Senator Wants Recount on Small Business Contracting A Senate subcommittee chair criticized SBA reporting rules that inflate the number of contract dollars awarded to small businesses. Those rules continue to count a business as small if it outgrows its size standard in the middle of a contract. By law, 8(a) Alaska Native Corporations are counted as small businesses even though many of those companies have long since exceeded their size standards. SBA reported that 22.7% of prime contract dollars went to small businesses in 2010. “Clearly we didn’t do 22.7 [percent],” said Democratic Sen. Clair McCaskill of Missouri, chair of the contracting subcommittee of the Senate Homeland Security and Governmental Affairs Committee. “I don’t know what we did. There’s a bunch of money in there that isn’t really from small business.” Even if the government did exceed its 23% small business goal, she said it would be “an empty achievement.” SBA’s top contracting official defended the rules at a July 26 hearing. Associate Administrator Joe Jordan said agencies deserve credit for awarding a contract to a small firm “because they did such a good job finding these small businesses that those small businesses grew and exceeded those size standards.” Other critics have pointed out that SBA inflates its numbers because it does not count contracts awarded overseas when it tallies small business performance. Overseas contracts typically go to large multinational corporations. McCaskill also criticized “NAICS shopping,” where contracting officers pick a NAICS code so that a favored company can win the work. She cited a defense contract awarded to VSE Corp. under a manufacturing NAICS code, even though the contract called for maintenance and repair services. She said VSE qualified as a small manufacturer, but would not have been small under the maintenance code. The American Small Business League has persistently claimed that large corporations are receiving contracts recorded as going to small firms. ASBL said 61 of the top contractors listed as small businesses in 2010 were large corporations or were owned by large corporations. The ASBL did not respond to questions about how it arrived at that figure. A small company that is acquired by a large one must change its ORCA listing to reflect that it is no longer small. But if the formerly small firm has ongoing contracts, agencies still get small business credit for the life of those contracts.