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SBA's "Safe Harbor From Fraud" Policy Comments End Monday

American Small Business League Comments on SBA's "Safe Harbor" Policy

PETALUMA, Calif., Aug. 21, 2014 /PRNewswire-USNewswire/ -- This is the comment to the Small Business Administration from the American Small Business League opposing the "safe harbor from fraud" policy.

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The Small Business Administration Office of Inspector General began sounding the alarm in 1995 on large businesses fraudulently misrepresenting themselves as small business to illegally receive federal small business contracts.

Every year since 2005, the SBA Office of Inspector General has continued to name the diversion of federal small business contracts to large businesses as the number one challenge at the SBA.

The SBA Office of Inspector General has issued numerous reports on the diversion of federal small business contracts to large businesses such as Reports 5-14, 5-15 and 5-16.

A long series of federal investigations have uncovered rampant fraud in federal small business contracting programs.

The diversion of federal small business contracts to Fortune 500 firms and thousands of large businesses has been reported by Fox News, ABC, CNN, NBC, MSNBC, CBS and CNBC.

Even President Obama acknowledged the magnitude of the abuse in federal small business contracting programs when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants."

For over twelve years the SBA has claimed the widely investigated and reported diversion of federal small business contracts to large businesses is the result of "miscoding", "computer glitches", "anomalies", "simple human error", "large businesses acquiring small businesses" and a variety of other excuses such as small businesses outgrowing their size standard.

The SBA has consistently denied there is any fraud in federal small business contracting.

I challenge anyone at the SBA to show me just one investigation by the SBA Inspector General that found too many large businesses were being unfairly prosecuted for misrepresenting themselves as small businesses.

Since there are no federal investigations that found too many large businesses were being unfairly prosecuted for fraud, I see no need for a "safe harbor from fraud" policy.

I do see a desperate need for a policy to stop the nation's 28 million small businesses from being cheated by the rampant diversion of billions of dollars a month in federal small business contracts to large businesses.

I do see a desperate need for a policy that would stop the SBA from cheating small business with their fabricated, "small business eligible dollars" policy.

I challenge anyone at the SBA or any other federal agency to show me the section of the Small Business Act that allows for "small business eligible dollars" to be used in calculating the percentage of awards to small businesses. I challenge anyone to provide the section from the Small Business Act that allows for Fortune 500 firms, their subsidiaries or any large businesses to legally receive federal small business contracts.

In conclusion, the American Small Business League is opposed to the "safe harbor from fraud" policy. This is just another loophole that will allow the federal government to cheat small businesses out of more contracts, encourage fraud, protect fraudulent firms and allow the SBA to continue to fabricate and falsify the government's compliance with the 23 percent small business-contracting goal.

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SOURCE American Small Business League

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