This document was e-mailed to the Office of Advocacy, U.S. Small Business Administration on November 14, 2003.
The only alteration of the document, in addition to this explanatory paragraph, is the “DRAFT”
watermark/background added to ensure that reviewers appreciate its status.
Summary of Findings
The small business code in the GSA’s master procurement database has become a
misleading indicator of how well the government is meeting its small business goals.
An analysis of the leading 1,000 federal contractors coded as small businesses in the
General Service Administration’s (GSA’s) master FY 2002 prime contract file reveals
that over seven percent of the dollars awarded to these 1,000 firms went to companies
that cannot be characterized as small businesses. Furthermore, an additional 18 percent
of these dollars went to firms exhibiting inconsistent and questionable small business
In fiscal year 2002, the GSA reported that 70,814 companies received a total of $48.5
billion in prime contract dollars as small vendors. The 1,000 largest small contractors
accounted for $25.6 billion, or 53 percent, of the FY 2002 small business total. These
same 1,000 companies, combined with their parent company affiliates, also reported
receiving $48.9 billion as large firms, $138 million as foreign firms, $653 million as
domestic contractors performing outside the United States and $2 billion as “Other,” a
business category that includes state and local governments, non-profit institutions and
Historically Black Colleges and Universities. Overall, the parent companies of the Top
1,000 small businesses received a total of $77 billion in prime contracts.
Among these Top 1,000 companies $1.6 billion in contracts coded as small business
awards went to 32 firms Eagle Eye designated as large businesses and another $275
million went to 8 firms designated as “Other.” A total of $438 million in 8(a) and small
business set-aside dollars went to firms that are probably large and n