On May 22, Rep. Hank Johnson, D-Ga., introduced a bill that would make sure federal small business contracts are awarded to independently owned companies instead of corporations.

The Fairness and Transparency in Contracting Act (HR 2568), will keep the federal government and prime contractors from reporting that contracts given to publicly traded corporations were given to small businesses. The resolution is based on a provision of the Small Business Act that defines a small business as a firm that is "independently owned," which publicly traded firms cannot claim to be.

Several federal investigations have found Fortune 500 companies have received billions of dollars in small business contracts since 2003. A report issued by the SBA called the awarding of small business contracts to corporate firms as "one of the most important challenges facing the Small Business Administration and the entire federal government today."

The resolution will also require the federal government to report the parent company name on all contracts. Current contracts can be issued in the name of corporate subsidiaries.

According to a press release, the act will also improve access to data on recipients of small business contracts.

Lloyd Chapman, president of the American Small Business League, was the original author of the Fairness and Transparency in Contracting Act, and estimated it could redirect over $100 billion a year in contracts back to small businesses.

Chapman estimates H.R. 2568 could redirect over $100 billion a year in federal small business contracts back to middle class firms.

“Small businesses create over 97 percent of all net new jobs, and this bill will do more to help those firms than any stimulus plan proposed so far," Chapman said. "It will create millions of new jobs and provide a dramatic boost to the middle class economy.”

Source:  http://www.thebusinessjournal.com/index.php?option=com_content&view=article&id=536:act-seeks-to-end-diversion-of-small-business-contracts&catid=13:national&Itemid=220