THE BLOG
09/17/2012 06:26 pm ET Updated Nov 17, 2012

Small Business Is the Engine of America

I have been receiving many hate-letters since speaking at the RNC. Here is a response to one letter from a small business owner.

***

I'm writing regarding your letter dated August 31, 2012.

First of all, I appreciate the fact that you took the time to write to me, communicating your disappointment about my comments in my speech given during Tuesday night at the convention.

You stated that stories about people who genuinely make it on their own without the backing of government are very important to you. You also have stated that you are a Patriot and have sought to become successful in business without Federal aid.

Just so you know, 40 years ago I was manufacturing Spanish Colonial furniture in a very small town with a population of about 1200 people located near a national forest in New Mexico. I was approached by a local forest employee about their need for signs. There had been large protests in our community in which the protestors had burned hundreds of forest service signs.

I saw this as an opportunity to make some additional money for my family, so as an entrepreneur I seized it. I found out to do work for the Forest Service I had to sign a federal contract. I believed that perhaps this turn of events would provide a brighter future for my family and my community.

Just so you know, I was not just given that contract. I had to bid against Unicor, which is a manufacturing operation of the federal government inside penitentiaries.

I believe you mistakenly misunderstood from my comments that I set my business up initially to go after government contracts. This is the farthest thing from the truth.

The Forest Service appreciated the detailed work that my employees did at our factory; and I was able to add more and more jobs over the years. Because of this fact, my very small community grew. Over the last 40 years, I have been able to sign up every U.S. Forest Service road across America. I understand that you do not feel that this is a legitimate business for a Patriot to build, but I am proud of what I have been able to accomplish. You see, my employees have become like family members. It has always been one of my goals to make a positive economic impact in rural New Mexico; and by the grace of God, I have been able to do this.

Because of my humble beginnings, growing up in a very poor area of New Mexico myself, with every employee I've been able to add, I can see a family unit's future improving.

In 1984, I received the Most Successful Minority award from President Reagan then, in 2007, I received the Manufacturer of the Year award from the Department of Commerce. They reviewed contractors from all over the United States for this award. So as a manufacturer in rural area New Mexico, I was very proud to receive it.

Because of the fact that my business was doing very well in 2007, I decided to expand. Yes, I did apply for and received a Small Business Administration construction loan; I am paying $7,000 a month for 30 years for this SBA and bank loan. I understand your point of view on this; however, it made the best business sense for the future success of my factory and its employees at the time. You have to remember it was a loan, not a grant.

We all know what happened in 2008 in the financial markets. As we watched what was happening, our individual lives and the lives of the people in our communities were suddenly uncertain. My wife actually had to close her small business in May 2009, after painstakingly building it over the course of 20 years. Our family was in jeopardy.

Therefore, when we heard about the Recovery Act and the possibility of our clients in the government agencies being able to order more signs from us, we were feeling a little less fear. I came to understand later, that the agencies were being asked to place orders for their future needs (in some cases 5 years or more). These products could then be saved in warehouses until needed.

You can imagine my surprise when not only did my manufacturing company not get any new orders; we totally stopped getting orders from the agencies whatsoever. The rules had changed and our client did not inform their vendors about these changes. I bid against the big companies and got $318,000 in orders that I would have received regardless. From there on, I could not compete.

The Recovery Act required the agencies to no longer honor existing contracts. All ordering was now done through a procurement process known as Federal Biz Ops.

Also, the agencies were obligated to "bundle" their orders which meant that an order may include signs, road work and other products. In most cases, the only companies that were able to provide for all of those requests in one order were the large corporations on the East Coast and West Coast. Those companies either could provide the additional products and services themselves, or they had the means to sub-contract out for them. I had no means to do either. Suddenly I see that a forest in my back yard is now buying their signs from a corporation in New York.

I honestly believed that the policy makers in Washington had not understood the very negative rippling effect that the Recovery Act made through the small business community. Because of this, I met with my Congressman. He set up a meeting with the Chiefs of Staff of my two Senators and the regional head of the Forest Service to talk about the issues, and see what could be done. I felt hopeful. In the end there was not going to be any change coming out of that meeting.

I understand from your letter that you are judging me as un-patriotic for having the government as a client in the first place; however, if you can imagine for just a moment, how painful it has been to lay off people in a community which is located 1.5 hours from Albuquerque and 2 hours from Santa Fe. These people, who have become family over the years, cannot go down the street and get another job. It's been heartbreaking.

Federal contracting is a standard of small business in this country. I know you don't agree with it, but this is a reality. The government buys from thousands of small businesses through contracts; beginning with the blind and handicapped then Unicor and GSA, SBA 8(a), small business set-asides, minority business set-asides, woman-owned business set-asides, etc. There is a long list, but you get the point.

If you do some research, just put "stimulus package results for small business" into the Google engine on the internet, you will see thousands of articles written over the past three years, that will show you that I was not alone in the adverse effect of this public policy change.

For example see, "The Stimulus Plan: A Year Later." Here is an excerpt:

"We haven't seen any of it," Rose says. "The stimulus money went to the big infrastructure companies that build highways and bridges -- the bigger, deeper, heavier part of our industry where you have to be a big company in order to compete."

In my case, I'm down to nine production workers at this point. Over the course of the past 40 years, I have had as many as 65 employees in a rural area. That equates to a large business in New Mexico.

Now we are a nation with chronic unemployment. I am trying to get a dialogue going now, since I am suddenly so well known through small business associations.

You see small business is the engine of America. The Recovery Act through the stimulus has made that engine blow a gasket. If the small businesses all across America do not bond together and cry out "FOUL" to the U.S. government, this country will have a really hard time coming back economically. We are the job creators in this country, not big business or the government. If we don't create jobs and employ people, the government does not have any money for public employees or to buy any products. If you understand what I am saying then I humbly request your response.

If you can get other business to join in and help maybe we can get America going again.

With Hope,
Phil T. Archuletta

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