SBA practices blasted by small biz, Dems

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SBA practices blasted by small biz, Dems

Central Valley Business Times
July 26, 2006

The Small Business Administration came under fire Wednesday for how it accounts for "small businesses" getting government contracts and for allowing money earmarked for small companies to be diverted to some of the nation's largest corporations.

Petaluma-based American Small Business League says small businesses were "cheated" out of as much as $100 billion in federal contracts that went instead to large businesses last year.

Last year, the SBA Office of Advocacy reported that $119 billion was awarded to small businesses in prime and subcontracts.

But the American Small Business League says small businesses with 100 employees or less received no more than $20 billion that year.

"The remainder of the awards went to large businesses, including major defense contractors like Boeing, Lockheed, Northrop Grumman, Raytheon, Bechtel, and General Dynamics," ASBL says.

It bases its charge on its own research of federal contracts and on research performed by Eagle Eye Publishers of Arlington, Va., a company which compiles data on federal contracts

Former SBA Administrator Hector "Barreto is either comparing apples to oranges or else he has access to numbers that the general public does not," says Paul Murphy, president and CEO of Eagle Eye in an article published by Washington Technology on July 24 ("Smoke and Mirrors at SBA" by Ethan Butterfield).

The SBA says it relies on data provided by an outside company and is confident in the figures.

Meanwhile, a report by the Democratic members of the House Small Business Committee claims at least $12 billion the government claims when to small business in reality went to large corporations.

Federal law requires that 23 percent of federal contracts be awarded to small businesses. The committee Democrats claim this is the sixth year in a row that has not happened.

In addition to what the report calls miscoding of the businesses, some actual small businesses which got contracts either expanded beyond that size or were bought up by large businesses.

U.S. Rep. Nydia Velazquez, D-N.Y., has asked the Government Accountability Office as well as the Defense, Treasury and State departments to look into the issue.

A request to the Small Business Administration for comment regarding the charges failed to elicit any response.

www.centralvalleybusinesstimes.com




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