Rep. Parren J. Mitchell (D-Md.), the legislative guardian of minority business, last week denounced new get-tough policies toward minority firms announced by the Small Business Administration and what he described by Congress and the private sector.
"I am deeply concerned with the May 1, 1981, proclamation of Mr. [Michael] Cardenas [the new SBA administrator]," Mitchell said. "I am concerned because the actions of Mr. Cardenas are creating havoc within the minority business community as well as within the federal procurement system."
Mitchell said that minority businesses can make a significant contribution to reducing unemployment and increasing the gross national product. "In an apparent total disregard for that, Mr. Cardenas has moved to place additional restraints on a segment of the economy which is in need of greater support, not less," Mitchell said.
Last week Cardenas unveiled new policies to eliminate companies that are too large, too successful or too hopelessly unsuccessful from a program designed to aid small, disadvantaged firms. The firms that still qualify will have their participation limited to between three and five years.
The agency also has imposed an indefinite moratorium on bringing new companies into the program and said the SBA will review the records of 40 of the largest firms now benefiting from the program. The program, known as 8A, awards noncompetitive federal contracts to firms headed by socially and economically disadvantaged persons.
"I have [been], and I will continue to be, one of the first to state that SBA must improve the [program]," Mitchell said. "However, I do oppose changes in this program when they are in apparent violation of the laws passed by Congress and when such changes try to circumvent established regulatory procedures. This must cease and desist."