Pentagon and SBA Data Slammed by Washington DC Watchdog Groups

Press Release

Pentagon and SBA Data Slammed by Washington DC Watchdog Groups

POGO Joins ASBL and Public Citizen in Questioning SBA Data

By Lloyd Chapman
American Small Business League
October 9, 5200

PETALUMA, Calif., July 9, 2015/PRNewswire-USNewswire/ -- The Project on Government Oversight (POGO) has now joined PublicCitizen and the American Small Business League (ASBL) in challenging the accuracy of small business contracting data released by the Pentagon and the SBA on June 26.

SBA Administrator Maria Contreras-Sweetand the Pentagon's Under Secretary of Defense for Acquisition, Technology andLogistics, Frank Kendall, held a joint meeting at thePentagon to release the results of the fiscal year 2014 Small BusinessProcurement Scorecard. They claimed small businesses received 24.99% of all federal contracts last year. Research by POGO, PublicCitizen and the ASBL all found the federal government's small business data wassignificantly inflated with billions of dollars in federalsmall business contracts to Fortune 500 firms and their subsidiaries.

POGO released an article by investigator Neil Gordonon July 7, titled "Federal Small Business Contracting: Fact or Fiction?"that found the SBA's Small Business Scorecard was dramatically inflatedstating, "the government simply fudges the numbers," and pointing out this problem"has persisted for years."

In May, Public Citizen released a damming investigative report titled "Slighted: AccountingTricks Create False Impression That Small Businesses Are Getting Their Share ofFederal Procurement Money, and the Political Factors That Might Be atPlay" that found the SBA had falsified the true percentage of federalcontracts to legitimate small businesses by grandfathering and exclusions.

The ASBL released their annual analysis of federal small business contracting dataon July 2. The ASBL study was based on the mostrecent data available from the Federal Procurement Data System. ASBL found theSBA had falsified the percentage and volume of federal contracts to legitimatesmall businesses by including contracts to over 175 Fortune 500 firms and theirsubsidiaries in the 24.99% of contracts they claimed were awarded to smallbusinesses. The largest recipient was Verizon with over $125million in federal small business contracts.

Some of the firms the SBA reported as small businesses were:Chevron, Apple, General Electric, AT&T, CVS, UPS, Bank of America, WellsFargo, Home Depot, Target, Microsoft, Hewlett Packard, Pepsi, Coca-Cola,Boeing, Oracle, Raytheon, Lockheed Martin, General Dynamics, Northrop Grummanand BAE.

Every year since 2005, the SBA Office of Inspector General hasnamed the diversion of federal small business contracts to large businesses as thenumber one problem at the agency.

The House Small Business Committee unanimously adopted an amendment requesting a new GovernmentAccountability Office investigation into fraud in federal small businesscontracting programs.

After the release of the Public Citizen investigative reportSenate Small Business Committee Chairman, David Vitter,sent a letter to Ms. Contreras-Sweet demanding a complete list of all firms the SBA counted as small businessesin 2014. Senator Vitter's office has indicated hearings on the fraud and abusein federal small business programs could begin once the data is received fromthe SBA.

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