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PETALUMA, Calif., Feb. 24, 2016 -- Fortune 500 firms and many of the largest firms in the world will continue to be allowed to receive billions in federal small business contracts if a new bill is passed in Congress to modernize the Small Business Act.
The House Small Business Committee has unanimously passed H.R. 4341, the "Defending America's Small Contractors Act of 2016." The bill now goes on to the full house for approval. The bill states it would modernize the Small Business Act and implement "common sense" reforms.
Beginning in 2003, the GAO uncovered over 5,300 large businesses that were receiving federal small business contracts. Since then, over two dozen federal investigations and investigative reports have uncovered fraud and abuse in federal small business programs. H.R. 4341 does not address any of the fraud, abuse and loopholes that have been uncovered in those investigations.
In 2005, the SBA 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."
President Obama acknowledged the magnitude of the fraud and abuse in federal small business contracting programs when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants."
NBC, CBS, ABC, CNN, MSNBC, RTTV, Fox News and CNBC have all reported on the fraud and abuse in federal small business contracting programs.
In May of 2015, Pubic Citizen released their investigative report on the issue titled, "Slighted." Public Citizen accused the federal government of using accounting tricks to "create false impression that small businesses are getting their share of federal procurement money."
The American Small Business League (ASBL) released their annual analysis of federal contracting data for fiscal year 2015. Information obtained from the Federal Procurement Data System indicated the federal government counted contracts to 151 Fortune 500 firms as small businesses contracts in fiscal year 2015.
In recent years some of the firms that have received federal small business contracts include, Chevron, Apple, Microsoft, General Electric, Home Depot, AT&T, CVS, UPS, Bank of America, Wells Fargo, Target, Hewlett Packard, Pepsi, Coca-Cola, Boeing, Oracle, Raytheon, Lockheed Martin, General Dynamics, Northrop Grumman and British Aerospace Engineering (BAE.)
ASBL President Lloyd Chapman stated, "This is a perfect example of why so many Americans no longer trust the government. Congress will pass this bill to 'modernize the Small Business Act' and adopt 'common sense' reforms but they will still allow Fortune 500 firms to receive federal small business contracts. It's absolutely astounding."
The American Small Business League plans to release a full-length documentary on fraud and abuse in federal small business programs this summer.
CONTACT: Steve Godfrey [email protected] 707-789-9575
