Testimony of Margot Dorfman Before the House Small Business Committee On the Updating and Improving the SBA's Contracting Programs October 4, 2007 Chairman Velazquez, Ranking Member Chabot, and members of the House Small Business Committee, my name is Margot Dorfman. I am the CEO of the U.S. Women’s Chamber of Commerce (USWCC).
I am honored to be here today speaking on behalf of small business owners to discuss updating and improving the SBA’s Contracting Programs. In a recent hearing before this committee, Ranking Member Chabot asked me what principle changes I would make in order to remedy some of the failings of the SBA. While my view is that many of the challenges we see come from a failure of leadership to engage in productively fulfilling the many SBA contracting programs, it is also clear that there are several areas in which Congress can help the process of improvement through legislative action.
Over many years, programs have been implemented with the purpose of assuring broad based fair access to federal contracting for all small businesses and to energize certain underserved communities. As these programs are facilitated it is critically important that this committee observe three things: the quality and commitment of the implementation by the SBA; the quality of the expected outcomes; and the affects of the unexpected outcomes. I hope, through this hearing process, you may gain insights in all three areas.
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Women-Owned Small Business Program
The SBA has shown a total lack of commitment to the women’s program. It has been nearly seven years since the women’s set-aside legislation became law. And we are still waiting for the regulations to be published, the list of underrepresented industries to be published, and the FAR updated so that agency leaders may effectively leverage this program. In the interim the SBA has stated many times that their website, women’s office and one-on-one sessions are more than enough to serve women small business owners.
Unfortunately, the statistics do not support this assertion. Women own one third of all businesses in the United States and more than fifty-percent of all small businesses. And, we are still only securing 3.4% of all federal contracting dollars. Additionally, using the method recommended by the National Academy of Sciences, the recent study by the Rand Corporation reports that women businesses are underrepresented in over eighty-six percent of all industries.
I call upon this committee to take action today. You need to act. Simply writing letters to the SBA won’t help. Calling SBA leaders into hearings won’t help. We strongly urge you to establish very clear legislation that compels the SBA to implement this program. The method of collecting and reviewing the data was made clear by the NAS. The Rand study collected and reported the data. Now, I ask you to compel the SBA to implement this program through clear legislation.
8(a) Program
We are not seeing broad based activity in the 8(a) program. A lot of emphasis is placed in signing businesses up as 8(a) contractors. Now we need the SBA to work diligently with these businesses and with agency leaders to achieve broad usage of 8(a) firms. 8(a) is intended as a foot in to federal contracting with strong 1200 G Street NW, Suite 800, Washington, D.C. 20005 888-41-USWCC toll free | 206-495-0819 fax
assistance to advance. To fulfill the promise of this program, we need to assure that there is strong activity by the SBA with these contractors and that a wide range of 8(a) contractors are part of the federal marketplace. Building a big list does nothing. We need to see real activity.
Additionally, we need to expand the net worth provisions increased and the time businesses may stay in the 8(a) program so that they can reach a level of size and strength and survive as the move out of 8(a).
HUBZone Program
A prime concern within the HUBZone program has been the validity of HUBZone contractors and the inappropriate leveraging of HUBZone companies doing work clearly well outside of the HUBZone. The purpose of this program was to energize underserved geographical regions – to give business leaders a way to compete fairly for government contracts and bring revenues back to their region. We strongly suggest that you tighten up the process for being designated as a HUBZone firm and the region of work in which these firms may leverage their HUBZone status. This will sustain the integrity of the HUBZone program.
General Small Business Contracting Program Issues
There are several general small business contracting issues that should be addressed:
Transparency. I strongly encourage you to require the SBA to publish much deeper reports showing the diversity of contracts going to small businesses. We especially need to measure the total number of small businesses receiving
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contracts by agency, and the disbursement of these contracts by size and location.
Size Standards. I encourage you to require annual reporting on employment and revenue for all SBA contracting programs. We need to assure that firms taking part in small business programs are small businesses.
Goals. I encourage you to push goaling more deeply into each agency by requiring the establishment of prime contract and subcontracting goals for each SBA program within each agency.
Integrity of Contractors. And, given the large amount of fraud we have seen in small business programs – and federal contracting in general, I encourage you to require a background of integrity to take part in any of the SBA small business programs.
Thank you for the opportunity to make these views heard before this committee. I applaud your diligence on behalf of small business and hope you will act now to improve the SBA small business contracting programs.
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