SBA chief pushes programs for Natives

[Vernon Windsor]

By Rob Capriccioso

LAS VEGAS – The Small Business Administration wants to work better with Indian businesses, says the agency’s top
official, while balancing its accountability to American taxpayers.

SBA Administrator Karen Mills addressed hundreds of tribal officials
attending the Reservation Economic Summit Feb. 24 at the Las Vegas
Hilton.

“Our commitment at SBA is to be there for you and to work arm-in-arm with you to grow and create jobs.”

In an interview after her speech, much of her attention focused on the
agency’s 7(a) loans and 8(a) contracting programs, both of which hold
substantial opportunities for Native businesses.

Mills reported that since 2007, approximately 350 7(a) loans have gone
to American Indians or Alaska Native-owned businesses; she’d like that
number to grow.

But that’s going to be an uphill battle, given recent reports that
indicate stimulus funds designated for the program have run dry.

“The good news is that the program worked really well. The bad news is that it ran out of money,” Mills said.

But she said this reality should not deter Native businesses, adding
that the agency is forming a queue so if and when Congress passes an
extension of funding, everyone in the queue can be funded.

Legislation focusing on an extension passed the House in December, and
bills have been submitted in the Senate. Mills said an extension has
the full support of the Obama administration.

Clara Pratte, SBA’s Office of Native American Affairs director, said
the amount of Native businesses that have taken advantage of the
program to date amounts to less than 1 percent, which translates to $84
million in received loans.

Mills said there’s no doubt that she wants more Native businesses to get involved in 7(a).

Along the lines of increasing accessibility, Mills said the SBA has
district offices with free counselors who are trained to assist Native
businesses interested in the program.

Approximately 15 SBA staffers attended RES this year to bolster Native knowledge of the agency.

The focus of the interview then turned to the 8(a) program, which
received scrutiny from Sen. Claire McCaskill, D-Mo., last year. The
senator held a Subcommittee on Contracting Oversight hearing in July,
during which she expressed beliefs that Alaska Native Corporations and
other tribal businesses have received unwarranted preferences for
federal contracts.

Mills said McCaskill was right to call for more accountability,
although she acknowledged that many tribal business leaders have said
the scrutiny seemed unjust – a belief she does not share.

“The important focus is that we cannot have fraud, waste and abuse in
any of our programs. The senator’s concern is really our concern. … We
have to make sure that we are delivering programs that don’t have the
image of being inappropriate,” Mills said.

Mills said the agency has taken robust action to ensure access to the
program is limited to those who should be eligible for it, adding that
the agency has done extensive consultation with Indian country leaders
on proposed rule changes.

Pratte, a citizen of the Navajo Nation, said some proposed rule
changes, such as not counting 401(k) contributions as part of the value
of 8(a) programs, have been well-received by tribal businesses.

Other changes, like those that would more strictly prevent “revolving
door” businesses from using the program, have received more mixed
feedback.

As to why SBA needed prodding from McCaskill to increase its
accountability, Mills said her staff entered “high work mode” as soon
as they became part of the Obama administration.

Mills added that her agency met a recent 90-day deadline from President
Barack Obama to submit a tribal consultation plan for review by the
Office of Management and Budget.

Pratte said the agency already had some consultation policies in place,
but officials have now made them more robust. For instance, regulatory
changes are going to receive increased internal reviews from the
agency’s Indian-focused office to better determine the need for
outreach to tribes.

“We are not siloed,” Mills said when asked if she’d consider putting
more staffers to work on Indian affairs. “Clara has the entire SBA
staff behind her.” 

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