The American Small Business League (ASBL) has released their annual analysis of federal contracting data for fiscal year 2015, and it shows that Fortune 500 firms and thousands of other large businesses received billions of dollars of federal contracts meant for small businesses.
Specifically, ASBL found that 151 Fortune 500 firms landed government small business contracts in 2015. ASBL’s research is based on publicly-available data pulled from from the Federal Procurement Data System (FPDS).
This year marks the sixteenth consecutive year of documentation that federal small business contracts have been diverted to corporate giants.
In the past year, Verizon received over $108 million in small business contracts through their subsidiary Terremark. Some of the other firms that received small business contracts last year include: Apple, Microsoft, General Electric, Home Depot, AT&T, UPS, Hewlett Packard, IBM, Bank of America, Citigroup, Wells Fargo, Pepsi, Boeing, Oracle, Raytheon, Lockheed Martin, General Dynamics, Northrop Grumman, Anthem and John Deere.
The Government Accountability Office (GAO) released their first investigation into corruption and fraud in federal small business contracting programs in 2003. The GAO uncovered over 5,300 large businesses had been the actual recipients of billions in US Government small business contracts.
As far back as 2005, the SBA’s Office of Inspector General described the diversion of small business contracts going to corporate giants as, “One of the most important challenges facing the Small Business Administration (SBA) and the entire federal government today” (OIG Report 5-15).
In 2014, Public Citizen released their investigation into fraud in government small business programs titled “Slighted.” They accused the federal government of using accounting tricks to “create false impression that small businesses are getting their share of federal procurement money.”
The House Small Business Committee recently unanimously passed H.R. 4329 titled, “Transparency in Small Business Goaling Act of 2016.” That bill was supposed to modernize the Small Business Act, but it contained no provision to halt the flow of federal small business contracts to Fortune 500 firms and thousands of other large businesses.
The ASBL’s research indicates middle-class small businesses are being shortchanged out of up to $200 billion a year. This is a result of the SBA’s exclusions of the majority of federal contracts from their calculations and the inclusion of billions in contracts to large businesses.