Senators unhappy with SBA

Kerry’s committee decries lack of progress on meeting the needs of small businesses

Senate committee members expressed frustration with the Small Business Administration for showing little proof of progress toward improving its programs for minority-owned small businesses. Sen. John Kerry (D-Mass.), chairman of the Small Business and Entrepreneurship Committee, said no one at SBA seemed to be moving to help minority- owned small businesses, a burgeoning segment of the small-business market. 

Three recent reports from SBA’s inspector general found that the agency does not track compliance with 8(a) regulations, improperly maintains an 8(a) database, poorly supervises mentor-protégé arrangements between 8(a) firms and larger businesses, and fails to ensure that 8(a) contracts go to more than a handful of participating firms.

“Frankly, it seems like it’s almost asleep,” Kerry said about SBA.
Sen. Olympia Snowe (R-Maine), ranking member on the committee, said the effectiveness of SBA programs has been repeatedly called into question.

At a committee meeting May 22 to review whether SBA’s contracting programs were meeting small-business needs, several senators said they were not convinced SBA was being as aggressive as it should.

SBA responded by saying it would implement a new recertification rule next month to ensure that small businesses receiving government contracts are small. The agency also said it intends to hire more contracting employees to help procurement officers identify small-business contracting opportunities.

In addition, SBA said it would start a Small Business Procurement Scorecard to monitor and grade agencies’ success at meeting their small-business contracting goals, and it would require federal agencies to review discrepancies in their contracting statistics.

SBA also announced new leaders in two of its largest program offices. Art Collins is now the director of government contracting in the Office of Government Contracting and Business Development. Grady Hedgespeth is now the director of financial assistance in the Office of Capital Access.

Calvin Jenkins, SBA’s deputy associate administrator of government contracting and business development, defended the agency during the hearing by saying SBA is working on new regulations to increase oversight and improve its programs. But he declined to give committee members further details about the regulations. Jenkins said SBA expected to send the proposed regulations to the Office of Management and Budget for review well before the end of fiscal 2007.

Sen. Ben Cardin (D-Md.) said it would be helpful if Jenkins could provide more details about the regulations that SBA is proposing. Kerry said he would write a letter in which he would press the SBA administrator for more details.

Kerry and Snowe promised to introduce legislation this summer to improve federal contracting procedures for small businesses and increase oversight of federal agencies. Snowe said the bill would propose ways to promote SBA’s entrepreneurship programs, including the 8(a) program.
SBA promises $85B for small businessesSenators recently instructed Small Business Administration officials to be aggressive in helping small businesses. Calvin Jenkins, SBA’s deputy associate administrator of government contracting and business development, responded by saying the agency is working hard to give small businesses access to the federal marketplace. Jenkins also said:
  • SBA expects to direct $85 billion in prime federal contracting dollars to small businesses in fiscal 2008.
  • SBA proposed an additional $500,000 in its fiscal 2008 budget request to examine the best way to serve disadvantaged businesses through its existing programs, such as the 8(a) program that sets aside government contracts for small businesses.
  • In fiscal 2005, companies in SBA’s 8(a) program received federal contracts totaling $10.5 billion. That same year, businesses in the agency’s Historically Underutilized Business Zone program received Congress set a governmentwide goal of spending 5 percent of agencies’ contracting dollars with small, disadvantaged businesses. Those businesses received 6.9 percent, or $21.7 billion, in fiscal 2005.
— Matthew Weigelt

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