A few weeks back, You’re The Boss readers rose up in mild insurrection against The Agenda. The occasion was a look at the Small Business Majority, a liberal organization trying to influence the health care debate. Readers thought The Agenda was unfair. “Subject the other business organizations to the same analysis and you would find AT LEAST as much ideology and partisan bias as the author has found on the Small Business Majority,” wrote one critic. Citing the National Federation of Independent Business, she added, “A few years ago, the N.F.I.B. contributed 95% of its PAC money to Republican candidates.” Another offered: “The N.F.I.B. on any piece of legislation will be slanted towards the leanings [of] the paying membership and, thus, not representative the feelings of all small businessmen.”

Not surprisingly, Democrats in Washington tend to agree. “There are lots of small businessmen who are liberal Democrats — they’re not members of the N.F.I.B.,” Bert Carp, a lawyer and veteran Democratic lobbyist, told me in the spring. “Their membership is self-selecting. And they select the issues that they go to their membership on.”

Many people identify the federation as the leading — or at least the loudest — lobby for small business, and its presumed partisan leaning is something I spent a lot of time thinking about this year. In the course of a long look into the organization, I talked to dozens of people: current and former N.F.I.B. lobbyists, current and former aides on Capitol Hill, and other lobbyists. Some of the results of that investigation were published in the September issue of Fortune Small Business, as a study of the N.F.I.B.’s role in the health care debate (including surprising alliances with Democrats and a labor union).

It was in the course of this reporting that I met Denny (born William) Dennis, the head of the N.F.I.B.’s Research Foundation. Mr. Dennis has what may be the messiest office at the N.F.I.B.’s Washington headquarters. His desk, like the bank of file cabinets off to one side, is piled high with binders, spiral-bound reports, and printouts of think-tank studies and surveys. The bookcases behind him are lined with scholarly journals.

Mr. Dennis is responsible for the raft of information that the N.F.I.B. produces about small businesses, including frequent polls and monthly economic reports. He is clearly suited for the work, at ease in a universe of regression models and statistical minutiae. “There has been very little small-business-specific information available,” he said. “It’s not like it’s growing on trees, so we have to develop our own sources frequently.” Besides the research that Mr. Dennis oversees, the organization regularly sends ballots to its members on national controversies affecting small business. The results help shape the N.F.I.B.’s stance. Generally, it won’t take a position on an issue unless it can marshal the support of at least 70, and probably closer to 80, percent of the membership.

The N.F.I.B. uses Mr. Dennis’s mountain of data — evidence that it is simply executing its members’ wishes — as a fortification against the charge that it is nothing more than a wholly owned subsidiary of the G.O.P. And Mr. Dennis insists that N.F.I.B. members believe no differently than small businesses at large. To prove it, he printed off a PowerPoint presentation that compares 500 randomly chosen N.F.I.B. members to 500 small employer firms randomly chosen from the Dun & Bradstreet database. (The Agenda discussed these side-by-side polls here.) To 36 questions on policies and priorities, asked by the polling firm Mason-Dixon, the two samples responded roughly the same, usually conservative by a wide margin. Curiously, the N.F.I.B. sample was slightly more inclined (though still not very inclined) to raise income and payroll taxes for top earners.

What, then, accounts for the entrepreneurs who vote Democratic? As Agenda readers would be the first to tell me, there are many, or at least many more than that N.F.I.B. survey would suggest. In a poll of small-business owners, commissioned by American Express OPEN and taken a year ago, 33 percent of the respondents identified themselves as Republicans and 32 percent called themselves Democrats. Twenty-nine percent said they were independent or claimed no party affiliation. (The sample was taken from a national list of businesses with 100 or fewer employees. The margin of error was plus or minus 4 percentage points. A general press release about the poll, which asked respondents about a broad array of issues, is available here.)

Mr. Dennis insisted the surveys are consistent. “We work on economic issues only, and for the most part, small businesses, whether they’re Democrats or Republicans tend to come out on those specific issues much like many of the Republicans do,” he said. “They tend not to want government interference, and they tend not to want high taxes, and all those sorts of things.” Or, as one former N.F.I.B. lobbyist put it, “People join N.F.I.B. because they want somebody in Washington who’s going to say no.”

But, Mr. Dennis added, “there are also a lot of Democrats in the small-business population that, for example, on the social side — which we take no position on at all — prefer the Democrats.” What determines an entrepreneur’s politics, he says, is not what he believes on an issue but how strongly he cares about it. In the OPEN survey, 24 percent of Republicans and 31 percent of those who claim no party affiliation said taxes would have the most influence on their vote, but only 8 percent of Democrats did. Conversely, 15 percent of the Democrats said Iraq was the most important issue, a much higher figure than in any of the other groups.

“The one thing that’s really interesting about small businesses when you poll them is they’re half business, half person,” Mr. Dennis continued. “When you poll big-business guys, they put on their big-business hat and everything is pretty much a business answer. You ask the public and you get a personal answer. We’re in the middle — they clearly are some of both.”

It is as plausible an answer as any The Agenda has heard. And it leads to another important question about the N.F.I.B.: does it represent its members’ interests, or their passions? For that matter, is there a difference? We’ll take that up soon, in another post.

Depending on how you look at it, the government missed its small-business contracting goal by a little, or a whole lot.

The government came out with its reckoning of small-business contracts this week and put the value of contracts awarded to small businesses at $93.3 billion in 2008, up $10 billion from 2007, and a record for such contracts. But that number still fell short of the Congressional mandate that 23 percent of government contracts go to small business. Only 21 percent of contracts went to small business, according to the government’s estimate.

Those are the government’s numbers.

But if you listen to advocacy group American Small Business League, the government shortchanged small business by a lot more than 2 percent.

The ASBL says the number’s more like 7 percent of government contracts going to small business. The group points out that since 2003, federal investigations have found that officials regularly cook the books when it comes to reporting small-business contracting, and 2008 was no exception.

The government, the ASBL claims, excludes large contracts as not being “small-business eligible,” taking a big chunk of government contracting out of the accounting for small-business contracts. The group also says some of the firms that made it into the government’s list of small businesses included Lockheed-Martin, Northrop-Grumman, Boeing, and Raytheon. Those are some thriving small businesses, all right.

After analyzing contracting data since 2000, ASBL claims small businesses have lost an average of $100 billion a year in contracts that should have gone to them.

Source:  http://www.portfolio.com/views/blogs/daily-brief/2009/08/26/government-small-business-contracts-miss-the-mark/