Fraud and Abuse Investigation Affecting Small Businesses Requested at Senate Confirmation Hearing for SBA IG and Chief Counsel for Advocacy

IG Complaint Filed including Ten Areas of Concerns Cited

Saint Augustine, FL, August 10, 2009 --( Senate Small Business Committee Members, at the urging of advocates, questioned the incoming SBA IG, Peggy Gustafson, and the new Chief Counsel for Advocacy, Winslow Sargeant, on recent complaints of fraud and abuse at their confirmation Hearing on August 6th.

The Fairness in Procurement Alliance (FPA) had just filed an official complaint (Case # 20090226) – with widespread community support - demanding an OIG investigation into various instances of Fraud and Abuse which fall under the government self-imposed $100K threshold.

FPA has criticized this limit because most of the contracts reserved for small businesses fall in that category and such self imposed limit prevents leveling the playing field in government contracting. Below is a link referencing the FPA announcement:

FPA filed the request on behalf of a constituency of 10 million small and disadvantaged businesses and trade groups whose procurement interests FPA represents. Raul Espinosa, FPA founder and spokesperson said, “FPA has asked Congress to put pressure on Government Officials to address bureaucratic blunders which – for over a decade - have limited small business participation and have allowed large businesses to maintain their monopoly over government procurement.”

Espinosa added, “Small and disadvantaged businesses must achieve ‘maximum practicable utilization’ as Congress intended to give them through P.L. 95-507. These new SBA officials must go on record with a plan to eradicate the abuses cited [1].”

Below are the key areas that need to be addressed:

1. Large fines and/or debarment for ‘size misrepresentation.’
2. Preventing Agencies from taking credit for restricted contracts awarded to large businesses.
3. Feasibility of using large fines to fund a ‘legal center’ in the private sector to protect small businesses.
4. What to do about the 47 muti-billion firms which have taken $3.1B in FY08 in restricted contracts.
5. Isolation and protection for all restricted solicitations as conceived by The Umbrella Initiative[2]
6. Revamping and Strengthening Size Protests to make sure they do offer justice and compensation.
7. Eradication of the abusive procurement practice referred to as ‘unfair end-user justifications.’
8. Bringing clarity to the statutory small businesses priority issue over all federal programs.
9. Removal of the ‘illegal exemptions’ (i.e., GSA and Foreign) from the FAR.
10. Needs for disparity studies and contracting data with which to support disadvantaged biz programs.


The Fairness in Procurement Alliance (FPA) represents the procurement priorities of a constituency of 10 million disadvantaged businesses. Its mission is to bring fairness to public procurements so that small and disadvantaged businesses can both compete and prosper at the federal, state and local levels.

[1] How to End Procurement Abuse. -
Latest example -
White Paper on Size Protests.-
Contracting Abuse at the Air Force.-
The Contracting Abuse Resolution Board Concept.-

[2] The FPA-UNF Umbrella Initiative. -
Fairness in Procurement Alliance (FPA)
Raul Espinosa