A federal judge has ordered SBA to release a consultant's draft report that allegedly shows evidence of fraud in small-business contracting.

The American Small Business League of Novato, CA, sued for release of the report. The League's president, Lloyd Chapman, says he believes it contains evidence that some large businesses deliberately masqueraded as small ones to win federal contracts.

On April 29 Judge Susan Illston of U.S. District Court in San Francisco rejected SBA's claim that the report was exempt from public disclosure because it was an internal document used in decision-making deliberations.

SBA's Office of Advocacy released the final version of the report by Eagle Eye Publishers in February. It showed that at least $2 billion in contract awards credited to small firms in fiscal 2002 actually went to large businesses or other entities such as nonprofits and universities. That version mentioned no evidence of fraud.

SBA Administrator Hector Barreto later told Congress that there is no "wholesale" fraud in contracting. He said large businesses were misreported as small ones primarily because the companies had outgrown size standards during the life of a contract or had been acquired by a bigger firm. (SAA, 2/18)