America's 27 million small businesses have a new hero and his name is Hank Johnson.
Last Friday, Georgia Congressman Hank Johnson (GA-04) introduced a new bill in the House of Representatives that will do more to help America's 27 million small businesses and stimulate the national economy than any stimulus plan proposed to date.
The bill, H.R. 2568, is titled "the Fairness and Transparency in Contracting Act of 2009." The new bill is based on a very simple principle that every American would certainly agree with: the largest corporations in the world should not be receiving government small business contracts. Congressman Johnson has worked with the American Small Business League (ASBL) staff for several months to get the bill into the final form he introduced into the House of Representatives.
The heart of the Fairness and Transparency in Contracting Act is a provision that precludes the federal government and prime contractors from reporting awards to publicly traded firms as small business awards. The original Small Business Act defines a small business as a firm that is 'independently owned." Publicly traded firms are publicly owned, and would not qualify as "independently owned."
This would seem like a no-brainer, but it has taken several years and someone with the integrity and sincere concern for our nation's 27 million small businesses like Representative Hank Johnson to finally address this staggering problem.
Since 2003, a constant flow of federal investigations have come from a variety of agencies in Washington that have all found Fortune 500 firms in the U.S. and even some of Europe's largest corporations receive billions of dollars in U.S. government small business contracts.
In 2005, the Small Business Administration Office of Inspector (SBA IG) released the results of its investigation into the diversion of federal small business contracts to corporate giants around the world. In Report 5-15, the SBA IG referred to the issue as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." That sounds pretty serious to me. Why hasn't Congress acted on this before? (http://www.sba.gov/IG/05-15.pdf)
Several senior level government officials have told me privately that as much as 86 percent of all federal small business contracts actually go to large businesses. Based on the latest numbers from the SBA Office of Advocacy indicating the total volume of contracts awarded to small businesses, 86 percent would equate to more than $100 billion a year.
I have won several Freedom of Information Act (FOIA) cases against the federal government, which forced the release of thousands of pages of information on the actual recipients of federal small business contracts. Based on all of the information I have seen, I would agree at least $100 billion a year in government small business contracts go to Fortune 500 firms and thousands of other large businesses around the world.
The latest data from the U.S. Census Bureau indicates that 98 percent of all U.S. firms have less than 100 employees. These firms create over 97 percent of all new jobs in America and employ over 50.2 percent of the private sector workforce.
The Obama Administration has stated that for every billion dollars in federal infrastructure spending 40,000 new jobs will be created. Based on the Obama Administration and the U.S. Census Bureau data, if the Fairness and Contracting Act becomes law up to 4 million new jobs could be created at no additional expense to the taxpayers.
There is another aspect to H.R 2568 that will no doubt delight almost every state in the country. Almost half of all federal small business contracts go to firms within 50 miles of the White House. These are the very corporate giants that have been passing off their subsidiaries and divisions as small businesses, and hijacking most of the small business contracts.
If President Obama signs the Fairness and Transparency in Contracting Act into law, every state will see its share of federal small business contracts double.
President Obama should love H.R. 2568. He has promised to create between 3 and 4 million new jobs. In February of 2008 he stated, "It is time to end the diversion of federal small business contracts to corporate giants." This bill will achieve both of those goals. (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)
Congressman Hank Johnson has introduced the most effective and cost efficient economic stimulus plan proposed to date. Hats off to Congressman Johnson for taking a stand for the American people, and letting the "corporate giants" and Washington bureaucrats know, there's a new sheriff in town and his name is Hank Johnson.