Is the Obama Administration “Cooking the Books” on Small Business Procurement?

By ASBL, Special for USDR

On Friday the Obama Administration will release their 2014 Small Business Federal Procurement Scorecard. As it has been for over 15 years the information released will fabricate the true volume and percentage of federal contracts awarded to small businesses. It will also significantly misrepresent the Obama Administration’s achievement of the 23% federal small business contracting goal.

A Public Citizen report titled “Slighted” points out a number of ways in which the data is falsified to misrepresent the true volume of federal contracts awarded to small businesses. The cover page of the investigative piece contains the subtitle, “Accounting Tricks Create False Impression That Small Businesses Are Getting Their Share of Federal Procurement Money, and the Political Factors That Might Be at Play.”

The Obama Administration’s small business contracting data will be fabricated and falsified in two ways.

  1. Exclusions – The Small Business Act clearly mandates a minimum of 23% of the total value of all federal contracts shall be awarded to small businesses. No provision in the Small Business Act allows for any “exclusions” to be made in calculating the percentage of awards to small businesses. To fabricate and inflate the percentage of awards to small businesses the SBA will use an eligible dollar figure that is significantly lower than the actual total procurement budget. As stated in the Public Citizen article this practice “does not appear to a basis in law.” The American Small Business League agrees the exclusionary rule is illegal and fraudulent and is used by the SBA to intentionally fabricate and falsify the true percentage of awards to legitimate small businesses.
  2. Five-year rule – To further fabricate and falsify the true volume and percentage of federal contracts to small businesses the Obama Administration will include billions of dollars in contracts to Fortune 500 firms and their subsidiaries. As the Public Citizen article points out, “There is no ‘five year’ loophole.” The Small Business Act clearly stipulates the definition of a small business requires a firm to be “independently owned” which would exclude Fortune 500 firms. The Small Business Act also clearly stipulates no firm can have more than 1500 employees and still qualify as a small business.

The percentage of awards to small businesses to be announced by the Obama Administration on Friday will be completely fabricated and false. Friday’s small business contracting data will include billions of dollars in federal contracts to Fortune 500 firms and their subsidiaries as it has for over fifteen years.

In 2005, the SBA Office of Inspector General released Report 5-15 that stated, “One of the most important challenges facing the Small Business Administration (SBA) and the entire federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards.”

The Public Citizen article proves the Obama Administration’s small business data is blatantly false, and fraud and abuse against small business will continue to be unchecked.

SOURCE American Small Business League

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.
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