Petaluma, Calif. - The following is a letter to President Barack Obama from American Small Business League President Lloyd Chapman:

I just finished watching your State of the Union address. 

You said something that really caught my attention. You said, "let's try common sense." I have some common sense suggestions for you.  Creating jobs and trying to boost our nation's struggling economy is obviously the number one issue all Americans want you to address. 

Based on the latest data from the U.S. Census Bureau, small business are responsible for virtually 100 percent of net new jobs in America.  So far your administration has allocated less than 3 percent of stimulus funds directly to small businesses. Wouldn't it make sense to shift more money to small businesses?   

Current federal law requires that a minimum of 23 percent of the total value of all federal contracts and subcontracts be awarded to small businesses. (http://www.smallbusinessnotes.com/fedgovernment/sba/sbact.html) That certainly makes sense. What better way to invest hard earned taxpayer dollars than to reinvest those funds with the small businesses where most taxpayer's work and nearly all net new job are created?

Unfortunately, since 2003 over a dozen federal investigations have reported that billions of dollars a month in federal small business contracts have been diverted to Fortune 500 firms. Based on data from the investigations it appears that between $75 and $120 billion a year in federal small business contracts are diverted to large businesses. (https://www.asbl.com/documentlibrary.html)

In 2005, the Small Business Administration (SBA) Office of Inspector General (IG) referred to this problem as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." Recently, for the fifth consecutive year, the SBA IG reported the diversion of federal small business contracts to corporate giants as the number one management challenge facing the agency. (https://www.asbl.com/documents/05-15.pdf; http://www.sba.gov/idc/groups/public/documents/sba_homepage/oig_reports_tmc_fy10.pdf)  

According to the most recent data released by your administration firms counted as small businesses included: Xerox, Bechtel, Lockheed Martin, Boeing, Raytheon, Northrop Grumman, British Aerospace (BAE), Ssangyong Corporation headquartered in Seoul, South Korea and Finmeccanica SpA, which is located in Italy with 73,000 employees. (https://www.asbl.com/documents/20090825TopSmallBusinessContractors2008.pdf)

You seemed to recognize the magnitude of this problem during your campaign when you 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)

It is now time to honor that campaign promise. You could issue an executive order directing the SBA and every federal agency to immediately halt the practice of diverting federal small business contracts to Fortune 500 firms and other large businesses.

You could also solve this problem by passing a bill I wrote titled, H.R. 2568, the Fairness and Transparency in Contracting Act. To date, H.R. 2568 has 20 co-sponsors. (http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h2568ih.txt.pdf)

Redirecting $75 to $120 billion a year in current federal infrastructure spending back to the small business that create 100 percent of net new jobs would clearly slash unemployment. It would also put more money into the middle class economy than anything you or Congress have proposed so far.

Most importantly, it is what you said you would do. Now that's common sense.

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I can already hear the empty pandering to the middle class in President Obama's State of the Union speech. He will be reading one of the most well written speeches of his presidency since he and his handlers realize their reign in Washington could be on the ropes.

President Obama has a documentable track record of broken campaign promises and policies that have virtually ignored the middle class.

In my perfect world, every network carrying President Obama's State of the Union address would be required to run a scrolling banner of my up to the minute commentary on the bottom of the screen.

When President Obama starts to roll out his impassioned B.S. about his concern for small businesses and the middle class, I could throw-up some of the actual data on his policies to date.

As people watch President Obama on the screen, I want them to see that small businesses in the middle class are responsible for over 97 percent of all net new jobs in America. To date, President Obama and the democratically controlled Congress have allocated approximately 2 percent of the stimulus funds to small businesses.

When he starts to talk about small businesses, I would run some of the latest government data that shows every day of his administration, hundreds of millions in federal contracts that by law are earmarked for small business have been diverted to Fortune 500 firms.

I would love to run the names across the bottom of the screen as he spoke of some of the firms the Obama Administration is currently giving small business contracts. I wonder how President Obama's most ardent supporters would feel when they saw billions of dollars in federal small business contracts going to Bechtel, Boeing, Lockheed Martin, Raytheon, and Northrop Grumman.

The largest recipient in the latest government small business data was Textron, a Fortune 500 corporation with 43,000 employees, and $14 billion in annual revenue. That's a small business right? Textron received nearly $780 million in federal small business contracts in a single year.

I wonder what affect it would have on his poll numbers if every American knew the Obama Administration was giving U.S. government small business funds to some of the largest corporations in England, France, Italy and even South Korea.

After all the shocking statistics ran, I would run a statement President Obama released almost two years ago in February of 2008, "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)

I think most people would be much more informed if they skipped President Obama's State of the Union address and spent that time looking up some of the stories on what he has actually done instead. Google "Lloyd Chapman Barack Obama small business" [Do not search with the words in quotes] and see what you find.

There is a staggering abyss between what Obama says and what Obama does.

One of the best examples is President Obama's campaign promise to enact a windfall profits tax on the oil and gas industry. On every campaign stop for two years, President Obama promised to enact a windfall profits tax on oil companies. If you want to find out how much you can trust what Barack Obama says, try and find his excuse for completely dropping the windfall profits tax.

So when you watch the State of the Union address or any Obama speech, realize that the man gives $2 billion a week in federal small business funds to some of the largest companies in the world.  Realize that his two top campaign contributors, Goldman Sachs and J.P. Morgan Chase are making record profits in the middle of the worst economic meltdown in 80 years, while bankruptcies for small businesses are up 44 percent over last year.

People need to begin to realize that President Obama should have received an Oscar for best actor instead of the Nobel Peace Prize.

Wednesday night he will read his lines with passion and conviction, but Thursday morning his policies will continue to ignore the middle class and the small businesses where most Americans work and that create over 97 percent of all net new jobs.

The only change the middle class going to get from President Obama will be the pocket change that's left in their bank accounts at the end of the month.

Petaluma, Calif. - The Obama Administration has removed a critical field from the Federal Procurement Data System - Next Generation (FPDS - NG) that has been used by federal contractors to indicate their status as a small or large business. Obama officials at the General Services Administration (GSA) removed the "small business flag" on all future and historical data.

Over a dozen federal investigations and numerous investigative stories by organizations such as ABC, CBS and CNN have used the small business flag to uncover billions of dollars in federal small business contracts that were fraudulently diverted to large businesses. (Report 5-15, https://www.asbl.com/documents/05-15.pdf; 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 removal of the "small business flag" will make it difficult if not impossible for any future federal investigations to uncover large businesses that have fraudulently claimed to be small businesses prior to 2009.

In addition to removing the small business flag, the GSA has forced all firms that obtain federal contracting data from the GSA for dissemination to the public, to sign an agreement, which severely restricts their release of the data. The GSA's "GETLIST RULES OF BEHAVIOR" warns, "parties failing to sign the agreement and comply with the terms will be denied access to this service."(http://www.fpds-ng.com/downloads/FPDS-NG%20getList%20Rules%20of%20Behavior.pdf)

In one example, the agreement stipulates a firm would be in violation of the agreement if they create a report that "show[s] socio-economic information but which contains none of the requisite SBA rules of exclusion."

The American Small Business League (ASBL) has challenged the SBA's "rules of exclusion" since there is no basis in the law for the practice. The Small Business Act stipulates a minimum of 23 percent of the "total value of all prime contract awards for each fiscal year" shall be awarded to small businesses. (http://www.sba.gov/regulations/sbaact/sbaact.html) The ASBL believes the SBA has arbitrarily created the "rules of exclusion" to artificially inflate the percentage of federal contracts awarded to small businesses by removing billions of dollars in major prime contracts from their calculations.

The GSA's "GETLIST RULES OF BEHAVIOR" would prevent firms from releasing accurate data on the actual percentage of all federal contracts awarded to small businesses. In the past, information released by private firms on the percentage of all federal contracts awarded to legitimate small businesses has been significantly lower than the percentage claimed by the Small Business Administration.

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