New Loopholes Could Cost Small Businesses Billions

The Senate Committee on Small Business and Entrepreneurship unanimously approved measures, included in legislation reauthorizing the Small Business Administration (SBA), that will allow the government to report billions of dollars in contracts to large firms as federal small business awards.


Advertisement



“If these new loopholes become law, they will do more to divert funds from small businesses than any potential solutions the Senate has proposed will fix,” Lloyd Chapman, president of the American Small Business League said. The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses, -- the 98 percent of U.S. companies with less than 100 employees.

The first provision will allow the largest financial institutions to receive federal small business status through owning a controlling interest in a small firm in the Small Business Innovation Research (SBIR) program. The second provision will allow the SBA to increase the size standards for small businesses by 150 times, to up to 1,500 employees.

A year ago, both provisions were resoundingly rejected when the SBA issued them as proposals for public comment. The response to these proposals was the highest the SBA has ever received and more than 95 percent of the comments received were violently opposed to creating new loopholes increasing the opportunities for large businesses to obtain federal small business contracts.

“I think the U.S. Senate need to realize that this country is a democracy. When the government asked people for their comments, they responded with an overwhelming 95 percent against adopting these measures,” Chapman stated. “In a country where we elected a president based on a 2 percent margin, 95 percent should be considered a mandate.”

In recent months, 13 federal investigations have found billions in small business contracts have been awarded to such large companies as Microsoft, Wal-Mart, AT&T, Rolls Royce, Lockheed Martin and Northrup Grumman.

Chapman believes the loopholes are inconsistent with the Congressional intent of passing the Small Business Act, explaining “We know that large corporations have a very strong voice in Congress. It looks like the best interests of small firms are being sold out again in favor of big money contractors.”

You may like these other stories...

CFOs and management accountants are playing an ever-increasing role in supporting the adoption of natural capital accounting in their organizations, according to a recent report.Natural capital – forests, rivers,...
Tesco says it overstated profit forecastStanley Reed of the New York Times reported that Tesco, the large British grocery retailer, disclosed on Monday that it had overstated its expected half-year profit by about $400...
The Public Company Accounting Oversight Board (PCAOB) on Monday reminded auditors that they should continue adhering to the board’s existing standards when considering an organization’s ability to operate as a...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.