New SBA Administrator Receives Failing Marks From Small Business Group

Press Release

New SBA Administrator Receives Failing Marks From Small Business Group

Steven Preston Accused of Covering Up Fraud

March 8, 2007

Petaluma, Calif.- The new Small Business Administration Head, Steven Preston, has now passed the sixth-month mark as chief of the Small Business Administration. Although organizations like the National Federation for Independent Business, the Small Business and Entrepreneurship Council and the US Chamber of Commerce applauded Preston’s credentials when he was first appointed, small-business advocacy groups are now deeply dissatisfied with his performance.
Preston outraged small business owners across the country when he allowed GTSI Corp, a major government IT contractor that the SBA Inspector General recommended for debarment for misrepresenting themselves as a small business, to continue to receive small business contracts without consequence. 
On Dec 12, 2006, while the American Small Business League was in the middle of research for a CBS investigative story on small business contracting fraud, Preston directed that all employee and revenue numbers that allow the public to determine the small business status of federal contractors be removed from the Central Contractor Registry data system. In November 2006, less than four months after his confirmation, Preston ignored the SBA Inspector General, the OMB, former head of the Administration for Federal Procurement Angela Styles, and a unanimous vote for annual recertification from the Senate Small Business Committee and put forth his own policy that will allow the government to report awards to Fortune 1000 firms as small business awards until the year 2012.
American Small Business League president Lloyd Chapman said that Preston’s actions are devastating for thousands of small businesses across the country.
“I told Forbes when Preston was nominated last year that he would likely foster policies that will act as barriers to small firms doing business with the federal government,” Chapman said. “He’s doing exactly what I said he would do by adopting policies that protect fraudulent companies and will divert even more from small businesses. He’s worse than I ever dreamed he would be.”
Chapman said that Preston promised to clean up the problems of federal contracting but has made them worse than even the former SBA Administrator, Hector Barreto.
“There’s a pattern here. Everything Preston has done makes it easier and easier for large business to misrepresent themselves,” Chapman said. “He’s let a company recommended for debarment go free. He’s proposed a policy that will cheat small businesses out of $300 billion in small business contracts over the last five years. And now he’s trying to cover up this fraud and abuse by removing information from a database that allows the public and the media to tell small businesses from large businesses.”



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