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The federal government has a goal of awarding 23 percent of the total value of its purchases to small businesses. It is not currently meeting that goal. A recent study by the American Small Business League (ABSL) found that small businesses only receive between 2 and 6 percent of federal government contracts (PDF).
The top “small business” contractors of 2008 included Lockheed Martin, Boeing, Raytheon, 3M, Hewlett-Packard, AT&T, Rolls Royce and General Electric (PDF).
Since 2003, more than a dozen federal investigations have found billions of dollars in federal contracts intended for small businesses actually flowing into the hands of Fortune 500 firms and other large businesses. In Report 5-15, the Small Business Administration Office of Inspector General referred to the issue as, “One of the most important challenges facing the Small Business Administration and the entire Federal government today.”
The ABSL has estimated that this issue pulls more than $100 billion a year in federal contracts out of the middle class economy. With that in mind, President Obama should use the power of his office to directly impact these issues, and stimulate the economy in the following ways:
1. Issue an executive order that would keep his campaign promise to, “end the diversion of federal small business contracts to corporate giants.” Economists agree that the best way to stimulate the economy is to direct federal infrastructure spending to small businesses. Ending this abuse would infuse the nation’s middle class economy with billions of dollars a month in existing federal infrastructure spending.
2. Support the passage of H.R. 2568, the Fairness and Transparency in Contracting Act. H.R. 2568 represents a pure, simple and effective means of directing billions of dollars in existing federal spending to the nation’s 27 million small businesses. The bill was introduced by Congressman Hank Johnson (D – GA) and currently has bi-partisan support from 26 co-sponsors.
3. Restore the Small Business Administration’s budget and staffing to pre- Bush Administration levels. The SBA had a larger budget during the Reagan Administration than it does today. Since 2003, a series of federal investigations have pointed to a lack of oversight as a major contributing factor to fraud and abuse in small business programs. President Obama should ensure that the SBA is fully capable of supporting small businesses, and adequately providing oversight on America’s small business programs.
4. Eliminate the Comprehensive Subcontracting Plan Test Program, which allows prime contractors to circumvent federal small business subcontracting goals. It is imperative that the Obama Administration hold prime contractors accountable for hitting small business subcontracting goals.
5. Stop the pentagon from dismantling federal contracting programs for minorities. The federal appeals court ruling in Rothe Development Corporation v. Department of Defense (DoD) effectively ended small business preference programs for Small Disadvantaged Businesses (SDB). President Obama should take steps to ensure that SDBs are protected in federal contracting programs.
In November of 2009 Robert Reich stated, “Who is going to buy the stuff we make, or the services we provide? Right now there is only one buyer left… the government. The only way to get jobs back right now is for the federal government to spend even more on the roads, bridges, schools, parks, public transport and everything else we need. Make up for the cut backs on the state level, and in this way, put Americans back to work.”
As the White House well knows, small businesses are responsible for creating between 65 and 90 percent of net new jobs (PDF). It is critical for our economic recovery that the government takes steps to make sure that 23% of federal contracts actually go to small businesses, and not Fortune 500 companies.
Lloyd Chapman is the founder of the American Small Business League
Other posts in this series:
. Question: What Things Can Obama Do Now?
. Bill Black: What Obama Could Do Now
. Alan Grayson: What Obama Could Do Now
. Glenn Greenwald: What Obama Could Do Now
. James Galbraith: What Obama Could Do Now
. Cynthia Kouril: Five Things President Obama Can Do Now
. Jon Walker: What Obama Could Do Now
20 Comments
Really, I can appreciate your perspective but I think these arguments are way behind the “power curve.” First I would correct Reich’s statement to be more honest and directly acknowledge the fact that the DoD owns our economy, technological infrastructure and spending (“black budget” is a feature not a bug; ten years and going!). One such later proof of that was the IPA and that every major corporation got in on the act including small business shell corporations I think were also used for sovereign funds (link: http://www.noendinsightmovie.com ; excerpt: http://www.youtube.com/watch?v=fl9Vi20EByI). Further, Obama made it clear in his first State of the Union that any cuts to this implementation were off the table; we are just not going to stop being the largest exporter and front-guy of bankster-made and run war and death. Today’s news flash: “Project Weimar: Why QE2 Could be More Inflationary Than You Think, by EB, Oct. 26, 2010 ; link: http://www.zerohedge.com/article/project-weimar-why-qe2-could-be-more-inflationary-you-think).
You could have just said, “Stop behaving as a neocon” is the first thing he could do and then you’d still have four more left. Really, there are too many disappointing things about Obama for any five to make much of a difference.
I agree. I think most of those boats have left the dock.
It is way past time to assume Obama wants to do the right thing and just needs a little push from the liberal base.
Proof of the problem:
From Alex Pareen in Salon
Hope the html tags work.
Joke Line, Tommy, Bobo and Jerry Dweeb I get but Dionne? The emperor must have coaxed him over to the dark side.
I guess E.J. is the token liberal.
If he had any sense, he’d just be the tokin’ liberal and call the others out on their BS.
It’s the fault of small businesses. Their campaign donations aren’t big enough. If only they’d write bigger checks, you know, like Goldman Sachs. Then they’d get something from DC. There’s no free lunch, don’t ya know?
What ‘Stick said.
Except, I think it was only one boat, and it was named “Titanic”…and as someone else posted, he’s backed her up and rammed the iceberg a time or two, just for good measure.
A bit late to talk about what he COULD do. Now, it’s about to become what he can’t do, and while that’s a long list, we can shorten it to:
“A week from now, he won’t be able to make enough of a difference in anything that’s happening (even if he wanted to…) to give himself a second term.”
His problems aren’t just domestic. Not many democrats even want to talk about Afghanistan, but that situation is about to go back on the front burner, big time. Karzai is digging in his heels about Obama surging new security “contractors” in there, and I don’t think he’s doing it just to play to the Afghans who are sick of us.
http://www.nytimes.com/2010/10/26/world/asia/26karzai.html?_r=1&emc=eta1
…and NATO, in general:
http://news.antiwar.com/2010/10/25/another-grim-milestone-nato-confirms-600th-death-in-2010-afghan-war/
Here is my suggestion for what Obama can do: Take a toke and expand his mind. In another 30 years he’ll catch up with all us old hippies. Oh yeah, Timothy Leary’s dead. No, no, no, he’s on the outside . . . looking in.
Small businesses that belong to the C of C know very well that their dollars are going to support goopers in the hopes that they will….do what? support small business? Or to paraphrase the wassilla witch “how’s that working out for ya?”
What Obama could do now–resign. Not even Joe Biden could be as bad.
How about making capital available to corporations who actually make a product. Products which innovate and foster competition and improve the human condition, opposed to making money on money and protecting stupidity?
Evergreen Solar Technology an American company needs capital. They can’t get any. They have been hung out to “dry” by corporate America. The reason is clear and simple. It is called oilmen. Oilmen do not want competition and value provided to America. They want one thing, profit, at America’s expense. America’s race to space vs the Soviets was driven by military considerations, and fostered by government Why can’t America realize the race to energy independence, utilizing solar technology to undercut the supply side scum buggery of fossil fuels, can be a powerful force for job creation, lowered energy costs and real economic growth, as China does? Why are we protecting corporations which provide horrible value for the money spent by American consumers? Why did we protect the institution of slavery? Simple answer, Greed and fuck-head mentalities. So instead of fostering the evolution of clean energy production, we protect the interests of oil corporations, who exploit America surely as slave owners exploited slaves. Meanwhile corporations in need of capital dry and die on the vine! “Dumber than dead dirt!” Lets continue to protect those that enslave us under the guise of freedom while extracting tremendous collective wealth and liberty, right out from under your ass!
I think it’s still important to keep this up, especially if we don’t expect Obama to take any of the suggestions to heart. As the list of Things Obama Can Do Right Now grows, his wiggle room gets smaller as he continues to ignore the suggestions.
Things Obama Can Do Right Now is a nice easy list of quick jabbing questions reporters can ask, or college students can ask, or grandmothers on camera can ask, when Obama says the lefties are whiners with no ideas. The very existence of this list screams “Progressives have ideas that are worth listening to!”
O/T
My reply (near the top) is time-stamped one minute BEFORE the comment to which I was replying. I suspect some server-side script is using time zone offsets, or is using the client-side time instead of FDL time.
Or, maybe I’ve got the ability to time travel? If I type a bunch of stuff as fast as I can, can we go back to the Democratic Convention of 2007? On second thought…how about we go back to 2006? …or 1999?
<grumble>wretched edit bug<grumble>
Agreed.
I think we know by now that the relationship between big business and the government is just one big fortuitous quid pro quo circle of unending opportunity and wealth for the chosen elites. The status quo reigns and nothing Obama does is going to change that reality.
Lloyd Chapman, you do know that Obama doesn’t intend to divert from his “New Democrat” plan, don’t you? He thinks it’s all going swimmingly.
These pleas are futile. Obama protects corporations not people. Make that a mantra for yourself.