California: The Small Business Admin. denies it is unlawfully withholding a report about reasons some large businesses are miscoded on federal databases as small and sometimes receive benefits intended for genuine small business.

The response is to a complaint filed under the Freedom of Information Act by the American Small Business League to get the report, prepared for the Office of Advocacy in SBA by Eagle Eye Publishers Inc., a Fairfax, VA, firm that specializes in federal procurement data (MBI, 0411p5).

SBA asks the U.S. District Court for the Northern District of California dismiss the complaint and order ASBL to pay the government's legal costs.

"I am in this to stay," says Lloyd Chapman, president of ASBL, who thinks the report confirms the existence of widespread fraud in federal contracting and SBA is withholding it to cover up the situation. SBA says the report is not completed and will be released when it is.

Paul Murphy, president of Eagle Eye, says he found about 15 different reasons why firms get miscoded but declines to give details until OA releases the final report.