PETALUMA, Calif., May 6, 2015/PRNewswire-USNewswire/ -- As early as 1995 the Small BusinessAdministration (SBA) Inspector General uncovered rampant fraud in federal small businesscontracting programs. The American Small Business League (ASBL) reviewed 20 years ofinvestigations that found the SBA clearly knew about rampant fraud, butadopted policies that encouraged fraud and protected fraudulent firms to inflate small businesscontracting data.

The investigation found the SBA Press Office responded to thedamming Inspector General reports by claiming the fraud was the result of miscoding,computer glitches, anomalies and simple human error. They even releasedpress releases claiming the fraud was a "myth."

The Inspector General suggested in Report 5-14, "If SBA had put as much effort intoverifying whether the company currently met the award's size standard as it putinto trying to find ways to earn credit towards its small business goals, thenperhaps the contract action would have been awarded to a company that waslegitimately small at the time of award."

A 1995 SBA Inspector General investigation found evidence of a"particular fraudulent practice" where large businessescontinued to illegally misrepresent themselves as small to hijack federal smallbusiness contracts. The Inspector General recommended the SBA to publish a listof all the fraudulent firms and circulate the list to all federal agencies toprevent the fraudulent firms from continuing to receive small businesscontracts.

The SBA refused to adopt the Inspector General'srecommendations.  As a result, the fraudulent firms continued to receive billionsof dollars in federal small business contracts. The investigationsrevealed the SBA has continued to knowingly include contracts to fraudulentfirms in their annual small business contracting data for over 20 years.

In 2005, the SBA Inspector General released Report5-15 that stated, "One of the most important challenges facing theSmall Business Administration (SBA) and the entire Federal Government today isthat large businesses are receiving small business procurement awards andagencies are receiving credit for these awards."

Report 5-14 uncovered 66 percent of the high dollar procurements the SBA itselfhad reported as going to small businesses actually went to large businesses.One of those firms was Dutch corporate giant Buhrmann NV with over 26,000employees around the world.

Report 5-16 uncovered the SBA knew large businesses werecommitting felony federal contracting fraud by making "false certifications" and "improper small business self-certifications."

A series of federal investigations have all found fraud andabuse in federal small business contracting programs. In 2009, the GovernmentAccountability Office essentially accused the SBA of encouraging fraud. NBC, CBS, ABC, CNN, CNBC, Fox Newsand RTTVhave all reported on the abuses.

For 20 years the SBA has refused to adopt policies to halt thefraud, but recently finalized the "safe harbor from fraud penalties" policy that helpsprotect fraudulent firms that are caught hijacking federal small businesscontracts.

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