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SBA accused of falsifying small business contracting data

by | Dec 4, 2007 | ASBL News

News

SBA accused of falsifying small business contracting data

Central Valley Business Times
December 4, 2007

The Small Business Administration is falsifying data to cover up the fact that Fortune 500 firms have received most small business contracts dollars in recent years, charges the American Small Business League of Petaluma.

Citing a New York Times story, the ASBL says large defense contractors are using “millions of dollars” of federal small business contracts. The story said that General Dynamics had 47 small business contracts, Northrop Grumman had 121 small business contracts and Boeing had 37.

"Clearly this is an attempt by the SBA to do what they have always done; to cover up the fact that Fortune 500 corporations are actually the recipients of most small business contracts," says Lloyd Chapman, president of ASBL.

But the SBA has a different point of view.

“The large companies mentioned -- which acquired small businesses that held federal contracts -- are simply not among the Top 100 companies holding small business contracts,” says Michael Stamler, a spokesman for the SBA. “And in any case, those companies will be reclassified as large companies over the course of the next year as a result of new regulations announced by SBA last summer.”

Mr. Chapman says his organization plans to sue the SBA “a means of forcing them to release the names of all the firms that received small business contracts for FY 2005 and FY 2006, which should total $75.1 and $77.8 billion respectively."

Mr. Stamler contends the information is readily available.

“As to the threat of lawsuit over acquiring a full list of small business contractors, that full list is and always has been public record available through the Federal Procurement Data System, available to anyone, anywhere,” Mr. Stamler says.

But Mr. Chapman says the SBA's list of the Top 100 small business contractors “flies in the face of more than 15 federal investigations that have found fraud, abuse, loopholes and a lack of oversight in federal small business contracting."

Critics question SBA's list of top 100 small-business contractors

by | Dec 4, 2007 | ASBL News

News

Critics question SBA's list of top 100 small-business contractors

By Elise Castelli
Federal Times
December 4, 2007

Critics are accusing the Small Business Administration of trying to hide the fact that large companies are winning billions of federal contracting dollars meant for small businesses.
The agency last week released a list of its top 100 small-business contractors. Not on the list were numerous behemoths that typically dominate similar reports: SAIC, Lockheed Martin, General Dynamics, GTSI and SI International, among others.
In 2006, for instance, SAIC ranked third among companies receiving the most federal contracting dollars targeted for small businesses, according to Eagle Eye Publishing, a private market research firm. General Dynamics was 13th, Lockheed Martin 26th.
None of them are on the SBA’s list of top small-business contract recipients for that same year.
An advocacy group representing small businesses says that’s because the agency is trying to deceive the public.
“This is an attempt by the SBA to do what they have always done: to cover up the fact that Fortune 500 corporations are actually the recipients of most small business contracts,” Lloyd Chapman, president of the American Small Business League said in a Dec. 3 statement. His group, which represents companies having fewer than 100 employees, intends to sue the SBA because the agency denied a recent Freedom of Information Act request for the data used by the agency in compiling the agency’s top 100 list.
Arthur Collins, SBA’s director for contracting, said tracking large businesses receiving small awards was not the intent of the new list.
“We looked at firms considered small and receiving large chunks of money under federal contracts,” Collins said. “It’s a different research question” from what the private companies have assessed in the past.
SBA removed $4.6 billion in contracts from its database on grounds that those contracts were incorrectly coded as being for small business. Still, it was conceivable that big firms might still be found getting small business awards, Collins said, so he was encouraged to see that by SBA’s research the larger firms didn’t break into the top 100.
“Releasing this list is part of SBA’s ongoing effort to increase the transparency, accuracy and integrity of government small business contracting data,” SBA Administrator Steve Preston said in the Nov. 30 statement.
He said all but one of the SBA’s top 100 firms were properly classified as small at the time they won their contracts. The one exception was DynCorp.
The SBA noted on its top 100 list that some small businesses listed were acquired by larger firms before fiscal 2006 and continued to receive small-business dollars. SBA did not explain why the data was listed by subsidiary, rather than the parent company that ultimately received the funds.
In all, 26 small firms on the list have either outgrown their small-business status or were purchased by large firms, like Lockheed Martin and General Dynamics, according to the SBA’s statement accompanying the list.

SBA Accused of Falsifying Small Business Contracting Data by the American Small Business League

by | Dec 3, 2007 | Press Release

Press Release

SBA Accused of Falsifying Small Business Contracting Data by the American Small Business League

December 3, 2007

In response to a Freedom of Information Act request filed by the American Small Business League for the specific names of firms that were coded as small businesses for FY 2005 and FY 2006, the Small Business Administration responded Friday by issuing a press release with the Top 100 report of small businesses that received the most small business procurement dollars for FY 2006. The ASBL accuses the SBA of falsifying the data to cover up the fact that Fortune 500 firms have received most small business contracts dollars in recent years.

The ASBL points to the fact that in a July 6, 2006 New York Times story titled, "Impersonators in the Land of Small Business," by Ron Nixon; spokesmen from General Dynamics, Northrop Grumman and Boeing acknowledged that they had millions of dollars in federal small business contracts. In fact, the story stated that General Dynamics had 47 small business contracts, Northrop Grumman had 121 small business contracts and Boeing had 37. Northrop Grumman and Boeing were conspicuously absent from the SBA's list of the top 100 recipients despite stories from ABC, CBS and CNN, which found that the Fortune 500 firms had received millions of dollars in small business contracts.

"Clearly this is an attempt by the SBA to do what they have always done; to cover up the fact that Fortune 500 corporations are actually the recipients of most small business contracts," President of the ASBL, Lloyd Chapman said. "To date no one has been able to obtain a list of all recipients of small business contracts. With this in mind, we intend to file a lawsuit against the SBA as a means of forcing them to release the names of all the firms that received small business contracts for FY 2005 and FY 2006, which should total $75.1 and $77.8 billion respectively."

In Report 5-15, the SBA Office of Inspector General stated that, "One of the most important challenges facing the SBA and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."

"The SBA's list of the Top 100 small business contractors flies in the face of more than 15 federal investigations that have found fraud, abuse, loopholes and a lack of oversight in federal small business contracting," Chapman said. "With this list, they made more of an attempt at muddying the waters surrounding this issue than at legitimately solving the problem of large firms receiving federal small business contracts."

According to a report by FEDMINE.US containing the Top 50 recipients of federal small business contracts, firms like: UT Battelle LLC, Blackwater, GTSI, Thales and Hewlett-Packard received billions of dollars in federal small business contracts during FY 2006. However, the SBA's report for the same year contains no mention of these firms. Additionally, the top recipient of federal small business contracts for FY 2006 is, "Miscellaneous Foreign Contractors," According to FEDMINE.US. With this in mind, the ASBL challenges the SBA to explain Miscellaneous Foreign Contractors, the disparity between the two lists and publish their methodology for compiling their list.

FEDMINE.US has access to the XML data feed from FPDS-NG.