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Senator McCaskill Slams Small Business Administration for Cheating Small Businesses

July 28, 2011

Petaluma, Calif. – The following is a statement by the American Small Business League:

At a hearing Tuesday of the Senate Homeland Security and Governmental Affairs Subcommittee on Contracting Oversight, Chairwoman Senator Claire McCaskill (D-Mo.) challenged the Small Business Administration’s (SBA) reasons for including billions of contract dollars to large businesses in their fiscal year (FY) 2010 small business procurement scorecard. http://www.senate.gov/fplayers/I2009/urlPlayer.cfm?fn=govtaff072611&st=930&dur=6675

In June, the SBA reported that agencies awarded 22.7 percent of all contract dollars to small businesses. According to the Federal Procurement Data System-Next Generation (FPDS-NG), that number is inaccurate because billions of the those dollars actually went to companies like Lockheed Martin, General Electric, VSE Corporation and Italian defense giant Finmeccanica. The purpose of the hearing was to find out why. http://www.asbl.com/documents/asbl_2010_dataanalysis.pdf

Based on FPDS-NG, the American Small Business League (ASBL) estimates more than $200 billion per year is diverted from small businesses to some of the largest corporations in the U.S., Europe and Asia.
Referencing the looming debt ceiling, Senator McCaskill stated it is time, “for all of us to take a hard look at the way the government does business.”

SBA spokesman Joseph Jordan tried to justify the inclusion of billions of dollars to large businesses around the world in the SBA's scorecard by suggesting that not doing so would penalize the contract officer and agency. Senator McCaskill said that “makes the number really misleading.”

More than a dozen federal investigations dating back to 2003 have uncovered hundreds of billions of dollars in fraud, abuse, loopholes and lack of oversight of small business contracting programs. http://www.asbl.com/documentlibrary.html

In 2005, the SBA office of Inspector General (SBA IG) released report 5-15, which stated, “One of the most important challenges facing the SBA and the entire federal government today is that large businesses are receiving small business procurement awards and agencies are taking credit for these awards.” For six consecutive years, the SBA IG has named the diversion of small business contracts to corporate giants as the number one challenge facing the SBA. http://www.asbl.com/documentlibrary.html#5-15

“Joseph Jordan’s lame excuse that agencies would be penalized if not allowed to report contracts to Fortune 500 firms as small business contracts is ludicrous,” said ASBL President Lloyd Chapman. “It is a tragedy we have people as dishonest as Joseph Jordan working for an agency as important to our country as the SBA.”






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