Contact Information: Contact: Christopher Gunn Communications Director American Small Business League (707) 789-9575
Department of Interior Awarded Over $430 Million in Small Business Contracts to Corporate Giants, According to New Study
Large Businesses May Have Received Over a Billion Dollars in Small Business Contracts From the Department of Interior
| Source: American Small Business League
PETALUMA, CA--(Marketwire - July 17, 2008) - The following is a statement by the American
Small Business League: On July 1st, 2008, the Department of Interior (DOI)
Office of Inspector General released a report, which found Fortune 500
firms were the actual recipients of federal small business contracts. The
report examined three tenths of one percent of contracts the DOI had
reported as going to small businesses during 2006 and 2007 and found that
the agency had awarded Fortune 500 corporations $5.7 million in federal
small business contracts.
According to the DOI Inspector General, divisions of Xerox and John Deere
had misrepresented themselves as small businesses within the government's
database of federal contractors as small businesses. Section 16 (d) of the
Small Business Act states that any large firm that misrepresents itself as
a small business for the purposes of obtaining a small business contract is
guilty of felony contracting fraud and subject to a penalty of ten years in
prison, a $500,000 fine per occurrence and debarment from federal
contracting programs. Based on a review of the report, the ASBL believes
contracting officers at the DOI intentionally falsified information entered
into the Federal Procurement Data System - Next Generation (FPDS-NG) as a
means of fabricating the DOI's and the Bush Administration's small business
contracting statistics.
In response to the DOI IG report, the ASBL conducted a review of the DOI's
top 100 recipients of federal small business contracts for both 2006 and
2007. The lists were obtained from Fedmine.us, which has direct access to
information within FPDS-NG.
Within the DOI's top 100 recipients of federal small business contracts for
2006, the ASBL found 22 large firms, most of which were Fortune 500
companies. Those 22 large firms received more than $200 million in federal
small business contracts, which were spread across 894 contract actions.
Within the DOI's top 100 recipients for 2007, the ASBL found 28 large
firms, which received more than $230 million in federal small business
contracts. The awards for 2007 were spread across 912 contract actions,
which make 26.55 percent of all contract actions awarded to the top 100 for
2007. Between the two top 100 lists, the ASBL found more than $430 million
in federal small business contracts awarded to large corporations.
In all, the ASBL found a total of 31 large companies within the top 100
lists from 2006 and 2007 combined. Of the 31 firms found, 16 companies
were found to have received federal small business contracts from the DOI
in both 2006 and 2007. In addition to the firms ASBL was able to determine
were large, the following clearly large firms were found within the DOI
small business contracting data: Booz Allen Hamilton*, Sprint
Communications Company, Perot Systems Government Services*, Hewlett Packard
Company, and KPMG*. * Received small business contracts in 2006 and 2007.
According to Fedmine.us, the DOI reported $2.5 billion in contracts to
small businesses in 2006 and $1.5 billion in contracts to small businesses
in 2007. Based on the DOI IG's methodology for conducting their recent
report, the total amount of small business contracts awarded to large
corporations by the DOI could exceed $1.7 billion for 2006 and 2007.
The Small business Administration (SBA) attempted to portray the $5.7
million reported by the DOI IG as the total amount of small business
contracts that had actually been awarded to Fortune 500 companies by the
DOI. In reality the $5.7 million was only three tenths of one percent of
the total amount of small business contracts awarded by the DOI during
those years. The ASBL believes that the SBA misrepresented the DOI IG's
findings in its statements to the press.
Under the Freedom of Information Act (FOIA), the ASBL intends to request
the specific names of all of the firms that were coded as small businesses
by the DOI during 2006 and 2007. The ASBL will request the specific names
of all of the firms that were included. The ASBL expects to find hundreds
of millions of dollars actually wound up in the hands of Fortune 500
corporations and other large businesses.
"If obvious Fortune 500 firms like Xerox and John Deere are listed as small
businesses in the governments contractor database, every federal agency and
every prime contractor in the country is reporting awards to these firms as
small business awards. The Bush Administration has tried to convince us for
six years now that the diversion of hundreds of billions of dollars in
federal small business contracts to Fortune 500 firms is the result of
'miscoding' or random data entry errors. It is simply not believable that
for over six years every time a contract is 'miscoded' it just happens to
inflate the Bush Administration's small business contracting statistics,"
said Lloyd Chapman, President of the ASBL. "This is obviously intentional
felony contracting fraud on the part of large businesses and federal
contracting officials. It's time for the FBI to investigate this and it's
also time for Congress to pass legislation to stop the wholesale diversion
of federal small business contracts to corporate giants. Any member of
Congress that won't support legislation to end fraud and abuse in federal
contracting should be voted out of office."