SBA Using Inflation To Justify Dismantling Small Business Programs

PETALUMA, Calif., Oct. 22, 2014 /PRNewswire-USNewswire/ -- The Small Business Administration (SBA) has proposed sweeping changes in federal small business size standards based on inflation that could force thousands of small business that depend on federal contracts to close their doors.

Critics of the new SBA policies believe the changes are actually a plan to dismantle federal small business programs after a plan by the Obama Administration to close the SBA by combining it with the Department of Commerce was exposed in the press.

The SBA is claiming small business size standards are being revised based on inflation. The American Small Business League (ASBL) is opposing the changes since small business size standards based on the number of employees are completely unrelated to inflation.

"Think about your local butcher shop, dry cleaners or bakery. The price of meat, dry cleaning and bread has gone up significantly over the last twenty years, but the number of employees in a local small business has remained unchanged. The SBA's claim that they are raising employee based small business size standards based on inflation is ludicrous. The SBA was established to help small businesses, but these new policies will bankrupt thousands of small business and cost America countless jobs," stated by ASBL President Lloyd Chapman.

U.S. Census Bureau data indicate 89% of all U.S. firms have less than 20 employees.

In some examples, the SBA is increasing the definition of a small business to include most of the largest businesses in a given industry. By raising the small business size standards to such high levels, legitimate small businesses will be unable to effectively compete for federal contracts with firms that are up to one hundred times larger than the average firm in that industry.

"Over the years the SBA has received comments that its size standards have not kept up with the changes in the economy," the SBA justified for their reason of increasing small business size standards.

The ASBL and their attorneys have made repeated attempts to request that the SBA provide any examples of the comments they claim to have received regarding increasing size standards. To date, the SBA has refused to prove any such information.

Every year for a decade, the SBA Office of Inspector General has named the diversion of federal small business contracts to large businesses as the number one problem at the agency. While the SBA is proposing to adopt policies that will allow large businesses to qualify as small businesses based on comments they refuse to produce, they have consistently refused to adopt any policies that address the billions in rampant fraud and abuse that has been uncovered by their own Inspector General for over a decade.

The SBA will be taking public comment on the proposed changes until Nov. 10.

Please take a moment to watch the trailer for Lloyd's upcoming new documentary.

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SOURCE American Small Business League