Small Business Administration Sued for Information on Contracting Fraud

Press Release

Small Business Administration Sued for Information on Contracting Fraud

SBA Faces Second Lawsuit Filed by the American Small Business League

November 28, 2005

SAN FRANCISCO, CA, Nov. 28, 2005 /PRNewswire/ -- The American Small Business League filed suit in Federal court last week against the Small Business Administration. The suit was filed under the Freedom of Information Act after the SBA refused to release documents detailing hundreds of contracting protests filed against large firms falsely claiming to be small businesses. ASBL attorneys have struggled to obtain the documents over a period of eighteen months.

Several government investigations and private studies have found that billions in Federal small business contracts actually wound up in the hands of corporate giants. In a recent report to Congress the SBA Office of Inspector General stated, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."

Earlier this year the ASBL won a similar case against the SBA when Federal Judge Susan Ilston ordered the SBA to produce the original draft of a report acknowledging that over two billion dollars in small business contracts had actually gone to some of the largest corporations in the U.S. and Europe.

"I don't think there is any question that the SBA is trying to withhold information that will show they have known about widespread fraud and blatant abuses in Federal small business contracting programs for several years. Thousands of small businesses have needlessly suffered, some have even been forced to close, because of these staggering abuses," stated Lloyd Chapman, President of the ASBL. "It's time for the Attorney General to stop helping the SBA withhold information on contracting abuse and begin investigating which Federal officials have been involved in allowing Federal small business contracts to be awarded illegally to large corporations."

Under federal law, falsely claiming to be a small business in order to receive a Federal small business contract is a felony with a penalty of up to ten years in prison and a $500,000 fine.

About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses - the 98% of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1951. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.


For more information contact:
Lloyd Chapman

To view a copy of the complaint, click here.



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