WASHINGTON – Mike Tucker remembers when the Internal Revenue Service, the Postal Service and other federal agencies hired his office supply business and other small businesses on a regular basis.
But in the six years since he became president of George W. Allen Co. Inc., Tucker has noticed a steady decline in business from agencies to the 50- year-old Beltsville company. It has gotten to the point that Tucker estimates his firm is losing $1 million in annual sales.
“One day, you’re able to sell to a government customer, and the next day, with no competitive difference and nothing you did wrong, you can’t,” Tucker said Thursday.
It is not because small businesses are too expensive, or unable to handle government needs, he said, but because agencies are moving to grant massive jobs to large corporations, in order to streamline contracts.
Tucker and other worried small business owners joined Rep. Nydia Velazquez, D-N.Y., on Capitol Hill Thursday for the release of a study of 21 federal agencies, which showed that they largely failed to meet annual goals for hiring small businesses.
Velazquez blamed the shortcomings to the streamlining, or contract bundling, that Tucker cited. She challenged claims that bundling saves money by streamlining contracts and paperwork.
“Those mega-contracts shut the door on small businesses,” which do not have the resources to compete for the entire bundled contract, but could supply parts of it for less, Velazquez said.
She said the worst-performing agencies — the “failing five” — are the U.S. Agency for International Development and the departments of Energy, Education, Defense, and Health and Human Services. All but HHS were spending a second year on the list, which was prepared by Democratic staffers of the House Committee on Small Business.
Defense Department officials conceded there are problems, but defended their performance overall in remarks Thursday before the committee, of which Velazquez is the ranking Democrat.
U.S. Air Force Col. Curtis A. Wright, reading a prepared statement from Under Secretary of Defense Pete Aldridge, said he does “recognize that the Department of Defense has work to do,” particularly in reaching set goals for woman-owned, underutilized and service-disabled veteran-owned businesses.
“We have done a lot with more work to do,” Wright added. “Our record has been, on balance, a successful one.”
Energy Department spokesman Alfonso Aguilar acknowledged that his department had failed to meet the general overall goals, although it did slightly better than last year.
But the department has already exceeded the goal set for contracts to small, disadvantaged businesses, Aguilar said, and plans to raise that goal for next year. The department plans to meet all of its goals for next year.
Tucker said he is hoping for laws to break up bundled contracts. Too many times agencies have told him and other entrepreneurs that they will only see business if a bigger company is unable to provide it first, he said.
“Small companies can successfully compete with large businesses when the odds aren’t stacked against them,” he said.