Big Companies Cash in on Fed Contracts
WASHINGTON - At least $12 billion in contracts the government claimed it gave to small companies last year wound up instead in the coffers of corporate giants like Microsoft and Rolls Royce, greatly inflating the Bush administration's record of help to small businesses, Democratic congressional investigators say. When small business contracts with large companies are excluded, the government missed for a sixth straight year a requirement that 23 percent of its $314 billion in annual contracts go to small businesses, House Democrats conclude in a report to be released Wednesday. There were two basic problems, the investigators said: Federal agencies miscoded thousands of contracts to big companies as small business awards. And many other companies that started small grew large or were purchased by corporate giants but continued to get small business contracts. "It's just unbelievable," said Rep. Nydia Velazquez of New York, the top Democrat on the House Small Business Committee. "We have just got to start holding agencies accountable." Velazquez is asking the Government Accountability Office and internal watchdogs for the State, Treasury, Defense and Transportation departments to investigate their contracting procedures and see if criminal activity is involved. Under federal law, representatives of large companies that falsely claim to be small firms can be punished with 10 years in prison, $500,000 in fines, and a permanent ban from doing government business.
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