By Kelly Spors
Wall Street Journal
April 14, 2009
As stimulus money starts trickling out, some are asking a timely question: Is the federal government doing enough to ensure small businesses get their share?
Lloyd Chapman, president of the American Small Business League – a California-based group that follows small-business contracting issues – argued in an editorial on HuffingtonPost.com yesterday that the Obama administration needs to be more proactive in directing government stimulus work at small companies. President Obama, he says, promised in February 2008 that he would fight for small-business contracting issues, but has mentioned the issue little, if at all, in recent weeks.
The issue at hand: Congress passed legislation in 2003 mandating that federal agencies aim at least 23% of all prime and subprime contracting dollars at small businesses. But several investigations found the government has done a shoddy job of enforcing that rule. And a Washington Post investigation last fall found that 38.5% of all government contracts coded as small were actually being diverted to Fortune 500 companies including Lockheed Martin Corp. and Dell Inc.
Mr. Chapman says that ensuring that money actually went to small businesses would result in $100 billion of government work for them.
“So far, nothing President Obama has proposed to stimulate our nation’s failing economy would be as effective and cost efficient as simply adopting policies and legislation that would redirect over $100 billion, year-after-year, back into the middle class economy,” he writes.
Mr. Chapman has consistently criticized the government (both under former President Bush and now President Obama) for not caring enough about small-business contracting rules, but now more than ever his point seems valid. Companies are looking at the federal government as a potential customer more than ever before. Many are applying for government contracts for the first time and competing against much larger companies with political influence.
If the federal government sees the stimulus money as helping businesses of all size, now seems a ripe time for the federal government to address the issue of contracting fairness and fraud and ensuring small businesses aren’t being overlooked.
So far President Obama has issued a government-wide review into how government contracting procedures, and whether they’re efficient. But he’s said little about whether he will address small-business contracting issues in particular.
Do you think President Obama needs to be more proactive in enforcing small-business contracting rules? Or is current oversight enough?