Large Companies Continue to Receive Small Business Contracts

Sixty-one of the top 100 recipients of federal small business contracts for fiscal year 2010 were large companies, according to a new report.

The report, by the American Small Business League, found that large companies received 62.5 percent of the dollars awarded to the top 100 recipients, with contracts totaling $8.8 billion.

The ASBL’s findings come in the wake of claims from the Small Business Administration that the federal government narrowly missed its congressionally mandated 23 percent small business goal. On June 24, the SBA announced that the government had awarded $98 billion, or 22.7 percent of federal spending, to small businesses.

“The SBA claims the government nearly hit its small business goal, and yet the government’s own data indicates it awarded no more than 5 percent of federal work to small businesses,” ASBL President Lloyd Chapman said in a statement. “The SBA’s most recent claims are just more misleading smoke and mirrors.”

The ASBL claims the Obama administration has dramatically inflated the percentage of contracts awarded to small businesses by under-reporting the actual federal acquisition budget, and by including billions of dollars in contracts awarded to large businesses. 

The ASBL maintains that the actual federal acquisition budget for foreign, domestic, classified and unclassified projects is roughly $1 trillion. The group said the Obama administration’s figures are based on a number that is less than half of the actual federal acquisition budget.

According to the Obama administration’s most recent small business data, recipients of small business contracts during fiscal year 2010 included Lockheed Martin, Raytheon, L-3 Communications, Hewlett-Packard, and AT&T, among many others, said the ASBL.

Since 2003, a series of federal investigations have uncovered the diversion of billions of dollars a month in federal small business contracts to corporate giants. This diversion has led to a significant shortfall in the volume of federal contracts actually going to legitimate small businesses. The 2010 federal data indicates that once again the government missed its small business goal by a minimum of 18 percent.

In April 2010, Sen. Mary Landrieu, D-La., the chair of the Senate Committee on Small Business and Entrepreneurship estimated that “increasing contracts to small businesses by just 1 percent” would create more than 100,000 new jobs. Based on the latest data, the ASBL estimates that ending this abuse would create upwards of 1.8 million jobs.