Large Businesses May Have Received Over a Billion Dollars in Small Business Contracts from the Department of Interior

PETALUMA, Calif., July 17, 2008 /PRNewswire via COMTEX News Network/ -- 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 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."

SOURCE American Small Business League

Copyright (C) 2008 PR Newswire. All rights reserved