House Small Business Committee Democrats Call for Greater Small Firm Participation in Sandy Recovery

WASHINGTON, Feb. 5, 2013 /PRNewswire-USNewswire/ -- New York Members of the House Committee on Small Business today wrote the Small Business Administration (SBA), calling for small businesses to receive a greater share of Sandy-related federal contracts.  According to recent data, the federal government is not achieving the level of small business participation outlined in federal law.  

"Employing locally owned, small businesses for Sandy recovery projects creates a win-win situation," said U.S. Rep. Nydia M. Velazquez (D-NY), the Ranking Democrat on the House Committee on Small Business.  "Not only will these firms perform quality work, but when they receive federal contracts they hire from within the community, helping reinvigorate our local economies." 

"Small businesses from across New York were devastated by the wrath of Hurricane Sandy, and ensuring that they fully recover remains a top priority of mine in Congress," said U.S. Rep. Grace Meng (D-Queens), a member of the Small Business Committee. "Small businesses are the backbone of our economy and our region's prosperity is dependent on their success. I urge the SBA to do everything in its power to get small businesses back up to speed, and making certain that they receive a greater share of Sandy-related contracts would be a major shot in the arm towards accomplishing that critical goal."
 
In a letter to the Administrator of the SBA, Velazquez and Meng noted that only about 15 percent of contracts related to Sandy have gone to small firms, to date.   Federal law calls for agencies to channel 23 percent of contracts to small firms, meaning entrepreneurs are already losing out on millions of dollars in business.  In addition to goals for small firms, federal law includes a number of targets for other disadvantaged businesses, such as those owned by women, veterans and minorities.  Unfortunately, to date, those businesses are also not receiving their share of Sandy-related recovery projects.

"With President Obama's enactment of the $50.5 billion Sandy assistance package last week, we have to redouble our efforts to make sure that small firms are at the center of these efforts and not an afterthought," Velazquez stated. "This means increasing outreach to local small businesses, enforcing subcontracting requirements, and using all of the tools available to channel more contracts to New York City's small firms."

Last week, Congress approved and President Obama signed into law a $50.5 billion aid package for states affected by Hurricane Sandy.  This legislation will include funding for construction and infrastructure projects, many of which are well-suited for small business participation.  As the letting of these and other Sandy-related contracts continues, Committee Democrats will continue to examine this issue.

CONTACT: Alex Haurek
(202) 225-2361

The full text of Velazquez and Meng's letter is below.

February 5, 2013

The Honorable Karen Mills
Administrator, U.S. Small Business Administration
409 Third Street, SW
Washington, D.C. 20416

Dear Administrator Mills:

As you are aware, Hurricane Sandy has caused catastrophic damage to the coastal communities in New York, New Jersey, and Connecticut.  With recent estimates for the economic losses associated with this disaster approaching $60 billion, the recovery efforts needed to reinvigorate these areas will be substantial.  In order for the rebuilding process to have the greatest positive impact on these areas, it is critical that the federal government channel a greater portion of contracts to locally-owned small businesses.

Unfortunately, recent data demonstrate that small businesses have been receiving contracts related to Hurricane Sandy at a rate well below the statutory goals.  To date, $305.6 million in contracts have been awarded, with only $47.2 million – or 15.4 percent – going to small businesses.  This is well below the 23 percent federal goal.  In addition, small disadvantaged businesses have received 3.2 percent of contracts (statutory goal is 5 percent); women-owned businesses have received 2.1 percent (statutory goal is 5 percent); and service-disabled veteran-owned businesses have received 0.5 percent (statutory goal is 3 percent).   By failing to incorporate more small businesses into federal recovery efforts, many local firms, which are already facing challenges due to the storm, are missing out on lucrative opportunities that could be the difference between survival and bankruptcy.

Going forward, it is imperative to strengthen the commitment to small firms and make sure that more federal contracts are open to them.  This is even more important now, given that President Obama has enacted legislation providing $50.5 billion in assistance for these efforts.  With our waterfront neighborhoods still reeling from this disaster, we must remember that local, small businesses must be part of the equation.  By incorporating them, we are giving them, their employees, and the communities they are located in, the best chance at a long-lasting recovery.

Sincerely,

Rep. Nydia M. Velazquez
Ranking Member

Rep. Grace Meng

SOURCE House Committee on Small Business Democrats