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New SBA Policy Opposed by Small IT Firms

by | Mar 31, 2015 | Press Releases

Press Release

New SBA Policy Opposed by Small IT Firms

ASBL opposes SBA policy to reclassify small businesses as large businesses

By Lloyd Chapman
American Small Business League
March 31, 2015

PETALUMA, Calif., March 31, 2015/PRNewswire-USNewswire/ -- If a new SBA policy takes effect, thousands of small businessesin the IT industry will be reclassified as large businesses. At the same timeexisting SBA policies will continue to report billions of dollars in contractsto Fortune 500 firms as small business contracts.

The SBA reopened a policy for public comments that is attempting to makeamendments to small business government contracting and the National DefenseAuthorization Act of 2013 involving small business set aside contracts andsmall business subcontracting. The SBA proposed changes to the standard forsubcontracting by small business primes from no more than 50% of personnelcosts performing the set aside contract to no more than 50% of the award amountreceived by the prime contractor.

There is no logical justification for making this change inpolicy. It is inconsistent with the SBA's primary mission and seems outrageousin comparison to the current SBA policies that allow contracts to Fortune 500firms to be reported as small business contracts. This change will have adevastating impact on IT Value Added Resellers who currently provide services andsupplies to Federal agencies.

A number of investigative stories in the main stream media and a long seriesof federal investigations have found widespreadfraud and abuse in federal small business contracting programs. A number ofcongressionalhearings have found lack of oversight on the part of the SBA that has allowed widespreadfraud to permeate virtually every program managed by the SBA.

This policy comes on the heels of another anti-small businesspolicy, the "safe harbor from fraud penalties" policy that wouldallow firms to commit Federal contracting fraud. Large businesses thatmisrepresent themselves as small businesses and commit Federalcontracting fraud to illegally receive federal contracts to avoid allprosecution can simply claim they "acted in good faith." Opponents of the new policy areconcerned this is just another policy that appears to be designed to weaken anddismantle federal small business contracting programs and create moreloopholes and channels where federal small business dollars can be diverted tolarge businesses.

When the SBA tried a similar policy in October of 2014, Professor Charles Tiefer and the U.S. House Small Business Committee released legal opinionsthat found the SBA did not have the legal authority to make that change.

"Based off of Professor Tiefer's legal opinion fromNovember of 2014, I don't believe the SBA has the legal authority to make thischange. This is yet another anti-small business policy from the SBA. The agencythat continues to report billions a year in contracts to Fortune 500 firms assmall business contracts. And if this policy is passed it will reclassifythousands of legitimate small businesses in the IT industry as large businesseswhile the SBA continues to convert billions in small business contracts toFortune 500 firms," stated Lloyd Chapman,President of the American Small Business League.

The SBA is taking public comment until April 6,2015.

To view full press release, click here: http://www.prnewswire.com/news-releases/new-sba-policy-opposed-by-small-it-firms-300058145.html

 


House Advances Bill to Curb Contract 'Bundling' that Favors Large Companies

by | Mar 30, 2015 | ASBL News

 

News

 

House Advances Bill to Curb Contract 'Bundling' that Favors Large Companies

By Charles S. Clark

Government Executive

March 30, 2015

 

Citing a shortage of accurate data on small business contracting, a House
panel last week approved an umbrella bill (H.R.
1481) aimed at forcing agencies to curb practices seen as freezing out
smaller bidders and requested a new Government Accountability Office study on
small business goals.

 

"We know that when small businesses compete for federal work, it creates
jobs, improves the quality of work, and saves taxpayers' money," said House
Small Business Committee Chairman Steve Chabot, R-Ohio. "This bill is a
commonsense approach to make sure that Washington is working with Main Street –
not locking it out of the procurement process altogether."

 

Combining six separate bills, the package would restrict "bundling" of
services or goods previously provided under separate contracts to the detriment
of small business and curb use of so-called reverse
auctions, in which contractors bid electronically for contracts at
progressively lower prices.

 

The bill would require the Small Business Administration, which announced
last year that agencies for the first time met the goal of awarding 23
percent of contracts to small businesses, to factor in use of subcontractors in
their performance. The committee's analysis of contract data from fiscal
2011-2014 showed that the number of small business contracting actions fell by
almost 60 percent and the average size of a contract action increased 230 percent.

 

"Under the [SBA's] scorecard system, the federal government received an A
grade for fiscal 2013," Chabot said in a statement. "While an A grade and a
reasonable percentage of small business prime contracting dollars would seem to
indicate that a healthy percentage of dollars are being awarded to small
businesses, [data] show that the use of small businesses is declining even as
the percentage of dollars awarded to small businesses increases. Additionally,
it is worth noting that in obtaining its A, the federal government did not meet
half of its numerical goals."

 

To view full GovExec article, click here: http://www.govexec.com/contracting/2015/03/house-advances-bill-curb-contract-bundling-favors-large-companies/108760/

 

 

House Advances Bill to Curb Contract 'Bundling' that Favors Large Companies

by | Mar 30, 2015 | ASBL News

News

House Advances Bill to Curb Contract 'Bundling' that Favors Large Companies

By Charles S. Clark
Government Executive
March 30, 2015

Citing a shortage of accurate data on small business contracting, a Housepanel last week approved an umbrella bill (H.R.1481) aimed at forcing agencies to curb practices seen as freezing outsmaller bidders and requested a new Government Accountability Office study onsmall business goals.

"We know that when small businesses compete for federal work, it createsjobs, improves the quality of work, and saves taxpayers' money," said HouseSmall Business Committee Chairman Steve Chabot, R-Ohio. "This bill is acommonsense approach to make sure that Washington is working with Main Street –not locking it out of the procurement process altogether."

Combining six separate bills, the package would restrict "bundling" ofservices or goods previously provided under separate contracts to the detrimentof small business and curb use of so-called reverseauctions, in which contractors bid electronically for contracts atprogressively lower prices.

The bill would require the Small Business Administration, which announcedlast year that agencies for the first time met the goal of awarding 23percent of contracts to small businesses, to factor in use of subcontractors intheir performance. The committee's analysis of contract data from fiscal2011-2014 showed that the number of small business contracting actions fell byalmost 60 percent and the average size of a contract action increased 230 percent.

"Under the [SBA's] scorecard system, the federal government received an Agrade for fiscal 2013," Chabot said in a statement. "While an A grade and areasonable percentage of small business prime contracting dollars would seem toindicate that a healthy percentage of dollars are being awarded to smallbusinesses, [data] show that the use of small businesses is declining even asthe percentage of dollars awarded to small businesses increases. Additionally,it is worth noting that in obtaining its A, the federal government did not meethalf of its numerical goals."

To view full GovExec article, click here: http://www.govexec.com/contracting/2015/03/house-advances-bill-curb-contract-bundling-favors-large-companies/108760/


Congresswoman Hahn Amendment Calls for Investigation into Small Business Contracts Unfairly Awarded to Fortune 500 Companies

by | Mar 25, 2015 | ASBL News

News

Congresswoman Hahn Amendment Calls for Investigation into Small Business Contracts Unfairly Awarded to Fortune 500 Companies

UNITED STATES REPRESENTATIVE JANICE HAHN (CA-44)
March 25, 2015

Washington, DC—Today, Congresswoman Janice Hahn (CA-44) calledfor an investigation into why designated federal small business contracts oftenare unfairly rewarded to large corporations.

"Contracting is one of the most important ways the federalgovernment can empower small businesses. But every year, small businesscontracts are routinely given to some of our country's largest corporations, "said Congresswoman Hahn. "Small businesses should not be losing out on thesevaluable contracts to corporate giants!"

An amendment introduced by Congresswoman Hahn directing the U.S.Government Accountability Office (GAO) to assess the extent of this problem,identify why this happens, and make recommendations for possible solutions wasunanimously passed today by the House Small Business Committee and receivedpraise from Committee Republicans Chairman Steve Chabot, Congressman ChrisCollins, and Carlos Curbelo and Ranking Democrat Nydia Velazquez.

The federal government has an annual goal of awarding 23% of allcontracting dollars to small businesses. However, numerous reports have castdoubt on whether designated small business contracts are actually going tosmall businesses. Major corporations including Disney, Apple, Chevron, and Bankof America have all reportedly received these small business contracts in thepast several years according to reports by the American Small Business League.

"I love my iPhone, and I enjoy taking my grandchildren toDisneyland, but Apple, Disney and other major corporations should not bereceiving federal contracts designated for small businesses," saidCongresswoman Hahn. "This problem is pervasive, and I hope that my amendmentwill lead us to take the necessary steps to stop the abuses in federalcontracting. When Fortune 500 companies are awarded small business contracts,small businesses across the country missing out on billions of dollars inbusiness."

To view full press release, click here: http://hahn.house.gov/press-release/congresswoman-hahn-amendment-calls-investigation-small-business-contracts-unfairly

 


Small Business Administration Refusing To Release Executives Un-redacted Emails

by | Mar 19, 2015 | Press Releases

Press Release

Small Business Administration Refusing To Release Executives Un-redacted Emails

ASBL Prepares For Legal Battle With SBA Over Press Office Executives Emails

By Lloyd Chapman
American Small Business League
March 19, 2015

PETALUMA, Calif., March 19, 2015/PRNewswire-USNewswire/ -- The Small Business Administration (SBA) isrefusing to release electronic un-redacted copies of emails from SBA PressOffice executives Terry Sutherland and FredBaldassaro.

The American Small Business League (ASBL) requested the emailsunder the Freedom of Information Act (FOIA) because they believe the emailswill show that the SBA Press Office staff has engaged in a systematic campaignto block stories in the media about the rampant fraudand abuse that has been uncovered in SBA managed programs.

A series of federal investigations and investigativereports in the media have all found billions of dollars in federal smallbusiness contracts that have been diverted to Fortune 500 firms and many of thelargest corporate giants around the world.

ABC, CBS, NBC, CNN, MSNBC, CNBC, Fox News and RTTV haveall reported on the SBA's role in the diversion of federal small businesscontracts to Fortune 500 firms.

The SBA has reported contracts to firms such as Dell, Verizon, Hewlett-Packard,Oracle, Microsoft, Rolls Royce, IBM and British Aerospace Engineering (BAE) as smallbusiness contracts.

The House Small Business Committee chastised SBAAdministrator Maria Contreras-Sweet for including billions of dollars incontracts to Fortune 500 firms in the SBA's 2013 small business contractingdata.

In 2009 the Office of Government Accountability essentiallyaccused the SBA of encouraging fraud in Report 10-108 that stated, "By failing to hold firmsaccountable, SBA and contracting agencies have sent a message to thecontracting community that there is no penalty or consequences for committingfraud…"

The SBA has now adopted the final rule on their "safe harbor from fraud penalties policy" that willallow fraudulent small business firms to avoid all penalties and prosecution bysimply claiming they "acted in good faith."

The ASBL believes the emails will also prove SBA Press Officedirector Terry Sutherland and FredBaldassaro have launched a campaign to interfere with theASBL's efforts to publicize President Obama's announcement that he intends to resurrectRonald Reagan's plan to permanently close the SBA by combining it with theDepartment of Commerce.

The ASBL plans to file an appeal of their request and then filesuit against the SBA in Federal District Court in SanFrancisco if their appeal is denied.

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To view full press release, click here: http://www.prnewswire.com/news-releases/small-business-administration-refusing-to-release-executives-un-redacted-emails-300052889.html