SPEECH
by the
Honorable Nydia M. Velázquez
National Small Business United
June 5, 2002

Good morning. Thank you for inviting me to speak to you today. My thanks especially to Todd McCracken --- it is always good working with you.

I appreciate the time everyone here is taking to advocate on behalf of American small enterprise. I say this all the time --- small business is big business in America. Together, you produce half our national output and create almost half of all jobs, making the American economy the envy of the world.

But nobody said starting and running your own company would be easy. On the Small Business Committee we recognize that, which is why we come to work each day with the same goal --- to help you in every way we can.

We check our ideologies at the door and sit down to do what is best for small business.

One of the values guiding the committee is a commitment to fairness and equity for small businesses. Too often you face UNfairness and INequity. For example, last month's NSBU report on the tax code illustrates how Congress and the Regulators write laws as if one size fits all.

We know that's not true. Such an approach simply does not work. Small businesses are weighed down by the tax code, regulations, and paperwork burdens much more than large corporations.
This report is so valuable that I am going to make sure all 435 Members of Congress receive a copy.

We are working on another area of government unfairness. I am talking about federal procurement --- the $220 billion in goods and services the government buys every year.

Now --- I recognize that most of you have never done work for our government. Whether it was the hassle or lack of opportunities, many of you don't have a personal stake in the procurement process. Despite what I am about to say, I hope you give it some thought. Federal contracting is a major means to help small businesses establish themselves.

For three years now, the Democrats' "Scorecard" reports have documented how the federal government continues to shut small businesses out of the procurement arena through the creation of mega-contracts.

These practices are unfair to small businesses --- and the American taxpayer. Because while federal agencies THINK they are getting the best value through contract consolidation --- they are WRONG.

In fact, small businesses routinely do better work for the lowest cost. This is because small businesses operate with lower overhead --- smaller profit margins --- and greater concern for their customers.

Unfortunately, federal agencies do not recognize this good work. And that has cost small business $12.5 billion last year and the American taxpayer uncounted billions in savings.

Worse still, I'm afraid, is the treatment of women-owned firms by federal agencies. While 42 percent of women-owned companies produce something the government buys, they win less than two-and-a-half percent of government contracts!

I pushed an initiative into law to address this inequity. Unfortunately, the Administration has refused to implement it. The result is $5.5 billion lost for women-owned small businesses --- the fastest-growing sector of entrepreneurs.

That is unfair. We both know how vital small businesses are to America. Anything that holds you back, stifles you or burdens you, in the end harms our economic strength.

I am not alone in this concern. President Bush agrees that federal contracts are too large, and small businesses are being excluded. He mentioned this during the campaign and again this March when he unveiled his small business agenda.

I have introduced two bipartisan bills to address these problems. The Small Business Contract Equity Act is designed to break up consolidated contracts before they get too big for small businesses to bid on them.

In addition, the Small Business Opportunity Enhancement Act will allow the Small Business Administration to appeal large agency contracts to the Office of Management and Budget. This gives small companies the due process of the fair hearing they deserve. But despite these opportunities to do the right thing, both remain stalled in the House.

Clearly, while we have made great progress, much more remains to be done.

I am happy you are here --- you can visit your Representatives with your tax report in hand. You can talk to them about how the tax code, and contracting practices hold back small businesses. You can remind them that when small businesses are held back, the whole country is held back. Working together, we can change that.

Thank you very much.

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