THE BLOG

New Bill Could be Powerful Economic Stimulus for Middle Class Firms

08/14/2009 05:12 am ET | Updated May 25, 2011

More than two years ago, notable small business advocate Lloyd Chapman sat in a hotel in Durango, Colorado and drafted a bill to stop billions of dollars in fraud and abuse in federal small business contracting programs. On Thursday, May 21, Congressman Hank Johnson (D - GA) introduced H.R. 2568, the Fairness and Transparency in Contracting Act of 2009.

With a mind for change, Chapman drafted H.R. 2568 with Congressman Johnson and Senator Barbara Boxer, while relying heavily on the guidance of the nation's preeminent expert on contracting law, Professor Charles Tiefer. The bill was designed to preclude the federal government from counting publicly traded firms towards the government's 23 percent small business procurement goal. The Small Business Act requires that a small business be independently owned and operated; publicly traded firms do not qualify as independently owned.

Since 2003, more than 15 federal investigations have uncovered the diversion of billions of dollars in federal small business contracts to Fortune 500 corporations and thousands of other clearly large firms. The American Small Business League (ASBL) has estimated that every year more than $100 billion in federal contracts intended for small businesses are awarded to firms like British Aerospace (BAE), Rolls-Royce, Xerox, John Deere, Wal-Mart, Home Depot, Sherwin-Williams, Dell Computer and Dutch giant Buhrmann NV.

The ASBL maintains that H.R. 2568 is a free and easy solution to a problem that is costing America's middle-class $100 billion a year.

With the assistance of the ASBL, Chapman has garnered a wide swath of support for H.R. 2568 from members of the House of Representatives, chambers of commerce and major business organizations across the country. With a wave of support that includes key decision makers in the minority and veteran business communities, support for H.R. 2568 appears to be turning into a major movement for change in the government's contracting community.

Despite its potential major positive impact, H.R. 2568 has run into roadblocks from faux small business advocates, the U.S. Chamber of Commerce, and the U.S. Hispanic Chamber of Commerce. That said, the ASBL maintains that the U.S. Chamber of Commerce and the U.S. Hispanic Chamber of Commerce are wolves in sheep's clothing; lobbying for the interests of Fortune 500 corporations who are currently receiving billions of dollars in small business contracts, while at the same time masquerading as small business advocates.

"The small business community needs to open its eyes to the deception of the U.S. Chamber of Commerce and the U.S. Hispanic Chamber of Commerce and get behind our movement towards change in federal small business contracting programs," ASBL President Lloyd Chapman said. "H.R. 2568 is the first and only solution to the diversion of billions of dollars in small business contracts to corporate giants. It is not reasonable to allow this problem to continue while our nation's small businesses go belly-up and our economy continues to flounder."

Small businesses are the backbone of our nation's economy. Small businesses are responsible for more than 50 percent of our gross domestic product and over 90 percent of innovations. According to the U.S. Census Bureau, 90 percent of all U.S. firms have less than 20 employees and those firms are responsible for 97 percent of net new jobs. It is time for our small business leaders to embrace a real solution, H.R. 2568, to the diversion of federal small business contracts to large corporations. our jobs, families, homes, and businesses rely on it.