Encouraging Success Act

Floor Speech

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Mr. ELLZEY. Mr. Speaker, I thank Chairman Williams and Ranking Member Velazquez for allowing me to lay out H.R. 5961, the Encouraging Success Act. Bipartisanship on this committee is alive and well, and I thank Congressman Thanedar for joining me on this bill.

The Small Business Administration's 8(a) program was established in the 1970s to help small businesses compete with large corporations for U.S. Government contracts.

A qualifying small business can only be a part of the program for 9 years. To initially qualify and remain in the 8(a) program, there is a cap to the value of a small business' assets.

Since the program's inception, the asset cap has only been raised twice and is currently at the very small amount of $6.5 million.

The asset threshold is set through an SBA-determined regulation, and the law does not outline any process of when or how the SBA should reassess the threshold to remain in line with market changes.

Unfortunately, because the requirements to initially qualify for the program or to remain in it haven't kept up with market changes, the cap is set to a level at which a small business is disadvantaged to compete in the open market at the end of the 9-year program.

The SBA's slow-to-change attitude with the asset cap can limit the success of an 8(a) small business or outright kill it.

With the threat of being graduated out of the 8(a) program, small business owners must decide whether their firm's growth is worth being removed from the program.

Our bill, H.R. 6591, helps solve the situation and encourages success of small businesses by compelling the SBA administrator to review the qualification caps with greater frequency to ensure that small businesses participating in the 8(a) program are allowed to grow big enough to compete with larger companies, once their participation in the program ends. We ask for your support for H.R. 6591.

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