Battle in Congress Over Billions in Small Business Contracts Heats-Up

PETALUMA, Calif.--(Business Wire)--
The following is a statement by the American Small Business League:

The National Venture Capital Association (NVCA) and its wealthiest members have
stepped-up their campaign to try and participate in federal small business
contracting programs. Yesterday, a bill was introduced in the House of
Representatives by Congressman Sam Graves (R - MO) that could allow firms that
are owned by some of the nation's wealthiest investors to receive billions of
dollars in federal small business contracts.

The bill, H.R. 2767, the "Investing in Tomorrow's Technology Act," would affect
small businesses involved in the government's Small Business Innovation Research
(SBIR) program. The heart of the bill is a proposed change in the longstanding
government definition of a small business, which currently requires that a small
business be "independently owned." Congressman Graves' bill would modify the
term "independently owned" to include firms that are actually not "independently
owned," but owned and controlled by venture capitalists. The bill circumvents
the affiliation rules currently governing venture capital ownership of a small
business.

Opponents of the bill say it will essentially repeal the Small Business Act by
changing the federal definition of a small business to include firms that are
actually not small businesses. The American Small Business League (ASBL) is
opposing the bill. The ASBL estimates that changing the federal definition of a
small business to include wealthy venture capitalists could divert billions of
dollars in federal contracts away from middle class firms and could devastate
legitimate small businesses around the country.

Although H.R. 2767 is focused on the SBIR program, the NVCA has blanketed both
the House and Senate small business committees with contributions in an effort
to have legislation passed that would allow them to participate in all federal
small business contracting programs. In 2007, with the help of House Small
Business Committee Chair Nydia Velázquez (D - NY), H.R. 3567 passed through the
House of Representatives. The bill would have allowed firms owned and controlled
by some of the country's wealthiest investors to participate in all federal
small business contracting programs.

Small business groups around the country became concerned about the future of
federal small business contracting programs when President Obama appointed
multi-millionaire venture capitalist Karen Mills, to head the Small Business
Administration (SBA) and venture capitalist Winslow Sargeant to head the SBA
Office of Advocacy. Both Mills and Sargeant were major contributors to President
Obama's campaign. They have also been outspoken advocates of changes in federal
policy and legislation that would allow venture capitalists and even some of the
nation's largest venture capital firms to receive federal contracts designated
for legitimate small businesses.

The ASBL is mounting a national campaign to oppose H.R. 2767 and any other
legislation to amend the definition of a small business as "independently
owned," to include wealthy venture capitalists.

American Small Business League
Christopher Gunn, 707-789-9575
Communications Director
cgunn@asbl.com

Copyright Business Wire 2009