Today Senators Mary Landrieu (D-LA) and John Kerry (D-MA) called on the Small Business Administration (SBA) to direct government contracts to local and small businesses in the Gulf region for the inspection of homes and businesses damaged by Hurricanes Katrina and Rita. Kerry is the Ranking Member and Landrieu is a member of the Senate Committee on Small Business and Entrepreneurship.

In Louisiana alone, over 365,200 residents were left homeless and 18,700 businesses were destroyed by the hurricanes. The SBA’s disaster loan program is responsible for approving loans for homeowners and business owners, but before loans are disbursed, losses must be verified. The SBA just issued a notice calling for contract bids to perform these services on January 27, 2006.

According to the SBA’s own data, as of yesterday, out of nearly 325,000 applications from homeowners, 50 percent are still waiting to be processed; out of 48,000 applications from business owners, nearly 40 percent are still waiting to be processed.

“The people of the Gulf Coast are ready and able to take the lead in the rebuilding efforts,” Sen. Landrieu said. “Our banks, credit unions, and small businesses must receive due consideration for federal contracts in these areas. Louisiana is not looking for a hand out, but a helping hand – and these contracts will help us help ourselves. Our businesses can do the job and Senator Kerry and I believe it is time for the SBA to recognize that fact.”

Landrieu and Kerry wrote SBA Administrator Hector Barreto, “Repeating our past requests and suggestions to enlist SBA’s lending partners, we want to know whether local banks, credit unions, and other qualified small businesses, will have the opportunity to be considered for these SBA contracts. To the maximum extent practicable, we would like the SBA to give priority ranking/scoring to applications from banks, credit unions, and small businesses in the affected areas in Alabama, Louisiana, Mississippi, and Texas. We also request that you provide us with detailed information on SBA recruiting and marketing for these service contracts and on whether SBA intends to conduct additional outreach to ensure local financial institutions and businesses are aware of this notice.”

Senators Landrieu and Kerry also asked for a swift reply by February 14, 2006, given the contract period for loss verification services begins on March 1, 2006. This is to ensure that businesses, credit unions, and banks in the Disaster Area will receive ample notice to compete for these contracts.

“Right now, homeowners and small businesses are at the mercy of a broken bureaucracy. Local businesses can speed up the process and help the Gulf Coast rebuild,” said Senator Kerry. “Senator Landrieu and I are calling on the SBA to give local and small firms every opportunity to help make the loan process move more quickly. Homegrown businesses should be the first to benefit from the rebuilding effort. And it’s common sense to use the banks, credit unions and other small businesses in the area that are experienced in loan loss verification rather than losing time and money to train new verifiers. My only wish is that the Administration had listened to us in November when we asked them to use the local banks.”

To read the text of the letter, please click here.