Blackwater Gets a Billion in Small Business Contracts with Help from SBA Loophole

A new report from the Small Business Administration (SBA) Office of Inspector General found Blackwater Worldwide had received "at least 100 small business set-aside contracts, worth over $144 million, since 2000." Additionally, the report pointed to the SBA's highly controversial ruling regarding Blackwater's size as a major contributing factor to the inclusion of Blackwater in federal small business contracting statistics.

In November of 2006, the SBA ruled that Blackwater was a small business by considering a substantial number of the firm's employees to be independent contractors. According to the SBA Inspector General report, more than 1000 employees were considered independent contractors and were not counted towards the company's size determination by the SBA. As a result, Blackwater was able to avoid the 1,500-employee size threshold for their industry and qualify for federal small business contracts. The SBA's interpretation helped Blackwater circumvent normal federal small business size standards. Without the SBA's loophole specifically created for Blackwater, the company would exceed the small business size standard by more than 250 employees and would not be eligible for federal small business contracts.

After reviewing the SBA Inspector General's report on Blackwater, the American Small Business League (ASBL) launched an independent investigation into the total dollar volume of contracts awarded to Blackwater from 2004 to 2008. The investigation was conducted by reviewing federal contracting data supplied by Fedmine.us. Fedmine.us is one of several companies with access to the XML data-feed from the Federal Procurement Data System-Next Generation (FPDS-NG), the federal government's repository of procurement data. As part of the ASBL's investigation, it reviewed contracts awarded to Blackwater Security Consulting, Blackwater Lodge & Training and Blackwater Target Systems LLC. The ASBL found that from 2004 to 2008 Blackwater received more than $1.07 billion in federal contracts coded as small business contracts.

This appears to be yet another example of a never-ending stream of federal investigations that have all found the Bush administration to have diverted billions of dollars in federal small business contracts to some of the largest corporations in the world. It is going to take the FBI to get to the bottom of this. The diversion of federal small business contracts to large corporations was first exposed in 2002, and yet no legislation has been passed to stop it. It is unconscionable that Congress has not passed legislation to stop this problem. Small businesses are sick and tired of members of Congress that are all talk with no action to back it up. This is a problem that should have been solved six years ago.

Comments

[commonsenserequired]

Mr. Chapman does us all a disservice, from his bio you have to assume he understands the SBA rules and regulations. You would also assume he read the letter from the SBA in reference to Blackwater. Unless I am mistaken the words "may have", "might" or "could have" were not indicative of systemic wrong doing, actually it told more about the SBA and the problems that they have as organization spending the taxpayers money.

The comments so far listed are from the un-informed.

[AshevilleVoice]

Un fricking believable.

[dadw5boys]

THE PROBLEM SHOULD HAVE BEEN RESOLVED 6 YEARS AGO????

WHEN THE REPUBLICANS HAD THE VOTING MAJOIRTY?

Yeah right!!!!!!!

We are waiting to get the voting majority now to clean up their mess.

Republicans are right now holding up a MILITARY funding bill for UPARMOURED VECHILES !!!!!

The Republicans want more TAX BREAKS for the OilCompanys boefore they will stop the FILIBUSTER on the Military Funding Bill.

The Military Funding Bill also provides more money for the V.A. Hospital to provide more ARTIFICAL LIMBS to disables Iraqi and Afgianstan Veterans.

Way to support the troops there Repugs!

[castlerider]

Sen. Henry Waxman is on this; let's hope he finds results that will bring criminal prosecution.
There needs to be a petition garnered for people to voice their disgust and repulsion about this and oblige our congress further to action on it immediately.

How about it, Move-on....?

[KateinAZ]

Exactly why is it that we can't impeach Bush/Cheney, Speaker Polosi?

[speakingtruth2power]

This is no loophole that certain businesses happened to find.

It is the reward for being friendly to THE criminal gang in DC!!

[Chewelahboy]

At least they named their "small business" appropriately. Once the Democrats take control of the White House, I'll be interested to see what happens.

Thanks for the post.

[americaforme]

This Blackwater benefits Small Business Fed. Loans, raises my blood presure up max. Adding insult to injury,Congress hits us in the guts with another painful, stupid, lobbyed,approved,loan. These criminals, are going to be private security for the wealthy...Tax payers are paying for their New Gate Prison...Those were the days (my friend) when we could stop this most corrupt group..We need to organize.

[dadw5boys]

AND BLACKWATER PAYS NO TAXES!!!!!!!!!!

[jcranman]

Cheney and Rove's doings. Since no one here in the US has the cahones to charge and try these criminals for the numerous, deceitful crimes they have perpetrated domestically, I say turn them over to the Hague, the whole bunch of them and let the rest of the world hang them for the war crimes and genocide..

[InfoGiant]

This linked timeline is what happens when your leaders take money from PAC's and Lobbyists...oh, and you vote to war and oil men into office:

http://infogiant.wordpress.com/?s=bush

[ErnestineBass]

Pretty good site you've put together, Info. I've added it to my list of favorites. EB

[SeekWisdom]

Nice overview Info. Thanks for putting what you have there together in one place. Helps one see the overall picture much better than fragments reported here and there.

I fear, though, that a complete documenting of this administration' s wrongdoings would dwarf the Encyclopedia Brittanica.