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News from U.S. Senator Olympia J. Snowe
Chair, Senate Committee on Small Business and Entrepreneurship
For Immediate Release: October 25, 2006
Contact:  Chris Chichester, 202-228-5843
 

Snowe Calls For GSA To Set Aside $500 Million Contract to Small Firms in Distressed Areas

Cites Small Business Job Impact, Potential Legal Violations

            Washington, D.C. – In a letter to General Services Administration Administrator Lurita A. Doan Senator Olympia J. Snowe (R-Maine), Chair of the Senate Committee on Small Business and Entrepreneurship, today called for the General Services Administration (GSA) to set aside a $500 million “Government-wide Acquisition Contract” (GWAC) task order for competition among small businesses operating in the Historically Underutilized Business Zones (HUBZones).  Snowe said that the GSA’s failure to set this contract aside runs contrary to the HUBZone provisions of the Small Business Act and harms job opportunities in low-income, high unemployment areas throughout the country. 

            “A contract of this magnitude has tremendous job creation potential in Maine and across the nation,” said Senator Snowe.  “The GSA must ensure that small firms in distressed areas are not denied these opportunities.” 

Senator Snowe noted that according to Small Business Administration and industry estimates, a $500 million HUBZone set-aside could create over 3700 jobs in HUBZones across the nation and over 350 jobs combined in Oxford, Franklin, Somerset, Piscataquis, Aroostook, and Washington Counties.  

            Excerpts of the letter:

            “I am writing today to request that your agency reverse its recent decision not to set aside a $500 million dollar GSA Infrastructure Technology Global Operations (GITGO) Acquisition for small businesses certified under the Historically Underutilized Business Zone (HUBZone) program.  On October 5, the GSA announced its intent to award the GITGO acquisition as a single task order under the GSA’s 8(a) Streamlined Technology Acquisition Resources for Services (STARS) government-wide acquisition contract (GWAC) . . . 

            “I believe that this decision runs contrary to the HUBZone provisions of the Small Business Act and implementing regulations.  It creates an uneven playing field for small businesses operating in HUBZones across the country, putting these small businesses that drive our nation’s economy at a strong disadvantage when competing for information technology work from your agency.  In Maine, low-income and high-unemployment areas in 9 out of 16 counties currently qualify for the HUBZone program.  By not setting this contract aside for HUBZone firms, your agency significantly expanded the field of bidders to a pool where non-HUBZone firms predominate.  As a result, the ability of HUBZone firms to win GITGO work will be greatly diluted . . .

            “As Chair of the Senate Committee on Small Business and Entrepreneurship, I remain concerned that the Federal government and your agency have developed a record of failing to deliver on their obligations under the Small Business Act to direct Federal contracts to economically distressed areas.  The Federal government has never met its statutory three percent HUBZone contracting goal, achieving only 1.23 percent in FY2003, only 1.595 percent in FY2004, and only 1.944 percent in FY2005.  The GSA has only met its HUBZone goals for a single year, FY2005, since the program’s creation . . . 

“Although your agency administers a separate GWAC for HUBZone firms, that GWAC is poorly utilized.  An August 2006 report, The Impact of Government-Wide Acquisition Contracts on Small Business, published by the Office of Advocacy of the U.S. Small Business Administration, concluded that the GSA’s HUBZone GWAC has been the second least-utilized GWAC overall out of 22 GWACs in existence throughout the Federal government as of FY2004.  Through August 31, 2006, firms on the HUBZone GWAC received only $27.3 million in task orders, while firms on the GSA’s STARS GWAC received $488.2 million . . . 

“To ensure compliance with the HUBZone statute, I ask that the GSA promptly set the GITGO acquisition aside for HUBZone small businesses by restricting it to companies on the HUBZone GWAC, or to HUBZone companies on the 8(a) STARS GWAC in accordance with the SBA regulations providing for preference to firms certified in the 8(a) and the HUBZone programs . . .

“I am confident that, as a former HUBZone contractor yourself, you would take appropriate action in the interest of small and HUBZone businesses.  I request that you provide a written response to this letter within 30 days, addressing my requests, concerns, and suggested additional measures.  In addition, I request that you promptly submit your acquisition strategy and any changes thereto for review by the SBA.   Finally, I ask that you provide an update concerning any other plans you may have for improving small business participation in GSA’s GWACs and otherwise advancing the President’s Small Business Agenda.”

            The letter is attached. 

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