STATEMENT
of the
Honorable Nydia M. Velázquez, Ranking Democratic
Member
House Committee on Small Business
Joint Committee Hearing on "Increased Participation
of Alaska Native Corporations in the 8(a) Contracting
Program"
June 21, 2006
Thank you, Mr. Chairman. The federal government has
grown to become the biggest buyer of goods and services
in the world. In the last year alone, federal purchasing
power increased by 3 percent to nearly $295 billion.
In order to achieve a vibrant and open
federal marketplace, it is essential for small firms
to be included in the procurement equation. Small businesses
have always played a key role in ensuring our government
is able to effectively operate and continue in this
role. These businesses are capable of providing quality
services at the best value for the American taxpayers'
dollar.
There are many federal government programs designed
to encourage agencies to utilize small business owners
in their federal buying strategies. These are valuable
programs that serve an important purpose, and have provided
the government with the highest quality products for
the taxpayer dollar. However, it is all too often that
many of these programs are unfairly singled out - not
because they are ineffective, but due to the current
administration's failure to properly modernize, fund,
and administer these initiatives.
The 8(a) program - our nation's only remaining
federal initiative focused solely on the development
of minority entrepreneurs - is one such initiative.
It has been responsible for the development of more
than 20,000 companies that have received almost $100
billion in federal contracts.
Yet, for all of the good the 8(a) program
has done - the Small Business Administration (SBA) has
allowed it to deteriorate significantly. Without sufficient
funding, manpower, and attention - the 8(a) program
has faltered in its ability to serve low income communities
and aid in the development of minority entrepreneurs.
Today, we have the opportunity to discuss
the findings of a recent GAO report, which takes an
in depth look at the current state of affairs with the
8(a) program. In particular - the dramatic increase
in 8(a) contracts awarded to Alaska Native Corporations
(ANCs), and the impact this may have on the future of
the program.
In FY 2004, ANC's were awarded $1.1 billion
- or 13 percent of total 8(a) dollars. This should be
contrasted with the fact that between FY 2003 and FY
2004, the 8(a) program as a whole - minus ANCs - declined
by $2 billion. The reality is that ANC participation
is increasing while 8(a) contract dollars are declining.
The reason for this decline is in large
part due to SBA's sheer lack of attention to the program.
The GAO has outlined 10 recommendations for the SBA
to increase its oversight. Without this, the GAO has
pointed out that "there is clearly the potential
for unintended consequences or abuse."
This situation not only takes away valuable
contracting opportunities from small business owners
- but also diminishes the ability of the 8(a) program
to fulfill its role of creating economic and community
development.
The important issue we are facing today
with this hearing is to attempt to strike a balance
between the need to provide economic development to
Alaska Natives, while ensuring small and minority business
owners do not see further contract dollar declines.
As we continue to look for ways to foster
economic development in minority and underserved communities,
it is essential that we do not lose sight of the capabilities
of the 8(a) program. This initiative has always been,
and should continue to be, a key element in building
stronger communities and local economies.
I am hopeful that the two of our committees
can find common ground to refocus the 8(a) program and
reengage the SBA in seeing that this initiative is truly
able to accomplish its intended mission. Thank you,
Mr. Chairman.
