THE BLOG

Dueling Bills in Congress Could Help or Hurt Middle Class Firms

11/16/2009 05:12 am ET | Updated May 25, 2011

In 2005, the Small Business Administration Office of Inspector General (SBA OIG) issued Report 5-15, which referred to the diversion of federal small business contracts to corporate giants as, "One of the most important challenges facing the Small Business Administration and the entire Federal government today."

Report 5-15 is just one of over a dozen federal investigations since 2003, which found that every month billions of dollars in federal contracts earmarked for small businesses are diverted to many of the largest corporations around the world.

The Obama Administration recently released data, which indicated that it had included billions of dollars in contracts to Fortune 500 firms and some of the largest companies in Italy, South Korea, England and France towards the government's small business contracting goal. Textron, a Fortune 500 firm, was the top recipient of federal small business contracts during fiscal year (FY) 2008; receiving over $775 million in federal small business contracts. Textron has 43,000 employees and over $14 billion in annual revenue.

In May of 2009, Congressman Hank Johnson (D - GA) introduced a new bill titled, "the Fairness and Transparency in Contracting Act" (H.R. 2568). The bill was written to halt the diversion of federal small business contracts to corporate giants around the world. To date, H.R. 2568 has 14 co-sponsors. Supporters of H.R. 2568 estimate that if the bill becomes law, over $100 billion a year in federal small business contracts will be redirected back to legitimate small businesses across the country.

Small business advocates are describing an opposing bill, the "Small Business Fair Competition Act" (H.R. 3558), as a "colossal loophole for big business." H.R. 3558 was introduced in the House of Representatives by freshman Congressman Parker Griffith (D - AL) on Monday, September 14, 2009. Several corporate giants such as Boeing, Northrop Grumman, General Dynamics and British Aerospace (BAE) maintain campuses in Congressman Griffith's district and are currently receiving federal small business contracts. (http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3558ih.txt.pdf)

If H.R. 3558 were to become law, Boeing, Lockheed Martin, British Aerospace and hundreds of other Fortune 500 firms and their subsidiaries would be able to continue receiving federal small business contracts indefinitely. Opponents of H.R. 3558 estimate that millions of middle class firms would be forced out of business or negatively impacted if the bill were to become law.

Chambers of Commerce across Alabama are opposed to H.R. 3558, and the American Small Business League (ASBL) has launched a national campaign to rally opposition to the bill.

Please click here to watch ASBL President Lloyd Chapman discuss the ASBL's concerns regarding H.R. 3558: http://www.youtube.com/watch?v=YE3mRI8mTko