Petaluma, Calif. - The American Small Business League (ASBL) has filedfor an injunction in Federal District Court in San Francisco against theSmall Business Administration to halt illegal policies they believe havedefrauded small businesses and small businesses owned by women, minorities anddisabled veterans out of hundreds of billions of dollars in governmentcontracts.

The ASBL's injunction is asking the court to halt twospecific SBA policies they believe have cheated small businesses out ofhundreds of billions in federal contracts.

The Small Business Act states, "TheGovernmentwide goal for participation by small business concerns shall beestablished at not less than 23 percent of the total value of all primecontract awards for each fiscal year." Within that category, the goalstates 5 percent for women-owned small businesses, 5 percent for minority-ownedfirms, and 3 percent for disabled veterans.

The SBA has created a policy they call the "exclusionaryrule" and "smallbusiness eligible dollars" that uses a significantly lower federalacquisition budget number to calculate the percentage of contracts awarded toall categories of small businesses. The ASBL maintains the SBA's exclusionarypolicy has no basis in the law and has allowed the SBA to defraud smallbusinesses out of billions in federal contracts.

Data from the CongressionalBudget Office indicates a total federal budget for fiscal year 2015 of $3.9trillion and a discretionary spending budget of $1.2 trillion. The ASBLbelieves $1.2 trillion is the most accurate acquisition budget number thatshould be used to calculate the volume and percentage of federal contractsawarded to small businesses for FY 2015.

The second SBA policy the ASBL believes is in violation ofthe Small Business Act is the SBA's "grandfatheringrule" or "five-yearrule". Using this policy, the SBA reports billionsin federal contracts to Fortune 500 firms, their subsidiaries, and hundredsof large businesses around the world as small business contracts. Thisdramatically inflates the volume of federal contracts that appear to have beenawarded to small businesses. The ASBL maintains no provision of the SmallBusiness Act would allow the SBA to report awards to Fortune 500 firms as smallbusiness contracts.

Professor Charles Tiefer, one of the nation's leadingexperts in federal contracting law, issued a legal opinionthat agreed with the ASBL's position that the total federal acquisition budget iswell over $1 trillion dollars and that language in the Small Business Act doesallow contracts to Fortune 500 firms, or any large businesses, to be reportedby the SBA as small business contracts.

Beginning in 2002 a long series of federal investigationsand investigative reports from groups such as PublicCitizen have challenged the SBA's policy of reporting awards to Fortune 500firms as small business contracts. ABC, CBS, NBC, CNN, MSNBC, CNBC, Fox News, Fox Business and RTTV have all reported onthe abuses.

ASBL President LloydChapman stated, "I am confident the court will find the SBA's policiesviolate federal law and the SBA has blatantly falsified federal small businesscontracting data and cheated small businesses out of billions of dollars."

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