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Thursday, October 22, 2009

Obama Small Business Plan Falls Short of Real Solutions

October 22, 2009

Petaluma, Calif. - On Wednesday, October 21, President Barack Obama held a press conference in Landover, MD to announce the administration's plans for a, "New Small Business Lending Initiative." According to President Obama's statements, the initiative would focus almost entirely on increasing the ceilings on government loans to small businesses. (

However, President Obama once again failed to address widespread abuses in federal small business contracting programs, which have lead to the yearly diversion of billions of dollars in contracts intended for small businesses to corporate giants. According to the administration's most recent small business contracting data, which was released on August 21st, 2009, the top recipient of federal small business contracts during fiscal year (FY) 2008 was Textron Inc. Textron is a Fortune 500 corporation, with 43,000 employees and over $14 billion in annual sales. (

In addition to Textron, corporate giants like: Lockheed Martin, Boeing, Raytheon, Northrop Grumman, General Dynamics, AT&T, 3M Corporation, Xerox, Dell Computer, Booz Allen Hamilton, Hewlett-Packard, General Electric, Staples, Office Depot, British Aerospace (BAE), Rolls-Royce and French firm Thales Communications were included in the Obama Administration's small business contracting data.

Corporate giants in Asia and Europe were also included. During FY 2008, Ssangyong Corporation headquartered in Seoul, South Korea received over $254 million in small business contracts and Finmeccanica SpA, headquartered in Italy with 73,000 employees, received over $283 million.

Since 2003, over 15 federal investigations have found that billions of dollars a month in federal small business contracts are diverted to large businesses. (

In February of 2008, President Obama acknowledged the magnitude of the problem and released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (

The American Small Business League (ASBL) points to the fact that President Obama has refused to adopt policy or support legislation to address the problem. ASBL projects that legitimate small businesses lose up to $100 billion a year in federal contracts due to rampant abuses in government contracting programs.

"If you want to know the truth about President Obama's commitment to small businesses you have to realize that about $1 million a minute in federal small business contracts is going to some of biggest companies around the world. He knows it. He said he would stop it more than a year ago, and yet he has done nothing. Look at the facts," ASBL President Lloyd Chapman said.


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

Tuesday, October 20, 2009

Justice Department Drops Appeal of Federal Court Ruling

October 20, 2009

Petaluma, Calif. - The U.S. Department of Justice has dropped its appeal of a ruling by the U.S. District Court for the Northern District of California awarding legal fees to the American Small Business League (ASBL). The case was scheduled to be heard by the 9th Circuit Court of Appeals early next year. (,

Prior to dropping its appeal, the Justice Department offered to drop its appeal of the District Court's ruling for attorney's fees if the ASBL agreed to waive legal fees it incurred during the appellant process. The ASBL declined the Justice Department's offer stating that it preferred to have the case heard by the 9th Circuit Court of Appeals.

The ASBL requested the specific names of the firms that were coded as small businesses for FY 2005 and 2006 and the specific dollar amounts that were awarded to those firms from the U.S. Small Business Administration (SBA). The request was made under the Freedom of Information Act (FOIA).

The SBA refused to comply with the ASBL's request for the data. During litigation, the SBA claimed that it had no information in its possession regarding the specific names of firms that had received federal small business contracts.

In the court's ruling, United States District Judge Marilyn H. Patel stated, "The court finds it curious the SBA's argument that it does not 'control' the very information it needs to carry out its duties and functions." (

As a result of Patel's ruling, the SBA was ordered to turn over the requested information and pay all of the legal fees incurred by the ASBL during the initial litigation process. The information the ASBL finally obtained indicated that the SBA, the General Services Administration (GSA) and virtually every other federal agency diverted billions of dollars in federal small business contracts to Fortune 500 firms and dozens of large businesses in Europe and Asia. (

Some of the firms that received federal small business contracts included Boeing, Lockheed Martin, Northrop Grumman, Raytheon, General Dynamics, GTSI, Rolls-Royce, Dell Computer, Thales Communications, and British Aerospace (BAE).

The ASBL has estimated that legitimate small businesses are losing over $100 billion a year in federal small business contracts to corporate giants.

The ASBL drafted legislation titled, the Fairness and Transparency in Contracting Act, or H.R. 2568, which would halt the flow of federal small business contracts to large businesses. On May 21, 2009, Congressman Hank Johnson (D-GA-4) introduced the bill into the U.S. House of Representatives. To date, the bill has 15 co-sponsors and has been endorsed by more than 50 chambers of commerce and business organizations around the country.