Velázquez, Chabot Press for Changes to Women’s Procurement Program

Dec 15, 2016

Washington, DC – Rep. Nydia M. Velázquez (D-NY), the top Democrat on the House Small Business Committee, and Rep. Steve Chabot (R-OH), the Chairman of the Committee, have written the Small Business Administration (SBA) calling for swifter implementation of improvements to the Women’s Procurement Program.  

“Female entrepreneurs are a rapidly growing sector of the American economy, but are often left behind when it comes to federal contracts,” Velázquez said. “Congress has passed legislation to help more women-owned businesses secure federal work, but SBA hasn’t taken the appropriate steps to implement these reforms. We can’t shortchange women-owned businesses and I will continue pressing SBA to remedy this situation.”

“The Small Business Committee has worked across party lines to identify improvements to the Women-Owned Small Business Federal Contracting Program, and it’s the SBA’s job to implement those improvements,” said Chairman Chabot “It’s disappointing but not surprising that this is yet another area in which the SBA has failed to carry out the intent of Congress, and we will continue to hold the SBA accountable.”

Velázquez authored the original law creating the Women’s Procurement Program and has worked in subsequent years on legislation to improve the program and empower more women-owned businesses to compete in the federal marketplace.

The full text of the letter is below.

December 14, 2016

The Honorable Maria Contreras-Sweet
United States Small Business Administration
409 3rd Street SW
Washington, DC 20416

The Honorable Peggy Gustafson
Inspector General
U.S. Small Business Administration
409 3rd Street SW
Washington, DC 20416

Dear Administrator Contreras-Sweet and Inspector General Gustafson:

We are writing to you in our capacities as Ranking Member and Chairman of the House Committee on Small Business to inquire about serious delays in the Small Business Administration’s (SBA) implementation of reforms to the Women-Owned Small Business Federal Contracting Program (the “Program”). The Committee has jurisdiction over federal procurement matters that impact small companies, including SBA contracting programs. An issue of great importance to these businesses is their lack of access to federal contracting. While there was authorizing legislation for a women’s contracting program, it took more than ten years for the program to be put into place. Since then there have been continued problems in ensuring that women-owned small businesses have access to contracting opportunities and disparities have continued as a result of the limitations on contracts available for the program.  

The Committee has worked in a bipartisan manner to address the problems and disparities within the Program.  Numerous provisions have been enacted to ensure that it has parity with other SBA contracting programs, including language in the National Defense Authorization Act of 2015 to eliminate self-certification in the Program.  However, while an Advanced Notice of Proposed Rulemaking has been issued, the SBA has yet to implement this change and as a result, the Program has been left vulnerable to fraud. Management challenges within the Program, including the failure to eliminate self-certification, were highlighted during oversight hearings with SBA’s Office of Government Contracts and Business Development and SBA’s Office of the Inspector General (OIG).

In fact, in a report issued last year, the (OIG) detailed instances in which possibly ineligible firms received over $8 million in contracting dollars through the Program. In its audit of 34 set-aside awards, the OIG found that 13 firms did not upload all of the required documentation to demonstrate eligibility into SBA’s repository for the Program, while twelve firms did not provide sufficient documentation to prove that a woman or women controlled the day-to-day operations of the firm.  Furthermore, there were an additional nine firms that provided no documentation into the Program’s repository.  The OIG noted that a proper certification program would not allow firms to participate without proper documentation. The proposed rule increases the likelihood that firms without this documentation may receive sole source contracts.  

Therefore, we are requesting information from the Administrator as to the timeline as to when self-certification will be removed from the Program.  Additionally, we are requesting information as to what steps have been taken by both of your offices to ensure that only qualified businesses are receiving contracts under this Program; the number of allegations of fraud that have been reported through the fraud, waste and abuse hotline or otherwise; the number of investigations that have been conducted as a result of reporting; and the actions taken against firms that have been found to be fraudulently participating in the Program.  

It is our hope that the administration and the Committee can work together over the coming months to ensure equal participation opportunities for legitimate women-owned small businesses in the federal marketplace.

Sincerely,

Nydia M. Velázquez                  Steve Chabot
Ranking Member                     Chairman

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