...aiding, counseling, assisting and protecting the interests of small businesses...

July 6, 2006 12:48 PM

Two weeks ago, the Small Business Administration proudly announced that they surpassed the legally required 23% of Federal contracts to small businesses. "This is excellent news for small businesses doing business with the federal government,” said Administrator Barreto. “For the third year in a row, the federal government has met or exceeded its small business contracting goal. The President and his administration are committed to helping small businesses get their fair share of government contracts.” [pdf] They however failed to mention that they continue to classify Boeing (member of the Dow Jones Industrial Average), GTSI ($900M in revenue last year), and other "small" businesses in that category.
posted by pwb503 (18 comments total)

From the article:

"Under federal contracting laws, a small business is determined by revenue and number of employees, under standards set by the Small Business Administration. Any manufacturer with fewer than 500 workers is viewed as small. And in the service and retail industries, the threshold is typically $6.5 million in revenue.

A spokesman for Boeing, listed as having 37 contracts, said the company was listed because it had acquired some small businesses with contracts or because its subsidiaries had received contracts as small businesses.

"The government is looking at these companies as small business and not at Boeing as a whole," said Bob Jorgensen, a Boeing spokesman. "They feel these companies shouldn't be penalized because they are associated with a large company."
posted by pwb503 at 12:51 PM on July 6, 2006

In 1996, GTSI was awarded a 10-year General Services Administration contract for a company with 500 employees or fewer, which the government considers a small business, said Paul Liberty, a spokesman for GTSI. "Since the company was classified as a small business at the time of the contract, it maintains that status until the contract ends," Mr. Liberty said.

GTSI's competitor goes on to complain about this "loophole" but there is no loophole - there's a contract.

Maybe they can change the rules of engagement going forward on new contracts, but you can't give someone a 10 year contract and shut it down per rules that did not exist in the original contract.
posted by b_thinky at 1:06 PM on July 6, 2006

b_thinky: GTSI's competitor goes on to complain about this "loophole" but there is no loophole - there's a contract.

Although it's not made completely clear, I think the part that irks GTSI's smaller competitors is mentioned in the very next sentence in the article.

The contract ends next year, and GTSI may no longer qualify as a small business, but until then the company can compete for contracts as a small business.

So while GTSI may have been a small company 10 years ago, they clearly aren't one now; yet, they're still eligible for new small business contracts now.
posted by mhum at 1:22 PM on July 6, 2006

A spokesman for Boeing, listed as having 37 contracts, said the company was listed because it had acquired some small businesses with contracts or because its subsidiaries had received contracts as small businesses.

As someone whose startup was largely SBA-funded, I think that's perfectly reasonable. There's no reason to invalidate a 10-year contract (and cause a great deal of additional expense transitioning to a new contractor) just because a company has grown or been acquired.

However, the loophole that permits large firms to compete for new small biz contracts, simply because of their existing SBA contracts, is utter crap and needs to be closed. SBA has no incentive to close it, though, since it means more work for them. And there's nothing a bureaucrat hates more than actually working.
posted by xthlc at 1:24 PM on July 6, 2006

Fine, b_thinky, they can keep their contract. But the government should quit bragging about how pro small business they are if they don't re-evaluate these businesses. They shouldn't still count on the list if they no longer would qualify for a contract.

The whole "it's not a part of Boeing, it's a small business" thing is bullshit.
posted by graventy at 1:26 PM on July 6, 2006

But the government should quit bragging about how pro small business they are if they don't re-evaluate these businesses. They shouldn't still count on the list if they no longer would qualify for a contract.

Maybe, but if the % of small business contracts in increasing, then I'd assume so is the number of actual small businesses that are getting these contracts is probably increasing as well. Two examples doesn't make a trend.

So while GTSI may have been a small company 10 years ago, they clearly aren't one now; yet, they're still eligible for new small business contracts now.

Yes, it's all because they received a 10 year contract 9 years ago when they were still a small business with <500 employees. Now they're larger, but the terminology of the original contract apparently doesn't stipulate an end to the contract if the company outgrows small business status before the contract ends.

Nobody's breaking any rules here. The rule may be dumb and inefficient, but hey, that's government.
posted by b_thinky at 1:42 PM on July 6, 2006

b_thinky: the terminology of the original contract apparently doesn't stipulate an end to the contract if the company outgrows small business status before the contract ends

Indeed. I'm not sure if anyone is arguing that the original contract should be terminated. I didn't see anything about that in the article nor did I mean to imply such. I think one of the main sticking points is whether or not the fact that GTSI was a small business when this contract was signed should allow them to be eligble for new small business contracts.

Also, you are correct in saying that "nobody's breaking any rules here". I think the gist of the article was that all of these apparent misclassifications are the result of the government's own laws and regulations.
posted by mhum at 1:49 PM on July 6, 2006

So this is what Bush means when he's saying he's the small business president.
posted by drezdn at 1:51 PM on July 6, 2006

b_thinky writes "Yes, it's all because they received a 10 year contract 9 years ago when they were still a small business with less than 500 employees. now they're larger, but the terminology of the original contract apparently doesn't stipulate an end to the contract if the company outgrows small business status before the contract ends.

I don't think anyone is asking for their current contract to end. The complaint seems to be over rules that allow for GTSI to bid for new contracts as a small business so long that 9-year-old contract is in force. This seems a reasonable complaint: why not consider the company's current size in evaluating their qualifications in bidding for new contracts.
posted by mr_roboto at 1:52 PM on July 6, 2006

And there's nothing a bureaucrat hates more than actually working.

As opposed to hard working professional types like us, who never find the time to take two hour lunches or post on metafilter, huh xthlc? The notion of the "lazy bureaucrat" is an opportunistic trope used to further the neo-right-wing privatization scam. (Not that there aren't lazy bureaucrats; just that the private sector folks aren't really much better.)
posted by saulgoodman at 2:00 PM on July 6, 2006

The complaint seems to be over rules that allow for GTSI to bid for new contracts as a small business so long that 9-year-old contract is in force. This seems a reasonable complaint: why not consider the company's current size in evaluating their qualifications in bidding for new contracts.

Yeah, that makes sense but you have to weigh it against the cost for the SBA to review each individual company to make sure they're currently in compliance. 10 years is a long time for a contract and I'm sure they did that intentionally to avoid wasting man-hours on this stuff.

Maybe worth changing the rules for if this sort of thing is an epidemic, but I don't think that's been proven. There are mountains of SBA contracts given out annually.

As opposed to hard working professional types like us, who never find the time to take two hour lunches or post on metafilter, huh xthlc? The notion of the "lazy bureaucrat" is an opportunistic trope used to further the neo-right-wing privatization scam. (Not that there aren't lazy bureaucrats; just that the private sector folks aren't really much better.)
posted by saulgoodman at 2:00 PM PST on July 6 [+fave] [!]

Been to the post office or DMV lately?

Forgetting anything about individual workers, I'd submit government workers are generally more inefficient than their private counterparts because of the stupid bereaucratic processes they box themselves into.
posted by b_thinky at 2:38 PM on July 6, 2006

Been to the post office or DMV lately?

Just got back from the USPS. Their service was equivalent if not superior to that of WalMart the last time I went there (yes, I shop at WalMart 2-3 times a year). The post office worker added extra reinforcing tape to a package I was shipping, and the WalMart checker had to call for assistance when an item didn't scan.

And my last visit to the DMV two years ago took less time to renew my car registration (where I was 80th person in line) than the Auto Club did last year (where I was 3rd person in line). In defense of the Auto Club, I was also re-joining after letting my membership lapse for three years AND they tried to sell me car insurance while I waited.

Stupid bureaucratic processes are not exclusive to public institutions.
posted by wendell at 2:55 PM on July 6, 2006

And there's nothing a bureaucrat hates more than actually working. - xthlc

Oh come off it. There's no reason to slag an huge caterogie of tens of thousands of people just because... well, no reason really.

or, what saulgoodman said.

I'd submit government workers are generally more inefficient than their private counterparts because of the stupid bereaucratic processes they box themselves into. - b_thinky

Do you honestly believe that government employees just make up lots of rules on the spot? As much as it's a pain in the ass to try and deal with beuraucracy from the outside, it's exponentially more iritating to be the gov't worker getting hampered by all the laws and regulations that dictate our every move, and then get told every fucking day that you're lazy/incompetent/whatever. There's lazy people in government, sure. But there's lots of hardworking people trying to make things better, more efficient, smarter, more friendly etc etc. Just like any other sector.

I've only worked in government for 2 years and I'm already really sick and tired of the stereotypes. I can only imagine how I'll feel in another 30 years.
posted by raedyn at 3:00 PM on July 6, 2006

I try really hard to help the citizens that I serve and to do a good job every day. A lot people come in the door hostile and assuming that I'm out to get them somehow and that I "don't want to work" blahblahblah. So they treat me like shit. I don't want to get too damn jaded, but I can see how after some years of that treatment, people start to not want to help people.
posted by raedyn at 3:03 PM on July 6, 2006

government workers are generally more inefficient
Inefficient does not necessarily mean lazy and vice-versa.
posted by forrest at 3:20 PM on July 6, 2006

b_thinky:
Forgetting anything about individual workers, I'd submit government workers are generally more inefficient than their private counterparts because of the stupid bereaucratic(sic) processes they box themselves into.

One of my favorite quotes from the Nobel winning economist Herbert A. Simon:

Most producers are employees, not owners of the firms..... Viewed from the vantage point of classical [economic] theory, they have no reason to maximize the profits of the firms, except to the extent that they can be controlled by owners.... Moreover, there is no difference, in this respect, among profit-making firms, non-profit organizations, and bureaucratic organizations. All have exactly the same problem of inducing their employees to work toward the organizational goals. There is no reason, a priori, why it should be easier (or harder) to produce this motivation in organizations aimed at maximizing profits than in organizations with different goals. The conclusion that organization motivated by profits will be more efficient than other organizations does not follow the organizational economy from the neo-classical assumptions. If it is empirically true, other axioms will have to be introduced to account for it.[Wikipedia]

Which, in simpler language says, there is no reason to assume that a corporation will be more efficient than government or non-profit just because it works for a profit. I've worked for two huge hundred-year-old multi-national corporations and they were the most amazingly bureaucratic and inefficient places to work that I've ever seen. And for the record, I can't remember a time when I had a problem with either the post office or PennDot (PA's version of the DMV).
posted by octothorpe at 3:36 PM on July 6, 2006 [1 favorite]

meh, whoda thunk that there could be more doublespeak coming out of dc?
posted by moonbird at 3:48 PM on July 6, 2006

The nominee to head the SBA, Steve Preston, went to my high school. Because he's an executive with ServiceMaster, a lot of SBA stakeholders are upset -- he isn't any kind of entrepreneur or small businessman, although he argues he's helped thousands of them -- Servicemaster franchisees.
posted by dhartung at 10:12 PM on July 6, 2006