Petaluma, Calif. – The following is a statement by the American Small Business League:

On March 12, 2010, the Obama Administration intends to move forward with a plan that could destroy years of incriminating contracting data.  The General Services Administration (GSA) plans to eliminate the socio-economic field, "SmallBusinessFlag," on all historical and future contracting data.  In the past, the Government Accountability Office (GAO), the Small Business Administration Office of Inspector General (SBA IG) and other agencies have used the small business flag to uncover large businesses that have misrepresented themselves as small businesses to illegally receive federal small business contracts.

Since 2003, twenty-five federal investigations have found that Fortune 500 firms and thousands of other large businesses have received billions of dollars a month in federal contracts earmarked for small businesses. (https://www.asbl.com/documentlibrary.html) 

In March of 2005, the SBA Office of Inspector General (IG) released Report 5-15 which stated, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (https://www.asbl.com/documents/05-15.pdf) 

In Report 5-16, the SBA IG reported that large businesses had committed fraud by falsely claiming to be small businesses by making "false certifications,” and "improper certifications." (https://www.asbl.com/documents/05-16.pdf) Another investigation from the SBA Office of Advocacy found large businesses had received federal small business contracts fraudulently through what they referred to as "vendor deception." (https://www.asbl.com/documents/eagkeeye_report%202002.pdf) 

The elimination of the small business flag will preclude any further investigations into the diversion of federal small business contracts to large corporations.

The American Small Business League (ASBL) is preparing to file a preliminary injunction against the GSA to halt the destruction of the historical contracting data.  The ASBL expects to file the order on Monday, March 8, 2010.

The ASBL was preparing to use the data in the small business flag field to launch civil and criminal action against large businesses that had received federal small business contracts fraudulently.

"There is absolutly no reason to destroy historical contracting data," ASBL President Lloyd Chapman said. "It's no coincidence that the GSA and the SBA have tried to withhold evidence in the past that would prove that Fortune 500 firms have received federal small business contracts.  This is just the latest attempt by the government to reduce transparency and cover-up the fact that large businesses have received billions of dollars a month in federal small business contracts. We are not going to let them do it."