updating and improving the sba's contracting programs

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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.


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


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


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.

updating and improving the sba's contracting programs

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