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Unemployment Soars as Obama Diverts Billions in Small Business Contracts to Corporate Giants

July 12, 2011

Petaluma, Calif. – The Labor Department reported Friday that June unemployment grew to 9.2 percent, and job growth hit a wall, capping at 18,000 jobs. This comes after the American Small Business League (ASBL) discovered 61 of the top 100 businesses that received small business contracts during fiscal year (FY) 2010 were actually large firms.

According to the U.S. Census Bureau, small businesses create 90 percent of all net new jobs. Data from the U.S. Bureau of Labor Statistics indicates that 98 percent of all American businesses have less than 100 employees. Moreover, the U.S. Census Bureau reports small businesses are responsible for more than 50 percent of GDP, 50.2 percent of private sector employment, 90 percent of exports and 90 percent of innovations.

The federal government has a congressionally mandated goal of awarding 23 percent of the total value of all contract dollars to small businesses. However, the government’s database of federal small business contractors is crowded with names like Raytheon, Lockheed Martin and General Electric. Giant foreign corporations like British Aerospace (BAE), Rolls-Royce and Thales are also among firms that received small business contracts.

Because of the diversion of billions of dollars in small business contracts to large firms, the ASBL estimates that legitimate small businesses actually received about five percent of federal contract dollars.

In 2008, President Obama said, “It is time to end the diversion of small business contracts to corporate giants.” Since 2003, a series of federal investigations have uncovered billions of dollars a year in federal contracts intended for small businesses actually going to large businesses. (http://www.asbl.com/documents/20081007_Obama_Promise_Website.pdf)

In Report 5-15, the Small Business Administration Office of Inspector General (SBA IG) referred to the issue as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.” The SBA IG has named the issue as the agency’s top management challenge for the last six consecutive years. (http://www.asbl.com/documentlibrary.html#5-15)

“Nothing would create more jobs than if Obama would stop diverting small business procurement funds to Fortune 500 corporations,” said ASBL President Lloyd Chapman.




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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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