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175 Fortune 500 Firms Land Federal Small Business Contracts

PETALUMA, CA -- (Marketwired) -- 07/02/14 -- According to the American Small Business League, the latest data from the Federal Procurement Data System (FPDS) shows 175 Fortune 500 firms received billions of dollars in federal small business contracts in 2013. In 2012, 235 Fortune 500 firms received small business contracts.

Some of the firms the Small Business Administration (SBA) has included in their small business contracting statistics include: Chevron, Apple, General Electric, AT&T, Hewlett Packard, IBM, Verizon, UPS, Bank of America, Citigroup, Home Depot, Microsoft, Wells Fargo, Pepsi, Boeing, Oracle, Lockheed Martin, Northrop Grumman, American Airlines and John Deere.

A recent legal opinion by one of the nation's leading experts on federal contracting law, Professor Charles Tiefer, describes the federal government's diversion of small business contracts to corporate giants as "fraud." He also points out the lack of oversight on small business contracting when he stated, "SBA and the agency are failing to demand recertifications, and failing to take action in the absence of valid certifications of continuing small size."

As early as 1995, the SBA Office of Inspector General reported on "a particular fraudulent practice" when firms that had been found not to be small businesses continued to claim to be small businesses to illegally land federal small business contracts.

A 2004 report from the Small Business Administration Office of Advocacy describes one of the reasons large businesses receive federal small business contracts is due to "vendor deception."

In 2005 the SBA Office of Inspector General released report 5-16 that reported large businesses were receiving federal small business contracts through, "false certifications" and "improper certifications."

Report 5-15 from the SBA Office of Inspector General described the diversion of billions of dollars in federal small business contracts to corporate giants as, "One of the most important challenges facing the Small Business Administration (SBA) and the entire federal government today..."

Report 5-14 from the SBA Office of Inspector General found the SBA itself was reporting awards to big businesses as small business awards.

In 2008 even President Obama recognized the magnitude of fraud and abuse in federal small business contracting programs when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants."

President Obama never adopted any policies or legislation to keep his campaign promise to American small businesses. Every year of the Obama Administration, the SBA Inspector General, Peg Gustafson, who was appointed by President Obama, has named the diversion of federal small business contracts to big businesses as the number one problem at the SBA.

In 2009 the Government Accountability Office essentially accused the SBA of encouraging fraud when it released Report 10-108 that stated, "By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud."

As opposed to adopting policies that stop the diversion of federal small business contracts to corporate giants, the SBA has proposed new policies that will allow thousands of large businesses to qualify as small businesses.

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