Plain Language in Contracting Act

— 751 — Small Business Administration implement relevant initiatives to reach small businesses. Programs would be nonduplicative and implemented on a first-come, first-served basis. l A modern, revamped, and streamlined SBA that better utilizes current technology and platforms for operations, for reporting, and in its programs to reach, service, and engage small businesses. l An Office of Advocacy that is strengthened by a renewed mandate and additional resources to protect against overregulation along with a research agenda that includes measuring the total cost that federal regulation imposes on small businesses. Accountability and Managerial Practice. The SBA lacks accountability and managerial practices to measure the effectiveness, success, and integrity of its various programs. As a future Administration evaluates agency structure and the particulars of how the SBA is spending appropriated funds, it should immediately require actions and procedures to compel a culture of accountability and perfor- mance. Specifically: l Require performance metrics and internal procedures to safeguard taxpayer dollars and program integrity. As noted in an October 2022 IG report, failure to adopt procedures that would reliably capture data and information for various programs, coupled with significant challenges and weaknesses regarding IT investments, systems development, and security controls, presents significant risks to program integrity and increased risk of waste, fraud, and abuse.34 Addressing these shortcomings and risks should be a priority challenge and action item for the next Administration. As underscored by the Inspector General in his introduction to the report, “Pandemic response has, in many instances, magnified the challenging systemic issues in SBA’s mission-related work.”35 l Review all internal government watchdog recommendations and require that SBA management implement or address outstanding and ongoing OIG and GAO recommendations within a specified time frame (ideally within 90 days of a recommendation) and on an ongoing basis. Strengthening the Office of Advocacy. The SBA Office of Advocacy (Advo- cacy) is “an independent office” within the SBA.36 It accounts for about one one-thousandth of SBA spending and 0.75 percent of SBA personnel. Under the Regulatory Flexibility Act, both under its current authority and with suggested — 752 — Mandate for Leadership: The Conservative Promise reforms, the Office of Advocacy could be a powerful weapon against the adminis- trative state’s regulatory extremism. l Amend the RFA so that all agencies are required to provide a copy of any proposed rule (other than bona fide emergency rules) along with initial regulatory flexibility analysis to the Office of Advocacy at least 60 days before a notice of proposed rulemaking is submitted for publication in the Federal Register. The Office of Advocacy would submit comments to agencies within 30 days, and each agency would have to consider these comments, make changes in the proposed rule based on those comments, or explain in a revised regulatory flexibility analysis why it chose not to change the proposed rule. The Office of Advocacy’s pre-proposing comments would be published on the agencies’ and its own websites. RFA economic analysis should be expanded to include indirect costs along with direct costs. In addition, the next Administration should require other agencies to seek Advocacy’s input. Currently, other agencies deny Advocacy the ability to enforce their duty to consider the effect of regulations on small entities by construing their regulations as not having significant economic impact, which would otherwise serve as a trigger for Advocacy’s input. Congress should presumptively exempt small businesses from new agency rules to force agencies to seek Advocacy’s input and permit new rules to apply to small businesses only with Advocacy signoff under specified criteria. l Increase the Office of Advocacy’s budget by at least 50 percent ($4.6 million). This would allow Advocacy to hire approximately 25 attorneys, economists, and scientists and enhance its role in the regulatory process. l Explicitly direct federal agencies to comply with the RFA. This would be similar to the approach adopted by President Trump in his January and February 2017 executive orders directing agencies to relieve the cost and burden of regulation on business.37 Advocacy should organize regional roundtables, onsite small-business visits, and an online platform to hear directly from small businesses and entities as it did from June 2017 through September 2018.38 This activity produced 26 letters to federal agencies and highlighted specific regulations that need reform and how Congress had addressed the most burdensome rules through the Congressional Review Act.39

— 762 — Mandate for Leadership: The Conservative Promise 29. U.S. Small Business Administration, “Ensuring Equal Treatment for Faith-Based Organizations in SBA’s Loan and Disaster Assistance Programs,” Proposed Rule, Federal Register, Vol. 86, No. 11 (January 19, 2021), pp. 5036–5040, https://www.federalregister.gov/documents/2021/01/19/2021-00446/ensuring-equal-treatment- for-faith-based-organizations-in-sbas-loan-and-disaster-assistance-programs (accessed February 18, 2023). 30. President Joseph R. Biden Jr., Executive Order 14019, “Promoting Access to Voting,” March 7, 2021, in Federal Register, Vol. 86, No. 45 (March 10, 2021), pp. 13623–13627, https://www.govinfo.gov/content/pkg/ FR-2021-03-10/pdf/2021-05087.pdf (accessed February 19, 2023). See also press release, “Small Business Committee Republicans: The SBA Should Stay Out of Elections and Focus on Our Small Businesses,” Small Business Committee Republicans, Committee on Small Business, U.S. House of Representatives, April 4, 2022, https://republicans-smallbusiness.house.gov/news/documentsingle.aspx?DocumentID=404061 (accessed February 18, 2023). 31. Press release, “SBA Administrator Guzman, Biden–Harris Administration Announce Community Navigator Pilot Program Grantees,” U.S. Small Business Administration, October 28, 2021, https://www.sba.gov/ article/2021/oct/28/sba-administrator-guzman-biden-harris-administration-announce-community-navigator- pilot-program (accessed February 18, 2023). 32. John Reosti, “SBA Hasn’t Given Up on Direct Lending,” American Banker, May 2, 2022, https://www. americanbanker.com/creditunions/news/sba-hasnt-given-up-on-direct-lending (accessed February 18, 2023). 33. Goldman Sachs, 10,000 Small Businesses Voices, “22 Years Is Too Long: Support Small Businesses. Reauthorize the SBA,” Open Letter to Congress, November 16, 2022, https://www.goldmansachs.com/ citizenship/10000-small-businesses/US/voices/reauthorize-the-sba-letter/index.html (accessed February 18, 2023). According to Goldman Sachs, the letter “was published in Politico on Wednesday, November 16 to kick of a broader campaign to prioritize small businesses and modernize the SBA in the next Congress” and “was signed by over 3,000 small business owners from all 50 states.” Ibid. 34. See, for example, “Challenge 3: SBA Faces Significant Challenges in IT Investment, System Development, and Security Controls,” in U.S. Small Business Administration, Office of Inspector General, Top Management and Performance Challenges Facing the Small Business Administration in Fiscal Year 2023, Report 23-01, October 14, 2022, pp. 16–19, https://www.sba.gov/sites/default/files/2022-10/SBA%20OIG%20Report%2023-01_0.pdf (accessed February 18, 2023). 35. Ibid., p. iv. 36. Appendix M, “Office of Advocacy’s Legislative Priorities,” and Appendix Q, “Memorandum of Understanding Between the Small Business Administration and the Office of Advocacy,” in U.S. Small Business Administration, Office of Advocacy, Background Paper, Office of Advocacy, 2017–2020, January 2021, pp. 192 and 197, https://cdn.advocacy.sba.gov/wp-content/uploads/2021/02/09101916/Background-Paper-Office-of- Advocacy-2017-2020-web.pdf (accessed February 18, 2023). 37. President Donald J. Trump, Executive Order 13771, “Reducing Regulation and Controlling Regulatory Costs,” January 30, 2017, in Federal Register, Vol. 82, No. 22 (February 3, 2017), pp. 9339–9341, https://www.govinfo. gov/content/pkg/FR-2017-02-03/pdf/2017-02451.pdf (accessed February 19, 2023), and President Donald J. Trump, Executive Order 13777, “Enforcing the Regulatory Reform Agenda,” February 24, 2017, in Federal Register, Vol. 82, No. 39 (March 1, 2017), pp. 12285–12287, https://www.govinfo.gov/content/pkg/FR-2017-03- 01/pdf/2017-04107.pdf (accessed February 19, 2023). 38. U.S. Small Business Administration, Office of Advocacy, What Small Businesses Are Saying and What Advocacy Is Doing About It: Progress Report on the Office of Advocacy’s Regional Regulatory Reform Roundtables, June 2017–September 2018, December 2018, https://cdn.advocacy.sba.gov/wp-content/ uploads/2018/12/20091536/What-Small-Businesses-Are-Saying-What-Advocacy-Is-Doing.pdf April 2020, https://advocacy.sba.gov/regulatory-reform/ (accessed February 18, 2023December 10, 2022). See also U.S. Small Business Administration, Office of Advocacy, Reforming Regulations and Listening to Small Business: Second Progress Report on the Office of Advocacy’s Regional Regulatory Roundtables, June 2017–December 2019, https://cdn.advocacy.sba.gov/wp-content/uploads/2020/04/20141200/2nd-Progress-Report-on-Reg- Reform-Roundtables.pdf (accessed February 18, 2023). 39. U.S. Small Business Administration, Office of Advocacy, What Small Businesses Are Saying and What Advocacy Is Doing About It: Progress Report on the Office of Advocacy’s Regional Regulatory Reform Roundtables, June 2017–September 2018, pp. 32 and 43.

— 763 — Small Business Administration 40. U.S. Small Business Administration, Office of Inspector General, Top Management and Performance Challenges Facing the Small Business Administration in Fiscal Year 2023, p. iv. 41. H.R. 748, CARES (Coronavirus Aid, Relief, and Economic Security) Act, Public Law No. 116-136, 116th Congress, March 27, 2020, https://www.congress.gov/116/plaws/publ136/PLAW-116publ136.pdf (accessed February 19, 2023). 42. Sarah McCammon, “Planned Parenthood Asked to Return Funds from Paycheck Protection Program,” NPR, May 21, 2020, https://www.npr.org/2020/05/21/859991359/planned-parenthood-asked-to-return-funds- from-paycheck-protection-program (accessed February 18, 2023). 43. Letter from William Manger, Associate Administrator, U.S. Small Business Administration, to Laura Meyers, Planned Parenthood of Metropolitan Washington, “Re: Notice of Investigation and Request for Records,” May 19, 2020, https://s3.documentcloud.org/documents/6922122/SBA-Letter-Planned-Parenthood-DC.pdf (accessed February 18, 2023). 44. Press release, “Lankford, HSGAC Republicans Demand Details on Illegal PPP Loans to Planned Parenthood Affiliates,” Office of U.S. Senator James Lankford, April 28, 2022, https://www.lankford.senate.gov/news/press- releases/lankford-hsgac-republicans-demand-details-on-illegal-ppp-loans-to-planned-parenthood-affiliates (accessed February 18, 2023). 45. Press release, “Romney, Colleagues Request Information from SBA Administrator Guzman on Illegal PPP Loans Given to Planned Parenthood Affiliates,” Office of U.S. Senator Mitt Romney, April 28, 2022, https:// www.romney.senate.gov/romney-colleagues-request-information-from-sba-administrator-guzman-on- illegal-ppp-loans-given-to-planned-parenthood-affiliates/ (accessed February 18, 2023). 46. 13 C.F.R. §§ 109.400(b)(11), https://www.law.cornell.edu/cfr/text/13/109.400; 123.301(g), https://www.law. cornell.edu/cfr/text/13/123.301; 123.502(n), https://www.law.cornell.edu/cfr/text/13/123.502; and 123.702(b)(6), https://www.law.cornell.edu/cfr/text/13/123.702 (all accessed February 19, 2023). 47. U.S. Small Business Administration, “Religious Eligibility Worksheet for all 7(a) and 504 Loan Programs” SBA Form 1971, http://www.sba.gov/sites/default/files/2020-11/sba-form-1971.pdf (accessed February 18, 2023). 48. U.S. Small Business Administration, “Ensuring Equal Treatment for Faith-Based Organizations in SBA’s Loan and Disaster Assistance Program.” 49. See, for example, Carson v. Makin, 596 U.S. ___ (2022), https://www.supremecourt.gov/ opinions/21pdf/20-1088_dbfi.pdf (accessed February 19, 2023). 50. 28 U.S. Code § 530d, https://www.law.cornell.edu/uscode/text/28/530D (accessed February 19, 2023). 51. U.S. Small Business Administration, “Ensuring Equal Treatment for Faith-Based Organizations in SBA’s Loan and Disaster Assistance Program.” 52. 13 CFR 120.110(k), https://www.law.cornell.edu/cfr/text/13/120.110 (accessed February 19, 2023). 53. U.S. Small Business Administration, “Regulatory Reform Initiative: Streamlining and Modernizing the 7(a), Microloan, and 504 Loan Programs to Reduce Regulatory Burden,” Final Rule, Federal Register, Vol. 87, No. 125 (June 30, 2022), pp. 38900–38910, https://www.federalregister.gov/documents/2022/06/30/2022-13483/ regulatory-reform-initiative-streamlining-and-modernizing-the-7a-microloan-and-504-loan-programs-to (accessed February 18, 2023). 54. Ibid. 55. U.S. Department of Justice, Office of Legal Counsel “Religious Restrictions on Capital Financing for Historically Black Colleges and Universities,” Memorandum Opinion for the Acting General Counsel, Department of Education, August 15, 2019, https://www.justice.gov/sites/default/files/opinions/ attachments/2021/01/01/2019-08-15-hbcu-capfin-2.pdf. (accessed February 18, 2023). 56. U.S. Small Business Administration, Office of Investment and Innovation, SBIR and STTR Annual Report, Fiscal Year 2019, p. 8, https://www.sbir.gov/sites/default/files/SBA_Final_FY19_SBIR_STTR_Annual_Report.pdf (accessed February 18, 2023). 57. S. 4900, SBIR and STTR Extension Act of 2022, Public Law No. 117–183, 117th Congress, September 30, 2022, https://www.congress.gov/117/plaws/publ183/PLAW-117publ183.pdf (accessed February 18, 2023). 58. U.S. Small Business Administration, Office of Investment and Innovation, SBIR and STTR Annual Report, Fiscal Year 2019, pp. 6, 40, and 108. — 764 — Mandate for Leadership: The Conservative Promise 59. Peter L. Singer, “Federally Supported Innovations: 22 Examples of Major Technology Advances that Stem from Federal Support,” Information Technology and Innovation Foundation, February 2014, https://wrnjradio.com/ bipartisan-call-to-crack-down-on-covid-19-ppp-eidl-fraud-prosecute-fraudsters-to-the-fullest-extent-of-the- law/ (accessed March 21, 2023). 60. Wells King, “Uncle Sam’s Top-Performing Venture Fund,” American Compass Case Study, November 2022, https://americancompass.org/wp-content/uploads/2022/11/AC-Case-Study_SBIR_final2.pdf (accessed February 18, 2023). 61. Elisabeth B. Reynolds, Hiram M. Samel, and Joyce Lawrence, “Learning by Building: Complementary Assets and the Migration of Capabilities in U.S. Innovative Firms,” MIT Industrial Performance Center Working Paper No. MIT-IPC-13-001, March 2013, https://ipc.mit.edu/sites/default/files/2019-01/13-001.pdf (accessed February 18, 2023). 62. American Compass, “Where’s The Growth? Assessing the Results of the Globalization Experiment,” March 2022, pp. 3–5, https://americancompass.org/wp-content/uploads/2022/10/AC-Atlas-Wheres-the-Growth.pdf (accessed February 18, 2023). 63. Sridhar Kota and Tom Mahoney, “Innovation Should Be Made in the U.S.A.,” The Wall Street Journal, November 15, 2019, https://www.wsj.com/articles/innovation-should-be-made-in-the-u-s-a-11573833987 (accessed February 18, 2023). 64. S. ___, SBA Reauthorization and Improvement Act of 2019, 116th Congress, 1st Session, Title III, § 303, https://www.rubio.senate.gov/public/_cache/files/80533629-2905-433f-a588-7c4e032f7347/ C096ED9C1EBA68E041CFDA143E01C66C.mir19891.pdf (accessed February 18, 2023). 65. David Adler, “Financing Advanced Manufacturing: Why VCs Aren’t the Answer,” American Affairs, Vol. III, No. 2 (Summer 2019), https://americanaffairsjournal.org/2019/05/financing-advanced-manufacturing-why-vcs- arent-the-answer/ (accessed February 18, 2023). 66. National Association of Manufacturers, “Overview of the Senate HEALS Act,” July 28, 2020, https://documents. nam.org/comm/HEALSActInfo.pdf (accessed February 19, 2023). See also remarks by Senator Mitch McConnell, “HEALS Act,” Congressional Record, Vol. 166, No. 132 (July 27, 2020), pp. S4491–S4492, https:// www.congress.gov/116/crec/2020/07/27/CREC-2020-07-27-pt1-PgS4491-7.pdf (accessed February 20, 2023). 67. S. 1059, American Innovation and Manufacturing Act, 117th Congress, introduced March 25, 2021, https:// www.crfb.org/blogs/whats-11-trillion-heals-act https://www.congress.gov/117/bills/s1059/BILLS-117s1059is.pdf (accessed February 18, 2023). 68. H.R. 7628, IMPROVE (Improve Management, Programs, Resources, and Oversight for Vital Entrepreneurs) the SBA Act, 117th Congress, introduced April 28, 2022, https://www.congress.gov/117/bills/hr7628/BILLS- 117hr7628ih.pdf (accessed February 19, 2023). 69. 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