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Tuesday, August 4, 2009

Obama Administration Stalls the Release of Small Business Contracting Data

August 4, 2009

Petaluma, Calif. - It has now been 10 months since the end of the federal government's fiscal year (FY) 2008, yet the Obama Administration has still not released the federal government's annual small business contracting statistics for that year.

Since the federal government's contracting database is essentially a real time database, the information could have been released shortly after the end of FY 2008, which ended on September 30th.

During the Bush Administration, hundreds of billions of dollars in federal small business contracts were diverted to Fortune 1000 firms and their subsidiaries. The Small Business Administration (SBA) included those contracts to large businesses towards the Bush Administration's small business contracting data, which greatly inflated those numbers.

It is not known if the Obama Administration will continue to artificially inflate federal small business contracting data by including awards to Fortune 500 firms and other large businesses in its statistics. Critics of the SBA believe the agency stalls the release of the small business data to give it time to modify the information to hide the fact that contracts to large businesses are included in the government's small business data.

Since 2003, over a dozen federal investigations found billions of dollars in federal small business contracts have wound-up in the hands of corporate giants. In Report 5-15, 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." (

In February of 2008, President Obama recognized the magnitude of the problem when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." To date he has failed to adopt any policy or legislation to honor that campaign promise. (

When the Obama Administration finally does release its small business contracting numbers there will almost certainly be a controversy over the accuracy of the data. The release of the government's annual small business contracting statistics is guaranteed to reignite demand for the federal government to end the practice of awarding small business contracts to corporate giants.

A new bill has been introduced in the House of Representatives titled the, "Fairness and Transparency in Contracting Act," or H.R. 2568, which will address the problem. To date, the Obama Administration has not issued a statement of administration policy endorsing the bill.


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