Fortune 500 companies are awarded billions of small business contracting dollars every year. Something just doesn’t add up.
Every year, the government sets aside a portion of federal contracting dollars for small businesses as a way of encouraging job growth. Many GAWDA members rely on these small business contracts to level the playing field for federal contracts. To qualify for these dollars, a business must qualify as a small under the procurement guidelines. The Small Business Act defines a small business concern as one that is “independently owned and operated, not dominant in its field, and whose size falls within the size standards established by the Small Business Administration.” So why, then, would Lockheed Martin, General Electric, AT&T and other Fortune 500 companies appear among those receiving small business dollars?
Two Sides to Every Story
The Small Business Administration (SBA) recently reported that $97.95 billion in federal contracts went to small businesses in Fiscal Year 2010. According to the SBA, this represents a 22.7 percent share of eligible government contracting dollars, just shy of its 23 percent goal, but up significantly over the 21.9 percent mark set in 2009.
However, if you ask the American Small Business League, the real number is closer to 5 percent. “The ASBL maintains the Obama Administration has dramatically inflated the percentage of contracts awarded to small businesses by under-reporting the actual federal acquisition budget, and by including billions of dollars in contracts awarded to large businesses,” says an ASBL press release. “The ASBL maintains, the actual federal acquisition budget for foreign, domestic, classified and unclassified projects is roughly $1 trillion.” This is a far cry from the roughly $432 billion claimed by the SBA.
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