WASHINGTON – Today, Small Business Committee Chairman Steve Chabot (R-OH) responded to the Small Business Administration’s (SBA) flawed reporting of federal contracting goals.
“The SBA is robbing small businesses. For every dollar the SBA doesn’t count, small businesses are losing 23 cents,” said Chabot. “In FY 2014, that means small businesses lost nearly $18 billion in contracts. The reason Congress asks for these numbers is so we can use them – not so that the Administration can pat itself on the back once a year. These are supposed to provide insight to help Congress craft policies that strengthen our industrial base. This sort of misreporting doesn’t help.”
The numbers reported today are incorrect because the SBA continues to exclude nearly $78 billion in federal contract dollars reported into the federal procurement data system, plus at least $6 billion to $10 billion that the Department of Veterans Affairs (VA) illegally excluded from the database.These are dollars spent by the federal government that should be subject to small business contracting goals. Moreover, the SBA scorecard focuses intensely on just one factor -- prime contract dollars. While this is certainly an indicator, it does not represent a holistic--and more accurate--depiction of the industrial base. For example, there are 100,000 fewer contractors today than there were four years ago and and the number of contract actions being awarded to small businesses has fallen by nearly 60 percent. Furthermore, the Administration is still not meeting its subcontracting goal, even though SBA lowered the goal last year.
Earlier this week, the Small Business Subcommittee on Oversight, Investigations, and Regulations examined the issue of bonuses being awarded based on fraudulent scorecard data at the VA. Subcommittee Chairman Cresent Hardy (R-NV) concluded:“It is evident to me that the VA and the Obama Administration have failed our veterans, small business owners and the American taxpayer.”
In its report, the SBA awarded the VA a “B”, but based on testimony it is clear that at least $6 billion to $10 billion worth of contract dollars were not included in this tabulation. If it had been, using the SBA’s own methodology, the percent of dollars awarded to small businesses by the VA would drop from 34.42 percent to between 22 and 26 percent, and the VA would have earned a“D” or an “F”. Likewise, the SBA gave the federal government an “A”, but the actual numbers show the Obama Administration only earned a “C”.
“The Administration can be 'proud' when it is actually meeting the small business goals based on honest accounting,”said Chabot.“Until then, our Committee will keep working on commonsense reforms that provide a more realistic picture of our industrial base.”
For more information on Chairman Chabot’s scorecard reform legislation click HERE.