A bigger Voice for Small Business

Small Business Administration Releases Fraudulent Data as Predicted

by | Jul 3, 2013 | Press Releases

Press Release

Small Business Administration Releases Fraudulent Data as Predicted

July 3, 2013

As predicted by the American Small Business League (ASBL), the Small Business Administration (SBA) released the federal government's latest claim that they have come very close to reaching the federal government's 23 percent small business contracting goal.

The SBA's claim that they have awarded 22.25 percent of all federal contracts to small businesses is completely false and totally unsupported by the facts.

The most recent data from the Federal Procurement Data System (FPDS) clearly indicates the total acquisition budget for the federal government for fiscal year 2012 was $1.1 trillion. Twenty-three percent of $1.1 trillion is $253 billion. The SBA failed to mention the acquisition budget they used to calculate the 22.25 percent, as well as the actual dollar amount of contracts awarded to small businesses in their press release.

The SBA's website does mention that $89.9 billion in federal contracts were awarded to small businesses. Federal law requires that "a minimum of 23 percent of the total value of all federal contracts" be awarded to small businesses. Using the actual federal acquisition budget from the FPDS of $1.1 trillion, small businesses would have received only 8.2 percent and not the 22.25 percent claimed by the SBA.

In addition to falsifying the easily verifiable actual federal acquisition budget, the SBA has also falsified the actual dollar volume of contracts awarded to legitimate small businesses. The latest data from the Federal Procurement Data System indicates of the top 100 recipients of federal small business contracts, 71 are currently large businesses.

In Report 5-15 the SBA's own Office of Inspector General described the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today..." The SBA Inspector General has continued to name this as the number one problem at the SBA for nine consecutive years.

The FPDS indicates some of the firms the SBA included in their small business contracting data include IBM, Verizon, Pepsi, Coca-Cola, Delta Airlines, J.P. Morgan Chase & Co., Citigroup, Honeywell, Dell, Chevron, AT&T, Apple, General Electric, Hewlett-Packard, Costco, Walt Disney, Oracle, United Technologies, Bank of America, Wells Fargo and Home Depot. General Dynamics alone received over $215 million in federal small business contracts for fiscal year 2012.

Using the actual federal acquisition budget of $1.1 trillion and excluding Fortune 1000 firms and other large businesses, legitimate American small businesses most likely received no more than five percent of the total value of all federal contracts required by law. The SBA's claim of 22.25 percent is totally false and unsupported by the federal government own data.

For more information view the ASBL's latest video. http://www.youtube.com/watch?v=rxz4tl-lfyw

Small Business Administration Violates Federal Law to Cheat Small Business Out of Billions

by | Jul 2, 2013 | Press Releases

Press Release

Small Business Administration Violates Federal Law to Cheat Small Business Out of Billions

July 2, 2013

In 2009 the General Accounting Office (GAO) issued report GAO-10-108 after investigating a Small Business Administration (SBA) managed small business program.

It stated, “The SBA and contracting agencies have sent a message to the contracting community there is no punishment or consequences for committing fraud.”

Every year for over a decade the SBA has claimed to either reach or just miss the 23 percent small business-contracting goal required by federal law.

In reality, every year for over a decade the SBA has encouraged fraud, fabricated and falsified federal contracting data to intentionally falsify the achievement of the 23 percent goal and cheat legitimate American small businesses out of billions.

The proof of this can easily be found in federal law, federal investigations and investigative reports by the media. NBC, CBS, ABC and CNN have all reported on the abuses by the SBA.

The Small Business Act requires that a minimum of 23 percent of the total value of all federal contracts shall be awarded to small businesses. According to Ashok Mehan, owner of Fedmine, a company that collects and tracks federal contracting data, the acquisition budget for FY 2012 was way more than the government admitted to. “The total unclassified spending that we track is $1.1 trillion, and the classified amount is $100 billion. In total, that equates to the federal acquisition budget being at least $1.2 trillion. Additionally, the Federal Procurement Data Systems has identified an unidentifiable amount of money that is untraceable.”

In a recent investigative report by CBS Boston, the SBA claimed the federal acquisition budget was a mere $442 billion and that small businesses received $91 billion of those contracts.

Based on the actual and documentable federal acquisition budget, small business should have received a minimum of $276 billion.

The $91 billion the SBA claimed small businesses received included billions of dollars to Fortune 1000 firms in the US and even to some of the largest corporate giants from around the world.

Federal law defines a small business having less than 1500 employees and one that "is independently owned and operated and which is not dominant in its field of operation." The definition of “independently owned” would exclude any publicly traded firms. No provision in any federal law would allow contracts to any firm that is currently foreign owned, a Fortune 1000 firm or any firm that is currently a large business to legally receive small business contracts.

The most recent data from the FPDS indicates of the top 100 recipients of federal small business contracts, 71 are currently large businesses including several Fortune 500 firms and foreign owned firms.

Using the actual federal acquisition budget and the legal definition of a small business under the Small Business Act, the American Small Business League estimates the SBA has knowingly and intentionally cheated American small businesses out of over two trillion dollars during the last 10 years.

For more information watch the ASBL’s latest video.

Federal government falls short of small business contracting goals (yet again)

by | Jul 2, 2013 | ASBL News

News

Federal government falls short of small business contracting goals (yet again)

By J.D. Harrison
The Washington Post
July 2, 2013

The federal government made progress toward but again fell short of its stated small business contracting goals this past year, according to new government data.

The U.S. Small Business Administration on Tuesday reported that 22.25 percent of federal prime contracting dollars, or $89.9 billion, went to small businesses in fiscal year 2012, higher than last year’s mark of 21.65 percent but still shy of the goal of 23 percent set by Congress.

It is the 12th consecutive year officials have missed the target.

In addition, the government came up short on its goal for contracts let to women-owned businesses (5 percent of contracting dollars) and firms in traditionally underserved and underemployed areas (5 percent). Officials came up just shy of their subcontracting goal, too (33.60 percent went to small firms, short of the 36 percent target).

House Small Business Commitee Chairman Sam Graves (R-Mo.) called the government’s continued failure to meet “meager” small-business contracing goals “simply unacceptable.”

“The Administration must make meeting this goal a priority because it’s efficient governance, and not just a law that makes small businesses feel good,” Graves said in an email to The Washington Post. “Improving small business opportunities through federal contracts creates jobs and saves taxpayer money because small businesses bring competition, innovation and lower prices.”

There were a few bright spots in the report. Officials met their goal for businesses owned by service-disabled veterans (3 percent) for the first time ever, and a record-high number of agencies met their individual contracting goals.

“Federal contracting with small businesses remains a win-win,” SBA officials wrote in a blog post about the data, noting that the agency “made real progress” toward its goals last year. “Small businesses get the revenue they need to grow their revenues and create jobs. Meanwhile, the federal government gets the chance to work with some of the most responsive, innovative and nimble companies in the U.S.”

The 2012 numbers bring President Obama’s first-term small-business contracting total to $376.2 billion. SBA Officials noted that was slightly more than during the final term under President George W. Bush, even as recent government spending has declined.

Before the start of his second term, Obama signed legislation to encourage agency leaders to take their small business goals more seriously. Starting this year, these annual small business contracting reports will be part of reviews for senior agency officials, which factor into their consideration for bonuses and promotions.

The White House has also backed proposals to raise the annual small-business contracting goals, despite the government’s continued failure to meet current targets.

Under SBA Administrator Karen Mills, who announced her resignation earlier this year but has yet to leave her post, the agency has taken several steps to try to meet the government’s routinely missed small business procurement benchmarks.

Most recently, officials launched a program to recruit more contractors in economically disadvantaged areas and partnered with Women Impacting Public Policy (WIPP) and American Express to educate women-owned firms about contracting opportunities.

Small business contracting has been a sore spot for the government dating back many years, and the struggles are not limited to missed procurement goals. A number of reports have suggested that a significant portion of the contracts SBA claims are delivered to small firms actually end up in the hands of large corporations.

Just last week, the chief executive of a large Arlington-based contractor was sentenced to four years in prison for creating what’s known as a “front” company to win more than $31 million in contracts reserved for small businesses. A week earlier, another former CEO of a security contractor, again in Arlington, was sentenced to six years in prison for illegally winning more than $150 million in contracts that had been set aside for small disadvantaged and minority-owned businesses.

In her latest semiannual report to Congress, SBA Inspector General Peggy Gustafson labeled small business contracting as the most serious challenge facing the agency.

“The agency faces a number of challenges in carrying out its mission, including fraudulent schemes affecting all SBA programs, significant losses from defaulted loans, procurement flaws that allow large firms to obtain small business awards, excessive improper payments, and outdated legacy information systems,” Gustafson wrote in her report, later highlighting several instances of large firms being awarded small-business status to apply for contracts.

The Small Business Administration's Fabricated and Fraudulent Contracting Data: Coming Soon

by | Jul 1, 2013 | Press Releases



Press Release


The Small Business Administration's Fabricated and Fraudulent Contracting Data: Coming Soon




July 1, 2013


Any day now the Small Business Administration (SBA) will release their latest data on the Federal government’s compliance with federal law that requires a minimum of 23 percent of all federal contracts are awarded to small businesses.

To avoid media scrutiny of the fabricated and fraudulent data, the SBA routinely releases the annual data on a Friday afternoon. If possible, they release the data close to a holiday weekend, such as the fourth of July.


The SBA will claim to have just barely missed their 23 percent small business goal. Typically, they claim to have achieved a small business contracting level in the neighborhood of 22.8 percent.


The Small Business Act Defines a small business as having no more than 1,500 employees, being “independently owned” and not being “dominant in their field.” These provisions would exclude foreign-owned firms and publicly-traded firms, such as Fortune 500 firms.


To dramatically inflate the true volume of federal contracts awarded to small businesses, the SBA will illegally include billions of dollars in contracts to many of the largest corporate giants around the world. Neither the Small Business Act nor any other federal legislation contains any language that would allow a foreign-owned firm, a Fortune 1000 firm, a publicly traded firm or any firm with over 1,500 employees to legally receive federal small business contracts.


To further inflate the percentage of contracts awarded to small businesses, the SBA will drastically underreport the actual federal acquisition budget. Federal law requires small businesses to receive “a minimum of 23 percent of the total value of all federal contracts.” It is difficult to pin down the exact total federal acquisition budget, but of the $3.5 trillion dollar federal budget for 2012, all available information indicates over $1.2 trillion was spend on acquisitions. The SBA will drastically misrepresent the total acquisition budget to be less than $500 billion.


The SBA Office of Inspector General has named the diversion of federal small business contracts to large business as the largest problem at the SBA for the last nine consecutive years. NBC, CBS, ABC and CNN have covered the story.


The General Accounting Office essentially accused SBA officials of encouraging fraud in Report 10-108 that stated, “The SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.”


The American Small Business League projects, in reality, the nation’s 28 million legitimate small businesses are receiving no more than 5 percent of all federal contracts or at least $200 billion a year less than required by law.






The Small Business Administration's Fabricated and Fraudulent Contracting Data: Coming Soon

by | Jul 1, 2013 | ASBL News, Press Releases

Press Release

The Small Business Administration's Fabricated and Fraudulent Contracting Data: Coming Soon

July 1, 2013

Any day now the Small Business Administration (SBA) will release their latest data on the Federal government’s compliance with federal law that requires a minimum of 23 percent of all federal contracts are awarded to small businesses.

To avoid media scrutiny of the fabricated and fraudulent data, the SBA routinely releases the annual data on a Friday afternoon. If possible, they release the data close to a holiday weekend, such as the fourth of July.

The SBA will claim to have just barely missed their 23 percent small business goal. Typically, they claim to have achieved a small business contracting level in the neighborhood of 22.8 percent.

The Small Business Act Defines a small business as having no more than 1,500 employees, being “independently owned” and not being “dominant in their field.” These provisions would exclude foreign-owned firms and publicly-traded firms, such as Fortune 500 firms.

To dramatically inflate the true volume of federal contracts awarded to small businesses, the SBA will illegally include billions of dollars in contracts to many of the largest corporate giants around the world. Neither the Small Business Act nor any other federal legislation contains any language that would allow a foreign-owned firm, a Fortune 1000 firm, a publicly traded firm or any firm with over 1,500 employees to legally receive federal small business contracts.

To further inflate the percentage of contracts awarded to small businesses, the SBA will drastically underreport the actual federal acquisition budget. Federal law requires small businesses to receive “a minimum of 23 percent of the total value of all federal contracts.” It is difficult to pin down the exact total federal acquisition budget, but of the $3.5 trillion dollar federal budget for 2012, all available information indicates over $1.2 trillion was spend on acquisitions. The SBA will drastically misrepresent the total acquisition budget to be less than $500 billion.

The SBA Office of Inspector General has named the diversion of federal small business contracts to large business as the largest problem at the SBA for the last nine consecutive years. NBC, CBS, ABC and CNN have covered the story.

The General Accounting Office essentially accused SBA officials of encouraging fraud in Report 10-108 that stated, “The SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.”

The American Small Business League projects, in reality, the nation’s 28 million legitimate small businesses are receiving no more than 5 percent of all federal contracts or at least $200 billion a year less than required by law.