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What IS a small business?

(AP (file))
There are more contracting problems for Gulf Coast reconstruction. Democrats on the House Small Business Committee say a total of $67 million in Katrina contracts were awarded to hundreds of large companies including Weyerhaeuser, CompUSA and Lowe's Home Improvement but federal agencies LISTED them as "small businesses". Members of congress held a hearing in New Orleans Thursday to address the issue.

The Small Business Administration (SBA) says 29% of all Katrina government contracts went to small businesses nationwide, which exceeds the federal requirement of 23%.

Kenneth Edmonds owns River Parish RV in La Place, Louisiana and was disappointed when he was rejected by FEMA for a trailer bid because his quote was too high. The FEMA rejection letter he received mentioned the eight companies who won trailer contracts. The letter also indicated Edmonds had no recourse, "No response is required unless a basis exists to challenge the small business size status of the apparently successful efforts." But one of the eight companies listed in the letter – PRI/DJI of San Diego California – is a subsidiary of the multi-billion dollar company Fluor Corporation headquartered in Texas.

Edmonds says he has no sympathy for those who say contracting mistakes are attributed to the chaos of the storm's aftermath, "That would be like saying you are shooting at a target and because of being distracted you missed the whole bullseye. In this case," he says, "FEMA missed the whole barn."

Last fall the House Oversight and Government Reform Committee identified federal contracts totaling over $8 billion that have "experienced significant overcharges, wasteful spending or mismanagement."