The indications that we are heading toward another recession are crystal clear. Markets are plunging, unemployment is soaring and investors, businesses and the general public are losing faith in Washington's ability to stimulate the economy. However, a bill aimed at directing federal infrastructure spending to the middle class could change everything.
The Fairness and Transparency in Contracting Act is a very simple bill that will close loopholes and end fraud and abuse in federal small business contracting programs. The legislation focuses on ending the diversion of federal small business contracts to large businesses, a problem preventing the creation of upwards of 1.8 million new jobs. Specifically, the bill targets ambiguous provisions within the Small Business Act of 1953 that have allowed large publicly traded and foreign-owned companies to qualify as small businesses and receive federal small business contracts. Representative Hank Johnson (D-GA-04) is expected to introduce the bill this year.
The reason this bill is so powerful is because of the job creating potential of the small business community. According to the U.S. Census Bureau, small businesses create 90 percent of all net new jobs. If passed, this bill would redirect existing federal infrastructure spending to our nation's chief job creators, providing them with the needed demand to hire employees and expand business. Existing federal infrastructure spending means deficit-neutral, requiring no new taxes and no new spending. Moreover, this is a permanent solution, not the usual one-shot-deal that tends to increase the deficit and has not actually worked.
Because of fraud, abuse, loopholes and lack of oversight of federal small business contracting programs, hundreds of billions of dollars in federal small business contracts are actually awarded to large, publicly traded and foreign-owned companies. During fiscal year 2010 alone, the government's data indicated that more than $175 million in federal small business contracts was awarded to Lockheed Martin. I think most Americans can agree that Lockheed Martin, a company with more than 125,000 employees and more than $45 billion in annual revenue, is not a small business. This happens while small businesses are forced to close their doors and millions of Americans lose their jobs. The Labor Department reports that the latest jobless figure remains at 9.1 percent, meaning 14 million people don't have jobs.
For nearly a decade, I have worked tirelessly to alert the press, lawmakers and the general public about large publicly traded and foreign-owned companies receiving federal small business contracts. Yet the Small Business Administration press office has downplayed the abuse and even denied its existence instead of working with lawmakers to solve the problem. Through the Freedom of Information Act, I have obtained emails from the SBA press office claiming to journalists that I am everything from a lunatic to a conspiracy theorist.
But this is not a conspiracy theory. The diversion of federal small business contracts to corporate giants has been well documented. Since 2003, a series of federal investigations have found hundreds of billions of federal small business contracts being awarded to large publicly traded companies like AT&T, Office Depot, Raytheon, John Deere, General Electric, Italian defense giant Finmeccanica and Rolls-Royce.
In Report 5-15 the SBA Office of Inspector General (SBA IG) described agencies awarding small business contracts to large businesses as, "One of the most important challenges facing the Small Business Administration and the entire federal government today." The SBA IG has named the issue as a top management challenge for six consecutive years.
During his 2008 campaign, Barack Obama stated, "It is time to end the diversion of federal small business contracts to corporate giants." If President Obama really wants to create jobs and save the world economy, he will keep his campaign promise and support and sign the Fairness and Transparency in Contracting Act.
Follow Lloyd Chapman on Twitter: www.twitter.com/LloydChapman
If large business do the job well, with a lesser priced product, it sounds logical that they should get the work.
However, large corporations do not create jobs, we spend trillions to bail them out, running up the debt, more people are unemployed,so we spend more on assistance.
I agree that the best value should be given to the company purchasing the product, but the company here is the United States of America, and we have to consider the overall bottom line. Small business is the engine that drives the American economy. Taking away anything that helps small business is a price too great to pay.
I might also remind you, those small businesses you are poo pooing, typically give a hell of a lot of more personal service, more attention to the care for your order, and the resepct of human interaction when you have an issue, versus a silly phone tree. It's not just the physical product you are buying when you buy from a small busiuness, you are buying your childrens future.
Why not try this bill? It won't cost us anything.If it doesn't work, we won't raise the debt and no one will lose their job.
It seems free and easy, and didn't it work really well before all the lobbyists took over Washington? We used to have a pretty darn good economy back when people actually paid attention to the Small Business Act. Let's give it a test drive, see if we like it.
We compete for your business. We provide the best product we can, at the lowest possible price.
We stand behind what we sell. We provide most of the new job opportunities in America.
Big Business, doesn't.
The sole purpose of becoming the biggest, is to drive out the competition, then raise prices to whatever the market will bear. Subcontract the work overseas, while charging an even higher markup then they did before. Take part in a system of virtual wage slavery, then pay US managers millions for their "good work" or "innovative solutions".
Yet our Government continues to support Big Business while either ignoring, or worse yet, penalizing small businesses.
Big Business OWNS this country, lock, stock, barrel, and congress. They've controlled the legislature for several decades and now they apparently own the Judiciary Branch of Government as well.
Looks to me like George Carlin had it right back in 2005 with his American Dream routine.
Warning, this link contains language that many might find foul. If you find profanity objectionable please do not watch it.
Personally I find what he has to say about what America has become to be the obscenity, and it looks very much to me, like he was right.
http://www.youtube.com/watch?v=acLW1vFO-2Q
so, it's autumn, 2011, and your bill has yet to be introduced ?
This is one of the MAJOR problems of the free market.
For small business, one of the biggest problems is availability of capital. The system is highly rigged for larger businesses. They have low cost of capital, the have size and infrastructure, etc. Today, lenders are happy to lend to large businesses but there is no lending to small businesses.
The government has underwritten $1T of lending to the home market. There is no reason that the government does not commit a similar level of lending to small business. The SBA does not work and never will. Further in the very short-term the government could create a huge tax incentive for investment in small business by allowing investors to deduct their investment into any small business immediately, to essentially get a tax deduction for investing in a small business.
If the business works and is sold in the future, the government will recover the deduction at that time. If the business goes under, it would have lost the money anyway through long-term capital loss. (there is a difference in tax rate/type).
Vote for the CPC progressives if you want change that's good for the average citizens and small business.
Didn't Cheney claim Halliburton was a small business?