PETALUMA, Calif. (March 10, 2015)—The Small Business Administration (SBA) has announced they will be releasing the results of a study by the University of Maryland, on March 12, 2015, titled "Unintended Outcomes of Small Business Legislation and Policy."
The American Small Business League (ASBL) predicts the results of the study will certainly justify President Obama's intention to resurrect Ronald Reagan's plan to permanently end all federal small business programs by combining the SBA and the Department of Commerce. ASBL President Lloyd Chapman predicted President Obama would try to close the SBA to cover-up widely reported fraud at the agency in 2008. Every year of the Obama Administration the SBA Office of Inspector General has named the diversion of federal small business contracts to large businesses as the number one problem at the agency.
ABC, CBS, NBC, CNN, Fox News, MSNBC, CNBC and RTTV have all reported on the diversion of billions of dollars in federal small business contracts to Fortune 500 firms. In 2009, the Government Accountability Office essentially accused the SBA of encouraging fraud in Report 10-108 when they stated, "By failing to hold firms accountable, SBA and contracting agencies have sent a message to the contracting community that there is no punishment or consequences for committing fraud."
In February the SBA finalized the "safe harbor from fraud penalties" policy that will essentially protect fraudulent firms from all prosecution and penalties. On Feb. 5, the SBA proposed another policy that will further dismantle small business subcontracting programs and divert billions in federal small business dollars to Fortune 500 firms. This policy would allow Fortune 500 firms to own up to 49 percent of a small business and perform up to 60 percent of the work of those firms. Contracts performed by these entities would be reported as contracts to a small business.
The SBA is also attempting to relaunch a policy they proposed in 2014 that, if adopted, could force over 12,000 small business in the information technology (IT) industry out of the federal marketplace. Under this policy, small IT firms with annual sales in excess of $27.5 million would no longer qualify as small businesses while billions in federal contracts to Fortune 500 firms would continue to be reported as small businesses contracts.
In December 2014, President Obama also renewed the Pentagon's Comprehensive Subcontracting Plan Test Program into its 28th year of testing. Professor Charles Tiefer's legal opinion described the program as a "sham" and that "its extension will be seriously harmful to vital opportunities for small business… It should not have gotten its 25 years of extension as a never-tested 'Test Program.' Let it expire."
A Pentagon spokeswoman acknowledged the program had harmed small businesses. "Despite President Obama's glowing rhetoric about middle class economics, the truth is he's determined to dismantle all federal programs to assist middle class small business," said Chapman.
