On June 30th, the Small Business Administration enacted a policy that will allow large companies who currently hold long term small business procurement contracts, to maintain those contracts through 2012. Last December, noted federal contracting expert Professor Charles Tiefer of the University of Baltimore School of Law issued an opinion on the loophole in new SBA size standard regulations. After a review of the regulations and related documentation, Tiefer concluded, "SBA's latest size standard regulations issued in mid-November will still result in the federal government reporting many of its prime contracts performed by large businesses as small business contract awards for at least five years to come."
Here is a link to Professor Tiefer's opinion:
www.asbl.com/documents/TieferOpinion.doc
Wednesday, July 11, 2007
Tuesday, July 10, 2007
ASBL on The U.S. Chamber of Commerce
We posted this video on YouTube yesterday. In it the American Small Business League discusses the U.S. Chamber of Commerce and their opposition of the removal of Fortune 1000 corporations, their subsidiaries and other large firms from federal small business contracting.
Monday, July 9, 2007
Top Defense Contractors Are Now Small Businesses Under New SBA Policy
July 9, 2007
PETALUMA, CA -- On June 30th, a Small Business Administration policy went into effect that will allow the federal government to count hundreds of contracts to many of the nation's largest defense and aerospace contractors as federal small business contracts through 2012.
The SBA's new five-year grandfathering/five-year re-certification policy will allow the federal government to include billions of dollars in contracts to firms like Boeing, Lockheed Martin, Northrop-Grumman, Raytheon, SAIC, L3 Communications and General Dynamics towards the government's 23 percent small business contracting goal.
In 2005, the SBA included over $650 million in government contracts to defense giant L3 Communications towards the government's small business contracting goal. For 2006, the SBA reported over $500 million to SAIC as small business contracts.
Small business owners around the country are outraged at the new policy and are pledging to take their complaints to Congress and federal court.
When the SBA originally proposed their grandfathering plan in 2005, it would have allowed the SBA to continue to report awards to any firm that had small business contracts towards the federal government's 23 percent small business procurement goal for five more years. This would have included: small business contracts found by the SBA Inspector General as being fraudulently obtained, contracts to large businesses the SBA acknowledged were miscoded as small business contracts, contracts to large businesses that had accidentally claimed small business status, contracts to firms that had outgrown their small business status and contracts to firms that had been acquired by a large business.
When the SBA asked for public comment on the proposed policy in 2005, they were bombarded with over 6000 angry comments opposing the grandfathering policy. Small business owners and small business groups, including the NFIB and Chambers of Commerce across the country, were strongly opposed to the proposed plan.
Even after the SBA received an overwhelmingly negative response to the proposed policy, SBA spokespersons told reporters for the Miami Herald and the Chicago Tribune in June of 2005 that the SBA still intended to implement the five-year grandfathering plan.
Shortly after new SBA Administrator Steven Preston was confirmed, he directed that the unpopular five-year grandfathering policy be renamed five-year re-certification and implemented. The net effect of the five-year re-certification and the five-year grandfathering policy are identical. Under the five-year re-certification policy, the same large businesses that would have benefited from the five-year grandfathering policy will be allowed to maintain their small business status until the year 2012. This will allow the SBA to continue to report contracts to hundreds of Fortune 1000 firms and other large businesses as small business awards for at least five more years.
SBA critics like the American Small Business League believe the real purpose of the SBA's five-year grandfathering/five-year re-certification policy is to artificially inflate the federal government's small business contracting statistics to create the false impression that the government has reached the Congressionally mandated 23 percent small business contracting goal.
ASBL estimates if the policy is allowed to take full effect, legitimate small businesses across America could lose over $300 billion in federal small business contracts over the next five years.
PETALUMA, CA -- On June 30th, a Small Business Administration policy went into effect that will allow the federal government to count hundreds of contracts to many of the nation's largest defense and aerospace contractors as federal small business contracts through 2012.
The SBA's new five-year grandfathering/five-year re-certification policy will allow the federal government to include billions of dollars in contracts to firms like Boeing, Lockheed Martin, Northrop-Grumman, Raytheon, SAIC, L3 Communications and General Dynamics towards the government's 23 percent small business contracting goal.
In 2005, the SBA included over $650 million in government contracts to defense giant L3 Communications towards the government's small business contracting goal. For 2006, the SBA reported over $500 million to SAIC as small business contracts.
Small business owners around the country are outraged at the new policy and are pledging to take their complaints to Congress and federal court.
When the SBA originally proposed their grandfathering plan in 2005, it would have allowed the SBA to continue to report awards to any firm that had small business contracts towards the federal government's 23 percent small business procurement goal for five more years. This would have included: small business contracts found by the SBA Inspector General as being fraudulently obtained, contracts to large businesses the SBA acknowledged were miscoded as small business contracts, contracts to large businesses that had accidentally claimed small business status, contracts to firms that had outgrown their small business status and contracts to firms that had been acquired by a large business.
When the SBA asked for public comment on the proposed policy in 2005, they were bombarded with over 6000 angry comments opposing the grandfathering policy. Small business owners and small business groups, including the NFIB and Chambers of Commerce across the country, were strongly opposed to the proposed plan.
Even after the SBA received an overwhelmingly negative response to the proposed policy, SBA spokespersons told reporters for the Miami Herald and the Chicago Tribune in June of 2005 that the SBA still intended to implement the five-year grandfathering plan.
Shortly after new SBA Administrator Steven Preston was confirmed, he directed that the unpopular five-year grandfathering policy be renamed five-year re-certification and implemented. The net effect of the five-year re-certification and the five-year grandfathering policy are identical. Under the five-year re-certification policy, the same large businesses that would have benefited from the five-year grandfathering policy will be allowed to maintain their small business status until the year 2012. This will allow the SBA to continue to report contracts to hundreds of Fortune 1000 firms and other large businesses as small business awards for at least five more years.
SBA critics like the American Small Business League believe the real purpose of the SBA's five-year grandfathering/five-year re-certification policy is to artificially inflate the federal government's small business contracting statistics to create the false impression that the government has reached the Congressionally mandated 23 percent small business contracting goal.
ASBL estimates if the policy is allowed to take full effect, legitimate small businesses across America could lose over $300 billion in federal small business contracts over the next five years.
Monday, July 2, 2007
Will new contract rules help small biz?
This story ran on American Public Radio's, Marketplace on Friday, June 29th. It is a very good story and definitely worth a listen:
http://download.publicradio.org/podcast/marketplace/pm/2007/06/29_marketplace.mp3
Small businesses are supposed to get 23 percent of federal government contracts. Yet, big companies have been winning some of those jobs. New rules take effect tomorrow that are intended to change that. Steve Tripoli reports.
TEXT OF STORY
SCOTT JAGOW: Small businesses are supposed to get a percentage of federal government contracts — 23 percent to be exact. But somehow, big companies have been getting some of those contracts. So, tomorrow, new rules take effect. They're supposed to address this problem.
But the small business community isn't exactly holding its breath. Steve Tripoli reports from the Entrepreneurship Desk.
Steve Tripoli: Small business owners are angry. They say that too many federal contracts marked as going to small-businesses continue to go to big businesses. The entrepreneurs and President Bush's Small Business Administration can't agree on the extent to which that's happening, or why. Steve Preston heads the SBA. He doesn't think it's much of a problem. And besides, he says, the government isn't out to cheat anyone.
Steve PRESTON: It's less about something subversive or nefarious, and a lot more around people just not doing their jobs the way they need to.
Preston says simple data-entry mistakes are part of what's wrong. And small businesses that win contracts and then grow into big ones also skew the numbers.
Lloyd Chapman of the American Small Business League says Preston's just making excuses for a flawed contract-monitoring program.
Lloyd CHAPMAN: The SBA doesn't want the public to realize that this program is largely smoke and mirrors.
Chapman accepts that small businesses grow or can be bought out by bigger competitors. But he says when that happens they shouldn't be able to be counted as small for as long as they are now. And he says that's not the worst of it.
CHAPMAN: There's been three federal investigations now that have found fraud as one of the reasons why large firms are getting small business contracts.
. . . including one from the SBA's own inspector general.
Chapman doesn't believe the SBA wants to crack down. He points to the agency's new regulation taking effect June 30th. Many businesses will have to report a change from small status sooner, but not until the regulation's been in effect for five years.
Chapman says that's not nearly soon enough, and other small-business people agree.
Cindy Frene: This is actually our backlot where we have just one vehicle, right now. It's part of our livery service.
Cindy Frene has owned her suburban Boston transportation business for 17 years. Like many other small-business owners she's come to see the SBA as more obstacle than advocate for small firms.
Frene has several state government contracts, and a few years ago she tried to qualify for federal work. But that's where she ran into a foul-up she says is typical of the SBA.
FRENE: I basically was turned down because I would have to have had proof that I was discriminated against because I was a woman. Which is laughable because, who would give me a letter that said they didn't hire me because I was a woman?
She sees the same unhelpful pattern in that new, five-year recertification rule that kicks in this month. Frene recertifies her small-business status every year. She has to do that for several state governments. She says it isn't onerous and the businesses handle most of the paperwork.
FRENE: If it's done as a matter of course for states, then why can't the federal government do it too? Rather than continue to put up barriers.
Frene says if companies reported their size annually the SBA would see how many of them are really big businesses taking contracts marked as small. Then it would be forced by law to reallocate more contracts to small firms.
The nonpartisan Government Accountability Office and several congressional committees seem to agree. They've joined small businesses in calling for the change.
PRESTON: There are many people on the other side as well.
That's SBA head Steve Preston. He says annual recertification is too onerous for many dynamic young companies.
Lloyd Chapman of the American Small Business League rejects that argument. He says waiting five years means billions in losses for small businesses. And it flaunts the intent of the 50-year-old Small Business Act.
CHAPMAN: I'm not gonna buy anyone's excuse that it's not feasible to enforce a piece of legislation that's been on the books for 50 years.
The irony here is that a previous SBA inspector general agreed with Chapman. Two years ago, he issued three reports saying that big businesses are unjustly hogging small-business contracts. We asked the current inspector general via e-mail if those problems still exist, and whether they're adequately addressed by the June 30th rule change. His lawyer's answer? No comment.
I'm Steve Tripoli for Marketplace.
http://download.publicradio.org/podcast/marketplace/pm/2007/06/29_marketplace.mp3
Small businesses are supposed to get 23 percent of federal government contracts. Yet, big companies have been winning some of those jobs. New rules take effect tomorrow that are intended to change that. Steve Tripoli reports.
TEXT OF STORY
SCOTT JAGOW: Small businesses are supposed to get a percentage of federal government contracts — 23 percent to be exact. But somehow, big companies have been getting some of those contracts. So, tomorrow, new rules take effect. They're supposed to address this problem.
But the small business community isn't exactly holding its breath. Steve Tripoli reports from the Entrepreneurship Desk.
Steve Tripoli: Small business owners are angry. They say that too many federal contracts marked as going to small-businesses continue to go to big businesses. The entrepreneurs and President Bush's Small Business Administration can't agree on the extent to which that's happening, or why. Steve Preston heads the SBA. He doesn't think it's much of a problem. And besides, he says, the government isn't out to cheat anyone.
Steve PRESTON: It's less about something subversive or nefarious, and a lot more around people just not doing their jobs the way they need to.
Preston says simple data-entry mistakes are part of what's wrong. And small businesses that win contracts and then grow into big ones also skew the numbers.
Lloyd Chapman of the American Small Business League says Preston's just making excuses for a flawed contract-monitoring program.
Lloyd CHAPMAN: The SBA doesn't want the public to realize that this program is largely smoke and mirrors.
Chapman accepts that small businesses grow or can be bought out by bigger competitors. But he says when that happens they shouldn't be able to be counted as small for as long as they are now. And he says that's not the worst of it.
CHAPMAN: There's been three federal investigations now that have found fraud as one of the reasons why large firms are getting small business contracts.
. . . including one from the SBA's own inspector general.
Chapman doesn't believe the SBA wants to crack down. He points to the agency's new regulation taking effect June 30th. Many businesses will have to report a change from small status sooner, but not until the regulation's been in effect for five years.
Chapman says that's not nearly soon enough, and other small-business people agree.
Cindy Frene: This is actually our backlot where we have just one vehicle, right now. It's part of our livery service.
Cindy Frene has owned her suburban Boston transportation business for 17 years. Like many other small-business owners she's come to see the SBA as more obstacle than advocate for small firms.
Frene has several state government contracts, and a few years ago she tried to qualify for federal work. But that's where she ran into a foul-up she says is typical of the SBA.
FRENE: I basically was turned down because I would have to have had proof that I was discriminated against because I was a woman. Which is laughable because, who would give me a letter that said they didn't hire me because I was a woman?
She sees the same unhelpful pattern in that new, five-year recertification rule that kicks in this month. Frene recertifies her small-business status every year. She has to do that for several state governments. She says it isn't onerous and the businesses handle most of the paperwork.
FRENE: If it's done as a matter of course for states, then why can't the federal government do it too? Rather than continue to put up barriers.
Frene says if companies reported their size annually the SBA would see how many of them are really big businesses taking contracts marked as small. Then it would be forced by law to reallocate more contracts to small firms.
The nonpartisan Government Accountability Office and several congressional committees seem to agree. They've joined small businesses in calling for the change.
PRESTON: There are many people on the other side as well.
That's SBA head Steve Preston. He says annual recertification is too onerous for many dynamic young companies.
Lloyd Chapman of the American Small Business League rejects that argument. He says waiting five years means billions in losses for small businesses. And it flaunts the intent of the 50-year-old Small Business Act.
CHAPMAN: I'm not gonna buy anyone's excuse that it's not feasible to enforce a piece of legislation that's been on the books for 50 years.
The irony here is that a previous SBA inspector general agreed with Chapman. Two years ago, he issued three reports saying that big businesses are unjustly hogging small-business contracts. We asked the current inspector general via e-mail if those problems still exist, and whether they're adequately addressed by the June 30th rule change. His lawyer's answer? No comment.
I'm Steve Tripoli for Marketplace.
Wednesday, June 27, 2007
Lloyd Chapman of the American Small Business League discusses the U.S. Chamber of Commerce
We just posted this video on our web site, http://www.asbl.com/. In the clip, Lloyd Chapman, President and founder of the American Small Business League discusses the U.S. Chamber of Commerce and their opposition to policies that will affect small businesses in a positive way. The main problem is that the U.S. Chamber of Commerce does not support the removal of Fortune 1000 corporations and other large businesses from the federal governments database of small businesses.
Check it out:
http://www.asbl.com/files/lc_uschamber.wmv
Check it out:
http://www.asbl.com/files/lc_uschamber.wmv
Tuesday, June 26, 2007
NASA To Use Fortune 1000 Firms To Hit Small Business Goal With New SBA Policy
Petaluma, Calif. - A new Small Business Administration policy set to take effect on June 30th will allow NASA to continue to count contracts to Fortune 1000 firms towards their federally mandated 23 percent small business contracting goal.
In February of 2006, NASA lost a federal lawsuit to the American Small Business League, which was filed under the Freedom of Information Act. NASA was forced to disclose information that indicated that they had included billions of dollars in contracts to many of the nation’s largest defense and aerospace firms towards their small business contracting goal.
Under the new SBA policy, NASA can continue to include awards to firms such as Boeing and Lockheed Martin in their small business contracting statistics until the year 2012.
The SBA originally proposed a “grandfathering” policy in November of 2004, after a series of federal investigations found the SBA had included billons of dollars in contracts to Fortune 1000 firms and hundreds of other large businesses towards the federal government’s 23 percent small business procurement goal. It would have allowed the SBA to continue to claim that the government had met their small business-contracting goal by continuing to count contract awards to large businesses as small business contract awards. The SBA was forced to shelve the grandfathering policy after receiving more than 6000 objections to the proposed policy.
New SBA Administrator Steven Preston resurrected the unpopular grandfathering policy shortly after he was appointed to office, renaming it “five-year re-certification.” Like the grandfathering policy, the five-year re-certification policy will allow NASA and all other federal agencies to include existing small business contracts to Fortune 1000 firms and other large businesses towards their small business contracting goals for five more years.
The Senate is expected to propose legislation to remove Fortune 1000 firms and all large businesses from federal small business contracting programs before the end of 2007.
###
In February of 2006, NASA lost a federal lawsuit to the American Small Business League, which was filed under the Freedom of Information Act. NASA was forced to disclose information that indicated that they had included billions of dollars in contracts to many of the nation’s largest defense and aerospace firms towards their small business contracting goal.
Under the new SBA policy, NASA can continue to include awards to firms such as Boeing and Lockheed Martin in their small business contracting statistics until the year 2012.
The SBA originally proposed a “grandfathering” policy in November of 2004, after a series of federal investigations found the SBA had included billons of dollars in contracts to Fortune 1000 firms and hundreds of other large businesses towards the federal government’s 23 percent small business procurement goal. It would have allowed the SBA to continue to claim that the government had met their small business-contracting goal by continuing to count contract awards to large businesses as small business contract awards. The SBA was forced to shelve the grandfathering policy after receiving more than 6000 objections to the proposed policy.
New SBA Administrator Steven Preston resurrected the unpopular grandfathering policy shortly after he was appointed to office, renaming it “five-year re-certification.” Like the grandfathering policy, the five-year re-certification policy will allow NASA and all other federal agencies to include existing small business contracts to Fortune 1000 firms and other large businesses towards their small business contracting goals for five more years.
The Senate is expected to propose legislation to remove Fortune 1000 firms and all large businesses from federal small business contracting programs before the end of 2007.
###
Thursday, June 21, 2007
Is small business getting the shaft?
This article is going to be featured on the cover of the Blue Ridge Business Journal, a Bi-weekly business publication, which is one of Virginia's oldest and most respected publications. It is a great article, which gives an excellent overview of the issues from multiple perspectives. It was published on June 18th with Lloyd Chapman our President and Founder on the Front Cover.
Here is the link:
http://www.bizjournal.com/content/article.php?id=482
Here is the link:
http://www.bizjournal.com/content/article.php?id=482
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