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Leveling the Playing Field: Challenges Facing Small Business Contracting

WASHINGTON, D.C. ÔÇô Today, Congressman Nick LaLota (R-NY), Chairman of the Small Business Subcommittee on Contracting and Infrastructure, led a hearing titled ÔÇ£Leveling the Playing Field: Challenges Facing Small Business Contracting.ÔÇØ Subcommittee Chairman LaLota issued the following statement after todayÔÇÖs hearing.

ÔÇ£Small businesses should not have to deal with 94,000 pages of government red tape just to get in the game. ItÔÇÖs embarrassing and even shameful that our small businesses have been systematically squeezed out of federal contracting for decades,ÔÇØ said Subcommittee Chairman LaLota. ÔÇ£TodayÔÇÖs witnesses provided real-world experiences to help our Committee make meaningful improvements to ensure small businesses are fully utilized in the federal procurement marketplace. We must work together to stop the decline of small business contracting and fight to keep Main Street open for business.ÔÇØ

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Watch the full hearing here.

Below are some key excerpts from todayÔÇÖs hearing:

Chairman LaLota: ÔÇ£Mr. Spinosa, thanks again for being here. Prior to being and serving as the vice chairman of ADDAPT, you’ve had 44 years of success in your industry, including being the co-owner and vice president of business Development at East West Industries. And we’ve said how the federal bureaucracy can be very difficult. 94,000 pages of rules and regulations for businesses like the ones that you represent. Mr. Spinosa, in your experience, what are some of the unique challenges that small businesses encounter when navigating the Department of Defense procurement process?ÔÇØ Mr. Spinosa: ÔÇ£Thank you, Chairman. The challenges are, as stated by other testimony here, daunting. You run a small business you do the best you can to get everything together. These regulations that come in, as I said, require attorneys to come in and help translate from legal speak to business speak and execution. And, you know, small businesses don’t have attorneys on staff. It’s expensive to do that and bring, even bring attorneys in to go through this. And in the end, you’re trying to figure out at times people come in and quote irregardless of what the regulations have in place, they ignore some of the regulations and the government doesn’t pick that up. You need to be able to have the regulations readily identifiable and clear to the businesses so that they adhere to that. And everybody is on a level playing field.ÔÇØ

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Rep. Molinaro: ÔÇ£In Binghamton alone, in my district, the Binghamton SBDC advised over 26,000 clients, created over 11,000 new jobs and accessed nearly 600 million a new capital. It is clear that SBDCs are really helpful. But we also know that knowledge of in partnership with SBDCs can become a bit of a challenge. So, to both Mr. Spinosa and Mr. Lipski, to the extent that you’ve had experience with SBDCs, and I know that you have, what has been that experience, what understanding exists of what SBDCs provide and, and what support do they provide? And then to the extent you want to offer some recommendations on how they can improve their work, we’re open to that.ÔÇØ Mr. Lipsky: ÔÇ£Yes, I can comment on this. So, associations like the Associate General Contractors also has the New York State chapter, which also represents a lot of the constituents upstate as well. The problem that I see with small businesses, which are the second-tier subcontractors and suppliers, is that governments have competition to private. So, if there is a, if there is an opportunity to get a deposit in advance and to get your money out on something, they’re going to go for that versus entering a state agency or federal contract. So, I think that the SBDC, as far as the partnership, the Small Business Partnerships, helps try and bring those people into the market.ÔÇØ

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Rep. Bean: ÔÇ£I asked yesterday to the firms there, has it ever been this bad?ÔÇØ Mr. Spinosa: ÔÇ£It has not been this bad. It’s hard to explain the confluence of all the different things that are happening and to go towards your bill for a moment. The government has tried to come out and do things and say, ÔÇÿwe’re going to do this better than industry can do.ÔÇÖ And every time they’ve gone through that, they found that they can’t do it as innovatively, as effectively, as economically. And the flipside is the organizations themselves try to show, you don’t want to show failure on things, so they try and make it look like a success.ÔÇØ Rep. Bean: ÔÇ£Mr. Taylor, What say you, my friend? Has it been this bad before?ÔÇØ Mr. Taylor: ÔÇ£So doing this for 20 years, I’ve seen a lot of ebbs and flows. And so, I think the one thing that makes this period worse is the direction that we’re going. We seem to be heading in an even more difficult direction. And that that’s what causes me the greatest concern.ÔÇØ

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