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Obama Administration Forced to Restore Incriminating Contracting Data

GSA Yields in Legal Battle with ASBL; Forced to Restore Incriminating Contracting Data

February 10, 2011

The American Small Business League (ASBL) has won a legal battle against the U.S. General Services Administration (GSA) forcing the agency to restore a decade’s worth of incriminating federal contracting data.  The ASBL originally filed suit against the GSA in March of 2010 after the agency removed information from the federal government’s contracting database which indicated that Fortune 500 firms in the U.S. and some of the largest firms in Europe and Asia had received billions of dollars in federal small business contracts.  The suit was filed in United States District Court, Northern District of California. (https://www.fpds.gov/fpdsng_cms/index.php/archives)

On March 12, 2010, the Obama Administration implemented changes to the Federal Procurement Data System-Next Generation (FPDS-NG), which eliminated the socio-economic field, "isSmallBusiness."  In past years, Congress, federal agencies, watchdog groups, and the general public have used the field to identify large firms who fraudulently misrepresented themselves as small businesses to illegally receive billions of dollars in small business contracts.

Since 2003, a series of federal investigations have used the information stored in the field to uncover billions of dollars a month in federal small business contracts flowing into the hands of Fortune 500 firms, European conglomerates and other large businesses. 

In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) described the abuses as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." Another investigation from the SBA Office of Advocacy found large businesses had received federal small business contracts fraudulently through what they referred to as "vendor deception." (http://www.asbl.com/documents/05-15.pdf, http://www.asbl.com/documents/eagkeeye_report%202002.pdf)     

Despite continuing denials by the SBA and other senior Obama Administration officials, corporate giants in the U.S. and Europe continue to receive billions of dollars in federal small business contracts. The recipients of federal small business contracts include Lockheed Martin, Boeing, Raytheon, General Dynamics, and Italian firm Finmeccanica SpA. (http://www.asbl.com/documents/20090825TopSmallBusinessContractors2008.pdf)

The ASBL plans to use the restored data to take legal action against fraudulent contractors and recover damages for small businesses.

“Prior to taking office President Obama promised the most transparent administration in history and an end to the diversion of federal small business contracts to corporate giants.  To date he has destroyed contracting data, forced the ASBL into the federal courts to uncover incriminating documents, and failed to honor his promises to small businesses,” ASBL President Lloyd Chapman said. “This is another major legal victory for small businesses and transparency.  This data will be instrumental in holding firms accountable for fraud and abuse.”

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