Scrub that data

By Max Cacas

The Small Business Administration is out with their newly released SBA Small Business Contracting Scorecard. The SBA says small businesses got a record $83.2 billion in government contracts in 2007 — up almost $6 billion from FY 06. But questions remain about a government-wide scorecard based on volumes of data that officials admit must be “scrubbed clean” to be usable.

After the acting SBA Administrator Sandy Baruah talked about the nuts and bolts in the scorecard, and all the accomplishments that they wanted to report, he turned to Wednesday’s Washington Post article, which he believes, in many ways, actually backs up the findings of the small business scorecard.

I think the Washington Post story was accurate, we have no beef with the story, and we think it actually helps us get the story out, and adds transparency to the situation. The Post’s estimate of about $5 billion in miscoded contracts is very consistent with our own estimate of just shy of $5 billion in miscoded contracts, and that represents an error rate of about 6 percent in the over-all small business contracting universe.


Baruah says it’s important to remember that these numbers about federal contracting to small business are initially reported by the agencies themselves to the Office of Federal Procurement Policy, which then hands them over to the SBA. That includes, he says, the important code that says whether a business is small…or whether it’s bigger:

The codings are done at the individual federal agencies, they are not done here, they’re done by staff at the agencies. We obviously want those to be as accurate as possible. We’re trying to do everything in our power and resources to make sure that it’s accurate. But let me put it in perspective here. There’s nearly 6 million contracting actions taken every year. If you have just a one percent error rate, that’s 60,000 errors. And a one percent error rate in any organization, public or private, is certainly not out of the realm of reasonability, if you will. That doesn’t mean we should excuse errors, it doesn’t mean we should be satisfied with the errors that clearly do exist, it doesn’t get this agency, or any federal agency off the hook for insuring more accurate data.

Baruah goes on to say that the scrubbing of the small business federal procurement data — in other words, taking additional steps to make sure the information in those reports to OFPP are as accurate as possible — has to happen for a variety of reasons:

  • smaller companies get bought by bigger ones
  • humans make mistakes in coding business size in the reports
  • often, there is a lag between the time the information is sent by the agency, to the time that it gets reported out to OFPP and the SBA.

With that in mind, we asked Administrator Baruah if he thinks changes are needed in the way that the small business scorecard is tallied and reported by the SBA’s Office of Government Contracting & Business Development:

What we are seeing is federal agencies trying to make their data more accurate. Remember, this is only the second year that we’ve done this, so we are learning as we go along, and I think the staff within GCBD here at SBA are going to be working this year with our federal partners to develop a more systematized standard operating procedure, if you will, for the scorecard, setting some more deadlines, in terms of when data comes to us, when it will be certified, and when we’ll be able to get this out.

Baruah said he had no advice at this time to pass along to his successor, who will be named by the next president in January.

On the Web:
Washington Post: Agencies Counted Big Firms As Small, 10/22/08
SBA: Small business contracting scorecard press release (pdf document)

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