April 21, 2010
Petaluma, Calif. - On Tuesday, April 20, the American Small Business League (ASBL) filed suit against the U.S. Department of Energy (DOE) in U.S. District Court, Northern District of California. The suit was filed under the Freedom of Information Act (FOIA). The DOE is refusing to release information about a $3.6 billion contract that was awarded to Bechtel, which listed the giant contractor as a small business under the socio-economic field. (http://www.asbl.com/documents/20100420_doe_bechtel.pdf)
Since 2003, over a dozen federal investigations have found fraud and abuse leading to the diversion of billions of dollars a month in federal small business contracts to corporate giants. The ASBL is attempting to gather information in accordance with these federal investigations that would once again provide evidence of fraud; and refute government claims that the problem is the result of miscoding, computer glitches, and honest mistakes. (http://www.asbl.com/documentlibrary.html)
Attorneys from the ASBL believe federal contracting officials, and possibly even employees of prime contractors could be sentenced to 10 years in prison for violating section 16(D) of the Small Business Act.
Section 16(D) states, "whoever misrepresents the status of any concern or person as a 'small business concern'...to obtain for oneself or another," any prime contract or subcontract with the government shall be subject to penalties of $500,000, 10 years in prison and/or debarment from federal contracting programs. (http://www.sba.gov/regulations/sbaact/sbaact.html)
Despite campaign promises of increased transparency, and an end to the diversion of federal small business contracts to corporate giants, the Obama Administration is refusing to release a wide range of information to the general public. The administration has refused to release information such as: the names of recipients of small business contracts, the names of federal contracting officials who awarded contracts to large corporations, the specific names of individuals responsible for misrepresenting large corporations as small businesses, and prime contractor compliance with small business subcontracting goals.
"We expect that by the end of 2010, through our freedom of information requests and lawsuits, that we will prove once and for all that the diversion of billions of dollars a month in federal small business contracts to corporate giants is not honest mistakes, miscoding, or computer glitches. Our efforts will prove that the government has adopted specific policies that divert small business contracts to large corporations, and in many cases the government has allowed federal contracting officials and prime contractors to get away with blatant contracting fraud," ASBL President Lloyd Chapman said.
Please click here to watch a clip about the ASBL's suit against the Department of Energy: http://www.youtube.com/watch?v=pFYZ5BMpdyM