Barack Obama Opposes the Diversion of Federal Small Business Contracts To Corporate Giants
February 27, 2008
Petaluma, Calif. – Sen. Barack Obama is the first and only presidential candidate to come out with a specific statement opposing the diversion of billions of dollars in federal small business contracts to Fortune 500 companies during the Bush Administration.
In a statement released yesterday, Senator Obama stated, “98 percent of all American companies have fewer than 100 employees. Over half of all Americans work for a small business. Small businesses are the backbone of our nation’s economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants.”
There are nearly 26 million small businesses in the United States. According to the Small Business Reauthorization Act of 1997, 23 percent of the total value of all federal prime and subcontracts should be awarded to small businesses.
Senator Obama's statements were made in response to a series of federal investigations conducted during the Bush Administration, which found that billions of dollars in federal small businesses contracts had been diverted from American small businesses to many of the largest corporations in the U.S. and Europe.
In Report 5-14, the Small Business Administration (SBA) Office of Inspector General found that even the SBA had included awards to large businesses in their small business contracting statistics. Additionally, in 2005 an investigation by the Center for Public Integrity found the Defense Department had awarded more than $47 billion in federal small business contracts to many of the nation’s top defense contractors.
Since 2006, investigative reports by ABC, CBS and CNN reported that the Bush Administration had intentionally inflated the government’s small business contracting statistics by including billions of dollars in federal small business contracts to firms like: Lockheed Martin, Boeing, Wall Mart, L3 Communications, Microsoft and Rolls Royce.
Small business advocates anticipate that Sen. Obama will support legislation and specific policy changes to halt the flow of federal small business contracts to Fortune 500 firms and other large businesses. California Senator Barbara Boxer and Massachusetts Senator John Kerry have both drafted legislation to address the issue.