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Crusader Against Size Fraud Forms SmallBiz Advocacy Group

By Jim Byrne
Minorities in Business Insider
June 30, 2004

Lloyd Chapman, who has battled for a dozen years to expose large businesses illegally claiming to be small, founds a new organization to work for a reversal of federal government policies and practices he believes have hurt small businesses.

"I think the Small Business Admin. has worked hand-in-glove with other federal agencies to let large firms get contracts as small businesses because it makes it easier for the agencies to meet their small-business goals," charges Chapman.

He says a high priority for his new group will be organizing class action lawsuits on behalf of small businesses harmed by large businesses claiming to be small.

The American Small Business League will supplant the Microcomputer Industry Suppliers Assn. he founded in 2001. Financed largely with his money, MISA has no paid membership but worked with about 5,000 small IT companies to force investigations of whether large companies were falsely claiming to be small.

Among the results was a General Accounting Office investigation that found 28% of federal procurement dollars identified as going to small businesses in FY 2001 went to companies that also received contracts as large businesses. The report was given last year at a hearing by the House Small Business Committee (MBI, 5/14/o3p2).

Chapman's efforts also caused SBA to remove about 600 companies from PRONet because they were found to be other than large. PRONet, the SBA's small-business database, has since been integrated into the Defense Dept.'s Central Contractor Registration (MBI, 04-1p3).

Chapman says the fact SBA did not prosecute for fraud any of the 600 companies removed from PRONet or any of the 85 firms found to be other than small as the result of protests in Fiscal 2002 (MBI, 4/23/03p2) makes him very skeptical about the agency's commitment to the welfare of small businesses.

Chapman plans a fund-raising effort among small businesses to support the new group. He is no longer on salary at GCMicro, the Novato, CA, IT company of which he once was general manager.



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