Feds Redirect Billions Intended for Small Businesses to Corporate Cronies

Becket Adams

The federal government has been hard at work ensuring that the “little guy” is getting his “fair share.”

According the American Small Business League:

” . . . 61 of the top 100 businesses that received small business contracts during fiscal year 2010 were actually large firms.”

Really? That doesn’t make any sense. According to the U.S. Census Bureau, small businesses create 90 percent of all net new jobs.

Furthermore, data from the U.S. Bureau of Labor Statistics indicates that 98 percent of all American businesses have less than 100 employees. The U.S. Census Bureau also reports small businesses are responsible for more than 50 percent of GDP, 50.2 percent of private sector employment, 90 percent of exports and 90 percent of innovations.

So it would make perfect sense that the government divert contracts that would benefit these small businesses to companies like Raytheon, Lockheed Martin, AT&T, and General Electric. Right?

But wait! There’s more!

Contracts have also been awarded to foreign companies including British Aerospace (BAE), Rolls-Royce and Thales.

Foreign companies?

Not only is this a blatant disregard for the well-being of the U.S. economy, but it is also in direct violation of the congressionally mandated goal of awarding 23 percent of the total value of all contract dollars to small businesses. Because of the diversion of billions of dollars in small business contracts to large firms, the Small Business League estimates that legitimate small businesses actually received about five percent of federal contract dollars.

But after seeing “kinetic action” in Libya, should it come as a surprise to anyone that this administration disregards congress?

Granted, the practice of falsely awarding contracts did not start during the Obama administration. According to The Wall Street Journal, “Since 2003, a series of federal investigations have uncovered billions of dollars a year in federal contracts intended for small businesses actually going to large businesses.”

But since then, congress has taken steps to guard against this sort of behavior. Furthermore, in 2008 the president himself promised to end this bureaucratic dishonesty when he said, “It is time to end the diversion of small business contracts to corporate giants.”

One would like to think that the American Small Business League’s recent statement comes as a complete shock.

But what do you expect from an administration that promises “[free] care for the sick and good jobs to the jobless,” receding oceans, a healing planet, an end to “a war,” a secured nation, a restored image as “the last, best hope on earth,” and that we would come together to remake “this great nation so that it may always reflect our very best selves and our highest ideals.”

So far they’re batting about .98

Good job, sluggers.