Corporate Giants Get Millions in Federal Small-Business Loans

ByABC News via logo
July 26, 2006, 7:02 AM

July 26, 2006 — -- Some of the biggest and richest companies in the world, including Microsoft, AT&T Corp. and Rolls Royce, have qualified for what could add up to as much as $12 billion worth of small-business contracts from the federal government.

Democratic congressional investigators are asking why in a report they're releasing today.

The legislators allege a myriad corporate giants were wrongly awarded millions.

"They didn't have any right to accept any contract that was supposed to go to a small business, and that is the reality here," said Rep. Nydia Velazquez, D-N.Y.

Microsoft won eight small-business contracts from the federal government, worth $1.5 million; Rolls Royce won $2.2 million in contracts; AT&T, $5 million.

Defense contractor Northrop Grumman was granted a whopping $90 million in small-business contracts from Uncle Sam.

In a statement, Northrop Grumman -- the only corporation to respond so far to the report -- said, "We do not seek any dollars intended for small businesses."

Meanwhile, Republicans on the small-business committee call the investigation a "purely political exercise."

They contend that small businesses often outgrow their small-business status after receiving federal money.

That doesn't fly with Susan Hughes, who runs a company out of her Virginia home. She applied for a federal contract, which she says went to a larger business.

"I would tell a small business that wants to stay in business to stay away from the federal government and its programs," Hughes said.