Central Valley Business Times
December 13, 2010
• Says program is stifling small business
• ‘This program has done the antithesis of what Congress said it would’
At a time when billions of federal dollars are being spent to create new jobs, eliminating a single federal program might create 400,000 jobs, says a small business advocacy group.
The program targeted by the American Small Business League of Petaluma is the Comprehensive Subcontracting Plan Test Program, which was established over 20 years ago with the mission of increasing subcontracts for small businesses.
The ASBL contends the program actually allows large defense contractors to circumvent small business subcontracting goals.
The ASBL estimates that elimination of the program would redirect approximately $10 billion a year in additional subcontracting opportunities for middle class firms.
When first coming into office, President Obama estimated that every billion dollars spent on federal infrastructure projects would create 40,000 jobs. Based on these estimates, ending the program would create roughly 400,000 new jobs, says ASBL.
The U.S. Census Bureau says small businesses are responsible for more than 90 percent of all net new jobs, 50.2 percent of the non-farm private sector workforce, 50 percent of the gross domestic product (GDP) and 90 percent of exports and innovations.
In October, five members of the House of Representatives, lead by Rep. Yvette Clarke, D-N.Y., requested the U.S. Government Accountability Office to investigate and evaluate the Comprehensive Subcontracting Plan Test Program to determine if the program was meeting its stated goals. After being in place for over two decades, the CSPTP has never been evaluated by the Pentagon or any federal agency.
“This program has done the antithesis of what Congress said it would. It needs to be eliminated and investigated to determine how much fraud has occurred over the past 21 years,” says ASBL President Lloyd Chapman. “If President Obama and Congress were serious about job creation, they would end programs like the Comprehensive Subcontracting Plan Test Program and ensure that federal contracts meant for small businesses actually go to middle class firms who create over 90 percent of all new jobs.”