NBC Bay Area’s Investigative Unit released a story on July 20th about the diversion of federal small business contracts to large corporations.

 

The investigation found 24 large companies with headquarters or major offices in the Bay Area that received 299 contracts labeled as “small business” awards since 2009. These contracts totaled to $77 million in federal small business funds going to some of the largest companies on the planet, including Apple, IBM, Microsoft and Oracle.

 

The latest data from the Obama administration also shows that of the top 100 recipients of federal small business contractors for fiscal year 2011, 72 were large companies, including Lockheed Martin, General Dynamics, BAE, and Finmeccanica.

 

The SBA’s response to NBC was that large corporations receive federal small business contracts accidentally referred to the errors as “anomalies.”

 

But the SBA’s excuses contradict several federal investigations. The SBA’s own Inspector General; in Report 5-16, found that large corporations receive small business contracts through “false certifications” and “improper certifications.” The SBA’s Office of Advocacy also found that large corporations receive federal small business contracts because of “vendor deception.”

 

Moreover, the SBA has never been able to explain why these “anomalies” overwhelmingly result in the diversion of federal small business contracts to large businesses and not the other way around.

 

Report 10-108 from the Government Accountability Office concluded, "By failing to hold firms accountable, SBA and contracting agencies send a message to the contracting community that there is no punishment or consequences for committing fraud."

 

In the NBC piece, ASBL President Lloyd Chapman stated, “it’s not random occurrences when every day for a decade, millions of dollars a day in federal contracts that should by law be going to small businesses, are not only ending up in the hands of the largest corporations in America, but also Europe and Asia.”