Transparency and Persistance Convinces Bureaucrats to Pay Small Businesses in Accelerated Fashion

Online, May 26, 2010 (Newswire.com) - The FPA Think Tank at UNF efforts to convince bureaucrats to enforce their own 'access to capital guidance' as far as 'accelerated payments' to small and disadvantaged business (SDB) has paid off after three long years of exposing cases and examples of abusive procurement practices. Skepticism among advocates, however, still exists because the Federal Acquisition Regulations (FAR) guidance involving contract financing and advance payments are not been applied and many barriers to contracting are yet to be eliminated.

The FPA Think Tank worked through the Office of Small and Disadvantaged Business Utilization (OSDBU) at DFAS - the accounting office of the Department of Defense (DoD) - to convince Theresa McKay, DFAS Director, to issue an Agency-wide Memorandum ordering DFAS "to pay small businesses within 7 days' and 'to pay disadvantaged businesses after invoices and receiving reports are received and before the payment due date on the Contract' (meaning sooner) to comply with existing Federal Acquisition Regulations (FAR) guidance which had not been followed and with new Congressional and Administration transparency efforts.

Michael Turner, DFAS OSDBU Director said, "The results of the FPA Think Tank efforts demonstrate how the OSDBU community can be used effectively to solve neglected procurement issues affecting small and disadvantaged businesses."

Although the FAR 232.903 guidance stipulates that "small business may be paid as quickly as possible, when all proper documentation, including acceptance, is received in the payment office and before the payment due date," the government paying offices had not fully implemented such guidance.

In support of its case, FPA had cited the fact that DFAR 232.906(a) confirmed that "DoD policy is to assist small disadvantaged business concerns by paying them as quickly as possible after invoices are received and before normal payment due dates established in the contract."

Even though pleased with the results, the Think Tank is now addressing solutions to many complaints that that the contracting community is not allowing small businesses sufficient time to arrange, in the private sector, contract financing and/or advance payments for their contracts. "The government is not informing small businesses of their rights and Contracting Officials are cancelling their contracts rather than giving small businesses time to complete the current cumbersome and expensive process," said Leutrell Osborne, former chair of the OSDBU Council.

"FPA has relied on 'Procurement Advisories,' 'protests,' 'congressional testimony' and 'media alerts' to bring attention and transparency to abusive procurement practices," said Raul Espinosa, Co-Founder of the procurement Think Tank at UNF. He added, "FPA is now attempting to convince Congress to order a GAO investigation to not only confirm the impact of the abusive procurement practices, but to give credence to the Think Tank recommendations now that the President has made 'contracting with small business' a priority."

In commemorating Small Business Week, President Obama said, "In these difficult times, we must do all we can to help these firms recover from the recession and put Americans back to work. Our Government cannot guarantee a company's success, but it can help create market conditions that allow small businesses to thrive."

Dr. Henry Thomas, the Think Tank co-founder said, "Our transparency efforts have finally paid off thanks to President Obama's Executive Orders creating Task Forces to pressure bureaucrats into eliminating barriers and opening up procurement opportunities."

Roger Campos, President of the Minority Business Round Table (MBRT) added, "The President Task Forces must consider relying on private sector efforts such as those spearheaded by FPA for the solutions." He added, "Entrepreneurs are the ones with the best ideas and the out-of-the-box solutions."

"Although P.L. 95-507 requires that the OSDBU Directors report directly to Cabinet Agency heads, this has not happened in most cases," said Hank Wilfong, President of the National Association of Small Disadvantaged Businesses (NASDB). He added, "The President Task Forces will have an opportunity to strengthen the OSDBU roles so that small businesses can have the attention they deserve."

Al Piña, Chairman of the Florida Minority Community Reinvestment Coalition (FMCRC) said, "Our advocates - within the government - and that includes the OSDBU specialists and the SBA Procurement Center Representatives (PCR) must be given more cloud and training to represent our concerns and defend our interests." He added, "The small business community needs responsive advocacy within the government to fight abusive procurement practices and promote contracting with small businesses ."

The Think Tank is now working on a private sector solution to allow the government's 'access to capital guidance' work as it relates to 'contract financing' and 'advance payments.'

"We welcome SBA Administrator Karen Mills timely announcement ensuring continued funding for two key lending provisions first implemented as part of the American Reinvestment and Recovery Act (ARRA) of 2009," said Espinosa, "The Loan Queue provisions will now be pursued as a potential funding avenue for small business contracts."

The Umbrella Initiative main objective is "to double the number of small businesses contracting with the government by the year 2020."
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