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SBA Pulls Information To Stop CBS Investigative Story

SBA tries to stop third CBS investigative story into the diversion of federal small business contracts to Fortune 500 firms

February 14, 2007

Petaluma, Calif., Feb. 14, 2007- In the middle of research by the American Small Business League for a CBS investigative report, the Small Business Administration abruptly pulled public information from the Central Contractor Registry that allows the determination of small-business status of federal contractors.
 
The ASBL was working with CBS on what would have been the network’s third and most damaging investigative story into the SBA’s role in the diversion of billions of dollars in small-business contracts to some of the nation’s largest firms. The ASBL believes that the SBA suddenly pulled the information without warning to hinder the investigation. Without access to the size and revenue information of contractors, the ASBL could not complete the necessary research and CBS temporarily shelved the story.
 
A spokesperson for the SBA said the agency removed the information because a small number of businesses had complained about their size and revenue information being made public. When the ASBL contacted the SBA in preparation for a Freedom of Information Act request for copies of any complaints made, the spokesperson responded that the agency had not actually received any formal written complaints, but rather a few phone calls. The SBA was unable to recall the names of any specific firms that had complained.
 
“It simply is not believable that the SBA would pull this information because it received a handful of phone calls,” said Lloyd Chapman, president of the ASBL. “The SBA doesn’t have a good track record of being responsive to small business complaints, let alone doing something as dramatic as pulling information from a federal data base that the media, contracting officials and the public use to determine the size status of federal contractors. If the SBA has ignored thousands of letters from small businesses all across the country urging it to change federal policies allowing the diversion of billions of dollars in small business contracts, why would it respond to a handful of phone calls?”
 
Two previous CBS investigative reports exposed the fact that the SBA had adopted policies that have allowed Fortune 500 firms like Lockheed, Boeing, Rolls Royce, L-3 Communications and Hewlett-Packard to receive billions in small business contracts.
 
 “It is no coincidence that the decision to pull this information was made in the middle of another damaging CBS investigation,” Chapman said.
 
Before the SBA pulled this information from the central contractor data base, ASBL’s research for CBS found that over half of the contracts that the Bush administration reported as going to small businesses actually went to the top two percent of American firms. The research concluded that between $50 and $60 billion a year has been diverted to major corporations. The new SBA administrator, Steven Preston, has proposed a new policy that will allow the federal government to continue to report awards to Fortune 500 companies as small business contracts until the year 2012. ASBL projects that this would rob legitimate small businesses of over $300 billion.
 
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