On August 1, SBA Administrator Maria Contreras-Sweet claimed the Obama Administration had awarded 23.39 percent of all federal contracts to small businesses.
In reality, legitimate small businesses probably received around 3 to 5 percent of all federal contracts. In fiscal year 2013, the Obama Administration may have cheated America’s 28 million small businesses out of as much as $200 BILLION in federal contracts.
Here are the facts. Federal law requires that a minimum of 23% of all federal contracts be awarded to small businesses. In FY 2013 the total federal spending was approximately $3.5 trillion. The actual government wide acquisition budget was at least one trillion dollars and possibly as high as $1.5 trillion. To be fair, we will use the one trillion dollar number. A recent legal opinion by Professor Charles Tiefer, one of the nation’s leading experts on federal contracting law, agrees that the one trillion dollar number is accurate.
Twenty three percent of one trillion dollars is $230 billion. Yet the SBA only claims to have awarded $83 billion in contracts to small businesses. This $83 billion includes billions of dollars in contracts to Fortune 500 firms, their subsidiaries, corporate giants from around the world and thousands of other firms that would not currently qualify as small businesses.
My analysis of the most recent data from the Federal Procurement Data system found that 175 Fortune 500 firms and their subsidiaries were included in the volume of awards the SBA used to calculate the volume and percentage of awards to small businesses.
No provision of the Small Business Act allows for Fortune 500 firms or their subsidiaries to be considered small businesses.
The second trick the Obama Administration used to cheat American small businesses was the use of the fabricated concept of “small business eligible dollars.”
Federal law requires small businesses receive 23 percent of all federal contracts. The term “small business eligible dollars” was pulled out of thin air by the GSA and the SBA and has no basis in law.
The SBA claims only $355 billion in “small business eligible dollars.” So by including billions of dollars in federal contracts to Fortune 500 firms, their subsidiaries and thousands of other firms that do not legally qualify as a small business and by using a federal acquisition budget that is approximately one third of the real federal acquisition budget for FY 2013 of over one trillion dollars, the Obama Administration claims to have awarded 23.39 percent of federal contracts to small businesses.
The U.S Census Bureau data found 98% of all U.S. firms have less than 100 employees, 89% of all U.S. firms have less than 20 employees and the average American company has approximately 10 employees.
Using an accurate definition of a small business as 100 employees or less and using a more accurate federal acquisition budget number of approximately one trillion dollars, legitimate American small businesses probably received 3% to 5% of all federal contracts in 2013.
Based on this data, that is infinitely more accurate than the numbers used by the Obama Administration, in fiscal year 2013 alone, legitimate American small businesses were likely defrauded out of somewhere between $150 and $200 billion in federal contracts.
By the time President Obama leaves office, his administration will likely have cheated small businesses out of well over $1 trillion and possibly as high as $1.6 trillion in federal contracts.
NBC, ABC, CBS, CNN, MSNBC, CNBC, and Fox News have all reported on the fraud and abuse at the SBA.
I know there are people out there that will read this and disagree with my findings. Let me put my money where my mouth is. I will send $1,000 to the FIRST person to send me the two sections out of the Small Business Act that allows Fortune 500 firms to be considered small businesses AND the section out of the Small Business Act that allows the use of “small business eligible dollars” in calculating the percentage of awards to small businesses.
If no one can provide me with those two sections of the Small Business Act then it cannot be denied the Obama Administration has falsified the volume and percentage of awards to small business and has in fact cheated American small businesses out of billions of dollars in federal contracts.
My offer will be good for 10 days (until 11:59pm, PDT September 1, 2014) following the release of this blog. You can send the information to [email protected].
P.S. Take a look at the trailer for a new documentary we plan to make on the history of how the federal government has cheated small businesses for over 20 years.