I’m confused. Every year since 2003 the Small Business Administration (SBA) has said the rampant diversion of billions of dollars a month in federal small business contracts to corporate giants around the world was just miscoding, anomalies, computer glitches and simple human error.
Now the SBA has announced a new proposed policy that would create a “safe harbor” from penalties for firms that commit felony federal contracting fraud? Under the new SBA policy any big business that misrepresented it’s status as a small business to hijack federal small business contracts could simply claim they “acted in good faith” if they were caught. It is essentially a get out of jail free card for contracting fraud.
Federal law stipulates that big businesses that misrepresent themselves as small businesses to receive federal small business contracts can face up to 10 years in prison, a $500,000 fine per occurrence or both.
Imagine a large business intentionally misrepresenting one of its divisions for years as a small business to illegally land hundreds of millions of dollars in federal small business contracts. Legitimate small businesses would have been cheated out of all the contracts the big business received. If and when the large business is uncovered violating a federal law with a penalty of up to 10 years in prison, all they have to do is claim they “acted in good faith” and poof, no jail time and no fines.
So if the diversion of hundreds of billions of dollars in federal small business contracts to corporate giants for over a decade is just simple human error and anomalies, why does the SBA need a new policy establishing a “safe harbor” from penalties for big businesses that commit fraud?
There can’t be any fraud in SBA managed federal small business contracting programs. I have personally seen SBA spokesmen on national television saying there is no fraud at the SBA. They wouldn’t lie, they work for the SBA, and they are there to help small businesses.
I think we should use the SBA’s own statements to kill their new “safe harbor” policy. Since the SBA has insisted for over 12 years that there is no fraud in federal small business contracting programs, there is no need for a new policy to protect fraudulent firms.
The SBA will be taking public comment until August 15. Send them a comment and let them know there is no fraud at the SBA and therefore we don’t need a new “safe harbor” policy to protect fraudulent firms.