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SBA administrator takes heat from Democrats and Republicans in Congress

Washington’s warm welcome appears to have run its course

By J.D. Harrison
The Washington Post
September 11, 2014

Maria Contreras-Sweet was well received by lawmakers on both sides of the aisle when she was tapped as the new head of the Small Business Administration.

That was seven months ago. On Wednesday, her reception on Capitol Hill wasn’t so warm.

During her first hearing before the House Small Business Committee, members from both parties grilled Contreras-Sweet on several perceived problems within the SBA, ranging from unauthorized pilot programs to scant contracting oversight.

“The agency continues to create policy without the benefit of notice or comment rulemaking,” Rep. Sam Graves (R-Mo.), the committee’s chairman, said just moments into the hearing. He quickly added that the SBA “has a history of pursuing initiatives it creates on its own while ignoring congressionally mandated activities.”

Contreras-Sweet, the final addition to President Obama’s second-term Cabinet, cast the agency’s new initiatives in a different light. She said that the department is “working to find new and creative ways to put micro capital into the hands of entrepreneurs” and that she plans to keep “championing bold initiatives to open new business channels for entrepreneurs within the federal government, corporate supply chains and international commerce.”

As an example, she pointed out that the agency is preparing to launch SBA One, an interactive online platform designed to simplify the SBA loan process for bankers and small-business borrowers. She told lawmakers the program will “save banks hours of processing time and money” by cutting down on faxed forms and allowing for electronic signatures.

“Do you have a study to show how many hours it will save?” asked Rep. Blaine Luetkemeyer (R-Mo.), arguing that changing an existing process could have the opposite effect. “This is a statement that should have facts, studies, something backing it up.”

Noting that the online portal has not been launched, Contreras-Sweet said she would report back with metrics after the rollout. “Please don’t come to this committee and make statements if you can’t back them up,” Luetkemeyer responded.

Contreras-Sweet got little reprieve from some of the Democrats on the panel.

Rep. Janice Hahn (D-Calif.) expressed concerns with the fact that women-owned small businesses have seen their share of SBA loan dollars fall from 40 percent before the recession to 16 percent today, while minority-owned firms have seen their share drop from 11 percent to less than 3 percent. While Hahn commended the administrator for recently reducing fees on some low-dollar loans, she questioned “whether enough changes have been made” to get more capital to firms owned by traditionally underserved groups.

Contreras-Sweet said the agency is committed to offering a robust array of loan products, ranging in size and structure, to meet the needs of all entrepreneurs, including women. In addition, she said, the SBA is working with its network of Women’s Business Centers across the country to make women more aware of lending, counseling and contracting opportunities.

Rep. Nydia M. Velázquez (N.Y.), the ranking Democrat on the committee, questioned Contreras-Sweet sharply about federal contracts designed for small businesses that went to large corporations.

“I would like to ask you whether you are aware that Northrop Grumman, Raytheon and Chevron have been included as small-business contracts by agencies,” Velázquez said.

To view full article, click here: http://www.washingtonpost.com/business/on-small-business/sba-administrator-takes-heat-from-democrats-and-republicans-in-congress/2014/09/11/291892c8-3859-11e4-8601-97ba88884ffd_story.html



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