House Small Business Committee

A Review of SBA’s 504/CDC Loan Program

House Small Business Committee News - Thu, 06/29/2017 - 10:00am



The Committee on Small Business Subcommittee on Economic Growth, Tax, and Capital Access will meet for a hearing titled, “A Review of SBA’s 504/CDC Loan Program.” The hearing is scheduled to begin at 10:00 A.M. on Thursday, June 29, 2017 in Room 2360 of the Rayburn
House Office Building.


Witnesses 

Mr. Wayne Williams
Senior Vice President
Business Finance Group
Fairfax, VA
Testimony
Disclosure

Ms. Barbara A. Vohryzek
President and CEO
National Association of Development Companies (NADCO)
Washington, DC
Testimony
Disclosure

Mr. Sherwood Robbins
Managing Director
Seedcopa
Exton, PA 
Testimony
Disclosure

Improving Broadband Deployment: Solutions for Rural America

House Small Business Committee News - Thu, 06/22/2017 - 10:00am

The Committee on Small Business Subcommittees on Agriculture, Energy, and Trade and Health and Technology will hold a joint hearing titled, “Improving Broadband Deployment: Solutions for Rural America.” The hearing is scheduled to begin at 10:00 A.M. on Thursday, June 22, 2017 in Room 2360 of the Rayburn House Office Building.  

Attachments
1. Hearing Notice
2. Witness List

Witnesses 
Mr. Mike Romano
Senior Vice President
Industry Affairs & Business Development
NTCA—The Rural Broadband Association
Arlington, VA
Testimony
Disclosure 

Mr. Dave Osborn
CEO
VTX1
Raymondville, TX
*Testifying on behalf of the Western Telecommunications Alliance
Testimony
Disclosure 

Mr. Tim Donovan
Senior Vice President
Legislative Affairs
Competitive Carriers Association
Washington, DC
Testimony
Disclosure 

Mr. Chris Allendorf
Vice President of External Relations and General Counsel
Jo-Carroll Energy, Inc. (NFP)
Elizabeth, IL 
Testimony
Disclosure 

SBC Examines How to Bring Broadband to Rural America

House Small Business Committee News - Thu, 06/22/2017 - 12:00am

WASHINGTON – Today, Members of the House Small Business Subcommittee on Agriculture, Energy, and Trade heard from a group of experts in the first of a series of hearings addressing the rural broadband deployment efforts small telecommunications companies are undergoing in rural America. Witnesses also discussed the potential for policy changes at the Federal Communications Commission (FCC) and what the FCC has done to help or hinder broadband deployment.

Our small businesses, particularly ones in rural areas, depend on new telecommunications technologies to compete across town and across the world,” said Subcommittee Chairman Rod Blum (R-IA).

“The nation’s small telecommunications providers are the ones that traditionally supply the bulk of broadband services to the most rural parts of America, and it is no easy task.  We’ve been making progress over the past few years, but more needs to be done to put rural America on par with urban America. These small businesses are ready, willing, able, and frankly itching to get out there and build these networks, if only Washington would get out of their way,” Blum continued.

Improving Broadband Deployment: Solutions for Rural America
Witness Testimony

“Fixed and mobile broadband, video, and voice are among the services that many rural Americans can access thanks to our industry’s networks and commitment to serving sparsely populated areas. These technologies serve as a small business incubator in rural areas that would otherwise see entrepreneurial activity gravitate toward the urban areas with greater resources,” said Mike Romano, Senior Vice President for Industry Affairs and Business Development at NTCA - the Rural Broadband Association.

 “Small companies like mine wait years and spend hundreds of thousands of dollars per project on environmental, archaeological, and historical preservation reviews. It is not uncommon for small companies like mine to experience delays of up to 18 to 24 months in getting broadband projects going because of these types of reviews. This is particularly problematic in parts of the country that have shorter construction seasons than Texas,” said Dave Osborn, Chief Executive Officer at VTX1 Companies.

“Policymakers must be mindful that small rural and regional providers have limited resources, and continue to face challenges securing adequate capital for wireless siting projects, an issue where this Committee plays a critical leadership role,” said Tim Donovan, the Senior Vice President of Legislative Affairs at the Competitive Carriers Association.

We applaud Chairman Pai and the Federal Communications Commission for creating the Broadband Deployment Advisory Committee (BDAC) to take look at the barriers to providing broadband access to rural areas of our country.  We were especially pleased that Jim Matheson, CEO of our national trade association, NRECA, was appointed to serve on the committee and bring the voice of non-traditional providers, like electric cooperatives to the table for these important discussions,” said Chris Allendorf, Vice President of External Relations and General Counsel at Jo-Carroll Energy, Inc. (NFP).

You can view the full video of today’s hearing HERE and read the full witness testimony HERE.


Chairmen of Senate, House Small Business Committees Lead on Strengthening Cybersecurity Defenses

House Small Business Committee News - Thu, 06/22/2017 - 12:00am

Washington, D.C. – Today, House Small Business Committee Chairman Steve Chabot (R-OH) joined Senate Small Business Committee Chairman Jim Risch (R-ID) to introduce bipartisan, bicameral legislation to improve cybersecurity resources for small businesses. The Small Business Development Center (SBDC) Cyber Training Act will be a priority in each respective committee. Representative Dwight Evans (D-PA) and Senator Gary Peters (D-MI) are original co-sponsors of the bills.

“Many small business owners lack the capital and expertise they need to prevent a cybersecurity attack. Unfortunately, one simple hit can destroy everything a small business owner has created. That’s why we need to ensure small businesses have access to the best cybersecurity resources and information possible.  Providing cybersecurity training to lead small business development center employees will broaden their expertise to help more small businesses prevent an attack and potentially help save their companies,” said Chairman Chabot.

“Entrepreneurs – particularly in rural areas – depend on online sales and marketing to commercialize their businesses, leaving them incredibly vulnerable to cyber risks,” said Chairman Risch. “With many small businesses unable to recover after suffering a cyber-attack, it is incredibly important that we address this threat head on.”

“Our small business owners and entrepreneurs are the engines that drive people to live, grow and succeed in our neighborhoods. We know that our small business community faces increasing cyber threats in our ever changing and evolving global economy. I am proud to join with my colleagues in the House and Senate to introduce bipartisan legislation that equips our small business owners and entrepreneurs with the resources they need to keep their businesses safe, secure and protected. Our small businesses depend on the essential resources that our Small Business Development Centers (SBDC) provide and I will continue to set forth legislation that allows our small businesses and SBDC’s to continue to thrive and prosper,” said Rep. Dwight Evans.

“Small businesses create two out of every three new jobs in our country each year, and they need the right tools and skills to identify cyber threats and protect their customers and their livelihoods,” said Senator Peters. “I’m pleased to support this bipartisan bill, which builds on efforts to educate business owners on ways to improve cyber defenses so that small businesses can focus on what they do best: creating jobs, fostering economic growth and driving innovation.”

The SBDC Cyber Training Act would require a percentage of SBDC employees to become certified in cyber strategy counseling, a method proven effective for export trade counseling. Without costing taxpayers more money, the Act would utilize already existing Small Business Administration (SBA) conferences to provide cyber strategy training to at least 20 percent of SBDC employees. Relying on the SBA’s expertise in training small businesses, the Act allows that agency to come up with new programming and to certify existing cyber education at SBDCs.

Full text of the bill can be found HERE

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Partners in Commerce: The Trade Promotion Coordinating Committee

House Small Business Committee News - Wed, 06/21/2017 - 11:00am
On Wednesday, June 21, 2017 at 11:00 a.m., the Committee on Small Business will meet in Room 2360 of the Rayburn House Office Building for a hearing titled, "Partners in Commerce: The Trade Promotion Coordinating Committee."  

Attachments
1. Hearing Notice 
2. Witness List

Witnesses 

Mr. Patrick Kirwan
Director
Trade Promotion Coordinating Committee (TPCC)
International Trade Administration
United States Department of Commerce
Washington, DC
Testimony

Mr. Peter J. Cazamias
Associate
Administrator Office of International Trade
United States Small Business Administration
Washington, DC
Testimony

Ms. Ann Pardalos
Manager
International Trade and Investment Office
Missouri Department of Economic Development
Jefferson City, Missouri 
Testimony




SBC Examines How to Help Small Businesses Increase Exports

House Small Business Committee News - Wed, 06/21/2017 - 12:00am

WASHINGTON – Today, the House Small Business Committee examined the Trade Promotion Coordinating Committee (TPCC) and its efforts to partner with federal, state, and local trade promotion agencies to help provide small businesses with the tools they need in a global marketplace and create new jobs in the United States. 

“Unfortunately, many small businesses consider exporting to be out of reach because they believe it is either too expensive or they don’t know how to find overseas customers. Other small businesses that dive into the export process often just give up because the process becomes too confusing and complicated,” said House Small Business Committee Chairman Steve Chabot R-OH).

“These are the real barriers to trade. If small businesses are ever going to be a major player in the global marketplace, we must ensure that they have the tools, knowledge, and confidence to become exporters,” Chabot concluded.

Partners in Commerce: The Trade Promotion Coordinating Committee

Witness Testimony

“The Federal and State Export Promotion Coordination plan identified opportunities for us to enhance our work, for example: additional international trade specialist training and direct training of exporters; coordination through the Small Business Administration's State Trade Expansion Program (STEP) award process; standardized client referral procedures; and greater utilization of existing partnership programs, among others. The Commerce Department is now working with the other TPCC agencies and our state and local partners to determine how we can move forward on these ideas,” said Patrick Kirwan, Director of the Trade Promotion Coordinating Committee (TPCC) of the International Trade Administration.

“Administrator Linda McMahon believes internal and interagency coordination is essential for us to achieve our small business trade objectives and run an effective and efficient operation in OIT.  As a result, over the past few weeks OIT has hosted or participated in a number of interagency trade and commercial policy-focused meetings with the goal of increasing opportunities for U.S. small business exporters,” said Peter Cazamias, Associate Administrator of the Office of International Trade at the United States Small Business Administration.

“With only 1 percent of small businesses exporting, state and federal agencies must work in unison to ensure they are not duplicating efforts and providing the best resources to small firms.Along with increasing the efficiency of the trade programs, the State-Federal Coordination Plan will help identify key gaps in services and resources available,” said Ann Pardalos, Manager of International Trade & Investment Office at the Missouri Department of Economic Development, on behalf of the State International Development Organizations (SIDO).

You can view the full video of today’s hearing HERE and read the full witness testimony HERE

Small Business Committee Approves Five Bipartisan Bills to Improve the SBA

House Small Business Committee News - Thu, 06/15/2017 - 12:00am

WASHINGTON – Today, the House Small Business Committee approved five bipartisan pieces of legislation to amend the Small Business Act and the Small Business Investment Act.

H.R. 2763, Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017, introduced by Subcommittee on Contracting and Workforce Chairman Steve Knight (R-CA)

H.R. 2763 will update and improve the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs. Specifically, it will reinforce the requirement that the SBA give a comprehensive annual report of the SBIR and STTR programs to Congress as well as hold the Department of Defense (DOD) accountable to stimulate technological innovation.

“The SBIR/STTR programs play an important role in utilizing small business technological innovation for federal research and development,” said Subcommittee Chairman Steve Knight. “The SBIR/STTR Innovation Act of 2017 was introduced to improve these programs by making them more efficient now that they have been reauthorized through fiscal year 2022.”

Passed by a vote of 19-0.

H.R. 2594, Small Business Payment for Performance Act of 2017, introduced by House Small Business Committee Member Rep. Brian Fitzpatrick (R-PA)

H.R. 2594 will ensure small business federal contractors get paid sooner for change orders. Specifically, the legislation allows contractors to submit a request for equitable adjustment (REA) - or an increase in fee - to the agency. The contractor may then bill the agency for any actual change order work completed while the REA is pending. Once the agency receives the REA, it must pay 50% of the billed change order work amount in a timely manner to offset extra costs.

“For small businesses, federal contracts can lead to good jobs, but can also result in many headaches. While businesses regularly deal with change orders in the private sector, contractors and subcontractors on federal construction projects are often forced to bear a financial burden by the slow process of approval. Some federal agencies routinely delay the approval process until the end of the project. That isn’t fair. The Small Business Payment for Performance Act stands up for small businesses by requiring federal agencies to make interim partial payments to contractors, allowing them to pay their own bills without being delayed until the end of the project. It’s common sense,” said Fitzpatrick.

Pass by a vote of 21-0

H.R. 2333, Small Business Investment Opportunity Act of 2017, introduced by Contracting and Workforce Subcommittee Chairman Steve Knight (R-CA)

H.R. 2333 will increase the amount of leverage made available to small business investment companies (SBICs).

“Access to capital can be a serious barrier to growth for small businesses, and the SBIC program is an excellent way of making those funds available. This bill would expand the amount of capital available to the entrepreneurs in our community to help them grow their operations and hire more of our neighbors,” said Subcommittee Chairman Knight.

Passed by a vote of 21-0.

H.R. 2364, Investing in Main Street Act of 2017, introduced by Contracting and Workforce Subcommittee Ranking Member Judy Chu (D-CA)

H.R. 2364 will increase the amount that financial institutions may invest in small business investment companies (SBICs).

“I’m so pleased that both Democrats and Republicans on our committee could come together today to help advance this important bill that will increase investment in our small businesses. Small businesses are the backbone of our economy, but I know, from talking to entrepreneurs in my district and around the country, that one of the greatest challenges to success is access to capital. That is what this bill will address, by letting banks or federal savings associations invest up to 15% of their holdings into SBICs. I hope this bill is brought to the floor soon so that more entrepreneurs will be able to access the capital they need to grow their business and hire more workers,” said Chu.

Passed by a vote of 21-0.

H.R. 2056, Microloan Modernization Act of 2017, introduced by House Small Business Committee member Rep. Stephanie Murphy (D-FL)

H.R 2056 will ensure the Microloan Modernization program is running efficiently and appropriately for small businesses.  Specifically, it will raise the microloan lending limit from $5 million to $6 million and provide flexibility to the 25/75 rule which restricts the amount of pre-loan technical assistance a microloan intermediary can offer to their small business.

“I’m proud of the bipartisan progress we are making together to help small businesses grow, including those in central Florida. My microloans bill will help more entrepreneurs and small businesses get the capital they need to start and grow, especially women and minorities. We’re also advancing legislation to help more small businesses more quickly and easily move their technologies to the commercialization stage. Finally, we are making substantive, commonsense reforms to the federal contracting process to ensure small construction contractors are paid in a fair and timely manner. As Ranking Member of the Contracting & Workforce Subcommittee, I’ll keep working in a bipartisan way to support our small businesses, create jobs, and strengthen our economy for all,” said Murphy.

Passed by a vote of 19-0.

"Small businesses play a critical role in our economy, providing almost 50% of our nation’s jobs. As Chairman for the Small Business Committee the last three years I’ve seen the SBA provide greats services to our nation’s small businesses although a few programs could be improved to provide even greater help to small firms. When we improve these programs, we are stimulating the economy by providing our nation’s job creators – small businesses – even great access to the tools and resources they need most,” said Chairman Steve Chabot (R-OH).

You can view the full video of today’s markup HERE and read the full materials from today’s markup HERE.

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A Cautionary Tale: A Review of SBA’s Failed 2014 Agency Restructure

House Small Business Committee News - Wed, 06/14/2017 - 11:00am






On Wednesday, June 14, 2017 at 11:00 a.m., the Committee on Small Business will meet in Room 2360 of the Rayburn House Office Building for a hearing titled, "A Cautionary Tale: A Review of SBA’s Failed 2014 Agency Restructure."  The Committee will examine how the Small Business Administration implemented its Voluntary Early Retirement Authority and Voluntary Separation Incentive Payment authority in FY 2014.


Attachments
1. Hearing Notice
2.
Witness List
3. Hearing Memo

Witnesses

Mr. Hannibal “Mike” Ware
Acting Inspector General
United States Small Business Administration
Washington, DC
Testimony

Mr. Joseph Loddo
Chief Operating Officer
United States Small Business Administration
Washington, DC 
Testimony





SBC Reviews Failed Retirement & Restructure Programs at SBA

House Small Business Committee News - Wed, 06/14/2017 - 12:00am

WASHINGTON – Today, the House Small Business Committee reviewed the Small Business Administration's (SBA) failed attempt to restructure the agency, particularly its use of the Voluntary Early Retirement Authority (VERA) and Voluntary Separation Incentive Payment (VSIP) Programs. The VERA and VSIP programs were created to help agencies restructure or downsize their workforce.

“The Office of Inspector General conducted an audit of SBA’s management of its VERA-VSIP program.  In its audit released just a couple of weeks ago, the OIG determined that SBA failed to achieve any of its goals.  It did not address workforce competency and agency skill gaps.  It did not decrease the average age of the agency’s workforce.  It did not address budgetary constraints to avoid a reduction in force.  In fact, apparently, the agency was facing no real threat of a reduction in force,” said House Small Business Committee Chairman Steve Chabot (R-OH).

“The VERA and VSIP options are supposed to help agencies restructure and reshape their workforces.  Yet, SBA’s workforce was left almost completely unchanged,” noted Chairman Chabot. 

A Cautionary Tale: A Review of SBA’s Failed FY 2014 Agency Restructure
Witness Testimony

“We found that while SBA made limited progress in restructuring and reshaping the workforce, it did not accomplish its stated goals of the VERA-VSIP program. As a result, SBA paid $2.1 million for early retirements for positions that were not restructured following VERA-VSIP. Overall, SBA may have been more successful in achieving its goals had it properly managed the VERA-VSIP program by developing specific and measurable VERA-VSIP goals,” said Mr. Hannibal “Mike” Ware, Acting Inspector General of the United States Small Business Administration’s Office of Inspector General.

“As the Inspector General’s audit report indicates, SBA did not carry out the 2014 VERA-VSIP properly,” said Joseph Loddo, Chief Operating Officer at the United States Small Business Administration.

“We will document the lessons learned, including in the areas of planning, implementation, results and recommended improvements. We will include all stakeholders in the process,” Loddo added.

You can view the full video of today’s hearing HERE and read the full witness testimony HERE.

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Chairman Chabot Responds to Passage of the Financial CHOICE Act

House Small Business Committee News - Thu, 06/08/2017 - 12:00am
WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-Ohio) released the following statement after passage of H.R. 10, the Financial CHOICE Act, to end taxpayer-funded bailouts and replace it with common-sense reforms that will help grow small businesses.  

“Dodd-Frank has failed our country. For the last seven years, it has only made it more difficult for small businesses, start-ups and entrepreneurs to get the credit and capital they need.  In contrast, the Financial CHOICE Act will hold Wall Street accountable, end taxpayer-funded bailouts, and free community banks from unnecessary regulations so they can provide loans to small businesses to grow and create more jobs,” said House Small Business Committee Chairman Steve Chabot (R-OH).  

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6/7/2017 - Full Committee Markup

House Small Business Committee News - Wed, 06/07/2017 - 11:00am


The Committee on Small Business will hold a markup on legislation to improve statutorily-authorized programs within the Small Business Administration. The markup will be held at 11:00 A.M. on Wednesday, June 7, 2017, in Room 2360 of the Rayburn House Office Building.  The items that will be marked up include:

· H.R. 2763, the “Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017

· H.R. 2594, the “Small Business Payment for Performance Act of 2017

· H.R. 2333, the “Small Business Investment Opportunity Act of 2017

· H.R. 2364, the “Investing in Main Street Act of 2017

· H.R. 2056, the "Microloan Modernization Act of 2017"

ICYMI - WSJ: A Jobs Rally At Last

House Small Business Committee News - Fri, 06/02/2017 - 12:00am

This week, the National Federation of Independent Business’s May report showed that hiring at small businesses surged this past month, according to a Wall Street Journal article.

"Owners of small companies report an adjusted average employment increase of 0.34 workers per firm over the past few months. “Few readings in the past 43 years have been higher,” says NFIB Chief Economist William Dunkelberg. This is the strongest report since February of 2006."

"Owners of small businesses are planning to continue the surge. “A seasonally adjusted net 18 percent plan to create new jobs, up 2 points and the best since November 2006,” adds Mr. Dunkelberg. And he has more good news for workers: “Reports of compensation increases gained 2 points to a net 28 percent, historically very strong.”"

"Small business appears to be surging, and owners and workers haven’t even gotten their Trump tax cut yet. This column believes that major tax relief is essential for sustained faster economic growth. But the encouraging May employment report from NFIB suggests that simply ending the Obama regulatory war on business is paying some early dividends."

Read the full article HERE.

The Small Business Subcommittee on Economic Growth, Tax, and Capital Access recently held a hearing in April on how small businesses are the key to economic growth. Dr. Robert Barro, from the American Enterprise Institute and Stephen Moore, from the Heritage Foundation were among the witnesses. Read more about the hearing HERE.


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Knight Introduces Bipartisan Bill to Hold SBA Accountable, Spur Innovation

House Small Business Committee News - Tue, 05/30/2017 - 12:00am

WASHINGTON – House Small Business Subcommittee on Contracting and Workforce Chairman Steve Knight (R-CA) today introduced H.R. 2763, the “Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017,” to update and improve the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs.

Specifically, H.R. 2763 reinforces the requirement that the SBA give a comprehensive annual report of the SBIR and STTR programs to Congress by December 31 of each year. Additionally, the legislation will hold the Department of Defense (DOD) accountable to stimulate technological innovation by requiring the DOD include more SBIR and STTR developed technology in larger programs of record. 

“The SBIR/STTR programs play an important role in utilizing small business technological innovation for federal research and development,” said Subcommittee Chairman Steve Knight. “The SBIR/STTR Innovation Act of 2017 was introduced to improve these programs by making them more efficient now that they have been reauthorized through fiscal year 2022.”

“I commend Subcommittee Chairman Knight and the Subcommittee on Contracting and Workforce for their hard work on this piece of legislation. This bill spurs technological innovation in the small business sector, keeps the SBA and the DOD accountable, and expands the commercialization of federally-funded small business research and development,” said House Small Business Committee Chairman Steve Chabot (R-OH).

Joining Rep. Knight as an original co-sponsor is Rep. Stephanie Murphy (D-FL), Ranking Member of the Contracting and Workforce Subcommittee.

You can read the full text of the bill HERE.

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All Work and No Pay: Change Orders Delayed for Small Construction Contractors

House Small Business Committee News - Thu, 05/25/2017 - 10:00am


The Subcommittees on Contracting and Workforce and Investigations, Oversight, and Regulations will meet for a hearing titled, “All Work and No Pay: Change Orders Delayed for Small Construction Contractors.”  The hearing is scheduled to begin at 10:00 A.M. on Thursday, May 25, 2017 in Room 2360 of the Rayburn House Office Building.  

This hearing will examine the effects of change orders on small business contractors and potential solutions to alleviate the financial burden on small businesses caused by agency delay in approval and payment of change orders.

Hearing Documents
1. Hearing Notice
2. Witness List 

Witnesses

Mr. Edward DeLisle
Co-Chair, Federal Contracting Group
Cohen Seglias Pallas Greenhall & Furman PC
Philadelphia, PA 
Testimony
Disclosure

Mr. Andy Brown
Vice President
GlenMar Construction
Clackamas, OR
*Testifying on behalf of the National Electrical Contractors Association
Testimony 
Disclosure

Mr. Greg Long
CEO
Long Electric Company
Napa, CA
*Testifying on behalf of the National Electrical Contractors Association
Testimony
Disclosure

Ms. Colette Nelson
Chief Advocacy Officer
American Subcontractors Association, Inc.
Alexandria, VA
*Testifying on behalf of the Construction Procurement Coalition
Testimony 
Disclosure

All Work and No Pay: Change Orders Delayed for Small Construction Contractors

House Small Business Committee News - Thu, 05/25/2017 - 12:00am

WASHINGTON – Today, the House Small Business Subcommittee on Contracting and Workforce and the Subcommittee on Investigations, Oversight, and Regulations heard from small businesses and experts about the effects of change orders on small business contractors and solutions to ease the financial burden. 

 “In contracting, a certain degree of reasonable delay is expected when changes are made; however, this becomes inexcusable when federal agencies are unwilling to formally execute change orders and fail to pay for work that has been completed for months – or even years,” said Subcommittee Chairman Steve Knight.  

“During this waiting period, small contractors are often left to finance new work out-of-pocket.  Some of these expenses include: paying employee salaries, taxes, building materials, renting expensive machinery, and any other costs a small construction firm must assume.  Unfortunately, this creates untenable situations and can result in financial distress and in some cases, bankruptcy,” added Knight.

“…the Committee is concerned that agencies may be engaging in unfair negotiation strategies with construction contractors.  One such tactic involves delaying multiple change order payments until the end of a project to try to leverage a better price.  Agencies may also be forcing small businesses to rely on the claims process to litigate their disputes,” said Subcommittee Chairman Trent Kelly.     

Kelly continued, “Small businesses do not have the time or resources to litigate claims and often settle for lesser amounts than owed—rather than face thousands of dollars in legal fees for the potential benefit of being paid pennies on the dollar.” 

From the Experts

“The concern rests with agencies failing to execute change orders and make payments to contractors for months – even years – at a time. Unsurprisingly, this delay causes serious harm to the project schedule and has a deleterious impact upon payment to the prime and subcontractors, especially small businesses which depend upon that cash flow to remain in business,” said Edward T. DeLisle, Co-Chair of the Federal Contracting Group at Cohen Seglias Pallas Greenhall & Furman PC.

Andy Brown, Vice President of Glen/Mar Construction, Inc., asserted, “When we [small construction contractors] don’t pay our bills our utilities shut off, our cars are repossessed, and our houses are foreclosed. However, when the government fails to pay their bills, small businesses go out of business.”

“A change order, in its simplest form, is an agreement to affect a change to the already executed contract. Often, it is necessitated by added, deleted or simply changed work from the plans and specifications already bid and agreed upon. While a change order typically adds value to the contract in exchange for the changed scope, it also can delete funds, change work without affecting price, and add or subtract time to completion of the work,” said E. Colette Nelson, Chief Advocacy Officer at the American Subcontractors Association, Inc.

Small Business Legislative Actions

Earlier this week, Small Business Committee Member Brian Fitzpatrick introduced H.R. 2594 the Small Business Payment for Performance Act of 2017 to ensure that small business federal contractors get paid in a timely manner for change orders.  On May 4th, Small Business Committee Member Don Bacon introduced H.R. 2350 the Small Business Know Before You Bid Construction Transparency Act to create transparency by requiring agencies provide notice to prospective contractors regarding their change order policies and processes.

You can view full video of today’s hearing HERE and full witness testimony HERE.

Accomplishments and Challenges at the SBA’s Office of International Trade

House Small Business Committee News - Tue, 05/23/2017 - 11:00am





The Committee on Small Business will meet for a hearing titled, “Accomplishments and Challenges at the SBA’s Office of International Trade.” The hearing is scheduled to begin at 11:00 A.M. on Tuesday, May 23, 2017 in Room 2360 of the Rayburn House Office Building.  

The Committee will hear directly from the SBA about its ongoing efforts to assist small businesses seeking to engage in the international trading system.

Attachments
1. Hearing Notice
2. Witness List

Witnesses 
Mr. Peter J. Cazamias
Associate Administrator
Office of International Trade
United States Small Business Administration
Washington, DC 

SBC Examines How SBA Can Help Small Businesses in the Global Marketplace

House Small Business Committee News - Tue, 05/23/2017 - 12:00am

WASHINGTON – House Small Business Committee Member Rep. Brian Fitzpatrick (R-PA) introduced H.R. 2594 the Small Business Payment for Performance Act to ensure small business federal contractors get paid in a timely manner for change orders.

Specifically, the legislation allows contractors to submit a request for equitable adjustment (REA) - or an increase in fee - to the agency. The contractor may then bill the agency for any actual change order work completed, while the REA is pending. Once the agency receives the REA, it must pay 50% of the billed amount immediately to offset extra costs. Currently, small businesses complete change orders without this protection. 

“For small businesses, federal contracts can lead to good jobs, but can also result in many headaches. While businesses regularly deal with change orders in the private sector, contractors and subcontractors on federal construction projects are often forced to bear a financial burden by the slow process of approval. Some federal agencies routinely delay the approval process until the end of the project. That isn’t fair,” said Fitzpatrick. “The Small Business Payment for Performance Act stands up for small businesses by requiring federal agencies to make interim partial payments to contractors, allowing them to pay their own bills without being delayed until the end of the project. It’s common sense.”

“When federal agencies request unexpected work, it often puts the burden of financing the change orders on the small business – including paying their employees, buying supplies and even paying taxes. We need to ensure small business owners won’t be shackled with extra financial burdens while completing a project, and I appreciate Rep. Fitzpatrick’s leadership on this very important legislation,” said House Small Business Committee Chairman Steve Chabot.

Joining Rep. Fitzpatrick as original cosponsors are Rep. Steve Knight (R-CA), Chairman of the Contracting and Workforce Subcommittee, and Rep. Stephanie Murphy (D-FL), Ranking Member of the Contracting and Workforce Subcommittee.

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Fitzpatrick Introduces Bipartisan Bill to Ensure Small Business Federal Contractors Get Paid

House Small Business Committee News - Tue, 05/23/2017 - 12:00am

WASHINGTON – House Small Business Committee Member Rep. Brian Fitzpatrick (R-PA) introduced H.R. 2594 the Small Business Payment for Performance Act to ensure small business federal contractors get paid in a timely manner for change orders.

Specifically, the legislation allows contractors to submit a request for equitable adjustment (REA) - or an increase in fee - to the agency. The contractor may then bill the agency for any actual change order work completed, while the REA is pending. Once the agency receives the REA, it must pay 50% of the billed amount immediately to offset extra costs. Currently, small businesses complete change orders without this protection. 

“For small businesses, federal contracts can lead to good jobs, but can also result in many headaches. While businesses regularly deal with change orders in the private sector, contractors and subcontractors on federal construction projects are often forced to bear a financial burden by the slow process of approval. Some federal agencies routinely delay the approval process until the end of the project. That isn’t fair,” said Fitzpatrick. “The Small Business Payment for Performance Act stands up for small businesses by requiring federal agencies to make interim partial payments to contractors, allowing them to pay their own bills without being delayed until the end of the project. It’s common sense.”

“When federal agencies request unexpected work, it often puts the burden of financing the change orders on the small business – including paying their employees, buying supplies and even paying taxes. We need to ensure small business owners won’t be shackled with extra financial burdens while completing a project, and I appreciate Rep. Fitzpatrick’s leadership on this very important legislation,” said House Small Business Committee Chairman Steve Chabot.

Joining Rep. Fitzpatrick as original cosponsors are Rep. Steve Knight (R-CA), Chairman of the Contracting and Workforce Subcommittee, and Rep. Stephanie Murphy (D-FL), Ranking Member of the Contracting and Workforce Subcommittee.

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SBA’s 7(a) Loan Program: A Detailed Review

House Small Business Committee News - Wed, 05/17/2017 - 11:00am

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On Wednesday, May 17, 2017 at 11:00 a.m., the Committee on Small Business will meet in Room 2360 of the Rayburn House Office Building for the purpose of examining the United States Small Business Administration’s (SBA) 7(a) Loan Program.  As a way to review the program’s ability to help creditworthy small businesses obtain capital, this hearing will offer Members of the Committee the opportunity to hear from SBA officials directly involved in administering the program.     

Attachments
1. Hearing Notice
2. Witness List
 
Witnesses

Ms. Linda Rusche
Director, Office of Credit Risk Management
Office of Capital Access
United States Small Business Administration
Washington, DC
Testimony

Mr. William Manger
Associate Administrator
Office of Capital Access
United States Small Business Administration
Washington, DC
Testimony

Small Business Committee Reviews SBA’s 7(a) Loan Program

House Small Business Committee News - Wed, 05/17/2017 - 12:00am

WASHINGTON— Officials from the Small Business Administration (SBA) told members of the House Small Business Committee today that they are working diligently to make sure small businesses can get the capital they need to grow their companies while conducting proper oversight of the 7(a) loan program,  SBA’s most common loan program, to maintain a zero subsidy cost to the taxpayer. 

“As the 7(a) Program grows in terms of loan volume, loan amount, and the Congressionally-authorized loan limit, we owe it to the taxpayers and the small businesses involved to conduct vigilant oversight. We have to make sure that American small businesses who are creditworthy but cannot obtain capital elsewhere, remain the priority,” said House Small Business Committee Chairman Steve Chabot.

SBA’s 7(a) Loan Program: A Detailed Review

“SBA is particularly interested in balancing the growing credit needs of America’s small businesses with prudent lending, always ensuring that we are meeting the requirements of our mission as authorized by the Small Business Act and the Small Business Investment Act,” said Linda Rusche, Director of the Office of Credit Risk Management at the Office of Capital Access at SBA.

“SBA also continues in active discussions with primary federal regulators on such topics as information sharing and vendor management. Through exchange of information we can bring improved oversight and monitoring to our activities and theirs, minimizing duplication and burden,” noted Rusche.

“It is of paramount importance to me and our agency that our 7(a) and 504 flagship programs continue to operate at zero subsidy and remain a great deal for taxpayers. As we look to refine the programs within the Office of Capital Access – the continued zero subsidy status of our programs will absolutely be a major priority for this Administration,” said William Manger, Associate Administrator at the Office of Capital Access at SBA.

This hearing was a follow up to the House Small Business Subcommittee hearing held in March: An Overview of SBA’s 7(a) Loan Program.

You can view full video of today’s hearing HERE and read full witness testimony HERE.

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