Billions of dollars in federal contracts that are intended for U.S. small business might actually be awarded to large companies -- and the Senate isn't happy about it.
At a hearing Tuesday, senators questioned the SBA over its claim that 22.7 percent of federal contract dollars went to small businesses in 2010. In an effort to make sure entrepreneurs can get in on government contract work, federal agencies aim to award at least 23 percent of those contracts to small businesses each year.
Sen. Claire McCaskill (D-Mo.), chairman of the Senate Subcommittee on Contracting Oversight, said the SBA's system for tracking and qualifying companies for small business contracts "doesn’t seem to make sense." "We don’t need to be spending taxpayer dollars to prop up a system that allows the government to take credit and large businesses to profit at the expense of the small businesses that the system is meant to help," she said.
McCaskill argued that a complicated framework of regulations makes it "virtually impossible" to track the number of federal contracts being awarded to small businesses. The Senate investigation claims several large companies abuse special exemptions to the SBA’s size standards while others hold small-business contracts although they no longer qualify as small businesses.
According to small business advocacy group the American Small Business League, 61 of the top 100 firms on the SBA's Small Business Procurement Scorecards for Fiscal Year 2010 -- ranked by the total dollar amount of their federal contracts -- are in fact large companies. Some of the larger companies named in the report include Lockheed Martin, Northrop Grumman and Motorola.
In his testimony, Joseph Jordan, an associate administrator of the SBA's Office of Government Contracting and Business Development, defended the SBA's "rigorous analysis" and monitoring of the contracting data, saying his group's top priority is to "ensure that the benefits of our programs flow to the intended recipients."
Has your business ever tried to secure a federal contract? Do you think the system works? Let us know in the comments section below.
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Comments:
Meanwhile, SBA recently took away HUB Zone certification for 3,400 small businesses, ensuring that thiese businesses will not be able to effectively compete for government contracts. HB 2131 would simply extend these certifications for 3 years, but, Congressman Sam Graves refuses to let the bill out of his Small Bussiness Sub committee.
You can bet your bottom dollar it does not work....too much bueracratic affiliation by the good old boys...even the sba agents are getting paid off internally its just job security....the sba is the nba....no business allowed for small business.
This does not work, because i am someone who owns a small and tried many times getting these contracts. I have been told there are not enough funding or not any contracts for my business , while bigger companies are given the same contracts. I live in CA , so many of you guys know many challenges facing CA..
As one poster said, “We've been approached by large companies to assist them in masking their size so that they could win a bid." I have also seen this; Ive found the requirements are too steep in many cases, which keep the big boys raking it in, and thats the way they like it. The system does not work for small companies, its a joke in fact; I don’t see why it will work as long as these large powerful contractors can buy Washington with the millions upon millions spent on lobbying each year.
Yes as a sales representative of a small business company I'm totally affected because I can't d business with most of the federal offices because they said they have contract with Office Depot or Staples and these guys are big.. where not even the size of their finger. Even just worth $100 order they cant spare to us. We supply It products such as headsets, laptops, office supplies and printing supplies
DOC Development, Inc is a small Medical, janitorial, hospitality, and food service supply firm that has applied for several government contracts, but has only been successful once. The SBA has not been helpful at all. We were beat out by large business that posed as small companies. We've been approached by large companies to assist them in masking their size so that they could win a bid, but we have refused. Big banks are the worse! They are not lending the money that they were given to loan and it's crushing the small business man that has potential to grow and hire more people. It really sucks right now to be a SDB because there's no one to turn to for help!
MacCasskill is partially right, and just as obviously, is myopic in her vision. It's a well known fact that any number of suppossed small business''s who do business with the Federal Govt are in fact 'front' subsidary's of much larger companies, Motorola being the prime violator. Who do you think supplies all the radio equipment for the Fed's ? Look at these supposedly small business company's State Corporate structure filing's to see who's behind them. Same for the 8A Minority Business Programs. Front's for bigger companies looking to take it all. Mills and the SBA crowd need to re-write the reg's and get some one who actually knows how to read a company's structure to determine if a 'small business' is actually a small business or just another dummy front. That would, at least, level the playing field. And Clare needs to stop listening to the numerous 'players' in DC when she asks questions. 'Players' are just gonna give her what she wants to hear, not what she needs to know. And as we all know, there's a world of difference between the 2, the current budget mess notwithstanding.