Group argues for shielding contractors’ revenue, employee counts

Disclosure would enable verification of size-based preference claims, advocates of transparency say.

An association representing federal contractors has requested that key data related to company size be withheld from the public, a measure that watchdog groups say would restrict access to important information.

The Professional Services Council, an Arlington, Va., group representing government service contractors, made the request in response to a notice of the pending release of information on all companies included in the Central Contractor Registration database. Undisclosed parties sought the release of the information under the Freedom of Information Act, according to the notice.

In its comments, PSC asked that three fields -- annual revenue, a company's number of employees and a company-specific identification code -- be excluded from publication, along with other fields such as bank account and routing numbers that the Defense Department office managing the registry has said are exempt from disclosure.

PSC argued that a company's revenue and number of employees are not important to the public. "The annual revenue number provides no useful information to the public; nor does giving the public access to this information assist the public in determining whether a firm is a 'small business' under the disclosed [industry classification] code since the determination is made on a contract-by-contract basis," wrote Alan Chvotkin, senior vice president at PSC, in a comment letter.

He similarly argued that the "average number of employees" field provides no useful information.

Some watchdog groups disagree, however, arguing that disclosure of those two fields is critical to letting the public verify a company's official size status. Under governmentwide acquisition rules, a company's right to classify itself as small for a particular contract -- potentially making it eligible for preferential treatment in the bidding process -- depends on the industry and either the business' revenue or the number of employees.

Scott Amey, general counsel of the Washington-based watchdog group Project on Government Oversight, said the information is currently available through another major contracting database, the Federal Procurement Data System.

"Certainly, losing that information would be a step backward in overseeing contracts awarded to small businesses," Amey said. "Access to contractor data adds a layer of accountability and transparency that taxpayers will lose if more data is shielded from them."

Amey acknowledged that while publicly traded companies already disclose revenue data, some private companies might prefer not to disclose that information. "Some privately held contractors might have a case, but receiving taxpayer dollars comes with certain duties. Accountability and transparency should prevail over corporate demands," he said.

Lloyd Chapman, president of the American Small Business League and a frequent litigant in cases alleging that large companies fraudulently misrepresent themselves as small, said government officials have sought to withhold the employee and revenue information to cover up a pattern of inappropriately awarding contracts to large firms.

In a December 2006 press release, Chapman's group highlighted what it said was a change to the contractor registry.

"On Tuesday, Dec. 12, 2006, the government revoked access to information that allows the public to determine the small business status of federal contractors within the Dynamic Small Business Search of the Pentagon's Central Contractor Registry," the group said. "Around 3 p.m. Pacific time, information on company revenue and number of employees suddenly disappeared from company profiles. In its place, this message was posted, 'A firm's actual revenues and number of employees are not releasable under the Freedom of Information Act.'"

Chapman believes the change was related to an investigative piece he was working on with a broadcast news group, which he says was subsequently canceled.

In the Federal Register notice announcing the pending database publication, though, officials identified 44 of the database's 194 fields that would be withheld due to exemption from FOIA. The revenue and employee fields were not among them.