September 8, 1997
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
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:
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.