SmallBusinessNewz

Big firms grabbed billions in small business federal contracts

Both houses of Congress want to see companies recertify their small business status annually, as proof of large firms receiving small business set-aside contracts became known in court.

A long running court battle between the Small Business Administration (SBA) and the American Small Business League (ASBL) culminated with the presiding judge ordering the release of documents about the disputed contracts. The SBA claimed Freedom of Information Act (FOIA) claims did not apply to it, but the court disagreed.

More details about the issue emerged in Kiplinger's. They noted documents from the SBA showed the agency dismissed over 100 complaints about large companies receiving set-aside contracts.

Such set-asides are supposed to go to firms that meet the criteria of a small business; further delineation reserves some federal contracts for woman- and minority-owned businesses.

But under the Bush Administration in 2005 and 2006, unqualified big businesses reaped half the contracts worth about $100 billion a year. Kiplinger's said documents released by the SBA to ASBL under court order demonstrated this.

A tightening of the criteria, and ongoing annual recertification of small businesses, should be on the Congressional agenda in 2009. Among the loopholes needing closure: small companies acquired by bigger firms have as long as five years to continue servicing an existing contract.