Washington (May 15, 2003) -- Some government contract dollars reported as being awarded to small businesses may actually be going to large companies, a report released by the General Accounting Office has found.

In a review of five large companies that received contracts totaling $1.1 billion in fiscal year 2001, the GAO found that $460 million of that amount was listed in the Federal Procurement Data System as small business awards. According to the GAO, the mis-reporting was caused in most cases by federal regulations that permit companies to be considered as a small business over the life of the contract, even if they’ve grown into a large business, merged with another company, or been acquired.

Agencies also relied on databases containing inaccurate information on current business size, GAO said. A copy of the report is available at http://www.gao.gov/new.items/d03704t.pdf

In response to the report’s findings, Women Impacting Public Policy, a national bipartisan group that represents 430,000 businesswomen and women business owners, called on the SBA to initiate an immediate clean up of its ProNet database and asked SBA to share results of contract awards with all agencies.

"The SBA welcomes the GAO’s findings,” said Fred Armendariz, Associate Deputy Administrator for Government Contracting and Business Development.

“SBA has identified the same concerns and we think that our proposed regulation requiring small contractors to certify their small business status annually will help us to ensure that small businesses get their fair share of federal procurement dollars,"

-- Melissa Klein

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