GSA’s Federal Acquisition Service Over-Reported Small Business Contracts by $89 Million

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Every year, when the SBA releases its annual Small Business Procurement Scorecard, I hear from a few folks who mistrust the data. “I think small business awards are being over-reported,” is a pretty common theme for Scorecard skeptics.

A new GSA Office of Inspector General report is a reminder that it’s not paranoia if people are really out to get you. According to the GSA OIG, the GSA’s Federal Acquisition Service over-reported small business contracts by a whopping $89 million in just two fiscal years.

The GSA OIG sampled procurements that the FAS identified as small business awards in Fiscal Years 2016 and 2017. According to the audit report, the FAS’s identification of small business awards in the Federal Procurement Database System–Next Generation was severely flawed:

We found that FAS’s reporting of small business procurements contained significant inaccuracies. We identified $89 million in procurements erroneously recorded as small business in FPDS-NG.

The GSA OIG explained that the flawed data was the result of Contracting Officers reporting work under the wrong NAICS codes:

We identified 10 procurements totaling $274 million for which the NAICS codes in FPDS-NG did not match the NAICS codes on the contract award documents. Four of those ten procurements, totaling $89 million, were large business procurements identified inaccurately in FPDS-NG as small business procurements due to the wrong NAICS code.

In response to the OIG report, the FAS provided a corrective action plan. Hopefully the FAS’s efforts will eliminate these errors in the future.

It’s worth noting that the GSA OIG didn’t review all FAS procurements from FYs 2016 and 2017–just a sample of 30 large small business contracts awarded in those years. Even from this limited sample, the GSA OIG found that small business awards were over-reported by nearly $90 million.

The SBA gave the GSA an “A” for its small business achievement in FY 2016 and again in FY 2017, but skeptics wouldn’t be crazy to question whether those grades were deserved. Either way, let’s hope that the GSA’s corrective action plan produces trustworthy data moving forward.

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