GSA Accused of Fabricating Small Business Contracting Statistics by Including Billions to Fortune 500 Firms
Petaluma, Calif. – Yesterday, the General Services Administration (GSA) issued a press release stating that the agency had exceeded all of its small business contracting goals, with the exception of the congressionally mandated 3 percent goal for Service Disabled Veteran Owned Small Businesses.
The GSA failed to mention in its press release on its increased small business contracting numbers, that most of the money actually ended up in the hands of Fortune 1000 corporations, publicly traded firms and even a number of large businesses overseas. This represents the seventh consecutive year that the Bush Administration has released small business contracting statistics that includes billions of dollars in contracts to some of the largest companies in the U.S. and Europe.
There have now been 15 federal investigations during the Bush Administration, that have all found large businesses as the actual recipients of hundreds of billions of dollars in federal small business contracts. In Report 5-15, the Small Business Administration Office of Inspector General stated, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/ig/05-15.pdf)
On July 1, 2008, the Department of Interior (DOI) Office of Inspector General released a report, which stated that the DOI misstated the achievement of its small business goals by including Fortune 500 corporations. According to the report, DOI included dozens of corporate giants such as Dell, GTSI, Home Depot, John Deere, McGraw-Hill, Ricoh, Sherwin Williams, Starwood Hotels, Waste Management Incorporated, Weyerhaeuser, World Wide Technology, and Xerox in its small business contracting statistics. (http://www.doioig.gov/upload/2008-G-0024.pdf)
The American Small Business League (ASBL) intends to file a Freedom of Information Act (FOIA) request to the GSA for the specific names of all of the firms the GSA used to hit and exceed its congressionally mandated small business contracting goals. The ASBL intends to request the information as a means of proving that the Bush Administration once again has fabricated its small business contracting numbers for fiscal year 2007.
The ASBL projects that the Bush Administration diverts up to $100 billion a year in small business contracts to large corporations.
"The Bush Administration has lost all credibility with the public and the media, especially when it comes to small business contracting. There have been 15 federal investigations, which have all found that hundreds of billions of dollars in contracts intended for small businesses actually went to Fortune 500 corporations," ASBL President Lloyd Chapman said. "The GSA's small business statistics are fabricated and have no validity. I would love to have someone from the press contact GSA's Acting Administrator Jim Williams and ask one question, 'are contracts to any Fortune 1000 corporations included in your small business contracting numbers, yes or no?' "
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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
Wednesday, September 17, 2008
Monday, September 15, 2008
Hurricane Relief Will be Hampered By SBA Budget Cuts
The following press release was distributed by the American Small Business League today...
Petaluma, Calif. - Relief to small businesses and homeowners recovering from this season's round of hurricanes will be dramatically hampered by a series of severe Bush Administration budget cuts at the Small Business Administration (SBA). The SBA's ability to respond to victims of Hurricane Katrina was severely handicapped by dramatic budget and staffing cuts at the agency prior to the storm.
The SBA was so overwhelmed during relief efforts following Hurricane Katrina, that the agency was forced to hire thousands of temporary workers to do the work of the multitude of experienced SBA staff that had been laid off by the Bush Administration. A Government Accountability Office (GAO) report issued on July 25, 2007 stated, "SBA also faced challenges training and supervising the thousands of mostly temporary employees the agency hired to process loan applications and obtaining suitable office space for its expanded workforce. As of late May 2006, SBA processed disaster loan applications, on average, in about 74 days compared with its goal of within 21 days." (GAO-07-1124T, http://www.gao.gov/new.items/d071124t.pdf)
The SBA's lack of experienced staff was seen as a contributing factor in the hundreds of cases of fraud and abuse that were uncovered in the aftermath of relief efforts.
On March 28, 2008, the SBA Office of Inspector General released Report 8-11 stating, "Due to the unprecedented number of loans, by the fall of 2006 SBA had accumulated a backlog of more than 90,000 undisbursed loans. To expedite disbursement, SBA launched a 90-in-45 Campaign to resolve the backlog within 45 days. Several SBA employees involved in this initiative complained that, to meet performance goals, SBA disbursed funds against borrowers' wishes, circumvented loan-processing requirements, unnecessarily cancelled approved loans and inappropriately withdrew loan applications." (SBA OIG Report 08-11, http://www.sba.gov/ig/8-11.pdf)
Despite the SBA's efforts to mask its inability to adequately respond to the volume of disaster loan applications following Hurricane Katrina, the agency still managed to accumulate a massive backlog of loan applications.
According to Report 7-20 released by the SBA OIG, following the 2005 Gulf Coast hurricanes, the SBA approved 158,000 disaster loans totaling $10.6 billion. The report stated that as of September 30, 2006, the SBA had only dispersed $3.1 billion or 30 percent of the loans. Furthermore, Report 8-11 states that as of January 25, 2008, the SBA had only dispersed $6.3 billion after approving more than 160,000 disaster loans. (SBA OIG Report 07-11, http://www.sba.gov/ig/7-20.pdf)
Since taking office, President Bush has cut the SBA's budget and staffing more than any other federal agency. Today, the agency's budget is less than half of what it was when President Bush took office.
Depending on the overall magnitude of the damage caused by Hurricanes Ike, Gustav and the remainder of the seasons storms, the SBA may have to once again resort to hiring inexperienced temporary workers as a means of handling the workload the agencies larger and more experienced staff was able to provide in the past.
Relief to victims of this season's hurricanes could be even worse than it was after Katrina, because the SBA's budget and staffing have been cut further in the years following Katrina.
To date, neither Senator Barack Obama (D - IL), nor Senator John McCain (R - AZ) have posed plans to restore the SBA's Budget if elected president.
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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
Petaluma, Calif. - Relief to small businesses and homeowners recovering from this season's round of hurricanes will be dramatically hampered by a series of severe Bush Administration budget cuts at the Small Business Administration (SBA). The SBA's ability to respond to victims of Hurricane Katrina was severely handicapped by dramatic budget and staffing cuts at the agency prior to the storm.
The SBA was so overwhelmed during relief efforts following Hurricane Katrina, that the agency was forced to hire thousands of temporary workers to do the work of the multitude of experienced SBA staff that had been laid off by the Bush Administration. A Government Accountability Office (GAO) report issued on July 25, 2007 stated, "SBA also faced challenges training and supervising the thousands of mostly temporary employees the agency hired to process loan applications and obtaining suitable office space for its expanded workforce. As of late May 2006, SBA processed disaster loan applications, on average, in about 74 days compared with its goal of within 21 days." (GAO-07-1124T, http://www.gao.gov/new.items/d071124t.pdf)
The SBA's lack of experienced staff was seen as a contributing factor in the hundreds of cases of fraud and abuse that were uncovered in the aftermath of relief efforts.
On March 28, 2008, the SBA Office of Inspector General released Report 8-11 stating, "Due to the unprecedented number of loans, by the fall of 2006 SBA had accumulated a backlog of more than 90,000 undisbursed loans. To expedite disbursement, SBA launched a 90-in-45 Campaign to resolve the backlog within 45 days. Several SBA employees involved in this initiative complained that, to meet performance goals, SBA disbursed funds against borrowers' wishes, circumvented loan-processing requirements, unnecessarily cancelled approved loans and inappropriately withdrew loan applications." (SBA OIG Report 08-11, http://www.sba.gov/ig/8-11.pdf)
Despite the SBA's efforts to mask its inability to adequately respond to the volume of disaster loan applications following Hurricane Katrina, the agency still managed to accumulate a massive backlog of loan applications.
According to Report 7-20 released by the SBA OIG, following the 2005 Gulf Coast hurricanes, the SBA approved 158,000 disaster loans totaling $10.6 billion. The report stated that as of September 30, 2006, the SBA had only dispersed $3.1 billion or 30 percent of the loans. Furthermore, Report 8-11 states that as of January 25, 2008, the SBA had only dispersed $6.3 billion after approving more than 160,000 disaster loans. (SBA OIG Report 07-11, http://www.sba.gov/ig/7-20.pdf)
Since taking office, President Bush has cut the SBA's budget and staffing more than any other federal agency. Today, the agency's budget is less than half of what it was when President Bush took office.
Depending on the overall magnitude of the damage caused by Hurricanes Ike, Gustav and the remainder of the seasons storms, the SBA may have to once again resort to hiring inexperienced temporary workers as a means of handling the workload the agencies larger and more experienced staff was able to provide in the past.
Relief to victims of this season's hurricanes could be even worse than it was after Katrina, because the SBA's budget and staffing have been cut further in the years following Katrina.
To date, neither Senator Barack Obama (D - IL), nor Senator John McCain (R - AZ) have posed plans to restore the SBA's Budget if elected president.
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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
Wednesday, September 10, 2008
Venture Capitalists Try to Buy Into Small Business Contracting Programs with Millions in Campaign Contributions
New Senate Bill Sets Dangerous Precedent for Federal Small Business Contracting Programs
Petaluma, Calif. - A new bill set to be voted on by the full Senate could be the beginning of the end for millions of small businesses nationwide. The bill, S. 3362, passed through the Senate Committee on Small Business and Entrepreneurship prior to the congressional summer recess. Under the bill, firms that are owned up to nearly 100 percent by some of the nation's wealthiest venture capitalists would be allowed to compete head-to-head with legitimate small businesses for federal small business contracts.
As passed through committee, S. 3362 would allow firms majority owned by venture capitalists to be awarded up to 18 percent of the Small Business Innovation Research (SBIR) program budget for the National Institutes of Health (NIH) and up to 8 percent for all other federal agencies. The law would allow groups of venture capital firms, otherwise known as syndicates, to own a majority interest in a small business, while still being considered a small business for the purposes of participation in federal contracting programs. Under S. 3362, no single venture capital operating company would be allowed to own more than 49 percent of a small business and qualify for small business programs.
Small business advocates are concerned that the new legislation will set a dangerous precedent for venture capital participation in all federal programs designed for small businesses. Last year, the House of Representatives passed H.R. 3567, which as originally written, would have amended the Small Business Act to allow firms owned up to 51 percent by a single venture capital firm to qualify as a small business. Small business advocates see the "handwriting on the wall," as Congress may be moving to amend the Small Business Act to allow firms that are owned and controlled by some of the nation's wealthiest venture capitalists to participate in federal small business contracting programs.
For several years, venture capitalists have blanketed Congress with millions of dollars in contributions in an effort to force legislators to pass legislation to allow billionaire venture capitalists to participate in federal small business contracting programs. Small business advocates and owners are concerned that Democratic leaders in Congress are virtually selling small business programs to the venture capital industry.
"At a time when our nation is in one of the worst economic downturns in its history, small businesses across America now more than ever need the benefits of federal small business contracting programs," American Small Business League President Lloyd Chapman said. "If S. 3362 becomes law, Bill Gates, Warren Buffet and Donald Trump will all be able to participate in federal small business programs and I can assure you that is not what Congress had in mind when they passed the Small Business Act."
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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
Petaluma, Calif. - A new bill set to be voted on by the full Senate could be the beginning of the end for millions of small businesses nationwide. The bill, S. 3362, passed through the Senate Committee on Small Business and Entrepreneurship prior to the congressional summer recess. Under the bill, firms that are owned up to nearly 100 percent by some of the nation's wealthiest venture capitalists would be allowed to compete head-to-head with legitimate small businesses for federal small business contracts.
As passed through committee, S. 3362 would allow firms majority owned by venture capitalists to be awarded up to 18 percent of the Small Business Innovation Research (SBIR) program budget for the National Institutes of Health (NIH) and up to 8 percent for all other federal agencies. The law would allow groups of venture capital firms, otherwise known as syndicates, to own a majority interest in a small business, while still being considered a small business for the purposes of participation in federal contracting programs. Under S. 3362, no single venture capital operating company would be allowed to own more than 49 percent of a small business and qualify for small business programs.
Small business advocates are concerned that the new legislation will set a dangerous precedent for venture capital participation in all federal programs designed for small businesses. Last year, the House of Representatives passed H.R. 3567, which as originally written, would have amended the Small Business Act to allow firms owned up to 51 percent by a single venture capital firm to qualify as a small business. Small business advocates see the "handwriting on the wall," as Congress may be moving to amend the Small Business Act to allow firms that are owned and controlled by some of the nation's wealthiest venture capitalists to participate in federal small business contracting programs.
For several years, venture capitalists have blanketed Congress with millions of dollars in contributions in an effort to force legislators to pass legislation to allow billionaire venture capitalists to participate in federal small business contracting programs. Small business advocates and owners are concerned that Democratic leaders in Congress are virtually selling small business programs to the venture capital industry.
"At a time when our nation is in one of the worst economic downturns in its history, small businesses across America now more than ever need the benefits of federal small business contracting programs," American Small Business League President Lloyd Chapman said. "If S. 3362 becomes law, Bill Gates, Warren Buffet and Donald Trump will all be able to participate in federal small business programs and I can assure you that is not what Congress had in mind when they passed the Small Business Act."
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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
Thursday, September 4, 2008
New SBA Head Stalling the Release of Latest Small Business Contracting Statistics
Petaluma, Calif. - In late July, the Small Business Administration (SBA) announced it would release its official federal small business contracting statistics for Fiscal Year (FY) 2007 by the end of August. On August 25, 2008, attorneys representing the SBA told Federal District Court Judge Marilyn H. Patel that the SBA did not have any information on the volume of contracts awarded to small business or the specific names of the firms that received those contracts.
In court documents Patel stated, "The court finds curious the SBA's argument that it does not 'control' the very information it needs to carry out its duties and functions." (http://www.asbl.com/documents/20080925courtordermod.pdf)
Now, in his second week on the job, new Acting Administrator of the SBA Santanu "Sandy" Baruah appears to be refusing to release the Bush Administration's latest small business contracting statistics. This is the first time in the SBA's 55-year history the agency has delayed the release of the federal government's small business contracting statistics until this late in the year.
The federal government's fiscal year for 2007 ended on September 31, 2007. The SBA has now had more than eleven months to review the data and release it. Since the government's contracting information is in a real-time database, the information could have been released on October 1, 2007.
The American Small Business League (ASBL) believes that Acting Administrator Baruah is withholding the Bush Administration's small business contracting statistics to avoid an inevitable challenge to the accuracy of the information in the press during the Republican National Convention. The ASBL believes the latest Bush Administration small business data will include hundreds of Fortune 1000 firms as it has every year during Bush's tenure.
Since 2003, 15 federal investigations have all found wide spread abuses in federal small business contracting programs, such as the diversion of billions of dollars in federal small business contracts to Fortune 500 firms. Some of the firms that have received small business contracts during the Bush Administration include: Lockheed Martin, Boeing, Battelle, Raytheon, General Dynamics, Northrop Grumman, L-3 Communications, Titan Industries, Xerox, John Deere and British Aerospace and Engineering (BAE). (http://www.asbl.com/documentlibrary.html)
In response to the series of investigations and over 400 stories on the issue in mainstream-media outlets across the United States, the Bush Administration has responded by making it more and more difficult for the public and the media to determine the actual recipients of federal small business contracts. Bush officials have repeatedly refused Freedom of Information Act (FOIA) requests for the specific names of firms that received government small business contracts. In June of 2007, the SBA adopted a policy, which will allow Fortune 500 firms to continue to receive federal small business contracts until 2012.
On July 30, 2008, Bush officials adopted a policy, which no longer requires government contractors to state their annual revenue or their number of employees. This makes it difficult, if not impossible, for the public to determine if large businesses are misrepresenting themselves as a small businesses. (http://www.asbl.com/documents/20080903ccrchange.pdf)
The ASBL plans to request the 2007 small business contracting statistics under FOIA if the information is not released by the end of the week.
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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn [at] asbl.com
(707) 789-9575
In court documents Patel stated, "The court finds curious the SBA's argument that it does not 'control' the very information it needs to carry out its duties and functions." (http://www.asbl.com/documents/20080925courtordermod.pdf)
Now, in his second week on the job, new Acting Administrator of the SBA Santanu "Sandy" Baruah appears to be refusing to release the Bush Administration's latest small business contracting statistics. This is the first time in the SBA's 55-year history the agency has delayed the release of the federal government's small business contracting statistics until this late in the year.
The federal government's fiscal year for 2007 ended on September 31, 2007. The SBA has now had more than eleven months to review the data and release it. Since the government's contracting information is in a real-time database, the information could have been released on October 1, 2007.
The American Small Business League (ASBL) believes that Acting Administrator Baruah is withholding the Bush Administration's small business contracting statistics to avoid an inevitable challenge to the accuracy of the information in the press during the Republican National Convention. The ASBL believes the latest Bush Administration small business data will include hundreds of Fortune 1000 firms as it has every year during Bush's tenure.
Since 2003, 15 federal investigations have all found wide spread abuses in federal small business contracting programs, such as the diversion of billions of dollars in federal small business contracts to Fortune 500 firms. Some of the firms that have received small business contracts during the Bush Administration include: Lockheed Martin, Boeing, Battelle, Raytheon, General Dynamics, Northrop Grumman, L-3 Communications, Titan Industries, Xerox, John Deere and British Aerospace and Engineering (BAE). (http://www.asbl.com/documentlibrary.html)
In response to the series of investigations and over 400 stories on the issue in mainstream-media outlets across the United States, the Bush Administration has responded by making it more and more difficult for the public and the media to determine the actual recipients of federal small business contracts. Bush officials have repeatedly refused Freedom of Information Act (FOIA) requests for the specific names of firms that received government small business contracts. In June of 2007, the SBA adopted a policy, which will allow Fortune 500 firms to continue to receive federal small business contracts until 2012.
On July 30, 2008, Bush officials adopted a policy, which no longer requires government contractors to state their annual revenue or their number of employees. This makes it difficult, if not impossible, for the public to determine if large businesses are misrepresenting themselves as a small businesses. (http://www.asbl.com/documents/20080903ccrchange.pdf)
The ASBL plans to request the 2007 small business contracting statistics under FOIA if the information is not released by the end of the week.
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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn [at] asbl.com
(707) 789-9575
Tuesday, August 26, 2008
Democratic Platform Dodges Key Small Business Issues
FOR IMMEDIATE RELEASE
August 26, 2008
Petaluma, Calif. – Approximately 168 million Americans work in nearly 27 million small businesses across the United States. There are several key issues effecting small businesses in middle class America that are conspicuously absent from the portion of the 2008 Democratic National Platform which specifically addresses small businesses. Most of the statements in the Platform, which reference small businesses, are vague, such as “We will help small businesses facing high energy costs.”
The Democratic National Platform makes no mention of any specific plans to address three small business issues that could infuse billions of dollars into the middle class economy, which has been the hardest hit by the recent dramatic downturn in the U.S. economy.
The following are just a few examples of critically important small business issues that are not mentioned in the Democratic National Platform: the restoration of the Small Business Administration's (SBA) budget and staffing; ending the diversion of billions of dollars in federal small business contracts to Fortune 500 firms; and the implementation of the federal law establishing a 5 percent set-aside contracting goal for woman-owned firms.
The SBA is the only agency in Washington specifically charged with assisting small businesses. Since taking office in 2001, the Bush Administration has cut the SBA’s budget and staffing more than any other federal agency. When President Bush leaves office, the SBA will be approximately half the size it was when he arrived in Washington. Several senior SBA officials have privately acknowledged the SBA has been cut to the point that “the agency can no longer carry out its mission.” The SBA is so understaffed that after hurricane Katrina the agency was forced to hire more than two thousand temporary employees to handle the workload.
During the last thirty days alone, four separate federal investigations have been released, which have found rampant abuses in several SBA programs. In each case, a lack of proper oversight by SBA officials was a major contributing factor to the problems.
Under the Bush Administration, dozens of other federal programs designed to assist woman-owned firms, minority-owned firms, veteran-owned firms and other small business have been crippled or even eliminated by budget and staffing cuts at the SBA.
Considering the current severe economic downturn in America, any political platform that purports to support small businesses should include specific plans to not only restore, but significantly expand the SBA’s budget, staffing and programs.
Since 2003, 15 separate federal investigations have found widespread fraud, abuse and mismanagement in federal small business contracting programs. A multitude of problems have allowed hundreds of billions of dollars in federal small business contracts to be diverted to Fortune 500 firms and hundreds of other large businesses around the world. Some of the largest recipients of federal small business contracts have been British Aerospace and Engineering (BAE), Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Titan Industries and Dutch conglomerate Buhrmann NV.
In Report 5-15, the SBA Office of Inspector General stated, “One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards.”
Any genuine plan to address the sagging economy by bolstering opportunities for the middle class would have to specifically address the wholesale diversion of federal small business contracts to Fortune 500 firms.
More than seven years ago, President Clinton signed legislation, which established a 5 percent set-aside contracting goal for woman-owned firms. The Bush Administration has persistently refused to implement the program. As a result, woman-owned firms have lost billions of dollars in federal contracting opportunities. The Democratic platform makes no mention of their intention to fully implement this program.
If the Democratic party wants to convince middle class voters that they have the solutions to the challenges facing small business, they must adopt clear and specific solutions for restoring the SBA’s budget and staffing, halt the flow of federal small business contracts to Fortune 500 firms and fully implement the federal law establishing the 5 percent set-aside contracting goal for woman-owned small businesses.
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August 26, 2008
Petaluma, Calif. – Approximately 168 million Americans work in nearly 27 million small businesses across the United States. There are several key issues effecting small businesses in middle class America that are conspicuously absent from the portion of the 2008 Democratic National Platform which specifically addresses small businesses. Most of the statements in the Platform, which reference small businesses, are vague, such as “We will help small businesses facing high energy costs.”
The Democratic National Platform makes no mention of any specific plans to address three small business issues that could infuse billions of dollars into the middle class economy, which has been the hardest hit by the recent dramatic downturn in the U.S. economy.
The following are just a few examples of critically important small business issues that are not mentioned in the Democratic National Platform: the restoration of the Small Business Administration's (SBA) budget and staffing; ending the diversion of billions of dollars in federal small business contracts to Fortune 500 firms; and the implementation of the federal law establishing a 5 percent set-aside contracting goal for woman-owned firms.
The SBA is the only agency in Washington specifically charged with assisting small businesses. Since taking office in 2001, the Bush Administration has cut the SBA’s budget and staffing more than any other federal agency. When President Bush leaves office, the SBA will be approximately half the size it was when he arrived in Washington. Several senior SBA officials have privately acknowledged the SBA has been cut to the point that “the agency can no longer carry out its mission.” The SBA is so understaffed that after hurricane Katrina the agency was forced to hire more than two thousand temporary employees to handle the workload.
During the last thirty days alone, four separate federal investigations have been released, which have found rampant abuses in several SBA programs. In each case, a lack of proper oversight by SBA officials was a major contributing factor to the problems.
Under the Bush Administration, dozens of other federal programs designed to assist woman-owned firms, minority-owned firms, veteran-owned firms and other small business have been crippled or even eliminated by budget and staffing cuts at the SBA.
Considering the current severe economic downturn in America, any political platform that purports to support small businesses should include specific plans to not only restore, but significantly expand the SBA’s budget, staffing and programs.
Since 2003, 15 separate federal investigations have found widespread fraud, abuse and mismanagement in federal small business contracting programs. A multitude of problems have allowed hundreds of billions of dollars in federal small business contracts to be diverted to Fortune 500 firms and hundreds of other large businesses around the world. Some of the largest recipients of federal small business contracts have been British Aerospace and Engineering (BAE), Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Titan Industries and Dutch conglomerate Buhrmann NV.
In Report 5-15, the SBA Office of Inspector General stated, “One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards.”
Any genuine plan to address the sagging economy by bolstering opportunities for the middle class would have to specifically address the wholesale diversion of federal small business contracts to Fortune 500 firms.
More than seven years ago, President Clinton signed legislation, which established a 5 percent set-aside contracting goal for woman-owned firms. The Bush Administration has persistently refused to implement the program. As a result, woman-owned firms have lost billions of dollars in federal contracting opportunities. The Democratic platform makes no mention of their intention to fully implement this program.
If the Democratic party wants to convince middle class voters that they have the solutions to the challenges facing small business, they must adopt clear and specific solutions for restoring the SBA’s budget and staffing, halt the flow of federal small business contracts to Fortune 500 firms and fully implement the federal law establishing the 5 percent set-aside contracting goal for woman-owned small businesses.
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Thursday, August 21, 2008
New Bush Administration Policy Helps Large Businesses Masquerade as Small Businesses
Petaluma, Calif. – A new Bush Administration policy will make it easier for large businesses to land government small business contracts by misrepresenting themselves as small businesses in government supplier databases. Under the new policy, firms will no longer be required to list their annual revenue or number of employees on the federal government’s Central Contractor Registration Database (CCR).
In the past, firms that listed themselves in the CCR database were required to disclose their annual revenue and total number of employees. This specific information was mandatory, because federal guidelines that determine a firm's eligibility to participate in federal small business contracting programs were based on these two fields. (http://www.ccr.gov/)
Making annual revenue or number of employees’ fields optional in the CCR will make it extremely difficult to determine if large firms are misrepresenting themselves as small businesses for the purpose of receiving federal small business contracts.
Since 2002, the Bush Administration has made several modifications to the CCR database as a means of making it increasingly difficult to determine if a firm is small or large.
Despite repeated statements from Bush Administration officials about increasing transparency and improving the accuracy of reported data in federal small business contracting programs, the new policy is seen as another major step backwards in accuracy and transparency.
Since 2003, 15 federal investigations have all found billions of dollars in federal small business contracts actually wound up in the hands of Fortune 500 firms and hundreds of other large businesses. Within the last thirty days, four separate investigations have been released which have found fraud and rampant abuses in government small business contracting programs. In one instance, the Department of Interior (DOI) Office of Inspector General found that the DOI had misstated the achievement of its small business goals by including Fortune 500 corporations.
(http://www.doioig.gov/upload/2008-G-0024.pdf)
In 2005, the SBA Office of Inspector General released Report 5-16, which found large businesses had received government small business contracts by making "false certifications.” (http://www.sba.gov/IG/05-16.pdf)
This policy will exacerbate the problem of large businesses receiving government small business contracts. It will now be even more difficult for federal officials, the public and watchdog groups to monitor the CCR database and uncover large businesses trying to masquerade as small businesses to illegally receive government small business contracts.
The new policy is the latest in a long series of similar Bush Administration policies designed to dismantle federal small business contracting programs and divert billions of dollars in federal small business contracts to large businesses. In February of 2007, former SBA Administrator Steven Preston removed all employee and revenue data from the CCR database in the middle of a CBS investigation on the actual recipients of federal small business contracts. In 2007, Preston adopted a policy that will allow Fortune 500 firms and hundreds of other large businesses to continue to receive federal small business contracts until the year 2012. (http://www.asbl.com/showmedia.php?id=553)
The American Small Business League (ASBL) is concerned that Acting Administrator of the SBA, Santanu "Sandy" Baruah may try to institute more policies that will further damage federal small business contracting programs as the Bush Administration comes to a close. The ASBL believes closing the SBA and ending all federal programs to assist woman-owned firms, minority-owned firms, veteran-owned firms and small businesses was a major goal of the Bush Administration. The ASBL predicts President Bush may still try to close the SBA by combining it with the United States Department of Commerce or some other federal agency. (http://www.asbl.com/showmedia.php?id=1068)
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In the past, firms that listed themselves in the CCR database were required to disclose their annual revenue and total number of employees. This specific information was mandatory, because federal guidelines that determine a firm's eligibility to participate in federal small business contracting programs were based on these two fields. (http://www.ccr.gov/)
Making annual revenue or number of employees’ fields optional in the CCR will make it extremely difficult to determine if large firms are misrepresenting themselves as small businesses for the purpose of receiving federal small business contracts.
Since 2002, the Bush Administration has made several modifications to the CCR database as a means of making it increasingly difficult to determine if a firm is small or large.
Despite repeated statements from Bush Administration officials about increasing transparency and improving the accuracy of reported data in federal small business contracting programs, the new policy is seen as another major step backwards in accuracy and transparency.
Since 2003, 15 federal investigations have all found billions of dollars in federal small business contracts actually wound up in the hands of Fortune 500 firms and hundreds of other large businesses. Within the last thirty days, four separate investigations have been released which have found fraud and rampant abuses in government small business contracting programs. In one instance, the Department of Interior (DOI) Office of Inspector General found that the DOI had misstated the achievement of its small business goals by including Fortune 500 corporations.
(http://www.doioig.gov/upload/2008-G-0024.pdf)
In 2005, the SBA Office of Inspector General released Report 5-16, which found large businesses had received government small business contracts by making "false certifications.” (http://www.sba.gov/IG/05-16.pdf)
This policy will exacerbate the problem of large businesses receiving government small business contracts. It will now be even more difficult for federal officials, the public and watchdog groups to monitor the CCR database and uncover large businesses trying to masquerade as small businesses to illegally receive government small business contracts.
The new policy is the latest in a long series of similar Bush Administration policies designed to dismantle federal small business contracting programs and divert billions of dollars in federal small business contracts to large businesses. In February of 2007, former SBA Administrator Steven Preston removed all employee and revenue data from the CCR database in the middle of a CBS investigation on the actual recipients of federal small business contracts. In 2007, Preston adopted a policy that will allow Fortune 500 firms and hundreds of other large businesses to continue to receive federal small business contracts until the year 2012. (http://www.asbl.com/showmedia.php?id=553)
The American Small Business League (ASBL) is concerned that Acting Administrator of the SBA, Santanu "Sandy" Baruah may try to institute more policies that will further damage federal small business contracting programs as the Bush Administration comes to a close. The ASBL believes closing the SBA and ending all federal programs to assist woman-owned firms, minority-owned firms, veteran-owned firms and small businesses was a major goal of the Bush Administration. The ASBL predicts President Bush may still try to close the SBA by combining it with the United States Department of Commerce or some other federal agency. (http://www.asbl.com/showmedia.php?id=1068)
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Tuesday, August 19, 2008
NVCA Moves to Hijack Federal Small Business Contracts
The American Small Business League distributed the following press release today:
Petaluma, Calif. – The National Venture Capital Association (NVCA) has blanketed the Congressional small business committees with generous campaign contributions in an attempt to have legislation passed which will allow the nation’s wealthiest investors to cash in on government contracts earmarked for small businesses.
In addition to contributions to most of the members of the House and Senate small business committees, the NVCA and its members have made significant campaign contributions to the Chair of the House Committee on Small Business, Nydia Velázquez (D – NY) and to House Speaker Nancy Pelosi (D – CA).
Federal law requires that 23 percent of all federal contracts and subcontracts, about $135 billion a year, be awarded to small businesses. If the NVCA is successful, a lion’s share of those small business contracts could soon be diverted to firms owned and controlled by some of the largest venture capital firms in the United States.
On September 30, the Small Business Innovation Research Program is set to expire. With that in mind, the Senate Committee on Small Business and Entrepreneurship has passed S. 3362, the SBIR/STTR Reauthorization Act of 2008. The bill will allow some of the largest venture capital firms in America to participate in federal small business programs. The bill caps venture capital participation at 18 percent for the National Institutes of Health and 8 percent for other agencies. If passed through the Senate, the bill would go to a conference committee between the House and Senate to be finalized.
With S.3362 pending, the NVCA and its members are pushing to include a substantial portion of the legislative language from two House bills which were passed through the House last year and were designed to reauthorize the program. As passed, Both H.R 3567 and H.R. 5819, would allow firms owned and controlled by billionaire venture capitalists and wealthy investors to qualify and participate in government small business contracting programs without limits on the total amount of venture capital participation in the program.
Small business advocates are concerned that if the legislation becomes law, the average American small business will be forced to compete head-to-head with firms owned and controlled by the nation’s largest venture capital companies for even the smallest orders of goods or services.
The American Small Business League (ASBL) projects that thousands of middle class firms across the country will be forced to close their doors if the NVCA is successful. Larger states like Texas, Florida, New York, Illinois and California could lose billions of dollars in federal contract dollars and thousands of jobs. Smaller states that have been hit the hardest by the current economic downturn will no doubt feel the impact of this legislation, which will pull hundreds of millions of dollars out of the middle class economy in those states.
Speaker Nancy Pelosi exerted so much pressure on members of the House, she was able to push the bills through in record time. In fact, Pelosi pushed the bills through the House so quickly that many members of the House voted for the bill before they had the chance to read the legislation or receive feedback from their constituents. As a result, the bills were passed despite opposition from every major small businesses organization in the country, including the Small Business Administration (SBA).
The fate of small business owners and the SBIR program is now in the hands of the full Senate. Small business owners and advocates were shocked and disappointed when Senate Small Business Committee Chair John Kerry (D – MA) passed the Senate version of H.R. 5819, S. 3362 through his committee shortly before the summer recess.
“Senator Kerry has been complaining for years about loopholes and Bush Administration policies that allow Fortune 500 firms to receive federal small business contracts. Yet, he has done nothing to stop that problem,” ASBL President Lloyd Chapman said. “Now he is backing federal legislation to give small business contracts to venture capital firms and billionaires. I couldn’t be more disappointed in this Congress and it’s leaders.”
The ASBL has pledged to fight both pieces of legislation by organizing opposition from Chambers of Commerce, other small business organizations and small business owners across the country.
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Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
Petaluma, Calif. – The National Venture Capital Association (NVCA) has blanketed the Congressional small business committees with generous campaign contributions in an attempt to have legislation passed which will allow the nation’s wealthiest investors to cash in on government contracts earmarked for small businesses.
In addition to contributions to most of the members of the House and Senate small business committees, the NVCA and its members have made significant campaign contributions to the Chair of the House Committee on Small Business, Nydia Velázquez (D – NY) and to House Speaker Nancy Pelosi (D – CA).
Federal law requires that 23 percent of all federal contracts and subcontracts, about $135 billion a year, be awarded to small businesses. If the NVCA is successful, a lion’s share of those small business contracts could soon be diverted to firms owned and controlled by some of the largest venture capital firms in the United States.
On September 30, the Small Business Innovation Research Program is set to expire. With that in mind, the Senate Committee on Small Business and Entrepreneurship has passed S. 3362, the SBIR/STTR Reauthorization Act of 2008. The bill will allow some of the largest venture capital firms in America to participate in federal small business programs. The bill caps venture capital participation at 18 percent for the National Institutes of Health and 8 percent for other agencies. If passed through the Senate, the bill would go to a conference committee between the House and Senate to be finalized.
With S.3362 pending, the NVCA and its members are pushing to include a substantial portion of the legislative language from two House bills which were passed through the House last year and were designed to reauthorize the program. As passed, Both H.R 3567 and H.R. 5819, would allow firms owned and controlled by billionaire venture capitalists and wealthy investors to qualify and participate in government small business contracting programs without limits on the total amount of venture capital participation in the program.
Small business advocates are concerned that if the legislation becomes law, the average American small business will be forced to compete head-to-head with firms owned and controlled by the nation’s largest venture capital companies for even the smallest orders of goods or services.
The American Small Business League (ASBL) projects that thousands of middle class firms across the country will be forced to close their doors if the NVCA is successful. Larger states like Texas, Florida, New York, Illinois and California could lose billions of dollars in federal contract dollars and thousands of jobs. Smaller states that have been hit the hardest by the current economic downturn will no doubt feel the impact of this legislation, which will pull hundreds of millions of dollars out of the middle class economy in those states.
Speaker Nancy Pelosi exerted so much pressure on members of the House, she was able to push the bills through in record time. In fact, Pelosi pushed the bills through the House so quickly that many members of the House voted for the bill before they had the chance to read the legislation or receive feedback from their constituents. As a result, the bills were passed despite opposition from every major small businesses organization in the country, including the Small Business Administration (SBA).
The fate of small business owners and the SBIR program is now in the hands of the full Senate. Small business owners and advocates were shocked and disappointed when Senate Small Business Committee Chair John Kerry (D – MA) passed the Senate version of H.R. 5819, S. 3362 through his committee shortly before the summer recess.
“Senator Kerry has been complaining for years about loopholes and Bush Administration policies that allow Fortune 500 firms to receive federal small business contracts. Yet, he has done nothing to stop that problem,” ASBL President Lloyd Chapman said. “Now he is backing federal legislation to give small business contracts to venture capital firms and billionaires. I couldn’t be more disappointed in this Congress and it’s leaders.”
The ASBL has pledged to fight both pieces of legislation by organizing opposition from Chambers of Commerce, other small business organizations and small business owners across the country.
-###-
Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
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