New Government Policy Will Exclude Thousands of American Small Businesses: ASBL Reports

PETALUMA, Calif., July 21, 2016 -- The General Services Administration (GSA) proposed a new policyon June 20^th that could exclude thousands of small businesses that are currently suppliers to the federal government.

Under the Federal Strategic Sourcing Initiative (FSSI), the number of firms that would be able to provide specific commodities could be reduced to as few as fifteen companies. There are currently approximately 500,000 small businesses that are registered as suppliers to the federal government.

The move by the federal government to drastically reduce the number of small business suppliers would seem to exacerbate the federal government's inability to achieve the 23% small business contracting goals established by the Small Business Act.

Federal law also mandates a 5% minority-owned small businesses goal, a 5% goal for woman-owned small businesses and a 3% goal for service disabled veteran-owned small businesses.

Fraud and corruption in federal small business contracting programs has been uncovered in dozens of federal investigations. ABC, CBS, NBC, Fox News, CNN, RTTV and Public Citizen have all reported on the abuses.

In 2003, the Government Accountability Office (GAO) found the federal government had fabricated compliance with small business goals by including contracts to over 5,300 large businesses in the volume of federal contracts the SBA reported were awarded to to small businesses.

The SBA Office of Inspector General release Report 5-15 that stated "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."

The GAO released Report 10-108 that stated "By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud or abusing the intent of the SDVOSB program."

Federal District Court Judge William Alsup accused the federal government of "…covering it up" and stated "They are trying to suppress the evidence" in a federal lawsuit filed by the American Small Business League (ASBL) against the Pentagon to expose fraud and corruption in Pentagon small business subcontracting programs.

The ASBL has filed another case in Federal District Court in San Francisco asking the court to grant an injunction against the SBA to halt illegal polices they believe have defrauded legitimate small businesses out of as much as $2 trillion in federal contracts and subcontracts over the last decade. 

The GSA proposal was published in the Federal Register on June 20^th. The GSA will be taking public comment on the proposed rule until August 20, 2016.

The ASBL believes government policies that have harmed small businesses are a major factor in the U.S. ranking 49^th worldwide by the World Bank in the ease of starting a new business.

CONTACT: Jeanne Spatola 
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