By ASBL, Special for USDR
On May 6, Public Citizen released a scathing investigative report title, “Slighted: 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,” that found the federal government’s small business contracting data has been grossly inflated for years. The White House was so embarrassed by the report they cancelled a major May 8 event to release the fiscal year 2014 Small Business Scorecard.
Despite the rampant abuses uncovered in the Public Citizen investigation, the Pentagon and the Small Business Administration stillheld a joint meeting on June 26 to claim small businesses received 24.99% of all federal contracts in 2014. Surprisingly, that number still included billions to Fortune 500 firms that had been uncovered in the Public Citizen investigative report.
In addition to the Public Citizen report, every year of the Obama Administration, Peg Gustafson, the Inspector General for the Small Business Administration who was appointed by President Obama, has named the diversion of federal small business contracts to large businesses as the number one problem at the SBA.
In 2009, the Government Accountability Office (GAO) essentially accused the SBA of encouraging fraud in Report 10-108 that stated, “By failing to hold firms accountable, SBA and contracting agencies have a message to the contracting community that there is no punishment or consequences for committing fraud…”
President Obama even released the statement, “It is time to end the diversion of federal small business contracts to corporate giants.”
Every year for the last few years the American Small Business League (ASBL) has released an analysis that has uncovered approximately 75% of the top 100 recipients of federal small business contracts, each year, are actually large businesses.
The ASBL analysis found over 160 Fortune 500 firms were the actual recipients of federal small business contracts in 2014.
Verizon was the single largest recipient of federal small business contracts last year with over $125 million.
Some of the firms that have received federal small business contracts include Hewlett-Packard, Oracle, IBM, Northrop Grumman, Raytheon, Lockheed Martin, British Aerospace Engineering (BAE), Verizon, Apple and Chevron.
Senate Small Business Committee Chairman, David Vitter, demanded a list of the names of all firms that received small business contracts last year. Vitter’s office has indicated he will hold a hearing on the rampant abuses in federal small business contracting programs.
The House Small Business Committee has also unanimously adopted an amendment to request a new GAO investigation into fraud in federal small business contracting programs based on research provided by the American Small Business League.
The American Small Business League has begun filming a documentary on fraud and abuse in federal small business programs featuring investigative reports on the issue by ABC, CBS, NBC, CNN, MSNBC, Fox News, RTTV and dozens of newspaper articlesand radio shows.