There are more than 26 million small businesses
in the United States. Almost all of them -- 98 percent -- have
fewer than 100 employees. Yet, the basic standard for many industries
is 500 employees.
A brief look at the problem
When discussing the diversion of federal small business contracts
to large corporations, most people are amazed to find out that
that a foreign company with 26,000 employees with offices in 17
countries has been considered a small business in the past and
has received federal small business contracts. However,
the reality of the matter is that the problem is not one large
company receiving federal small business contracts, but dozens. We
estimate that roughly $60 billion a year in federal small business
contracts is diverted to large corporations.
Over the years, the Small Business Administration has revised
its "size standard" - the numerical definitions for each industry.
A recommendation to reduce the basic employee limit to 100 was
halted by the SBA in July 2004, despite response comments that
were overwhelmingly in support of the reduction.
"Small businesses are the backbone of the American economy," Representative
Lynn Woolsey (D-CA) said in June 2004. "By working to change the
definition of a small business for government contracts from 500
to 100 employees, federal contracts specifically designed to ensure
the success of American small business would go where they belong
- to support Americans, not big companies dressed in sheep's clothing."
The Small Business Administration issued the proposed rule change
on March 19, 2004, stating its intention to reduce and simplify
the number of size standards. The proposed rule would have helped
millions of truly small businesses compete for government contracts.
However, the proposal was withdrawn because it would have reclassified
as large businesses more than 34,000 firms currently recognized
as small businesses.
The ASBL is committed to reducing the allowable size of small
businesses so that truly small businesses have a fair opportunity
to compete for government contracts.
- 600 large businesses have been stopped -
Our information prompted their removal from SBA's database of
- Victorious in reducing the SBA's Information
Technology Value-Added Reseller size standard from 500 to 150.
- Gathered overwhelming support for the reduction
in the size standard from 500 to 100 when the SBA sought public
comment. The support ASBL received came from U.S. Chamber of
Commerce, Small Business groups, and concerned small businesses
across the country.
- Won a series legal battles - Since 2004,
the ASBL has won a series of federal lawsuits that have forced
federal agencies to release information, which has shown that
billions of dollars in federal small business contracts reported
as going to small businesses actually wound up in the hands of
some of the largest companies in the world.