Bill would halt 8(a) program

The leader of the House Small Business Committee plans soon to offer legislation canceling the Small Business Administration's $5.5 billion 8(a) contracting program, although it is unlikely such a measure would get through Congress this year.

Rep. Jan Meyers (R-Kan.), who is retiring from the House when her term ends in January, is a longtime critic of the program, which sets aside contracts for companies owned by socially and economically disadvantaged individuals - mostly ethnic minorities. "Congress has attempted to reconfigure this program three different times," said Craig Orfield, Meyers' press secretary. "No matter how much legislation we throw at it, it's not going to get to the heart of the problem."

Like other federal affirmative-action programs, the 8(a) program has few friends among the Republican majority in Congress. And even 8(a) supporters have found flaws with the program, after audits by General Accounting Office and the SBA inspector general concluded that it helped relatively few firms and that the SBA did not monitor participants' eligibility adequately. In the past two years, the SBA has taken steps to address these criticisms, but the program continues to draw complaints.

Nevertheless, it is unclear how much support an outright repeal of the 8(a) program would have. Orfield said Meyers would like to move her proposal, which is being drafted, out of committee by the end of July. He added that she has not yet settled on a strategy for bringing it to the House floor.

Some observers think legislators will not want to risk a floor fight on an issue that is politically divisive just before the election, although House Speaker Newt Gingrich has promised a vote on affirmative action this year. Program backers have argued that government contracting officials still discriminate against minority-owned companies and need the incentives that the 8(a) program offers to hire such firms. One Democratic House aide said there would be "a huge, very divisive, very nasty battle," if any roll-back of affirmative-action programs reached the House floor between now and the fall. But, he said, the dynamics might change if Meyers' proposal were to come to the floor as part of some other bill rather than as stand-alone legislation.

Devon Hewitt, a lawyer with Shaw, Pittman, Potts and Trowbridge, McLean, Va., who represents 8(a) companies, said minority vendors see Meyers' plan more as an effort to "frame the issue" for the upcoming election rather than a serious attempt to enact new law this year.

Meanwhile, it appears unlikely the Senate will take action on a repeal of the 8(a) program before Congress' scheduled adjournment in October. Kenneth Bricker, a spokesman for Senate Small-Business Committee chairman Sen. Christopher Bond (R-Mo.), said Bond is "not interested in repealing 8(a)."

Bond is promoting a bill that would set aside federal contracts to businesses that are located in, and hire residents from, economically depressed areas. If enacted, that new program "would have priority over 8(a), but we're not saying it would be a replacement." A new affirmative-action rule proposed by the Justice Department said the SBA would "strengthen safeguards against fraud" in the 8(a) program and tighten its eligibility criteria for the program.

Some congressional Republicans think the Supreme Court decision, Adarand v. Pena, on which this proposed rule is based, demands that the 8(a) program be eliminated anyway. The ruling said race-based programs are allowed only when discrimination can be proven. Administration officials counter that 8(a) rules do not preclude white-owned companies from participating if they can prove they are disadvantaged.


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