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ASBL wants Congress to change language of new small business bill

by | Sep 20, 2010 | ASBL News

News

ASBL wants Congress to change language of new small business bill

By Staff
Job.com
September 20, 2010

The Senate recently passed a small business bill that will increase lending to small firms. The hope is that the boost in small business loans will help create more jobs within the private sector. The Obama administration has long touted the importance of bolstering loans to small firms, as many analysts have suggested that they have the potential to be major job creators. When Barack Obama was campaigning in February 2008, he announced his intentions to try to and help remove large firms from federal small business contracting.

The House of Representatives is due to approve the bill later this week and the American Small Business League (ASBL) recently spoke about the importance of Congress adding language into the legislation that would halt the diversion of federal small business funds to corporate giants.

"If President Obama wants to create jobs, it's real simple; quit giving small business contracts to Fortune 1000 firms and large businesses. He could do that with one or two sentences in the jobs bill," ASBL President Lloyd Chapman said.

The ASBL cites that information released by the Obama administration reveals that 65 percent of the funding given to the top 100 recipients of federal small business contracts went to large businesses instead of small firms.

Small businesses are a large part of American employment. According to the Small Business Association, small firms have generated 64 percent of new positions over the past 15 years. Additionally, these employers account for 44 percent of the total private payroll in the U.S. The high-tech industry, which is expected to increase significantly over the next few years, is also involved with the field, as small businesses higher 40 percent of technology workers.

Source: http://www.job.com/career-advice/employment-news/asbl-wants-congress-to-change-language-of-new-small-business-bill-$438031523-855.html

Obama Jobs Bill Could Protect Fraudulent Contractors

by | Sep 17, 2010 | Press Release

Press Release

Obama Jobs Bill Could Protect Fraudulent Contractors

September 17, 2010

Petaluma, Calif. – A provision within President Obama’s Small Business Jobs Act, which is set to pass the House today, has small business groups across the country concerned. Section 1341, contains language that would protect large businesses that intentionally misrepresent themselves as small businesses as a means of illegally receiving federal small business contracts.

Section 1341 states that the Administrator of the Small Business Administration (SBA), “shall promulgate regulations to provide adequate protections to individuals and business concerns from liability under this subsection in cases of unintentional errors, technical malfunctions, and other similar situations.” (http://finance.senate.gov/legislation/details/?id=da799068-5056-a032-5229-92cebbd2b7a0)  

The American Small Business League (ASBL) believes that this section may provide a safety net under which large prime contractors could be absolved of fraudulent misrepresentation under the guise of, “unintentional errors, technical malfunctions, and other similar situations.”

Since 2003, there have been over a dozen federal investigations, which have found Fortune 500 firms and thousands of large companies around the world as the actual recipients of federal small business contracts. The SBA’s Inspector General has listed this problem as the number one management challenge facing the agency for the past five consecutive years and referred to this problem as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” (https://www.asbl.com/documentlibrary.html)  

Report 5-16 from the SBA Inspector General referred to these misrepresentations as, “false certifications” and “improper certifications.” Other federal investigations described the blatant fraud as “vendor deception.” (https://www.asbl.com/documents/05-16.pdf)

Concerns have been raised that this provision of the bill was included specifically to protect large firms that have misrepresented themselves as small in order to prevent them from being prosecuted under section 16(d) of the Small Business Act. Section 16(d) prescribes penalties of up to $500,000 and up to 10 years in prison for firms that misrepresent themselves as small businesses in order to illegally receive federal small business contracts.

 “This is really unbelievable. There have been over a dozen investigations showing that large businesses are committing felony contracting fraud, President Obama has promised to stop it, and now he has included a provision in the bill that will essentially legalize federal contracting fraud,” ASBL President Lloyd Chapman said. “The language in this bill will create a loophole where large firms can misrepresent themselves as small without any consequences.”


Obama Jobs Bill and Task Force Ignore Major Challenge For Small Businesses

by | Sep 17, 2010 | Press Release

Press Release

Obama Jobs Bill and Task Force Ignore Major Challenge For Small Businesses

September 17, 2010

Petaluma, Calif. – Neither the Obama Administration’s Jobs Bill nor the recommendations released on Wednesday by President Obama’s Small Business Task force contain any language that will stop the federal government from giving billions of dollars a month in small business contracts to Fortune 1000 firms.

During his campaign, President Obama promised to end the diversion of federal small business contracts to Fortune 1000 firms and stated, “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)  

Since 2003, over a dozen federal investigations have found corporate giants from around the world as the actual recipients of billions of dollars in federal small business contracts.

Some of the firms that have received government small business contracts include: Rolls-Royce, British Aerospace (BAE), Lockheed Martin, Boeing, Northrop Grumman, L-3 Communications, SAIC, Titan Industries, Raytheon, Dell Computer, Xerox, French firm Thales Communications, Italian firm Finmeccanica SpA, and Ssangyong Corporation headquartered in Seoul, South Korea. Textron, a Fortune 500 firm, received over $775 million in federal small business contracts in a single year.

In 2005, the Small Business Administration Office of Inspector General (SBA IG) referred to the diversion of federal small business contracts to corporate giants as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” (https://www.asbl.com/documents/05-15.pdf)  

In Report 5-16, the SBA IG found large businesses had received federal small business contracts illegally by making “false certifications” and “improper certifications.” The SBA Office of Advocacy found large businesses had received small business contracts illegally through “vendor deception.” (https://www.asbl.com/documents/05-16.pdf)  

Section 16(d) of the Small Business Act prescribes a penalty of up to ten years in prison for firms that misrepresent themselves as small businesses to illegally receive federal small business contracts.

As opposed to offering legislation and policy that will end the diversion of federal small business contracts to corporate giants, language in the “jobs bill” could actually protect large businesses that misrepresent themselves to illegally receive federal small business contracts.

Section 1341, paragraph 4 of H.R. 5297, Small Business Jobs Act, creates a legal loophole that could allow fraudulent firms to avoid prosecution and penalties by claiming they received federal small business contracts through, “unintentional errors, technical malfunctions, and other similar situations.”  

If the bill becomes law the American Small Business League (ASBL) plans to challenge the language in section 1341 in federal court.

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Pelosi Asked to Remove Loophole for Fraudulent Contractors

by | Sep 17, 2010 | Press Release

Press Release

Pelosi Asked to Remove Loophole for Fraudulent Contractors

September 17, 2010

Petaluma, Calif. – On behalf of America’s 27 million small businesses, the American Small Business League (ASBL) has asked Speaker of the House Nancy Pelosi to remove language in H.R. 5297, the Small Business Jobs Act, which may allow large businesses to receive federal small business contracts without fear of prosecution for felony contracting fraud. (www.asbl.com/documents/20100916_LTR_SPKPelosi.pdf)  

Since 2003, a series of federal investigations have found billions of dollars a year in federal small business contracts are diverted to Fortune 500 firms and some of the largest companies around the world. (https://www.asbl.com/documentlibrary.html) Some of the firms that are currently receiving federal small business contracts include: Lockheed Martin, Boeing, Raytheon, L-3 Communications, British Aerospace (BAE), Northrop Grumman, General Electric, Booz Allen Hamilton, Thales Communications, General Dynamics, and Dell Computer.

In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the diversion of federal small business contracts to corporate giants as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” (https://www.asbl.com/documents/05-15.pdf)  

In Report 5-16, the SBA IG found large businesses had received federal small business contracts illegally by making “false certifications” and “improper certifications.” The SBA Office of Advocacy found large businesses had received small business contracts illegally through “vendor deception.” (https://www.asbl.com/documents/05-16.pdf)  

The ASBL is concerned that Section 1341, paragraph 4 of H.R. 5297, will create a legal loophole that could allow fraudulent firms to avoid prosecution and penalties for felony contracting fraud by claiming that the contracts were awarded as a result of, “unintentional errors, technical malfunctions, and other similar situations.”  

In June, the ASBL conducted a review of the top 100 recipients of federal small business contracts for FY 2009. Within its sample, the ASBL identified 60 large firms, which received 64.5 percent of the total dollars the government claimed to have awarded to small businesses. (https://www.asbl.com/documents/ASBL_2009_dataanalysis.pdf)  

“We do not need more loopholes and protection for fraudulent contractors,” ASBL President Lloyd Chapman said in a letter to Speaker Pelosi Thursday.  “The American Small Business League (ASBL) strongly urges you to remove Section 1341, paragraph 4 from H.R. 5297 as a means of protecting the nation’s small businesses.”

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Homeland Security Sued Over Lockheed Data

by | Sep 16, 2010 | Press Release

Press Release

Homeland Security Sued Over Lockheed Data

September 16, 2010

The Department of Homeland Security is being sued by the American Small Business League (ASBL) for refusing to release subcontracting data on a contract awarded to Lockheed Martin. (www.asbl.com/documents/Complaint_48KB_LockheedMartin.pdf)  

The ASBL filed suit in United States District Court, Northern District of California on Wednesday, September 15.  The case was filed after the Department of Homeland Security (DHS) repeatedly refused to respond to a Freedom of Information Act request for individual subcontracting reports (ISR) and summary subcontracting reports (SSR) on a prime contract awarded to Lockheed Martin.

The ASBL believes the information contained in the reports may show Lockheed Martin and the Department of Homeland Security may have cooperated in an effort to circumvent federal law which requires 23 percent of all federal contracts to be awarded to small businesses. The ASBL is gathering information on several major government prime contractors in preparation for litigation that may include cases filed under the False Claims Act and Section 16(d) of the Small Business Act.

ASBL has won a series of Freedom of Information Act (FOIA) cases against the federal government. Some of the information obtained by the ASBL indicates the federal government diverted small business contracts to Lockheed Martin and hundreds of other Fortune 1000 firms. The Obama Administration is currently awarding small business contracts to firms such as Boeing, Raytheon, L-3 Communications, British Aerospace (BAE), Northrop Grumman, and Dell Computer. (https://www.asbl.com/documentlibrary.html)

The ASBL currently has six lawsuits pending against the federal government and plans to file at least six more cases in federal court before the end of the year. 

“We can always tell how damaging the information we have requested is based on how hard the government fights to withhold it. This looks like we might have uncovered some very damaging information, since the 9th Circuit Court of Appeals has already ruled that this information is releasable in a case I won 20 years ago,” ASBL President Lloyd Chapman said. “The Obama Administration has no hope of winning. My guess is they are stalling for time to modify the data before they are forced to release it. President Obama promised to have the most transparent administration in history, (http://www.propublica.org/article/obama-details-promises-for-transparency-1107) but under his administration we have been forced to go to federal court to obtain the most basic information on small business contracting programs. It makes you wonder what they’re trying to hide.”