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These meetings were held in the following cities: Indianapolis, Ind.; San Antonio, Tex.; Portland, Oreg.; Oakland, Calif.; Charlotte, N. C.; Denver, Colo.; Hutchinson, Kans.; Atlanta, Ga.; Boston, Mass.; New Orleans, La.; Seattle, Wash.; Trenton, N. J.; Syracuse, N. Y.; Omaha, Nebr.; Little Rock, Ark.; Philadelphia, Pa.; Waterbury, Conn.; Los Angeles, Calif.; Kansas City, Kans.; and Cleveland, Ohio.

Many proprietors of small firms who could not attend the opportunity meetings learned by word-of-mouth or through the local publicity given to the meetings that the Small Business Administration and the other agencies which participated in the meetings have programs to assist them. Small Business Administration field offices are receiving requests from many firms which learned of the services available to them as the result of publicity given the opportunity meetings. N. Bringing Government purchases to the attention of small firms

When a small concern requests the agency's assistance in obtaining Government business, it is asked to register its facilities with the appropriate regional office. That office then notifies the firm of opportunities to bid on purchases for which its facilities are suited, at the same time urging it to get on the bidders lists so that it will then receive notices of the next opportunities direct from the purchasing offices. Since Small Business Administration regional offices receive bid sets from many procurement installations, this program enables small firms to learn of countless bidding opportunities of which they otherwise would be unaware. During calendar 1956 the agency's field offices made 29,967 referrals of prime contract opportunities to small-business concerns.

O. Examples of procurement assistance

Typical examples of procurement assistance are given in exhibit G.

IV. OTHER PRODUCTION, PRODUCTS, AND MANAGERIAL ASSISTANCE ACTIVITIES The following discussion pertains to additional facets of the SBA procurement and technical assistance program. All are directed toward helping small firms to overcome the problems of keeping abreast of production and marketing techniques. Coupled with procurement assistance, these activities provide to individual small concerns a means whereby they can (1) gain access to production, research, and development information; (2) obtain current technical data on new or improved products and marketing; and (3) improve their management practices (exhibits H, I, and J).

A. Materials and equipment assistance

The Small Business Administration has given increasing attention to the effect on small business of shortages of certain materials and equipment. As part of its activities, the agency prepared a report to the Joint Committee on Defense Production discussing the status of small firms which earlier had complained to the agency of difficulty in obtaining an adequate supply of nickel. The report included data showing each company's purchases of market-price nickel, premiumprice nickel, and gray-market nickel. A copy of the report also was furnished the Department of Commerce for its analysis and use in the preparation of a study on the nickel situation.

In addition, the Small Business Administration implemented its assignment under Defense Mobilization Order I-24 by developing, in cooperation with the Department of Commerce, a procedure for referring to that Department cases where small firms are experiencing hardship obtaining materials and equipment. The Department has agreed (1) to recommend to the Small Business Administration alternate sources of supply for those small firms which are dealing entirely with civilian work, and (2) to issue priorities or directives to those small firms engaged in defense production to insure completion of their defense orders on time.

The Small Business Administration assists small firms in locating machine tools or other equipment necessary for production of defense or civilian contracts, when problems arise which make it difficult for the small firm to obtain new equipment in time to meet contract schedule needs or when the small firm has difficulty in locating satisfactory used equipment to meet its needs. Availability of Government-owned machine tools is explored, as well as a survey being made of the commercial market.

As a regular part of its work, the Agency reviews each Department of Defense request to the Office of Defense Mobilization for approval to lease Government-owned machine tools for nondefense purposes. When it appears

that a proposed leasing of tools might adversely affect the competitive position of small firms, the agency makes appropriate recommendations to the Office of Defense Mobilization. Small Business Administration representatives also are participating in the Interagency Task Group on Uniform Leasing, which is developing a uniform leasing schedule for use by all Government activities in leasing Government-owned tools to private industry.

The agency acts as spokesman for small business before other Government agencies which are considering the adoption of materials and equipment policies or programs affecting small business. During the last 6 months, Small Business Administration representatives have taken part in numerous meetings and conferences with representatives of other agencies relating to steel products, machine tools, titanium, electronic equipment, construction machinery, oil field machinery and equipment, brass and bronze, aluminum, scrap and other products.

Another implementation to Defense Mobilization Order I-24 provides for Small Business Administration review of all proposed mobilization orders or regulatory directions which are under consideration by the Department of Commerce. This assures the agency of an opportunity to make recommendations which are in the interests of the small business community.

The Small Business Administration implemented its assignment under Defense Mobilization Order I-24 by developing, in cooperation with the Department of Commerce, procedure for referring hardship cases involving materials shortages to the Department to explore alternate sources of supply in cases of civilian work and to assure priorities or directives in the cases of firms engaged in defense production to insure completion of defense orders on scheduled deliveries.

B. Tax amortization program

Under the accelerated tax amortization program, the Government encourages business concerns to expand defense production facilities by offering tax relief in the form of accelerated amortization of the cost of the new or expanded facilities. When an application of this type is approved by the Office of Defense Mobilization, a stated percentage of the cost of the new or expanded plant may be written off over a period of 60 months.

The Small Business Administration assists small firms in obtaining a share of accelerated tax amortization privileges. For example, the agency obtains additional information on small firms' applications where requested to do so by the Office of Defense Mobilization or other agencies to which it has referred the applications for comment. Frequently, applications filed by small firms lack necessary data, or the agency reviewing the application wants additional information in support of certain parts of the application. When this occurs, the appropriate Small Business Administration field office obtains the necessary information from the applicant and if requested, the agency will check the status of a small firm's application.

Few of the un

As of December 31, 1956, only 16 expansion goals were open. filled goals are in categories normally suitable for small firms. The SBA field offices have complete current lists of open goals and assist applicants interested in expansion under the stipulated goals. Applications for tax amortization assistance have been declining over the past few months.

Tax amortization program as of Dec. 31, 1956

Total

Amount

Certificates of Necessity issued to small business concerns.

Certificates of Necessity issued by ODM to small business concerns from
Aug. 1, 1953, through Dec. 31, 1956...

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Certificates of Necessity issued to small business firms in which SBA participated from Aug. 1, 1953, through Dec. 31, 1956...

826, 959, 865

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C. Production pools

Under section 217 of the Small Business Act of 1953, as amended, the Small Business Administration is responsible for providing small manufacturers with information about pooling and to help them in forming and operating pools.

The SBA pooling program is especially effective for two types of small firms: Those having different manufacturing facilities and those having similar manufacturing facilities, and wishing to associate in order to enable the groups— through improved ranges of facilities and through enlarged capacities-to compete effectively for business from which the members would otherwise be excluded.

While the formation of production pools declined during July to December 1956, evidenced by the fact that no new pools were approved during this period and no formal requests for approval are pending, interest in production pools continues to a moderate degree. Regular reports from the SBA field offices continue to reflect the receipt of inquiries regarding the formation of pools, in addition to those received directly in the Washington office. Should mobilization activities increase, in the light of past experience, a revision upward in figures for pooling functions would be expected.

As of December 31, 1956, there were 6 approved small-business production pools of the Small Business Administration. These pools are composed of 51 companies, employing approximately 3,000 persons. Two of the presently active pools have reported 245 prime contract awards, valued at $963,232, in addition to 4 subcontract awards valued at $85,967.

D. Products assistance program

The Small Business Administration's Products Assistance program is designed to help small concerns gain access to product development information available from Government and industry. Since start of the service in July 1954, requests for this type of assistance have increased steadily.

As part of this service the agency

1. Helps small concerns gain access to data on research and on product, process and market development needed in solving day-to-day operating problems and in planning production and marketing programs.

2. Provides small firms a clearinghouse for information on available products and processes which can be used to maintain, diversify, or expand their operation.

Expenditures by Government and industry on research and development have increased steadily over the years. As a result, a wealth of information on product and process development has been accumulated. Much of this data is nonconfidential in nature and is available to any potential user. However, it is not always readily accessible, particularly to small-business owners who either do not have the time or do not know where to obtain the information needed in solving a specific problem. One of the objectives of the Products Assistance Service is to help bridge this gap, to assist small concerns in gaining access to needed information.

The Small Business Administration does not maintain laboratory or staff facilities for research on product and process development. It does, however, provide technical counsel and assistance to individual small-business concerns on new product research and development. In this connection, the agency enlists the cooperation of industry, other Government agencies, public and private research organizations, and trade associations in solving the small-business problems submitted to it.

During the last 6 months, the number of requests for this aid increased 56 percent; 4,881 firms requested and were furnished information on product, process and market development (exhibit A). Since the service was established in July 1954, the number of small firms that have been provided this type of technical assistance totaled 13,381.

As another part of this service, the agency issues a monthly products list circular, a publication which provides information on patented inventions (privately owned and Government owned) available for production and distribution. Over 12,000 small concerns have now asked to receive this publication on a continuing basis. During the past year, 3,262 small firms requested further information on the 1,027 new and improved products and processes listed in the products list circular. In the 6 months ending December 1956 a total of 459 products were listed and 1,371 requests were received for information and data on these items.

E. Managerial assistance program

Managerial assistance is inherent in the various SBA activities relating to procurement, production, and products assistance: problems in these areas naturally involve the application of appropriate managerial techniques.

Four series of management publications are currently issued covering problems perplexing the owners of small firms. Three are distributed free upon individual request and the fourth is sold at nominal prices by the Government Printing Office. An increasing number of the publications is issued in the SBA administrative management courses offered by educational institutions to proprietors of small businesses.

Management Aids for Small Manufacturers: To date 78 of these 4-page, free leaflets have been issued. More recent aids include Protecting Your Records Against Disaster, Surveying and Controlling Executive Time, and How the Post Office Helps Small Business. Total distribution of the management aids is now 1,865,775 copies.

Technical Aids for Small Manufacturers: Today technological changes affect many production aspects of the smallest manufacturing plant or shop. These changes involve production processes, materials, machinery and equipment, and maintenance. To date 46 technical aids have been published. More recent aids include Modern Welding Methods, and Cash Values in Industrial Scrap. The number of copies of technical aids distributed now totals 587,975.

Small Marketers Aids: The newest series of free aids is prepared for the "use of the small retailer, wholesaler, and service operator. Their management problems are analyzed and proven solutions to actual problems are briefly presented. Typical of these leaflets are Sizing Up Small Business Locations, Appraising the Market for the Services You Offer, and Improving Personal Selling in Small Business. Over 366,000 copies of the 17 issued to date have been distributed.

Small Business Management Series: When a management subject cannot be adequately covered in a short leaflet, the SBA has a leading authority in the field prepare a manuscript on the subject. These booklets are sold at nominal prices by the Superintendent of Documents. Widespread acceptance of them is indicated by the sale of more than 427,200 copies of the 19 booklets issued thus far. Among the best sellers are Cost Accounting for Small Manufacturers, Cutting Office Costs in Small Plants, Human Relations in Small Industry, and A Handbook of Small Business Finance.

All of these publications are prepared with the greatest care to cover the more important management problems in a practical manner. Subjects are selected with the aid of advisory committees of businessmen, written by experts in their respective fields, and all manuscripts are reviewed by equally outstanding experts. The wide acceptance of the management publications justifies the care taken in their preparation. A table showing the distribution and sale of SBA publications and a list of publications described above is appended (exhibit K).

Another aspect of managerial assistance is the administrative management courses. In cooperation with universities and other educational groups throughout the Nation, the SBA is cosponsoring short courses in administrative management for small business owners and managers. The courses are designed to help the small-busines operator improve his knowledge of business administration. They are concerned with management policy having to do with organizing, staffing, planning, directing, and controlling. During fiscal year 1957 (up to December 25, 1956), 36 courses have been completed, 3 are in progress, 20 more are contemplated. These 59 courses are being conducted by 52 educational institutions. Approximately 5,600 businessmen have attended these courses up to the present time.

The educational institutions assume educational and financial responsibility for all of the courses, and the SBA lends assistance in the role of cosponsor. Most of the classes meet 1 evening per week for a period of 8 to 10 weeks. Typically, each session runs from 2 to 3 hours. Costs are defrayed by tuition fees paid by the businessmen who take the courses. Speakers are selected from among businessmen, educators, bankers, and Government officials.

Evaluations from more than 1,300 businessmen who have attended these courses have been analyzed. These evaluations were unsigned and made by the businessmen after they had completed a course. Nearly all made favorable comments. Of those who rated the courses as a whole, 86 percent rated them good to excellent, while 14 percent considered them fair. Only three persons rated them as poor. More than 95 percent of the students asked said that the problems discussed were important or vital to the operation of their businesses.

V. SMALL BUSINESS ADMINISTRATION PRIME CONTRACT PROGRAM The Small Business Administration is empowered to enter into contracts with any department or agency of the United States Government to furnish supplies

and services, and to arrange for the performance of such contracts through subcontracting to small-business concerns or others, as may be necessary.

The Small Business Administration believes that its authority to take prime contracts in order to extend subcontracting should be continued as a standby basis, for use in emergencies.

VI. RESEARCH AND DEVELOPMENT

The Department of Defense has reported that small-business concerns were awarded 5.9 percent of its research and development prime contracts during fiscal year 1956. Small firms were awarded 9.7 percent of total Army contracts, 9.4 percent of Navy contracts, and 3.7 percent of Air Force contracts. However, since awards to educational and nonprofit institutions are included in these small-business percentages, they do not adequately reflect the volume of research and development contracts going to small firms.

In their procurement counseling, Small Business Administration staff members stress to qualified small-business concerns the importance of their trying for research and development work and guide them to the proper offices. This is important, because a firm which performs a research and development contract has an advantage over competitors when the production contract for the item is awarded.

During the last half of calendar year 1956, one-fourth of the value of all procurements screened by the Agency's representatives at the Quartermaster Research and Development Command, Natick, Mass., was jointly set aside for small business. Good progress also is being made in other Army and Navy installations.

VII. PROGRESS PAYMENTS

The first progress report of the Cabinet Committee on Small Business recommended that the President direct departments and agencies engaged in extensive procurement to adopt procedures designed to (1) insure that a need by a bidder for progress payments or advance payments will not be treated as a handicap in awarding a contract, and (2) accelerate the making of progress payments to small suppliers when requested.

On November 16, 1956, the Secretary of Defense issued Department of Defense Directive No. 7800.4, which deals with the subject "Defense Contract Financing Policy-Small Business Concerns." The stated purposes of the directive are to insure that a need for progress or advance payments by contractors will not be treated as a handicap in awarding contracts, and to facilitate and speed up the making of progress payments requested by small suppliers under Government contracts. The directive also emphasizes the desirability of providing proper contract financing assistance to small-business concerns.

Similarly, the Administrator of the General Services Administration issued Personal Property Management Regulation No. 33 on December 31, 1956. This regulation, directed to heads of all Federal agencies, prescribes basic policies and procedures governing executive agencies in providing contract financing in the form of progress payments. The regulation applies only to fixed-price contracts for supplies and nonpersonal services other than contracts for construction or the engineering and architectural contracts pertinent to construction. The regulation states further that to the maximum practicable extent the need for progress payments will not be treated as a handicap in awarding contracts to concerns qualified as responsible suppliers. Prospective contractors deemed reliable, competent, and otherwise responsible will not be regarded as any less responsible because of the need for progress payments. The regulation requires executive agencies to take whatever action is necessary to facilitate and speed up payments on contracts when due.

VIII. SMALL BUSINESS SIZE STANDARDS

Congress, in the Small Business Act of 1953, stated that to be considered small, and therefore eligible for assistance from the Small Business Administration, a business concern must be "independently owned and operated and * * * not dominant in its field of operation." The act also authorized the Small Business Administration, in making a more detailed definition of small business, to use such criteria as number of employees and dollar volume of business. The agency uses two different yardsticks in determining whether a firm is small— one is employed in determining whether a firm is eligible for assistance in selling to the Government, the other in determining whether it qualifies for financial and other nonprocurement assistance.

92432-57——5

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