Bush Makes False Claims About Helping Small Businesses

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The facts show the Bush Administration failed to meet goal on small business contractsÂ?the White House fact sheet is wrong.

The facts show the Bush Administration failed to meet goal on small business contracts—the White House fact sheet is wrong. There’s a glowing statement on the White House website claiming that “small businesses won more than 23% of all contract dollars last year … exceeding the statutory goal for the first time by any Administration.”

The problem is, the claim is wrong. Due to omissions and number-juggling by the Small Business Administration and outright fraud by many large corporations that were awarded contracts aimed at small businesses, the country’s small businesses lost billions of dollars last year by receiving only a small portion of the contracts they were due.

A study released last month by the Center for Public Integrity detailed the extent of the problem with Defense Department contracts, a major portion of government contracts. A 2003 Government Accountability Office investigation confirmed billions in small business contracts improperly going to the nation’s largest companies.

There are two key reasons the Bush Administration claim is wrong:

1.    The SBA is artificially pumping up the percentage of contracts going to small businesses by lowering the total dollar figure of all government procurement. By law, “23% of the total value of all prime contracting awards for each fiscal year” is set aside for small businesses. Yet the SBA disregards overseas contracts (including tens of billions for military construction) which all go to large corporations, as well as all contracts resulting from grants. With all contracting awards counted, the small-business portion is a much smaller percentage

2.    As the Center for Public Integrity study stated, billions of dollars of contracts ostensibly given to small business actually have gone to large corporations through fraud, abuse, and loopholes.

“America loses when the SBA cheats small business, which create most of our new jobs,” said Lloyd Chapman, president of the American Small Business League. “It's outrageous that the Bush Administration funneled billions in small-business contracts to big corporations last year, then cooked the books to claim that it met statutory small business goals."


Jennifer Auerbach

Ph# 707-789-9575

Fx# 707-789-9580


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