SBA Small Business Report Raises Criticism

Rep. Nydia M. Velazquez (D-NY) has alleged that the U.S. Small Business Administration (SBA) incorrectly reported data contained in their prime contracting report on 2004 federal contacting. The report released in August stated small businesses had been awarded 23.1 percent of all federal contracting dollars or $69.2 billion on about 4.4 million actions.


Click Here
Cougar Mountain has all the features of the high-end accounting products at an affordable price. Fully integrated modules including our award-winning Point of Sale product mean you only enter data once - saving time and ensuring accuracy. Cougar Mountain is the answer for small to mid-sized businesses that have outgrown their initial accounting package.
Learn more!

Cougar Mountain Home Cougar Mountain Accounting
Sign up for a Web Demo Cougar Mountain Point of Sale
Request a Call Cougar Mountain FUND

Rep. Velazquez with the American Small Business League claimed that large businesses were miscoded as small businesses skewing the reported contracting numbers. Velazquez is the ranking Democrat on the House Small Business Committee.

“Despite the phenomenal growth of the federal marketplace—opportunities for this nation’s 23 million small businesses continue to lag. This is yet another year that the federal government has failed to meet their small-business contracting goal—costing small businesses billions of dollars in lost opportunity,” said the congresswoman.

“Each federal agency is responsible for entering its own contract actions, and each SBA reports the numbers as collected by the General Services Administration, so when [Velazquez] says that we miscode, that’s totally inaccurate because we don’t enter any other data than our own,” Allegra McCullough, SBA associate deputy administrator for government contracting and business development, told the Government Computer News concerning Velazquez’s allegations.

The congresswoman also raised the issue of the exclusion of contracts with other government agencies in SBA’s goaling program and prime contracting report. McCullough explained that the agencies excluded those subject to Federal Acquisition Regulations. This requirement excludes agencies such as the U.S. Mint, the U.S. Postal Service, the Federal Aviation Administration, and the Transportation Security Board. The latter two agencies were cited by Velazquez in her criticism.

Velazquez also claimed that contract bundling hurt small businesses by $1.75 billion in 2004 and questioned the SBA’s monitoring of bundling guidelines. McCullough answered that Velazquez didn’t understand contract bundling as it applied to the SBA. Their definition of contract bundling is a contract action awarded to a small business to which other requirements are later added. Velazquez went on to claim that the Defense Department cost small businesses at least $1.5 billion and up to $2.9 billion when factoring in misrepresented contracts.

“A lot of people, including the congresswoman, look at any large contract as being bundled, but that’s not the true definition," McCullough added. "We take contract bundling very, very seriously, and we are very vigilant in terms of looking at what we consider to be bundling.”

The congresswoman remarked that service-disabled veteran-owned and woman-owned businesses did not meet or exceed set contract award goals of 3 and 5 percent respectively. Their numbers came in at 0.3 and 5 percent instead. Contracts to veteran-owned small businesses more than doubled, reaching $1.15 billion, up from $550 million in 2003. Dollars to woman-owned small businesses increased by $814.6 million to a record $9.1 billion.

“Given the current figures and practices, regardless of all the Bush administration’s rosy rhetoric, the reality is that small businesses continue to struggle to receive fair treatment in the federal marketplace," Velazquez said. "In the end, this is not just bad for small business, but most of all it is bad for the taxpayer who loses out on the quality products at affordable prices that this nation’s small firms provide.”

You may like these other stories...

Individuals interested in reviewing the proposed 2015 US Generally Accepted Accounting Principles (GAAP) taxonomy from the Financial Accounting Standards Board (FASB) have until October 31 to submit their written comments....
Ernst & Young 2013 audit deficiency rate 49%, regulators sayMichael Rapoport of the Wall Street Journal reported on Thursday that the Public Company Accounting Oversight Board (PCAOB) found deficiencies in 28 of the...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.