Richest Corporations Received Millions of Dollars in Small Business Contracts

Friday, September 27, 2013
Lockheed Martin CEO Marillyn Henson

Some of the wealthiest companies in America are reaping million-dollar government contracts that are supposed to go to small businesses.


The American Small Business League (ASBL) says in a new report that 235 companies listed in the Fortune 500 received hundreds of millions of dollars in small business contracts during the last two fiscal years (2012 and 2013).


The ASBL, which has complained for years about small business contracts going to big corporations, pointed out that many of the Fortune 500 companies are double dippers—meaning they’ve been awarded federal deals for both large and small businesses.


Lockheed Martin is one example. Ranked 59th in the Fortune 500, Lockheed is the federal government’s largest vendor, which didn’t stop it from collecting more than $110 million in small business contracts in FYs 2012 and 2013.


General Dynamics (98th in the Fortune 500) accepted more than $215 million in small business contracts, while operating as the fourth largest federal contractor.


In fact, 71 of the top 100 small business contractors in FY 2012 were actually large companies that enjoyed a total of $9.5 billion in small business awards, according to ASBL.


Large companies continue to win small business contracts as a result of businesses lying about their size, and government agencies doing a poor job of screening contractors, according to 2011 report (pdf) by the Small Business Administration’s (SBA) Office of Inspector General.


The ASBL has also charged the SBA with “rampant fraud,” claiming that it has “intentionally falsified the volume and percentage of federal contracts awarded to small businesses.”


The Small Business Act of 1953 (pdf) requires that, on an annual basis, the federal government must spend 23% of all federal prime contracts dollars with small business.

-Noel Brinkerhoff


To Learn More:

Nearly Half of Fortune 500 Gets the (Small) Business (by Neil Gordon, Project On Government Oversight)

Fortune 500 Companies Labeled as Small Businesses to Fraudulently Receive Federal Small Business Contracts (American Small Business League) (pdf)

Small Businesses Mostly Off the Radar for Energy Department Contracts (by Noel Brinkerhoff, AllGov)

Large Corporations Continue to Grab Contracts Meant for Small Businesses (by Danny Biederman and Noel Brinkerhoff, AllGov)

Obama Administration Allows Bigger Businesses to Qualify as Small Businesses (by David Wallechinsky and Noel Brinkerhoff, AllGov)


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