NASA To Use Fortune 1000 Firms To Hit Small Business Goal With New SBA Policy

Petaluma, Calif. - A new Small Business Administration policy set to take effect on June 30th will allow NASA to continue to count contracts to Fortune 1000 firms towards their federally mandated 23 percent small business contracting goal.

In February of 2006, NASA lost a federal lawsuit to the American Small Business League, which was filed under the Freedom of Information Act. NASA was forced to disclose information that indicated that they had included billions of dollars in contracts to many of the nation’s largest defense and aerospace firms towards their small business contracting goal.

Under the new SBA policy, NASA can continue to include awards to firms such as Boeing and Lockheed Martin in their small business contracting statistics until the year 2012.

The SBA originally proposed a “grandfathering” policy in November of 2004, after a series of federal investigations found the SBA had included billons of dollars in contracts to Fortune 1000 firms and hundreds of other large businesses towards the federal government’s 23 percent small business procurement goal. It would have allowed the SBA to continue to claim that the government had met their small business-contracting goal by continuing to count contract awards to large businesses as small business contract awards. The SBA was forced to shelve the grandfathering policy after receiving more than 6000 objections to the proposed policy.

New SBA Administrator Steven Preston resurrected the unpopular grandfathering policy shortly after he was appointed to office, renaming it “five-year re-certification.” Like the grandfathering policy, the five-year re-certification policy will allow NASA and all other federal agencies to include existing small business contracts to Fortune 1000 firms and other large businesses towards their small business contracting goals for five more years.

The Senate is expected to propose legislation to remove Fortune 1000 firms and all large businesses from federal small business contracting programs before the end of 2007.

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Is small business getting the shaft?

This article is going to be featured on the cover of the Blue Ridge Business Journal, a Bi-weekly business publication, which is one of Virginia's oldest and most respected publications. It is a great article, which gives an excellent overview of the issues from multiple perspectives. It was published on June 18th with Lloyd Chapman our President and Founder on the Front Cover.

Here is the link:

http://www.bizjournal.com/content/article.php?id=482

Group argues for shielding contractors' revenue, employee counts

This article came out today and discusses access to data fields on the Central Contractor Registration. In a comment to the Small Business Administration, responding to a FOIA request to have 44 items removed from the exempt list of CCR fields; the Professional Services Council, an Arlington, Va., group representing government service contractors annual revenue opposed the removal of exempt status and promoted the addition of several other fields including a company's number of employees and a company-specific identification code.

The removal of such fields would make it harder than it already is to determine which companies in the CCR are small and furthermore, which large companies are obtaining small business contracts. We promote the publishing of a majority of the exempt fields including average revenue, number of employee statistics and NAICS codes along with additional fields that would designate status as a parent company or a subsidiary and to which companies.

Here is the link to the article:

http://www.govexec.com/dailyfed/0607/061407m1.htm

New SBA Policy Lets Miscoded Small Business Contracts Continue Until 2012

Petaluma, Calif.- On June 30th a new Small Business Administration policy is set to take effect that has outraged small business owners across the country. The new SBA five-year re-certification/grandfathering policy will allow the SBA to include billions of dollars in federal contracts to Fortune 1000 firms towards the federal government’s 23 percent small business contracting goal until the year 2012.

As early as 2002, federal investigations began to find that the SBA had reported contracts to hundreds of Fortune 1000 firms as small business awards. Two investigations by the SBA Office of Advocacy and the SBA Office of Inspector General found in many cases large businesses had received federal small business contracts fraudulently. (http://www.asbl.com/documents/05-16.pdf)

The SBA responded to the charges by saying the contracts to the large businesses had been "miscoded" as small business contracts. (http://www.asbl.com/showmedia.php?id=393) The new five-year re-certification/grandfathering policy will allow the SBA to continue to include the "miscoded" small business contracts to Fortune 1000 firms in their small business contracting statistics until the year 2012.

Beginning in 2003, the Office of Federal Procurement policy and the SBA Office of Inspector General called for a plan to remove Fortune 1000 firms and other large businesses from the government's small business contracting programs. (http://www.washingtontechnology.com/print/17_22/20148-1.html) The SBA never implemented the policies, and they continued to include billions of dollars in contracts to Fortune 1000 firms and other large business in the United States and Europe towards the government's 23 percent small business goal.
SBA critics point out that if the new five-year re-certification/grandfathering policy is allowed to stand, legitimate small business could lose between $200 and $300 billion in federal small business contracts over the next five years.

Small business owners and advocates were hoping Congress would step in and pass legislation to stop the SBA policy from taking effect. To date, no legislation has been passed to stop the SBA policy or halt the flow of federal small business contracts to large businesses.

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ASBL - Small Businesses Fight For the Removal of All Fortune 1000 Corporations from Small Business Contracting

We have been making dramatic progress in recent weeks towards the removal of Fortune 1000 corporations and their subsidiaries from America's small business contracting program, but we need to keep pressing the senate to include a provision in the Senate modification of H.R. 1873 that would call for the removal of all Fortune 1000 corporations from federal small business contracting. Our members and their employees have been active on the phones calling their senators, congressmen and the members of the Senate Committee on Small Business and Entrepreneurship, but we need more people to join in the effort. We need everyone that is concerned about the diversion of federal small business contracts, including you, to help us out and contact their senators today. Below you will find some links to the senate and congressional directories as well as a letter template that you can use to email them. Its time to ban together; we need your help.

Links

Senate: http://www.senate.gov/general/contact_information/senators_cfm.cfm

Congress: http://www.uschamber.com/chambers/directory/default

Sample Letter

Dear_____,

As an owner/employee of a small business I am very concerned about H.R. 1873, the Small Business Fairness In Contracting Act. The bill does not contain a provision that calls for the removal of all Fortune 1000 corporations and other large companies from the federal database of small businesses. I am asking that you propose and/or support a provision in the Senate modification of H.R. 1873 that would preclude Fortune 1000 corporations and other large businesses from receiving federal small business contract awards. I am also asking you to propose and/or support a provision that would prevent federal prime contractors and the Small Business Administration from awarding small business awards to large businesses and counting those awards toward the federal government's 23 percent small business procurement goal. The diversion of federal small business contracts has been covered by every major television network and newspaper in America and I believe it is time for Congress to take actions to ensure that federal small business contracts and subcontracts go to legitimate small businesses. We appreciate your help and consideration.

Sincerely,

Owners slip through the small business loophole

Here is an interesting article from Massachusetts that sheds light into small business issues in Senator John Kerry's state. As you know Senator Kerry is the chair of the Senate Committee on Small Business and Entrepreneurship. Despite evidence of the diversion of federal small business contracts to Fortune 1000 corporations through fraud, abuse, loopholes, and a lack of oversight, Senator Kerry has yet to hold oversight hearings in his committee.

Owners slip through the small business loophole
http://www.dailynewstribune.com/homepage/x1017306418

Presidential Debates In New Hampshire Ignore Small Businesses

Petaluma, Calif.- This week in Manchester, New Hampshire ten Republican Presidential candidates and eight Democratic Presidential candidates debated a variety of issues including the war in Iraq, healthcare, immigration and gays in the military. One subject that was conspicuously absent from the debates were any issues facing America’s 25 million small businesses.

With the exception of a brief comment from Governor Mitt Romney about the cost of health care for small businesses, the two words “small business” were absent from the debates.

President Bush and members of Congress routinely refer to small businesses as the backbone of our nation’s economy. They’re right: nationwide, small business accounts for 50.1 percent of the private sector workforce with 98 percent of all U.S. firms having less than 100 employees.

An analysis by My Success Gateway (http://www.mysuccessgateway.com/candidate.php), of the websites of major Presidential candidates such as Barack Obama, Hillary Clinton, Mitt Romney, John Edwards and Rudy Giuliani, found no mention of key issues facing America’s 25 million small businesses. Jim Peake, Founder and CEO of My Success Gateway LLC said, “It’s surprising that the websites of major Presidential candidates lack a concentration on solutions for small businesses, seniors and veterans.” Peak points out that 25 million small businesses, 38 million AARP members and 25 million veterans possibly represent 88 million potential votes, which is 72 percent of the 122 million popular votes collectively received by all candidates during the 2004 election (http://en.wikipedia.org/wiki/U.S._presidential_election,_2004).

Since both political parties have repeatedly promised to clean up fraud in government; small business advocates watched the debates hoping to see some mention of the twelve federal investigations that found the Small Business Administration had included billions in federal contracts to Fortune 1000 corporation such as Boeing, Lockheed, L3 Communications, Raytheon and Rolls Royce towards the federal governments 23 percent small business goal. Two separate investigations found that fraud was responsible for the diversion of federal small business contracts to big businesses.

“The fact that there were no questions or comments relating to America’s 25 million small businesses is a prime example that small businesses do not have the voice in Washington they deserve,” American Small Business League President Lloyd Chapman said. “We are going to change that before the next debates.”

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