The Rudman bill deals with the estimated $32.5 billion spent by the government for commercially available goods and services in 1981. It proposes a seemingly simple piece of procedural surgery to get rid of what business considers the festering cancer of government competition. Rudman points out that commercial goods and services produced by the government, rather than bought from the private sector, increased from 40% in 1967 to 60% in 1981.
Senator Rudman would junk what he considers the wholly improper cost-benefit standard that has been used (and, in my view, abused) to keep the government in competition with business. He attacks the underlying theory that government is justified in making or providing services for itself if it can do either more cheaply than the private sector can. The competitive private enterprise system, he argues, allowed to function over time, will be more efficient. Sooner or later, it will bring down any ostensibly higher price.
In place of complex statistical comparisons between the cost of the government making what it needs or buying it, he offers three simple criteria.
First, are the goods or services to be bought by the government available commercially? If so, the government should simply not make them. Second, only if the goods are for "legitimate national defense," or, third, if they are "necessary to the managerial or fiduciary functions of government" will the government be allowed to produce them itself.
To Senator Rudman, that "simple and direct" standard will do the job. He argues that 71% of the commercial activities engaged in by government are activities that have been contracted out extensively by large, private corporations for years. He is right in my view, but not n the opinion of the fastest-growing unions in the country -- unions of government workers. They will surely oppose the bill. Passage of the bill would produce an estimated savings to taxpayers of about $1 billion a year.
Senator Dixon's bill toughens the requirement that small companies be used to add competition in federal procurement. It adds authority to the Small Business Administration's Certificate of Competency Program, which rules on whether a small company is competent and fiscally responsible to do a specific federal job. It pushes federal procurement officers to buy and make available to others "technical data packages" needed to subcontract parts competitively.
It is alleged by the Government Accounting Office, the House Small Business Committee, and several other congressional committees that these packages are now improperly squirreled away by prime contractors, a practice that denies the government the opportunity to have components and spare parts taken out of prime contracts and purchased competitively. If the savings found by the SBA in a sample study are typical of what exists generally, notes Senator Dixon, taxpayers should be saved about $4 bilion a year.
As favorably as small business may view these bills, there is a great limitation to their appeal as a big new gain. Of all the small companies that attempted to sell to the government in 1981, only 47,000 succeeded. That is a small, although not insignificant, portion of our 10 million nonagricultural smaller enterprises, and in that sense, the issue is indeed a crucial one for small business. Cutting waste or needless expense will benefit all these companies as taxpayers. A stronger rampart keeping the government out of competition with private business should have broad appeal across the board.
The only other big-gain issue that seems likely at this time arises from proposals for deficit-cutting "tax enhancement." These proposals may lead to an effort to take from small business some of its regrettably small share of the 1981 tax cut. If there is a flat, across-the-board change in tax rates, for example, it will deepen the bias against small business. Such a blatantly unfair scenario could then provide a defensive "big issue." Still-better positive "big gain" prospects mayyetturnup.
The national committees of both parties can play a key role in the upcoming congressional session. Why not prove that you are making an honest commitment to the future of small business interests in this country? Give the small business groups the specific task of advising you and, through you, your party's elected and appointed officials as to how to compile the best possible record for your party. For example, make it plain that you are setting these groups up for five years, rather than just for the campaign months. Let them plan issues, goals, and priorities for the next one, three, and five years. That means recruiting people with little interest in favors, contracts, or ego-stretching fun and games. They are really not hard to find. There are many small business stalwarts in your ranks who want nothing so much as a chance to strengthen entrepreneurship in our country. Many of the most successful entrepreneurs take very seriously a self-imposed duty to give some of their expertise and their money back so that the system will work even better for others.
What, if any, added clout your party groups can give small business we cannot know until you have tried for several sessions of Congress. Small business can certainly use any help anyone gives it in the clout department -- although it has made some real gains and more symbolic ones in recent years. Dispassionate observers agree that the political parties have lost ground as policymaking centers. The creation of small business advisory groups within the structure of the national political parties may help you to formulate some new policies. If it does, that in turn will strengthen the parties within a very significant portion of the country. Small business owners and managers and their employees represent more than half of the private sector. The way you handle your new commitment to small business vill effect more than the votes in one election.
