SMALL BUSINESS ADMINISTRATION PROCUREMENT
TUESDAY, FEBRUARY 7, 1978
SUBCOMMITTEE ON GOVERNMENT PROCUREMENT,
SELECT COMMITTEE ON SMALL BUSINESS,
Washington, D.C.
The subcommittee met, pursuant to call, at 10 a.m., in room 1318 Dirksen Senate Office Building, Hon. William D. Hathaway, chairman of the subcommittee, presiding.
Present: Senator Hathaway.
Also present: Allen W. Neece, Jr., legislative counsel; Kay Klatt, professional staff member; and Thomas P. Downing, legislative assistant to Senator Hathaway.
Senator HATHAWAY. The committee will come to order. We would like to welcome this morning Ms. Patricia M. Cloherty, Deputy Administrator of the Small Business Administration, who will testify on the procurement assistance program of the Small Business Administration.
This testimony will assist the committee in its evaluation of the effectiveness of this program in helping small businesses to obtain opportunities to bid on Government contracts.
We wish to explore whether the procurement assistance program of the SBA is sufficiently supportive of the policy of Congress that "a fair proportion of the total purchases and contracts or subcontracts for property and services for the Government *** be placed with small-business enterprises." We wish to know whether the Agency has the appropriate resources to act as an effective spokesman for small businesses who wish to do business with the Federal Government.
I think we all agree that the $70 billion plus Government market is vital to a large number of smaller firms. In many cases, were the SBA not available to open up opportunities for small business to contract with Federal agencies, these firms would, in fact, be left out of the Government market.
This is the first oversight hearing on SBA's procurement assistance program since this committee was granted authority beginning in 1977 to consider and report out legislation on matters relating to the Small Business Administration. I hope it will be possible for this committee and the Agency to develop a commonly shared standard of performance for this very important aspect of ŠBA's operations.
Good morning, Ms. Cloherty. It is nice to see you. Your entire statement will be placed in the record at this point, and you may summarize it if you wish.
[The prepared statement of Ms. Cloherty follows:]
Mr. Chairman, we thank you very much indeed for providing us this occasion to review the several categories of our Procurement Assistance programs.
Before summarizing the present status of our programs, we will first treat with a number of matters which we understand may be of particular interest to the Subcommittee:
Procurement Automated Source Program (PASS)
In answer to a critical need for information on small business
firms that are potential sources for providing goods and services
to the Federal Government, and in our continuing undertaking to
bring increased business to the small business community, the
SBA is developing the Procurement Automated Source System (PASS).
(The Department of Energy is cooperating with SBA in development
of PASS by funding approximately 40% of its contract cost.)
PASS will be a centralized, computerized data base of approximately
150,000 small business firms in manufacturing, research and
development, construction and services that have expressed an
interest in doing business with the Federal Government. The PASS
will select from its data bank small firms with capabilities
that meet particular procurement requirements by matching key words
in the procurement description with key words in the firms' PASS
records. Searching the data bank will be accomplished by means
of remote terminals in major SBA and DOE offices. Through SBA's
Prime Contracts and Subcontracting Assistance Programs, the PASS.
will be available to over 300 major Federal procurement offices
and 350 plants of major prime contractors. Department of Energy
participation in and use of PASS will bring energy related
procurement opportunities to small firms. The PASS will provide
a profile of each firm selected for a given procurement solicita-
tion including information on whether the firm is woman or
minority owned.
On September 29, 1977, we awarded as a result of a competitive
small business set-aside, a contract to Systems Architects, Inc. of
Randolph, Mass. It is a nineteen month contract for the development,
test, and first year of operation of PASS. The amount of the
contract is $346,453. The schedule calls for development and test
of PASS to be completed April 30, 1978. The first year of operation
will begin in May 1978 with a limited data base of approximately
5000 firms. The first year of operation will include a major
outreach effort to expand the data base.
In April 1979 at the end of the first year of operation, the
data base will include approximately 69,000 small firms. The total
of 150,000 firms will not, with current resources, be achieved
until April 1982. While limited SBA field personnel resources
dictate a lengthy period for bringing the data base to its planned
total, I would hasten to point out that in April 1979 the PASS
will be three times larger than the current manual system it
is replacing. The 54 month data base creation period could be
shortened to 30 or 36 months if sufficient funds, approximately
$2.5 million, were made available for contracting out the initial
field data gathering effort. One of the features, key to the
success of the PASS is the currency of its data. Therefore
beginning in the second operational year, the system will automa-
tically initiate annual update inquiries to all firms registered
in the PASS. Processing and review of the update responses from
the firms will require approximately 20 man years each year of SBA
Source Specialists effort. At present we have only eight Source
Specialists authorized. Therefore, in order to maintain the
system we need additional personnel. Lacking the additional
personnel, we will maintain the PASS by borrowing from other
already short-handed procurement assistance programs.
We have been working toward development of the PASS for nearly
two years and we believe the PASS is fully responsive to the
priority established in PL 95-89 to "developing a small business
procurement source data bank."
The impact of the PASS on the small business community is
potentially great as indicated by the realization that if, as a
result of PASS, the share of Federal prime and subcontracts
going to small business were increased as little as one-half
of one percent, it would result in over $80 million in increased
business for small business.
Training Provided for Procurement Personnel
Personnel assigned to all of the Procurement and Technical Assistance
Programs are well-trained professionals. Each of them has been in
his or her respective position for a considerable period of time,
or in the case of recent additions to the field staff, we have
been successful in recruiting professional procurement personnel
from other agencies. However, in order to keep them aware of
new developments in the procurement profession, of changed rules
and regulations and provide for their continuing development, we
have an annual training conference during which time personnel
assigned to each program meet in two-day workshops and undergo an
intensive interchange of information, ideas and experiences.
As new people are added to the field staff they are brought to the
Central Office for a one to two week period to be indoctrinated
in the intricacies of the operation of SBA's Procurement and
Technical Assistance Program.
The SBA has an Executive Development Program in which several of the Procurement and Technical Assistance professionals are enrolled on a voluntary basis, and through this program attend courses of instruction deemed necessary by the individual in conjunction with training experts to enhance their individual development and their overall potential both to the SBA and the Federal Government.
Field Organization and Central Office Monitoring of Procurement
Specialists
The current SBA organization, which is detailed in the attached
organizational chart, is based on the "operations concept," under
which field procurement assistance personnel report to the
appropriate District or Regional Directors. Regional Directors
report to the Associate Administrator for Operations. The Office
of Procurement and Technical Assistance (OPTA), under the
Associate Administrator for Procurement Assistance, has program
management responsibility for procurement assistance programs
(other than 8(a)), and for monitoring the extent and quality of
procurement assistance services provided by field specialists.
OPTA's monitoring function is carried out by review and analysis
of monthly and quarterly field reports and by review by senior
OPTA managers at each regional office on a periodic basis.
Results of OPTA monitoring efforts are transmitted to the
appropriate Regional Directors, through Operations, for any
remedial action called for.
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