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The Administration strongly supports reauthorization of the programs of the
Small Business Administration and supports Senate passage of S. 1139, with the
changes described below. The bill reauthorizes small business loan programs
which assist tens of thousands of small businesses each year and contribute to
the overall vitality of our economy. The Administration also supports the
increase in the government-wide small business participation goal in federal
contracting from 20 to 23 percent, following a phase-in period and in
conjunction with the elimination of the Small Business Competitiveness
Demonstration Program.
However, the Administration strongly opposes the bill's changes to current law
on "contract bundling," as well as extension of the Small Business
Competitiveness Demonstration Program and creation of the "HUB Zone" program.
The Administration will seek amendments to address these and other concerns as
addressed below.
Contract Bundling. The Administration is committed to maintaining a
strong role for small businesses in Federal contracting, but is concerned that
the proposed changes to the current law contract bundling provisions could deny
taxpayers the cost savings and improved quality achievable by appropriate
consolidation of Federal contract requirements. Therefore, the Administration
urges the Senate to maintain current law, which provides sufficient authority
and flexibility for the Administration to protect the important interests of
small businesses.
Small Business Competitiveness Demonstration Program. The
Administration strongly opposes any extension of the Small Business
Competitiveness Demonstration Program. Small businesses will substantially
benefit from discontinuing this program and lifting the unnecessary paperwork
and reporting burdens it imposes. Moreover, the Administration believes that
if this demonstration program is not allowed to terminate as scheduled, S.
1139's small business participation goal will be extremely difficult to achieve.
HUBZones. The Administration strongly supports new efforts to promote
economic development in the Nation's distressed urban and rural communities.
The bill's HUB Zones provision, however, could weaken one of the strongest
tools for achieving this objective by according the proposed program a
contracting priority equal to that of the 8(a) program.
The Administration has already proposed regulations and is ready to begin
pilots for the Empowerment Contracting Program (ECP), a new contracting program
targeted at distressed communities. The Administration believes that these
tests should be permitted to proceed, and that they will demonstrate the ECP's
ability to accomplish the goals of the HUB Zones provisions at less expense and
without affecting the 8(a) program.
Other Administration Concerns
The Administration will also seek amendments to:
- Remove proposed restrictions on the SBA's ability to use Women's Business
Center funding to finance the costs of administering the program. Removal of
these restrictions is important to ensuring the effective execution of this
program.
- Maintain the ability of Small Business Development Centers (SBDCs) to
charge appropriate fees for counseling services provided under the program.
- Authorize sufficient microloan technical assistance funding to support the
projected growth in this program.
- Reauthorize the Small Business Technology Transfer (STTR) Program for three
years, rather than six. The three-year authorization proposed by the
Administration is consistent with the authorization period for the companion
Small Business Innovation Research (SBIR) Program, and provides a reasonable
period for both achieving and evaluating program results.
- Delete the proposed pilot program targeting technical assistance to certain
States.
This provision would divert scarce resources needed to administer the STTR and
SBIR programs.
Pay-As-You-Go Scoring
S. 1139 would increase direct spending; therefore it is subject to the
pay-as-you-go requirement of the Omnibus Budget Reconciliation Act of 1990.
OMB's preliminary scoring estimates of this bill are presented in the table
below. Final scoring of this legislation may differ from these estimates.
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