By Lloyd Chapman
President, American Small Business League
For the last seven years I have fought with the United States Government in the courts, in Congress and in the media over one simple principle, Fortune 500 firms should not be allowed to receive federal small business contracts.
I would imagine it would be difficult to find many people in America that would disagree with that principle; particularly now, as our nation struggles to deal with its worst economic downturn in 80 years. The latest U.S. Census Bureau data indicates that 98 percent of all U.S. firms have less than 100 employees. These 27 million small businesses employ over 55 percent of the private sector workforce and create over 97 percent of all net new jobs. Those same small businesses are responsible for over 50 percent of the Gross Domestic Product (GDP) and over 50 percent of all innovations.
Federal law requires that a minimum of 23 percent of the total value of all federal contracts and subcontracts be awarded to small businesses.
This all makes sense doesn't it? Small businesses create virtually all net new jobs in America. Most taxpayers work in small businesses. Aren't we trying to stimulate the economy and create jobs? What better way is there to achieve both of these goals than to spend 23 percent of federal infrastructure dollars with small businesses?
Other than the Federal government, guess who my biggest opponents have been… every major organization in America that claims to represent small businesses. I have discovered that the overwhelming majority of so-called small business groups are actually funded by Fortune 500 firms, and consequently they support the political agenda of Fortune 500 firms. Groups like the U.S. Chamber of Commerce that claim 96 percent of their members are small businesses with less than 100 employees, actually have 15 Fortune 1000 firms represented on their board of directors which have received federal small business contracts. The same thing is true for the U.S. Hispanic Chamber of Commerce. Several of the U.S. Hispanic Chamber of Commerce's corporate sponsors have received federal small business contracts. That's the real reason they are not supporting H.R. 2568, the Fairness and Transparency in Contracting Act of 2009. H.R. 2568 was proposed on May 21 by Congressman Hank Johnson (D - GA), and would stop the federal government from counting corporate giants towards its small business goals.
The National Federation of Independent Businesses (NFIB) claims to be "the voice of small business." In reality, NFIB primarily lobbies for the political agenda of Fortune 1000 firms. Even minority and women's groups are funded by Fortune 500 firms, and take their marching orders from those firms. Groups like the U.S. Hispanic Chamber of Commerce, the U.S. Women's Chamber of Commerce, and the National Small Business Association (NSBA) are funded by big business, and push the political agenda of corporate giants in America.
If you're not convinced, lets take a look at the facts. Since 2003, a series of federal investigations have been released which found that Fortune 500 firms and thousands of other large businesses have received billions of dollars in federal small business contracts. The Small Business Administration Office of Inspector General (SBA OIG) referred to the diversion of federal small business contracts to large corporations as, "One of the most important challenges facing the Small Business Administration [SBA] and the entire Federal government today." (http://www.asbl.com/documents/05-15.pdf)
The American Small Business League (ASBL) estimates up to $120 billion a year in federal small business contracts actually go to big businesses.
Since 2002, the story has been covered in virtually every major newspaper in the country, dozens of magazines, and in most of our nation's mainstream media outlets including CNN, ABC and CBS. Additionally, this issue has been the subject of hundreds of radio interviews, and hundreds of stories in Internet based publications. (ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; CNN, http://www.asbl.com/showmedia.php?id=1170)
Now, take a look at the website for any group in America that you believe represents the best interest of small businesses. Try and find any mention of the issue at any time during the last seven years. Remember, over 500 stories in the media have covered the issue along with more than a dozen federal investigations. Despite the press, the federal investigations and thousands of business closures, you won't find anything.
You won't find any press releases calling for an end to the problem on the U.S. Chamber of Commerce's website. You will not find any mention of the issue anywhere on NFIB's website. You will not find any mention of the diversion of billions of dollars in federal small business contracts to Fortune 500 firms on the U.S. Hispanic Chamber of Commerce's website. There will be no mention of one of the largest challenges facing the entire federal government today on the U.S. Women's Chamber of Commerce website. Finally, if you examine the NSBA's website, you will not find any discussion of legislation they have written to address the issue, or lawsuits they have filled to try and end the rampant abuses against small businesses.
I would advise any small business that belongs to any of these groups to quit wasting your time and money, and drop out today. You have been duped.
The irrefutable truth is that a vast majority of supposed small business groups in America are shams. They are funded by, run by and for the benefit of Fortune 500 firms. The truth is, no major small business group in America will even mention the diversion of federal small business contracts to corporate giants. Look for yourself. If you disagree, send me the proof that I'm wrong to firstname.lastname@example.org.