The Magic of SBA's Small Business Procurement Scorecard
The July 28, 2021 press release by SBA starts like this:
Federal Government Awards Record-Breaking $145.7 Billion in Contracting to Small Businesses
Eight Federal Agencies Receive A+ Rating on FY2020 Small Business Federal Procurement Scorecard
Our friends at the U.S. Small Business Administration, or the SBA, have released the results of the FY2020 Small Business Procurement Scorecard. Surprisingly, they issued an "A" grade for Government-Wide Performance of agencies meeting, exceeding or making a good effort to achieve the goals set by them and the SBA for prime and subcontracting achievement. I say surprisingly, because of a glaring truth not included in the report but very well-known to the SBA and others. What is that truth?
The Government didn't really earn this grade. The Government also did not "assist" small businesses with winning all of the $145.7 billion cited as 'record-breaking spending.'
How dare I, some will say. With all of the meticulous detail and the sophisticated formulas for counting obligated dollars, the report must be true. Right?
Here's why I believe this.
- Goals. By definition, a "goal" is something planned, intended or at the very least, pursued. Of the $145.7B obligated (awarded) to small business concerns during fiscal year 2020, over $24B of that was defined as "NO SET ASIDE USED." in the system SBA uses to capture data related to the Prime Contracting Achievement portion of the scorecard. That's 16.5% of the overall spend cited as record spending on small business. Those "NO SET ASIDE USED." dollars were spread across 68 Contracting Departments with $20B of it coming from DoD, HHS, USDA, VA and DHS.
Instead of "borrowing" success from the small businesses SBA is charged with helping, let's come up with ways to find $24B in actual set-asides and sole source awards, and let go of those hard-fought dollars won by small business with NO ASSISTANCE.
- Double and Triple-Dipping. I did my own query in the Data Bank Ad-Hoc system (formerly FPDS-NG Ad Hoc) and noticed a trend. Obligations to the four socioeconomic designations listed under the Prime Contracting Achievement:
- Woman Owned Small Business
- Small Disadvantaged Business
- Service Disabled Veteran Owned Small Business
shared more than just the spotlight of achievement, they shared many of the same obligated dollars, too. Although each of those designations was reportedly assisted by Government to achieve these numbers, the truth is there are competitive and sole source obligations for nearly every recognized designation counted towards the success the others. As an example, Small Disadvantaged Business obligations include $500M in WOSB awards, both competitive and sole source. There is also $2.2B in SDVOSB competitive and sole source obligations counted towards the SDB achievement.
What would happen if the Government only counted those once?
For one, the grade of "A" its given itself for the last fiscal year and many prior to that, would change. Most likely to a "C" if not lower. More importantly, think of the enormous economic impact that would occur in communities around the country. If the dollars represented by the Government's intent actually existed and made it to small businesses. These are the same small businesses touted by the Government for job creation and innovating in support of agency missions.
What if we showed the leaders and members of the House and Senate Small Business Committees, and Congress as a whole, what impact this half-truth was having on the small businesses owned and operated by their constituents? I think it's time we have that discussion and break down this spending to show how many small businesses in their Congressional Districts are not being afforded opportunities because of the approaches currently in play.
I invite Chairwoman Nydia Velazquez of the House Committee on Small Business and Chair Ben Cardin of the Senate Committee on Small Business & Entrepreneurship, to invite me and my colleagues in for a conversation. Not to bash Government but to discuss the truth and to develop solutions for immediate and future wins for agencies, small businesses and our Nation.