Contracting Update: Surprise Reaction

Lloyd Chapman, president and founder of the American Small Business League has been leading the crusade for federal contracting reform. Each year, billions of dollars in federal contracts that are earmarked for small businesses actually fall into the hands of large corporations.

Yet the Bush administration has done little to stem the problem, despite repeated investigations by Congress, the Government Accountability Office and the Small Business Administration's Inspector General. The House Small Business Committee, however, finally took action. It passed a bill last week that addresses the problem. But missing from the measure is a provision to require annual recertification to make sure contractors are actually small businesses.

Chapman's reaction? "Stunned."

"Everyone in Congress knows that annual recertification is what's going to solve this problem. The SBA recommended it, the Office of Management and Budget recommended it, and this law does not have it," he said. "This was the opportunity for the House to put this baloney to bed once and for all, and they didn’t do it."

Fortunately, the Senate SBA budget reauthorization bill contains the recertification provision. Sen. John Kerry, D-Mass., who chairs the Senate small business committee supports the measure and could add it to the House Bill as well, when it comes before his committee.

"It means $50 billion a year to small companies," Chapman said. "I'm disappointed with the Democrats."