In a recent story published by the Medill News Service, Small Business Administration (SBA) Spokesman Mike Stamler continued to maintain that the diversion of billions of dollars a month in federal small business contracts to Fortune 500 firms is merely random data entry errors.
In the story, Mr. Stamler claims that large companies receive small business contracts, “because of simple human error,” and “miscoding.” For years, the SBA and Mr. Stamler have used “miscoding” to explain why some of the largest firms in the U.S. and Europe receive billions of dollars a month in contracts intended for small businesses. In a May 2007 press release the SBA even claimed the rampant abuses were simply a “myth.”
Mr. Stamler’s remarks stand in stark contrast to a series of federal investigations, going back to 2003, from the Government Accountability Office (GAO), the SBA Office of Advocacy, and the SBA’s Inspector General (SBA IG) that have found widespread fraud and abuse in virtually every program managed by the SBA.
In Report 5-16 from March 2005, the SBA IG reported that large businesses had committed fraud by misrepresenting themselves as small businesses through “false certifications,” and “improper certifications.” Another investigation from the SBA Office of Advocacy found large businesses had received federal small business contracts fraudulently through what they referred to as “vendor deception.”
In Report 5-15, the SBA IG referred to the diversion of federal small business contracts to corporate giants as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” For the last five consecutive years the SBA IG has reported these rampant abuses as the #1 management challenge facing the SBA.
An SBA IG investigation from March 2010 found that the SBA itself awarded federal small business contracts to large businesses during fiscal years 2008 and 2009.
In February of 2008, the American Small Business League (ASBL) sued the SBA for the release of the names of Fortune 500 firms and other large businesses that had received billions of dollars in federal small business contracts. The SBA withheld the information until directed to release it by United States District Judge Marilyn H. Patel. In the court’s ruling Patel stated, “The court finds it curious the SBA’s argument that it does not ‘control’ the very information it needs to carry out its duties and functions.”
“I am stunned that Mr. Stamler has any credibility left with the media. Putting an end to Mr. Stamler’s blatant lies and the SBA’s misinformation campaign is absolutely crucial to ending these abuses,” ASBL President Lloyd Chapman said. “I think it is time that journalists ask Mike Stamler or Karen Mills the following question: why is it that all of these computer glitches, miscoding errors or data entry problems, always divert funds away from hardworking American small businesses into the hands of Fortune 500 firms, while at the same time falsely inflating the government’s small business contracting data?”
For video commentary on this issue, see: http://www.youtube.com/watch?v=c-KHFzpKkIY
— The above statement was issued by the American Small Business League on Mon., 24 May 2010 11:50:38 GMT.