GSA Scandal Reveals Small Biz Not Getting Contracts

Small businesses are suffering from the latest government spending scandal. The General Services Administration (GSA) has come under heat recently for its spending practices and in its processes for awarding government contracts.

Many of the government contracts mandated for small businesses were instead diverted to larger businesses, according to The Washington Post.

The accusations arose based on a Las Vegas event two years ago. At the "Western Regions" training conference. The inspector general's report showed that the government spent over $822,000 on the conference, with included 300 attendees. According to the report, $75,000 was spent on team building exercises, $6,000 on commemorative coins and $6,000 on canteens, reports CNN.

There was even money spent on hiring a clown for entertainment.

The problem most relevant to small businesses relates to the contracting practices of the GSA. While the GSA is required to award 23 percent of contract dollars to small businesses annually, the recent data showed that they were not in compliance. In 2011 alone, 72 percent of the government contracts were given to large companies.

Other allegations of misconduct include the procedures for receiving bids. The inspector general reported that the agency failed to publish a solicitation contract on the government's list of Federal Business Opportunities.

Such cracks in the system are causing problems for small businesses. The Obama Administration has attempted to mitigate the problem by creating an inter-agency task force to increase government work contracted to small businesses.

A full congressional hearing will take place this week on spending allegations of the GSA.

Related Resources:

• Sources of Small Business Financing (FindLaw)
• General Services Administration (Homepage)
• Deeper investigation of GSA spending needed, lawmaker says (CNN)
• A GSA Music Video Wows D.C. (The Wall Street Journal)