SOURCE: American Small Business League

American Small Business League

June 21, 2017 07:17 ET

ASBL Reports: Government Small Business Statistics Include Over 5,000 Large Businesses

PETALUMA, CA--(Marketwired - June 21, 2017) - Data from the Federal Procurement Data System compiled by Rockville, Maryland-based Fedmine, found the Small Business Administration included federal contracts to over 5,000 large businesses in the $99.96 billion the SBA claimed were awarded to small businesses.

The SBA's small business data also included billions in federal contracts that actually went to over 150 Fortune 500 firms.

Some of the firms that have received federal small business contracts in recent years include, Apple, Walmart, Microsoft, Home Depot, Bechtel, SAIC, Raytheon, Hewlett-Packard, Oracle, IBM, Johnson and Johnson, General Electric, Northrop Grumman, Honda Motors, British Aerospace and Engineering and Rolls Royce.

The Fedmine report indicates the SBA dramatically inflated the volume and percentage of federal contracts awarded to legitimate small businesses.

In a May 18th, press release the SBA claimed small businesses had received $99.96 billion in federal contracts and 24.34 percent of all federal contracts awarded in fiscal year 2016.

Data from the Congressional Budget Office indicates the SBA also significantly inflated the percentage of awards to small businesses by excluding the vast majority of federal acquisitions from their calculations.

The Congressional Budget Office (CBO) reports the total federal acquisition budget for 2016 was $1.2 trillion. The Small Business Act mandates small businesses receive a minimum of 23% of all federal contracts.

Small businesses should have received 23 percent of the $1.2 trillion in contracts the federal government actually awarded in 2016 which would be approximately $276 billion. To claim small businesses received 24.34 percent of all federal contracts in FY 2016, the SBA excluded over $790 billion in contracts and used an acquisition budget number of just $410 billion.

Every year since 2005 the SBA Office of Inspector General has named the diversion of federal small business contracts to large businesses as the number one management problem at the SBA. As early as 2003 the Government Accountability Office (GAO) found over 5,300 large businesses were the actual recipients of federal small business contracts.

In 2008, President Obama released the statement, "It is time to end the diversion of federal small business contracts to corporate giants."

Professor Charles Tiefer, one of the nation's leading authorities on federal procurement law and a contributor to Forbes released an article on June 5, 2017 challenging the accuracy of the SBA's statistics.

In 2014, Public Citizen released an investigative report titled "Sleighted", that found the SBA had fabricated compliance with federal small business contracting goals. In 2016, Mother Jones released their investigative report titled, "Giant Corporations Are Reaping Billions From Federal Small Business Contracts."

ABC, CBS, NBC, CNN, CNBC, MSNBC, Fox News and RTTV have all released investigative reports that found the SBA included billions in federal small business contracts to Fortune 500 firms.

The American Small Business League (ASBL) has filed for a federal injunction to stop the SBA from falsifying federal small business data. The case is currently in the 9th Circuit Court of Appeals.

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