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Small Business Advocacy Group Takes Pentagon to Court

By Neil Gordon
Project On Government Oversight
June 13, 2012

By NEIL GORDON

In an ongoing effort to document the extent to which large businesses are winning federal small business contracts, the American Small Business League (ASBL) has filed another lawsuit to force the government to turn over contracting data.

This time, ASBL is seeking an injunction to compel the Department of Defense (DoD) to respond to its March 2010 Freedom of Information Act (FOIA) request for small business subcontracting reports on federal contracts with Hewlett-Packard. DoD denied the request on the ground that the reports, which are submitted to measure compliance with the Small Business Act, contain trade secrets and other sensitive financial details.

“I am confident that the documents we requested will further prove that corporate giants are receiving billions a month in federal small business contracts—and the fact that we must take the Pentagon to court should be an indication of how damaging the information is,” ASBL president and founder Lloyd Chapman told Federal Computer Week in regard to the lawsuit.

Under the Small Business Act, anyone who misrepresents the status of their company as a small business in order to obtain a federal contract or subcontract may be subject to fines up to $500,000, imprisonment up to ten years, and suspension or debarment from federal contracting, although proving the intent necessary to impose punishment is often very difficult. However, as the Small Business Administration Inspector General reported last year, most instances of large companies obtaining small business contracts are actually the result of “errors made by government contracting personnel, including misapplication of small business contracting rules.”

ASBL has filed numerous FOIA lawsuits against the federal agencies and has won many of them. ASBL’s willingness to fight the government in court has been a boon for federal contracting transparency, exposing to the world the billions of dollars in federal small business contracts that have been diverted to some of the world’s largest companies. Last week, POGO joined an ASBL-led coalition demanding more accurate reporting of the proportion of federal contracts awarded to small businesses.

Neil Gordon is a POGO investigator.



 
 

 
 

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