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IBM, AT&T Unfairly Getting Small-Business Contracts: Study

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Some of the world's biggest companies are benefiting from a program meant to help America's small businesses, according to a new study.

Lockheed Martin, IBM and AT&T all have snatched up federal government contracts meant for small businesses, according to a study from the American Small Business League.

Indeed, almost three-fourths of the top 100 federal "small" business contractors in fiscal year 2011, were actually large companies, says the report highlighted by the Project on Government Oversight.

Some of the biggest beneficiaries include Aegis, a 1,900-employee defense contractor, and Sierra Nevada, an 1,800-employee aircraft parts maker. Among the top recipients were Metro Machine Corp. in Norfolk, Va., which received almost $240 million in contracts even though it is a subsidiary of General Dynamics, a conglomerate with $2 billion in annual revenue.

The ASBL, which has repeatedly complained about instances in which large companies misrepresent their status to the government in order to qualify for such contracts, said such diversion of contracts deprives legitimate small businesses of more than $60 billion in contracts each year.

"Misrepresenting your firm as a small business is a felony, but the SBA has NEVER prosecuted a single offender," it says on the league's website. An SBA spokesman emailed the following statement from John Shoraka, the agency's Associate Administrator for Government Contracting and Business Development:

"To date, SBA has not published the FY11 small business government contracting data. Any reference to those numbers is merely a snapshot taken at a single point in time of a database that changes daily as federal agencies adjust their entries to account for anomalies and errors made when the original data was entered.

"Each federal agency is responsible for ensuring the quality of its own contracting data, but SBA conducts an additional analysis to help agencies identify any potential data anomalies. As part of its ongoing data quality efforts, SBA is continuing to work with federal agency procurement staff to provide tools to facilitate review of data, implement improvements to procurement systems and conduct training to improve accuracy. SBA will publish the official FY11 Small Business Procurement Scorecard this summer."

The industry group found that the government failed to reach its statutory goal of providing 23 percent of all federal contracts to small businesses in fiscal year 2010 and that there was an increase in the number of large businesses winning such contracts, as reported by the Project on Government Oversight.

The discrepancy could get worse. The SBA recently issued a rule that broadens the definition of companies that qualify as small businesses, as noted by POGO.

Spokesmen for Lockheed Martin, IBM and AT&T did not return emails seeking comment.

This story has been updated with comment from the Small Business Administration.

Chamber, Business Groups Aim To Weaken Anti-Bribery Law

A law that bans American companies from paying bribes to often-corrupt foreign leaders seems pretty obvious.

But the Chamber of Commerce is spearheading an under-the-radar battle to weaken the decades-old Foreign Corrupt Practices Act, which was passed in 1977 in the wake of scandals like Bananagate, in which Chiquita admitted to bribing the president of Honduras.

In that year alone, more than 400 U.S. companies admitted to making questionable payments of more than $300 million to foreign government officials and politicians. Recent violators include Siemens AG, which was forced to pay a $450 million fine for distributing more than $800 million to governments around the world, and former representative William "Dollar Bill" Jefferson (D-La.), who was busted for bribing African governments to win contracts for business colleagues.

American companies have often chafed at the rule, complaining that it hurts their ability to compete for business against non-U.S. firms that are not subject to such anti-bribery laws. The Chamber, which corralled a number of other prominent trade associations to send a letter this week to the Justice Department seeking clarity on the law, has long lobbied against it.

The Chamber's Institute for Legal Reform hired former Bush administration attorney general Michael Mukasey last year and has spent millions to lobby on the FCPA and other bills.

This week is a particularly vulnerable time for DOJ with the collapse of one of its biggest bribery cases against more than a dozen defendants in a case involving military equipment contracts. Still in officials' sights are Avon, over whether it paid bribes in China to win a license there, and Wynn Resorts, which gave a $135 million donation to the University of Macau while seeking gaming licenses there, as reported by Reuters.

Pentagon Lets Down Whistleblowers, Says GAO

Members of the military who fear retaliation for blowing the whistle on fraud and other concerns may not get help from the Pentagon, according to a new Government Accountability Office report. Military brass take too long to investigate whistleblower complaints and have sometimes put the careers of whistleblowers in jeopardy, according to the audit. But the process also can transform the career of a grunt -- in one example cited by the GAO, a servicemember eventually was given a Bronze Star that had been denied to him due to reprisal.

Quick Hits

* The Securities and Exchange Commission is making government geeks happy with a user friendly redesign of its database of official speeches, statements and videos.

* SEC Chairman Mary Schapiro expressed her support for the STOCK Act, which seeks to limit congressional insider trading in the wake of a "60 Minutes" investigation.

* Yet more SEC news: Two former top officials, including ex-commissioner Kathleen Casey and ex-general counsel Brian Cartwright just joined Patomak Global Partners, a consulting group in D.C. already run by a former SEC commissioner, Paul S. Atkins.

* Headline of the day: "No Whey: Dust Explosion at Milk Specialties Stirs Up OSHA Fines"