THE POSITION AND PROBLEMS OF SMALL BUSINESS IN PROCUREMENTS FINANCED BY THE AGENCY FOR INTERNATIONAL DEVELOPMENT Part I.-AGENCY FOR INTERNATIONAL DEVELOPMENT AND PRIVATE INDUSTRY TESTIMONY THURSDAY, MAY 15, 1969 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON GOVERNMENT PROCUREMENT OF THE SELECT COMMITTEE ON SMALL BUSINESS, Washington, D.C. The subcommittee met, pursuant to notice, at 9 a.m., in room 2359, Rayburn House Office Building, Hon. James C. Corman (chairman of the subcommittee) presiding. Present: Representatives Corman, Kluczynski, Addabbo, Broyhill, and Burton. Also present: Henry A. Robinson, subcommittee counsel; Myrtle Ruth Foutch, clerk; and Fred M. Wertheimer, minority counsel. Mr. CORMAN. The subcommittee will come to order. Gentlemen, we appreciate your accommodating the committee by coming at an earlier than normal hour for hearings. Regrettably, each of us has other committee obligations and we will have to adjourn this subcommittee early today. The Subcommittee on Government Procurement of the House Small Business Committee opens hearings today to review the position of American small business in the procurement of goods and services financed with Agency for International Development funds. In announcing these hearings, Chairman Evins stated that the purpose is to determine whether AID policies and practices encourage and enable U.S. small firms to participate equitably in AID-financed purchases of commodities and services. The AID mission under the Foreign Assistance Act includes the making of loans and grants to certain less-developed countries and their private entities with which to purchase items necessary to develop their economy and free enterprise system. The volume of these procurements in the American market runs well over $1 billion a year. The manner in which these AID-financed purchases are made has a direct and significant effect upon our own Nation's economy and our people. It is essential that AID exercise its functions with wisdom and foresight to the end that the potential capacity of American small business firms in this field be fully encouraged and developed and their interests protected in line with our national policy. Section 2(a) of the Small Business Act sets forth this policy in these words, in part: SEC. 2. (a) The essence of the American economic system of private enterprise is free competition. Only through full and free competition can free markets, free entry into business, and opportunities for the expression of growth of personal initiative and individual judgment be assured. The preservation and expansion of such competition is basic not only to the economic well-being but to the security of this Nation. Such security and well-being cannot be realized unless the actual and potential capacity of small business is encouraged and developed. It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small business concerns in order to preserve free competitive enterprise *** and to maintain and strengthen the overall economy of the Nation. Recognizing the vital role of small business in our free economic enterprise system, the Congress further provided in section 602 of the Foreign Assistance Act the following: SEC. 602. (a) Insofar as practicable and to the maximum extent consistent with the accomplishment of the purposes of this Act, the President shall assist American small business to participate equitably in the furnishing of commodities, defense articles, and services (including defense services) financed with funds made available under this Act (1) by causing to be made available to suppliers in the United States, and particularly to small independent enterprises, information, as far in advance as possible, with respect to purchases proposed to be financed with such funds; (2) by causing to be made available to prospective purchasers in the countries and areas receiving assistance under this Act information as to such commodities, articles, and services produced by small independent enterprises in the United States; and (3) by providing for additional services to give small business better opportunities to participate in the furnishing of such commodities, articles, and services financed with such funds * * *. In these hearings we expect to review the various procurement rules and regulations adopted by AID and the methods utilized to implement our national small business policy expressed in these enactments. We wish to determine whether the AID regulations, programs, and practices are effective in doing the job intended by the Congress. We would also like to ascertain the extent, and the growth or decline, of small business participation in the AID-financed procurement market. These hearings will explore additional methods and techniques to increase opportunities for U.S. small businesses to sell their products and services in this vast market, such as the small business set-aside. To obtain the necessary information in these matters we invited the Administrator of the Agency for International Development, Dr. John A. Hannah, and members of his staff, to testify today. Sessions of these hearings will be scheduled on dates to be later announced to obtain testimony from representatives of the American business community, those who are most directly affected by the AID programs, policies, and practices. After we have heard the industry witnesses, the AID Administrator will be afforded an opportunity to review their testimony and to submit such comments and information as he may wish to present for the committee's consideration. Mr. Kluczynski, did you wish to make a statement at this time? Mr. KLUCZYNSKI. Well, I am happy to be on this subcommittee, with you as chairman. As you know, I have been a small businessman all my life. I am interested in trying to save the fellow who is drowning, the small businessman. I want to be a good listener this morning. I |