Congresswoman Hahn Requests Federal Investigation Into Small Business Contracting Fraud

PETALUMA, Calif., April 8, 2015 /PRNewswire-USNewswire/ -- As a member of the House Small Business Committee, Congresswoman Janice Hahn from California's 44^th District has proposed an amendment that would request a new Government Accountability Office (GAO) investigation into the diversion of billions of dollars in federal small business contracts unfairly awarded to Fortune 500 companies.

Congresswoman Hahn's decision to request the new GAO investigation was based on research by the American Small Business League (ASBL). Hahn expressed concern about the government's claim that 23% of all federal contracts were actually being awarded to small businesses when that number included billions of dollars to Fortune 500 firms such as Apple, Chevron, Disney, Verizon and Bank of America.

The last GAO investigation into the diversion of federal small business contracts to corporate giants was in 2002 and was prompted by information provided by ASBL President and founder Lloyd Chapman. That investigation found over 5,300 large businesses were receiving federal small business contracts. Chapman was invited to testify before the House Small Business Committee after the results of the GAO investigation were released.

A recent study by the ASBL found Fortune 500 firms are still receiving billions of dollars in federal small business contracts. After reviewing data from the Federal Procurement Data System, the ASBL found of the top 100 recipients receiving the highest dollar amount in federal small business contracts, over 75 were currently large businesses, Fortune 500 firms or subsidiaries of large businesses. Some of the firms that have received federal small business contracts in recent years include, Disney, British Aerospace Engineering (BAE), Raytheon, Apple, IBM, Hewlett-Packard, Oracle, Lockheed Martin, Rolls Royce and Finmeccanica in Italy.

The largest recipient of federal small business contracts in fiscal year 2014 was Verizon.  They received over $125,885,000 in federal small business contracts through their subsidiary Terremark Federal Group.

Every year since 2005 the Small Business Administration Office of Inspector General has named the diversion of federal small business contracts to large businesses as "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today…"

ABC, CBS, NBC, CNN, MSNBC, CNBC, Fox News and RTTV have all released investigative reports on the diversion of federal small business contracts to Fortune 500 firms.

"Congresswoman Hahn's call for a new GAO investigation into small business contracting fraud could redirect billions in federal small business contracts from corporate giants and back into the hands of thousands of legitimate small businesses. This would provide a significant boost to the middle class economy and create jobs across the country. Congresswoman Hahn is without question one of the strongest voices for American small businesses in Congress today," stated ASBL President Lloyd Chapman.

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SOURCE American Small Business League