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Obama Drops Campaign Promise To End Contracting Abuses

December 4, 2008

Petaluma, Calif. - President-elect Barack Obama has apparently decided to drop a campaign promise to America's 27 million small business owners to stop the diversion of billions of dollars in government small business contracts to Fortune 500 firms. Obama's February 26th pledge to address the problem has been dropped from the Change.gov website.

In February, President-elect Obama issued the following statement, "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." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Obama reiterated his pledge to address the problem in his Small Business Emergency Rescue Plan, which was released on October 10th.  The Obama Small Business Rescue Plan was included in the Obama-Biden campaign website but was subsequently dropped from the Change.gov website. (http://obama.3cdn.net/d14eb1b3649c4d6745_0evzmv02w.pdf)

Now, any reference to Obama's campaign promise to "end the diversion of federal small business contracts to corporate giants" has disappeared completely.

Since 2003, over a dozen federal investigations have found that billions of dollars in federal small business contracts have been diverted to Fortune 500 firms, their subsidiaries and other clearly large firms in the United States and even Europe. The story has been covered by nearly every major newspaper in the nation, over a hundred radio stations, and by ABC, CBS and CNN. (ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; CNN, http://www.asbl.com/showmedia.php?id=1170)  

Some of the firms that have been exposed as recipients of federal small business contracts include Lockheed Martin, Boeing, Raytheon, General Dynamics, Hewlett-Packard, Dell Computers, Rolls-Royce, Home Depot, Xerox, John Deere and British Aerospace (BAE).

Report 5-16 from the Small Business Administration Office of Inspector General (SBA OIG) found that large businesses had received government small business contracts through, "vendor deception" and "false certifications". (http://www.sba.gov/IG/05-16.pdf)

In 2005, the SBA OIG issued Report 5-15, which stated, "One of the most important challenges facing the Small Business Administration (SBA) and the entire Federal Government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.sba.gov/IG/05-15.pdf)

"Over 80 percent of the new jobs in this country are created by our nation's 27 million small businesses, and those small businesses employ over 56 percent of all Americans. If President-elect Obama is serious about helping our nation recover from this economic crisis, he needs to stop Fortune 500 firms from hijacking billions of dollars in federal small business contracts," American Small Business League President Lloyd Chapman said.  "The surprisingly low priority Obama has given small business issues on his websites is a clear indication this is not going to be a pro small business administration."

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