Small Business Administration Accused of Fabricating Small Business Contracting Data
Press Release
Small Business Administration Accused of Fabricating Small Business Contracting Data
American Small Business League Uncovers 151 Fortune 500 Firms Received Small Business Contracts
American Small Business League
March 3, 2016
PETALUMA, Calif., March 3, 2016/PRNewswire-USNewswire/ -- Yesterday the Small Business Administration (SBA) announced that small businesses received 25.8 percent of all federal contracts in fiscal year 2015,a total of $90.7 billion.
The American Small Business League (ASBL) has challenged theaccuracy of the data pointing out that the SBA included thousands of largebusinesses including 151 Fortune 500 firms in the calculations of their data.
Some of the firms that the SBA has includedin their small business contracting data include: Verizon, Apple, Microsoft,General Electric, Home Depot, AT&T, UPS, Hewlett Packard, IBM, Bank ofAmerica, Citigroup, Wells Fargo, Pepsi, Oracle, Raytheon, General Dynamics, NorthropGrumman, Anthem and John Deere.
The SBA's Inspector General has challenged the accuracy of theSBA's data for over a decade. In 2005, they released Report5-15 that described the diversion of small business contracts going tocorporate giants as, "One of the most important challenges facing the SmallBusiness Administration (SBA) and the entire federal government today."
A series of federal investigations have all found that thenumbers were dramatically inflated. ABC, CBS, NBC, CNN, CNBC, MSNBC, Fox Newsand RTTVhave all reported on the fraud and abuse in federal small business contractingprograms.
As early as 2003, the Government Accountability Office (GAO)conducted the first investigation into corruption and fraud in federalsmall business contracting programs. The GAO uncovered over 5,300large businesses had been the actual recipients of billions in USGovernment small business contracts.
President Obama acknowledgedthe magnitude of the abuses by releasing the statement, "It is time to end the diversion of federal small businesscontracts to corporate giants."
On March 25, 2015, Congresswoman Janice Hahnrequested aGAO investigation into small business contracting based upon research doneby the American Small Business League.
In 2014, Public Citizen released a report titled "Slighted" which accused the federal government ofusing accounting tricks to "create false impression that small businesses are gettingtheir share of federal procurement money."
Research by the ASBL foundthat the SBA has shortchanged small businesses in two ways. First, to inflate the percentage the SBA uses a number which is lessthan a third of the actualfederal acquisition budget. Secondly, the SBA has included billions ofdollars in contracts to Fortune 500 firms and some of the biggest companiesaround the world in their numbers.
"It is astounding that the President and Congress haveallowed this rampant fraud to go on for so long. When you look at anyreasonable definition of a small business, and the total federal acquisitionbudget, small businesses are receiving probably closer to one tenth of what theSBA claims they are awarding to small businesses. This is blatant fraud and itshould be investigated by the FBI," stated ASBL President Lloyd Chapman.
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