One of the leading critics of the Small Business Administration says plans are in the works to change a key policy that prevents large companies from competing for small business government contracts.

Lloyd Chapman, president and founder of the American Small Business League, says the SBA reauthorization bill contains a Republican-inspired provision that would require the SBA to grant small business status to the franchises of large companies.

"This policy is a recipe for disaster. If it passes, I guarantee that next year you'll see hundreds of Fortune 1000 companies set up their divisions as franchises in order to improperly receive federal small business contracts," said Chapman.