Velazquez on President's Procurement Executive Order

WASHINGTON, May 12, 2011 /PRNewswire-USNewswire/ -- Rep. Nydia M. Velazquez (D-NY), the Ranking Member of the House Committee on Small Business, delivered the following statement today at a hearing entitled "Politicizing Procurement: Will President Obama's Proposal Curb Free Speech and Hurt Small Business?":

"Thank you, Chairman Graves and Chairman Issa.  Contracting with the federal government represents an unparalleled opportunity for small businesses. In fact, the Federal Government is the world's largest purchaser of goods and services. For many of these firms, government contracts provide reliable, sustainable growth. Last year alone, federal contracting accounted for $540 billion in taxpayer dollars and small businesses received over $100 billion of those funds. Given the importance and enormity of the federal procurement process, the American taxpayer deserves to know that when contracts are awarded it is on the merits, not because of political contributions.

"While contracts should be awarded without such interference, recent court rulings on political spending and current campaign finance laws may hinder the ability of the procurement process to remain insulated from improper political influence. Under the current campaign finance system, much of a contractors' political spending may be undisclosed and unknown to the public. And, because of the Supreme Courts' recent ruling, big corporations can now contribute unlimited sums to influence federal campaigns. These undisclosed sums have great potential to improperly influence federal procurement and disadvantage firms that play by the rules.

"In 2010, there was nearly $300 million in spending on elections by organizations not directly affiliated with political campaigns. Nearly 50 percent of that total was spent by organizations that did not disclose their donors. This type of spending is increasing rapidly, outpacing spending by political parties on Congressional campaigns by nearly $100 million in 2010.  As undisclosed spending increases, so does the potential for improper influence in federal procurement.

"The Obama Administration's draft Executive Order increases taxpayer transparency regarding federal contracts and levels the playing field by publicly disclosing campaign contributions. Yet, while it is important to reform the system to prevent potential improper influence and to engender public trust, it is paramount that small business concerns be put first.  This is particularly important because since small businesses are at the forefront of the economic recovery, generating nearly two out of every three new jobs.

"Historically, small businesses have faced many challenges in entering the federal marketplace. Therefore, as we work to level the playing field for businesses, we must also work carefully to minimize the burden of disclosure requirements on small firms. There are a number of sensible policy options to reduce the burden of disclosure on small businesses.   To this end, as the Administration's rule making moves forward, this Committee will be certain to carefully review and comment on this process so that common sense disclosure requirements are adopted and burden is minimized.  

"In closing, companies that do business with the government – and thus with the taxpayers – should be transparent in their political giving.  However, as we seek to increase accountability in the federal marketplace, the needs of small businesses must be a priority and we must take great care not to discourage the participation of small businesses.   I look forward to today's testimony and thank the witnesses for their participation. "

CONTACT: Alex Haurek
(202) 225-2361

SOURCE Representative Nydia M. Velazquez, Ranking Member, House Committee on Small Business

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