Agencies with the deepest pockets gave the least amount of business to small firms last year, according to a new report by the Small Business Administration.
More than 60 percent of federal prime contract dollars in fiscal 1998 were spent by agency procurement centers with poor records of awarding contracts to small firms, SBA's Office of Advocacy concluded in the report. On average, these centers awarded only 6.3 percent of contract dollars to small firms.
The study ranked more than 2,000 federal procurement centers on their "small business friendliness," as determined by the percentage of spending awarded to small businesses. Prime contracts less than $25,000 and subcontracts were not included in the review.
The centers with the highest small-business-friendliness rankings spent an average of 41.6 percent of contract dollars on small firms, the study said. Nearly ten percent of the reviewed procurement centers spent all of their contract dollars with small businesses, while 260 centers, or 11.6 percent, did no business at all with small firms.
Federal procurement policy requires agencies to spent at least 23 percent of their prime contract dollars in the small business sector. But in fiscal 1998, small businesses took home less than 20 percent of the $181.7 billion federal agencies awarded in prime contracts reviewed that year, SBA found.
The discovery that the more a purchasing center spent, the less business it gave to small firms was unexpected, said Jere W. Glover, chief counsel for advocacy at SBA. One explanation, he said, may be that large centers are "so busy buying tanks or F-16 fighters that they aren't focusing on other opportunities that are out there."
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