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Monday, March 9, 2009

SBA Loses Fourth Lawsuit For Refusing to Release Contracting Data

Petaluma, Calif. – The Small Business Administration (SBA) has lost its fourth lawsuit to the American Small Business League (ASBL) in the 9th Circuit Court of Appeals. The ruling will increase transparency and set a new legal standard. The SBA will now be forced to release the names of any and all firms that received federal small business contracts.

In September of 2008, the SBA appealed a United States District Court ruling, which directed the agency to release the specific names of all recipients of federal small business contracts during fiscal years (FY) 2005 and 2006.

The ASBL filed suit against the SBA under the Freedom of Information Act (FOIA) after the SBA refused to comply with the ASBL’s request. The ASBL requested the data from the SBA as a means of proving the Bush Administration diverted billions of dollars in federal small business contracts to Fortune 500 corporations, their subsidiaries and other clearly large businesses.

Although the SBA is charged with the responsibility of overseeing and administering virtually every aspect of federal small business contracting programs; during proceedings in United States District Court, Northern District of California, SBA attorneys attempted to convince United States District Judge Marilyn H. Patel that the agency maintained no such information.

Patel dismissed the SBA’s excuse, ruling in favor of the ASBL. In the court’s decision, Patel stated, “The court finds curious the SBA’s argument that it does not ‘control’ the very information it needs to carry out its duties and functions.”

Since 2002, over a dozen federal investigations have found that hundreds of billions of dollars in federal small business contracts have been diverted to corporate giants such as Lockheed Martin, Boeing, General Dynamics, Raytheon, L-3 Communications, Northrop Grumman and British Aerospace (BAE).

Report 5-15 from the SBA Office of Inspector General stated, “One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (

The ASBL has drafted legislative language titled the, “Small Business Fairness and Transparency in Contracting Act,” which would end the diversion of billions of dollars in federal small business contracts to Fortune 500 firms, and redirect over $100 billion a year back into the middle class economy where over 97 percent of new jobs are created.


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