Solution providers looking to the government for economic stimulus dollars for IT projects may be disappointed unless the government does a better job of working with small businesses, according to a small-business activist working with Congress to push such a change.
Lloyd Chapman, president of the American Small Business League and a former IT solution provider who has been working with federal government leaders and through the courts to ensure that government contracts set aside for small businesses end up in the right hands, said poorly run programs have cost small businesses millions of jobs and will result in little opportunity to take advantage of the economic stimulus spending.
Chapman, who started championing the cause of small businesses years ago when his own company lost government contracts to larger corporations, two years ago started writing the first draft of what is now known as The Fairness and Transparency in Contracting Act of 2009.
The act, which was introduced by U.S. Rep. Hank Johnson, (D-Ga.), earlier this week, specifies that a "small business" cannot include publicly traded or foreign-owned companies or their subsidiaries.
It further specifies that the Small Business Agency (SBA) and other government agencies respond to and report on complaints about small-business contracts awarded to companies that do not fit the definition of a small business, and that a complete list of approved contractors be published.
The act is necessary because, while small businesses account for 98 percent of new jobs in the U.S., the government and the SBA have been lax in ensuring that small businesses get their fair share of government spending, Chapman said.
Chapman estimated that the act would push an additional $100 billion in infrastructure spending to small businesses, including smaller solution providers that now have to compete against larger integrators that either fraudulently or in error have been classified as small businesses.
"Who in their right mind would oppose legislation that would create millions of jobs?" Chapman said. "Anyone opposing it shouldn't be in Congress."
Chapman said that President Obama, in some of his prior speeches, estimated that every $1 billion in infrastructure spending creates 40,000 jobs.
"But my research shows that up to $120 billion a year in small-business contracts goes to large businesses," he said. "If my bill passes, it will create 4 million new jobs, based on President Obama's estimates."
Small businesses are the only real means for stimulating the economy, Chapman said.
"If you're trying to stimulate the economy, you have to work with small businesses because that's where the jobs are created," he said. "Since 1977, large businesses have not created one net new job. This is because of things like NAFTA, which shipped millions of U.S. jobs overseas, and the fact that fewer and fewer Americans work for large companies."
Getting small businesses involved in the economic stimulus is an urgent goal of Chapman and his bill.
"Unemployment is rising every month," he said. "We expect no new jobs created in 2009 and 2010. If that happens, when will the stimulus kick in?"
If the act passes, Chapman said small IT firms could see their government sales double or even quadruple. "My bill would do more to create jobs than any other bill," he said. "Economic stimulus funds for now go to only the top 1 percent of businesses."