Petaluma, Calif. – Tonight, President Barack Obama will deliver his second State of the Union address to the American people.  The American Small Business League (ASBL) is predicting that President Obama will rely on the same tired rhetoric regarding economic stimulus, while continuing to ignore the diversion of federal small business contracts to corporate giants. 

Since 2003, more than a dozen federal investigations have uncovered the diversion of billions of dollars a month in federal small business contracts to some of the largest businesses in the world.  In Report 5-15, the Small Business Administration Office of Inspector General referred to the abuse 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)

Recently, 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. According to government data, recipients of federal small business contracts included: Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Dell Computer, Xerox, SAIC, General Dynamics, Bechtel and John Deere. (www.asbl.com/documents/ASBL_2009_dataanalysis.pdf)

Based on its research and the federal government’s own small business contracting data, the ASBL has estimated that every year more than $100 billion in federal small business contracts are diverted to Fortune 500 firms and other large businesses.  As a result of these abuses, the ASBL maintains that the federal government is achieving less than 5 percent of its congressionally mandated 23 percent small business-contracting goal.

In April of 2010, Senate Small Business Committee Chair Mary Landrieu (D – LA) estimated that increasing federal contracts to small businesses by just 1 percent would create more than 100,000 new jobs.  Based on this estimate, ending the flow of federal small business contracts to corporate giants could create more than 1.8 million new jobs. (www.smallbusinessmajority.org/_docs/resources/SBC_Jobs_Package.pdf)   

“The American people need to quit buying into President Obama’s well written speeches, and start paying attention to his actions,” ASBL President Lloyd Chapman said. “Our economy is being threatened, and yet President Obama has repeatedly refused to address this job killing contracting scandal.  You cannot create jobs with rhetoric, but you can supercharge job creation by ending the diversion of federal small business contracts to corporate giants.”

In addition to failing to stop the diversion of federal small business contracts to corporate giants, President Obama has ignored a series of campaign promises including: full restoration the SBA’s budget and staffing to pre-Bush Administration levels, and restoration of cabinet-level status of the SBA Administrator.