Hispanic Business Magazine

Small Business Group Claims Victory Over Feds On Contracting Suit

A small-business advocacy group is claiming victory over the federal government in a yearlong case in which the feds have allegedly cheated small businesses out of billions of dollars worth of government contracts.

The advocacy group, called the American Small Business League, says the feds –which were appealing an August ruling in favor of the league — have “capitulated” by failing to deliver an appellate brief by the Wednesday deadline.

“It is time for President Obama to make good on his campaign promise
to stop the diversion of federal small business contracts to corporate
giants,” the league’s president, Lloyd Chapman, said in a statement. “The abuses in these economic stimulus programs for small businesses are at least a contributing factor to our country’s current economic catastrophe.”

The league believes that since 2003, hundreds of billions of dollars in federal grants meant for small businesses actually went to large entities such as Fortune 500 companies and their subsidiaries.

The recipients include Lockheed Martin, Boeing, Rolls Royce, Microsoft, Wall-Mart, L-3 Communications, British Aerospace Engineering (BAE) and Buhrmann NV, a Dutch firm with 17,000 employees in 26 countries, according to the league.

The league’s announcement on Thursday came a day after President Obama
vowed to clean upa “broken” system of government contracting.

In 2007, the league sued the federal government for its failure to adhere to a Freedom of Information Act request to reveal the names of all the firms that received federal small-business contracts during 2005 and 2006. During the proceedings, the federal government’s Small Business Administration division tried to argue that it does not have any information on the actual recipients of federal small-business contracts.

In August 2008, the court ruled in favor of the league.

“The court finds curious the (federal government’s) argument that it does not ‘control’ the very information it needs to carry out its duties and functions,” wrote U.S. District Judge Marilyn H. Patel in her opinion.

As a result of the league’s victory, the Federal Small Business Administration will be forced to hand over the documents.

Kevin Baron, the league’s director of government affairs, told that the league has defeated the federal government in all six of the lawsuits it has filed since 2003. Five of the cases have been against the federal Small Business Administration.

“Under the Bush administration, they would just completely stonewall us,” he said. “I’m hoping that will change under the Obama administration.”