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SBA Accused of Shortchanging Small Business Contractors

By Rick H
May 8, 2015

The consumer rights advocacy group Public Citizen released an investigative report during National Small Business Week accusing the Small Business Administration (SBA) of using accounting tricks and funky statistics to artificially inflate the number of contracts awarded to small businesses.

Public Citizen’s premise, based on earlier work conducted by the American Small Business League (ASBL), centers on two findings:

1.       The Small Business Act mandates that small businesses receive a minimum of 23% of the total value of all federal contracts. The SBA uses a significantly lower budget number than the actual total procurement budget that greatly inflates the percentage of federal contracts to small businesses.

2.      The Federal Government greatly exaggerates the volume of federal contracts awarded to small businesses by including billions of dollars in federal contracts to Fortune 500 firms, their subsidiaries and thousands of large businesses. The Small Business Act clearly defines a small business as being independently owned and having no more than 1500 employees. The definition independently owned would exclude any Fortune 500 firms since they are publicly owned and obviously have more than 1500 employees.

GovExec reports that “In 2013, seven of the 10 largest federal contractors received at least one contract that SBA counted toward fulfillment of small business goals, the report said. Of the 100 contractors receiving the most federal dollars counted toward small business goals in 2012, 71 did not meet the government’s standards to qualify as small businesses, the [Public Citizen] report said, citing the American Small Business League.”

To view full article, click here: http://www.procas.com/blog/index.php/headlines-sba-accused-of-shortchanging-small-business-contractors/ 




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