President Obama seems determined to destroy every single federal program to help small businesses before he leaves office.
Over the last few months the Obama Administration has adopted a smorgasbord of anti-small business polices. I exposed and halted his plan to close the Small Business Administration by combining it with the Department of Commerce. An article in Forbes stated, “I agree with Lloyd Chapman, head of the American Small Business League, cited by Harrison, when he warns that this is just another attempt to shutter one of the only government agencies in place to help the nation’s nearly 30 million small business owners.” Now he has launched a renewed and even more sinister attack on federal small business programs.
Obama’s new plan to shutter the SBA is to dismantle federal small business programs with a series of policies that will allow larger and larger firms to qualify as small businesses while adopting other polices that will drive legitimate small businesses out of the federal marketplace by redefining them as large businesses.
On September 10, the SBA announced a new proposed policy change that will bankrupt thousands of IT value added resellers. Under the new policy, small businesses that have been receiving federal contracts and subcontracts under NAICS code 541519, with annual sales in excess of $27.5 million will lose their small business status by the end of the year.
Once the new federal small business size standard takes effect, any IT value added reseller with annual sales above $27.5 will legally be considered a large business. Those firms will then be required to compete head to head with Fortune 500 firms such as IBM, Hewlett-Packard and Dell for federal IT contracts.
The new rule will push legitimate small business out of the federal market place to make more room for large businesses to hijack federal small business contracts.
The most startling aspect of this new and devastating policy change for small businesses in the IT industry is that not only will they suddenly become large businesses, other Obama Administration policies will allow the SBA to report awards to many Fortune 500 firms and their subsidiaries as small business contracts.
The most recent data from the Federal Procurement Data System indicates the Obama Administration included billions of dollars in federal contracts to Fortune 500 firms and thousands of other large businesses in their small business contracting statistics. Of the top 100 recipients of federal small business contracts last year, over 75% were actually large businesses.
Numerous stories in the press reported on the fraud and abuse in federal small business programs. New SBA Administrator Maria Contreras-Sweet faced harsh criticism from the House Small Business Committee for the SBA’s inclusion of firms like Lockheed Martin, Northrop Grumman, Raytheon and Chevron on their small business contracting data.
As usual, the American Small Business League (ASBL) is the only national small business advocacy group in the country that is opposing the Obama Administration’s attempt to force IT value added resellers out of the federal market place. ASBL President has already begun opposing the new anti-small business policy in interviews on radio stations across the country.
The ASBL has launched a national campaign to defeat the new Obama Administration policy that will destroy thousands of legitimate small business in the IT industry and cost America millions of jobs. The ASBL has begun to contact all the small businesses that could be hurt by the new policy.
The ASBL legal team is preparing a possible injunction to halt the proposed policy change even before the official comment period is over.
The SBA will be taking public comment on the proposed policy change until November 10, 2014. Individuals that wish to send a comment to the SBA opposing the policy can do so by clicking “comment now” on the Federal Register’s website.