Snowe Calls on SBA to Improve Small Business Opportunities for Minorities and Women 

          Washington D.C. — During a Senate Small Business and Entrepreneurship Committee hearing today, U.S. Senator Olympia J. Snowe (R-ME) addressed the vital need of promoting economic opportunities for minority-owned and women-owned small businesses.  As ranking member of the Committee, Snowe pledged her commitment to ensuring that the Small Business Administration improves programs that help members of minority-owned small businesses reach their full potential by achieving economic self-sufficiency and overcoming discrimination. 

The following is text of Senator Snowe’s statement as delivered:            

Just last week, the U.S. Census Bureau announced that over 100 million people – or one in three U.S. residents – are classified as an ethnic or racial minority.              

According to a study released in last month by the SBA Office of Advocacy, minorities owned approximately 18 percent of the 23 million firms in the United States.   Additionally, there are now over four million minority-owned businesses across the country.                

As former Chair and now Ranking Member of this Committee, I have championed an aggressive contracting agenda that promotes entrepreneurship opportunities for minority-owned and women-owned small businesses, as well as for business located in Historically Underutilized Business Zones (HUBZones).  In the coming weeks, I will work closely with you, Chairman Kerry, to develop a bipartisan small business contracting package that will address ways to promote small business utilization of key SBA entrepreneurship programs – including the 8(a) and HUBZone programs.            

The SBA is responsible for administering and implementing programs to ensure that members of minority-owned small businesses achieve economic self-sufficiency, overcome the vestiges of discrimination, and realize their tremendous potential.  The SBA’s minority entrepreneurship programs, especially the Small Disadvantaged Business (SDB) and the 8(a) business development program for small disadvantaged businesses, have provided real economic opportunities to minority communities across America.            

Unfortunately, the effectiveness of these programs has been repeatedly called into question.  Three recent reports of the SBA Inspector General found that the SBA: (1) does not track compliance with 8(a) regulations; (2) improperly maintains an 8(a) database; (3) improperly supervises mentor-protégé arrangements between 8(a) firms and larger businesses; and (4) fails to ensure that 8(a) contracts go to more than a handful of participating firms.              

These conclusions are echoed by the Government Accountability Office, which found that over the last two years, the 8(a) program is vulnerable to “fronting” and fraud by larger business concerns, and that subcontracting opportunities for small disadvantaged businesses were not properly enforced on Katrina reconstruction projects in the Gulf Coast.  It is my sincere hope that the SBA will explain to us this morning the specific, corrective remedies the Agency has taken to rectify these problems.                

In conclusion, I again look forward to continuing to work closely with you, Chairman Kerry, in developing a bipartisan contracting package that builds on what was included in our SBA Reauthorization bill from last year – and that addresses a number of the concerns raised this morning.  

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