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ASBL President Lloyd Chapman Sends Series of Open Letters Urging Obama to End Contracting Fraud

November 16, 2011

Today American Small Business League (ASBL) President Lloyd Chapman called on national leaders and key members of the media to help end a ten-year-old federal contracting scandal that has cost the nation millions of jobs. 

According to Chapman, federal agencies frequently misreport their funding actions as contracts awarded to small businesses when, in reality, large corporations like Raytheon, Boeing, Lockheed Martin, AT&T, Italian defense giant Finmeccanica, Rolls Royce and British Aerospace— to name a few— are the true recipients of the majority of federal small business contracts. Over a dozen federal investigations conducted since 2003 support Chapman’s assertions.

Ending this fraudulent practice, Chapman said, is a fail-safe, permanent, deficit-neutral solution to job creation and economic stimulus. According to the U.S. Census Bureau, small businesses create more than 90 percent of all net new jobs. Moreover, The Kauffman Foundation found that small businesses have created virtually 100 percent of all net new jobs since 1980, meaning that Fortune 1000 companies have not created a single net new job in more than thirty years.

In Report 5-15 the SBA Office of Inspector General (SBA OIG) described the abuse as, “One of the most important challenges facing the Small Business Administration and the entire federal government today.” SBA Inspector General Peggy Gustafson recently testified before Congress and named the abuse as a top management challenge facing the SBA for the seventh consecutive year. While this blatant federal contracting abuse has been well documented for more than a decade, media coverage has been rare.

During his 2008 presidential campaign President Obama promised to address the issue stating, “It is time to end the diversion of federal small business contracts to corporate giants.”  But despite President Obama’s campaign promises, the federal government’s FY 2010 contracting data indicates that 60 of the top 100 small business contractors were actually large businesses.

Chapman provides irrefutable evidence to back up his claims but warns that the federal government will attempt to impugn his credibility in hopes of negating his criticisms.

“There is nothing that the government, or anyone, can say about me to change the fact that large businesses fraudulently receive small business contracts,” Chapman said. “We need to urge President Obama to issue an executive order to end this longstanding scandal.”




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