House Opens Federal Marketplace to More Small Business Participation, Helps Fight Fraud in Contracting System

As small businesses continue to struggle to access the $340 billion federal marketplace, the House last Wednesday [May 9] passed the most comprehensive reform of the contracting system for entrepreneurs in over a decade. H.R. 1873, the Small Business Fairness in Contracting Act, which increases small business access to federal contracts, offers protections against contract bundling, and prevents large businesses from receiving small-business contracts, passed by a wide margin of 409 to 13.

"For many entrepreneurs, access to federal contracts provides an important step in developing and expanding a business," said Rep. Nydia M. Velázquez [D-N.Y.], chairwoman of the U.S. House Committee on Small Business. "Today, the House passed legislation that ensures small business owners are competing on a level playing field. This is a major, and long overdue, step forward for entrepreneurs."

Over the past several years, small businesses' federal contracting opportunities have not kept pace with the expanding federal marketplace or small firms' growing share of the economy. Small companies confront numerous obstacles when attempting to access federal contracts, as the government continues to combine work into contracts too large for entrepreneurs to bid on, making the projects less accessible to small businesses.

In the past few years, small businesses have also lost out on opportunities, as contracts intended for small businesses were awarded to large corporations. There are currently few penalties for agencies and companies that misrepresent larges businesses as small.

The combination of barriers such as these has resulted in billions of dollars in lost contracting opportunity each year for this nation's small businesses.

"Awarding federal contracts to small businesses creates jobs, develops companies, promotes competition and yields the best value for the taxpayer dollar," said Chairwoman Velázquez. "Congress acted today to guarantee that our entrepreneurs get the opportunities they deserve and to hold the federal government more accountable for how taxpayer money is spent."

H.R. 1873, introduced by freshman Rep. Bruce Braley [D-Iowa], chairman of the Subcommittee on Contracting and Technology, makes more contracts available to small firms. During consideration of the bill, several measures also passed that raise the level of federal commitment to contracting with small businesses, ensure small firms can compete for overseas contracts, strengthen requirements for agencies to review the economic impacts of large contracts, and provide greater protections for small business subcontractors. These additions enhance improvements for small firms in H.R. 1873 that will allow for greater small business participation in the federal marketplace.

"I am proud that my first bill to pass the House is one that will help small businesses compete," Congressman Braley said. "The Small Business Fairness in Contracting Act ensures that small businesses have the same opportunities as large corporations to earn government business.

"When government contracts are awarded through huge super-contracts, small businesses just can't compete on a level playing field. By forcing government agencies to be held accountable for awarding these so-called 'bundled contracts,' more small businesses will have the opportunity to benefit from earning government business. Furthermore, by providing for the enforcement of these new provisions, this bill will have the teeth to make sure government agencies are following the law. At the end of the day, this means expanded opportunities for small business."

This legislation is part of the committee's ongoing work to restructure how small businesses interact with the federal procurement system. The Small Business Fairness in Contracting Act is the first piece of legislation to address problems outlined in the committee's annual scorecard on federal contracting.

GoodBiz113's take: Little by little, it seems, our rants/wish-list items [e.g., "Welcome to GoodBiz113!" "GoodBiz113 Drafts Small-Biz Wish List for 110th Congress," "GoodBiz113 Issues Open Memo to Leaders of Congressional Small Business Committees"] are helping to attract productive results for small businesses and entrepreneurs. Hats off to U.S. House members for forcing federal agencies to do the right thing for all concerned.
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Kerry Calls for Investigation Into Women’s Business Center Funding Delays

On Wednesday [May 9], Sen. John Kerry [D-Mass.] asked the Inspector General of the Small Business Administration to conduct a thorough investigation into the agency’s onerous grant disbursal process to Women’s Business Centers [WBCs] nationwide.

“I want to know why Women’s Business Centers are receiving federal grants months and even years late,” said Kerry, chairman of the U.S. Senate Committee on Small Business and Entrepreneurship.

“Each year, WBCs -- such as the Center for Women & Enterprise in Boston, Worcester and Providence -- help tens of thousands of women, minority and veteran entrepreneurs turn dreams into reality by providing critical business development assistance," Kerry noted. "These centers should be allowed to focus on providing these services, instead of worrying about how to get their funding from Washington.”

Leaders from WBCs around the country have charged that the application process for grants is arduous, with circuitous procedures that result in delayed grant disbursals for qualified centers.

Last year, WBCs assisted more than 197,000 businesses nationwide. In Massachusetts, WBCs served almost 2,500 women in 2006. Since 1995, the Center for Women and Enterprise, which serves Massachusetts and Rhode Island, has trained more than 13,000 entrepreneurs and helped them secure nearly $30 million in business loans, generating more than 15,000 jobs and $430 million in wages.

Following, is the text of Kerry’s letter to SBA Inspector General Eric M. Thorson:


May 9, 2007

Dear Mr. Thorson:

I have repeatedly heard from the leaders of Women’s Business Centers [WBCs] around the country that they are experiencing problems receiving their grants from the Small Business Administration [SBA], and I request that you immediately undertake an investigation into this matter.

For a number of years, the Committee on Small Business and Entrepreneurship has received complaints from WBCs about the process of applying and receiving grants from the SBA’s Office of Women’s Business Ownership. According to their stories, the process is unnecessarily lengthy and arduous. Information is repeatedly requested from WBCs and then lost. There have been cases where the same information is requested 10 or even 12 times. In addition, the process lacks clear guidelines and transparency. A WBC may believe that they supplied all necessary information, only to be told months later that they must supply additional documentation.

As a result of these and other shortcomings, the grants are often disbursed months or even years after the quarter in which the expenses were incurred. Since most WBCs rely on SBA funding as a major source of funding, this delayed reimbursement can be disastrous, especially for new or small WBCs.

It is simply unacceptable that WBCs continue to struggle to receive funding from the SBA. Therefore, I request that you undertake a full and complete investigation to determine the extent of any problems with the grant disbursal process and make recommendations on how to improve it.

If you have any questions or need additional information, please contact Karen Radermacher on my staff at 202-224-5175. Thank you for your attention to these matters.

Sincerely,

John Kerry


GoodBiz113's take: We're very pleased that Sen. Kerry is holding SBA's Office of Inspector General accountable for achieving its stated mission, "To improve SBA management and effectiveness, and to detect and deter fraud in the Agency's programs." Kerry's bold efforts are bound to have positive and far-reaching ripple effects on all small businesses and our myriad stakeholders.

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Freshman Rep. Heath Shuler: Broadband Critical to Rural Economic Development

As broadband reaches more areas of the country, rural and agriculture-based communities are searching for better ways to maximize its local economic development potential. On Wednesday [May 9], providers and consumers of rural telecommunications services told the U.S. House Small Business Subcommittee on Rural & Urban Entrepreneurship that, while these technologies can increase investment and employment in their communities, they are not yet being used to their full potential.

"Many rural communities across the country are struggling to remain competitive," said subcommittee Chairman Heath Shuler [D-N.C.], elected to the 110th Congress last Nov. 7. "By harnessing new technologies, we can create new opportunities, improving the way businesses -- especially, farms -- operate, and reverse this trend."

Broadband technologies have proven to be a key component of rural communities' growth and prosperity, facilitating partnerships, creating online infrastructure, and expanding the market for goods and services.

For farmers, high-speed Internet technology that helps control costs and optimize production -- such as remote temperature monitoring -- can be especially important, because the industry operates with low profit margins. Broadband can also be instrumental in creating networks of entrepreneurs that can increase employment and spur additional investment.

Although this technology has reached 99 percent of ZIP codes, these benefits are only beginning to emerge in rural America.

"As today's economy changes, so do the needs of this nation's entrepreneurs," Chairman Shuler said. "Expanding the economic benefits of broadband is one way to help this nation's farmers and rural small businesses, increase the efficiency of their operations, and, in turn, support economic growth."

During the hearing, suppliers and consumers of rural broadband outlined strategies that use this technology to expand rural economic development. These innovative community partnerships, industry co-ops and economic synergies use broadband to accelerate economic activities in creative, scalable ways.

Furthermore, witnesses identified policies that can help more areas implement these programs -- including strengthening of the Universal Service Fund and Broadband Utility Service. By reducing costs and speeding the uptake of emerging technologies, these steps will promote the expansion of community and economic development initiatives.

"As today's discussion demonstrated, broadband can transform rural communities by bringing entrepreneurs together, and connecting small-business owners to customers," said Chairman Shuler. "This technology is exciting because we are still creating the new ways to use broadband for development in districts like mine. More needs to be invested to ensure this innovation and the development it encourages to reach all Americans."

Wednesday's hearing continues the committee's examination of rural economic development issues. Last week, the committee began a series on renewable fuels, with a look at how those technologies are encouraging development in rural America.

Click here to read to prepared testimony from Wednesday's hearing.
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