Head of Small-Biz Association Resigns

After facing a number of challenges during his five-year tenure, Hector Barreto has resigned as head of the U.S. Small Business Administration (SBA). He will move on to chairman of the Latino Coalition after a new administrator is announced.

Barreto has been the target of a fair share of criticism, standing as the figurehead of an organization criticized by some for not offering programs that ensure adequate opportunities for small businesses. An ongoing issue for the SBA has been the failure by federal agencies to allocate the recommended percentage of contract dollars to set-asides, such as small businesses owned by minorities, women and service-disabled veterans.

Further, the SBA under Barreto's leadership has received flack for not aggressively combating the supposed masquerading of large businesses as small. According to the American Small Business League (ASBL), 11 federal investigations documented varying degrees of misrepresentation in small-business contracting programs. Just last month, Insight Public Sector agreed to pay $1 million to settle allegations that the company misrepresented itself as a small business between 2002 and 2005.

"In regard to large businesses receiving small-business contracts, I don't see this as a huge trend. There are businesses that are not big when they got small-business contracts, but grew out of their size standard or were acquired by large companies during the samll-business contracts," Barreto says. "In fact, $69 billion of goods and services went to small businesses this year. That's 40 percent more than when I first started.

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Under Barreto's leadership, the SBA saw a 40 percent budget cut.

"The past year was not without its share of challenges for the SBA," Barreto said in his 2006 budget testimony to the Senate Small Business and Entrepreneurship Committee. "However, I am proud to say that last year was also one of great success. We were faced with several critical issues, but we were able to work together and reach agreement in ways that proved beneficial to both America's small businesses and America's taxpayers."

Yesterday, President Bush nominated Steven Preston to replace Barreto.