PETALUMA,Calif., Aug. 3, 2016 /PRNewswire-USNewswire/ -- In responding to the federallawsuit filed by the American Small Business League (ASBL) for diverting federal small businesscontracts to Fortune 500 firms, the SBA is arguingthey have no legal responsibility to ensure the accuracy of their reports.

ASBLattorney Robert Belshaw stated, "The SBA is trying to deny any legalobligation to give an accurate report on the true level of small businessparticipation as the statutes requires."

TheASBL is asking the court to stop two specific policies the SBA has created thatare a directviolation of the Small Business Act. The ASBL believes the illegalSBA policies cheat small businesses out of billions of dollars in federalcontracts every year.

Federallaw mandates that small businesses receive a minimum of 23%of all prime contracts. The SBA created an "exclusionaryrule" that excludes the vast majority of the total federalacquisition budget from their calculations. This policy has dramaticallyreduced the volume of federal contracts that are actually awarded to smallbusinesses. According to the CongressionalBudget Office, the total acquisition budget for fiscal year 2015 was$1.2 trillion. For 2015, the SBA used a number of just $391 billion. The ASBLbelieves in 2015 small businesses lost over $186 billion in contractsas a result of the SBA's "exclusionary rule."

In aninterview with Mother Jones,nationally recognized expert on federal contracting law, Professor Charles Tiefer,estimated in 2011 the SBA had excluded $677 billion in federal contracts. Basedon Professor Tiefer's calculations, the SBA"exclusionary rule" cost American small businesses $155.7 billion infederal contracts in 2011.

TheASBL is also asking the court to halt the SBA policy of divertingbillions of dollars a year in federal small business contracts to Fortune 500 firms. SBAAdministrator Maria Contreras-Sweet admitted the SBA created a "grandfathering rule"that allows them to divert federal small business contracts to Fortune 500firms such as Northrop-Grumman, Chevron and Raytheon.

TheSBA's Inspector General stated, "One of themost important challenges facing the on Small Business Administration (SBA) andthe entire federal government today is that large businesses are receivingsmall business procurement awards and agencies are receiving credit for theseawards."

PresidentObama acknowledgedthe magnitude of the abuse at the SBA when he released the statement, "It is time to end the diversion offederal small business contracts to corporate giants."

In attemptingto justify the SBA "exclusionary rule," SBA Associate Administrator JohnShoraka stated,"When we came in as an administration in 2009, we wanted to be able tocontinue to measure apples to apples to apples, to see if we're actuallyprogressing… We kept those exclusions as they stood when we arrived, to makesure we weren't accused of sort of fiddling with the numbers and making it looklike we were having success."

Thefirst court date for the case it set for September 29, 2016. 

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PETALUMA,Calif., Aug. 2, 2016 /PRNewswire-USNewswire/ -- A new policy proposedby the General Services Administration (GSA) on June 20, 2016 is "blatantand undeniably illegal" according to a new legal opinion by one ofAmerica's leading legal experts on federal contracting law, Professor CharlesTiefer. Professor Tiefer also found that the new GSA Federal Strategic SourcingInitiative (FSSI) would "reduce the breadth of small businesscontracting by up to 80% or even 90% in lines of business where small businessis currently common."

ProfessorTiefer's legal opinion is titled, "Proposed Regulations IllegallyAuthorize 'Strategic Sourcing' to Massively Reduce the Breadth of ContractingWith Small Business."

Tieferis a Professor of Government Contractsat the University ofBaltimore Law School. He was Commissioner from 2008 to 2011 on theCongressionally chartered independent Commission on Wartime Contracting inIraq and Afghanistan and is also a contributor at Forbes.com.

ProfessorTiefer's legal opinion states, "The House Small Business Committee hasheld, in recent years, a number of hearings on how strategic sourcing wouldaffect small businesses, with impressive witnesses warning against letting itinjure small business contracting. The witnesses warned the unmanaged strategicsourcing may push large numbers of small businesses out of the federalprocurement market and possibly even out of business especially when done asthe proposed rules would."

ProfessorTiefer states, "…both Congress and the Supreme Court instruct agencies toprovide small business with 'the maximum practicable opportunity' for federalcontracting…" He goes on to say, "The Proposed'Strategic Sourcing' Rules Must, But Do Not, Provide Small Businesses with 'theMaximum Practicable Opportunity' for Federal Contracting."

His conclusionstates, "The proposal should be junked. It would have an overwhelminglybad impact on the breadth of small business contracting, contrary to the intentof the small business laws."

TheAmerican Small Business League (ASBL) has mounted anational campaign to opposethe GSA's FSSI policy proposal. The ASBL is evaluating the filing of a federalinjunction to block the implementation of the FSSI policy.

TheASBL currently has two cases againstthe government in the federal courts to halt policiesthat have harmed small business contracting and subcontracting opportunities.Mother Jones recently published an articleon the ASBL's legal battles with the federal government.

ASBLPresident Lloyd Chapman stated, "A recent study by the World Bank found theUnited States is 49^th world wide in the ease ofstarting a new small business. If you want to start a new business it would beeasier if you moved to Morocco, Kazakhstan, Armenia, Latvia, Macedonia or Lithuania.All available data show small business creation in America has completely stalled out. Our economyis growing at record lowrates. Small Businesses create over 90% of the net newjobs so it's no wonder our middle class economy is withering under anunrelenting barrage of anti-smallbusiness legislation and policies coming out of Washington."

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PETALUMA,Calif., Aug. 1, 2016 /PRNewswire-USNewswire/ -- The Small BusinessAdministration (SBA) has finally responded to the federal injunctioncase filed by the American Small Business League (ASBL)on May 3rd.

The SBA's responsedodged the two substantive issues of the case. The response did not include anyspecific justification to the SBA's long standing policy of diverting federalsmall business contracts to Fortune 500 firms.  The SBA's responsecontained no legal justification for falsifying the government's compliancewith the 23% small business contracting requirement by excluding the majorityof the federal acquisition budget.

ASBLattorney Robert Belshaw stated, "The SBA has obviously sidestepped therelevant issues of this case because their policies are undeniably in directconflict with the Small Business Act."

TheSmall Business Act requires a minimum of 23%of the total value of all prime contracts to be awarded to small businesses andsmall businesses owned by women, minorities and service disabled veterans. TheSBA's "exclusionarypolicy" excludes the majority of the federal acquisition budgetfrom their calculations which dramatically reduces the volume of contractsawarded to all categories of small businesses.

SBAAdministrator Maria Contreras-Sweet has admitted the SBA has a "grandfathering rule"they use to report federal contracts to Fortune 500 firms such as Chevron,Northrop Grumman and Raytheon as small business contracts. In fiscal year 2015,the SBA included contracts to over 151 Fortune 500 firms inthe $90 billion they claim were awarded to small businesses. In recent yearsthe SBA has diverted billions in federal small business contracts to hundredsof firms such as Verizon,IBM, Hewlett-Packard, Microsoft, HomeDepot, Oracle, General Dynamics, Bechtel, Walmart, Citigroup,Johnson & Johnson, Honda, Finmeccanica in Italy, Thales in France, BritishAerospace (BAE) and Rolls Royce.

TheSBA's own Inspector General has described the diversion of federal smallbusiness contracts to large businesses as "One of the most important challengesfacing the Small Business Administration (SBA) and the entire federalgovernment today…."

PresidentObama released the statement,"It is time toend the diversion of federal small business contracts to corporate giants."

The General Accounting Office(GAO) found over 5,300 largebusinesses were the actualrecipients of billions of dollars in federal small businesscontracts. GAO Report 10-108uncovered similar fraud and abuse.

In2015, Public Citizen released an investigative report titled, "Sleighted- Accounting Tricks Create False Impression That Small Businesses Are GettingTheir Share of Federal Procurement Money." On July 25^th,Mother Jones released their investigative piece on the SBA titled, "GiantCorporations Are Reaping Billions From Federal "Small Business"Contracts."

ABC, NBC, CBS, CNN, Fox News, CNBC, MSNBC, RTTV, HuffPost Live, and the APhave reported on the abuses. ASBL President Lloyd Chapman is releasing a documentary on thehistory of fraud at the SBA.

CaliforniaNorthern District Court Judge Vince Chhabria will preside over the case(3:2016cv02410).

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