MONEY AND WORK

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May 6, 2009

CAN SBA HANDLE SMALL BUSINESS STIMULUS PACKAGE

New America Media -The $787 billion stimulus package signed into law in February has reignited concerns among some small-business owners and advocates, who question whether the U.S. Small Business Administration is prepared to handle the massive expansion of lending and investment programs.

The government's goal to award almost one quarter of its contracts to small businesses should mean plenty of work for the sector that generates six out of 10 of the country's new jobs. But these days optimism is quickly replaced by frustration. That's because many entrepreneurs are skeptical these contracts will actually go to small firms. They point to widely reported cases in which large companies have obtained small-business contracts through loopholes, government mismanagement, and even fraud. . .

The SBA manages and oversees the procurement process across the federal government, including contracts tailor-made for small companies and disadvantaged and minority-owned businesses.

It negotiates small-business contracting goals with federal agencies, and then tracks their progress.

But the SBA's Inspector General and other studies have shown that management flaws have allowed large firms to receive small-business awards. A Washington Post analysis in October revealed that federal agencies made at least $5 billion in mistakes in their procurement reports, listing companies such as Lockheed Martin and Dell Computer as small. (The firms denied it was their fault).

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