August 22, 2008
A new Bush Administration policy will make it easier for large businesses to land government small business contracts by misrepresenting themselves as small businesses in government supplier databases, according to the American Small Business League (ASBL).
Under the new policy, firms will no longer be required to list their annual revenue or number of employees on the federal government's Central Contractor Registration Database.
In the past, firms that listed themselves in the CCR database were required to disclose their annual revenue and total number of employees. This specific information was mandatory, because federal guidelines that determine a firm's eligibility to participate in federal small business contracting programs were based on these two fields.
Making annual revenue or number of employees' fields optional in the CCR will make it extremely difficult to determine if large firms are misrepresenting themselves as small businesses for the purpose of receiving federal small business contracts, said ASBL.
Since 2002, the Bush Administration has made several modifications to the CCR database as a means of making it increasingly difficult to determine if a firm is small or large.
Despite repeated statements from administration officials about increasing transparency and improving the accuracy of reported data in federal small business contracting programs, the new policy is seen by ASBL as a major step backward in accuracy and transparency.
Since 2003, 15 federal investigations have found billions of dollars in federal small business contracts actually wound up in the hands of Fortune 500 firms and hundreds of other large businesses. Within the last thirty days, four separate investigations have found fraud and rampant abuses in government small business contracting programs.
In one instance, the Department of Interior (DOI) Office of Inspector General found that the DOI had misstated the achievement of its small business goals by including Fortune 500 corporations.
In 2005, the Small Business Administration (SBA) Office of Inspector General released Report 5-16, which found large businesses had received government small business contracts by making "false certifications."
This policy will aggravate the problem of large businesses receiving government small business contracts, said ASBL, making it even harder for federal officials, the public and watchdog groups to monitor the CCR database and uncover large businesses trying to masquerade as small businesses to illegally receive government small business contracts.
