[Senate Hearing 107-686]
[From the U.S. Government Publishing Office]
S. Hrg. 107-686
ARE GOVERNMENT PURCHASING POLICIES
FAILING SMALL BUSINESS?
=======================================================================
ROUNDTABLE
BEFORE THE
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
JUNE 19, 2002
__________
Printed for the Committee on Small Business and Entrepreneurship
Available via the World Wide Web: http://www.access.gpo.gov/congress/
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
.........................................................
ONE HUNDRED SEVENTH CONGRESS
----------
JOHN F. KERRY, Massachusetts, Chairman
CARL LEVIN, Michigan CHRISTOPHER S. BOND, Missouri
TOM HARKIN, Iowa CONRAD BURNS, Montana
JOSEPH I. LIEBERMAN, Connecticut ROBERT F. BENNETT, Utah
PAUL D. WELLSTONE, Minnesota OLYMPIA J. SNOWE, Maine
MAX CLELAND, Georgia MICHAEL ENZI, Wyoming
MARY LANDRIEU, Louisiana PETER G. FITZGERALD, Illinois
JOHN EDWARDS, North Carolina MIKE CRAPO, Idaho
MARIA CANTWELL, Washington GEORGE ALLEN, Virginia
JEAN CARNAHAN, Missouri JOHN ENSIGN, Nevada
Patricia R. Forbes, Democratic Staff Director and Chief Counsel
Emilia DiSanto, Republican Staff Director
Paul H. Cooksey, Republican Chief Counsel
C O N T E N T S
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Opening Statements
Page
Kerry, The Honorable John F., Chairman, Committee on Small
Business and Entrepreneurship, and a United Sates Senator from
Massachusetts.................................................. 1
Carnahan, The Honorable Jean, a United States Senator from
Missouri....................................................... 21
Bond, The Honorable Christopher S., Ranking Member, Committee on
Small Business and Entrepreneurship, and a United States
Senator from Missouri.......................................... 09
Witness Testimony
App, Steven, deputy chief financial officer, Department of the
Treasury, Washington, D.C...................................... *
Armendariz, Fred, associate deputy administrator, Office of
Government Contracting and Business Development, U.S. Small
Business Administration, Washington, D.C....................... *
Allen, Susan, president and CEO, US Pan Asian American Chamber of
Commerce, Washington, D.C...................................... *
Clark, Major, assistant advocate for procurement, U.S. Small
Business Administration, Office of Advocacy, Washington, D.C... *
Denlinger, Stephen, president and CEO, Latin American Management
Association, Washington, D.C................................... *
Henry, Major General Charles, U.S.A. (Ret.), president and CEO,
National Veterans Business Development Corporation, Alexandria,
VA............................................................. *
Hudson, Morris, program director, Missouri Procurement Technical
Assistance Centers, Columbia, MO............................... *
Kasoff, Barbara, vice president, Women Impacting Public Policy,
Oklahoma City, OK.............................................. *
Mazza, Pamela, senior partner, Piliero, Mazza & Pargament,
Washington, D.C................................................ *
Newlan, Ron, chairman, HubZone Contractors National Council,
Alexandria, VA................................................. *
Parker, Patricia, president and CEO, Native American Management
Services, Inc., McLean, VA..................................... *
Payne, Joann, president, Women First National Legislative
Committee, Washington, D.C..................................... *
Robinson, Michael, program manager, Massachusetts Small Business
Development Centers, University of Massachusetts, Amherst, MA.. *
Rodriguez, Ramon, chief operating officer, U.S. Hispanic Chamber
of Commerce, Washington, D.C................................... *
Styles, The Honorable Angela B., administrator for Federal
procurement policy, Office of Management and Budget,
Washington, D.C................................................ *
Thomas, Ralph III, associate administrator for OSDBU, National
Aeronautics and Space Administration, Washington, D.C.......... *
Turner, John, Minority Business Enterprise Legal Defense and
Education Fund, Washington, D.C................................ *
Turpin, James, director, Government and Industry Relations,
American Subcontractors Association, Inc., Alexandria, VA...... *
Wilfong, Henry, president, National Association of Small
Disadvantaged Businesses, Silver Spring, MD.................... *
Prepared Testimony and Appendix Material Submitted
Kerry, The Honorable John F.
Opening statement............................................ 1
Prepared statement........................................... 44
Letters for the Record....................................... 87
S. 1994 analysis and text.................................... 62
S. 2466 analysis and text.................................... 68
Analysis and Discussion draft of the ``Small and
Disadvantaged Business Ombudsman Act''..................... 77
Armendariz, Fred
Prepared Testimony........................................... 96
Report of Annual Procurement Preference Goaling Achievements. 98
Black, Ed, president and CEO, Computer & Communications Industry
Association, Washington, D.C., letter and comments for the
record......................................................... 99
Bollinger, John, deputy executive director, Paralyzed Veterans of
America, Washington, D.C., comments for the record............. 104
Denlinger, Stephen
Prepared Testimony........................................... 111
Henry, Major General Charles
Prepared Testimony........................................... 112
Hudson, Morris
Prepared Testimony........................................... 116
Kasoff, Barbara
Prepared Testimony........................................... 123
Newlan, Ronald
Prepared Testimony........................................... 128
Payne, Joann
Prepared Testimony........................................... 131
Turpin, James
Prepared Testimony........................................... 141
Wilfong, Henry
Prepared Testimony........................................... 155
Wilson, Don, president, Association of Small Business Development
Centers, Birke, VA, letter..................................... 159
* Comments, if any, are located between pages 6 and 41.
ROUNDTABLE: ``ARE GOVERNMENT PURCHASING POLICIES FAILING SMALL
BUSINESS?''
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WEDNESDAY, JUNE 19, 2002
United States Senate,
Committee on Small Business and Entrepreneurship,
Washington, D.C.
The Committee met, pursuant to notice, at 9:11 a.m., in
room 428-A, Russell Senate Office Building, The Honorable John
F. Kerry, (Chairman of the Committee) presiding.
Present: Senators Kerry, Carnahan, and Bond.
OPENING STATEMENT OF THE HONORABLE JOHN F. KERRY, CHAIRMAN,
SENATE COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP, AND A
UNITED STATES SENATOR FROM MASSACHUSETTS
Chairman Kerry. This is the most orderly group I have ever
had to gavel to order.
[Laughter.]
Chairman Kerry. Thank you all. Good morning, everybody.
[Chorus of good mornings.]
Chairman Kerry. Great. We are awake. I love it.
Thank you very much. I really appreciate everybody taking
time to come in, and thank you so much for participating in
another roundtable and what we consider to be a very important
one, and I thank you for taking part in this.
We are, as you all know, here today to examine, in our
roundtable format, which we have found extraordinarily
effective, the question of whether or not Government purchasing
policies are hurting small businesses. I wish the title were
different. I wish we were here to examine how well we are doing
and how much progress we have made, but sadly there is just a
disconnect. We are talking a lot these days about the culture
of the FBI and the CIA. Regrettably, there is a poor culture in
Government surrounding procurement. There is a culture problem,
to a large degree, an awareness problem, a caring problem, and
I think, to some measure, my own personal opinion is it is an
expediency problem. I think people sort of have this sense,
well, I do not want to spend time dealing with a lot of small
businesses or I do not think they will do it as well for us.
Let us just get one big package, and get this off our plate. I
mean, there is a mentality about it.
We need to think through how we are going to deal with
this. We cannot have the Federal Government spending billions,
hundreds of billions of dollars, and not try to proactively
reach out and share the pie. I mean, you just cannot do that,
and there are so many goals contained in what we are trying to
do, as we do this, in terms of growing small businesses,
diversifying, allowing people to enter the business world who
might not otherwise have easy access, particularly women-owned
businesses.
So I think this is imperative, and I think we have to
acknowledge here today, I think, that one of the foundation
premises of this discussion is that the procurement reform, as
it was so-called of the early 1990s, simply has not adequately
protected small business. There are actions such as contract
bundling, increased use of GSA supply schedule cutbacks in the
procurement personnel, as well as limitations on certain
procurement programs in response to the Adarand decision, all
of which have had a devastating impact, and I underscore that,
a devastating impact on small business and their ability to do
business with the Federal Government. I am sorry about that.
We have some folks here particularly to sort of try to
explain some of this from the administrative point of view, but
we really need a major change in how we are thinking about
this, and we have got to figure out how we are going to do
that. Until the Federal Government, at all levels, realizes the
importance of doing business with small business, I am afraid
that these negative trends are going to continue, and we will
not have the access that we seek on a national basis for a wide
range of small business suppliers across the country, and they
will continue to lose billions of dollars in opportunities year
after year.
In your packets that have been handed out by our staff,
there are a series of charts which detail the Federal
Government achievement on small business or lack of achievement
on small business prime contracting goals, and you will see
that the news is not encouraging. Most striking is the failure,
for the second year in a row, to meet the main small business
prime contracting goal of 23 percent. It should not be that
hard.
[The chart follows:]
[GRAPHIC] [TIFF OMITTED] T1834.001
Chairman Kerry. Equally troubling, I mean, if you have the
intent to do it, if you are determined to do it, you can meet
the goal, and if you have some kind of enforcement mechanism,
and if you care about it. If you do not care about it and you
just kind of let it slide into the backwaters of your efforts,
then you are where we are. It is a lack of leadership, a lack
of effort and a lack of caring, and we have got to underscore
this.
You also see in the charts the near failure of the HUBZone
and Disabled Veteran-Owned Small Business Procurement programs,
with respect to goal attainment, as well as the lack of any
real increase in women-owned small business participation in
Government procurement.
We were bragging a few years ago about the incredible
increase of women in small business, and here we are seeing
just sort of a casual disregard for the capacity to continue
that, and I think it is shameful. I would also point out that
the Administration's delay in implementing the provisions of
the fiscal year 2000 Small Business Reauthorization Act,
creating the Women's Procurement Program, has also played a key
role in keeping women-owned small businesses out of the Federal
marketplace last year. I hope some of you will talk about that
today.
So we have a diverse group of people here with extensive
knowledge of Government Small Business Procurement programs. I
am grateful Angela Styles is going to be joining us from the
Office of Federal Procurement Policy, and we have SBA Associate
Deputy Administrator for Government Contracting, Fred
Armendariz, and from the program side we have a number of
representatives of Small Business's procurement offices at
several Federal agencies, including the Procurement Technical
Assistance Center representatives. We also have a number of
advocates and business owners who work with participants in
these procurement programs.
Now it is my hope that today's discussion will be both
thorough and constructive. We are not here to, I mean, you have
got to state the problem, and I am trying to be honest in
stating the problem, but I take no pleasure out of sort of a
berating session. I mean, it just does not get us anywhere, and
that is not what this is about. This is an effort to sort of
figure out how do we turn this corner, how do we set where we
ought to be.
It is my hope that this discussion is going to accomplish
that, and we look forward to receiving your input on some of
the legislation that is in front of the Committee at this point
in time, especially the draft of the Small and Disadvantaged
Business Ombudsman Act.
[The legislation and analyses are located in the appendix
on p. 77].
Chairman Kerry. I understand that no one piece of
legislation is going to cure all of small business's problems.
It never could. But on the other hand, it gives you the tools
to be able to advance the process, and I think that the
creation of the SDB ombudsman at the SBA will put us on a
better track, in terms of isolating and focusing on the
procurement issues and providing a mechanism for people to be
able to come to somebody without fear of retribution.
One of the reasons that we have not really had an ability
for companies to sort of fight for themselves is that the
minute they do, they are blackballed. So you raise your voice
and say, ``Hey, wait a minute, what is happening here?'' And
you think that next contract down the road is gone forever
because you were the skunk at the garden party. We all know how
it works, and we have got to provide some kind of capacity for
people to be able to advocate here.
This ombudsman I think has the ability to do that, to track
complaints, to do it on a confidential basis and to try to help
make the process work. Of critical importance in this is the
first statutory consequence of an agency failing to meet its
goals. We have to have some consequence. You cannot just slide
by and have nothing happen. So our hope is that any agency that
fails to meet their goal will be required to submit a report,
and there will be a visible sort of airing of their having
missed the goal and of what they are going to do to remedy it.
They have to specifically submit that plan to remedy and detail
why they failed to meet their business goal so that we can
address those concerns.
The ombudsman will also be responsible for tracking
compliance with Section K of the Small Business Act, which
stipulates that the Director of the Office of Small and
Disadvantaged Business Utilization at each Federal agency will
report to the head or deputy head of that agency.
Late last year, with the support of Senator Bond, the
Ranking Member, I sent a letter to 21 Federal agencies to gauge
compliance with this provision, and using a very lenient
standard of compliance, we have concluded that at least nine of
the Federal agencies we surveyed are in violation of Section K
of the Small Business Act. That is simply unacceptable. So
later this week, I will be forwarding those survey results to
the GAO so that it can perform a more detailed investigation.
[The letter can be found on page 87.]
Chairman Kerry. One final note on the legislation is the
conclusion of a provision to increase the Governmental Small
Business Prime Contracting Procurement Goal from 23 percent to
30 percent. When I first made the suggestion that the Small
Business Procurement Goal should be increased 7 percentage
points, my office received a number of calls, both in support
and in opposition, but, by and large, those in opposition
pointed to the fact that the Federal Government has never
achieved such a level of business procurement participation,
and while that is true, no one said it was impossible. So it is
simply a question of what is our goal?
Ninety-nine percent of the businesses in America are small
business. Fifty-two percent of American workers work in what is
defined as a small business. Are we to believe that when the
Federal Government is spending money, we do not have the
ability to achieve the goal of 30-percent businesses having
access to that kind of procurement? What that does is provide
enormous strength to the small business community, and I think
it is a mark of the Federal Government's confidence and belief
in the ability of these businesses to meet the standards and do
the job.
Obviously, we all know here, if they cannot do it, if there
is a lack of availability, there is all the capacity in the
procurement process to take note of that. Nobody is required to
buy something from somebody who does not have it. Nobody is
required to buy something that does not meet the standards.
Nobody is required to buy something that does not do the job or
that puts people at risk or that does anything contrary to good
procurement policy. That is not the purpose of this.
There is no diminution of standards or quality in what we
are seeking to do. It is simply saying that all things being
equal, we want the small business community to be able to
share, and we ought to be able to do that.
I think that that is probably the outline, as much as I
would like to go into it at this point in time. We will discuss
two other important pieces of legislation: S. 1994, the
Combined 8(a) and HUBZone Priority Preference Act, and S. 2466,
the Small Business Federal Contractor Safeguard Act. I think
everybody understands what those bills do and what we are
trying to do with them.
Chairman Kerry. So, without further ado, Senator Bond is 5
minutes away.
Let me just run through sort of how we are going to work
this. How many of you have taken part in one of the roundtables
before? Several of you--OK, so you are pretty experienced and
versed in this.
For those of you who have not--let me just ask you, when
you intervene, as we invite you to do, in my absence or Senator
Bond's absence, our staffs will run the show, and they have
done so with great ability in the past events, and we have a
full record which is then made part of the record of the
Committee.
But, please, just state your name clearly. This is an
official proceeding. There is a court reporter who is taking
down everybody's statements, et cetera, to be part of that
record. If you want to speak, just flip your card up on its
side, and then they will take note of you as we go along here.
Again, if we can try to contain the comments so there is a
good dialogue and not long speeches, I think that is very
helpful in terms of making this more rewarding and more of a
dialogue, rather than sort of a long series of soliloquies.
John DaSilva, of my staff, and Cordell Smith, of Senator
Bond's staff, will act as the facilitators. So why do we not
just run around very quickly. Everybody just introduce
themselves, say who you are, and then we will sort of open up.
Mr. Smith. Hi, I am Cordell Smith. I am with Senator Bond's
staff.
Mr. App. Steve App, Deputy Chief Financial Officer at
Treasury.
Mr. Armendariz. Fred Armendariz, Associate Deputy
Administrator from the U.S. Small Business Administration.
Ms. Allen. Susan Allen, president and CEO of the U.S. Pan
Asian American Chamber of Commerce, hoping to represent the one
million Asian-owned businesses in the country.
Mr. Clark. Good morning. Major Clark, Office of Advocacy,
U.S. Small Business Administration.
Mr. Denlinger. Steve Denlinger, president of LAMA, Latin
American Management Association.
General Henry. Chuck Henry, president and CEO of the
National Veterans Business Development Corporation,
representing, hopefully, 2.4 million veteran owners.
Mr. Hudson. Morris Hudson, program director, Missouri
Procurement Technical Assistance Center, also president-elect
of the Association of Government Marketing Assistance
Specialists.
Ms. Kasoff. Barbara Kasoff, co-founder and vice president
of Women Impacting Public Policy.
Ms. Mazza. I am Pam Mazza, with the law firm of Piliero,
Mazza & Pargament. I am a Government contracts attorney, and
our firm represents small businesses in the 8(a) program, the
HUBZone program, women-owned businesses, graduates, and other
small businesses.
Mr. Newlan. Ron Newlan, chairman of the HUBZone Contractors
National Council, representing all HUBZone firms nationwide.
Ms. Parker. Patricia Parker. I am president and CEO of
Native American Management Services, and I am also here
representing the National Indian Business Association and a
founding partner of Women Impacting Public Policy.
Ms. Payne. I am Joann Payne. I am president of Women First
National Legislative Committee, and I represent those women
certified in the Disadvantaged Business Enterprise program,
administered by the Department of Transportation, and I might
add the most successful program we have.
Mr. Robinson. Hi. I am Michael Robinson, program manager at
the Massachusetts Procurement Technical Assistance Center.
Mr. Rodriguez. Good morning, Senator. Ramon Rodriguez. I am
the chief operating officer of the U.S. Hispanic Chamber of
Commerce, representing approximately 1.8 million Hispanic-owned
businesses in the country.
Mr. Thomas. I am Ralph Thomas. I am assistant administrator
for Small and Disadvantaged Business Utilization at NASA, and I
am also the chairman of the Federal Small Business Directors
Interagency Council.
Mr. Turner. Good morning, Senator. My name is John Turner,
Jr. I am director of Special Projects for the Minority Business
Enterprise Legal Defense and Education Fund, an organization
founded in 1980 by former Maryland Congressman Parren Mitchell.
I am representing Anthony Robinson, our president, who had
pressing family business today.
Both Anthony Robinson and former Congressman Parren
Mitchell asked me, as a preliminary matter, to commend your
interest, concern and support for the minority business
community. We have seen firsthand the work you have done in
Massachusetts, and especially in Boston.
Mr. Turpin. Good morning, Senator. My name is James Turpin,
and I represent the American Subcontractors Association, a
trade association representing subcontractors and specialty
trade contractors in the construction industry.
Mr. Wilfong. Good morning, Senator. My name is Hank
Wilfong, president of the National Association of Small
Disadvantaged Businesses. We are about 300-strong around the
country, dealing primarily with the aerospace defense industry.
One of the things I wanted to do was to compliment you on the
Ombudsman bill. I think it is awesome. I have reviewed it and
re-reviewed it, and I think it is awesome and will help do a
lot of the things that need to be done.
Also, I want to personally thank you for your putting that
letter, the SDB set-aside letter that you wrote to SBA. I am
sorry it did not come out exactly like we would have liked to
have done, but I appreciate your having done it, and I wish we
could send it again.
Ms. Forbes. I am Patty Forbes. I am the Chairman's staff
director on this Committee.
Mr. DaSilva. I am John DaSilva. I work for Senator Kerry on
the Committee, handling procurement issues.
Chairman Kerry. Well, thank you all very, very much.
Those of you who commended me will be placed high on a
special list here.
[Laughter.]
Chairman Kerry. Thank you very much. Thanks for the
comments.
So why do we not start off. I know Senator Bond is on his
way. We are going to interrupt when he comes, and I have a 9:30
that I am supposed to be at, but I will stay until he gets
here.
Who would like to lead off? Do you have a specific----
Ms. Allen. I would.
Chairman Kerry. Before you do, let me try to--and we will
come back to you, Susan, in 1 second.
Is there something inherent--let me just sort of put this
question on the table, if I can, as a beginning point--is there
something inherent in the procurement process itself that is a
stumbling block to the ability to be able to do better or, I
mean, what would each of you say is the principal reason, if
there is one principal reason that leaps out at you, for why we
are not meeting this goal or not able to. Can we start there?
Ms. Allen. I think it is lack of transparency, the
complication of the process. Nowadays, when the small
businesses, particularly our constituents, and we hear a lot
from them, they were told, if you want to participate in the
Federal contracting process, go to our website, and they hire a
full-time staff, they hire another full-time staff, they just
do not have enough money to hire the staff to go search on the
website, and that is one major obstacle.
Small businesses, and this is the point I wanted to make
when I volunteered to start to lead this off, have been
extolled for nearly 20 years as the backbone of the American
economy. We created more jobs than all Fortune 500 companies
combined. We are the risk-takers, we are the innovators, and
yet now with the contract bundling practice, it is hurting
them. It is bundling them out of the table, and I just want to
bring a new perspective because I am sure later I will be
hearing, Senator Kerry, a lot about the other issues that have
affected why small businesses are having less and less portion
of the contracting businesses.
Remember, in the 1980s, how we used to hear Japan is the
country who could say, ``no''? One very arrogant Japanese
politician in Japan wrote a book and said, ``Japan is the
country that could say no.''
Well, Japan has been run by a handful of major
corporations, mega corporations, and that is what we call
Japan, Inc. Look at Japan today, these keiretsus, which is
analogous to our bundled corporations, have brought Japan's
economy to its knees, and we do not want to be the keiretsu of
Japan. I think the lack of transparency, the lack of
accountability, the lack of innovation in major corporations
who no longer do as much R&D as they used to, they wait for
their small businesses to take the risk, and invent the
processes and products, and then the major corporations come in
like Pac-Man, they eat them up, and with the Federal
procurement process it is so complicated, it is like a maze. If
we can simplify the process, do not just go to the small
business and tell them go surf our website, that will be a
major step.
Chairman Kerry. So three things. You need a contact person
that helps make it happen; you need transparency----
Ms. Allen. Accountability.
Chairman Kerry. And accountability.
Ms. Allen. It is not just the major contractors, but make
the subcontractors come up with the report, and some have even
suggested--OMB held a public hearing last Friday and suggested
that their future contracts be tied to their performance. Of
course, as you said, we should award contracts according to
merit and not for the sake of goals.
Chairman Kerry. Good comments.
Before we go further, and, General, we will come back to
you, I said we would interrupt when Senator Bond got here. He
is now here, and I would like to turn the floor over to Senator
Bond for his opening comments.
OPENING STATEMENT OF THE HONORABLE CHRISTOPHER S. BOND, A
UNITED STATES SENATOR FROM MISSOURI
Senator Bond. Mr. Chairman, thank you. I apologize. This is
one of those days. This is the ``Perfect Storm,'' when I had a
couple of items this morning and a hearing in the Health,
Education, Labor and Pensions Committee going on all at once,
but I commend you for taking the lead in this, Mr. Chairman,
and I welcome our procurement roundtable. Because, as I think
everybody knows now, this Committee has had a long-standing
interest in ensuring that small business has the ``maximum
practicable opportunity to participate,'' in the words of the
Small Business Act, in government contracting, and certainly
Susan has just given a very good reason why this small business
participation is so important.
First, I want to recognize my Missouri constituent, Morris
Hudson, who has joined us today. He heads the Procurement
Technical Assistance Center at the University of Missouri and
is the president-elect of the national professional association
for PTAC staff, the Association of Government Marketing
Assistance Specialists.
I want to say a special word of greeting, also, to Angela
Styles, the Administrator of the Office of Federal Procurement
Policy for President Bush. In March, the President personally
stated his commitment to tackle the problem contract bundling,
and Angela has been the point person in trying to convert that
commitment into specific policy steps. Unfortunately, around
here, when you are the point person, you are also the point
target.
[Laughter.]
Senator Bond. There have been some anonymous sources making
anonymous comments about her actions in the area, and one
anonymous critic was dismayed that Angela bought into the
``myth'' that bundling has hurt small business, suggesting
Angela was pursuing this issue out of personal motives, rather
than as an Administration initiative.
Well, I have heard the President, in his own words, say
from his own heart, that this is a problem. So, Angela, you
must be doing something right. I have the analogy we used to
use back home. If you throw a rock into a pack of dogs, you
know the one that has been hit because that is the one that
barks, and if they howl, you know that you must be doing
something right.
But we are looking forward to a good discussion today about
bundling. We need to know the state of play on the
Administration's initiative, as well as the reaction to the
bill that Chairman Kerry and I have introduced. We came close
in last year's defense authorization on agreement to tighten
the current law, but our bill is going to build on that
language.
I also want to welcome Ron Newlan of the HUBZone
Contractors National Council. Ron has some concerns about the
bill that Chairman Kerry and I introduced to provide a super-
preference for firms that are both HUBZone and 8(a) program
participants. I share the view that a 20-percent price
evaluation preference, 10 percent for each program added
together, is probably too high.
Ron also has some concerns about some of the bill language
from set-asides. For example, the bill says when bills are
being sought just from HUBZone firms, a HUBZone set-aside, and
a HUBZone firm that is also 8(a) is bidding, that firm should
get the preference when it submits a bid comparable to one from
a non-8(a) HUBZone firm, but ``comparable'' is the rub.
So we need to hear these kinds of criticisms and
suggestions. That is what we are here to do in this roundtable,
to learn how we can make legislation better, how we can deal
with the problems we find.
We have draft bill language in front of us. The Chairman's
idea is to create a Small and Disadvantaged Business Ombudsman
at SBA. I want to hear your views on this. I want to know your
thoughts to see which way I go. But a strong piece of the bill
is the requirement that agencies negotiate plans to achieve the
small business participation goals. Instead of just failing to
meet the goals every year, let us find some way that we can get
them done. Whether that requires a new position in SBA or
whether the task can be handled by the Associate Deputy
Administrator, that is one of the questions.
The bill would also increase the small business goal from
23 percent to 30 percent. Thirty percent sounds better than 23
percent, but when you are not getting 23 percent done, what do
you need to do? My view is that let us get to the first goal
first before we worry about trying to raise the goal when we
are not getting the performance we need.
So these are some of the things that I hope that you will
get out on the table, and I apologize that I am not going to be
able to be with you today because we have got--we are going to
be talking about ergonomics in the HELP Committee, and some of
you in small business have spoken to us about ergonomics in the
past. So I am going to go see if we can make sure that that
comes out well.
But, again, Mr. Chairman, thanks for your leadership.
Thanks to all of you for joining us today.
Chairman Kerry. Thank you, Senator Bond. Let me just
acknowledge that I appreciate particularly Michael Robinson
coming down from Massachusetts from the Procurement Technical
Assistance Center there. I understand the skepticism, and I
mentioned it, Senator, before you got here, about sort of
moving the goal when we acknowledge we are not where we are,
but it is a little bit like, if you change your culture and you
actually put in place the kinds of tools necessary to get
somewhere, sort of like changing a team, you know, you get a
new coach who comes in and says, ``I do not care about your
less-than-winning-ways last year.'' We are going to set a new
goal, and this is how we are going to achieve it, and that is
how you create a Super Bowl team. That is how you turn people
around is by raising the standards and moving further.
Senator Bond. OK. OK.
[Laughter.]
Senator Bond. All right, the Patriots beat the Rams, now,
damn it, we have been getting along good.
[Laughter.]
Senator Bond. I mean, we have got this Democrat-Republican
thing, we can overcome that. But if you want to rub the
Patriots in my face, just because you got lucky----
Chairman Kerry. I did not know----
Senator Bond. I mean, Brady did a hell of a job, but, damn,
do not go rubbing it in, OK?
Chairman Kerry. Sensitive, sensitive, sensitive.
[Laughter.]
Senator Bond. You got a raw nerve. I will tell you what.
Chairman Kerry. I never mentioned the name. I was thinking
about Vince Lombardi, not Bill Belichek.
Senator Bond. We do not speak of rope to the family of a
man who has just been hanged.
[Laughter.]
Senator Bond. And you do not go giving me Super Bowl
analogies, but outside of that we are good friends.
Chairman Kerry. Gees, you do take it personally.
Senator Bond. Yeah.
Chairman Kerry. Senator, let us just try to do better.
General you were next, and thanks for being patient.
General Henry. Thank you.
Chairman Kerry. We look forward to your ongoing comments.
General Henry. Mr. Chairman, Senator Bond.
First, Mr. Chairman, let me thank you and Senator Cleland
for your help with our corporation on the no-year funding for
2002. We certainly appreciate your effort in making that happen
so that we could deal as business people, rather than being a
little bureaucratic on it.
I think that the answer that I would like to bring to you,
in response to the question concerning whether or not the
legislation and whether or not the programs that we have, what
I see, from a standpoint of having been the Army's competition
advocate general, and having been the senior procurement
executive at the Defense Logistics Agency, is that the goals
that we have can be met, but the problem is in the execution. I
would suggest that this body look at putting some teeth into
why you are not meeting the goals. I look at this both from the
Federal Executive Branch and from the prime contractors.
We all know that bundling is not working for the small
business community, and we can sit and do a lot of jawboning on
that particular issue. I think that what you need is that you
hold the Executive Branch responsible. I would even advocate so
far, if they did not meet their objectives on it, that you
withdraw contracting authority. Angela, you may not like that.
But nothing will get a senior executive officer's attention
faster than realizing that he can no longer award the contract.
So you have got a lot of contracting agencies around the
Federal Government, and there is not a problem with finding
somebody that can award a contract. So you have a goal, you
have a target. If they are not meeting the goals, the answer is
not ``why not?'' It is ``we withdraw your authority until we
find out that you can do it.''
Having said that, that leads me to the Ombudsman issue.
Back in 1984, this body enacted the Competition in Contracting
Act, and I was fortunate enough to become the Army's first
competition advocate. I was an ombudsman for increasing
procurement in Army procurement. I worked for two great
gentlemen--the Secretary of the Army, John Marsh, and General
Wickham, who was the chief of staff, and both of them granted
to me the authority to stop a procurement if, in my opinion, it
did not meet the Competitive Acquisition Exec.
What we did is, in 3 years we went from 34 to 64 percent,
and I found out that while this was a new position, four stars
in the Army took notice when they realized that I had the ear
of the Secretary of the Army and the chief of staff of the
Army.
So I would say to you that the Ombudsman should never be
below the senior level, reporting directly to the senior person
in the organization, and you give the ombudsman the teeth to
stop a procurement if, in his opinion, it does not meet the
goals and objectives going forward. I believe that if you do
that, you will see some very, very substantial advantages.
I have spoken too long.
Mr. DaSilva [presiding]. Thank you.
Hank, you were up next.
Mr. Wilfong. To me, John, it is simple, and to the Senator.
Monitoring, compliance and enforcement. I hold the Ombudsman
Act very highly, and a number of that 95-507, 99-661, 101-560,
101-510, all of them are great acts and great laws, but if they
are not monitored and enforced, what good is it to pass another
law?
So my thing here today, the one note that I came here today
is to monitor compliance and enforcement.
Mr. DaSilva. Ron, you had yours up next?
Mr. Newlan. Thank you, John. It is too bad the Chairman
left, because I come from a background similar to his, active
duty Navy and then came to the private sector. The general, and
others around the table, I am sure have a--I know the general
does--and others have a military background.
Basic training in the military is you do not give
responsibility for a function unless you also give them the
authority to carry out that function. We see too few people in
the Federal procurement business that have both the
responsibility and the authority to change a procurement, make
it a small business set-aside and to assist towards the 23-
percent minimum floor, which I prefer to call it, other than
the goal.
So I would look around and see who in the departments and
agencies has the authority and has the responsibility. I think
the Secretary, Secretary of Transportation, Secretary of HUD,
Secretary of Defense, clearly, has the authority and the
responsibility, but as you go down the organization, I do not
see many people, and none of them are held accountable.
The OSDBUs might have a responsibility, but they do not
have the authority, in most agencies, to change something. They
recommend; they do not dictate. I think we have got to focus on
giving somebody, in all of these departments, who is close
enough to the action both the total authority and total
responsibility to hit the 23- or 30-percent minimum.
Thank you.
Mr. DaSilva. Steve.
Mr. Denlinger. Thanks, John.
The Senator asked the question: Why is it so difficult to
participate in the Federal market? Just as one example, I have
a meeting at 1:30 p.m. with a Member of ours, a high-end
security services firm in the computer side of security
services, who is working on the upgraded security at the
Pentagon after the September 11th situation. We have got a
situation where the impact of bundling is being felt beyond the
initial bundled contract. There is a very, very large
contractor there that is performing work all across the entity,
and our company is performing an 8(a) contract, and what is
happening is the pieces of work that our company is doing are
now being carved out and being lateralled over to this giant,
huge contractor. There are some provisions, as you know, that
provide safeguards for 8(a). You cannot take away work from an
8(a) company if that work was formerly 8(a).
I think those same kinds of safeguards need to be put in
place with respect to whether it is HUBZone or veteran- or
woman-owned and so forth. So it is not only the bundling of the
contract to begin with, but it is the tendency of the agencies
to funnel work into that bundled contract work that is being
performed by other small businesses.
I want to commend you for the other pieces of legislation
that you have put together. They are really terrific. The
Ombudsman Act, I have got a couple of pieces that I want to
suggest to improve that.
The combined HUBZone parity, 8(a) parity situation, brings
to my mind something that I think we are all going to have to
face, and that is that it is getting to the point where we need
to reconcile how all of these programs work together or do not
work together. We have some programs like 8(a) that has a
procurement mechanism and no goal.
We have the women's procurement program that has a goal and
no procurement mechanism and SBA is finding it difficult to
implement that procurement mechanism legislation which was put
in place a couple of years ago.
HUBZone has a goal and a procurement mechanism. Veterans
has a goal, but no procurement mechanism. Some of these
programs have price preferences, some of them do not. I sat
down a couple of months ago, and I read guidance in one of the
agencies to contracting officers as to how to deal with these
preferences. I have been involved in this work for 30 years,
and I have never been so confused in my life. We are going to
have to reconcile all of these programs so they are all treated
equally, so they are uniform, so contracting officers can
understand exactly how to proceed and give them the
responsibility to meet the goal.
I commend you for the 30-percent goal. That is a big,
important step forward. If you give agencies a minimum goal,
they will achieve it, and they will stay right there. So it is
time to move forward to a more aggressive role.
Thank you.
Mr. DaSilva. Thank you. I will pass it on to the Chairman.
If I could just make a couple more housekeeping remarks.
When you are recognized to speak, if you could take the
microphone nearest to you and put it by you so that we are sure
that everybody can hear. The acoustics in here are fairly good,
but this will help a bit. If I fail to state your full name,
which is a little habit of mine, if you could state that so the
court reporter can take that down.
James Turpin.
Mr. Turpin. Yes, just a quick point. Getting the contract
on the front end is only part of the problem. I think we need
to look at the other end of the process and getting paid in a
timely way and the payment protections under the Prompt Payment
Act, you can get paid on Federal work, but if it is a Federal
grant, then it falls under the State payment protections, and
in a State like Massachusetts, you could very easily be working
in six or eight different States in a very small radius, each
of whom have a different payment law, and you do not know when
or how you are going to get paid.
Also, back in 1988, we experimented with direct
disbursement, and that was very quickly abandoned. But I think
with technology being what it is today, we should be able to do
direct disbursement because if you do not get the cash flow on
your contract, then you may not be in business to finish the
contract. So getting the contract is only the first step. You
need to get paid in a timely way so you can be there to do the
next contract.
Mr. Smith. John, may I jump in with a question?
Mr. DaSilva. Certainly.
Mr. Smith. James, what do you observe in terms of prompt
payment and a difference between prime contractors and
subcontractors in dealing with the Federal Government? Our
impression is you at least have a Federal law that provides
some protection for the primes, but what sort of flow-down is
there to make sure that subcontractors get paid promptly?
Mr. Turpin. Well, there are certain protections in the
Prompt Payment Act for construction, but it depends a lot on
the general contractor and how they pass that on through to
their subs. That is one of the reasons we are advocating for
direct disbursement, where it will not have to go through the
general to get to the sub. If you have completed your work in a
timely way, the general signs off on it, then you would get
your payment, instead of it going through the general and you
having to get it through the general. You can shorten the
process if it just goes directly to the person who has
completed their work and is entitled to be paid.
Mr. Smith. Does the law currently provide for a time frame
that says once the sub has submitted the invoice, the clock is
ticking, and you have this many days, that is comparable to
what the Federal relationship with the primes is? Is there any
kind of time line for subs or is it when they get around to it?
Mr. Turpin. There is, but it is not always enforced.
Mr. Smith. Not as robust?
Mr. Turpin. Or consistent. It is not consistent.
Mr. Smith. Thank you.
Mr. DaSilva. John Turner next.
Mr. Turner. Yes. We do support the Ombudsman bill, and we
are encouraged by the comments that have been made around the
table concerning the importance of monitoring, and compliance,
enforcement, and the ability to stop procurement. We also are
encouraged by the acknowledgement that bundling can have an
adverse effect on procurement.
We strongly urge, on behalf of the Minority Business
Enterprise Legal Defense and Education Fund, that we not go all
the way down the road in analyzing the Ombudsman Act without
taking into account the report of the Commercial Activities
Panel, which has endorsed the use of best value.
Our organization has taken the approach that the best-value
approach to contracting is a Trojan horse designed to kill that
small and minority business person.
We had a case in point, when we were retained by the
Department of Energy to do a ``lessons learned'' piece of the
Superconducting Super Collider Project from many years ago. One
of the things we learned was--and I was project director of
that, so I am speaking firsthand--the people there said we have
got a project to build. We do not have time to pay attention to
goals for minority, women and small businesses.
Our fear is that best value will become, in 2002, what
bundling was about to become before the turn of the century.
Mr. DaSilva. Thank you. I want to point out that this is an
issue that has been raised to the Chairman. We were actually
trying to help a firm that should have been awarded a contract,
but when it became apparent that it was going to go to that
small business, they changed the best value makeup so that they
wound up losing that contract.
Mr. Turner. If I may, one of the fears that we have is that
the rampant use of best value will take away the effective
ability of the agency to monitor and to stop a procurement
because there will be no staff on the Government agency that
would be in regular contact with the people, with the big
companies that are designing, and building, and carrying out
that procurement. So--well, point made.
Mr. DaSilva. Ralph Thomas, next.
Mr. Thomas. Thank you.
One thing I want to say is that, and I think I am the only
Government agency here, other than, of course, Angela----
Mr. DaSilva. SBA is here.
Mr. Thomas. Oh, I am sorry, Fred, not on purpose, believe
me, and, Steve, just ignore it.
[Laughter.]
Mr. DaSilva. We have two PTACs, as well.
[Laughter.]
Mr. Thomas. I want to say that if a Government agency wants
to meet a goal, I mean, furiously wants to meet a goal, it is
definitely possible. Congress required NASA in a bill in 1990
to award at least 8 percent of its prime and subcontract
dollars to small disadvantaged businesses, and we embarked on a
plan, on an aggressive plan utilizing the law very
aggressively, and we went up, and up, and up and now we are at
19.3 percent.
We have gotten awards from virtually every trade
association in here, including the National Association of
Small Disadvantaged Businesses, the U.S. Pan Asian American
Chamber of Commerce. We recently got the award for women, and
others, if I missed you, I am sorry. So, if you can please that
many entities at the same time, you must be doing something
right.
Having said that, I think that we understate the progress
of small businesses and procurement dollars when we do not
count at all for subcontracting. Subcontracts are very
important to NASA. Recently, when an astronaut was putting the
robotic arm on the space station, what kept that astronaut
alive were batteries manufactured by a small minority business.
The device that they used to communicate with the inside of the
shuttle and Houston is a device manufactured by a woman-owned
business on a subcontract, both of those things on
subcontracts. So I think, with NASA, with the emphasis that we
have on subcontracting and not to count it all, recognize it
all, I think understates progress.
Having said that, in terms of prime contracts and 30
percent, I think some recognition has to be done about the
budget makeup of all of the agencies. NASA does not have 30
percent of prime contracts left over, after large contracts
are--the space station, the space shuttle, the Jet Propulsion
Laboratory. So I think we have to talk in terms of what the
budget makeup of the agencies are. I mean, all agencies are not
the same.
We have consistently met all of the goals we negotiate with
the SBA, but in terms of across-the-board goals, certainly,
what applies to the Department of Interior does not apply to
NASA.
Mr. DaSilva. I am going to turn it over to Cordell in a
second. I am just anxious to speak to this.
Just a couple of points. One, the Ombudsman Act does not
require every agency to meet a 30-percent goal. It requires a
governmentwide goal, and I know Cordell really wants to speak
on the topic of the prime and subcontracting, so I am going to
let him do so.
Mr. Thomas. I know that is not what you require, but
sometimes that is the way it is implemented across the board. I
think that that does not set all agencies on a level playing
field.
Mr. Smith. Ralph, you mentioned you had an 8-percent goal
that was set in, what, 1992?
Mr. Thomas. No, it was set in 1990.
Mr. Smith. That is a unique goal for the SDB program for
NASA?
Mr. Thomas. Right.
Mr. Smith. That does combine prime and sub; is that right?
Mr. Thomas. Right, yes, it does.
Mr. Smith. But the governmentwide 23-percent, possibly 30-
percent, goal currently is prime contract dollars.
Mr. Thomas. Right. What I am saying is other people never
meet a 23- or 30-percent goal as an Agency because of the way
our structure is.
Mr. Smith. It is just also the nature of what you buy, and
I know the Department of Energy is similarly situated.
Mr. Thomas. Right.
Mr. Smith. I know the OSDBU Council has been trying to kick
this around back and forth trying to figure out a way to handle
this. Have you come up with something other than, I hope,
adding the numbers together? Because I think my main concern
about the approach of taking prime dollars and subcontract
dollars and adding them together and saying, X plus Y equals
the number of dollars we gave to small business, is, for
example, we had the discussion with Mr. Turpin a moment ago
about there being a substantive difference between subs and
prime contracts and their value to small business. I am afraid
you add apples and oranges together when you do that.
Mr. Thomas. Well, they may or may not be. A prime contract
may or may not be more important than a sub. On the space
station, where you have--what is more important? A million-
dollar subcontract or having the $2.2 billion prime contract?
Certainly, in that situation, the subcontract----
Mr. Smith. Have you all--I am sorry--have you all come to
any kind of discussion or any kind of conclusion on what you
are recommending on this front?
Mr. Thomas. Not yet, but prime contracts should count as
prime contracts and subcontracts as subcontracts. Yes,
sometimes we add them, but always distinguishing it. We may say
we are doing 32-percent total dollars with a certain amount
prime and a certain amount sub. I think that being done, I do
not see any problem with that.
Mr. Smith. Another way to tackle this that I find quite
interesting is Pete Aldridge's memo, the Under Secretary of the
DoD, he did the attempt to create a report card for the
executive branch--he had a grade for prime, and a grade for
sub, and a grade for this goal and that goal, and then came up
with an overall assessment.
Mr. Thomas. Right.
Mr. Smith. I think that that is a good approach to come up
with an overall grade, but without taking the prime and sub and
adding them together, which I think is potentially misleading.
Have you all any thoughts on that approach?
Mr. Thomas. Well, I have seen Mr. Aldridge's formula and
like it very much. The OSDBU Council has been working on
setting standards, coming to a consensus on setting standards
for grading Federal small business programs. Whatever the
formula is, it has to recognize what my problem is.
Today, subcontracting is not recognized whatsoever at all.
The scorecard does not recognize it at all, when putting goals,
overall goals into place, whether it be 23 percent or 30
percent. There is no recognition of subcontracting at all, when
it is very important, extremely important to the future of
small businesses.
Mr. Smith. When you report your data to FPDS, just to--I
think you are saying this, but just to be clear--when you
report your data to FPDS, the Federal Procurement Data System,
and you say we had X prime contract dollars, it is prime
contract dollars.
Mr. Thomas. Right, absolutely.
Mr. Smith. There is no mixing of the two.
Mr. Thomas. Absolutely. Whenever we talk about it, we
distinguish what is what, but it does not matter because we
have gone way up in prime contract dollars too. In fact, we
have the fastest rate of increase of any other agency in the
last 7 years. Just because we are strong in subcontracting, we
do not stop prime contracting. That is extremely important, but
we can only do what we have left. We cannot create something
that is not there.
Mr. Smith. Thank you.
Mr. DaSilva. Ms. Styles, I believe you are next.
Administrator Styles. Thank you very much. I just want to
let you know how much I appreciate the opportunity to be here
today and how much this Administration appreciates the support
of this Committee as we move forward assessing some very
difficult problems that we have.
I categorize them into four categories as we look at the
task that we have ahead of us, where we are looking at
addressing the issues of access of small businesses, we are
looking at contract bundling, we are looking at the
transparency of our contracting system, and we are looking at
accountability. If there is one thing I can focus on, it is:
governmentwide we are really looking at accountability.
I consider my job to be one to ensure that our procurement
system allows small businesses to flourish, and I can tell you
that has not been the commitment of my office over the past 8
to 10 years. We are really taking a very hard look, I think, at
what has been created through the past 8 years of acquisition
reform and the situation of small businesses as a result.
I think it is really antithetical and something of an
anathema to the President to have small businesses come in and
say we have to hire a lobbyist in Washington in order to get a
contract, we have to go and knock on the door of every agency.
We have to be a prequalified contractor and then go knock on
doors. We have created, I think, a system that you have to get
the inside track on procurements at different departments and
agencies. We have created, I think, a system that is favoring
the access of a few, to the detriment of many, including small
businesses.
In March, the President made a real commitment to move
forward on many small business issues, but in particular he
focused on several of the government contracting issues related
to small businesses and has asked my office to make
recommendations to him. I think our working groups have been
working very hard moving forward.
I think we will have recommendations ready this fall on two
of the key issues: one is contract bundling and the other one
is the state of our system in terms of access, the openness of
the system and the transparency of the system. But the group we
have put together is a good group. I think they are really
people at the departments and agencies that are committed to
small business, and I think the recommendations that come out
will be good recommendations.
Thank you.
Mr. DaSilva. If I could just ask one quick follow-up
question on the President's proposal. One of the things, though
we are thrilled to see the level of attention this is
receiving, one of the things that has come to the Committee's
attention, the concerns that have been raised to us, are the
consequences of going to complete, full and open competition
and what that means for small business--set-asides, for
reserving contracts for 8(a), for HUBZones and for the
individual small business programs.
Can you sort of elaborate a little on what is envisioned by
full and open competition?
Administrator Styles. It is not a move back to CICA, in
terms of full and open competition for everything in any
respect. The problem I think we are seeing is that you can have
a thousand people on a schedule, and a department or agency
only has to go to three. So small businesses simply never find
out about the opportunities, and we have to make sure that
those task and delivery orders are transparent, that they are
open, that people know what the needs of the departments and
agencies are.
That does not mean that we are getting rid of the many good
things that were created during acquisition reform and the many
different contracting vehicles. It is not to remove a focus
from other statutory requirements, it is just a recognition
that there is a real problem here with the procurement system,
in terms of us telling people what our needs are, and us
continuing to contract with large contractors, and departments
and agencies continually going back to the same contractors and
never telling the public what their needs are.
Mr. DaSilva. Joann Payne.
Ms. Payne. Thank you.
I wanted to basically discuss, first of all, the proposed
bill by the Senator, where I think it would necessarily
advocate for small, disadvantaged businesses. Women are left
out of there, so it would be nice to sort of take that
Executive Order and legislate that, as well, as part of this--
Mr. DaSilva. Just a clarification, it is small and
disadvantaged business ombudsman, and the legislation itself
within the text does cite gender issues.
Ms. Payne. Yes, but women are not considered disadvantaged
in these programs, so the bottom line is I think you really
have to take the Executive Order that was signed by the
President and sort of legislate that and make that a law and
include them in here.
You talk about gender issues. What does that mean, in all
honesty?
There are a couple of other issues I wanted to address, and
since I do women's, I would like to do that, if I may. I
believe it is important that SBA develops MOUs with all of the
Federal agencies. SBA has one with the Department of
Transportation and has streamlined the certification process,
even though women have to jump an additional hoop to do so, and
that is another completely different issue.
I think it is also important to strengthen, and I think
Ralph Thomas is right on the nose here, to strengthen the
Federal subcontracting program by eliminating sub--I,
personally, would like to see the elimination of most, as we
know it today, subcontracting plans. I think it is so much
easier to just have direct goals on our contracts and for
subcontracts and just get it done. I mean, that is just the
bottom line. If you want to make it work, that is the way you
make it work.
Develop a program, which I just said, sort of a women's
contract program, which I think is on hold right now because
they cannot figure out how to make it work.
Strengthen all of the certification programs and streamline
or consolidate the certification process amongst all of the
agencies; adjust the accounting and tracking procedures for
contracting goal achievements. Minority women get counted four
times, sometimes five, as far as the goals are concerned,
counting the goals. Minority men can get counted three or four
times. Women can be counted twice. So, when you see a goal of
23 percent or being reached at 22, whatever it is, fiscal year
2001, the chances are it is probably closer to 18 and 20 than
it is the 22 or 23, just simply the way they count and track
the goal.
Legislate enforcement procedures for prime and
subcontracting goals. I think that is extremely important. The
other thing I want to stress, something that John said, is best
value. It seems to me, from my experience, best value
procurement can create a good ol' boy system within the Federal
contracting community. I mean, it just makes sense to me that
if you are going to go with best value and you are not going to
take into consideration the contributions that women, and
minorities, and small businesses make to this country, to this
Government, what is going to happen is that it is going to be a
lot easier for contracting officers to just sort of give it to
the Microsofts of the world. I mean, for goodness sake, that
makes common sense.
The other thing that John said, also, that I thought was
important is that our talking about taking the goal of 8
percent for NASA, combining the subcontracts and the prime
contracts, my women that I represent in the Disadvantaged
Business Enterprise Program, basically, they do some prime
work, but basically they are subcontracting. They do about $2
billion a year or something like that. Together, women and
minorities do about $3 billion a year. I do not think it
matters if it is flowing from a prime contract--or if money
flows from a prime contract or a subcontract. It is money, and
it is going into the hands of small businesses. I think that is
extremely important.
I mean, I do not get the argument. I am sorry, Mr. Smith, I
do not get the argument of separating--counting them, but
adding them together and reaching that goal. You could reach a
goal of 30 percent by combining both.
I just wanted to say that, as far as the proposed
legislation, it just seems to me that with powers to report,
review, analyze and coordinate, without the agencies' authority
to enforce, will simply establish another person or entity that
celebrates the problem, but we do not solve it. I think that is
really, really important.
Mr. Smith. I guess the question that I would have for you,
and perhaps you have heard from your Members on this or perhaps
they have not run into this problem, but we have heard it from
other associations, that once a firm gets relegated to a
subcontract level, they tend not to come back, basically,
because their chances for exposure to the contracting officer
are reduced, their interaction directly with the agency, their
opportunity to hear about upcoming opportunities. So once we
say there is no distinction between the two, then basically
they get permanently at that status for subcontracting
opportunities and not to get their foot in the door to hear
about the prime contracting opportunities.
The reason that I think that that is important is for
establishing past performance history--dealing directly with
the Government agencies, managing the contract themselves and
getting that experience--and I think there is a value-added
there. That is what we have heard. Perhaps, you are hearing
differently from some of your members or have you heard that
concern?
Ms. Payne. I think we are talking about, at the end of the
day--
Mr. Smith. The money, yeah.
Ms. Payne. The money. Ralph Thomas, at his desk, putting
the two together. I think that is totally different than out in
the field and contracting as prime or subcontract.
However, I will tell you, in the construction industry, and
the subcontracting association can speak to this, a lot of
subcontractors do prime work, and a lot of prime subcontractors
do subcontracting work. I mean, a lot of that gets done. So I
really----
Mr. Smith. I certainly can see your point, and I agree that
a dollar is a dollar, however it comes to you. The question is
whether it gets to you and whether you get the contract
opportunity in the first place. I think that is the concern
that we have.
Ms. Payne. I think that is where you start with getting rid
of these subcontracting plans, No. 1, and not moving towards
the best value procurement kind of thing. Of course, the
bundling. Thank you so much for addressing that issue. That is
extremely important because it devastated small businesses, and
I appreciate that.
But the bottom line is that, without enforcement and
without direct subcontracting procurement, with goals on actual
contracts that have got to be met, if not, the prime contractor
just does not get the job. That is absolutely the way to go if
you really want to make this work.
Mr. DaSilva. Thank you. I am going to turn it over to
Senator Carnahan so that she can make some remarks.
OPENING STATEMENT OF THE HONORABLE JEAN CARNAHAN, A UNITED
STATES SENATOR FROM MISSOURI
Senator Carnahan [presiding]. Thank you very much, John. I
want to thank all of you for being here this morning and
participating in this roundtable. I particularly want to thank
Morris Hudson for being here. I have worked with him. He has
worked with our office, and we have been helpful in getting
some funds for Procurement Technical Assistance Centers. So it
is good to have had that opportunity.
I hope that today's discussion will lead to some
substantial improvements in our understanding of the
shortcomings of Government procurement policies. Certainly,
having all of you here is a very impressive collection of
experts, and we look forward to learning from your comments.
I believe this Committee will benefit from hearing about
all of your ideas on how we can expand procurement
opportunities for small businesses, especially among minority-
and women-owned businesses. I have met with many small business
owners throughout Missouri, and I have always been impressed
with their dedication to their dreams. They are people who
actually put some fire to their dreams and work for the things
that are so meaningful in their lives and in their communities.
Small businesses have become really the engines of our
economy, and the Federal Government should be able to play an
important role in promoting their growth and their success.
Last year, the Federal Government spent more than $600 million
purchasing products and services from small businesses in my
home State of Missouri. This is an impressive figure, and it is
certainly a testimony to the many hardworking business owners
in our State. But it is less than 10 percent of the total
Federal procurement dollars spent in Missouri, and that,
indeed, is disappointing.
I look forward to working with my colleagues to improve
Federal purchasing policies to provide even greater
opportunities to small businesses. One of the first steps we
can take in this process is to address the problem of the so-
called bundled contracts. I am very pleased to be an original
co-sponsor of the Small Business Federal Contractor Safeguard
Act. This legislation will ensure that Federal agencies do not
consolidate different procurement requirements into such large
contracts that small businesses can no longer effectively
compete.
Congress tried, at one point, to remedy this problem, but,
unfortunately, agencies have abused this and found loopholes in
the current law. So I hope that we will act this year to close
some of those loopholes and increase the opportunities that are
available to small businesses.
I am also looking forward to hosting a procurement
conference later this summer in Missouri. As Morris knows, the
Science and Technology Conference will be held at Fort Leonard
Wood, and it will provide small businesses an opportunity to
meet with some of the top officials from the Defense
Department. They will be able to demonstrate their products and
learn about the procurement needs of the military.
I hope that business owners and procurement officials will
take the opportunity to establish relationships that can lead,
ultimately, to greater contracting opportunities for small
businesses.
So I look forward to hearing from you. Certainly, I will be
reading your testimony and reviewing the transcripts that you
leave today.
Again, I thank you for being here and for the opportunity
that you give us to hear and to learn from you.
Thank you.
I would like, at this time, to turn the microphone over to
Pat Parker and to hear from her.
Pat.
Ms. Parker. Thank you. Good morning, Senator, John,
Cordell. My name is Patricia Parker.
First of all, I want to take a little different perspective
and view on contract bundling, and I want to come from a point
where--because I used to be a Federal employee, and I have
worked in program, and I have worked in contracting. Now I am a
Native American woman-owned small business contractor here in
the area and also with the National Indian Business Association
and Women Impacting Public Policy.
I understand that sometimes enforcement and accountability,
and I agree with that, and I think there is not anyone at the
table that would not agree that we need to do that when it
comes to procurement, especially with contract bundling, but
sometimes when people are forced to do something, they are a
little less enthusiastic about carrying out the process. I find
that when people are more willing and want to do something, the
process speeds up, and more is accomplished, and a lot more
gets done.
So I just throw out this concept to look at it from a
little different perspective, and one might say from more of a
nurturing side, but I think that is a good thing about who we
are as women, that we are able to look at something from a
little different perspective sometimes.
We know the bottom line, when it comes to contract bundling
and the large businesses out there, is pricing and their
ability to have a competitive edge, and as small businesses we
all know that is what we are out there marketing for,
competitive edge.
If we could, perhaps somehow, when a large prime contractor
meets their subcontracting plan and gets out there and let them
demonstrate it, so we do not put that on the responsibility
always of the Federal program person out there, a contract
person there because we all know that part of the reason for
the contract bundling is the lack of contracting staff. They
are already overworked, and when you start asking them to do
more paperwork and more requirements, sometimes that can slow
the process down, rather than actually expedite it, which is
what we are all trying to do, make it easier and faster to do
things.
So, if we are looking at that, and we are asking the prime
contractor to take a responsibility that the Federal Government
cannot do right now because of the lack of staff, which is to
encourage small business, make sure that small business is
there at the table to be able to play and be part of these
large procurements, then perhaps incentives to the prime
contractors can help facilitate that, and it is not necessarily
more money.
Maybe if they come in and meet their subcontracting goals,
and they demonstrate to the contracting folks and to the
Federal agency that they are meeting that, they get some kind
of price evaluation to give them a competitive edge when they
are out there also trying to compete for contracts. That brings
everybody wanting to make this happen, rather than, in some
cases, begrudgingly, if it is going to mean more paperwork or I
am going to have to, as large primes will say, I have got a
bottom line, I have got stakeholders, we have to go with the
best price and the best quality.
So maybe some incentives, from that standpoint, if we could
look at that, might be able to help facilitate a faster
progress than always just coming in and thumping people on the
head if they do not do what they need to do. However, sometimes
a thump on the head is necessary, and so I do not want to
discount that.
On Friday, I was very honored to be able to speak before
OMB on the competition and contracting review, on behalf of
Women Impacting Public Policy. We had made a suggestion that I
thought was, as far as the enforcement--when you want to get
somebody's attention, obviously, the pocketbook is always the
way to get somebody's attention. So we recommended that
perhaps, for every percentage that an agency fails to meet
their goals, their budget be reduced by that amount. Perhaps
that would give them incentive to go out there and make sure
that those goals are met.
Thank you very much.
Mr. Smith. May I--I am sorry, please.
Senator Carnahan. Go ahead, please.
Mr. Smith. No, Senator, you get to--
[Laughter.]
Senator Carnahan. In that case, I will ask Cordell if he
would like to ask a question.
[Laughter.]
Mr. Smith. Very well. Just to clarify. Your view is that
the subcontracting plans are an appropriate approach, that if
you did away with them and had it all direct Federal mandates,
you would then have the problem of getting staff to police
that; is that what you are saying? So your view is slightly
different.
Ms. Parker. It is slightly different, looking at it a
different way. I mean, I am not saying that--subcontracting
plans are what we have now. I guess I am looking at what have
we got now, what have we got to work with? Yes, if we want to
work with legislation to try to improve it, but that is a
process that is going to take a while.
Small businesses, we have got payrolls to meet next week.
Mr. Smith. Right.
Ms. Parker. We want to make sure that we try to get to the
table and get some of that pie right now. While we are doing
what we have to do to push legislation and make sure everybody
can participate, that is great, but I also want to look at what
we can do immediately. If the subcontracting plans are what we
are having to live with right now, how can we encourage and
facilitate primes to help us, not try to cause a little bit
more of a tougher hand? I would like to want them to
participate because, as I say, I find it's a little quicker,
you get things done quicker that way.
Mr. Smith. Thank you, Senator.
Senator Carnahan. Thank you. Before I leave, I will take
advantage of another senatorial prerogative and call on the
gentleman from my State, a constituent, Morris Hudson, to speak
next.
Mr. Hudson. Thank you, Senator. I appreciate that very
much.
I know we are getting short on time, so I would like to
make my comments concise and address each proposed bill.
First of all, on Senate bill 1994, I think it is time that
priorities are established. I think this is badly needed. I do
have a question about whether the preferences would be optional
or whether they would be mandated. So that is one issue I have
with that bill.
On Senate bill 2466, Small Business Federal Contractor
Safeguard Act, on bundling: I think defining the problem better
will help. I think bundling is a major problem, but there is no
need to discuss that further. It has been discussed and seems
to be unanimous.
On the Ombudsman Act, I have concern with that. I am not
opposed to it, but I do have concern about it, that it might
just become another Federal bureaucratic activity. There does
not seem to be any direct contact with the small business
people, and that is one thing that concerns me with that act.
In the Procurement Technical Assistance Centers, we work
with businesses in the trenches on an hourly or minute basis,
and there is a lot of frustration out there. I think this
Committee may have, within their prerogative, to eliminate some
of that duplication, and I will mention one example: If a
company is going to do business with the Department of Defense,
such as Fort Leonard Wood or Whiteman Air Force Base or the
Army Corps of Engineers in Missouri, and of course this extends
throughout the Nation, it is mandatory that they be registered
in the Central Contractor Registry. We help companies with
that.
It is also recommended that they be registered in Pro-Net.
Many of those data elements are the very same, but they have to
enter this information into two different systems. We have
heard rumors that the systems would be combined at some point
in time, but right now it seems to be only rumors. We would
certainly encourage the Committee to look at that and see if
that could be done because that would help companies at the
working level in eliminating this type of duplication.
Also, and someone alluded to this earlier, we would like to
see better publicizing of the requirements, and I am going to
quantify this, from the $2,500 level, credit card level, up to
$25,000. Now, agencies do maybe a good job of advertising this,
publicizing this within their own agency or at a lower level,
at the base or installation level. But when you are a small
business person, you do not have time to go to all of the
different websites where you have to track this down.
I would like to see a system similar to FedBizOps that
captures these type of requirements and makes them available
for the small business community.
Then, finally, I would like to add that a lot of companies
have made a lot of progress with electronic commerce, moving
into the computer age and so on, but there are still a number
of companies out there that could use some assistance in this
area. So I would like to see at least some of the funding and
responsibilities restored that existed in the Electronic
Commerce Resource Centers and see that made available for the
small business community.
Thank you.
Mr. DaSilva [presiding]. Thank you, Senator. Thank you,
Morris.
I am going to be a little heavy-handed here. I am going to
call on Michael Robinson in just a second, and then we are
going to have to move on to the next topic because we are
running very far behind on time--so I am going to ask everybody
to put their cards down until I throw out the next topic for
discussion after Michael is done, and I apologize to folks who
did not get a chance to speak on this, but as it is 10:30, we
are going to need to move on.
Michael.
Mr. Robinson. Thank you, John.
Also, from a PTAC in Massachusetts, again, from the
trenches, and I would just like to share one anecdote from the
field that is a bundling-related anecdote, and it takes it out
of the rather esoteric money and contracts and puts kind of a
human face on the situation.
We have an 8(a) company that is owned by a service-disabled
veteran in a wheelchair. He had been performing on a contract
for several years for the Veterans Administration's facilities
in Rhode Island. The contract came up for renewal again, and
the contract requirements were consolidated into a regional
contract, which ultimately was awarded, after a lot of
protests, and screaming, and gnashing of teeth, to a Fortune
100 company.
There have been several further protests by the service-
disabled vet. He is one of our clients. This service-disabled
vet has since been forced to declare personal bankruptcy. This
is the human face of a constituent contracting with the very
agency who should be protecting his interests, and it is the
effect of what we who are involved in Government might call
operational streamlining and better stewardship of our dollars.
It is kind of a tragic story.
Thank you very much, John.
Mr. DaSilva. Thank you.
We are going to turn to the next topic on the agenda,
``Improving the SBA's Small Business Contracting Programs.'' I
would like to throw out two questions for the group: No. 1,
Chairman Kerry touched on when he was here, wanted to put out
why is the SDB set-aside program a thing of the past and does
the Executive Branch have the authority to override the
statute?
I want to throw out a second question, as well, one that
Senator Kerry has been working on, and I believe the SBA is
addressing, is that: Why is certification so difficult for some
SBA programs, and should all SBA programs have procedures and
applications similar to the HUBZone program?
So, at this time, if you wanted to address these topics,
you can put up your cards.
Hank, go ahead.
Mr. Wilfong. SDB set-asides. Why would you figure I wanted
to talk about that?
[Laughter.]
Mr. DaSilva. Just a hunch.
Mr. Wilfong. Ironically, I see a lot of answers to a lot of
the problems that has been raised. I see SDB set-asides as the
answer. The General pointed out some things, and Ralph Thomas
pointed out some things. I believe goals can be met if the
agencies really want to do it and if they are caused to want to
do it.
SDB set-asides, we do not have to worry about
subcontracting a whole lot if we have some pieces of action
set-aside for competition between small and economically
disadvantaged firms. That is one of the positives of SDB set-
asides.
I have heard a complaint that, yeah, but, Hank, there is
the Roth case and there are other cases about race-based
methods. First, small and economically disadvantaged, I have
not mentioned race yet. But if we are talking about racial
discrimination and remedying racial discrimination, how are you
going to deal with racial discrimination if you do not deal
with race? Now that may be a rhetorical question. I cannot
figure the answer of how can we deal with race discrimination
and cause efforts without some consideration of race.
So I think, John, the SDB set-aside is the one thing that I
would like to see this Administration address. We had it
before. There was a moratorium, and as I recall, the moratorium
was so that we could find--and I am generalizing--a better way
of doing it. Hell, what we had was working well. Why do you
have to find a better way than something that is working
excellently?
So I would like to have that moratorium, which was a 2-year
moratorium established 7 years ago, removed.
Mr. DaSilva. Fred, would you like to address any of those
comments?
Mr. Armendariz. Currently, the SDB numbers for fiscal year
2001 were 7.12 percent, which is 140 percent of the goal, and
is why at this time we believe that the program is working
without the set-aside.
Mr. DaSilva. Is that if you combine 8(a) and non-8(a)
together for the SDB goal?
Mr. Armendariz. All 8(a) firms are SDB firms.
Mr. DaSilva. I understand. I know. But this is the first
year--for 2001, it is the first year they are actually
reporting the goal together instead of breaking it out
separately----
Mr. Armendariz. 8(a)s have always been SDBs.
Mr. DaSilva. I understand, Fred. It is just the first year
that it has been reported together, but it is true that all SBA
firms are SDB firms, I understand.
Mr. Armendariz. Correct.
Mr. DaSilva. So that's the position at the time because of
the percentage?
Mr. Armendariz. Right.
Mr. DaSilva. John.
Mr. Turner. Thank you. The Minority Business Legal Defense
Fund also takes a position as the Senator has and as Hank has,
that SBA should seriously reconsider the set-aside program, and
we believe that is the appropriate way to go.
In the interest of time I will bullet to other comments
that relate to that. You raised an issue relating to the SDB
certification process, and in our view, to date the SDB
certification process has been a disaster, and we stand
prepared to work with, as we have in the past, to work with the
Hill and the agency to make this process work better.
There are many different suggestions which we will not go
into today, but I think it is very important for us not to
ignore the fact that work is required here. The last point is
that of course our founder, Parren Mitchell, the author of
Public Law 95-507 and the father of the 8(a) program, we have a
overriding concern about the--that everything that we do, we
must always keep in mind that the pie for 8(a) is getting
smaller and smaller and smaller and smaller, much due to the
Federal Acquisition and Streamlining Act, much due to other
factors such as thresholds of purchasing. We have gone on
record on our position concerning the parity or the HUBZone and
8(a). HUBZone is a laudable program, but we must find a way to
take the 8(a) program and to provide a greater pool, a greater
reservoir for our 8(a) contractors.
Mr. Armendariz. John, could I make a comment?
Mr. DaSilva. Certainly.
Mr. Armendariz. I wholeheartedly agree with you in regards
to the application process. I think I am probably one of the
few people here that has actually tried to go through that
process. I drew on my own experience when I came to the agency.
The first task force that I assembled, the very first one, was
to address the application process. I put a very capable person
in charge, Mike McHale, who put together our HUBZone
application.
Mr. Turner. Good man.
Mr. Armendariz. He is a good man. He has been working
diligently in putting together what we believe is a state-of-
the-art
e-capable application that should be ready for launch in the
next 12 months. So we are very excited about simplifying the
process and getting more people involved in the program. We
have been working furiously as well in regards to keeping the
8(a) numbers up. Last year we increased the 8(a) program $500
million over the previous year. There was a little bit of a
setback in the year 2000, but we came back in 2001 and we want
to make 2002 even a better year. So you have our commitment at
the SBA that not only is the 8(a) program important, but it is
extremely visible to us. We have a lot of new initiatives that
are focused directly on that program, and we think are going to
revamp the entire mission of the statute.
Mr. DaSilva. I think Ron was next, and then Joann was up.
Mr. Newlan. Thank you, John.
A couple of thoughts. The topic we are on is improving the
SBA's small business contracting programs. I think it starts
with the funding of the SBA's contracting program within the
Appropriations bill and the budget. I am not an expert in that
area. We have got experts at the table. I do attend the
hearings and I hear the SBA Administrator talking about,
``Well, we got more money last year, and we got more money the
year before that, and we got more money before that, but we are
going to do the best we can with what we have.'' The world was
more complex. The Small Business programs are more complex.
The SBA Government contracting program, across the board
needs more money. I led a fight for the HUBZone funding which
got overlooked by the House, and was restored. But they need
more money, and to the extent OFPP might be able to fit that
into a recommendation if they happen to agree with me, the
Administration and certainly the Senate represented here might
be able to help out.
One of the things, if I were there and got more money, I
would buy some PCRs, Procurement Center Representatives, and I
would go back to a system that worked well in the 1980s, where
the PCRs really rode herd over the other agencies, and they did
not do an unrestricted procurement without the PCR's personal
involvement, the personal understanding and thorough
examination. PCRs are spread so thin now, they cannot do that.
There is perhaps one third the number of PCRs today to cover
the Federal Government than there was 15 years ago.
Mr. DaSilva. I am going to go to Joann, and then Barbara. I
would also ask that if anybody else wanted to make comments on
SBA programs, put your cards up so I can take note of you.
After this we are going to move on to the next topic.
Joann.
Ms. Payne. Thank you so much. I just wanted to address
something that the SBA advocate over there said. We have talked
about the small disadvantaged business and the set-aside issue,
and the program is working well at 7.12. The only comment I
have is that it does include 8(a) so it means they were counted
twice, sometimes three or four times. So my guess is, is that
the counting figure is very high. I think that is simply the
bottom line. If you are also certified as a HUBZone, counted
you 4 or 5 times in that number. So just let me just stress to
you it is so important that we reevaluate how SBA counts and
tracks the goals because you do not know really what is going
on unless you have that. In addition to that, as some of you
know, SBA has a MOU with the Department of Transportation in
the certification process, which means that women and
minorities who are certified in the Disadvantaged Incentivized
program should be able to get certified easier as a small
disadvantaged or an 8(a). That is the point of it I think.
The reality is that minorities can in fact get certified a
lot easier. Women have got to jump an additional hurdle. On the
one hand women are presumed to be socially and economically
disadvantaged in a nontraditional area like transportation
construction, but not so at SBA. So what happens is that women
have to jump an additional hoop, and by doing so, there are not
very many certified woman-owned businesses in the 8(a) program
and on the Small Disadvantaged Business program.
Mr. Armendariz. First of all, the 8(a) numbers are not
counted double for the SDB number, and I will get some
information to you immediately after the hearing that
demonstrate that to you.\1\
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\1\ Information is located on page 98 in the appendix of this
document.
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I do not know if Angela has any comment in regards to how
the numbers are accumulated, but in that particular case that
is not a correct statement.
However, I cannot agree with you more in regards to needing
to simplify the fact that companies, when they start working
with our Federal Government, need to have a smooth transition
into starting to participate in our programs. I do not believe
it is in anyone's best interest that we ask small businesses to
spend this disproportionate amount of time going through
certification programs. One of the other task forces that I
would like to launch in the near future is a reciprocity task
force so that we can have small businesses apply once and be
accepted not only within the Federal Government, but across
state lines as well. We find that people have to go through and
apply in Michigan and if they are doing business in Ohio, they
have to reapply in Ohio, et cetera, et cetera, and I think that
is just a complete waste of time. We think we can take the lead
on that.
Ms. Payne. What is interesting, if I may just follow up
with that, is that women, with the certification process--and I
will be interested to see how you count the 8(a), because I
know they are counted as small business and they are counted as
others as well, but we will get into that; I would love to talk
to you about that. But with the certification--and with the
Department of Transportation you have on-site reviews. You have
DOT people who actually come on site of a business to make sure
that you own 51 percent, you know, all of the requirements. It
is an in-depth, thorough certification. My women get denied at
SBA by paperwork. I just find it just absolutely appalling,
absolutely appalling.
Mr. Armendariz. I agree that we need to simplify the
process. Joann, I would like to have a conversation with you
again. I would like to talk about that a little bit further.
Mr. DaSilva. I also remind everybody that the record is
going to be open, that you can have 14 days to submit your
comments at the end if you did not have a chance to speak to a
particular topic.
We are going to go Barbara, Susan, Pam, Steve, and then we
are going to move on to the next topic.
Go ahead, Barbara.
Ms. Kasoff. Good morning. My name is Barbara Kasoff, and I
represent Women Impacting Public Policy. We are well over
250,000 women-owned businesses right now across the country. I
can tell you that 80 percent of our constituency is not only
just passionate and angry about this, but they are in a state
of despair, and most of them do not even want to try to go
through the process as it is right now. It is obvious that we
have a very onerous and complex system that is riddled with
barriers rather than with opportunities.
I can tell you, I can bring it down even to a more basic
level when I can say to you that almost half of our
constituency is on dial-up rather than on high-speed access,
and they cannot even download a procurement contract to bid on
because high-speed access is not available to them.
The President said real clearly that we need
accountability. Everybody here in this room has said that we
need accountability. I can tell you also that in the corporate
world, when the sales department is having trouble getting
sales because they are getting constant complaints, when a
customer cannot fill out an order form so that they can get the
product, and when a warehouse cannot ship a product and get the
product out the door, two things better happen in that
corporation. No. 1, they had better listen to their customer so
they have a real clear understanding of what the problem is,
and No. 2, they need to revamp their procedure. We are the
customers here in this situation. We need to be part of the
solution, not just experience the problem. If legislation was
written two years ago and passes, and is not out the door,
there has to be a real clear understanding of what is wrong
with it so that we can fix it. The clock is ticking. We are not
doing the business that we should be doing--we, the
entrepreneurs--and if we are not doing the business that we
need to be doing because of these barriers, then the economy is
suffering.
I want to state for the record that Women Impacting Public
Policy is ready to have a seat at the table. We accept the
challenge and we want to be part of the solution.
Mr. DaSilva. Thank you.
Susan.
Ms. Allen. Susan Allen, U.S. Pan-Asian-American Chamber of
Commerce.
I just wanted to revisit the issue of certification. Fred,
you talk about wanting to take the lead in getting reciprocity,
which is a good thing, but right now there are more than scores
of certification processes around the country, and we have got
to live with that. That initiative that you are going to take
the lead on is going to take some time. There will be turf
battles to be fought all around.
My question is that some years ago, during the last
Administration, there was a process for self certification or
privatized certification. I think the dialog is still there,
and there are still some organizations doing private
certification like WBNC, the Women's Business National Council,
and NMSDC, but for the Asian-American community, we have 57
ethnic groups within our community, spread across 1 million
businesses. Many of them are new Americans. They are not very
familiar with the Federal process, and as we know, the biggest
procurer of products and services is the Federal Government and
all the moneys and opportunities trickle down to the community.
So what I would like to do is to make sure that the Asian-
Americans get into the certification program. What we want to
do is to educate and tell them that we would help you out,
because when we tell them to go to the SBA, they say, ``Oh, no,
no, no. It takes too long.'' One told me, ``Moving the Federal
Government, trying to get something done in the Government is
trying to move a destroyer in the middle of an ocean. It takes
what seems to be ages to turn a 10-degree corner.'' So we would
like to be able to be considered, our organization, as a
certifying agency accepted by the SBA, not that we will replace
your program or any other program, but in so doing we can get
these Asian-Americans into this process so that they say, ``All
right, get one certification done, I can move on to the
other.''
We tried, during the last Administration, to get noticed.
They never sent us the notice when the opportunities were sent
out for this private process, and I would like to know whether
it is still in place, and if so, can we get to the table?
Mr. Armendariz. The Administrator constantly states that
the focus of the SBA programs is to include more of the 25
million small businesses of America. I think it would behoove
the SBA to include all different parties at the table and start
focusing and drilling down in the different program areas that
we need to address, and this is one of them. We encourage your
participation, so thank you.
Mr. DaSilva. Pam.
Ms. Mazza. Thanks.
I thought that Senator Kerry's opening remarks were exactly
on point. I mean these are very, very complicated issues that
we are dealing with here. You know, fixing the SBA's
procurement problems does not involve just SBA. It is a
mentality with the agencies that relates to question No. 1: How
do you increase commitment to meet goals? What do the
procurement people think? What do the contracting officers
think? Are they being evaluated on whether or not they have
done the best that they can to meet their goals, or are they
concerned because of the myth that we still live with, that
bigger is better and smaller is more expensive? That is simply
not true. So there is a lack of information still out there, or
at least there is a myth that just keeps getting generated. I
think that the more that we can do to continue to talk to
eliminate those concerns, I think the better off we will be.
Ron, your point that PCRs do not have any tools really to
do their jobs, nor do they have the technical expertise to be
able to--I do not think--to be able to say, ``Yes, there is an
environmental firm out there that can do this as a small
business set-aside or not''. So maybe we are limited with our
resources, but can we be doing things to put task forces
together to help the PCRs to do their jobs better and to make
people more accountable for their decisions. I do not think
there is any way they can be reviewing each procurement action
to determine whether or not it is an appropriate set-aside or
whether small businesses are capable.
I have a couple of specific comments on the legislation,
and I commend Senator Kerry and Senator Bond for trying to move
these pieces forward. On contract bundling: as a lawyer I think
that changing the definition is going to go a long way to the
word-smithing that eliminated our ability to go in and say this
is a bundled contract, because 3 or 4 years later we see that
the definition just really had a lot of loopholes in it and I
think that this legislation will certainly help with that.
I have a thought that I throw out for you, and that is that
if I read the contract bundling bill correctly, we are going to
require agencies--if they procure a consolidated contract over
$2 million and $5 million--to step through a lot of additional
paperwork. I think that a $2 million contract and a $5 million
contract is not a very large contract. In the IT field that is
a few bodies if it is a 5-year contract. There is no reason why
small businesses cannot perform those contracts even if they
are consolidated. I mean I feel there are small businesses out
there, certainly my clients, that could do that contract even
if it were consolidated. So perhaps a consideration for the
Committee would be to say, ``You do not have to step through
those studies, over $2 million, over $5 million even though you
consolidated it, if you are still restricting the competition
to small businesses, whether it is through small business set-
aside, 8(a) set-aside, or whether you are going out on a GSA
schedule but only to small business holders.'' So in other
words, go ahead and consolidate if you want to consolidate, but
if small businesses can still do it, then no need to step
through your study as to why you consolidated. I am not sure of
any of the down-sides to that, but I think it is something that
maybe should be considered.
On your Ombudsman bill, I think that is terrific that you
are thinking of protecting the firms as they come in with their
problems. I am on the SBA's Regulatory Fairness Committee and
with the Ombudsman at SBA on reg. fairness issues. I was
surprised, when I got appointed to that Committee, that
procurements and contract bundling are not within the purview
of the current Ombudsman or the current Regulatory Fairness
Board. So there is a void right now, and as we go across the
country and we listen to small businesses' concerns, a lot of
them want to talk about bundling, and we have to say, ``No, we
do not have jurisdiction over that.'' If this bill moves
forward, I think it should be clear--I was happy to hear you
say that the Ombudsman will be responsible to, it sounds like,
all small businesses, including women-owned small businesses,
because as I said right now, there is no Ombudsman for
procurement, and I think that there is a void. On the other
hand, I think that our board and the Ombudsman does not have
the resources to do what we need to do, so creating another
slot without resources may just be creating another slot that
is not going to be effective, so I think that probably that
needs to be reviewed too.
Mr. DaSilva. Thank you.
Steve.
Mr. Denlinger. Thanks. Steve Denlinger, LAMA, Latin
American Management Association.
I am going to make a gentle remark about the difference
between prime contracts and subcontracts, but let me assure
you, I do not hear it gently from my members around the
country. There is an enormous difference between prime
contracts and subcontracts. It is not just a matter of dollars.
Prime contracts give you extremely important experience with
the Federal Government, direct experience with the Federal
Government. Prime contracts are more profitable. They give you
the opportunity to do the good quality work as opposed to the
dregs, which prime contractors tend to give you when you are in
the subcontract mode.
Also importantly, it gives you the opportunity to get paid
on time. I hear horror stories at every turn about members not
getting paid by prime contractors, and they are afraid to do
anything about it because they will be blackballed.
I am delighted to hear, Fred, that you guys are taking on
the issue of reciprocity with respect to certification. It is
one of the most onerous things that small businesses have to
deal with across the country. Would you please add to that the
forms that prime contractors require MBEs and SDBs to fill out
every year? Every prime contractor has a different form. Every
prime contractor sends that out to our members each year to be
done all over again. If you do not submit it, you do not have
an opportunity to be considered for bids. If you do submit it,
it is a mountain of paperwork. There ought to be one single
form, one single intake form that is used by all prime
contractors to get the basic data from SDBs, and then if that
prime contractor is seriously interested in doing business with
that company, then it is certainly appropriate to go ask for
this new information.
But that paperwork load is just onerous, and it comes from
the very prime contractors, very companies that often complain
about the load of paperwork that the Federal Government places
upon them, but they have no problem placing that kind of
onerous paperwork burden on our companies.
The extreme case was Lockheed Martin Missiles and Space,
which sent one of our companies a 23-page form to fill out to
be considered for business there. The owner of the company
looked at me and handed me this, and said, ``I am never going
to do business there. This is ridiculous.''
One item with respect to the Ombudsman's monitoring, about
a year and a half ago I asked the SBA to what extent are the
price adjustment credits being used by the civilian agencies?
We know that they cannot be used by Defense right now. We were
not able to get a handle on that. If you could make sure that
the Ombudsman also monitors the extent to which price
adjustment credits are actually used, I do not think anybody
here knows the extent to which they are being used at any of
the agencies in addition to the evaluation points that prime
contractors get for the quality of their subcontracting
programs and the incentives at the tail end.
One final item, if at all possible, Ms. Styles, I am
wondering if you could comment on the OMB's view of the SDB
set-aside with respect to the women's procurement preference
legislation. I understand that there is a general sense that
the President and the Administration does not support set-
asides. Then specifically with respect to the women's
procurement preference, that there were issues related to how
the study was conducted relating to which areas of Federal
procurement women were under-represented in. Secondly, that
SBA's approach did not meet the Adarand test. So could you
possibly comment on that?
Administrator Styles. Yes, I can briefly comment on it. It
was actually withdrawn by the SBA Administrator, so Fred may be
more appropriate to comment on some of the details. Certainly
my understanding was that there were some legal concerns with
the statistical data that were part of the study, and that we
really wanted to, SBA really wanted to firm it up, make sure
that it was done right and that it could be legally supported.
As far as our policy: there is not an Administration policy
against set-asides from a perspective certainly of my office. I
am concerned about the broad procurement policies and the
access of small businesses as a whole that we have created a
situation in our procurement system that we cannot live with,
and that in many respects I think is creating something of a
stigma on businesses and small businesses themselves within the
procurement community. I hear from a lot of contracting
officers on a regular basis, and it concerns me that we have
created a system of statutes and regulations that is very, very
difficult to understand. Contracting officers do not know when
it is appropriate to award to a HUBZone or SDB or an 8(a) or a
women-owned small business, and they have to have a specialty
in and of their own in order to understand it, and I certainly
can sympathize. I did not come into this job as an expert in
small business, and it has taken me a great deal of time to get
up to speed on the different statutes and regulations and how
they work. But I think the overriding concern in my mind is
that it is almost as if the contracting officer wants to ignore
them, or that it reflects poorly on small businesses, that
there is something wrong, that this is a handout to them, that
this is somehow something that they do not deserve.
From my office I have got to help the procurement community
get over those hurdles and ensure that we have a procurement
system that is focusing on access for all of the small
businesses, but that is not--I do not think that is to the
detriment or to the exclusion of any particular group.
Mr. DaSilva. I am going to let Steven App make some
comments--he has been extraordinarily patient. He got bumped
from the last go-round, but then we are going to move on to the
next topic, and I apologize because we are running overtime
slightly. Surprise, surprise, a Small Business Committee
function running over time.
Mr. App. Just very briefly, I think the legislation is
important; we are supportive of it. I think the complexity is a
real issue. But the key to it, and the key I think to
Treasury's success has been that we had a very strong
integrated acquisition planning process that permeates all
levels of the Department. We consistently beat the 23 percent.
We were over 30 percent last year for prime contracts. We set
our goal higher at 28 percent this year. We are doing 26.
The point is that we have instilled a culture in the
acquisition planning process so that no procurement is really
considered without looking at a small business aspect of it,
and it is done through metrics. We can demonstrate metrics to
everybody who is thinking about doing a contract, that the
service quality and the cost advantage is very real, and that
is how you do it. Legislation is important. Complexity you have
to work through, but a strong, integrated planning process I
think gets you over the hurdle of people trying to move through
the cycle times quickly because they have not planned for it.
Program people, procurement people, small business people, all
together--integrated planning is how Treasury has been
successful.
Mr. DaSilva. Thanks, Steve.
We are going to move over to the last part of the agenda,
which is specifically on the legislation. We have heard a lot
of comments on the proposals before the Committee, but I did
notice that a lot of questions have been raised. Senator Bond
raised some questions as well. So I wanted to throw out a
couple of general things to start.
No. 1, I hope to hear some more feedback on increasing the
goal to 30 percent, whether that is achievable, whether we
should take the idea of looking more at agencies that can do
more on an individual basis. I want to talk about the 8(a)
HUBZone Priority Preference bill and the 20-percent evaluation
preference within the legislation, what people felt about that.
Cordell, did you have any other specific issues?
Mr. Smith. No, I think that covers it.
I do think that I would be interested in knowing what is
currently done in terms of efforts to try to help agencies that
fall short of their goals, whether anyone currently does
anything to negotiate goal attainment plans. I think that a
real strength of the Ombudsman bill is requiring that, but I do
not know what is being done. My sense is we hear about it by
accident, when somebody decides to do that, but we do not know
that there is anything done systematically now, and maybe that
does point to a need for legislation.
Mr. DaSilva. Hank, were you up first?
Mr. Wilfong. Thank you. Thirty percent. You know, John, I
think it ought to be 40 percent.
[Laughter.]
Mr. Wilfong. Thirty percent certainty. Forty percent it
should be. Twenty-three percent they did not make. I think this
is just an indictment against the fact that maximal practicable
utilization. Senator Bond talked about maximal practicable
utilization. I think that is excellent. So I think 23 percent
is too low. Thirty percent is getting there. So I strongly
endorse that.
Part of it, John, too, to throw in my little bit, and this
will be my final comment, I am totally disturbed by a number of
things that are going on right now in the procurement area, and
it gets back to this race-neutral versus race-based methods. No
way to avoid it. Until and unless we address what was brought
out in 95-507, the extensive findings of 95-507, that there was
racial discrimination in this country, and that a certain part
of the community was being denied equal access to the laws
through the procurement system, we're not really getting to it.
So my thing is that, as I sit here, some things are becoming
very clear to me. Reluctantly, I am accepting the fact that
these people tend to want litigation-proof kinds of things as
relates to us. They are constantly bringing up the litigation
that others are bringing. So I guess probably what I am
reluctantly coming to, is that those of us like my association,
and the women-owned business association, and maybe the
HUBZone, we are going to have to start thinking about getting
to our members to start to litigate, because they keep talking
about the rights of others and afraid of the litigation of
others. Nobody ever seems to bother about whether we are going
to litigate or not.
So that, John, if nothing else comes out of this--and
reluctantly I sat here and my spirits got lower and lower, and
it is because I do not like to sue, but I do not know what else
to do if I am being denied.
Mr. Turpin. James Turpin. I had one comment on the bundling
bill. We talked about access and transparency in the
procurement process. There is also an integrity issue, an issue
we are concerned about is bid-shopping, where the prime
contractor will win the bid and then shop it. Where you think
you are going to get the subcontract, you are not going to get
it. So there is an integrity issue here too because the same
person that is bundled on Monday is going to be shopped on
Tuesday, and the end result on Wednesday is that they have not
gotten either job. So I think there is--if we are going to have
a procurement process, it needs to have those elements if it is
going to work for everybody.
Mr. DaSilva. Thank you.
Ron.
Mr. Newlan. Ron Newlan.
We will take advantage of the 14-day submission time and
put our comments in writing with respect to S. 2466 and the
Ombudsman bill, but just in summary say that we support both.
We think they are very good bills. We think we could make a
couple of small improvements, and we will document it to you.
The 30 percent we believe is good and should remain.
Senator Bond, I could not have asked for a better setup
than he gave me as it relates to S. 1994. We are primarily
concerned with the priority preference aspect, and that would
be the aspect where a dual certified HUBZone and 8(a) firm gets
a preference in a HUBZone competition or a 8(a) competition,
and we are concerned that the tie breaker is if your bids are
comparable. I have worked with both the Chairman's staff and
the Ranking Member's staff, and we will submit in this same
document our detailed thoughts on that. But I do not think,
based on the conversations we have had, that we are far apart
at all.
Mr. DaSilva. Thank you.
John.
Mr. Turner. John Turner, Minority Business Legal Defense
Fund.
On the topic of attainability of the 30-percent goal, it is
my experience and the fund's experience that if you have the
commitment of the agency, if you have substantive enforcement
powers, and above all, talented personnel, it can indeed be
done. There is a good friend, colleague of mine in the city of
Dallas that oversaw the building of the Dallas Area Mass
Transit Subway, Barton Burrell, he succeeded in getting--and I
think my numbers may be a little off--but last I checked,
something like 29 point something percent, women minority SDB
participation in that massive project. With the American
Airlines Center--which he oversaw the building of--he met and
exceeded the goals which were substantive. So you had a very
talented man, you had the support of the employer, and he had
some enforcement powers, it can be done.
Mr. DaSilva. Thank you.
Ralph.
Mr. Thomas. Yes. I want to reassert the importance, and I
wish--speaking for myself, I wish the bill could be amended to
include some portion about subcontracting by just 30 percent--
with the Government, we are putting all of the responsibility
on the Government and none on the prime contractors. The more
we keep de-emphasizing subcontractors, we are de-emphasizing
subcontracting, we are giving strength or energy to prime
contractors not wanting to do anything. We are saying to the
Federal Government that it is OK not to stress subcontracting,
or not to follow up, or not to monitor, or not to make it
important. It is a whole approach, it is not just the
Government being responsible. Prime contractors have a
responsibility as well. They are the ones getting the bulk of
the money, and we cannot attack one without the other. We
cannot measure one without the other.
Thank you.
Mr. DaSilva. Thank you. On that issue, first, I wanted to
thank Steve for some comments that he had made before about the
importance of prime contracting versus subcontracting. I think
you are absolutely correct, subcontracting is important, but
that relationship that a prime contractor builds with the
Federal Government cannot be overemphasized. I think the
Committee, throughout its history on procurement issues--and
correct me if I am wrong, Cordell--has always stressed the
relationship of prime contracting as being of paramount
importance to the Committee and paramount importance to small
business. But on the subcontracting issue, I would like to
point out that the Ombudsman legislation, in response to small
businesses that have come to the Committee on subcontracting
issues, saying that their prime contractor is not meeting their
subcontracting plans and that the oversight of them is very
very limited, specifically because the CMRs at SBA are
essentially disappearing or being merged with the PCRs. it does
call on the Ombudsman to monitor those subcontracting
agreements, to take reports back when small businesses are not
receiving their share of prime contracts when they were told
that they would be getting those prime contracts, and the prime
never contacts them again after they win.
But if anybody would like to add anything on the
subcontracting and subcontracting agreements and oversight of
that, I would be more than happy.
Mr. Thomas. I just want to say that it is not just the
responsibility of the SBA or any Ombudsman. It is the
responsibility of the Federal agencies as well. A lot of prime
contractors today, small businesses start off as
subcontractors. I mean subcontracts can lead to prime
contracts. As Joann said, they inter-relate a lot. Primes can
be subs. It depends on the situation if a prime contract is
better than a subcontract. But my point is, regardless of how
we feel about that, to consistently de-emphasize subcontracting
and say it is not important, we are falling--we cannot not talk
about it on the one hand and then expect somebody to monitor it
on the other. I know that we give a lot of attention to team
agreements. We have a lot of classes on understanding team
agreements and we teach them all over the country, and we are
working with the aerospace industry's association to have
general rules of fairness and principles of fair dealing, but
it has to come from all ends. It is not a one-hand approach.
It's like--just stressing prime contracts is just like having
one arm with the other arm. They both inter-relate and one
leads to the other, so I would hope that we would pay more
attention to that in the future.
Mr. DaSilva. Thank you.
We are going to go to Joann, and then Hank, General Henry,
and then Ron, and I am going to ask that by the time we have
gone on to Hank, if you want to address any topic, to have your
card up by then, because I am going to close it out after that.
So, Joann.
Ms. Payne. Just very quickly, I agree with Steve and of
course with Ralph with the prime and the subcontracting, so do
not get me wrong. But the reality is, the majority of women-
and minority-owned businesses are in fact subcontractors, and
that is why the subcontracting piece is so important to have
money flow to woman and minority contractors.
Mr. DaSilva. Hank.
Mr. Wilfong. Hank Wilfong, NASDB. Jumping in on the
subcontracting part, the reality of the way we are now is that
the majority of the work from our association, the overwhelming
majority of quality work is coming through subcontracting. Now,
we can wish that we had the heyday in the 1970s and 1980s where
small and disadvantaged businesses were getting a significant
amount of contracts from the Federal Government or we had PCRs,
Ron, who would go out and help break out requirements that we
could prime contract with. But the reality is that we have
things like space stations, consolidated space operation
contracts, Odin, et cetera, et cetera, joint strike fighter,
that these are major kinds of already bundled, already
consolidated contracts, and there will be more like them no
matter what kind of language you put into law because
economically it makes good sense. Falling back again to where I
started off, part of the reason I wear my NASA pin so proudly
and proud of my participation in the program over there, is
because of the subcontracting part. Of course we have got good
prime contracts, but overwhelmingly, our members have made a
good substantial profit and firm development through
subcontracting. So I join my friend Ralph by saying, why do we
so de-emphasize subcontracting? Subcontracting is extremely
important, and that is the point I think, Ralph, I am glad that
you made, that the subcontracting part--and I did not realize,
John, this law did not include subcontracts?
Mr. DaSilva. It does.
Mr. Wilfong. Oh, it does?
Mr. DaSilva. It does.
Mr. Wilfong. OK, thank you.
Mr. DaSilva. General Henry.
General Henry. Thank you.
First, let me say how pleased I am to be here with you and
thank you very much, you and the Senator, for asking.
Just a couple of comments around. I certainly agree with
the comments of Mr. Thomas of NASA. I agree with him on the
point of the subcontracting. As you may know, I spent many
years in contract management. We had $780 billion at one point,
so I spent a lot of time studying the issue.
The first thing that I think that you should recognize is
contracting officers really do not like mandatories. Any time
that you get into it, there is a rebellion that exists for
that. Contracting officers like to preserve the contracting
officer's discretion. So when you impose either the social or
economic provisions on a contracting officer, there is a
natural tendency for him not to like it, so they are never
going to like it.
That brings me to the point of the goal. I certainly
support, as my friend here, I would like to see 40 percent for
it, but I do not think that adding legislation a ratchet up on
the goal is going to get you where you want to. I think that
you have got to focus on the accountability. The issue to the
prime contractors. Prime contractors are looking for the next
job. If you embody into their present contract a responsibility
to act a certain way and to give a certain performance, and
failure to do that is a condition precedent on the next award,
you have got the CEO's attention. If you embody it into that,
you will have the contracting community.
I certainly agree with what I heard over here, debundle and
deconnect the fact of the small business plans. That is kind of
a feel-good approach that everybody does it, it goes on the
shelf and nobody ever looks at it. The comment that the lady
said was that let us take and find out what did you do. If you
are a prime contractor and you are on the next major supersonic
whatever it is, what was your performance on this contract at
the end of the day? Did you or did you not make it? For the
next award or the following award it is going to be a critical,
essential element for the award of that contract. You will get
their attention.
Same thing holds true for the agency. When I was a senior
acquisition executive I made a comment one time, what happens
to me if I do not meet this award? The answer was, nothing. If
you can turn that, to say to the guy that is in my position,
that bad things are going to happen to you, you will get their
attention. The agency has got to lead this issue because all
those contracting officers are stretched thin. They have a
position where they need to have some guidance. If the agency
comes out and says that by September 30, regardless of what
happens, you will meet this goal and you will produce that,
then I think that you have a chance of being successful, and
all that we have spoken to will come to pass. Thank you.
Mr. DaSilva. Ron.
Mr. Newlan. Ron Newlan.
There is an expression in sports, a tie is like kissing
your sister. Well, a subcontract, in my opinion, is even less
exciting than that. Many of you know that in the late 1970s I
founded a small business and ran it for 20 years, and when I
left that firm 4 years ago, it was the 54th largest Federal
Government contractor. At that business, we spent 92 percent of
our marketing dollars focused on being a prime. Eight percent
of our marketing dollars, in any one year, we would chase
subcontract opportunities. That is just one business's
marketing strategy.
Administrator Styles, who represents what the President
said, has said many times that the President wants to create an
environment in which small businesses can flourish. If our role
is to help small businesses flourish, it is to get them prime
contract opportunities. If it is to keep them a small business
and to put bread on their table and feed their family, then
perhaps subcontracting business is good enough and appropriate,
but if we want to flourish as a small business and ultimately
become a big business, there is no substitute for being the
prime. Thank you.
Mr. DaSilva. Thanks, Ron.
Pat.
Ms. Parker. Patricia Parker.
You know, we talk about accountability and holding--and
reports, and even the certification process. Well, what we are
talking about is data, the ability to collect data, the ability
to identify data, process it, get it back, make decisions
quickly so this can go through. As we know with any good
legislation, any good programs that come of that, resources,
financial resources are needed to make that happen, and as we
know, this is in scarce resources, we need to focus those
resources. I think a lot of attention needs to be paid to
putting resources towards technology to help us all work better
and smarter. Thank you.
Mr. DaSilva. That is quite ominous.
[Laughter.]
Ms. Parker. I am glad somebody agrees.
[Laughter.]
Ms. Parker. But I mean because it is. If we want to hold
primes accountable, we want to hold agencies accountable, then
we do need to report. They need to be able to have the data.
There needs to be software programs that are out there. Small
businesses go get a Small Business Innovative Research grant so
that they can develop a technology that can help process all of
this quickly so agencies can see those numbers and they can
hold people accountable. Without that it is just pointing
fingers and saying you did not do it, and coming up with
numbers. So I think that using technology to help this process
is going to be a big push in making all of this happen.
Mr. DaSilva. Thank you.
Michael.
Mr. Robinson. Michael Robinson.
Building on what General Henry said, I think that the way
to incentive primes and agencies is to get this buy-in at the
top. Without that buy-in this is not going to work. We have
programs right now that are languishing, where we offer an
awardee in the amount of 5 percent if companies will use Native
American-owned firms in the Indian Incentive Act, and this
program is not working. So financial incentives do not work.
Report-onlys, which is what we have in DoD, is not working. We
have an agency charged to find and report on the progress of
the primes. DCMA, they do a wonderful job, but DoD is not
making its goals.
So I think that buy-in at the top and holding primes
accountable in past performance, and making those conditions
for further awards, is a good incentive to move these programs
forward.
Mr. DaSilva. Thank you.
With that, I am going to be closing out the Roundtable.
Before I do, I would just like to again thank Senator Kerry's
constituent, Michael Robinson from our PTAC, Morris Hudson,
Senator Bond's constituent from their PTAC, Angela Styles, who
just left a few minutes ago, but gave a tremendous amount of
her time, as did Fred Armendariz.
With that I would like to thank all the participants for
participating in this Roundtable discussion today. I remind you
that the record will be open for 14 days. Please feel free to
submit any comments on anything anybody said, any of the agenda
items, and particularly the legislation.
And with that, thank you very much for coming. We are
adjourned.
[Whereupon, at 11:27 a.m., the Roundtable was adjourned.]
A P P E N D I X
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Computer & Communications Industry Association,
Washington, D.C., July 2, 2002
Senator John F. Kerry, Chairman,
Senate Committee on Small Business,
428A Russell Senate Office Building,
Washington, D.C.
Dear Senator Kerry: I am writing to express the Computer &
Communications Industry Association's (CCIA) support for S. 2466, the
``Small Business Federal Contractor Safeguard Act.''
CCIA was founded on the belief that competition and vibrant markets
are critical factors in the success of our economy and in our ability
to lead the world in innovation and technology. We are the leading
industry advocate in promoting open, barrier-free competition in the
offering of computer and communications products and services
worldwide, and our motto is ``open markets, open systems, open
networks, and full, fair and open competition.''
CCIA is an association of computer, communications, Internet and
technology companies that range from small entrepreneurial firms to
some of the largest members of the industry. CCIA's members include
equipment manufacturers, software developers, providers of electronic
commerce, networking, telecommunicatioas and online services,
resellers, systems integrators, and third-party vendors. Our member
companies employ nearly one million people and generate annual revenues
exceeding $300 billion.
We have found that, in general, contract bundling can harm many
small businesses by locking them out of ``mega contracts;'' can harm
taxpayers by promoting procurement of goods and services that may not
be cost-efficient; and can hurt vendors of all sizes who do not have
the resources to fulfill bundled contracts. We believe that the
requirements of S. 2466 in regards to bundled contracts of over $2
million and $5 million will go far in ensuring that bundling is used
only in the rare case and as the norm.
We appreciate your efforts to promote effective and fair
procurement policies, and congratulate you on this excellent proposal.
Please let me know if there is anything I can do to assist in passage
of S. 2466. You can contact me at (202) 783-0070 ext. 110, or Gabe
Rubin of my staff at (202) 783-4070 ext. 107.
Sincerely,
Ed Black,
President & CEO.
______
News Release of the Computer & Communications Industry Association\1\,
July 1, 2002
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\1\ CCIA is an international, nonprofit association of computer and
communications industry firms, representing a broad cross-section of
the industry. CCIA is dedicated to preserving full, free and open
competition throughout its industry. Our members employ over a half-
million workers and generate annual revenues in excess of $300 billion.
---------------------------------------------------------------------------
ccia: contract bundling impediment to full and open competition
Washington, D.C.--The Computer & Communications Industry
Association (CCIA) today submitted comments to the Office of Management
and Budget (OMB) describing the potential competitive barriers created
by contract bundling when used for Federal procurement. CCIA submitted
its views in response to President Bush's call for comments from
affected industries and individuals describing how contract bundling
limits ``fair and open'' competition.
In the comments, CCIA makes several recommendations including:
making bundled contracts easier to protest; providing longer times to
respond to requests for bundled contracts; giving OMB the authority to
resolve disagreements on bundled contracts; and requiring more
stringent standards for an agency to request the use of bundling.
Additionally, CCIA recommends that the presumption of validity for the
use of bundling move away from the affected agency and to those
challenging its use.
CCIA recognizes the hard work of several Senators and Members of
Congress, and heartily endorses Senator John Kerry's bipartisan ``Small
Business Federal Contractor Safeguard Act'' and Representative Nydia
Velazquez' bipartisan ``Small Business Opportunity Act.'' Both pieces
of legislation will go far in ensuring greater access to the government
procurement system, and better, more cost-effective solutions to
acquiring goods and services for the Federal Government. While not just
a small business issue, CCIA recognizes that small businesses are
disproportionately affected by bundling, and locked out of contracts
where they could otherwise provide cost-effective solutions.
``Too many times the Federal Government will decide that it wants
to procure from a particular vendor and create a bid process that is
tilted against anyone but the one vendor who can provide the `mega-
contract,' '' said Ed Black, President and CEO of CCIA. ``This does not
achieve the goals of full, fair and open competition that is required
from our laws. Moreover, this causes the taxpayers to pay more for what
the government wants to do. This is not the way our resources should be
used.''
The comments can be found at http://www.ccianet.org/papers/
contract--bundling.pdf.
______
Comments on Competition in Contractng Review: Contract Bundling, Office
of Management and Budget, Executive Office of the President
The Computer & Communications Industry Association (CCIA) was
founded on the belief that competition and vibrant markets are critical
factors in the success of our economy and in our ability to lead the
world in innovation and technology. We are the leading industry
advocate in promoting open, barrier-free competition in the offering of
computer and communications products and services worldwide, and our
motto is ``open markets, open systems, open networks, and full, fair
and open competition.''
CCIA is an association of computer, communications, Internet and
technology companies that range from small entrepreneurial firms to
some of the largest members of the industry. CCIA's members include
equipment manufacturers, software developers, providers of electronic
commerce, networking, telecommunications and online services,
resellers, systems integrators, and third-party vendors. Our member
companies employ nearly one million people and generate annual revenues
exceeding $300 billion.
For nearly 30 years, CCIA has supported policies that ensure
competition and a level playing field in the computer and
communications industries. CCIA has been effective in advocating our
mission in Congress, in the Executive Branch, and in the courts.
Notably, we have taken a keen interest in antitrust enforcement,
participating in the cases against IBM, AT&T, and most recently
Microsoft. Additionally, CCIA has taken a lead role in advocating that
the government should not compete against private sector enterprises,
such as current competitive activities undertaken by the United States
Postal Service, the Office of Personnel Management, and plans by the
Internal Revenue Service.
It is with this strong belief in full, fair and open competition
that CCIA was extremely pleased by President Bush's recent
announcement:
government contracting must be more open and more fair to small
businesses . . . I know government contracting, if wisely done,
can help us achieve a grand national goal . . . But you know as
well as I do that there are some large hurdles for small
businesses . . . and the main one is . . . that agencies
sometime, many times, only let huge contracts with massive
requirements . . . called bundling. It effectively excludes
small businesses. And we need to do something about that.\1\
---------------------------------------------------------------------------
\1\ President George W. Bush, Address at the Women's
Entrepreneurship Summit (March 19, 2002) (transcript available at
http://www.whitehouse.gov/news/releases/2002/03/20020319-2.html).
CCIA wholeheartedly endorses President Bush's vision, and is pleased to
provide our comments on how contract bundling often fails to achieve
the rule of ``full and open'' competition that ``remains the general
rule when agencies acquire goods and services.''\2\
---------------------------------------------------------------------------
\2\ Competition in Contracting; Contract Bundling; Notice of Public
Meeting and Request for Comments, 67 Fed. Reg. 87, 30403 (May 6, 2002).
---------------------------------------------------------------------------
In short, most contract bundling is a huge impediment to full and
open competition in Federal procurement. Bundling is defined as ``the
consolidation of two or more smaller contracts into one very large
contract.''\3\ Invariably, these are contracts that could have been
separately bid on by a variety of vendors, achieving the same outcome
but with a more cost-effective solution for the government and U.S.
taxpayer. The practice of contact bundling deprives small vendors of
the ability to compete for many Federal sales, as many compete in niche
areas and are not able to fulfill contracts that reach beyond their
business specialty. The numbers make this fact clear: for every
additional 100 bundled contracts, there is a corresponding decrease of
106 contracts awarded to small firms.\4\
---------------------------------------------------------------------------
\3\ Procurement Policies of the Pentagon with Respect to Small
Businesses and the New Administration: Hearing Before the House Comm.
on Small Bus., 107th Cong. 51 (2001) (Statement of Susan M. Walthall,
Acting Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Bus.
Admin.).
\4\ The Impact of Contract Bundling on Small Business: FY 1992-FY
1999, Report by Eagle Eye Publishers, Inc. to the U.S. Small Bus.
Admin. Office of Advocacy, (September 2000).
---------------------------------------------------------------------------
Contract bundling was also cited by the House Small Business
Committee Democrats as a major impediment for Federal agency
contracting with small businesses. In a recently released report,
Ranking Democrat Nydia Velazquez (D-New York) emphasized the woeful
performance of the Federal Government's track record in accomplishing
its statutorily defined small business goals.\5\ In grading 21
agencies, only one received a grade of A; one received a grade of B;
seven received a grade of C; 10 received a grade of D; and two received
failing grades.\6\ Senator Christopher ``Kit'' Bond (R-Missouri) has
also faulted contract bundling as anticompetitive, resulting in
contracts that small businesses are unable to perform ``due to its
complexity or its obligation to do work in widely disparate geographic
location[s].''\7\ Senator Bond further stated that contract bundling
``eliminates small businesses from competing for contracts to sell the
government some of the $200 billion in goods and services it buys every
year.''\8\
---------------------------------------------------------------------------
\5\ See generally 2002 Scorecard III: Small Bus.: Opportunity
Denied, Report by the House Small Bus. Comm. Democrats, (May 15, 2002).
\6\ Id. at 8.
\7\ Senator Kerry Introduces Legislation to Limit ``Contract
Bundling,'' 44 No. 19 Gov't Contractor 189 (May 15, 2002).
\8\ Id.
---------------------------------------------------------------------------
Clearly, contract bundling is a device that locks out many
qualified venders and strikes at the heart of fair and open
competition. In addition to costing taxpayers valuable resources, the
restrictions in availability of these contracts will hurt these
vendors' ability to survive, thus reducing future competition.\9\ CCIA
certainly does not believe that it is the Federal Government's
responsibility to subsidize small business, or specifically use its
purchasing power to buttress venders who otherwise would not be in a
position to provide goods or services on competitive terms. This also
parallels President Bush's comments: ``I do not believe the role of
government is to create wealth. . . . The role of government is to
create an environment that facilitates the flow of capital, and an
environment in which people can realize their dreams.''\10\ However,
there is a great difference between subsidizing small businesses that
aren't competitive and placing onerous restrictions that unnecessarily
foreclose viable businesses from bidding for Federal contracts. In
CCIA's view, contract bundling, in its current excessive use, has
operated to do the latter.
---------------------------------------------------------------------------
\9\ See Ishak Akyuz, Bundling into the New Millenium: Analyzing the
Current State of Contract Bundling, 30 Pub. Cont. L.J. 123, 124 (2000).
\10\ President George W. Bush, Address at the Women's
Entrepreneurship Summit (March 19, 2002).
---------------------------------------------------------------------------
CCIA recognizes that there may be circumstances that warrant the
use of bundled contracts but cautions that they should be used in only
the most sparing cases. In general, Federal law appears to discourage
bundling but allows it when there would be ``measurably substantial
benefits'' including: cost savings; quality improvements; reduction in
acquisition cycle times; better terms and condition; or any other
benefts.\11\ While the agency is required to conduct market analsysis
to determine if bundling is ``necessary and justified,''\12\ the
language of ``any other benefit'' is troubling due to its vagueness.
Further, it should be noted that there is no guarantee ensuring the
independent quality of market research, and such research has recently
come under attack for its less than objective reporting.\13\ Given the
limitations of relying on questionable market research, CCIA believes
that this data, used to justify any other benefit, creates too much
leeway for vendors and agencies to game the system.
---------------------------------------------------------------------------
\11\ See 15 U.S.C. Sec. 644(e)(2)(B) (2000).
\12\ See 15 U.S.C. Sec. 644(e)(2)(A) (2000).
\13\ See e.g. Analyzing the Analysts: Hearing Before the House
Subcomm. on Capital Mrkts., Ins. and Gov't Sponsored Enterprises, 107th
Cong. (2001).
---------------------------------------------------------------------------
There are other particular circumstances when bundling is allowed,
such as when the agency reasonably believes that de-aggregating tasks
to separate contracts would be impracticable;\14\ when effective
coordination of the tasks involved require a single contractor;\15\
when unbundling would create undue technical risks;\16\ when
interoperability and compatibility would be hampered;\17\ when the
agency has integrated the purchasing and installation on systems;\18\
and when the procurement results in a novel approach that will provide
substantial benefits to the agency.\19\ While protests have
demonstrated that contract bundling will be rejected when the agency's
rationale for doing so is insufficient or unreasonable,\20\ considering
all the circumstances in which bundling is allowed, as described above,
it appears that agencies have wide latitude and discretion in bundling
contracts. In CCIA's view, this discretion often leads to unwise
bundling, and as a result, the current structure is an ineffective one
for ensuring fair and open competition.
---------------------------------------------------------------------------
\14\ Ishak Akyuz, Bundling into the New Millenium: Analyzing the
Current State of Contract Bundling, 30 Pub. Cont. L.J. 123, 125-6
(2000) (citing EAI Corp., Comp. Gen. B-283129, Oct. 7, 1999, 99-2 CPD
para.69).
\15\ Id. (citing Electro-Methods, Inc., 70 Comp. Gen. 53, 90-2 CPD
para.363, at 5; LeBarge Prods., Inc., Comp Gen. B-232201, Nov. 23,
1998, 98-2 CPD para.510, at 3-4).
\16\ Id.
\17\ Id.
\18\ Id. (citing Tucson Mobile Phone, Inc., Comp. Gen. B-274684.2,
Feb 1, 1994, 94-2 CPD para.45)
\19\ Id. (citing S&K Elecs., Comp. Gen B-282167, June 10, 1999, 99-
1 CPD para.111, at 4).
\20\ Ishak Akyuz, Bundling into the New Millenium: Analyzing the
Current State of Contract Bundling, 30 Pub. Cont. L.J. 123, 125-6
(2000) (citing Better Serv., Comp. Gen B-265751.2, Jan 18, 1996, 96-1
CPD para.90, at 3; Ralph C. Nash, Contract Bundling: An Update, 12 Nash
& Cibinic Rep. para.9 at 24-5 (1998)).
---------------------------------------------------------------------------
There are two notable legislative efforts to reform contract
bundling and CCIA wholeheartedly endorses both. In the House, the
bipartisan Small Business Opportunity Enhancement Act (H.R. 2867) has
passed the Small Business Committee and is awaiting floor action. This
bill would amend the Small Business Act to give the Director of the
Office of Management and Budget (OMB), or a subordinate who is
appointed by the President and approved by the Senate, the authority to
resolve disagreements on bundled or ``mega'' contracts in addition to
extending the time period from 30 to 60 days for a small business to
respond to a solicitation for a bundled contract. By moving the appeal
process from the affected agency to OMB, bundled contracts will likely
face more rigorous scrutiny and not be rubber-stamped, an issue that
the Small Business Committee identified as a major problem in bundled
contract appeals.\21\
---------------------------------------------------------------------------
\21\ H.R. REP. NO. 107-432, at 3 (2002).
---------------------------------------------------------------------------
Senator John Kerry (D-Massachusetts) has introduced the bipartisan
Small Business Federal Contractor Safeguard Act (S. 2466). This bill
provides more stringent guidelines for allowing a bundled contract. It
would require, for bundled contracts over $2 million, a statement of
benefits, a statement of alternative approaches, and a specific
determination that the bundling is necessary and the anticipated
benefits justifies bundling. The bill adds further requirements for
contracts over $5 million, including conducting market research, an
assessment of impediments to small business participation, and
specified actions to maximize small business participation.
Additionally, these contracts will not be accepted if the ``necessary
and justified'' determination is based solely on administrative and
personnel savings unless those savings will be substantial.
Taken in tandem, these two approaches would go far in ensuring more
access by a wider array of vendors into the government procurement
process. CCIA also recommends that protests be automatically available
in the case of bundled contracts and that Congress should direct the
Government Accounting Office (GAO) to shift the presumption away from
the affected agency when determining if a bundled contract is necessary
and justified. Anecdotally, CCIA has determined that in too many
instances, Federal agencies give far too much deference to their
procurement offices in determining the appropriate scope of bundling of
contracts, and in turn GAO gives these agencies overly broad latitude.
This trend needs to be reversed. CCIA believes that the aims of H.R.
2867, moving dispute resolution to OMB, would be an effective way to
begin to overcome this hurdle.
CCIA believes contract bundling serves as a significant impediment
to not only fair and open competition, but more importantly, fosters
shortsighted decisionmaking resulting in limiting the value the
government ultimately receives for their investments in technology.
A recent example can be found with the implementation of agency
Financial Management Systems required under GAO's Joint Financial
Management Information Program (JFMIP) where contract bundling is
prevalent, resulting in unfair (or lack of) competition and the
elimination of both ``best of breed'' and Small Business as solution
providers. Under the direction of the GAO, JFMIP documentation calls
out for a ``single integrated system''. The document further explains
that this does NOT mean one software solution yet this is exactly the
path recently taken by such agencies as NASA, the Navy and programs
such as the Army's Wholesale Logistic Modernization Program (LOGMOD).
In each case, a foreign-based provider was selected to support the
modernization of the agency financial system. Agencies have gone on to
further justify the use of this solution for all encompassing agency
requirements at what appears to be significant and elevated costs
resulting in reduced value to the government.
Further contract bundling is frequently the precise hidden
objective of the ``so-called independent'' analysis from consultant
firms who strive to benefit from their very same decisions. In our
opinion, the government needs to have a far more critical review of
``independent'' analysis perfonmed by consultants and organizations.
Certainly, the top Fortune 100 companies are NOT moving toward a single
or one software solution relying on an individual organization. They
realize the risk is just too high to depend on ``one'' software
provider, but instead move toward a strategic alliance with several
software companies that meet a high degree of their critical needs
(i.e. financial, HR-Human Resources, physical assets, IT assets).
Consultant organizations will provide integration but allow the client
company or agency to have the benefit of superior products which fit
the specific needs of their organization.
In summary, bundled contracts greatly harm the competitive process.
As the Federal Government spends over $219 billion annually, making it
the largest purchaser in the world,\22\ procuring the best solutions
for government agencies in a fair, competitive and thus cost-effective
way should be of paramount importance. The Federal Government has the
ability to make winners and losers in the marketplace. As previously
stated, CCIA does not advocate using this power to unduly help
businesses that can't compete effectively in the marketplace; however,
it should not use this system to lock out venders who can compete, but
for unnecessary, burdensome contracting requirements. While much
discussion of bundling revolves around small businesses, CCIA's
position is not that this is solely a small business issue. Rather this
is one that affects vendors of all sizes, and more importantly, it
affects all citizens in how much they pay for goods and services
through their taxes, and what they will receive. CCIA appreciates the
President's dedication to this issue, and welcomes the quick action on
the part of OMB in assembling these written comments, and oral comments
at the open meeting recently held. If you have any further questions,
or if CCIA can be of more assistance, please do not hesitate to contact
CCIA President & CEO, Ed Black.
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\22\ Federal Agencies Receive Poor Grades for Small Business
Contracting, 44 No. 20 Gov't Contractor 195 (May 22, 2002).
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Additional Written Comments by Women Impacting Public Policy for the
Committee Roundtable
are government purchasing policies failing small business?
Mr. Chairman: On behalf of Women Impacting Public Policy, (WIPP),
we are responding to questions raised at the June 19 Roundtable
Discussion, ``Are Government Purchasing Policies Failing Small
Business?'' Specifically, Women Impacting Public Policy (WIPP) wants to
go on record as supporting the draft language submitted by Chairman
Kerry at the hearing regarding the creation of a Small and
Disadvantaged Business Ombudsman for Procurement in the Small Business
Administration (SBA).
Women own more than 9 million businesses in this country, employ
more than 27.5 million and contribute more than $3.6 trillion to the
nation's economy. Yet, since the Federal Acquisition Streamlining Act,
enacted 7 years ago, women-owned firms have received, at most, 2.2
percent of all contracting dollars.
Given those statistics, our support for the creation of an
Ombudsman for procurement at the SBA should come as no surprise. There
is no question in our members' minds that the SDB Ombudsman should
serve as a facilitator between Federal agency procurement officers,
small businesses (especially women-owned firms) and prime contractors.
The interagency coordination required through each Federal agency's
Office of Small and Disadvantaged Business Utilization (OSDBUs) in the
proposed language, should go a long way toward ensuring procurement
goals for women-owned and minority-owned businesses are met. Toward
that end, the confidentiality provision of the proposed legislation is
absolutely essential to making that happen.
WIPP understands that Committee members may differ on where to
place the Ombudsman within the SBA. We believe the Committee must make
a judgment as to where the Ombudsman can be the most effective
independent voice for small and disadvantaged business. Certainly, no
Ombudsman can be effective unless he/she is perceived to have enough
authority and access to compel compliance among Federal agencies and
prime contractors. We feel certain the Ombudsman cannot be an effective
voice for our members if he/she is hampered by the perception of being
subject to political pressures rather than being a true advocate for
small and disadvantaged businesses.
Finally, we support increasing the governmentwide small business
goal from 23 percent to 30 percent. As Senator Bond indicated in his
opening remarks at the Roundtable, the government is not currently
meeting the 23 percent goal. WIPP believes, however, raising the goal
to 30 percent provides leadership from the Congress that Federal
agencies must continue to strive to work with small businesses. At the
same time, setting higher goals must be accompanied with a strong goal
attainment plan. The proposed legislation requires a plan from each
agency on how to meet the targets if they fail to do so. WIPP believes
that consequences for failing to meet the goals should be stronger than
requiring a plan. Our small business owners face much greater
consequences when they fail to meet their business targets. Failure to
meet business goals results in lost revenue for small businesses. In
the private sector, failure of employees to meet company goals and
objects results in lost jobs. We suggest that Congress consider a
similar model for the agencies. Those agencies failing to meet their
goals, should face a decrease in their budget by a corresponding
amount. We urge the Committee to explore stronger enforcement measures
for agencies failing to meet their small business goals.
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Association of Small Business Development Centers,
July 16, 2002.
Hon. John F. Kerry, Chairman,
Committee on Small Business and Entrepreneurship,
U.S. Senate
Dear Mr. Chairman: I am writing in strong support of the National
Small Business Regulatory Assistance Act, S. 2483. As you know, this
legislation establishes a pilot program to award competitive grants to
20 selected Small Business Development Centers (SBDCs) to provide
regulatory compliance assistance to small businesses. With these
grants, the SBDCs would form partnerships with Federal compliance
programs, provide education and training, and offer free compliance
counseling to small businesses. The legislation also provides privacy
protections to small business owners who seek assistance under the
pilot program, and also extends privacy guarantees to all small
businesses that seek assistance from their local SBDCs.
SBDCs are in a unique position to provide regulatory assistance to
small businesses. With more than 1,000 centers across the nation, the
SBDC network assists about 600,000 small business owners each year in
face-to-face counseling and training, in addition to hundreds of
thousands more small businesses that SBDCs assist through the mail,
telephone, fax-on-demand and e-mail.
Small business owners try to comply with government regulations.
Many small businesses are family-owned and operated. Small business
employees are frequently family or friends of the same employer. Small
business owners do not want their employees working in unsafe
workplaces, and they want their children to grow up in a clean and
healthy environment. However, small business owners may not know what
is expected of them and how they can comply with regulations in a cost-
effective manner.
Legislation similar to S. 2483 was passed by the House of
Representatives by voice vote on October 2 of last year, with strong,
bi-partisan support from the House Committee on Small Business. S.
2483, which you are cosponsoring, includes changes to the House-passed
bill that are supported by the ASBDC. These changes include technical
corrections, an improved funding formula to distribute grants more
evenly among grant recipients, improved study provisions, and
clarification of privacy protections. I sincerely appreciate your
openess in working with the ASBDC on these changes, and I want to
commend John DaSilva of your staff for his work on this bill.
S. 2483 recognizes the very real need of small- and medium-size
employers for regulatory compliance assistance. Thank you for your
leadership on this important small business development legislation.
Sincerely,
Don Wilson,
President.