President Barack Obama stops for breakfast with small business owners, Aug. 16, at Rausch's Cafe in Guttenberg, Iowa, during his three-day economic bus tour. | AP Photo

The author says Obama has ensured that small businesses have fair access to federal government contracting.

Agencies stiffing small-businesses

In a memorandum issued last April, President Barack Obama stated that he is “committed to ensuring that small businesses, including firms owned by women, minorities, socially and economically disadvantaged individuals and service-disabled veterans, have fair access to federal government contracting.” I agree with the president’s statement. Allowing small businesses to compete for government contracts is good for the government, taxpayers and the economy. However, the president’s actions don’t match what he has said. In fact, six Cabinet-level agencies have demoted their respective small-business advocates.

The Small Business Act requires that each agency have an Office of Small and Disadvantaged Business Utilization to ensure that contracts are written in a manner to encourage small business participation. By statute, the OSDBU director shall “be responsible only to, and report directly to, the head of such agency or to the deputy of such head.” This language is fairly straightforward, yet a recent report found that the departments of Agriculture, Commerce, Interior, Justice, State and Treasury are not complying with the requirements.

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These agencies are flouting the law in one of two ways. Some name the chief acquisition officer or chief financial officer as the official OSDBU director and then relegate the functional responsibilities to someone less senior. Others have the OSDBU director report to the chief acquisition officer, senior procurement executive or a similar position on a day-to-day basis, while only interacting with the deputy head from time to time.

The reporting relationship is not an issue of form over function. These small-business advocates are intended to be a peer of the chief acquisition officer and senior procurement executive. They are meant to serve as an authoritative figure — not an afterthought — so they can serve as a constant advocate for small businesses and an aggressive check against abuse.

Another of their goals is to meet the statutory target of awarding 23 percent of all prime contract dollars to small businesses. Unfortunately, the administration missed that target by 3 percent. And considering that the government spent over $536 billion through contracts last year, this failure translates to more than $14 billion dollars in lost opportunities for small businesses across the country. For this reason, no agency can claim that it has done enough for small businesses, especially when the president has told agencies to “strive to exceed the statutory goals.”

On Aug. 5, I sent letters to Secretaries Hillary Clinton, Tim Geithner, Ken Salazar and Tom Vilsack, Attorney General Eric Holder and acting Secretary Rebecca Blank, alerting them to their agencies’ noncompliance and asking them to let me know by Aug. 31 how they intend to bring themselves into compliance. The Department of the Interior, the Department of Commerce and the Department of Agriculture refused to send a response.

The responses we did receive ranged from the Social Security Administration saying it would update its practices to the Departments of Treasury, State and Justice refusing to change. These refusals fly in the face of the Small Business Administration, which also sent a letter to all agency heads and deputy agency heads on Sept. 9, stating that the SBA agreed with reports that these agencies did not currently comply with the law.

This apparent disinterest in helping small businesses is unacceptable, and the agencies that refuse to adhere to the Small Business Act will be held accountable. I will hold hearings on this subject, and I will continue working to restore the OSDBU directors to their rightful place as independent small-business advocates. Until we correct this issue, the president’s statements that “small business contracting should always be a high priority in the procurement process” will continue to ring hollow. And his words still won’t match his actions.

Rep. Mick Mulvaney (R-S.C.) serves as chairman of the House Small Business Subcommittee on Contracting and Workforce.

Authors:
Rep. Mick Mulvaney