States government agency responsible for supporting entrepreneurs has been
accused of short-changing small business owners out of $2 trillion in
federal contracts over the last ten years.
currently dictates that small businesses must receive a minimum of 23 percent
of all government contracts granted, and the Small Business Administration (SBA) is responsible for
helping to ensure that target is met by connecting government agencies with
to advocates at the American
Small Business League (ASBL), the SBA has been “falsifying” the
government’s 23 percent target compliance by using inaccurate budgeting
In 2015, the Congressional Budget Office (PDF) reported an
acquisition budget of $1.2 trillion. This would mean that small businesses
should have been legally entitled to receive a minimum $276 billion worth of
government contracts that year. But according to the ASBL, the SBA only used an
acquisition budget of $370 billion in its figures — thus “inflating their
numbers” to show that small businesses received 24.9 percent of all federal
contracts in 2015.
As a result,
the ASBL asserts small business owners received just $40 billion of the $276
billion in contracts that should have been set aside for them last year,
landing them with just three percent of all federal contracts.
the ASBL accused the SBA of diverting billions of dollars in federal contracts
to larger companies thanks to a grandfathering rule that continued to class
businesses that had grown substantially in size over time as “small”.
accusations led to the ASBL filing a controversial injunction against the SBA
in May, although Federal District Judge Vince Chhabria ultimately tossed out the injunction (PDF) on October 18. He
argued that, if the SBA has indeed falsified meeting its target requirements,
it should be Congress not the courts that hold the agency to account.
release, ASBL President Lloyd Chapman said the court’s decision is
disappointing setback in the group’s battle to hold the SBA responsible.
lawsuit had been allowed to get its rightful day in court on the merits, the
lawsuit would have required the SBA to give all small businesses —
and doubly so for minority, women-owned, and disabled veteran
businesses — a larger and proper share of federal procurement,” Chapman
the suit frustrates the legitimate rights of small businesses to their proper
share of the true scale of government contracting.”
The SBA has
yet to issue a statement following the court’s decision to toss out the
injunction. The ASBL has said it plans to appeal.
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