July 3, 2013
As predicted by the American Small Business League (ASBL), the Small Business Administration (SBA) released the federal government's latest claim that they have come very close to reaching the federal government's 23 percent small business contracting goal.
The SBA's claim that they have awarded 22.25 percent of all federal contracts to small businesses is completely false and totally unsupported by the facts.
The most recent data from the Federal Procurement Data System (FPDS) clearly indicates the total acquisition budget for the federal government for fiscal year 2012 was $1.1 trillion. Twenty-three percent of $1.1 trillion is $253 billion. The SBA failed to mention the acquisition budget they used to calculate the 22.25 percent, as well as the actual dollar amount of contracts awarded to small businesses in their press release.
The SBA's website does mention that $89.9 billion in federal contracts were awarded to small businesses. Federal law requires that "a minimum of 23 percent of the total value of all federal contracts" be awarded to small businesses. Using the actual federal acquisition budget from the FPDS of $1.1 trillion, small businesses would have received only 8.2 percent and not the 22.25 percent claimed by the SBA.
In addition to falsifying the easily verifiable actual federal acquisition budget, the SBA has also falsified the actual dollar volume of contracts awarded to legitimate small businesses. The latest data from the Federal Procurement Data System indicates of the top 100 recipients of federal small business contracts, 71 are currently large businesses.
In Report 5-15 the SBA's own Office of Inspector General described the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today..." The SBA Inspector General has continued to name this as the number one problem at the SBA for nine consecutive years.
The FPDS indicates some of the firms the SBA included in their small business contracting data include IBM, Verizon, Pepsi, Coca-Cola, Delta Airlines, J.P. Morgan Chase & Co., Citigroup, Honeywell, Dell, Chevron, AT&T, Apple, General Electric, Hewlett-Packard, Costco, Walt Disney, Oracle, United Technologies, Bank of America, Wells Fargo and Home Depot. General Dynamics alone received over $215 million in federal small business contracts for fiscal year 2012.
Using the actual federal acquisition budget of $1.1 trillion and excluding Fortune 1000 firms and other large businesses, legitimate American small businesses most likely received no more than five percent of the total value of all federal contracts required by law. The SBA's claim of 22.25 percent is totally false and unsupported by the federal government own data.
For more information view the ASBL's latest video. http://www.youtube.com/watch?v=rxz4tl-lfyw