Law360, New York (October 03, 2014, 5:49 PMET) -- Procurement data obtained by the American Small Business League showsthat large companies received millions of dollars in contracts intended forsmall and disadvantaged businesses, which the league says casts doubt on the SmallBusiness Administration's recent assertion that agencies met theirsmall-business contract goals in 2013.

ASBL president Lloyd Chapman obtained a list of companies with small-businesscontracts worth $83 billion through a Freedom of Information Act request to theSBA. The list includes some big-name contractors — $46.6 million went to Lockheed MartinManagement Systems Designers Inc., $4.59 million went to Raytheon BBNTechnologies Corp. and  $419,000 went to Raytheon Co., according tothe ASBL's list.

Chapman said that the raw data obtained through the FOIA request is likely amore accurate representation of what's happening in the SBA contractingprograms than the official data, which is "cleaned up" over the course ofseveral months before being released.

"Every year when this information comes out, SBA says the large businessesrepresented are the result of anomalies, miscoding, simple human errors,computer glitches, small businesses outgrowing their size status, and largebusinesses acquiring smaller companies," Chapman said. "But there's a verystrong case that this is not simply [an accumulation of errors] ... anotherword that you could use is fraud."

Small-business contracts have been the subject of frequent government reports,and agencies including the GovernmentAccountability Office, the Department ofthe Interior inspector general and the Small Business Administrationinspector general have found overreporting of small-business contracts andevidence that agencies improperly award and take credit for small-businesscontracts that end up in the hands of large business.

The SBA's inspector general issued a report Sept. 24 that concluded thatagencies significantly overstated the value of contracts awarded to businessesin the SBA's Historically Underutilized Business Zone program and its 8(a)Business Development Program for small, disadvantaged businesses.

"We identified over $400 million in contract actions that were awarded toineligible firms, which may have contributed to the overstatement of smallbusiness goaling dollars for the Small Disadvantaged Business and theHUBZone Business preference programs in FY 2013," the inspector general'sreport said. "Besides reporting inaccurate information in [the FederalProcurement Data System], procuring agencies may have limited contractingopportunities for firms currently participating in the 8(a) or HUBZoneprograms."

The discrepancies raised by the SBA's data have also caught the attention oflawmakers like Rep. Nydia Velazquez, D-N.Y., who said during a Sept. 10 hearingthat the SBA allowed agencies to take credit for small-business contracts thatwere performed by large companies like NorthropGrumman Corp., Chevronand Raytheon.

"I don't know how, I don't know when they became small businesses, butwere you aware that agencies were taking credit towards their small-businesscontracting goals by including contracts that were given to largecompanies?" Velazquez asked SBA administrator Maria Contreras-Sweet.

Contreras-Sweet said that at least some of those discrepancies were explainedby SBA's "grandfathering" policy, which allows a company to keep itssmall-business status for up to five years after being acquired by a largecompany like Northrop Grumman.

Velazquez was unsatisfied by Contreras-Sweet's explanation and said she wouldpress the SBA to do more to make sure "numbers are not being cooked by theseagencies."

To view full article, click here: http://www.law360.com/governmentcontracts/articles/584036?utm_source=rss&utm_medium=rss&utm_campaign=section