Department of Energy Falsified Data to Meet Small Business Contracting Requirements; Government Office of Accountability Reports that the Department of Energy is Not Meeting Small Business Contracting Goals.

WASHINGTON -- A new report from the U.S. Government Accountability Office (GAO) says that inaccurate reporting by the Department of Energy (DOE) has covered up the DOE's failure to meet its small business subcontracting goals.

"Misleading data has created the false impression that DOE is meeting its small business subcontracting goals, undermined DOE's oversight of subcontracting efforts, and generated mistrust among members of the small business community," the report states.

In 2004, the SBA required the DOE to award 50 percent of its total subcontracting dollars to small businesses. The GAO report states, "Because about 85 percent of DOE's funding currently goes to its facility management contractors, none of which are small businesses, the small business subcontracting efforts of those facility management contractors are of even greater importance to DOE."

"Last March, SBA administrator Hector Barreto issued a press release claiming that the government had reached a 25 percent small business contracting goal. He called it a 'tremendous victory for America's small business owners.' This latest GAO report is the sixth government investigation that proves those numbers were dramatically inflated. All six government investigations into small business contracting programs have found fraud, misrepresentation and falsified government reports. American small businesses are being cheated out of billions of dollars in federal small business contracts. The Bush administration's response to these investigations will be the real indication of their commitment to the 23 million small businesses in America," said Lloyd Chapman, president of the American Small Business League.

In the United States today, 98 percent of all businesses employ fewer than 100 people. The Small Business Act of 1953 directs that 23 percent of all federal government procurement contracts be awarded to small businesses. The DOE and other federal agencies are responsible for establishing and reaching small business contracting goals as part of this larger objective.

"Until the problems with contractor-reported achievement data are resolved and the program oversight issues are addressed, DOE cannot ensure that the federal policy of providing the maximum practicable opportunity for small businesses is being achieved," the GAO report states.

The GAO report is available at http://www.gao.gov/new.items/d05459.pdf

About the American Small Business League

The ASBL is a national organization focused on promoting the interests of the 23 million American companies with fewer than 100 employees. Among our successes, we provoked a GAO investigation confirming that a majority of small business contracts are going to large companies; we prompted a congressional hearing into abuse in small business contracting; we pushed the government to begin requiring annual recertification for suppliers; we helped eliminate a federal policy that allowed large businesses to buy small businesses and keep that small business status for up to 20 years; we forced the SBA to remove 600 large corporations from the SBA's database of small businesses; we succeeded in reducing the SBA's Information Technology Value-Added Reseller size standard from 500 to 150 employees; we prompted the SBA to propose redefining a small business as one with 100 employees or fewer; and we drove the SBA to change procedures allowing businesses to file protests against large companies falsely claiming to be small businesses. For more information, please go to www.asbl.com.