Contracts: The SBA's Fuzzy Math

Its tally is bloated

In June, the Small Business Administration announced that small businesses received a record-breaking $79.6 billion in federal prime contracts. That's 25.4% of the $314 billion in total contracts awarded in 2005 and enough to surpass the agency's stated goal of 23%.

But hold the champagne. "The reporting is fake reporting," says John Kerry (D-Mass.), the ranking member on the Senate Committee on Small Business & Entrepreneurship. "The Administration is exaggerating." After analyzing General Services Administration and Transportation Dept. data, Eagle Eye Publishers, a Fairfax (Va.) company that tracks federal contracting, agrees. It pegs the small business total at $64.5 billion.

In addition, the SBA's numbers do not include contracts to companies overseas, those partially or fully paid by foreign governments, federal prison industries, and some other sources of federal contracts. Adding those contracts boosts the total to $377 billion, and decreases small business' share to a less impressive 17%. With $377 billion to go around, you'd think there'd be a bit more for entrepreneurs.

By Jeffrey Gangemi

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