Small Business owners now find themselves fighting not only large US corporations, but also large foreign corporations, when contracting with the federal government.

In 2008 The American Small Business League (ASBL) endorsed candidate Barack Obama. Now, according to a July 31 statement released by (ASBL) President Lloyd Chapman, “It’s unconscionable that the Obama administration would propose giving more small business contracts to corporate giants at a time when our middle class economy is suffering one of the worst economic recessions in history.”

A proposed rule from the U.S. Small Business Administration (SBA) will allow federal agencies to divert billions of dollars in federal small business funds to large businesses every year. The current target for contracts to small businesses is 23%. Based on fiscal year 2011 data, large firms received 77.55% of funding. However, based on Inspector General reports going back to 2005, the actual funding to large businesses is grossly understated.

Two Federal reports highlighted the problems facing small businesses. The first report, 10-108, from the Government Accountability Office concluded: "By failing to hold firms accountable, SBA and contracting agencies send a message to the contracting community that there is no punishment or consequences for committing fraud."

The SBA's Inspector General, in a second report, found that large corporations received small business contracts fraudulently through "false certifications" and "improper certifications." That report, number 5-16, quotes the SBA's Office of Advocacy findings that large corporations receive small business contracts because of "vendor deception."

In 2008, President Obama promised to end these abuses when he stated, “It is time to end the diversion of federal small business contracts to corporate giants.” Instead, the administration closed out comments on proposed rule changes on July 17, 2012 without addressing the understatement, fraud, and false certifications.

Information found in the 2011 Federal Procurement Data System indicates that a Brazilian company, J&F Participacoes S.A (J&F)., received over $87M dollars in funds through the Small Business Administration. The company announced last month that they are seeking to acquire four additional companies and become “. . . a Brazilian Berkshire Hathaway, with a business model created in such a way that J&F itself can become a publicly traded company” according to CEO Joesley Batista.

J&F is a beef processing and marketing company based in Sao Paulo, Brazil. The company, according to CEO Batista, was built through more than 50 acquisitions in the last few years.

The Brazilian company was listed in reports that included Cargill, Tyson, Cal Western Packaging and Archer-Daniel-Midland as the top five recipients of Agriculture contracts. They were part of an investigation based on the latest data from the Obama administration which shows that, of the top 100 recipients of federal small business contracts during fiscal year (FY) 2011, 72 were large companies, including Lockheed Martin, General Dynamics, BAE and the Italian firm Finmeccanica.

This article is produced using information from NBC Bay Area Investigative Team (Stephen Stock, Liz Wagner and Felipe Escamilla), Business Wire, and American Small Business League.

Source: http://www.examiner.com/article/obama-administration-helps-large-companies-compete-with-small-business