STATEMENT
of the
Honorable Nydia M. Velázquez, Ranking Democratic
Member
Subcommittee on Regulatory Reform and Oversight
Hearing on "SBA's Procurement Programs"
House Committee on Small Business
March 30, 2006
Thank you Mr. Chairman. I was also want to thank Congresswoman
Bordallo for letting me sit in on this hearing. I appreciate
all of the hard work you are doing on this issue.
Over the last several years the federal
market place has continued to rapidly increase, and
is $100 billion dollars more than it was at the beginning
of the President's term. This growth is attributed to
spending related to the war on terror and our involvement
in Iraq. The Department of Defense's procurement volume
in 2004 was bigger than the entire federal market place
in 1999. Based on this, you would think small businesses
are thriving, but let me tell you - nothing could be
further from the truth.
From 2003 to 2004 alone, small companies
lost nearly 1.7 billion in contracting opportunities
and contract actions to small businesses declined by
31%. While this Administration claims small businesses
are important, they obviously don't think they are important
enough to do business with.
We constantly hear that SBA is doing
more with less but it is clear entrepreneurs are not
benefiting. By 2007 the agency's staff will be reduced
by one-third, and their budget has already been cut
in half. The lack of personnel and resources causes
programs to be abused, fraud-ridden and in some cases
not executed at all.
One of the most important roles SBA serves is to ensure
agencies comply with current contracting laws. This
job falls on the Procurement Center Representatives,
the front line defense against items such as contract
bundling. There were 73 PCR's when the federal marketplace
was almost half of its current size - and now there
are only 58 PCR's. This leaves small firms without an
advocate and results in a drop in contracting opportunities.
At a time when many small businesses are
struggling to recover from Hurricanes Katrina and Rita,
local entrepreneurs are receiving less than 20 percent
of FEMA's contracting dollars. To make matters worse,
nothing is being done to expand small business opportunities
in the Gulf Region for recovery work. While the SBA
does not think this is alarming, our nation's small
businesses are being neglected.
These shortcomings are most glaring with
respect to women and minorities. The 8 (a) program -
the primary program through which minority-owned businesses
enter the federal marketplace, has dropped by 20%. What
is most disappointing is that this program has not been
updated in nearly 20 years - and as a result has moved
away from its core mission of minority business development.
This administration has also done nothing
to implement the Women's Procurement program, an initiative
that allows for women-owned businesses to access the
federal market place. By failing to execute this program,
women business owners have lost out on $25 billion in
contracting opportunities.
Small business participation in the federal marketplace
is important and should not be viewed as an undue burden.
Entrepreneurs are the innovators, drivers of the economy
- they make this economy tick. This is not just good
for small business, but it creates competition in the
federal marketplace, gives federal agencies quality
products, and most importantly it provides the best
value for taxpayer dollars.
Rather than recognizing this, the administration's
sole focus is providing no bid contracts to companies
like Halliburton who then turn around and over charge
the government millions of dollars. This is the wrong
set of priorities for this nation and it needs to change.
