Designed to ensure that small business government contracts go to small businesses instead of subsidiaries of large companies, H.R. 2568 is a direct result of more than 15 investigations that exposed widespread abuses in the federal small business contracting programs.

The Small Business Administration Inspector General found in 2002 that at least 4.4 percent of 1,000 contractors awarded federal funds designated for small businesses did not meet basic requirements to receive those contracts.

Specifically, the study revealed that construction behemoth Bechtel and computer giant Hewlett Packard – among many others – were awarded small business contracts by government agencies, and subsequently those funds were counted toward the respective agencies’ small business contracting goals.

To correct this, H.R. 2568 would modify the definition of a small business in the Small Business Act by including the additional requirement that no publicly traded company can qualify as a small business in relation to these funds. It also allows a person to file a complaint if they have evidence that a small business contract was improperly awarded.

If passed, the bill would require the SBA to submit to Congress an annual report detailing the nature of the complaints and the resolution.

Small businesses are the foundation of the nation’s economy. According to the U.S. Census Bureau, businesses with 20 employees or less make up 90 percent of all U.S. firms and those firms are responsible for 97 percent of net new jobs.