Small defense contractors are up in arms over new legislation that would allow senior Department of Defense (DoD) officials to create a secret “blacklist” that could exclude some contractors from federal programs.
The National Defense Authorization Act for Fiscal Year 2011, which Congress is considering now, would allow “de facto” exclusions of small businesses from participating in DoS contracting programs, which could affect all federal government contracting programs.
Small business advocates say this would exclude contractors from federal contracting programs without due process and could lead to the contracts going primarily to a small number of large companies.
“This blatant power grab by the Pentagon puts America’s 27 million small businesses directly in the line of fire,” said Lloyd Chapman, president of the American Small Business League (ASBL). “We should be protecting the nation’s small businesses by building more government accountability, not chipping away at it. This is yet another move by the federal government to exclude small businesses from the federal government’s contracting processes.”
The federal government has a congressionally mandated goal of awarding 23 percent of its purchases to small businesses. Yet the ASBL estimates that the federal government is off by more than 18 percent due to the continued diversion of federal small business contracts to large corporate companies.
Since 2003, more than a dozen federal investigations found that billions of dollars in federal contracts intended for small businesses instead went to larger businesses. The ASBL estimates that each year, more than $100 billion in federal small-business contracts are diverted away from small companies, which instead go to large companies such as Boeing, Lockheed Martin and Northrop Grumman.
Last year, small businesses lost out on even more contracts when a congressional investigation found that 10 small companies defrauded the government out of $100 million contracts set aside for service-disabled veterans.
