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Federal Market Intelligence for Small Business |
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Judge dismisses ASBL lawsuitA federal judge has dismissed the American Small Business League’s lawsuit against the Small Business Administration. Federal District Judge Vince Chhabria granted the SBA’s motion to dismiss, citing a lack of subject matter jurisdiction, according to a press release from ASBL. The judge stated in his decision that “Congress enacted a statute requiring the SBA to provide information about the participation of small businesses in federal contracting. If the SBA is giving Congress bad information, then Congress can do something about it, either in an oversight or legislative capacity,” according to the ASBL release. Lloyd Chapman, president of the ASBL, said the group would appeal the decision to the Ninth Circuit Court of Appeals. ASBL’s allegations The ASBL’s lawsuit alleged that the SBA was defrauding small businesses out of federal contracts by overstating its goal achievement. Chapman based his allegations on claims that the SBA is required to award a minimum of 23% of contracts to small businesses. However, Congress in the Small Business Act of 1997 set 23% as a goal, not explicitly as a requirement. The goal was met for the first time in fiscal 2013. Chapman told Set-Aside Alert that in his opinion 23% is “not just a suggestion.” But the government appears to have viewed the 23% target as a goal and not a requirement for 19 years. $276B for small business? Chapman also claims that small businesses should be receiving $276 billion a year from a federal discretionary spending budget of $1.2 trillion a year. But that $1.2 trillion includes salaries for federal workers, care for veterans, grants for research and all other discretionary funding in addition to all federal contracts. USASpending.gov reported the federal contracting budget was $439 billion in fiscal 2015. The SBA reduced the total in its goal calculations to $362 billion because it said small businesses were not eligible for some contracts. Asked to explain the discrepancies, Chapman sent a statement from Charles Tiefer, a law professor at the University of Baltimore. Tiefer suggested that Medicare, Medicaid, veterans health care, agriculture and highway subsidies, intelligence spending and other programs should be placed under federal acquisition rules and subjected to small business goaling. If that were done, the federal acquisition budget could reach $1 trillion, Tiefer wrote. Fortune 500 companies ASBL also charges that some Fortune 500 companies are receiving small business contracts. However, some of those Fortune 500 small business contracts are legitimate, for a short period of time, after they acquire small companies. “Nowhere in the Small Business Act does it say that Fortune 500 companies are allowed to receive small business contracts,” Chapman told Set-Aside Alert. Chapman also quotes findings from a Government Accountability Office report from fiscal 2003, claiming they are evidence supporting his arguments. However, those findings are based on GAO research in fiscal 2001.
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