SBA to redefine small-business size

The Small Business Administration plans to issue a regulation to revise the rules regarding contractor reporting and certification of small-business size status.

The Federal Procurement Data System (FPDS) will be modified accordingly, SBA said in a memorandum issued by Administrator Steven Preston.

Preston said SBA reported in June that the federal government had awarded more than 25 percent of contracting dollars, or $79.6 billion, to small businesses in fiscal 2005. He called that an important and unprecedented achievement but added that recent reports have questioned the accuracy of this achievement.

The American Small Business League is among those organizations that have questioned the numbers. Last month, the league said it wrote to Preston in July, asking that the names of those small-business contractors be made public. The league said it had received no reply as of mid-August.

Preston's memo made no mention of the league. He said critics have charged that several reported small-business contracts and related contract actions actually went to midsize or large contractors. He said SBA used data submitted to FPDS by departments and agencies, which are responsible for verifying their accuracy.

“There may be several reasons for possible data inaccuracies or reporting discrepancies,” Preston said. “For example, small businesses can grow larger during performance of federal contracts. Such examples illustrate the success of our policies that foster federal contracting with small businesses. However, even in these cases, agencies need to accurately report the status, and sometimes the changing status, of their contractors.”

He added that other reasons for data inaccuracies or reporting discrepancies include acquisitions of small-business contractors by large businesses, inaccurate contractor reporting and incorrect data entry by federal acquisition employees.

“Transparency and accurate data are critical to ensuring the integrity of the acquisition system, and we are taking steps to increase transparency and the accuracy of federal procurement and small-business data,” Preston said.

He called on agency and department heads to direct their chief acquisition officers “to work closely with SBA to correct or reconcile these apparent data inaccuracies and reporting discrepancies.”

SBA will provide CAOs with a reporting form that should be returned to SBA Chief of Staff Joel Szabat by Nov. 20, the memo states.