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More Fraud in SBA Managed Small Business Programs

November 24, 2009

Petaluma, Calif. – In a recent U.S. Government Accountability Office (GAO) investigation into fraud in the Service Disabled Veteran Owned Small Business (SDVOSB) program, investigators stated, "By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud or abusing the intent of the veterans program." http://www.gao.gov/new.items/d10108.pdf  

The report, which was presented to Congress on Thursday, November 19, is just the latest example of ongoing abuses in the government's small business contracting programs, finding at least $100 million in federal contracts fraudulently awarded to ineligible firms.

Since 2002, there have been more than 24 other federal investigations, which have found fraud, abuse, loopholes and a lack of oversight in small business contracting programs under various federal agencies. http://www.asbl.com/documentlibrary.html  

In 2005, Report 5-15 from the Small Business Administration Office of Inspector General (SBA OIG) stated, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." Since 2006, The SBA OIG has classified this issue as the #1 management challenge facing the agency. http://www.asbl.com/documents/05-15.pdf, http://www.sba.gov/idc/groups/public/documents/sba_homepage/oig_reports_tmc_fy10.pdf   

In 2008, the Department of Interior Office of Inspector General (DOI OIG) released a report titled, "Interior Misstated Achievement of Small Business Goals by Including Fortune 500 companies."  In its report, the DOI OIG found the agency awarded small business contracts to Fortune 500 firms like, Home Depot, John Deere, Dell, Sherwin Williams, Starwood Hotels and Waste Management.
http://www.doioig.gov/upload/2008-G-0024.pdf  

The American Small Business League (ASBL) has estimated that due to these abuses, every year more than $100 billion in federal small business contracts are diverted away from legitimate small businesses and into the hands of Fortune 500 corporations and other clearly large firms around the world. 

In February of 2008, President Obama promised to stop these abuses by stating, "It is time to end the diversion of federal small business contracts to corporate giants."  To date, the Obama Administration has not honored that promise. http://www.barackobama.com/2008/02/26/the_american_small_business_le.php

"It is ludicrous to think President Obama is trying to help small businesses when he has given them a tenth of a percent of the stimulus funds, and his administration has continued to give billions of dollars a month in federal small business contracts to some of the biggest companies in the world," ASBL President Lloyd Chapman said.


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Please click here to watch a short clip about the ASBL's concerns: http://www.youtube.com/watch?v=cX34LddPtHE  



 
 

 
 

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Reid Brownlie
Communications Contact

American Small Business League
3910 Cypress Dr., Suite B
Petaluma, CA 94954

707-789-9575 | fax 707-789-9580
email to rbrownlie@asbl.com

 

 

     

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