"Salazar: “The 8(a) Program: Overview and Next Steps to Promote Small Business Success.”"

Summary

The opening statement as prepared for delivery by Subcommittee Ranking Member Maria Salazar at a March 2, 2022 hybrid hearing of the House Small Business Subcommittee on Contracting & Infrastructure on the 8(a) program. It states that the law mandates that 5 percent of federal spending on goods and services go toward small, disadvantaged businesses, and that according to the SBA this goal was exceeded in fiscal year 2020 at approximately 10.5% or $59 billion. Salazar states doubts about the data's accuracy and says fewer small businesses are winning bigger awards. The statement cites an Office of Inspector General report finding that the SBA is failing to adequately measure the effectiveness of the 8(a) program, and calls on the SBA to tackle potential fraud and abuse.

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Opening Statements

Salazar: “The 8(a) Program: Overview and Next Steps to Promote Small Business Success.”

Subcommittee Ranking Member Maria Salazar

March 2, 2022

Tags:

Contracting

WASHINGTON, D.C. - Today, the House Small Business Subcommittee on Contracting & Infrastructure held a hybrid hearing on “The 8(a) Program: Overview and Next Steps to Promote Small Business Success.”

Subcommittee Ranking Member Maria Salazar’s opening statement as prepared for delivery:

Thank you, Mr. Chairman. Contracting with the federal government is the American dream.

Today’s hearing is a perfect example of the work this committee must perform on behalf of America’s small contractors.

We owe it to them.

Congress is at it’s best when we are making laws that protect the interests of all small businesses.

Let me repeat that, we must help all small businesses.

However, Congress made a specific point to give special recognition to socially and economically disadvantaged entrepreneurs through the small business act.

The minority small business and capital ownership development program, also known as the 8(a) program.

This program creates a space for entrepreneurs to grow to compete and be productive contributors to our nation’s workforce and economy.

The law mandates that 5 percent of the federal government’s spending on goods and services must go towards small, disadvantaged businesses.

According to the SBA, this goal was exceeded in fiscal year 2020 at approximately 10.5% or $59 billion dollars.

While I have some doubts about its accuracy, the data does seem to show some level of success.

We cannot ignore issues that continue to plague the 8(a) program.

For instance, we are seeing that fewer small businesses are winning bigger awards.

This is a problem.

Let me translate that for you – this means less diversity, less competition, more costs for taxpayers, and more importantly, less money in the pockets of small business owners.

We have to increase participation within all of SBA's contracting programs and enhance diversity of awards so that all small businesses can succeed, not just a few who know how to work the system.

On that note, I’d like to talk about the SBA's role in ensuring the success of its 8(a) participants.

The SBA has the responsibility to make this program work.

Recently and unfortunately I need to report, the office of inspector general report found that the SBA is failing to adequately measure the effectiveness of the 8(a) program.

That means we are allocating money without knowing if it is effective.

It is effectively going to enhance and help small business owners.

The program is as effective as is its ability to root out waste, fraud, and abuse.

The SBA must aggressively tackle potential fraud and abuse within all of its programs.

Every dollar going to an ineligible firm is an American taxpayer dollar that is wasted and abused.

So, what do we need to do?

We must ensure the SBA is operating the program at optimal levels, that no level of fraud or abuse is acceptable, and that the federal government awards the widest range of contract awards to as many small firms as possible.

That is the American way and that is why I am here to ensure this occurs.

Thank you, Mr. Chairman, I yield back.

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