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Department of Interior
Awarded Over $430 million in Small
Business Contracts to Corporate Giants
Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
FOR IMMEDIATE RELEASE
July 17, 2008
Department of Interior Awarded Over $430
million in Small Business Contracts to
Corporate Giants, According to New Study
Large businesses May Have Received Over
a Billion Dollars in Small Business
Contracts From the Department of
Interior
Petaluma, Calif. – On July 1st, 2008,
the Department of Interior (DOI) Office
of Inspector General released a report,
which found Fortune 500 firms were the
actual recipients of federal small
business contracts. The report examined
three tenths of one percent of contracts
the DOI had reported as going to small
businesses during 2006 and 2007 and
found that the agency had awarded
Fortune 500 corporations $5.7 million in
federal small business contracts.
According to the DOI Inspector General,
divisions of Xerox and John Deere had
misrepresented themselves as small
businesses within the government’s
database of federal contractors as small
businesses. Section 16 (d) of the Small
Business Act states that any large firm
that misrepresents itself as a small
business for the purposes of obtaining a
small business contract is guilty of
felony contracting fraud and subject to
a penalty of ten years in prison, a
$500,000 fine per occurrence and
debarment from federal contracting
programs. Based on a review of the
report, the ASBL believes contracting
officers at the DOI intentionally
falsified information entered into the
Federal Procurement Data System - Next
Generation (FPDS-NG) as a means of
fabricating the DOI’s and the Bush
Administration’s small business
contracting statistics.
In response to the DOI IG report, the
ASBL conducted a review of the DOI’s top
100 recipients of federal small business
contracts for both 2006 and 2007. The
lists were obtained from Fedmine.us,
which has direct access to information
within FPDS-NG.
Within the DOI’s top 100 recipients of
federal small business contracts for
2006, the ASBL found 22 large firms,
most of which were Fortune 500
companies. Those 22 large firms received
more than $200 million in federal small
business contracts, which were spread
across 894 contract actions. Within the
DOI’s top 100 recipients for 2007, the
ASBL found 28 large firms, which
received more than $230 million in
federal small business contracts. The
awards for 2007 were spread across 912
contract actions, which make 26.55
percent of all contract actions awarded
to the top 100 for 2007. Between the two
top 100 lists, the ASBL found more than
$430 million in federal small business
contracts awarded to large corporations.
In all, the ASBL found a total of 31
large companies within the top 100 lists
from 2006 and 2007 combined. Of the 31
firms found, 16 companies were found to
have received federal small business
contracts from the DOI in both 2006 and
2007. In addition to the firms ASBL was
able to determine were large, the
following clearly large firms were found
within the DOI small business
contracting data: Booz Allen Hamilton*,
Sprint Communications Company, Perot
Systems Government Services*, Hewlett
Packard Company, and KPMG*. * Received
small business contracts in 2006 and
2007.
According to Fedmine.us, the DOI
reported $2.5 billion in contracts to
small businesses in 2006 and $1.5
billion in contracts to small businesses
in 2007. Based on the DOI IG’s
methodology for conducting their recent
report, the total amount of small
business contracts awarded to large
corporations by the DOI could exceed
$1.7 billion for 2006 and 2007.
The Small business Administration (SBA)
attempted to portray the $5.7 million
reported by the DOI IG as the total
amount of small business contracts that
had actually been awarded to Fortune 500
companies by the DOI. In reality the
$5.7 million was only three tenths of
one percent of the total amount of small
business contracts awarded by the DOI
during those years. The ASBL believes
that the SBA misrepresented the DOI IG’s
findings in its statements to the press.
Under the Freedom of Information Act (FOIA),
the ASBL intends to request the specific
names of all of the firms that were
coded as small businesses by the DOI
during 2006 and 2007. The ASBL will
request the specific names of all of the
firms that were included. The ASBL
expects to find hundreds of millions of
dollars actually wound up in the hands
of Fortune 500 corporations and other
large businesses.
“If obvious Fortune 500 firms like Xerox
and John Deere are listed as small
businesses in the governments contractor
database, every federal agency and every
prime contractor in the country is
reporting awards to these firms as small
business awards. The Bush Administration
has tried to convince us for six years
now that the diversion of hundreds of
billions of dollars in federal small
business contracts to Fortune 500 firms
is the result of “miscoding” or random
data entry errors. It is simply not
believable that for over six years every
time a contract is “miscoded” it just
happens to inflate the Bush
Administration's small business
contracting statistics,” said Lloyd
Chapman, President of the ASBL. “This is
obviously intentional felony contracting
fraud on the part of large businesses
and federal contracting officials. It's
time for the FBI to investigate this and
it’s also time for Congress to pass
legislation to stop the wholesale
diversion of federal small business
contracts to corporate giants. Any
member of Congress that won't support
legislation to end fraud and abuse in
federal contracting should be voted out
of office.” |
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