Small Businesses Look To Partnerships For Federal Contracts

Some call it criminal, some call it gamesmanship, and some call it an unfortunate matter of too many classifications and too many loopholes. But any way you pitch it, small businesses taking aim at federal contracts often get slighted: overmatched, underprepared, or just generally bogged down by a system some advocacy groups say is incorrigibly stacked against them.

The U.S. Department of the Interior (DOI) Office of the Inspector General released a report July 1 indicating that several Fortune 500 businesses were the actual recipients of some $5.7 million in federal contracts designated for small businesses over the last two years. The report examined three-tenths of 1 percent of all contracts dated 2006 and 2007.

For advocacy groups like the American Small Business League (ASBL), which has alleged unfair treatment of small businesses from the federal government's Small Business Administration (SBA) for years, the report hardly scratches the surface.

"I wonder how many we would find if we looked at the other 99 percent. My guess is hundreds," said ASBL President Lloyd Chapman, a former solution provider.

The ASBL has conducted its own reviews of the DOI's top 100 recipients of federal small business contracts in 2006 and 2007, using data culled from Fedmine.us. Between the two years it identified 50 large firms, including businesses like ManTech SRS Technologies Inc., Newport Beach, Calif., and GTSI Corp., Chantilly, Va., the latter of which was recommended for debarment from future small business contracts by the SBA in 2006. (GTSI did not respond to repeated requests for comment.)

But it's part of a larger problem, Chapman emphasized—one that the ASBL suggests the SBA has repeatedly failed to address.

"The SBA's excuse was miscoding, but miscoding would be an accidental data entry error, right?" Chapman said. "Is it possible that every day for seven years that contracts could be miscoded? Well, why then is a Fortune 500 company always miscoded as a small business, and not the opposite, if it's accidental? It's just not really believable, is it?"

The ASBL has long maintained Bush administration politics have much to do with a climate that allegedly favors large corporations—the league has endorsed Sen. Barack Obama for president—and while solution providers interviewed for the article didn't always want to talk politics, many agreed that a small business designation is sometimes little more help than a blank sheet of paper.

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