Out of Reach

Some say that the SBA is withholding contracts--and important information.
Magazine Contributor
2 min read

This story appears in the February 2005 issue of Entrepreneur. Subscribe »

Small-business groups are taking aim at the SBA for failing to ensure procurement opportunities. Two lawsuits were filed late last year arguing that the SBA has refused to implement a congressionally dictated women's procurement set-aside program and to release an internal study showing widespread fraud in procurement programs.

The U.S. Women's Chamber of Commerce filed a complaint in the U.S. District Court to force the SBA to implement the Women's Procurement Program. It was included in the SBA's 2000 reauthorization passed by Congress and told the SBA to set aside contracts for businesses in industries underrepresented by women-owned businesses. "We have heard from thousands of members that their ability to gain access to contracts has been harmed by the delay in implementing this mandate," says Margot Dorfman, CEO for the Women's Chamber.

The SBA's Raul Cisneros points to an agency press release stating that women-owned businesses received $1.5 billion more in federal prime contracts in fiscal 2003 than in 2002. That came to 2.98 percent of all federal contract dollars. But Dorfman says that Congress set a goal 10 years ago of 5 percent, which has never been reached. That failure prompted Congress to pass the 2000 amendment.

It's not just women who are complaining, though. The American Small Business League (ASBL) says the SBA is illegally withholding an internal report that shows the set-aside program is rife with fraud. "We believe that the SBA is covering up the problem by keeping the report under wraps," says ASBL president Lloyd Chapman. The ASBL lawsuit attempts to overturn the SBA's rejection of a Freedom of Information Act request on details of the study.

Cisneros argues the report sought by ASBL is only a draft. It has not been finalized, he says, so it can't be released.

Stephen Barlas is a freelance business reporter who covers the Washington beat for 15 magazines.

More from Entrepreneur

Grow Your Business at Entrepreneur LIVE! Join us on Nov. 16 in Brooklyn, NY, to learn from legends like Danica Patrick and Maria Sharapova, pitch our editors, meet with investors, and potentially walk away with funding!
Register here

One-on-one online sessions with our experts can help you start a business, grow your business, build your brand, fundraise and more.
Book Your Session

In as little as seven months, the Entrepreneur Authors program will turn your ideas and expertise into a professionally presented book.
Apply Now

Latest on Entrepreneur

My Queue

There are no Videos in your queue.

Click on the Add to next to any video to save to your queue.

There are no Articles in your queue.

Click on the Add to next to any article to save to your queue.

There are no Podcasts in your queue.

Click on the Add to next to any podcast episode to save to your queue.

You're not following any authors.

Click the Follow button on any author page to keep up with the latest content from your favorite authors.