PETALUMA, Calif.--(BUSINESS WIRE)--President Obama has proclaimed June 16 through June 22 as National Small Business Week. He stated, “This week we celebrate America’s entrepreneurial spirit, and we recommit to helping our small businesses get ahead.”

A recent investigative report by CBS Boston seems to contradict the federal government’s commitment to small businesses. CBS Boston has uncovered the government-wide diversion of billions of dollars in federal small business contracts to Fortune 500 firms. They found 10 federal investigations that proved federal officials at the Small Business Administration (SBA) and other agencies have been aware of the fraud and abuse for years and appear to have even helped facilitate it.

An investigation by NBC in 2012 had similar findings.

CBS and NBC interviewed American Small Business League President, Lloyd Chapman who has fought to end the abuses for over a decade.

In February of 2008, President Obama stated, “It is time to end the diversion of federal small business contracts to corporate giants.”

The latest federal data indicates of the top 100 largest recipients of federal small business contracts for 2012, 71 are currently large businesses.

Some of the firms that have recently received federal small business contracts include, Russian-owned Rosoboronexport, Italian defense giant Finmeccanica, Lockheed Martin, Raytheon, Global Partners, Hewlett-Packard, IBM, Oracle, AT&T and Bechtel. In 2012, General Dynamics received over $215 million in federal small business contracts.

For the last nine years, the SBA Office of Inspector General (SBA OIG) has named the diversion of federal small business contracts to large businesses as the number one problem at the SBA.

In October of 2009, the General Accounting Office essentially accused government officials of encouraging fraud in Report GAO-10-108, which stated, “By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud.”

Other federal investigations have found large businesses had committed fraud through, “vendor deception” and “false certifications.”

In Report 5-15, the SBA OIG referred to the diversion of federal small business contract to corporate giants as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today…”

The General Services Administration responded to the series of embarrassing investigations by removing the parent company Dunn & Bradstreet number from the Central Contractor Registration database, which makes it more difficult for journalists and federal investigators to determine if a firm is a legitimate small business or a subsidiary or division of a Fortune 500 firm.

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