As $640 Billion in Contracts is Diverted from Small Businesses, SBA Calls Federal Exemptions Illegal

According to the Fairness in Procurement Alliance (FPA), the SBA (Small Business Administration) passed an historic legal precedent which will benefit minority and small business to contract with the federal government. The ruling states that the GSA (General Services Administration) has to adhere to rules for contracts between $3,000 and $100,000. The GSA ignored rules under its schedule program for years. The GSA claimed unfair exemptions for large businesses which made it difficult for small or minority businesses to compete for government contracts.

Raul Espinosa, the founder of FPA, said that the new 'Regulatory Review and Reform Initiative' will rescind these exemptions.

John Mica, a Congressman, wrote letters to the Director of the OMB (Office of Management and Budget) demanding an investigation of the allegations sighted by Mr. Espinosa and the FPA. In addition, Thomas Davis III, Congressman and Ranking Member of the House Committee on Oversight and Government Reform also wrote letters to the OMB requesting that the OMB's procurement practices be reviewed.

Espinosa says that $640 Billion in Federal contract monies over the past decade have been illegally excluded from small and minority businesses.

The Department of Energy, the Transportation Security Administration, the Postal Service and overseas contracts by the State and Defense Department have been cited as organizations that have been exempt from the Small Business Act. On January 15, 2005 in a letter to Senator Olympia Snowe and Senator John Kerry, and The Department of State Secretary Powell, the Senate Small Business Committee said that the Executive Departments do not have the right to interpret the law with regards to government procurements.

President and CEO of the Minority RoundTable (MBRT), Roger Campos, who is also a member of the SBA National Advisory Board, said that the new ruling will free $60 Billion for annual contracts for small businesses.