PETALUMA, Calif., May 4, 2015 /PRNewswire-USNewswire/ -- The American Small Business League(ASBL) has completed a twelve-month investigation and analysis of threepolicies the Small Business Administration (SBA) has used to circumvent theSmall Business Act and defraud legitimate American small businesses out ofhundreds of billions in federal contracts.

Those SBA policies include miscoding, the SBA's exclusionaryrule and their five-year rule.

The ASBL'sresearch has been aided by legal opinions and counsel from ProfessorCharles Tiefer, one of the nation's leading experts on federal contracting law.

1.    Miscoding, computer glitches and anomalies - For over twelveyears the SBA has claimed the diversion of federal small business contracts toFortune 500 firms and their subsidiaries is the result of random errors mostcommonly referred to as "miscoding." The ASBLfound the supposed random "miscoding" errors did not have a random pattern ofdistribution but in fact always resulted in the diversion of federal smallbusiness contracts to large businesses. The ASBL also concluded itwas mathematically impossible for the "miscoding" to be actual randomerrors. The ASBL concluded the misreporting of federal contracts to largebusinesses and was clearly willful and intentional efforts by the SBA tofalsify the true volume and percentage of federal contracts awarded to smallbusinesses.

2.    The Five Year Rule – The SBA has used the "five yearrule" to justify the inclusion of billions of dollars in federal contractsto Fortune 500 firms, their subsidiaries, thousands of clearly large businessesand even foreign owned corporate giants like Rolls-Royce and British AerospaceEngineering (BAE). The SBA's "five year rule" has absolutely no basisin law and is in fact in direct violation of every provisionof the Small Business Act that established the legal definition of asmall business. Since no language in the Small Business Act supports the SBA's"five year rule" it is blatantly illegal.

3.    The Exclusionary rule - The SBA's "Exclusionary Rule"has been fabricated to dramatically inflate thepercentage of federal contracts to legitimate small businesses byusing a federal acquisition budget that is significantly lower than the actualtotal annual federal acquisition budget. The 23.39% of federal contracts theSBA claimed small businesses had received in FY 2013 used a total eligibledollar figure of just $355 billion. The SBA's "ExclusionaryRule" has no basis in law and is in fact in direct violation of the SmallBusiness Act that stipulates that small businesses shall receivea minimum of 23% of the total value of all prime contract awards. Alegal opinion by Professor Charles Tiefer found the actual total annual federalacquisition budget to beapproximately one trillion dollars.

The ASBL study concluded thatif all provisions of the Small Business Act were followed, the actualpercentage of federal contracts awarded to legitimate small businesses would beno more than 5% for FY 2013 and not the 23.39% claimed by the SBA.

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