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ASBL: Obama Administration Still Diverting Small Business Dollars to Corporate Giants

Petaluma, California (PRESS RELEASE – July 14, 2011) – 61 of the top 100 recipients of federal small business contracts for fiscal year (FY) 2010 were large firms, according to a new report from the American Small Business League (ASBL).  These large firms received 62.5 percent of the dollars awarded to the top 100, or $8.8 billion.

The ASBL’s findings come in the wake of Small Business Administration (SBA) claims that the federal government narrowly missed its congressionally mandated 23 percent small business goal.  On Friday, June 24, the SBA announced the government awarded $98 billion, or 22.7 percent of federal spending, to small businesses.

“The SBA claims the government nearly hit its small business goal, and yet the government’s own data indicates it awarded no more than 5 percent of federal work to small businesses,” ASBL President Lloyd Chapman said. “The SBA’s most recent claims are just more misleading smoke and mirrors.”

The ASBL maintains the Obama Administration has dramatically inflated the percentage of contracts awarded to small businesses by under-reporting the actual federal acquisition budget, and by including billions of dollars in contracts awarded to large businesses.  The ASBL maintains, the actual federal acquisition budget for foreign, domestic, classified and unclassified projects is roughly $1 trillion. The Obama Administration’s goaling achievement is based on a number that is less than half of the actual federal acquisition budget.

According to the Obama Administration’s most recent small business data, recipients of small business contracts during FY 2010 included Lockheed Martin, Raytheon, L-3 Communications, Hewlett-Packard, and AT&T, among many others.

Since 2003, a series of federal investigations have uncovered the diversion of billions of dollars a month in federal small business contracts to corporate giants.  This diversion has lead to a significant shortfall in the volume of federal contracts actually going to legitimate small businesses. 2010 federal data indicates that once again the government missed its small business goal by a minimum of 18 percent.

In April 2010, Senator Mary Landrieu (D-LA), the Chair of the Committee on Small Business and Entrepreneurship estimated that, “Increasing contracts to small businesses by just 1 percent,” would create more than 100,000 new jobs. Based on the latest data, the ASBL estimates that ending this abuse would create upwards of 1.8 million jobs.

“It is time for the Obama Administration to stop misleading the public, and start actually working to end billions of dollars in fraud and abuse in small business contracting programs,” Chapman said.  “Ending this abuse would be a more effective economic stimulus than anything proposed by the Obama Administration to date.”


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