It’s Business, And It’s Personal

Government awards small-business contracts to large companies

On Behalf of | May 31, 2013 | Business Contracts & Disputes |

Small businesses in North Carolina and throughout the country create most of the net new jobs in America. The expenses incurred by these job-creating small businesses, including business litigation, are significant. Despite the fact that small businesses help drive the American economy, studies have shown that the federal government is giving small-business contracts to huge corporations.

Data from the U.S. Census Bureau shows that small businesses created more than 90 percent of the net new employment positions in the United States. A study by the Kaufmann Foundation found that small businesses generated 100 percent of net new jobs in America since 1980.

The Small Business Act, signed into law by Dwight Eisenhower in 1953, requires the federal government to award at least 23 percent of the entire value of all government contracts to small businesses. Small businesses are not reaping the rewards of this law. Investigations found that many of the contracts that the federal government claims it awarded to small businesses were given to large corporations.

Many of the large companies that receive government small-business contracts ship jobs overseas. Some of these large corporations pay either a negligible amount of federal income taxes or no income tax at all. Despite these facts, the government gave huge companies around 95 percent of the taxpayer dollars from the Reinvestment and Recovery Act and the Troubled Asset Relief Program.

The government should award these business contracts to small, innovative companies instead of giving them to corporate conglomerates. Small businesses, including North Carolina companies, would generate more work if the government properly awarded them small-business contracts. Companies that have more work can hire more employees. Professional business and commercial law attorneys may be able to give small-business owners advice regarding the growth of their companies.

Source: Huffington Post, “Should the Federal Government Be Giving Small Business Contracts to Fortune 500 Firms?“, Lloyd Chapman, May 23, 2013