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Big Companies Receive Federal Government Contracts Intended for Small Businesses

Some U.S. lawmakers want the government to investigate whether large businesses intentionally misrepresented themselves in order to win federal contracts. The request comes after Democratic Party Congressional investigators found billions of dollars in government contracts that were meant to help small businesses were given to some of the biggest companies in the world.

Companies cited in a congressional probe by Democratic Party members include the likes of AT&T, Rolls Royce, and Microsoft -- hardly the kinds of businesses anyone would call small.

New York Congresswoman Nydia Velazquez says they were among the companies receiving nearly $12 billion in small business contracts last year. "It illustrates the continual disconnect between what this administration says and what is actually happening for this nation's entrepreneurs."

The allegation stems from a report by the Small Business Administration (SBA). It says the government exceeded its own goals - awarding small businesses 25 percent of last year's $300 billion worth of federal contracts.

A Democratic Party report says the figure is actually 21 percent -- because some of those contracts went to large companies.

Guam's delegate to Congress, Madeleine Bordallo, says the Pentagon was one of the worst offenders. "America's small businesses are definitely being shortchanged. The Department of Defense controls 70 percent of the federal government's contracting dollars. It controls the vast majority of the federal marketplace in my district, the Territory of Guam. But according to this report, $8 billion of Department of Defense contracting money was provided to large businesses but listed as going to small business."

The Democratic report says more than 2,500 large firms were given small business contracts, including: defense contractor Northrop Grumman, which received $90 million; British automaker Rolls Royce, $2.2 million; and software-maker Microsoft, $1.5 million.

SBA officials defended the government's accounting figures. It says some large businesses were given contracts because they acquired small businesses that had multiple year contracts.

The Senate Committee on Small Business says it will ask the Government Accounting Office to investigate.