Obama Administration Moves To Quietly Close The SBA With Policies
American Small Business League Fights To Save Federal Small Business Programs
By Lloyd Chapman
American Small Busienss League
October 1, 2014
PETALUMA,Calif., Oct. 1, 2014 /PRNewswire-USNewswire/ -- Earlier thisyear the Obama Administration abandoned plans to close the Small Business Administration under the guise of streamlining the government. After a series ofarticles appeared that agreed with American Small Business League (ASBL)President, Lloyd Chapman, Obama's plan to shutter the agency came to an end.
Havingfailed to close the Small Business Administration under the guise ofstreamlining government and combining agencies, the Obama Administration hasadopted a new strategy to close the agency with a series of policies thatappear to be designed to dilute and dismantle federal small business programs.
Startingin May of this year the SBA announced a sweeping series of policies that dramatically increased the federal definitionof a small business in hundreds of categories. According to the latest datafrom the U.S. Census Bureau 89% of all U.S. firms have less than 20 employees.Under the new small business size standards firms with up to 1500 employeesqualify as small businesses.
AWashington Post story described the new small business size standards as, "How 8,500 large companies will become small businessesovernight."
Thenet result is that programs to help legitimate small businesses will bedismantled, as small businesses must now compete head to head with some of thelargest firms in their respective industries for federal small businesscontracts.
Inaddition to the skyrocketing new definition of a small business, the ObamaAdministration has continued their policy of diverting billions of dollars infederal small business contracts to Fortune 500 firms.
Anothernew policy that received no media coverage is the "safe harbor from fraud penalties" policy. Undercurrent federal law, misrepresenting a firm's status as a small business toillegally land federal small business contracts is punishable by up to 10 years in prison, a $500,000 fine, or both.
Underthe "safe harbor from fraud penalties" policy, a large business canavoid any penalties for committing felony federal contracting fraud by simplyclaiming they "acted in good faith". The "safe harbor from fraudpenalties" policy will obviously promote more fraud in federal smallbusiness contracting programs and push legitimate small businesses out of thefederal marketplace, as more large businesses will be encouraged to illegallygo after federal small business contracts and subcontracts.
Nowthe Obama Administration is proposing another new policy that could force thousands of legitimatesmall businesses in the IT industry out of the federal market place. Under thenew proposed rule, SBA proposes to remove the Information Technology ValueAdded Resellers exception under NAICS 541519, making firms that provide a widerange of computer products to the federal government lose their small businessstatus if their annual sales exceed $27.5 million.
Ifthe new rule is adopted a small IT business with annual sales in excess of $27.5 million will beconsidered a large business while contracts to firms like Lockheed Martin, Northrop Grumman andRaytheon will continue to be counted as small business contracts.
FormerPentagon PR executive Terry Sutherland was likely assigned to head the SBA PressOffice and block any media coverage on the covert effort to close the SBA.
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