Petaluma, Calif. - On July 1st, 2008, the Department of Interior (DOI) became the latest federal agency to issue a report that found Fortune 500 firms were the actual recipients of federal small business contracts. The report (http://www.doioig.gov/upload/2008-G-0024.pdf) also found contracts to Fortune 500 firms were used to falsify the DOI's compliance with its small business contracting goal and significantly misrepresent the Bush Administration's compliance with the Congressionally mandated 23 percent small business contracting goal.

The report stated that despite regulations and policies put in place to ensure data integrity, contracting officers intentionally reported contracts to some of the nation's largest corporations as small business contracts. The DOI Inspector General found contracting officers knowingly entered GSA contract information into the Federal Procurement Data System - Next Generation (FPDS-NG) improperly, which allowed them to code a contract to an obvious large firm as a small business set-aside contract. The report noted that DOI contracting officers had recently received training on the proper entry of GSA acquisitions into FPDS-NG.

During 2006 and 2007, DOI reported millions of dollars in contracts to Fortune 500 corporations such as Dell, GTSI, Home Depot, John Deere, McGraw-Hill, Ricoh, Sherwin Williams, Starwood Hotels, Waste Management Incorporated, Weyerhaeuser, World Wide Technology and Xerox Corporation as small business contracts.

The DOI Office of Inspector General's report is the latest investigation to contradict two Small Business Administration (SBA) press releases, which claimed that it was a "myth" that large businesses received federal small business contracts.

The General Accounting Office (GAO) first uncovered the diversion of federal small business contracts to Fortune 500 corporations in 2002. Since then, there have been approximately a dozen federal investigations that have all found Fortune 500 firms and other large corporations were the actual recipients of billions of dollars in federal small business contracts every year. Despite the series of federal investigations and over 400 stories in the press since 2002, no legislation has been passed to address the problem.

As opposed to adopting policies to stop the flow of federal small business contracts to Fortune 500 firms, former SBA Administer Steven Preston adopted a SBA policy in June of 2007 that will allow Fortune 500 firms to continue to receive federal small business contracts until the year 2012. Preston also removed all information from the government's Central Contractor Registration (CCR) database that could be used to determine if a firm was small or large. Additionally, Preston refused to release the specific names of all firms that received government small business contracts.

Senator Barbara Boxer (CA - D) has written a bill entitled, the Fairness and Transparency in Contracting Act of 2008. If passed into law, the bill would completely stop the diversion of federal small business contracts to large corporations.

The American Small Business League (ASBL) projects that the diversion of federal small business contracts to large corporations during the Bush Administration could top $800 billion.

"Federal investigations have been coming out for roughly 6 years now that clearly show that Fortune 500 corporations are the actual recipients of federal small business contracts and yet the Bush Administration continues to maintain that it is a 'myth' that large firms receive federal small business contracts (http://www.sba.gov/ig/05-15.pdf)," ASBL President Lloyd Chapman said. "This situation is obviously not limited to the DOI. The intentional diversion of federal small business contract dollars to Fortune 500 firms is a government wide problem. The SBA's own Inspector General found widespread fraud in federal contracting in Report 5-16. (http://www.sba.gov/ig/05-16.pdf) It is time for Congress to finally pass Senator Boxer's, Fairness and Transparency in Contracting Act of 2008, and it is time for the GAO to look at the federal government as a whole and get to the bottom of this problem. I am confident that if Senator Obama becomes President, his administration will right these wrongs in short order. You won't see Fortune 500 firms receiving U.S. government small business contracts under an Obama administration."

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Petaluma, Calif. - On June 12th, the Small Business Administration (SBA) issued the latest release in a series of press releases entitled "Myth vs. Fact". (http://www.sba.gov/idc/groups/public/documents/sba_homepage/myth_fact.pdf) The latest "Myth vs. Fact" press release is in response to a New York Times article on a multitude of significant problems at the SBA that continue even after the departure of Administrator Steven Preston. In the release, Bush officials at the SBA once again claimed, "Large corporations are not receiving contracts meant for small businesses."
(http://www.nytimes.com/2008/06/12/business/smallbusiness/12sba.html?ref=smallbusiness)
 

Despite a growing mountain of evidence, the Bush Administration is still refusing to admit they diverted billions of dollars in federal small business contracts to a long list of corporate giants. A series of federal investigations beginning in 2002 (https://www.asbl.com/documents/keystatements.html) all found the Bush Administration awarded billions of dollars in federal small business contracts to firms such as Lockheed Martin, Boeing, Raytheon, Halliburton, L-3 Communications, Battelle, Titan Industries and British Aerospace and Engineering (BAE).

In 2003, the General Accounting Office (GAO) completed the first investigation into the diversion of government small business contracts to large businesses and found that the Bush Administration awarded federal small business contracts to thousands of large businesses.

Since 2003, over 400 stories have run in newspapers, magazines and on-line regarding the diversion of federal small business contacts to Fortune 1000 firms. ABC, CBS and CNN have all run investigative stories on the issue. 

Bush officials have persistently ignored the overwhelming preponderance of evidence and even claim it is a "myth" that large businesses are receiving federal small business contracts. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/myth_fact.pdf) The SBA first claimed it was a "myth" that large businesses were receiving government small business contracts in a "Myth vs. Fact" press release on March 11, 2007. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_07-30.pdf) The American Small Business League issued a press release refuting each of the SBA's statements. (https://www.asbl.com/showmedia.php?id=577)

Even federal offices headed by Bush appointees acknowledged that Fortune 1000 firms and other large businesses have been the actual recipients of billions of dollars in federal small business contracts.

In 2004, the SBA Office of Advocacy, headed by Bush appointee Thomas Sullivan, released an investigation on a sampling of government contracts that discovered firms such as Hewlett-Packard, Oracle, Raytheon, General Dynamics, Northrop Grumman, Booze Allen Hamilton and the Carlyle Group received billions of dollars in contracts the Bush Administration reported as going to small businesses.
(https://www.asbl.com/asbl.resource/content/supdoc/SBAreport.pdf)

In statements to the Senate Committee on Small Business and Entrepreneurship in July of 2006, Bush appointee Eric Thorson, the SBA's own Inspector General, acknowledged large firms were being allowed to receive and perform government small business contracts. His recommendations to stop the flow of federal small business contracts to large firms were subsequently ignored by SBA Administrator Steven Preston. (http://www.sba.gov/ig/WrittenStatement-7-12-06SSBECHearingonGovernment.pdf)

The most damaging evidence against the SBA's latest "Myth vs. Fact" press release comes from the SBA's own Office of Inspector General.

In Report 5-15, the SBA Inspector General stated, " One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/ig/05-15.pdf)

Report 5-14, found the SBA itself inflated their small business contracting data by reporting millions of dollars in awards to large business as small business awards. In one example the SBA reported contracts to the Dutch giant Buhrmann NV as small business awards. (http://www.sba.gov/ig/05-14.pdf) Buhrmann is headquartered in Amsterdam and has thousands of employees in over 25 countries worldwide.

In June, the ASBL won its fourth federal lawsuit against the SBA under the Freedom of Information Act (FOIA). The SBA was forced to release over 10,000 pages of documents on the actual recipients of federal small business contracts for fiscal years 2005 and 2006. The data proved conclusively that the Bush Administration had in fact awarded billions of dollars in federal small business contracts to Fortune 1000 firms and hundreds of other large businesses. Third party analysis of the data found hundreds of individual Fortune 1000 firms had received as much as $900 million annually in federal small business contracts. The data is available on the ASBL website.

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Petaluma, Calif. - After losing its fifth federal lawsuit to the American Small Business League (ASBL), the Bush Administration has been forced to release more than 10,000 pages of documents that list the recipients of federal small business contracts for fiscal years 2005 and 2006.  Bush Administration officials at the Small Business Administration (SBA) fought the release of the information, but United States District Court Judge Marilyn H. Patel ruled in favor of the ASBL and ordered that the information be released. 

The information turned over by the SBA proves the ASBL's long-standing claim that the Bush Administration has fabricated small business contracting data and lied to the public, Congress and the media about the diversion of federal small business contracts to some of the largest firms in the United States and Europe. 

"Our goal was to prove before President Bush left office that his administration had fabricated reports and lied to the public, Congress and the media.  This information proves that the Bush Administration is responsible for the diversion of more than $100 billion a year in federal small business contracts away from middle-class America and into the hands of some of the largest companies in the world," ASBL President Lloyd Chapman said.

The information the ASBL has received indicates firms such as Lockheed Martin, Boeing, GTSI, Office Depot, L-3 Communications, Bechtel, and even the world's third largest defense contractor, British Aerospace and Engineering (BAE) have been the recipients of federal small business contracts.

Since 2002, over a dozen federal investigations have all found that billions of dollars in federal small business contracts have actually wound up in the hands of large businesses. During that time, Bush Administration officials conducted a significant public relations campaign to deny these findings. In May of 2007, the SBA went so far as to circulate a press release titled, "Myth VS Fact: SBA and Government Contracting." The press release stated that it is a myth that, "Large companies, including large, multinational corporations are taking away federal contracts specifically intended for small businesses."  The information the ASBL has now received clearly shows that these statements were blatantly false and that large businesses in the United States and Europe were recipients of small business contracts.

The ASBL will continue to use the Freedom of Information Act (FOIA) to request more information from the Bush Administration and will file additional lawsuits if those requests are denied.  In addition to the damaging information, four senior level Bush Administration officials have privately told ASBL President Lloyd Chapman that between $65 and $110 billion a year in federal small business contracts actually went to large businesses.

"After the release of this information I don't think that any spokesperson for the SBA or the Bush Administration has any credibility left on this issue. It seems that the SBA's press office has been lying about this issue for years and cannot be believed anymore," Chapman said.

In March of 2007, Democratic Presidential candidate, Senator Obama released a statement that said, "98 percent of all American companies have fewer than 100 employees. Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants." The ASBL will be turning this information over to Senator Obama's office and asking for his help to close the loopholes and stop the Bush Administration from further dismantling federal small business programs designed to help middle-class Americans receive government contracts.

 
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Petaluma, Calif. - United States District Court Judge Marilyn H. Patel has ruled against the Small Business Administration (SBA) in a lawsuit filed under the Freedom of Information Act (FOIA) by the American Small Business League.  In the order, Patel gave the SBA two weeks to provide the ASBL with a complete list of the names of all firms that received federal small business contracts for fiscal years 2005 and 2006.

In documents filed with the court, the SBA tried to claim that they had no information in their possession that would indicate the actual recipients of federal small business contracts.

"It is simply not believable that the federal agency charged with administering every aspect of all federal small business programs has no idea who is actually receiving federal small business contracts. It is just not believable and Judge Patel obviously agreed," said Lloyd Chapman, President of the ASBL.  "It wouldn't surprise me if the SBA filed an appeal with the 9th Circuit Court since the release of this information will be so damaging to the Bush Administration."

This is the fourth federal lawsuit the ASBL has won against the SBA.  The ASBL filed suit under FOIA after the SBA refused to provide the information. The ASBL believes that the information it has requested will prove that the Bush Administration inflated the federal small business contracting reports for fiscal years 2005 and 2006 by including billions of dollars in contracts to Fortune 500 corporations.

"The fact that we have to go to federal court to find out who is getting federal small business contracts is a clear indication that the Bush Administration has something to hide," Chapman said.  "At this point in time, I don't think that the SBA has any credibility on this issue. The SBA has a clear and documentable track record of making misleading statements on this issue.  For 5 years running, the SBA has claimed that Fortune 500 firms have gotten small business contracts because of data entry errors or what they like to call 'miscoding,' and in its Myth v. Fact press release, the SBA claimed it was a myth that large firms are taking away federal contracts intended for small businesses.  From now on when the media talks to the SBA about this issue, they need to consider the credibility of the source." (https://www.asbl.com/showmedia.php?id=577) 

The ASBL is preparing to file its fifth federal lawsuit against the SBA for refusing to release the emails of Mike Stamler, Director of the SBA's Press Office.  The ASBL requested Stamler's emails in an effort to prove that the SBA had launched a national campaign to stop prominent media outlets from running stories regarding fraud and abuse in the federal small business contracting programs.

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