Small Business Advocate’s List Shows Many Large Firms Getting Set Asides

The gadfly American Small Business League’s new annual list of Fortune 500 companies it argues are grabbing undeserved federal contracts includes such household names as Verizon, Wellpoint, Target and Boeing.

“Year after year, large corporations illegally receive billions of dollars in small business contracts intended for legitimate small businesses,” said a recent release from the Petaluma, Calif.,-based league run by Lloyd Chapman.

Among the top 179 federal contract award winners in fiscal 2014, by the league’s analysis, were Verizon Communications ($125,949,391); WellPoint ($27,092,843); Boeing ($7,596,087); Raytheon ($3,878,029);IBM ($3,379,118); General Dynamics ($2,577,577); United Technologies ($2,498,067); and Lockheed Martin ($2,441,197).

The league has long attacked the Small Business Administration’s methodology for determining who qualifies as a small business and is hence eligible for set-asides that every agency is under mandate to honor.

The SBA, while taking no position on the league’s methodology, argued in a Friday statement that legitimate small firms might appear as large ones because of the growth of a business, mergers and acquisitions, or human data entry error by a contracting officer. “SBA has no tolerance for fraud, waste and abuse, and takes corrective steps when actionable information comes to light,” an official said. “Over the past seven years, SBA has initiated more governmentwide suspension and debarment actions than in the previous 10 years. The fact that a contract awarded to a large business is coded in a database as an award to a small business does not mean that the contract was taken away from a small business or that small businesses suffered.”

 In addition, the official said, SBA has a protest process for small business set-asides. “If a known large business submits an offer as a small business on a small business set-aside, the legitimate small businesses and even the contracting officer can and will file a size protest to challenge the size representation.”