[Congressional Record (Bound Edition), Volume 155 (2009), Part 17]
[Extensions of Remarks]
[Pages 23654-23655]
[From the U.S. Government Publishing Office, www.gpo.gov]




 INTRODUCTION OF LEGISLATION TO AMEND SECTION 31 OF THE SMALL BUSINESS 
 ACT WITH RESPECT TO AWARDING CONTRACT OPPORTUNITIES TO QUALIFIED HUB 
          ZONE SMALL BUSINESS CONCERNS, AND FOR OTHER PURPOSES

                                 ______
                                 

                           HON. WALLY HERGER

                             of california

                    in the house of representatives

                        Tuesday, October 6, 2009

  Mr. HERGER. Madam Speaker, today I introduced a bill that would level 
the playing field for small businesses in my Northern California 
Congressional District competing for federal contracts. Under current 
law, federal contractors are required to give first priority to 
businesses that are HUB Zone certified, often times precluding worthy 
non-HUB Zone small businesses from having a fair opportunity to compete 
for federal contracts.
  Numerous small businesses in my Northern California Congressional 
District have contacted me to explain that the HUB Zone program in its 
current form is preventing them from bidding on contracts with the U.S. 
Forest Service (USFS) with a value over $100,000. For instance, an 
engineering firm in Redding, California, a company that had previously 
received USFS contracts, informed me that they are no longer able to 
bid for such contracts because they are not a HUB Zone certified 
company. They were told that USFS had changed its contracting policies 
based on a 2007 Government Accountability Office (GAO) report that 
found that the USFS was not in compliance with the small business 
contracting rules established by the HUB Zone Act of 1997. The new 
requirements stipulated that only companies with HUB Zone certification 
could bid for these contracts.
  The limitation to HUB Zone certified companies is not in the best 
interest of all areas. The unemployment rate in my Northern California 
District exceeds 14% in some areas, but because of the way the HUB Zone 
criteria were written, only small portions of Redding, California are 
classified as a HUB Zone. The criteria are based on the long term 
unemployment rate for an area along with its income

[[Page 23655]]

levels, two variables that change frequently. Secondly, the maps that 
define the boundaries are haphazardly drawn, resulting in different 
sides of a street or even offices in a building having different HUB 
Zone statuses. Most important, the boundary lines are rarely updated 
and years may pass before the boundaries note a change in an area's 
economic situation.
  The legislation that I have introduced would provide federal 
contracting officers with the flexibility to select from the various 
types of small business classifications. In doing so, HUB Zone 
classified small businesses would no longer have automatic first 
preference for federal small business contracts. This legislation would 
fix the current rigid preference system and give discretion to federal 
contracting officers to select small businesses based solely on the 
circumstances of the contract and quality of the bid.
  The legislation would make only a one word change to the HUB Zone 
statute. It takes away the automatic preference given to the HUB Zone 
program for federal contracts going to small businesses, thereby 
leveling the playing field for other small businesses. With federal law 
mandating that 23% of federal contracts go to small businesses, it is 
important that federal policy promote competition to ensure that U.S. 
taxpayer dollars go to the most worthy contractor.
  In short, my legislation would level the playing field for small 
businesses in a manner that is responsible to the taxpayers while 
continuing to provide assistance to small businesses in economically-
disadvantaged areas. I look forward to working with my colleagues to 
move this legislation through Congress.

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