No. 246

December 2004

SMALL BUSINESS

RESEARCH

SUMMARY

Analysis of Type-of-Business Coding for the Top 1,000

Contractors Receiving Small Business Awards in FY 2002

by Eagle Eye Publishers, Inc.

2004. [14] pages. Fairfax, Va. 22030

under contract no SBAHQ-02-M0465 (Part 2)

This Small Business Research Summary (ISSN 1076-8904) summarizes one of a series of research papers prepared under contracts

issued by the U.S. Small Business Administration’s Office of Advocacy. The opinions and recommendations of the authors of this study do

not necessarily reflect official policies of the SBA or other agencies of the U.S. government. For more information, write to the Office of

Advocacy at 409 Third Street S.W., Washington, DC 20416, or visit the office’s Internet site at www.sba.gov/advo.

The Individual Contract Action Report (ICAR),

maintained by the General Services Administration’s

(GSA’s) Federal Procurement Data System (FPDS) is

the government’s master contract database of how

agencies spend available procurement dollars.

Information entered into the FPDS plays a critical

role in measuring the success or failure of small

business procurement policies each year.

A review of the transaction records coded as being

awarded to small businesses in the ICAR file identified large vendors as some of the actual recipients.

This calls into question the reliability of the FPDS in

determining contractor size. Drawing extensively

from data in the ICAR file, this study provides a preliminary statistical assessment of the extent to which

names of large businesses appear among the awards

made to the 1,000 largest small business contractors

in FY 2002.

Overall Findings

Of the top 1,000 small business contractors in FY

2002, Eagle Eye Publishers’ analysis found 44 parent

companies it identified as either large firms or

“other.” Contracts to these two groups taken together

had a total value of $2 billion. The coding problem

could have been a result of erroneously assigned

type-of-business codes, or of a large firm’s acquisition of a smaller firm during the fiscal year, or of a

small firm’s growing out of its size classification,

among other possible reasons.

Highlights

• Eagle Eye found 39 large companies among the

top 1,000 small business contractors in FY 2002. It

classified another five contractors as “other” entities,

including non-profit organizations and government

entities.

• The total contract dollars awarded to these 44

entities was $2 billion. If these awards had been

coded as going to large businesses or “other,” this

would have lowered the small business share of FY

2002 procurement from 20.5 percent to 19.7 percent.*

• The Department of Defense and the General

Services Administration accounted for 79 percent of

the contract awards found to have gone to large businesses or those in the “other” category. The analysis

shows that DoD’s contracts amounted to $967.6 million and GSA’s were $620.0 million. Other agencies

had significantly lower amounts.

• Eighty percent of these awards were issued on

some form of multiple award or IDIQ (indefinite

delivery/indefinite quantity)-type contract.

• The inconsistent type-of-business coding found

in this study suggests that federal policymakers need

to review and streamline agency policies on designating vendors as small businesses.

*Percentage of contracting dollars designated for small business

procurement based on Eagle Eye estimates for FY2002.
Scope and Methodology

The authors selected all FY 2002 ICAR transaction

records coded as a “small, minority-owned business”

or “all other small business.” This information was

merged with Eagle Eye’s proprietary data on parent

companies for every firm listed in the ICAR database. The resulting database was then sorted, totaled,

and ranked, generating Eagle Eye’s small business

ranking for FY 2002.

Eagle Eye then identified all known Dun &

Bradstreet Data Universal Numbering System

(DUNS) numbers associated with these companies.

This contract file was also merged with the Central

Contractor Registry (CCR) and Pro-Net company

files, using the DUNS number as the linking field, to

identify the SBA- and Department of Defense

(DoD)-assigned small business classifications for the

top 1,000 contractors. The official CCR and Pro-Net

small business indicators helped to validate Eagle

Eye’s small business designations.

Eagle Eye developed a coding system of business

size status to identify small firms in the ICAR data

that appeared to be coded correctly, questionably, or

incorrectly.

The final report was peer reviewed consistent with

the Office of Advocacy’s data quality guidelines.

More information on this process can be obtained by

contacting the director of economic research at advocacy@sba.gov or (202) 205-6533.

Ordering Information

The full text of this report and summaries of other

studies performed under contract to the U.S. Small

Business Administration’s Office of Advocacy are

available at www.sba.gov/advo/research. Copies are

also available from:

National Technical Information Service

5285 Port Royal Road

Springfield, VA 22161

(703) 487-4650, (703) 487-4639 (TDD)

www.ntis.gov

NTIS order number: PB2005-100004

Pricing information:

Paper copy A03 ($26.50)

Microfiche A01 ($14.00)

CD-ROM A00 ($18.95)

Electronic download A00 (Free) 

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