This is the main question within the veteran-owned small
business community in light of recent events. Businesses with fewer than 500
employees account for:
99% of all employer firms,
jobs for over half of the nation’s private workforce,
nearly two-thirds of all new jobs, and
44% of total U.S. private payroll.
This is a huge part of the American economy, giving the
Administrator of the SBA the potential to have major influence on American
commerce. Surprisingly, the top SBA position has been vacant for some time now,
leading me to believe that the Executive Branch does not view small business
progress as a priority. Surely there are plenty of people with the talent and
desire to have a key position like this to serve their country and thousands of
small businesses across the country.
After appointing Karen Mills as the new SBA Administrator in
2009, President Obama elevated SBA to Cabinet-level status in January 2012.
Small businesses across the country hailed this political advancement of small
business a major victory.
Under Mills tenure, the SBA backed more than $106 billion in loans to small
companies. This included record years of more than $30 billion worth of loan
guarantees in both 2011 and 2012. Mills led a charge to make it easier for
small businesses to apply for various government-backed loans and automated
much of the application process.
Her tenure was also marred by allegations of widespread fraud
and abuse of SBA programs, according to FOX Business News.
During Mills’ term at the SBA, the minimum 23 percent of federal
contracts that should go to small business by law was never met. Federal
contracting goals for woman-owned firms, Service Disabled Veteran-Owned small
businesses, minority-owned and HUBZone small businesses were rarely – if ever —
Though one cannot say if the lack of meeting these small
business ‘goals’ precipitated this change of course and Administrative action,
rumor has it that SBA might be shifted to the Department of Commerce. No
verifiable source has been identified to sustain this rumor.
At that time, the Pentagon was the driving force behind two
failed campaigns to move SBS to Commerce.
However, interesting developments within SBA may give some
indication of what may be in store for the Small Business Administration.
Lloyd Chapman writes in the Huffington Post:
“Senior Pentagon officials and some of the biggest names in the
defense and aerospace industry have been lobbying for more than thirty years to
close the SBA in order to cover up decades of rampant fraud in federal small
business contracting programs by the DoD and its prime contractors. The excuses
from the government that every year, for over a decade, small business
contracts wind up in the hands of some of the nation’s largest defense
contractors as a result of “miscoding, computer glitches, anomalies and simple
human error” are starting to wear thin and are no longer believable or
“ABC, CBS, NBC and CNN have all covered the story of the
diversion of hundreds of billions of dollars in federal small business
contracts to major Pentagon prime contractors.” Full article: http://www.huffingtonpost.com/lloyd-chapman/pentagon-pr-heavyweight-t_b_3825196.html
media sources contend, however, that a senior Pentagon PR official, Retired
Commander Terrance Sutherland, has taken over the SBA press office. Sutherland
has tamped down some of the biggest flare-ups ever in DoD. What’s odd about
this? DoD has never met of the minimum contract expenditures awarded to small
business. The most recent years of the SBA ‘Scorecard’ indicates that DoD
ranked among the worst government agencies to contract with small business. And
the “Scorecard” is just another toothless, bureaucratic measurement that should
be very easy to meet.
Some small business representatives, including many for
service-disabled veteran owned small business (SDVOSB) and veteran owned small
business (VOSB) regard Sutherland’s reassignment as a ruse to appease the small
business community. His reassignment could accomplish several things:
Prop-up DoD’s flailing ‘Scorecard’ numbers to small business;
Redirect giant contracts that account for the massive cases of
DoD contract fraud to small business;
Prepare the Commerce Department for incoming SBA functions;
Aid in dismantling the SBA;
De-rail HR 2882, a bill introduced last month by Mike Coffman
(R-CO), to transfer SDVOSB/VOSB from VA to SBA;
Increase employment opportunities in both agencies for the huge
influx of veterans returning from the Middle East. This accomplishment is the
only positive economic result, but very unlikely. DoD and VA public relations
offices (AND Sutherland) would have publicized the heck out of this weeks ago.
Sutherland, a retired Commander in the US Navy, was a career
public relations professional handling controversial DoD situations such as
cases of “rape, murder, downed spy planes, terrorist attacks, shootings by military
personnel, Saddam Hussein and advanced weapons systems.
Sutherland has been on the front lines many times with great
successes for DoD.
On another front, the Government Accountability Office’s (GAO)
recently released Report 10-108, which indicated: “By failing to hold firms
accountable, the SBA and contracting agencies have sent a message to the
contracting community that there is no punishment or consequences for
committing fraud.” GAO also found that up to 25 percent of Pentagon
expenditures cannot be accounted for.
Now THAT’S a major flare-up, but can Sutherland address this? I
hope so, but what then with SBA? Does it lose its status as a Cabinet-level
agency? Will it become a pawn in the Commerce Department? Just another wing in
an invisible government building? If this turns out to be the case, small
business will rank extremely low in the American economic landscape.