New Charles Tiefer Opinion, SBA Rule Would Devastate Small IT Firms

PETALUMA, Calif., April 2, 2015 /PRNewswire-USNewswire/ -- Professor Charles Tiefer, one of America's leading experts on federal contracting law has issued an opinion slamming a new policy proposed by the Small Business Administration (SBA) that could force thousands of small businesses in the Information Technology industry out of the federal market place.

"The change would strike an unwarranted blow at the Information Technology (IT) 'Solutions' industry." Professor Tiefer also states, "The rule change will mean thousands of small business concerns would be ineligible for government contracts."

Professor Tiefer appeared on Federal News Radio on Wednesday to voice his opposition to the new SBA policy.

In 2014, the SBA proposed a similar new policy that would have reclassified over 13,000 small businesses in the IT industry as large businesses. Professor Tiefer's opinion on that policy found the SBA lacked the Congressional authority to adopt such a rule that would have been so harmful to thousands of small IT firms.

"Doing that, as the opinion showed, violates Congress's statutory intent in the Small Business Jobs Act of 2010, and, without justification, repeals the SBA's 2003 action recognizing this sub-industry. It struck a wholly unjustified hard blow at these struggling valuable modest sized businesses. On the proposed rule change addressed here, the SBA is again wrong in trying to do this—and is wrong once again," Professor Tiefer stated in referring to his opposition to the SBA's 2014 proposed policy that could have devastated thousands of small IT firms.

The SBA has been widely criticized for adopting policies that harm legitimate small businesses while adopting other policies that divert billions of dollars in federal small business contracts to Fortune 500 firms. Several federal investigations and investigative reports in the media have uncovered blatant fraud in virtually every program administered by the SBA.

In a recent hearing in the U.S. House Small Business Committee, new SBA Administrator Maria Contreras-Sweet was criticized by members of the committee for including billions of dollars in contracts to Fortune 500 firms in the SBA's claim the government awarded 23.39 percent of all federal contracts to small businesses in fiscal year 2013.

Just last week House Small Business Committee member Janice Hahn called for a Government Accountability Office (GAO) investigation into the diversion of federal small business contracts to Fortune 500 firms based on research conducted by the American Small Business League (ASBL).

"This new SBA policy will force thousands of small businesses in the Information Technology industry out of the federal market place while the SBA continues to divert billions in federal small business contracts to corporate giants. It's time for Congress and the GAO to step in and find out exactly who is responsible for the continual flow of anti-small business policies coming from the SBA," stated ASBL President Lloyd Chapman.

The SBA will be taking public comment on the proposed policy until Monday, April 6, 2015.

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SOURCE American Small Business League