October 6, 2011
The Washington Post
Robert O'Harrow Jr.,

Small government contractors often violate regulations by passing on most of the work and profits to large businesses, a practice that crowds out legitimate small businesses from the federal market, according to a House oversight panel Thursday.

“When a prime contract is set aside for a small business, the government wants to make sure that the small business is not simply a front for a large business, so the Small Business Act requires that the small business perform a certain percentage of the work,” said Rep. Mick Mulvaney (R-S.C.), chairman of the subcommittee on contracting and workforce.

The hearing focused on contracts in which government investigators have concluded that subsidiaries of Alaskan native corporations passed on the bulk of more than $1 billion worth of work to subcontractors.

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