August 18, 2011
Petaluma, Calif. – The following is a statement by the American Small Business League:
President Barack Obama has yet to end a small business contracting scandal that costs the nation millions of jobs every year. This comes as the president wraps up his Midwest jobs tour and the nation awaits his next job creation plans.
The small business community creates 90 percent of net new jobs, according to the U.S. Census Bureau. Yet large businesses annually receive hundreds of billions in federal contract dollars intended for small businesses.
In April 2010, Senator Mary Landrieu (D-LA), Chair of the Committee on Small Business and Entrepreneurship estimated that, “increasing contracts to small businesses by just 1 percent,” would create more than 100,000 new jobs. Based on an American Small Business League (ASBL) examination of government contracting data, and Chairwoman Landrieu’s estimation, ending this abuse would create upwards of 1.8 million jobs.
Since 2003, a series of federal investigations have uncovered billions of dollars in federal small business contracts going to some of the largest companies in the U.S., Europe and Asia. During FY 2010, 61 of the top 100 recipients of small business contracts were actually large businesses.
During President Obama’s 2008 campaign 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.”
Despite the president’s campaign promise, his administration’s most recent small business data includes small business contracts awarded to Lockheed Martin, Raytheon, L-3 Communications, Hewlett-Packard, and AT&T, among many others. The Small Business Administration Office of Inspector General has named the issue the agency’s top management challenge for the last six consecutive years.
According to officials, this September President Obama will announce fresh ideas on job creation, including infrastructure investment and tax cuts. Thus far, he has not addressed problems in the nation’s largest and oldest job creation plan, the Small Business Act. This legislation directs federal infrastructure spending to the middle class by mandating 23 percent of all federal contract dollars go to small businesses.
“The SBA was created by Congress to create jobs and direct federal infrastructure spending to the middle class,” said ASBL President Lloyd Chapman. “President Obama has allowed these programs to be hijacked by large corporations.”