Congressman Hank Johnson, a Georgia Democrat, is proposing new legislation that he says will close loopholes that allow federal contracts intended for small business to go to large corporations.

H.R. 2568 would update the definition of a small business in the Small Business Act by barring  publicly traded companies. It would also allow individuals to file complaints regarding small-business-focused federal contracts.

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 quality.

"It's unconscionable that some large corporations are the beneficiaries of small business contracts," said Johnson, "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 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."

Source:  http://blog.entrepreneur.com/2009/06/bill-would-bolster-federal-contracts-for-entrepreneurs.php

The American Small Business League has been vocal over the past few months about President Obama's plans to help the small business community.

Earlier this year the group lashed out over his nod for the SBA chief, saying that Karen Gordon Mills would be too closely aligned with venture capitalists based on her background with a similar firm.

The ASBL has also voiced concern that Obama had flip-flopped on his stance of support for small business owners.

Now, the group has said that another former venture capitalist being appointed to an SBA position - this time chief counsel for the Office of Advocacy at the SBA - poses another threat to small businesses trying to vie for government contracts that could potentially be awarded to venture capital firms.

ASBL president Lloyd Chapman expressed the group's frustration in the following statement.

"In the middle of one of the worst economic disasters in history, [President Obama] is going to allow Fortune 500 firms and multi-millionaire venture capitalists to hijack federal contracts meant for the legitimate small businesses that create 97 percent of all new jobs in America," said Chapman.

Source:  http://capitalsolutionsbancorp.com/news/small-business-voice-fears-venture-capitalists-set-to-gain-20090529

•  Say it could bring billions in new federal contracts to California

•  Would conform contracting to the law, say supporters

Two of the Central Valley’s congressmen are co-sponsoring a bill that supporters say could bring over $10 billion a year in additional federal small business contracts to California.

U.S. Reps. Dennis Cardoza, D-Merced, and Jim Costa, D-Fresno, along with Bob Filner, D-Chula Vista, are pushing the “The Fairness and Transparency in Contracting Act” that they say will stop the flow of over $100 billion a year in federal small business contracts to Fortune 1000 firms and thousands of other large businesses.

The bill’s sponsor is Georgia Congressman Hank Johnson, but it was originally written by Lloyd Chapman, president of the American Small Business League of Petaluma. Mr. Chapman has campaigned for years against what he says are proven diversions of federal contracts that were meant for small businesses to some of the nation’s largest corporations.

A July 2008 article from the Associated Press found over 33 percent of all federal small business contracts go to firms in the Washington, D.C., area, he says, with the majority of those companies actually subsidiaries and divisions of Fortune 1000 firms.

The result is that every other state, including California, does not receive a proportional share of government small business contracts, Mr. Chapman says.

The bill, H.R. 2568, is designed to end the diversion of federal small business contracts and double the volume of federal small business contracts to every state in the country, he says.

Source:  http://www.centralvalleybusinesstimes.com/stories/001/?ID=12115

On May 22, Rep. Hank Johnson, D-Ga., introduced a bill that would make sure federal small business contracts are awarded to independently owned companies instead of corporations.

The Fairness and Transparency in Contracting Act (HR 2568), will keep the federal government and prime contractors from reporting that contracts given to publicly traded corporations were given to small businesses. The resolution is based on a provision of the Small Business Act that defines a small business as a firm that is "independently owned," which publicly traded firms cannot claim to be.

Several federal investigations have found Fortune 500 companies have received billions of dollars in small business contracts since 2003. A report issued by the SBA called the awarding of small business contracts to corporate firms as "one of the most important challenges facing the Small Business Administration and the entire federal government today."

The resolution will also require the federal government to report the parent company name on all contracts. Current contracts can be issued in the name of corporate subsidiaries.

According to a press release, the act will also improve access to data on recipients of small business contracts.

Lloyd Chapman, president of the American Small Business League, was the original author of the Fairness and Transparency in Contracting Act, and estimated it could redirect over $100 billion a year in contracts back to small businesses.

Chapman estimates H.R. 2568 could redirect over $100 billion a year in federal small business contracts back to middle class firms.

“Small businesses create over 97 percent of all net new jobs, and this bill will do more to help those firms than any stimulus plan proposed so far," Chapman said. "It will create millions of new jobs and provide a dramatic boost to the middle class economy.”

Source:  http://www.thebusinessjournal.com/index.php?option=com_content&view=article&id=536:act-seeks-to-end-diversion-of-small-business-contracts&catid=13:national&Itemid=220