Congress Told to Let Private Sector Interpret Government Contracting Results to Prevent SBA Report Card to Misinform the public. Misinformation Creates Distrust and Discourages Participation in Government Contracting
Embargoed for Release August 8th Contact: Raul Espinosa (904.347.4726) Congress Told to Demand Private Sector Interpretation of Contracting Results to End Agency Misrepresentation of Small Business Awards Proposed Procurement Portal will Bring Transparency by Tracking Results and Participation WASHINGHTON, DC., AUGUST 8th, 2011. – At the request of the Senate Small Business Committee1, the Umbrella Initiative and its Think Tank offered Congress five recommendations with which to bring accuracy and integrity to the tracking of contracts awarded to small and disadvantaged businesses. Dr. Henry Thomas, DPA, Co‐Founder of The Umbrella Initiative said, “the combination of misinformation, barriers plus a lack of academic procurement trainings has created mistrust in the government2 and has discouraged the participation of small and disadvantaged businesses in government contracting.” The Umbrella Initiative is an out‐of‐the‐box entrepreneurial initiative that involves private sector entrepreneurs, University professors and students in sustainable government contracting projects that bring transparency to government contracting and create jobs in the community. Its mission is “to double the number of small businesses contracting with the government by the year 2020.” Below are the Umbrella Initiative recommendations to Congress: 1. OMB – through the Data Quality Act (DQA) ‐ must become responsible for bringing accuracy to the reporting of the contracting results with small and disadvantaged businesses. The ‘certification’ of the Agency procurement data, which OMB has put in place, by itself, will not prevent future blunders involving the Agencies data. 2. Private industry must be used to effectively interpret the government’s results in contracting with small and disadvantaged businesses. This belief, is shared by the Government Community of Technology Officers.3 3. The SBA Size Standards must be simplified4 – as small business contractors have demanded through NaFCA ‐ and all of its elements (i.e., size determination, size protests, penalties and enforcement) overhauled. Fixing one element without the other three is equivalent to fixing a flat tire on a car without an engine. 4. Academic procurement training ‐ as opposed to government procurement training ‐ is essential in the elimination of abusive procurement practices. Let’s face it, Procurement Officials will not admit their own barriers are a large part of the problem. 5. The participation level of small and disadvantaged businesses in government contracting is the only measurable tool that can validate the success or failure of the outreach efforts that are being undertaking. Funding and supporting such validation efforts, along with those which bring transparency to the process, are badly needed. 1 Letter with Think Tank Evaluation Sent to Senate Small Business Committee. ‐ http://bit.ly/phUhkN 2 The Pew Research Center Research Report on Trust in Government. ‐ http://bit.ly/ph1XpL 3 Mark Day, CTO at HUD,“Federal agencies can often do more to improve public knowledge and trust by providing raw data to private sector than by trying interpret the data themselves.” 4 The NaFCA solution Summit video on Size Standard Simplification, http://bit.ly/ggzDmx Dr. Thomas comments emphasize the fact that the procurement data Federal Agencies have been turning over to SBA to be made public through the SBA Report Card has been wrong ever since the SBA Report Card was conceived5. Dr. Henry Thomas is the former Director of the Florida Center for International Policy at the University of North Florida (UNF). He, along with Raul Espinosa, Founder of the Fairness in Procurement Alliance (FPA), co‐founded the Umbrella Initiative to bring transparency to public contracting, increase the participation of minority and disadvantaged businesses and to create jobs that benefit underserved communities. The SBA Report Card Inaccurate Data The Umbrella Initiative provided the Senate Committee with an evaluation by Florida Atlantic University Public Procurement Center confirming the methodologies used by the private sector to verify anomalies on the list of the Top 100 Contractors Receiving Small Business Contracts.’ Watchdog groups such as the American Small Business League (ASBL) had claimed that 61 businesses on the FY 2010 list were not small businesses, yet they were listed as having been awarded $8.8 B in small business contracts.6 Daniel Gordon, the Administrator of the Office of Federal Procurement Policy (OFPP) at OMB on a May 31st, 2011 Directive to Agency Procurement Officials7, admitted that, “Federal procurement data that is gathered by, reported, and entered by procurement agencies into information systems…is often incomplete, inaccurate, and untimely.” The SBA Inspector General has also acknowledged the fact that the Federal Agencies known practice to take credit for small business contracts awarded to ineligible large firms is one of the SBA two biggest challenges.8 The second one is stopping large businesses from misrepresenting their size or status. Espinosa commented, “we interviewed data intelligence service providers which admitted that only a few of the Agencies subscribe to private data providers and many in the contracting workforce have cautiously admitted to them their fear that the loss of their jobs outweigh the advantages provided by those intelligence providers.” Espinosa went on to say, “given the public’s skeptical eye towards most claims the government makes on having achieved its annual small business contracting goals, it would be very wise for them to embrace private sector providers to corroborate their achievements before they submit them to SBA for the Report Card.” A new OMB directive, put in place on March 31st, 2011, but not implemented on the data reported on the 2010 SBA Report Card, now requires that Agencies certify the accuracy of the procurement information they release, including the data for the SBA Report Card, a recommendation The Umbrella Initiative had made – on POGO Guest Editorial in 20109 ‐ to eliminate the misrepresentation of contracting results by Federal Agencies. ‐ MORE ‐ 5 Challenging the SBA Claims on the contracting result for FY 2005 ‐ http://bit.ly/oLfjBv 6 ASBL Announcement. ‐ http://asbl.com/showmedia.php?id=1859 7 OMB Memo to Contracting Officials. ‐ http://1.usa.gov/l1O7eB 8 SBA Report OIG 05‐15.‐ http://bit.ly/ilWeiE 9 Project on Government Oversight (POGO) Guest Editorial. ‐ http://bit.ly/913R9K Discouraging the Participation of Small and Disadvantaged Businesses Dr. Carlton Lamar Robinson, Director of Research for the Umbrella Initiative and past President of the First Coast Black Chamber of Commerce said, “To further demonstrate that Federal Agencies, through their own barriers and misrepresentation of results, have been discouraging the participation of small businesses in government contracting, the Umbrella Initiative released a chart which would demonstrate than less than two (2) percent of eligible small businesses are actually registered to do business with the Federal government.” SMALL AND MINORITYBUSINESS PARTICIPATION IN GOVERNMENT CONTRACTING AT THE FEDERAL LEVEL Latest U.S. Businesses Registered as Umbrella Census Data of 03‐2011 to contract Initiative Mission with the Federal by 2020 Government 10 Total Small Businesses 27.2M 482,262 (1.7%) 964,524 Minority Businesses 5.8M 117,636 (2%) 235,272 Disadvantaged Businesses11 21.1 M 260,860 (1.2%) 521,720 Espinosa said, “The Umbrella Initiative is focused on measurable projects that encourage participation and bring the type of transparency that prevent disparities and abusive procurement practices.” Dr. Thomas added, Below is a summary of how The Umbrella Initiative intends to accomplish its objectives: Through a replicatable and scalable Procurement Portal that support participation, education and tracking of contracting data, including awards. Through a Legal Center Network that will involve Law School professors and Students in bringing transparency to the process Through a Think Tank Network that will involve Business Schools and Academic procurement Centers to bring attention to barriers and regulatory abuses. Through a Distance Learning Center to help train the procurement work force and support entrepreneurs. # # # 10 Registration on the the CCR Database is required to bid on government contracts. ‐ https://www.bpn.gov/ccr/default.aspx 11 Represents small businesses owned and/or controlled by members of groups Congress has determined, through P.L. 95.507, that are economically disadvantaged or underserved.
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