PETALUMA, Calif.--(BUSINESS WIRE)--On July 2, the Small Business Administration (SBA) claimed the federal government awarded 22.25 percent of all federal contracts to small businesses. The SBA claimed for fiscal year, 2012 small businesses received $89.9 billion in contracts from the government.

Federal law requires a minimum of 23 percent of the total value of all federal contracts to be awarded to small businesses. Federal law also defies a small business as being “independently owned,” not being “dominant in their field” and having no more than 1500 employees. All three aspects of this definition would exclude Fortune 500 firms or any other firm that was publicly owned and traded on the New York stock exchange.

Based on the latest data from the Federal Procurement Data System (FPDS), the SBA’s claim that small businesses received 22.25 percent of all federal contracts is false.

The FPDS indicates for fiscal year 2012, of the federal government’s $3.5 trillion dollar annual budget, the acquisition budget was $1.1 trillion. Of that number, small businesses should have received $253 billion. This number alone would drop the SBA’s percentage of awards distributed amongst small businesses to 8.1 percent for fiscal year 2012.

The FPDS data also indicates the SBA dramatically inflated the dollar volume of awards to small business by including billions in contracts to Fortune 1000 firms and hundreds of other large businesses.

The SBA’s attempts to fabricate the government’s compliance with the Congressionally mandated 23 percent small business contracting goal has been exposed in numerous investigative reports by ABC, NBC, CBS and CNN.

The SBA has repeatedly tried to explain the diversion of billions in federal small business contracts to corporate giants for over a decade as “computer glitches,” “anomalies,” “simple human error,” “miscoding” and “large businesses buying small businesses.”

No journalist has ever reported that federal law does not allow a firm to continue to qualify as a small business once they are acquired by a large business. No journalist has ever mentioned the true federal acquisition budget is more than twice as high as the one claimed by the SBA. No journalist has ever asked any government official to explain why alleged random error patterns attributed to computer glitches, anomalies, simple human error and miscoding don’t have a random pattern but instead, always report federal contracts to large businesses as small business contracts.

The SBA has refused to go on camera with any journalist to discuss this issue.

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