Letter to the editor | Small-business programs deserve protection
- By Lloyd Chapman
- Sep 15, 2008
As a long time advocate for legitimate small businesses across the country, I have to disagree with Jerry Grossman's comments and suggestions on federal small business contracting policy
Mr. Grossman talks primarily about the needs and concerns of the government and government contractors. What about the needs and concerns of the American people? After all, we do live in a democracy, and the sole purpose of the government and government contractors is to carry out the will of the people.
The primary problems with federal small business contracting programs are not that goals are too high, size standards are too low, or that there is not enough "liquidity to investors."
The real problems with federal small business contracting programs can be found in the 15 federal investigations into small business contracting programs, which have been released since 2003. In each case, federal investigators found that billions of dollars in federal small business contracts have been diverted to large businesses through fraud, abuse, loopholes, intentional mismanagement and a blatant lack of oversight. Just this summer, four federal investigations have been released, which found dramatic abuses in federal small business contracting programs.
Report 5-15 from the Small Business Administration Office of Inspector General provides the most accurate and objective assessment of this issue. It 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."
I believe Mr. Grossman, his clients and every federal employee should consider this.
Washington represents only a miniscule percentage of this country's population and any federal policy regarding small business contracting programs needs to address the best interest of the entire country, not just firms in Washington.
President Bush said, "We are a nation of laws," and federal law states a minimum of 23 percent of the total value of all prime contracts and subcontracts should go to small businesses. In 1953, the Small Business Act was passed because it is in the best interest of our country to have programs to direct federal funds to the small businesses where most Americans work.
Census Bureau statistics tell us 98 percent of all U.S. firms have less than 100 employees. Over 56 percent of all Americans work in those 27 million firms. Those firms are responsible for over 90 percent of the new jobs in this country, exports and technical innovations.
I am always surprised when I hear people who do not think it is reasonable for 27 million small businesses and the 168 million Americans that work in those firms to receive a paltry 23 percent of government contracts and subcontracts. Even a 30 percent small business goal would still leave 70 percent of all federal contracts for large businesses.
Small businesses are the heart and soul of the American economy. Most of the tax revenue, which funds the Department of Defense, NASA and every other federal agency comes from American small businesses. There is no better use for federal funds than to reinvest them in the small businesses where most Americans work.
The defense and aerospace industry should realize they are shooting themselves in the foot by opposing federal small business programs. The Small Business Act was an economic stimulus program to create jobs, boost the national economy and generate more revenue for the federal government.
If the defense and aerospace industry would begin to make a sincere effort to comply with small business contracting programs there would be more federal funds available to spend on defense and aerospace programs.
Too many individuals in Washington that oppose federal small business contracting programs are prospering financially from the subversion of those programs. They may be able to delude themselves with discussions of what is best for the government and contractors, but they are not fooling anyone out here in the rest of America.
Federal programs to direct contracts to small business are not going away. Its time for the defense and aerospace industry to stop trying to circumvent the will of the American people and begin to fully comply with all federal small business contracting programs for the benefit and future of our government and all Americans.Lloyd Chapman is the president of the American Small Business League.
For more information, visit www.asbl.com.