PETALUMA, Calif., April 29, 2015/PRNewswire-USNewswire/ -- Next week the Federal Government will celebrateNational Small BusinessWeek May 4-8. The weeklong celebration offederal small business programs could be spoiled by a series of federalinvestigations that have uncovered Fortune 500 firms are the actual recipientsof billions of dollars in federal small business contracts.

Every year of the last decade the Small Business AdministrationOffice of Inspector General has reported the diversion of federal smallbusiness contracts to large businesses as the numberone problem at the SBA.

Neither the SBA nor Congress has adopted any legislation orpolicies to halt the fraud and abuse that has been uncovered. Quite thecontrary, in February the SBA adopted the final rule of the "Safe harbor from fraudpenalties" policy that would provide legal protection for large businesses that are caughtcommitting fraud by illegally obtaining federal small business contracts.

SBA Administrator Maria Contreras-Sweetwas chastisedby members of the House Small Business Committee for diverting billions infederal small business contracts to Fortune 500 defense contractors such asNorthrop Grumman and Raytheon.

An investigation released by the SBA Inspector General in 2005, Report 5-14,found the SBA's policy of diverting small business contracts to largebusinesses was illegal and was in direct violation of the Small Business Act. Report 5-16 discovered large businesses were committingfelony federal contracting fraud by making "false certifications" and"improper certifications."

As early as 1995, the SBA Inspector General found largebusinesses were committing a "particular fraudulent practice" to illegally obtainfederal small business contracts.

In 2003, the Government Accountability Office launched aninvestigation based on information provided by American Small Business League(ASBL) President and founder Lloyd Chapmanthat foundover 5,300 large businesses were the actual recipients of billions infederal small business contracts.

In the following years dozens offederal investigations continued to find Fortune 500 companies and theirsubsidiaries were hijacking federal small business contracts.

Federal Judge William Alsuphas accused the Pentagon of trying to "cover up" and "suppress the evidence" in the Pentagon's smallbusiness subcontracting programs. Professor Charles Tieferissued a legal opinion on the Pentagon's smallbusiness-subcontracting program describing it as a "sham."

In March, the House Small Business Committee unanimously adoptedan amendment to request a new GAOinvestigation into fraud in small business programs based on research doneby Lloyd Chapman's ASBL.

ABC, CBS, NBC, CNN, MSNBC, CNBC, Fox News and RTTV allreported on the diversion of federal small business contracts to corporategiants.

The latest threat to federal small business programs has comefrom President Obama when he included a proposal in his FY 2016 budget to resurrect a plan by Ronald Reagan to permanently close the SBA and endall federal programs for small business by combing the SBA with the Departmentof Commerce.

The ASBL has produced a documentaryto save the SBA.

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