Monday, April 05, 2010
Billion$ in small business loans are diverted to Large defense contractors
Federal Investigation Finds Corporate Giants Received Billions in Small Business Funds
March 25, 2010
Petaluma, Calif. – The Small Business Administration Office of Inspector General (SBA IG) has released the latest in a series of investigations, which found billions in federal small business contracts have been diverted to corporate giants. The SBA IG investigation found that the SBA itself awarded federal small business contracts to large businesses. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/oig_report_10-08.pdf)
Report 10-08 uncovered that during fiscal year (FY) 2008 the SBA awarded more than 30 percent of its contracts to large businesses, and 92 percent of the contract actions contained blatant errors. Additionally, the report found that during FY 2009 the percentage of misleading data jumped to a record 97 percent.
Since 2003, more than a dozen federal investigations have found the SBA played a key role in the diversion of billions of dollars a month in federal small business contracts to large businesses around the world.
Exerpts from Huffington Post:
The American Small Business League (ASBL) has estimated that every year more than $100 billion in federal small business contracts are diverted away from legitimate small businesses and into the hands of some of the largest corporations in the world. The most recent data released by the Obama Administration indicates that firms counted as small businesses included: Xerox, Bechtel, Lockheed Martin, Boeing, Raytheon, Northrop Grumman, British Aerospace (BAE), Ssangyong Corporation headquartered in Seoul, South Korea and Finmeccanica SpA, which is located in Italy with 73,000 employees.
In May of 2009, Congressman Hank Johnson (D-4-GA) introduced HR 2568, the Fairness and Transparency in Contracting Act. If passed the bill would halt the flow of federal small business contracts to large businesses and redirect more than $100 billion a year in federal infrastructure spending to legitimate small businesses. Although the bill has bipartisan support with 19 co-sponsors, to date President Obama has refused to endorse the legislation.