SBA Secures Funding to Extend Recovery Act Loans; Agency Plans to Restart Recovery Loan Approvals by Dec. 28

President Obama signed the U.S. Department of Defense [DOD] appropriations bill on Saturday [Dec. 19], which included $125 million to continue through Feb. 28, 2010 -- the enhancements made possible through the American Recovery and Reinvestment Act [ARRA] to SBA’s two largest loan programs. The SBA estimates the additional funding will support $4.5 billion in small-business lending.

New approvals of loans with the higher guarantee and reduced fees made possible by ARRA are expected to begin by Dec. 28. Loan applications from borrowers who chose to be placed in the SBA’s Recovery Loan Queue will be funded first, followed by new loan approvals beginning on or before Dec. 28.

“This Administration and Congress recognize that these key programs were successful in helping jump-start the economic recovery for America’s small businesses,” said SBA Administrator Karen Mills. “The increased guarantee and reduced fees on SBA loans helped put more than $16.5 billion in the hands of small-business owners and brought more than 1,200 lenders back to SBA loan programs. The extension of these programs through February is important to continuing our path toward recovery, and will mean that thousands more small-business owners have access to the credit they need.

“Just two weeks ago, President Obama laid out key aspects of his jobs plan -- including significant ongoing support for small businesses. We will continue to work with Congress on moving those proposals forward -- including extending these loan enhancements as the President has called for, to ensure that small-business owners have the tools they need to drive economic growth and create jobs in communities all across the country.”

As part of ARRA, SBA received $730 million -- which included $375 million to increase the SBA guarantee on 7[a] loans to 90 percent, and to waive borrower fees on most 7[a] and 504 loans. The funds for these programs were exhausted on Nov. 23.

SBA created the Recovery Loan Queue as part of its transition back to pre-ARRA lending on Nov. 23, because previously approved loans are sometimes canceled or never disbursed for a variety of reasons. Eligible small businesses, in consultation with their lender, could choose to be placed in the queue for possible approval of an ARRA loan if funding became available. Currently, there are 1,069 loans totaling almost $530 million in the Recovery Loan Queue.

The extension included in the DOD bill authorizes the higher guarantee levels through Feb. 28, 2010. The fee relief is authorized until this additional funding is exhausted or the end of the fiscal year, whichever comes first. As was the case in November, SBA will transition into a queue system as the funds start to wind down, in order to ensure the maximum simulative effect of the programs and disbursement of funds.

For non-ARRA 7[a] or 504 loans funded during the transition period, this extension does not provide a retroactive guarantee or waived fees. Loans that were funded under non-ARRA terms cannot be canceled and resubmitted to take advantage of the ARRA extension provisions.

This extension does not affect other SBA ARRA programs -- including the America’s Recovery Capital [ARC] Loan Program, or the agency’s microloans. ARRA funding still remains for both of those programs.

SOURCES: Library of Congress, Recovery.gov, U.S. Small Business Administration
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Landrieu Fights for Small-Business Contracts in Military Procurement Process

United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu [D-La.] wrote today to Senate Armed Services Committee Chairman Carl Levin [D-Mich.] and Ranking Member John McCain [R-Ariz.] in support of the Weapons System Acquisition Reform Act of 2009 [S.454], which was marked up this morning.

Specifically, Sen. Landrieu indicated her support for Section 205, “Organizational Conflicts of Interest in the Acquisition of Major Weapon Systems,” and Section 203, “Maximization of Competition Throughout the Life Cycle of Major Defense Acquisition Programs,” which would increase meaningful opportunities for small businesses to compete for Department of Defense [DoD] projects.

Currently, the DoD procurement process sometimes lacks independent or objective analysis to determine the best firm for a particular contract. In her letter, Sen. Landrieu cited an example in which a small business was nearly put out of business because the DoD disregarded a conflict of interest when making a contracting decision.

With the help of the Small Business Innovation Research [SBIR] program, the company, NAVSYS Corporation, developed technology for a GPS navigation system for the Air Force, which the government found helpful. When the Air Force began to transition the technology into its GPS program, it asked the prime contractor to assess whether the technology should be used. The prime contractor, however, had a conflict of interest in determining whether the small business should get the contract or the prime contractor should do it themselves. The prime contractor ultimately decided to do it themselves.

“Small businesses are too often overlooked or harmed by the federal government’s contracting process,” Sen. Landrieu said today. “Section 205 of the Weapons System Acquisition Reform Act will go a long way toward protecting small businesses from conflicts of interest, while eliminating waste and inefficiency at the DoD.

“Section 203 of the bill would also help to maximize competition for defense acquisition contracts, which will help small businesses because it creates more potential opportunities for them to participate.”

Sen. Landrieu’s letter to Sens. Levin and McCain is available online at: http://tinyurl.com/d7zc3s.

GoodBiz113's take: For far too long, greedy and gluttonous prime contractors have feasted at the DoD contracting table. It's time for them to share the wealth of DoD procurement opportunities with smaller, leaner and faster enterprises who bring real innovation and cost-effective efficiencies to the needs of our military forces. Bravo to Sen. Landrieu for her efforts to improve DoD's acquisition procedures to serve the greater good.

SOURCES: Library of Congress, U.S. Senate Committee on Small Business & Entrepreneurship
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Sens. Kerry and Harkin Secure Additional Small-Business Research Funding for Inclusion in Rep. Murtha's Defense Bill

In a victory for small-business innovation, this week, $85 million in additional funding for the Small Business Innovation Research [SBIR] program was signed into law. Sens. John Kerry [D-Mass.] and Tom Harkin [D-Iowa] pushed for this funding to be included in the final version of the Department of Defense Appropriations Act [H.R. 3222], which Congressman John Murtha [D-Pa., pictured] secured in the House bill. The funding will allow the military to increase the use of small, high-tech businesses to help the military develop the best technologies, diversify the supply base, and reduce costs.

“Investing in small-business research pays off, both for our national security and our economic security,” noted Sen. Kerry, chairman of the Committee on Small Business and Entrepreneurship. “In my home state of Massachusetts, which has received the second-most SBIR grants in the country, small businesses are helping the military cut shipbuilding costs and develop more effective unmanned transportation systems. This increased funding will help ensure that our troops have access to the best technology America has to offer.”

“This partnership between small businesses and the Department of Defense allows Iowa’s innovative technology market to support our national security endeavors,” explained Sen. Harkin, a senior member of Kerry's committee. “In past years, local businesses have helped our military members by equipping them with improved sonar capabilities and developing technologies to reduce flight-deck noise and protect against hearing loss. I am eager to see how the Iowa workforce puts these newly secured funds to good use in developing cutting-edge technologies in the coming years.”

The additional funding will be used to support the transition of SBIR technologies at the DoD: $20 million will be allocated to the Army’s Future Combat Systems; $40 million for the Navy’s surface ship and submarine development activities; and $25 million for the Joint Strike Fighter program.

Kerry and Harkin, working with Sen. Olympia Snowe [R-Maine], ranking member of the committee, will be working on comprehensive legislation to renew the small-business research program next year.

On Oct. 1, 2007, the Senate passed an amendment to temporarily extend the SBIR program through 2010 and prevent a shutdown or funding delays when the program expires in September 2008. The Senate also passed an amendment to extend a DoD pilot program that helps firms transition their projects to the marketplace.

Sources: Library of Congress, OpenCongress, U.S. Senate Committee on Small Business and Entrepreneurship
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Cardin Chairs Small-Business Field Hearing on Improving Government Contracting

On Monday, Sen. Benjamin L. Cardin [D-Md.] chaired a field hearing of the U.S. Senate Committee on Small Business and Entrepreneurship to investigate federal government contracting problems and legislative remedies that will help small and minority-owned businesses compete for federal contracts.

“Small business is the engine that drives our economy and sustains our technological lead in the global marketplace,” said Cardin, a member of the committee. “The federal government has a responsibility and interest in fostering and promoting a business climate that supports small-business growth.”

For the past six years, the federal government has consistently failed to meet its small-business contracting goals. According to the Small Business Administration [SBA], in 2006, the federal government failed to meet any of its small-business contracting goals. The SBA report also showed that its goals for women and minorities fell below the 5% objective.

Another recurring theme of those testifying at the hearing was that many of the contracts that were intended for small businesses end up going to large corporations. In 2005, at least six of the top 30 small-business vendors doing business with the federal government were actually large corporations.

Representatives from the SBA, U.S. Department of Defense, General Services Administration, plus several small and minority business leaders in Maryland testified at the hearing. Sen. Cardin announced that he is working with members of the committee on legislation that will deal with barriers that make it difficult for small businesses competing for federal contracts.

“Small business plays a vital role in the federal contracting system,” Cardin noted. “It ensures competition and supplies the federal government with a constant supply of new entrants who bring new ideas and novel approaches for doing the job at hand and supplying services at a competitive rate.”

Source: U.S. Senate Committee for Small Business and Entrepreneurship

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