John Kerry" The Bush Administration Gives Small Business the Shaft

A new report by the GAO obtained by AP News on Thursday shows that small businesses lose out on hundreds of millions of dollars in contracts from the Energy Department each year. Instead of awarding some of contracts to small businesses, the government often gives "no-bid work to large firms on flimsy grounds, congressional auditors say." The report looked at small business contracting practices at the Energy department, "whose $22.8 billion in annual awards for research, nuclear weapons maintenance and environmental cleanup make it the largest civilian contracting agency."

The Energy Department actually failed to meet small business contract goals by 5.5 percent or lower in four out of the last five years. The reasoning behind this loss of contracts for small businesses -- "lack of controls, poor planning and questionable assumptions that smaller firms couldn't handle the jobs." Or to put it bluntly, the Bush administration prefers to favor large corporations and friends like Halliburton.

AP reports that the 39-page report is scheduled to be released next month. The reports shows that the Energy Department "is clearly constrained by the department's traditional reliance on a limited group of large firms and universities to manage high-cost projects in which public safety and national security are important concerns."

When asked about the report, John Kerry, D-Mass., the Ranking Member on the Senate Committee on Small Business and Entrepreneurship, said, "This administration gives big businesses all the breaks and gives small businesses the shaft.''

"We need to break down big contracts so small businesses can get a piece of the federal pie,'' he said. "This is evidence of a systematic failure by the Bush administration to look out for small businesses, let alone level the playing field.''

The report also notes that "Energy officials gave small firms work mostly in dwindling, noncore areas such as legal services and construction, rather than research and waste cleanup, where most of the contract dollars lie."

Small firms also were typically given subcontracts, which are labor-intensive but much less profitable because of the cuts taken by the large prime contractors.

As a result, the agency missed contracting goals in four of the last five years, leading to missed opportunities for small businesses totaling more than $970 million, auditors said.

The Federal Procurement Data System government database shows that in recent years, "about one-third of total contracts were handed out on a no-bid or limited competition basis."

The GAO audit comes in the wake of increased scrutiny of federal contracting -- due to pressure from John Kerry and the Senate Committee on Small Business and Entrepreneurship, "particularly in the Hurricane Katrina response and rebuilding effort."

Earlier this month, the GAO found the government wasted millions of dollars on 13 major Katrina contracts - most of which were awarded based on limited bids - that went to large firms with extensive government ties.