New Republican Policies Would Divert Billions from Small Businesses
While billions of dollars
in small business contracts are being diverted to companies
like Boeing, Lockheed, Bechtel, and Northrop Grumman, Senate
Small Business Committee Chairman Olympia Snowe is favoring
a plan that would create yet another loophole.
Under the proposed plan, the government would be able to
report grants and contracts to some of the world's largest
banks as small business awards. The proposal would allow
venture capital companies with controlling interest of 51%
in a small research or R&D company to be eligible for small
business status and all the benefits that come with it under
the SBIR (Small Business Innovation Research) program.
Current guidelines prevent majority private equity-backed
companies from participating in the SBIR program, which was
created to strengthen the role of innovative small business
concerns through access to federal grants and contracts for
research and development.
"The ASBL fully supports government funding for critical
research and development, however, the SBIR program was
created to assist legitimately small businesses, not giant
financial institutions," stated Lloyd Chapman, President of
the American Small Business League.
The ASBL also discovered that House Small Business Committee
Chairman Don Manzullo recently proposed the repeal of a
long-standing federal policy that prevents large franchisors
from using their franchisees as fronts to illegally receive
federal small business contracts. Under the new policy,
franchises of large companies would be granted small
business status. Critics are concerned that Manzullo, an
Illinois Republican, proposed the change within a matter of
days after Steven Preston, former executive of giant
Illinois franchisor ServiceMaster, was nominated for
Administrator of the SBA.
"It's hard to imagine that these two congressional leaders
have proposed two more loopholes that will only exacerbate
the problem that the SBA's Inspector General called one of
the biggest challenges facing the government today," stated
Chapman. "These policies clearly indicate that Republicans
have no intention of proposing any legislation that will end
fraud and abuse in small business contracting. Quite to the
contrary, these policies will divert funds from small firms
and allow the government to report contracts to the nation's
largest corporations and financial institutions as small
business awards."
About the ASBL
The American Small Business League was formed to promote and
advocate policies that provide the greatest opportunity for
small businesses - the 98% of U.S. companies with less than
100 employees. The ASBL is founded on the principle that
small businesses, the backbone of a vital American economy,
should receive the fair treatment promised by the Small
Business Act of 1953. Representing small businesses in all
fields and industries throughout the United States, the ASBL
monitors existing policies and proposed policy changes by
the Small Business Administration and other federal agencies
that affect its members.
in small business contracts are being diverted to companies
like Boeing, Lockheed, Bechtel, and Northrop Grumman, Senate
Small Business Committee Chairman Olympia Snowe is favoring
a plan that would create yet another loophole.
Under the proposed plan, the government would be able to
report grants and contracts to some of the world's largest
banks as small business awards. The proposal would allow
venture capital companies with controlling interest of 51%
in a small research or R&D company to be eligible for small
business status and all the benefits that come with it under
the SBIR (Small Business Innovation Research) program.
Current guidelines prevent majority private equity-backed
companies from participating in the SBIR program, which was
created to strengthen the role of innovative small business
concerns through access to federal grants and contracts for
research and development.
"The ASBL fully supports government funding for critical
research and development, however, the SBIR program was
created to assist legitimately small businesses, not giant
financial institutions," stated Lloyd Chapman, President of
the American Small Business League.
The ASBL also discovered that House Small Business Committee
Chairman Don Manzullo recently proposed the repeal of a
long-standing federal policy that prevents large franchisors
from using their franchisees as fronts to illegally receive
federal small business contracts. Under the new policy,
franchises of large companies would be granted small
business status. Critics are concerned that Manzullo, an
Illinois Republican, proposed the change within a matter of
days after Steven Preston, former executive of giant
Illinois franchisor ServiceMaster, was nominated for
Administrator of the SBA.
"It's hard to imagine that these two congressional leaders
have proposed two more loopholes that will only exacerbate
the problem that the SBA's Inspector General called one of
the biggest challenges facing the government today," stated
Chapman. "These policies clearly indicate that Republicans
have no intention of proposing any legislation that will end
fraud and abuse in small business contracting. Quite to the
contrary, these policies will divert funds from small firms
and allow the government to report contracts to the nation's
largest corporations and financial institutions as small
business awards."
About the ASBL
The American Small Business League was formed to promote and
advocate policies that provide the greatest opportunity for
small businesses - the 98% of U.S. companies with less than
100 employees. The ASBL is founded on the principle that
small businesses, the backbone of a vital American economy,
should receive the fair treatment promised by the Small
Business Act of 1953. Representing small businesses in all
fields and industries throughout the United States, the ASBL
monitors existing policies and proposed policy changes by
the Small Business Administration and other federal agencies
that affect its members.
