Federal Injunction Against The SBA Thrown Out, Costing Small Businesses Billions of Dollars

After a rocky litigation riddled with several eyebrow raising moments, (the SBA tried to reword the ASBL's accusations that they were not hitting their small business contracting goals, and the initial hearing was canceled at the last minute in favor of a private ruling) Judge Vince Chhabria has ruled against the injunction. "This is not unexpected" says ASBL President Lloyd Chapman, "This case would uncover over $2 trillion in fraud from the Obama Administration. If the Federal courts can't stop fraud in federal small contracting, where do you go?"

Federal law 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 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.

In addition, the ASBL seeks to stop the SBA from diverting billions of dollars in federal small business contracts to Fortune 500 firms and their subsidiaries.  

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. "Today's ruling locked the courthouse door without even giving this very real and meaningful suit its rightful day in court," says Tiefer. "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." "Dismissing the suit frustrates the legitimate rights of small businesses to their proper share of the true scale of government contracting."

Contact: Kyle Hilmoe
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SOURCE American Small Business League