In a May
18 press release, the Small Business Administration claimed the federal
government had achieved the small business procurement contracting goal for
the fourth consecutive year. The SBA states that in fiscal year 2016 small
businesses received $99.96 billion in federal contracts, which it claimed was
24.34 percent of all federal contracts. To me, this is not credible.
matters a lot because a key way the federal government helps small business
is by awarding federal contracts to small business. The SBA sets overall
government goals for small business awards, which it then makes into goals
for each department and agency. When the SBA says it meets its goal, the
whole federal machinery for awarding small business contracts believes it has
achieved victory and, in effect, can take it easy. This suggests the Trump
Administration is not making the kind of effort it promised.
statement by the American Small Business League (ASBL) responding to the SBA
claim shows why, in vital respects, the SBA really is not meeting its target.
First, the SBA is counting federal acquisition for FY 2016 at around $410
billion. That is an artificial and unconvincing low figure. I have written in
the past that the actual figure is more than double that. The SBA is only
counting one type of acquisitions, in one data base. Many agencies do not
enter their acquisitions in that database. Agencies do not count certain
kinds of payments for goods: for example, it counts drugs bought with federal
dollars for VA hospitals, but not the same drugs bought with federal dollars
for Medicare at private hospitals.
more culpably, the ASBL says, “The SBA had been fabricating the true volume
and percentage of federal contracts that have been awarded to legitimate
small businesses for over two decades.” That is, large businesses receive
contracts intended for, and counted as going to, small business. According to
data from the Federal Procurement Data System (FPDS) compiled by FEDMINE, the
$99.96 billion the SBA claimed was awarded to small businesses was greatly
inflated. A report compiled by FEDMINE found over 100 Fortune 500 firms
received small business contracts.
$99.96 billion the SBA claimed went to small businesses, it appears no more
than 50% of that number actually went to firms that currently legally qualify
as small businesses. In reality, legitimate small businesses may well have
received no more than $50 billion in federal contracts and subcontracts in FY
2016. That would come out to just mid-single digit percentages of the full
level of federal acquisitions for FY 2016, a far cry from the 24.34 percent
claimed by the SBA.
reports from a variety of observers concur that intended, and claimed, small
business procurement instead goes to large businesses. The Government
Accountability office and the SBA Office of Inspector General (and the
inspectors general of other agencies) report this.
story was first reported by the Associated Press in 2003. Since 2003 the
SBA’s efforts to fabricate and falsify the diversion of hundreds of billions
in federal small business contracts to Fortune 500 firms has been the topic
of large numbers of articles. ABC, CBS, NBC, CNN, CNBC, MSNBC, and Fox News
have all covered the abuses. In 2014, Public Citizen released an investigative
report titled ‘Sleighted’ that exposed the fraud and abuses in federal small
business programs. In 2015 Mother Jones released their investigative report
‘Giant Corporations Are Reaping Billions From Federal "Small
year for 16 years the SBA Inspector General has reported the diversion of
federal small business contracts as the number one problem at the SBA. SBA
Inspector General Report 5-15 stated, “One of the most important challenges
facing the Small Business Administration (SBA) and the entire Federal
Government today is that large businesses are receiving small business
procurement awards and agencies are receiving credit for these awards.’
full story, click here: https://www.forbes.com/sites/charlestiefer/2017/06/05/trump-administration-fails-at-creating-jobs-by-missing-small-business-contract-targets/#6db7a65436ca