Re: Letter to the editor published June 19, 2008, entitled, "The Small Business Administration's Comeback" by Jovita Carranza, Acting Administrator, Small Business Administration.
The American Small Business League (ASBL) is disappointed by statements made by the Honorable Jovita Carranza, Acting Administrator of the Small Business Administration (SBA) in her June 19, 2008 letter to the Editor of The New York Times.
In her letter, Ms. Carranza stated:
"The S.B.A. helps small businesses get government contracts. In 2006 (the last year with published data), small businesses reached a record level of federal contracts. Small businesses owned by women experienced their largest year of growth and hit a record level. Small disadvantaged businesses (generally minority-owned) hit a record level.
The S.B.A. has also led tough-minded efforts to improve the integrity of small business contracting data and to tighten the rules to qualify, reducing the value of contracts coded as small business by more than $10 billion, increasing new opportunities."
Since 2003, there have been a series of federal investigations that have all found that the SBA has included billions of dollars in contracts to Fortune 500 corporations, and even companies in Europe towards its small business contracting statistics.
In fact, in 2005 the SBA's own Inspector General released Report 5-15, which stated, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."
To the contrary of Ms. Carranza's statements, 2006 was anything but a record setting year. In fact, on May 19, 2008, United States District Court Judge Marilyn H. Patel ruled in favor of the ASBL and ordered the SBA to provide the ASBL with more than 10,000 pages of data that listed the names of all firms that received federal small business contracts for fiscal years 2005 and 2006. In a review of the data, the ASBL uncovered that the SBA had included billions of dollars in awards to Fortune 500 corporations in its small business contracting data. The list of large firms within the SBA's 2006 small business contracting statistics includes firms like: Dyncorp, Battelle Memorial Institute, Hewlett Packard, Government Technology Services Inc (GTSI), Bechtel, Lockheed Martin, General Dynamics, General Electric, Northstar Aerospace, Booz Allen Hamilton Inc. and Raytheon.
Regarding Ms. Carranza's statements surrounding the SBA's efforts to improve the integrity of small business contracting data and increase contracting opportunities, the ASBL would like to draw attention to the SBA's poor record of actually implementing policies to do so. On June 30, 2007, former SBA Administrator and current Secretary of HUD, Steven Preston, implemented a very unpopular grandfathering/5-year re-certification policy going against recommendations made by both the current and former SBA Inspector General for an annual re-certification policy. The SBA's grandfathering/5-year re-certification plan will allow contracts to Fortune 500 corporations to be counted as small business awards through 2012.
The first Congressional hearing on the diversion of federal small business contracts to large corporations was held in May of 2003. Since then, the SBA and the Bush Administration have failed to stop the giveaway of federal small business contracts to large corporations. In fact, the Bush Administration has done everything it can to dismantle small business programs designed to assist small businesses from nearly every background. For example, in 2006, the Bush Administration closed the office at the SBA solely dedicated to helping veteran-owned small businesses. For the last 7 years it has refused to implement the congressionally mandated women-owned set-aside program. We predict that before President Bush leaves office he is going to continue to dismantle small business programs and modify the definition of a small business to include companies that have no legitimate claim to federal small business contracting programs.
Sources referenced:
1. Report 5-15
http://www.sba.gov/ig/05-15.pdf
2. SBA's Grandfathering Proposal
Federal Register, volume 69, 70200, No 232, December 3, 2004.
http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-26609.pdf
3. Bush Officials Manipulated Court Ordered Contracting Data
http://www.asbl.com/showmedia.php?id=1059
4. Bush Administration Closure of SBA Veteran's Office
http://www.targetgov.com/Content.asp?id=2313
5. SBA Office of Inspector recommendation for annual re-certification
http://www.asbl.com/showmedia.php?id=15
http://www.sba.gov/IG/WrittenStatement-7-12-06SSBECHearingonGovernment.pdf