Obama Officials Avoided Questions from Press on Misleading Contracting Data

As far as I know, not a single journalist in America asked even one question of any Obama Administration official as to why they included billions of dollars in contracts to some of the largest companies in the world as small business contracts in its fiscal year 2008 data.

Stories in the Washington Post and the Wall Street Journal did not even mention the fact that according to information in the Federal Procurement Data System (FPDS) eight of the top ten recipients of federal small business contracts were actually large businesses or divisions of large businesses. Of the top 100 recipients, 64 percent of the contracts went to large businesses. Seems like a pretty important point to miss when covering the government's latest small business contracting data.

Neither story mentioned the fact that Obama Administration officials included contracts to Lockheed Martin, Boeing, Raytheon, British Aerospace (BAE), General Dynamics, 3M, Hewlett-Packard, AT&T, Dell Computer, Office Depot, Xerox, General Electric and Rolls-Royce as small business contracts.

A story on the front page of the Washington Post in October of 2008 reported that in a sampling of $13 billion in federal contracts reported as going to small businesses, more than 38 percent actually went to Fortune 500 firms alone. Why didn't they mention it this year? In the 2008 story, the Small Business Administration (SBA) claimed that it had cleaned up the data, and Fortune 500 firms wouldn't be counted as small businesses anymore. What happened?

I never studied journalism, but wouldn't it seem reasonable to ask SBA Administrator Karen Mills a question like, "President Obama campaigned on 'an end to business as usual in Washington.' That said, why is the Administration allowing Fortune 500 firms to receive federal small business contracts for the tenth consecutive year?"

Maybe it would have made the story more interesting if some journalist had asked Administrator Mills why the Obama Administration has refused to address the issue the SBA Office of Inspector General referred to as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today ..." (http://www.asbl.com/documents/05-15.pdf)

If I were writing a story on this issue, I would ask Karen Mills to explain why in February of 2008 President Obama released the statement, "It is time to end the diversion of federal small business contracts to corporate giants," but the latest data clearly shows that campaign promise has not been honored. (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

If I were a professional journalist I would ask someone from the Obama Administration why they were sponsoring 200 seminars around the country to help small businesses land federal contracts, while they were simultaneously diverting millions of dollars a day in federal small business contracts to Fortune 500 firms and corporate giants in Italy, England, France and South Korea.

Maybe I'm just being nit-picky, but I might have asked SBA Administrator Mills why the agency told a federal Judge that it did not have any information on the actual recipients of federal small business contracts.

The story would have been much more interesting if some journalist had asked the SBA if $775,773,505 in contracts to Textron Inc., a Fortune 500 firm, were reported as small business contracts as a result of "miscoding" or "computer glitches."

I would just love to see a journalist ask the SBA's Mike Stamler, why every day since fiscal year 2000 "miscoding," "computer glitches" and "out of date information" always just happen to wind up reporting billions of dollars in federal small business contracts to big businesses as small business awards and never the other way around.

Another good question for SBA spokesman Mike Stamler would be why the SBA claimed that it was a "myth" that large businesses were receiving federal small business contracts when in Report 5-14, the SBA Inspector general found that the SBA itself was reporting awards to large businesses as, "small business awards at the time of the procurement." http://www.asbl.com/documents/05-14.pdf

Since the Obama Administration is so concerned with helping small businesses, maybe some hot shot journalist might ask an Obama Administration spokesman if President Obama was going to endorse the Fairness and Transparency in Contracting Act, H.R. 2568, which would completely halt the flow of federal small business contracts to corporate giants.

I guess my last question for an Obama Administration spokesman would have to be, since small businesses create over 97 percent of all net new jobs, employ over 50 percent of the private sector workforce and create over 50 percent of the Gross Domestic Product (GDP), why would the Obama Administration allow Fortune 500 firms to take government small business contracts during our nation's worst economic downturn in 80 years?

Follow Lloyd Chapman on Twitter: www.twitter.com/LloydChapman

Comments

[Read2know]

The Obama administration is saying a lot about helping small businesses, but apparently is not taking much action to actually help small businesses.

[Radar423]

My questions to Karen Mills would be a little different than Lloyd's, but I am curious like that.

"What is it like to be the heiress of the Tootsie roll fortune, and how does that help you lead the Small Business Administration?"

"Miss Mills, under your leadership, can small businesses across the nation expect to cash inheritance checks in the near future?"

"Since being a venture capitalist doesn't qualify as small business experience, did your invention of the Tootsie Roll Midgee show your small business experience in your interview to be the head of the Small Business Administration?"

"What candy is the SBA planning to give out for Halloween?"

Any others I missed?

[GrimJack]

The mainstream media is owned and controlled by some of those giant firms that benefit from the government, so why would they want to report on something that would harm their meal ticket - you do not bite the hand that feeds.

I looked at the Census Bureau's small business data, and what they show relates to what Lloyd is saying, and after reading this, I find myself very hesitant to believe any data coming out of the SBA, especially if this is the same agency that thinks AT&T or Lockheed Martin is "small business." I would laugh if this wasn't so sad...

[DinkSinger]

Fiscal year 2008 ended on September 30, 2008. That means that all of the contracts in question were entered into by the Bush SBA. Ms. Mills was sworn in as SBA Administrator on April 6, so the Obama administration was in power at SBA for less than 6 months of FY 2009. We won't know if Mills and Joseph Jordan, Associate Administrator, Office of Government Contracting and Business Development, who took office in March, are doing a good job of fixing this problem, until we can see the data for FY 2010.

The claim that "small businesses create over 97 percent of all net new jobs" is incorrect. According the the SBA, the latest available data for 2006 shows businesses with less than 500 employees were responsible for 70.2% of the net increase in private, non-farm employment. And while 50.2% of private, non-farm employees work for firms with under 500 employees, they earn only 44.4% of the wages.

[kevlar0076]

I have a question for you, yes the 2008 data is from the Bush Administration, but if the tremendous leadership at the SBA, put in by Obama, does not even acknowledge these problems and abuses, how are they going to fix the system? It seems, according to comments made by Joe Jordan that the SBA is in complete denial that large companies are getting small business contracts and get included in the small business goals. Jordan said their data is cleaner than ever...rea­lly? Does he really believe that? Is the leadership at the SBA really that blind to the reality of the situation? If they really believe that, then they need to step down because that makes them either completely incompetent or completely bought and paid for by big business. There are several independent third parties that have shown the giant companies that are included in that 21.5 percent number the SBA is throwing about, trying to play things off that 2008 was some kind of record year for small business - what a load of BS!

Here is another point, what is the SBA and the Obama Administration actually doing about this? I hear a lot of talk about wanting to clean up federal procurement, but unless these issues are addressed head on by strong leadership that is willing to actually do something to help small business, then words are meaningless, because small businesses will continue to lose out to big firms.

[Kelly Fleury]

Let's be fair. The SBA's data may, in fact, be "cleaner than ever." Unfortunately, that isn't saying much....

[Lloyd Chapman - Huffpost Blogger]

I am glad to see the SBA press office is reading my blogs, you can see the public support that I and the American Small Business League (ASBL) have, and the distain that the public has for the SBA. You sound just like that liar Mike Stamler. Let's get the facts strait.

One of the most recent reports from the SBA's own Office of Advocacy, which was based on the latest U.S. Census Bureau data, found that companies with less than 20 employees make up 90 percent of all U.S. firms and those firms are responsible for 97 percent of all net new jobs in America. http://www.inc.com/news/articles/200708/data.htmll)

Small businesses employ over 50.2 percent of the private sector workforce and are responsible for over 50 percent of the Gross Domestic Product (GDP), 90 percent of innovation and a vast majority of exports.

[Lloyd Chapman - Huffpost Blogger]

In February of 2008, President Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." He lied. http://www.barackobama.com/2008/02/26/the_american_small_business_le.phpp)

Although a vast majority of the contracts that were coded as going to small businesses during FY 2008 went to large businesses, the Obama Administration did not have to continue the Bush Administration tactic of lying and fabricating federal contracting data. It is a direct offense to every man, woman, and child in America to have the Obama Administration tell us that it is a record year for small businesses when the truth is that 85 percent of the money awarded to the top 10 recipients of federal small business contracts went to large businesses.

The bottom line: the SBA lied to the public about this situation. Fact: large businesses have received federal small business contracts for the last decade, yet the Obama Administration appears to be continuing the bush Administration's anti-small business policies. To date, President Obama has not appointed the Administrator of the SBA to a cabinet level position, he has not implemented the 5 percent set-aside program for women, and he has not stopped the diversion of federal small business contracts to corporate giants. That makes him a liar and a conman in my book.

[GrimJack]

oh, snap!

[Kelly Fleury]

While you may argue about 97 percent versus 70 percent, it seems that both you and Chapman agree that small business is responsible for the lion's share of the net increase in private, non-farm employment. Why, then, is small business so under-represented in government contracts? Government and small business must work together to solve the problem. Arguing about how much of a majority of net new jobs small business represents is rather petty, considering the enormity of the actual problem that needs to be addressed. Frankly, I think Lloyd Chapman is doing his dead level best to address the issue of underrepresentation of small business in government contracting. What are you doing?