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Small Business Fairness and Transparency in Contracting

Guest greenzen

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Guest greenzen

The Fairness and Transparency in Contracting Act amends the Small Business Act to exclude as a small business, for purposes of meeting federal agency contracting goals with small businesses, any small business (or subsidiary thereof) that is publicly traded, or any business (or subsidiary thereof) with more than 50% non-U.S. citizen ownership. Requires the Administrator of the Small Business Administration (SBA) to notify the head of each federal department or agency regarding this Act and its amendments, and the department or agency head to then notify its contractors. Directs the Administrator to:


( 1 ) publish a report regarding federal prime contracts awarded to businesses identified as small businesses for purposes of achieving small business contracting goals; and


( 2 ) establish procedures to ensure that the Central Contractor Registration database provides an adequate warning regarding criminal penalties for misrepresenting the status of a small business or person in order to obtain federal contracts. Provides for enforcement of complaints about the classification of a business for such purposes.

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In March of 2005, the Small Business Administration (SBA) Office of Inspector General released Report 5-15, which states, "One of the most important challenges facing the Small Business Administration and the entire Federal government today is that large businesses are receiving small business procurement awards and agencies are receiving credit for these awards." (http://www.asbl.com/documents/05-15.pdf) The SBA Inspector General has listed this problem as the number one management challenge facing the agency for the past five consecutive years.




Since 2003, there have been over a dozen federal investigations which have found Fortune 500 firms and thousands of large companies around the world have received federal small business contracts. Some of those firms are: Lockheed Martin, Boeing, Raytheon, L-3 Communications, British Aerospace (BAE), Northrop Grumman, General Electric, Booz Allen Hamilton, Thales Communications, General Dynamics, and Dell Computer.




According to the US Census Bureau and the Small Business Administration Office of Advocacy, small businesses create over 90 percent of all net new jobs.




When it comes to creating jobs, the focus must be on small business.


It is not surprising that the Obama Administration's economic policies are not working. They are intended to create jobs, but are completely ignoring the small businesses that create all new jobs and employ over half of the private sector workforce, create over half of the nation's gross domestic product (GDP), are responsible for over 90 percent of the nation's exports, and generate over 90 percent of new innovations.


Not only has the Obama Administration shortchanged small businesses with stimulus funds, but also information released by the Obama Administration clearly shows that every month President Obama has been in office, billions of dollars in small business contracts are being diverted to large businesses, Fortune 500 firms and multinational corporations.


An even bigger problem is that on Friday, the Obama Administration released its fiscal year (FY) 2009 small business contracting data and claimed to have awarded over $96 billion, or 21.8 percent, in federal contracts to small businesses. In reality, of the top 100 recipients of small business contracts, 60 were large businesses that received 65 percent of the total contract dollars. In addition to diverting billions of dollars in federal small business contracts to large businesses, the percentage of awards to small businesses was also dramatically inflated by using an acquisition budget that was less than half of what it actually is.




The actual federal acquisition budget for domestic, foreign, unclassified and classified contracting is well over $1 trillion a year. The Small Business Act currently states that small businesses are to receive not less than 23 percent of the total value of all prime contracts, which would be over $230 billion a year.


I am sure that 99.9 percent of all Americans would agree with me that the government should not be giving small business contracts to some of the biggest companies in the world. I think it is time for President Obama to honor his 2008 campaign promise, where he stated, "It is time to end the diversion of federal small business contracts to corporate giants." If you are sincerely interested in turning the economy around, just do what the law says, and simply give small businesses the portion of federal contracts that they already should be getting under the law. It is time to end the diversion of federal small business contracts to corporate giants.


President Obama could achieve this by executive order, SBA policy, or by signing the Fairness and Transparency in Contracting Act, H.R. 2568, into law.

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