WASHINGTON - Senator John Kerry today sent a letter to Attorney General John Ashcroft and Small Business Administration Inspector General Harold Damelin calling for an expanded investigation into reports that large, well-known businesses were falsely identifying themselves as small businesses for the purpose of competing for federal contracts. Kerry's call for an expanded investigation stems from a report that surfaced in early May of this year, which made the claims.

The focus of the report is an online small business system called Pro-Net, a database where federal contractors can find data on small businesses that make everything from napkins to missiles. The report found that large businesses have been registering themselves on Pro-Net as small businesses in order to solicit goods and services to federal contractors. The five large businesses mentioned in the report apparently received through the network contracts totaling $1.1 billion in 2001, including $460 million as small business awards.

In his letter, Kerry stated: "The current situation is robbing small businesses of hundreds of millions of dollars worth of federal contracts they deserve. If this nation is going to effectively recover from this time of economic stagnation and rising unemployment, it is essential that the federal government do everything within its power to support the growth and development of small businesses, the nation's job creators.

"I am sending this letter on behalf of the thousands of small businesses who were robbed of more than $460 million in federal contracts by big businesses who blatantly lied to the federal government."

The Small Business Act imposes a penalty of $500,000 or up to 10 years in prison for any company that knowingly misrepresents its status as a small business concern, HUBZone small business concern, or a socially and economically disadvantaged business concern.