Fortune 500 Companies Are Getting Billions From Federal Small Business Contracts
Fortune 500 firms and other large companies swept up billions in federal small business contracts last year, including companies like Apple, Verizon, General Electric, and Boeing.
A total of 151 Fortune 500 firms landed government and small business contracts in 2015, according to an analysis of federal procurement data by the American Small Business League.
Verizon (VZ), No. 15 on the Fortune 500 list, brought in over $108 million in small business contracts through their subsidiary Terremark, the report found. Meanwhile, Apple (AAPL) (No. 5 on the Fortune 500) pulled in over $640,000, General Electric (GE) (No. 8) received over $883,000, and Boeing (BA) (No. 27) got nearly $986,000.
Small business fund misallocation has long been a problem within the federal government. The Government Accountability Office launched its first investigation into the issue in 2003 and found that over 5,300 large businesses had received contracts meant for small operations. Since then, the issue has continued to capture lawmakers’ and advocates’ attention.
“The agency faces a number of challenges in carrying out its mission, including fraudulent schemes affecting all Small Business Administration programs, significant losses from defaulted loans, procurement flaws that allow large firms to obtain small business awards, excessive improper payments, and outdated legacy information systems,” said SBA Inspector General Peggy Gustafson in her semi-annual report to Congress in 2013.
The revelation comes after the federal government crowed about hitting its small business federal contracting goal for the second consecutive year in 2015. The federal government awarded 25% of federal contracts to small businesses (thaat share doesn’t include overseas contracts). A total of $91.7 billion in federal contracts were distributed to small businesses.