PETALUMA,Calif., Aug. 11, 2014 /PRNewswire-USNewswire/ -- The AmericanSmall Business League (ASBL)is reporting that the Small Business Administration (SBA) is taking publiccomment on a new policy that would create a "safe harbor from fraudpenalties" for large businesses that misrepresent themselves as smallbusinesses to illegally receive federal small business contracts.

TheSBA's "safe harbor from fraud penalties" is being stronglyopposed by Chambers of Commerce around the country, Veterans business groups, Tea Party groups and the American SmallBusiness League.

Everyyear for a decade the SBA Office of Inspector General has named the diversionof federal small business contracts to large businesses as the numberone problem at the SBA. The SBA has consistently refused to adopt anypolicies to halt the rampant fraud.

TheSBA even denied the widely reported fraud calling it a "myth" in a2007 press release titled "Myth vs.Fact".

NBC, CBS, ABC, CNN, MSNBC and CNBC haveall reported on the fraud and abuse at the SBA.

Asearly as 1995 the SBA Inspector General uncovered large businesses werecontinuing to misrepresent themselves as small business to illegally landfederal small business contracts, even after they had lost formal size standardprotests. The SBA Inspector General recommended the SBA produce a list offraudulent firms and circulate it among federal agencies to halt the fraud.

TheSBA declined the Inspector General's recommendation's responding that,"the risks outweighed the benefits" of producing such a list.

In2003 an investigation by the Government Accountability Office (GAO) found over5,000 large businesses were receiving federal small business contracts.

Aninvestigation commissioned by the SBA Office of Advocacy found large businesseswere continuing to receive federal small business contracts as a result of "vendordeception".

A2005 investigation by the SBA Inspector General found large businesses werecommitting contracting fraud by making "false certifications" and "impropercertifications".

Report 5-14 from the SBA Inspector General found the SBAwas reporting awards to large businesses as small business awards in its ownprocurements. One of the firms the SBA reported, as a small business wasBuhrmann NV, a firm located in Hollandwith over 26,000 employees around the world in 28 countries.

Aninvestigation by the General Accounting Office essentially accused the SBA ofencouraging fraud. GAO Report 10-108 stated, "By failing to hold firms accountable, SBA and contractingagencies have sent a message to the contracting community that there is nopunishment or consequences for committing fraud…"

Individualscan send comments to the SBA on the "safe harbor from fraudpenalties" policy by going to the proposed rule on the Federal Registerwebsite and clicking on "Submit a formal comment" in the upper right handcorner. The comment period will end on August 25, 2014.

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