The American Small Business League, a nonprofit organization that represents small businesses across the nation (100,000 by its own count), today expressed fears that the revised $700 billion financial rescue package being considered in Congress this week could allow the federal government “to completely ignore the federal government’s small business contracting goals,” according to a statement from the group.

The latest version of the Senate bill, which is expected to be quite similar to the one defeated in the House of Representatives save for stronger homeowner protections, could contain language, as did the doomed bill, that would waive provisions of federal acquisition law pertaining to small businesses. “It’s just a typical Bush Administration move where they’ll put something in a bill that doesn’t need to be there just to give themselves more power,” says league president and founder Lloyd Chapman.

Chapman says such a loophole would allow the Secretary of the Treasury to ignore federal rules that direct billions of dollars in government contracts to women-, minority- and veteran-owned small businesses. “This allows the Bush Administration complete leeway to abolish federal contract laws that affect small businesses,” he says.

Entrepreneur is seeking a response from the federal Small Business Administration.

As things stand, Chapman points out that the federal government has already diverted federal small businesses contracts to major corporations, some of them based overseas. A Department of the Interior Inspector General report (PDF) from July states that federal small business contracts have gone to the likes of Home Depot, John Deere and Starwood Hotels. “Fortune 500 firms are getting billions of dollars a year in federal small business contracts,” Chapman says.

“Let’s put a provision in the rescue package that says they can no longer do that.”

Source:  http://www.entrepreneur.com/blog/entry/197400.html

The Bush "bailout bill" has drawn some criticism from small business enthusiasts, namely the American Small Business League (ASBL) unsurprisingly.

"Not only does this bill not contain any provisions that specifically help small business, it has provisions that could actually harm middle class firms. The language in Section 107 of the bill is totally inconsistent with the stated objectives of this legislation," says ASBL President Lloyd Chapman.

The part Chapman is talking about says, "For the purposes of this Act, the Secretary may waive specific provisions of the Federal Acquisition Regulation upon a determination that urgent and compelling circumstances make compliance with such provisions contrary to the public interest."

"It is clearly not necessary to suspend federal acquisition law to bail out Wall Street and the financial industry," says Chapman. "I am very concerned the Bush Administration included that language to give them the authority to further dismantle federal programs designed to assist small businesses. We got into this situation because of a lack of proper regulation and now the same people that are responsible for these staggering economic problems want to be able to ignore any sections of federal contracting law they deem necessary. George Bush has proven time-after-time that he cannot be trusted especially when it comes to small business issues."

The ASBL has been very vocal about its criticism over the federal government and the way it handles small business contracts, often calling attention to "schemes" aimed at giving said contracts to large firms. They note that President Bush has cut the Small Business Administration's (SBA) budget in half, and cut funding and oversight for every program assisting small businesses, including woman, minority and veteran-owned firms.
 
The ASBL has not limited its criticism to the Republican Party though. Democrats have been just as fair game. The ASBL has also called out Senator John Kerry for "backing federal legislation to give small business contracts to venture capital firms and billionaires."

The Small Business Administration has been ordered to reveal the specific names of all firms that had received federal small business contracts during fiscal years 2005 and 2006, according to the American Small Business League, which sued the SBA for the information.

The ASBL says U.S. District Court Judge Marilyn Patel denied all of the SBA's motions on Tuesday, in the latest Freedom of Information Act (FOIA) case filed by the ASBL against the Small Business Administration.

Although the SBA had been previously ordered by Ms. Patel to release the information to Lloyd Chapman, president of ASBL, the SBA attempted to have the case dismissed as a means of avoiding releasing further information and having to reimburse the ASBL for its legal fees, ASBL says.

Bush Administration officials fought to withhold the release of the names to circumvent disclosing that Fortune 500 firms and other large businesses around the world had received a lion's share of government small business contracts since President Bush assumed office in 2001, ASBL says.

“This is just more press release gamesmanship by the ASBL. The records ASBL sought in this case were produced, controlled and possessed by the General Services Administration. GSA provided the records to the ASBL prior to its suit against the SBA,” says SBA spokesman Sean Rushton in an e-mail to CVBT. “Therefore, SBA believes ASBL’s lawsuit was unnecessary, and SBA stands behind the position it took in the litigation.

“All this fits a pattern of duplicative and unnecessary lawsuits from ASBL. SBA is committed to transparency and accountability, yet ASBL prefers to take up SBA staff time -- time that could be spent helping small businesses get federal contracts -- with ceaseless suits, information requests and misleading public statements,” he says.

SBA says it is considering an appeal to the Ninth Circuit in conjunction with the Department of Justice.

During the proceedings, attorneys for the Bush Administration persistently denied that the SBA had ever possessed a list containing the names of firms that had received government small business contracts. They went on to claim that officials at the SBA never had knowledge of the actual recipients of federal government small business contracts for any year.

Regarding the SBA's claims, case documents stated, "The court finds it curious the SBA's argument that it does not 'control' the very information it needs to carry out its duties and functions."

After questioning SBA attorneys, Ms. Patel declined to accept the SBA's claim and stated, "SBA's attempt to argue that the information sought by the League is not an 'agency record' is the kind of bureaucratic foot-dragging that FOIA -- by providing the public with free open access to government records -- was designed to avoid."

"By now it should be obvious to everyone involved that all of the information the Bush Administration has been releasing on federal small business contracting is misleading and disingenuous," Mr. Chapman says.

"The truth is, the Bush Administration has intentionally diverted the vast majority of our government's small business contracts to some of the largest companies in the world," Mr. Chapman says.

Most Americans think of the Small Business Administration (SBA) as the agency that is supposed to help small businesses get started, secure loans, grow and maybe land some federal contracts.

The truth about the SBA can be uncovered in reports from their own Office of Inspector General (OIG), the United States Government Accountability Office (GAO) and in court documents from the many Freedom of Information Act (FOIA) lawsuits the SBA has lost.

Paper Chase

These documents paint the picture of a federal agency that, along with the Office of Management and Budget (OMB), has done everything possible to dismantle every federal program to designed assist small businesses.

In 2007, the ASBL filed a FOIA request for the specific names of the firms that received federal small business contracts for fiscal years 2005 and 2006.

The SBA once again refused to provide the data. As a result, the ASBL filed suit against the SBA in Federal District Court in San Francisco on February 6, 2008.

The SBA was so determined to withhold the damaging information that its attorneys told the court that the agency did not have any information on the actual recipients of government small business contracts.

United States District Court Judge Marilyn H. Patel didn’t buy it. She directed the SBA to release the information. Recently the SBA moved to dismiss the case and avoid paying the ASBL’s legal fees. Patel again ruled against the SBA and denied their motion. In court documents Patel stated, “The court finds curious the SBA’s argument that it does not ‘control’ the very information it needs to carry out its duties and functions.”

Since May of 2003, there have been 15 federal investigations regarding federal small business programs. They all found fraud, abuse, loopholes, a blatant lack of proper oversight and the intentional diversion of billions of dollars in federal small business contracts to hundreds of the largest firms in the world.

Additionally, the investigations found hundreds of large firms that had received federal small business contracts, including: Lockheed Martin, Boeing, Raytheon, Hewlett-Packard, Northrop Grumman, John Deere, Dell, Xerox, General Dynamics, and British Aerospace and Engineering (BAE).

Surprisingly, no one in Congress has even proposed legislation to stem the flow of federal small business contracts to corporate giants around the world.

The ASBL projects that the SBA and the OMB are allowing large businesses to take up to $100 billion a year in federal small business contracts from middle-class America.

Bush officials that call the shots at the SBA may have painted themselves into a corner. For the first time in the SBA’s 55-year history, the agency is refusing to release the government’s small business contracting statistics.

How can they? They told a federal judge they didn’t have any such data.

The Bush Administration is apparently extremely concerned about the negative impact the release of this information could have on the upcoming elections. SBA attorneys notified the Federal District Court in San Francisco that the agency would appeal the District Court’s decision to deny its motion to the 9th Circuit Court of Federal Appeals.

The SBA’s arguments before the 9th Circuit Court will no doubt be, shall we say, creative. It’s not likely they will have any luck in trying to convince the 9th Circuit Court of Federal Appeals that the SBA has no information whatsoever on the actual recipients of more than $140 billion a year in federal small business contracts.

In 1992, I won my first FOIA case against the federal government in the 9th Circuit Court. During the hearing, the panel of federal judges lambasted the federal government’s attorney so severely that she left the courtroom in tears. My advice to the unfortunate soul that will be charged with representing the SBA during this case, “bring a hanky.” 

Lloyd Chapman is the president of the California-based American Small Business League.