Members of the House Small Business Committee yesterday accused officials of federal agencies of delaying compliance with a law requiring minority and small-business participation in government contracts -- and warned that bureaucrats who thwart the law could lose their jobs.
The oversight subcommittee began an investigation yesterday of reports that as much as $4.6 billion may have been awarded in contracts that didn't comply with the law. Members grilled federal procurement and Small Business Administration officials about why the law is being implemented so slowly and questioned steps taken to correct the situation.
"The figures are atrocious and just prove that the whole government continues to do business as usual and give lip service to the small business community," said Rep. Joseph P. Addabbo (D-N.Y.) before the hearing. Addabbo drafted the legislation and gathered the figures suggesting the law has had little effect.
Addabbo and other members were short-tempered with explanations that the law's complexity and time-consuming bureaucratic processes were to blame for a slow start in implementing the law. The law, which requires plans for minority and small-business participation as subcontractors on major federal contracts, was enacted in October 1978.
"At best, we have gross dereliction of duty on the part of federal agencies, and at worst on the part of some of the agencies there may have been a willful desire to circumvent the law for the longest period possible -- perhaps in hopes that it would go away," said Rep. John J. LaFalce (D-N.Y.), who conducted the hearing.
Rep. Parren J. Mitchell (D-Md.) said the evidence suggests "a flagrant, deliberate lack of compliance" with the law and warned that "any agency employe that deliberately attempts to circumvent the law" may be liable for firing under civil service regulations.
"If you continue to defy the law, you will not have much occasion to smile," said Mitchell, noting the smiles that greeted his warning.
Among the agencies that came in for the heaviest criticism were the Department of Health, Education and Welfare, the General Services Administration and the Department of Defense. Defense, by its own reckoning, awarded approximately $3.9 billion in contracts that weren't in compliance with the law after the department's implementing regulations went into effect.
Dale W. Church, deputy under secretary of Defense for research and engineering, outlined corrective steps Defense agencies may take to bring those contracts and solicitations for other contracts into compliance, and defended the DOD's record in dealing with small and minority businesses.
"We have been vigorously supporting our small-business and disadvantaged program throughout the entire chain of command from the secretary of Defense down to the individual buyers and contracting officers," said Church. He said awards to minority businesses had increased by more than 400 percent since 1976.
"If you have zero and you go to four, you've got a 400 percent increase," responded Addabbo, noting that minority businesses received only about $1 billion out of $60 billion spent.
Committee members also criticized officials of the Office of Federal Procurement Policy and the Small Business Administration for their role in implementing the law.
"The SBA is as guilty as every one of these agencies," said Addabbo. "It continues to violate the law by not being the advocate for small business. "We gave you all these teeth in the law, and 14 months later you're saying 'Mr. Chairman, we haven't been doing it, but we're going to do it now'," Addabbo said of SBA's compliance monitoring.
"It seems to me some heads should roll within SBA, and maybe it should start from the top," said LaFalce.
A. Vernon Weaver, administrator of SBA, said in a press conference later in the day, "We're not the least bit happy in the way the law has been implemented. I wish we'd been more successful." But Weaver said, "We have tried. We are trying."
Officials' interpretations of when regulations implementing the law took effect varied, but under any of the interpretations there appeared to by substantial numbers of contracts awarded that didn't comply with the law. Among the steps an agency may take to remedy the situation are modifying the contracts, terminating them or to leaving them alone, according to the General Accounting Office.