US Small Businesses Slam Clean Tech Funding "PR ploy"

News

US Small Businesses Slam Clean Tech Funding "PR ploy"

New $37 million grant scheme for clean tech-focused small businesses dismissed as a drop in the ocean

By Danny Bradbury
Businessgreen.com
August 25, 2009

Source: Businessgreen.com

Obama Administration Small Business Data Includes Billions to Corporate Giants

Press Release

Obama Administration Small Business Data Includes Billions to Corporate Giants

August 24, 2009

Petaluma, Calif. - On August 21st, the Obama Administration released its latest statistics on the volume of federal contracts awarded to small businesses. Federal law requires a minimum of 23 percent of the total value of all federal contracts to be awarded to small businesses. Federal statute defines a small business as being "independently owned," which excludes publicly traded firms.

The Obama Administration is claiming the government awarded $93.3 billion in contracts to small businesses or 21.5 percent during fiscal year (FY) 2008.

According to information from the Federal Procurement Data System - Next Generation (FPDS-NG), of the ten largest recipients of federal small business contracts, 85.4 percent of the contracts went to large businesses. Eight of the top ten recipients of small business contracts were large businesses.

The top recipient of government small business contracts was Textron, which received $775.7 million.  Textron is a Fortune 500 firm with 83,000 employees and over $25 billion in annual revenue.

Two other top ten recipients of federal small business contracts were Ssangyong Corporation, which is headquartered in Seoul, Korea and received over $254 million and Finmeccanica SpA, which is headquartered in Italy with 73,000 employees and received over $283 million in contracts.

The 14th largest recipient of federal small business contracts is listed as “Miscellaneous Foreign Contractors” with $210 million in government small business contracts.

Other firms included in the Obama Administration's small business data were Lockheed Martin, Boeing, Raytheon, Northrop Grumman, General Dynamics, AT&T, 3M Corporation, Xerox, Dell Computer, Booz Allen Hamilton, Hewlett-Packard, General Electric, Staples, Office Depot, British Aerospace (BAE), Rolls-Royce and French firm Thales.

Since 2003, over a dozen federal investigations have found that legitimate small businesses have lost billions of dollars in federal small business contracts, which have been diverted to many of the largest firms around the world. In 2005, the SBA Inspector General referred to the diversion of federal small business contracts to corporate giants as, "One of the most important challenges facing the Small Business Administration (SBA) and the entire federal government today."  (https://www.asbl.com/documents/05-15.pdf) 

In February of 2008, President Obama promised to halt the rampant abuses when he released the statement, "It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)   

To date, President Obama has taken no actions to honor his campaign promise, and corporate giants continue to dominate government small business contracting programs.

The American Small Business League (ASBL) estimates that during the first six months of the Obama Administration, legitimate small businesses have lost over $50 billion in federal small business contracts to corporate giants. (www.asbl.com)   

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Please click here to watch our response to the Obama Administration’s small business contracting statistics: http://www.youtube.com/watch?v=oV0jeTrYPsM


The S.B.A. Puts the Best Face on Small-Business Contracting

News

The S.B.A. Puts the Best Face on Small-Business Contracting

By Robb Mandelbaum
The New York Times
August 24, 2009

The Small Business Administration took a victory lap Friday in the press release (pdf) that accompanied its annual scorecard rating the government on awarding contracts to small firms. In fiscal year 2008, which ended last Sept. 30, “small businesses won a record $93.3 billion in federal prime contracts,” the agency said, “an increase of almost $10 billion from 2007.” Moreover, “small disadvantaged businesses, women-owned businesses and service-disabled veteran-owned businesses increased their share of federal contracting dollars by at least $1 billion to $3 billion.”

That’s the S.B.A. for you, always bringing the good news. The whole story is, of course, more complicated and less complimentary to the bureaucracy. Here’s your annotated fact-check:

Though small-business contracting grew, the federal government fell short of its goals. The law of the land sets a goal — not a requirement — that the federal bureaucracy as a whole award at least 23 percent of prime contract dollars to small firms. Within that figure, there are sub-goals for disadvantaged small businesses (5 percent), small firms owned by women (5 percent) and service-disabled veterans (3 percent), and firms located within distressed areas known as HUBZones (3 percent). The S.B.A. negotiates with each agency to establish its individual goals.

In 2008, nominal small-business contracts accounted for just 21.5 percent of all eligible contract dollars. Not only is that below the goal, it’s worse than in 2007, when small businesses received 22 percent of the dollars. The federal government as a whole hasn’t met this goal since 2005.

In three of the four sub-goals, government agencies mostly made progress but still fell well short of the target. Only among “small disadvantaged businesses” did the government meet its goal — and actually exceeded it. But even that comes with a caveat: a provision of the law allows agencies to count as small disadvantaged business contracts deals made with large corporations owned by Alaska Natives. (And those companies are typically managed by well-paid white men, often veterans of government procurement.)

The figures are inflated because much federal spending is excluded from the goal calculation. Among such expenditures are purchases paid out of user fees or other operating funds (think the post office), instead of from Congressional appropriations. Agencies that don’t follow the standard acquisition regulations, such as the Federal Aviation Administration and the Transportation Security Administration, are also excluded. Nor are international contracts counted, which makes the dismal small-business performances turned in by the State Department and the United States Agency for International Development look even worse.

“Small businesses play a very important role in some of these categories, including foreign military sales and contracts performed overseas,” says Paul Murphy, whose Eagle Eye Publishers, of Fairfax, Va., analyzes federal procurement data. Mr. Murphy has been able to add some of the exclusions back in and found that they totaled $80 billion — which drops the small-business share of the expanded contracting pie to just over 19 percent.

Contracts to giant conglomerates are often counted as small-business contracts. According to data from July compiled by Eagle Eye, the No. 2 “small business” contractor in 2008 was Textron, a Fortune 500 company with $14. 2 billion in sales and 37,000 employees. No. 8 is QinetiQ, a British company — that that doesn’t seem right, does it? — with $2.3 billion in global revenue. No. 9 is ManTech International, which, with $1.9 billion in sales and 8,000 employees, proudly acknowledges that it has been ranked among “400 Best Big Companies in the nation.” Five of the remaining top 10 are among the aforementioned Alaska Native Corporations.

Typically this sort of miscoding occurs when a QinetiQ buys a small firm with federal contracts. Or buys a firm that bought small contractors — it used to be that it could keep the small-business designation for the life of those contracts, including options to extend that could stretch years into the future. The S.B.A. tightened those rules a couple of years back, and Mr. Murphy has since noted small improvements. “I think fewer dollars are being miscoded these days,” he says. (General Dynamics and Lockheed Martin, which were the eighth- and 19th-biggest “small business contractors” in 2005 dropped to 41 and 42 in 2008.) “But we’re still a few years away before the error rate is insignificant.”

Of course, some large companies willfully misrepresent themselves as small. Nobody knows the extent of such fraud, but as Lloyd Chapman, the head of the American Small Business League who has a made a federal case (literally!) out of protesting this malfeasance, pointed out to me a couple years ago for an article that ran in Inc. magazine, few firms are likely to be deterred by rigorous enforcement — as of a couple years ago, at least, not one firm had been prosecuted for falsely representing itself as small.

Senator Mary Landrieu, chairwoman of the Senate Small Business Committee, issued an anemic statement: “While I am encouraged by these numbers, I still see room for improvement,” etc., etc. — hardly the sentiment she would have expressed had it been the Bush administration releasing these numbers. Of course, the Obama administration should not be excoriated for reporting on the dismal performance of its predecessor, which confined its small-business agenda largely to cutting taxes and gutting regulation.

But history suggests that ignoring small business in the bureaucracy isn’t a partisan preference. If the numbers haven’t improved next year at this time, Democrats will not have an excuse to hold their fire.

Source: New York Times


Obama Administration Fabricates Small Business Contracting Data

Press Release

Obama Administration Fabricates Small Business Contracting Data

August 21, 2009

Petaluma, Calif. - The American Small Business League (ASBL) is challenging the latest statistics released by the Obama Administration regarding the volume of federal contracts awarded to small businesses during fiscal year (FY) 2008.

Since 2003, over a dozen federal investigations have found that every year billions of dollars in federal small business contracts have been awarded to Fortune 500 firms and some of the largest corporations in the United States and Europe.  (https://www.asbl.com/documentlibrary.html)  

Every major newspaper in the country has covered this story along with a number of major television networks like ABC, CBS, CNN and FOX. These stories have reported that firms like British Aerospace (BAE), Xerox, Dell Computer, John Deere, Microsoft, Wal-Mart and Rolls-Royce have all received federal small business contracts. (ABC, https://www.asbl.com/abc_evening_news.wmv; CBS, https://www.asbl.com/cbs.wmv; CNN, https://www.asbl.com/showmedia.php?id=1170; FOX, https://www.asbl.com/showmedia.php?id=1388)    

In February of 2008, President Obama acknowledged the extent of the abuses when he said, "Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants."  (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)  

To date, President Obama has refused to support legislation such as H.R. 2568, the Fairness and Transparency in Contracting Act of 2009 or adopt any policy that would stem the flow of federal small business contracts to large corporations.  Consequently, the same Fortune 500 firms that were allowed to receive small business contracts during the Bush Administration continue to receive federal small business contracts.

The ASBL points out that the government's small business contracting statistics have been inflated or falsified in several ways.  In one way, the government under-reported the total volume of the federal acquisition budget as a means of manipulating the final percentage reported as going to small businesses.  Secondly, the Obama Administration continues to include Fortune 500 firms in the government's small business contracting statistics. 

The ASBL will release a more detailed analysis of the Obama Administration's 2008 small business contracting statistics early next week.

"Despite all of President Obama's pre- and post-campaign rhetoric regarding small businesses, the fact is that the Obama Administration is allowing approximately $400 million a day in federal small business contracts to be awarded to Fortune 500 firms and some of the largest corporations in the world," ASBL President Lloyd Chapman said. "The fact that the Obama Administration is awarding small business contracts to Fortune 500 corporations cannot be denied.  It is irrefutable.  I challenge anyone in the country to prove me wrong.  In my mind, the Obama Administration is anti-small business, and we all need to stop listening to what they say, and start looking at what they do." 

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Federal government misses its small business contracting mandates

News

Federal government misses its small business contracting mandates

By Doug Caldwell
Central Valley Business Times
August 21, 2009

•  Only one agency makes their goals

•  Where are the billions going?

Again in 2008 as in previous years, federal tax dollars failed to flow to American small businesses as mandated by law, according to a report Friday from the Small Business Administration.

Just one federal agency out of 25 – the General Services Administration – met its small business contracting goal, the SBA says.

Two agencies that spend tax money didn’t make any of their goals: the Agency for International Development and the Office of Personnel Management.

Federal law says the 25 agencies must spend 23 percent of their purchasing budgets with small businesses. The figures in the past have been disputed with critics pointing out that billions of dollars meant for small businesses have gone instead to some of the nation’s largest firms.

Although goals were not met last year, the SBA contends at least it’s an improvement.

“Small businesses won a record $93.3 billion in federal prime contracts in Fiscal Year 2008 (Oct. 1, 2007-Sept. 30, 2008), an increase of almost $10 billion from 2007,” it says in a press release Friday.

“In addition, small disadvantaged businesses, women-owned businesses and service-disabled veteran-owned businesses increased their share of federal contracting dollars by at least $1 billion to $3 billion,” the SBA says.

In terms of dollars spent, the $93.3 billion represents 21.5 percent of some $434 billion in spending last year covered by the law. In 2007, the figure was 22.0 percent and in 2006 it was 22.8 percent.

But those earlier numbers were riddled with errors, critics have said. “Since 2003, over a dozen federal investigations have found that every year billions of dollars in federal small business contracts have been awarded to Fortune 500 firms and some of the largest corporations in the United States and Europe,” says the American Small Business League of Petaluma.

“This record $93.3 billion in contracts to small businesses is significant, however, across the federal government we are committed to ensuring that the 23 percent goal is met and even exceeded going forward,” says SBA Administrator Karen Mills. “Especially during these tough economic times, federal contracts for small businesses can be just the opportunity they need to continue to grow and create jobs.”

But the head of the ASBL believes the books are cooked.

"Despite all of President Obama's pre- and post-campaign rhetoric regarding small businesses, the fact is that the Obama Administration is allowing approximately $400 million a day in federal small business contracts to be awarded to Fortune 500 firms and some of the largest corporations in the world," ASBL President Lloyd Chapman says.

"The fact that the Obama Administration is awarding small business contracts to Fortune 500 corporations cannot be denied. It is irrefutable. I challenge anyone in the country to prove me wrong. In my mind, the Obama Administration is anti-small business, and we all need to stop listening to what they say, and start looking at what they do," Mr. Chapman says.

Source:  http://www.centralvalleybusinesstimes.com/stories/001/?ID=12872