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Congress Continues to Ignore Top Issue for Middle Class Firms

May 19, 2009

Petaluma, Calif. – Sunday, May 17 marked the beginning of National Small Business Week.  Unfortunately, Congress has failed to produce any legislation to address one of the more pressing issues for middle class firms in America.

Since 2002, a series of federal investigations have been released, which found that every year over $100 billion in federal contracts set-aside for small businesses are diverted to Fortune 500 firms and thousands of large businesses around the world. 

In 2005, the Small Business Administration (SBA) Office of Inspector General (IG) referred to the problem as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today…" (http://www.sba.gov/IG/05-15.pdf

Investigative stories by ABC, CBS and CNN have all found that firms such as: Office Depot, Rolls-Royce, Microsoft, Wall-Mart, L-3 Communications and British Aerospace Engineering (BAE) have all received government small business contracts. (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)

In June of 2008, the Department of Interior (DOI) IG found that in a sampling of just 0.3% of the agency's total contract actions for Fiscal Year (FY) 2006 and 2007, the DOI had awarded small business contracts to Fortune 500 firms like:  Home Depot, Xerox, Starwood Hotels, Dell Computer, Sherwin Williams, Ricoh, Weyerhaeuser, McGraw-Hill and Waste Management. (http://www.doioig.gov/upload/2008-G-0024.pdf) 

Even President Barack Obama weighed in on the issue during the campaign, when in February of 2008 he said, "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

To date, Congress has failed to pass legislation to address the issue.  The only legislation ever written to address the issue was drafted by the President of the American Small Business League (ASBL), Lloyd Chapman.  The draft legislation, which is titled the Fairness and Transparency in Contracting Act, is currently making the rounds in Congress.  If passed, the bill could redirect over $100 billion a year in federal small business contracts back to legitimate small businesses around the country. 

"It has been 7 years since this issue was exposed.  There have now been over a dozen investigations.  It is time for Congress to pass legislation to address this issue.  Clearly, small businesses are the backbone of our nation's economy.  It is time for politicians to quit talking and take some action," ASBL President Lloyd Chapman said. "The Fairness and Transparency in Contracting Act is the most effective legislation ever proposed to address this issue.  It will create more jobs than anything that has been proposed by the Obama administration to date."




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Reid Brownlie
Communications Contact

American Small Business League
3910 Cypress Dr., Suite B
Petaluma, CA 94954

707-789-9575 | fax 707-789-9580
email to rbrownlie@asbl.com




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