[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                    SUBCOMMITTEE HEARING ON FEDERAL


                   GOVERNMENT EFFORTS IN CONTRACTING


                      WITH WOMEN-OWNED BUSINESSES

=======================================================================

               SUBCOMMITTEE ON CONTRACTING AND TECHNOLOGY
                      COMMITTEE ON SMALL BUSINESS
                 UNITED STATES HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 21, 2007

                               __________

                          Serial Number 110-9

                               __________

         Printed for the use of the Committee on Small Business


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house



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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman


JUANITA MILLENDER-McDONALD,          STEVE CHABOT, Ohio, Ranking Member
California                           ROSCOE BARTLETT, Maryland
WILLIAM JEFFERSON, Louisiana         SAM GRAVES, Missouri
HEATH SHULER, North Carolina         TODD AKIN, Missouri
CHARLIE GONZALEZ, Texas              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              MARILYN MUSGRAVE, Colorado
RAUL GRIJALVA, Arizona               STEVE KING, Iowa
MICHAEL MICHAUD, Maine               JEFF FORTENBERRY, Nebraska
MELISSA BEAN, Illinois               LYNN WESTMORELAND, Georgia
HENRY CUELLAR, Texas                 LOUIE GOHMERT, Texas
DAN LIPINSKI, Illinois               DEAN HELLER, Nevada
GWEN MOORE, Wisconsin                DAVID DAVIS, Tennessee
JASON ALTMIRE, Pennsylvania          MARY FALLIN, Oklahoma
BRUCE BRALEY, Iowa                   VERN BUCHANAN, Florida
YVETTE CLARKE, New York              JIM JORDAN, Ohio
BRAD ELLSWORTH, Indiana
HANK JOHNSON, Georgia
JOE SESTAK, Pennsylvania

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

               Kevin Fitzpatrick, Minority Staff Director

               SUBCOMMITTEE ON CONTRACTING AND TECHNOLOGY

                      BRUCE BRALEY, IOWA, Chairman


WILLIAM JEFFERSON, Louisiana         DAVID DAVIS, Tennessee, Ranking
HENRY CUELLAR, Texas                 ROSCOE BARTLETT, Maryland
GWEN MOORE, Wisconsin                SAM GRAVES, Missouri
YVETTE CLARKE, New York              TODD AKIN, Missouri
JOE SESTAK, Pennsylvania             MARY FALLIN, Oklahoma

        .........................................................


                                  (ii)


                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Braley, Hon. Bruce...............................................     1
Davis, Hon. David................................................     3
Velazquez, Hon. Nydia M..........................................    23

                               WITNESSES


PANEL I
Carranza, Hon. Jovita, Deputy Administrator, Small Business 
  Administration.................................................     4
Spampinato, Frank, Department of Energy..........................     5
Warder, Larry, Department of Education...........................     7
Luedtke, Thomas, National Aeronautics and Space Administration...     8

PANEL II
Dorfman, Margot, CEO, U.S. Women's Chamber of Commerce...........    27
Lomasney, Christina Ann, President & CEO, ISOTRON Corporation....    29
Smith, Karyl L., Iowa Valley Appraisal...........................    31
Roberts, Sheryl, CEO, CCSI LP....................................    33

                                APPENDIX


Prepared Statements:
Braley, Hon. Bruce...............................................    41
Davis, Hon. David................................................    43
Velazquez, Hon. Nydia M..........................................    44
Carranza, Hon. Jovita, Deputy Administrator, Small Business 
  Administration.................................................    46
Spampinato, Frank, Department of Energy..........................    48
Warder, Larry, Department of Education...........................    53
Luedtke, Thomas, National Aeronautics and Space Administration...    57
Dorfman, Margot, CEO, U.S. Women's Chamber of Commerce...........    60
Lomasney, Christina Ann,President & CEO, ISOTRON Corporation.....    62
Smith, Karyl L., Iowa Valley Appraisal...........................    67
Roberts, Sheryl, CEO, CCSI LP....................................    71

Statements for the Record:
Women Impacting Public Policy....................................    75
Women Construction Owners & Executives, USA......................    82
Rossi & Meagher LLP..............................................    86

                                 (iii)


                    SUBCOMMITTEE HEARING ON FEDERAL


                   GOVERNMENT EFFORTS IN CONTRACTING


                      WITH WOMEN-OWNED BUSINESSES

                              ----------                              


                       WEDNESDAY, MARCH 21, 2007

                     U.S. House of Representatives,
                               Committee on Small Business,
                   Subcommittee on Contracting & Technology
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2360 Rayburn House Office Building, Hon. Bruce Braley 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Braley, Velazquez, Jefferson, 
Clarke, Sestak and Davis.

              OPENING STATEMENT OF CHAIRMAN BRALEY

    Chairman Braley. I can this hearing to order.
    This is the very first hearing of the Subcommittee on 
Contracting and Technology ever. And we are pleased to have our 
guests with us today, and also the members who joined us.
    I would like to begin by reading an opening statement.
    Women-owned small businesses are an important part of the 
economy. They employ 7.1 million people and their annual 
payroll is almost $175 billion. These firms are deriving future 
growth and job creation in our communities.
    One of the best ways for these and other small businesses 
to grow is to have the Federal Government as a customer. The 
U.S. Government is the biggest buyer in the world with 
purchases of $340 billion per year. It buys everything from 
aircraft to road construction to computer services. Even with 
this large market at their disposal, businesses owned by women 
are still not getting their fair share of opportunities.
    In 2005 only 3.3 percent of Federal contracts went to firms 
owned by women, the Government's highest achievement to date. 
In order to increase the likelihood that women-owned businesses 
would be able to participate in Government contracts, Congress 
set a 5 percent goal in 1994 as part of the Federal Acquisition 
Streamlining Act, also known as FASA. It quickly become 
apparent, however, that without a specific procurement 
mechanism for achieving that goal real progress would be hard 
to achieve for women-owned businesses. Between 1994 and 2000 
the Federal Government never came close to meeting this 5 
percent goal.
    To address this inequity the Chairman of our Committee, the 
Honorable Nydia Velazquez introduced the Equity In Contracting 
for Women Act, which Congress passed into law on December 21, 
2000. This important Act requires the Small Business 
Administration to conduct a study to identify particular 
industries where small businesses owned and controlled by women 
were underrepresented in Federal procurement contracting. It 
also required the SBA to establish procedures to verify 
eligibility to participate in a procurement program.
    More than 6 years have passed and the SBA has not yet 
implemented the program. We are here today to ask why.
    We are also here to talk about the impact of this failure 
on women-owned businesses in this country. Since the 
establishment of the 5 percent target the number of women- 
owned businesses increased by nearly 20 percent, and today they 
continue to represent one of the fastest growing segments of 
small businesses. Unfortunately despite their numbers, growth 
and contributions to the economy, the 5 percent goal has yet to 
be accomplished.
    If the goal had been accomplished, women-owned businesses 
would have received an additional $5.2 billion in contracts in 
2005 alone. In the past 5 years women would have received more 
than $27 billion in additional Government contracting 
opportunities.
    If these companies had realized this additional revenue, 
they would have created at least 750,000 jobs in communities 
throughout the country, shoring local economies and improving 
people's lives.
    Today's hearing will provide us with a forum to examine the 
obstacles that have prevented women-owned businesses from 
achieving the 5 percent and how the Federal Government can 
increase its contracts with women-owned small businesses.
    We will also investigate whether there are any actions that 
this Committee and the Congress should take to reinforced the 
importance of including women-owned businesses in Government 
work.
    We have called upon four agencies to testify; the SBA, the 
Department of Energy, NASA and the Department of Education. 
These four agencies as buyers represented $36 billion in 
Government contracting in fiscal year 2005, almost 12 percent 
of the Federal marketplace. There are some common themes to 
their purchases from women-owned companies that we would like 
to evaluate, and we would like to hear about their use of these 
businesses in their respective agency's contracts.
    The Subcommittee is concerned about the delays that have 
this program stuck in a peculiar regulatory limbo. More than a 
year ago in November of 2005, the U.S. District Court in the 
District of Columbia decided that the SBA had an unreasonably 
delayed the implementation of the program in violation of the 
Administrative Procedures Act. And yet here we are today with 
the women's procurement program still not up and running. We 
need to work together to create these inequities and removed 
the obstacles to participation that currently exist.
    In order to better understand the challenges that women-
owned businesses are facing today our second panel will consist 
of women who own businesses from around the country. They 
exemplify the type of companies that Federal agencies should be 
including in their contracts.
    I am particularly please to welcome Ms. Karyl Smith, owner 
of Iowa Valley Appraisal from my congressional district in 
Iowa.
    Women business owners are one of the fastest growing 
segments of the small business population and are expanding at 
twice the rate of other companies. Great strides have been made 
in the private sector to expand opportunities for women. It is 
time for the Federal Government to do its share.
    And with that I recognize my friend, the Ranking Member Mr. 
Davis for his opening statement.

                 OPENING STATEMENT OF MR. DAVIS

    Mr. Davis. Thank you, Bruce.
    Good morning. I would like to thank Chairman Braley for 
holding this hearing. I am looking forward to working with you 
on this Subcommittee. And I appreciate the witnesses coming 
here to testify today in what promises to be an interesting 
hearing.
    I would especially like to thank the SBA Deputy 
Administrator Jovita Carranza, because I understand this is 
your first appearance before a congressional hearing since your 
confirmation.
    I will keep my opening statement brief so we will be able 
to get down to our panel.
    I think everyone here can appreciate the vital role that 
small businesses play in this country. They are what drive the 
economy. Since its inception the Small Business Administration 
also known as the SBA has been charged with, among other 
things, ensuring that small businesses receive their fair 
portion of the Government contracts and sales. The SBA has done 
a lot of good work towards that end. But there's a lot more 
work that needs to be done.
    In the year 2000 Congress passed and the President signed 
into law legislation mandating that the SBA establish a program 
to increase federally procurement contracts with women-owned 
businesses specifically in industries in which women are 
historically underrepresented. I was not here when that 
legislation was passed, but 7 years later the program still has 
not been implemented.
    According to the SBA, prime contracting dollars going to 
women-owned businesses increased from $4.6 billion in fiscal 
year 2000 to $10.5 billion in fiscal year 2005. While progress 
has been made toward having a minimum of 5 percent of Federal 
prime contracting dollars go to women-owned businesses, that 
goal has not been achieved. Based on the data that I have seen, 
some departments do better than others.
    I understand the challenges faced by SBA in establishing 
the areas in which women-owned businesses are underrepresented. 
But what I would like to better understand is what causes such 
sufficient delays in the evaluation of the initial study, the 
contracting of the second study and the publication of the 
rules.
    It is my belief that when a mandate is given to an agency 
by Congress it is incumbent on that agency to take all 
necessary steps to expeditiously as possible implement the 
mandate. I look forward to hearing from the witnesses today in 
that regard.
    Thank you for being here. And thank you, Mr. Chairman.
    Chairman Braley. Thank you, Mr. Davis.
    Are there any other members who wish to make an opening 
statement?
    For the benefit of our witnesses, let me explain the 5 
minute rule that applies at this hearing. Witnesses will be 
allowed 5 minutes to deliver their prepared. And the way the 
lights work you will have a yellow light that will come on when 
you have one minutes remaining, and when your time is up the 
red light will come in.
    Chairman Braley. I would like to begin with our first 
witnesses, Mr. Jovita Carranza. Ms. Carranza is the Deputy 
Administrator for the United States Business Administration. 
And she was confirmed in December of last year.
    Welcome.

   STATEMENT OF JOVITA CARRANZA, DEPUTY ADMINISTRATOR, SMALL 
                    BUSINESS ADMINISTRATION

    Ms. Carranza. Good morning, Chairman Braley, Ranking Member 
Davis. Thank you for inviting me to testify today on behalf of 
the U.S. Small Business Administration regarding Federal 
Government efforts in contracting with women-owned businesses.
    Federal contracts can be a significant sourceof revenue for 
small businesses and women-owned small businesses. SBA is 
working to ensure that small businesses and women-owned small 
businesses have a seat at the table when competing for Federal 
contracts.
    In 1994, through the Federal Acquisition Streamlining Act 
Congress established a statutory goal of not less than 5 
percent of the total value of all Federal Government prime 
contract and subcontract awards for each fiscal year going to 
women-owned small businesses. Statistics do show that there has 
been growth in the area of contracting to women-owned 
businesses. Federal prime contract dollars going to women- 
owned small businesses increased from $4.6 billion in fiscal 
year 2000, or 2.88 percent, to $10.5 billion, and that is to 
say 10.5 in fiscal year 2005, or 3.342 percent.
    Subcontracting dollars have increased from $3.6 billion in 
fiscal year 2000 to over $6 billion in fiscal year 2003 based 
on the latest validated data available.
    Although we have seen an increase in the number of 
contracting dollars going to women-owned small businesses, the 
Federal Government still has not reached the statutory goal. 
SBA's Office of Government Contracting and Business 
Development, GCBD is working closely with Offices of Small 
Disadvantaged Business Utilization in the major Federal 
procuring agencies to promote the use of women-owned small 
businesses and encourage them to reach the 5 percent goal.
    In addition to these efforts, SBA's GCBD office 
collaborated with SBA's National Women's Business Council to 
develop a website for women business owners, and it's known as 
the womenbiz.gov. This website contains in-depth information 
for women business owners that are interested in doing business 
with the Government. It also provides over 100 links to current 
procurement information.
    In December of 2000, Congress created the framework for a 
Women-Owned Small Business Federal Contracting Program. SBA has 
been, and remains committed to implementing the statutorily-
mandated set-aside for women-owned businesses, but doing so in 
a way that would be upheld by the courts as constitutionally 
valid.
    Consistent with the requirement in the legislation for SBA 
to determine the utilization of women-owned small businesses in 
the Federal marketplace, SBA itself conducted a study to 
establish the findings. Once completed, an independent panel of 
experts at the National Academy of Sciences reviewed the study 
to assess the sufficiency and validity of SBA's methodology. 
Ultimately, the NAS panel concluded that the original SBA study 
was flawed. The NAS recommended a sound methodology for 
performing a study that would more effectively withstand legal 
scrutiny.
    While SBA was moving forward in its efforts to conduct a 
valid and constitutionally sound study, the U.S. Women's 
Chamber of Commerce brought suit against SBA to expedite 
implementation of the Women's Procurement Program. The U.S. 
District Court for the District of Columbia is currently 
monitoring SBA's progress.
    On February 21, 2006, SBA awarded a contract to the Rand 
Corporation and it commenced work to study all industry groups 
to determine those industries in which women are 
underrepresented and substantially underrepresented in 
accordance with the methodology recommended by the NAS. 
Although there were some unavoidable delays, the disparity 
study is now in the final stages of clearance and should be 
published sometime in April.
    I speak on behalf of the Agency and on behalf of 
Administrator Preston when I say that SBA is focused on this 
issue and ensuring the implementation of the program.
    I want to thank you for the opportunity to testify today. I 
look forward to any questions that you may have.
    [The prepared statement of Ms. Carranza may be found in the 
Appendix on page 46.]
    Chairman Braley. Thank you.
    Our next witness is Dr. Frank Spampinato. Dr. Spampinato is 
the Chief Acquisition Officer for the Department of Energy.
    Welcome.

 STATEMENT OF DR. FRANK SPAMPINATO, CHIEF ACQUISITION OFFICER, 
                      DEPARTMENT OF ENERGY

    Dr. Spampinato. Thank you.
    Good morning, Mr. Chairman and Members of the Committee. I 
am pleased to appear before you today to discuss the Department 
of Energy's use of women- owned small businesses in DOE 
contracts. Let me begin by stating that DOE has established 
increasing contracting opportunities for women-owned small 
businesses as an objective in its FY '07 Strategic Plan for 
Small Business. As such, we've established agency strategies, 
prime and subcontracting objectives, and education, training 
and outreach objectives for DOE's Women-Owned Small Business 
Program. Before addressing these strategies, I would like to 
discuss DOE's business procurement model, which will 
demonstrate the nature of DOE's procurements and the level at 
which DOE's small business prime and subcontracting goals are 
established.
    DOE's business or procurement model includes two distinct 
types of contracts: Facilities Management Contracts and non-
Facilities Management Contracts. The Facilities Management 
Contracts are the primary procurement vehicle utilities at DOE 
for the operations of its network of Government-owned 
contractor operated laboratories and other facilities.
    FMCs have historically represented from 85 to 90 percent of 
the Department's procurement dollars. As directed by statute, 
DOE establishes its prime contracting goals annually. Small 
business goal for FY '06 was established at 828.7 million or 
4.3 percent of an estimated procurement base of 19.1 billion. 
And the women-owned small businesses goal, which is a portion 
of that, was established at 65.1 million. The Department 
exceeded its women-owned small businesses goal by achieving 
160.1 million.
    DOE also experienced growth in its subcontracts to women-
owned small business concerns. From the period FY 2000 through 
FY 2005, the latest fiscal year for which data is available, 
subcontracts to women-owned small businesses grew from 485 
million to 668 million, a 35 percent increase.
    Women-owned small business concerns are a key focus in all 
of DOE's efforts to improve contracting and subcontracting 
opportunities for small businesses. Forty-one percent of the 
proteges mentored by DOE prime contractors in its Mentor-
Protege program are women-owned small business concerns. Women-
owned small business concern serve on DOE's Small Business 
Advisory Team; and DOE designates an annual Secretarial Award 
for offices and facilities that achieve outstanding performance 
in contracting and subcontracting to women-owned small 
businesses.
    In past years several facilities have won the Small 
Business Administration's ``Frances Perkins Vanguard Award'' 
for outstanding achievement in contracting with women-owned 
small businesses. In addition to your Strategic Plan 
requirements, DOE has specific prime and subcontracting 
objectives for women-owned small businesses, such as:
    To include a prime contractor's past performance in 
contracting with women-owned small businesses as an evaluation 
factor in solicitations and to incentivize Mentor Protege 
relations with women-owned small businesses.
    In addition, DOE holds monthly Advanced Monthly Acquisition 
Team meetings to review the Department's major acquisitions for 
the purpose of maximizing the utilization of small businesses, 
including women-owned small businesses.
    In summary, let me assure that DOE recognizes the important 
role that women-owned small businesses play in our national and 
local economies and we will continue to support and promote 
opportunities for women-owned small businesses to assist them 
in becoming viable and dynamic entities. DOE will continue to 
advocate for a strong Federal program for women-owned small 
businesses in prime contracting, subcontracting, and inclusion 
in financial assistance opportunities.
    Thank you for the opportunity to appear before this 
Committee. That concludes my prepared remarks. I would be 
pleased to answer any questions you may have.
    Thank you.
    [The prepared statement of Dr. Spampinato may be found in 
the Appendix on page 48.]
    Chairman Braley. Thank you.
    Our next witness is Mr. Larry Warder. Mr. Warder is the 
Chief Financial Officer for the Department of Education.

  STATEMENT OF LARRY WARDER, CHIEF FINANCIAL OFFICER FOR THE 
                    DEPARTMENT OF EDUCATION

    Mr. Warder. Thank you, Mr. Chairman and Members of the 
Committee.
    I would like to take the opportunity to discuss our efforts 
in attempting to increase our effort to contract with all 
women-owned small businesses.
    To put in perspective what the Department of Education is, 
is we are a very large grant making and loan making 
organization. We have a budget of nearly $100 billion, 
virtually all of which is spent on grants and aid to secondary 
education and loans to students. So 58 percent of the dollars 
that we spent in fact go to secondary institutions in forms of 
grants or they go directly to loans to students or to support 
those loans.
    Another 36 percent is spent on elementary and secondary 
education.
    We have another 5 percent of grants that go for various 
purposes such as research and discrimination of research 
information to various organizations.
    Only less than 2 percent of the budget of the Department is 
actually spent on administering and managing these activities. 
And as part of that we contract, again we're a fairly small 
contracting organizations with contracting of slightly over a 
billion dollars a year, unlike many of the other organizations.
    So while we are small, we are also small in people. We have 
4200 employees that manage this flow of one billion dollars. 
And we do that through a significant amount of outsourcing of 
our large systems to accomplish this activity. And those 
systems would include some such things as the grant making 
process; everything from discriminating the information about 
grants that will be awarded through the application, the 
awarding and then the distribution of funds of those grants. We 
also outsource our large loan servicing business which 
administers a $400 billion loan portfolio of student loans. And 
these require some very large multinational or at least 
national in many cases, multinational organizations most of 
which are publicly held.
    So what do we do to try and encourage small business? We 
have taken as many of those as we can and have segregated out 
the pieces of those contracts that we in fact could contract 
directly with smaller organizations. And have been successful 
in doing that and increasing our small business by more than 
double over the last three or four years.
    We also will take our large systems development efforts and 
segment those. For example, we typically use an IV&V 
contractor, which would be a small business contractor, in 
order to help accomplish these activities.
    So we have attempted to take our very large complex 
projects and find places where we in fact can contract directly 
with small businesses.
    Now, in the area of the small business we have had a huge 
increase in areas of network equipment and telecom and 
maintenance and other such services.
    In terms of contracting with women-owned small businesses, 
we also have made substantial improvement. We have not yet hit 
our 5 percent goal, however we have made substantial progress. 
If you look at 2005, our volume of direct contracting was small 
and women businesses was slightly under 3 percent. We ratcheted 
that up to over 4 percent in 2006. We are running well ahead of 
last year's pace in 2007. And my testimony says that we are 
running currently at 9 percent; that is a little deceptive. We 
will not hit 9 percent this year. In fact, we will be fortunate 
to hit 5. Some of those very large contracts are yet to be let 
that typically go to these large national/multinationals. We 
will improve substantially over 2006. We hope to meet our 5 
percent target. We will get close to it, but we may not quite 
reach it this year.
    So we are committed. We are doing the best we can to 
identify the opportunity for women-owned small businesses. And 
we are confident that over the next year or two we are going to 
get to our 5 percent.
    Thank you for this opportunity. And I will be happy to 
address any questions.
    [The prepared statement of Mr. Warder may be found in the 
Appendix on page 53.]
    Chairman Braley. Our next witness is Mr. Thomas Luedtke. 
Mr. Luedtke is the Assistant Administrator for Procurement at 
the National Aeronautic and Space Administration, also known as 
NASA.
    Welcome.

   STATEMENT OF THOMAS LUEDTKE, ASSISTANT ADMINISTRATOR FOR 
PROCUREMENT AT THE NATIONAL AERONAUTIC AND SPACE ADMINISTRATION

    Mr. Luedtke. Thank you, Mr. Chairman and Members of the 
Committee for the opportunity to testify concerning the 
participation of women- owned small businesses in NASA.
    Consistent with NASA policies supporting other small 
business programs, the Agency is committed to providing women-
owned small businesses the maximum opportunity to participate 
in acquisitions at the prime contract level. Additionally, the 
participation of NASA prime contractors in providing 
subcontracting opportunities to women-owned small businesses is 
an essential part of the Agency's commitment to increasing the 
participation of women- owned businesses in NASA contracts.
    It is important to note that NASA is focusing on 
participation of women-owned businesses in high technology 
areas.
    Pursuant to the Small Business Act, NASA negotiates the 
goals, as do the other agencies, with SBA in implementing our 
women-owned business program. The Office of Procurement and the 
Small Business Programs work together.
    In addition, at each of our ten field locations the Agency 
has designated small business specialists to provide a central 
point of contact women-owned and other small businesses in 
identifying specific contracting opportunities.
    Since the Executive Order in May 2000 the efforts of our 
field centers have resulted in an increase in women-owned 
business participation in NASA programs. In fiscal 2005 NASA 
expended approximately $263 million in direct awards to women-
owned businesses and another 516 million to women-owned small 
businesses as subcontracts. Preliminary results for 2006 show 
that NASA expended approximately 280 million in direct awards 
to women- owned small businesses and another 573 million in 
subcontract awards.
    As previously stated, NASA places particular emphasis on 
ensuring that women-owned and other small businesses have the 
opportunity to complete for the high technology opportunities 
that encompass a large pat of our Agency procurement action. In 
this regard, our Center Small Business Specialists work in 
cooperation with the contracting officers and technical people 
to seek and develop the information on technical competence of 
women-owned small businesses for research and development 
contracts, and ensure that this information is available to the 
acquisition community during acquisition planning. Let me give 
you a few specific examples.
    Recently at NASA's Langley Research Center, Science Systems 
and Applications, a woman-owned small business, was awarded the 
Center's Science, Technology & Research Support Services 
contract. A contract valued at $140 million over 5 years will 
provide support to Langley's atmospheric analytical studies, 
operational data processing and archiving, instrumentation 
development, field studies and other activities.
    Hernandez Engineering, a woman-owned business, has been 
selected by NASA's Marshall Space Flight Center to provide 
safety and mission assurance support, a contract valued at 
approximately $370 million over 5 years.
     Analytical Services, a woman-owned small business and 
SBA's Region National Contractor of the Year provides 
engineering and technical support to NASA's Dryden Flight 
Research Center with a contract valued at approximately $51 
million over 5 years.
    Finally, a few of the women-owned small businesses that 
helped us in our return to flight efforts were Bay Systems of 
Oakland, California, AMTI of Rosslyn, Virginia and Hernandez 
Engineering of Houston.
    NASA believes that these examples represent the types of 
expertise that women-owned businesses can provide in support of 
the nation's space program. NASA will continue to seek ways to 
provide opportunities for women-owned small businesses 
including the consideration of additional tools that may assist 
the Agency in meeting our women-owned small businesses goals.
    Again, thank you for the opportunity to appear before the 
Committee today. I would be pleased to respond to any questions 
you have.
    [The prepared statement of Mr. Luedtke may be found in the 
Appendix on page 57.]
    Chairman Braley. Members will have 5 minutes each for 
questioning of witnesses. And we may do more than one round of 
questions.
    Deputy Administrator Carranza, let me begin with you. Prior 
to your confirmation what experience did you have with either 
the 5 percent contracting goal of FASA or the Equity in 
Contracting in Women Act.
    Ms. Carranza. Working for one of the world's largest 
package distribution companies, and working closely with the 
corporate office in oversight of contracting for that company. 
I was responsible for several projects, construction projects. 
And one of my roles as a VP in that company was to ensure that 
I complied with the requirements of recognizing contracts to 
the under served. We didn't call them under served at that 
point, but it was a particular program that the corporate 
office had to ensure that we had not only women businesses 
given job bids, contracting bids, as well as minorities of all 
ethnicities. So I was very familiar with the process. I was not 
familiar with the particular program, per se, but our 
responsibility for compliance gave me some insight on our 
responsibility to perform a due diligence to get equal 
opportunity to contractors.
    Chairman Braley. Did those responsibilities involve 
actually working to make sure that women-owned businesses were 
receiving a portion of the contracts that your company was 
involved in?
    Ms. Carranza. Yes.
    Chairman Braley. And can you give us some indication of the 
types of success you had in meeting those objectives?
    Ms. Carranza. Well, it was a company-wide perspective and 
goal. I had a small part of it, being part of the airline 
operation. I did have significant size projects. And if they 
gave me a particular list of contractors, I had to recognize 
women businesses and minority businesses and hold the prime 
contractors responsible for ensuring that they also respected 
the subcontracting.
    So from a perspective of having a plant engineering 
manager, I was responsible for a plant engineering manager and 
he was responsible for the compliance as well as I.
    So that was my experience. I could not give you a percent 
effective, if that is what you are asking.
    Chairman Braley. One of the requirements of the Equity in 
Contracting for Women Act of 2000 was for SBA to conduct a 
study to identify industries in which small businesses owned 
and controlled by women were underrepresented. Has SBA 
completed that study?
    Ms. Carranza. It has completed the study and we are in the 
stage of having the Rand Corporation going through its 
analysis. So if I can use the term, it is in play. We know that 
it is in the process stage, and we should realize it this year. 
And I am very much encourage that I will see it in my lifetime 
in this particular role to its fruition.
    We are very anxious for the Rand Corporation to bring the 
results to us. They are performing their due diligence, however 
the Administrator and I are not going to try to push the 
analyses to where we would jeopardize the quality of it as well 
it withstanding the constitutionality issue.
    Chairman Braley. Well, you may be encouraged that you may 
see it in your lifetime, but there are literally thousands of 
women-owned business who, like me, cannot comprehend why it 
takes 6 years to complete a study of this nature.
    Is it your testimony today that the only barrier has been a 
dispute as to the methodology that is being used to complete 
that study?
    Ms. Carranza. Based on the information that I have 
received, Mr. Chairman, and the review of the chronology of the 
particular either studies, data analysis, the recommendations 
by several administrative bodies in the body to ensure that 
whatever studies SBA performed were accurate and could withhold 
constitutional oversight or insight. At this point based on 
from 1994 through 2006 it has gone through several 
reiterations. And they can be substantiated as it relates to 
who is involved during what period.
    Am I in agreement and support the delay factor and the 
gaps? I am going to tell you as part of my testimony there are 
some shortfalls in that whole process. But it is very 
encouraging to learn that--I did not mean to be lighthearted 
when I said ``in my lifetime.`` I am very much encouraged to 
learn that in this particular period this year, early part of 
this year we will be able to address this particular program in 
a viable manner with concrete data that, once again, would 
stand the scrutiny of a legislative body.
    Chairman Braley. Well, and that is where I am confused, 
too. Because one of the things that I did when I went to law 
school is I studied the Constitution. And it seemed to me that 
the directive of the Equity in Contracting for Women Act gave 
SBA the responsibility to identify industries in which small 
businesses owned and controlled by women are unrepresented. 
That is simply an identification of a problem. That has nothing 
to do with the awarding of contracts that would give rise to a 
potential concern about whether they were being awarded in a 
constitutionally permissible fashion. So I am at a loss as I 
sit here today to understand why the first component of that 
directive was held up because of concerns about 
constitutionality.
    Ms. Carranza. My understanding is, Chairman, that the first 
study performed by SBA had a discrepancy in the compilation of 
NEAC and what they call the Standard Industrial Codes, the 
identification of the industries. And so there were definite 
flaws identified in the first study. That is my understanding.
    The particulars of how many flaws and could they have been 
remedied at the time, I could not answer to that. But where 
there are concrete documented flaws in the study that would 
have hampered the progress of a particular program, I believe 
can be quantified.
    Chairman Braley. Was that first study ever officially 
completed?
    Ms. Carranza. It was completed 18 months after the 2000 law 
was executed. And, yes, it was completed within the SBA body, 
not by subject matter experts.
    Chairman Braley. Was that study ever published?
    Ms. Carranza. I could not answer about it being published. 
But I do know that it had been submitted for review by the 
OSDBU group, advisory group to look at the industries that were 
being represented, how the data was being compiled. And it went 
through several reiterations. Reviews I should say, not 
reiterations but reviews. And ultimately the OMB Office 
recommended that they would have an external study performed 
based on the findings of close to about a year's worth of 
review.
    Chairman Braley. And when did OMB make that recommendation?
    Ms. Carranza. I do not know exactly what the date was. But 
I do know that the National Academy of Science in 2003 
conducted the study.
    Chairman Braley. A study of the methodology or a study of 
the underlying objective?
    Ms. Carranza. They reviewed the data that was compiled by 
SBA and validated that there were flaws in the study that SBA 
performed.
    Chairman Braley. And did the National Academy of Science 
publish their results?
    Ms. Carranza. I could not tell you that, Chairman. I cannot 
answer that.
    Chairman Braley. Would you be willing to check into that 
and report back to the Committee?
    Ms. Carranza. Absolutely. Yes, absolutely. I am sorry.
    Chairman Braley. Do you know who made the ultimate 
determination that the initial study was not valid and would 
have to be redone?
    Ms. Carranza. I would have to get back to you on the 
particulars of the governing body or the group of personnel or 
who particularly pulled back that study.
    Chairman Braley. Well, was it your understanding from the 
language of the Equity in Contracting for Women Act of 2000 
that the ultimate responsibility for completion of the study 
would have been at the feet of the Administrator of the Agency?
    Ms. Carranza. I could not attest to that, but I am familiar 
that the study had to be the responsibility of SBA, which would 
be the Administrator. So I agree.
    Chairman Braley. The second component of the requirements 
from the Equity in Contracting for Women Act required the 
Agency to establish procedures to verify eligibility to 
participate in the procurement program. Do you know whether 
that phase was ever completed?
    Ms. Carranza. I could not comment on that, Chairman, and I 
would have to get back to you on it.
    Chairman Braley. Are you aware of any procedures that have 
been proposed by the Small Business Administration to verify 
eligibility to participate in the procurement program?
    Ms. Carranza. Yes. Although I am not overly familiar with 
the regulations, but we do have the regulations addressed. Have 
been addressed, Chairman.
    Chairman Braley. And what does that mean?
    Ms. Carranza. To be exact, Chairman, the day before 
yesterday the regulations have been submitted or to the 
agencies for review.
    Chairman Braley. And was that done in some official 
capacity under your jurisdiction or who would have been 
responsible for releasing the regulation for interagency 
review?
    Ms. Carranza. Yes. It is through our contracting office as 
the administration office.
    Chairman Braley. Mr. Warder, I want to ask you a few 
questions. I come from a long line of teachers. My wife is a 
teacher, my mother has been teaching for 50 years, my 
grandmother was a teacher, my great grandmother was a teacher. 
And one of the things that concerns me when I look at the 2005 
achievements of the Department of Education was that an agency 
that has jurisdiction over a profession that as literally built 
on the backs of women was doing such a poor job of meeting this 
5 percent procurement requirement. And I understand that based 
on your 2006 statistics it appears that the Agency has made 
significant progress and it sounds like 2007 is also 
encouraging. But can you give me some sense of what the 
Department of Education's commitment is to recognizing the long 
history of contributions by women to this profession and how 
that will be reflected in the awarding of contracts by the 
Department of Education to women-owned businesses?
    Mr. Warder. Mr. Chairman, thank you for the opportunity.
    Obviously as you point out so well, women have been such an 
important part of the education process, and something that we 
support very highly.
    Our commitment to improving our performance in this 
contracting activity, and again we are relatively small 
contracting activity, is to attempt to identify those segments 
where in fact we can directly contract out those activities 
that we do. One of the difficulties is so much of our total 
dollar volume is spent on a few contractors operating our very 
large systems and processes that we outsource. Those by 
definition are typically publicly held companies. These 
publicly held companies will account for something like 70 or 
75 percent of the volume of contracting we do.
    So we work very hard to try and reach that 5 percent 
threshold. In fact, our objective is to exceed it. As I said, I 
do not think we will quite make it this year. We are going to 
get awfully close. And I would expect in the next year or two 
we will exceed the 5 percent. So we are absolutely committed to 
doing it. Our problem is how do we segment out the pieces of 
our very large contracts in a way that we can actually do them 
with small businesses in total, however they are owned. So that 
is our challenge. And that is how we are attacking it first; is 
how can we in fact take these pieces of very large work and be 
able to contract any of it with a small business and then 
identifying those women-owned businesses that we can contract 
with.
    Chairman Braley. And what efforts has the agency undertaken 
to try to reach out and broaden its audience to potential small 
businesses owned by women who may not be on the radar screen of 
some of the other information systems that give rise to 
knowledge about these opportunities?
    Mr. Warder. We do research around, again, I will make it a 
broader research activity, it is around small businesses 
including the women-owned small businesses to identify those 
and what segments they are in to see if in fact we can contract 
with them. And then we look at our contracts and we try and get 
the request for quotes out to those specific organizations and 
get them into our normal flow of contracting activities.
    Chairman Braley. Mr. Luedtke, one of the questions that I 
have for you deals with what we have seen as concentration in 
terms of the vendors who are providing the services who quality 
as women-owned businesses in terms of the types of companies 
that are doing that and the geographic distribution of those 
companies. I think one of the things that concerns many people 
is that it appears that a lot of these contracts to many 
Federal agencies are awarded to businesses that are inside the 
beltway or close to the beltway. Can you talk to us a little 
bit about efforts made on the part of NASA to try to reach and 
expand some of the contract opportunities for women-owned 
businesses that aren't located near your major facilities?
    Mr. Luedtke. Yes, Mr. Chairman, although I would make a 
distinction if I may in terms of those inside Washington or 
near Washington and those near our facilities since our 
facilities are located across the country. And, in fact, many 
of our contractors locate either originally or a large part of 
their business close to our facilities in order to better 
support us.
    We have in general attempted to reach out to the small 
business community including women-owned small businesses. We 
have also felt that it is critical because of the nature of our 
business where we have a couple of very large contracts, for 
instance, the Orion spacecraft, the Aries launch vehicle, the 
space shuttle operations, that a large portion of our work is 
basically driven to very large businesses, actually. And to 
work with them in subcontracting opportunities as well. I think 
it is important from our point of view that we not only reach 
out to small businesses that can do the entire effort, but also 
small businesses that can do a portion of effort. And we've had 
success in the past with other small businesses in bringing 
them in, then developing their capabilities as subcontractors 
and then going on to become very viable prime contractors for 
us.
    So we are working with various women-owned business 
organizations. We're working also internally to ensure that our 
folks are aware of the kinds of skills and expertise that 
women-owned small businesses provide to make sure that they 
don't just focus on those businesses that are local and that 
are more well-known because they have dealt with them in the 
past.
    Chairman Braley. According to the latest information that I 
had available, in 2005 only 2.1 percent of NASA contracts went 
to women-owned businesses. Can you explain why that is and what 
steps NASA is taking affirmatively to raise that number?
    Mr. Luedtke. Yes, sir. One of the major reasons is we have 
a few very large contracts in my agency. We have contracts that 
are multibillion dollars in nature that make up a substantial 
portion of our portfolio. So part of the problem we have or the 
challenge we have with any small business goal is that a large 
portion of our dollars are locked up in a very few contracts 
for the major systems that we buy and operate.
    That said, we are again reaching out trying to help 
develop. We have a mentor protege program as well which is 
focused very heavily on small businesses and small 
disadvantaged businesses and women-owned small businesses. We 
are expanding that. In fact, we are retooling it to make it 
more effective. We are working very diligently to identify 
women-owned businesses that would be able to provide the kinds 
of services and goods that we use.
    We are also working, as I said, with our prime contractors. 
Because we have a few of these very large contracts, a large 
part of our effort is necessarily through those companies. In 
fact, in our subcontracting goals we have exceeded those. Those 
are at 11 percent of our subcontracts for women-owned 
businesses, and we have exceeded those the last several years.
    So we are attempting to address the prime contractor issue, 
but also to make sure that as a community the women-owned 
businesses have an opportunity to participate. In some cases, 
that is more viable in the subcontracting role.
    Chairman Braley. Dr. Spampinato, I would like to ask you a 
little bit about the history at the Department of Energy. In 
your testimony you indicated that increasing opportunities for 
women-owned businesses was an objective of your agency. And I 
think one of the concerns that I have, and I think one of the 
concerns a lot of the women-owned small businesses have is 
getting beyond objectives to results.
    When I looked at the information from 2005 your agency had 
only awarded .57 percent of contracts to women-owned 
businesses. What is your explanation for why that number is so 
low and what can you tell us about the efforts being made to 
move beyond an objective and achieve an actual designed result?
    Mr. Spampinato. Mr. Chairman, first of all, thank you.
    And what I would like to say in response to your inquiry, 
we have a couple of things going for us and a couple of things 
not going for us. I thing I would like to talk about is our 
legacy. For better or for worse, we talk about these M&O 
contracts that we have, these facilities management contracts. 
Now, the challenge on that side of the house is to look at 
these contracts, which we do at these APAT meetings, and try to 
take segments out of these contracts that will be opportunities 
for small businesses and women- owned small businesses 
specifically. That is our big challenge. Because, you know, 
over the last ten years or so if you look at the number of M&O 
contracts, we have cut them in half. And so we are making 
progress in that area. But that is one of our big challenges.
    Okay. But a couple of other things we are doing, too, to 
make this better. We try to do just some specific things. We go 
out all over the U.S. at our sites, we go out prior to issuing 
any requests for proposals and we send a notice of interest and 
we ask for specific participation by small businesses.
    Now understanding that there is not a requirement for 
women-owned small businesses, a regulatory requirement, they 
have to fall into one of the categories of 8A or a small 
business, or an 8A or a HUB Zone or something like that. But we 
do afford opportunities and look specifically for small 
businesses, and we list all the socioeconomic groups. Okay. So 
we are doing that.
    We are reaching out to these businesses through our 
conferences. We have our big small business every year. This 
year it is in Washington, D.C. I personally make myself 
available. I have talked to several small businesses. You know, 
I have been on board for a short time, but I talk to them 
individually. And our OSDBU talks to them specifically. I mean, 
we make ourselves available to them. We have a lot of online 
resources.
    When I go out and talk to large businesses or small 
businesses, I go out and tell them about the resources that we 
have available. They can look, see what efforts we have out 
there. They can look at the scopes of work. They can look what 
they think is appropriate for them to bid on them. Okay. They 
can see what is out there, what is coming up, what is going to 
expire. They can look. We have all that information.
    We are very strong in this Mentor Protege programs. Okay. 
Both DOE is and SBA is. We go out there. When we are talking to 
large businesses we tell them this is very important, this is 
critical, to do these Mentor Protege to help small businesses 
along. Critical.
    We also have the offices set individual goals. And we make 
each individual office accountability.
    And this visibility goes all the way up to the Secretary 
and the Deputy Secretary. So we got high visibility on that.
    The last thing I want to say on that is, and I do not want 
to make this excuse. It is not an excuse about the M&O 
contract. We are doing our best to look at that work and what I 
would like to say is I just want to also give credit to SBA on 
this. They have been working very closely with us trying to 
understand these M&O contracts and our specific problems that 
we face trying to break up these contracts. So they work 
closely with us.
    Chairman Braley. If I am a woman who owns a business and 
wants to get more information about participating in a DOE 
procurement program, what is the easiest thing for me to do?
    Mr. Spampinato. I think there are many things you could do. 
But I would say the easiest thing you could do, Mr. Chairman, 
is to contact our small business staff, our OSDBU. Contact them 
or contact the SBA and we can lead you whatever direction you 
want to go on. Wherever you need to go.
    Chairman Braley. Well, you mentioned the website. Is there 
a link on your website where women-owned businesses can go to 
find out information about procurement opportunities?
    Mr. Spampinato. I would say yes, there are. It is not 
specific to them, but it is available to everybody out there. 
All businesses, small and large.
    Chairman Braley. I will reserve any additional questions I 
have.
    I also would like to recognize the Chairwoman of the 
Committee, Nydia Velazquez has now joined us.
    And with that, I will turn it over to the Ranking Member 
for his questions.
    Mr. Davis. Thank you, Mr. Chairman.
    And I would like to start with questioning Deputy 
Administrator Carranza. I thank you again for being here.
    And if you could just help me understand again, just to get 
some base points, how long have you been with SBA?
    Ms. Carranza. I started December 15th.
    Mr. Davis. Okay. So you were not in here 7 years ago when 
the original legislation was passed?
    Ms. Carranza. Correct. I have been here 3 months.
    Mr. Davis. Okay. And part of the original legislation that 
we are talking about today and the failure of SBA to move 
forward and do what needs to be done talks about 
underrepresented and substantially underrepresented industries. 
How do you go about determining which industries are 
underrepresented or substantially underrepresented?
    Ms. Carranza. My understanding and we are going through 
that Rand study that is supposed to be addressing those 
particular indices, Ranking Member. And with that they will be 
able to substantiate which industries are underrepresented. At 
this point my understanding is that the 5 percent is a Federal 
goal target, mandated. And so that each agency is to strive to 
attain that percent performance for Government contracting.
    To answer your specific questions about how we identify 
underrepresented and under served, we have tools with respects 
to the HUB Zones and the small businesses women's programs and 
small business programs. But the mechanics of that I could not 
answer that at this point.
    Mr. Davis. It is my understanding that was not built into 
the legislation.
    Ms. Carranza. Correct.
    Mr. Davis. What was underrepresented and then moving from a 
congressional definition what is underrepresented then to 
implementation of 5 percent. It was actually left up to the 
Administration to determine. And I think that is where we have 
had the failure.
    I know in the past there has been a study that was started. 
That didn't work. And if the study is not done correctly, would 
the study misidentify those business sectors which women are 
underrepresented? Is that a possibility?
    Ms. Carranza. That is correct. That is correct. If the data 
is not analyzed correctly, we could have greater shortfalls. 
And that is why the Administration is taking a very cautious 
position to make sure that, once again, although the delay is 
not acceptable and cannot be supported other than the 
incremental interventions that took place since 1994 and then 
year 2000, that we want an accurate, a viable product that 
again could withstand any type of legislation insight. Because 
then the program could be held up, more often than not, if it 
is not well written.
    Mr. Davis. When do you think we will have the results of a 
good study?
    Ms. Carranza. Our expectations, as the Administrator has 
indicated in previous presentations, we are shooting for the 
end of April. So if everything administratively goes well, then 
we are anticipating material, information to develop a program.
    Mr. Davis. Okay. You mentioned in your testimony earlier 
that there were some constitutional concerns that the SBA has. 
Could you talk me through and help me understand what your 
concerns are about the constitutionality of this piece of 
legislation?
    Ms. Carranza. My understanding is that Adarand v. Pena was 
a court case in 1995 that was race-based and it was not dealing 
with gender-based criteria or sex- based criteria. And at this 
point as an advocate of small business in general with a focus 
on the under served, we want to make sure that all under served 
markets are being considered level playing field. And once 
again constitutional would mean that it would be not further 
scrutinized or upheld, but would meet all of the criteria for 
equal opportunity for all indices. All participants, I should 
say.
    Mr. Davis. Okay. It is my understanding back in 2001 that 
there was proposed regulations and SBA withdrew those. I know 
you were not there, but can you help me understand why SBA 
withdrew their regulations back in 2001?
    Ms. Carranza. It would be premature for me to answer that 
question, but I can get back to you on that with a particular 
chronology of actions that took place.
    Mr. Davis. I understand that we are going to have a study 
coming forth in April. When do you think that the Women's 
Procurement Program will be fully up and running?
    Ms. Carranza. Ranking Member, I want to acknowledge your 
particular question, but I would also like to precede that the 
Women's Program or Procurement, I believe, has made gains. My 
observation is that they have made gains as it relates to 
attraction of progress. Have we met our goal? No. Are we 
satisfied with that goal level? Not the goal level but the 
performance level? We are not. However, with regards to a 
program as it relates to procurement program or Women's 
Procurement Program, I believe that we would have that in play 
for this year, and it would be well understood, if I am not 
speaking out of line.
    Mr. Davis. Thank you for your candor.
    I would like to move now to Mr. Luedtke. Thank you for 
being here today. I appreciate that.
    You mentioned in your testimony the actual dollar amounts 
awarded to women-owned businesses. Can you translate that into 
percentage for me?
    Mr. Luedtke. For the prime contracts it works out to, I 
think, about 2.1 percent. The subcontracts we measured that 
against the dollars available for subcontracting, and I think 
we are at between 11 and 12 percent of the subcontract dollars.
    Mr. Davis. Thank you.
    I understand that the business that you are in and the 
Department you are in has very high technology demands. And can 
you help me understand how small business plays a part in what 
you do and how much percentage all small business plays in what 
you do and how technology demands effect that percentage?
    Mr. Luedtke. Yes, sir.
    We had, I think in the last year that we have validated 
data, about $1.8 billion that went to small businesses of all 
kind, both prime and subcontracts. So small businesses actually 
provide a fair amount of what we do, and much of that is on the 
high technology area.
    The difficulty we have with the prime contracts is we tend 
to have a very few large contracts. For the space station and 
for the shuttle, those kinds of things, are multibillion dollar 
contracts. And that when you look at a percent then, obviously, 
takes away a fair amount of dollars that would even be 
available for any kind of small business.
    We have made efforts over the last several years to 
particularly seek small businesses both at the prime and the 
subcontract level. A fair number of them are fairly innovative 
and they bring in new ideas, and so we think there are some 
real opportunities. In fact, we awarded through another 
transaction type opportunity, two contracts to firms for 
alternate access to space, to actually build launch vehicles 
that will take cargo and possibly astronauts to the space 
station. Both of those companies, although this was outside the 
normal procurement process, were small businesses. And so we 
are very open to ways that we can attract new people into the 
community.
    We also have a problem, and I think the Defense Department 
shares that since we share a lot of the same suppliers, is that 
with the consolidation in the aerospace industry and also in 
the suppliers in the aerospace industry, we are seeing fewer 
and fewer companies available to bid. And so we are looking for 
small businesses including women-owned small businesses that 
could fill that role. We want to bring new companies in, and we 
think a fair number of them either have or are developing the 
technology that would allow us to use them. So both from 
meeting our small business goal, but also from a selfish point 
of view of just trying to get more people in that would provide 
more competition and innovation, we are looking and trying to 
reach out to new firms and small businesses in particular to 
provide that.
    Mr. Davis. And that leads me right into my next question. 
Of all the women- owned businesses seeking contracts with NASA, 
how many have actually been awarded? Do you know how many have 
sought a contract?
    Mr. Luedtke. No, sir. We can try and provide that. I am not 
sure we would have all of that data in terms of keeping records 
of unsuccessful bidders.
    Mr. Davis. But you would have the total amount of women-
owned businesses that have applied?
    Mr. Luedtke. We may. Because in a large number of cases 
small businesses bid in open competitions. And so we would not 
be tracking the size standard of a company unless they were 
awarded or unless it was a small business set aside.
    Mr. Davis. Okay. Thank you.
    Mr. Spampinato, just like to ask you a few questions, if I 
may. Thank you for being here.
    What is the process that the Department of Energy currently 
uses in procuring contracts with women-owned small businesses?
    Mr. Spampinato. Yes, sir. A couple of things that I 
mentioned, I do not know if you can call it a process so to 
speak. But a couple of things that I mentioned previously.
     We try to go out prior to issuing any RFPs so that small 
businesses, all small businesses have plenty of notice that we 
have efforts out there.
    We make available to them, like I said, we have a lot of 
online resources where businesses can look to see what is 
available, the scopes of work, what kind of work it is, what 
kind of skills they will need. We have all that out there for 
them. We make that available.
    I mean I do not know if it is appropriate to talk about the 
goaling, about the internal processes that we do.
    Mr. Davis. Please.
    Mr. Spampinato. Well, what we do is we call upon the 
offices, they are in the best position, to look at the work, 
the kind of work that they have coming up in the next fiscal 
year. We go to them and work with them and their small business 
program managers, which that person is crucial to this process. 
And what they do is they work and they come up with a number. 
Then looking at their, you know, the skills they need, the kind 
of work they need, what contracts are expiring, what new work 
is coming up; all these kinds of things that programs look at. 
And they will say this is the amount of work that we think we 
would like to go out with small businesses.
    Then what will happen is all of those requirements from 
every program throughout the Department will be floated up to 
the top, at the top levels. We will look at that goal. We 
involve everybody in the process. We keep the program and the 
small business program managers involved. And then we also 
involve talking with the SBA. Like I said, they have been 
working with me, working through the dilemmas we have with the 
big contracts. And we will negotiate our goals with them. And 
that is kind of how that process works.
    But we also keep the programs accountable, hold them 
accountable for meeting their goals. And what we do is every 
quarter we have a report that comes out with green and red, you 
know how they are doing, if they are meeting their goals. And 
what we will do if they are not meeting their goals, we will go 
to the Program Office and say ``Look, you know, this is 
critical. This is important. This maintains high level 
visibility. You have to do this. Why are you not doing it?'' 
And then we work with them to come up with innovative, creative 
approaches so that they can meet their small business goals.
    And that is kind of basically the process we go through.
    Mr. Davis. Okay. I am going to ask just one quick question 
to wrap this up. You mentioned a moment ago that you are going 
to have your conference this year in Washington, D.C.
    Mr. Spampinato. Yes, sir.
    Mr. Davis. Do you think Washington, D.C. is the best place 
to have a small business conference where we have a lot of 
people that are very smart and bright connected to Government, 
but most small businesses are located out in America, outside 
the beltway?
    Mr. Spampinato. Well, sir, that is a good point. And as a 
matter of fact, a lot of the small businesses that do business 
with us are located all over the United States. Now what we do 
as far--I don not know in two years ago, but last year we held 
this in Seattle. So what we do is we try it around every year 
so that different people--you know, some small businesses 
cannot really maybe afford to travel to some of these 
conferences that are far away. So if we keep moving it around, 
we give small businesses opportunities to come to the 
conference.
    Mr. Davis. That is what I wanted to hear. Thank you.
    Mr. Spampinato. Thank you.
    Chairman Braley. The Chair recognizes the Chairwoman of the 
Committee, Ms. Velazquez for 5 minutes.
    Ms. Velazquez. Ms. Clarke was here first.
    Chairman Braley. The Chair recognizes Ms. Clarke.
    Ms. Clarke. Thank you, Ms. Chair. And thank you, Madam 
Chair.
    Good morning to each and everyone of you.
    One of the things that I am a bit concerned about is the 
level of, I guess, advertising, the level of outward approach 
and the ferocity at which we go about seeking individual, 
women- owned businesses to participate with the Federal 
Government. I think often times we believe that through, you 
know, notice prior to an RFP that is going to be the best way--
well, it is probably just the way that we have been doing it to 
attract business. But what I notice in the private sector 
whenever there is an urgency behind whatever product that is 
trying to be sold, there is an all-out blitz that takes place.
    And I know in communities like mine in New York City and in 
Brooklyn, access to contracts has been very allusive for many 
years. And we probably have more activity involving the Federal 
Government in New York City than a little bit.
    My question to you is thinking outside of the box what 
measures do each of your entities see in concert, perhaps, with 
one another and then separately can be done to really truly 
attract businesses that we know are already engaged in the 
private sector to want to partner with Government to expand 
upon the base and the pool of valuable businesses out there 
that are capable, quite capable of doing business with your 
agencies? And that is to everyone on the panel.
    Ms. Carranza. I will begin first. And thank you for the 
opportunity to answer your question.
    What we do in the Procurement Advisory Council, and it is 
chaired by the SBA, is to engage all of the agencies, the 
OSDBU, to share best practices. We have taken it to another 
level where business as usual is discussed, and then discussion 
of where do we need to go next because it is attaining the 
performance levels that we are shooting for.
    The next level is transparency in our measurement tools. In 
other words, we are developing an internal scorecard, and it 
was alluded to earlier. But it is going to be a scorecard that 
will track the performance of the agencies, and it will be made 
public. So wherever there is a shortfall, it will be know. So 
we are now having transparency as a unit.
    In addition to that we recognize that we work as the 
watchdog, we oversee and we advocate, and we try to engage and 
much more aggressively all of the outreach opportunities that 
we have from the Small Business Administration, whether it is 
the SBDCs, the SCORE in addition to the Women's Business 
Centers. And we need to take those entities to another level of 
Government contracting knowledge and skill as well.
    In addition to that it is also improving, increasing not 
only the skill level, but the numbers of PCRs so that they 
could interact and be accessible to all of the agencies as well 
and work stronger as a conduit.
    And we understand that the agencies take ownership for 
their strategic planning on how they are going to meet their 
goals. But if we could use the Procurement Advisory Council to 
push forward much more aggressively the agendas to be much more 
visible to the Women's Program community, then that how we are 
engaging and how we are going to take it to the next level.
    Ms. Clarke. Thank you.
    Mr. Spampinato. Ma'am, thank you for that question.
    If I might add, I mean I agree 100 percent. I think one of 
the frustrations is sometimes we like to go out there and say 
``Hey, we have all these systems. Why do you not find the 
contracts?'' And, you know, this is not acceptable. And, of 
course we have man power issues where we really cannot get out 
there as much.
    But, you know, I guess in its simplest form what I see in 
our department we have a very good group of OSDBU people. We 
are out there all time making themselves available.
    You know when I came on board I went to an Indian American 
Conference. And, you know, it is funny but at the basic level 
people like to put a face on the Government. And I walked 
around that conference and I must have taken 50 or so business 
cards and talked to people face-to-face. And I think that is 
the big challenge; getting out there, putting a friendly face 
on the Government. Because a lot of times people say ``I do not 
know who to contact.'' People just do not exactly know to go to 
the webpage and say doing business with DOE and click on it. 
And not everybody knows that.
    So what I try to do, and I know what we try to do, is we 
try to get out there as much as we can. You know, we extend 
ourselves as much as we can and get out to small businesses and 
large businesses and say, ``Look, here we are. This is us.'' 
And, you know, you can call me. I have had so many people call 
me with questions on what to do or how to do it. And I mean 
they do not ask me anything that is procurement sensitive. I am 
the Chief Acquisition Officer. But, you know, it is just very 
easy to talk to them and to tell them ``Look, this is how you 
find out what is available.'' And I know that is not going to 
get the entire population, but that is my simple approach. Just 
to put face-to-face with as many people as we possibly can. And 
I know my OSDBU takes that approach also.
    That is basically my thing.
    Chairman Braley. The time has expired. But Mr. Warder, Mr. 
Luedtke, if you would like one minute to respond to Ms. 
Clarke's question.
    Mr. Warder. Congresswoman Clarke, thank you for the 
question.
    In our case we have aggressively worked to try to identify 
all small business potential candidates, but also women-owned 
small businesses. And we have heavily researched and continue 
to try and identify those businesses that in fact can satisfy 
our requirements, put them on our list and make sure that they 
do get notification we do have bid opportunities.
    So we are reaching out to try and expand that list. And 
then as part of that over the last couple of years we have been 
growing our small business contracting by over 40 percent a 
year. The last year in 2006 we grew the women- owned small 
businesses portion of that by approximately 60 percent.
    So we are pushing it hard. Our people are very aware of it 
and we are doing our best to expand our knowledge of what is 
available out there.
    Chairman Braley. Mr. Luedtke?
    Mr. Luedtke. We do similar things. Let me just add a couple 
of things that we do that may be of interest.
    One is we provide, recognizing that it's not always easy to 
understand how to do business with the Government for somebody 
that is new to the Government world, we provide training 
classes at various locations around the country to small 
businesses that are interested, think they have something to 
offer so that they can understand what is involved and how best 
they can pursue opportunities. And being a high tech 
organization, we also developed an Internet system that allows 
people to register and be notified of any opportunities we 
have, either globally or where they are located, what they are 
interested in. In fact, that become FedBizOops, the Government 
system. And it was developed in order to reach small businesses 
because we knew the large businesses would figure out what was 
going on.
    Ms. Clarke. Thank you very much for your indulgence, Mr. 
Chair.
    I just wanted to say that, you know, that the issue for me 
really is how many people are really aware. And it is an 
awareness campaign that I am talking about, casting a very wide 
net. We know that there is a weeding out process. We know that 
there is an educational training, a cultivating, a mentoring 
issue. But when this Government wants to recruit individuals to 
join its military, you cannot pass a community that does not 
have a billboard.
    So I am saying why are we not advertising in women's 
magazines? Why are we not at women's physical fitness 
facilities where they are? Why are we not at the beauty saloon 
where women congregate? And I am sure women of all stripes are 
there, many who are starting their own business or who have 
already entered the business realm in the private sector.
    I am thinking creatively. I am saying let us go directly to 
the population that we are trying to reach in as many avenues 
as we can.
    Certainly not everyone is going to meet the standard for 
participation. But the knowledge that they have that they can 
share with others. Our religious institutions dominated by 
women. Dominated by woman. Why are we not there where we can 
begin the conversations that then spread through our 
communities and identify the entrepreneurs that we are 
targeting?
    I think often times we are not thinking about how we really 
zoom in and capture that audience. And that is what I am trying 
to impress upon you.
    I know all of the tools that exist. What is missing is that 
connection with the environment that will produce the results 
we are trying to accomplish.
    Thank you very much, Mr. Chair.
    Chairman Braley. The Chair recognizes the gentlewoman from 
New York Ms. Velazquez for five minutes.

               STATEMENT OF CHAIRWOMAN VELAZQUEZ

    Ms. Velazquez. Thank you, Mr. Chairman. And I want to thank 
you and the Ranking Member, Mr. Davis, for holding this 
important hearing. And I want to thank you all for taking time 
to be here.
    Look, we could be here today, we could be here next week, 
next month, two months from now to discuss all the average that 
the different departments are doing and all the business cards 
that you are collecting. But those numbers and those average 
are meaningless if you cannot achieve the goal of 5 percent for 
women businesses. And this is exactly why we passed legislation 
six years ago to create this Women Procurement Program to 
address what we are discussing here today.
    So my question to you, Ms. Carranza, is when this program 
is going to be up and running?
    Ms. Carranza. Thank you for the question, Chairwoman. I now 
have an opportunity to tell the phases that we're looking 
forward to having this women's program implemented this year.
    The first phase is the RAND study has been completed and so 
we should have the opportunity to offer for public view, public 
input the end of April. And then based on the public comments 
that are accumulated and then compiled, we should have the 
program soon after that. April--
    Ms. Velazquez. When?
    Ms. Carranza. I can't tell you how--I can tell you that the 
study itself will be--our goal is to have it in hand for public 
consumption in April.
    Ms. Velazquez. If you know that it is going to be ready by 
April for public consumption--
    Ms. Carranza. Yes.
    Ms. Velazquez. --then after that what is the time table? 
The Administrator was here. I asked him exactly the same 
question. And if I'm not mistaken, he said it would be up and 
running by the summer. I want to hear that.
    Ms. Carranza. Yes, ma'am.
    Ms. Velazquez. Is this going to be up and running by the 
summer?
    Ms. Carranza. If that was the commitment he made, then we 
will do everything that we possibly can to make it in the 
summer. The one thing that I want to not go out on point and 
fall short of the commitment, Chairwoman Velazquez, is that if 
for some reason the public comments proceed a little bit longer 
than anticipated, and we're expecting summer to be the end 
date, then we will keep you informed on a timely basis, keep 
your staff informed and, obviously, just expose to you the 
progress of that.
    Ms. Velazquez. So it is your commitment to work to make 
this happen?
    Ms. Carranza. Absolutely.
    Ms. Velazquez. To have this program up and running?
    Ms. Carranza. Absolutely. Yes.
    Ms. Velazquez. Well, let me just say that by issuing press 
releases like the one that you issued yesterday questioning the 
constitutionality of the program, that doesn't help.
    My question to you is why is it that you didn't raise the 
constitutionality issue when the SBA raised its concern when 
the SBA did their finding with the U.S. District Court for the 
District of Columbia? How come when you did your finding, 
didn't raise that issue?
    Ms. Carranza. Chairwoman Velazquez, I want to make sure 
that the statements that I make to you are as accurate and 
represent as accurate the status of the particular reference 
that you're making.
    It is not so much about the constitutionality, and I may 
have misspoken earlier. It is about the accuracy and the 
sufficiency of the detailed information that should be 
recognized before--or should support the Government needs, the 
particular Government interests or the preference interest 
also. So you are talking about the constitutionality as it 
relates to the accuracy of the detailed information that is 
necessary to identify either the preference group that we are 
addressing or, for that matter, to support the compelling 
interest of the preference group that we are addressing.
    Ms. Velazquez. My original question to you was why did you 
raise that now or you did not raise it when you filed?
    Ms. Carranza. Chairwoman Velazquez, I am not in a position 
to answer that, and I can give you--
    Ms. Velazquez. That is why I wanted the Administrator to be 
here.
    (Applause).
    Ms. Carranza, in the press release that the agency issued 
yesterday it identifies the 8A program and the HUB Zone program 
as option for women entrepreneurs. All women entrepreneurs are 
not eligible for the 8A program nor for the HUB Zone program. 
Is the SBA suggesting that these programs are sufficient for 
the needs of women entrepreneurs?
    Ms. Carranza. Chairwoman, with all due respect, 8A program 
and the HUB Zone programs are valuable strategic tools. They 
are in addition to the women's programs, Procurement Program. 
And it is just an addition to make the opportunities much more 
comprehensive. They are not singularly--
    Ms. Velazquez. Well, I will invite you to read the press 
release that your agency issued yesterday with the intent to 
prove the point that since we have the 8A program and the HUB 
Zone, then the Women's Procurement Program is not needed.
    If the Women's Procurement goal of 5 percent was 
accomplished in 2005, women would have received an additional 
$5.2 billion in contracts. Is the agency suggesting in this 
press release that the Women's Procurement Program will not 
help agencies accomplish their goals?
    Ms. Carranza. Thank you for the question, Chairwoman 
Velazquez.
    It would be--I would be remiss to not acknowledge the loss 
of revenues by not having this particular program already in 
play. However, I also recognize that to move too expeditiously 
now that we have a viable study it could add significant value 
to a program, I think there is--that we may miss other 
opportunities and 5 billion may be a base and not the full 
capacity of a potential quality driven program.
    Ms. Velazquez. Well, as you can see in the line of my 
questions to you or maybe my expression, I am frustrated. And I 
resent the fact that after six years this programs has not been 
implemented.
    My message to the Administrator is it will be back in this 
Committee until this program is implemented.
    And to the agencies that are here, this is sound policy and 
is fair policy. Women business owners should have an 
opportunity to do business with the Federal Government. And we 
will continue to issue our scorecard report every single year. 
And we will go and check to see how your average efforts are 
working or if they are failing. So you have to do a better job. 
And you have to go back and assess the fact that whatever you 
are doing is not working is not fair. This is a way to protect 
taxpayers' money, and this is the way to show that we do care 
about providing every economic opportunity that we can through 
the Federal Government so that women business owners and small 
businesses have the opportunity to do business in the Federal 
marketplace.
    Thank you, Mr. Chairman.
    (Applause).
    Chairman Braley. Thank you.
    I just have one follow up question. Only two of the 
agencies present here today, NASA and the Department of 
Education, have awarded contracts to women-owned companies 
located in my State of Iowa in 2005. These two businesses 
received contracts totaling $66,000 and yet your four agencies 
represent $36 billion in contracts. That means that women- 
owned businesses in Iowa received .00018 percent of your agency 
contracts. And I would like to know for the women- owned 
business owners in my state how something like that can happen.
    Mr. Spampinato. Mr. Chairman, I would say there is no 
reason for that. There is no discernable reason. It should not 
be happening. And I think as the Madam Chair said, outreach is 
probably the issue. There has to be more outreach and 
especially in smaller areas of the country. We have just got to 
do more outreach. And the information is just not getting out 
there. That is the only thing I would say for us.
    Chairman Braley. Deputy Administrator Carranza, there are 
currently no SBA procurement center representatives located in 
Iowa. And yet when the Administrator came and testified before 
us, he talked about the new PCRs that are going to be put in 
place. Does the SBA plan on placing one of the new PCRs in Iowa 
to correct this imbalance?
    Ms. Carranza. In our--excuse me, Chairman. Thank you very 
much for the question.
    With the new goal of putting on approximately 11 new PCRs, 
we are accessing based on the potential procurement opportunity 
the PCRs. And we are taking a beltway look as well on 
considering for the rural reach, and that is a market we are 
assessing currently. How many and when, I could not profess at 
this point. But there are 11 that we are actually considering 
to be assigned.
    And I will take your concern under strict consideration.
    Chairman Braley. Well, when taxpayers represent 1 percent 
of the total population of the country and they receive .000.18 
percent, it is a reason for them to be concerned about whether 
they are getting a proper return on their tax dollars.
    Ms. Carranza. I agree, Chairman.
    Chairman Braley. Thank you.
    Member Davis, do you have any further questions for the 
panel?
    Mr. Davis. Mr. Spampinato, you mentioned in your testimony, 
UT-Batelle and Oak Ridge is a success story.
    Mr. Spampinato. Yes, sir.
    Mr. Davis. Could you take just a moment and do you know 
enough about that to talk about it a little bit?
    Mr. Spampinato. Sir, I do not have the information at this 
time, but I could get it back to the Committee and make it a 
part of the record.
    Mr. Davis. That would be good. And thank you for having 
businesses there in east Tennessee. Thank you.
    Chairman Braley. That will conclude the testimony of our 
first panel. I want to thank you all for taking time from your 
busy schedules to appear today. I think we all would like to 
see us move beyond objectives to results. And I am encouraging 
everyone of you to work with this Committee to make that 
happen.
    Thank you.
    Ms. Carranza. Very good. Thank you.
    Mr. Spampinato. Thank you.
    Chairman Braley. Now I would like to call up the members of 
our second panel.
    If witnesses would take their seats, we will begin.
    We have a very distinguished group for our second panel, 
and let me begin by introducing our first witness, Ms. Margot 
Dorfman. Ms. Dorfman is CEO of the U.S. Women's Chamber of 
Commerce based in Washington, D.C. The Chamber represents 
500,000 women-owned companies throughout the country.
    Welcome, and please share your opening statement.

  STATEMENTS OF MARGOT DORFMAN, CEO, U.S. WOMEN'S CHAMBER OF 
                            COMMERCE

    Ms. Dorfman. Thank you very much, Chairman Braley, Ranking 
Member Davis, and the members of the Subcommittee on 
Contracting and Technology.
    My name is Margot Dorfman and I am the CEO of the U.S. 
Women's Chamber of Commerce. I am here today on behalf of the 
millions of American women business owners to draw the line in 
the sand and say enough.
    It has been more than a decade since Congress established a 
5 percent goal for contracting with women. This goal was set 
because in 1994 Congress recognized there was a disparity 
between the number and capability of women-owned firms and 
their commensurate access to Government contracts. In all this 
time, the Federal Government has NEVER met the paltry 5 percent 
goal. This inexcusable shortfall remains in spite of the 
incredible surge in the number and capability of women-owned 
firms over the last 10 years, a growth of 42 percent.
    Let me briefly review the time line as it applies to women-
owned small businesses and Federal contracting:
    In 1994 the Federal Acquisition Streamlining Act of 1994 
set an overall goal of 5 percent for women-owned businesses. 
The Act did not, however, establish a specific procurement 
mechanism for accomplishing that goal. And between 1994 and 
2000, the Federal Government never even came close to meeting 
this 5 percent goal.
    In 2000 to address the ongoing shortfall of contracts with 
women-owned firms, Congress passed the Equity in Contracting 
for Women Act of 2000, and that was on December 21, 2000. This 
Act was to give agencies the ability to limit certain 
competitions to women- owned small businesses. It required the 
Small Business Administration to:
    (1) ``Conduct a study to identify industries in which small 
business concerns owned and controlled by women are 
underrepresented with respect to Federal procurement 
contracting'' and,
    (2) ``Establish procedures to verify eligibility to 
participate in the procurement program.''
    To date, the SBA has not implemented this program.
    2004. On October 29, 2004, the U.S. Women's Chamber of 
Commerce, in support of its 500,000 members, brought suit 
against the SBA for its failure to conduct the study of 
underrepresented industries and publish the regulations 
necessary to implement the women's program.
    2005. In 2005, finally a victory. While the SBA filed a 
Motion to Dismiss, it was denied by the court on December 8, 
2005. The court found that the SBA had unduly delayed the 
Women's Federal Procurement Program and further noted that the 
SBA, and this is a quote, ``...had sabotaged, whether 
intentional or not, the implementation of a procurement 
program...'' and concluded that, another quote, ``a deadline is 
in order.''
    2006. On March 6, 2006, the SBA notified the court that it 
would finally complete the disparity study within 9 months or 
by November 21, 2006. No study has been produced to date. The 
Federal Government still has not reached the 5 percent goal for 
contracting with women. Instead, contracting with women-owned 
small businesses hovers around 3 percent. This contracting 
shortfall costs women-owned small businesses over $5 billion 
every single year.
    2007. The USWCC petitioned the court on February 9, 2007 
for a Status Report and that the SBA report on its progress 
every 45 days.
    The result of this travesty is that a culture of failure 
has taken hold. Year in and year out the SBA sets goals with 
agencies, knowing that certain agencies will not meet their 
goals. Year in and year out the SBA claims they are going to 
implement the 6 year old Women's Federal Procurement Program. 
But they don't. The SBA has failed to step up to serve their 
true role on behalf of women-owned small businesses.
    We are here today to call for an end to the culture of 
failure that has become pervasive at the SBA and all the 
Federal agencies that are not meeting their goals.
    We are here today to call for the implementation of P.L. 
106-554 the Women Federal Procurement program.
    We ask that we stop blindly setting goals that are never 
met; the SBA stops that. And tat the agency acquisition leaders 
commit to and meet goals for contracting with women-owned firms 
by leveraging acquisition strategies that will achieve the 
congressional mandated 5 percent goal.
    Many, many agencies have proven that they can meet and 
exceed the 5 percent goal. It is time for the culture of 
failure to end and for our Federal Government to open its doors 
to the dynamic women-owned small business marketplace.
    And upon listening to some of the testimony, I have to say 
that our members know how to do their research. They know what 
the websites are, they go to the websites. They know their 
small business representatives. They respond to proposals. And 
the fact remains they do not have access to these contracts 
because they cannot compete. The competition that they are 
expected to compete with are the large corporations, the 
Lockheed Martins of the world. And women-owned firms are 
usually a third the size of their male counterpart cannot hold 
to that. We must get this law implemented.
    We are tired of waiting and we will not let this issue 
rest. Women-owned small businesses lose over $5 billion dollars 
annually. We are taxpayers, we are voters, we are community and 
family leaders. I ask that our representatives in Congress step 
up for us. I ask the Federal acquisition leaders act now to 
advance opportunities for women-owned firms. And I ask that the 
SBA end their culture of failure and finally step up to 
leadership on behalf of women-owned small businesses.
    Thank you very much.
    [The prepared statement of Ms. Dorfman may be found in the 
Appendix on page 60.]
    Chairman Braley. Our next witness is Christina Lomasney. 
She is President and CEO of Isotron Corporation headquartered 
in Seattle, Washington. This company is in the material science 
engineering and nanotechnology industry.
    Welcome.

  STATEMENT OF CHRISTINA LOMASNEY, PRESIDENT AND CEO, ISOTRON 
                          CORPORATION

    Ms. Lomasney. Thank you very much.
    Mr. Chairman, Ranking Member and Members of the 
Subcommittee, I want to thank you for allowing me this 
opportunity to appear before you this morning.
    My name is Christina Lomasney. I am the CEO of Isotron 
Corporation and Modumetal, Inc., both Seattle-based, woman- 
owned and operated small businesses.
    Modumetal and Isotron exist today due to the contributions 
of highly trained technical individuals, the vast majority of 
whom have advanced degrees in science and engineering. Thirty 
percent of my technical teams are women. Isotron and Modumetal 
deal in very advanced fields of material science and 
engineering that involve applications of nanotechnology to 
polymer composites and metal alloys respectively. Current and 
past clients include the Department of Defense, the Department 
of Homeland Security, the Environmental Protection Agency, the 
Department of Energy and commercial partners such as General 
Dynamics and the Ford Motor Company.
    This morning I have been asked to address concerns related 
to the Women's Federal Procurement Program, and specifically 
the Equity in Contracting for Women Act of 2000.
    Let me first state that I have been the grateful 
beneficiary of the support of the Federal Government and the 
American taxpayers for a great deal of the advanced research 
and development carried out at Isotron and Modumetal. I am 
always mindful of the tremendous responsibility that I have to 
be a wise steward of the resources that have been entrusted to 
us to develop cutting edge technologies that are intended to 
serve this nation in both public and private sector 
applications.
    Furthermore, as the proud sister of 3 Marines, one of whom 
is currently active duty and deployed in Iraq, I believe the 
core mission of both Isotron and Modumetal is to identify 
creative technologies to enhance the personal safety, 
protection and success of our nation's citizens and the men and 
women who defend our freedom in the field. It is for this 
reason and for many others that my exposure to the shortcomings 
of certain Federal contracting programs brings me here today.
    Most importantly, I want to offer one person's humble 
opinion on how we can make the Women's Federal Procurement 
Program more successful in the future.
    In 2003, Isotron was funded to provide the feasibility of 
an advanced, removable vehicle coating for the Department of 
Defense. Despite letters of support provided directly from the 
United States Marine Corps recommending a Phase II effort to 
advance the demonstrated system, the program stalled at the 
very stage where the technology would have been transaudient to 
a prototype product. We did not give up in the face of this 
obstacle, however. We have over the past 3 years worked 
directly with a commercial partner, a major military vehicle 
manufacturer, to continue requirements definition and testing 
internally. And today the Joint Services Chemical and 
Biological Defense Program has stepped up to put their full 
support behind this vision.
    It is my hope that we will provide a product to the field 
within the next two years that will measurably improve the 
survivability of our men and women in the field. The 
frustration and, indeed, the tragedy is that in a more 
efficient market we might have delivered this critical product 
to the field three years ago.
    As part of my testimony this morning I believe it is 
incumbent upon me to do more than just offer my concerns about 
what has not worked in the context of the Women's Federal 
Procurement Program.
    Given, and the facts bear out, that the Federal Government 
has not met its self-imposed 5 percent procurement goal and 
that over the last 5 years alone women have lost an estimated 
$25 billion in contracting opportunities, I expect that it is 
time we had a frank talk about changing or enhancing the status 
quo.
    Federally funded research and development is unquestionably 
very effective at developing high risk early stage technologies 
which hold great promise to serve the public. It is, however, 
my humble opinion that federally funded transition of that 
research into products is often inefficient. The reality, in 
fact, has become so common, it has its own name: The Valley of 
Death.
    It is time that these inefficiencies are directly 
addressed. And I hope to use my time here to offer some 
thoughts on what might work.
    We have an opportunity today to try a new approach which 
compliments the old that will provide women-owned businesses an 
opportunity to compete in specific areas in which we have been 
historically underrepresented. We have an opportunity to try 
something that will help women-owned small businesses lead the 
charge in crossing the Valley of Death.
    My interests, and I believe the interests of a vast 
majority of a women-owned businesses is to create a dynamic 
market in which the investment in our expertise, our creativity 
and our technology creates more investment because of the power 
of our business model alone. AS a woman small business owner 
and operator, the opportunity to forge a partnership with major 
corporations or customers to bring products to market is often 
a missing piece of my economic puzzle. The Federal Government 
can help complete the puzzle by developing or expanding 
programs such as the procurement program before you, the mentor 
protege program or focus tax credits in which major commercial 
partners receive significant incentive to invest in women-owned 
small businesses. As incubators of growth, as employers of 
skilled innovators, as developers of new products such an 
approach will create new markets and new opportunities not only 
for innovative small businesses like mine, but also for the 
major corporations that invest in our potential and for the 
markets that we serve.
    Additionally, if such programs are expanded we may have 
created a bridge against the Valley of Death that any small 
business can safely and successfully cross.
    The current Women's Federal Procurement Program was 
intended to provide women-owned businesses an opportunity to 
compete where we have been underrepresented. The proposed 
approach continues the same philosophy and takes it one step 
further: To establish a competitive field of women-owned 
businesses addressing the national challenge of transitioning 
advanced research into product.
    In conclusion, I hope my testimony today is of some value 
and benefit to this Subcommittee. As I indicated in the 
beginning of my remarks, I am grateful for the opportunity to 
be the beneficiary of the trust of the Federal Government and 
taxpayers who support programs that serve to incentivize 
innovation. But I hope that we will not stop there, that we 
will not see more technologies and companies flounder in the 
Valley of Death. I hope that with your support we can bridge 
this valley and in our execution realize the objective of a 
marketplace where women and minority-owned businesses play a 
competitive role with their technological rivals to the benefit 
of the military, education, energy and other Federal and 
commercial customers that we serve.
    [The prepared statement of Ms. Lomasney may be found in the 
Appendix on page 62.]
    Chairman Braley. Thank you.
    Very pleased to recognize and welcome one of my 
constituents to the panel. Karyl Smith is the owner of Iowa 
Valley Appraisal located in Waverly, Iowa, which is a real 
estate appraisal company.
    Welcome to the hearing.

        STATEMENT OF KARYL SMITH, IOWA VALLEY APPRAISAL

    Ms. Smith. Thank you. Good morning.
    I am honored to appear before you today to offer an insight 
into my profession, to address the concerns regarding the delay 
of the implementation of the Women's Federal Procurement 
Program, and to ask for your help to intercede on behalf of 
women-owned small businesses like mine, and hold those 
Government agencies and individuals accountable for their 
failure in implementing this program in a timely manner. I 
would also like to offer suggestions that I feel would enable 
other women-owned small businesses the opportunity to 
participate in this program.
    As a certified general real estate appraiser I presently 
contract with the USDA and provide appraisals on small, single 
and multi-family homes. For several years I was not aware that 
the USDA hired or contracted privately with real estate 
appraisers. Then while attending a continuing education program 
and in a seminar, a woman from the USDA office in Des Moines 
stood and asked if anyone was interested in appraising for the 
USDA. She handed out her business cards, told the attendees to 
reply by e-mail, provide her with the required information and 
we would be placed on the list or roster of eligible 
appraisers. Now I must annually register on the CCR in order to 
be eligible to receive contracts from the USDA.
    How the USDA utilizes this system is very simplistic. Once 
registered in a county the appraiser's name is placed on a list 
and each appraiser is given a turn or contract. It is a simple 
repeating process. The simplicity of this system does not 
acknowledge women-owned small businesses nor does it track the 
percentage of contracts awarded to them. Let me repeat, this 
system my business is currently registered in with the USDA 
does not acknowledge women-owned small businesses nor does it 
track the percentage of contracts awarded to them.
    The USDA is the only agency that I presently contract with. 
My concern in regards to my profession is how many Government 
agencies have needed or required the services of real estate 
appraisers in the past, present or future that I am not aware 
of?
    With the devastation that Hurricane Katrina left on our 
south and southeastern coastal areas, I am sure that there are 
numerous agencies of Government, perhaps FEMA, Homeland 
Security or HUD, who could have and may even still need 
appraisal services, but there is no centralized system or 
depository for businesses, such as mine, to bid or access this 
information. Without an outreach program or depository in place 
there is a significant amount of research and time required to 
locate buyers or users of any product or service, monitor any 
bids that they submit, accumulate all the associated data 
relevant or required in order to bid, then prepare and submit 
the bid. With all service businesses, time is money. The 
tremendous amount of time involved would take resources that 
many small businesses simply do not have. I know I do not have 
the time to do extended researches, continue my education, run 
a small business and maintain a home.
    According to the US Women's Chamber of Commerce, women-
owned small businesses have annually lost $5 billion dollars 
worth of contracting opportunities. Over these past 6 years 
this amount totals a staggering $30 billion dollars. Without 
the implementation of the Women's Federal Procurement Program 
this amount continues to grow. We need to ask ourselves how 
many women-owned small businesses have shut their doors and 
folded when they could have been awarded a small piece of this 
$30 billion dollar pie? We need to ask ourselves, how many 
women-owned small businesses, and specifically real estate 
appraisers, could assist in the timely re-building of our Gulf 
Coast had we been solicited through the Women's Federal 
Procurement Program? And, how much of that ``lost'' $5 billion 
could have been injected to a small business like mine?
    In my profession I am required to follow the laws and the 
procedures established by the Appraisal Standards Board and the 
Iowa Professional Licensing Division. If I fail in following 
this set of procedures and laws I would be disciplined. This 
discipline could possibly include the loss of my license. Why 
isn't the Federal Government held to the same standards it 
expects its citizens to abide to?
    Why is it that 6 years after the Equity in Contracting for 
Women Act of 2000, which passed on December 21, 2000, is still 
not implemented? This Act required the Small Business 
Administration to do two things. Is it not one of the SBA's 
main purposes or jobs to aid and assist small businesses? Why 
then would it not be a priority for them to get this program up 
and running? What was so difficult in this task that it would 6 
years and counting to complete? Who is being held accountable 
for this delay?
    My suggestions for taking this negative and turning it into 
a positive include making the SBA develop strategies that would 
assist women-owned small business in acquiring governmental 
contracts. Also that these strategies be placed on a time line 
and if or when they have failed in being implemented, that 
someone is held accountable.
    Another suggestion which would greatly impact all business 
owners would be a centralized or depository for governmental 
contracts. This system would allow both users and providers of 
products and services easy access to information including a 
listing of eligible women-owned small businesses. It would also 
include a publicized listing of who and where contracts are 
awarded, by what agencies and the monetary amount of the 
contract.
    The system then would be able to track the percentages of 
contracts awarded to designated women-owned small businesses. 
If there is a similar system in place, it is not easily 
accessible or public knowledge. I have no idea of one.
    Lastly, the number of women-owned business continues to 
grow daily.: This is a good thing. However, the revenue 
generated by us pales by comparison. With the assistance of the 
Women's Federal Procurement Program we could add to the vital 
economy of this country, bring additional dollars to our 
community and ensure our families live the American dream.
    Thank you for this opportunity to appear before you today 
and be a voice for women-owned small businesses.
    [The prepared statement of Ms. Smith may be found in the 
Appendix on page 67.]
    Chairman Braley. Thank you.
    Our last witness is Ms. Sheryl Roberts. She is the Chief 
Executive Officer of CCS Holdings, LP in Irving, Texas. CCS 
company is a Third Party Administrator specializing in workers' 
compensation claims and risk management services.
    Welcome.

    STATEMENT OF SHERYL MENDENHALL-ROBERTS, CHIEF EXECUTIVE 
                   OFFICER, CCS HOLDINGS, LP

    Ms. Mendenhall-Roberts. Thank you.
    Good morning again. My name is Sheryl Mendenhall-Roberts 
and I am a founding principal and the Chief Executive Officer 
of CCS Holdings, LP of Irving, Texas. It is woman-owned and 
operated small business. Please accept my appreciation for 
permitting CCS to offer requests and comments before this 
distinguished committee
    CCS companies have been in business for 10 years. Our 
companies are Third Party Administrators, providing workers' 
compensation claims and risk management services to the 
Government and to the private sector. We provide unique 
expertise with the Federal Employees Compensation Act, 
otherwise known as FECA and have years of experience working 
with the Department of Labor. Our FECA program allows us to 
represent the Agency, to support the injured employee through 
the claims process and to provide information to the Department 
of Labor to facilitate a satisfactory resolution of the claim 
as soon as medically possible.
    In 2005 annual report to Congress, the U.S. Department of 
Labor/OWCP indicated an annual benefit charge back to Federal 
agencies of $2 billion dollars and administrative expenses of 
nearly one $140 million dollars. Adverse trends identified by 
OWCP were:
    A 6 percent increase in the number of workers' compensation 
claims reported from the previous year;
    A 30 percent increase in serious injuries reported since 
the fiscal year 2000, and;
    A 22 percent increase in total disability days during the 
continuation of pay period.
    The report also states that the Department of Labor 
projects a gross liability for the Federal Government for 
future FECA benefits at $26 billion. As we specialize in the 
analysis and administration of workers' compensation, and these 
expenditures and trends are alarming to us. We believe our 
track record shows that our services not only reduce the costs 
and trends, but we have found it challenging to tell our story.
    Since 1998 we have knocked on the doors or submitted 
unsolicited proposals to approximately 25 or more agencies and 
departments but our success ratio is small. After obtaining our 
GSA Schedule, we were excited that GSA FSS contracted with us. 
The GSA FSS contract, over a period of five years, produced 
conservative savings of $13 million. Our fee was only $150,000, 
that produced a return on investment of $86.66 for every $1.00 
paid in our fees. Despite the savings, the contract ended when 
the GSA took the program back in house. There has been no 
additional contract awarded since.
    Another example: We were awarded a Federal contract in 2001 
for FECA administration. And we were told by the Department of 
Commerce that their internal department costs were reduced by 
more than 50 percent due to this privatization. Due to the 
success of the contract, the Department of Commerce gave us 29 
of their most difficult cases in a pilot project. The project 
produced savings of more than $35 million. The original 
contract was then amended the following year to include 75 
similar claims annually for a fee of $49,999. In spite of 
savings averaging $1,206,896 per file in future liabilities, 
the Department of Commerce could not get the funds appropriated 
to outsource additional cases and the following year the 
amendment was terminated. Fortunately, the Department of 
Commerce has maintained its contract for new claims and will 
continue to see a suppression in future liabilities on these 
claims. Considering our successes, however, the lack of 
contracts is not only frustrating to us as a small woman-owned 
business, but also as taxpayers. Taxpayers are paying 
unnecessarily for claims that could be negotiated or eliminated 
by using services such as ours. And, by using a woman-owned 
small business, most Government agencies could drastically 
improve their goals toward the Federal Women's Procurement 
Program.
    Our business involves providing a service, an Agency Human 
Resources function for outsourced FECA administration. We do 
not produce a widget.
    In many instances, our attempts to contact Government 
entities go unheard. We have found it difficult to find 
legitimate opportunities to present our program. They do not 
see the innovative ``out of the box'' concept of moving toward 
outsourcing and dismiss the service without truly investigating 
its value. Despite the proven savings, we have been told by 
some agencies that they are simply not interested, for example, 
the Department of State.
    When we are provided an audience, as with Commerce and the 
General Services Administration, we are ordinarily met with 
positive feedback and genuine interest. Unfortunately, we are 
most often told that while there is tremendous value in our 
service, the uniqueness of the program makes it difficult or 
impossible to get funds appropriated. Agencies such as the U.S. 
Army and FEMA fall into this category.
    We ask, why would Government agencies not be interested in 
doing business with a small business who can produce these 
kinds of result? Why is it so difficult to get an audience with 
anyone who can make a decision that the services brought before 
them are worthy of consideration?
    What is the value of certification and contract processes 
that are not utilized?
    How does a small business stand a chance of bringing new 
and innovative ideas in areas that were previously not 
considered, if Government entities are not willing to try a new 
approach?
    When will the Government as a whole, not only recognize, 
but reward small women-owned businesses that are capable of 
producing worthy products and services?
    Where is the real push to see greater business, 8A, small 
business that's woman-owned business set asides included?
    We ask for an open door policy with an open door; for 
participation: for parity; for organized effort: for a real 
rapport with Government: for a unified front from all of you; 
for a turning point: a newness of resolve: for your tenacity: 
for an initiative to create our participation;
    We ask for meaningful opportunity.
    Thank you.
    [The prepared statement of Ms. Mendenhall-Roberts may be 
found in the Appendix on page 71.]
    Chairman Braley. Thank you.
    Let me start with you, Mr. Dorfman. Can you explain based 
upon input from your members why the Women's Procurement 
Program would be helpful in increasing contracting 
opportunities for women-owned businesses.
    Ms. Dorfman. Yes, I would be glad to. Thank you.
    The members that we have, this is not just a women's issue 
for one thing. It is a family issue. It is a community issue.
    The majority of women-owned firms, as you mentioned 
earlier, we employ quite a few people in the community. And 
without this being implemented, we are unable to access the 
contracts that will bring the monies back into the business and 
into the communities. So it is very important that this is 
implemented.
    Chairman Braley. How do you respond to people who say that 
the lawsuit filed by the U.S. Women's Chamber of Commerce has 
slowed down the implementation of the Procurement Program?
    Ms. Dorfman. I would say that nothing has happened without 
the court direction to the SBA. The SBA has not taken any 
action without court direction. And this is what we need to do 
to make it move. This is what we are doing. We have got the 
court involved and, thankfully, we have got the House Committee 
on Small Business doing the oversight that is needed to bring 
forth, hopefully, speedy implementation.
    Chairman Braley. You were here when the Deputy 
Administrator testified today.
    Ms. Dorfman. Yes.
     Chairman Braley. What was your reaction to her 
justification about why the program had not been implemented?
    Ms. Dorfman. I have heard many of the justifications over 
the years, and the facts remain that the law was passed six 
years ago. That the law must be implemented. It is a law. And 
that the SBA--it is not in the SBA's authority to disregard the 
law, to make changes to the law. When they came out with the 
first set of draft regulations they actually changed the 
intention of the law from what Congress had intended. And we, 
of course, responded to that as well. But what we see that 
needs to happen is that the law must be passed as it was 
intended by Congress and the results are to get the contracts 
to the women-owned firms so that they have access that they can 
compete in the market, they can grow their businesses and we 
can grow the economy of the United States.
    Chairman Braley. In your view will the agencies meet their 
5 percent goal for contracting with women-owned businesses 
without this Women's Procurement Program?
    Ms. Dorfman. Absolutely not. When we first started to talk 
to our members and ask them how is it that you would like us to 
help you to grow our business, they said we need access to 
Federal contracts. We don't have access currently. We met with 
every single small business director for every single agency. 
And whether they were appointed or not, doors would shut. But 
that is what they said. If you really want us to be able to 
assist and grow the numbers of women-owned firms that we can 
help get contracts, this law must be implemented. And it was 
upon those two requests that we started the process of meeting 
with the SBA, started the testifying here at House Committee on 
Small Business to really bring the issue to light and 
ultimately meet the Administrator, at the time, Hector Barreto 
who said to us in quote ``This Administration has no intention 
of implementing this program.''
    When we sent out our release to our members to say this is 
what we have done, this is what the response is, what do you 
want us to do next we had hundreds of thousands of responses 
saying it is time to fight. We have to sue. That is when our 
pro bono attorney Covington & Burling stepped up to assist us 
and we filed the lawsuit.
    So this is imperative. It is a good tool for the agencies. 
I heard other issues that were needed. One was the whole 
bundling concept which is a whole number issue that once we get 
through this, get this implemented, we will have to go back and 
start the unbundling. But we need to get this. Without this 
tool those agencies' hands are fairly well tied.
    Chairman Braley. In June of last year the SBA issued 
proposed regulations for the Women's Procurement Program and 
suggested that establishing a certification program whereby SBA 
would certify all companies as women-owned, does that seem 
reasonable to you?
    Ms. Dorfman. Well, I think what needs to happen is they 
need to go back to the letter of the law that Congress 
implemented and follow that.
    What they were proposing was that through this 
certification process that they would take in house, they would 
not also acknowledge DOT certification which is already in 
play, that they would be able to get 2,000 certifications for 
woman-owned firms done a year. There is 76,000 woman-owned 
firms registered in CCR. This would 38 years more to actually 
complete and get implemented. I don't think that is reasonable 
at all. I think we need to stick to what the letter of the law 
is and follow that.
    Chairman Braley. Ms. Smith, during your testimony you 
talked about some of the problems you had experienced in 
delaying the implementation of this program and also talked 
about suggestions you might have to offer other women-owned 
businesses who face challenges in gaining access to these 
procurement programs. I just wanted to give you the opportunity 
to share some of those suggestions with us.
    Ms. Smith. I think one really good suggestion was, and it 
was brought before you about outreach. The SBA can go to 
different organizations. They can go to conferences held by 
women-owned businesses. They can implement a program that would 
allow a centralized system so that we can access it easily. 
Because the research now, I don't have time to sit in front of 
my computer and research for hours on hours. That I think the 
biggest key for me is getting a centralized location so that 
they know who we are and that we are women- owned and we are 
all small businesses. And that they can even come to us as 
opposed to us always going to them.
    Chairman Braley. All right. One of the things you talked 
about in your testimony was the amount of research required to 
identify contracts to bid. Have you taken advantage of any of 
the electronic systems that we talked about, such as the 
FedBizOpps?
    Ms. Smith. Actually, I was not aware of that until I 
started doing research to appear here today. Weekly I get e-
mails from companies that offer me the service to research for 
me at a fee of $120 a month. But they cannot guarantee any 
results or return on my investment of $120 a month. So I have 
not taken the time.
    Once again, it is simply because as a woman I have several 
hats. I have the hat of a mother. I have the hat of a wife. I 
also am a partial owner of two additional businesses. But I 
also registered with the CCR. Why could not the CCR come back 
to me and offer me suggestions of where I can get governmental 
contracts.
    Chairman Braley. One of the concerns I mentioned earlier in 
the hearing was this issue of geographic imbalance. The 
Department of Education has 88 percent of its contracts awarded 
in the greater D.C. area. The Small Business Administration has 
90 percent of its contracts awarded in the greater D.C. area.
    As someone who has participated out in the heartland, can 
you talk to us a little bit about the specific challenges of 
small businesses owned by women who do not have access to some 
of the information and resources available here in this area?
    Ms. Smith. That was really disheartening for me to read 
also when I started doing research. Let me just state that 2 
percent of my income comes from the Government for contracts 
with USDA. My taxes on that, I pay well over 400 percent of 
that back in taxes. It is very disheartening for me.
    The problem that women-owned small businesses have out 
there, especially in rural Iowa, and this is very sad to say, 
but even in my profession we call it ``the good boys club.'' We 
are not always allowed access. We are kept out of a lot of 
professions in a lot of areas, which even makes it even more 
difficult.
    There are some companies and institutions, the University 
of Northern Iowa for example, offers an excellent outreach 
program to help women get into business, help them meet their 
goals of their business. I applaud them. But once again, it is 
a time factor. I do not know how many women can take out 2 to 3 
weeks out of their lives and go and learn a lot of this and yet 
still try to keep this business that they started up and 
running.
    Chairman Braley. Ms. Lomasney, in your testimony you talked 
about what has not worked and you mentioned specifically the 
federally funded transition of research into products is 
inefficient, and you described as the Valley of Death. Can you 
give us a little bit more insight into your experience with 
that particular problem?
    Ms. Lomasney. Absolutely. I would be happy to.
    My company does a lot of contract research and development 
for the Department of Defense. And in general we are trying to 
develop technologies that will result in innovative products. 
Unfortunately, the SBIR programs tend to stop at a particular 
point in the development process. And the result of that is 
that we do not actually get to procurement contracts. So we do 
not realize that transition from an interesting technology that 
shows promise to an actual product that can realize benefit in 
the field. And it is that transition that is our challenge. And 
I think it is the Valley of Death that we need to address.
    Chairman Braley. And so as you walk in the shadow of the 
Valley of Death and you fear no evil what suggestions do you 
have for this Subcommittee on how we can eliminate that 
obstacle?
    Ms. Lomasney. Well, I think there are a lot of things that 
we can do. Certainly being aware of the Valley and trying to 
focus initiatives towards realizing that transition within the 
Government is one way.
    Another way is to look to the commercial sector. And I 
think that is where we are trying to innovate and I think 
women-owned small businesses could lead the way in trying to 
partner with larger corporations, the mentor protege program 
being one way of realizing that, to realize that transition. 
The commercial markets are very efficient at transitioning 
technologies into products. And so we can leverage, I think, a 
lot of the expertise that already exists to do that.
    The question is how do we incentivize corporations that 
have already crossed the Valley of Death to work with small 
businesses and women-owned small businesses to make that 
transition or to bridge that gap.
    Chairman Braley. Based on your testimony it is clear that 
your company had contracts that could be considered both prime 
and subcontracts, correct?
    Ms. Lomasney. Yes.
    Chairman Braley. And given that, some people might argue 
that your company is not in need of the additional assistance 
that might be available from this type of procurement program. 
How do you respond to that?
    Ms. Lomasney. Well, first of all, I will say we will never 
sit on our laurels and say good enough is good enough. I would 
welcome anyone to come and visit our library in Seattle. We 
keep copies of all of the proposals we have ever written in our 
library. And from visiting you might think we would be a much 
larger corporation.
    My statistics show that approximately 1 in 10 to 1 in 12 of 
the proposals we write actually result in some sort of awards. 
So there is a lot of room for improvement.
    I will also mention that I have never ever received a 
contract from the Federal Government that was the result of a 
well known small business set aside. So we work very hard to 
compete in full and open competitions. If that were not the 
case, I think our statistics might be quite different. The 
number of jobs that we can create as a result would also be.
    Chairman Braley. Ms. Roberts, listening to your testimony I 
felt a great deal of frustration at what you must have gone 
through in providing a valuable service that provided a good 
return to the taxpayers of this country only to have door 
slammed in your face. I wondered if you could comment about 
what that does to women business owners who are trying to 
capture a piece of this important market by having to go 
through the hoops of countlessly reselling the value of your 
services to the Federal Government?
    Ms. Mendenhall- Roberts. Well, you are quite correct. There 
is a high level of frustration that goes into something that 
you pour your life into. There is a high level of frustration 
when what you can give back, and has been proven that you can 
give back, is certainly valuable to us all for many reasons.
    I think what it says to women, quite often, is what chance 
do we really stand. I think it says that perhaps there is a lot 
of lip service but there is not much beyond that.
    I think it says that there is an awful lot of rhetoric but 
there is very little accountability that really goes behind. 
You can enact all the laws you want to. Someone is going to 
have to enforce it. You can make all the good Committee 
hearings and let us get on the air and let us put facts before 
you, but unless you decide that you are going to take this back 
and try to do something with it with your peers that is 
accountable, then we are rather stymied
    We keep trying. I think that you will find most women 
business owners, and I am sure most business owners in general, 
we are quite tenacious people. I was called a she-wolf one time 
by a peer of mine, that if I ever got my teeth into something, 
I would never let it go. And I have never let go of the dream 
that this business that means I think so much to what could 
happen here. Because think about it. If we could produce 
savings on 29 files in excess of #35 million, then what really 
is there to be accomplished? How many programs have you and 
your peers wanted to see go forward that you had to cut because 
of budget restraints. Those funds might have kept lunches in 
children's tummies instead of having to have it cut.
    I think women believe in what they do. I think we believe 
that you people must care. I think you are probably somewhat 
frustrated sometimes to know what to do for us. And the only 
thing that we can ask you to do is to keep being innovative. 
Keep hearing. And keep being willing to carry that ball down 
the field. A touchdown is possible.
    Chairman Braley. Thank you.
    And with that, I will yield to the Ranking Members.
    Ms. Dorfman. Thank you, Mr. Chairman. I have no questions.
    Chairman Braley. I want to thank the panel for your courage 
in sharing these observations with us. I want to thank everyone 
who came to the hearing today to be part of the very first 
hearing of the Contracting and Technology Subcommittee of the 
Small Business Committee of the United States House of 
Representatives.
    We have heard a lot of important testimony. We have a lot 
of follow up work that needs to be done. And I will be working 
with the Chairwoman of the Committee and the Ranking Member to 
make sure that there is greater accountability to see that this 
program not only gets off the board, but it starts to have the 
type of impact in the lives of women-owned businesses around 
this country and achieves the dream that was first set out in 
1994.
    Thank you all for coming.
    This meeting is adjourned.
    [Whereupon, the Subcommittee meeting was adjourned at 12:30 
p.m.]
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