VETERANS ENTREPRENEURSHIP AND SELF EMPLOYMENT

 


 HEARING

BEFORE  THE

SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

OF THE

COMMITTEE ON VETERANS' AFFAIRS

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION


MAY 17, 2007


SERIAL No. 110-23


Printed for the use of the Committee on Veterans' Affairs

 

 

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COMMITTEE ON VETERANS' AFFAIRS

BOB FILNER, California, Chairman

 

CORRINE BROWN, Florida
VIC SNYDER, Arkansas
MICHAEL H. MICHAUD, Maine
STEPHANIE HERSETH SANDLIN, South Dakota
HARRY E. MITCHELL, Arizona
JOHN J. HALL, New York
PHIL HARE, Illinois
MICHAEL F. DOYLE, Pennsylvania
SHELLEY BERKLEY, Nevada
JOHN T. SALAZAR, Colorado
CIRO D. RODRIGUEZ, Texas
JOE DONNELLY, Indiana
JERRY MCNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

STEVE BUYER,  Indiana, Ranking
CLIFF STEARNS, Florida
JERRY MORAN, Kansas
RICHARD H. BAKER, Louisiana
HENRY E. BROWN, JR., South Carolina
JEFF MILLER, Florida
JOHN BOOZMAN, Arkansas
GINNY BROWN-WAITE, Florida
MICHAEL R. TURNER, Ohio
BRIAN P. BILBRAY, California
DOUG LAMBORN, Colorado
GUS M. BILIRAKIS, Florida
VERN BUCHANAN, Florida

 

 

 

Malcom A. Shorter, Staff Director


SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman

JOE DONNELLY, Indiana
JERRY MCNERNEY, California
JOHN J. HALL, New York
JOHN BOOZMAN, Arkansas, Ranking
RICHARD H. BAKER, Louisiana
JERRY MORAN, Kansas

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public hearing records of the Committee on Veterans' Affairs are also published in electronic form. The printed hearing record remains the official version. Because electronic submissions are used to prepare both printed and electronic versions of the hearing record, the process of converting between various electronic formats may introduce unintentional errors or omissions. Such occurrences are inherent in the current publication process and should diminish as the process is further refined.

 

       

C O N T E N T S
May 17, 2007


Veterans Entrepreneurship and Self Employment

OPENING STATEMENTS

Chairwoman Stephanie Herseth Sandlin
    Prepared statement of Chairwoman Herseth Sandlin
Hon. John Boozman, Ranking Republican Member
    Prepared statement of Congressman Boozman
Hon. Susan A. Davis


WITNESSES

U.S. Small Business Administration:
 William D. Elmore, Associate Administrator, Veterans Business Development
    Prepared statement of Mr. Elmore
Louis J. Celli, Jr., Chairman, Advisory Committee for Veterans Business Affairs, and Chief Executive Officer, Northeast Veterans Business Resource Center
    Prepared statement of Mr. Celli
U.S. Department of Veterans Affairs, Scott F. Denniston, Director, Office of Small and Disadvantaged Business Utilization, Center for Veterans Enterprise
    Prepared statement of Mr. Denniston


American Legion, Joseph C. Sharpe, Jr., Deputy Director, Economic Commission
    Prepared statement of Mr. Sharpe
Halfaker and Associates, LLC, Washington, DC, F. Dawn Halfaker, Owner/Chief Executive Officer
    Prepared statement of Ms. Halfaker
MicroTech, LLC, Vienna, VA, Anthony R. Jimenez, President and Chief Executive Officer
    Prepared statement of Mr. Jimenez
National Veterans Business Development Corporation, The Veterans Corporation, Walter G. Blackwell, President and Chief Executive Officer
    Prepared statement of Mr. Blackwell
Oak Grove Technologies, Raleigh, NC, Mark Gross, President/Chief Executive Officer
    Prepared statement of Mr. Gross
Veterans Enterprise Training and Service Group, Inc. (VETS Group), Joe Wynn, President, and Member, Veterans Entrepreneurship Task Force (VET-Force)
    Prepared statement of Mr. Wynn
Vietnam Veterans of America, Richard F. Weidman, Executive Director for Policy and Government Affairs
    Prepared statement of Mr. Weidman


SUBMISSION FOR THE RECORD

Veterans of Foreign Wars of the United States, Eric A. Hilleman, Deputy Director, National Legislative Service, statement


MATERIAL SUBMITTED FOR THE RECORD

Executive Order 13360—Providing Opportunities for Service-Disabled Veteran Businesses To Increase Their Federal Contracting and Subcontracting, dated October 20, 2004


VETERANS ENTREPRENEURSHIP AND SELF EMPLOYMENT


Thursday, May 17, 2007
U. S. House of Representatives,
Subcommittee on Economic Opportunity,
Committee on Veterans' Affairs,
Washington, DC.

The subcommittee met, pursuant to notice, at 2:20 p.m., in Room 334, Cannon House Office Building, Hon. Stephanie Herseth Sandlin [Chairwoman of the Subcommittee] presiding.

Present:  Representatives Stephanie Herseth Sandlin, McNerney, Hall, and Boozman.

Also Present:  Representative Susan A. Davis of California.

OPENING STATEMENT OF CHAIRWOMAN HERSETH SANDLIN

Ms. HERSETH SANDLIN.  Good afternoon ladies and gentlemen.  The Veterans' Affairs Subcommittee on Economic Opportunity hearing on Veteran Entrepreneurship and Self Employment will come to order.  First, I ask unanimous consent that Ms. Susan Davis of California be invited to sit at the dais for this Subcommittee hearing today. 

Hearing no objection, so ordered. 

The ranking member and some of the panelists may recall a joint hearing we held with our colleagues on the Committee on Small Business back in May of 2005 on Veteran-Owned Small Businesses. 

Today's hearing will build upon that hearing as we receive testimony to explore the current state of veteran entrepreneurship and the challenges and obstacles they may encounter.  Small businesses are essential to economic prosperity.  The implementation of strong economic development plans, especially in rural States like South Dakota and certainly parts of Arkansas is essential.  Time and again, veterans have continually assisted in preserving this critical element of our Nation's economic prosperity.

In my home State of South Dakota, more than 17,000 veteran‑owned small businesses are operating.  These brave men and women add tremendous value to our economy when given the opportunity to start and manage their own businesses. 

Starting and growing a small business is no easy task and can be a difficult challenge.  I have heard of many of the difficulties that disabled veterans face when starting and developing a small business.  In addition, I have also heard from many members of the National Guard and Reserve in South Dakota who find it challenging to maintain their small businesses when deployed overseas to Iraq and Afghanistan and a number of those who return that look to pursue other opportunities separate from the career path they were on prior to deployment.  I look forward to working with Ranking Member Boozman and members of the Subcommittee to focus our efforts on assisting our Nation's veterans with these challenges.  I now recognize the Ranking Member, Mr. Boozman, for any opening remarks he may have.

[The statement of Chairwoman Herseth Sandlin appears in the Appendix.]

Mr. BOOZMAN.  Thank you, Madam Chairwoman.  In the interest of time, what I would like to do is just make a very brief statement and then submit the rest for the record if you don't have any objections.

Ms. HERSETH SANDLIN.  No objection.  So ordered.

Mr. BOOZMAN.  I am sure you are very pleased at that.

Ms. HERSETH SANDLIN.  Yes, yes, I appreciate it, because I know we have three panels today and a number of questions.

Mr. BOOZMAN.  And we have votes.

Ms. HERSETH SANDLIN.  I would defer to see if there is a brief opening statement that Ms. Davis might have.  Any opening comments? 

OPENING STATEMENT OF HON. SUSAN A. DAVIS

Mrs. DAVIS.  Thank you, Madam Chair, I appreciate being here today.  I have had an opportunity to serve with you briefly as well, and Mr. Boozman, when I was on the Veterans' Affairs Committee.  I think it has become clear to us in speaking to many of our veterans returning from Iraq and Afghanistan particularly that they are looking and hopeful of beginning, starting a small business with the skills that they bring back, and so it is very important that we try and understand what programs work.  What are the best practices?  How can we build on those?  And I am happy to be part of this today.  Thank you.

OPENING STATEMENT OF HON. JOHN BOOZMAN

Mr. BOOZMAN.  Can I just mention, Madam Chairwoman, again, I appreciate you having this because it is so important.  As Ms. Davis said, we have these people coming back, and I was an optometrist.  We had 80 or 90 employees prior to coming.  And I know how difficult it is to be a part of a small business, and so, again, I appreciate it. 

I know, in looking at some of the testimony and looking at some of the, just some of the comments that we have had, I think that it is fair to say that there is a level of dissatisfaction and disappointment with TVC's performance, and so, again, I am looking forward to the testimony and thank you for your leadership.

[The statement of Congressman Boozman appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you, Mr. Boozman.  I want to welcome our panelists testifying before the Subcommittee today.  Let me introduce our first panel, joining us is Ms. Dawn Halfaker, President and Chief Executive Officer of Halfaker and Associates, LLC; Mr. Mark Gross, President and Chief Executive Officer of Oak Grove Technologies; and Mr. Anthony Jimenez, President and Chief Executive Officer of MicroTech, LLC.

STATEMENTS OF F. DAWN HALFAKER, OWNER/CHIEF EXECUTIVE OFFICER, HALFAKER AND ASSOCIATES, LLC, WASHINGTON, DC; MARK GROSS, PRESIDENT/CHIEF EXECUTIVE OFFICER, OAK GROVE TECHNOLOGIES, RALEIGH, NC; AND ANTHONY R. JIMENEZ, PRESIDENT AND CHIEF EXECUTIVE OFFICER, MICROTECH, LLC, VIENNA, VA

Ms. HERSETH SANDLIN.  Welcome to all of you.  Thank you for being here, and Ms. Halfaker, we will go ahead and begin with your testimony.  You are recognized for 5 minutes.

STATEMENT OF F. DAWN HALFAKER

Ms. HALFAKER. Thank you.  Chairwoman Herseth Sandlin, Ranking Member Boozman and Subcommittee members.  I greatly appreciate the opportunity to testify at this hearing regarding veteran entrepreneurship and self employment.  And I am very honored to represent a newer generation of entrepreneurs and wounded war fighters, as I am an Operation Iraqi Freedom (OIF) veteran.  I am Captain Dawn Halfaker, retired, owner and CEO of Halfaker and Associates.  We are a woman‑owned, service‑disabled, veteran‑owned HUBZone small business providing national security consulting services to the Federal Government.  We are focused on mission support for the global war on terror in the areas of force protection and anti‑terrorism homeland security emergency management and chem biodefense operations.

I started the company in January 2006, a year and a half after I was severely wounded in action in Iraq.  As a result of my injuries I lost my right arm at the shoulder, but even more devastating, I lost my career as a military officer.  Like most of the wounded war fighters who are medically retired and off active duty, I really didn't know what I wanted to do with my career.  But I knew that I wanted to remain close to the fight and continue my service in some capacity. 

As a business owner, my company enabled me to do just that.  I have the opportunity to use my military skills and expertise to continue my service as well as the ability to work and provide jobs for other veterans.  My company competes for work within the Federal Government, primarily DOD, and targets contracting opportunities based not only on our capabilities that I mentioned but also the ability to be able to hire wounded veterans to perform the work that we get.

Since I began my business, we have realized a fair amount of success early on.  After a year and 5 months, we have gone from one employee to 12 employees, and our projected revenue through the end of calendar year 2007 is $2.5 million.  We currently have one prime contract and seven subcontracts and are obviously pursuing a number of other opportunities.

With this, many times people have asked me how we have done this so quickly and what resources we have used in our fair amount of success.  And my answer is always the same.  Hard work.  And as you mentioned other veteran business owners, I would just like to point out some of the resources that have been so useful to me.  One of the individuals, who happens to be sitting right next to me, and that is the CEO of Oak Grove Technologies.  I would just like to point this out because I think it is very important to realize, as a young small business owner, there are a lot of pitfalls that we can step into and get bogged down with things that may seem like good resources but in truth aren't really doing much to help us grow our businesses and are somewhat of a distraction. 

I would like to say that the best resources I have received is the help I have gotten from people who are willing to lend their time, their energy and their financial resources and give them to me at my disposal.  For example, Oak Grove Technologies has been setting up my Web site absolutely free.  Their only contingency is that it doesn't look better than theirs.  With that said, there have been a number of other things that they have helped out with.  They have helped us get our financial system in order, and they have given us a number of different H.R. functions, paperwork, just different things that you don't really know what you are getting into when you start a business.  So I would just like to point out that I think, as we move forward and as we are looking for things that are very valuable, I would just like to recognize the other servicemembers and veterans in the community for stepping up and reaching out and really helping people like myself.  And I think it would be valuable to point out that this has been my most efficient resource.  I really have not received a lot of help in any other aspect other than people in the community reaching out to me and saying, this is what you need to do to be successful.  So I think it might be worth looking into some kind of formal or informal program where other service‑disabled, veteran‑owned businesses, small businesses are able to help people like myself get started.  I think it is basically taking the mentor/protégé model and looking at how successful that has been and mainly looking at how we can implement that at a lower level. 

In sum, again, I would just like to say thank you for the opportunity to be here.  That is all I have.

[The statement of Ms. Halfaker appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you very much, Ms. Halfaker for your testimony.  Thank you for your service and for suggesting areas that we will be pursuing, not only with the other panels today but working with our staff and others that can evaluate some of the recommendations that you have made through your testimony. 

Mr. Gross, thank you for being here.  You are now recognized for 5 minutes.

STATEMENT OF MARK GROSS

Mr. GROSS.  Good morning, Chairwoman Herseth Sandlin, Ranking Member Boozman and members of the Subcommittee.  First, I want to thank everyone here for the invitation to come before you today and share some of my experiences within the veteran business community.  I am a veteran of the United States Army.  I founded Oak Grove Technologies, which is a service‑disabled, veteran‑owned company, 5 years ago this past August or this coming August.

Today I am proud to say that I employ over 140 people.  Over 70 percent of those employees are veterans, 16 percent of disabled veterans.  Geographically, we are dispersed in 16 States as well as supporting both Operation Enduring Freedom (OEF) and OIF, both Iraq and Afghanistan.  I am here today to offer testimony on behalf of the business community and to offer some of the benefits of some research and some opinions that myself on the Veteran Business Advisory Committee has been privy to. 

The question before the committee today is, what is the state of veterans entrepreneurship, obstacles faced by aspiring entrepreneurs, programs being relied upon by veterans and the current status of Federally funded programs to assist veterans? 

I feel that I am uniquely qualified to answer some of these questions, as I have not only built a successful business in this economic climate, but I have also taken on the task of mentoring a number of other disabled veterans' companies.  In my opinion, Congress has done an outstanding job in passing legislation, such as Public Laws 106‑50 and 108‑183, both of which established programs for the disabled veteran Federal goals and mandates in Federal contracting.  Some of the problems today revolve more around accountability within some of these agencies and their willingness to make attempts to meet these goals.

I am here to offer my views on what I think can be done to ensure the state of veterans entrepreneurship within the Federal Government.

Congress and this specific committee have been working with veteran business owners for years.  This issue is as important to our veterans as it is to you.  What we have seen, however, in many agencies has been, frankly, a cavalier attitude toward meeting this 3 percent goal.  I believe that many agencies believing that the mandate really doesn't apply to them. 

In 2005 alone, the Department of Defense awarded 0.49 percent of contracts to disabled veterans' companies.  Department of Defense accounts for roughly 70 percent of all government procurement spending, yet its repeated inability to meet service‑disabled veteran contracting goals make it all but impossible for the other agencies as a whole to meet their 3 percent goal. 

I would like to offer six recommendations on what can be done in order to meet that goal.  Some of the legislation—well, one is eliminate the "Rule of Two" wherein a contracting officer has to have two or more disabled veteran companies before they can set aside a procurement.  That is the only statutory program that has that requirement.  Both the 8(a) program and HUBZone program do not have that requirement to create a level playing field between the statutory programs by changing the "may" to "shall" when using restricted competition for service‑disabled programs.  Both the HUBZone and 8(a) program use shall be procured to those particular socio‑economic programs whereas in the disabled veteran community, it is the contracting officer.  They give them a lot of latitude as far as "may." 

Small business subcontracting plans, including all details of the plans, required by large prime contractors should be made public and accessible electronically upon request.

Mandate that contracting officers impose liquidated damages, as predicated by the Federal Acquisition Regulation (FAR) part 19.705‑07 for those large companies that fail to demonstrate a good faith effort to fulfill the requirement of their subcontracting plan. 

Close some of the loopholes in the GSA schedule FAR Par 8 wherein large businesses use small companies as fronts and take away business that really was intended for some of the small businesses. 

And penalize agencies that don't make a reasonable effort to maintain that, to meet that goal.

One of theI can't speak very intelligently about many of the Federal programs out there because, frankly, not many—I haven't used many of them.  One, I am aware of is The Veterans Corporation (TVC), and I am quite familiar with them.  We used to be co-located in the same building in Alexandria, Virginia.

I frankly don't quite know really what they do.  I had looked to them back in 2003 for some assistance and really didn't feel that there was a whole lot of assistance to be offered to me at that time.  I believe they do bonding and some things like that, but none of which were my line of business.

On the other hand, I would like to recognize two agencies that I feel do a great job as far as outreach, and that is the Department of Veterans Affairs, and that is the Army Small Business Office, both of which in my opinion have really taken the lead as far as outreach to the community.  We are proud to be the first disabled veteran's small business in the DOD Mentor Protégé program that was created by Public Law 108‑103, and this year we were awarded the DOD's Nunn‑Perry award for small business growth.

As an entrepreneur and veteran, I think the climate certainly has gotten a lot better than in the past 7 years.  We still have a long way to go, but I am confident that Congress, many of the Federal Agencies, like the VA and the Army, are committed to this cause.  And with that, I would just like to thank everyone for their time and all the efforts in improving the economic climate for disabled‑veteran small businesses.

[The statement of Mr. Gross appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you for your testimony, Mr. Gross, and your insights and your participation in mentoring other business owners, in describing your experience with different programs or lack thereof, based on how successful you have been as well as maybe a lack of clarity about what some of these programs can offer you, specifically.  We will explore that further as well. 

Mr. Jimenez you are recognized for 5 minutes.

STATEMENT OF ANTHONY R. JIMENEZ

Mr. JIMENEZ.  Good afternoon, Chairwoman Herseth Sandlin, Ranking Member Boozman and Subcommittee members.  It is a privilege to be here today.  I want to thank the Subcommittee for allowing me to share my thoughts regarding veteran entrepreneurship and, in particular, current programs funded by the Federal Government that support businesses owned by veterans.

I am CEO and president of MicroTech, which is a service‑disabled veteran-owned small business.  I retired from the Army approximately 4 years ago after serving 24 years.  I started as a private and ended as a Lieutenant Colonel and am confident that the experience that I learned as a veteran can be applied to the Federal Government as a contractor or subcontractor. 

I would like to begin today by clearing up what I believe to be a misconception about the primary obstacles facing service‑disabled veteran small businesses or SDVOSBs.  My sense is that there is a widely held belief that what service‑disabled veterans need most is access to training, capital and other elements that support business development goals.

In response to these perceived needs, The Veterans Corporation was created.  The Veterans Corporation provides many helpful tools for veterans looking to start a business, such as help with business plans, advice about contracting with the government, assistance obtaining financing and so on.  And I am sure this type of assistance is very valuable to many folks starting new businesses and particularly by those that have taken advantage of that.

But I do not believe that these are the primary factors holding back business from veterans, especially well established service‑disabled veterans. 

I believe that these companies are more in need of advocacy and opportunity than they are in need of startup assistance and support.  In fact, right now, today, there are over 12,500 service‑disabled, veteran‑owned small businesses and 37,000 veteran‑owned small businesses which have negotiated all the hurdles required to become registered in the Contractor Central Registry (CCR). 

Based on my personal knowledge and experience, I believe that the majority of these small businesses stand ready to deliver quality solutions to the government today.  I firmly believe that what service‑disabled veterans are in need of are genuine opportunities.  These are opportunities that allow them to demonstrate and grow their capabilities. 

To date, the government's record of identifying, setting aside and awarding contracts to service‑disabled veterans is disappointing at best.  The law mandates that the governmentwide goal for participation and government awards to service‑disabled veterans is 3 percent of the total value of all contracts awarded each year. 

To date, the government has fallen far short of that goal.  Let's contrast the difference between the approximately 12,500 service‑disabled veterans registered in the Central Contractor Registry, the CCR, to that of the approximately 10,000 8(a) small businesses registered.  The legally mandated goals for 8(a) and service‑disabled veterans are the same.  And the government consistently meets the requirements of setting 3 percent aside for 8(a) small businesses almost across the board.  What these circumstances translate into is a non‑level playing field for service‑disabled, veteran‑owned small businesses.  When you take DOD small business statistics for year 2001 through 2005, you will find that the targets for both 8(a) and service‑disabled veteran‑owned small business spending was over $31 billion each.  The target was essentially met for 8(a)s. The amount awarded to service‑disabled veterans was just under $7 billion.

That represents a deficit of nearly $25 billion worth of opportunities that were never afforded service‑disabled veteran‑owned small businesses.

Despite this disparity and according to the U.S. Small Business Administration (SBA), veteran entrepreneurs are successfully self‑employed at a higher rate than any other group of American citizens.  Imagine what service‑disabled veterans could do if they had the opportunities they desperately need.  We want to help create those opportunities and we need your help.  And I promise you that if you can provide the opportunities, veterans will respond.

My other question is, why does this disparity of opportunity occur, and what can we do about it?  I believe there are two factors, a lack of commitment to provide the mechanisms for service‑disabled veteran-owned small businesses to become large businesses and a lack of knowledge of the current perceptions about service‑disabled veterans.  Contracting officers and their customers are simply not aware of the depth and breadth of options available that service‑disabled veterans can provide. 

I believe that many in government are reluctant to set aside large complex efforts for service‑disabled veteran-owned small businesses for fear that the pool of respondents would be too small or that the offerings would be too expensive or noncompetitive.  I believe this reluctance is also felt by the general business community. 

Large businesses will never partner with or mentor service‑disabled veterans if they perceive resistance on the part of the government or if it seems the commitment to develop, grow or mentor service‑disabled veteran-owned small businesses is not genuine.  With respect to the service‑disabled veterans' ability to compete, I know from experience, it can be significant.  To win our second‑largest contract, which is a service‑disabled veteran-owned small businesses set‑aside, my company had to compete against 50 other service‑disabled veteran-owned small businesses to win.  We have successfully completed our base year of performance and are now working in our first option year, which is our second year of work.  Our customer is receiving top notch service at a very competitive price and, having seen our capabilities first hand, understands the value of setting aside opportunities for veterans and service‑disabled veterans. 

We are also one of 44 companies to receive an award on the U.S. General Services Administration, GSA, Veterans Technology Services, VETS, Governmentwide Acquisition Contract (GWAC).  Over 200 service‑disabled veterans bid on that opportunity in a very competitive selection process.

Another outstanding example of veteran entrepreneurship is the NASA SEWP contract, which stands for Solutions for Enterprise‑Wide Procurement.  SEWP provides the latest in information‑technology products, IT products, for all of the Federal Agencies.  Until recently, SEWP had only large, small and 8(a) businesses as primes.  On May 1, 2007, with the award of SEWP IV, six service‑disabled veteran-owned small businesses are now prime contractors on SEWP IV.  That means the Federal Agency now has the ability to procure the latest in IT products from service‑disabled veterans at a very competitive price. 

This is where advocacy comes in.  These success stories need to be told.  Government program managers, contracting officers and the business community at large should understand the significance in supporting small businesses that are owned by veterans.  And they need to hear concrete examples of success stories where businesses owned by veterans have delivered excellent results.  I think this type of educational advocacy should become an important part of any charter for any Federal programs that are funded by the Federal Government, such as The Veterans Corporation.

Another important resource that could help create opportunities for service‑disabled, veteran‑owned small businesses is a value that is gained when a large business partners with a service‑disabled, veteran‑owned business.  For many years, there has been an 8(a) Mentor Protégé program at SBA that enhances the capabilities of 8(a)s to compete more successfully for government contracts.  The program encourages private‑sector relationships and expands SBA's efforts to identify and respond to developmental needs of 8(a) clients.  Right now, there is nothing similar at the SBA for service‑disabled, veteran‑owned small businesses.

I personally know these types of relationships work.  Our largest contract is with the VA where we provide enterprise solutions for Microsoft products and associated services.  We are the prime on this contract, which is the largest contract ever awarded to a service‑disabled veteran-owned small business.  Our first award was $56 million.  The VA contract would have never happened if it hadn't been for VA's Office of Information and Technology and in particular Mr. Craig Niedermeier and Mr. Dan Nascimento and all of the great people in their offices that worked so hard to provide more opportunities for service‑disabled veterans.  This contract is an example of VA's commitment to service‑disabled, veteran‑owned small businesses.

Once potential service‑disabled, veteran‑owned small business bidders were identified each identified business worked hand in hand with the Microsoft Federal team made up of Brian Roach, Geary Brummell and Marc MacDonald, and each one was paired with a large account reseller so that they could put in a number of competitive bids.  Many companies worked together, and we in particular worked with Software Spectrum, who understood the need to mentor and assist service‑disabled, veteran‑owned small businesses.  And they continue to do so today.

We have expanded that relationship, and we are picking up skill transfer and knowledge transfer, which is essential for our growth.  We completed our base year of performance earlier this month, and we are now in our first option year, and VA is receiving top notch products and services at a very competitive price. 

They—the VA are very pleased with our services and our process for delivering products and solutions.  This contract continues to be a sterling example of what can happen when big business works with small business to create business opportunities, especially for service‑disabled, veteran‑owned small businesses.

I hope that my words have provided additional insight into veteran entrepreneurship and, in particular, the need to define the mission of current programs funded by the Federal Government.  With the right focus, many of these programs can serve as opportunity advocates and can help ensure businesses owned by veterans have the opportunities they need to be successful.

I am convinced that the harder the government works to identify opportunities for veterans, the more success stories there will be.  Thank you.

[The statement of Mr. Jimenez appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you, Mr. Jimenez 

We have been joined by two other members of the Subcommittee, Mr. McNerney of California and Mr. Hall of New York. 

I have a couple of initial questions, and then I am going to defer to the Ranking Member and the other members who have joined us here in the Subcommittee today for questions. 

Ms. Halfaker, let me just probe a little bit more on how you got started.  You talked about Mr. Gross and his help and other's who are service‑connected disabled veteran who own their own businesses or other veterans who may not be service‑connected disabled but who are business owners and the help they provided. 

Did the Small Business Administration, the Center For Veterans Enterprise (CVE) or The Veterans Corporation assist you in any way in getting your business started?  Was Mr. Gross part of the network of any of these three entities? 

Ms. HALFAKER. Madam Chairwoman, when I first started my business, I didn't know what any of those organizations were.  The first interaction that I had, in terms of becoming a business owner and realizing that there were actually resources out there, was probably through the SBA, just in going to their Web site and then initially meeting with a Score counselor at the SBA.  And that was a very limited interaction.  I paid, I think it was $40 and went to one class and realized that I was wasting my time.  And that is not to say anything about the SBA it is just, I think I was already at a point where I needed, I was a little bit more aggressive and needed some additional help other than the very basic resources that they were providing. 

So I continued to look and find other resources and tried to figure out how I was going to be able to accelerate the point my business was at and get to where I wanted to be quicker and attain my goals in terms of doing business with the government. 

In terms of the other organizations you mentioned, the only other interactions I have had are subsequent to starting my business and having really been already running it for about a year.  I would say it wasn't until maybe January of this year, a year after I started, when I really got involved with this community and obviously was introduced to Mr. Gross and started working with him, and then he also brought me into the community and introduced me to some other individuals.

Since that time, I have met with some members from Veterans Corp. They instructed me that they do have financial resources that they could help me get access to so I might pursue that.  I haven't decided yet.  But just exploring my options and learning, still learning what is out there.

Ms. HERSETH SANDLIN.  You established your business and it has been up and running for about a year, and it is now an established business.  You just described what The Veterans Corporation offered as relating to financing opportunities and the financial resources.  Do you agree with Mr. Jimenez that the best help for you at this stage, now that your business is established, that to grow your business is the advocacy and the opportunity factors versus the training and other assistance, such as financial assistance? 

Or do you think, since it is a fairly new business, that you still need access to some of the training and the other assistance in addition to advocacy and opportunity? 

Ms. HALFAKER. Madam Chairwoman, I would say that it is a little bit of both.  I believe that my business—first of all, I do agree, to answer your question, with Mr. Jimenez, and my business being a year and a half old is still at the point where we can benefit tremendously from some mentorship.  But that mentorship, from what I have experienced, comes from a trusted partner, somebody who, you know, you leave the service and there is an element of trust.  You are used to being in an environment with people who basically would do anything for your life, and you go into a business environment, and it is a, I would say, a completely different kind of combat, and you don't know who you can trust.  There are a lot of different avenues you can go down.  There are so many resources out there that it is very confusing.  And the worst thing for a business—and I think some somebody mentioned this already—is to waste your time with something that is not going to ever help you grow your business.  So, that said, I think that there are resources out there, but I found the most effective resources to be other businesses, and I do agree with Mr. Jimenez

Ms. HERSETH SANDLIN.  Thank you. 

Mr. Boozman?

Mr. BOOZMAN.  Thank you, Madam Chairwoman.  I think one of you all mentioned that the climate seems to be a little bit better now than it was, and certainly this Subcommittee, in a very bipartisan way, has really been working on that, and it seems like in dealing with the agencies involved, that in some cases you were having a little bit of success. 

That being said though—and all of you have seem to run across a little bit of an attitude with various procurement officers.  I think in your testimony, Ms. Halfaker, you talk about being some place and somebody saying you and everybody else as far as the veterans' set‑aside, Mr. Jimenez and Mr. Gross also, mentioned similar types of things. 

So I guess something that—and again, we can talk about this, Madam Chairwoman—but I would really like to have some procurement officers over here and maybe get some of those that are doing a good job that seem to have figured this out because my experience is that, for the most part, these are good folks that are working hard.  However, sometimes they don't have the understanding of how to make it work where it is just easier to do it the way it has always been done so if we can, again, we will visit but if we could have a roundtable or something, and talk about maybe some of the men and women that are doing a good job of that, their experiences, some of you, that have done a good job of playing that game, I think that would be valuable. 

Very quickly, one of the things that we are trying to do is bring the GI Bill up in the sense of getting it into the 21st century.  Do you in your experiences of getting education for the businesses that you are in or continuing education, is there anything you have run across that maybe helped or was a hindrance?  Perhaps we can work on in that aspect also with the entrepreneurship? 

For instance, one of the things we are trying to do is frontload, some of the short courses, trust, don't go as long, frontload the GI Bill to that sort of thing so you can go ahead and get the payment versus—go ahead.

Mr. GROSS.  For me, the GI Bill, the GI Bill actually paid for my education.  So the GI Bill worked very well for me.  I believe that, you know, giving folks the opportunities GI Bill funds for, you know, for educational purposes that may not be, you know, pursuing a bachelor degree or that sort of thing I think would be very valuable.  So I think using the GI Bill funds for training and some mentorship that sort of thing, I think the question then becomes, what organization is going to provide that? 

Mr. JIMENEZ.  Sir, if I may, I often referred to myself in the Army as the poster child for the GI Bill.  I came from a very modest family.  Neither of my parents were college graduates.  In fact, neither were high school graduates.  They didn't get their GEDs until late in life.  And they didn't have the means to pay for college, so we had one of two options; either be very smart or be very good at sports.  I was neither, so I found myself leaning more toward the military.  And fortunately for me, they liked me as much as I liked them.  And I was able to benefit from the GI Bill, which today I sit here with two master's degrees and a ton of experience and education that I owe to the Federal Government, to the U.S. Army in particular for having sent me to school on the GI Bill, and more importantly the guidance that I received from both the Army and the VA in how to best utilize my benefits.  And I utilized the heck out of them. 

I never have ever paid for any education, which I find shocking to this day; yet I was able to rise from Private E1 in the Army to Lieutenant Colonel 05 in the Army, and I went from being responsible for nothing to ultimately everything.  My last job prior to leaving was the program director of eArmyU, and here I was a guy who started out with no degree to managing a program that educated 45,000 soldiers.  I thought it was just a phenomenal opportunity to show the great things that could happen.  And I continue to think that even though there are disadvantages to serving in the military, the advantages far outweigh the disadvantages.  It was an eye opener for me.

And it provided me with a business foundation I desperately needed to be successful.  Had I not gotten that education and been able to take advantage of those benefits, I probably would have returned back to the neighborhood where I surely would not have been as successful.

Mr. BOOZMAN.  Thank you, Madam Chairman, and thanks to the panel.

Ms. HERSETH SANDLIN.  Thank you. 

Ms. Halfaker, did you want to take an opportunity to respond to Mr. Boozman's question?  You don't need to.  I just wanted to make sure I gave you the opportunity despite time being—okay, all right, I do want to now recognize Mr. McNerney for any opening statement or questions for the panel.

Mr. MCNERNEY.  Thank you, Madam Chairman. 

I don't have an opening statement.  I do have some questions. 

Mr. Gross, I was delighted to hear you say that the VA, along with the Army Small Business Department,were very helpful to you.  Could you answer fairly directly, without the SBA, would you have been able to start a business?  Without the SBA, CVE and TVC, would you have been able to start a business? 

Mr. GROSS.  Well, CVE is part of VA, so, actually, I, frankly, relied on CVE early on quite a bit.  So, you know, they kept a calendar of all procurement opportunity conferences and that sort of thing.  So I did rely on CVE..

Mr. MCNERNEY.  And they helped you develop a business plan? 

Mr. GROSS.  I wrote my own business plan.  They didn't help me write a business plan, but it was a good place to go for outreach as far as the future procurement opportunities.  And I will say and I know CVE has done a lot for me where they have provided outreach and brought the program managers from different VA opportunities and linked them up with contractors like myself to do direct capability briefings and so CVE has been helpful to me.  SBA and TVC, I, frankly, haven't really gone to them, so I can't comment one way or the other. 

Mr. MCNERNEY.  Okay, thank you.

Mr. Jimenez, you are pretty blunt about lack of commitment being a big problem.  And could you expand whether that is just the 3 percent, or is it also a lack of commitment from people within the administration? 

Mr. JIMENEZ.  Sir, I think it would be safe to say and I think probably just to give you kind of an idea of my—and I won't call it a tainted view—but my view as a business owner is that I was in the procurement business in the Army and found it extremely difficult to get the flow down of information you needed about changes in the FAR and new legislation. 

What I found when I got out was that I was much more educated than many of the folks I was going to visit that were responsible for procurement and in particular changes to the procurement law.  What I found was that, every time I walked in, I would have to educate contracting officers, program managers, folks who were responsible for opportunities and providing those opportunities in the Federal Government. 

It was an education process.  And the education process was extremely difficult, trying to make them understand what the difference was, what a veteran was, what a service‑disabled veteran‑owned small business was, what the difference was between 8(a) and service‑disabled veteran small business and what were some of the laws or FAR clauses that would allow them to be able to provide me an opportunity to compete. 

What I honestly believe is happening now is contracting officers, like many other folks in the Federal Government, are overworked, and they are more concerned at this point about providing satisfaction for the Federal Government by procuring what they can at the best cost.  So the additional burden of having to provide opportunities to certain socio‑economic type groups is creating a problem for many of them, and many of them just aren't interested in doing that. 

I think the education process has been significant, but what I think would help that is to have somebody letting them know that they are being checked on, that it is down to the lower level.  It seems to me that it reaches to the agency level, and the agency is responsible for announcing, we have met our goals or we haven't met our goals, but there is nobody at the top of the agency serving as the advocate for many of the agencies. 

And exceptions obviously are the U.S. Army and Veterans Affairs and GSA where folks there have advocacy at the very top.  Unfortunately, the other agencies, they almost seem to be absent landlords when it comes to taking care of service‑disabled veterans.  You tell them.  You speak with them.  You meet with them.  You explain the advantages of contracting with the service‑disabled veteran.  Some of the opportunities, even in my case, some of the vehicles that I have, you plead with them.  You respond to sources sought.  You respond to Requests for Information (RFIs), and yet you don't see anything. 

And what I desperately need is somebody besides myselfan advocate at these agencies saying, we will provide opportunities for service‑disabled veterans.  I have been empowered.  I am going to go down and tell contracting officers.  And many of the small business offices just don't have the resources to be able to do that.  And that is where I think that agencies that are funded, such as TVC, might be able to assist in that by maybe at least being a watchdog group in the sense of who is going, well, who is not doing well; why haven't you turned this into a service‑disabled veterans set‑aside; this is a good fit; this would be a good opportunity for a service‑disabled veteran. 

And aside from some of the small business offices, I happen to be a big fan of the CVE.  I think they do a great job within the VA of being that voice I just described.  And I am not saying it because Mr. Denniston is sitting behind me, but he has been a friend to service‑disabled veterans since the day I started my business, and he has been a friend to me.  He does it in a very of agnostic process in that he provides opportunities for all service‑disabled veterans, and we all get a chance to compete, and they are coming very fast but VA is just one agency.  The Army is just one agency.

The other agencies, unfortunately—GSA is a great agency—the other agencies, we have difficulty getting them to acknowledge that service‑disabled veterans are meaningful in the small business relationship piece. 

Mr. MCNERNEY.  Very informative answer.  Thank you. 

Ms. HERSETH SANDLIN.  Thank you, Mr. McNerney. 

Mr. Hall, do you have questions or an opening statement? 

Mr. HALL.  Thank you, Madam Chair. 

I have questions.  And first of all, thanks to all three of our panelists for your service and for your continuing service now and for coming here and sharing your experience and your observations with us.

And, Mr. Jimenez, I couldn't help but thinking, as you told your story of where you have come from and where you are now and your masters degrees and your success in businesses and so on, it is too bad it doesn't fit into a 30‑second commercial.  Very inspiring.  It is kind of like the advertising slogan, "Be All That You Can Be," but really expounded upon.  And I think it would be good for a lot of people to hear your comments about the advantages of being in the service far outweighing the disadvantages.  And this goes for all of you, but especially the way you described it, Mr. Jimenez, your initiative and energy and accomplishing those things.  It was nice that the opportunities were there.  But it takes personal fortitude to take advantage of them so.

Ms. Halfaker, I just want to ask you, in terms of achieving the 3 percent goal—I think this question maybe all three of you can answer if you like—how can we help that goal be achieved?  Would an ombudsman represent veterans with all the different agencies that you might seek to procure contracts or compete for contracts with, is that an idea that might be worth something and any of the suggestions to make sure that fair and equal consideration is given to those veterans and that procurement officers are not, either because they are so busy or because of the way things have always been done or whatever reason, that they don't overlook the importance of our veterans having this opportunity?  It is a long question, but answer it however you like. 

Ms. Halfaker first.

Ms. HALFAKER. Yes.  I would just like to comment that I do believe that there is certainly an accountability issue that has already been brought up, and maybe it is a lack of resources from the side of the procuring officers and the contracting officers.  But I think if there was just—there is a systemic problem, though.  And it is a lack of caring on their part, and it is permeating, I think, you know, through many of the agencies and the agencies I have had experience with, particularly even the Navy, which I mean that just shouldn't happen.  These are our own people.  And I have run into a couple of different situations personally where people have just downright told me we don't care; how does this affect me?  And it is simply a matter because it doesn't affect them because there is no negative reinforcement or repercussions when they don't do the right thing and they don't follow the rules.

So I guess I would just like to say that any kind of support that anybody can give would be helpful because I think that, you know, even if there is not—I do believe that there has to be some kind of consequence.  But even if there isn't, just to show you guys just being here shows a tremendous amount of support but even taking that a step further and putting your name on something I think is really taking the first step in saying this is important and taking care of our veterans, veteran business owners, is important.

Mr. HALL.  Perhaps one idea might be to fence off or to quarantine that 3 percent of the budget until it is used for veterans' projects or unless it can be proven that no veterans have applied for those, have bid for those projects. 

Mr. GROSS.  I think that is a great idea.  You know, I think there needs to be a, you know, a reward/penalty program.  I think we need to reward those who are making an effort and who are advocating, and penalize with budget those who don't.

Mr. HALL.  Any thoughts on the idea of an ombudsman to keep an eye on all the different agencies? 

Mr. GROSS.  Well, I think we start at the Office of Federal Procurement Policy (OFPP).  Start there. 

Mr. HALL.  They are supposed to be doing that? 

Mr. GROSS.  Right.

Mr. JIMENEZ.  Sir, I agree with both Mr. Gross and Ms. Halfaker in that I—they bring up some very good points.  We are not going to be able to change the mindset of people.  They believe what they believe, and some will see value and some won't, no matter how much you confuse them with the facts.

I think the ombudsman is a good idea.  But I think Mr. Gross just made an important point, and that is that the Office of Federal Procurement Policy has the ability to do something very similar—I am assuming, and I have not worked there, and I am not up on what capabilities they might have or what they might not have.  But it would seem to me that if they in fact are the policy branch that would provide that, that that would be a good place to put somebody, but more importantly, I think that if the dollars were fenced off and if I, as a contracting officer, knew that if I used those dollars for service‑disabled veterans, that provides me with the opportunity to provide opportunity to service‑disabled veterans; and that if I don't, I leave money on the table when money is tight; I think that would be would go a very long way to providing opportunities for veterans and service‑disabled veterans. 

I think the ombudsman is a good idea, but without the ability to actually go in and provide penalties or to enforce the legislation that is presently in place, I think it would just be another position that unfortunately would be powerless to make changes. 

Mr. HALL.  Thank you, Madam Chair.

Ms. HERSETH SANDLIN.  Thank you, Mr. Hall, and we will follow up with you on some of the ideas that you are so gifted in generating in our hearings. 

Ms. Davis do you have questions for the panel?

Mrs. DAVIS.  Thank you, Madam Chair, and again, thank you for holding this hearing.  As someone who has been an advocate I would say for The Veterans Corporation and some of the good work that they do, I am really interested in what you had to say.  And I know that, through the course of the hearing, we will have an opportunity to talk to a number of different entities that are very involved with trying to provide those kinds of opportunities. 

But I would say, Madam Chair, I would certainly, certainly endorse my colleague's point of view in terms of, how could you do that?  Money talks, we all know that.  And so if there is some way within the procurement area or others that you can provide incentives for those who would get credit for having established a track record for helping service‑disabled veterans, I think that would be significant. 

It may be that, you know, there is a contract here and there, but what we are looking for is those who are strong advocates, put their energy and their investment of time and resources into providing that and really establishing all the poster companies I think that grow out of this.  So I would hope that perhaps we could look at that. 

But I wanted to see—you mentioned The Veterans Corporation.  How do you see them as either providing the monitoring, the oversight that you think could be a stronger part of their role? 

Mr. JIMENEZ.  And I have talked to Mr. Blackwell, ma'am, on this subject.  I think he has a great organization.  I think he is a great advocate.  Unfortunately, I don't think that he has that charter or the ability to go out and do the things that I as an established small business need for him to do for me.  And that is, when he shows up and asks, why is this set‑aside not a service‑disabled set‑aside, or why is this small business set‑aside not a service‑disabled set‑aside, or why is this large business opportunity not a set‑aside; the first question is, who are you, and the second question is because we don't want to.

I think if Mr. Blackwell were given the opportunity, perhaps through a charter or some way, I think he would be able to do that quite effectively, and I think a number of folks would.  But he is in the same situation.  Without tools and enforcement, there is just not much anybody is going to be able to do.

Mrs. DAVIS.  If I could follow up quickly just in terms of policies.  Are there policies in contracting, such as bundling jobs, that you think get in the way of this as well?  I know, I am from San Diego, and we have a number of small businesses that are very frustrated often because they don't hear about the jobs or it is very difficult for them engage in the process. 

Mr. JIMENEZ.  I think the government has done a much better job particularly in the last 3 or 4 years of not doing the bundling.  However, I am concerned about the fact that sometimes bundling does leave service‑disabled veterans out in the cold.  And more importantly, what I find is the problem that comes with bundling is not that it exists but that nobody goes in when there is a large corporation and says, we intend to do 20 percent small business, make a small business plan that includes 20 percent service‑disabled, 20 percent 8(a) or small business, and they don't do it.  And when they don't do it, nobody does anything about it.  There are no penalties.  There are no liquidated damages.  And more importantly, nobody knows because there is nobody that has the ability to check.

So, first off, we have to identify that, in fact, didn't happen; that somebody said they were going to give business to small business or to service‑disabled veterans or 8(a) or woman‑owned or HUBZone, and when they didn't, somebody did something about it. 

Mrs. DAVIS.  Would you either of you like to comment? 

Mr. GROSS.  That is a big problem today.  Many of the larger procurements, when the larger companies—I believe the threshold is $500,000 or greater—they are required to provide in their proposal a small business subcontracting plan.  When, you know—and I myself have gone through this.  You know, you put a lot of time and effort into a bid and proposal dollars into, you know, going after an opportunity with the company.  They win, and they give you nothing, and there is not a whole lot you can do.  There is really—now that contracting officer has the ability within the FAR to assess liquidated damages against that contractor.  But it is hardly ever done. 

Mrs. DAVIS.  Thank you.  I guess the other question would be, quickly, how many people or how many positions do we have that are serving as enforcement in this area and really monitoring to see what is happening?  Thank you. 

Mr. GROSS.  I don't believe there are any.  I know SBA, I will say, they have the ability.  And I have used the PCRs, which is the Procurement Contracting Representatives.  They have the ability to help out in the field.  But they are hard to get to.  And like anything else, some are better than others. 

Mrs. DAVIS.  Thank you very much. 

Thank you, Madam Chairwoman.

Ms. HERSETH SANDLIN.  Thank you, Ms. Davis, for joining us and for your questions.  Mr. Boozman, do you have follow up questions for the panel? 

I have just a couple because we have two more panels, and just a couple of observations.  I think Mr. Boozman makes a strong recommendation that we do need to follow‑up and invite others that are procurement officers, perhaps someone from the Office of Federal Procurement Policy, perhaps someone specifically from the SBA to address the enforcement issue.  I also think, as Mr. Jimenez said, and I think you are particularly well situated to serve as an advocate given your years as a procurement officer as well within the Army, that maybe we need to address this in two different ways; someone at the head of each agency that is responsible as an advocate, but then an overall sort of watch dog group where there is an enforcement mechanism built in and that we are ensuring an adequate number of FTEs to do that either within an agency or within an umbrella group.

That does go to the issue of accountability that, Mr. Gross, you mentioned at the beginning.  Where is the accountability within the agencies and the willingness to take on the congressional objectives that we have stated?  It seems where there have been successes when you have an entity like CVE within VA that is serving in that advocacy role. 

One thing that you had mentioned, Mr. Gross, was the issue of some larger companies using small companies as a front.  I have heard this from other small business owners that I represent in South Dakota.  Have you filed complaints?  Do you work with SBA?  Is there still the lack of an identified enforcement mechanism to address this issue? 

Mr. GROSS.  Well, it is, frankly, it is just a loophole in the process, in the reporting process, so like with the GSA schedules, if a company like myself has a GSA schedule, you know, agencies will target you, but the FAR Part 19 rules don't apply on the GSA schedule, so what happens is—and this is a good example—if I was pursuing an opportunity with Department of Army, and it was a contract to provide 10 people, if they set it aside as a small business set‑aside, I maintain 51 percent of that contract.  Well, 51 percent really gives you control. 

Using the GSA schedule, what they will do is they will take a large contractor, use your vehicle; you may get one position and the large contractor gets nine.  Well, clearly you have zero control.  But the agency gets 100 percent credit for small business, and they take the credit for the socio‑economic program, too, under the GSA schedule.

And so when I have run into that myself, I called the contracting officer and said, hey, look, in the spirit of the program, this isn't the right thing to do.  And he said, well, I understand, but it gives me the credit, and it is an easy way to do it.  And the GSA reporting, online reporting, provides that to him, so he is not going to do anything that is technically wrong.

Ms. HERSETH SANDLIN.  Well, thank you, again, for your insights.  There are a number of areas that I think many members of the Subcommittee, again, working with our staff and with you, would like to follow up on and get some concrete proposals on how we can either get rid of loopholes, how we can look at changes to charters, how we can look at accountability through an incentives and penalization process to meet the 3 percent requirement.  As we vet some of these proposals and develop them further, we may very well be looking to you in a more informal basis to help these ideas percolate even further.

I thank all of you for your testimony.  I will now invite the second panel to the witness table.

Let me thank each and every one of you for your service to the country, your years in the Army.  You were with the Army, as well, Ms. Halfaker?

Ms. HALFAKER. Yes.

Ms. HERSETH SANDLIN.  Thank you all for that service and for what you are doing now to create jobs, particularly for veterans and particularly service‑disabled veterans that you employ. 

Panel two, as they make their way up to the table, let me introduce them to the Subcommittee and our guests in the audience today.

We have Mr. Joe Wynn, President of the Veterans Enterprise Training and Service Group, Incorporated; Mr. Joseph Sharpe, Deputy Director for the Economic Commission of the American Legion; and Mr. Richard Weidman, Executive Director for Policy and Government Affairs for the Vietnam Veterans of America.  I welcome all of you back to the Subcommittee.  We look forward to your testimony.

STATEMENTS OF JOE WYNN, PRESIDENT, VETERANS ENTERPRISE TRAINING AND SERVICE GROUP, INC. (VETS GROUP), AND MEMBER, VETERANS ENTREPRENEURSHIP TASK FORCE (VET-FORCE); JOSEPH C. SHARPE, JR., DEPUTY DIRECTOR, ECONOMIC COMMISSION, AMERICAN LEGION; AND RICHARD F. WEIDMAN, EXECUTIVE DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF AMERICA

Ms. HERSETH SANDLIN.  Mr. Wynn, why don't we start with you this afternoon on this panel.  You are recognized for 5 minutes.

STATEMENT OF JOE WYNN

Mr. WYNN.   Good afternoon, Chairwoman Herseth Sandlin, Ranking Member Boozman and distinguished members of the Subcommittee. 

Let me first thank you for the opportunity to come before you today to share some of my views and the collective views of many veterans and service‑disabled veteran business owners, veterans who served with honor and many who received distinguished honors for displaying valor and courage during their periods of military service. 

Though my time of service was many years ago, as a veteran of the U.S. Air Force with the 66th Strategic Missile Squadron, I still have a very vivid memory of the military experience.  As a lifetime member of the National Association for Black Veterans, I have spent the past 16 years or more assisting veterans and, in recent years, serving as a Commissioner of the congressionally appointed Veterans Disability Benefits Commission, Treasurer for the Veterans Entrepreneurship Task Force, and as President of the Veterans Enterprise Training and Services Group, referred to as the "VETS Group," which is a nonprofit, community‑based organization providing supportive services to veterans seeking to start or expand their own small businesses. 

Since the Vietnam era, America has been involved in numerous conflicts, missions and peacekeeping endeavors, and since the tragedy that overtook America on September 11, 2001, we are still engaged in the global war on terrorism, primarily in Iraq and Afghanistan where the death toll continues to rise despite the best efforts to end this ordeal. 

Now a new generation of veterans exists.  They are well‑trained, loyal, battle‑tested, and underemployed.  Those who return with loss of limbs, mental disorders and/or other severe disabilities face the greatest challenges of all. 

In the past few months, since the difficulties of service members' transitioning from their active duty military under the DOD, Department of Defense, system through the Walter Reed Army Medical Center into the VA system have come to light, it is now evident that we have been unsuccessful in providing the originally promised assistance our veterans have earned, deserve and require so that they would have the opportunity to be as successful in their civilian pursuits as they were in their military assignments. 

I commend this 110th Congress and its leadership for rising to the occasion from both sides of the aisle, as evidenced by the many hearings, roundtable discussions and over 200 pieces of legislation related to veterans introduced in your first 5 months.  Some have already passed the House or Senate, but only a few have been directed toward veterans entrepreneurship, which is the focus of this hearing today. 

So let me summarize my views on this topic, relative to the assistance veterans have to work with, in my remaining few minutes, though I hope that a more detailed discussion of the issues will be considered before actions are taken. 

If veterans and service‑disabled, veteran‑owned businesses are to succeed, it will more than likely take place in the public sector where there are trillions of dollars in contract opportunities from a multitude of goods and services.  But veteran businesses will have to overcome a number of impediments, some of which are resistant to change across all agencies—no enforcement of prime subcontracting plans, inaccurate agency data, miscodings, double counting, and the perception that procurements are based on just who you know and that the pie for small businesses is shrinking, not to mention there is contract bundling. 

As we all know, two major pieces of legislation really set the stage for the emergence of today's veteran entrepreneurs.  You, Congress, did an excellent job of laying the foundation for veterans entrepreneurship to succeed in America when you passed the Veterans Entrepreneurship and Small Business Development Act of 1999, referred to as Public Law 106‑50.  Public Law 106‑50 also created some new entities and the restructuring of some existing ones in order to assist veterans in pursuit of entrepreneurship.  These three entities were the Small Business Administration's Office of Veterans Business Development, the VA Center for Veterans Enterprise, and the National Veterans Business Development Corporation. 

There was another piece of legislation that came later, Public Law 108‑183, which essentially made it mandatory that agencies and prime contractors procure a minimum of 3 percent—it made it mandatory to procure a 3 percent minimum of goods and services from service‑disabled, veteran‑owned businesses. 

Following that, we also had Executive Order 13360, which many of you are familiar with now, which essentially directed agencies to carry out the laws that previously came before it, but of the three government entities created to deal with this situation, The Veterans Corporation appears to be somewhat misdirected. 

The Office of Veterans Business Development is still buried in the shadows of the Small Business Administration, while the Center for Veterans Enterprise is continuing to show some promise.  These entities should collectively be assisting in identifying and registering the capabilities of veteran business owners, developing relationships with agency procurement officers, matching veteran businesses with prime and subcontracting opportunities, expanding the pool of capable and qualified veteran‑owned small businesses, while alleviating barriers to discrimination and demanding that agencies follow the law. 

Much has been said about the seemingly poor performance of the National Veterans Business Development Corporation.  Let me just say that, in essence, the heart of the matter seems to come down to the amount of appropriations received over a short number of years, some $14‑plus million, with no contracts for service‑disabled veterans to really speak of. 

Bottom line, a business has to get business to survive.  So we can count Web sites, hits on a Web site, we can talk about the number of contact visits, we can talk about the number of training sessions; but the bottom line is, businesses have to get some contracts. 

Many veterans still do not know that The Veterans Corporation even exists, and this may be partly because of the facility and the location, where they are.  There is no really visible, public way for people to know that it is located there.  It would be nice at some point, though, if that particular organization had a portion that was open to the public wherein it could have a state‑of‑the‑art facility where veterans could come and learn about small business and exchange information and network with other small business owners. 

Right now, it seems as though The Veterans Corporation provides duplicative services and limited funding for four Veterans Business Resource Centers.  Now, these services and centers are needed, but it is just that we also have 1,400 other small business centers operated by the Small Business Development Center, each having access to Web sites, and most are affiliated with colleges and universities.  We also have access to one‑on‑one counseling, training, workshops, and seminars through the Procurement Technical Assistance Centers, which are located throughout the country. 

There is also a lack of Federal contracting assistance for veteran business owners, and this has been a major issue because as you heard from some of the witnesses on the first panel, the real issue with the veterans and contracting right now is with the Federal marketplace; and unless we have a true advocate that is actually speaking up on behalf of the veterans in the Federal marketplace, it continues to be very difficult for veterans to move forward and receive the contracts that they deserve. 

It was thought in the beginning, when TVC was first founded, that it would, in fact, be that national veterans advocate for veteran business owners, particularly in light of the fact that their board of directors is appointed by the President.  It was thought that this organization would be able to go head‑to‑head with agency heads throughout the government, speaking on behalf of veteran business owners. 

Let me just move quickly to a couple of comments about the Office of Veterans Business Development under the SBA. 

Ms. HERSETH SANDLIN.  Mr. Wynn, if you could, just wrap up within about another minute as they are going to call votes on us probably; and I would like to get through the other two witnesses' testimonies before we may have to go.

Mr. WYNN.   I sure will. 

I will just quickly say that the Office of Veterans Business Development has been doing a tremendous job with limited resources to reach out to veterans here.  Recently, they expanded their staff to include an experienced person to help with Federal contracting. 

As far as the Center for Veterans Enterprise is concerned, they have been doing a tremendous job as well.  As you know, they also maintain the database for veteran business owners, and they have been doing a tremendous job of outreach to veterans in the community in terms of helping them understand and navigate the Federal marketplace. 

Let me, just on that note, mention that, while we applaud the VA with becoming the first Federal agency soon to implement legislation that will prioritize the use of service‑disabled veterans and veterans in Federal contracting, we still need to better understand the role that CVE plays in relationship to the Office of Small Business and Disadvantaged Business Utilization under the VA.  They work together, and there are still some aspects of that that would be helpful.  That can conclude my statement. 

Thank you. 

Ms. HERSETH SANDLIN.  Thank you, Mr. Wynn. 

[The statement of Mr. Wynn appears in the Appendix.]

Ms. HERSETH SANDLIN.  I would just remind all of our witnesses on this panel and the next one that your full statements will be made part of the record, and I never like interrupting anyone in their statement.  Given that we have just gotten notice that there may be votes, I just wanted to make sure that we were able to get through the testimony of the other two panelists. 

Mr. Wynn, I appreciate all of the recommendations that you included in your full statement, and we will be taking a very close look at those in addition to those that you articulated in the last few minutes. 

Let me now move to Mr. Sharpe.  You have 5 minutes for your opening statement.

STATEMENT OF JOSEPH C. SHARPE, JR.

Mr. SHARPE.  Madam Chairman and members of the Subcommittee, I appreciate this opportunity to share the views of the American Legion on the state of veterans entrepreneurship and self‑employment, obstacles faced by veterans, and the programs they rely on. 

The American Legion views small business as the backbone of the American economy.  It is the mobilizing force behind America's past economic growth and will continue to be the major factor as we move well into the 21st century. 

Presently, more than nine out of every ten businesses are small firms which produce approximately half of the gross national product.  Currently, over one‑half of the Nation's workforce is employed by a small business with the average company employing approximately 11 persons.  Small businesses create, by some estimates, 60 to 80 percent of all net new jobs, thereby providing an essential element for strong economic growth. 

Government should assist in the creation of new jobs by encouraging qualified entrepreneurs to start and expand their small businesses.  No group is better qualified or deserving of this type of assistance than our veterans.  Congress enacted the Veterans Entrepreneurship and Small Business Development Act of 1999, Public Law 106‑50, to assist veteran and service‑connected‑disabled, veteran‑owned businesses by creating the National Veterans Business Development Corporation. 

In the beginning of its inception, The Veterans Corporation created a veterans entrepreneur training program to promote and foster successful veteran entrepreneurship within the veteran business community, but this program no longer operates.  Currently, the organization's main efforts have been to provide distance‑learning education, veteran entrepreneur training in how to start and expand their own businesses, to include training in finance, accounting and contracting. 

The Veterans Corporation has gone through a number of mission and staffing changes since its inception.  Its latest version is to assist Guard and Reserves and transitioning members of the Armed Forces and their families with the establishment of their own businesses. 

TVC has, in the past, stressed creating online education programs to assist veterans with obtaining basic literacy skills, hosted by other third‑party organizations.  Their current plans are to create an online platform to match veterans with entrepreneur education and career opportunities and to provide grants to Small Business Development Centers around the country and to other business development organizations to specifically assist veterans. 

In conclusion, the American Legion realizes the National Business Development Corporation, created through Public Law 106‑50, was uniquely positioned to provide American veterans with superior entrepreneur training and business resources that show them how to start or to grow their businesses and, in turn, to contribute to the economic well‑being of the Nation. 

The American Legion believes that TVC has not fulfilled the mandates of Public Law 106‑50 and is actively moving away from those mandates of the public law by focusing their efforts and funding on online entrepreneur programs that they believe would maximize their available resources and reach more returning veterans.  Therefore, the American Legion strongly recommends that the Small Business Administration Office of Veterans Business Development be the lead agency to ensure that veterans returning from Iraq and Afghanistan, particularly, are provided with entrepreneur development assistance. 

Comprehensive training should be handled by SBA and augmented by TVC's online training. 

The American Legion strongly supports the mandates of Public Law 106‑50 that were designed to assist all veterans wishing to start, expand or protect their businesses.  If there is a true desire to assist veterans, especially those returning from Iraq and Afghanistan, in developing small businesses, we must work together to enforce the mandates of Public Law 106‑50. 

Madam Chairman, this concludes my testimony.  I appreciate the opportunity to present the American Legion's views on these important, timely topics. 

[The statement of Mr. Sharpe appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you very much, Mr. Sharpe, for your testimony and for being here today.

Mr. Weidman, you have 5 minutes.  Although that was our 15‑minute bell, that will be just right for you to give us your opening statement and then for us to return for questions that we may have for all three of you. 

STATEMENT OF RICHARD F. WEIDMAN

Mr. WEIDMAN.  Madam Chairwoman and Mr. Boozman, distinguished members of Congress, thank you very much for the opportunity for Vietnam Veterans of America to present our views here today on this extraordinarily important question. 

And I say "extraordinarily important question" because veterans getting into business with assistance from the Federal Government, and particularly disabled vets, are much, much more likely to hire other disabled veterans.  If you want to do something about veterans' employment, do something about growing veteran‑owned and service‑disabled, veteran‑owned business.  That is who will reach out to the young people coming home from the wars today all torn up; give them the break and recognize the ability instead of seeing the disability, give those folks a break to really realize all they can contribute to American society in civilian life. 

In regard to the major entities that are supposed to be assisting us in growing that pie, if you will, of veteran‑owned and service‑disabled, veteran‑owned business, the VA has done far and away the best job.  We believe that is for a variety of reasons.  The previous Secretary was very strongly committed to helping veterans enter business and succeed at business.  When Secretary Nicholson came on board, on his second day on the job, the executive directors of the "big six," which includes me from Vietnam Veterans of America, met and had breakfast with the Secretary.  The first thing I brought up to him was the need to make that 3 percent and exceed that 3 percent and set an example for the entire United States Government and for all departments and agencies that it could, in fact, be done. 

What happened is, while we had had great cooperation out of CVE and had the establishment of the vendor information pages, that were a tremendous tool that continues to prove to be more and more valuable as the place where you can find folks, it was the commitment from the Secretary and the establishment of Executive Order 13360 which forced every agency to produce a plan and to designate a senior designated official. 

Now, in agencies like VA, where they designated the Deputy Secretary, as a senior designated official, as the Chief Operating Officer, you had someone you could go to who could actually make something happen.  In other agencies where they designated the Director of the Office of Small and Disadvantaged Business Utilization, they have no line authority whatsoever.  Therefore, we did not have anybody to work with at a senior level. 

Since that time, folks are asking about how do we get accountability.  Creating ombudsman offices at each of the Federal agencies, we do not believe, is the right way to go.  Frankly, the way to go, in our view, is by continuing to bring public light on the issue. 

We ask for your assistance from this committee in the way of a bipartisan letter from the chairwoman and the ranking member to the head of SBA, asking for a legal opinion as to why the 294s and 295s—294s are the plans filed by major contractors as to what subcontracting they are going to do, and they are bound to 3 percent of their subcontracts going to service‑disabled, veteran‑owned businesses; the 295s are the actual results of what they actually did at the end of the contract. 

The SBA continues to sandbag us on this.  This is something we have brought directly to the administrator, have told him we are going to file a Freedom of Information Act (FOIA).  If by Memorial Day we do not have access to same, we will file a FOIA.  If that does not work, we are going to Federal court in order to seek that information.  

It is being sandbagged on the grounds that it is proprietary information.  It is not proprietary information.  We are talking about taxpayer dollars and the United States Code and enforcing here. 

So the issue of accountability is, frankly, that the task forces fill that role.  The Center for Veterans Enterprise was not in a position to do that.  The SBA, until we got our new administrator—who, I might add, we have more confidence in than anybody who we have had in 20 years in that role as administrator of SBA; in terms of what appears to be the evidence towards doing something useful for vets, SBA has been irrelevant. 

Frankly—I am not going to spend any time talking about The Veterans Corporation because, frankly, they are irrelevant to most of the things that we are interested in in terms of either the delivery of direct services to veterans, in terms of helping them, preparing them to succeed in business; and they are totally irrelevant in terms of getting accountability from the agencies in terms of contracting. 

I see I have 30 seconds, Madam, and I just want to wrap up by saying VA is doing a great job, and they can do a better job, but that is because of commitment directly from the top. 

The SBA, we believe, is doing a mediocre job, but heading in the right direction and, with the new administrator, will do the right thing. 

The Veterans Corporation, instead of giving them $25 million, we should divvy that up between the Office of Veterans Business Development and the Center for Veterans Enterprise and get on with the serious business of helping veterans succeed in business, particularly when it comes to Federal procurement. 

I want to thank you very much for the opportunity to offer comments here today, and I look forward to answering any questions anyone may have from this distinguished panel. 

Thank you.

[The statement of Mr. Weidman appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you very much. 

There is just one vote.  We will head down for this one vote and be back momentarily for questions to the panel. 

Thank you. 

[Recess.]

Ms. HERSETH SANDLIN.  Thank you for waiting for us to make that trip over to the Capitol and back.  Let me just start out with a question for all of you. 

Can you tell me what you know of the DOD Mentor Protégé Program that Ms. Halfaker mentioned in her testimony and how long that has been around and how well it has worked for veterans who you have worked with in the past?  Also, any thoughts on Mr. Jimenez' testimony with regard to advocacy and opportunity, in addition to training financial assistants, and the relative weight of importance for new businesses/established businesses for veterans and, specifically, service‑connected disabled veterans and their businesses? 

Mr. WYNN.   Thank you. 

With regard to the DOD Mentor Protégé Program, I do not know all of the exact specifics about it, but I am familiar with it somewhat. 

It has been around for a while, and it seemingly has been a very effective program.  As a matter of fact, we have often asked and inquired as to why don't they have these programs within each of the agencies.  They have them in some of the others, but not all; and it seems to be a very effective way to get a small entrepreneur business that is up and growing—to really get them over to that next level by working with a more established company. 

With regard to advocacy, I think that is a very key and fundamental piece in this whole picture here with service‑disabled and veteran business owners and its 3 percent goal, because so often we are hearing that within the agencies there is disagreement about the interpretation of the law. 

We have got veterans—I hear from veterans who have tried to establish themselves within a particular agency only to be told that even though they are capable and qualified, seemingly, in that particular region, they are the only service‑disabled vet who could do that particular work, so they are reluctant to set it aside for that particular service‑disabled vet's company with contradictions about whether to sole‑source, or the Rule of Two which—we have asked that they eliminate that because of the confusion.  So the advocacy role is very important. 

As I mentioned, too, we thought that there would be some entity that would be nongovernmental to work with the veteran business community, to serve as that advocate; and for the most part, over the past few years, it has turned out to be the Veterans Entrepreneurship Task Force, and the members of that task force comprise various veteran service organization representatives. 

You also have veteran small business owners, and you have other interested persons and supporters who just come together and provide support and advocacy.

Mr. SHARPE.  I know of the protégé program only through Mark Gross.  He has always spoken favorably of it, and through him, I have met other entrepreneurs who would like to have that same sort of experience.  So it sounds like that would be a worthwhile program. 

It appears that the biggest problem that a lot of these business owners have, who want to do business with the government, is in not having access to certain individuals within the government who could probably help them or mentor them; and I could see that as being something that you would probably want to expand and build on. 

As far as advocacy, you know, I thought that could be a role of The Veterans Corporation, since most Federal agencies cannot lobby and do that themselves, that that would be a niche kind of mark for them where—since they are here in Washington, that that is something that they could follow up on as far as working with the Federal agencies.  They seem to know everyone on the Hill anyway, and that would be a good—it would probably help the veterans community if they could fill that role or to have some organization fill that role, that niche role of advocacy, because it is important. 

Mr. WEIDMAN.  I think that the question of advocacy, if I am not mistaken, Madam Chairwoman, had to do with advocacy before the agencies—to try to get the agencies to do what they are supposed to be doing. 

In terms of advocacy on the Hill, it is our reading of the law that The Veterans Corporation, because it is virtually 100 percent Federally funded, is precluded from being up here lobbying for more Federal dollars. 

There was a question about that from a Republican counsel yesterday, and so we went to legislative counsel yesterday and reviewed that section, and the section of the law that says that The Veterans Corporation may seek funding from Federal, State or local organizations is clear and is based on a committee report that what it meant is, you can seek grants from those existing entities, not that you can come up here and, unfettered, using Federal dollars 100 percent, lobby the Congress for new laws and for additional dollars, which is clearly precluded under the United States Code. 

Now, in regard to advocacy before the agencies, the good Lord helps those who get their act together and start to do it for themselves.  We have invited the gentleman from the previous panel to join us before on the task force because that is what we do.  We meet regularly and have regular contact with OFPP. 

Now we have somebody who is actually responsive at the SBA, at the top of the SBA, both the chief of staff and the administrator we are in contact with there.  We reach out to all of the major agencies in terms of contacting about how can we work with them to help them do what they are supposed to be doing in the first place, and all of those things; and we would certainly invite all three of the previous panel members to join us. 

We meet monthly with the task force, and it has work that is ongoing daily with most of the major veterans and military service organizations and many independent business owners; and we would urge them to join us.  We are meeting again tomorrow with DOD, with the Deputy Under Secretary of Defense, and I have already supplied this to your staff about the seven talking points that we are going to be going over there.  We met last Friday, and we are meeting again tomorrow to see some things that they can do at DOD. 

We are very grateful for the pressure applied by Senator Kerry and Senator Snowe at a hearing from January 31st.  The mere fact of this hearing today will apply pressure to many other agencies; and it is up to us to work closely with those of you on the Hill who are friends and advocates in order to either change legislation or to get people to do what they were supposed to be doing in the first place in terms of publicity and in letters. 

On June 14th, the task force is, with the Center for Veterans Enterprise, cosponsoring a Veterans Accountability Conference, to which I would like to personally invite you; and you will get a letter, in addition to that, plus all other new members of this distinguished panel.  And on that day, I am going to be issuing a report card to the Nation on how well each of the agencies is doing both in terms of actual numbers of contracting out, but also in regard to how that squares up with the plan that the agency had to file under Executive Order 13360. 

Last but not least, under the whole question of advocacy, it has become clear to us—and I want to publicly express again how grateful I am to you and to Mr. Boozman for the bipartisan leadership of this committee in establishing the section of Public Law 109‑461 which gives additional tools to the VA.  We are using that as a model in approaching other Members of Congress on both sides of the Hill, asking them in their committees to make that apply to the Interior Department, to make that apply to DOD.  We are actively discussing that even with the Deputy Under Secretary of DOD. 

This is the kind of tool that DOD needs to have because that is who the agencies listen to.  They do not listen to the SBA, and they really do not even listen to OFPP.  Who they listen to are their authorizing and appropriating committees.  That is who gets their attention and keeps it; and therefore, a whole series of laws that gives those kinds of tools and forces them to report back every year to their authorizing and appropriating committees is the way we believe we need to go. 

So last but not least, we are certainly not looking to The Veterans Corporation, and we are not looking to someone else to do what we already can do together, meaning the veterans service organizations, military service organizations, the task forces, and those individual veterans business owners who have a rubric already to come together. 

I might also add that we have increasingly reached out to the U.S. Chamber of Commerce, and—that is where the real big bucks are anyway and not with doing business with the Feds—and they are using VIP as the model.  And at the Small Business Summit at the end of this month, they are going to be using the brochure that was prepared by Scott Denniston and his staff with private employers, to get them to go use the vendor information pages at the Center for Veterans Enterprise for Fortune 500 companies to start reaching out and doing contracting with veteran‑owned and service‑disabled, veteran‑owned businesses. 

Those the kinds of advocacy efforts, frankly, that you cannot rely on someone who is in a bureaucratic position, as ombudsman, to do.  Those are the kinds of things where we have to have the leadership coming from the community to get things done. 

I, once again, want to thank you for your leadership and for that of your distinguished colleague on the other side of the aisle for keeping this process moving. 

Ms. HERSETH SANDLIN.  Thank you all for your responses. 

Mr. Boozman, do you have questions for the panel? 

Mr. BOOZMAN.  Just a few. 

I think that really is a good idea.  Again, in working with the chairwoman, we might provide the model law.  Many of us—in fact, all of us—are on other committees.  I am on the Transportation Committee.  To go to the Foreign Affairs, to go to the State Department and to go to the others and then try and do through our committees, what we have done here; I think that is an excellent idea. 

I would like, with your permission, Madam Chairwoman—Mr. Weidman has referred several times to different statutes or whatever he feels like is not being done.  I would like to enter into the record the White House Service‑Disabled Veterans executive order.  I think this was around October 21st of 2004; and it is excellent.

In looking through this—and this is the first time I have seen it in a while—we really are not doing a very good job of meeting what the President asked us to do, and so I think this just kind of piggybacks on the statement that you had. 

Ms. HERSETH SANDLIN.  Without objection, so entered.

[Executive Order 13360—Providing Opportunities for Service-Disabled Veteran Businesses To Increase Their Federal Contracting and Subcontracting, dated October 20, 2004, appears in the Appendix.]

Mr. BOOZMAN.  Thank you. 

The other panel felt like senior procurement officials were certainly key, and I think we would all agree with that.  Do you all have any suggestions on how you feel like we could influence the senior procurement officials to do a better job of advocacy and things?  How do you do that, from your perspective? 

Mr. WYNN.   Thank you, sir, for allowing me to respond to that question. 

I think, quite frankly, without a doubt, Congress has a great deal of influence that could be leveraged on the agencies to actually come forward and do the things that have been required of them under the law. 

I am glad you mentioned, too, about the Executive Order 13360.  That order, to me, in my opinion, laid out a very clear directive of how we could possibly increase contracting opportunities for service‑disabled veterans, and veterans, as well.  The problem with it, though, is that very few of the agencies have actually been following that executive order where it calls for them to actually develop a specific, strategic plan; to name a particular senior‑level official who will oversee that plan for that particular agency; and it also calls for SBA to be involved with the monitoring of that plan, which has been really difficult in that regard for that to happen. 

We have had some discussions here recently with the SBA about beginning to provide some oversight of these strategic plans and calling for the agencies to present them because, each year, each agency was supposed to, at the end of the year, submit a report indicating what progress they had made within their agency and, in addition to the report, revise the plan based on how well they had done and, actually, publicly display a new plan so that we, all of us, could follow along and see what they intended to do for each year. 

To my knowledge, these plans have only been published one time since that executive order came out, and we still encourage the agencies to do it because it actually lays out a road map as to how you are going to increase these opportunities, and if it is not working, we have got some checks and balances, something to look at, a guide, to say, "Okay, that is not working.  Let us try this." 

So, yes.  I think Congress, if they would continue, as you are holding these hearings here today, to discuss the issues and give us an opportunity, too, to broaden this discussion either by additional hearings or a series of roundtables or independent study groups to look at the issues so that we could actually come forward with some real recommendations, that would improve the process and increase the number of contracts to service‑disabled veterans and veterans. 

Thank you.

Mr. BOOZMAN.  Thank you, Mr. Wynn.

Mr. WEIDMAN.  Just, if I may, tack onto that, at the VA, things really started to change, and Scott Denniston started to get the support that he needed when we realized we were not getting anywhere and went to the deputy secretary and said, "Put it in their performance evaluations, by God; then they will care about it because they will not get their bloody bonus if they do not make the 3 percent." 

With the howls and the screams from those 21 visiting directors, I am surprised you could not have heard them back in Arkansas when you were home for the work period, because they did not want to do it.  They all said they were trying, and all of a sudden, as soon as it was in their performance evaluations, that is how the VA made the 3 percent. 

So it not only needs to be in the managers' evaluations; it needs to be in the contract officers' evaluations, whether or not they are making the effort in the 3 percent of the contracts that they write; and the subcontracts of the contracts they write really are for service‑disabled, veteran‑owned businesses.  It is amazing how reasonable people can be once you have their full attention, Mr. Boozman. 

Mr. BOOZMAN.  Thank you.

Ms. HERSETH SANDLIN.  I have some additional things I want to explore, but I also know, with the third panel waiting, that we want to get to them.  I think that your testimony here has provided us some additional ideas.  I am pleased that Ranking Member Boozman is inclined to pursue working together, as we have in the past and have continued to do so, as we tried to do under Mr. Buyer's leadership, as Chairman of the full Committee last Congress.  We need to look at information technology and data security and the changes that need to be made in response to the problem that we had last year.  We can share, as you mentioned, Mr. Weidman, the tools that we authorized with our chairmen and ranking members of full committees, of the others on which we serve and of others throughout the Congress, too.  Perhaps making reference to the executive order and getting the administration's support in working with all of the committees to try to encourage the same kind of commitment among the Cabinet secretaries of the other agencies and providing the tools and the lines of authority to deputy directors. 

This is another example of how important your input is to us, and we will look forward to following up with you on some other areas. 

One that I would like to follow up on with you is the issue mentioned by Mr. Wynn, and I saw your head was nodding, Mr. Weidman.  It is this loophole in the sole‑sourcing issue, in terms of the contractor requirements and different interpretations of if, indeed, there is one identified business that is a service‑connected disabled, veteran‑owned business. 

I do not want to follow up now, because I think it is an area that would be better served by a more informal discussion and getting a more complete explanation on from what the two of you know on how we might be able to address that in the fuller context of some of these other areas.  Whether it is the larger companies using the smaller companies as fronts, and a whole host of things that we may want to work on with the Small Business Committee. 

We thank you for your testimony and for your insights today. 

I now would like to invite our third panel up that we have participating with us, and I want to thank them for their patience as they make their way forward. 

We have Mr. Walter Blackwell, President and Chief Executive Officer for The Veterans Corporation; Mr. William Elmore, Associate Administrator for Veterans Business Development of the U.S. Small Business Administration; Mr. Scott Denniston, Director of Small and Disadvantaged Business Utilization for the U.S. Department of Veterans Affairs; and Mr. Louis Celli, Chairman of the Advisory Committee on Veterans Business Affairs for the U.S. Small Business Administration. 

STATEMENTS OF WALTER G. BLACKWELL, PRESIDENT/CHIEF EXECUTIVE OFFICER, NATIONAL VETERANS BUSINESS DEVELOPMENT CORPORATION, THE VETERANS CORPORATION; WILLIAM D. ELMORE, ASSOCIATE ADMINISTRATOR, VETERANS BUSINESS DEVELOPMENT, U.S. SMALL BUSINESS ADMINISTRATION; SCOTT F. DENNISTON, DIRECTOR, OFFICE OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION, CENTER FOR VETERANS ENTERPRISE, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND LOUIS J. CELLI, JR., CHAIRMAN, ADVISORY COMMITTEE FOR VETERANS BUSINESS AFFAIRS, AND CHIEF EXECUTIVE OFFICER, NORTHEAST VETERANS BUSINESS RESOURCE CENTER

Ms. HERSETH SANDLIN.  Thank you all for being here. 

Mr. Blackwell, you are recognized for 5 minutes.  Again, your written statement, will be made part of the record.  So if you want to modify that or perhaps respond to anything that was mentioned in the first two panels, you are recognized for 5 minutes.

STATEMENT OF WALTER G. BLACKWELL

Mr. BLACKWELL.  Thank you, Madam Chairwoman, Ranking Member Boozman, distinguished members of the Subcommittee and, of course, Congresswoman Davis. 

Good afternoon.  I thank you for the opportunity to testify before you today.  In addition to my written testimony, I would like to add TVC's fiscal year 2006 annual report to the record, if I may, that was made available to both Congress and the President. 

[The TVC 2006 Annual Report has been retained in the Committee files.]

My name is Walter G. Blackwell.  I am the President and CEO of The Veterans Corporation and a Navy veteran.  It has been a long afternoon, and we have heard from several sectors supporting veteran entrepreneurship.  Each of us is committed, well‑intentioned, although we do not always agree, as you have heard. 

The one topic on which we all find common ground, though, is that Congress must continue to support veteran entrepreneurship and self‑employment.  Veteran entrepreneurs need assistance in quickly finding and accessing business information and mentorship—programs like Mentored Access to Capital, Mentored Access to Bonding with no Caps, Start‑Up and Growth Business Paths—resources delivered through TVC staff, as well as our public‑private partnerships, providing the business knowledge and support that is essential to standing up and running successful businesses. 

In my written statement, you will find details on each of these programs that TVC is currently pursuing.  Two new, key programs that I would like to call your attention to are Boots to Business for Transitioning Veterans, and Deploy‑Proofing your Business for our Nation's Guard and Reserve.  However, the delivery of these programs alone, without direct mentorship and casework follow‑up, is an empty promise for our veteran entrepreneurs.  That is why TVC staff and our partners are actively engaged in the mentorship of veteran entrepreneurs no matter what program they are currently going through. 

Within the veteran entrepreneurship community that now spans 6‑plus decades, needs differ greatly based on the type of business they want to start, based on geography that they are located in, and on their education and business experience.  Therefore, there is no one cookie‑cutter solution, no one program, no one opportunity, no one government agency or organization, no one way to impact education that will be able to answer the wide range of questions that veteran entrepreneurs ask daily; and certainly no one way to distribute past and current hard and soft business tools that will be needed by each of them. 

For these reasons, The Veterans Corporation delivers, through the abilities of its funding, a diverse range of programming and multiple delivery methodologies of business education from face‑to‑face learning to online learning, all leveraging technology, delivery and tracking. 

The important work of our Veterans Business Resource Center hubs, that the TVC finances through noncompetitive grants in Boston, Massachusetts, St. Louis, Missouri, and Flint, Michigan, is a valued link of TVC's outreach into the veteran community.  However, each of these centers has a limited reach based on the urban area they serve.  For veterans outside their reach, TVC staff, working once again through public‑private partnerships, provides support services to disabled veterans unable to travel to that hub, or frankly, to rural veteran populations anywhere. 

Public‑private partnerships are possible through TVC's status as a 501(c)(3) entity.  This important difference permits TVC to form these partnerships for enhanced veteran programming where government agencies are limited or prohibited by law from increasing the critical elements of business support, especially to capital and bonding. 

So how is TVC making a difference?  TVC has a handout, which we have provided, that samples some of the veterans we are currently working with—one with a microloan need, another currently in Iraq who found us via TVC's website with a major capital requirement, a third with a bonding need, and finally a veteran who wishes to do business with the Federal Government. 

In addition, I am submitting for the record, our letters of support for the ongoing efforts of TVC from the Disabled American Veterans and the Iraq and Afghanistan Veterans of America.

Madam Chairwoman, in my prior 25‑year career in corporate America and now having spent the last 14 years of my association leadership career working with entrepreneurs on five continents and in 65 countries, I can say with certainty there is no one single answer, no one single solution to the issue before this committee today. 

Veteran entrepreneurship and self‑employment demand each of today's panel members to come together and consistently and constantly explore the best practices for and develop a deep mentorship relationship to help the survivability of veteran entrepreneurial efforts. 

TVC has invested a great deal of time in intellectual capital, monitoring and working with leaders from the education and business communities.  The TVC, limited by both funding and reach, makes every attempt to provide both broad‑brush solutions and targeted programming and services a reality for veterans. 

In the true spirit of entrepreneurship, TVC has embraced existing services both inside and outside the government, expanding its reach through technology, and stands ready to provide solutions to meet the increasing demands and needs of veteran entrepreneurs so that they are not left alone. 

Madam Chairwoman, thank you for this opportunity, and this concludes my testimony. 

Ms. HERSETH SANDLIN.  Thank you, Mr. Blackwell.

[The statement of Mr. Blackwell, and attached referenced letters of support, appear in the Appendix:]

Ms. HERSETH SANDLIN.  Mr. Elmore, you are recognized for 5 minutes.

STATEMENT OF WILLIAM D. ELMORE

Mr. ELMORE.  Chairwoman Sandlin, Ranking Member Boozman and other distinguished members of the Subcommittee, thank you for the opportunity to appear before you today to share information on the state of veteran entrepreneurship and self‑employment and the efforts of the U.S. Small Business Administration to assist and support veterans, service‑disabled veterans and Reserve component members who are self‑employed or small business owners. 

I am William Elmore, the Associate Administrator for Veterans Business Development. 

As expressed in the January 24, 2007, memorandum for heads of departments and agencies, jointly issued by SBA Administrator Preston and the Office of Federal Procurement Policy Administrator Bennett, the administration is broadly committed to enhancing all of our entrepreneurial programs and services for veterans and reservists, especially those returning from duty in the global war on terror and for those service members injured or disabled in service to America. 

As the Associate Administrator for Veterans Business Development, I manage our national program for veterans and support administration programs and policies for veterans and reservists.  I coordinate SBA activities with other Federal, State and local government programs and with not‑for‑profit and private partners.  Each year, my office delivers direct assistance to over 25,000 veterans and reservists through five Veterans Business Outreach Centers and through special competitive funding for our district office Veteran Business Outreach Initiatives coordinated by R‑68 Veterans Business Development Officers. 

SBA's Veterans Business Development Office acts as a liaison and as a technical expert to our Federal partners and agencies with procurement authority, and I do act as an ombudsman for full consideration of veterans in every administration program.  Each year, SBA provides reportable direct and indirect assistance to more than 100,000 veterans and reservists who participate in every SBA program. 

While improved services are being delivered, Administrator Preston and Deputy Administrator Carranza have tasked each office within SBA with reviewing their programs and how they support veterans' small business success.  We are identifying additional steps that every program can take to better deliver SBA assistance to veterans, reservists, discharging service members, and family members. 

Recent examples of improved services to this important population is inclusion as a target market in our community express loan program that offers expedited loan processing with mandatory business planning and technical assistance.  We have recently improved our surety bond guarantee program for service‑disabled veterans and veterans, and we are exploring new ways to further target the veteran, Reserve and Guard community through our lending programs.  Thus far, the results have been good.  The numbers of new loans being made to veterans has increased significantly.  The number of new loans to veterans has grown from 4,800 in fiscal year 2000 to approximately 8,000 in fiscal year 2006. 

Public Law 106‑50 established a 3 percent Federal procurement goal for prime contracts for small businesses owned and controlled by service‑disabled veterans and established a "best efforts" clause for veterans in Federal procurement at the subcontracting level.  While the government has yet to achieve the required 3 percent goal for Federal procurement, we are making progress towards it.  In 2004, the President issued Executive Order 13360, and preliminary data shows that both SBA and the Department of Veterans Affairs each exceeded their respective 3 percent goals for fiscal year 2006.  Leading by example, this represents a significant improvement for both agencies over achievements in fiscal year 2005. 

Each year, our Office of Entrepreneurial Development and our resource partners provide small business counseling and training for approximately 1.5 million aspiring start‑up and growing small business owners.  Annually, close to 90,000 of these customers are veterans, service‑disabled veterans, Reserve component members, and active duty personnel.  Our SBDC national office provides program design, core operational funding and oversight to almost 1,100 Small Business Development Centers. 

In addition, we deliver assistance through the expertise of almost 400 SCORE chapters, with approximately 11,000 experienced SCORE business counselors, and through 100 women's business centers.  We also provide a robust range of online business counseling and training opportunities, supporting everything from start‑up and early‑stage decision‑making to significant expansion and growth assistance. 

Let me turn my attention to our efforts on behalf of small business owners who are members of Reserve components of the U.S. military and who have been or may be activated for the global war on terror.  In August 2001, we began offering our Military Reservist Economic Injury Disaster Loan as one tool that can be of great assistance to an activated reservist.  We have implemented a comprehensive outreach program that includes veterans and reservists, and we have strengthened our business counseling and training programs to inform, develop and deliver pre‑ and post- mobilization business planning that can be critical to the economic success and survivability of reservist small business owners.

After the September 11th, 2001 attacks on America, we established an SBA committee to coordinate outreach and service delivery to reservists.  We created and had distributed more than 400,000 SBA Reserve and Guard fact sheets, and we established special Web pages for reservist small business owners in 2002, with over 700,000 visits since then.  Now we know Web is not enough as well. 

Two years ago, we requested and secured the authority from Congress to include reservists in our definition of "veteran" for purposes of our comprehensive outreach effort, and we included "veteran reservist" in our community express loan program to provide additional access to capital beyond our Military Reservists Economic Injury Disaster Loan program.

Again I thank you for this opportunity to testify before you today.  I am proud of the progress we have made and of our knowledge and assistance for aspiring and existing veteran entrepreneurs, and I look forward to continuing to enhance these efforts. 

This concludes my testimony and I welcome your questions.

Thank you.

[The statement of Mr. Elmore appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you Mr. Elmore. I welcome Mr. Denniston.  You have 5 minutes.

STATEMENT OF SCOTT F. DENNISTON

Mr. DENNISTON.  Thank you.

Madam Chairman, Mr. Boozman, Mrs. Davis, thank you for convening the hearing today.  I am honored to represent Secretary Nicholson, Deputy Secretary Mansfield, and the dedicated employees throughout the Department of Veterans Affairs who serve our veterans daily. 

I have good news to report.  The veterans business program is working well at VA.  Last fiscal year our procurement budget was $10.3 billion.  Of this, we spent approximately $651 million or 6.35 percent with veteran‑owned small businesses.  Of that $346 million, or 3.38 percent of the total, was with service‑disabled veteran‑owned small businesses.

We attribute VA success to several factors.  Our leadership demands commitment to veterans in business.  Program executives personally report their accomplishments at our quarterly senior managers meeting.  VA applied the strategies in our Executive order plan and they have worked.  Veterans doing business throughout our Department have proven themselves to be solid performers.  The VA Office of Small Business and the Center for Veterans Enterprise have been effective catalysts in working partnerships to educate and assist both buyers and sellers, and the Center for Veterans Enterprise is a very effective resource for both veterans and the contracting activities.

As a result of Public Law 109‑461, which I would like to thank you for your leadership on, the VA is now the first agency to place service‑disabled veterans and veterans at the top of our priority source list.  In addition, this law provides VA with direct sourcing authority—a tool unique among Federal agencies.  With this new program, VA expects a marked increase in expenditures for service‑disabled vets and veterans in fiscal year 2009. 

As you know, VA operates the Center for Veterans Enterprise, which has 16 employees, 12 of whom were veterans.  CVE staffs a national call center to assist veterans interested in business ownership or expansion; talks to veterans, and their families and business partners daily.  VA CVE also hosts the VetBiz.gov Web portal and manages the VetBiz.gov information pages, a database containing information about products and services offered by veterans and service‑disabled vets. 

Veterans in this database may elect to receive daily extracts from Fed Business Ops and extracts from VA's Forecast of Contracting Opportunities.  We also use the database to conduct market research and to blast early alerts about upcoming requirements or conferences.

We partner with other organizations.  Our first partnership was with the Association of Procurement Technical Assistance Centers.  The PTACs educate owners new to the Federal marketplace.  We refer many veterans to PTACs to help owners learn how to be successful Federal contractors. 

Another steadfast partner is the General Services Administration.  We have cosponsored regional conferences with GSA and assisted in the Veterans Technology Service Government-wide Acquisition Contract called GWAC.  We look forward to using that within VA in coming years.

At all of our outreach programs we distribute a tool kit for veteran‑owned small businesses which is jointly developed and co‑branded by GSA and VA.  It contains legislation and policy documents, information on how to market to Federal agencies, a list of Federal veteran and business advocates and templates to assist business owners.  This tool has proven to be so successful it is now in its fourth edition.

We are continuing our joint outreach efforts with the military services, conducting road shows with the Air Force, Army Corps of Engineers, to reach military program managers.  The Corps routinely dispatches advanced procurement announcements of forthcoming opportunities to owners in the VetBiz information database.  The Corps of Engineers has awarded several Indefinite Delivery Indefinite Quantity contracts using service‑disabled vets set‑aside authority.  As a result you will see many of those offices honored at our annual Champion of Veterans Enterprise Award program. 

We also have a very effective partnership with the Army Small Business Office, through comprehensive support of the military community, defense contractors, volunteers from a range of Federal agencies and the business owners community.  We have jointly organized the National Veteran Business Conference for the past 3 years.  This year's program will be June 25 through 28 in Las Vegas.  Last year more than 1,200 participants joined together to focus on how to improve opportunities for veterans, especially service‑disabled vets, in prime and subcontracting. In the commercial marketplace, more than 300 franchise owners have joined the VetFran program which VA and the International Franchise Association refreshed in 2002. 

Currently, more than 700 veterans have opened franchises under this program.  Through VetFran, veterans are eligible for reduced franchise fees and other support. 

With that I will conclude my remarks and submit my written testimony for the record.

[The statement of Mr. Denniston appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you very much, Mr. Denniston. Mr. Celli, you are recognized for 5 minutes.

STATEMENT OF LOUIS J. CELLI, JR. 

Mr. CELLI.  Thank you.  Well, good afternoon, Chairwoman Herseth Sandlin, Ranking Member Boozman and Congresswoman Davis, members of this Subcommittee.  Thank you for the invitation to come before you and discuss veterans entrepreneurship.

It has been 7 years since the unanimous passage of Public Law 106‑50 and this Subcommittee now asks basically, how are we doing?  My name is Louis Celli and I am a 22‑year veteran of the United States Army, a service‑disabled veteran.  I started two businesses and I am the chairman of the SBA's Veterans Small Business Advisory Committee. 

You have assembled before you today some of the most  renowned names in the veterans community.  You have heard their testimony and you have listened to the needs of your constituents.  So now what do we do?  We know that the program hasn't quite hit the mark, not yet.  We know that the Federal agencies and Federally funded programs charged with carrying forth this plan to promote and defend veterans entrepreneurship all believe that they are hitting the mark.  We know that veterans aren't so sure.

But what does this mean and what can we do about it?  It means that when you set your own goals and standards by which success is measured, success is easily achieved. 

I retired in 2002 as an Army master sergeant.  When I was on Active Duty, it was my job to take care of soldiers.  When I was working with Army Recruiting Command, my job was to reassure parents of the new soldiers coming into the Army that their sons and daughters were going to be protected and taken care of.  I was then, and I am still today, proud of our Armed Forces and proud to have worn our Nation's uniform.

One of the hardest things for me now is to be working with the returning veterans as they process through Walter Reed.  I feel a deep sense of guilt.  I feel that I have let them down because I am not personally out there today in a Humvee protecting them.  I have to keep reminding myself that it is not my job anymore.  I have tried to go back but I can't.  I am 40 percent disabled.  I am no longer qualified to serve in the Army.  This is very hard.  The men and women are hurt and in some cases they are hurt bad. 

Seven years ago we passed a law that was meant to address the needs of American servicemen and women who wanted to compete as business owners in the American economy they fought so hard to protect.  Seven years ago we were riding high on a Nation at peace and at full strength militarily.  Seven years ago, we knew that we hadn't done enough to assist veterans—particularly service‑disabled veterans—in serving a greater role in the economy of the United States by forming and expanding small business enterprises directly from Public Law 106‑50. 

Seven years later we are still not there.  Why?  No coordination.  We created the right tool, but put in place no measures for success, oversight, or accountability.  You charged the VA, SBA, TVC with building programs, told all the Federal agencies to support this effort and then closed the book.  No one was put in charge.  Since no one was in charge, no standards were set. 

Who could say whether the agencies or corporations were complying or not?  Based on the fact that we are here today, and this is the third congressional hearing in almost as many months regarding the same issue, it is apparent that your constituents are not satisfied, veterans and nonveteran alike.  It has become such an important issue, that congressional leaders are working together in uncommon fashion, as represented here today by the Honorable Congresswoman from California, Congresswoman Davis, who has been asked to attend as a guest of this Subcommittee. 

It may be time that we take a good look at restructuring this program and assembling all of these independent moving parts into a cohesively high‑functioning machine.  We would save money, effort and time, and finally put an end to the turf wars which have plagued this program from the beginning.

Congress needs to establish an office to organize and coordinate this program, Veterans Business Program Management Office, and it should be an office with Federal authority.  This office should be responsible for monitoring, assisting, organizing and coordinating oversight of the Veterans Entrepreneurship Advocacy, Veterans Entrepreneurship Training, Veterans Professional Skills Certification, Veterans Federal Procurement, also assisting with Veterans Procurement at the State level, promotion of public and private partnerships with regard to Veterans Entrepreneurship, Small Business and Employment, Entrepreneurial Vocational Rehabilitation Case Management, and Comprehensive Work Therapy and Training Directorate.

This office should report directly to the President of the United States and to Congress and either this committee or the Small Business Committee, or a new committee comprised of representatives of each.  I have been approached by companies, small businesses and entrepreneurs, both veteran‑owned and nonveteran‑owned, who have offered to build complete companies with the sole intention of employing only service‑disabled veterans.  We need a program which assists them as well. 

Members of Congress, I can't protect these veterans anymore, but you can.  Help us.  Help us build a program that will work and that will be around long after we are gone, benefiting American warriors, wounded and whole, the men and women who have suffered so much and to whom we owe so much in return.  We are not all Democrats, Republicans, or veterans, but we are all Americans.  And each and every one of us in this room have benefited from the sacrifices of time, sweat, and blood that our American service members have made and continue to make for us each day. 

Thank you for holding this hearing.  Thank you for your continued interest in veterans entrepreneurship.

[The statement of Mr. Celli appears in the Appendix.]

Ms. HERSETH SANDLIN.  Thank you very much, Mr. Celli, and thank you to all of you.  I am trying to figure out the best way to begin the questioning here, so let me begin with a preface, one I hope we all share.  I have met some of the individuals that each of your agencies or that The Veterans Corporation works with and I don't think that there is any disagreement in regards to the various services you have provided, and some individuals that you have worked with, that there have been success stories, and that there are people, veterans and their families, who are enormously grateful to the people that work with you in your different organizations. 

But I think that Mr. Celli makes a very good point about the issue of oversight, coordination and accountability, and that has seemingly been the overarching theme of much of the testimony we have received today.  We are focused on how to best deliver services and administer the benefits that veterans have earned in a way where someone is in charge of at least overseeing how this is all working, when Congress passes new authorities, establishes new entities, makes changes along the way but, again, wanting to do it in the most efficient way possible. 

When Mr. Sharpe from the previous panel mentioned The Veterans Corporation in particular and observed, I think as he put it, there have been numerous mission adaptations or changes over time, that I think we need to explore a little bit.

I do want to pose my first question to you, Mr. Blackwell, with regard to some of the programs that you have consistently offered, some of the new programs that you have described.  Let me ask you, in particular, about the bonding programs and access to capital.  If The Veterans Corporation didn't offer those programs, where would a veteran go?  Mr. Elmore, you can jump in here too.  Is there any coordination of activities between The Veterans Corporation and the Small Business Administration as it relates to bonding?  I believe, Mr. Elmore, there is the surety bond guaranty program through SBA.  If you can begin perhaps, Mr. Blackwell.

Mr. BLACKWELL.  Thank you Madam Chairwoman.  I would be happy to enumerate on your first part of that, which is why so many changes, why so many tacks, why so many approaches.  The issue is we are, as we said earlier, a six‑plus generation community.  We are bifurcated on self‑interest.  We are bifurcated on the main mission accomplishments of those organizations.  And it makes it very, very difficult to come together on any one particular thing. 

TVC is tasked to start and grow businesses.  And one of the things this particular panel shares in common is you have before you two ex officio members of our board of directors, and you have Mr. Celli who is a funded arm of TVC's local provision through Boston, Massachusetts.  I can tell you that we work very closely together as a board to look at opportunities that exist within the current agencies.  And certainly the 7(a) loan program and the 524 program that SBA offers are addressed in addition to—by the National Economic Opportunity Fund (NEOF), and in fact Jim mentioned the president of that organization is here today.  And we look specifically at what is the best issue for that veteran and their funding issues. 

In addition to SBA's express program we have an agreement with ACCION nationally for mini‑micro loans from $500 to literally $25,000, that are nice loans that are available.  So we really see the work we do with National Economic Opportunity Forum and Access to Capital, a combined program with both Bill's program and the 7(a) program, and then when veterans aren't able to use those programs, we can go and work with them either in the mini‑micro loan program or with another lending agent, usually within their community. 

Why it is important to express the mentorship part of this is that many veterans applying for capital go ill‑prepared.  Either their business plan isn't ready, they haven't thought through transitions.  And our approach is that we mentor those early steps through the NEOF program and TVC to prepare them to best have their capital plan in place.

In terms of access to bonding, SBA's bonding program is capped at $2 million.  One of the other duties that I serve, as vice chair of GSA's Small Business Advisory Council, we talk about the issue of bonding.  We talk about the programs that are currently available through SBA, which is why in concert with our other ex officio Member, DOD, we established a program, Outside Partnership with Surety and Fidelity Association of America, now almost a year ago.  And that program allows us to have a 50 State coverage with no caps.  That means that a company with either a single or aggregate bond level of $18 million doesn't have to worry about losing that current bonding level to go tackle new projects or, in effect, Mentor Protégé, a new veteran company, which is often the case, to use and leverage their current bonding level to start a new company, receive bonding, and work at the State and Federal levels.

I would just say in general the reason we have seen so many different programs come across is that we have learned a great deal.  We have learned that one size doesn't fit all.  Face‑to‑face works in certain groups.  Face‑to‑face doesn't work with our current returning Iraq and Afghanistan members.  Bill Ferguson, also here today with Iraq and Afghanistan's Veteran Association, and his team and I have talked at great length about how we best address these young men and women. 

We had a wonderful phone call from Iraq just a week and a half ago from a young first lieutenant who is literally opening a restaurant in New Orleans, Louisiana, and needed extensive funding.  We were able to work with him very quickly to make that happen.  His restaurant opens literally in 30 days, before he even returns back from assignment.

So I will tell you that we must continue face‑to‑face relationships.  We have entered into a Memorandum of Understanding with the ASBDC, Association of Small Business Development Centers.  Mr. Don Wilson is also here today.  I think that is an incredible leveraging tool as we work with not 3, not 8, not 12, but literally 1,100‑plus organizations to make that possible to reach more veterans and drive more veterans into existing facilities. 

So that is my short version of how we think we are doing it.  I will just tell you we are very, very excited about this new Boots2Business program and Deploy‑Proof, because their all‑electronic tools that are all SCORE‑compliant, can be used in the field in Iraq, in South Dakota, in California, in Washington, D.C., for important veteran entrepreneur business to be transacted. 

Mr. ELMORE.  Let me try to help address where I think Walt was going, and we will talk about capital, at least at this point.  If you look at SBA programs, we have what you can argue is sort of a continuum of access to capital, starting at the smaller end with our microloan program, which has technical assistance associated with it, average loans about $11,000.  It goes up to $35,000.

Then you get into our 7(a) range.  And then you get into our 504, which tends to be more of a community development corporation engagement with structural kinds of things, buying or building buildings, securing equipment, those kinds of things; and then, ultimately, the venture capital world, which has been supported to a great degree or started through SBA's Small Business Investment Corporation program historically.

So we provide access to this full range of capital, but at the same time we are nowhere near the majority lender for small businesses in America  nor should we be.

If you think of this community and you think of what we now know are the approximately 4 million existing veteran businessmen and women in America, the approximately 3 million aspiring, Walt is right; there is no one answer.  Every business is different.  Every existing or prospective business owner is different.  And every idea that they want to pursue is their own.  And if you don't have this full range, public and private, the majority of our lending, other than our disaster loans, are through thousands of private bankers. 

So as an example, as we design initiatives—and we are working right now on some more lending initiatives specifically for veterans, reservists, discharging service members and others, we have to not only design to meet our constituency, we have to design so that our lending partners understand this as a valuable, usable productive tool for them as well.  And ultimately our role is not really to enable public success—because in my view, entrepreneurial success in America predominantly lies in America's private sector, not in the public sector.  So while procurement is an incredibly important arena and a huge market, it is one part of the American market.  And our engagement is with the American market.  Federal procurement, as an important part of that, is a third of our agency, but that is not where we focus all of our activity and effort.  It really is out into this private side.  So I hope that helps answer the question, ma'am.

Ms. HERSETH SANDLIN.  It does.  It may lead to others from other members of the Subcommittee or some follow‑up that I may want to pursue.  I am going to come back, just to put you on notice Mr. Celli, I would like to get your thoughts and responses to both what Mr. Elmore and Mr. Blackwell had to say.  I just wanted to put you on notice, because I want to recognize the Ranking Member for questions he may have, and Ms. Davis and I will come back to you after they are finished with their questioning.

Mr.  Boozman?

Mr. BOOZMAN.  Thank you, Madam Chairwoman.  Mr. Blackwell, you mentioned that, you went through a variety of different ways you were trying to meet the needs of veterans.  We have heard a little bit of criticism regarding the way things are going.  At the very least, do we need to—based on your experiences as CEO, rework the law?  Do we need to help you in that way or—

Mr. BLACKWELL.  There is one answer and one answer only.  The answer is "yes."  Mr. Celli said it well.  When this law was being crafted, we were in a different time in our Nation's financial history, and certainly at a different time in our peace‑war status. 

All of the framers that I have spoken to of Public Law 106‑50 are still very supportive, Bill Elmore being the one who wrote that particular piece for that particular group.  The issue isn't so much how we do what, when.  It is how flexible we are to provide what we need now and tomorrow. 

I still believe in face‑to‑face education.  I know that is a slow methodology.  I know that only works for certain groups of people.  I know that is expensive, not only in terms of providing that service, but also in terms of the time it takes out of a veteran‑owned small business, to leave their business for any particular period of time and/or take people out of their business for any particular period of time:  lost revenue, lost ability to sell. 

So in terms of just the simple answer "yes," I think what we need to do is completely look at the issues you have heard of today.

And if I may, Madam Chair, I would say I would be happy to in a formal way issue a rebuttal to what I have heard today and to the other testimony.  There are some inaccuracies, and I will correct that in my rebuttal. 

But to close on your question, Congressman, I would just say that we really do need to look at the now 1.6 million Iraqi/Afghanistan veterans that we have—will break the 2 million mark, the number in Vietnam, very shortly—we have with 300,000 young men and women coming back this year.  We have 350,000 come back in the next year.  So when you look at those numbers, this is a technologically savvy group of people.  This is a group of people that are used to gathering information in a different way.  They are as different from the caveman as we are today, and I hope GEICO doesn't get upset, but the bottom line is we have to continue to be flexible in our delivery system and not held to a specific period of time.

I would love very much either to look at a rewrite or, in the case of a bill currently being drafted, an entire authorization of both the mission and vision of TVC. 

Mr. BOOZMAN.  Thank you. 

Mr. Denniston, can you tell us what the status is of implementing the provisions of Public Law 109‑461? 

Mr. DENNISTON.  As you know, the law requires that it become effective 120 days after signature—180 days after signature.  That gives us until June 20th.  So right now we are on target to meet that.  The draft rules have been written and they are going through the internal clearance process.  The Privacy Act issues are being addressed at the Office of Management and Budget and we will be ready on June 20th to kick the program off and make the announcement.

Mr. BOOZMAN.  Thank you.  I agree with you, Mr. Elmore, that the answer really is the private sector and yet it is not too much to ask that the public sector do what we ask them to do.  And when we talk to them individually, everybody is for this, but it just doesn't filter down.  It just doesn't get where it is going so. 

And then you have a situation we learned from the previous panels.  It really is a big deal if you can get some people to get their foot in the door, and then they go out and mentor others, and then they might have a different avenue that they are interested in some other business, but it really does help, pushing that thing forward. 

So I guess my question is, Mr. Denniston, Mr. Elmore, could you all possibly do a symposium where you really educated the procurement officers?  And I know you are trying to do this now.

But there is a—I think that again in hearing the other panel, I think in hearing personal reference, there really is not—and I don't mean this bad again—as one of the panelists said, these guys are working hard, and they are overworked, but in many cases there is an ignorance of what the President has directed, and what the law is trying to direct. 

If we could just get aggressive with some sort of mandatory seminar, some sort of check the box, to help understand this, I think that would be helpful.  Is anything like that a possibility?

Mr. ELMORE.  Sir, I think it is.  There is actually a couple of things I would like to share with you about this.  Our new administrator—and I am pleased that he is there, has been there now 9 months—he came in, he put a number of initiatives in motion.  I have been with SBA almost 7 years now.  Hard for me to believe.  And he came in and he actually engaged the employees.  He engaged our field people.  He engaged our CPRs and he engaged our district directors.  He asked them what worked and what didn't.  He took all of that input and he designed a number of special initiatives and created a number of internal agency task forces, and amongst those are initiatives that look at exactly what you are talking about. 

We have responsibility for service‑disabled veterans, we have responsibility for women as well.  We have responsibility for 8(a) for HUBZone, for small and disadvantaged business, and we also do some work in the Native American community and the international trade arena.  All of these are being touched by these task forces that are developing special and new efforts to go out and do exactly what you talked about.

What kind of reporting do we get?  How can we do it electronically?  Anybody that knows SBA knows we don't operate at the scale of our friends at VA or Department of Defense.  Or Department of Labor for that matter.  We are not a huge agency.  We have third parties we have to work through.  So we are trying to get our hands around contemporizing how we do exactly what you ask, education for the procurement system, reporting for that procurement system, and how others, myself included, gain access to real time outputs from that procurement system so that I don't have to sit in front of you a year and a half later and report 2005 data. 

Now, the 2006 data is not SBA's data.  It comes from somewhere else.  And I am not trying to throw rocks at any of our partners, but I am hampered without access to real‑time data about what is really happening out there.  That is a real frustration for not only me but the other professionals inside SBA that want to do their job, want to do it right and want to do it well. 

So back to the point, the Administrator is leading this new effort himself.  I am doing 12‑hour days.  He is doing 14‑hour days.  I can't keep up with him.  I am grateful he is doing it, although he is wearing me out, I will say that. 

Let me go to the mentoring thing.  I want to touch on that.  I think the one most important thing that our Nation can do is engage what I call our military alumni business community.  And there really hasn't been a process to do that.  What Walt talked about, what my five centers do, what the centers that he funds do, what CBE does, what Lou Celli does, the more that we engage the men and women who went before us, the more we are going to be able to engage the men and women who come behind us because, by and large, anybody that knows this community—and, sir, you know this—it is our kids that are going to carry the burden next time.  There are families that produce warriors in this society and families that don't.  And the best mentors at Walt's program in St. Louis are two very successful veteran businessmen whose sons have served in Iraq.  These come from families that don't have to serve in Iraq but these families produce warriors, and they help their sons and daughters when they come home.

So if I had a broad policy approach, I would suggest let's get our hands around how do we engage this huge asset of the already successful private business community that is out there waiting to be mobilized in ways—and this is where the caveat comes in.  These men and women don't like the Federal Government, by and large, very much.

So we have to do it in a way that really comes from that community and is managed by that community.  Because the first woman on your first panel said it best:  Mentorship is easy to say, it is hard to do.  It is based on personal relationships, expertise sharing, and a willingness of people with ability to take that ability and infuse it into people that they are really now just getting to know.  But if we could turn that on it wouldn't take much money, but it would take coordination, we could turn this whole arena in a way where 5 years, 2 years, perhaps a year from now, we would be talking about how do we manage the phenomenal growth and success of this whole arena, not just including small business procurement from the Federal Government. 

Mr. DENNISTON.  If I may, let me address your question from the standpoint of procurement because I think that we are making strides.  As an example, the President's executive order, one of the requirements in there was for DOD to have training of all contracting and personnel in the government. 

Within a week of the executive order being passed, the Defense Acquisition University had an on‑line course.  That was done.  We in the Center for Veterans Enterprise have worked with just about every large agency and what the requirements are for Public Law 106‑50 and Public Law 108‑183.  And we do that in a lot of ways.  A lot of times we are invited into the agencies to train staff, on the requirements.  We also go to a lot of events in particular States.  We work very closely with the Procurement Technical Assistance Center that you have in Little Rock, that one does a great job.  We have done a number of events in San Diego that bring in SPAWAR, which is obviously the largest buyer, and all the contractors that support SPAWAR.  We do it in conjunction with the Procurement Technical Assistance Center, we do it in conjunction with Bob Mulz who runs the Elite DVEV network so that we have the opportunities to bring people in.  And I think that has gone well. 

I have to tell you about yesterday.  Yesterday, this week, GSA has had their expo, which is where all the contractors that are on the Federal supply schedule have an opportunity to display their wares to buyers throughout the government marketplace.  On Tuesday, we had a whole veterans day down there.  In the expo we had a section of nothing but the service‑disabled vets that have won the GWAC contracts.  And I wish you could have been there to see the excitement that they had. 

And Lurita Doan, the Administrator of GSA, and I walked through there in the afternoon and talked to the veteran owners.  And one of the questions that we asked was:  Now you have the vehicle, what are you going to do to make it successful?  And every one of those companies had target opportunities that they have identified in their marketing with different agencies—and we are proud to say VA was the most one mentioned—but they are excited about what we have got. 

If you could see the excitement that we have when we have the conference in the end of June in Las Vegas, or if you could see the opportunities that are going to come out when we do the accountability day—yeah, we know we have agencies that aren't coming to the forefront the way they should.  But you know what?  You also have to remember that contracting officers in the government are overworked.  It is a cultural issue.  For the last 30 years, we have beat on contracting officers to make small business opportunities available for minorities and women.  Now all of a sudden we are changing the dynamics and we are saying, you did a great job there; now we want you to take care of veterans and service‑disabled vets, and the contract officers and the program managers say, wait a minute, I have developed this cadre of minority‑ and women‑owned businesses that you have asked me to support and I have done that.  I don't want to change.  I have missions.  I have risks that I have got to deal with in delivering services to whoever my constituents are.  And now you are asking me to bring in a whole group of people.  I am not willing to take that risk. 

So a lot of this is culture.  That is why the importance of having the people at the top be supportive of it the way our Secretary and Deputy Secretary have done and say, by golly, we are going to make this work one way or another, that is what it takes.

I think we have enough of us to make this program successful.  I think it is now an issue of accountability. 

Mr. CELLI.  May I dovetail on to that? 

I was very excited to hear Scott talk about the change in culture.  I was asked to sit on a committee—and I don't want this to sound like it is a jab to GSA, I love GSA and I think they are doing wonderful work.  I was asked to sit on a steering committee for Veterans Procurement Day by the GSA.  And the regional administrator was there.  Many of the experts you have called today sat there and were part of that steering and planning committee. 

In the meeting, they brought in some of their own procurement officers to sit around so we could talk about how to best do outreach to service‑disabled veterans.  That was really the goal.  What breakout sessions do we want to have, and what is the best way to market and reach them?  And that is my expertise.  I am not in procurement.  I am not an expert in procurement.  I have been thrust into this arena because of the work I do.  But my expertise is in building businesses, marketing, outreach, that is what I do best.

And as we started to go around the table, there was a pause and one of the procurement officers asked if he could say something.  And his question was:  Please explain to me the service‑disabled veteran thing.  Is that 8(a)?  And there was a strong silence in the room.  And there were three procurement officers.  A second one looked over and nodded in agreement and the third one, who was very knowledgeable about veterans, said no, that is not it.  And the regional administrator at that time stopped and said, you know, I am really glad that you asked that question because what that does is tell me that we need to do more training within our agency, with our procurement officers. 

So this is 2007.  And you know we still have procurement officers who don't understand the program.  So I guess my question would be:  Is that a lack of emphasis from the top?  Or, I guess I am not sure.  And I will leave it at that.

Ms. HERSETH SANDLIN.  Thank you, Mr. Celli. 

Ms. Davis do you have questions for the panel? 

Mrs. DAVIS.  Thank you, Madam Chair.  Thank you to all of you.  I appreciate that, and I know it is late and I will try to be very brief. 

I just wanted to thank Mr. Blackwell.  I appreciate your being here and the work you did on behalf of at least one of my constituents.  And I know there are many more.  I enjoy having the opportunity to work on these issues and we certainly want to continue to do that.

And I think that the overriding theme here in many ways has been on accountability.  We often ask, you know, it is the law, what is the problem?  Why can't we do a better job in oversight and in trying to have enough enforcement so that people believe that, in fact, there is a job to be done and that they know that someone is out there to make sure that it happens.

But I wanted to just focus on one or two things quickly.  You mentioned the mentoring, and certainly Ms. Halfaker was benefited by that.  Are there programs in your respective programs in which you have an opportunity to link experienced veteran business entrepreneurs with newcomers to small business, and has there been any evaluation on how that is going?  And what role would you like to see the committee play in trying to expand on that and, I guess, guarantee that that element is working? 

Mr. ELMORE.  Let me try to start and share at least the work that we have done.

The five centers that I provide funds to, that provide assistance to about 11,000 veterans and reservists a year, all of those have a mentoring piece in the things that they do.  That is not the only thing they do, but that is one of the elements in the agreement that they have with us. 

Okay, how well does that work?  I think it really probably depends, more than anything else, on the skills of the counselors in those specific programs and their ability or their connection with the private business community, not just the veterans looking for assistance.  So I think it is pretty spotty. 

I think our SCORE volunteers, better than half of which are veterans, some of them do take on a mentoring relationship with their customers.  Not all of them.  Not every SCORE counselor is capable of taking on a mentoring relationship.  It is almost a personal sort of a thing that has to happen. 

Our Small Business Development Centers and our Women's Business Centers also have mentoring, but it is not a specific program.  It is not a program that you can impose. It almost has to be led by the community itself.  And I think you saw evidence of that at your first panel.  Nobody said to Mark, help her.  For some reason, Mark began helping her.  And there is no empirical evidence in this, but I believe this in my heart and in my gut, that veterans, probably more than any other group of entrepreneurs in America, have an interest in, and have almost a compulsion to a degree, to go back and provide this assistance to those who come behind us. 

I am not sure that I know how to do it.  I just know that if we can figure out how to unleash the private business community, that is not looking for help.  They do what I call, "they want to help."  There is a quiet pride there that we have to give them an opportunity to exercise. 

If I had a suggestion for Congress, it is not build another Federal program, because most of these veterans aren't really interested in helping the Government do something again.  Okay.  But you can help, because you are visible and you are leaders in the American community, in your communities where you come from. 

One of the things I have tasked my district office directors to do at our district outreach is to begin to develop local volunteer lending committees that would do exactly what Walt said.  Instead of a veteran going to a bank with a business plan that isn't really ready, maybe isn't thought through, isn't completed, didn't understand exactly what should be there, whatever, develop these local volunteer committees; let our veterans come before them once a month, what I have suggested, get their plans reviewed. 

I think there are a number of things that come from that.  One is you get better business plans because the bankers, as volunteers, are going to say.  This isn't ready, this is—you need to fix this, this will never work.  Take it back and look at it some more.

The other thing it will do is it will begin to build our community inside America's lending community.  One of the strengths of us, our community, is that we are everywhere.  But at this point, the only "everywhere" we are talking about is the Federal part of it.  And you can help us lead an open America to come back and help our sons and daughters come along behind us and succeed.  We are going to succeed, with or without the government.  We already do.  Government's role is to maximize our resources and help succeed.  But, ultimately, most that have success is in the private sector.

And I would love to be part of a no cost—not another law—let's figure out how to do this and finally unleash this potential of these millions of men and women that are in America. 

Mr. DENNISTON.  I would argue that it is already happening.  One of the dilemmas that we all had when we started our respective programs is that nowhere could we find an identifiable source of veteran‑owned small businesses, so we started from scratch and we started sort of building this up. 

As an example, in San Diego, the elite DVD networking.  One of the reasons we have these community support groups of networks of veteran‑owned small businesses is to do exactly that; is to help each other.  Whether it is mentoring with financing, whether it is mentoring from a standpoint of joint venturing on prime contracts with the Federal Government, it is happening.  I think, as Bill mentioned, it is happening without the government. 

One of the misnomers, I think, of the Mentor Protégé programs that we have in the Federal agencies, that is not for a start‑up business.  If your going to be a protégé of a mentor—remember, these mentors are the big guys.  It is the Northrops, it is the Boeings, it is the General Dynamics, and there are huge expectations.  And they are not going to enter into a Mentor Protégé relationship unless they have an experience with you as a subcontractor.

One of the differences between doing business with the government working as a prime contractor with us and as a sub, we look at contracting from a government perspective; we are dating you.  We look at it from a contract‑by‑contract basis, and if we find somebody better.  Then we are going to go to them.

The prime contractors, on the other hand, their philosophy is more of a marriage.  And if I am going to work with you, by golly, I am going to make sure you grow and develop and I have someone I can count on in future years. 

And I think when small businesses get into Mentor Protégé agreements, what they find is there is a lot more that is required of them than what is expected.  So the really good Mentor Protégé programs we do in the government are for companies that have been in existence, have some financial and production wherewithal, and have experience in that marketplace.

But, again, I think what is happening is we have a groundswell of this mentoring thing of veterans wanting to help other veterans.  One of the new programs we hope to start in CVE with our database of 15,000 veterans is twofold.  One is to put out a call to step up and volunteer to help another veteran start a small business, and the other is the huge areas of employment, because we know that veterans hire veterans. 

Mr. CELLI.  First of all, I would like to recognize Congresswoman Davis and her State as being an industry leader in the way veterans procurement works at the State level.  I work with a couple of veterans from the State of California and they couldn't be—they couldn't be happier at the way that program has really spearheaded veterans procurement at the State level.

When we talk about the mentoring and the coaching, similar to what we heard Dawn Halfaker and Mark Gross, their relationship, the question that you asked was if we have that type of program established within the existing programs that we now service.  And, really, the answer is no.  Any type of mentoring that is done company to company, you know, neophyte company or fledgling company to established company, is done on the fly.  It is done on the cuff.  And it does happen, but it is not evaluated because, again, it is—you know, there is a lot, there is a lot there.

And one of the things I would really like to point out, and I was waiting until you got back to me, is that something that really may have been alluded to but wasn't really touched upon in all of the testimony that you heard today, is that we are essentially—really we are talking about two customers.  We are talking about new business start‑ups as one customer base which has its whole set of training and of assistance that it needs, and then we are talking about established customers which have companies that are trying to grow, whether that is through procurement, whether that is through marketing and outreach at the State level, where that is just trying to reach regular commercial customers.  So you really need to think about this program as a two‑pronged program, at a minimum, and look at those two finite sets of customers with two very specific needs. 

As we set up conferences around the country, we always have to identify, first, who is our base customer and core customer going to be?  Is it going to be the new customer or is it going to be the established customer?  And when we do that, that is the way we market, and that is the way we set these programs up. 

I would like to respectfully disagree with Bill when he talks about young veterans not liking the government.  That was in the original part of my testimony, in the executive summary, I talk a little about the history of veterans through World War II, and up to today, and how the prevailing sentiment has been carried through with respect to how veterans are perceived, and which directly relates to their success not only in the marketplace but in the job market. 

And though my colleagues here—they were raised in a different time.  And veterans now don't have that same, I think, distrust of the government.  I am not going to say that it doesn't exist.  But the prevailing questions that I hear when I first get someone who is freshly off Active Duty is, isn't there a government program to help me? 

So it is more inquisitive and not how come the government isn't there, or I don't want the government's help; it is more of an expectation.  Where is the government?  And one of the biggest misnomers within the community is how do I sign up for the VA business loan, which they are confusing the home loan with, and we have to tell them that it absolutely does not exist. 

So I think that veterans today absolutely expect the government to be there for them with regard to some of the programs we are talking about today. 

Mr. BLACKWELL.  If I may cap this in kind of a crass way, so you will forgive my directness.  Mentorship first.  Mentorship comes in as many different flavors as there are businesses.  Sometimes it is just an arm around a shoulder, saying, I am here for you, pal, I can answer your questions; I can't get involved in your business plan right now, but you call me if you need me.  That is one form of mentorship.

In Protégé kind of activity, you are really talking about the more technical sides of our business, the IT world, where it makes sense to leverage and partner and do all those things.  And from a sheer outreach standpoint, where you can help us most—and I mean, this in the most sincere way—you are looking at a very small group of people today.  But between Bill's group and Scott's group, my staff, our staffs out in the field, you are talking less than 50 people.  You are talking less than 50 people to address the needs of over 8 million veterans who are either in business or want to start a business, not counting all the Iraqi‑Afghanistan veterans.  If you want to help us, stand with us.  Help us have the oversight that is needed from a congressional standpoint for you to give us money. 

We are delighted to report back to you.  It was the most fun I have ever had to do, and that is writing my fiscal year 2006 accomplishments to you and the President.  I was amazed myself. 

Will they get better?  Absolutely.  But we need your support.  No private-sector money is going to be given to us as TVC without the partnership of the U.S. Congress, because the private sector folks believe that it is in your responsibility realm to stand with our veterans. 

So as crass as it may sound, we are a little tiny group.  We don't get along all the time, I promise you that.  We have very differing opinions on the services we can and, frankly, are able to provide, given that limited funding outreach. 

I don't know who my customer is.  Scott does, because he keeps the database.  But he is not allowed to share that with me.  So I am in the reactive mode more than the proactive mode.  As a business person, I think you will understand how frustrating that can be.  Bill has the same problem.  Out of the 567 new business starts from TVC last year, Mr. Celli has 222 of those.  He has four people. 

Mr. CELLI.  I have two full‑time people and two part‑time people. 

Mr. BLACKWELL.  So how much more can we do?  I don't know.  Fund us.  Give us a shot.  We have a plan.  It is working.  We have leveraged technology.  You cannot find more dedicated people than you have heard today on these panels, I promise you. 

The team is here.  Play with us.  Thank you. 

Mr. CELLI.  I also have another recommendation I would like to bring to your attention with regard to promoting the mentorship that we heard so much about.  In the 2006 Small Business Advisory Group report, one of the suggestions that we had was to have the SBA create Regional Finance Bonding and Security Veterans Small Business Advisory Councils.  And what I mean by that is having the SBA look at their regions and their districts and say, go out and find some bankers and bonding folks and create an advisory council to help vets.

When they do that, come back with recommendations, meet and go out and find ways to promote veterans.  When these public‑private partnerships start to develop and these bankers start to come up with recommendations, they are going to own them.  And they are going to endorse them.  And they are going to push that down, you know, push back from the top down.  And the next thing you know, veterans will become important in the banking community.  Veterans will become important in the bonding community.  Veterans will become important in the business community over all. 

Mr. ELMORE.  Can I say one thing, Madam Chair? 

Ms. HERSETH SANDLIN.  Yes, because I have a number of thoughts I still want to share with you too.  Go ahead. 

Mr. ELMORE.  This is my second testimony today, and so far I haven't gotten in trouble.  And I am kind of disappointed in that.

Ms. HERSETH SANDLIN.  Don't speak too prematurely. 

Mr. ELMORE.  I won't go too far, I promise. 

One of the things that was talked about when the community came together, really years ago, but in 1997, 1998, 1999, to create what became Public Law 106‑50, none of us knew that that was going to pass.  The 1997 statute did not pass in the form that we wrote it.  Neither did the 1992 statute or the 1991 statute or the 1990 statute that we wrote.  None of those passed. 

One of the things we talked about in 1998 and 1999 was the Community Reinvestment Act.  That is not within SBA's purview, and this is where I get in trouble.  But you know what?  It is in America's purview.  That is where most capital comes from, is from the banking community, the private equity markets out there in the real world, not just the Federal part of this.  Perhaps that is as far as I will go, but I hope you get my hint and I hope I didn't get in too much trouble.

Ms. HERSETH SANDLIN.  I appreciate the hint.  And I appreciate—I am sure Ms. Davis and Mr. Boozman would agree that we have a lot that we can work on here.  But some of my thoughts, if I might, because I think, Mr. Celli, you ultimately got to the question I wanted to come back to you on.  What is the most immediate thing that you think the Subcommittee can do to facilitate our common objective?  And I do want to come back to a point that you made, Mr. Elmore, just to clarify, but also to respond, because I think Mr. Celli addressed it, but what I heard you say wasn't maybe so much the young veterans having this distrust, but the established military alumni that are out there of that older generation.  I think that while that may be true, and I think there are a variety of factors for where that distrust—from where it stems—but I think one of them has to be a disappointment when they see Federal agencies not living up to a modest 3 percent set‑aside in contracting. 

While I understand, some of what you said previously as well, that there is all this private sector opportunity.  We know that.  The focus of the Office of the SBA isn't so much just on the public contracting side, I think.  As I said before, the theme here is the issue of enforcement and accountability.  I think that there are things that we can do, working together on the Subcommittee, that isn't passing more laws, but working with our colleagues to figure out the best mechanism and the best model to ensure that level of accountability beyond our oversight hearings, that is very important—but beyond that, to establish the commitment that can help erode over time that distrust that I don't think is there to the same degree with the younger generation, but to go to that point with the younger generation. 

It goes to the point Mr. Blackwell was making:  How do we best adapt our agencies and our programs to meet, to transition, to serve different constituencies? 

I do want to commend what you have been doing with that, Mr. Blackwell, but while you have been doing that the mission has changed.  People observe that questions get raised that aren't always answered to everybody's satisfaction.  I hear what you are saying about the small group we are dealing with the dedicated group we are dealing with, the results and the outcomes I think we have had in many cases. 

But I think you will find a receptivity from me anyway, more focused initially as it relates to enforcing laws we have already on the books.  I would like to work with you to figure out ways—and I think I was going to ask you a question, Mr. Denniston, about the PTACs and working with the veterans themselves.  But clearly we have got some work that we can pursue on training procurement officers.

And I would be more comfortable at this stage—I am not saying I am not willing to seek additional resources in a pretty tight budget environment for additional programmatic funding, but I also think, if people are overworked and if we have procurement officers who do not know the difference between 8(a) and the other programs that are geared toward our service‑connected disabled veterans, that there are some issues here that we can focus on immediately in making sure we are adequately resourcing that as we then work with you to identify the best coordination of services and how we deliver those benefits to different constituencies, whether they are based on generation or, in terms of pursuing some of what we were just talking about with the mentorship and the protégés. 

So, Mrs. Davis, thank you for your time. 

Thank you to all of our witnesses on this panel and the preceding panels.  I want to thank staff for their work in getting us prepared for this hearing, but I am also going to thank staff in advance for all of the work that we are going to undertake in following up on all of the information we have gathered at the hearing today. 

With that, I will be around to visit with you maybe a little bit more following the hearing, but again, thank you for the statements, and for the information.  We value your insight and your ideas. 

The hearing stands adjourned. 

[Whereupon, at 5:42 p.m., the Subcommittee was adjourned.]


APPENDIX

Prepared Opening Statements:

Prepared statement of the Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on Economic Opportunity, and a Representative in Congress from the South Dakota
Prepared statement of Hon. John Boozman, Ranking Republican Member, Subcommittee on Economic Opportunity, and a Representative in Congress from the State of Arkansas


Witness Prepared Statements:

Prepared statement of  F. Dawn Halfaker, Owner/Chief Executive Officer, Halfaker and Associates, LLC, Washington, DC
Prepared statement of Mark Gross, President/Chief Executive Officer, Oak Grove Technologies, Raleigh, NC
Prepared statement of Anthony R. Jimenez, President and Chief Executive Officer, MicroTech, LLC, Vienna, VA
Prepared statement of Joe Wynn, President, Veterans Enterprise Training and Service Group, Inc. (VETS Group), and Member, Veterans Entrepreneurship Task Force (VET-Force)
Prepared statement of Joseph C. Sharpe, Jr., Deputy Director, Economic Commission, American Legion
Prepared statement of Richard F. Weidman, Executive Director for Policy and Government Affairs, Vietnam Veterans of America
Prepared statement of Walter G. Blackwell, President/Chief Executive Officer, National Veterans Business Development Corporation, The Veterans Corporation
Prepared statement of William D. Elmore, Associate Administrator, Veterans Business Development, U.S. Small Business Administration
Prepared statement of Scott F. Denniston, Director, Office of Small and Disadvantaged Business Utilization, Center for Veterans Enterprise, U.S. Department of Veterans Affairs
Prepared statement of Louis J. Celli, Jr., Chairman, Advisory Committee for Veterans Business Affairs, U.S. Small Business Administration, and Chief Executive Officer, Northeast Veterans Business Resource Center


Submission for the Record:

Prepared statement of Eric A. Hilleman, Deputy Director, National Legislative Service, Veterans of Foreign Wars of the United States


Material Submitted for the Record:

Executive Order 13360—Providing Opportunities for Service-Disabled Veteran Businesses To Increase Their Federal Contracting and Subcontracting, dated October 20, 2004