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Thank you for that introduction, Mark. (Mark Mills, President, APTAC). It’s great to be here with all the PTAC counselors from across the country.
I heard you had a little party last night. You deserved it. Congratulations on the 25th anniversary of this program. And thank you all for the impact you have made on thousands of small businesses across the country during that time.
I also want to thank the organizers for working with SBA staff yesterday on breakout sessions on subcontracting and helping small businesses apply for HUBZone and 8(a).
It’s true. Our partnership with the 94 PTACs is absolutely crucial. Our counselors are working side-by-side with you, sometimes in a very literal sense. And together, we’re helping meet America’s Defense needs while also helping small businesses grow and create jobs.
As you know, we work not just with Defense – but all federal agencies – to help ensure that at least 23% of about $500 billion each year in contracts go to small business. We also help ensure that 5% go to small disadvantaged businesses, 3% go to HUBZone firms, 3% go to service-disabled veteran-owned small businesses, and 5% go to women-owned small businesses.
It’s a win-win. Small businesses get the revenue they need to increase their top line and hire workers… while the federal government gets to work with the most responsive, innovative and nimble companies in the world — often with a direct line to their CEO.
Over the past two years, we’ve headed in the right direction. Instead of just 23%, we put 31% of Recovery Act contracts in the hands of small businesses. And for FY 2009, we saw an increase to about 22% overall, just one percent shy of our goal.
But we can do better.
So, my question for you is this: How do we create even more of these win-wins?
Well, two important things happened recently. The Small Business Jobs Act and the recommendations from the President’s Task Force on Small Business Contracting.
Let’s start with the Jobs Act. There were 19 provisions related to small business contracting in the Jobs Act. I want to just mention the top 5.
First, parity. The law ensures equal treatment across our contracting programs. Before the law passed, there was confusion about whether one program – HUBZone – gets priority over the others. There is no confusion anymore. Defense and other contracting officers are now free to choose among businesses owned by women and service-disabled veterans, as well as businesses participating in HUBZone and 8(a).
Second, the repeal of the Competiveness Demonstration Program. When I first heard the name of that program, I thought it sounded nice. But the fact is, “Comp Demo” actually hurt small businesses in industries such as construction, landscaping, pest control and others. We know that small businesses won $24 billion in contracts in these industries in Fiscal 2009. By eliminating this program, DoD and other agencies will be able to build on that.
Third, I’m sure that you’re all familiar with the Federal Supply Schedule also known as the GSA Multiple Award Schedule. The law will give Defense and other contracting officers the ability to reserve orders for small businesses on contracts with multiple awards using this Schedule.
Fourth, the law will help the government root out fraud, waste and abuse. It’s called the “presumption of loss” provision and it targets firms that misrepresent themselves. Let’s say the Army buys 1,000 chairs from a small business that claims to be owned by a service-disabled veteran. But it turns out that the firm was lying. The Army can claim a loss on that procurement. That means – in the eyes of the law – Army didn’t get anything from spending that money, and it can pursue those firms accordingly.
And fifth, the law will hold prime contractors more accountable to subcontracting plans. If a big prime doesn’t meet their own subcontracting plan, they’ll have to explain – in writing – why not. This will help eliminate “bait-and-switch” tactics that occur when large primes win contracts but don’t follow through with their own plans to give subcontracts to small firms.
That’s the top 5. And, as I said, there are 19. I should note that some of these Jobs Act provisions are the same as the recommendations that came out of the President’s Task Force back in August.
In addition, both the Task Force and the Jobs Act are going to help us provide stronger training for contracting officers… as well as strengthen effective programs like mentor-protégé across the federal government.
On top of that, there are some Task Force Recommendations that weren’t in the Jobs Act at all… but we’re going to do them anyways, too.
For example, we’re going to enhance the FedBizOpps website, which I’m sure you’re all familiar with. We want it to serve as a one-stop resource for upcoming contracting and subcontracting opportunities. And we want it to include a calendar of matchmaking and training events.
So overall, we’re going to provide more opportunities for small businesses to compete… And we’ll measure our progress every step of the way.
And speaking of measuring progress, we updated our Scorecards this year at SBA. Instead of green, yellow and red to rate the agencies, we gave them a grade. It’s great that the Department of Defense improved on all of their percentages from FY 2008 to 2009, including subcontracting goals. And Defense’s overall grade was a B. I’m a big fan of “Bs.” It’s a good grade, but there is still room for improvement, and it’s our joint responsibility to get there.
I think we can do it. What do you guys think?
At the same time, we need to make sure that those contracts are getting in the right hands – and that we’re being careful stewards of taxpayer dollars. That’s my second point. It’s not just about rolling out new programs and policies… It’s about making sure the ones that we already have are working the way they’re intended.
We need to make sure small business contracting programs are only benefiting small businesses… by eliminating waste, fraud and abuse.
We are focused on three areas – three steps in the process:
On the front-end, we want efficient and effective certification to allow only eligible firms to participate in our programs. That’s why we reengineered HUBZone certification… That’s why we’re collaborating with VA to strengthen accountability in the Service Disabled Veteran-Owned Small Business program… And that’s why we undertook a major review of the 8(a) program to make sure mentor-protégé and joint ventures are designed to give maximum benefits to the small firms.
The second step is to be more vigilant with monitoring firms that are already in our programs. That’s why, in the HUBzone program, we conducted 1,000 site visits in FY10, up from just 100 in FY 2008. We also sent program exam letters to over 5,000 HUBZone firms asking them to certify, under penalty of perjury, that they are indeed eligible. And in 8(a), we’re training our supervisors to help them identify and pursue ineligible firms.
And third, we simply must hold bad actors more accountable. I already mentioned the “presumption of loss” provision in the Jobs Act that is going to give the agencies a stronger legal footing to go after these guys. In addition, we’re going to keep referring firms that break the rules to the Inspector General. It also means we pursue suspension and debarment. And where appropriate, we refer firms to the Justice Department for prosecution.
So, overall, we’re not just making sure that more handshakes are happening between small businesses and federal agencies… we’re making sure that the right handshakes are happening.
To sum up, the Jobs Act, the Task Force, and our renewed effort to combat waste, fraud and abuse are all critically important.
But before I wrap up, I just want to mention one more thing that I’m very excited about.
As I said before, the government is charged with putting at least 5% of federal contracts in the hands of small women-owned firms. With the Recovery Act, we are doing a great job with 5.5% of those contracts going to women. And Defense is improving, too. From FY 2008 to 2009, Defense contracts to women-owned firms rose from 2.95 to 3.37%.
We’re going to build on that.
Back in 2000, Congress authorized SBA to create a program to help more women-owned firms get federal contracts. Over the past 10 years, it just didn’t happen, but when President Obama took office, we decided that we were going to get the job done.
That’s why we developed a strong rule based on data which identified 83 industries where women-owned firms are underrepresented. That’s why we reached out and got comments from about 1,000 women leaders to make sure this rule would be a success. And that’s why I’m very proud to say that we published the women’s contracting rule just a few weeks ago.
By early February, we will update our databases to make sure we create an efficient and user-friendly system. For example, we’ll roll out a secure online storage portal for background filings and certification documents for participating firms. At the same time, we will train contracting officers in how to set aside opportunities for women-owned firms.
This means that starting in early 2011, the promise of new opportunities for women-owned small firms in federal contracting will finally be realized.
Thank you in advance for helping us “get the word out” about this.
In closing, I just want to say thank you again, for all the work you do.
I’ll just close by mentioning that we’ve been talking with APTAC leadership about how we can do more to link, leverage and align our efforts. We want PTACs to be working even more closely – arm-in-arm with our Field Offices, our Small Business Development Centers, our Women’s Business Centers, our Veteran’s Business Outreach Centers and our SCORE mentors.
Maybe it’s co-hosting more matchmaking events… Maybe it’s establishing better referral networks at the local level… Maybe it’s simply making sure that we avoid duplicative efforts - so that our limited dollars can be stretched to help as many small businesses as possible.
If we work together, I know we can do even more to give small businesses the training and the tools they need to compete for federal contracts and subcontracts.
And all of us at SBA know that we need your help and your partnership every step of the way – as we fulfill our mission of growing businesses and creating jobs.
Thank you for renewing your commitment to our partnership as you enter your next 25 years – and again, thank you for everything you do.