July 6, 2011
Petaluma, Calif. – The Small Business Administration (SBA) fired back at American Small Business League (ASBL) claims that the number of federal contracts awarded to small businesses was dramatically inflated.
Michele Chang, the SBA’s senior advisor for government contracting and business development, said agencies have gone through processes to ensure that data is “clean” and free of data anomalies such as “miscoding.” Chang said, “we’re confident this is the cleanest data we’ve had and the cleanest it can be.”
But the SBA made similar claims in 2009. Joe Jordan, the SBA’s associate administrator for government contracting and business development, said, “I can tell you this data is as clean as its ever been…but it’s not 100 percent free of errors.” (http://www.asbl.com/showmedia.php?id=1493)
On June 24, 2011, the SBA released the government’s fiscal year (FY) 2010 Small Business Procurement Scorecard, reporting almost $98 billion in federal contracts, or 22.7 percent of contract dollars, went to small businesses. The ASBL reviewed the top 100 recipients of federal small business contracts for FY 2010 and found that 61 were large firms. Furthermore, the ASBL identified Fortune 500 corporations and foreign-owned firms, including Lockheed Martin, AT&T, British Aerospace (BAE) and Hewlett-Packard. (http://www.asbl.com/documents/asbl_2010_dataanalysis.pdf)
Chang denied the ASBL’s allegation that only five percent of recipients of small business contracts were actually small. However, when asked if Lockheed Martin, AT&T and Hewlett-Packard received small business contracts, Chang said she “can’t comment on them specifically.”
By law, the federal government must award at least 23 percent of the total value of all prime contract dollars to legitimate small businesses. The ASBL maintains that the Obama Administration has dramatically inflated the percentage of contracts awarded to small businesses by under-reporting the actual federal acquisition budget, and by including billions of dollars in contracts awarded to large businesses.
In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the problem as, “One of the most important challenges facing the SBA and the entire federal government today.” For six consecutive years, the SBA IG has named the issue as the number one challenge facing the SBA. (http://www.asbl.com/documents/05-15.pdf)
“Michele Chang is a liar,” said ASBL President Lloyd Chapman. “They have said the same thing for over a decade. If that is the cleanest the data can be, everyone working at the SBA is completely incompetent. They are simply lying.”