Petaluma, Calif. - Yesterday marked the fifth anniversary of the first congressional hearing on the diversion of billions of dollars in federal contracts intended for small businesses to Fortune 1000 corporations. To date, no legislation has been passed to stop large firms from dominating federal programs designed for small businesses.

Since 2003, a series of federal investigations and private studies have all found that many of the actual recipients of federal small business contracts were Fortune 1000 corporations. In Report 5-15, the Small Business Administration Office of 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)

In addition to the first congressional hearing on abuses in federal small business contracting, May 7, 2008 also marks the fifth anniversary of the first Associated Press story on this issue.  The story entitled, "Feds Favor Big Business Over Small," by Larry Margasak states, "Despite a goal of giving small businesses 23 percent of government contracting dollars, the federal contracting system works in favor of larger companies, congressional investigators have found." (https://www.asbl.com/showmedia.php?id=332) 

In the five years since May of 2003, there have been more than 400 stories on the diversion of federal small business contracts to large corporations in nearly every major newspaper and mainstream media outlet across the United States.  Investigative reports by ABC, CBS and CNN have all found that billions of dollars in federal contracts intended for small businesses have actually gone to firms like: Lockheed Martin, Boeing, Rolls Royce, L3 Communications, British Aerospace Engineering (BAE) and Raytheon. (www.asbl.com)

Despite the evidence pointing to substantial abuses in federal small business programs, the Bush Administration has not introduced or implemented any policy that would stop large firms from masquerading as small businesses in federal small business contracting programs.  In fact, on June 30, 2007, the Bush Administration instituted a policy that will allow large firms to continue to receive federal small business contracts through the year 2012.  (https://www.asbl.com/showmedia.php?id=596) 

In separate statements, four Bush Administration Officials have privately acknowledged that between $65 and $100 billion in federal small business contracts are awarded to large businesses every year.  In an effort to address this issue and stop the diversion of federal small business contracts to large corporations, the ASBL supports the passage of S. 2300, the Small Business Contracting Revitalization Act of 2008. (http://www.govtrack.us/congress/bill.xpd?bill=s110-2300) Additionally, the ASBL has drafted legislation with Senator Barbara Boxer (D - CA) titled, the Small Business Fairness and Transparency in Contracting Act of 2008, that would preclude the federal government from counting contracts to large corporations as small business procurement awards.

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