Fortune 500 Firms Land Billions in Government Small Business Contracts
ASBL to Challenge Government Small Business Contracts to Fortune 500 Firms
Apr 28, 2016, 07:33 ET
PETALUMA, Calif., April 28, 2016 /PRNewswire-USNewswire/ -- The Small Business Administration (SBA) has announced they will hold a national conference call on Thursday, April 28 to announce the federal government awarded $90.7 billion dollars in federal contracts to small businesses in fiscal year 2015. The SBA has claimed that the $90.7 billion was 25.7% of all federal contracts awarded in 2015.
The American Small Business League (ASBL) is accusing the SBA of cheating American small businesses out of hundreds of billions in federal contracts by fabricating policies that violate the Small Business Act to dramatically misrepresent the true volume and percentage of federal contracts awarded to legitimate small businesses.
The Small Business Act mandates small businesses receive a minimum of 23% of the total value of all federal contracts and subcontracts. The ASBL is objecting to an SBA policy used to significantly inflate the percentage of contracts awarded to small businesses that excludes over 70% of all federal contracts from their calculation.
The SBA has referred to this policy as their "exclusionary rule". The ASBL points to the fact the SBA's "exclusionary rule" has no basis in law and is inconsistent with both the specific language of the Small Business Act and the Congressional intent of passing the Small Business Act.
In order to arrive at their 25.7% number the SBA used a federal acquisition budget number of just $352 billion. According to data from the Congressional Budget Office, the total federal discretionary spending for FY 2015 was approximately $1.2 trillion. Using the SBA's $90.7 billion figure, this would mean small businesses actually received no more than 7.5% and not the 25.7% claimed by the SBA.
The ASBL is also challenging the accuracy of the $90.7 billion the SBA claims was awarded to small businesses. Data from the Federal Procurement Data System indicates in FY 2015, 151 Fortune 500 firms and hundreds of other large businesses received federal small business contracts.
Research by the ASBL indicates that legitimate small businesses received no more than $40 billion in federal contracts in FY 2015 or approximately 3.4%, of the $1.2 trillion in contracts awarded by the federal government in FY 2015.
The SBA Inspector General, CBS, NBC and Public Citizen have all released investigative reports that found the SBA has, in fact, fabricated the volume of federal contracts awarded to small businesses by including billions to Fortune 500 firms for over ten years.
Attorneys for the ASBL are considering filing an injunction against the SBA to prevent them from reporting contracts to Fortune 500 firms as small business contracts as well as using a dramatically reduced federal acquisition budget to fabricate the accurate percentage of contracts awarded to small businesses.
The ASBL plans to release a documentary this summer chronicling the history of corruption and fraud at the SBA.
Contact: Alyssa Prophet
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SOURCE American Small Business League
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