Arbitrary federal regs block many small engineering firms from creating jobs

WASHINGTON — In this difficult economy, Hinman Consulting Engineers, is one of the few engineering firms in a position to hire new employees. But the firm is close to exceeding $4.5 million in revenues, meaning it will lose its competitive SBA status that helps the San Francisco-based firm get government projects. CEO Eve Hinman knocked on doors in Washington to get help to raise this artificial SBA barrier to job creation beyond the 25 employees that currently work at woman-owned HCE.

The Small Business Administration has arbitrarily said that the engineering company Hinman runs which performs homeland security services — and all other engineering and architectural firms — must be treated as large companies in federal contracting if they earn one dollar more than $4.5 million in revenues.

“It’s tough for small firms to compete with big engineering firms for federal projects,” said Hinman. “So SBA’s regulation, in effect, means that all firms our size and smaller must stay small. That means we can’t hire more people or buy goods and services that will help our communities grow and thrive. It also means that taxpayers will have to pay for work done primarily by big, costlier companies.”

Hinman, a pioneer in her field, was a principal author in charge of two Federal Emergency Management Administration’s books on how to better protect buildings from terrorist attack. She is passionate about her engineering science, has testified before Congress, published a book on the Oklahoma City bombing, has written extensively, and is consulted by leading building designers all over the world. But there is a limit on her ability to expand her company’s work in this field.

In meetings on Capitol Hill and with White House officials, Hinman sought to win an increase in the long-standing SBA ceiling. She has ventured to Washington as part of a group of women executives with the organization Women Impacting Public Policy, who will be meeting with their elected representatives and with Obama Administration staffers this week.

Dr. Chris Klentzman, who leads Hinman’s branch office in Northern Virginia, said: “It makes no sense for our type of services firm to be classified as a small business only if we have less than $4.5 million in revenues, when other similarly organized professional services firms have ceilings of $7 million.” Firms with higher ceilings include law firms, environmental consultants, marketing agencies, financial services companies and many other types of businesses. Some companies are classified by the SBA as small businesses even if they employ as many as 499 people.

“Why limit job growth for engineering and architectural firms?” Hinman asked. “It’s completely arbitrary and hasn’t changed in years.”