Federal Cash
SBA’s Database Not So ‘Small’
By Emily Esterson, 5-16-05
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With base closures on everyone’s minds lately (New Mexico’s Cannon Air Force Base is on the closure list, prompting big hustle by the state's politicos) another story about Federal money matters has been surfacing recently about Small Business Administration’s database of “small businesses.� That list apparently includes the likes of Burhmann (annual sales: 5.5 billion Euros) and Office Depot, says Loyd Chapman, of the American Small Business League.
In New West territory, the number of businesseses considered small averages about 97% (but noting that small business is considered less than 500 employees).There are 34 small business contracts up for bid this year in Colorado, and 24 contracts in other New West states, and that's just for the Dept. of Energy. None of those contracts are less than $100,000.
Across the West and especially in New Mexico, where government contracts have been the lifeblood of the economy, the SBA story should be making more noise than it is.
In February, the Small Business Administration’s Office of the Inspector General issued a memo entitled “Large Businesses Receive Small Business Awards� that outlines some of the problems with the SBA’s database of so-called small companies. The report says the Federal government reported $65.6 billion in Federal contracts, or 23.5% (the goal) awarded to small businesses (FY2003) but “given recent findings these numbers are questionable.�
The SBA claims the problems are data-entry related, but the ASBL says there's more to the story. It recently challenged the SBA in court to disclose a 16 page report that details the errors. Despite the SBA’s appeals, ASBL won the case (decided April 29).
In this 16-page report, which is now on on ASBL's website, 39 of the top 1000 small business contractors were actually large companies (the report is from FY 2002).The Defense Department and General Services Administration accounted for 79 percetne of the contract awards found to go to large companies.
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Comments
While actually small businesses should get a shot at government contracts, it's also obvious to some of us that the New West states need to get out of the governemnt dependency business. Given the deficits, government spending isn't sustainable at current levels over the long haul. The challenge of creating smart jobs - and smart companies - will be with us for the next several decades.