PETALUMA, CA—(Marketwired – Jul 31, 2014) – In a statement released on July 30, the Small Business Administration (SBA) has announced they are finally going to release their fiscal year 2013 Small Business Federal Procurement Scorecard, as confirmed by the American Small Business League. The Scorecard will report on the specific dollar volume and the percentage of federal contracts awarded to small businesses.
New SBA Administrator Maria Contreras–Sweet will release the data in a press conference at NASA Goddard Space Flight Center with NASA Administrator Charles Bolden and Senator Ben Cardin, D–Md.
A series of federal investigations and investigative reports have found the SBA continues to include billions of dollars in federal contracts to Fortune 500 firms and thousands of other large businesses in their small business contracting statistics.
Federal law requires that a minimum of 23% of the total value of all federal contracts be awarded to small businesses. In calculating the percentage of federal contracts to small businesses, for over 12 years, the SBA has significantly inflated that percentage by using a federal acquisition budget number that is much smaller than the actual federal acquisition budget required by law.
The American Small Business League (ASBL) estimates that if the SBA did not include billions of dollars in federal contracts to Fortune 500 firms and thousands of large businesses and used the actual total federal acquisition budget required by law, the percentage of federal contracts awarded to small businesses would be closer to five percent than the 22% to 23% number that will be reported in their Scorecard.
A legal opinion issued by Professor Charles Tiefer, one of the nation's leading experts on federal contracting law, agrees with the findings of the ASBL that the SBA's numbers are dramatically inflated. Professor Tiefer found no legal justification for the SBA's inclusion of contracts to large businesses in their small business contracting data. He also found that the actual total federal acquisition budget is closer to one trillion dollars versus the much smaller number used by the SBA.
Beginning in 2005 the SBA Inspector General referred to the diversion of 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…”
Every year since 2003 the SBA has claimed that the inclusion of billions of dollars in federal contracts to Fortune 500 firms and thousands of large businesses in their small business contracting data is the result of miscoding, computer glitches, anomalies and simple human error.
This consistent claim by the SBA seems improbable since fiscal year 2013 ended last September and the SBA has had 10 months to review the data to remove any anomalies or miscoding.