Washington Post Should Do a Follow-up Story on Small Business Contracting Scandal
October 30, 2008
Petaluma, Calif. - Washington Post reporter Carol Leonnig's story, "Agencies Counted Big Firms As Small," was excellent. Hopefully, the story was embarrassing enough to Congress, the Bush Administration and the Fortune 500 firms that were exposed for receiving federal small business contracts, that Congress will finally pass legislation to stop it.
The Washington Post should consider doing a follow-up story to report on some of the key elements of this issue that were not covered by the original story.
Some of the points the Washington Post could cover in a follow up story are:
- The American Small Business League (ASBL) is the only small business advocacy group in America that has consistently fought the Bush Administration to end the diversion of federal small business contracts to Fortune 500 firms.
- The SBA removed over 600 large businesses from the government's small business database in 2003. Some of the Fortune 500 firms the Washington Post found that were still receiving small business contracts in 2007, were the same firms removed from the SBA's small business list in 2003. (www.asbl.com/documents/600Lfpronet.zip)
- Since 2003, over a dozen federal investigations have been released, which found fraud, abuse, loopholes and a lack of oversight in federal small business contracting programs. (https://www.asbl.com/documentlibrary.html)
- Some of the federal investigations found that large businesses had made "false certifications," "improper certifications" and committed "vendor deception" to illegally receive government small business contracts. (http://www.sba.gov/IG/05-16.pdf)
- Congress has not passed a single piece of legislation to address this issue despite the numerous federal investigations and hundreds of stories in the main stream media regarding the diversion of federal small business contracts to Fortune 500 firms.
- The Small Business Administration (SBA) Office of Inspector General found the SBA itself had reported awards to large businesses as small business awards. The SBA reported contracts to a Dutch firm with over 16,000 employees worldwide as small business contracts. (http://www.sba.gov/IG/05-14.pdf)
- Although misrepresenting a firm's status as a small business is a felony with a penalty of up to 10-years in prison under section 16 (d) of the Small Business Act, no firms have been prosecuted for this crime. (http://www.smallbusinessnotes.com/fedgovernment/sba/sbact.html)
- In 2005, the SBA Office of Inspector General referred to the diversion of federal small business contracts to corporate giants as, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today."
- The SBA has lost a series of Freedom on Information Act (FOIA) lawsuits filed by the ASBL, which has forced the release of information proving that Fortune 500 firms had received billions of dollars in government small business contracts.
- The Bush Administration has alleged that the diversion of federal small business contracts to large corporations is the result of miscoding errors for seven consecutive years. These miscoding errors are always the result of the reporting of awards to Fortune 500 firms as small business awards.
- The Washington Post found no evidence of any awards to small businesses had been miscoded as large business awards.
- This pattern clearly indicates that the miscoding of contracts to Fortune 500 firms is not a random occurrence or the result of human error, but an intentional campaign to divert government small business contracts to large businesses.
- Based on the Washington Post sampling, the Bush Administration may have diverted well over $500 billion in federal small business contracts to Fortune 500 firms.