Think the federal government's small business contractingnumbers are inflated? The Small Business Administration's inspector generaljust confirmed your suspicions.

The agency's internal watchdog identified $428 million incontracts that federal agencies awardedto ineligible firms in two programs for small businesses: the 8(a) program,which benefits minority-owned businesses; and the Hubzone program, whichbenefits firms located in low-income areas. Even more contracts could have beenawarded to ineligible businesses; the inspector general only looked atcontracts worth more than $3 million.

These improperly awarded contracts not only inflated thenumbers reported by the SBA for these programs, they also took opportunitiesaway from legitimate participants in these two programs.

The inspector general also identified more than $1.5 billionin 8(a) and Hubzone contracts that were performed by businesses that no longerwere in these programs. That's legal under SBA regulations, but including themmakes it look as though 8(a) firms and Hubzone businesses got more work thanthey actually did.

The SBA reported two months ago that the federal government hitits goal of awarding 23 percent of its contracting dollars to smallbusinesses in 2013 — the first time that' s happened since 2005.

The inspector general's report, which looked at only a smallslice of government contracts, gives ammunition to critics who contend thisachievement was hollow because the data doesn't reflect reality.

To view full article, click here: http://www.bizjournals.com/bizjournals/washingtonbureau/2014/09/sba-watchdog-just-blew-a-hole-in-small-business.html?page=all