ASBL Appeals SBA Injunction Case to 9th Circuit Court of Appeals

The ASBL asked the court for an injunction against the SBA's "grandfathering policy." The SBA uses their "grandfathering policy" to dramatically misrepresent the government's compliance with the 23% small business contracting goal by including billions in federal contracts to Fortune 500 firms. In 2015 the SBA included contracts to over 150 Fortune 500 firms and large businesses in the $91 billion they claim were awarded to small businesses. A Government Accountability Office investigation in 2003 found federal contracts to over 5,300 large businesses were being reported as small business contracts. No language in the Small Business Act would allow Fortune 500 firms or their subsidiaries be considered as small businesses.

Some of the firms the SBA counted as small businesses in recent years have included, Rolls Royce, Home Depot, General Dynamics, Microsoft, Oracle, Hewlett-Packard, IBM, Bechtel, Disney, Johnson & Johnson, General Electric and British Aerospace, Leonardo Finmeccanica in Italy and Thales Communication in France. 

The ASBL was also seeking an injunction against the SBA's "exclusionary rule". The Small Business Act specifically states small business shall receive a minimum of 23% of "all" federal contracts. No language in the Small Business Act would allow any exclusions. The SBA has used their "exclusionary rule" to inflate the percentage of federal contracts awarded to small businesses by excluding the majority of federal acquisitions from their calculation on the percentage of federal contracts that have been awarded to small businesses each year.

According to the Congressional Budget Office the total available federal acquisition budget for 2015 was $1.2 trillion. For 2015 the SBA used an acquisition budget number of just $352,291,573,414.00 to claim small business received 24.9% of all federal contracts. A legal opinion by Professor Charles Tiefer, one of the nation's leading experts on federal contracting law agrees the total federal acquisition budget that should be used in calculating the correct percentage of federal contracts awarded to small businesses is over one trillion dollars.

ASBL President Lloyd Chapman stated, "This is actually a very simple case, Fortune 500 firms are obviously not small businesses and the Small Business Act clearly states small business shall receive 23% of all federal contracts with no exclusions of any kind."

Contact: Kyle Hilmoe
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707-772-9913

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SOURCE American Small Business League