WASHINGTON – Legislation to ensure that federal agencies provide more work for small businesses, allowing them to hire and expand in New York has been introduced by North Country Congressman Bill Owens.

Owens said there is a congressionally mandated goal for 23 percent of all annual federal contracts to be awarded to small businesses, but that goal is regularly ignored.

H.R. 3779, the Small Business Growth and Federal Accountability Act, would attempt to force compliance by decreasing a federal agency’s procurement budget by 10 percent each year it fails to meet the small business contracting goals.

“Small businesses are a major driver of economic development, so it is critical that federal agencies be held accountable for giving New York entrepreneurs the tools they need to create jobs and grow the economy,” said Owens.

“This legislation will do just that and ensure that Washington lives up to its promise to foster an environment of success for small businesses. When federal agencies fail to meet their small business goals, I call on the Appropriations Committee to direct the savings from their reduced budgets towards paying down the federal debt.”

While each federal agency is permitted to set its own small business procurement goals in consultation with the Small Business Administration (SBA), the sum of all agencies’ goals must add up to 23 percent, according to congressional legislation from 1997. However, federal agencies typically fail to meet their small business contracting goals and there are no penalties for shortfalls.

The Government Accountability Office (GAO) and SBA Office of Inspector General both issued reports in 2010 noting that many of what are supposed to be small business contracts are actually going to larger corporations either because a company misrepresents itself or the small business grows or is acquired and the agency fails to take note of those changes.

The Small Business Growth and Federal Accountability Act would also require federal agencies to give preference to small business when awarding contracts. The SBA generally defines a small business as independently owned and operated with a maximum of 500 to 1,500 employees, depending on the industry and type of product manufactured.