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Obama Approves Program That Allows Prime Contractors to Cheat Small Businesses

As part of the National Defense Authorization Act (NDAA), President Barack Obama renewed a program large prime contractors use to circumvent the Small Business Act. The Comprehensive Subcontracting Plan Test Program (CSPTP) is fascinating for a number of different reasons. First of all, it’s a test program that has never been evaluated. It is more than 20-years-old and was also originally passed under the guise of helping small businesses. Let’s examine this test program and see if it really helps small businesses.

The federal government has a statutory goal of awarding 23 percent of all federal contracts to legitimate small businesses. A great way to hit the 23 percent goal and stimulate the middle class is to require prime contractors to subcontract with small businesses. The law says that any prime contractor that fails to make a good-faith effort to hit their small business-subcontracting goal shall pay a penalty in the amount of the deficiency. The CSPTP undermines that law. Before the CSPTP, prime contractors were required to submit quarterly subcontracting reports that the public, watchdog groups like the American Small Business League (ASBL) and federal investigators could use to monitor compliance.

Think about it: no reports and an exemption from any penalties for non-compliance. Does anyone really think that is going to increase contract opportunities for small businesses? If President Obama genuinely thinks that the CSPTP is going to stimulate growth among small businesses, we should try the same thing with the IRS. I think the IRS should adopt President Obama’s plan for small businesses. That would mean no income tax forms and no penalties for not paying your income tax.

So if Obama thinks it’s going to help small businesses to renew the CSPTP, which allows contactors to avoid the law, let’s do the same thing with the IRS and see how that works. Of course, that will never happen.

So Obama’s renewal of the CSPTP is the antitheses of everything we need right now to help stimulate our economy. According to the U.S. Census Bureau, small businesses create more than 90 percent of all net new jobs; they are responsible for half the GDP, half the private sector workforce and 90 percent of U.S. exports. And president Obama is renewing a program that will decrease the volume of federal contracts going to America’s chief job creators.

Another prime example of when you quite listening to what Barack Obama says and start watching what he does, he’s anti-small business.

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Lloyd Chapman

Lloyd Chapman