Don't Divert Small-Business Aid to Big Business

By Norton, James | The Christian Science Monitor, July 28, 2006 | Go to article overview

Don't Divert Small-Business Aid to Big Business


Norton, James, The Christian Science Monitor


On paper, 2005 was a very good year for Americans with small businesses. A "record breaking" $79.6 billion worth of federal contracts were given to small businesses, according to a press release issued by the Small Business Administration.

This is exciting news; small business, we're told (at least 10 times a week during election cycles) is the engine of innovation and hard work that drives the American economy.

So who are some of these little dynamos scooping up federal dollars? See if any of these names ring a bell: Northrop Grumman. Boeing. Bechtel. General Dynamics.

Since 2000, federal contracting has exploded in terms of annual volume, growing 55 percent to $377 billion in 2005. By law, at least 23 percent of that money should be awarded to small businesses - in order to nurture new ideas, the nimble exploitation of new economic opportunities, and the revitalization of neighborhoods that are down on their luck but trying to make a new start.

But nearly $5 billion of contracts - coded as "small business" - went to 13 of the largest government contractors, according to a recent review by The New York Times of data provided by Eagle Eye, a research firm based in Virginia. The same firm found that the percentage of federal contracts given to small businesses decreased last year from 20 percent to 17 percent.

Moreover, an unknown percentage of that 17 percent went to big businesses due to error, fraud, or loopholes. Some of the confusion surrounding these figures has been created by the Small Business Administration itself; newly appointed SBA administrator Steven Preston is refusing to release to the American public a list of firms coded as small businesses in fiscal year 2005.

A preference for massive, politically connected firms has been this administration's stock-in-trade. From Vice President Cheney's secret energy task force to the former industry lobbyists who weakened or destroyed federal environmental protections to the military contracts awarded to cronies of elected officials, a tone has been set: Big firms with Republican officers have prospered at the expense of transparency and the public good.

But small business has been central to this administration's economic policy. …

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