Bailout Bill Needs New Language to Stop Billions in Contracting Abuses

Bailout Bill Needs New Provisions to Redirect Billions To Middle Class Firms

Petaluma, Calif. - In March of 2005, the Small Business Administration (SBA) Office of Inspector General issued Report 5-15, which stated, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards."

Since the purpose of the "bailout bill" is to bolster our nation's economy, wouldn't it make sense to include a simple and easy provision that would solve a major and longstanding problem within the federal contracting system and redirect up to $100 billion a year in federal small business contracts back into the hands of legitimate and hardworking middle class firms?

The Small Business Act defines a small business as a firm that is "independently owned." Legally, the term independently owned is defined as a firm that is not publicly owned or traded. The addition of a single sentence to the bailout bill could redirect billions of dollars in federal small business contracts back to the very middle class firms the bill is supposed to ultimately rescue. This single sentence would also finally bring an end to years of abuses in federal small business contracting programs.

The sentence should read, "As of January 1st, 2009, the federal government will no longer report awards to publicly traded firms as small business awards."

The addition of this sentence would be a simple and easy solution to the diversion of hundreds of billions of dollars in federal small business contracts to large corporations, and it would provide small businesses and the middle class economy with a much-needed boost.

Since 2003, 15 federal investigations have all found that billions of dollars in federal small business contracts have actually gone to hundreds of the largest corporations in the United States and Europe. In fact, some of the firms federal investigators identified as recipients of federal small business contracts were: Rolls-Royce, Lockheed Martin, Boeing, Raytheon, General Dynamics, Northrop Grumman, Xerox, Dell, John Deere, Microsoft, Titan Industries, British Aerospace Engineering (BAE) and Dutch conglomerate Buhrmann NV.

It is time for this problem to be solved and through the bailout bill a solution could be easily achieved. If government investigators are right, up to $100 billion a year is being pulled out of the middle class economy. It's time for Senator Barack Obama (D - IL), Senator John McCain (R - AZ) and members of Congress to give America's 27 million small businesses more than just lip service.

If Congress really wants to stabilize and bolster our nation's failing economy, let's put $100 billion a year in federal small business contracts back in the hands of the middle class firms where most American's work.


-###-



Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575