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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Thursday, August 21, 2008
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.
-###-
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
Thursday, August 14, 2008
Pelosi Backed Bills Let Billionaire Investors Hijack Small Business Contracts
Petaluma, Calif. - After receiving significant campaign contributions from the National Venture Capital Association (NVCA), and special interests representing the biotechnology industry, Speaker of the House, Nancy Pelosi (D - CA) has ramrodded legislation through the House of Representatives that will allow billionaire venture capitalists to hijack federal small business contracting programs. Thousands of legitimate small businesses across America could be forced to close their doors if the legislation becomes law.
Both bills, H.R. 3567 and H.R. 5819 will require the average American small business to compete head-to-head with firms owned and controlled by the nation's wealthiest investors for even the smallest federal small business contracts.
In its original form, H.R. 3567 would have allowed firms that are completely controlled by wealthy investors to be considered small businesses. Despite opposition from the nation's largest small business organizations and the Small Business Administration (SBA), Speaker Pelosi exerted enough pressure on her colleagues to get the bill passed in record time. The bill was pushed through the House so quickly, that many members of the House complained that they did not have adequate time to even read the bill before they were strong-armed by Pelosi into voting for it.
In H.R. 5819, Pelosi went so far as to allow some of the nation's largest and wealthiest venture capital firms to own up to 98 percent of a company and still be considered a small business. The full senate will be considering its version of the bill, S.3362, when they return from summer recess.
"I truly think that it is unfair for firms owned by venture capital companies to be considered small businesses. The inclusion of venture capital firms in government small business programs will leave legitimate small businesses out in the cold when it comes to getting federal work," said ASBL member Daryl Corley, President and CEO of the Clinton, Maryland based MSDS Consultant Services.
In a January 5, 2007 press release, Speaker Pelosi stated, "Honest leadership is not just a partisan goal. It is the key to putting the interests of all Americans ahead of the special interests. It is what the American people sent us here to do, and House Democrats are proud to have taken serious and substantive steps to ensure Congress governs with the highest ethical steps." Pelosi's words are a stark contrast to her actions regarding H.R. 3567 and H.R. 5819, which support the interests of Biotechnology Industry Organization (BIO) and the NVCA, as opposed to the interests of America's nearly 27 million legitimate small businesses.
Speaker Pelosi has received significant contributions from several groups, which stand to substantially benefit from venture capital participation in federal small business programs. According to MAPLight.org, from January 2005 to May 2008, Speaker Pelosi received a combined $108,400 from venture capital giant, Kleiner Perkins Caufield & Byers; pharmaceutical giant, Amgen Inc; and lobbyist, Akin Gump Strauss Hauer & Feld LLP.
According to Opensecrets.org, in addition to its contributions to House Speaker Pelosi, the NVCA made major contributions to 17 members of the House Committee on Small Business to ensure that its two bills passed that committee. The largest recipient of their generous contributions was Committee Chair, Nydia M. Velázquez.
"I think Speaker Pelosi has forgotten that America is a Democracy. You will not find anyone outside the National Venture Capital Association who thinks billionaires and venture capital firms should be allowed to participate in federal programs to assist small businesses," ASBL President Lloyd Chapman said. "Our government is supposed to represent the will of all the people not just the wealthy people. Speaker Pelosi has clearly gone back on her campaign promises to end corruption in Washington. She is turning our government into a plutocracy and is selling legislation to wealthy investors that will cheat small business in the middle class economy out of hundreds of billions of dollars in federal contracts."
Chapman added, "It is starting to look like small business in America might have been better off with a Republican controlled Congress."
-###-
Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
www.asbl.com
Both bills, H.R. 3567 and H.R. 5819 will require the average American small business to compete head-to-head with firms owned and controlled by the nation's wealthiest investors for even the smallest federal small business contracts.
In its original form, H.R. 3567 would have allowed firms that are completely controlled by wealthy investors to be considered small businesses. Despite opposition from the nation's largest small business organizations and the Small Business Administration (SBA), Speaker Pelosi exerted enough pressure on her colleagues to get the bill passed in record time. The bill was pushed through the House so quickly, that many members of the House complained that they did not have adequate time to even read the bill before they were strong-armed by Pelosi into voting for it.
In H.R. 5819, Pelosi went so far as to allow some of the nation's largest and wealthiest venture capital firms to own up to 98 percent of a company and still be considered a small business. The full senate will be considering its version of the bill, S.3362, when they return from summer recess.
"I truly think that it is unfair for firms owned by venture capital companies to be considered small businesses. The inclusion of venture capital firms in government small business programs will leave legitimate small businesses out in the cold when it comes to getting federal work," said ASBL member Daryl Corley, President and CEO of the Clinton, Maryland based MSDS Consultant Services.
In a January 5, 2007 press release, Speaker Pelosi stated, "Honest leadership is not just a partisan goal. It is the key to putting the interests of all Americans ahead of the special interests. It is what the American people sent us here to do, and House Democrats are proud to have taken serious and substantive steps to ensure Congress governs with the highest ethical steps." Pelosi's words are a stark contrast to her actions regarding H.R. 3567 and H.R. 5819, which support the interests of Biotechnology Industry Organization (BIO) and the NVCA, as opposed to the interests of America's nearly 27 million legitimate small businesses.
Speaker Pelosi has received significant contributions from several groups, which stand to substantially benefit from venture capital participation in federal small business programs. According to MAPLight.org, from January 2005 to May 2008, Speaker Pelosi received a combined $108,400 from venture capital giant, Kleiner Perkins Caufield & Byers; pharmaceutical giant, Amgen Inc; and lobbyist, Akin Gump Strauss Hauer & Feld LLP.
According to Opensecrets.org, in addition to its contributions to House Speaker Pelosi, the NVCA made major contributions to 17 members of the House Committee on Small Business to ensure that its two bills passed that committee. The largest recipient of their generous contributions was Committee Chair, Nydia M. Velázquez.
"I think Speaker Pelosi has forgotten that America is a Democracy. You will not find anyone outside the National Venture Capital Association who thinks billionaires and venture capital firms should be allowed to participate in federal programs to assist small businesses," ASBL President Lloyd Chapman said. "Our government is supposed to represent the will of all the people not just the wealthy people. Speaker Pelosi has clearly gone back on her campaign promises to end corruption in Washington. She is turning our government into a plutocracy and is selling legislation to wealthy investors that will cheat small business in the middle class economy out of hundreds of billions of dollars in federal contracts."
Chapman added, "It is starting to look like small business in America might have been better off with a Republican controlled Congress."
-###-
Contact:
Christopher Gunn
Communications Director
American Small Business League
cgunn@asbl.com
(707) 789-9575
www.asbl.com
Friday, August 8, 2008
Washington Post: Blackwater Worldwide: Small Business?
Today, the Washington Post's, "Government Inc." blog by Robert O'Harrow Jr. stated:
"Like companies across the land, Blackwater sought to be designated as a small business to win contracts more easily from the State Department or other agencies. But is it also possible that government procurement officials wanted to apply the designation to Blackwater to make it easier to award the contracts?
Don't laugh. It happens all the time."
The re-emergence of this issue brings us back to a press release distributed by the American Small Business League (ASBL) on July 30th, which found that from 2004 to 2008 Blackwater received upwards of $1.07 billion in federal contracts coded as small business contracts. Additionally, the ASBL reported that if the SBA had made the determination that Blackwater's 1000 "independent contractors" were employees, the firm would have exceeded the small business size standard for its industry by 250employees. To read more please click here http://www.asbl.com/showmedia.php?id=1113.
To read the entire Washington Post blog, please click here: http://voices.washingtonpost.com
"Like companies across the land, Blackwater sought to be designated as a small business to win contracts more easily from the State Department or other agencies. But is it also possible that government procurement officials wanted to apply the designation to Blackwater to make it easier to award the contracts?
Don't laugh. It happens all the time."
The re-emergence of this issue brings us back to a press release distributed by the American Small Business League (ASBL) on July 30th, which found that from 2004 to 2008 Blackwater received upwards of $1.07 billion in federal contracts coded as small business contracts. Additionally, the ASBL reported that if the SBA had made the determination that Blackwater's 1000 "independent contractors" were employees, the firm would have exceeded the small business size standard for its industry by 250employees. To read more please click here http://www.asbl.com/showmedia.php?id=1113.
To read the entire Washington Post blog, please click here: http://voices.washingtonpost.com
Wednesday, July 30, 2008
Huffington Post: Blackwater Gets a Billion in Small Business Contracts with Help from SBA Loophole
A new report from the Small Business Administration (SBA) Office of Inspector General found Blackwater Worldwide had received "at least 100 small business set-aside contracts, worth over $144 million, since 2000." Additionally, the report pointed to the SBA's highly controversial ruling regarding Blackwater's size as a major contributing factor to the inclusion of Blackwater in federal small business contracting statistics.
In November of 2006, the SBA ruled that Blackwater was a small business by considering a substantial number of the firm's employees to be independent contractors. According to the SBA Inspector General report, more than 1000 employees were considered independent contractors and were not counted towards the company's size determination by the SBA. As a result, Blackwater was able to avoid the 1,500-employee size threshold for their industry and qualify for federal small business contracts. The SBA's interpretation helped Blackwater circumvent normal federal small business size standards. Without the SBA's loophole specifically created for Blackwater, the company would exceed the small business size standard by more than 250 employees and would not be eligible for federal small business contracts.
Please click here to read more: www.huffingtonpost.com
In November of 2006, the SBA ruled that Blackwater was a small business by considering a substantial number of the firm's employees to be independent contractors. According to the SBA Inspector General report, more than 1000 employees were considered independent contractors and were not counted towards the company's size determination by the SBA. As a result, Blackwater was able to avoid the 1,500-employee size threshold for their industry and qualify for federal small business contracts. The SBA's interpretation helped Blackwater circumvent normal federal small business size standards. Without the SBA's loophole specifically created for Blackwater, the company would exceed the small business size standard by more than 250 employees and would not be eligible for federal small business contracts.
Please click here to read more: www.huffingtonpost.com
Tuesday, July 29, 2008
Lloyd Chapman on the Huffington Post: SBA Goes After Its Harshest Critic
Petaluma, Calif. - The American Small Business League (ASBL) has uncovered an extensive campaign by the Small Business Administration (SBA) to impugn the organization's credibility and defame its President, Lloyd Chapman.
A number of journalists have informed the ASBL that after quoting Chapman in stories on the diversion of federal small business contracts to Fortune 500 firms, they received aggressive phone calls and e-mails from the Director of the SBA's Press Office, Mike Stamler attempting to discredit Chapman and the ASBL.
In one case, after quoting Chapman in a story, the Long Island Business Journal (LIBJ) received a series of aggressive correspondence from Stamler, which was so profane in nature that editors of the paper responded by publishing a blog entitled, "Expletives the SBA's Forte." (http://libizblog.wordpress.com/2008/02/22/expletives-the-sbas-forte/)
The ASBL has responded to the SBA's actions by using the Freedom of Information Act (FOIA) to request all e-mail correspondence to and from Mike Stamler during the years 2006 and 2007.
Although the SBA has refused to release all of Stamler's correspondence, the SBA has released some correspondence, which clearly demonstrates a pattern of libelous communication between Stamler and journalists regarding Chapman. The emails went as far as to attack the credibility of the ASBL's contracting data, which actually was data the SBA was forced to release to ASBL after losing four FOIA lawsuits to them.
Click here to read more: www.huffingtonpost.com
A number of journalists have informed the ASBL that after quoting Chapman in stories on the diversion of federal small business contracts to Fortune 500 firms, they received aggressive phone calls and e-mails from the Director of the SBA's Press Office, Mike Stamler attempting to discredit Chapman and the ASBL.
In one case, after quoting Chapman in a story, the Long Island Business Journal (LIBJ) received a series of aggressive correspondence from Stamler, which was so profane in nature that editors of the paper responded by publishing a blog entitled, "Expletives the SBA's Forte." (http://libizblog.wordpress.com/2008/02/22/expletives-the-sbas-forte/)
The ASBL has responded to the SBA's actions by using the Freedom of Information Act (FOIA) to request all e-mail correspondence to and from Mike Stamler during the years 2006 and 2007.
Although the SBA has refused to release all of Stamler's correspondence, the SBA has released some correspondence, which clearly demonstrates a pattern of libelous communication between Stamler and journalists regarding Chapman. The emails went as far as to attack the credibility of the ASBL's contracting data, which actually was data the SBA was forced to release to ASBL after losing four FOIA lawsuits to them.
Click here to read more: www.huffingtonpost.com
Monday, July 28, 2008
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