April 21, 2011
Petaluma, Calif. – On Tuesday, April 19, the American Small Business League (ASBL) filed suit against the U.S. Department of Interior (DOI). The ASBL was forced to file suit after the agency refused to release information on contracting officers referenced in a July 2008 Inspector General (IG) Report titled, “Interior Misstated Achievement of Small business Goals by Including Fortune 500 Companies.” The case was filed under the Freedom of Information Act (FOIA) in United States District Court, Northern District of California. (http://www.asbl.com/documents/complaint_doi_contractingofficers_2008report.pdf)
The DOI IG investigation found millions of dollars in contracts reported as going to small businesses actually wound up in the hands of some of the largest corporations in country. Additionally, the report found that contracting officers intentionally falsified information entered into the Federal Procurement Data System - Next Generation (FPDS-NG) as a means of inflating the DOI's small business contracting statistics.
The ASBL maintains that contracting officers who intentionally misrepresent large businesses as small should be prosecuted, and held accountable for their actions. Section 16 (d) of the Small Business Act states, “whoever misrepresents the status of any concern or person as a ‘small business concern,’” shall be subject to a fine of as much as $500,000, up to 10 years in prison, or both. ASBL attorneys believe contracting officers fall under the jurisdiction of section 16(d).
“According to the DOI Inspector General these people knowingly, willfully and intentionally reported awards to corporate giants as small business awards. They need to be prosecuted for their actions,” ASBL President Lloyd Chapman said.
Since 2003, a series of federal investigations have found Fortune 500 firms and other corporate giants are the actual recipients of most federal small business contracts. In February of 2008, President Barack Obama promised to end the abuse. Despite thousands of business closures and countless lost jobs, the Obama Administration has failed to honor its promise, and end the diversion of federal small business contracts to corporate giants. (http://www.asbl.com/documentlibrary.html, http://www.asbl.com/documents/20081007_Obama_Promise_Website.pdf)
“It is curious that the government is refusing to release the names of contracting officers that may have broken the law. These people have inflicted serious damage on the nation’s economy. As opposed to being transparent, once again the Obama Administration is covering-up evidence of fraud and abuse in federal small business contracting programs,” Chapman said. “This is another prime example of President Obama doing the opposite of what he said he would do. Actions speak louder than words, and people need to remember his failure to act during the next election.”