PETALUMA, CA--(Marketwired - October 03, 2016) - A federal case filed by the American Small Business League (ASBL) against the Small Business Administration (SBA) could result in a significant increase in the volume of federal contracts that will be awarded to both woman-owned and minority-owned small businesses in the next administration.
The case will be heard by Federal District Court Judge Vince Chhabria on October 6th in Federal District Court in San Francisco.
Federal law has established a minimum small business contracting goal for the federal government of 23% of all federal contracts. Including a minimum of 5% of all federal contracts be awarded to woman-owned small businesses and a 5% goal for minority-owned small businesses.
According to the Congressional Budget Office the total federal acquisition budget for fiscal year 2015 was $1.2 trillion. To claim the federal government had awarded 5% of all federal contracts to small businesses owned by women and minorities in 2015, the SBA excluded over $800 billion in federal acquisitions from their calculations. The ASBL believes in 2015 alone legitimate woman-owned small businesses and minority-owned small businesses were each shortchanged out of over $40 billion in federal contracts and subcontracts.
The ASBL is asking the court to grant an injunction to stop the SBA from excluding the majority of the federal acquisition budget to fabricate compliance with small business contracting goals.
The ASBL's case points out the Small Business Act mandates all categories of small business goals are based on "all" federal contracts and makes no mention of any provisions to exclude any portion of the federal acquisition budget.
The ASBL is also asking the court to issue an injunction to stop the SBA from diverting billions of dollars a month in federal small business contracts to Fortune 500 firms, their wholly owned subsidiaries and thousands of large businesses. In recent years some of the firms that received federal contracts the SBA reported as going to small businesses included, Rolls Royce, IBM, Apple, General Electric, Target, Home Depot, Pepsi, Staples, John Deere, CVS, Wells Fargo and UPS.
In the ASBL's filings with the court, they point out that no language in the Small Business Act would allow any large businesses, or their subsidiaries, to be considered a small business. The ASBL believes if they win their case against the SBA, legitimate woman-owned and minority-owned small businesses will see their volume of federal contracts go up by $400 billion each over the next ten years.
ASBL President Lloyd Chapman stated, "We believe the court will agree that the word 'all' is not ambiguous and that Fortune 500 firms are not small businesses."