STATEMENT
of the
Honorable Nydia M. Velázquez
Small Business Committee Hearing
May 15, 2002
Thank you, Mr. Chairman.
Two months ago, President Bush announced his small business
agenda. Significantly, he said, "whenever possible
we are going to insist we break down large contracts so
that small business owners have got a fair shot at Federal
contracts." That statement goes to the heart of what
this Committee has been trying to do for the past 10 years.
A major determining factor in turning the
President's rhetoric into reality will be the implementation
of this agenda by the Department of Defense --- the Agency
that is responsible for 65 percent of all government purchases.
If the past is any indication, however,
we have a long uphill climb toward compelling the Pentagon
to implement this agenda, and that climb is getting steeper
every day. There is no one Agency more responsible for
the exclusion of small businesses than the Department
of Defense.
For the past two years, DoD has not met
a single one of its small business goals --- costing small
businesses $3.5 billion and women-owned small businesses
$4.3 billion. This absolutely must change.
Our Committee has spent a considerable amount
of time and energy looking at DoD's mishandling of contracting
on seven separate occasions. It is nice to finally have
the opportunity to hear from Mr. Aldridge. In the previous
hearings we always hear the words about how important
small businesses are to the agency, but we have seen no
evidence of any concrete action.
In the Committee Democrats' annual Scorecard study, the
DoD has received a failing grade for the past 3 years
running. The primary reasons for these failing grades
is the increasing reliance on contract consolidation ---
the very thing the President said must stop.
Just a few weeks ago, we issued a watch
list of 10 of the worst contracts that rob opportunities
from small businesses. Seven of these 10 were DoD contracts.
That is disgraceful.
Worst yet, the Pentagon continues to engage
in this practice without being able to demonstrate one
dime of savings to the taxpayer.
In fact, their system has disintegrated
to the point where this Committee has taken the drastic
action of reviewing these contracts one by one because
the Department is either unwilling or unable to manage
them itself. I believe it is much more unwilling than
it is unable.
The Department puts out plans that don't
even meet the requirements of the law --- and then structures
its contracts to make sure poor goal work won't even be
achieved. This is just in the planning stages!
If and when a small business is lucky enough
to get a contract, the situation only goes from bad to
worse. Small businesses are threatened with poor performance
ratings --- paid late --- and forced to perform work without
proper paperwork and documentation that creates confusion
and frustration later on. At that point, they come to
this Committee because there is no effective advocate
within the Department. This is not the way it should be.
Small businesses are a critical factor in the economy
and should not be treated like second-class citizens ---
especially from a federal department that has a history
of $600 hammers and $7000 coffee makers. Because small
businesses can and do provide the government with a quality
product many times more affordable than their big corporate
counterparts.
