ASBL Study: Large Corporations Unfairly Getting Small Business Contracts

Lockheed Martin, IBM, AT&T and other large corporations have snatched up federal government contracts meant for small businesses, according to a study from the American Small Business League.

Close to three-fourths of the top 100 federal “small” business contractors in fiscal year 2011, were actually large companies, according to the report.

Some of the biggest beneficiaries include Aegis, a 1,900-employee defense contractor, and Sierra Nevada, an 1,800-employee aircraft parts maker. Among the top recipients were Metro Machine Corp. in Norfolk, Va., which was awarded almost $240 million in contracts even though it is a subsidiary of General Dynamics, a conglomerate with $2 billion in annual revenue.

The ASBL, which has repeatedly complained about instances in which large companies misrepresent themselves in order to qualify for such contracts, said legitimate small businesses are losing out on more than $60 billion in contracts each year.

“Misrepresenting your firm as a small business is a felony, but the SBA has NEVER prosecuted a single offender,” it says on the league’s website.

The government failed to reach its statutory goal of providing 23 percent of all federal contracts to small businesses in 2010 and there was an increase in the number of large businesses winning such contracts, as reported by the Project on Government Oversight.

The discrepancy is sure to get worse as the Small Business Administration just recently issued a rule that broadens the definition of companies that qualify as small businesses.

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