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Obama Administration Diverting Federal Contracts From Small Businesses, Says ASBL

Written by Jenna Weiner
Published: 1/25/2010

General Services Administration eliminates its "small business flag" from federal contracting data.

In 2008, Barack Obama earned the American Small Business League's endorsement for pledging to, in the candidate's words, "end the diversion of federal small business contracts to corporate giants." But breaking small business news feeds into growing disappointment with the Obama administration's follow-through on this pledge.

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The General Services Administration has eliminated a significant aspect of its Federal Procurement Data System - Next Generation, which keeps track of federal contracts. A "small business flag," which indicated the size of contracted organizations, will not appear on future official records and has been deleted from historical data.

More than a dozen federal investigations and reports have found that the small business flag was used fraudulently, diverting billions of dollars a month in federal small business contracts to Fortune 500 firms. Without the flag it will become significantly more difficult to monitor federal contracting data. Further, GSA has forced firms that obtain this data to sign an agreement preventing them from releasing certain facts, such as the percentage of federal contracts awarded to small businesses.

The Small Business Act stipulates that at least 23 percent of the "total value of all prime contract awards for each fiscal year" go to small businesses. "It is time for President Obama to make good on his campaign promise," says ASBL President Lloyd Chapman.

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