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Feel Cheated?

The SBA's corruption scandals should fuel your fire.

What happened to the SBA? Over the past several years, the SBA's budget, staff and employee morale have been cut in half. Investigations by the SBA's Office of Advocacy and the Office of Government Accountability found that billions in federal contracts awarded to some of the largest corporations in the world were reported as small-business awards. A report by the Office of Advocacy found that the SBA had completely failed to ensure that bundled contracts were broken up to give legitimate small businesses their fair share.

How did an agency established to assist small businesses come to this? Somewhere along the way, the true mission of the SBA was hijacked by bureaucrats and politicians. Now the future of the SBA is in jeopardy, as more information comes out that major defense contractors like Northrop-Grumman and General Dynamics are the actual recipients of billions in federal small-business contracts.

How can the SBA recover? Restore the budget and staff. Eliminate policies and regulations that have allowed Fortune 1000 firms to be considered small businesses. And prosecute fraudulent firms.

Finally, entrepreneurs need to realize they have been duped. Several national organizations claim to represent your interests, but do they really? Federal investigations have found fraud, significant abuse and a staggering lack of oversight in federal small-business programs. Search the websites of the groups that you believe represent small businesses--if there is no mention of these problems and their efforts to address them, they are phonies. When you find groups truly trying to address the problems at the SBA and other agencies, join, get involved, and support their efforts.

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This article was originally published in the August 2006 print edition of Entrepreneur with the headline: Feel Cheated?.

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