news

A slate of Democratic bills cleared the House Small Business Committee this week, taking an important step toward final passage and enactment.  Rep. Nydia M. Velázquez (D-NY), the top Democrat on the Committee, said the measures would help more small firms to access capital and secure federal contracting and subcontracting opportunities.  

“Small businesses are the cornerstone of the American economy and, when that sector thrives, our entire nation prospers,” said Velázquez.  “The legislation our Committee Members passed this week will make important reforms to several federal programs, helping more entrepreneurs launch new ventures, more small firms to grow, and creating jobs along the way.”

H.R. 6347, authored by Rep. Dwight D. Evans (D-PA), would reduce burdens on lenders and small business borrowers participating in Small Business Administration’s (SBA) 7(a) program.  Under current rules, for loans over $250,000 secured by commercial real property, the lender or SBA must obtain an appraisal of the property being used as collateral.  Evans’ bill would update these standards to be in line with appraisal thresholds established by federal regulators.  By reducing the number of loans that require an appraisal, the bill would help channel capital to small companies more quickly.  

“The appraisal standard is out of date and this is constricting the flow of capital to small companies,” noted Velázquez.  “I applaud Mr. Evans for putting forth this change, which will mean more businesses can secure financing to grow their operations and invest in their communities.”

“I am pleased to introduce H.R. 6347 which lowers the cost of doing business by requiring fewer mandatory appraisals,” said Rep. Evans. “With the enactment of this important piece of legislation, appraisal costs passed on to borrowers will be greatly reduced since formal appraisals will only be mandatory on loans over $500,000, or above any threshold established by the regulators in the future.   Updating the Small Business Act statutory appraisal threshold is important to both SBA lending partners and small business borrowers. The City of Philadelphia has a robust real estate industry which employs appraisers, lenders, construction workers, bankers, and numerous others.  This industry is responsible for critical job creation.  And I look forward to working with my colleagues on this Committee as we continue to look for more tools in the toolbox to ensure that America’s small businesses can continue to grow, prosper, and most importantly, hire.”

Additional Democratic bills that passed this week aim to expand small firms’ involvement in the federal marketplace.  H.R. 6367, the Incentivizing Fairness in Subcontracting Act, authored by Rep. Al Lawson (D-FL) passed the Committee.  It would allow federal agencies in certain instances to count dollars spent by prime contractors on subcontractors toward agencies’ statutory small business contracting goals. The bill further includes provisions to ensure prompt payment to subcontractors when work is completed.  

“As contracts become larger, more small businesses are finding a role in the federal marketplace as subcontractors,” said Velázquez.  “We’ve also heard that prompt payment is a challenge for many small firms after they complete work either as a prime contractor or a subcontractor.  Mr. Lawson’s bill takes innovative steps to incentivize larger contractors to employ small firms as subcontractors and to ensure small businesses are paid on time.”  

“Small businesses work hard to receive federal contracting jobs and must go through an intensive process involving paperwork and costs,” Rep. Lawson said. “Unfortunately, even after a federal contract is awarded, small businesses still struggle with various issues including delay in payment. H.R. 6367 helps solve these problems by providing the clarity and resources needed to help contractors work at full capacity. I am proud that this bill has passed the House Small Business Committee, and I look forward to working with my colleagues in Congress to create a more fair and balanced system for our subcontractors.”

A third Democratic measure passed by the Committee seeks to address the growing use of “category management,” a federal contracting practice which many critics say increasingly locks small businesses out of the contracting process.  Committee hearings have previously found that category management, while billed as lowering costs for contracting agencies, actually does the opposite. Moreover, the model often results in further exclusion of small businesses from the federal marketplace.  

As a first step to address this issue, Rep. Alma Adams (D-NC) authored the “Clarity on Small Business Participation in Category Management Act,” H.R. 6382.  The bill, which also cleared the Committee this week, would require that federal agencies and the SBA include in their annual report information on “best in class” contractors, companies that largely benefit from category management. This bill would provide lawmakers with information on whether category management is reducing the role of small firms, women-owned firms, minority-owned companies and veteran-owned enterprises in federal contracting.  

“The Trump Administration appears intent on expanding the practice of category management, potentially depriving many small firms of contracting opportunities,” noted Velázquez.  “Rep. Adams has been a fierce champion for entrepreneurs and her bill would give us the data we need to look into how category management impacts small businesses and traditionally disadvantaged enterprises. I applaud her for moving this bill forward.”

“After hearing multiple testimonies from concerned small businesses, I authored H.R. 6382, the Clarity on Small Business Participation in Category Management Act, as a first-step to address the harmful effects of the Office of Management and Budget’s (OMB) category management model on minorities, women, veterans and other already disadvantaged small business owners in the federal marketplace,” said Congresswoman Adams. “I urge my colleagues in the House to support this bill, which requires the Small Business Administration to report on the amount of small businesses who participate in and benefit from the ‘best in class’ designation. Small businesses are the heart of American enterprise, and we must ensure a level playing field for them to compete for federal contracts.”

A final Democratic bill approved in Committee this week will help foster entrepreneurship and technological partnership between small businesses and the federal government.  H.R. 6368, the Encouraging Small Business Innovators Act, written by Rep. Adriano Espaillat (D-NY) makes changes to the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) initiatives. Among other steps, the bill will allow experienced firms in the SBIR/STTR programs to mentor younger companies, encouraging more firms to be involved.  

“The SBIR and STTR programs are a valuable partnership that involve leading-edge small businesses in performing research and development of new products that can be game changers in our economy,” said Velázquez. “Mr. Espaillat’s bill puts forth a series of thoughtful changes that will make these initiatives work better and help more small, innovative companies benefit from SBIR and STTR. I thank him for authoring this measure.” 

“I introduced the Encouraging Small Business Innovators Act in an effort to bring more small businesses into the forefront of groundbreaking research, development, testing and evaluation of technologies that will help make government more efficient as well as yield great value throughout the commercial marketplace,” said Espaillat (D-NY). “Access to capital, particularly research and development funding is a concern for minority and women-owned small businesses. I hear this from small business owners in my district all the time. Small businesses are often excluded from patent pending industries, and miss out on valuable opportunities for growth and expansion. This bill helps level the playing field for small businesses, the communities they serve, and our nation’s overall economy.”

All of the Democratic bills passed the Committee with strong bipartisan support.  They will now need to be considered by the full U.S. House of Representatives.  

###