A bigger Voice for Small Business

Obama Economic Policies Defy Logic and Reason

by | Jul 20, 2011 | Press Release

Press Release

Obama Economic Policies Defy Logic and Reason

July 20, 2011

Petaluma, Calif. – According to the U.S. Census Bureau, small businesses create 90 percent of all net new jobs in America. Yet President Obama’s economic policies continue to ignore this clear avenue toward a better economy.

The Administration’s failed policies come at the expense of the middle class. During the first half of 2011, Americans have faced massive unemployment and endured dismal job growth. The number of Americans without a job has shot above 14 million, an increase of more than 500,000 since March. (http://www.bls.gov/news.release/empsit.nr0.htm)

Data indicates that the President and Congress are ignoring small businesses while promoting policies aimed at helping the nation’s chief job exporters, large corporations. The American Small Business League (ASBL) reports that legitimate small businesses have been left out of the federal government’s most practical economic stimulus plan, the Small Business Act, which requires that 23 percent of all prime contract dollars go to small businesses.

Since 2003, a series of federal investigations have discovered billions of dollars in small business contracts going to some of the largest corporations in the United States and Europe. For example, in fiscal year (FY) 2010, the government reported $768 million in small business contracts went to ManTech Sensor Technologies Inc. (STI), which is a subsidiary of ManTech International Corporation and has 8,000 employees and $1.8 billion in annual revenue.

In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the issue as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” The SBA IG has named the issue as the agency’s top management challenge for the last six consecutive years. (https://www.asbl.com/documentlibrary.html#5-15)

In 2008, the President said, “98 percent of all American companies have fewer than 100 employees. Over half of all Americans work for a small business. Small businesses are the backbone of our nation’s economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.” (https://www.asbl.com/documents/20081007_Obama_Promise_Website.pdf) 

Data from the U.S. Bureau of Labor Statistics and the U.S. Census Bureau support the President’s statement, yet the latest data from his administration illustrates that 61of the top 100 small business contractors during FY 2010 were actually large firms. (www.asbl.com/documents/asbl_2010_dataanalysis.pdf)

“President Obama’s economic policies defy all logic and reason,” said ASBL President Lloyd Chapman. “If the President would stop diverting small business contract dollars to Fortune 500 firms, it would direct more than $100 billion a year in existing federal infrastructure spending to the middle class and the nation’s chief job creators. It requires no new taxes, no new spending, and it is deficit neutral.”

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How to help the drivers of job growth

by | Jul 16, 2011 | ASBL News

News

How to help the drivers of job growth

By Loren Steffy
Houston Chronicle
July 16, 2011

If the entire economy could have fit into the room at Houston's Lakeside Country Club, it would be fixed.

The 30 or so people who gathered there recently exuded a determination and self-reliance that remains undaunted by the Great Recession and the Not-So-Great Recovery. The annual Entrepreneurs Workshop, sponsored by Services Cooperative Association, brought together small-business owners, entrepreneurs and the businesses and services to help them grow.

Executive Director C. Dean Kring is a ponytailed evangelist for small businesses solving their own problems and not waiting for the government to provide solutions.

He talked of how small-business owners are infused with "entrepreneurons" that are like energy particles for economic development.

"Entrepreneurons tend to thrive, propagate and increase in a free enterprise system, excepting those environments in which bureaucracies are found to predominate," he said. "Entrepreneurons comprise the greatest economic energy resource in the United States."

By the time I left, I started to believe I could feel them bouncing around the room.

Outside, though, the reality beat down like the unrelenting July sun. A recent U.S. Bancorp survey of more than 1,000 small businesses nationwide found that almost three-fourths have no plans to expand in the next year.

Meanwhile, the National Federation of Independent Businesses optimism index fell again in May, its third straight month of decline. Across the country, small businesses are struggling to get by as costs rise, customers remain skittish about spending and, most of all, credit remains hard to find.

They didn't cause it

While entrepreneurs may extol the virtues of not relying on the government, they shouldn't have to in an economy like this.

Small-business owners didn't cause the financial crisis, but they play a key role in rebuilding from it, and it is among small businesses that government should be focusing its support.

Too much of the federal stimulus efforts have merely strengthened the bond between big business and big government, either by awarding contracts to large companies or by literally handing them money. I'm looking at you, General Motors.

Sure, bailouts for GM and Chrysler saved a lot of jobs, but how many jobs will they create over the long term? Big manufacturers have been boosting productivity for years — a never-ending quest to make more stuff with fewer people.

If oil is yesterday's fuel, then auto plants are yesterday's economic development.

Last month, the U.S. Small Business Administration issued a report saying that almost $98 billion in federal contracts, or almost 23 percent of contract dollars spent by the government, went to small businesses.

That's roughly the amount that's required under federal contracting laws.

Critical of data

The American Small Business League, which focuses on federal contracting issues that affect small businesses, has long criticized the SBA's data. The group, based in Petaluma, Calif., says many of the contracts actually go to large companies like AT&T, Lockheed Martin and Hewlett-Packard that use subsidiaries that are mistaken for or disguised as small businesses.

The percentage of federal contract dollars awarded to actual small businesses is closer to 5 percent, said Brian Reeder, an ASBL public affairs analyst.

"What we're finding in our data is that a lot of these contracts that the SBA is saying are going to small business are actually going to large businesses," Reeder said.

The SBA maintains that its data is as accurate as it can be.

Government contracts are an important opportunity for small businesses, and it's the kind of stimulus that provides real benefit for taxpayers, the economy and, of course, the business owners.

"They need someone to sell goods and services to, and the government is the biggest buyer of goods and services," Reeder said. "It seems like a no-brainer. It seems like you'd want to shift more demand to those chief job creators."

In other words, it seems like you'd want to tap into those entrepreneurons in rooms like that one at the Lakeside Country Club and help channel it toward creating jobs and rebuilding the economy.





SBA Spokesman Continues to Mislead the Media

by | Jul 7, 2011 | Press Release

Press Release

SBA Spokesman Continues to Mislead the Media

July 7, 2011

Petaluma, Calif. – For the past decade, Small Business Administration (SBA) spokesman Mike Stamler has led a coordinated campaign to mislead the public and media about the diversion of federal small business contracts to corporate giants.

On June 24, the SBA released its fiscal year (FY) 2010 small business scorecard and goaling report, claiming that small businesses received just under $98 billion in federal contracts, or 22.7 percent of total spending. An analysis of the FY 2010 contracting data by the American Small Business League (ASBL) found that 61 of the top 100 small business contract recipients were actually large companies that received more than $8.8 billion in contracts counted towards the congressionally mandated 23 percent goal. (https://www.asbl.com/documents/asbl_2010_dataanalysis.pdf)

In response to the analysis by the ASBL, Mr. Stamler defended the SBA’s numbers claiming that, “Every federal agency certified that the data is correct.” (https://www.asbl.com/showmedia.php?id=1857)

For years, the SBA and Mr. Stamler have used the excuse of “miscoding” to explain why some of the largest firms in the U.S. and Europe receive billions of dollars a month in contracts intended for small businesses. Last year, Mr. Stamler claimed that large companies receive small business contracts, “because of simple human error,” and “miscoding.” In a May 2007 press release, the SBA even claimed the rampant abuses were simply a “myth.” (https://www.asbl.com/documents/sbamythvfact.pdf)

In 2008, after quoting ASBL President Lloyd Chapman in a story, the Long Island Business Journal (LIBJ) received a series of aggressive correspondence from Stamler, which was so profane in nature that editors of the paper responded by publishing a blog entitled, “Expletives the SBA's Forte.” (http://libizblog.wordpress.com/2008/02/22/expletives-the-sbas-forte/)

Mr. Stamler’s remarks stand in stark contrast to a series of federal investigations from the Government Accountability Office (GAO), the SBA Office of Advocacy, and the SBA’s Inspector General (SBA IG) that have found widespread fraud and abuse in virtually every program managed by the SBA. (https://www.asbl.com/documentlibrary.html)

In Report 5-15, the 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.” For the last six consecutive years, the SBA IG has reported these rampant abuses as the top management challenge facing the SBA. (https://www.asbl.com/documents/05-15.pdf)

An SBA IG investigation from March 2010 found that the SBA itself awarded federal small business contracts to large businesses during fiscal years 2008 and 2009. (http://www.sba.gov/idc/groups/public/documents/sba_homepage/oig_report_10-08.pdf)

“There is no way Stamler and the SBA can explain over a trillion dollars in small business contracts going to large firms over the past decade as an accident or simply a miscoding error,” Lloyd Chapman said. “That is statistically impossible.”

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Small Business Administration Claims Misleading Data is “cleanest it can be"

by | Jul 6, 2011 | Press Release

Press Release

Small Business Administration Claims Misleading Data is "cleanest it can be"

July 6, 2011

Petaluma, Calif. – The Small Business Administration (SBA) fired back at American Small Business League (ASBL) claims that the number of federal contracts awarded to small businesses was dramatically inflated.

Michele Chang, the SBA’s senior advisor for government contracting and business development, said agencies have gone through processes to ensure that data is “clean” and free of data anomalies such as “miscoding.” Chang said, “we’re confident this is the cleanest data we’ve had and the cleanest it can be.”
(http://blog.nacm.org/blog/shappell/sba-responds-to-allegations-that-small-business-scorecard-misleading)

But the SBA made similar claims in 2009. Joe Jordan, the SBA’s associate administrator for government contracting and business development, said, “I can tell you this data is as clean as its ever been…but it’s not 100 percent free of errors.” (https://www.asbl.com/showmedia.php?id=1493)

On June 24, 2011, the SBA released the government’s fiscal year (FY) 2010 Small Business Procurement Scorecard, reporting almost $98 billion in federal contracts, or 22.7 percent of contract dollars, went to small businesses. The ASBL reviewed the top 100 recipients of federal small business contracts for FY 2010 and found that 61 were large firms. Furthermore, the ASBL identified Fortune 500 corporations and foreign-owned firms, including Lockheed Martin, AT&T, British Aerospace (BAE) and Hewlett-Packard. (https://www.asbl.com/documents/asbl_2010_dataanalysis.pdf)

Chang denied the ASBL’s allegation that only five percent of recipients of small business contracts were actually small. However, when asked if Lockheed Martin, AT&T and Hewlett-Packard received small business contracts, Chang said she “can’t comment on them specifically.”

By law, the federal government must award at least 23 percent of the total value of all prime contract dollars to legitimate small businesses. The ASBL maintains that the Obama Administration has dramatically inflated the percentage of contracts awarded to small businesses by under-reporting the actual federal acquisition budget, and by including billions of dollars in contracts awarded to large businesses.

In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the problem as, “One of the most important challenges facing the SBA and the entire federal government today.” For six consecutive years, the SBA IG has named the issue as the number one challenge facing the SBA.  (https://www.asbl.com/documents/05-15.pdf)

“Michele Chang is a liar,” said ASBL President Lloyd Chapman. “They have said the same thing for over a decade. If that is the cleanest the data can be, everyone working at the SBA is completely incompetent. They are simply lying.”

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