SBA Administrator Could Face Tough Questions From Congress On Wednesday

PETALUMA, Calif., Sept. 9, 2014 /PRNewswire-USNewswire/ -- The House Small Business Committee is holding a hearing on Wednesday, September 10, titled Small Business Administration: Management and Outlook. The hearing will be held at 1:00 PM in Room 2360 of the Rayburn House Office Building.

The only witness scheduled is new SBA Administrator Maria Contreras-Sweet. Administrator Contreras-Sweet could face some tough questions on a series of controversies at the SBA.

Every year since 2005 the SBA Office of Inspector General has named the diversion of federal small business contracts to large businesses as the number one problem at the SBA. ABC, NBC, CBS, CNN, MSNBC, CNBC, Fox News and RTTV have all reported on the issue.

The SBA has consistently refused to adopt any policies to halt the rampant fraud and abuse. To the contrary the SBA recently concluded taking public comment on a new "safe harbor from fraud penalties" policy that many people believe will encourage even more fraud in federal small business contracting programs.

Over 90 percent of the comments the SBA received on the "safe harbor from fraud penalties" policy were opposed to it. 

On August 1, Administrator Contreras-Sweet announced the federal government had awarded $83 billion in federal contracts to small businesses. The SBA claimed that amounted to 23.39 percent of all federal contracts. Since the announcement on August 1, it has been reported the SBA included billions of dollars in contracts to Fortune 500 firms and their subsidiaries in the $83 billion the SBA claims was awarded to small businesses.

Federal law requires a minimum of 23 percent of all federal contracts be awarded to small businesses.  To reach their 23.39 percent number, the SBA used a policy that has no basis in federal law they created called "small business eligible dollars". For fiscal year 2013 the SBA claims the "small business eligible dollar" amount was a mere $355 billion out of a total federal spending for that year of $3.5 trillion.

A recent legal opinion by Professor Charles Tiefer, one of the nation's leading experts on federal contracting law, states there is no basis in the law for including any contracts to large business in small business contracting data. He also concluded a more accurate federal acquisition budget number that should be used in calculating the percentage of award to small businesses is over one trillion dollars.

The American Small Business League estimates that if the more accurate one trillion dollar federal acquisition budget number were used and no contracts to Fortune 500 firms or other large businesses were included, legitimate small businesses probably received no more than 5 percent of all federal contracts and not the 23.39 percent claimed by the SBA.   

Questions for the SBA can be directed to SBA spokesman Terry Sutherland
(202) 205-6919 | [email protected] | www.terrysutherlandinfo.org  

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SOURCE American Small Business League

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