SBA Winnows Businesses
P> Infotech 8(a) companies may face more anxiety in coming weeks as a congressional committee intensifies its examination of the Small Business Administration program.
The SBA has released a list of 334 companies that have been eliminated from the program in the past 18 months. That's more than the aggregate of all the firms kicked out since the program started in 1969, said D.J. Caufield, a spokesman for the SBA.
But the majority of the 334 companies are defunct and shouldn't have been on the SBA's list of 5,300 8(a) participants in the first place, said Charles Rowe, counsel for the House Committee on Small Business.
"They are throwing out a bunch of companies they don't have to throw out because the companies don't exist anymore," said Rowe. He has requested a more detailed list that includes addresses and phone numbers for the companies.
Bob Dornan, senior vice president of Federal Sources, a research firm in McLean, Va., said he would not be surprised that many of the 334 firms have gone out of business.
"What they were inferring was that they had found a bunch of millionaires who didn't belong in the program," Rowe said. "We would like to see the paperwork, if you please."
But Caufield said the SBA never boasted about kicking out the companies because they had exceeded the program's income or net worth limits.
"We're just simply making the claim that these firms are no longer eligible," said Caufield. "We are terminating firms that are listed in the portfolio. We are not saying that all of those firms are currently active on a daily basis," he explained.
Dornan said he couldn't find one infotech firm eliminated among those in his 1995 database of firms with government contracts.
"I think it shows they haven't thrown out many infotech firms in this area," said Dornan.