The US government’s is diverting federal contracts intended for medium-sized companies to some of the largest corporations in the world, it was claimed yesterday.

Lobby group, the American Small Business League (ASBL), claims the government's Federal Procurement Data System (FPDS) indicates that government officials are wrongly claiming that “billions of dollars in contracts” awarded to corporate giants around the world actually contributed to the government's 23 per cent small business contracting goal.

ASBL pointed out that the Obama administration claimed that 2008 was a record year for federal contracts awarded to small businesses. However, it notes that some of the firms counted as small business included, General Electric, Xerox, Office Depot, Staples, Dell Computer, AT&T, Hewlett-Packard, 3M Company, General Dynamics, Booz Allen Hamilton, Northrop Grumman, L-3 Communications, GTSI, Raytheon, Boeing and Lockheed Martin.

According to ASBL, US officials also counted dozens of large foreign-owned firms such as Rolls-Royce, British Aerospace (BAE) and French firm Thales Communications as small businesses. Over $254m in contracts to Ssangyong Corporation in South Korea were also counted towards the government's small business goal.

“Federal law requires that a minimum of 23 per cent of the total value of all federal contracts be awarded to small businesses. Obama officials have further reduced the volume of federal contracts going to middle class firms by under-reporting the actual federal acquisition budget, which is the total dollar amount the percentage is based. Obama officials used a figure of $434m to arrive at 21.5 percent of federal contracts awarded to small businesses. The actual federal acquisition budget including top-secret projects is in excess of $650bn,” ASBL stated.

“The American Small Business League (ASBL) projects that by counting big businesses in the United States and Europe as small businesses, and by under reporting the actual federal acquisition budget, the Obama Administration may be shortchanging middle class firms out of as much as $100bn a year in federal small business contracts.”

Source:  http://www.procurementleaders.com/news/latestnews/213-us-freezes-firms-contracts/