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Wednesday, October 1, 2008

Bailout Plan May Include Anti-Small Business Language

The following was release was distributed by the American Small Business League On October 1, 2008.

The Bush “bailout bill” includes some suspicious language that has small business advocates concerned. The Bush Administration has been persistent in its efforts to dismantle federal small business contracting programs and to divert those funds to big businesses. During his tenure, President Bush has cut the Small Business Administration’s (SBA) budget in half, and cut funding and oversight for every program assisting small businesses, including woman, minority and veteran-owned firms. (

The American Small Business League (ASBL) contends that language within the bailout bill seems out of place, extremely vague and overly broad. As a result, the legislation would give the Secretary of the Treasury a blank check to waive any section of the Federal Acquisition Regulations (FAR) he deems appropriate.

Section 107 of H.R. 3997, which addresses contracting procedures states, “For the purposes of this Act, the Secretary may waive specific provisions of the Federal Acquisition Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the public interest.” The House of Representatives defeated H.R. 3997 Monday with a 228-205 vote. However, the ASBL is concerned that as Congress moves to address the current financial crisis, a second incarnation of H.R. 3997 may be adopted with similar language.

During the last thirty days alone, Bush officials at the SBA have suspended taking applications for the Small Disadvantaged Business (SDB) contracting program, refused to release the government’s small business contracting statistics for fiscal year 2007, which ended a full year ago and appealed a Federal District Court ruling requiring them to release the names of firms that received federal small business contracts during FY 2005 and 2006. (

If the Bush bailout bill were to become law with the language of Section 107 in place, Bush officials would have the legal power to ignore the sections of the FAR that stipulate federal contracting opportunities for small businesses, woman-owned firms, minority-owned firms and veteran-owned firms. Federal agencies and prime contractors could be allowed to completely ignore the federal government’s small business contracting goals. Section 107 does not contain any stipulation on how long the “wavier of specific provisions” could last. The federal government’s ability to exclude small businesses could last years, and middle-class firms could continue to lose billions of dollars in government contracts and subcontracts.

The ASBL predicted the Bush Administration would try to intensify its efforts to dismantle and weaken federal small business contracting programs as the administration entered its final months. (

To date, 15 federal investigations have all found that during the Bush Administration, hundreds of billions of dollars in federal small business contracts have been diverted to some of the largest corporations in the World. ( In addition, CBS, ABC and CNN have all done investigative stories on the issue. (

“Not only does this bill not contain any provisions that specifically help small business, it has provisions that could actually harm middle class firms. The language in Section 107 of the bill is totally inconsistent with the stated objectives of this legislation,” ASBL President Lloyd Chapman said. “It is clearly not necessary to suspend federal acquisition law to bail out Wall Street and the financial industry. I am very concerned the Bush Administration included that language to give them the authority to further dismantle federal programs designed to assist small businesses. We got into this situation because of a lack of proper regulation and now the same people that are responsible for these staggering economic problems want to be able to ignore any sections of federal contracting law they deem necessary. George Bush has proven time-after-time that he cannot be trusted especially when it comes to small business issues.”


Christopher Gunn
Communications Director
American Small Business League
(707) 789-9575

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