Small businesses play an important role in the health of the economy.

That’s especially true in Maine, where, as of 2001, there were more than 38,900 small businesses employing more than 60 percent of the state’s workforce.

When the federal government sets goals for awarding contracts to small businesses, that’s good. What’s not good, however, is the actual execution of this policy, which, as it stands now, needs to be just plain executed instead.

Congress and the Bush administration have a target of awarding 23 percent of all federal contracts to small business. The problem is that the government’s contractor database lists behemoths like Verizon Communications, AT&T Wireless, Barnes & Noble, Dole Food Co. and KBR – a Halliburton subsidiary that is one of the world’s largest providers of oil field services – as small businesses.

A few isolated mistakes might be excused. But according to research by the Senate Committee on Small Business, which Maine’s Olympia Snowe leads, as many as 5,000, or 10 percent, of the 50,000 contracts that were listed as having been awarded to small businesses during the 2001 fiscal year actually went to companies that were in the system twice – once as a small business and once as a big business.

According to the committee, the errors call into question about $13.8 billion in federal contracts that might have been incorrectly reported as benefiting small businesses.

“This practice violates the very tenet of the law,” Snowe said when asked about the database errors. “There is no point in having a 23 percent requirement if big businesses and large companies are taking away economic opportunities from small business.”

So far, there’s been no evidence that large companies have broken the rules so they could be designated as a small business. The problem looks to be a series of mistakes. But surely when the people who finally OK a contract or examine data about contract awards see the name Verizon, they should recognize it from television commercials or their own phone bills.

All this means two things: Work intended for small businesses is being misdirected, and numbers released by the government to show its support for small businesses are misleading and wrong.

Helping competent small businesses compete for government jobs is an important goal. Again, looking just at Maine, small businesses make up the bulk of the companies in the state. In 1999, 97.5 percent of the businesses in the state carried the “small” designation and employed fewer than 500 employees.

This issue shouldn’t require a legislative fix. But so far, the problem hasn’t been resolved. Small businesses are waiting.


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