FOR IMMEDIATE RELEASE
April 15, 2009
Petaluma, Calif. - Yesterday, President Barack Obama gave a 60-minute speech to the nation regarding the state of the economy. His speech discussed the Obama Administration's five pillars for addressing the economy, however President Obama's plans for helping America's biggest job creators, its small businesses, were conspicuously absent.
During the campaign, President Obama said he would create millions of jobs. According to the U.S. Census Bureau, 98 percent of all U.S. firms have less than 100 employees, and those firms are responsible for over 98 percent of all new jobs in America. (www.asbl.com)
To date, President Obama has given 100 percent of the stimulus funds to the top 1 percent of American firms. According to the U.S. Census Bureau, those large firms have not created one net new job since 1977.
In his March 22, 2009 column in the New York Times, Nobel Prize winning economist Paul Krugman wrote about President Obama's plan to save the economy and stated, "This is more than disappointing. In fact, it fills me with a sense of despair." In March, Krugman also stated that Obama's economic policies are almost certain to fail. (http://www.nytimes.com/2009/03/23/opinion/23krugman.html?_r=1)
Since 2003, over 15 federal investigations have found that hundreds of billions of dollars in federal small business contracts have been diverted to Fortune 500 corporations and thousands of other large businesses in the United States and Europe. (http://www.asbl.com/documentlibrary.html)
Groups like the American Small Business League (ASBL) are angry with President Obama because of his refusal to make good on a February 2008 campaign promise in which he stated, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)
Small business owners around the country are angered and disappointed that President Obama has refused to make good on his campaign promise, and has allowed an estimated $2 billion a week in federal small business contracts to be diverted to some of the largest corporations in the world, including Fortune 500 firms.
"You don't have to be a Nobel Prize winning economist to figure this out. Small businesses create 98 percent of all new jobs. So far, not only has President Obama not given those companies a dime of the stimulus funding, but he is refusing to end blatant, widespread fraud and abuse in existing government economic stimulus programs for small businesses," ASBL President Lloyd Chapman said.
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Wednesday, April 15, 2009
Monday, April 13, 2009
Lloyd Chapman: Obama Ignores Simple Solution to Stimulate Economy
President Barack Obama is a smart man, and he has no doubt surrounded himself with a multitude of well-educated and extremely intelligent individuals. With that in mind, it is difficult to understand why he has consistently ignored some of the most fundamental principals of the U.S. economy, and the suggestions of some of our nation's leading economic experts in drafting his stimulus plan.
President Obama's stimulus plan ignores the fact that 98 percent of all firms in the United States have less than 100 employees. Over 26 million firms fall into that category. They employ approximately 50.4 percent of the private sector workforce and create over 80 percent of all new jobs in America. These firms are responsible for over 90 percent of all U.S. exports and over 90 percent of all technological innovation in America. Large businesses on the other hand, have not created one net new job in America since 1977.
If President Obama wants to stimulate the national economy and create jobs, he needs to adopt policies and legislation to direct federal infrastructure funds to America's 27 million small businesses.
Recently, Carly Fiorina and Laura Tyson were on CNN regarding the economy. Dr. Laura Tyson was the Chair of the U.S. President's Council of Economic Advisers under the Clinton Administration. Carly Fiorina was the former CEO of Hewlett-Packard and one of Senator John McCain's top economic advisors. They both agreed the best way to stimulate the failing U.S. economy is to direct federal infrastructure funds to small businesses. (http://www.youtube.com/watch?v=jR-fWcpkOHM)
When Congress passed the Small Business Act in 1953, its members realized what President Obama seems to have missed, that small businesses are the heart and soul of the U.S. economy. The Small Business Act was an economic stimulus plan, and it worked. Existing federal law states that a minimum of 23 percent of the total value of all federal contracts and subcontracts shall be awarded to small businesses.
Unfortunately, during the Bush Administration, the Small Business Act and all the benefits it provided to our national economy were significantly damaged. Since 2003, over a dozen federal investigations found Bush officials in every federal agency allowed billions of dollars in federal small business contracts to be diverted to some of the largest firms in the U.S. and even Europe. (http://www.asbl.com/documentlibrary.html)
Investigative stories by ABC, CBS and CNN as well as many of the nation's largest newspapers have reported that hundreds of billions of dollars in federal contracts that by law were intended for small businesses, actually went to firms such as Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, L-3 Communications, British Aerospace (BAE) and Rolls-Royce. (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)
The American Small Business League (ASBL) won a series of federal lawsuits against the Bush Administration that forced the release of over 30,000 pages of information on the actual recipients of federal small business contracts. Many of the federal investigations into the diversion of federal small business contracts to corporate giants were based on information provided by the ASBL. Based on information obtained through years of litigation, and information gleaned from several current and former government executives, the ASBL estimates over $100 billion a year in federal small business contracts are diverted to Fortune 500 firms and other large businesses.
So far, nothing President Obama has proposed to stimulate our nation's failing economy would be as effective and cost efficient as simply adopting policies and legislation that would redirect over $100 billion, year-after-year, back into the middle class economy.
If President Obama sincerely wants to create jobs and stimulate the national economy he needs to start by making good on a campaign promise he made in February of 2008 when he stated, "Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)
President Obama's stimulus plan ignores the fact that 98 percent of all firms in the United States have less than 100 employees. Over 26 million firms fall into that category. They employ approximately 50.4 percent of the private sector workforce and create over 80 percent of all new jobs in America. These firms are responsible for over 90 percent of all U.S. exports and over 90 percent of all technological innovation in America. Large businesses on the other hand, have not created one net new job in America since 1977.
If President Obama wants to stimulate the national economy and create jobs, he needs to adopt policies and legislation to direct federal infrastructure funds to America's 27 million small businesses.
Recently, Carly Fiorina and Laura Tyson were on CNN regarding the economy. Dr. Laura Tyson was the Chair of the U.S. President's Council of Economic Advisers under the Clinton Administration. Carly Fiorina was the former CEO of Hewlett-Packard and one of Senator John McCain's top economic advisors. They both agreed the best way to stimulate the failing U.S. economy is to direct federal infrastructure funds to small businesses. (http://www.youtube.com/watch?v=jR-fWcpkOHM)
When Congress passed the Small Business Act in 1953, its members realized what President Obama seems to have missed, that small businesses are the heart and soul of the U.S. economy. The Small Business Act was an economic stimulus plan, and it worked. Existing federal law states that a minimum of 23 percent of the total value of all federal contracts and subcontracts shall be awarded to small businesses.
Unfortunately, during the Bush Administration, the Small Business Act and all the benefits it provided to our national economy were significantly damaged. Since 2003, over a dozen federal investigations found Bush officials in every federal agency allowed billions of dollars in federal small business contracts to be diverted to some of the largest firms in the U.S. and even Europe. (http://www.asbl.com/documentlibrary.html)
Investigative stories by ABC, CBS and CNN as well as many of the nation's largest newspapers have reported that hundreds of billions of dollars in federal contracts that by law were intended for small businesses, actually went to firms such as Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, L-3 Communications, British Aerospace (BAE) and Rolls-Royce. (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)
The American Small Business League (ASBL) won a series of federal lawsuits against the Bush Administration that forced the release of over 30,000 pages of information on the actual recipients of federal small business contracts. Many of the federal investigations into the diversion of federal small business contracts to corporate giants were based on information provided by the ASBL. Based on information obtained through years of litigation, and information gleaned from several current and former government executives, the ASBL estimates over $100 billion a year in federal small business contracts are diverted to Fortune 500 firms and other large businesses.
So far, nothing President Obama has proposed to stimulate our nation's failing economy would be as effective and cost efficient as simply adopting policies and legislation that would redirect over $100 billion, year-after-year, back into the middle class economy.
If President Obama sincerely wants to create jobs and stimulate the national economy he needs to start by making good on a campaign promise he made in February of 2008 when he stated, "Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)
Wednesday, April 8, 2009
New SBA Administrator Should Remove Executives that Covered up Fraud and Abuse
FOR IMMEDIATE RELEASE
April 8, 2009
Petaluma, Calif. – During the Bush Administration over 15 federal investigations and two private studies have found fraud, and widespread blatant abuses in a variety of programs administered by the U.S. Small Business Administration (SBA).
Several investigations such as Report 5-16 from the SBA Office of Inspector General (IG) found large businesses had received federal small business contracts illegally by making what the SBA IG referred to as "false certifications" and "improper certifications." (http://www.sba.gov/IG/05-16.pdf)
Another investigation from the SBA Office of Advocacy found large businesses had received federal small business contracts fraudulently through what they referred to as "vendor deception." (http://www.asbl.com/documents/eagkeeye_report%202002.pdf)
Under section 16(d) of the Small Business Act, misrepresenting a firm's status as a small business to illegally receive federal small business contracts is a felony, which carries a $500,000 fine per occurrence, up to ten years in prison and debarment from federal contracting programs. (http://www.smallbusinessnotes.com/fedgovernment/sba/sbact.html)
During the eight years of the Bush Administration, several SBA executives were clearly involved in an ongoing campaign to cover-up and minimize the fraud and abuses that were uncovered through the federal investigations, as well as in investigative stories in the media.
Several SBA executives conspired to deny the presence of any fraud and abuse in SBA programs for over seven years by describing even the most blatant cases of fraud and abuse as "miscoding." On several occasions they went so far as to launch a campaign to convince Congress, the public and the media that it was a "myth" that large businesses were receiving federal small business contracts. (http://www.asbl.com/documents/sbamythvfact.pdf)
Other SBA executives launched campaigns to cover-up fraud and abuse by fraudulent contractors by fighting legal efforts to obtain data under the Freedom of Information Act (FOIA) that would uncover blatant abuses in programs administered by the SBA. (http://www.asbl.com/showmedia.php?id=1151)
Federal court rulings even opposed the SBA's executives campaign to withhold damaging information by ruling against the SBA in each and every FOIA case filed by advocacy groups like the American Small Business League (ASBL). (www.asbl.com)
In February of 2008, President Barack Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php) If new SBA Administrator Karen Mills intends to end fraud and abuse at the SBA, she will make good on President Obama's campaign promise. The SBA executives responsible for allowing the abuses, and then attempting to cover them up must be removed as one of Mills' first actions at the SBA.
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April 8, 2009
Petaluma, Calif. – During the Bush Administration over 15 federal investigations and two private studies have found fraud, and widespread blatant abuses in a variety of programs administered by the U.S. Small Business Administration (SBA).
Several investigations such as Report 5-16 from the SBA Office of Inspector General (IG) found large businesses had received federal small business contracts illegally by making what the SBA IG referred to as "false certifications" and "improper certifications." (http://www.sba.gov/IG/05-16.pdf)
Another investigation from the SBA Office of Advocacy found large businesses had received federal small business contracts fraudulently through what they referred to as "vendor deception." (http://www.asbl.com/documents/eagkeeye_report%202002.pdf)
Under section 16(d) of the Small Business Act, misrepresenting a firm's status as a small business to illegally receive federal small business contracts is a felony, which carries a $500,000 fine per occurrence, up to ten years in prison and debarment from federal contracting programs. (http://www.smallbusinessnotes.com/fedgovernment/sba/sbact.html)
During the eight years of the Bush Administration, several SBA executives were clearly involved in an ongoing campaign to cover-up and minimize the fraud and abuses that were uncovered through the federal investigations, as well as in investigative stories in the media.
Several SBA executives conspired to deny the presence of any fraud and abuse in SBA programs for over seven years by describing even the most blatant cases of fraud and abuse as "miscoding." On several occasions they went so far as to launch a campaign to convince Congress, the public and the media that it was a "myth" that large businesses were receiving federal small business contracts. (http://www.asbl.com/documents/sbamythvfact.pdf)
Other SBA executives launched campaigns to cover-up fraud and abuse by fraudulent contractors by fighting legal efforts to obtain data under the Freedom of Information Act (FOIA) that would uncover blatant abuses in programs administered by the SBA. (http://www.asbl.com/showmedia.php?id=1151)
Federal court rulings even opposed the SBA's executives campaign to withhold damaging information by ruling against the SBA in each and every FOIA case filed by advocacy groups like the American Small Business League (ASBL). (www.asbl.com)
In February of 2008, President Barack Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php) If new SBA Administrator Karen Mills intends to end fraud and abuse at the SBA, she will make good on President Obama's campaign promise. The SBA executives responsible for allowing the abuses, and then attempting to cover them up must be removed as one of Mills' first actions at the SBA.
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Monday, April 6, 2009
New SBA Head Will Ignore Agency’s Biggest Problem
FOR IMMEDIATE RELEASE
April 6, 2009
Petaluma, Calif. – Since 2003, over a dozen federal investigations have found billions of dollars in federal contracts earmarked for small businesses have been diverted to Fortune 500 corporations and some of the largest companies around the world.
In her confirmation hearing, Administrator of the U.S. Small Business Administration (SBA) Karen Gordon Mills sidestepped a question from Senator Jeanne Shaheen (D - NH) regarding her plan to address the diversion of federal small business contracts to Fortune 500 corporations and other clearly large firms.
The American Small Business League (ASBL) is predicting that new SBA Administrator Mills will completely ignore the issue. Additionally, the ASBL believes Mills will continue Bush Administration policies of covering up and withholding information that would prove the SBA has dramatically inflated the government's small business contracting statistics by including up to $100 billion a year in contracts to large businesses.
During the Bush Administration, the SBA lost a series of lawsuits against the ASBL. The lawsuits resulted in the release of thousands of pages of data proving that every year billions of dollars in government small business contracts have wound up in the hands of companies like: Lockheed Martin, Boeing, Rolls-Royce, Microsoft, Wall-Mart, L-3 Communications, British Aerospace Engineering (BAE), Home Depot, Xerox, Starwood Hotels, Dell and Buhrmann NV, a Dutch firm with 17,000 employees in 26 countries.
All of the SBA executives that were involved in the Bush Administration's policies to divert federal small business contracts to corporate giants and then cover-up any information that would prove it, remain active employees at the agency.
Report 5-15 from the SBA's own 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." Despite Report 5-15, and more than a dozen other federal investigations, SBA Press Office Director Mike Stamler continues to try to convince the media that these abuses in small business programs are a “myth.”
"I predict Mills is not going to do anything to stop the diversion of federal small business contracts to large businesses and in fact, you can bet that Mills is going to support policies to divert even more federal small business contracts to some of President Obama's wealthiest contributors in the venture capital industry," ASBL President Lloyd Chapman said.
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April 6, 2009
Petaluma, Calif. – Since 2003, over a dozen federal investigations have found billions of dollars in federal contracts earmarked for small businesses have been diverted to Fortune 500 corporations and some of the largest companies around the world.
In her confirmation hearing, Administrator of the U.S. Small Business Administration (SBA) Karen Gordon Mills sidestepped a question from Senator Jeanne Shaheen (D - NH) regarding her plan to address the diversion of federal small business contracts to Fortune 500 corporations and other clearly large firms.
The American Small Business League (ASBL) is predicting that new SBA Administrator Mills will completely ignore the issue. Additionally, the ASBL believes Mills will continue Bush Administration policies of covering up and withholding information that would prove the SBA has dramatically inflated the government's small business contracting statistics by including up to $100 billion a year in contracts to large businesses.
During the Bush Administration, the SBA lost a series of lawsuits against the ASBL. The lawsuits resulted in the release of thousands of pages of data proving that every year billions of dollars in government small business contracts have wound up in the hands of companies like: Lockheed Martin, Boeing, Rolls-Royce, Microsoft, Wall-Mart, L-3 Communications, British Aerospace Engineering (BAE), Home Depot, Xerox, Starwood Hotels, Dell and Buhrmann NV, a Dutch firm with 17,000 employees in 26 countries.
All of the SBA executives that were involved in the Bush Administration's policies to divert federal small business contracts to corporate giants and then cover-up any information that would prove it, remain active employees at the agency.
Report 5-15 from the SBA's own 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." Despite Report 5-15, and more than a dozen other federal investigations, SBA Press Office Director Mike Stamler continues to try to convince the media that these abuses in small business programs are a “myth.”
"I predict Mills is not going to do anything to stop the diversion of federal small business contracts to large businesses and in fact, you can bet that Mills is going to support policies to divert even more federal small business contracts to some of President Obama's wealthiest contributors in the venture capital industry," ASBL President Lloyd Chapman said.
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Friday, April 3, 2009
ASBL President Lloyd Chapman tells CNBC Where the Jobs Are
President of the American Small Business League (ASBL) Lloyd Chapman tells CNBC where the jobs are in this economy.
Thursday, April 2, 2009
New SBA Administrator Supports Plan to Divert Small Business Contracts to Wealthy Venture Capitalists
FOR IMMEDIATE RELEASE
April 2, 2009
Petaluma, Calif. - On Wednesday, the U.S. Senate Committee on Small Business and Entrepreneurship voted unanimously to confirm President Barack Obama's nominee to head the Small Business Administration (SBA), multi-millionaire venture capitalist, Karen Gordon Mills. As predicted, during the hearing Mills voiced her support for legislation that will divert government small business contracts to some of the nation's wealthiest investors. The full senate is expected to vote on Mills' confirmation by the end of the week.
During the hearing, Mills was asked a question regarding participation in the government's Small Business Innovation Research Program (SBIR) by firms that are owned and controlled by some of the nation's wealthiest investors. Mills acknowledged that she will support legislation that will divert small business contracts to venture capitalists.
In addition to the appointment of venture capitalist Mills to head the SBA, President Obama has already announced that he intends to adopt a policy that will exempt the sale of stock in small businesses from capital gains tax. This appears to be the one-two punch, into which venture capitalists have poured millions of dollars in campaign contributions, and years of lobbying.
The American Small Business League (ASBL) predicts that within a matter of months, the Obama Administration will move forward with its plans to adopt policies that will divert government small business contracts to venture capital controlled companies, while at the same time giving venture capital companies an exemption from capital gains tax when they divest themselves of their interests in those firms.
The ASBL has vowed to oppose the Obama Administration's efforts to divert small business contracts to some of its top campaign contributors from the venture capital industry.
"To me, it is unconscionable for President Obama to campaign for 'change we can believe in,' and then turn around and nominate an SBA Administrator who will support legislation designed to allow multi-millionaire investors to hijack federal programs designed to assist small businesses," ASBL President Lloyd Chapman said. "It is not reasonable to open yet another federal small business program to widespread abuse as our country moves closer and closer to what could be the worst economic catastrophe in American history. President Obama is clearly allowing venture capitalists to buy access to federal small business programs by contributing to his campaign."
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Please contact the American Small Business League at info (at) asbl.com. Thank you.
April 2, 2009
Petaluma, Calif. - On Wednesday, the U.S. Senate Committee on Small Business and Entrepreneurship voted unanimously to confirm President Barack Obama's nominee to head the Small Business Administration (SBA), multi-millionaire venture capitalist, Karen Gordon Mills. As predicted, during the hearing Mills voiced her support for legislation that will divert government small business contracts to some of the nation's wealthiest investors. The full senate is expected to vote on Mills' confirmation by the end of the week.
During the hearing, Mills was asked a question regarding participation in the government's Small Business Innovation Research Program (SBIR) by firms that are owned and controlled by some of the nation's wealthiest investors. Mills acknowledged that she will support legislation that will divert small business contracts to venture capitalists.
In addition to the appointment of venture capitalist Mills to head the SBA, President Obama has already announced that he intends to adopt a policy that will exempt the sale of stock in small businesses from capital gains tax. This appears to be the one-two punch, into which venture capitalists have poured millions of dollars in campaign contributions, and years of lobbying.
The American Small Business League (ASBL) predicts that within a matter of months, the Obama Administration will move forward with its plans to adopt policies that will divert government small business contracts to venture capital controlled companies, while at the same time giving venture capital companies an exemption from capital gains tax when they divest themselves of their interests in those firms.
The ASBL has vowed to oppose the Obama Administration's efforts to divert small business contracts to some of its top campaign contributors from the venture capital industry.
"To me, it is unconscionable for President Obama to campaign for 'change we can believe in,' and then turn around and nominate an SBA Administrator who will support legislation designed to allow multi-millionaire investors to hijack federal programs designed to assist small businesses," ASBL President Lloyd Chapman said. "It is not reasonable to open yet another federal small business program to widespread abuse as our country moves closer and closer to what could be the worst economic catastrophe in American history. President Obama is clearly allowing venture capitalists to buy access to federal small business programs by contributing to his campaign."
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Please contact the American Small Business League at info (at) asbl.com. Thank you.
Wednesday, April 1, 2009
New SBA Administrator Should Address Biggest Problem First
FOR IMMEDIATE RELEASE
April 1, 2009
Petaluma, Calif. – No problem facing the Small Business Administration has been the subject of more federal investigations and more media attention than the diversion of federal small business contracts to Fortune 500 firms. The American Small Business League (ASBL) has estimated that every year more than $100 billion in federal small business contracts are diverted from legitimate small businesses to some of the largest corporations in the United States and Europe.
Since U.S. Census Bureau statistics show that firms with less than 20 employees create more than 97 percent of all new jobs in America, bringing an end to the diversion of billions of dollars in federal small business contracts to "corporate giants" should be the first order of business for incoming SBA Administrator Karen Gordon Mills.
In March of 2005, the SBA Office of Inspector General (OIG) released Report 5-15 which stated, "One of the most important challenges facing the Small Business Administration 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)
Every major newspaper in the country has written about the diversion of hundreds of billions of dollars in federal small business contracts to Fortune 500 firms and thousands of other large businesses in the United States, and even Europe. (http://www.asbl.com/documentlibrary.html)
ABC, CBS and CNN have aired investigative stories, which found corporate giants such as Rolls Royce, Wal Mart, Microsoft, Xerox, Sherwin-Williams, John Deere, Raytheon, General Dynamics and British Aerospace (BAE) had been the actual recipients of federal small business contracts. (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)
In February of 2008, President Obama recognized the gravity of the issue when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)
As a first order of business at the SBA, Karen Mills should immediately remove all Fortune 500 firms, large businesses and their subsidiaries from any and all government databases of firms claiming status as small businesses. This would once and for all bring an end to the "miscoding" that has plagued the SBA for the last eight years.
Next, a warning should be placed on the government's Central Contractor Registration (CCR) Database warning all government suppliers that misrepresenting a firms status as a small business to illegally receive federal small business contracts is a felony under section 16(d) of the Small Business Act, which carries a penalty of up to 10 years in prison and a $500,000 fine per occurrence.
Finally, Administrator Mills should ask President Obama to issue an executive order immediately directing all federal agencies and all prime contractors to stop reporting awards to publicly traded firms as small business awards. The Small Business Act clearly defines a small business as "independently owned." Publicly traded firms are certainly not small businesses, and do not qualify as "independently owned."
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April 1, 2009
Petaluma, Calif. – No problem facing the Small Business Administration has been the subject of more federal investigations and more media attention than the diversion of federal small business contracts to Fortune 500 firms. The American Small Business League (ASBL) has estimated that every year more than $100 billion in federal small business contracts are diverted from legitimate small businesses to some of the largest corporations in the United States and Europe.
Since U.S. Census Bureau statistics show that firms with less than 20 employees create more than 97 percent of all new jobs in America, bringing an end to the diversion of billions of dollars in federal small business contracts to "corporate giants" should be the first order of business for incoming SBA Administrator Karen Gordon Mills.
In March of 2005, the SBA Office of Inspector General (OIG) released Report 5-15 which stated, "One of the most important challenges facing the Small Business Administration 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)
Every major newspaper in the country has written about the diversion of hundreds of billions of dollars in federal small business contracts to Fortune 500 firms and thousands of other large businesses in the United States, and even Europe. (http://www.asbl.com/documentlibrary.html)
ABC, CBS and CNN have aired investigative stories, which found corporate giants such as Rolls Royce, Wal Mart, Microsoft, Xerox, Sherwin-Williams, John Deere, Raytheon, General Dynamics and British Aerospace (BAE) had been the actual recipients of federal small business contracts. (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)
In February of 2008, President Obama recognized the gravity of the issue when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)
As a first order of business at the SBA, Karen Mills should immediately remove all Fortune 500 firms, large businesses and their subsidiaries from any and all government databases of firms claiming status as small businesses. This would once and for all bring an end to the "miscoding" that has plagued the SBA for the last eight years.
Next, a warning should be placed on the government's Central Contractor Registration (CCR) Database warning all government suppliers that misrepresenting a firms status as a small business to illegally receive federal small business contracts is a felony under section 16(d) of the Small Business Act, which carries a penalty of up to 10 years in prison and a $500,000 fine per occurrence.
Finally, Administrator Mills should ask President Obama to issue an executive order immediately directing all federal agencies and all prime contractors to stop reporting awards to publicly traded firms as small business awards. The Small Business Act clearly defines a small business as "independently owned." Publicly traded firms are certainly not small businesses, and do not qualify as "independently owned."
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