Lawmaker: SBA disaster management system may not be Katrina-ready

The Small Business Administration's new centralized disaster management system may not be in a position to provide efficient relief for small businesses destroyed by Hurricane Katrina, according to Rep. Nydia Velazquez (D-N.Y.)

Velazquez, the ranking member of the House Small Business Committee, said earlier this week in a letter to President Bush that, because of recent changes at SBA's Office of Disaster Assistance, she is unsure whether its workforce is ready to process the expected onslaught of loan applications from Katrina-damaged businesses.

"I am concerned that ODA may be unable to meet this demand due to the recent reductions in SBA's workforce, the ongoing centralization of core ODA applications, and [the fact] that ODA employees were in the midst of adjusting to a new system at the time of this tragic event," Velazquez wrote.

SBA is centralizing its loan management systems at a single location in Fort Worth, Texas, as part of an effort to streamline and expedite how the agency handles loan applications. Originally, applications were processed regionally through four offices across the country. Now they are processed at the Fort Worth location.

The agency also launched its new Disaster Credit Management System in November. DCMS' goal is to serve as a central communications point for SBA inspectors in the field.

In a series of questions, Velazquez asked the president whether the DCMS system is "up and running at an efficient level."

Velazquez also said small businesses need to participate in hurricane recovery efforts, claiming that recent procurement waivers issued by the White House "do not allow agencies to target local small businesses to perform on these emergency contracts. The small businesses that were impacted by this natural disaster should be at the top of the list when it comes to participating in the rebuilding and recovery of their very own communities."