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Wednesday, September 16, 2009

New Bill Will Create More Loopholes in Federal Contracting Programs

September 16, 2009

Petaluma, Calif. – A new bill introduced into the House of Representatives could create yet another loophole in federal small business contracting programs, which would divert more federal small business contracts to corporate giants.

The Small Business Fair Competition Act (H.R. 3558), was introduced by Congressman Parker Griffith (D – AL) on September 14, and would allow firms that have outgrown the federal government’s small business size standards, because of a government contract, to compete and be counted as a small business once that contract is competed again.

Since 2003, more than 15 federal investigations have found that billions of dollars in federal contracts intended for small businesses have been awarded to Fortune 500 corporations and other clearly large firms around the world. In Report 5-15, the Small Business Administration (SBA) Office of Inspector General referred to the diversion of federal small business contracts to large corporations as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” (

During fiscal year (FY) 2008, 60 of the Top 100 recipients of federal small business contracts were large businesses, according to an analysis by the American Small Business League (ASBL). (

To date, Congress has not passed legislation to stop the diversion of federal small business contracts to large corporations, and now H.R. 3558 has the potential to create yet another loophole allowing small business contracts to go to some of the largest corporations in the world. During FY 2008, corporate giants Boeing, Northrop Grumman, General Dynamics and British Aerospace (BAE) received federal small business contracts. All four firms maintain campuses located in Congressman Griffith’s district.

“With H.R. 3558, Congressman Griffith has created a colossal, anti-small business loophole to divert federal small business funds to some of his largest campaign contributors,” ASBL President Lloyd Chapman said. “This is one of the most egregious examples I have ever seen of a member of Congress selling legislation to the highest bidder.”

The ASBL has launched a campaign in opposition to H.R. 3558 and is encouraging members of Congress to support H.R. 2568, the Fairness and Transparency in Contracting Act of 2009.


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