Minority supplier groups split on 'Obama effect'

20 January 2009

20 January 2009 | Paul Snell

Hours away from being sworn in as the new US president, Barack Obama has already been accused of breaking a campaign promise.

The American Small Business League (ASBL) claims Obama has backtracked on a pledge to prevent big businesses winning government contracts meant for SMEs.

The President-elect has been working with politicians to create "American Recovery and Reinvestment" legislation to be passed soon after he takes up office. This package is estimated to be worth around $800 billion (£573 million) to the US economy.

It was hoped the proposed economic stimulus package would stop federal deals only being awarded to large firms, but Lloyd Chapman, president of the ASBL, said Obama had not included any such reference.

"It would take one sentence in this bill to create thousands of jobs and to redirect billions of dollars in federal contracts to legitimate small businesses around the country," he said.

On the campaign trail in February last year, Obama pledged: "It is time to end the diversion of federal small business contracts to corporate giants." This pronouncement came after more than 12 federal investigations uncovered evidence of contracts for SMEs being awarded to large businesses and their subsidiaries in the US and Europe.

Chapman told supplymanagement.com he feared SMEs across the US would be disappointed. "When I met Obama I felt he would be the saviour, but it doesn't look like that will happen. I would like him to do what he said he would do. In February he came out and said that and now he has pulled back on it.

"The number one piece of advice I could give him is to do what he said he would. If he goes backwards he will end up like George W. Bush. You lose your image fast if you don't do what you say."

But other minority supplier campaigners are more positive about Obama's election. Linda Denny, president of the Women's Business Enterprise National Council, was invited to meet with the President's transition team in December.

"They asked if we wanted to make policy suggestions that would be helpful in addressing these issues. In other words they asked about the problems and how we would like to see them resolved. A real first for my time in Washington DC," she said.

And Larry Giunipero, professor of supply chain management at Florida State University and an expert in supplier diversity, is also optimistic about the role a president from a minority background will play in raising the profile of the issue. "I think just his physical presence in the White House gives more respectability to and increases acceptance of minority businesses and supplier diversity in general."


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