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Obama Will Allow Fortune 500 Firms to Receive Federal Small Business Contracts

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Petaluma, Calif. - President-elect Barack Obama has dropped a campaign promise to end Bush Administration policies that have allowed Fortune 500 firms to receive federal small business contracts.

In February, President-elect Obama released the following statement, "Over half of all Americans work for a small business. Small businesses are the backbone of our nation's economy and we must protect this great resource. It is time to end the diversion of federal small business contracts to corporate giants." (http://www.barackobama.com/2008/02/26/the_american_small_business_le.php)

Just two days after the election, the Obama-Biden Transition Team launched its transition website, Change.gov. Any mention of President-elect Obama's campaign promise to stop Fortune 500 firms from hijacking government small business contracts had vanished without explanation. (http://www.asbl.com/documents/Economy_Change.pdf)

Since 2003, more than a dozen federal investigations have found widespread fraud and abuse in virtually every federal small business contracting program under the Bush Administration. (http://www.asbl.com/documentlibrary.html) Several investigations found Fortune 500 firms and thousands of other large businesses had received billions of dollars in federal small business contracts. Two separate investigations found large businesses had received federal small business contracts illegally through "vendor deception" and "false certifications". (http://www.sba.gov/IG/05-16.pdf)

In July, the Department of the Interior Office of Inspector General found the agency had awarded millions of dollars in federal small business contracts to Fortune 500 firms such as Xerox, John Deere, Sherwin Williams, Dell, World Wide Technology, Home Depot, McGraw-Hill, Ricoh, Starwood Hotels and Weyerhaeuser. (http://www.doioig.gov/upload/2008-G-0024.pdf)

In October, the Washington Post released an independent study which found approximately 40 percent of all federal prime small business contracts had actually gone to Fortune 500 firms. Based on the sample used by the Washington Post, as much as 80 percent of government small business contracts could be going to Fortune 500 firms and thousands of other large businesses. (http://www.asbl.com/showmedia.php?id=1179)

The diversion of billions of dollars in government small business contracts to Fortune 500 firms has been reported by most of the nation's largest newspapers, over two hundred radio stations and by ABC, CBS and CNN. (ABC, http://www.asbl.com/abc_evening_news.wmv; CBS, http://www.asbl.com/cbs.wmv; CNN, http://www.asbl.com/showmedia.php?id=1170)

Considering the current state of the U.S. economy, Obama's decision to drop his campaign promise to rescue millions of middle class firms and end the diversion of federal small business contracts to "corporate giants" is seen by small business owners and advocates as a clear indication that the Obama Administration will not be pro-American small business.

The American Small Business League (ASBL) predicts that President-elect Obama will enact legislation and policies that will hurt American small businesses and even create more loopholes that will allow some of the nation's wealthiest investors to take federal contracts earmarked for legitimate small businesses.

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