Database errors show business giants as tiny
By Larry Margasak
Associated Press
WASHINGTON — Some of the nation's largest businesses shrink in size when they appear on the government's database of federal contractors.
Companies including Barnes & Noble booksellers, Dole Food Co., AT&T Wireless and Verizon are listed as small businesses in records obtained by The Associated Press.
Such misrepresentations help overstate the Bush administration's record of awarding government work to smaller companies.
"The numbers are inflated, we just don't know the extent," said David Drabkin, senior procurement officer for the General Services Administration.
Drabkin, whose agency maintains the records entered by contracting officials across the government, said the GSA is working to ensure accurate entries in the future but the errors are "not something we can clean up overnight."
Once a company's status is mischaracterized, it stays that way through the life of a contract — which can be 20 years. That means smaller firms that the administration intended to help may be frozen out from fresh business by the bigger companies with the incorrect designations.
"This transition has led to the apparent diversion of contract dollars intended for small business," said Sue Hensley, a spokeswoman for the U.S. Small Business Administration.
One small businessman who is pushing to have the listings corrected says that workers are paying in lost jobs.
"Most Americans work for small businesses and most of all the new jobs are created by small businesses. This certainly has a dramatic impact on job creation," said Lloyd Chapman, who formed the California-based Microcomputer Industry Suppliers Association.
The government defines a small business as one that is independently owned and operated and is not dominant in its field.
Size standards vary from one industry to another, based on either the number of employees or revenues.
The Bush administration has set a goal of providing small business with 23 percent of all federal contracts, but has fallen about 3 percentage points short after awarding $53 billion to small companies.
Officials have acknowledged that the percentage was inflated by the erroneous database entries and that the true amount of federal business that went to small firms was smaller.
