Attorney General John Ashcroft
U.S. Department of Justice
950 Pennsylvania Avenue NW
Washington, DC 20530-0001
E-mail:
September 15, 2004
Dear Attorney General Ashcroft:
In 1995, the Small Business Administration’s Office of the Inspector General issued a report that indicated widespread fraud in federal small business contracting. The SBA declined to take any action to stop this fraud at that time. In 2003, the American Small Business League (then called M.I.S.A.) provided information to the SBA, the GAO, and the U.S. Attorney’s office that clearly showed that hundreds of firms had intentionally and illegally misrepresented themselves to be small businesses to receive small business contracts and sub-contracts. Subsequently, the SBA acknowledged that hundreds of companies were falsely claiming to be small and removed 600 firms from their database of small businesses. In 2002, the GAO launched an extensive investigation also based on the information ASBL provided and found that billions in small business contracts were being illegally awarded to large businesses. In addition, the SBA Office of Advocacy commissioned a report recently which also found widespread fraud and abuse and that as a result, billions in small business contracting dollars were being awarded to large businesses.
There are 23 million businesses in America with less than 100 employees and these are the firms that are the heart of the US economy. When federal funds that Congress intended to go to these small firms are hijacked by large businesses masquerading as small, there is a significant negative impact on the economic strength of our nation.
Misrepresenting a firm’s status as a small business to illegally receive federal small business contracts and sub-contracts is a felony with severe penalties such as 10 years in prison, a $500,000 fine, cancellation of all contracts, and debarment from selling to the federal government.
Although there is abundant evidence indicating that felony federal contracting fraud in small business contracting is widespread, no firm has been punished in any way for this crime in over a decade. We ask that the Justice Department launch an immediate investigation into the manner in which the SBA has handled the multitude of evidence brought to their attention regarding fraud and abuse in the federal small business-contracting program. We also ask that you ensure that any firms that have clearly misrepresented themselves as small businesses in order to receive federal small business contracts are prosecuted and punished in accordance with the law.
Sincerely,
(add place for name and address here)