Just a week after the Small Business

Administration celebrated record-breaking

contract awards to small business owners eligible for government set-asides,

a longtime critic filed

suit in federal court for an injunction to force SBA to halt some of the

practices used in measuring its success.

The Petaluma, Calif.-based American

Small Business League, in an injunction addressed

to Administrator Marie Contreras-Sweet filed in Federal District Court in San

Francisco, argued that the SBA's "illegal policies" have "defrauded small businesses

and small businesses owned by women, minorities and disabled veterans out of

hundreds of billions of dollars in government contracts."

It quotes the Small Business Act's

language noting that "the governmentwide goal for participation by small

business concerns shall be established at not less than 23 percent of the total

value of all prime contract awards for each fiscal year." And within

that category, the goal states 5 percent for women-owned small businesses, 5

percent for minority-owned firms, and 3 percent for disabled veterans.

But the SBA, the group's argument goes,

"has created a policy they call the 'exclusionary rule' and 'small business eligible dollars' that

uses a significantly lower federal acquisition budget number to calculate the

percentage of contracts awarded to all categories of small businesses."

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Among the types of contracts defined as

"excluded," according to the brief, are those involving contracts

performed outside of the United States; acquisitions by agencies on behalf of

foreign governments, entities or international organizations; and all contracts

involving the following agencies: the Federal Deposit Insurance Corp., the U.S.

Postal Service, the Bureau of Engraving And Printing, the U.S. Mint, the Office

of the Comptroller Of The Currency, the Office Of Thrift Supervision, the

Transportation Security Administration, the Federal Aviation Administration,

the Tennessee Valley Authority, the Administrative Office of the U.S. Courts,

the Architect of the Capitol, Bankruptcy Courts, the Central Intelligence

Agency, the Congressional Budget Office, the Court Services and Offender

Supervision Agency, the Pretrial Services Agency, the Federal Judicial Center,

the Overseas Private Investment Corp., the Supreme Court, TRICARE, and the

Centers for Medicare & Medicaid Services.

"The SBA cannot claim it has met its

small business participation goals unless a significant portion of the total

contracts are ignored, some contracts are declared exempt, despite the act's

crystal clear use of the phrase all prime contracts," the injunction concludes.

"I am confident," said league

President Lloyd Chapman, "the court will find the

SBA's policies violate federal law and the SBA has blatantly falsified federal

small business contracting data and cheated small businesses out of billions of

dollars."

An SBA spokesman told Government

Executive, "We don't have any comment and aren't aware of any

complaint."

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