May 21, 2010
Petaluma, Calif. - The Department of Energy (DOE) has lost a Freedom of Information lawsuit filed by the American Small Business League (ASBL). The ASBL filed the lawsuit after the DOE refused to release information regarding a $3.6 billion federal contract awarded to Bechtel Bettis Inc. The socio-economic status indicated "small business" on hundreds of millions of dollars in awards under the prime contract. (http://www.asbl.com/documents/litigation/Case_10.pdf)
The ASBL requested the information as part of an ongoing investigation into the diversion of federal small business contracts to Fortune 500 firms.
Since 2003, more than a dozen federal investigations have uncovered the diversion of billions of dollars a month in federal small business contracts to Fortune 500 corporations. In Report 5-15, the Small Business Administration (SBA) Office of Inspector General described the problem as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." (http://www.asbl.com/documents/05-15.pdf)
The DOE refused to release the names of Bechtel officials overseeing the contract. Specifically, DOE withheld the name of Kimon Andreos, Manager, Procurement and Materials Management, and Lisa Smith, Small Business Program Manager. The contract was awarded by DOE Contract Specialist Anthony DeNapoli.
Section 16(D) of the Small Business Act which 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)
The ASBL intends to uncover more evidence of contracting abuses in small business programs at NASA, the DOE and the U.S. Department of Defense (DoD). The organization has launched a campaign to review all of the DOE contracts awarded to Bechtel and all of the DOE contracts that have been awarded by Mr. DeNapoli.
"We will continue to use the Freedom of Information Act to prove that the diversion of federal small business contracts to Fortune 500 firms is not miscoding, computer glitches, or honest mistakes as the government has claimed. It is clearly premeditated and deliberate," ASBL President Lloyd Chapman said. "We will prove that the Obama Administration is diverting billions of dollars a month in federal small business funds to Fortune 500 firms. We'll prove that the DOE, NASA and the Pentagon are cheating American small businesses out of billions of dollars a month in federal contracts."