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SBA Merger Will Destroy Small Business Programs

January 13, 2012


The Obama administration is proposing to merge the Small Business Administration with the Department of Commerce, a move that small business advocates like the American Small Business League (ASBL) maintain is aimed at eliminating small business programs under the guise of saving money.

On November 25, 2008 ASBL President Lloyd Chapman issued a press release predicting that President Obama would attempt to close the SBA by combining it with the Department of Commerce. He made the same prediction in November 2010 and August 2011.

Chapman believes Obama's latest move is prompted by pressure from lobbyists of large corporations that want 100 percent of all federal contracting dollars. The federal government has a congressionally mandated goal of awarding 23 percent of federal contract dollars to small businesses. However, because of fraud and abuse of small business federal contracting programs, most contracts earmarked for small businesses are awarded to large corporations.

In May 2003, the GAO investigated the federal small business contracting program and found that billions of dollars in federal small business contracts were being awarded to large corporations. Since that landmark GAO investigation, a series of more than a dozen federal investigations have found that every year billions of dollars in federal small business contracts are diverted to some of the largest corporations in the United States and Europe. Some of the companies that have received federal small business contracts include Lockheed Martin, Boeing, AT&T, Raytheon, Dell Computers, British Aerospace (BAE) and Rolls-Royce.

"This is not a move to save money," said Chapman. "This is a move to eliminate federal small business contracting programs. The $3 billion Obama says he'll save over ten years is infinitesimal compared to the $6 trillion the Pentagon will spend in the same timeframe. This is going to harm our nation's economy and cost millions of jobs."

SOURCE: American Small Business League



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