On July 2, the Small Business Administration (SBA) released their FY 2012 federal small business contracting statistics. In it, they claim small businesses received 22.25 percent of all federal contracts.

Federal law requires a minimum 23 percent of all federal contracts be awarded to small businesses. Federal law also defines a small business as being “independently owned,” not being “dominant in the field” and having no more than 1,500 employees. All three federal definitions of a legitimate small business would clearly exclude Fortune 500 firms, since they are publicly owned, and would not meet the federal definition of “independently owned” and all have more than 1,500 employees.

The SBA’s false claim that small businesses received 22.25 percent of federal contracts was based on a violation of both statutes in the Small Business Act that defines a legitimate small business and the statute that requires small business shall receive “a minimum of 23 percent of the total value of all federal contracts.”

The total federal budget for FY 2012 was approximately $3.5 trillion. Based on data from the Federal Procurement Data System, the acquisition budget for 2012 was actually approximately $1.1 trillion for unclassified spending alone, not in the $500 billion range as reported.

Based on the $1.1 trillion in just unclassified acquisitions, legitimate small businesses should have received a minimum $253 billion in contracts, not the $89.9 billion the SBA claimed to have awarded.

The SBA also violated the statue that defines a small business by including billions in awards to many of the largest corporate giants in the world. Some of the firms included in the SBA’s small business data include Chevron, Apple, General Electric, AT&T, Hewlett-Packard Verizon, IBM, Dell, Costco, Wells Fargo, Home Depot, Microsoft, Walgreens, Johnson & Johnson, Pepsi, Intel, Coca-Cola, FedEx, DuPont, Honeywell, Oracle, Delta Air Lines and Sprint. The SBA in their calculations included over $215 million in contracts to General Dynamics alone.

NBC, CBS, ABC and CNN have all covered the story on the diversion of federal small business contracts to corporate giants.

The American Small Business League (ASBL) estimates legitimate small business have received approximately $200 billion a year less in federal contracts than required by law or approximately $2 trillion during the last ten years.

The ASBL continues to be the only national organization working to end the diversion of federal small business contracts to corporate giants and insure legitimate small businesses receive the actual 23 percent of all federal contracts required by law.

Click here to watch the ASBL’s latest video

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