February 24, 2011
Petaluma, Calif. – Despite national unemployment above 9 percent, and a continued jobless recovery, the Obama Administration has refused to make good on a campaign promise to end the diversion of billions of dollars a month in federal small business contracts to corporate giants. As a result, the nation’s chief job creators, small businesses, are forced to compete head-to-head against Fortune 500 firms and other large businesses for even the smallest orders for goods and services.
Federal law requires the U.S. government to direct 23 percent of its purchases to small businesses. Yet every year, a vast majority of federal small business contracts go to some of the biggest companies around the world.
According to the U.S. Census Bureau, small businesses create more than 90 percent of net new jobs, are responsible for 50 percent of the gross domestic product, 50.2 percent of the private sector workforce, and 90 percent of exports and innovations. Given the clear impact of small businesses on the nation’s economy, the American Small Business League (ASBL) maintains that it is unreasonable for the Obama Administration to continue ignoring this damaging widespread abuse. (http://www.sba.gov/advo/research/re359.pdf)
Since 2003, a series of federal investigations have shown that an overwhelming majority of federal small business contracts actually go to Fortune 500 firms and even some of the largest corporations on earth. The most recent data released by the Obama Administration shows recipients of federal small business contracts including: Boeing, Lockheed Martin, Northrop Grumman, Raytheon, Dell Computer, Xerox, SAIC, General Dynamics, Bechtel and John Deere. (http://www.asbl.com/documents/05-15.pdf; www.asbl.com/documents/ASBL_2009_dataanalysis.pdf)
The ASBL maintains that the most effective way to supercharge job creation and stimulate the economy is to pass the Fairness and Transparency in Contracting Act. If passed, the bill would end widespread abuse in small business programs and direct billions of dollars in existing federal spending to the nation’s 27 million small businesses. The ASBL expects the bill to be reintroduced into the U.S. House of Representatives by Congressman Hank Johnson (D-GA) shortly. (http://www.opencongress.org/bill/111-h2568/show )
“Passing the Fairness and Transparency in Contracting Act would create more jobs than anything proposed by the Obama Administration to date. It’s simple, easy, deficit neutral and would provide the nation’s chief job creators with significantly increased access to federal contracting opportunities,” ASBL President Lloyd Chapman said. “It is time for President Obama to keep his promise and ‘end the diversion of federal small business contracts to corporate giants.’ ”