Small Business Contracts: How Oversight Failures and Regulatory Loopholes Allow Large Businesses to Get and Keep Small Business Contracts

Since 2005, the Inspector General of the Small Business Administration (SBA) has listed as one of the agency’s top management challenges the fact that large firms are obtaining small business contracts and agencies are counting contracts performed by large businesses toward their small business goals. According to the Inspector General, many contract awards recorded as going to small businesses are actually performed by large businesses. The purpose of the hearing was to examine the ways in which large businesses are obtaining and performing small business contracts. The hearing also assessed the steps taken by the SBA to improve their oversight in this area and the reasons why the SBA and other agencies have failed to implement the Inspector General’s recommendations. The hearing also examined what legislative and regulatory steps may be necessary to address these issues.