Small Business Contracts
Awarded To Large Corporations

According to The New York Times, the Interior Department and the Government Accountability Office (GOA) in recent reports found that contracts listed as going to small businesses actually went to a dozen Fortune 500 corporations, including John Deere Company.

The report, based on a sampling of the department’s small business contract awards in fiscal years 2006 and 2007, said no fraud was found but that large businesses received the contracts because of data entry errors, incorrect data and failure by contracting officials to verify the actual size of the business. Corporations also appeared to have misrepresented themselves as small businesses on the federal contractor database, the article said.

Congress has required that 23% of all federal contracts, which total more than $400 billion annually, be set aside for small businesses. Agencies are required to state whether they have met their annual contracting goals. But several inquiries, including one by the GAO in 2003, have raised questions about their accuracy.

John Deere, reportedly won more than $617,000 in small business contracts from the Interior Department in 2006 and 2007. The company has over 52,000 employees and revenue nearing $23 billion last year. The government database listed Deere as having $2 million in annual revenue and under 500 employees. (The government defines a small business as one with fewer than 500 employees.)

Deere said they were moving to correct those errors, and Senator John F. Kerry (D-MA) who heads the Senate Committee on Small Business and Entrepreneurship, called for all federal agencies to audit their small business contracting practices. ?