The nomination by President Bush last week of Steven Preston to take over as Secretary of Housing and Urban Development (HUD) sent chills through the small business community and has left many small business advocates outraged. One of those who appears to be outraged is Representative Nydia M. Velázquez (D - NY), Chair of the House Committee on Small Business and New York City's senior Member on the Subcommittee on Housing and Community Opportunity.
In a statement released last week, Rep. Velázquez stated, "…the fact remains the agency Mr. Preston has been responsible for leading [SBA] is still plagued by serious problems of its own. Large businesses continue getting small business contracts, SBA's Katrina disaster relief program is a failure, and morale of the agency's personnel is one of the lowest in the federal government." I would like to highlight the section of this quote where Rep. Velazquez clearly states that "Large businesses continue getting small business contracts."
It is interesting that Rep. Velázquez has been Chair of the House Committee on Small Business since January of 2007 and has yet to introduce a single piece of legislation that will end the diversion of billions of dollars in federal small business contracts to large and Fortune 1000 firms every year. In fact, she is responsible for pushing through (in less than a week) H.R. 5819, the SBIR/STTR Reauthorization Act, which will open up a gigantic loophole for venture capital participation in the SBIR program and set a dangerous precedent to allow billionaire venture capital firms access to billions of dollars in federal small business contracts. The Chair of the House Committee on Small Business likes to bluster about the importance of small businesses while at the same time giving away small business contracts and grants to billionaire venture capitalists.
I would like Rep. Velázquez to follow though on rhetoric. If she is really outraged at Preston's failure to stop the diversion of federal small business contracts to large firms, then she MUST draft legislation that will ensure small business contracts go to legitimate small businesses.