United Technologies Corporation (UTC), a Fortune 500 company which owns numerous large defense contractors including Pratt & Whitney, Hamilton Sundstrand and Sikorsky Aircraft, was fined $75 million last week after it was found that the firm had illegally exported U.S. computer software that helped China build its first modern attack helicopter, the Z10 (which was first delivered to China in 2009 and still remains in production today).

 

However, while UTC has now been given a slap on the wrist for violating a U.S. embargo on military exports to China that dates back to Tiananmen Square events in 1989, no mention has been made of the $119 million in federal small business contracts the U.S. has awarded to UTC since 2006 – the same year the Justice Department launched its probe into export violations committed by UTC while under contract with the Pentagon.

 

UTC is just one of many large corporations that received billions of dollars worth of federal small business contracts in recent years. Others include Lockheed Martin, Apple, Rolls-Royce, Chevron, GE, Time Warner, and Russian arms company Rosoboronexport.

 

In 2005, the Small Business Administration Office of the Inspector General issued Report 5-15, which stated, “One of the most important challenges facing the SBA and the entire federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for those awards.”

 

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

 

Legislation has been introduced to prevent large corporations from receiving federal small business contracts but neither committee leadership nor the President have supported the bill (H.R. 3184).

 

“The Pentagon has given over $2 billion worth of federal contracts (including $119 million in small business contracts!) to a company that illegally sold U.S. military technology to China,” ASBL President Lloyd Chapman said. “Such rampant abuse of federal programs designed to help small businesses has gone on for the last decade because Congress, the President and the mainstream media refuse to address these blatant issues.”

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