Big problem for small business

Dan Grech Jul 26, 2006


SCOTT JAGOW: The government claims it’s giving a certain percentage of federal contracts to small businesses. But a report out this morning says some of those contracts are actually going to companies like Wal-Mart, ExxonMobil, Microsoft. This report from House Democrats says last year, $12 billion went to the biggies instead of the little guys. More now from Marketplace’s Dan Grech.

DAN GRECH: 23 percent of government contracts are supposed to go to small firms. The idea is to level the playing field.

But the House Democrats report that a lot of small business contracts are going to big businesses such as Rolls Royce and Google.

Ron Utt with the Heritage Foundation says that these are bureaucratic flaws and nothing new.

RON UTT: “What we have it seems is mistakes in coding by staff at the various agencies that are doing these contracts. Or at least that’s one way to look at it.”

Kate Davis has another way. She’s a spokeswoman for the Democratic side of the House Small Business Committee.

KATE DAVIS: “The fact that they’ve seen a 500 percent increase in miscoding over the past four years leads them to believe that obviously something intentional is taking place here.”

Democrats are asking for the Government Accountability Office to investigate this miscoding to see if it’s fraud or just honest mistakes.

I’m Dan Grech for Marketplace.

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