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Big Firm Gets Small Business Contracts

The Washington Post released an investigation reporting that massive Virginia firm MicroTechnologies has been using a little-known contracting method to rake in millions of dollars of contracts designated for small businesses from the Department of Veterans Affairs (VA).

How did MicroTech manage this? By claiming to still be a small business as they grew and grew. VA officials told the Post they believe contractors are operating in good faith and simply don’t have enough workers to check companies closely.

From The Washington Post:

In mid-2010, MicroTech received an award for companies with revenue of $50 million to $250 million from an industry magazine called CRN. In applying for the award, MicroTech’s chief financial officer submitted a notarized letter claiming gross revenue of $185 million in the previous year, the magazine told The Post.

But in 2010, MicroTech certified to the government that it still qualified for contracts reserved for firms earning $25 million or less.

“The government’s own contracting data show that MicroTech’s annual revenues far exceeded that small-business size standard,” said Paul Murphy, a senior data analyst at Bloomberg Government, which provides industry analysis for businesses.

Read the rest of the investigation at The Washington Post.

Unfortunately, the flow of small business contracts to large companies is nothing new. In September, the Project On Government Oversight reported that the American Small Business League claimed 235 companies in the Fortune 500 received small business contracts in 2012 and 2013. Those companies include some of the government ‘s largest vendors, including Lockheed Martin and General Dynamics.


By: Avery Kleinman
Former Beth Daley Impact Fellow, POGO

Avery Kleinman At the time of publication, Avery Kleinman was the Beth Daley Impact Fellow for the Project On Government Oversight.

Topics: Contract Oversight

Related Content: Veterans Affairs, Contractor Accountability, Federal Contractor Misconduct, Competition in Federal Contracting

Authors: Avery Kleinman

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