...  Joanne's Congressional Testimony (2003)

  ABOUT  SITEMAP  CONTACT  SERVICES  PRODUCTS  PROJECTS  NEWS  SAM  PARTNERS  LOGIN  TERMS

On April 11, 2003 Abator's CEO was called to testify at the Paperwork Reduction Act Hearing on the Business Paperwork Burden. The hearing was held by the Congressional Committee on Government  Reform (Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs) chaired by the Honorable Doug Ose (R - California). Here's a copy of her remarks:

Thank you, Chairman Ose, for holding this important hearing on the burden of federal paperwork. I appreciate this opportunity to testify and I thank all members of the subcommittee for seeking ways to reduce this burden, particularly for our nation’s small businesses. My name is Joanne Peterson, and I am President of Abator -- a women-owned technology services company.

Small business faces complex, diverse challenges and priorities. One challenge is the complicated, expensive process to do business with state and federal agencies. Another, the significant cost encountered preparing and filing routine federal and state paperwork.

Ohio directed Abator to qualify for its State Term contract list. This involves successful completion of a federal GSA solicitation process. Federal Acquisition and GSA Regulation clauses run 56 pages, the document itself … another 84, and attachments 68 pages. That’s a lot of fine print. I’m not sure why Ohio decided to use this federal procurement process. I am certain, however, that compliance will be expensive.

We’ve spent $840 in labor and $125 on processing fees for credit and customer satisfaction checks. I could spend $175 per hour on legal reviews or engage a federal procurement expert for $8,000 to $25,000. We’ll do neither – given our current economic position.

By the way, contractors pay the GSA an industrial funding fee of 1% of sales. I applaud the GSA’s efforts to recoup part of its operating costs through this mechanism. I hope they will explore ways to reduce the paperwork burden for small businesses striving to support them.

Abator has no experience bidding federal contracts so, I’ll talk about a recent state bid. It required 289 complete bid packages … in triplicate. We hand delivered over 44,000 pages to avoid shipping charges since our other costs ran about $12000. Adding the federal Solicitation to this already burdensome process puts small firms like Abator at a competitive    disadvantage.

I am grateful for President Bush’s contract unbundling initiative. Abator, a member of Women Impacting Public Policy (WIPP) and the Women Business Entrepreneur National Council (WBENC), supports this initiative. We hope it will lead to greater federal participation by small, minority and historically underutilized businesses. Though our efforts go unrewarded, Abator has completed reams of paper to support prime vendors on federal contracts. We remain undeterred and will continue to seek growth. We will complete the GSA Solicitation process, despite the intimidating amount of paperwork.

All business bears the burden of annual tax reporting. Abator spent $7700 last year – funds that could be invested in equipment, hiring or coping with increased health insurance costs. Streamlining that process would help reduce costs.

Last year, Abator spent $1575 in reorganizing our pension plan’s paperwork to comply with federal regulations. We didn’t change the plan, just the paper. That money would have meant larger pension contributions.

Independent employment status is a significant issue for Abator. I believe Section 1706 of the Tax Reform Act of 1986, discriminates against technical experts … restricting their access to entrepreneurial independent status. Abator filed an SS-8 in December 1986. This 20 question test ran 50 pages. We repeatedly requested an IRS ruling. It took 11 years. We spent $5000 preparing and were subjected to an on-site IRS audit of our business practices. Eventually we received a letter advising that we “appeared” to be complying with the law. We felt relieved because an adverse ruling could have closed our doors. We remain concerned -- the test contains many gray areas and the IRS can change its mind. Since 1706, Abator has lost revenues. Customers fear their organizations may be at risk and have cancelled contracts because the regulations are murky and inconsistently applied.

Finally, Abator filed three green card applications in 1999. The process was a nightmare. The Immigration and Naturalization Service (INS) phone numbers always ring busy, and we never once managed to speak with an INS representative. In 30 months no progress was made. After September 11th, I sought assistance from Senator Rick Santorum. Through his staff we facilitated the subsequent approval and award process. Beyond the time and material costs, there was a substantial emotional cost to this four year process, the simple cost of not knowing – and having no way to learn – the immigration status of key consultants.

Small business is the backbone of the United States economy, and the high technology industry is a major slice of our economic future. Many small business owners find ourselves expending limited resources on excessive and often redundant paperwork to satisfy state and federal government agencies. Any assistance this committee can offer in freeing our resources to be used productively would be very much appreciated.

Thank you for your time and consideration.