Petaluma, Calif. - The Small Business Administration (SBA) has lost another round in its ongoing legal battle with small business advocate Lloyd Chapman and the American Small Business League (ASBL).

Judge Marilyn H. Patel of United States District Court, Northern District of California denied all of the SBA's motions on Tuesday, in the latest Freedom of Information Act (FOIA) case filed by the ASBL. Using FOIA, the ASBL requested the specific names of all firms that had received federal small business contracts during fiscal years 2005 and 2006.

Even though the SBA had been previously ordered by Patel to release the information to Chapman, the SBA attempted to have the case dismissed as a means of avoiding to release further information and having to reimburse the ASBL for its legal fees.

Bush officials fought to withhold the release of the names to circumvent disclosing that Fortune 500 firms and other large businesses around the world had received a lion's share of government small business contracts since President Bush assumed office in 2001.

During the proceedings, attorneys for the Bush Administration persistently denied that the SBA had ever possessed a list containing the names of firms that had received government small business contracts. They went on to claim that officials at the SBA never had knowledge of the actual recipients of federal government small business contracts for any year.

Regarding the SBA's claims, case documents stated, "The court finds it curious the SBA's argument that it does not 'control' the very information it needs to carry out its duties and functions."

After questioning SBA attorneys, Patel declined to accept the SBA's claim and stated, "SBA's attempt to argue that the information sought by the League is not an 'agency record' is the kind of bureaucratic foot-dragging that FOIA - by providing the public with free open access to government records - was designed to avoid."

"By now it should be obvious to everyone involved that all of the information the Bush Administration has been releasing on federal small business contracting is misleading and disingenuous," ASBL President Lloyd Chapman stated. "The truth is, the Bush Administration has intentionally diverted the vast majority of our government's small business contracts to some of the largest companies in the world. All of the Bush Administration's lame excuses of 'miscoding' and their ridiculous 'myth vs. fact' PR campaign were a pathetic attempt to dupe the media and the public, and it has failed miserably."

Chapman added, "The American Small Business League will continue to lead the fight to take back our country's small business programs from corporate giants and billionaire venture capitalists. We will help American's 26 million small businesses to unite and speak with a single voice that will be so strong our next President and every member of Congress will be able to hear it loud and clear."

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Petaluma, Calif. – Approximately 168 million Americans work in nearly 27 million small businesses across the United States. There are several key issues effecting small businesses in middle class America that are conspicuously absent from the portion of the 2008 Democratic National Platform which specifically addresses small businesses. Most of the statements in the Platform, which reference small businesses, are vague, such as “We will help small businesses facing high energy costs.”

The Democratic National Platform makes no mention of any specific plans to address three small business issues that could infuse billions of dollars into the middle class economy, which has been the hardest hit by the recent dramatic downturn in the U.S. economy.     

The following are just a few examples of critically important small business issues that are not mentioned in the Democratic National Platform:  the restoration of the Small Business Administration's (SBA) budget and staffing; ending the diversion of billions of dollars in federal small business contracts to Fortune 500 firms; and the implementation of the federal law establishing a 5 percent set-aside contracting goal for woman-owned firms.

The SBA is the only agency in Washington specifically charged with assisting small businesses. Since taking office in 2001, the Bush Administration has cut the SBA’s budget and staffing more than any other federal agency. When President Bush leaves office, the SBA will be approximately half the size it was when he arrived in Washington. Several senior SBA officials have privately acknowledged the SBA has been cut to the point that “the agency can no longer carry out its mission.” The SBA is so understaffed that after hurricane Katrina the agency was forced to hire more than two thousand temporary employees to handle the workload.

During the last thirty days alone, four separate federal investigations have been released, which have found rampant abuses in several SBA programs. In each case, a lack of proper oversight by SBA officials was a major contributing factor to the problems.  

Under the Bush Administration, dozens of other federal programs designed to assist woman-owned firms, minority-owned firms, veteran-owned firms and other small business have been crippled or even eliminated by budget and staffing cuts at the SBA.

Considering the current severe economic downturn in America, any political platform that purports to support small businesses should include specific plans to not only restore, but significantly expand the SBA’s budget, staffing and programs.  

Since 2003, 15 separate federal investigations have found widespread fraud, abuse and mismanagement in federal small business contracting programs. A multitude of problems have allowed hundreds of billions of dollars in federal small business contracts to be diverted to Fortune 500 firms and hundreds of other large businesses around the world.  Some of the largest recipients of federal small business contracts have been British Aerospace and Engineering (BAE), Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Titan Industries and Dutch conglomerate Buhrmann NV.

In Report 5-15, the SBA Office of Inspector General stated, “One of the most important challenges facing the Small Business Administration (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.”

Any genuine plan to address the sagging economy by bolstering opportunities for the middle class would have to specifically address the wholesale diversion of federal small business contracts to Fortune 500 firms.

More than seven years ago, President Clinton signed legislation, which established a 5 percent set-aside contracting goal for woman-owned firms. The Bush Administration has persistently refused to implement the program. As a result, woman-owned firms have lost billions of dollars in federal contracting opportunities. The Democratic platform makes no mention of their intention to fully implement this program. 

If the Democratic party wants to convince middle class voters that they have the solutions to the challenges facing small business, they must adopt clear and specific solutions for restoring the SBA’s budget and staffing, halt the flow of federal small business contracts to Fortune 500 firms and fully implement the federal law establishing the 5 percent set-aside contracting goal for woman-owned small businesses.

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Petaluma, Calif. – A new Bush Administration policy will make it easier for large businesses to land government small business contracts by misrepresenting themselves as small businesses in government supplier databases. Under the new policy, firms will no longer be required to list their annual revenue or number of employees on the federal government’s Central Contractor Registration Database (CCR).

In the past, firms that listed themselves in the CCR database were required to disclose their annual revenue and total number of employees. This specific information was mandatory, because federal guidelines that determine a firm's eligibility to participate in federal small business contracting programs were based on these two fields. (http://www.ccr.gov/)

Making annual revenue or number of employees’ fields optional in the CCR will make it extremely difficult to determine if large firms are misrepresenting themselves as small businesses for the purpose of receiving federal small business contracts.

Since 2002, the Bush Administration has made several modifications to the CCR database as a means of making it increasingly difficult to determine if a firm is small or large.

Despite repeated statements from Bush Administration officials about increasing transparency and improving the accuracy of reported data in federal small business contracting programs, the new policy is seen as another major step backwards in accuracy and transparency.

Since 2003, 15 federal investigations have all found billions of dollars in federal small business contracts actually wound up in the hands of Fortune 500 firms and hundreds of other large businesses. Within the last thirty days, four separate investigations have been released which have found fraud and rampant abuses in government small business contracting programs.  In one instance, the Department of Interior (DOI) Office of Inspector General found that the DOI had misstated the achievement of its small business goals by including Fortune 500 corporations.
(http://www.doioig.gov/upload/2008-G-0024.pdf)

In 2005, the SBA Office of Inspector General released Report 5-16, which found large businesses had received government small business contracts by making "false certifications.” (http://www.sba.gov/IG/05-16.pdf)

This policy will exacerbate the problem of large businesses receiving government small business contracts. It will now be even more difficult for federal officials, the public and watchdog groups to monitor the CCR database and uncover large businesses trying to masquerade as small businesses to illegally receive government small business contracts.

The new policy is the latest in a long series of similar Bush Administration policies designed to dismantle federal small business contracting programs and divert billions of dollars in federal small business contracts to large businesses. In February of 2007, former SBA Administrator Steven Preston removed all employee and revenue data from the CCR database in the middle of a CBS investigation on the actual recipients of federal small business contracts. In 2007, Preston adopted a policy that will allow Fortune 500 firms and hundreds of other large businesses to continue to receive federal small business contracts until the year 2012. (https://www.asbl.com/showmedia.php?id=553)

The American Small Business League (ASBL) is concerned that Acting Administrator of the SBA, Santanu "Sandy" Baruah may try to institute more policies that will further damage federal small business contracting programs as the Bush Administration comes to a close. The ASBL believes closing the SBA and ending all federal programs to assist woman-owned firms, minority-owned firms, veteran-owned firms and small businesses was a major goal of the Bush Administration. The ASBL predicts President Bush may still try to close the SBA by combining it with the United States Department of Commerce or some other federal agency. (https://www.asbl.com/showmedia.php?id=1068)

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