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Summary statement of business and disaster loan approvals and disbursements, by type, as of Apr. 30, 1957-Continued

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In addition, SBA processed and performed the closing and disbursing functions for 7 sec. 302 Defense Production Act loans approved by the Treasury Department in the amount of $4,306,000. Source: Budget and Reports Division, May 13, 1957.

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SMALL BUSINESS ADMINISTRATION

Selected statistics on financial assistance and procurement and technical assistance activities, current fiscal year through April 1957, in comparison with same period in fiscal year 1956

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Cases of procurement assistance counseling and representation to procurement agencies in behalf of small firms..

Firms assisted to bid on specific procurements.

Additional sources of supply furnished for bidders lists on which small business competition was needed.

Certificates of competency:

Applications received.

Value.

COC's issued.

Value.

Plant visits in connection with progress of certified contracts.

Engineering surveys (loans, certificates, preaward, etc.).

Cases in which production and management assistance, including material and equipment assistance, was given..

Requests for products assistance handled.

Inventions listed in the products list circular.

8,701

$559, 720, 600
16,805

4. 438 $351, 201, 000 23, 405

$414, 880, 400

$251, 979, 000

47, 211

73,853

3,916

2,736

5,586

26, 458
8,403

3 6, 157

2,808

18, 598 4,991

33, 570

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Requests received for information and data on inventions listed in the products list circular..

1 These awards resulted in 10,091 contracts to small firms.

2 These awards resulted in 6,029 contracts to small firms.

3 Through March of each fiscal year only.

4 September 1955-April 1956.

$ December 1955-April 1956.

Source: Office of Controller, Budget and Reports Division, May 13, 1957.

Mr. BARNES. I have only one other thing I would like to add. It has been my custom when appearing before this committee to give you figures as to the losses we have charged off through our loan

program.

The latest figures, as of last night, show that there have been six loans, which have been charged off and which amount to $102,377.27. Now, of course, we have loans in liquidation, and we estimate some of those will result in losses. They have not resulted in losses yet. We are either collecting them or the assets are being liquidated and sold.

We have other delinquent loans which we believe may become losses or go into the liquidation stages, but before you now is the exact loss that has been charged off as uncollectible by us in the lending program. I would be glad to answer any questions and appreciate the patience of the committee in hearing our statement.

(The following data was submitted by the Small Business Administration :)

SMALL BUSINESS ADMINISTRATION-PROGRAMS OF PROCUREMENT AND TECHNICAL ASSISTANCE TO SMALL BUSINESS, MARCH 1957

I. INTRODUCTORY REMARKS

The passage of the Small Business Act of 1953 by the 83d Congress gave recognition to a growing national awareness that unless the small business segment of the national economy was afforded positive measures for assistance, the outlook of small-busines men was uncertain. This act, in effect creating the Small Business Administration, was the culmination of a decade of attempts by business and legislative leadership and Government departments and agencies to aid small business. A national program, based on a policy enunciated by Congress, was in this act established with the stated objective of preservation of free, competitive, small-busines enterprise, of insuring that a fair proportion of Government purchases of supplies and services would be placed with small business, and that the Government would aid, counsel, assist, and protect, insofar as possible, the interests of small business.

This national legislation, designed to provide the kind of Government service that would meet the specific needs of individual small business concerns, was extended to June 30, 1957, by the 84th Congress, 1st session, by the passage of Public Law 268. In this extension the original act was amended in several instances.

The Small Business Administration is primarily a service organization, providing financial, procurement, managerial, and technical assistance to individual small businesses requesting such aid.

In setting forth that the Small Business Administration was established to carry out the policy of Congress in order that "*** the interest of smallbusiness enterprises may be recognized, protected, and preserved ***" it was indicated that the Small Business Administration should consult and cooperate with other Government departments and agencies. The act, and hearings and reports preceding this legislation clearly indicate that the intent of Congress is to make the Small Business Administration the spokesman for small business in the establishment of policy and an advocate in the correction of particular problems of small business.

To carry out this policy, Congress provided specifically for certain programs wherein the Small Business Administration exercised complete control. In other instances, the agency is not given complete jurisdiction but is directed to cooperate and consult with other agencies of the Government.

The Small Busines Act of 1953, as amended, gives the Small Business Administration itself the authority, in addition to making business and disaster loans, (1) to determine and cooperatively set aside for award to small firms, all or any part of a proposed procurement; (2) to provide technical and managerial aids to small firms; (3) to enter into contracts with Government procurement agencies; (4) to make an inventory of all production facilities of small firms; (5) to certify as to capacity and credit to perform a specific Government procurement contract; and (6) to certify as to size of business concerns.

The Small Business Administration is directed to consult and cooperate with ether agencies and to recommend policies which would be beneficial to small firms; to consult and cooperate with officers of the Government having procurement powers; to encourage the letting of subcontracts by prime contractors; to make studies and recommendations to appropriate agencies to insure that a fair proportion of total purchases and contracts be placed with small business enterprises; to consult and cooperate with all Government agencies for the purpose of insuring that small business concerns receive fair and reasonable treatment; and to make recommendations concerning the effect of price, credit, and other controls imposed on small business under war or defense programs.

By drawing on the technical staff and research facilities of other Government departments, the Small Business Administration is placed in the position to render an effective job of helping small business without duplication of efforts on the part of either the Small Business Administration or other Government departments.

Furthermore, this cooperative undertaking with respect to various Government departments and particularly with reference to activities of procurement and

managerial and technical aids-provides tangible evidence that the Small Business Administration is directing its program activities to bring about close and cooperative working relationships in recognition of the intent of Congress.

II. PROCUREMENT AND TECHNICAL ASSISTANCE ACTIVITIES

Exhibit A provides a summary of progress and accomplishments of the Small Business Administration. This summary shows the cumulative results of programs since the agency started operations in August 1953. A review of the 6-month period ending December 1956, and a comparable period for the previous year, is also given. The details relative to programs are discussed in a later part

of this report.

In brief, highlights reflected in exhibit A show:

(a) The number of set-aside actions increased 120 percent for the 6 months ending December 1956 compared with the 6 months of the previous year.

(b) A substantial increase is recorded for contract awards resulting from these set-asides, the increase over the similar period a year ago amounting to 69 percent.

(c) Corresponding increases were recorded in the dollar value of set-asides and awards. The value of set-asides increased 79 percent and the value of awards increased 38 percent.

(d) The increased emphasis that was directed to developing subcontract opportunities is reflected in the 65-percent increase in the number of contacts made during the 6 months ending December 1956, as compared with the previous 6 months. During this same period, subcontracting opportunity referrals were made to around double the number of small firms reached by referrals for the comparable period of the previous year.

(e) The number of firms assisted to bid on specific procurements increased 85 percent.

(f) A 91-percent increase is marked for additional sources of supply on bidders' lists.

(g) The number of applications received for certificates of competency increased 29 percent and COC's issued is 37 percent greater. The value of COC's issued in the 6 months ending December 1956 was 32 percent more than for the comparable previous year.

(h) The increasing number of loans and other types of small business cases involving technical production assistance is observed in the 36-percent increase in engineering surveys related to thees items.

(i) SBA small business publications are being requested in increasing numbers as small firms become aware of their availability. The most significant increase is with respect to the Technical Aids series. While the number distributed in this series increased 785 percent over the similar period for the previous year, this is not a complete reflection of increase in demand. As with other publications in the aids series, the greatest distribution is of new issues. In the previous period (July 1-December 31, 1955) because of difficulty in obtaining suitable manuscripts, no new issues were released, whereas during the same period of 1956, there were three releases.

Another pronounced increase was recorded in the sales of the United States Government Specifications Directory, an increase of 680 percent, largely due to the publicity it received at the small business opportunity meetings during the fall of 1956. The overall total of SBA publications distributed during the 6 months ending December 1956 is 445,400 copies. Since August 1953, a grand total of 2,976,000 copies have been distributed.

(j) There has been a 56 percent increase in the number of requests to the agency for products assistance. A total of 459 new products was listed in the agency's products list circular during the 6 months covered by this report, and 1,371 requests were received by the agency for information and data on the items so listed.

III. PROCUREMENT ASSISTANCE TO SMALL BUSINESS

Progress has been made by the agency to strengthen and expand the programs of aiding, counseling, and assisting small business concerns to participate in purchases and contracts for supplies and services for the Government. The Small Business Administration recognizes fully, however, that the optimum results with respect to assistance to small business in achieving a fair proportion of Government contracts and in participation in subcontracting opportunities still remains to be obtained (exhibit A).

The most persistent problem continues to be how best to divide the available manpower in order to meet all of the many requests arising throughout the country for this assistance and to fulfill the various functions required in extending procurement assistance to small firms.

A. Joint set-asides; the joint determination program

The SBA cooperative program of set-asides for small business was begun August 1953. The increasing tempo of activity and progress in the program is reflected in the data on proposed set-asides initiated by SBA, set-asides agreed to by procuring officials, and contracts awarded to small business as a result of these set-asides (exhibit B).

Exhibit B provides these data by 6-month periods, starting with the last half of fiscal year 1954 and continuing through December 1956. A compilation of awards under the joint set-aside program, by States, cumulative through December 25, 1956, is given in exhibit C.

In the table of exhibit B, for the period July-December 1953, SBA proposed 733 set-asides for small business covering purchases totaling about $180 million. For the 6 months ending December 1956, there were 4,892 set-aside actions, totaling $381 million. The fact that a substantial increase is reflected in initiated set-asides, an increase of 567 percent, is indicative that SBA procedures are becoming increasingly effective. The dollar volume of these initiated set-asides increased 112 percent.

Inasmuch as SBA was just getting underway in 1953, and due to normal lag time, data would include statistics of Small Defense Plants Administration for the period of July-December 1953. Therefore, the period of JulyDecember 1954 has been taken for comparative purposes of this statement.

In using these data for purposes of contrast between selected periods of time, it was kept in mind that there is a normal timelag between the initiation of the set-aside and award of contract. Because of this lag, a misleading conclusion is possible in comparing awards for a selected period with the initiated setasides for that period. On the other hand, contrasting initiated set-asides, setasides agreed to, and procurement awards between like calendar periods, does permit a measure of progress and accomplishment.

In comparing the period of July-December 1954 to the July-December 1956 period, set-asides initiated increased from 1,532 to 4,892, an increase amounting to 219 percent. For these same periods the dollar value of initiated set-asides increased 91 percent, from $199 million to $381 million. The dollar value measure of set-asides as reflected by data for these 2 periods discloses a substantial progress of 301 percent increase in the number of procurement awards, with the dollar value increasing from $71 million to $218 million, an equivalent increase of 206 percent.

The joint set-aside program is carried out by the Small Business Administration with the cooperation of Government agencies having procurement authorities and related requirements. Section 214, Public Law 163, as amended, empowers the SBA and Government contracting officers to set aside proposed procurements for competition among, and award to, small-business concerns when the procurement agencies concur that such action is in the interest of maintaining or mobilizing the Nation's full productive capacity or is in the interest of war or national-defense programs.

This program is directed toward the discharge of their common responsibilities that a fair proportion of total purchases and contracts for supplies and services of the Government shall be placed with small-business concerns. It provides the means to assure small businesses an opportunity to compete with other small businesses for procurements which have been exclusively earmarked for small firms. This program accomplishes this objective of increasing the numbr of items acceptable for restriction to small-business competition. This, in turn, broadens the base by increasing the number of small-business bidders and suppliers.

To carry out the program, the Small Business Administration has assigned representatives to certain major Government purchasing offices. These representatives review proposed purchases, determine the type of facilities needed to produce the items, evaluate the prospects for small-business competition, and advise procurement officials of those which they believe should be earmarked for competition exclusively among small firms. The entire purchase can be set aside for small-business firms by restricted advertising, or partial quantities of the total proposed requirements can be set aside after the contracting official has determined the economical production run that will produce a fair

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