When the U.S. Small Business Administration released its annual report in August, saying that the government had spent $10 billion more on contracts with small businesses than it had the year before, it looked like good news for small business owners. But some reports indicate that the math the SBA uses to calculate their figures is deeply flawed.
Ian Mount, reporting for CNN, says that the government's numbers include contracts awarded to "small businesses" like the two billion-dollar corporations that received the most small business money from the government last year, skirting the regulations by using small subsidiaries to bid for contracts.
Some small business groups are angry with the government for spending money on big corporation, arguing that the 1997 law that stipulates that 23 percent of government contracts must go to small businesses is being circumvented. Lloyd Chapman, the founder of the American Small Business League, has sued the government on multiple occasions, and recently got 600 companies removed from the SBA's list of approved contractors.
Advocates say that more stringent oversight is needed to ensure that the small businesses the government spends 23 percent of its annual contracting budget on are, in fact, small.
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