Pentagon and SBA Faces Tough Scrutiny

By ASBL, Special for  USDR

The Project on Government Oversight (POGO) has now joined Public Citizen and the American Small Business League (ASBL) in challenging the accuracy of small business contracting data released by the Pentagon and the SBA on June  26.

SBA Administrator Maria Contreras-Sweet and the Pentagon’s Under Secretary of Defense for Acquisition, Technology and Logistics,Frank Kendall, held a joint meeting at the Pentagon to release the results of the fiscal year 2014 Small Business Procurement Scorecard. They claimed small businesses received 24.99% of all federal contracts last year. Research by POGO, Public Citizen and the ASBL all found the federal government’s small business data was significantly inflated with billions of dollars in federal small business contracts to Fortune 500 firms and their  subsidiaries.

POGO released an article by investigator Neil Gordon on July 7, titled “Federal Small Business Contracting: Fact or Fiction?” that found the SBA’s Small Business Scorecard was dramatically inflated stating, “the government simply fudges the numbers,” and pointing out this problem “has persisted for  years.”

In May, Public Citizen released a damming investigative report titled “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 SBA had falsified the true percentage of federal contracts to legitimate small businesses by grandfathering and  exclusions.

The ASBL released their annual analysis of federal small business contracting data on July 2. The ASBL study was based on the most recent data available from the Federal Procurement Data System. ASBL found the SBA had falsified the percentage and volume of federal contracts to legitimate small businesses by including contracts to over 175 Fortune 500 firms and their subsidiaries in the 24.99% of contracts they claimed were awarded to small businesses. The largest recipient was Verizon with over $125 million in federal small business  contracts.

Some of the firms the SBA reported as small businesses were: Chevron, Apple, General Electric, AT&T, CVS, UPS, Bank of America, Wells Fargo, Home Depot, Target, Microsoft, Hewlett Packard, Pepsi, Coca-Cola, Boeing, Oracle, Raytheon, Lockheed Martin, General Dynamics, Northrop Grumman and  BAE.

Every year since 2005, the SBA Office of Inspector General has named the diversion of federal small business contracts to large businesses as the number one problem at the  agency.

The House Small Business Committee unanimously adopted an amendment requesting a new Government Accountability Office investigation into fraud in federal small business contracting  programs.

After the release of the Public Citizen investigative report Senate Small Business Committee Chairman, David Vitter, sent a letter to Ms. Contreras-Sweet demanding a complete list of all firms the SBA counted as small businesses in 2014. Senator Vitter’s office has indicated hearings on the fraud and abuse in federal small business programs could begin once the data is received from the  SBA.

SOURCE American Small Business  League

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