At Risk

The near-term threat to 8(a) is probably more political than legal. Rep. Canady's aide says exit polls showed substantial Democratic support for California Proposition 209, which passed by a vote of 54 percent to 46 percent. It's too early to tell whether Democrats in Congress will support either a Canady bill or a narrower bill targeting only 8(a).

One of the wild cards here is working women, a critical component in Clinton's election. White women are not presumed to be eligible for 8(a); they must first prove they have been discriminated against. That is a hard case to make. Only nine white women have succeeded in proving discrimination and been accepted into the program thus far.

One of them, Shirley A. Stewart Veal, president of SAS General Construction Contractor, a construction firm in Herndon, Virginia, says she has received no help from the SBA since qualifying for 8(a) in 1992. "It seems to me the real issue here is not whether the program will work for me but why the program officers at the Small Business Administration seem determined not to help me," she says.

Another factor contributing to anti-8(a) sentiment is a string of General Accounting Office studies underlining the program's inadequacies. For example, 50 out of the 6,002 companies certified by the SBA have in recent years received 25 percent of total contracts awarded. The SBA Inspector General said in 1995 that 32 of the top 50 firms exceeded their respective industries' averages for five performance factors. The SBA subsequently set requirements for its field staff to consider graduation for any firm that exceeded three of those five criteria. But a February 1996 review by the SBA found its field staff was flummoxed by the mandate.

You don't have to look far to find aspects of 8(a) worth mending. But is the program so full of holes it should be tossed out? The sewing kit is in the hands of Congress and the Supreme Court.

Stephen Barlas is a freelance business reporter who writes monthly Washington columns for 15 magazines.

This article was originally published in the February 1997 print edition of Entrepreneur with the headline: At Risk.