Rep. Hank Johnson, D-Ga., has introduced a bill that would ensure that small business government contracts go only to small businesses instead of the subsidiaries of large companies.

Small businesses are especially keen to get their share of federal contracts now that the stimulus package has begun to take effect. H.R. 2568, “The Fairness and Transparency in Contracting Act of 2009,” is the result of more than 15 investigations that have exposed widespread abuses in a system that is supposed to direct a proportion of federal contracts toward small businesses.

The Small Business Administration Inspector General found in 2002, for example, that at least 4.4 percent of 1,000 contractors awarded federal funds designated for small businesses did not meet basic requirements to receive those contracts. Large companies such as Bechtel and HP were awarded small business contracts by government agencies, and those funds counted toward the agencies’ small business contracting goals.

“It’s unconscionable that some large corporations are the beneficiaries of small business contracts, especially given how many small businesses are struggling in this recession,” said Johnson (pictured) in a statement. “H.R. 2568 will go a long way in helping correct this egregious error.”

If passed, the bill would require the SBA to submit to Congress an annual report detailing the nature of the complaints and the resolution.

American Small Business League President Lloyd Chapman lauded Johnson’s efforts.

“Every small business in America owes Congressman Johnson a debt of gratitude for introducing this bill,” said Chapman. “Small businesses create more than 97 percent of all net new jobs, and this bill will do more to help those firms than any stimulus plan proposed so far. It will create millions of new jobs and provide a dramatic boost to the middle class economy.”

Notification and reporting requirements in the bill include notification for government agencies and contractors of changes in the bill. The bill also requires the SBA to make public which companies are receiving small business contracts, and requires each federal agency to report on their Web site a list of companies receiving small business contracts from that agency. In addition, the bill requires that the agency responsible for maintaining the database of all federal contractors provide an adequate warning about the penalties for misrepresenting the status of a business concern or person in order to obtain certain federal contracts.

Source:  http://www.webcpa.com/news/Bill-Introduced-Restrict-Small-Business-Contracting-50599-1.html

Central Valley Business Times

May 23, 2009

The issue of whether the federal government ignores the law by giving government deals to major corporations that were meant for small businesses could be put to rest by a bill introduced this week.

Rep. Hank Johnson, D-Ga., is carrying the legislation written by American Small Business League President Lloyd Chapman and dubbed the “Fairness and Transparency in Contracting Act of 2009.”

Mr. Chapman contends it will increase the flow of federal infrastructure spending to small businesses nationwide by as much at $100 billion a year.

He says the act has the potential to create 4 million new jobs using existing programs designed to assist small businesses.

“In this time of economic hardship, H.R. 2568 offers the possibility of a major economic stimulus for our nation's middle class economy,” he says.

Source:  http://www.centralvalleybusinesstimes.com/stories/001/?ID=12052

The issue of whether the federal government ignores the law by giving government deals to major corporations that were meant for small businesses could be put to rest by a bill introduced this week.

Rep. Hank Johnson, D-Ga., is carrying the legislation written by American Small Business League President Lloyd Chapman and dubbed the “Fairness and Transparency in Contracting Act of 2009.”

Mr. Chapman contends it will increase the flow of federal infrastructure spending to small businesses nationwide by as much at $100 billion a year.

He says the act has the potential to create 4 million new jobs using existing programs designed to assist small businesses.

“In this time of economic hardship, H.R. 2568 offers the possibility of a major economic stimulus for our nation's middle class economy,” he says.

Source:  http://www.centralvalleybusinesstimes.com/stories/001/?ID=12052

A senator from Missouri is launching a new investigation into the billions of contracting dollars awarded to Alaska Native corporations by the federal government in recent years.

Last week, Sen. Claire McCaskill, a former state auditor and prosecutor, wrote a letter to 20 of Alaska's biggest Native corporations, asking them to furnish eight years worth of internal records, including how much they paid their executives and how many of their employees were Native. She gave them a deadline of 13 days.

The reactions from Native executives and Alaska politicians this week ranged from frustration to concern about the future of the Native companies, many of which have grown rapidly in recent years due to their success in landing massive federal contracts for services such as security and maintenance at military bases and providing equipment at U.S. border checkpoints.

"We are always open to scrutiny" said Will Anderson, president of the ANCSA Regional Association, a league of the 13 regional Native corporations created by the federal Alaska Native Claims Settlement Act in 1971.

He and other Native executives pointed out that they have run through a gantlet of congressional investigations in recent years and that the same concerns keep cropping up over and over again.

"The government is getting a very good value for (its) money," Anderson said.

Some watchdog groups disagree.

A series of federal reports in recent years have found that certain Native contractors were violating federal contracting rules, the California-based American Small Business League pointed out Monday.

The government has refused to take "even the most minuscule steps" to address the problem, said Lloyd Chapman, who heads the league, which lobbies Congress on contracting matters for small-business owners.

'GREAT CONCERN'

Alaska's two senators, Lisa Murkowski and Mark Begich, said Monday they have "great concern" about McCaskill's probe, which they worry could lead to far-reaching harm for the Native firms and their shareholders.

Many but not all of Alaska's Native-owned firms have grown into multimillion-dollar companies by using special contracting advantages inserted years ago into federal law by former Sen. Ted Stevens. The key advantage allows the companies to obtain federal contracts of any size. Another advantage lets them get some contracts without bidding against other companies for the work.

Over the past decade, the new opportunity to gain million- or billion-dollar federal contracts has transformed some Native companies that had been struggling into corporate giants with gleaming corporate offices in Anchorage.

ADVERTISEMENT

 In 2007, the government awarded Native companies about $3.2 billion in contracts, 26 percent of the total dollars awarded to minority-owned companies that year, according to data provided by the Native America Contractors Association.

The companies' explosive growth attracted many critics in the Lower 48 and prompted a U.S. General Accountability Office investigation in 2006. That investigation recommended no changes to federal law and cited no abuses by Native corporations, but it did recommend stronger oversight by the U.S. Small Business Administration. The SBA runs the government's minority contracting program.

Some minority groups have raised concerns that Alaska Natives don't have caps on the size of their contracts, like other minority groups do.

At least one of the Native firms that received McCaskill's letter, Anchorage's Cook Inlet Region Inc., says it has never received any money from no-bid contracts.

Another one, The 13th Regional Corp. based in Washington state, is in financial disarray and none of its subsidiaries remain in business.

AUDIT PENDING

In a letter sent on Friday, Murkowski and Begich reminded McCaskill that the SBA is planning to publish new rules for Native contracting. Also, they said, the SBA's inspector general is auditing the companies' contracting practices. That review will examine how much contract revenue reaches Alaska Natives as shareholder dividends, Murkowski and Begich said.

According to an interim report published by the SBA inspector general's office last year, a contracting firm owned by Juneau's urban Native corporation, Goldbelt Inc., violated federal contracting rules, creating grounds for its termination from the program for minority contractors. That company, Goldbelt Raven, says it regained its minority contracting status this year and was never penalized by the SBA.

McCaskill's committee, the Subcommittee on Contracting Oversight, is working with the SBA inspector general on the Native contracting issues, said her press secretary, Maria Speiser, on Monday. She is planning a July 16 hearing on Native contracting.

The subcommittee was created in January by Sen. Joe Lieberman, who has oversight over government affairs. Its focus is on rooting out waste and fraud in government contracts.

One of its members is Sen. John McCain, who campaigned for president last year with Gov. Sarah Palin as his running mate.

 Source:  http://www.adn.com/money/industries/native_corporations/story/800379.html