As sales manager for a Petaluma-based computer company in the late 1980s, Chapman listened as a sobbing sales team member explained how she had spent three months working on getting a contract that was earmarked for a U.S. small business only to lose out to a Dutch company with 26,000 employees.
“I thought, 'What?'” Chapman said. “How can that be true?”
Since then, Chapman, 63, has dedicated his life to fighting what he calls corruption and fraud in the way small businesses are awarded federal contracts. After a career in the computer industry, the Texas transplant founded the American Small Business League in Petaluma in 2004.
“We are the only organization in the country, no, in the world, that's working on fixing small business contracting,” Chapman said. “We think it's a problem that the government is giving small business contracts to Fortune 500 companies.”
The Small Business Act of 1953 mandates that 23 percent of government contracts must go to small businesses. Chapman has sued the White House, the Pentagon and the Small Business Administration multiple times to try and achieve more transparency in how government contracts are awarded.
He recently worked with Rep. Hank Johnson (D-GA) to draft a bill that would “close the loopholes that allow publicly traded, foreign-owned and Fortune 1000 companies to receive federal contracts intended for small businesses.”
Chapman's lawsuits have spurred investigations into fraud and abuse in small business contracting, which found that large companies such as Verizon, General Electric and Bank of America received contracts earmarked for small businesses.
“Before I got involved, there were zero investigations,” Chapman said. “Now there are dozens of investigations.”
The American Small Business League headquarters, in a quiet, nondescript office park in southern Petaluma, is far from the halls of power and influence in Washington, D.C. Yet thanks to its tenacious, charismatic founder, the tiny local organization punches above its weight as it advocates for small businesses.
Chapman, who is short and wiry with wispy grey hair and black-rimmed glasses, has appeared on most major broadcast news outlets including CNN, NBC and CBS. Newspapers such as The New York Times, Los Angeles Times and Washington Post have interviewed him.
As a reward for his tireless crusading, Chapman has received death threats, had his phone tapped, and been followed by government agents, he claims. (He turned off his phone and left it in another room before a recent interview).
“I'm exposing trillions of dollars in fraud,” he said. “Of course they're going to monitor what we're doing.”
A frequent target of Chapman's ire is the Small Business Administration, the federal agency established to help small businesses win federal contracts. Chapman thinks the agency is complicit in fraud, while the agency says it is working to make sure that big businesses are not being counted toward the federal government's small business contracting goal.
“I know Lloyd. He's definitely passionate about small business contracting,” said Mark Quinn, district director for the SBA San Francisco office. “His methods are a bit different than what we would do, but we have the same goals. We don't want to see large businesses fronting or misrepresenting themselves as small businesses.”
Despite Chapman's monumental task of stopping governmental graft, his organization keeps a low profile in an office off of Lakeville Highway that is shared with computer company GC Micro. The group, which is funded by small business members and $2 million of Chapman's own money, has less than 10 employees and no presence outside Petaluma, said spokesman Will Hixson.
“It surprises people that we're in Petaluma,” he said. “We're pretty low key.”
The mercurial Chapman occasionally travels to Washington to lobby for his cause, though he is not a registered lobbyist, and he sometimes appears in court, though he is not a lawyer. An energetic fast-talker with a penchant for recalling financial data, Chapman mostly tries to spread his message by making media appearances and writing blog posts.
Chapman doesn't think his bill, The Fairness and Transparency in Contracting Act of 2013, has much of a chance of being made into law or even making it out of committee. He helped a similar bill get introduced in Congress in 2009 that went nowhere. But he is using this occasion to raise awareness for the issue and continue fighting his sometimes-vicious battle.
“I'm motivated,” he said. “As soon as I got involved, the government started attacking me. They called me a nut and a conspiracy theorist. Now, it's personal.”