In his 2010 State of the Union address, President Obama called small business growth key to the economic recovery. "We should start where most new jobs do—in small businesses, companies that begin when an entrepreneur takes a chance on a dream, or a worker decides it's time she became her own boss," he said then.

Now the US Small Business Administration says that in fiscal year 2010 it doled out $98 billion in federal contract work to small businesses, just shy of its 23 percent of total federal contract funding goal (PDF).

Not so, counters the non-profit American Small Business League, which has hammered the SBA on this issue for years: It claims that 61 of the top 100 companies that received government small business contracts are actually big corporations, including subsidaries of defense contractors Lockheed Martin and Rockwell Collins (PDF). In a statement, the group's president Lloyd Chapman called the government numbers "misleading smoke and mirrors" and said small business awards were closer to five percent of total funds.

Federal investigations dating back to 2003 suggest that billions of dollars in small business contracts have landed in the hands of big firms. In the 2010 fiscal year, according to the ASBL, those included AT&T, General Electric, Hewlett-Packard, and John Deere, among many others. (Remember when Bechtel-Bettis got an $128 million "small business" contract for managing the Department of Energy's Pittsburgh Naval Reactors Office?)

Last year, Sen. Mary Landrieu (D-LA), who heads the Committee on Small Business and Entrepreneurship, predicted that increasing legitimate small business contracts by a single percent would create more than 100,000 new jobs for the fiscal year. The ASBL used her prediction to make one of its own: It believes that halting the flow of small business contracts to big businesses would create nearly 2 million jobs.

"Ending this abuse would be a more effective economic stimulus than anything proposed by the Obama Administration to date," Chapman said in the statement.

Source: http://motherjones.com/mojo/2011/06/obama-stimulus-small-business

Sixty-one out of the top 100 recipients of federal small business contracts for fiscal year 2010 were large firms, not small businesses, says the American Small Business League (ASBL), pointing to its own analysis of a recent SBA report.

The large firms received 62.5 percent of the dollars awarded to the top 100, or $8.8 billion, ASBL says. Last week the Small Business Administration said that the federal government narrowly missed its congressionally mandated 23 percent small business goal. The SBA announced the government awarded $98 billion, or 22.7 percent of federal spending, to small businesses, it said on June 24.

“The SBA claims the government nearly hit its small business goal, and yet the government’s own data indicates it awarded no more than 5 percent of federal work to small businesses,” says ASBL President Lloyd Chapman. “The SBA’s most recent claims are just more misleading smoke and mirrors.”

The ASBL maintains that the Obama Administration has dramatically inflated the percentage of contracts awarded to small businesses by under-reporting the actual federal acquisition budget, and by including billions of dollars in contracts awarded to large businesses.

According to the Obama Administration’s most recent small business data, recipients of small business contracts during FY 2010 included Lockheed Martin, Raytheon, L-3 Communications, Hewlett-Packard, and AT&T, among many other large – not small – businesses, the ASBL says.

“It is time for the Obama Administration to stop misleading the public, and start actually working to end billions of dollars in fraud and abuse in small business contracting programs,” says Mr. Chapman. “Ending this abuse would be a more effective economic stimulus than anything proposed by the Obama Administration to date.”

Source: http://www.centralvalleybusinesstimes.com/stories/001/?ID=18765

The Obama administration reports it has nearly met Congress’s goal of giving 23 percent of federal contracts to small businesses, but a new analysis shows that claim is significantly overstated.

A report by the American Small Business League found the administration came close to the 23 percent goal counting contracts with large companies, including Fortune 500 companies as small-business contracts.

The federal government counted businesses with hundreds or thousands of employees and hundreds of millions of dollars in revenues as small businesses, the report found.

The group reported that the top five recipients of federal small business contracts were actually large businesses, such as Sensor Technologies, a company with 8,500 employees, and Seta Corporation, a firm with 1,500 employees and $699 million in annual revenue. The full report will become public on Tuesday.

One of the top 100 recipients of small-business contracts in 2010 was the defense giant Lockheed Martin, the group said.

The analysis undermines the Small Business Administration’s claim that the federal government gave 22.66 percent of federal contracts to small businesses in 2010, a hair short of its 23 percent goal.

“The biggest companies in the world are getting small-business contracts,” said Lloyd Chapman, president of the American Small Business League. “If you’re trying to create jobs and know small businesses create 90 percent of jobs, wouldn’t be a no-brainer to stop giving small contracts to Fortune 500 companies.”

Chapman is a major Democratic donor. He gave $27,800 to Democratic candidates, including $1,000 to President Obama in 2008, according to data compiled by the Center for Responsive Politics. But Chapman is frustrated that Obama’s administration is misleading the public over how many federal contracts are going to small business.

He argues the Small Business Administration has inflated the reported percentage of contracts going to small businesses by underreporting the federal acquisition budget.

He claims the budget for federal contracts is closer to $1 trillion than the $430 billion the administration claims. The SBA counts a budget of $430 billion because it doesn’t count classified spending or contracts not eligible for small businesses, according to the American Small Business Leaguge.

“Small business are getting one-tenth of what they’re supposed to,” Chapman said.

Mike Stamler, spokesman for the Small Business Administration, defended the claim that 22.7 percent of federal contracts have gone to small businesses. He said it was based on data provided by federal agencies.

“We use data that federal contracting officers across the government put into the federal contracting database,” he said.

However, he acknowledged that agencies sometimes make errors. He also noted that the federal government often awards contracts to businesses that are considered small at the time of signing but are then later acquired by larger businesses.

“Every federal agency certified that the data is correct, which is not always true. There are lots of errors. There are 6 million contract actions a year on average,” Stamler said.

Stamler said the SBA is trying to reduce errors by working with federal procurement officials “to give them the tools to improve the data.”

“We conduct training so the data put into database will be more accurate,” Stamler said. “We’re focused on increasing contracting opportunities for small businesses.”

Christopher Gunn, spokesman for the American Small Business League, said the group came up with its findings by reviewing contracts classified as small-business contracts in the federal procurement data system.

The other top-five recipients of small business contracts were Atlantic Diving Supply, Inc., a company with 300 employees and $350 million in annual revenue; and Aegis Mission Personnel, a company with 1,900 employees and $350 million in annual revenue, according to the small-business league.

Gunn said his organization estimates that less than 5 percent of federal contracts went to small businesses, far below the 22.7 percent claimed by the SBA.