The AmericanSmall Business League (ASBL) has filed aninjunction in Federal District Court in San Francisco against the SmallBusiness Administration (SBA), asking the court to stop policies theorganization claims defraud small businesses and "cheat small businesses out ofhundreds of billions in federal contracts." Specifically, ASBL takes issue withthe way the SBA categorizes the dollars awarded to small businesses whencalculating whether the federal government achieved its annual goal ofawarding 23% of contracting dollars to small businesses.

According tothe ASBL press release:

The SBA hascreated a policy they call the "exclusionaryrule" and "smallbusiness eligible dollars" that uses a significantly lower federalacquisition budget number to calculate the percentage of contracts awarded toall categories of small businesses. The ASBL maintains the SBA's exclusionarypolicy has no basis in the law and has allowed the SBA to defraud smallbusinesses out of billions in federal contracts.

Data fromthe Congressional Budget Office indicates a total federal budget for fiscalyear 2015 of $3.9 trillion and a discretionary spending budget of $1.2trillion. The ASBL believes $1.2 trillion is the most accurate acquisitionbudget number that should be used to calculate the volume and percentage offederal contracts awarded to small businesses for FY 2015.

Anyone whohas been following the drama encircling the SBA's annual Small BusinessProcurement Scorecard should be familiar with this complaint. In other words,the SBA limits the larger pool of contracting dollars to a smaller chunk, whencalculating the percentage of small business contracting dollars, creating whatASBL claims is a false impression of meeting the goals. 

The secondcomplaint brought in the injunction is against the so-called "five-year rule"or "grandfathering rule," that essentially counts companies as small businessesfor five years even if they've been acquired by a larger contractor, or haveoutgrown the small business definition. According to the nonprofit Public Citizen's 2015 report, "Sleighted,"which raised a number of similar concerns:

SBAAdministrator Maria Contreras-Sweet was asked in a 2014 U.S. House ofRepresentatives committee hearing why contracts given to large businessesNorthrop Grumman, Raytheon and Chevron were counted toward small businessgoals. "We have a rule in place that says that once you get in a contract withgovernment, that you are given five years. And so if a large company acquires asmall business, then it is grandfathered in for a number of years,"Contreras-Sweet responded.

The ASBL hasbeen fighting this fight for a number of years, and was bolstered by PublicCitizen's report last year. This suit is going to be followed closely by justabout everyone involved in federal contracting and the reporting of data. Toread the suit in full, click here.

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