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Friday, April 18, 2008

Democrats Push Bill That Would Hurt Small Businesses

This is a great post from Abby Prince at Click Here to read more.

Just in Time for Small Business Week, Congresswoman Velazquez Hands Venture Capital Firms a Billion Dollar Gift

Yesterday, in yet another move in a long line of disappointments, Chair of the House Committee on Small Business, Representative Velazquez (D-NY) introduced a new bill, H.R. 5819, the “SBIR/STTR Reauthorization Act,” which will open up federal small business programs to allow venture capital firms access to billions of dollars in federal money that is meant for small businesses.

On the eve of Small Business Week, which is next week, Chairwoman Velazquez has successfully handed venture capital firms a gift that will amount to billions of dollars. Unfortunately, this gift will come at the cost of legitimate small businesses that will now have to compete against billionaires venture capital firms for valuable SBIR money.

Last year, Velazquez pushed through H.R. 3567, the “Small Business Investment Expansion Act,” which contained almost verbatim the same provision as Title II of H.R. 5819. The ASBL led the successful opposition to H.R. 3567 and was joined by the White House, the U.S. Chamber of Commerce, NFIB, and numerous other small business groups and was able to stop H.R. 3567 in the Senate.

This makes me wonder why the Chair of the House Committee on Small Business keeps introducing legislation that will effectively harm small businesses while allowing venture capital firms access to billions of dollars in federal small business money. For the second time in less than a year, Velazquez has stated publicly that the National Venture Capital Association, a group that has supported her by funding her re-election campaigns, supports both H.R. 5819 and H.R. 3567. Question answered.

Now to add insult to injury, it has just been announced that President Bush will appoint SBA Administrator, Steve Preston to head the Department of Housing and Urban Development (HUD). While HUD has been mired in scandals under former Secretary Jackson, Preston’s appointment seems to fall in line with previous appointments made by Bush, where the prime qualification seems to be loyalty over competence- does anyone remember “Brownie, you’re doin’ a heck of a job?”

Preston took over as Administrator of the SBA in 2006, and since then he has presided over a 100 billion dollar giveaway in small business contracts to some of the largest firms in the United States and Europe.

Thursday, April 17, 2008

H.R. 5819, the “SBIR/STTR Reauthorization Act”

Today, H.R. 5819, the "SBIR/STTR Reauthorization Act," was marked-up in the House committee on Small Business. The Bill which was introduced by Congresswoman Nydia M. Velázquez (D - NY), contains a provision that changes the definition of a small business from the current definition of "independently owned" to include businesses owned up to 49.9 percent by a venture capital firm. Title II of the act amends Sec. 9 (e) of the Small Business Act, which is specific to the SBIR program. It is our understanding that the bill limits venture capital participation in a small business concern to the SBIR program. However, it appears that the change creates a dangerous precedent for venture capital participation in other small business programs. If the definition of a small business is amended to include SBIR participation, even for the purposes of SBIR, legislators are opening the door for venture capital participation in other small business programs.

Additionally, according to the bill would, "reauthorize the programs through 2010 and would give Congress time to examine how the programs are working. The bill also would increase funding levels, raising Phase I awards from $100,000 to $300,000 and Phase II awards from $750,000 to $2.2 million, to reflect the rising costs of high-tech research. The authorization also increases the SBIR program's flexibility by allowing cross-agency awards, letting applicants apply directly for Phase II funding, and loosening eligibility for awards to include small businesses that are backed by venture capital funding. The bill expands the requirements for databases of recipients and it requires interoperability and accessibility between databases in order to allow for better congressional oversight." (

Please visit the following link to watch a clip of the mark-up of H.R. 5819 in the House Committee on Small Business:

Please click here to view a copy of the bill:

Wednesday, April 16, 2008

Today: House and Senate Hearings Ignore Diversion of Federal Small Business Contracts to Large Firms

Post by: Kevin Baron, ASBL Team Member

Today, the House Committee on Small Business, Subcommittee on Contracting and Technology will hold a hearing on “Ensuring Small Businesses Have Fair Access to Federal Contracts” While the witness list consists of a well-rounded group that includes Chris Bates from the National Office Products Association (NOPA), Margaret Dorfman from the U.S. Women’s Chamber of Commerce, Faye Ott from the SBA as well as others, there is not a single witness that will be discussing one of the most pressing issues facing small businesses in the federal contracting arena today- the diversion of billions of dollars a year in federal small business contracts to large and Fortune 500 firms.

Report 5-15, released by the SBA Inspector General in March of 2005 stated, “One of the biggest challenges facing the Small Business Administration and the entire federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards.”

Today’s hearing in the House should provide for the examination of several important issues that face small businesses trying to work with the federal government, but unfortunately the hearing will ignore the 800-pound gorilla in the room. Last year alone, roughly $60 billion in federal small business contracts went to some of the largest firms in the United States and Europe, yet the Subcommittee on Contracting and Technology will ignore the single largest problem facing small businesses, and focus on issues that stem from this problem- this is like trying to heal a bullet wound with a band-aid. This makes me wonder why the Committee will not address this issue head-on, what are they afraid of?

In related news, the Senate Committee on Small Business and Entrepreneurship will hold a hearing today to examine how the recent credit crunch is effecting small businesses. At this hearing, SBA Administrator Steven Preston will testify as well as a second panel representing small business interests. It will be interesting to see if the issue of federal small business contracts to large firms will be discussed.

Monday, April 14, 2008

Billion Dollar Venture Capital Firms to Receive Government Small Business Contracts Under New Bill

April 14, 2008

Petaluma, Calif. – The following is a statement from the American Small Business League:

A new bill set to come out of the House Committee on Small Business will allow the largest venture capital firms in the nation to participate in federal programs designed to assist small businesses.

On its surface, the bill appears to be designed to expand the federal government’s Small Business Innovation Research program (SBIR). However, opponents believe the actual purpose of the bill is to create a new loophole that will allow multi-billion dollar venture capital firms to receive billions of dollars in federal small business contracts every year.

Critics of the new bill say it will essentially repeal the Small Business Act and could have devastating consequences for thousands of small businesses across the country. The key provision of the bill will amend the Small Business Act by changing the definition of a small business as “independently owned and operated” to include firms owned up to 49.9 percent by a venture capital firm.

To read more, please click here:

Sunday, April 13, 2008

Small Business Administration Agrees to Turn Over PR Executive’s E-Mail

April 2, 2008

Petaluma, Calif. – The Small Business Administration (SBA) has agreed to turn over two years of correspondence from Mike Stamler, the agency’s Press Office Director, to the American Small Business League (ASBL).

The ASBL requested the information under the Freedom of Information Act (FOIA). The ASBL believes Stamler’s correspondence will help to expose the SBA’s long-standing public relations campaign to misrepresent the diversion of billions of dollars in federal small business contracts to Fortune 1000 firms. The SBA has consistently tried to deny the problem by describing it as “miscoding” and a “myth”. ( )

The ASBL was preparing to file suit against the SBA in federal district court in San Francisco when the agency finally decided to release the information. The SBA is charging the ASBL $2300.00 to provide the information.

To read more, please visit