MUSCLE SHOALS - U.S. Rep. Parker Griffith said this week that legislation meant to guarantee federal contracts to small businesses and scathed by an industry group will require modifications before moving forward.

Griffith, a member of the House Committee on Small Business, introduced the Small Business Fair Competition Act (H.R. 3558) on Sept. 14, the fifth bill sponsored by the junior congressman. Federal law mandates that 23 percent of all federal contracts each fiscal year be awarded to small businesses.

Griffith meant his bill to give a framework as to which companies would be eligible to compete for governmental contracts worth billions of federal dollars.

The American Small Business League, a group of 100,000 dues-paying small business owners, however, has rolled out a campaign against the legislation. They say it gives a loophole for large corporations to use small subsidiaries to scoop up the lucrative contracts.

"We recognize that the bill needs to be modified and have said to our critic, 'I think your point is well made,' " Griffith said.

"It seems that the individual that is attacking the bill may not be interested in improving the situation, he may just be interested in some notoriety," Griffith said.

The league had a different take.

"It is simply not believable that Congressman Griffith accidentally wrote a bill that is going to allow the subsidiaries of some of his largest campaign contributors like Boeing (and) Northrop Grumman to get small business contracts. It is absurd," American Small Business League President Lloyd Chapman wrote in an e-mail response Tuesday.

"He tries to tell people that I'm seeking notoriety. If anyone is disingenuous, it's Congressman Griffith, because his staff told us a week ago that they were dropping their support for the bill."

Small businesses are defined by the Small Business Administration in a 44-page table that Griffith said hasn't been re-evaluated in 20 years.

For example, a peanut farmer who earns more than $750,000 is considered a large business; a cotton gin that has less than $7 million in sales is a small business, according to the guide.

Griffith's 283-word legislation would give large corporations a loop-hole that would allow them to compete with small businesses, critics say.

"There are difficulties in the bill I have introduced that will have to be modified so that it doesn't have any unintended consequences," Griffith said. "We want to avoid our larger businesses setting up smaller companies to compete against our small companies."

Griffith has said that other business groups were consulted and supported the legislation, but Chapman countered, "We are routinely the only critic of this type of legislation because every other "small business group" in America is funded by Fortune 500 corporations. I take personal offense to Congressman Griffith's notion that I do all this for notoriety. I intend to double my efforts to bring attention to the negative consequence the bill carries.

"15 federal investigations, 10 years, and more than 500 stories on the diversion of federal small business contracts to large corporations - and now Congressman Griffith has introduced legislation that will make the problem worse."

When asked how the bill would be modified, Griffith responded, "There is a way to modify that bill so that if Boeing or Northrup Grumman has any ownership in any of the small businesses that are applying, they would be disallowed."

Boeing and Northrop Grumman are not only major industries in north Alabama, but contributors to Griffith's war chest. Northrop Grumman, Griffith's top campaign contributor, donated $11,000 and Boeing, ranked eighth, donated $9,500 to Griffith's campaign, according to opensecrets.org, a political monitoring site.

Another criticism of the bill was that companies may be small at the initial time the contract is awarded, but 20 years later, may still be awarded the contract as a small company even though they have outgrown the definition.

A competing bill, The Fairness and Transparency in Contracting Act (H.R. 2568), was introduced in May by U.S. Rep. Hank Johnson, D-Ga., with 14 co-sponsors. The bill would ban publicly-traded corporations or businesses with more than 50 percent non-U.S. citizen ownership from being defined as a small business.

On Monday, during a stop in the Shoals, Griffith said, "I'm completely unfamiliar with it, but we can become familiar with it."

Trevor Stokes can be reached at 740-5728 or trevor.stokes@TimesDaily.com.

Source:  http://www.timesdaily.com/article/20090930/ARTICLES/909305008/1011/NEWS?Title=Griffith-Bill-needs-more-work