all the data that comes up through the federal agencies” but ultimately the score is based on the data they submit, Baruah said last week.

In cleaning data from fiscal 2006 small-business contracting, officials removed approximately $5 billion in miscoded small-business data in FPDS. That comes to roughly 6 percent of contracting dollars.

The problems with data were confirmed by a 2008 report by the Interior Department’s inspector general. The IG found contracting officers’ coding errors were the primary reason large companies were listed as holding small-business contracts. Interior took credit over the past two years for more than $5.7 million in small-business contracts that it actually awarded to large corporations, some of which are Fortune 500 companies.

“Contracting officers often click through mindlessly when entering contracts” in FPDS, the report states, quoting a contracting officer at Interior who was interviewed for the report.

The Office of Federal Procurement Policy in 2007 told agencies to make data quality a top priority so FPDS could be an authoritative source for federal information.

To get that improved data, Jim Williams, acting administrator of the General Services Administration, suggested in a speech last week that electronic purchasing tools would likely help. Maintaining a flow of quality information will continue to be important for whoever wins the presidential election, he said.

But based on the data SBA has, the federal government missed its overall small-business contracting goal for fiscal 2007. The government spent $83.27 billion, or 22 percent of its contracting dollars, on prime contracts with small businesses in fiscal 2007, an increase of $6.07 billion compared the previous year, according to SBA’s small-business contract score card. The governmentwide goal is 23 percent annually.

As a whole, agencies reached only one of five governmentwide socioeconomic goals in fiscal 2007. Small, disadvantaged businesses received $24.9 billion, or 6.58 percent of agencies’ contracting dollars. The goal is 5 percent.