ASBL Finds SBA Policies That Cheat Small Business Are Illegal

PETALUMA, Calif., May 4, 2015 /PRNewswire-USNewswire/ -- The American Small Business League (ASBL) has completed a twelve-month investigation and analysis of three policies the Small Business Administration (SBA) has used to circumvent the Small Business Act and defraud legitimate American small businesses out of hundreds of billions in federal contracts.

Those SBA policies include miscoding, the SBA's exclusionary rule and their five-year rule.

The ASBL's research has been aided by legal opinions and counsel from Professor Charles Tiefer, one of the nation's leading experts on federal contracting law.

1. Miscoding, computer glitches and anomalies - For over twelve years the SBA has claimed the diversion of federal small business contracts to Fortune 500 firms and their subsidiaries is the result of random errors most commonly referred to as "miscoding." The ASBL found the supposed random "miscoding" errors did not have a random pattern of distribution but in fact always resulted in the diversion of federal small business contracts to large businesses. The ASBL also concluded it was mathematically impossible for the "miscoding" to be actual random errors. The ASBL concluded the misreporting of federal contracts to large businesses and was clearly willful and intentional efforts by the SBA to falsify the true volume and percentage of federal contracts awarded to small businesses.
2. The Five Year Rule – The SBA has used the "five year rule" to justify the inclusion of billions of dollars in federal contracts to Fortune 500 firms, their subsidiaries, thousands of clearly large businesses and even foreign owned corporate giants like Rolls-Royce and British Aerospace Engineering (BAE). The SBA's "five year rule" has absolutely no basis in law and is in fact in direct violation of every provision of the Small Business Act that established the legal definition of a small business. Since no language in the Small Business Act supports the SBA's "five year rule" it is blatantly illegal.
3. The Exclusionary rule - The SBA's "Exclusionary Rule" has been fabricated to dramatically inflate the percentage of federal contracts to legitimate small businesses by using a federal acquisition budget that is significantly lower than the actual total annual federal acquisition budget. The 23.39% of federal contracts the SBA claimed small businesses had received in FY 2013 used a total eligible dollar figure of just $355 billion. The SBA's "Exclusionary Rule" has no basis in law and is in fact in direct violation of the Small Business Act that stipulates that small businesses shall receive a minimum of 23% of the total value of all prime contract awards. A legal opinion by Professor Charles Tiefer found the actual total annual federal acquisition budget to be approximately one trillion dollars.

The ASBL study concluded that if all provisions of the Small Business Act were followed, the actual percentage of federal contracts awarded to legitimate small businesses would be no more than 5% for FY 2013 and not the 23.39% claimed by the SBA.

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SOURCE American Small Business League

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