STATEMENT
of the
Honorable Nydia M. Velázquez, Ranking Democratic
Member
House Committee on Small Business
Hearing on Removal of Regulatory Burdens on Small Businesses
July 18, 2001
Thank you, Mr. Chairman.
I am happy that the committee
is examining this issue today, because I believe it follows
our core mission as advocates of small business.
This committee has addressed
the burden of government regulation and paperwork, which
drains time and money from small business and discourages
them from competing for federal contracts.
In the past year, we have
focused a great deal of attention on the practice of "bundling",
which is the systematic exclusion of small business from
scaled federal contracts when they are "bundled"
and handed to a prime contractor. We have proven time and
time again that this practice does MORE than just discriminate
and exclude. Bundling is costly, wasteful, inefficient,
and more likely to procure lower quality goods and services
for the federal government.In addition, this committee and
others have held a series of hearings in past years on the
Federal Prison Industries' anti-competitive practices for
government contracts. Last month we took a fresh look. We
learned that UNICOR pays a fraction of the federal minimum
wage, remains exempt from OSHA requirements, and can dictate
pricing. No company in this country could possibly get away
with that.
All of these practices
hurt American entrepreneurs' right to compete and win lucrative
federal contracts.
Today we focus on an even
more pernicious phenomenon: the federal government's direct
competition with small business for goods and services.
This is exactly opposite the ideal of a market economy.
No company should fear direct competition from government,
which is more entrenched, subsidized, protected and powerful
than they could ever be.
These are difficult activities
to ferret out because they have been restricted for a generation,
first by the Office of Management and Budget's Circular
A-76 and later by the 1998 FAIR Act. Under scrutiny, anti-competitive
government activities have become more subtle. That is why
we are here: to look a little deeper.
We will hear the concerns
of several small businesses here, in particular bus charter
contracts won by federally backed Public Transit Authorities,
as well as the practice of the Post Office, which imposed
requirements on independent mail box owners that drove away
customers.
Our aim here is simple:
to continue to remove barriers and obstacles the federal
government has placed in the way of America's small businesses.
Our entrepreneurs have reason to expect the government will
not compete with them directly, just as they expect the
government to allow them to compete fairly for federal contracts.
