Please e-mail the American Small Business League (ASBL) at Thank you.

Thursday, August 21, 2008

New Bush Administration Policy Helps Large Businesses Masquerade as Small Businesses

Petaluma, Calif. – A new Bush Administration policy will make it easier for large businesses to land government small business contracts by misrepresenting themselves as small businesses in government supplier databases. Under the new policy, firms will no longer be required to list their annual revenue or number of employees on the federal government’s Central Contractor Registration Database (CCR).

In the past, firms that listed themselves in the CCR database were required to disclose their annual revenue and total number of employees. This specific information was mandatory, because federal guidelines that determine a firm's eligibility to participate in federal small business contracting programs were based on these two fields. (

Making annual revenue or number of employees’ fields optional in the CCR will make it extremely difficult to determine if large firms are misrepresenting themselves as small businesses for the purpose of receiving federal small business contracts.

Since 2002, the Bush Administration has made several modifications to the CCR database as a means of making it increasingly difficult to determine if a firm is small or large.

Despite repeated statements from Bush Administration officials about increasing transparency and improving the accuracy of reported data in federal small business contracting programs, the new policy is seen as another major step backwards in accuracy and transparency.

Since 2003, 15 federal investigations have all found billions of dollars in federal small business contracts actually wound up in the hands of Fortune 500 firms and hundreds of other large businesses. Within the last thirty days, four separate investigations have been released which have found fraud and rampant abuses in government small business contracting programs. In one instance, the Department of Interior (DOI) Office of Inspector General found that the DOI had misstated the achievement of its small business goals by including Fortune 500 corporations.

In 2005, the SBA Office of Inspector General released Report 5-16, which found large businesses had received government small business contracts by making "false certifications.” (

This policy will exacerbate the problem of large businesses receiving government small business contracts. It will now be even more difficult for federal officials, the public and watchdog groups to monitor the CCR database and uncover large businesses trying to masquerade as small businesses to illegally receive government small business contracts.

The new policy is the latest in a long series of similar Bush Administration policies designed to dismantle federal small business contracting programs and divert billions of dollars in federal small business contracts to large businesses. In February of 2007, former SBA Administrator Steven Preston removed all employee and revenue data from the CCR database in the middle of a CBS investigation on the actual recipients of federal small business contracts. In 2007, Preston adopted a policy that will allow Fortune 500 firms and hundreds of other large businesses to continue to receive federal small business contracts until the year 2012. (

The American Small Business League (ASBL) is concerned that Acting Administrator of the SBA, Santanu "Sandy" Baruah may try to institute more policies that will further damage federal small business contracting programs as the Bush Administration comes to a close. The ASBL believes closing the SBA and ending all federal programs to assist woman-owned firms, minority-owned firms, veteran-owned firms and small businesses was a major goal of the Bush Administration. The ASBL predicts President Bush may still try to close the SBA by combining it with the United States Department of Commerce or some other federal agency. (


Tuesday, August 19, 2008

NVCA Moves to Hijack Federal Small Business Contracts

The American Small Business League distributed the following press release today:

Petaluma, Calif. – The National Venture Capital Association (NVCA) has blanketed the Congressional small business committees with generous campaign contributions in an attempt to have legislation passed which will allow the nation’s wealthiest investors to cash in on government contracts earmarked for small businesses.

In addition to contributions to most of the members of the House and Senate small business committees, the NVCA and its members have made significant campaign contributions to the Chair of the House Committee on Small Business, Nydia Velázquez (D – NY) and to House Speaker Nancy Pelosi (D – CA).

Federal law requires that 23 percent of all federal contracts and subcontracts, about $135 billion a year, be awarded to small businesses. If the NVCA is successful, a lion’s share of those small business contracts could soon be diverted to firms owned and controlled by some of the largest venture capital firms in the United States.

On September 30, the Small Business Innovation Research Program is set to expire. With that in mind, the Senate Committee on Small Business and Entrepreneurship has passed S. 3362, the SBIR/STTR Reauthorization Act of 2008. The bill will allow some of the largest venture capital firms in America to participate in federal small business programs. The bill caps venture capital participation at 18 percent for the National Institutes of Health and 8 percent for other agencies. If passed through the Senate, the bill would go to a conference committee between the House and Senate to be finalized.

With S.3362 pending, the NVCA and its members are pushing to include a substantial portion of the legislative language from two House bills which were passed through the House last year and were designed to reauthorize the program. As passed, Both H.R 3567 and H.R. 5819, would allow firms owned and controlled by billionaire venture capitalists and wealthy investors to qualify and participate in government small business contracting programs without limits on the total amount of venture capital participation in the program.

Small business advocates are concerned that if the legislation becomes law, the average American small business will be forced to compete head-to-head with firms owned and controlled by the nation’s largest venture capital companies for even the smallest orders of goods or services.

The American Small Business League (ASBL) projects that thousands of middle class firms across the country will be forced to close their doors if the NVCA is successful. Larger states like Texas, Florida, New York, Illinois and California could lose billions of dollars in federal contract dollars and thousands of jobs. Smaller states that have been hit the hardest by the current economic downturn will no doubt feel the impact of this legislation, which will pull hundreds of millions of dollars out of the middle class economy in those states.

Speaker Nancy Pelosi exerted so much pressure on members of the House, she was able to push the bills through in record time. In fact, Pelosi pushed the bills through the House so quickly that many members of the House voted for the bill before they had the chance to read the legislation or receive feedback from their constituents. As a result, the bills were passed despite opposition from every major small businesses organization in the country, including the Small Business Administration (SBA).

The fate of small business owners and the SBIR program is now in the hands of the full Senate. Small business owners and advocates were shocked and disappointed when Senate Small Business Committee Chair John Kerry (D – MA) passed the Senate version of H.R. 5819, S. 3362 through his committee shortly before the summer recess.

“Senator Kerry has been complaining for years about loopholes and Bush Administration policies that allow Fortune 500 firms to receive federal small business contracts. Yet, he has done nothing to stop that problem,” ASBL President Lloyd Chapman said. “Now he is backing federal legislation to give small business contracts to venture capital firms and billionaires. I couldn’t be more disappointed in this Congress and it’s leaders.”

The ASBL has pledged to fight both pieces of legislation by organizing opposition from Chambers of Commerce, other small business organizations and small business owners across the country.


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