Report urges change - study by the U.S. Commission on Minority Business

Black Enterprise, Nov, 1992 by Kevin D. Thompson

If Joshua I. Smith, Chairman and CEO of Maxima Corp., a BE 100s computer information management company, has his way, the final report of the U.S. Commission on Minority Business Development will set the future agenda for developing minority-owned businesses. The long-awaited report, issued in August, will impact heavily on black-owned companies' ability to do everything from eliminating government red tape to breaking down barriers to capital and credit.

Says Smith, the commission's chairman: "We're not just looking at minority issues. We want the government to look at minority-owned businesses as an investment, not just an expense. This country must have healthy minority-owned businesses."

The two-year study analyzed the operations of all federal programs designed to foster minority business development. The following recommendations were offered to make those programs operate more effectively:

* Take the major portions of the controversial 8(a) program away from the Small Business Administration (SBA) and give all government agencies the authority to contract directly with 8(a)firms.

* Create the Administration for the Development of Historically Underutilized Businesses (ADHUB), which would oversee the 8(a) program's technical and loan divisions. The new agency, says Andre Carrington, the commission's executive director, would have an $80 million to $100 million operating budget.

* Create a national strategy for providing greater access to capital and credit.

* Revise the qualifications for all ADHUB and government personnel charged with running the small and minority business programs.

"What we have done," says Smith, "is make some very strong recommendations to streamline the process and minimize the bureaucracy. Two major issues are lethal to black businesses' unnecessary obstacles for certification and lack of access to capital."

Not surprisingly, SBA officials were less than pleased with some of the recommendations. "The 8(a) program might get lost at a larger agency," says an agency insider. "Although there are some people who question the bureaucracy and the process at the SBA, what's in place today is there to prevent waste, fraud and abuse."

Robert Hardie, president and CEO of Sentel Corp., an Arlington, Va.-based engineering company that received its 8(a) certification in 1989, disagrees. "Some of the procurement practices only stifles minority businesses," he says.

That's exactly what the report is trying to eliminate.