SBA administrator faces a tough crowd at House Small Business Committee

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SBA administrator faces a tough crowd at House Small Business Committee

By Kent Hoover
Washington Bureau
September 10, 2014

SBA Administrator MariaContreras-Sweet got a taste Wednesday of what awaits her from the HouseSmall Business Committee, which doesn't want the Small Business Administration to do anything that ithasn't authorized.

Contreras-Sweet got off relatively easy since it was her first appearance before thecommittee. Chairman SamGraves, who will step down as head of the committee at the end of thisyear, scolded the SBA for making policy changes, such as a new credit scoringmodel for loans of under $350,000, without going through the normal rulemakingprocess. This means the agency ignored "valuable input of those most affected,"the Missouri Republican said.

"Additionally, the agency has a history of pursuinginitiatives it creates on its own, while ignoring congressionally mandatedactivities," Graves complained.

The SBA has failed to fully implement reforms to governmentcontracting programs that were enacted two years ago, "while resources insteadhave been devoted to potentially duplicative, unauthorized entrepreneurialdevelopment programs dreamed up by the agency with little public input," hesaid.

Looking over the SBA's shoulder is the committee's mainresponsibility, and the House committee in recent years has been tougher on theagency than its Senate counterpart. For the most part, small businesses benefitfrom this oversight — the SBA is a small agency with limited resources, so it'simportant that it gets the biggest bang for the buck.

Wednesday's hearing shows the SBA still has work to do in anumber of areas, including getting more loans and federal contracts into thehands of women-owned businesses.

Rep. NydiaVelazquez, D-N.Y., challenged Contreras-Sweet on this point. Since 2010,when Congress increased the maximum size of loans available through the SBA'sflagship 7(a) loan program, the share of loan dollars going to women-ownedbusinesses has declined, Velazquez noted. That's because male-owned businessesare disproportionately benefiting from the larger loans, she said.

So the congresswoman, who has been the top Democrat on thecommittee for more than a decade, pressed Contreras-Sweet about what the SBAadministrator was going to do to reverse this slide in lending to women-ownedbusinesses.

Contreras-Sweet said there's "no one silver bullet" to servingany particular market, but she said the SBA's emphasis on increasing the numberof small loans it backs should help more women-owned businesses get financing.

That wasn't good enough for Velazquez, who toldContreras-Sweet to review the data and come back with "specific steps" toincrease lending to women-owned businesses.

Velazquez also had concerns about government contracting. TheSBA is in charge of working with federal agencies to meet Congress' goal ofawarding at least 23 percent of their contracting dollars to small businesses.This year, the SBA finally was able to announce that the goal had been met, butthis achievement came with some asterisks. For example, many types of contractsare excluded from consideration when agencies calculate how much of their moneywent to small businesses.

Plus, agencies keep counting some contracts being performed bybig businesses as small business contracts, Velazquez said.

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SBA Administrator Could Face Tough Questions From Congress On Wednesday

Press Release

SBA Administrator Could Face Tough Questions From Congress On Wednesday

American Small Business League (ASBL) Announces House Small Business Committee Hearing

By Lloyd Chapman
American Small Business League
September 9, 2014

PETALUMA,Calif., Sept. 9, 2014 /PRNewswire-USNewswire/ -- The HouseSmall Business Committee is holding a hearing on Wednesday,September 10, titled Small Business Administration: Management and Outlook. Thehearing will be held at 1:00 PM in Room 2360 of theRayburn House Office Building.

Theonly witness scheduled is new SBA Administrator MariaContreras-Sweet. Administrator Contreras-Sweet could facesome tough questions on a series of controversies at the SBA.

Everyyear since 2005 the SBA Office of Inspector General has named the diversionof federal small business contracts to large businesses as the number oneproblem at the SBA. ABC, NBC, CBS, CNN, MSNBC, CNBC, Fox News and RTTV haveall reported on the issue.

TheSBA has consistently refused to adopt any policies to halt the rampant fraud andabuse. To the contrary the SBA recently concluded taking public comment on anew "safe harbor from fraud penalties" policy that manypeople believe will encourage even more fraud in federal small businesscontracting programs.

Over90 percent of the comments the SBA received on the "safe harbor from fraudpenalties" policy were opposed to it

On August 1, Administrator Contreras-Sweet announced the federal government had awarded $83 billion in federal contracts to small businesses. TheSBA claimed that amounted to 23.39 percent of all federalcontracts. Since the announcement on August 1, ithas been reported the SBA included billions of dollars in contracts to Fortune 500 firms and their subsidiaries in the $83 billion the SBA claims was awarded to smallbusinesses.

Federallaw requires a minimum of 23 percent of all federal contracts be awarded tosmall businesses.  To reach their 23.39 percent number, the SBA used apolicy that has no basis in federal law they created called "smallbusiness eligible dollars". For fiscal year 2013 the SBA claims the "small businesseligible dollar" amount was a mere $355 billionout of a total federal spending for that year of $3.5 trillion.

Arecent legal opinion by Professor Charles Tiefer,one of the nation's leading experts on federal contracting law, states there isno basis in the law for including any contracts to large business in smallbusiness contracting data. He also concluded a more accurate federalacquisition budget number that should be used in calculating the percentage ofaward to small businesses is over one trillion dollars.

TheAmericanSmall Business League estimates that if the more accurate one trillion dollar federal acquisition budget numberwere used and no contracts to Fortune 500 firms or other large businesses wereincluded, legitimate small businesses probably received no more than 5 percentof all federal contracts and not the 23.39 percent claimed by the SBA.  

Questionsfor the SBA can be directed to SBA spokesman TerrySutherland
(202) 205-6919 | terrence.sutherland@sba.gov| www.terrysutherlandinfo.org

To view full press release, click here:  http://www.prnewswire.com/news-releases/sba-administrator-could-face-tough-questions-from-congress-on-wednesday-274445541.html

 


SBA Facing National Campaign To Secure GAO And FBI Investigations

Press Release

SBA Facing National Campaign To Secure GAO And FBI Investigations

American Small Business League (ASBL) wants GAO to investigate SBA executives for fraud

By Lloyd Chapman
American Small Business League
September 3, 2014

PETALUMA,Calif., Sept. 3, 2014 /PRNewswire-USNewswire/ -- TheAmerican Small Business League (ASBL)has launched a national campaign to prompt Congress to request aninvestigation of the Small Business Administration (SBA) by both the GovernmentAccountability Office (GAO) and the FBI.

TheSmall Business Act mandates that a minimum of 23% of thetotal value of all federal contracts be awarded to small businesses. By law 5% of all federal contracts should go to woman-ownedsmall businesses, 5% to small disadvantaged owned businesses, 3% to service disabledveteran-owned small businesses and 3% to HUBZone businesses. The SBA isresponsible for overseeing all federal small business contracting programs.

TheASBL believes the information uncovered in a series of previous federalinvestigations clearly indicated that officials at the SBA helped to coordinatethe diversion of hundreds of billions of dollars in federal small businesscontracts to Fortune 500 firms and thousands of large businesses. Basedon information the ASBL has obtained under the Freedom of Information Act, theybelieve senior SBA officials have systematically falsified government reportson the actual percentage of federal contracts awarded to small businesses inevery federal program to assist small businesses. 

Everyyear since 2005, the SBA Office of Inspector General has reported the diversionof federal small business contracts to large businesses as thenumber one challenge at the SBA and yet SBA officials have refused to adoptany policies to halt the fraud and abuse.

TheGovernment Accountability Office investigated the SBA and essentially accusedthe SBA of encouraging fraud in the federal program to direct 3% of federalcontracts to disabled veteran-owned small businesses. In GAO Report 10-108 theGAO stated, "By failing to hold firms accountable, SBA and contractingagencies have sent a message to the contracting community that there is nopunishment or consequences for committing fraud or abusing the intent of theSDVOSB program."

TheASBL believes senior SBA officials have intentionally and illegally defraudedsmall business out of hundreds of billions of dollars in federal contracts byusing fabricated terms such as "smallbusiness eligible dollars" to inflate the true volume of federalcontracts awarded to all categories of small businesses and intentionallyfalsify the government's compliance with federal law mandating small businesscontracting goals.

The Washington Post, The Hill, Government Executive, NBC, CNN, ABC, Fox News, MSNBC, RTTV and CNBC haveall reported on the abuses at the SBA.

TheASBL has mobilized a national campaign to encourage Chambers of Commerce andevery organization that supports small businesses, minority-owned, woman-ownedand service disabled veteran-owned small businesses to pressure Congress intoordering the SBA investigations.

TheASBL has launched an investigation of the SBA using theFreedom of Information Act (FOIA). To date the SBA has refused to fullycomply with any of their FOIA requests.

To view full press release, click here:http://www.prnewswire.com/news-releases/sba-facing-national-campaign-to-secure-gao-and-fbi-investigations-according-to-the-american-small-business-league-273722001.html