Federal District Judge Vince Chhabria has granted the SBA's motion to dismiss the case stating, "The upshot is that Congress enacted a statute requiring the Small Business Administration to provide information about the participation of small businesses in federal contracting. If the Small Business Administration is giving Congress bad information, then Congress can do something about it, either in an oversight or legislative capacity."
"This is not unexpected," says ASBL President Lloyd Chapman, "This case would uncover billions in fraud in federal small business contracting programs. If the Federal courts cannot stop fraud in federal small contracting, where do you go?"
The Small Business Act mandates small businesses receive a minimum of 23% of all federal contracts. Within that goal are separate goals for small businesses owned by women, minorities and service-disabled veterans.
The Congressional Budget Office reported an acquisition budget of $1.2 trillion in 2015. Twenty-three percent (what small businesses are legally entitled to) would equal a minimum of $276 billion. In 2015, the SBA only used an acquisition budget of $370 billion, a major decline from the $1.2 trillion. The ASBL estimates that as opposed to the $276 billion legitimate small businesses should have received in 2015, they likely received between $35 to $40 billion or just 3% of all federal contracts.
A Government Accountability Office investigation uncovered the SBA had falsified the government's compliance with the 23% small business contracting goal by including billions of dollars in federal small business contracts to over 5,300 Fortune 500 firms and other large businesses.
Professor Charles Tiefer, one of the nation's leading experts in federal contracting law and former Commissioner of Wartime Contracting in Iraq and Afghanistan, submitted a declaration in support of the ASBL case. "If the lawsuit had been allowed to get its rightful day in court on the merits, the lawsuit would have required the SBA to give all small businesses -- and doubly so for minority, women-owned, and disabled veteran businesses -- a larger and proper share of federal procurement."
The ASBL will be appealing the case to the 9th Circuit Court of Appeals.
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SOURCE American Small Business League