Center For Public Integrity Attacks Federal Government's Small Business Contracts

As reported by the AP, critics are crying out that the federal government is bending the rules of small business contracting by not complying with mandatory quotas for rewards and by misconstruing the definition of "small business."

The critics point to The Titan Corp. (Titan) as its "poster-child" for a company taking advantage of small business loopholes by purchasing small businesses with lucrative government contracts. Titan, a company with $1.8 billion in revenue in 2003, received $550 million in small business contracts from 1998-2003 thanks to a string of acquisitions.

The critics also point to GTSI Corp. as its "poster-child" for a corporation that continues to obtain small business contracts when the firm has outgrown small business status long ago. GTSI has won over $1.2 billion in government contracts over a 6 year period, even though GTSI's total sales in 2003 was $954 million.

These two "poster-child" corporations provide critics with reason to question SBA's claims that they are meeting their contracting targets. The main problem that critics point to is that government contracts allow companies to maintain small business status over the life of the contract, which can extend upwards of twenty years. SBA maintains that it is meeting its goals and its numbers are sound.