Petaluma group sues for small businesses


Petaluma group sues for small businesses

Advocacy group alleges $60 billion in federal agency contracts meant for entrepreneurs going to corporations

October 9, 1200

A Petaluma advocacy group filed suit Wednesday against the U.S. Small Business Administration, alleging the agency is withholding data that show contracts meant for small companies are going to big corporations instead.

The group contends the federal government gives more than $60 billion a year in small-business contracts to large corporations, including Wal-Mart, Microsoft, Lockheed Martin, Boeing, Halliburton, Bechtel, Hewlett-Packard and L-3 Communications.

Federal law requires the government to spend 23 percent of the value of its contracts with small companies, according to the American Small Business League, a Petaluma group that has long criticized the SBA's compliance with contracting policies.

The SBA is refusing to release the names of the firms it reported as small businesses for the purpose of meeting federal procurement targets, said Lloyd Chapman, the league's president.

An SBA spokesman on Wednesday declined to comment on the lawsuit, but said the names of companies receiving U.S. small-business contracts are readily available on government Web sites.

"We don't know anything about this lawsuit," said Mike Stamler, an SBA spokesman in Washington. "We haven't seen it yet."

The lawsuit was filed in U.S. District Court in San Francisco under the federal Freedom of Information Act. It is the fourth lawsuit filed by the Petaluma group seeking information from the SBA.

In a report last year, the SBA said it is taking steps to keep large companies from getting government contracts set aside for small business. The report said some large corporations got them when they acquired small companies that had existing federal contracts.

In addition, some small businesses with federal contracts have grown so large they no longer meet the criteria, the SBA said.

The agency said there are "very few" cases of large corporations getting federal contracts meant for small business.

But the Petaluma group said the SBA has made it impossible for the public to determine whether a company is small or large and has delayed action to stop the misuse of small-business contracts.

The lawsuit asks for a court order forcing the SBA to turn over its list of companies that received $78 billion in contracts meant for small business in 2006.

"I want people to know that when the government diverts contracts from middle-class America, there is a staggering negative economic impact," Chapman said.

"I don't think there's any question that the Bush administration's anti-small business policies have been a contributing factor to our nation's current economic woes," he said.

You can reach Staff Writer Steve Hart at 521-5205 or




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