Fight to Save SBA Escalates

News

Fight to Save SBA Escalates

By Keith Girard
AllBusiness.com
April 10, 2006

The firestorm touched off by suggestions that the Small Business Administration should be abolished has drawn another major business group into the fray.

The National Black Chamber of Commerce (NBCC) said today that it had alerted its 100,000 members to put Congress on notice: "Trying to kill the SBA will be like trying to kill your political career."

The group joins the American Small Business League, which has been sounding the alarm over what it says is an effort by conservatives to kill the troubled agency and end government programs that aid small businesses.

The furor was touched off by a study published by the American Enterprise Institute, a conservative Washington think tank. It calls the SBA programs ineffective, and notes that only a fraction of small businesses take advantage of them.

At stake, however, according to Business League President Lloyd Chapman, is about $119 billion in federal contracts that are earmarked annually for small businesses.

The NBCC likened efforts to kill the SBA to a conservative campaign to abolish federal affirmative action programs. "It appears to [conservatives] that the SBA has done too much for Black, Hispanic, Asian, Native American, and women-owned businesses," the group said in its alert.





Senator examines SBA work

News

Senator examines SBA work

Senator probes agency's effectiveness, questions practices and seeks ways to measure progress

By Megan Lisagor
Federal Computer Week
April 10, 2006

Sen. Tom Coburn (R-Okla.) wants to know whether the Small Business Administration is effectively promoting the best interests of small companies. Last week he called a hearing of the Homeland Security and Governmental Affairs Committee's Federal Financial Management, Government Information and International Security Subcommittee, which he chairs, to try to find out.

SBA Administrator Hector Barreto testified, along with several critics and supporters of the agency. Coburn also addressed concerns that his goal is to abolish SBA programs, a view put forth by the American Small Business League and other groups in the days before the hearing.

"There is a perception out there that to be for the SBA is to be for small business and to be against the SBA is to be against small business," Coburn said. "If SBA is broken, it's certainly not the small-business sector that benefits from maintaining the status quo at the agency, but rather the bankers and big corporations who are currently profiting from SBA, among others."

Barreto touted the more than $19 billion in guaranteed loans distributed to about 98,000 small businesses in fiscal 2005, a figure that has increased by $5 billion since 2001. Coburn questioned SBA's definition of small businesses and why big businesses are scoring a piece of the small-business procurement pie, as some studies have shown. SBA has attempted – without success so far – to simplify the complicated formula for determining whether a company is small.

Veronique de Rugy, a research fellow at the American Enterprise Institute, took a tougher stance, observing that "there seems to be no failure of the private sector to allocate loans efficiently, thus discrediting the economic justification for any government-sponsored small-business lending or loan guarantee program." De Rugy's Forbes article, "Small-Firm Idolatry," sparked much of the controversy surrounding the hearing, and she didn't hold back.

The agency's loan guarantee program, she said, "is not having a significant positive effect on the market. But you would never know this from the SBA's evaluations of its programs. In fact, the SBA's only measure of success amounts to stating how many loans have been guaranteed in a given year and how much it has spent on small businesses, rather than measuring the return on its efforts."

Coburn said he would like to see a scientific analysis of SBA's impact on the marketplace, calculating what taxpayers are getting in return for the agency's spending. He suggested a Government Accountability Office study could be in order, but he did not formally request one.





National Black Chamber of Commerce Joins the Fight to Save Small Business Programs

Press Release

National Black Chamber of Commerce Joins the Fight to Save Small Business Programs

April 10, 2006

PETALUMA, Calif., April 10, 2006 /PRNewswire/ In response to recent efforts by conservative Republicans to bring an end to Federal programs for small businesses, the National Black Chamber of Commerce sent this statement to over 100,000 of its members in a recent e-mail newsletter:

Now the Bigots want to kill the SBA: Right wing conservative think tanks have found a new target. Being that they can't thoroughly kill affirmative action through hate initiatives and stacking the commission of the U.S. Civil Rights Commission with anti-civil rights fanatics, they now want to kill the SBA. It appears to them that the SBA has done too much for Black, Hispanic, Asian, Native Americans and Women-owned businesses. Providing loans and contracts that would otherwise not touch these segments, they are furious that not all lending and contractual opportunities go strictly to white males. Job creation in minority communities and women leaving the kitchen are considered threats to them. Think tank groups such as the American Enterprise Institute for Public Policy Research have gone on the attack. Let's rise and beat them back. Congress should be put on notice: Trying to kill the SBA will be like trying to kill your political career – LITERALLY. We are watching.

"I applaud the National Black Chamber of Commerce for defending the small business programs that assist so many entrepreneurs nationwide," stated Lloyd Chapman, President of the American Small Business League. "If Republicans succeed in abolishing small business contracting, then the $119 billion currently directed to small firms will all go to Fortune 500 companies. Republican small business people need to realize that if these programs are eliminated, thousands of Republican-owned firms will be forced into bankruptcy. Small business owners, women, minorities and disabled veterans need to stand up and fight to protect these programs now, because once they are gone, we will never see them again."

About the ASBL
The American Small Business League was formed to promote and advocate policies that provide the greatest opportunity for small businesses - the 98% of U.S. companies with less than 100 employees. The ASBL is founded on the principle that small businesses, the backbone of a vital American economy, should receive the fair treatment promised by the Small Business Act of 1953. Representing small businesses in all fields and industries throughout the United States, the ASBL monitors existing policies and proposed policy changes by the Small Business Administration and other federal agencies that affect its members.

###

Contact:
Lloyd Chapman
lchapman@asbl.com
707-789-9575
www.asbl.com



Contracting Review Touches Off Concerns

News

Contracting Review Touches Off Concerns

By Keith Girard
AllBusiness.com
April 6, 2006

The rules of the game could be changing for winning General Services Administration (GSA) contracts – and some small business advocates fear that the playing field could be tilted as well.

The sprawling federal agency, which awards work worth billions of dollars a year to businesses large and small, is reviewing its contracting procedures to "improve efficiency." But some small business advocates fear that the agency will cut small companies out of the action.

"I'm very concerned that the GSA is going to do what they've always done, which is to implement policies that will allow federal agencies and prime contractors to report contracts to large companies as small business awards," said Lloyd Chapman, President of the American Small Business League, in a statement.

Chapman is urging small business owners to submit public comments on the changes directly to the GSA, or through the Small Business League Web site. Comments must be submitted on or before Monday, April 17.





New Federal Policies Threaten Small Business Contracting Programs

Press Release

New Federal Policies Threaten Small Business Contracting Programs

General Services Administration may Propose Policies to Allow Billions to go to Large Firms

April 6, 2006

PETALUMA, Calif., April 6, 2006 /PRNewswire/ Small business owners across the country have begun to voice their concerns that the General Services Administration is about to propose policies which would allow billions of dollars in small business contracts to be diverted to large firms. Under the guise of "improving efficiency", the GSA has announced that they are beginning their review for an update of the GSA Acquisition Regulation (GSAR), or the regulatory part of the GSA's Acquisition Manual.

There are a number of areas being reviewed in the GSAR that address the interests of small and disadvantaged businesses, minority, women and veteran-owned firms. The GSA is not specific about how they plan to "streamline" the regulations that pertain to these entities. Because government personnel and industry have been asked to submit suggestions, many small business owners fear that regulations that currently protect their participation in the procurement process will be eliminated or altered to create loopholes that will exclude them.

"I'm very concerned that the GSA is going to do what they've always done which is to implement policies that will allow Federal agencies and prime contractors to report contracts to large companies as small business awards," stated Lloyd Chapman, President of the American Small Business League. "I also foresee that the GSA will attempt to disallow any comments they receive that do not agree with their goal of diverting contracts to large businesses. My experience has been that the government manipulates this process in order to achieve its own ends."

Although seven Federal investigations have uncovered fraud and abuse in small business contracting, none of the areas that the GSA is proposing to change address the significant problems that allow this to happen.

Business owners concerned about the GSA proposal can submit their comments directly or through the ASBL Web site at www.asbl.com. Comments must be submitted on or before Monday, April 17, 2006 in order to be considered. The full text of GSA's Advanced Notice of Proposed Rulemaking is at