Just a week after the Small BusinessAdministration celebrated record-breakingcontract awards to small business owners eligible for government set-asides,a longtime critic filedsuit in federal court for an injunction to force SBA to halt some of thepractices used in measuring its success.

The Petaluma, Calif.-based AmericanSmall Business League, in an injunction addressedto Administrator Marie Contreras-Sweet filed in Federal District Court in SanFrancisco, argued that the SBA's "illegal policies" have "defrauded small businessesand small businesses owned by women, minorities and disabled veterans out ofhundreds of billions of dollars in government contracts."

It quotes the Small Business Act'slanguage noting that "the governmentwide goal for participation by smallbusiness concerns shall be established at not less than 23 percent of the totalvalue of all prime contract awards for each fiscal year." And withinthat category, the goal states 5 percent for women-owned small businesses, 5percent 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' thatuses a significantly lower federal acquisition budget number to calculate thepercentage 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 contractsperformed outside of the United States; acquisitions by agencies on behalf offoreign governments, entities or international organizations; and all contractsinvolving the following agencies: the Federal Deposit Insurance Corp., the U.S.Postal Service, the Bureau of Engraving And Printing, the U.S. Mint, the Officeof the Comptroller Of The Currency, the Office Of Thrift Supervision, theTransportation 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 IntelligenceAgency, the Congressional Budget Office, the Court Services and OffenderSupervision Agency, the Pretrial Services Agency, the Federal Judicial Center,the Overseas Private Investment Corp., the Supreme Court, TRICARE, and theCenters for Medicare & Medicaid Services.

"The SBA cannot claim it has met itssmall business participation goals unless a significant portion of the totalcontracts are ignored, some contracts are declared exempt, despite the act'scrystal clear use of the phrase all prime contracts," the injunction concludes.

"I am confident," said leaguePresident Lloyd Chapman, "the court will find theSBA's policies violate federal law and the SBA has blatantly falsified federalsmall business contracting data and cheated small businesses out of billions ofdollars."

An SBA spokesman told GovernmentExecutive, "We don't have any comment and aren't aware of anycomplaint."

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