Petaluma, Calif. – Just days before the election, President Barack Obama dropped a comprehensive plan to stimulate the middle class economy by stopping the diversion of federal small business contracts to corporate giants. The plan was drafted over the course of three months by dozens of small business experts around the country who had been invited to serve on President Obama's small business advisory panel.

The plan included a number of policies that would have redirected up to $100 billion a year in federal small business contracts back to legitimate middle class firms around the country.

Since 2003, a series of over 15 federal investigations found Bush Administration officials allowed billions of dollars in federal small business contracts to be diverted to Fortune 500 firms, their subsidiaries and thousands of large businesses in the United States and Europe.

A report issued by the Small Business Administration (SBA) Office of Inspector General (OIG) referred to the diversion of federal small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." (http://www.sba.gov/IG/05-15.pdf) 

President Obama responded to the investigations in February of 2008 with 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) 

The plan included support for a new piece of draft legislation written by the American Small Business League (ASBL) titled the Fairness and Transparency in Contracting Act. The new legislation would prevent government contracting officials from awarding small business contracts to Fortune 500 firms and other large businesses. The ASBL estimates the new legislation would provide a dramatic boost to the nation's failing economy by redirecting up to $100 billion a year in federal infrastructure funds to middle class firms.

As opposed to other stimulus plans that could cost taxpayers hundreds of billions of dollars, the Fairness and Transparency in Contracting Act would be virtually free to taxpayers.

In December President Obama's transition team stated that up to 40,000 jobs could be created with every billion dollars spent on federal infrastructure projects. (http://www.nytimes.com/2008/12/07/us/politics/07radio.html?_r=1) If calculations by President Obama and the ASBL are correct, the Fairness and Transparency in Contracting Act could create over 4 million new jobs at virtually no expense to taxpayers.  

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Petaluma, Calif. - President Obama has not offered any plans to stop Bush Administration policies that will allow Fortune 500 firms and some of the largest companies in Europe to continue to receive hundreds of billions of dollars in federal small business contracts through the year 2012.

In June of 2007, former Administrator of the Small Business Administration (SBA) Steven Preston ignored recommendations from the SBA's own Office of Inspector General (OIG) and adopted a policy that will allow Fortune 500 firms and thousands of other large businesses to continue to receive federal small business contracts until 2012. (https://www.asbl.com/showmedia.php?id=592) 

During the Bush Administration, 15 federal investigations and two private studies were released, which uncovered widespread fraud and abuse in virtually every federal small business contracting program. (https://www.asbl.com/documentlibrary.html) 

In March of 2005, the SBA OIG released Report 5-15 which 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." (http://www.sba.gov/IG/05-15.pdf)  

In Report 5-16, the SBA OIG found large businesses had committed felony federal contracting fraud by making "false certifications" and "improper certifications." (http://www.sba.gov/IG/05-16.pdf) 

In Report 5-14, the SBA OIG found the SBA itself had reported contracts to Dutch conglomerate Buhrmann NV, with 26,000 employees worldwide as small business awards. (http://www.sba.gov/IG/05-14.pdf) 

A report from the SBA Office of Advocacy found large businesses had illegally received federal small business contracts through, "vendor deception." (https://www.asbl.com/documents/eagkeeye_report 2002.pdf) 

In July of 2008, the Department of the Interior (DOI) OIG found that the agency had awarded millions of dollars in federal small business contracts to firms such as Dell Computer, Sherwin-Williams, John Deere, Xerox, Home Depot, GTSI Incorporated, McGraw-Hill Companies, Ricoh, Starwood Hotels, Weyerhaeuser, Waste Management and World Wide Technology. (http://www.doioig.gov/upload/2008-G-0024.pdf) 

ABC, CBS and CNN all released investigative reports on the issue. (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) 

The American Small Business League (ASBL) estimates that every year up to $100 billion in federal small business contracts are diverted to Fortune 500 firms and other large businesses.

In February of 2008, President Obama released the statement, "Its 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) Small business advocates and millions of legitimate small businesses are hoping President Obama will make good on his campaign promise, but no specific plans to address the billions in fraud and abuse in federal small business contracting programs have been proposed by President Obama so far.