Small Businesses Demand Data on Contract Fraud

Press Release

Small Businesses Demand Data on Contract Fraud

SBA Is Withholding Report that Reveals the Extent of Abuse in Government Procurement, Lawsuit Charges

October 6, 2004

The American Small Business League filed suit in U.S. District Court on Wednesday to force the Small Business Administration to release a report it commissioned on the extent of fraud and abuse in federal contracts.
The demand comes less than a week after a new study by the Center for Public Integrity revealed that the Pentagon has awarded more than $47 billion in contracts designated for small businesses to its biggest contractors – none of them small businesses.

" The SBA has had a report on small business contracting since January but refuses to release it," said American Small Business League (ASBL) president Lloyd Chapman. "We believe its report confirms widespread fraud in federal contracts, and that the SBA is covering up the problem by keeping the report under wraps. The Center for Public Integrity's study on contract abuse is just the tip of the iceberg."

The Small Business Administration and White House claim that the government met the statutory requirement of allocating 23% of procurement contracts to small businesses last year. ASBL and other critics say the true percentage is much lower because fraud, loopholes and abuse allow large companies to receive small business "set-aside" contracts worth billions of dollars.

In its Freedom of Information Act lawsuit, the ASBL asks the court to order the Small Business Administration to disclose "statistical and other factual data" from its unpublished report. The suit, filed by Gutierrez-Ruiz LLP, states that the SBA's report "contains statistical and other factual information about the allocation of contracts which is not subject to any exemption under the Freedom of Information Act, and must be disclosed."

" Freedom of Information Act law is clear that the public is entitled to see this information," said attorney Robert Belshaw, a partner at Gutierrez-Ruiz. "We believe this material is needed to determine the extent of the government's small business contracting problem."



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