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Small Businesses Demand Enforcement of Penalties and Accurate Accounting of their Contracts

Saint Augustine, Florida (PRESS RELEASE – November 3, 2009) — “My second Size Protest victory within two months against a large business which had misrepresented its size to win small business contracts (3) will help demonstrate that the size protest process does not work as Congress had intended and the process needs a major overhaul,” said Raul Espinosa, President of FitNet, a government purchasing group in Northern Florida. He added, “Violators are not concerned with the penalties Congress had imposed for fraud because there is no enforcement and the protest winners cannot get back the contract they fought for nor collect any fees nor expenses for their efforts.”

In 2005, Espinosa founded The Fairness in Procurement Alliance (FPA), following his Size Protest victory against a front for a large business to help demonstrate that the Size Protest process did not deliver justice (4) . FPA has since become a major national coalition to advance ‘partnership concepts’ and encourage bureaucrats to pay attention to out-of-the-box solutions. The flagship of this effort is The Umbrella Initiative (5) , whose goal is to level the playing field in government contracting not only at the Federal level, but at the State and local level as well. Among its published Reports, is a White Paper on Why Size Protests Need Strengthening (6) , which cites numerous mishandled size protest cases and recommends specific solutions for the process to deliver justice.

FPA is now relying on its successes (7) to help secure funding for seven pilot projects in Florida (8) that do not only encourage small business participation in government contracting, but their projected results can be replicated in other States. Espinosa said, “The Umbrella Initiative pilot programs intend to make better use of existing networks of service providers such as the Small Business Development Centers (SBDC) and the Women’s Business Centers (WBC).”

Through an appeal before the Office of Hearings and Appeals (OHA) for yet another alleged mishandled size protest (9), Espinosa is also attempting to demonstrate how Agencies are not only overlooking size standards violations, but allowing the abusive procurement practice referred to as unfair justification (10) to abuse small businesses. “FPA has demonstrated that the Size Protest process is ineffective at delivering justice and deterring fraud and abuse,” said, Borden Hallowes, Esq., Acting Director of the FPA Legal Center. He added, “There are entrepreneurial ways with which to fix the protest process and protect the statutory small business reservation with the Data Quality Act. FPA intends to bring attention to the ways it can be done.”

Anthony Robinson, President of MBELDEF said, “Espinosa’s determination since winning his 2005 key court victory to deter fraud and abuse in government contracting and help bureaucrats meet the objective of P.L. 95-507 (11) deserves the attention of Congress and the consideration of bureaucrats.”

Dr. Henry Thomas, Director of the FPA Think Tank at UNF said, “Our efforts are aimed at bringing attention to what we call “entrepreneurial solutions” that can level the playing field in government contracting. He added, “Our government is blinded by pro big business — Too big to fail thinking.”

Espinosa added, “FPA has corroborated what the SBA OIG has already claimed is the SBA biggest challenge: (12) Stopping large businesses from taking small business contracts and preventing Agencies from taking credit for small business contracts awarded to large businesses.”

“For small and disadvantaged businesses to receive maximum practicable utilization in government contracting, as required by P.L. 95-507, all contracting abusive practices must be eliminated,” said Roger Campos, President of the Minority Business Round Table (MBRT) and a Member of the National SBA Advisory Committee.

Paul Murphy, President of Eagle Eye, a strategic partner of FPA said, “Transparency has allowed us to show that Federal Agencies had taken credit for $4.01B in small business contracts awarded to 48 multi-billion dollar businesses in FY 2008 which the Agencies did not account for to SBA.” (13)

Bob Coakley, a former staff director to former Florida Governor and Senator Lawton Chiles who is a FPA advisor noted, “Congress ought to inquire into the accuracy of the underlying data of the SBA Report Card. He added, “The Data Quality Act was intended to extend the requirements of the Chiles authored Paperwork Reduction Act. OMB has an affirmative responsibility to ensure that information disseminated by the federal government is reliable. Moreover, the Obama Administration is insisting upon transparency of government operations. They should determine and act upon the concern that small and disadvantaged businesses were shortchanged $4.01B in contracts they did not receive.”

For the current government outreach initiative to succeed at encouraging more small and disadvantaged businesses to contract with the government, SBA, MBDA and DoJ have to cooperate and support entrepreneurial efforts at eliminating ‘fraud and abuse,’ and at opening more contract opportunities at all levels. “Eliminating the alleged illegal ‘exemptions’ on the Federal Acquisition Regulations (FAR) will allow $64B in federal contracts to become eligible for the statutory small business reservation,” said Al Piña, Chairman of the Florida Small Business Reinvestment Coalition. (FSBRC) He added, “Accurately accounting for all Florida minority businesses and for the municipal and State contracts disadvantaged businesses are receiving. The projects of The Umbrella Initiative must be made a priority for the outreach efforts to succeed.”

Murphy, said, “The Umbrella Initiative and their projects will permit an accurate accounting for all disadvantaged businesses at the State level and for the contracts they are receiving from the State and municipal government.” He added, “The Umbrella Initiative intends to match state and municipal data to the Federal statistics and thus help State and municipal officials maximize all efforts at leveling the playing field.” (14)

Scott Amey, General Counsel for the Project on Government Oversight (POGO) said, “If the Administration is serious about acquisition reform, this is one of the first places it should look to enhance competition and improve federal contract spending.”

Congresswoman Corrine Brown along with other elected officials in Florida are supporting The Umbrella Initiative and its goal to establish a Minority Procurement Center at UNF (15) which would work on projects that would double the number of small businesses contracting with the government by the year 2020.


(1) SBA IG Petition. – http://www.docstoc.com/docs/13394703/Congress-Asked-to-Enforce-Penalties-and–Revamp-Size-Protests

(2) The Data Quality Act. – http://en.wikipedia.org/wiki/Data_Quality_Act

(3) Size Protests Decisions against Unisen, Inc. – http://www.docstoc.com/docs/13810534/Consecutive-Size-Protest-Decisions-Against-Unisen-Inc

(4) The OHA and SBA Decisions. – http://www.prweb.com/releases/2005/10/prweb302024.htm

(5) The Umbrella Initiative. – http://www.docstoc.com/docs/3683947/The-FPA-UNF-Umbrella-Initiative

(6) White Paper on Size Protests.- http://www.docstoc.com/docs/3651041/Reasons-why-the-SBA-Size-Protest-System-does-not-Work

(7) FPA Successes . – http://www.docstoc.com/docs/11209387/FPA-Success-and-Track-Record

(8) Proposed Florida Pilot Projects. – http://www.docstoc.com/docs/4458661/?key=N2QyYzg3N2Qt&pass=NjA2ZC00ZThh

(9) OHA Appeal for Mishandled Protest. – http://www.docstoc.com/docs/13806343/OHA-Filing-for-Mishandled-Size-Protest

(10) The Unfair Justification Procurement Advisory. – http://www.prweb.com/prfiles/2008/08/31/162468/FPAAdvisoryUnfairJustifications.pdf

(11) P.L. 95-507. – http://www.docstoc.com/docs/3626707/The-public-law-that-defines-procurement-set-asides

(12) The SBA OIG Report 5-15. -http://www.sba.gov/idc/groups/public/documents/sba/oig_gcbd_05-15.pdf

(13) 48 Ineligible Firms – http://www.docstoc.com/docs/13948639/FPA-List-of–48-Inelegible-Suppliers-Awarded-Small-Biz-Contracts-in-FY08

(14) The State and Municipal Efforts. – http://www.docstoc.com/docs/13393316/Florida-Minority-Participation-in-Federal-Highway-Contracts

(15) The Minority Procurement Center at UNF. – http://www.docstoc.com/docs/6048073/Cong-Corrine-Brown-Supports-FPA-UNF-Initiative

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Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.

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