Nativ8aworks.com – Editor’s Note: Here are excerpts from a question and answer interview that the Alaska Journal of Commerce conducted with Small Business Administration’s Deputy Director Maria Johns.
Q. The SBA 8(a) program has gotten a lot of criticism over the last year. Where do you think there are real areas where the 8(a) program can do better and where are some places where the critics or proposed legislation is misguided?
A. The review of 8(a) we’ve just completed, the regulations hadn’t been reviewed in over 15 years, so it was definitely time. We now have new regulations in place and are looking forward to seeing how those new regulations help us implement an even stronger program. One of the key areas of focus for the new regs was to have a very fine screen for waste, fraud and abuse, so the benefits flow to those businesses for whom the benefits are intended. That’s generally where the criticisms are centered — that the wrong people, or businesses took advantages that weren’t supposed to.
It’s hard to argue against the power of the 8(a) program and it’s ability to provide opportunity for small business. There are countless examples of small businesses who have taken advantage of 8(a) properly and done a great job of strengthening their communities and growing jobs. At SBA, we just want to make sure, and through the review of regs, we looked for every opportunity to tighten the screen so the waste, fraud and abuse elements are there.
Q. And where do you think the critics are going wrong?
A. For example, I had a wonderful opportunity to visit an Alaska Native corporation in Tatitlek, and had a presentation from the CEO Roy Totemoff, their senior VP of operations, and other officials. I heard the story and saw for myself how the benefits of their participation in the 8(a) program are definitely having a positive effect on the village.
It’s important for people to understand there is an organic aspect to the 8(a) program with the ANCs. Some detractors have said all the economic activity should occur in the village. Well, that’s really not feasible given where the villages are, the demographics and, most importantly, what villagers want. The activity happens in a variety of places, but benefits in all cases continue to flow to the villages to support cultural and language preservation, supporting senior citizens, improving education, infrastructure development. All those key elements for keeping those villages there and growing for the next generation.
I would encourage those detractors to actually visit some of these companies and see what’s happening. It’s very powerful, positive work that’s being done.
Q. How engaged were the ANCs with the drafting of the regs, reviewing them, and how engaged were you with them on getting feedback?
A. We have been pretty much universally complimented on the process. It was an extremely engaging process where we visited 10 cities, we had three tribal consultations, we had well over 2,000 comments that were factored into the new regulations.
Q. What was the best piece of input you got from the Alaska companies in making the program better?
A. One regulation we’ll be implementing soon is one where the corporations will be reporting on an annual basis about how the benefits from the enterprises flow to the shareholder community. What I heard in a number of conversations with these business leaders is that they are looking forward to that and this structured opportunity to talk about how the benefits flow and tell that story. That will be a way to address a lot of the misperception that exists regarding how these programs work and how the benefits flow.
Q. What are your immediate and long-term goals for developing the 8(a) program?
A. We’re not going to wait another 15 years to look under the hood and see what refinements need to be made. We’ll continually look to see how we can make it stronger based on what we’re hearing from the community. The bottom line now and into the future is how to make sure this program continues to serve as an important way to grow businesses and create jobs.
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