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Small Business Administration Contracting Data to Be Challenged

Companies mentioned in this article: American Small Business League

PETALUMA, CA -- (Marketwired) -- 08/04/14 -- The American Small Business League (ASBL) is announcing that they will be challenging the accuracy of the Small Business Administration's (SBA's) FY2013 Small Business Federal Procurement Scorecard. The ASBL has issued a Freedom of Information Act request to the SBA for the specific names of the firms that the SBA has included in their 2013 Small Business Federal Procurement Scorecard. They believe the SBA has included billions of dollars in contracts to Fortune 500 firms and other large businesses in their FY2013 Scorecard.

On Friday, August 1 at 1:00p.m. newly appointed SBA Administrator Maria Contreras-Sweet joined by NASA Administrator Charles Bolden and Senator Ben Cardin, D-Md., announced the results of the 2013 Small Business Federal Procurement Scorecard at a press conference at NASA's Goddard Space Flight Center. The SBA claims they hit their goal for the first time in eight years, awarding 23.39 percent in federal contracts to small businesses totaling $83.1 billion. The ASBL believes that small businesses got only one tenth of what the SBA says they did and will be moving forward with inquiries on that subject.

The most recent information from the Federal Procurement Data System indicates that 175 Fortune 500 firms and their subsidiaries received federal small business contracts in FY 2013.

The ASBL believes the SBA has significantly misrepresented both the volume and the percentage of federal contracts awarded to small businesses. Research by the ASBL indicates the SBA dramatically inflates small business contracting statistics in two major ways.

First, to inflate the percentage of awards to small businesses the SBA uses a federal acquisition budget that is significantly less than the actual total federal acquisition budget. Federal law requires that a minimum of 23% of the total value of all federal contracts be awarded to small businesses. Based upon the US Government Spending website, total federal spending for FY2013 was approximately $3.8 trillion. The SBA claims the total federal acquisition budget for FY2013 was $355 billion.

A legal opinion from one of the nation's leading experts on federal contracting law, Professor Charles Tiefer, supports the ASBL's contention that the SBA uses a significantly lower number in calculating the percentage of awards to small businesses and that the real federal acquisition budget should be closer to $1.1 trillion.

Second, to further inflate the volume and percent of contracts awarded to small businesses the SBA includes billions of dollars in contracts to Fortune 500 firms and thousands of other large businesses in their small business data. Professor Tiefer's legal opinion found no federal law allowing large businesses to be considered small businesses.

Every year of the Obama Administration, SBA Inspector General Peg Gustafson has named the diversion of federal small business contracts to large businesses as the number one problem at the agency. To date, no legislation or policies have been adopted to end the abuse.

To the contrary, the SBA is currently taking public comment on a new policy that will create a "safe harbor" for big businesses that have fraudulently landed small business contracts.


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