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ASBL Files Federal Suit Over SBA’s Small Business Scorecard

May 6, 2016

The American Small Business League (ASBL) has filed an injunction in Federal District Court in San Francisco against the Small Business Administration (SBA), asking the court to stop policies the organization claims defraud small businesses and “cheat small businesses out of hundreds of billions in federal contracts.” Specifically, ASBL takes issue with the way the SBA categorizes the dollars awarded to small businesses when calculating whether the federal government achieved its annual goal of awarding 23% of contracting dollars to small businesses.

According to the ASBL press release:

The SBA has created a policy they call the “exclusionary rule” and “small business eligible dollars” that uses a significantly lower federal acquisition budget number to calculate the percentage of contracts awarded to all categories of small businesses. The ASBL maintains the SBA’s exclusionary policy has no basis in the law and has allowed the SBA to defraud small businesses out of billions in federal contracts.

Data from the Congressional Budget Office indicates a total federal budget for fiscal year 2015 of $3.9 trillion and a discretionary spending budget of $1.2 trillion. The ASBL believes $1.2 trillion is the most accurate acquisition budget number that should be used to calculate the volume and percentage of federal contracts awarded to small businesses for FY 2015.

Anyone who has been following the drama encircling the SBA’s annual Small Business Procurement Scorecard should be familiar with this complaint. In other words, the SBA limits the larger pool of contracting dollars to a smaller chunk, when calculating the percentage of small business contracting dollars, creating what ASBL claims is a false impression of meeting the goals. 

The second complaint brought in the injunction is against the so-called “five-year rule” or “grandfathering rule,” that essentially counts companies as small businesses for five years even if they’ve been acquired by a larger contractor, or have outgrown the small business definition. According to the nonprofit Public Citizen’s 2015 report, “Sleighted,” which raised a number of similar concerns:

SBA Administrator Maria Contreras-Sweet was asked in a 2014 U.S. House of Representatives committee hearing why contracts given to large businesses Northrop Grumman, Raytheon and Chevron were counted toward small business goals. “We have a rule in place that says that once you get in a contract with government, that you are given five years. And so if a large company acquires a small business, then it is grandfathered in for a number of years,” Contreras-Sweet responded.

The ASBL has been fighting this fight for a number of years, and was bolstered by Public Citizen’s report last year. This suit is going to be followed closely by just about everyone involved in federal contracting and the reporting of data. To read the suit in full, click here.

To view full article, click here: http://publicspendforum.net/2016/05/05/asbl-sues-sba/





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