Bill Would Let Franchises Win Small-Business Contracts

Govex:

A rule change in the Small Business Administration reauthorization bill that would allow franchises of the nation’s largest corporations to qualify for government contracts is being criticized by industry representatives, who claim it will “divert money from legitimate small businesses.”

Lloyd Chapman, president of the American Small Business League, is waging a campaign against the provision, which he says would make “every McDonald’s considered a small business.” The change in the reauthorization bill, sponsored by House Small Business Chairman Donald Manzullo, R-Ill., would create size standards that franchises would have to meet to qualify for government small-business contracts, which amount to $119 billion annually.

Existing law prevents franchises from being considered for small business awards, which must make up 23 percent of government contracts. Chapman said the provision would encourage Fortune 1000 companies to buy up smaller businesses that meet the size standards to be created under the new rule.