Congress Votes on Billion Dollar Loophole for Venture Capital Firms

PETALUMA, CA--(Marketwire - September 27, 2007) - The following is a statement by the American Small Business League:

Today the House of Representatives will vote on a bill that could allow many of the nation's largest venture capital firms to receive billions of dollars in federal small business contracts. The bill, titled H.R. 3567, the Small Business Investment Expansion Act, will amount to nothing short of a repeal of the Small Business Act, according to some of the bill's most vocal critics.

H.R. 3567 will force the average small business to compete head-to-head with firms owned and controlled by multi-million dollar venture capital firms for even the smallest orders of goods and services purchased by the federal government.

If passed, H.R. 3567 will give venture capital firms an exemption in federal small business size determination. Venture capital firms will be allowed to acquire small businesses and retain that firm's small business status for an indefinite period of time.

The bill was introduced by Pennsylvania Congressman Jason Altmire (D - PA) and co-sponsored by Congresswoman Nydia Velázquez (D - NY) and Congressman Sam Graves (R - MO).

Earlier this year, Velázquez appeared on ABC and CBS complaining about current federal policy, which has allowed firms like Microsoft, Wal-Mart, Rolls Royce, Hewlett-Packard and many of the nations top defense contractors to receive billions of dollars in federal small business contracts.

A sampling of federal set-aside contracts by the House Small Business Committee found over $12 billion in federal small business contracts wound up in the hands of dozens of Fortune 500 firms. To date, no member of Congress has proposed legislation to prevent a "Who's-Who" of corporate giants from receiving a significant portion of federal small business contracts.

Critics of H.R. 3567 say that it will only exacerbate the problem and divert even more federal small business contracts to firms controlled by big business.

Contact Information: Contact: Christopher Gunn Communications Director American Small Business League (707) 789-9575