Monday, April 23, 2007

GoodBiz113 Issues Open Memo to Leaders of Congressional Small Business Committees

TO: Sen. John Kerry [D-Mass.], Chair, and Sen. Olympia Snowe [R-Maine], Ranking Member, U.S. Senate Committee on Small Business & Entrepreneurship; and Rep. Nydia Velazquez [D-N.Y.], Chair, and Rep. Steve Chabot [R-Ohio], Ranking Member, U.S. House Committee on Small Business

FROM: Kari Larson, Editor & Publisher, GoodBiz113

SUBJECT: Striving for Enforced Compliance, Accountability and Transparency

Last Friday, President George W. Bush praised America's small-business owners and employees, and proclaimed the week of April 22-28 as a time to recognize "their important role in ensuring that America remains the economic leader of the world."

The President's proclamation was issued on the eve of the U.S. Small Business Administration's observance of National Small Business Week in Washington, D.C. [April 23-24]. The two-day conference will focus on small-business accomplishments, including disaster recovery, federal contract procurement and entrepreneurial success. The celebration honors the nation's most outstanding entrepreneurs, and culminates with the selection of the National Small Business Person of the Year for 2007 from among the 53 state small-business winners, including the District of Columbia, Puerto Rico and Guam.

"The state and regional winners who will be a part of this event personify the entrepreneurial spirit that is vital to the growth of the American economy," said SBA Administrator Steven C. Preston [pictured above]. "They are an innovative and diverse group involved in technology, manufacturing, retail, construction, professional services and a host of other industries. We are proud to have them here in Washington, and we are proud to have helped many of them achieve their business success."

View from the Small-Biz Bunker
On the face of things, that's all good. However, it's not unlike watching this weekend's Zurich Classic of New Orleans on TV, then assuming that restoration of the PGA TOUR's lush TPC Louisiana golf course reflects widespread Gulf Coast disaster-recovery efforts in the 19-month wake of Hurricane Katrina. A wide-angle look reveals some major divots in the small-biz realm.

Current small-business set-aside and subcontracting Federal Acquisition Regulations [FAR] are well-intended to engage small businesses in the potentially lucrative realm of government contracting. Unfortunately, actual enforcement of FAR standards leaves a lot to be desired in order to level the playing field for small-business owners, entrepreneurs and their employees -- "the lifeblood of cities and towns across the country," declared President Bush.

Compliance Begins With Education
As with most issues, education is key. Since registering as a woman-owned small business 10 years ago, I've found that some decision-makers in several federally funded entities -- e.g., prime contractors, public agencies, land-grant educational institutions -- are totally unaware of their organization's responsibilities to procure business from small businesses and enterprises owned by minorities, women, veterans and socially disadvantaged populations. In too many cases, even the procurement directors and/or designated small-business liaison officers [SBLOs] neither knew, nor seemed to care, that they're contractually obligated to engage small businesses.

Proposed solution: Remind all federally supported agencies, companies and organizations that they need to comply with FAR set-aside and subcontracting standards, lest their funding be drastically reduced or cut off completely. Encourage each entity to fully educate managers of their procurement requirements -- perhaps by using a carrot-and-stick approach that rewards them for complying; e.g., the University of Minnesota's AIR [Awards Incentive & Recognition] Program, which kicks off July 1, 2007.

While you're at it, please remind DoD's Procurement Technical Assistance Center [PTAC] directors that they're funded to provide free or low-cost counseling to small-business owners wading into the federal contracting waters -- especially, via the General Services Administration [GSA], that convoluted, quasi-public behemoth conceived to somehow streamline the federal procurement process.

[FYI: I met one clever counselor who worked part-time for PTAC, earning all the accompanying benefits for himself and his family, a steady paycheck, etc. He also ran his own small-business consulting enterprise that charged folks -- mostly, his PTAC clients -- $14,000-plus to prepare the 300-page GSA schedules that he strongly suggested they complete in order to help land federal contracts. Legal? I guess. Ethical? You decide.]

Hold All Funded Entities Accountable -- and Do So Transparently
As of this writing, the total U.S. cost of the invasion of Iraq approaches $420 billion. That money has to come from somewhere, and federal agencies are duking it out for their share of the financial pie. Meanwhile, companies large and small are competing for federal contracts. Too often, it seems, one can't discern how federal contracting funds are actually spent.

Proposed solution: Require that all federally funded entities -- including agencies -- publish accounts of exactly how dollars are spent, and make those frequently updated reports easily accessible by virtually anyone via the Internet.

Last year, after noticing that an agency -- one that had previously done a consistent job of communicating with its small-business vendors, their stakeholders, etc. -- hadn't published anything, online or off, in months. Deducing a possible opportunity for my seasoned communications expertise, I queried the agency's Office of Small & Disadvantaged Business Utilization [OSDBU] director. He informed me that he'd retained a small agency to do the work -- two months prior to my call.

Suffice to say, about one or two months later, that OSDBU director left his post [as did the agency's secretary], and no deliverables ever manifested. Further, as much as the new, interim OSDBU director wanted to engage my services, he couldn't, because the creative-services agency commissioned by his predecessor had sapped the communications budget.

In another instance, I had occasion to discuss my concerns about contracting practices with a U.S. Senate legislative assistant. When I asked him about discerning exactly how, if at all, defense contractors, agencies, etc., were fully complying with FAR small-business standards, he replied that it would be impossible to do without subpoenas for each entity.

Allocation of public dollars should be public information. During National Small Business Week, we celebrate the far-reaching contributions of America's 25.8 million small businesses that generally create 60 to 80 percent of the net new jobs, and contribute $918 billion to the U.S. economy. It would greatly benefit all concerned if your committees announced an initiative to enforce full compliance, accountability and transparency regarding FAR's small-business set-aside and subcontracting standards.

Sources: U.S. Small Business Administration, U.S. Census Bureau

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