Petaluma, Calif. – The American Small Business League (ASBL) takes exception to statements made by the Jovita Carranza, Acting Administrator of the U.S. Small Business Administration (SBA) in a June 19, 2008 letter to the editor of The New York Times. (http://www.nytimes.com/2008/06/12/business/smallbusiness/12sba.html?ref=business - Due to length of URL, Please copy and paste link into browser. Remove the space if one exists.)  

In the letter entitled, "The Small Business Administration's Comeback," Carranza stated:

"The S.B.A. helps small businesses get government contracts. In 2006 (the last year with published data), small businesses reached a record level of federal contracts. Small businesses owned by women experienced their largest year of growth and hit a record level. Small disadvantaged businesses (generally minority-owned) hit a record level.

The S.B.A. has also led tough-minded efforts to improve the integrity of small business contracting data and to tighten the rules to qualify, reducing the value of contracts coded as small business by more than $10 billion, increasing new opportunities."

The first congressional hearing on the diversion of federal small business contracts to large corporations was held in May of 2003. Since then, the SBA and the Bush Administration have failed to stop the giveaway of federal small business contracts to large corporations. In fact, the Bush Administration has done everything it can to dismantle programs designed to assist small businesses from nearly every socio-economic background. For example, in 2006, the Bush Administration closed the office at the SBA solely dedicated to helping veteran-owned small businesses; and for the last 7 years it has refused to implement the congressionally mandated women-owned set-aside program. (http://www.targetgov.com/Content.asp?id=2313)

Since 2003, there have been a series of federal investigations that have all found that the SBA has included billions of dollars in contracts to Fortune 500 corporations, and even companies in Europe, towards its small business contracting statistics. (https://www.asbl.com/documents/keystatements.html)

In fact, in 2005 the SBA's own Inspector General released Report 5-15, which states, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/ig/05-15.pdf)

To the contrary of Ms. Carranza's statements, 2006 was anything but a record setting year. In fact, on May 19, 2008, United States District Court Judge Marilyn H. Patel ruled in favor of the ASBL and ordered the SBA to provide the ASBL with more than 10,000 pages of data that listed the names of all firms that received federal small business contracts for fiscal years 2005 and 2006. In a review of the data, the ASBL uncovered that the SBA had included billions of dollars in awards to Fortune 500 corporations in its small business contracting data. The list of large firms within the SBA's 2006 small business contracting statistics includes firms like: Dyncorp, Battelle Memorial Institute, Hewlett Packard, Government Technology Services Inc (GTSI), Bechtel, Lockheed Martin, General Dynamics, General Electric, Northstar Aerospace, Booz Allen Hamilton Inc. and Raytheon. (https://www.asbl.com/showmedia.php?id=1059)

Regarding Ms. Carranza's statements surrounding the SBA's efforts to improve the integrity of small business contracting data and increase contracting opportunities, the ASBL would like to draw attention to the SBA's poor record of actually implementing policies to do so. On June 30, 2007, former SBA Administrator and current Secretary of HUD, Steven Preston, implemented a grandfathering/5-year re-certification policy going against recommendations made by both the current and former SBA Inspector General for an annual re-certification policy. The SBA's grandfathering/5-year re-certification plan will allow contracts to Fortune 500 corporations to be counted as small business awards through 2012. (http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/ 2004/pdf/04-26609.pdf - Due to length of URL, Please copy and paste link into browser. Remove the space if one exists.)

We predict that before President Bush leaves office he will to continue to dismantle small business programs and modify the definition of a small business to include companies that have no legitimate claim to federal small business contracting programs.

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