Contact Information: Contact: Lloyd Chapman President American Small Business League (707) 789-9575
New SBA Policy Lets Miscoded Small Business Contracts Continue Until 2012, Says American Small Business League
| Source: American Small Business League
PETALUMA, CA--(Marketwire - June 14, 2007) - The following is a statement by the American
Small Business League:
On June 30th a new Small Business Administration policy is set to take
effect that has outraged small business owners across the country. The new
SBA five-year
re-certification/grandfathering policy will allow the SBA to include
billions of dollars in federal contracts to Fortune 1000 firms towards the
federal government's 23 percent small business contracting goal until the
year 2012.
As early as 2002, federal investigations began to find that the SBA had
reported contracts to hundreds of Fortune 1000 firms as small business
awards. Two investigations by the SBA Office of Advocacy and the SBA Office
of Inspector General found in many cases large businesses had received
federal small business contracts fraudulently.
(http://www.asbl.com/documents/05-16.pdf)
The SBA responded to the charges by saying the contracts to the large
businesses had been "miscoded" as small business contracts.
(http://www.asbl.com/showmedia.php?id=393) The new five-year
re-certification/grandfathering policy will allow the SBA to continue to
include the "miscoded" small business contracts to Fortune 1000 firms in
their small business contracting statistics until the year 2012.
Beginning in 2003, the Office of Federal Procurement policy and the SBA
Office of Inspector General called for a plan to remove Fortune 1000 firms
and other large businesses from the government's small business contracting
programs. (http://www.washingtontechnology.com/print/17_22/20148-1.html)
The SBA never implemented the policies, and they continued to include
billions of dollars in contracts to Fortune 1000 firms and other large
business in the United States and Europe towards the government's 23
percent small business goal.
SBA critics point out that if the new five-year
re-certification/grandfathering policy is allowed to stand, legitimate
small business could lose between $200 and $300 billion in federal small
business contracts over the next five years.
Small business owners and advocates were hoping Congress would step in and
pass legislation to stop the SBA policy from taking effect. To date, no
legislation has been passed to stop the SBA policy or halt the flow of
federal small business contracts to large businesses.