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Chairman Graves in Politico: More Business for Small Businesses

Washington, Sep 2 -

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More Business for Small Businesses
By: Chairman Sam Graves
September 2, 2011 

 
Our debt has dominated much of the political discussion here in Washington this year, and it will definitely be at the forefront this fall as the new congressional supercommitte searches for $1.5 trillion in federal savings.

So, as we continue to address our record $14.3 trillion debt, we must look at ways to save money –and reevaluate how the government spends taxpayer dollars, making sure we make the best use of our limited dollars.

One function being scrutinized is federal contracting. Each year, the government dedicates over half a trillion dollars to the purchase of goods and services through federal contracts with private sector businesses, both big and small. Because this is a significant amount of federal dollars, we owe it to the taxpayers to make sure that we are using them wisely and efficiently.

While I’m committed to decreasing the total number of dollars, we also need to ensure that every penny spent results in the best possible value to the taxpayer. One way to do this is to increase contracting opportunities for small businesses.

Small business contracting is smart contracting. These firms bring more competition and reduced prices, resulting in better value. Additionally, small business innovation, efficiency and flexibility allow the government to do more with less. Small companies have proven time and time again that they can do the work – and do it more cheaply and more quickly.

With unemployment at 9.1 percent, it’s important to remember that small business contracting will also create jobs. While many large companies can perform new government contract work with existing workforce, most small businesses hire more employees to handle the extra workload. It’s well established that small businesses are the engine of job creation throughout the nation. And allowing them every opportunity to compete for contracts provides fuel to that engine.

As the total value of federal contracts decreases, I believe that we must increase the percentage of contracts awarded to small businesses from the current goal of 23 percent to 25 percent, not only to increase efficiency, but also to spur job creation.

The federal procurement system does contain protections to ensure that small businesses can compete, but these provisions are not properly enforced.

The unjustified bundling of requirements into huge contracts too large for small businesses has been prohibited since 1997. Yet, it remains one of the top challenges for small businesses. Another problem is that some unethical contractors seek to exploit small business programs for which they do not qualify. And the Government Accountability Office has just found that seven agencies are not complying with the law regarding small business contracting advocates.

We must make it a top priority to fix these problems, not only to be good stewards of taxpayer dollars, but also for the sake of our economy. This fall, the House Small Business Committee will look at legislative solutions to address these problems.

Another item on the House Republicans’ job creation agenda is the repeal of the 3 percent withholding rule. Beginning in 2013, federal, state, and local governments will be required to withhold 3 percent of all contractor payments over $10,000, essentially forcing small businesses to give the government an interest-free loan for more than a year until taxes are filed.

The effect of this provision will be massive, causing accounting burdens on governments and harmful cash flow disruptions for contractors and subcontractors across all sectors – and costing the government more to implement than it will ultimately collect. Therefore, we hope to repeal this burdensome requirement and relieve contracting construction companies, medical providers, manufacturers, farmers and many others of the uncertainty of the impending law.

As our nation continues this substantive fiscal conversation, I challenge elected officials and constituents alike to view small business contracting as one of the best possible uses of government expenditures. This cost-saving strategy can actually help Washington address our out-of-control federal debt and help create jobs.

Rep. Sam Graves (R-Mo.) is chairman of the House Small Business Committee.
 
To read the op-ed online CLICK HERE