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Tuesday, July 22, 2008

POGO: Small Business Contractors Get a 'John Deere' Letter

This week, the Project On Government Oversight (POGO) blogged about the recent Department of Interior (DOI) Office of Inspector General investigation into the diversion of federal small business contracts to large corporations. In the Blog, POGO staffer Neil Gordon stated,

"Last month, we blogged about the American Small Business League's (ASBL) claim that the Bush administration, through the Small Business Administration (SBA), has lied to Congress and the public about the extent to which federal small business contracts end up going to some of the world's largest companies. With the release of this DOI-IG report, the ASBL reiterates that claim. According to the ASBL, the SBA is misleading the public in press statements that characterize the $5.7 million cited in the report as the total amount of small business contracts that went to large companies, neglecting to point out that the figure comes from a survey of just a tiny fraction of all small business contracts awarded by the DOI.

The report reviewed just 0.3% of the $4 billion DOI bureaus awarded to small business entities during fiscal years 2006-2007. The ASBL, however, decided to investigate further. It conducted a review of the DOI's top 100 recipients of federal small business contracts for 2006 and 2007. Between the two top 100 lists, the ASBL found more than $430 million in federal small business contracts had been awarded to 31 large corporations, most of which are Fortune 500 companies. Based on the DOI-IG report's methodology, the ASBL estimates the total amount of small business contracts awarded to large corporations by the DOI could exceed $1.7 billion for 2006 and 2007.

Some may scoff at the ASBL's findings and somewhat heated rhetoric. However, a glance at Appendix 3 in the DOI-IG report, which lists numerous other recent government reports that highlight serious problems in the small business contracting program, indicates the ASBL is probably on the right track."

To read the full post, please click on the following link:

The first congressional hearing on the diversion of federal small business contracts to large corporations was held in May of 2003. Since then, there have been more than a dozen federal investigations that have found Fortune 500 corporations as the actual recipients of federal small business contracts.

This latest DOI report is further proof that the federal government is counting small business contract awards to large businesses towards its small business procurement goals. Clearly, there are major problems in federal small business contracting programs and it is time to address these problems. Click here to learn more about what you can do to stop this problem:

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