Judge Orders SBA to Comply with FOIA Request

What’s in the final report released last year by the Small Business Administration’s (SBA) Office of Advocacy that they don’t want the public to see? The American Small Business League (ASBL) would like to know, too. They requested a copy of the report under the Freedom of Information Act (FOIA). The SBA denied the request. On April 29, a judge ordered the SBA to turn the report over.

The court order was the result of a complaint filed on October 6, 2004 in the U.S. District Court for Northern California by the ASBL. The complaint alleged that the SBA had received the final draft of the report, detailing how large companies won contracts intended for small businesses, in November 2003 but had not released it. The version that was released in December, according to the complaint, was a draft report, not the final report.

The SBA had sought a summary judgment in the case, claiming the report was part of a deliberative process and therefore exempt from the FOIA. Judge Susan Illston strongly rejected the SBA’s arguments and ordered the report be turned over to the ASBL within 21 days. The SBA is considering appealing the decision.

The edited draft of the report released in December acknowledged that small business contracts had been awarded to “small businesses” like Raytheon Co., BAE Systems, Northrop Grumann Corp., Hewlett-Packard and others. A total of 44 large companies were awarded roughly $2 billion in small business contracts in 2002, according to the edited report, however, nearly 600 large companies were removed from the SBA small business database after an investigation by the ASBL discovered them. The draft of the report released in December found no wrongdoing by the large companies, blaming, instead, regulatory loopholes and coding problems, among other issues.

The Small Business Act of 1953 requires 23 percent of prime federal government contracts be awarded to small businesses. Each year, Congress sets goals for small business participation and reviews how close each federal agency and department came to reaching those goals the previous year. Agencies are encouraged to restrict bidding on some contracts to small businesses. The open question, even with the release of the edited report, is whether large firms intentionally misrepresented themselves and their size in order to bid on and win some of the contracts set aside for small businesses.

It is a question the ASBL hopes the final version of the report the court ordered released will answer.

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