IG Finds ‘Significant Inaccuracies’ in Federal Acquisition Service’s Reporting of Small Business Contracts

There have been “significant inaccuracies” in the Federal Acquisition Service’s reporting of small business contracts, a watchdog reported earlier this week. 

On Monday, the General Service Administration inspector general issued a report that looked at the data GSA’s Federal Acquisition Service entered into the Federal Procurement Data System - Next Generation, which is managed by GSA. The Small Business Administration uses that system to assess if the federal government achieves its overall annual goal of awarding 23% of contracts to small businesses. Based on its review of Federal Acquisition Service procurements from fiscal 2016 and 2017 (that totaled $3.7 billion), the IG identified issues that led to overstating of small businesses procurements. 

“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 [the Federal Procurement Data System–Next Generation],” said the IG. “In addition, FAS’ small business procurement reporting does not identify the extent of the work performed by large businesses. We found approximately $120 million of small business procurements in which large businesses performed a portion of the work.”

The IG reviewed the agency’s contracting data and internal policies as well as interviewed GSA officials and small business contractors, for its audit that was conducted from June 2018 to June 2019. While the report was about FAS, the IG found the issues were, in some ways, out the agency’s control. 

On the issue of incorrect labels, the IG said that while it is contracting officers’ responsibility to input the classification codes into the system, there is a limitation in the Federal Procurement Data System in which codes “pre-populate” for task orders and the system doesn’t let officers change them when they’re wrong. 

As for the involvement of large businesses, the IG said there is no mandate for FAS or small businesses to report how much of the work was subcontracted to large businesses. Therefore, “the reported information may not provide an accurate assessment of FAS’s small business procurements.”

The IG recommended that the FAS commissioner fix the limitations of the contracting system, so contracting officers are able to accurately report procurements. It also recommended that the commissioner discuss with the SBA if changes need to be made on how subcontracting and reseller agreements are reported because GSA cannot do so on its own. 

GSA partially agreed with the recommendation on fixing the contracting data system’s limitations, and concurred with the second. It said it would produce a plan to address both.

GSA's recent schedule consolidation and transition from the Federal Business Opportunities website to beta.sam happened after the time period covered in the report. 

Dave Drabkin, former GSA senior procurement executive and deputy chief acquisition officer, who is now a chairman at the Public Contracting Institute, said the recent changes will not fix the issue with inaccuracies in the database. “This problem isn’t new,” he told Government Executive on Tuesday. “It results from a number of competing policy issues and the reality of the marketplace.”