AGC Urges the House to Vote “YES” on H.R. 3867, HUBZone Reform (AGC Key Vote Letter)

October 29, 2007

Dear Representative:

On behalf of the Associated General Contractors of America (AGC), I am writing to urge your support of H.R. 3867, the Small Business Contracting Program Improvements Act of 2007.  Reauthorization of the Small Business Act is a priority for our members and we strongly advocate for legislation that will improve the small business contracting environment as it relates to the construction industry. This legislation contains several key improvements to that will greatly benefit America’s small businesses.

One important issue addressed in the legislation is how construction contracts would be awarded to HUBZone firms. Current regulations do not prohibit construction contracts awarded to firms that do not have their principal office located within the HUBZone in which the project is to be built. In practice, HUBZone contractors end up building federal projects in areas that are not benefiting the HUBZone in which they are located. This encourages a brokering process in which HUBZone contractors are merely buying materials from non-program suppliers for subsequent delivery to non-program contractors for the construction of projects hundreds if not thousands of miles away. We believe H.R. 3867 will maximize the impact of the program, which is to provide federal contracting assistance and increase employment opportunities and investment in HUBZones.

Another critical component of the legislation is requiring the Small Business Administration to perform on-site verifications of a HUBZone company’s eligibility prior to the award of the company’s second contract obtained with a HUBZone preference. This is designed to ensure that those HUBZone firms who are meeting the requirements of the program will no longer have to compete with businesses fraudulently participating in the programs.

The Small Business Contracting Program Improvements Act of 2007 is an important step in enacting long overdue reforms to the federal procurement process that correct perennial problems for our industry. AGC strongly encourages you to support H.R. 3867 and will consider using this key vote in our legislative scorecard.

Sincerely,

Stephen E. Sandherr
Chief Executive Officer