By Jeffrey A. Tannenbaum

The Clinton administration's efforts to increase federal contracts for minority-owned small businesses are running into resistance in Congress.

An investigative report by the Government Operations Committee has criticized the Small Business Administration's 8(a) program and a successor program suggested by the agency last June. Proposed changes in the long-criticized federal program aimed at assisting such businesses "could create an untenable situation and render the program even less effective," the House panel reported.

SBA officials defended the agency's proposal for a new and broader minority-enterprise development program that would involve more participants than 8(a) does. "The proposal is comprehensive and would resolve many of the concerns about 8(a) expressed in the report," an SBA spokesman said.

The 8(a) program, begun in 1968, helps "disadvantaged" small firms to gain federal contracts by subcontracting for work in which the SBA becomes the prime contractor. The SBA said the 8(a) program has more than 5,000 participants and accounts for about $ 4 billion a year in contracts.

But almost half of all 8(a) firms haven't received any contracts, the House report said. And some contracts go to firms that should no longer even be eligible for the program because they no longer are disadvantaged, the report said.

Herbert L. Mitchell, the agency's associate administrator for minority enterprise development, said the SBA still hopes to persuade Congress to adopt a new program. "Obviously, there's disagreement on certain provisions of the proposal," he said. "We'll basically go back again. It's quite possible some of the provisions will be revised."

This fall, Sen. John F. Kerry (D., Mass.) and Rep. Kweisi Mfume (D., Md.) introduced bills calling for a new minority-development program modeled after the SBA's proposal. But Congress adjourned without holding hearings on those bills.

The next session of Congress - to be led by Republicans - will have to decide whether to take up such measures again. Far from wanting to expand the SBA's efforts, some Republican leaders are talking about closing the agency altogether.

The House report covered problems faced by both minority-owned and female-owned small businesses in obtaining federal contracts. The report called for "a more comprehensive and unified" federal policy to develop small businesses owned by minorities or women. It also sought "a stronger commitment" by federal officials to make current programs work.

But criticism of the existing program isn't new. The SBA has previously acknowledged that the program doesn't work well. "The 8(a) program as it currently stands is woefully outdated," Erskine Bowles, then director of the SBA, said in a July news release.

"The agency can't continue to support a program that serves far too few minority-owned companies, doesn't begin to attack this sector's major problem, which is access to credit, and channels most of its benefits only to those firms specializing in federal contracting," Mr. Bowles said. (He left the SBA in October to become deputy chief of staff for White House operations; his successor is Philip Lader.)

The new approach sought by the SBA contains elements "that are excellent and probably should be implemented," the House report conceded. For example, the proposed program would place greater emphasis on training and other assistance to 8(a) firms before they try to obtain government contracts.

But the SBA proposal would do little to correct the major problems of the current program, the House report said. Indeed, by trying to aid more firms, the understaffed SBA "will create an untenable and unjustifiable situation under current conditions," the report said.

The report resulted from an investigation by the Commerce, Consumer and Monetary Affairs Subcommittee. In a statement appended to the report, subcommittee member C. Christopher Cox (R., Calif.) said that Congress "at the very least" should replace the 8(a) program with a more efficient one. But Mr. Cox also questioned the fundamental idea of giving "special preference" to 8(a) firms.

As an alternative, Congress should consider a program that assists "all" small businesses in gaining access to federal contracts, Rep. Cox said. "This would be both wise and bold action that could finally put an end to the interminable reports of corruption, graft and inefficiency in the 8(a) program."