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Obama Administration Diverts Small Business Funds to General Dynamics

Obama Administration Diverts $28.5 Million in Small Business Dollars to General Dynamics

December 9, 2009

Petaluma, Calif. – The Obama Administration has awarded a $28.5 million small business contract to Fortune 500 firm General Dynamics.  As America's fourth largest prime contractor, General Dynamics did more than $29.3 billion in sales during fiscal year (FY) 2008 and maintains more than 92,000 employees. http://www.asbl.com/documents/20091202GeneralDynamics_Created_20091027.pdf      

According to the most recent data from the Federal Procurement Data System - Next Generation (FPDS-NG), General Dynamics is just one of hundreds of corporate giants that are currently receiving federal small business contracts from the Obama Administration.

Since 2003, twenty-five federal investigations have uncovered the diversion of billions of dollars a month in federal small business contracts to corporate giants. http://www.asbl.com/documentlibrary.html In Report 5-15, the Small Business Administration Office of Inspector General (SBA OIG) referred to the issue as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today." http://www.asbl.com/documents/05-15.pdf As recently as October 16, the SBA OIG listed the issue as the SBA's top management challenge for the fifth consecutive year.

The American Small Business League (ASBL) has estimated that every year more than $100 billion in federal small business contracts are diverted away from legitimate small businesses and into the hands of some of the largest corporations in the world.  The most recent data released by the Obama Administration indicates that firms counted as small businesses included: Xerox, Bechtel, Lockheed Martin, Boeing, Raytheon, Northrop Grumman, British Aerospace (BAE), Ssangyong Corporation headquartered in Seoul, South Korea and Finmeccanica SpA, which is located in Italy with 73,000 employees.

During the 2008 presidential election cycle, President Barack Obama promised to address these abuses when he stated, "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." Yet to date, President Obama has failed to adopt any policy or legislation to honor that promise. http://www.barackobama.com/2008/02/26/the_american_small_business_le.php The ASBL maintains that stopping the diversion of federal small business contracts to large corporations alone would serve as a greater economic stimulus than anything proposed to date. 

In May of 2009, Congressman Hank Johnson (D-4-GA) introduced H.R. 2568, the Fairness and Transparency in Contracting Act.  If passed the bill would halt the flow of federal small business contracts to large businesses and redirect more than $100 billion a year in federal infrastructure spending to legitimate small businesses.  Although the bill has bipartisan support with 19 co-sponsors, to date President Obama has refused to endorse the legislation.




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email to rbrownlie@asbl.com




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