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SBA steps up oversight of contractor registrations.

Set-Aside Alert
April 29, 2005

SBA has begun monitoring entries in the Central Contractor Registration to make sure businesses are what they claim to be.

Effective April 22, the agency said, small businesses are longer able to self-certify on the CCR database as a small disadvantaged business, 8(a) or HUBZone business. SBA will mark the business fields in the CCR to indicate whether a business is certified in those categories.

In another move to improve the accuracy of the database and combat fraud, SBA will use an automated function to examine a company's Trading Partner Profile and make sure it satisfies the size standards to qualify as small in its NAICS codes.

Small businesses registering or updating their profiles in the CCR will be presented with a fraud and misrepresentation acknowledgement statement listing the penalties imposed for misrepresentation.

Studies by the Government Accountability Office, the Center for Public Integrity and Eagle Eye publishing have found many large contractors being identified as small businesses in official records, artificially inflating the small business share of government procurement. Eagle Eye reported that $2 billion of the $50.8 billion credited to small businesses in fiscal 2002 went to large corporations, nonprofit organizations, government entities or other organizations.

"This upgrade to the CCR database will improve upon the accuracy of the federal government's reporting of small business achievements and will allow the SBA to monitor and confirm the companies' small business status," said SBA Administrator Hector Barreto.

In December SBA began requiring small firms to recertify their eligibility if they merge or are acquired. (SAA, 1/7) The agency is still considering a proposed rule that would require annual recertification on GSA schedules and other multiple-award contracts, instead of the current requirement that companies recertify when options are exercised, usually ever five years. (SAA, 4/1)

Lloyd Chapman, president of the American Small Business League and a campaigner for tougher measures to track down large businesses posing as small ones, said the SBA actions are welcome, but don't go far enough. He said companies are still permitted to self-certify their capability statements and NAICS codes in the CCR, or to leave those fields blank. "This allows people to misrepresent themselves," he said.

SBA said the CCR database is now using only 2002 NAICS codes. Companies in the construction, wholesale trade, retail trade or information services industries should make sure their Trading Partner Profiles reflect the new codes. A conversion chart is available at www.census.gov/epcd/naics02.

 
 

 
 

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