Petaluma, Calif. – The Small Business Administration (SBA) fired back at American Small Business League (ASBL) claims that the number of federal contracts awarded to small businesses was dramatically inflated.

Michele Chang, the SBA’s senior advisor for government contracting and business development, said agencies have gone through processes to ensure that data is “clean” and free of data anomalies such as “miscoding.” Chang said, “we’re confident this is the cleanest data we’ve had and the cleanest it can be.”
(http://blog.nacm.org/blog/shappell/sba-responds-to-allegations-that-small-business-scorecard-misleading)

But the SBA made similar claims in 2009. Joe Jordan, the SBA’s associate administrator for government contracting and business development, said, “I can tell you this data is as clean as its ever been…but it’s not 100 percent free of errors.” (https://www.asbl.com/showmedia.php?id=1493)

On June 24, 2011, the SBA released the government’s fiscal year (FY) 2010 Small Business Procurement Scorecard, reporting almost $98 billion in federal contracts, or 22.7 percent of contract dollars, went to small businesses. The ASBL reviewed the top 100 recipients of federal small business contracts for FY 2010 and found that 61 were large firms. Furthermore, the ASBL identified Fortune 500 corporations and foreign-owned firms, including Lockheed Martin, AT&T, British Aerospace (BAE) and Hewlett-Packard. (https://www.asbl.com/documents/asbl_2010_dataanalysis.pdf)

Chang denied the ASBL’s allegation that only five percent of recipients of small business contracts were actually small. However, when asked if Lockheed Martin, AT&T and Hewlett-Packard received small business contracts, Chang said she “can’t comment on them specifically.”

By law, the federal government must award at least 23 percent of the total value of all prime contract dollars to legitimate small businesses. 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.

In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the problem as, “One of the most important challenges facing the SBA and the entire federal government today.” For six consecutive years, the SBA IG has named the issue as the number one challenge facing the SBA.  (https://www.asbl.com/documents/05-15.pdf)

“Michele Chang is a liar,” said ASBL President Lloyd Chapman. “They have said the same thing for over a decade. If that is the cleanest the data can be, everyone working at the SBA is completely incompetent. They are simply lying.”

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Petaluma, Calif. – A new bill aimed at closing loopholes and ending fraud and abuse in federal small business contracting programs could rescue the national economy. The Fairness and Transparency in Contracting Act focuses on ending the diversion of federal small business contracts to large businesses, a problem preventing the creation of upwards of 1.8 million new jobs. Representative Hank Johnson (D-GA-04) is expected to introduce the bill later this year.

The bill targets ambiguous provisions within the Small Business Act of 1953 that have allowed publicly traded and foreign-owned firms to qualify as small businesses for the purpose of receiving federal small business contracts. This will help the federal government award contracts to legitimate small businesses and reach its congressionally mandated goal of awarding 23 percent of the total value of all prime contract dollars to small businesses. 

According to the U.S. Census Bureau, small businesses create more than 90 percent of all net new jobs. Moreover, a recent study by the Kauffman Foundation found that since 1980 businesses less than five years old have created nearly all new jobs. However, based on government data, the American Small Business League (ASBL) estimates that every year up to $200 billion in federal small business contracts is diverted from the nation’s chief job creators—its 27 million small businesses—to some of the largest corporations in the U.S. and Europe. The new law would end this abuse. 
(http://www.kauffman.org/research-and-policy/where-will-the-jobs-come-from.aspx)  

Since 2003, a series of federal investigations have uncovered billions of dollars in fraud and abuse in small business contracting programs. In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the problem as, “One of the most important challenges facing the SBA and the entire federal government today.” For six consecutive years, the SBA IG has named the issue as the number one challenge facing the SBA.
(https://www.asbl.com/documentlibrary.html#5-15)
 
In Fiscal Year (FY) 2010 large companies like Lockheed Martin, Dell, Hewlett-Packard, General Electric, 3M and AT&T received federal small business contracts.
(https://www.asbl.com/documents/asbl_2010_dataanalysis.pdf)  

“The Fairness and Transparency in Contracting Act is the most efficient, effective solution to job creation that has ever been proposed,” ASBL President Lloyd Chapman said. “It requires no new spending, no new taxes, and it is deficit neutral. Just take existing federal infrastructure spending, and direct it to the nation’s chief job creators; its small businesses.”

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Contact:
Brian Reeder
Public Affairs Analyst
American Small Business League
brianreeder@asbl.com
(707) 789-9575

Petaluma, Calif. –61 of the top 100 recipients of federal small business contracts for fiscal year (FY) 2010 were large firms, according to a new report from the American Small Business League (ASBL).  These large firms received 62.5 percent of the dollars awarded to the top 100, or $8.8 billion.  (https://www.asbl.com/documents/asbl_2010_dataanalysis.pdf)  

The ASBL’s findings come in the wake of Small Business Administration (SBA) claims that the federal government narrowly missed its congressionally mandated 23 percent small business goal.  On Friday, June 24, the SBA announced the government awarded $98 billion, or 22.7 percent of federal spending, to small businesses. (http://www.sba.gov/content/small-business-procurement-goaling-scorecards)  

“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,” ASBL President Lloyd Chapman said. “The SBA’s most recent claims are just more misleading smoke and mirrors.”

The ASBL maintains 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.  The ASBL maintains, the actual federal acquisition budget for foreign, domestic, classified and unclassified projects is roughly $1 trillion. The Obama Administration’s goaling achievement is based on a number that is less than half of the actual federal acquisition budget.

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 others.

Since 2003, a series of federal investigations have uncovered the diversion of billions of dollars a month in federal small business contracts to corporate giants.  This diversion has lead to a significant shortfall in the volume of federal contracts actually going to legitimate small businesses. 2010 federal data indicates that once again the government missed its small business goal by a minimum of 18 percent. (https://www.asbl.com/documents/05-15.pdf)  

In April 2010, Senator Mary Landrieu (D-LA), the Chair of the Committee on Small Business and Entrepreneurship estimated that, “Increasing contracts to small businesses by just 1 percent,” would create more than 100,000 new jobs. Based on the latest data, the ASBL estimates that ending this abuse would create upwards of 1.8 million jobs. http://sbc.senate.gov/public/index.cfm?a=Files.Serve&File_id=bc065833-dafc-46c5-9e6f-21209a532de2

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

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