Congressman Sam Graves Joins Lloyd Chapman and Charles Tiefer in Opposing SBA
ASBL Leads Opposition on SBA Anti-Small Business Policy
By Lloyd Chapman
American Small Business League
November 14, 2014
PETALUMA, Calif., Nov. 14, 2014/PRNewswire-USNewswire/ -- House Small Business Committee Chairman SamGraves has joined American Small Business League (ASBL) President Lloyd Chapman and Professor Charles Tiefer in opposing a new policy the SBA proposed on Sept.10 that would have pushed thousands of small businesses in theInformation Technology (IT) industry out of the federal marketplace.
The SBA had proposed to remove the 150-employee small businesssize standard for small businesses in the IT industry. If the policy wasadopted, small IT firms with a few as 10 employees could be reclassified aslarge businesses. At the same time the SBA would continue to report billions incontracts to Fortune 500 firms as small business contracts.
The ASBL launched a nationalcampaign to oppose the policy they described as "anti-small business" and retained Professor Charles Tiefer, one of the nation's leadingexperts on federal contracting law, to review the SBA's authority to proposesuch a damaging policy for small businesses.
"This proposed SBA change breaks the law by violatingCongress's statutory intent in the Small Business Jobs Act of 2010,"Professor Tiefer stated in his comment. "The SBA does not give any marketdata or other persuasive reason for the elimination," adding that thisrule does exactly the opposite of what Congress intended and that if adoptedinto a final rule, "small businesses will be squeezed out of the federalmarketplace."
In 2002, Lloyd Chapman launched a successful campaign to oppose the 500-employee smallbusiness size standard in favor of a more industry appropriate 150-employeesize standard when the SBA originally created the category Other ComputerRelated Services under NAICS code 541519.
"I believe the most compelling argument against eliminatingthe 150-employee small business size standard for 541519 comes from the SBAitself. In 2003, after months of research and deliberation in their final ruleon 541519 the SBA stated, 'An employee size standard is considered a bettermeasure of the size of ITVARs operation than receipts since a substantialproportion of their receipts merely reflect the dollar value of equipment andsoftware sold,'" said Chapman in his comment. "That statement was true in 2003 and itis still true today."
On Nov. 10, Congressman Sam Graves submitted a 12 page letter to the SBA agreeing with Professor Tieferand Lloyd Chapman that the SBA did not have theauthorization or the justifications to remove the 150-employee small businesssize standard for Information Technology Value Added Resellers.
In a Gov. Exec. article by Charles Clarktitled, "SBA Takes Flak Over Revising Company Size Standards,"Charles recognizes Congressman Graves' letter and points out that Graves warnedthe SBA of "litigation and a legislative fix" if the SBA does notwithdraw the proposed rule.
"The Proposed Rule violates the express statutory languageadded to the Small Business Act," said Graves. "The Committee urgesthe agency to withdraw the proposed rule Should the SBA proceed with therulemaking, the Committee will consider appropriate legislative action."
Almost a month prior to the Small Business Committee's letter,the ASBLhad also proposed to consider legislative action, if necessary, by filing aninjunction against the SBA to block implementation of the rule.
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