November 28, 2006
PETALUMA, Calif., November 28, 2006 / -- Earlier this month the Small Business Administration (SBA) issued a press release announcing a policy it claims was designed to help small businesses obtain more federal contracts. Many journalists who had written stories based on the press release were shocked and dismayed to discover that the actual policy, issued the following day, was substantially different than the information contained in the release. In reality, the new SBA policy will allow the government to continue to report contracts to large businesses as small business awards until the year 2012.
According to Lloyd Chapman, president of the American Small Business League (ASBL), the volume of contracts that could be diverted from America's middle class to Fortune 1000 corporations over the next five years is estimated to be in excess of $200 billion.
The SBA acknowledged that the vast majority of responses received during the policy's public comment period agreed with the SBA Inspector General, who has recommended annual recertification of business size status to curtail fraud and abuse in federal small business contracting. The Senate Committee on Small Business & Entrepreneurship has also unanimously recommended annual recertification.
The SBA also acknowledged the presence of illegal contracting activity but declined to put any measures in the policy to enforce stiff federal penalties against contracting fraud.
In delaying implementation of the policy for six months (effective June 30, 2007) federal agencies and prime contractors now have an extended period of time to enter into "small business contracts" with many of the largest corporations in the country that currently qualify as small firms under existing contracting law. Once the contracts are in place and the policy goes into effect next June, the companies will not have to recertify for a period of five years.
"This is the best example that I could ever point to that the SBA does not care about the welfare of small businesses, it only cares about helping the government continue to do what it has done for the last several years, which is to allow small business contracts to go to large firms," said Chapman.
By the time this policy goes into effect, nine years will have passed since this situation was originally exposed in the media. The ASBL estimates that over $400 billion in federal small business contracts will have been awarded to large companies during this period of time.
About the ASBL
The ASBL was founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1953. For more information see www.asbl.com.