Lloyd Chapman's Crusade on Government Contracting and Small Business
By Steve King
Small Business Labs
July 31, 2009
By Steve King
Small Business Labs
July 31, 2009
July 29, 2009
Los Angeles, CA – In a recent national address, President Barack Obama boldly proclaimed that his administration’s economic stimulus package was working. Meanwhile, small businesses in middle class America struggle to simply keep their doors open. Despite thousands of business closures during the last several months, the mainstream media has spent little time discussing the importance of small businesses to America’s economic vitality. Our nation’s political leaders routinely recognize small business as the backbone of our nation’s economy, but to date small businesses have largely been left out of efforts to stimulate America’s economy.
America’s 27 million small businesses generate more than $6 trillion in annual revenue and collectively account for more than half of our nation’s Gross Domestic Product (GDP). U.S. Census Bureau data indicates that companies with less than 20 employees account for 90 percent of all U.S. firms and are responsible for more than 97 percent of net new jobs.
When small businesses thrive, our economy grows. Yet today, millions of these businesses are being threatened by the very plan that was supposedly intended to help them. The president’s stimulus package, rather than providing aid to small businesses is diverting resources to save mismanaged corporate giants.
Congress earmarked a mere 1.9 percent of the initial $789 billion stimulus package to assist small businesses. Worse yet, to date, less than ½ of 1 percent has been distributed to small businesses. The irony of this is that in the long run small businesses will bear the burden of paying nearly the entire tab for this extravagant spending package and receive almost NOTHING in return.
The new administration is taking capital and revenue from the mouths of America’s small business owners and feeding it to the big national banks, greedy Fortune 500 CEOs and Wall Street executives. This theory enraptures Wall Street, yet alienates Main Street. Even the Small Business Administration (SBA) is led by venture capital vipers who are licking their chops at a chance to infiltrate and dominate federal programs designed for small businesses.
The SBA was planning to guarantee $20 billion in loans during fiscal year (FY) 2009, yet it is currently on-track to reach half of that mark. Loan programs like the ARC [America’s Recovery Capital] have been purposely structured so that few small businesses can qualify and banks literally have little motivation to lend. Even more disconcerting, every year, billions of dollars in federal contracts intended for small businesses are diverted to Fortune 500 corporations and other clearly large firms. Since 2003, more than 15 federal investigations found fraud, abuse, loopholes and a lack of oversight have led to widespread abuses in federal small business programs. The American Small Business League (ASBL) has estimated that every year up to $100 billion in federal small business contracts are diverted to corporate giants.
On top of this, small businesses are facing a hike in taxes for those earning more than $250,000, limits on itemized deductions, higher dividend taxes and shouldering more responsibility for worker health care.
While the Fortune 500 corporations have an army of lobbyists in Washington, small businesses are on their own. For this reason, it is more important than ever that small businesses unite. Regardless of political affiliation or industry association something needs to be done to stop this insane, wasteful spending spree. The ASBL and the Small Business Hour Radio Show are urging small business owners to make their voice heard. They collectively will be working together to shine a brighter light on issues facing America’s 27 million small businesses, and to help the small business community organize a more powerful unified voice. To participate in this united movement towards change, please listen to the Small Business Hour with Mark Deo at www.smallbusinesshour.com and become a supporter of the ASBL by visiting https://www.asbl.com/joinasbl.html.
Lloyd Chapman, President of the American Small Business LeagueA vocal crusader for the rights of small business, Mr. Chapman is a familiar figure at the Small Business Administration and in the United States Congress, where he has continued to work tirelessly during the last two presidential administrations to prevent federal small business contracts from being diverted to large corporations. He is regularly quoted by the media on small business contracting issues. He can be contacted at www.asbl.com
Mark Deo, Host of the Small Business Hour. Mark Deo is a small business advocate, author, journalist and business owner. For 12 years he has been the host of CBS radio’s, "The Small Business Hour." He has been voted "Journalist of the Year" by the Small Business Administration; his weekly radio show can be heard at www.smallbusinesshour.com.
By Nick Brokaw
July 22, 2009
In a clash of business interests, the California Chamber of Commerce finds itself in an odd position: It doesn’t support federal legislation that would generate billions of dollars for California small businesses.
The bill by Rep. Hank Johnson, a Georgia Democrat, aims to eliminate the diversion of billions of dollars in federal contracts intended for small businesses from going to Fortune 500 corporations and large foreign films. The legislation, H.R. 2568, dubbed the Fairness and Transparency in Contracting Act, was introduced May 21.
While the Chamber has not given a specific reason why it doesn’t support H.R. 2568, some small business interest including the American Small League have their own hunch.
Is the Chamber’s neutral position on the bill an indication that its interests may be more aligned with protecting large businesses than smaller ones?
The Chamber declined to discuss the issue with Capitol Weekly.
But others weren’t so reluctant.
“Both [the U.S. and California Chambers of Commerce] are funded by, and run for the benefit of, the Fortune 500 firms that I am trying to stop from receiving federal small business contracts,” American Small Business League President Lloyd Chapman said.
“There is a direct correlation between the firms that are receiving the lion’s share of federal small business contracts and the boards of directors for both the U.S. Chamber of Commerce and the California Chamber of Commerce,” he added.
Specifically, the bill would change the Small Business Act’s definition of a small business to include a new provision that would prohibit publicly traded companies from qualifying as a small business for the purpose of the funds. The act would also allow individuals to file a complaint if there was evidence that the rule had been broken.
In California alone, it is estimated that the bill would effectively create 400,000 new jobs and provide an additional $10 billion a year to California small business, according to estimates done by the ASBL, the group backing the bill.
The legislation is backed by the American Small Business League, which for years has been railing against the loophole that has allowed corporations such as Hewlett Packard to receive federal contracts intended for smaller operations.
The ASBL speculates that President Obama will support the bill because he stated last year that “it is time to end the diversion of federal small business contracts to corporate giants,” according to ASBL spokesman Christopher Gunn.
“If passed, H.R. 2568 would infuse the middle class economy with up to $100 billion a year in infrastructure spending,” Gunn said. “Given the state of our economy, it is imperative that our legislators pass H.R. 2568 as a means of providing small businesses the tools they need to drive our floundering economy….To date, 44 chambers of commerce and small business groups have endorsed the bill, and exclusive of Congressman Johnson, 12 members of congress have co-sponsored the legislation,” Gunn said.
“It’s unconscionable that some large corporations are the beneficiaries of small business contracts,” Congressman Johnson added. “Especially given how many small businesses are struggling in this recession. H.R. 2568 will go a long way in helping correct this egregious error.”
The California Chamber of Commerce denies joining the opposition coalition, stating that it is neither for nor against H.R. 2568.
The bill has been referred to the House Committee on Small Business and the House Committee on Oversight and Government Reform. Currently, the bill is being reviewed by staff members on both committees.
Johnson notes that the Small Business Administration Inspector General found that four out of 100 recipients of federal contracts intended for small business did not qualify.
The ASBL has estimated that every year more than $100 billion in federal small business contracts are awarded to Fortune 500 corporations and other clearly large firms around the world.
July 21, 2009
Petaluma, Calif. - Congressman Hank Johnson (D - GA), today issued a press release applauding the American Small Business League (ASBL) and its President Lloyd Chapman for their efforts as an advocate for small businesses, specifically businesses owned by minorities, women and veterans. (https://www.asbl.com/documents/hr2568%20_4_.pdf)
On May 21, Congressman Johnson proposed bipartisan legislation known as the "Fairness and Transparency in Contracting Act of 2009." H.R. 2568 would provide small businesses across the country with billions of dollars in additional contracting opportunities. Chapman originally drafted the concept for the bill with guidance from the nation's preeminent expert on contracting law, Professor Charles Tiefer.
"Lloyd Chapman and the American Small Business League deserve recognition for the hard work they have done trying to bring an end to the diversion of federal small business contracts to corporate giants," Johnson said. "Their efforts, along with the passage of H.R. 2568, will provide a significant boost to our nation's middle class economy."
For more than 7 years, the ASBL has tirelessly fought to stop widespread abuses, which have lead to the diversion of more than $100 billion a year in federal small business contracts to corporate giants.
In 2002, information provided by Chapman lead to the first Government Accountability Office (GAO) investigation into the diversion of federal small business contracts to large corporations. As a result of the investigation, the first congressional hearing into widespread abuses in small business contracting programs took place on May 7, 2003. Since then, more than 15 investigations have separately confirmed that Fortune 500 corporations and other companies, which exceed the government's small business size standards, are receiving billions of dollars in federal small business contracts. Chapman and the ASBL have been instrumental in spurring government inquiries into this issue. (https://www.asbl.com/documentlibrary.html)
In one such report, 5-15, the Small Business Administration (SBA) Office of Inspector General stated, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (https://www.asbl.com/documents/05-15.pdf)
Chapman has spent more than 20 years advocating for the rights of small businesses across the country. During that time, Chapman and the ASBL have won a series of federal lawsuits, which have forced the release of information that proves Fortune 500 corporations have received small business contracts. In its history, the ASBL has worked diligently to raise awareness about the diversion of federal small business contracts to large corporations and to advocate for small businesses across America.
July 21, 2009
Petaluma, Calif. - Congress is considering two separate bills written to halt the diversion of billions of dollars in federal small business contracts to many of the largest firms in the world.
Since 2003, over a dozen federal investigations have been released which found thousands of firms such as British Aerospace (BAE), Rolls-Royce, AT&T, Wal-Mart, Xerox, Home Depot, General Dynamics, Raytheon, John Deere, Dell Computer and Dutch conglomerate Buhrmann NV have all received federal small business contracts.
The American Small Business League (ASBL) estimates that over that $100 billion a year in federal small business contracts actually go to Fortune 500 firms and other clearly large businesses. (www.asbl.com)
In Report 5-15, the Small Business Administration Office of Inspector General (SBA OIG) referred to the diversion of federal small business contracts to large corporations as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." (https://www.asbl.com/documents/05-15.pdf)
In Report 5-16, the SBA OIG reported that in some cases large businesses received federal small business contracts because current policy allows large businesses to self certify their status as small businesses. The SBA OIG referred to the abuses as "False certifications." (https://www.asbl.com/documents/05-16.pdf)
In the Senate Committee on Small Business and Entrepreneurship, congressional leaders are considering S. 2300, the Small Business Contracting Revitalization Act, as a potential solution to longstanding abuses in federal small business contracting programs. That said, the bill would allow large businesses to continue to self certify, but would require them to do so annually.
In the House of Representatives, congressional leaders are considering H.R. 2568, the Fairness and Transparency in Contracting Act which eliminates self certification and puts the onus on federal contracting officials to ensure that Fortune 500 firms and other publicly traded firms no longer receive federal small business contracts. Current federal law stipulates that a small business must be "independently owned." Since publicly traded firms are publicly owned, they would not qualify as "independently owned" for the purpose of federal small business contracting programs. H.R. 2568 stipulates that federal contracting officials and prime contractors would no longer be able to report awards to publicly traded firms as small business awards.
The ASBL originally drafted H.R. 2568, which was introduced by Congressman Hank Johnson (D - GA) on May 21. To date, H.R. 2568 has received letters of support from more than 45 Chambers of Commerce and small business organizations around the country.
In a recent appearance on CNBC, U.S. Chamber of Commerce spokesman Giovanni Coratolo refused to back H.R. 2568. Fifteen Fortune 1000 firms represented on the U.S. Chamber of Commerce Board of Directors have received federal small business contracts.