Too many agencies don't comply with small-business laws, congressman charges

Senior executives at several Cabinet-level departments received letters Aug. 5 that asked why their small-business advocacy offices have not been given the authority required by federal law.

Rep. Mick Mulvaney (R-S.C.), chairman of the Small Business Committee’s Contracting and Workforce Subcommittee, wants to know why departments' office of small and disadvantaged business utilization (OSDBU) officials don’t have access to top officials to deal with small-business problems, such as contract bundling and paying firms promptly.

The Small Business Act requires that heads of a department’s OSDBU should “be responsible only to, or report directly to, the head of such agency or to the deputy of such head.”

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It’s not happening, according to a Government Accountability Office report from June.

Only nine of the 16 federal agencies that GAO reviewed were in compliance with that part of the Small Business Act. The remaining seven agencies failed to comply with the law. Those agencies’ OSDBU directors reported to lower-level officials or had delegated OSDBU responsibilities to officials who did not meet the reporting requirement, GAO wrote.

Further, these agencies were not in compliance when GAO last examined them in 2003.

In GAO’s latest review, Social Security Administration officials said they fixed the problem. Officials at the Interior Department agreed to re-evaluate their reporting structure.

On the other hand, the Commerce, Justice, State and Treasury departments disagreed with GAO, saying they were in compliance. The Agriculture Department also got a letter because officials delegated the OSDBU director's authority in a way that was contrary to the law.

Mulvaney wants to know more details about each agencies’ OSDBU, including the assigned functions and budget. He also asked when the OSDBU will actually have access to top officials, in addition to a copy of the new organizational chart. He expects responses by Aug. 31.

The subcommittee is planning a hearing in September to look further into this situation.