Billions in Fraud and Abuse Ignored by Congress, Reveals Report by Small Business Groups

Press Release

Billions in Fraud and Abuse Ignored by Congress, Reveals Report by Small Business Groups

109th Congress Fails to Stop Diversion of Billions in Federal Small Business Contracts

October 20, 2006

Petaluma, CA, October 20, 2006/ US Newswire/ -- The American Small Business League, in concert with the U.S. Women's Chamber of Commerce and other small business groups around the nation, has put forth a scorecard on the lack of legislation enacted by the 109th Congress to address the myriad of problems facing small firms across the county. In particular, lawmakers failed to produce one piece of legislation to address the Bush Administrations' annual diversion of between $50 to $100 billion in federal small business contracts to firms such as Lockheed, Boeing, General Dynamics, Northrop Grumman, Wal-Mart, and Rolls Royce.

The scorecard (http://www.uswcc.org/scorecard) covers nine votes held during the 109th Congress that were specifically geared to assist small businesses. Most of the legislation failed to pass, despite the fact that Republicans held the majority in both houses of Congress. This outcome has left America's entrepreneurs wondering why their concerns have been so dismally neglected, particularly when Republicans have promoted themselves as the party of small business.

I think that the 109th Congress has intentionally ignored the most critical issues facing small firms in America today. There have been 13 federal investigations that have found widespread fraud, abuse, and loopholes that have resulted in billions of dollars in small business contracts being diverted to Fortune 500 corporations. It's appalling that Congress has failed to take even a single step to address this," stated Lloyd Chapman, ASBL president. "To make matters worse, Congress did nothing for six years while Bush consistently cut the budget and staff of the Small Business Administration to the point where the agency is no longer able to fulfill its mission. The poor response to Hurricane Katrina is a dramatic example of this. It's time for a change."

Small businesses are the heart of the U.S. economy. There are 23 million small firms in this country with less than 100 employees. These companies are where most Americans work, create the most jobs, pay the most taxes, and produce the most exports. The SBA is the only agency in the entire federal government designed to support and protect the rights of these firms.

Chapman added, "Whatever their party affiliation, I think it's time for small business owners to realize that we need Congressional representatives that are determined to address the real needs of small businesses. It's time for Congress to step up to the plate and take definitive action to restore the SBA budget and stop George Bush from trying to eliminate all programs designed to help small, women-owned, minority-owned, and disabled veteran-owned firms."

About the ASBL
The American Small Business League was formed to promote policies that provide the greatest opportunity for small businesses - the 98% of U.S. companies with less than 100 employees. The ASBL is 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. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.

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Voting Scorecard Shows Lack of Support for Small Businesses in the 109th Congress

Press Release

Voting Scorecard Shows Lack of Support for Small Businesses in the 109th Congress

October 19, 2006

To: National Desk

Contact: Jill Van Dierendonck of the U.S. Women's Chamber of Commerce, 800-738-0653

WASHINGTON, Oct. 19 /U.S. Newswire/ -- Today, a coalition of small business organizations, led by the U.S. Women's Chamber of Commerce (USWCC), released a voting scorecard (http://www.uswcc.org/scorecard) that evaluates Members of the U.S. House of Representatives on their support for this nation's small business owners in the 109th Congress.

"With the myriad of challenges facing small businesses today it is important to take a look at the progress that is being made in Congress to address these issues," Margot Dorfman, CEO of the USWCC, said. Cris Young, president of the National Procurement Council, adds, "This voting scorecard should remind both Members of Congress and small business owners about where they stand on the issues, and whether or not the level of need is matching the level of action entrepreneurs across the nation are seeing."

The report released by the USWCC in conjunction with the American Small Business League, Latino American Management Association, National Procurement Council, Small Business Majority and Business Professional Women/USA, reviewed nine votes that took place in the House of Representatives in the 109th Congress, which would have impacted small businesses. Some of the legislation did pass, but the majority was not adopted, raising questions about the commitment of Congress for small businesses.

"With the vital role that small businesses play in the economy today -- this scorecard illustrates the need for stronger commitment to small businesses in the next Congress," Art Lopez, Chair of the Latino American Management Association said. "Small business owners should be aware of the votes cast by their elected representatives and step up to be heard as important contributors to our economy," adds Deborah Frett, CEO of Business Professional Women/USA.

Small businesses are critical to economic growth - creating up to 80 percent of all new jobs, and representing 99.7 percent of all employers. Due to their significant economic contributions, small firms are often relied on for job creation and development throughout the U.S. The nine votes in this report were selected because of the direct impact they would have had on this nation's 24 million small businesses. The reviewed measures covered a broad array of issues facing entrepreneurs today, including closing the business ownership gap among minorities, ensuring assistance is provided for businesses impacted by Hurricanes Katrina and Rita, and accessing affordable capital, and the $300 billion federal marketplace.

"The 109th Congress has given only lip service to small business. We've seen virtually no legislation that will provide significant benefits to small businesses or address the rampant fraud and abuse that has diverted billions of dollars in Federal small business contracts to the "who's who" of fortune 1000 corporations," says Lloyd Chapman, president of the American Small Business League.

The voting scorecard was released by a group of 6 small business trade associations that work on behalf of this nation's 24 million small businesses, and represent a membership of upward to 1 million small businesses, women owned businesses and minority firms across the country.

"The findings of this report underscore the fact that hardworking small business people, who are the heart and soul of the America Dream, continue to be ignored by our government, particularly over the past six years," said John Arensmeyer, CEO of Small Business Majority.

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The U.S. Women's Chamber of Commerce (tm) (http://www.uswcc.org) is the leading advocate for women on economic and leadership issues. The USWCC is a not-for-profit 501(c)6 organization founded in 2001; its headquarter offices are located in Washington, D.C.



Contractor Certification, Reporting Rule Is Near

News

Contractor Certification, Reporting Rule Is Near

Set-Aside Alert
October 13, 2006

In a move to stop counting large businesses as small ones, the new heads of SBA and OMB's Office of Federal Procurement Policy said they are taking steps to improve the accuracy of small business contracting data.

In a memo to agencies' chief acquisition officers, SBA Administrator Steven Preston and OFPP chief Paul Denett wrote, "SBA will soon issue a regulation to revise the rules regarding contractor reporting and certifying of small business size status."

They gave no details about the revised rules. In 2003 SBA proposed requiring small firms to recertify their size status ever year, but no final rule has been issued. The Senate Small Business Committee has recommended requiring annual recertification in the SBA reauthorization bill that is now pending in the Senate.

The memo is SBA's first action to deal with long-standing criticism of the Federal Procurement Data System, the official database of contracting information. Many critics inside and outside government have complained that, even after a new "Next Generation" system was put in place last year, the data are inaccurate and inflate the small business share of federal procurement.

In June SBA reported small firms received a record 25.4% of prime contract dollars in fiscal 2005, based on FPDS figures. But Democrats on the House Small Business Committee said their analysis of the figures found that small businesses received only 21.6% of the dollars. They said $12 billion in contracts that were counted as small businesses actually went to large corporations, universities or other nonprofits. (SAA, 6/30 and 8/11)

Some critics have charged that large companies are fraudulently misrepresenting themselves as small ones, but the Preston-Denett memo echoes more innocent explanations given by SBA officials in the past: that small businesses outgrew their size standard during the life of a contract; a small firm was acquired by a large one; a contractor made a mistake in filling out a form; or there was a mistake in data entry to FPDS.

Preston and Denett said they want to know why large businesses were counted as small in reports to FPDS. In a follow-up memo, Karen Hontz, SBA associate administrator for government contracting, sent agencies a list of large companies found to be classified as small and asked them to explain how each of the errors occurred. She asked for reports by Nov. 20.

The Preston-Denett memo said, "Transparency and accurate data are critical to insuring the integrity of the acquisition system, and we are taking steps to increase transparency and the accuracy of Federal procurement and small business data."

The memo, "Reporting Small Business Contracting Information," is available at www.fac.gov/.




Small Business Administration Threatens Small Business Organization with Lawsuit

Press Release

Small Business Administration Threatens Small Business Organization with Lawsuit

October 4, 2006

PETALUMA, Calif., October 4th, 2006 /PRNewswire/ -- The Small Business Administration and the Justice Department are threatening to file suit against the Petaluma, California based American Small Business League. The SBA is claiming the American Small Business League is using the SBA official seal in a way that violates federal law. The SBA seal appears on the American Small Business League website on an excerpt of an investigation from the SBA's Office of Inspector General. The ASBL's position is that the SBA's seal is not being used on their website for any commercial purposes, nor does it appear in any way that would indicate an SBA endorsement.

The SBA Inspector General investigation in question found, "agencies are counting awards made to large firms towards their small business procurement goals". The SBA was one of the federal agencies found to be falsifying their small business contracting statistics. The SBA Inspector General found the SBA had reported millions in awards to several large businesses, including Dutch conglomerate, Buhrmann NV, towards their small business contracting goals.

ASBL President Lloyd Chapman believes newly appointed SBA Administrator Steven Preston prompted the threat of litigation against the ASBL to retaliate for the ongoing legal battle between the SBA and the ASBL. The ASBL has won two federal law suits against the SBA to force the disclosure of information that the SBA and General Services Administration were aware of widespread fraud and abuses in federal small business contracting programs. The ASBL is currently suing the SBA to force the disclosure of the name of a major federal contractor that was recommended for debarment by the SBA Inspector General for felony contracting fraud.

ASBL President Lloyd Chapman stated, "SBA Administrator Steven Preston is wasting his time and taxpayer money if he thinks this is going to intimidate me to stop our campaign in the media and the courts to prove the Bush Administration has cheated legitimate American small businesses out of billions in federal small business contracts."

"The SBA's own Inspector General has found firms that are guilty of blatant felony contracting fraud and instead of going after those firms they are harassing me with this ridiculous threat. I hope they do sue me so the public can see the SBA is more concerned with covering up fraud and abuse than they are in trying to stop it."

About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses - the 98% of U.S. companies with less than 100 employees. The ASBL is 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. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.

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