There is a new bill in Congress (H.R. 4341) that states it will “modernize the Small Business Act” and adopt “common sense” reforms that will help small businesses.

There is only one problem with this bill. It will allow Fortune 500 firms and many of the largest corporate giants in the world to continue to receive billions of dollars a year in federal small business contracts.


In 1995, the SBA Office of Inspector General’ Semiannual Report uncovered what they described as a “particular fraudulent practice” where large businesses were misrepresenting themselves as small businesses.

In 2003, the Government Accountability Office (GAO) launched one of the first investigations into the diversion of federal small business contracts to large businesses. I testified in the hearing in the House Small Business Committee that reviewed the GAO investigation. The Associated Press published a story of the issue that ran in newspapers across the nation.

In 2005, the SBA Inspector General released Report 5-15 that stated, “One of the most important challenges facing the Small Business Administration (SBA) and the entire federal government today is that large businesses are receiving federal small business contracts and agencies are receiving credit for these awards.”

In 2008, President Obama released the statement, “It is time to end the diversion of federal small business contracts to corporate giants.

The diversion of federal small business contracts to Fortune 500 firms and thousands of large businesses has been exposed in over two-dozen federal investigations. Every major newspaper in the country has reported on the issue. Over a dozen investigative stories on the issue have aired on CNN, CBS, NBC, ABC, RTTV, Fox News, CNBC and MSNBC.

I have dozens of national television appearances trying to expose the abuses. I wrote a bill, “The Fairness and Transparency in Contracting Act” that would have halted the abuses. Georgia Congressman, Hank Johnson (D), introduced that bill to Congress three times, but it never made it out of committee.

This is not a conspiracy theory. It’s been well documented for over twenty years. So what’s the problem? Why hasn’t Congress passed legislation to halt these rampant and blatant abuses in federal small business contracting programs?

This isn’t a controversial and polarized issue like gun control, abortion or ObamaCare. This is Fortune 500 firms and clearly large businesses receiving billions a month in federal small business contracts. What percentage of Americas would agree with me that Fortune 500 firms should not be receiving federal small business contracts? 100 percent I bet.

How can anyone in Congress write a bill to “modernize the Small Business Act” and adopt “common sense” reforms to federal small business contracting programs and not include language to address the most widely reported abuses in these programs?

The Small Business Act is the single largest economic stimulus program ever passed by Congress specifically for the middle class. If legitimate small businesses were to actually receive 23 percent of all federal contracts as the law requires, it would be over $250 billion a year. That’s one hundred times larger than the reported $2.5 billion middle class American’s received under Troubled Asset Relief Program (TARP).

Survey after survey has shown the number one issue for most voters is the economy and jobs. Data from the U.S. Census Bureau indicates small businesses are responsible for over 90 percent of the net new jobs, over 50 percent of the private sector work force, over 50 percent of the Gross Domestic Product and over 90 percent of all U.S. exporters.

So, if Congress sincerely wants to pass legislation to “modernize the Small Business Act” and adopt “common sense” reforms, it must contain language that stops Fortune 500 firms and blatantly large businesses from hijacking billions of dollars a year in federal small business contracts.

Chapman is president and founder of the American Small Business League.