Over 300 small business owners attended an Obama administration small business forum at the U.S. Department of Commerce on Monday.

Obama administration officials who hosted a series of discussion groups were bombarded with complaints from hostile small business owners regarding a variety of subjects, according to the American Small Business League, an advocacy group for small business federal contracting. A common theme shared by many of the attendees was anger over having to compete against large businesses for federal small business contracts. 

Dozens of attendees were visibly irritated when Small Business Administration administrator Karen Mills attempted to claim that 30 percent of contract dollars allocated under the federal stimulus went to small businesses. The ASBL estimates that small businesses received less than 3 percent of stimulus funds.

Mills’ comments raised eyebrows again when she claimed that small business contracting information coming from the SBA was “clean and accurate.”

As recently as February of 2010, the inspector general for the SBA found that the agency itself was awarding more than 30 percent of its own small business contracts to large businesses. Additionally, the report found that 97 percent of the contracts reviewed contained erroneous data.

“In the four-hour meeting not one person recommended that the federal definition of a small business, as being independently owned, be modified in any way,” said ASBL president Lloyd Chapman. “Since President Obama appointed a venture capitalist to head the SBA and the SBA Office of Advocacy, I am expecting that they’ll try to break up the SBA and change the definition of small business to include firms that are owned and controlled by some of the nation’s wealthiest venture capitalists. That could divert billions of dollars a year away from the nation’s legitimate small businesses and have a significant negative effect on job creation.”

In Mills’ closing comments she promised that comments from the meeting would be included in the Obama interagency small business taskforce recommendations, but Chapman predicts that will not happen.

A new bill introduced Tuesday in the Senate, the Small Business Jobs Act, includes some provisions that purportedly would close loopholes that often put government work into the hands of multinational corporations instead of Main Street businesses. It would establish accountability of large business prime contractors for prompt payment to small business subcontractors. However, the legislation would also provide for a periodic review of small business size standards to ensure that the size indicators were consistent with inflation and industry growth of small businesses.

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