June 1, 2009
Petaluma, Calif. - Georgia Congressman Hank Johnson (D - GA4) has introduced a new bill in the House of Representatives that could provide a more dramatic boost to the national economy than any economic stimulus plan that has been proposed so far. (http://www.asbl.com/documents/hr2568.pdf)
The new bill, H.R. 2568 the "Fairness and Transparency in Contracting Act," will send over $100 billion a year in current federal infrastructure spending directly to middle class firms. The American Small Business League (ASBL) wrote the original draft of the bill. Congressman Johnson worked with the ASBL for several months to fine-tune the bill before it was introduced. The bill is based on current provisions of the Small Business Act that define a small business as a firm that is "independently owned." Currently, several loopholes in federal contracting law allow Fortune 500 firms to qualify as small businesses.
H.R. 2568 will close those loopholes, preventing the federal government from reporting awards to publicly traded firms as small business awards. Publicly traded firms do not qualify as "independently owned."
The latest U.S. Census Bureau data indicates that over 98 percent of all U.S. firms have less than 100 employees and these firms employ over 50.2 percent of the private sector workforce and are responsible for over 97 percent of net new jobs in America.
Earlier this year, the Obama Administration announced that every billion dollars in infrastructure spending generates approximately 40,000 new jobs. Directing over $100 billion a year in federal small business contracts to the small businesses that create over 97 percent of all new jobs in America could create over 4 million new jobs.
Since 2003, several federal investigations found that every year billions of dollars in federal small business contracts are diverted to Fortune 1000 corporations and even many of the largest firms in Europe. (http://www.asbl.com/documentlibrary.html) Investigative stories by ABC, CBS and CNN reported hundreds of firms such as Wal-Mart, Home Depot, Microsoft, Xerox, Dell Computer, John Deere, British Aerospace (BAE), Rolls-Royce and Dutch giant Buhrmann N.V. have all received federal 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)
H.R. 2568 would bring an immediate end to the diversion of federal small business contracts to large businesses in the United States and Europe.
"It's unconscionable that some large corporations are the beneficiaries of small business contracts," Congressman Johnson said. "Especially given how many small businesses are struggling in this recession. H.R. 2568 will go a long way in helping correct this egregious error."
President Obama is expected to support H.R. 2568. In February of 2008 he released the statement, "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)