PETALUMA, Calif., July 27, 2016 /PRNewswire-USNewswire/ — An article released by Mother Jones journalist Josh Harkinson has exposed rampant fraud at the Small Business Administration (SBA). The article reveals illegal SBA practices that have defrauded American small businesses out of hundreds of billions of dollars in federal contracts and subcontracts. Harkinson’s article is titled, Giant Corporations Are Reaping Billions From Federal “Small Business” Contracts.
For several years the SBA Press Office has declined to speak directly with journalists and will only respond to written questions. In 2003, the Government Accountability Office (GAO) released a scathing investigation that found legitimate small businesses had been cheated out of billions of dollars when federal agencies had diverted federal small business contracts to over 5,300 large businesses.
In 2003, the SBA initially acknowledged the actual volume of federal contracts to small businesses had been dramatically inflated, but that admission soon changed to excuses of miscoding and computer glitches as the reason for why many of the largest firms in the world were listed in the SBA’s database of small businesses.
The SBA has never been able to explain why every year for over 15 years their alleged miscoding, computer glitches, anomalies and simple human error have always diverted federal small business contracts to corporate giants, while at the same time dramatically inflating the volume of federal contracts that appear to have been awarded to legitimate small businesses.
The SBA was unable to provide Harkinson with the language in the Small Business Act that they use to justify reporting federal contracts to Fortune 500 firms as small business awards. They were also unable to provide any language from the Small Business Act that would allow the SBA to exclude the majority of the total federal acquisition budget in calculating the percentage of all federal contracts awarded to small businesses.
The American Small Business League (ASBL) estimates that over the last decade legitimate small business may have been cheated out of over two trillion dollars in federal contracts and subcontracts as a result of illegal policies that have been used by the SBA and federal agencies.
Every year for the last eleven years, 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.
President Obama recognized the magnitude of the fraud and abuse against small businesses when he released the statement, “It is time to end the diversion of federal small business contracts to corporate giants.”
Most recently the GSA has proposed a new policy that will exclude thousands of current small businesses from continuing to receive federal contracts. Language in the 2017 National Defense Authorization Act will further reduce federal contracting opportunities for small businesses.
The American Small Business League has file for an injunction against the SBA in Federal District Court in San Francisco to halt the illegal policies they used to defraud legitimate small businesses out of billions of dollars in federal contracts each year.
The American Small Business League plans to release a full-length documentary that will chronicle the history of corruption and fraud in federal small business contracting programs.