THE BLOG

No Policies From Obama To Stop Diversion of Federal Small Business Contracts

02/22/2009 05:12 am 05:12:01 | Updated May 25, 2011

Since 2003, over a dozen federal investigations have uncovered billions of dollars in federal contracts intended for small businesses actually wound up in the hands of Fortune 500 firms.

Any plans from President Barack Obama to adopt the recommendation of the Small Business Administration (SBA) Office of Inspector General to address the problem have been conspicuously absent from any of his stimulus plans or proposed policies.

President Obama has also ignored repeated pleas from small business groups around the country to adopt legislation and policies to stop Fortune 500 firms and thousands of other large businesses from commandeering up to $100 billion a year in federal small business contracts.

ABC, CBS and CNN have all released investigative stories on the issue, which found firms such as Lockheed Martin, Wal-Mart, Microsoft, John Deere, Xerox, Dell Computer, Northrop Grumman and Home Depot all received millions of dollars in federal small business contracts.

Even some of the largest firms in Europe such as British Aerospace (BAE), Rolls-Royce and Dutch giant Buhrmann NV have received hundreds of millions a year in U.S. government contracts intended for small businesses.

Thousands of middle class firms have been forced to close their doors as they struggled in vain to compete with Fortune 500 firms for even the smallest government orders for goods and services specifically set aside for small businesses.

Small business advocates are concerned that President Obama will not only allow federal small business contracts to continue to be diverted to Fortune 500 firms, but that he will support a new federal policy that will create a new loophole in federal law allowing even more government small business contracts to be diverted to firms controlled by some of the nation's wealthiest investors.

The National Venture Capital Association (NVCA) has contributed millions of dollars to President Obama and key members of Congress, such as House Speaker Nancy Pelosi, to try and have federal law changed to allow some of the wealthiest investors in the country to masquerade as small businesses and take billions of dollars in federal contracts designated for legitimate small businesses.

President Obama's appointment of Karen Mills, a multi-millionaire venture capitalist, to the post of Administrator of the SBA is seen by small business groups as a confirmation that President Obama will attempt to create more loopholes in federal contracting law, which will divert more federal small business contracts away from middle class firms and into the hands of wealthy investors.