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SBA Closes up Vets Office, Annual Contracts Plunge

SBA Closes Veterans Assistance Office

Target Gov
September 11, 2006

Without consultation or notification, the Bush Administration has closed its office at the Small Business Administration (SBA) solely dedicated to helping veteran-owned small businesses gain access to federal contracts. The Administration has also informed the Veterans Advisory Committee, another group dedicated to helping veteran small business owners, that their charter will not be extended and instead will expire this September. These unprecedented moves hurt America's veteran entrepreneurs and raise serious questions about the Administration's commitment to comply with federal law.

Budget cuts and Barreto's resignation leave SBA toothless. One small- business advocate is sounding the alarm as best he can that companies should prepare for the possible closure of the Small Business Administration. It's just a matter of time, said Lloyd Chapman, president of the American Small Business League. President Bush and the Republican-controlled Congress want to shut SBA's doors for good, he said.

In closing the contracting assistance office, the Small Business Administration (SBA) has eliminated the one office solely dedicated to implementing a law that requires three percent of all federal contracting dollars to be awarded to service-disabled veteran owned firms. The government has failed to meet this goal and has also failed to develop and support the Veteran's Advisory Committee, as required by law passed in 1999. Last year, the federal government awarded just .38 percent of contract dollars to companies owned by service-disabled veterans, costing them nearly $9 billion in lost contracts.

"It is shameful that in a time of war, the Administration saw fit to abandon our commitment to those who have honorably served our country - and the brave men and women serving today who will be the proud veterans of tomorrow. Now, it should be our turn to serve them, by protecting their personal information and by providing them with opportunities to start a business, or rekindle businesses that are struggling from recent deployments in Iraq and Afghanistan," said Kerry.

Joe Wynn, President of the VETs Group and executive member of the Task Force for Veterans Entrepreneurship, said, "Despite the best efforts of the Task Force and other veteran's groups to work with the SBA to help make the Veterans Procurement Program under PL 108-183 become a success for the government and for the service disabled veteran business owners that it was designed to serve, the SBA continues to demonstrate a seemingly disregard for carrying out the President's Executive Order, 13-360, which instructed the SBA to provide information, federal procurement training, and assistance to increase participation in federal contracting for service disabled veteran business owners."

Bob Hesser, also a member of the Task Force for Veterans Entrepreneurship, and President of Vetrepreneur, LLC a Service- Disabled Veteran-Owned small business said, "During the short time the SBA's Veteran's office existed there were meaningful actions that gave us a belief that someone cared. I am just not sure of that today!"

The SBA has also failed to respond to a letter sent on February 27,
2006 from Senator Kerry and Senator Daniel Akaka (D- Hawaii), Ranking Member of the Veterans' Affairs Committee, regarding their role in implementing the Veteran's Benefits Act of 2003.

For follow-up contact: Kathryn Seck of the Senate Committee on Small Business and Entrepreneurship, 202-224-9431

Small Business Contracts Plunge to Record Low
The latest statistics on Federal small business contracting show the lowest participation by small businesses in recent history. According to current government figures, small businesses received a meager 17% of the total value of Federal contracts during fiscal year 2005. This number represents the lowest level of Federal contracts that have been awarded to small businesses in the past 20 years.

The Small Business Act of 1953 requires that 23% of Federal contracts go to small businesses. Last year, the SBA reported that 23.09% of contracts were awarded to small firms during FY 2004.

Although President Bush has repeatedly pledged his support to America's entrepreneurs, this statistic paints a different picture. The fact that the percent of small business contracts has dropped from 23% to 17% in only one year appears to indicate a lack of commitment by the Bush Administration to offer small business owners a fair opportunity to do business with the government.

Lloyd Chapman, President of the American Small Business League, points to eleven Federal investigations and two private studies that have found fraud, abuse, and lack of oversight in small business contracting. The SBA's own Inspector General uncovered outright fraud in small business contracting and in Report 5-15 called the diversion of Federal small business contracts, "One of the biggest problems facing the SBA and the entire Federal government today ..." In report 5-20, the Inspector General also found that the SBA has done nothing to stem the growing use of large, multiple-award contracts (or "bundling") that significantly reduce the opportunities for legitimate small businesses to participate in the Federal procurement process.

"This information should sound an alarm to small business groups around the country that President Bush is serious about shutting down the SBA. It's time for small business owners around the country to wake up and see what's happening and begin to fight," stated Chapman. "People need to stop listening to what Bush says and start paying attention to what he is doing. President Bush is trying to end all programs that help small, women-owned, minority-owned, and veteran-owned businesses in order to divert more Federal contract dollars to the defense and aerospace industries."

The list of firms that received small business contracts includes the names of hundreds of large businesses. Among the top 100 recipients, over thirty firms were large, including giant defense contractors such as Science Applications International, General Dynamics, and Northrop Grumman. ASBL estimates that if all awards to large businesses were removed from the total, the small business number could decline to below 10%.



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