Friday, August 17, 2007

SBA Releases First-Ever Procurement Scorecard; Seven of 24 Federal Agencies Met 2006 Contracting Goals

In an effort to increase the transparency and accountability in small-business contracting, the U.S. Small Business Administration [SBA] today released its first-ever Small Business Procurement Scorecard. The Scorecard will help agencies measure their achievements and progress in making contracting opportunities available to small businesses, improve the accuracy of contracting data regarding small businesses, and provide the public the opportunity to assess agencies’ performance in meeting these goals.

Seven federal agencies -- the Departments of Agriculture, Energy, Homeland Security, Housing and Urban Development, Transportation, Veterans Affairs, and SBA itself -- met their small-business contracting goals.

“SBA’s and the agencies’ commitment to small-business contracting results is unprecedented,” said Clay Johnson, Deputy Director for Management at the Office of Management and Budget. “With clear, outcome-oriented goals, clear, realistically aggressive plans to achieve them, clearly defined accountability, and frequent tracking of performance, SBA and the agencies are saying they want to be held most publicly accountable for contracting with small business at desired levels.”

SBA’s Scorecard builds on a series of administration initiatives to improve small-business access to federal contracts. At the request of the White House’s Office of Federal Procurement Policy and SBA, federal agencies spent months reviewing 11 million contract actions from the last two years to cleanse the database of miscoded contracts.

On June 30, federal regulations were changed. Contracts awarded to small companies acquired by large corporations will no longer count towards federal agency small-business goals – even if the acquisition took place before the rule change.

“These changes – increased accuracy, transparency and accountability – provide a real window of opportunity for America’s small businesses,” said SBA Administrator Steven Preston [pictured]. “Almost $5 billion in misreported contracts have been cleaned out of the small-business database.

"To meet their goals in 2007 and beyond, federal agencies know they will have to place more new contracts with small businesses. SBA is also increasing its staff and technical assistance to help our federal partners meet their contracting needs.”

Small Business Goaling Report
After working with federal agencies to identify miscoding and anomalies in the contracting database, SBA released the annual Small Business Goaling Report for FY 2006, and revised the FY 2005 report.

The Goaling Report shows that $77.7 billion in federal contracts were awarded to small businesses in FY 2006 -- up $2.7 billion from the previous year. The revisions reduce the share of contracts awarded to small businesses in 2005; $4.6 billion from the previously reported 25.4 percent, to 23.4 percent. For 2006, the figure is 22.8 percent, just short of the small-business procurement goal established by law at 23 percent.

Administrator Preston cited the progress federal agencies have made towards meeting the five targeted sub-categories for small businesses procurement as an example of what can be accomplished when agencies track progress towards small-business goals. “While only the target for small disadvantaged business has been met so far,” he said, “SBA is encouraged by the real gains made in every category in 2006.”

In other categories, contracts to companies owned by service-disabled veterans increased by 50 percent, from $2 billion to $3 billion; contracts to women-owned businesses increased by a billion dollars; contracts to 8(a) enterprises rose by $700 million; and contracts to HUBZone firms were up $1 billion.

“We still have more to do to reach our targets,” Preston said, “but these are accomplishments that our federal partners can be proud of.”

View From the Senate
In light of SBA's new report, Sen. John Kerry [D-Mass.], chairman of the Committee on Small Business and Entrepreneurship, expressed reserved praise.

“I’m glad to see Administrator Preston has taken some steps to fix the faulty and misleading small-business contracting numbers and hold agencies accountable, but these numbers should still be viewed with caution," Kerry declared in a formal statement. "Despite the federal contracting budget increasing by at least $20 billion last year, the percentage going to small businesses decreased, and the government still isn’t counting the whole pie because of special exemptions and exclusions.

“It’s critical that we continue to improve the reporting system and count all contracts in calculations, so we know the reality on the ground. It’s not about meeting the goals for the sake of meeting a number. Doing more business with small firms is good for our economic and national security, because it diversifies our supply base. I will continue to review and analyze these numbers, and will work with Administrator Preston to ensure that the entire government is truly meeting the small business goals.”

About the Scorecard
SBA rates 24 agencies green, yellow or red -- both on whether they reached their annual small-business contracting goals, and on their progress on efforts to make contracting opportunities available to small businesses. To achieve a green rating, a federal agency has to meet its overall small-business contracting goal, as well as the goals for at least three of four subcategories. For their current status, seven agencies were rated green, five yellow, and 12 were red. In the second category, under “progress,” 12 agencies were rated green, eight were yellow, and four were red.

Each federal agency has a different small-business contracting goal, determined annually in consultation with SBA. SBA ensures that the sum total of all of the goals exceeds the 23 percent target established by law. The Scorecard will be updated every six months and is publicly available on the SBA Web site.

Sources: U.S. Senate Committee on Small Business and Entrepreneurship, U.S. Small Business Administration

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