Fact 3. The SBA hasn't done anything to stop misrepresentation of these as small business contracts and has made it easier for large businesses to misrepresent themselves.
Proof - As early as 1995 the SBA Office of Inspector General found fraud in federal small business contracting. In their semi-annual report to Congress, the SBA Inspector General reported officials at the SBA declined to adopt their recommendation to stop the fraudulent activity. SBA official Robert Neal wrote the response to the SBA Inspector General declining to adopt the recommendation to stop fraud. Neal was later convicted of soliciting bribes, extortion, money laundering and witness tampering. He was sentenced to 25 years in prison.
The SBA has refused to place a warning on small business databases informing vendors that misrepresentation of a firm as a small business to illegally receive federal small business contracts is a felony under section 16 (d) of the Small Business Act, with a penalty of up to ten years in prison.
The SBA’s currently proposed five-year re-certification rule will allow large businesses, including large multinational firms, to continue to receive federal small business contracts for five more years.
In December, the SBA removed employee and revenue data from the government vendor database, which the public uses to determine small business status of government contractors. Legitimate small businesses used this information to file protests against large businesses falsely claiming to be small businesses. This will make it difficult, if not impossible, for legitimate small businesses to file protests and make it easier for large firms to misrepresent themselves as small businesses.
A prime example of misrepresentation comes in the form of the GTSI corporation case in which the SBA Inspector General recommended GTSI for debarment. To this date the SBA has taken no action and GTSI continues to receive hundreds of millions of dollars in federal contracts.