SBA's Inspector General did a report, including this:
The audit also found a glitch in reporting large businesses working for small businesses on procurements. The report said there are no requirements or mechanisms to measure small business awards that are subcontracted to large businesses.
It's an instance ofthe "golden rule" in government--those who have the gold, rule. Over the years I've become convinced that, at least in the American system of government, the elite, the wealthy, can and do over time figure out how to evade and/or take advantage of well-intentioned rules and programs. This is an example:
SBA is required by law to designate "small businesses" owned by women, minorities, and those with disabilities, and agencies are required to give preference in contracting to these small businesses. So when a project is big, the small business bids and then subcontracts the work out to the big business. That happened on several IT projects I was involved with during my career. That's a legal way to take advantage of the rules. Alaskan tribal enterprises are one category of such owners.
I'm not sure there's a solution. Part of the problem is that "do-gooders" (like me) get aroused around an issue and get enough power to pass a law/put a program in place, but we assume the law will be self-executing, will be implemented as intended, and other parties won't have the brains and money and incentive to act to manipulate the situation.
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