Certified Small Business Enterprise Shortchanged

WI Web Staff Report | 12/10/2011, 12:45 p.m.

WASHINGTON, D. C . - In a Dec. 9 hearing chaired by At-Large Councilmember Vincent B. Orange, it was revealed that District agencies did not expend the required $440 million for Fiscal Year 2011 with the certified small business enterprise ("CSBE") community as required by D.C .law. City Auditor Yolanda Branche revealed only $50 million was spent with the CSBEs in fiscal year 2011.

In addition, the auditor revealed that the law required District agencies to spend approximately $221 million with CSBEs in Fiscal Year 2010. However, only $103 million was spent with the CSBE community, resulting in a shortage of $118 million of expenditures for 2010.

The public hearing revealed serious weaknesses on the part of District agencies in using CSBEs to foster development of small businesses, hiring of District residents, increasing District tax revenue, economic growth, and compliance with D.C. law.

Many District agencies blamed the D.C. government freeze and budget exclusions for their failure in meeting CSBE performance goals. Many District agencies also failed to submit the required CSBE expenditure reports for 2010. Of the 75 agencies required to be in compliance for 2010, only 19 agencies passed the test of spending at least 50 percent of their expendable budgets with CSBEs. Therefore, 56 agencies failed the test.

"I am deeply distressed to learn that DC small business enterprises are being shortchanged by millions of dollars in business opportunities. I convened this hearing to make District agency leaders more sensitive to their role in expanding employment and contracting opportunities for small businesses in the District," said Orange. "District agency leaders must understand their role in supporting the small business enterprise community which is critical to spearheading economic growth, tax revenue and employment for District residents. It is incumbent that District agency leaders do their part in meeting their CSBE compliance obligations."