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Remarks by Administrator Johnson at the Enterprise Center in Philadelphia

Remarks as Prepared for Delivery

Enterprise Center
Philadelphia
Martha N. Johnson
3/1/2012
3:30 p.m.

I’m delighted to be here, and I bring greetings from President Barack Obama and the rest of my colleagues in his administration.

I also bring greetings as a business woman. Early in my career, I worked in a Cummins Engine Co. factory. We were building a 10-liter diesel engine and at the same time retooling our assembly line, helping that iconic American engine company secure its competitive edge in the global economy.

But I’ve also worked for small businesses: an architecture firm, an executive search group, a strategy and consulting company, a MOBIS [Mission Oriented Business Integrated Services] government contractor. I know firsthand the sacrifice, risk, and worry that goes into running and working for a small business, and I know the satisfaction when a client comes through, a deal is inked, or a sale is made.

Those experiences have been my compass as I have led GSA. They particularly help me nurture GSA’s partnership with industry, and frame my thinking toward GSA’s small-business strategies.

Let me start by dispelling some confusion. GSA doesn’t stand for the Girl Scouts of America, or the Gay Straight Alliance. It stands for the General Services Administration. We do the buying and building – the business – of government, and we do it at scale.

GSA manages and guides a river of consumption worth nearly $95 billion dollars that includes everything from the world’s largest charge card program to information technology services to travel procurement. We manage a fleet of more than 220,000 vehicles and guide the acquisition of an additional 200,000. GSA is also the nation’s largest landlord, with more than 370 million square feet of owned and leased space – more than 2 percent of U.S. commercial real estate. In other words, we are big. Yes, I am a woman who talks about the joys of being at scale, sized, massive.

GSA combines the functions of Amazon, Costco, Hertz, Travelocity, and the country’s largest landlord. You start to get the picture. GSA is also the government’s front door. Our tools and policies are often the entrance for the public into the full breadth of government services. And, to close the metaphor, we’re the government’s back door. We handle the disposal of property, helping agencies auction or otherwise relinquish the space shuttles, cars, lighthouses, and roughly 10,000 computers a week.

Let me set up my remarks with one number: 8 million. That’s how many jobs were lost in the course of the recession that began in 2008. When the president took office, the economy was shedding 700,000 jobs every month – roughly the size of Detroit.

And small business bore the brunt of that recession: the lack of capital, shrinking markets, frozen workforce due to the decimated housing market. The list is long, and many of you in the audience no doubt know the litany all too well.

But today, we’re seeing serious progress. For the past 23 straight months, we’ve reversed the downward trend. We’ve seen 3.7 million private-sector jobs created in that period. We’re ahead of schedule toward the president’s goal of doubling U.S. exports within five years. The auto industry is back on top. Our economy is growing, flexing, and moving again.

Now it’s time to keep the pedal on the floor and keep our momentum going. Which is why in his State of the Union, the president laid out a blueprint for an America built to last. The blueprint is based on four key principles: American manufacturing, American energy, American skills, and American values. Underlying each of these four principles is a cast-iron commitment to supporting our nation’s small businesses.

Now, why is that? Why, in the wheel of work to be done should the president set his cap for small business? I’m glad you asked. First, it’s about supporting innovation. We need innovation – as a government and as a country. It’s no secret that small businesses are the economy’s innovation engines.

Time and again, we see the best products coming from startups, the newest thinking emerging from small, collaborative consulting shops, and the most efficient performance driven by our small firms.
You know this as well as I do. Small firms aren’t bogged down with spaghetti process, bureaucratic organizational charts, or stale thinking. As a result, on average, small firms produce 13 times more patents per employee than larger firms. They move faster, are more nimble, and can preempt market movement with new ideas and products.

And, small businesses are hungry. Their margins of error are slim at best, and profits are narrow and measured daily and weekly – not annually. Survival is at the top of their agenda. With only 70 percent lasting past their second anniversary, and 49 percent lasting past their fifth, small businesses have the sharpest incentives to compete, to find the edge, to be differentiated, to innovate.

Second, we should “bother” with small business because you are the engine of economic growth and job creation. You create roughly two of every three new jobs in America each year. More than half of working Americans own or work for a small business. They represent 99.7 percent of all employing firms in the economy.

By supporting small businesses, we’re supporting an economy built on innovation and job creation. And we’re maximizing our greatest strengths: creativity, ingenuity, grit, and determination. After all, every big American company, from General Electric to General Mills, started out small. Facebook was dreamed up in a college dorm room. Google started in a garage. Microsoft began between two childhood friends.

Throughout our history, America has thrived because entrepreneurs have dared to ask “What if?” “How come?” and “Why not?” Innovative small companies are part of our national DNA. They’ve made us who we are today, and they hold the promise for our tomorrow.

So, if small businesses are so vital, how do we support them? Frankly, there are no silver bullets for building and recharging small business. Instead, what we need, to quote the author Bill McKibbon, is silver buckshot. And, that’s the approach the president has taken.

He has:

-Supported landmark legislation such as the Small Business Jobs Act and initiatives such as the -Small Business Lending Fund and the Small Business Jobs Forum;
-Signed 17 tax cuts for America’s small businesses in the past three years;
-Supported the Small Business Administration, which has backed $70 billion in loans to more than 150,000 small businesses in the past three years;
-Eased patent restrictions and sped up government payments to contractors;
-Signed last week a payroll tax cut that will give more people more money to spend so that more businesses can hire more workers; and
-Insisted on aggressive procurement goals on the part of his government.

Now, let me pause to tell you that he is “no kidding” about that.

Every quarter, my counterparts at other agencies and I are invited to the Roosevelt Room in the White House. It’s an impressive room. Just off the Oval Office, with a painting of Teddy Roosevelt over the fireplace and the flags of the military branches decked out with ribbons commemorating their significant battles. It’s resonant with memory. Honor. Duty. Service. Purpose. When you’re summoned there, you know it’s not a casual drop-by. It’s the president’s private conference room, and it means business.

So every quarter we show up, and in front of the group, we have to read out and explain our quarterly small business numbers. It’s a daunting experience, but it demonstrates the president’s commitment to hitting the small-business targets. I’ve been proud that, thanks to the work of GSA staff, every time I’ve had rock-solid numbers to stand on and strong stories to back them up. And, we intend to keep it that way.

This is all by the way of saying that we at GSA have a number of ways to support the president’s agenda and help our nation’s small firms thrive. Let me describe two of them, and we can get into more examples in the Q&A.

To start, you in the small-business community are desperate to know the lay of the land, assess market potential, and spot the openings available. You need data and information, and you can’t hire big research firms or pay expensive consultants. I know myself. How many hours does a small outfit have to deliver, meet payroll, find customers, oh, and, figure out the next move? And, what about tapping the federal market, finding those government-backed loans, and navigating the rules and regulations?

For too long, entrepreneurs – and especially small-business owners – have been forced to navigate a confusing maze of government agencies to get their answers. The president has made it clear that this is unacceptable. He believes that we need to give U.S. businesses every opportunity and tool to succeed so that they can grow and hire and thrive right here in America. So, GSA has just rolled out a new website, BusinessUSA.gov. It’s an online platform for businesses to access the services and information they need.

I know, I know – there are websites and then there are websites. Trust me: This one is cool. It’s a virtual one-stop shop where businesses can find the full encyclopedia of resources. They can get assistance with patents, find loans, unearth information on contracting opportunities, and start to navigate into new markets overseas. The site takes a “no-wrong-door” approach with a common platform to match businesses with government services. GSA worked with businesses, entrepreneurs, and relevant online communities to create BusinessUSA.gov. We will continue to evolve the site, so give us feedback. I should note that BusinessUSA.gov also helps the government meet the president’s goal of streamlining business-related agencies so they can meet the needs of America’s businesses in the 21st century global economy.

Another site that makes GSA proud is Data.gov, which is a portal for the public to engage with the rivers of information available to the government. This site directly democratizes data. It brings the public in and pushes information out. This means data sets – new data sets – are now available to researchers, scholars, historians, scientists, economists, engineers, meteorologists, and small-business owners. This is a whole new order of transparency.

We are seeing access by many to unprecedented amounts of data. Go to Data.gov yourself. It’s a kick. You’ll find grain transport reports, aquaculture statistics, trademark registration information, weather data. It’s easy, available, and mind-bending.

Third, we are transforming the way business engages with the government through our schedules program. The Multiple Award Schedule Program is the traditional way for companies to get access government contracting opportunities. It is essentially GSA’s catalog. By vetting and organizing suppliers, we have streamlined government buying.

Importantly, our schedules allow small and disadvantaged firms increased access to business opportunities with the government. For example, fiscal year 2011 sales on the schedules were $49 billion, 34 percent of which went to more than 15,000 small-business contracts. Approximately $1 billion went to service-disabled, veteran-owned small businesses. More than $2.5 billion went to woman-owned small businesses.

And, during the past six months, our 8(a) STARS II [Streamlined Technology Acquisition Resources for Services] contract for small, disadvantaged businesses has sent nearly $26 million to small firms.

Now, let’s unpack this a little more. The government’s metric of success for a long time was sheer numbers. The idea was to get a lot of businesses on the schedules. Choice is good. More is better. You and I both know that you get what you measure. So, yes, we have a ton of firms on the schedules. But – to invoke the law of unintended consequences – do those businesses see much business? Oh, and by the way, what is the cost of all of this?

Those are important questions. Frankly, getting on the schedules is sort of like being walked to the altar. It takes a lot of work and money to get there and then, oh my, it takes a lot more work to make it work. And, I’m speaking here looking at 30 years next year. Or, maybe the better way to say it is that getting the fishing license doesn’t guarantee you’ll catch the fish.

And, from our side of things, it costs more than $3,000 a year to maintain nonselling companies on the schedules. That nets to about $24 million per year in taxpayer dollars maintaining a catalog of firms that aren’t receiving government business.

That doesn’t make sense any way you cut it. Businesses are spending money to get onto the schedules, we’re spending money to keep them on the schedules, but there’s no money flowing back to business. This is simply not fair to business and particularly small business.

GSA does not want to just be the referee, determining who gets on the schedules. We want to help you learn how to get on schedules, and, this is important, make a strategic choice for your business about whether that is a healthy risk and choice for you. We want to help you have information, link with partners, and complete the handshake.

Before taking your questions, let me make a final observation. I like to think of GSA as a membrane between government and industry. We need to be healthy and porous – not fragile and brittle. Therefore, we’re constantly nurturing our relationship with both government and industry by playing a range of roles: as counselor, guide, a voice of reality and strategy, and the go-to procurement experts.

To do this well, we need your partnership. Today’s conversations are important to us. Please share your ideas. We need to spot trends, learn of your challenges, and recognize when messages aren’t clear. And be demanding. Demand our fairness, openness, and creativity.

In closing, I salute the fabulous team at GSA that is eager, hardworking and ever ready to learn with you. I salute the small businesses of our country that tirelessly carry the weight, the risk, and the great promise of our economy and our country.

Thank you.