Small Business Administration Sued For Refusing to Release Contracting Data

SBA sued by the American Small Business League for withholding data on billions of dollars in contracting abuses

Petaluma, Calif. – Today the American Small Business League filed their 4th federal lawsuit against the Small Business Administration (SBA) in the U.S. District Court, Northern District of California. The lawsuit was filed under the Freedom of Information Act (FOIA) over the SBA's refusal to release the names of Fortune 1000 firms that received billions of dollars in Federal small business contracts during 2005 and 2006.

Since 2003, more than a dozen federal investigations uncovered the fact that some of the largest corporations in the United States and Europe were the actual recipients of billions of dollars in federal small business contracts.

Under FOIA, the ASBL requested the specific names of all firms that were coded by the federal government as small businesses for FY 2005 and FY 2006. Despite more than 400 stories in mainstream media across the nation documenting the diversion of federal small business contracts to large corporations, the SBA consistently refuses to release the names of Fortune 1000 corporations and other large businesses that received federal small business contracts.

In addition to the federal investigations, investigative stories by organizations including CBS, ABC and CNN found that firms such as Lockheed Martin, Boeing, Halliburton, Bechtel, Microsoft, Wal-Mart, GTSI, Hewlett Packard, L-3 Communications and Rolls-Royce were the actual recipients of billions of dollars in federal small business contracts.

“In his recent State of the SBA speech, SBA administrator Steven Preston stated that he was a strong proponent of transparency in federal government,” President of the American Small Business League Lloyd Chapman said. “However, since his appointment Mr. Preston has: removed the data from the government’s database (CCR) that the public could use to determine if a company is small or large; adopted a policy that allows Fortune 1000 corporations to continue to receive federal small business contracts through 2012; refused to implement the congressionally mandated small business program for women-owned firms; and refused to release the names of the firms that the SBA reported as small businesses for the purpose of meeting the Federal government’s small business procurement goal.”

During 2007, the SBA attempted to cover-up the diversion of federal small business contracts by issuing their Myth v. Fact press release. In the release, the SBA stated that it was a myth that large businesses received federal small business contracts. However, with the release of the SBA’s “Top 100 Report”, Preston acknowledged that large businesses had received federal small business contracts, a blatant contradiction of the SBA’s earlier press releases.

“I am sure that we will win this lawsuit.” Chapman said. “I want people to know that when the government diverts $100 billion a year in contracts from middle class America, there is a staggering negative economic impact. I don’t think there is any question that the Bush Administration’s anti-small business policies have been a contributing factor to our nation’s current economic woes.”

Within the next 60 days, the ASBL plans to file similar lawsuits against the Pentagon and the General Services Administration.


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To check out the complaint filed against the SBA in federal court, Click here

Check out these Stories regarding this issue:

Central Valley Business Times - includes a podcast with ASBL President Lloyd Chapman

Advocacy group sues SBA By Michael Hardy, Washington Technology

Small business advocate sues SBA for withholding contracting data By ELISE CASTELLI, FederalTimes.com