Congress Voted To Protect Contracting Fraud Not Stop It

PETALUMA, Calif., Nov. 19, 2014 /PRNewswire-USNewswire/ -- In 2005, the Small Business Administration Office of Inspector General released Repot 5-15 that 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."

Every year since 2005, every SBA Inspector General has reiterated that the diversion of federal small business contracts to large businesses is still the number one problem at the SBA.

A long series of federal investigations have all uncovered many Fortune 500 firms have been the actual recipients of billions of dollars in federal small business contracts. The Associated Press reported on the problem in 2003. NBC, CBS, ABC, CNN, Fox News and RTTV have also reported on the diversion of federal small business contracts to corporate giants.

Some of the firms that have received federal small business contracts include, Oracle, Hewlett-Packard, Dell, IBM, Verizon, Chevron, Apple, General Electric, AT&T, UPS, Bank of America, Citigroup, J.P. Morgan Chase & Co., Home Depot, Wells Fargo, L-3 Communications, Microsoft, Pepsi, Boeing, Raytheon, Lockheed Martin, Northrop Grumman, General Dynamics, American Airlines and John Deere.

During his first campaign President Obama released the statement, "It s time to end the diversion of federal small business contracts to corporate giants."

Congress has refused to pass any legislation such as the Fairness and Transparency in Contracting Act (H.R. 1622) to stop large businesses from hijacking billions of dollars in federal small business contracts year after year.

Under section 16(d) of the Small Business Act the penalty for any large business that misrepresents itself to illegally received federal small business contracts is up to ten years in prison, a $500,000 fine or both.

As opposed to passing any legislation to halt the illegal diversion of federal small business contracts to large businesses, Congress passed legislation that will likely encourage more fraud in federal small business programs. In the 2013 National Defense Authorization Act (NDAA), Congress approve the "safe harbor from fraud penalties" policy. Under the policy any large business that is uncovered illegally receiving federal small business contracts can avoid all penalties simply by claiming they "acted in good faith".

American Small Business League President, Lloyd Chapman, launched a national campaign to oppose the policy. "It's very disappointing Congress has refused to pass any legislation to stop the rampant fraud that has been uncovered in federal small business contracting programs. It's absolutely astounding that instead they passed legislation that will certainly increase fraud by adopting legislation that will actually protect fraudulent firms from prosecution. It seems Congress has received more lobbying dollars from large fraudulent firms than America's 28 million legitimate small businesses."

The SBA is expected to release the final rule establishing the "safe harbor from fraud penalties" policy before the end of the year.

Here is a trailer about Lloyd Chapman's crusade for his new documentary.

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SOURCE American Small Business League

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