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



 
                       VETERANS ENTREPRENEURSHIP

                          AND SELF EMPLOYMENT

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


                                HEARING

                               before the

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 17, 2007

                               __________

                           Serial No. 110-23

                               __________

       Printed for the use of the Committee on Veterans' Affairs




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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     RICHARD H. BAKER, Louisiana
Dakota                               HENRY E. BROWN, Jr., South 
HARRY E. MITCHELL, Arizona           Carolina
JOHN J. HALL, New York               JEFF MILLER, Florida
PHIL HARE, Illinois                  JOHN BOOZMAN, Arkansas
MICHAEL F. DOYLE, Pennsylvania       GINNY BROWN-WAITE, Florida
SHELLEY BERKLEY, Nevada              MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado            BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana                GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California           VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                                 ______

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

          STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman

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

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


                            C O N T E N T S

                               __________

                              May 17, 2007

                                                                   Page
Veterans Entrepreneurship and Self Employment....................     1

                           OPENING STATEMENTS

Chairwoman Stephanie Herseth Sandlin.............................     1
    Prepared statement of Chairwoman Herseth Sandlin.............    54
Hon. John Boozman, Ranking Republican Member.....................     2
    Prepared statement of Congressman Boozman....................    54
Hon. Susan A. Davis..............................................     2

                               WITNESSES

U.S. Small Business Administration:
  William D. Elmore, Associate Administrator, Veterans Business 
    Development..................................................    34
    Prepared statement of Mr. Elmore.............................    81
  Louis J. Celli, Jr., Chairman, Advisory Committee for Veterans 
    Business Affairs, and Chief Executive Officer, Northeast 
    Veterans Business Resource Center............................    38
    Prepared statement of Mr. Celli..............................    87
U.S. Department of Veterans Affairs, Scott F. Denniston, 
  Director, Office of Small and Disadvantaged Business 
  Utilization, Center for Veterans Enterprise....................    36
    Prepared statement of Mr. Denniston..........................    84

                                 ______

American Legion, Joseph C. Sharpe, Jr., Deputy Director, Economic 
  Commission.....................................................    23
    Prepared statement of Mr. Sharpe.............................    67
Halfaker and Associates, LLC, Washington, DC, F. Dawn Halfaker, 
  Owner / Chief Executive Officer................................     3
    Prepared statement of Ms. Halfaker...........................    55
MicroTech, LLC, Vienna, VA, Anthony R. Jimenez, President and 
  Chief Executive Officer........................................     6
    Prepared statement of Mr. Jimenez............................    57
National Veterans Business Development Corporation, The Veterans 
  Corporation, Walter G. Blackwell, President / Chief Executive 
  Officer........................................................    32
    Prepared statement of Mr. Blackwell..........................    74
Oak Grove Technologies, Raleigh, NC, Mark Gross, President and 
  Chief Executive Officer........................................     4
    Prepared statement of Mr. Gross..............................    56
Veterans Enterprise Training and Service Group, Inc. (VETS 
  Group), Joe Wynn, President, and Member, Veterans 
  Entrepreneurship Task Force (VET-Force)........................    19
    Prepared statement of Mr. Wynn...............................    60
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................    24
    Prepared statement of Mr. Weidman............................    71

                       SUBMISSION FOR THE RECORD

Veterans of Foreign Wars of the United States, Eric A. Hilleman, 
  Deputy Director, National Legislative Service, statement.......    93

                   MATERIAL SUBMITTED FOR THE RECORD

Executive Order 13360--Providing Opportunities for Service-
  Disabled Veteran Businesses To Increase Their Federal 
  Contracting and Subcontracting, dated October 20, 2004.........    95


             VETERANS ENTREPRENEURSHIP AND SELF EMPLOYMENT

                              ----------                              


                         THURSDAY, MAY 17, 2007

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

    The Subcommittee met, pursuant to notice, at 2:20 p.m., in 
Room 334, Cannon House Office Building, Hon. Stephanie Herseth 
Sandlin [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Stephanie Herseth Sandlin, 
McNerney, Hall, and Boozman.
    Also Present: Representative Susan A. Davis of California.

        OPENING STATEMENT OF CHAIRWOMAN HERSETH SANDLIN

    Ms. Herseth Sandlin. Good afternoon ladies and gentlemen. 
The Veterans' Affairs Subcommittee on Economic Opportunity 
hearing on Veteran Entrepreneurship and Self Employment will 
come to order. First, I ask unanimous consent that Ms. Susan 
Davis of California be invited to sit at the dais for this 
Subcommittee hearing today.
    Hearing no objection, so ordered.
    The Ranking Member and some of the panelists may recall a 
joint hearing we held with our colleagues on the Committee on 
Small Business back in May of 2005 on Veteran-Owned Small 
Businesses.
    Today's hearing will build upon that hearing as we receive 
testimony to explore the current state of veteran 
entrepreneurship and the challenges and obstacles they may 
encounter. Small businesses are essential to economic 
prosperity. The implementation of strong economic development 
plans, especially in rural States like South Dakota and 
certainly parts of Arkansas is essential. Time and again, 
veterans have continually assisted in preserving this critical 
element of our Nation's economic prosperity.
    In my home State of South Dakota, more than 17,000 veteran-
owned small businesses are operating. These brave men and women 
add tremendous value to our economy when given the opportunity 
to start and manage their own businesses.
    Starting and growing a small business is no easy task and 
can be a difficult challenge. I have heard of many of the 
difficulties that disabled veterans face when starting and 
developing a small business. In addition, I have also heard 
from many members of the National Guard and Reserve in South 
Dakota who find it challenging to maintain their small 
businesses when deployed overseas to Iraq and Afghanistan and a 
number of those who return that look to pursue other 
opportunities separate from the career path they were on prior 
to deployment. I look forward to working with Ranking Member 
Boozman and members of the Subcommittee to focus our efforts on 
assisting our Nation's veterans with these challenges. I now 
recognize the Ranking Member, Mr. Boozman, for any opening 
remarks he may have.
    [The prepared statement of Chairwoman Herseth Sandlin 
appears on p. 54.]
    Mr. Boozman. Thank you, Madam Chairwoman. In the interest 
of time, what I would like to do is just make a very brief 
statement and then submit the rest for the record if you don't 
have any objections.
    Ms. Herseth Sandlin. No objection. So ordered.
    Mr. Boozman. I am sure you are very pleased at that.
    Ms. Herseth Sandlin. Yes, yes, I appreciate it, because I 
know we have three panels today and a number of questions.
    Ms. Herseth Sandlin. I would defer to see if there is a 
brief opening statement that Ms. Davis might have. Any opening 
comments?

            OPENING STATEMENT OF HON. SUSAN A. DAVIS

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

             OPENING STATEMENT OF HON. JOHN BOOZMAN

    Mr. Boozman. Can I just mention, Madam Chairwoman, again, I 
appreciate you having this because it is so important. As Ms. 
Davis said, we have these people coming back, and I was an 
optometrist. We had 80 or 90 employees prior to coming. And I 
know how difficult it is to be a part of a small business, and 
so, again, I appreciate it.
    I know, in looking at some of the testimony and looking at 
some of the, just some of the comments that we have had, I 
think that it is fair to say that there is a level of 
dissatisfaction and disappointment with TVC's performance, and 
so, again, I am looking forward to the testimony and thank you 
for your leadership.
    [The prepared statement of Mr. Boozman appears on p. 54.]
    Ms. Herseth Sandlin. Thank you, Mr. Boozman. I want to 
welcome our panelists testifying before the Subcommittee today. 
Let me introduce our first panel, joining us is Ms. Dawn 
Halfaker, President and Chief Executive Officer of Halfaker and 
Associates, LLC; Mr. Mark Gross, President and Chief Executive 
Officer of Oak Grove Technologies; and Mr. Anthony Jimenez, 
President and Chief Executive Officer of MicroTech, LLC.

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

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

                 STATEMENT OF F. DAWN HALFAKER

    Ms. Halfaker. Thank you. Chairwoman Herseth Sandlin, 
Ranking Member Boozman and Subcommittee members. I greatly 
appreciate the opportunity to testify at this hearing regarding 
veteran entrepreneurship and self employment. And I am very 
honored to represent a newer generation of entrepreneurs and 
wounded war fighters, as I am an Operation Iraqi Freedom (OIF) 
veteran. I am Captain Dawn Halfaker, retired, owner and CEO of 
Halfaker and Associates. We are a woman-owned, service-
disabled, veteran-owned HUB Zone small business providing 
national security consulting services to the Federal 
Government. We are focused on mission support for the global 
war on terror in the areas of force protection and anti-
terrorism homeland security emergency management and chem 
biodefense operations.
    I started the company in January 2006, a year and a half 
after I was severely wounded in action in Iraq. As a result of 
my injuries I lost my right arm at the shoulder, but even more 
devastating, I lost my career as a military officer. Like most 
of the wounded war fighters who are medically retired and off 
active duty, I really didn't know what I wanted to do with my 
career. But I knew that I wanted to remain close to the fight 
and continue my service in some capacity.
    As a business owner, my company enabled me to do just that. 
I have the opportunity to use my military skills and expertise 
to continue my service as well as the ability to work and 
provide jobs for other veterans. My company competes for work 
within the Federal Government, primarily DOD, and targets 
contracting opportunities based not only on our capabilities 
that I mentioned but also the ability to be able to hire 
wounded veterans to perform the work that we get.
    Since I began my business, we have realized a fair amount 
of success early on. After a year and 5 months, we have gone 
from one employee to 12 employees, and our projected revenue 
through the end of calendar year 2007 is $2.5 million. We 
currently have one prime contract and seven subcontracts and 
are obviously pursuing a number of other opportunities.
    With this, many times people have asked me how we have done 
this so quickly and what resources we have used in our fair 
amount of success. And my answer is always the same. Hard work. 
And as you mentioned other veteran businessowners, I would just 
like to point out some of the resources that have been so 
useful to me. One of the individuals, who happens to be sitting 
right next to me, and that is the CEO of Oak Grove 
Technologies. I would just like to point this out because I 
think it is very important to realize, as a young small 
business owner, there are a lot of pitfalls that we can step 
into and get bogged down with things that may seem like good 
resources but in truth aren't really doing much to help us grow 
our businesses and are somewhat of a distraction.
    I would like to say that the best resources I have received 
is the help I have gotten from people who are willing to lend 
their time, their energy and their financial resources and give 
them to me at my disposal. For example, Oak Grove Technologies 
has been setting up my Web site absolutely free. Their only 
contingency is that it doesn't look better than theirs. With 
that said, there have been a number of other things that they 
have helped out with. They have helped us get our financial 
system in order, and they have given us a number of different 
H.R. functions, paperwork, just different things that you don't 
really know what you are getting into when you start a 
business. So I would just like to point out that I think, as we 
move forward and as we are looking for things that are very 
valuable, I would just like to recognize the other service 
members and veterans in the community for stepping up and 
reaching out and really helping people like myself. And I think 
it would be valuable to point out that this has been my most 
efficient resource. I really have not received a lot of help in 
any other aspect other than people in the community reaching 
out to me and saying, this is what you need to do to be 
successful. So I think it might be worth looking into some kind 
of formal or informal program where other service-disabled, 
veteran-owned businesses, small businesses are able to help 
people like myself get started. I think it is basically taking 
the mentor / protege model and looking at how successful that 
has been and mainly looking at how we can implement that at a 
lower level.
    In sum, again, I would just like to say thank you for the 
opportunity to be here. That is all I have.
    [The prepared statement of Ms. Halfaker appears on p. 55.]
    Ms. Herseth Sandlin. Thank you very much, Ms. Halfaker for 
your testimony. Thank you for your service and for suggesting 
areas that we will be pursuing, not only with the other panels 
today but working with our staff and others that can evaluate 
some of the recommendations that you have made through your 
testimony.
    Mr. Gross, thank you for being here. You are now recognized 
for 5 minutes.

                    STATEMENT OF MARK GROSS

    Mr. Gross. Good morning, Chairwoman Herseth Sandlin, 
Ranking Member Boozman and members of the Subcommittee. First, 
I want to thank everyone here for the invitation to come before 
you today and share some of my experiences within the veteran 
business community. I am a veteran of the United States Army. I 
founded Oak Grove Technologies, which is a service-disabled, 
veteran-owned company, 5 years ago this past August or this 
coming August.
    Today I am proud to say that I employ over 140 people. Over 
70 percent of those employees are veterans, 16 percent of 
disabled veterans. Geographically, we are dispersed in 16 
States as well as supporting both Operation Enduring Freedom 
(OEF) and OIF, both Iraq and Afghanistan. I am here today to 
offer testimony on behalf of the business community and to 
offer some of the benefits of some research and some opinions 
that myself on the Veteran Business Advisory Committee has been 
privy to.
    The question before the Committee today is, what is the 
state of veterans entrepreneurship, obstacles faced by aspiring 
entrepreneurs, programs being relied upon by veterans and the 
current status of Federally funded programs to assist veterans?
    I feel that I am uniquely qualified to answer some of these 
questions, as I have not only built a successful business in 
this economic climate, but I have also taken on the task of 
mentoring a number of other disabled veterans' companies. In my 
opinion, Congress has done an outstanding job in passing 
legislation, such as Public Laws 106-50 and 108-183, both of 
which established programs for the disabled veteran Federal 
goals and mandates in Federal contracting. Some of the problems 
today revolve more around accountability within some of these 
agencies and their willingness to make attempts to meet these 
goals.
    I am here to offer my views on what I think can be done to 
ensure the state of veterans entrepreneurship within the 
Federal Government.
    Congress and this specific Committee have been working with 
veteran businessowners for years. This issue is as important to 
our veterans as it is to you. What we have seen, however, in 
many agencies has been, frankly, a cavalier attitude toward 
meeting this 3 percent goal. I believe that many agencies 
believing that the mandate really doesn't apply to them.
    In 2005 alone, the Department of Defense awarded 0.49 
percent of contracts to disabled veterans' companies. 
Department of Defense accounts for roughly 70 percent of all 
government procurement spending, yet its repeated inability to 
meet service-disabled veteran contracting goals make it all but 
impossible for the other agencies as a whole to meet their 3 
percent goal.
    I would like to offer six recommendations on what can be 
done in order to meet that goal. Some of the legislation--well, 
one is eliminate the ``Rule of Two'' wherein a contracting 
officer has to have two or more disabled veteran companies 
before they can set aside a procurement. That is the only 
statutory program that has that requirement. Both the 8(a) 
program and HUB Zone program do not have that requirement to 
create a level playingfield between the statutory programs by 
changing the ``may'' to ``shall'' when using restricted 
competition for service-disabled programs. Both the HUB Zone 
and 8(a) program use shall be procured to those particular 
socio-economic programs whereas in the disabled veteran 
community, it is the contracting officer. They give them a lot 
of latitude as far as ``may.''
    Small business subcontracting plans, including all details 
of the plans, required by large prime contractors should be 
made public and accessible electronically upon request.
    Mandate that contracting officers impose liquidated 
damages, as predicated by the Federal Acquisition Regulation 
(FAR) part 19.705-07 for those large companies that fail to 
demonstrate a good faith effort to fulfill the requirement of 
their subcontracting plan.
    Close some of the loopholes in the GSA schedule FAR Part 
eight wherein large businesses use small companies as fronts 
and take away business that really was intended for some of the 
small businesses.
    And penalize agencies that don't make a reasonable effort 
to maintain that, to meet that goal.
    One of the--I can't speak very intelligently about many of 
the Federal programs out there because, frankly, not many--I 
haven't used many of them. One, I am aware of is The Veterans 
Corporation (TVC), and I am quite familiar with them. We used 
to be co-located in the same building in Alexandria, Virginia.
    I frankly don't quite know really what they do. I had 
looked to them back in 2003 for some assistance and really 
didn't feel that there was a whole lot of assistance to be 
offered to me at that time. I believe they do bonding and some 
things like that, but none of which were my line of business.
    On the other hand, I would like to recognize two agencies 
that I feel do a great job as far as outreach, and that is the 
Department of Veterans Affairs, and that is the Army Small 
Business Office, both of which in my opinion have really taken 
the lead as far as outreach to the community. We are proud to 
be the first disabled veteran's small business in the DOD 
Mentor Protege program that was created by Public Law 108-103, 
and this year we were awarded the DOD's Nunn-Perry award for 
small business growth.
    As an entrepreneur and veteran, I think the climate 
certainly has gotten a lot better than in the past 7 years. We 
still have a long way to go, but I am confident that Congress, 
many of the Federal Agencies, like the VA and the Army, are 
committed to this cause. And with that, I would just like to 
thank everyone for their time and all the efforts in improving 
the economic climate for disabled-veteran small businesses.
    [The prepared statement of Mr. Gross appears on p. 56.]
    Ms. Herseth Sandlin. Thank you for your testimony, Mr. 
Gross, and your insights and your participation in mentoring 
other businessowners, in describing your experience with 
different programs or lack thereof, based on how successful you 
have been as well as maybe a lack of clarity about what some of 
these programs can offer you, specifically. We will explore 
that further as well.
    Mr. Jimenez you are recognized for 5 minutes.

                STATEMENT OF ANTHONY R. JIMENEZ

    Mr. Jimenez. Good afternoon, Chairwoman Herseth Sandlin, 
Ranking Member Boozman and Subcommittee members. It is a 
privilege to be here today. I want to thank the Subcommittee 
for allowing me to share my thoughts regarding veteran 
entrepreneurship and, in particular, current programs funded by 
the Federal Government that support businesses owned by 
veterans.
    I am CEO and president of MicroTech, which is a service-
disabled veteran-owned small business. I retired from the Army 
approximately 4 years ago after serving 24 years. I started as 
a private and ended as a Lieutenant Colonel and am confident 
that the experience that I learned as a veteran can be applied 
to the Federal Government as a contractor or subcontractor.
    I would like to begin today by clearing up what I believe 
to be a misconception about the primary obstacles facing 
service-disabled veteran small businesses or SDVOSBs. My sense 
is that there is a widely held belief that what service-
disabled veterans need most is access to training, capital and 
other elements that support business development goals.
    In response to these perceived needs, The Veterans 
Corporation was created. The Veterans Corporation provides many 
helpful tools for veterans looking to start a business, such as 
help with business plans, advice about contracting with the 
government, assistance obtaining financing and so on. And I am 
sure this type of assistance is very valuable to many folks 
starting new businesses and particularly by those that have 
taken advantage of that.
    But I do not believe that these are the primary factors 
holding back business from veterans, especially well 
established service-disabled veterans.
    I believe that these companies are more in need of advocacy 
and opportunity than they are in need of startup assistance and 
support. In fact, right now, today, there are over 12,500 
service-disabled, veteran-owned small businesses and 37,000 
veteran-owned small businesses which have negotiated all the 
hurdles required to become registered in the Contractor Central 
Registry (CCR).
    Based on my personal knowledge and experience, I believe 
that the majority of these small businesses stand ready to 
deliver quality solutions to the government today. I firmly 
believe that what service-disabled veterans are in need of are 
genuine opportunities. These are opportunities that allow them 
to demonstrate and grow their capabilities.
    To date, the government's record of identifying, setting 
aside and awarding contracts to service-disabled veterans is 
disappointing at best. The law mandates that the governmentwide 
goal for participation and government awards to service-
disabled veterans is 3 percent of the total value of all 
contracts awarded each year.
    To date, the government has fallen far short of that goal. 
Let's contrast the difference between the approximately 12,500 
service-disabled veterans registered in the Central Contractor 
Registry, the CCR, to that of the approximately 10,000 8(a) 
small businesses registered. The legally mandated goals for 
8(a) and service-disabled veterans are the same. And the 
government consistently meets the requirements of setting 3 
percent aside for 8(a) small businesses almost across the 
board. What these circumstances translate into is a non-level 
playing field for service-disabled, veteran-owned small 
businesses. When you take DOD small business statistics for 
year 2001 through 2005, you will find that the targets for both 
8(a) and service-disabled veteran-owned small business spending 
was over $31 billion each. The target was essentially met for 
8(a)s. The amount awarded to service-disabled veterans was just 
under $7 billion.
    That represents a deficit of nearly $25 billion worth of 
opportunities that were never afforded service-disabled 
veteran-owned small businesses.
    Despite this disparity and according to the U.S. Small 
Business Administration (SBA), veteran entrepreneurs are 
successfully self-employed at a higher rate than any other 
group of American citizens. Imagine what service-disabled 
veterans could do if they had the opportunities they 
desperately need. We want to help create those opportunities 
and we need your help. And I promise you that if you can 
provide the opportunities, veterans will respond.
    My other question is, why does this disparity of 
opportunity occur, and what can we do about it? I believe there 
are two factors, a lack of commitment to provide the mechanisms 
for service-disabled veteran-owned small businesses to become 
large businesses and a lack of knowledge of the current 
perceptions about service-disabled veterans. Contracting 
officers and their customers are simply not aware of the depth 
and breadth of options available that service-disabled veterans 
can provide.
    I believe that many in government are reluctant to set 
aside large complex efforts for service-disabled veteran-owned 
small businesses for fear that the pool of respondents would be 
too small or that the offerings would be too expensive or 
noncompetitive. I believe this reluctance is also felt by the 
general business community.
    Large businesses will never partner with or mentor service-
disabled veterans if they perceive resistance on the part of 
the government or if it seems the commitment to develop, grow 
or mentor service-disabled veteran-owned small businesses is 
not genuine. With respect to the service-disabled veterans' 
ability to compete, I know from experience, it can be 
significant. To win our second-largest contract, which is a 
service-disabled veteran-owned small businesses set-aside, my 
company had to compete against 50 other service-disabled 
veteran-owned small businesses to win. We have successfully 
completed our base year of performance and are now working in 
our first option year, which is our second year of work. Our 
customer is receiving top notch service at a very competitive 
price and, having seen our capabilities first hand, understands 
the value of setting aside opportunities for veterans and 
service-disabled veterans.
    We are also one of 44 companies to receive an award on the 
U.S. General Services Administration, GSA, Veterans Technology 
Services, VETS, Governmentwide Acquisition Contract (GWAC). 
Over 200 service-disabled veterans bid on that opportunity in a 
very competitive selection process.
    Another outstanding example of veteran entrepreneurship is 
the NASA SEWP contract, which stands for Solutions for 
Enterprise-Wide Procurement. SEWP provides the latest in 
information-technology products, IT products, for all of the 
Federal Agencies. Until recently, SEWP had only large, small 
and 8(a) businesses as primes. On May 1, 2007, with the award 
of SEWP IV, six service-disabled veteran-owned small businesses 
are now prime contractors on SEWP IV. That means the Federal 
Agency now has the ability to procure the latest in IT products 
from service-disabled veterans at a very competitive price.
    This is where advocacy comes in. These success stories need 
to be told. government program managers, contracting officers 
and the business community at large should understand the 
significance in supporting small businesses that are owned by 
veterans. And they need to hear concrete examples of success 
stories where businesses owned by veterans have delivered 
excellent results. I think this type of educational advocacy 
should become an important part of any charter for any Federal 
programs that are funded by the Federal Government, such as The 
Veterans Corporation
    Another important resource that could help create 
opportunities for service-disabled, veteran-owned small 
businesses is a value that is gained when a large business 
partners with a service-disabled, veteran-owned business. For 
many years, there has been an 8(a) Mentor Protege program at 
SBA that enhances the capabilities of 8(a)s to compete more 
successfully for government contracts. The program encourages 
private-sector relationships and expands SBA's efforts to 
identify and respond to developmental needs of 8(a) clients. 
Right now, there is nothing similar at the SBA for service-
disabled, veteran-owned small businesses.
    I personally know these types of relationships work. Our 
largest contract is with the VA where we provide enterprise 
solutions for Microsoft products and associated services. We 
are the prime on this contract, which is the largest contract 
ever awarded to a service-disabled veteran-owned small 
business. Our first award was $56 million. The VA contract 
would have never happened if it hadn't been for VA's Office of 
Information and Technology and in particular Mr. Craig 
Niedermeier and Mr. Dan Nascimento and all of the great people 
in their offices that worked so hard to provide more 
opportunities for service-disabled veterans. This contract is 
an example of VA's commitment to service-disabled, veteran-
owned small businesses.
    Once potential service-disabled, veteran-owned small 
business bidders were identified each identified business 
worked hand in hand with the Microsoft Federal team made up of 
Brian Roach, Geary Brummell and Marc MacDonald, and each one 
was paired with a large account reseller so that they could put 
in a number of competitive bids. Many companies worked 
together, and we in particular worked with Software Spectrum, 
who understood the need to mentor and assist service-disabled, 
veteran-owned small businesses. And they continue to do so 
today.
    We have expanded that relationship, and we are picking up 
skill transfer and knowledge transfer, which is essential for 
our growth. We completed our base year of performance earlier 
this month, and we are now in our first option year, and VA is 
receiving top notch products and services at a very competitive 
price.
    They--the VA are very pleased with our services and our 
process for delivering products and solutions. This contract 
continues to be a sterling example of what can happen when big 
business works with small business to create business 
opportunities, especially for service-disabled, veteran-owned 
small businesses.
    I hope that my words have provided additional insight into 
veteran entrepreneurship and, in particular, the need to define 
the mission of current programs funded by the Federal 
Government. With the right focus, many of these programs can 
serve as opportunity advocates and can help ensure businesses 
owned by veterans have the opportunities they need to be 
successful.
    I am convinced that the harder the government works to 
identify opportunities for veterans, the more success stories 
there will be. Thank you.
    [The prepared statement of Mr. Jimenez appears on p. 57.]
    Ms. Herseth Sandlin. Thank you, Mr. Jimenez
    We have been joined by two other members of the 
Subcommittee, Mr. McNerney of California and Mr. Hall of New 
York.
    I have a couple of initial questions, and then I am going 
to defer to the Ranking Member and the other members who have 
joined us here in the Subcommittee today for questions.
    Ms. Halfaker, let me just probe a little bit more on how 
you got started. You talked about Mr. Gross and his help and 
other's who are service-connected disabled veteran who own 
their own businesses or other veterans who may not be service-
connected disabled but who are businessowners and the help they 
provided.
    Did the Small Business Administration, the Center For 
Veterans Enterprise (CVE) or The Veterans Corporation assist 
you in any way in getting your business started? Was Mr. Gross 
part of the network of any of these three entities?
    Ms. Halfaker. Madam Chairwoman, when I first started my 
business, I didn't know what any of those organizations were. 
The first interaction that I had, in terms of becoming a 
business owner and realizing that there were actually resources 
out there, was probably through the SBA, just in going to their 
Web site and then initially meeting with a Score counselor at 
the SBA. And that was a very limited interaction. I paid, I 
think it was $40 and went to one class and realized that I was 
wasting my time. And that is not to say anything about the SBA 
it is just, I think I was already at a point where I needed, I 
was a little bit more aggressive and needed some additional 
help other than the very basic resources that they were 
providing.
    So I continued to look and find other resources and tried 
to figure out how I was going to be able to accelerate the 
point my business was at and get to where I wanted to be 
quicker and attain my goals in terms of doing business with the 
government.
    In terms of the other organizations you mentioned, the only 
other interactions I have had are subsequent to starting my 
business and having really been already running it for about a 
year. I would say it wasn't until maybe January of this year, a 
year after I started, when I really got involved with this 
community and obviously was introduced to Mr. Gross and started 
working with him, and then he also brought me into the 
community and introduced me to some other individuals.
    Since that time, I have met with some members from Veterans 
Corporation They instructed me that they do have financial 
resources that they could help me get access to so I might 
pursue that. I haven't decided yet. But just exploring my 
options and learning, still learning what is out there.
    Ms. Herseth Sandlin. You established your business and it 
has been up and running for about a year, and it is now an 
established business. You just described what The Veterans 
Corporation offered as relating to financing opportunities and 
the financial resources. Do you agree with Mr. Jimenez that the 
best help for you at this stage, now that your business is 
established, that to grow your business is the advocacy and the 
opportunity factors versus the training and other assistance, 
such as financial assistance?
    Or do you think, since it is a fairly new business, that 
you still need access to some of the training and the other 
assistance in addition to advocacy and opportunity?
    Ms. Halfaker. Madam Chairwoman, I would say that it is a 
little bit of both. I believe that my business--first of all, I 
do agree, to answer your question, with Mr. Jimenez, and my 
business being a year and a half old is still at the point 
where we can benefit tremendously from some mentorship. But 
that mentorship, from what I have experienced, comes from a 
trusted partner, somebody who, you know, you leave the service 
and there is an element of trust. You are used to being in an 
environment with people who basically would do anything for 
your life, and you go into a business environment, and it is a, 
I would say, a completely different kind of combat, and you 
don't know who you can trust. There are a lot of different 
avenues you can go down. There are so many resources out there 
that it is very confusing. And the worst thing for a business--
and I think some somebody mentioned this already--is to waste 
your time with something that is not going to ever help you 
grow your business. So, that said, I think that there are 
resources out there, but I found the most effective resources 
to be other businesses, and I do agree with Mr. Jimenez
    Ms. Herseth Sandlin. Thank you.
    Mr. Boozman.
    Mr. Boozman. Thank you, Madam Chairwoman. I think one of 
you all mentioned that the climate seems to be a little bit 
better now than it was, and certainly this Subcommittee, in a 
very bipartisan way, has really been working on that, and it 
seems like in dealing with the agencies involved, that in some 
cases you were having a little bit of success.
    That being said though--and all of you have seem to run 
across a little bit of an attitude with various procurement 
officers. I think in your testimony, Ms. Halfaker, you talk 
about being some place and somebody saying you and everybody 
else as far as the veterans' set-aside, Mr. Jimenez and Mr. 
Gross also, mentioned similar types of things.
    So I guess something that--and again, we can talk about 
this, Madam Chairwoman--but I would really like to have some 
procurement officers over here and maybe get some of those that 
are doing a good job that seem to have figured this out because 
my experience is that, for the most part, these are good folks 
that are working hard. However, sometimes they don't have the 
understanding of how to make it work where it is just easier to 
do it the way it has always been done so if we can, again, we 
will visit but if we could have a round table or something, and 
talk about maybe some of the men and women that are doing a 
good job of that, their experiences, some of you, that have 
done a good job of playing that game, I think that would be 
valuable.
    Very quickly, one of the things that we are trying to do is 
bring the GI Bill up in the sense of getting it into the 21st 
century. Do you in your experiences of getting education for 
the businesses that you are in or continuing education, is 
there anything you have run across that maybe helped or was a 
hindrance? Perhaps we can work on in that aspect also with the 
entrepreneurship?
    For instance, one of the things we are trying to do is 
front load, some of the short courses, trust, don't go as long, 
front load the GI Bill to that sort of thing so you can go 
ahead and get the payment versus--go ahead.
    Mr. Gross. For me, the GI Bill, the GI Bill actually paid 
for my education. So the GI Bill worked very well for me. I 
believe that, you know, giving folks the opportunities GI Bill 
funds for, you know, for educational purposes that may not be, 
you know, pursuing a bachelor degree or that sort of thing I 
think would be very valuable. So I think using the GI Bill 
funds for training and some mentorship that sort of thing, I 
think the question then becomes, what organization is going to 
provide that?
    Mr. Jimenez. Sir, if I may, I often referred to myself in 
the Army as the poster child for the GI Bill. I came from a 
very modest family. Neither of my parents were college 
graduates. In fact, neither were high school graduates. They 
didn't get their GEDs until late in life. And they didn't have 
the means to pay for college, so we had one of two options; 
either be very smart or be very good at sports. I was neither, 
so I found myself leaning more toward the military. And 
fortunately for me, they liked me as much as I liked them. And 
I was able to benefit from the GI Bill, which today I sit here 
with two master's degrees and a ton of experience and education 
that I owe to the Federal Government, to the U.S. Army in 
particular for having sent me to school on the GI Bill, and 
more importantly the guidance that I received from both the 
Army and the VA in how to best utilize my benefits. And I 
utilized the heck out of them.
    I never have ever paid for any education, which I find 
shocking to this day; yet I was able to rise from Private E1 in 
the Army to Lieutenant Colonel O5 in the Army, and I went from 
being responsible for nothing to ultimately everything. My last 
job prior to leaving was the program director of eArmy U, and 
here I was a guy who started out with no degree to managing a 
program that educated 45,000 soldiers. I thought it was just a 
phenomenal opportunity to show the great things that could 
happen. And I continue to think that even though there are 
disadvantages to serving in the military, the advantages far 
outweigh the disadvantages. It was an eye opener for me.
    And it provided me with a business foundation I desperately 
needed to be successful. Had I not gotten that education and 
been able to take advantage of those benefits, I probably would 
have returned back to the neighborhood where I surely would not 
have been as successful.
    Mr. Boozman. Thank you, Madam Chairman, and thanks to the 
panel.
    Ms. Herseth Sandlin. Thank you.
    Ms. Halfaker, did you want to take an opportunity to 
respond to Mr. Boozman's question? You don't need to. I just 
wanted to make sure I gave you the opportunity despite time 
being--okay, all right, I do want to now recognize Mr. McNerney 
for any opening statement or questions for the panel.
    Mr. McNerney. Thank you, Madam Chairman.
    I don't have an opening statement. I do have some 
questions.
    Mr. Gross, I was delighted to hear you say that the VA, 
along with the Army Small Business Department,were very helpful 
to you. Could you answer fairly directly, without the SBA, 
would you have been able to start a business? Without the SBA, 
CVE and TVC, would you have been able to start a business?
    Mr. Gross. Well, CVE is part of VA, so, actually, I, 
frankly, relied on CVE early on quite a bit. So, you know, they 
kept a calendar of all procurement opportunity conferences and 
that sort of thing. So I did rely on CVE.
    Mr. McNerney. And they helped you develop a business plan?
    Mr. Gross. I wrote my own business plan. They didn't help 
me write a business plan, but it was a good place to go for 
outreach as far as the future procurement opportunities. And I 
will say and I know CVE has done a lot for me where they have 
provided outreach and brought the program managers from 
different VA opportunities and linked them up with contractors 
like myself to do direct capability briefings and so CVE has 
been helpful to me. SBA and TVC, I, frankly, haven't really 
gone to them, so I can't comment one way or the other.
    Mr. McNerney. Okay, thank you.
    Mr. Jimenez, you are pretty blunt about lack of commitment 
being a big problem. And could you expand whether that is just 
the 3 percent, or is it also a lack of commitment from people 
within the administration?
    Mr. Jimenez. Sir, I think it would be safe to say and I 
think probably just to give you kind of an idea of my--and I 
won't call it a tainted view--but my view as a business owner 
is that I was in the procurement business in the Army and found 
it extremely difficult to get the flow down of information you 
needed about changes in the FAR and new legislation.
    What I found when I got out was that I was much more 
educated than many of the folks I was going to visit that were 
responsible for procurement and in particular changes to the 
procurement law. What I found was that, every time I walked in, 
I would have to educate contracting officers, program managers, 
folks who were responsible for opportunities and providing 
those opportunities in the Federal Government.
    It was an education process. And the education process was 
extremely difficult, trying to make them understand what the 
difference was, what a veteran was, what a service-disabled 
veteran-owned small business was, what the difference was 
between 8(a) and service-disabled veteran small business and 
what were some of the laws or FAR clauses that would allow them 
to be able to provide me an opportunity to compete.
    What I honestly believe is happening now is contracting 
officers, like many other folks in the Federal Government, are 
overworked, and they are more concerned at this point about 
providing satisfaction for the Federal Government by procuring 
what they can at the best cost. So the additional burden of 
having to provide opportunities to certain socio-economic type 
groups is creating a problem for many of them, and many of them 
just aren't interested in doing that.
    I think the education process has been significant, but 
what I think would help that is to have somebody letting them 
know that they are being checked on, that it is down to the 
lower level. It seems to me that it reaches to the agency 
level, and the agency is responsible for announcing, we have 
met our goals or we haven't met our goals, but there is nobody 
at the top of the agency serving as the advocate for many of 
the agencies.
    And exceptions obviously are the U.S. Army and Veterans 
Affairs and GSA where folks there have advocacy at the very 
top. Unfortunately, the other agencies, they almost seem to be 
absent landlords when it comes to taking care of service-
disabled veterans. You tell them. You speak with them. You meet 
with them. You explain the advantages of contracting with the 
service-disabled veteran. Some of the opportunities, even in my 
case, some of the vehicles that I have, you plead with them. 
You respond to sources sought. You respond to Requests for 
Information (RFIs), and yet you don't see anything.
    And what I desperately need is somebody besides myself--an 
advocate at these agencies saying, we will provide 
opportunities for service-disabled veterans. I have been 
empowered. I am going to go down and tell contracting officers. 
And many of the small business offices just don't have the 
resources to be able to do that. And that is where I think that 
agencies that are funded, such as TVC, might be able to assist 
in that by maybe at least being a watchdog group in the sense 
of who is going, well, who is not doing well; why haven't you 
turned this into a service-disabled veterans set-aside; this is 
a good fit; this would be a good opportunity for a service-
disabled veteran.
    And aside from some of the small business offices, I happen 
to be a big fan of the CVE. I think they do a great job within 
the VA of being that voice I just described. And I am not 
saying it because Mr. Denniston is sitting behind me, but he 
has been a friend to service-disabled veterans since the day I 
started my business, and he has been a friend to me. He does it 
in a very of agnostic process in that he provides opportunities 
for all service-disabled veterans, and we all get a chance to 
compete, and they are coming very fast but VA is just one 
agency. The Army is just one agency.
    The other agencies, unfortunately--GSA is a great agency--
the other agencies, we have difficulty getting them to 
acknowledge that service-disabled veterans are meaningful in 
the small business relationship piece.
    Mr. McNerney. Very informative answer. Thank you.
    Ms. Herseth Sandlin. Thank you, Mr. McNerney.
    Mr. Hall, do you have questions or an opening statement?
    Mr. Hall. Thank you, Madam Chair.
    I have questions. And first of all, thanks to all three of 
our panelists for your service and for your continuing service 
now and for coming here and sharing your experience and your 
observations with us.
    And, Mr. Jimenez, I couldn't help but thinking, as you told 
your story of where you have come from and where you are now 
and your masters degrees and your success in businesses and so 
on, it is too bad it doesn't fit into a 30-second commercial. 
Very inspiring. It is kind of like the advertising slogan, ``Be 
All That You Can Be,'' but really expounded upon. And I think 
it would be good for a lot of people to hear your comments 
about the advantages of being in the service far outweighing 
the disadvantages. And this goes for all of you, but especially 
the way you described it, Mr. Jimenez, your initiative and 
energy and accomplishing those things. It was nice that the 
opportunities were there. But it takes personal fortitude to 
take advantage of them so.
    Ms. Halfaker, I just want to ask you, in terms of achieving 
the 3 percent goal--I think this question maybe all three of 
you can answer if you like--how can we help that goal be 
achieved? Would an ombudsman represent veterans with all the 
different agencies that you might seek to procure contracts or 
compete for contracts with, is that an idea that might be worth 
something and any of the suggestions to make sure that fair and 
equal consideration is given to those veterans and that 
procurement officers are not, either because they are so busy 
or because of the way things have always been done or whatever 
reason, that they don't overlook the importance of our veterans 
having this opportunity? It is a long question, but answer it 
however you like.
    Ms. Halfaker first.
    Ms. Halfaker. Yes. I would just like to comment that I do 
believe that there is certainly an accountability issue that 
has already been brought up, and maybe it is a lack of 
resources from the side of the procuring officers and the 
contracting officers. But I think if there was just--there is a 
systemic problem, though. And it is a lack of caring on their 
part, and it is permeating, I think, you know, through many of 
the agencies and the agencies I have had experience with, 
particularly even the Navy, which I mean that just shouldn't 
happen. These are our own people. And I have run into a couple 
of different situations personally where people have just 
downright told me we don't care; how does this affect me? And 
it is simply a matter because it doesn't affect them because 
there is no negative reinforcement or repercussions when they 
don't do the right thing and they don't follow the rules.
    So I guess I would just like to say that any kind of 
support that anybody can give would be helpful because I think 
that, you know, even if there is not--I do believe that there 
has to be some kind of consequence. But even if there isn't, 
just to show you guys just being here shows a tremendous amount 
of support but even taking that a step further and putting your 
name on something I think is really taking the first step in 
saying this is important and taking care of our veterans, 
veteran businessowners, is important.
    Mr. Hall. Perhaps one idea might be to fence off or to 
quarantine that 3 percent of the budget until it is used for 
veterans' projects or unless it can be proven that no veterans 
have applied for those, have bid for those projects.
    Mr. Gross. I think that is a great idea. You know, I think 
there needs to be a, you know, a reward / penalty program. I 
think we need to reward those who are making an effort and who 
are advocating, and penalize with budget those who don't.
    Mr. Hall. Any thoughts on the idea of an ombudsman to keep 
an eye on all the different agencies?
    Mr. Gross. Well, I think we start at the Office of Federal 
Procurement Policy (OFPP). Start there.
    Mr. Hall. They are supposed to be doing that?
    Mr. Gross. Right.
    Mr. Jimenez. Sir, I agree with both Mr. Gross and Ms. 
Halfaker in that I--they bring up some very good points. We are 
not going to be able to change the mindset of people. They 
believe what they believe, and some will see value and some 
won't, no matter how much you confuse them with the facts.
    I think the ombudsman is a good idea. But I think Mr. Gross 
just made an important point, and that is that the Office of 
Federal Procurement Policy has the ability to do something very 
similar--I am assuming, and I have not worked there, and I am 
not up on what capabilities they might have or what they might 
not have. But it would seem to me that if they in fact are the 
policy branch that would provide that, that that would be a 
good place to put somebody, but more importantly, I think that 
if the dollars were fenced off and if I, as a contracting 
officer, knew that if I used those dollars for service-disabled 
veterans, that provides me with the opportunity to provide 
opportunity to service-disabled veterans; and that if I don't, 
I leave money on the table when money is tight; I think that 
would be would go a very long way to providing opportunities 
for veterans and service-disabled veterans.
    I think the ombudsman is a good idea, but without the 
ability to actually go in and provide penalties or to enforce 
the legislation that is presently in place, I think it would 
just be another position that unfortunately would be powerless 
to make changes.
    Mr. Hall. Thank you, Madam Chair.
    Ms. Herseth Sandlin. Thank you, Mr. Hall, and we will 
follow up with you on some of the ideas that you are so gifted 
in generating in our hearings.
    Ms. Davis do you have questions for the panel?
    Mrs. Davis. Thank you, Madam Chair, and again, thank you 
for holding this hearing. As someone who has been an advocate I 
would say for The Veterans Corporation and some of the good 
work that they do, I am really interested in what you had to 
say. And I know that, through the course of the hearing, we 
will have an opportunity to talk to a number of different 
entities that are very involved with trying to provide those 
kinds of opportunities.
    But I would say, Madam Chair, I would certainly, certainly 
endorse my colleague's point of view in terms of, how could you 
do that? Money talks, we all know that. And so if there is some 
way within the procurement area or others that you can provide 
incentives for those who would get credit for having 
established a track record for helping service-disabled 
veterans, I think that would be significant.
    It may be that, you know, there is a contract here and 
there, but what we are looking for is those who are strong 
advocates, put their energy and their investment of time and 
resources into providing that and really establishing all the 
poster companies I think that grow out of this. So I would hope 
that perhaps we could look at that.
    But I wanted to see--you mentioned The Veterans 
Corporation. How do you see them as either providing the 
monitoring, the oversight that you think could be a stronger 
part of their role?
    Mr. Jimenez. And I have talked to Mr. Blackwell, ma'am, on 
this subject. I think he has a great organization. I think he 
is a great advocate. Unfortunately, I don't think that he has 
that charter or the ability to go out and do the things that I 
as an established small business need for him to do for me. And 
that is, when he shows up and asks, why is this set-aside not a 
service-disabled set-aside, or why is this small business set-
aside not a service-disabled set-aside, or why is this large 
business opportunity not a set-aside; the first question is, 
who are you, and the second question is because we don't want 
to.
    I think if Mr. Blackwell were given the opportunity, 
perhaps through a charter or some way, I think he would be able 
to do that quite effectively, and I think a number of folks 
would. But he is in the same situation. Without tools and 
enforcement, there is just not much anybody is going to be able 
to do.
    Mrs. Davis. If I could follow up quickly just in terms of 
policies. Are there policies in contracting, such as bundling 
jobs, that you think get in the way of this as well? I know, I 
am from San Diego, and we have a number of small businesses 
that are very frustrated often because they don't hear about 
the jobs or it is very difficult for them engage in the 
process.
    Mr. Jimenez. I think the government has done a much better 
job particularly in the last 3 or 4 years of not doing the 
bundling. However, I am concerned about the fact that sometimes 
bundling does leave service-disabled veterans out in the cold. 
And more importantly, what I find is the problem that comes 
with bundling is not that it exists but that nobody goes in 
when there is a large corporation and says, we intend to do 20 
percent small business, make a small business plan that 
includes 20 percent service-disabled, 20 percent 8(a) or small 
business, and they don't do it. And when they don't do it, 
nobody does anything about it. There are no penalties. There 
are no liquidated damages. And more importantly, nobody knows 
because there is nobody that has the ability to check.
    So, first off, we have to identify that, in fact, didn't 
happen; that somebody said they were going to give business to 
small business or to service-disabled veterans or 8(a) or 
woman-owned or HUB Zone, and when they didn't, somebody did 
something about it.
    Mrs. Davis. Would you either of you like to comment?
    Mr. Gross. That is a big problem today. Many of the larger 
procurements, when the larger companies--I believe the 
threshold is $500,000 or greater--they are required to provide 
in their proposal a small business subcontracting plan. When, 
you know--and I myself have gone through this. You know, you 
put a lot of time and effort into a bid and proposal dollars 
into, you know, going after an opportunity with the company. 
They win, and they give you nothing, and there is not a whole 
lot you can do. There is really--now that contracting officer 
has the ability within the FAR to assess liquidated damages 
against that contractor. But it is hardly ever done.
    Mrs. Davis. Thank you. I guess the other question would be, 
quickly, how many people or how many positions do we have that 
are serving as enforcement in this area and really monitoring 
to see what is happening? Thank you.
    Mr. Gross. I don't believe there are any. I know SBA, I 
will say, they have the ability. And I have used the PCRs, 
which is the Procurement Contracting Representatives. They have 
the ability to help out in the field. But they are hard to get 
to. And like anything else, some are better than others.
    Mrs. Davis. Thank you very much.
    Thank you, Madam Chairwoman.
    Ms. Herseth Sandlin. Thank you, Ms. Davis, for joining us 
and for your questions. Mr. Boozman, do you have follow up 
questions for the panel?
    I have just a couple because we have two more panels, and 
just a couple of observations. I think Mr. Boozman makes a 
strong recommendation that we do need to follow-up and invite 
others that are procurement officers, perhaps someone from the 
Office of Federal Procurement Policy, perhaps someone 
specifically from the SBA to address the enforcement issue. I 
also think, as Mr. Jimenez said, and I think you are 
particularly well situated to serve as an advocate given your 
years as a procurement officer as well within the Army, that 
maybe we need to address this in two different ways; someone at 
the head of each agency that is responsible as an advocate, but 
then an overall sort of watch dog group where there is an 
enforcement mechanism built in and that we are ensuring an 
adequate number of FTEs to do that either within an agency or 
within an umbrella group.
    That does go to the issue of accountability that, Mr. 
Gross, you mentioned at the beginning. Where is the 
accountability within the agencies and the willingness to take 
on the congressional objectives that we have stated? It seems 
where there have been successes when you have an entity like 
CVE within VA that is serving in that advocacy role.
    One thing that you had mentioned, Mr. Gross, was the issue 
of some larger companies using small companies as a front. I 
have heard this from other small businessowners that I 
represent in South Dakota. Have you filed complaints? Do you 
work with SBA? Is there still the lack of an identified 
enforcement mechanism to address this issue?
    Mr. Gross. Well, it is, frankly, it is just a loophole in 
the process, in the reporting process, so like with the GSA 
schedules, if a company like myself has a GSA schedule, you 
know, agencies will target you, but the FAR Part 19 rules don't 
apply on the GSA schedule, so what happens is--and this is a 
good example--if I was pursuing an opportunity with Department 
of Army, and it was a contract to provide 10 people, if they 
set it aside as a small business set-aside, I maintain 51 
percent of that contract. Well, 51 percent really gives you 
control.
    Using the GSA schedule, what they will do is they will take 
a large contractor, use your vehicle; you may get one position 
and the large contractor gets nine. Well, clearly you have zero 
control. But the agency gets 100 percent credit for small 
business, and they take the credit for the socio-economic 
program, too, under the GSA schedule.
    And so when I have run into that myself, I called the 
contracting officer and said, hey, look, in the spirit of the 
program, this isn't the right thing to do. And he said, well, I 
understand, but it gives me the credit, and it is an easy way 
to do it. And the GSA reporting, online reporting, provides 
that to him, so he is not going to do anything that is 
technically wrong.
    Ms. Herseth Sandlin. Well, thank you, again, for your 
insights. There are a number of areas that I think many members 
of the Subcommittee, again, working with our staff and with 
you, would like to follow up on and get some concrete proposals 
on how we can either get rid of loopholes, how we can look at 
changes to charters, how we can look at accountability through 
an incentives and penalization process to meet the 3 percent 
requirement. As we vet some of these proposals and develop them 
further, we may very well be looking to you in a more informal 
basis to help these ideas percolate even further.
    I thank all of you for your testimony. I will now invite 
the second panel to the witness table.
    Let me thank each and every one of you for your service to 
the country, your years in the Army. You were with the Army, as 
well, Ms. Halfaker?
    Ms. Halfaker. Yes.
    Ms. Herseth Sandlin. Thank you all for that service and for 
what you are doing now to create jobs, particularly for 
veterans and particularly service-disabled veterans that you 
employ.
    Panel two, as they make their way up to the table, let me 
introduce them to the Subcommittee and our guests in the 
audience today.
    We have Mr. Joe Wynn, President of the Veterans Enterprise 
Training and Service Group, Incorporated; Mr. Joseph Sharpe, 
Deputy Director for the Economic Commission of the American 
Legion; and Mr. Richard Weidman, Executive Director for Policy 
and government Affairs for the Vietnam Veterans of America. I 
welcome all of you back to the Subcommittee. We look forward to 
your testimony.

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

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

                     STATEMENT OF JOE WYNN

    Mr. Wynn. Good afternoon, Chairwoman Herseth Sandlin, 
Ranking Member Boozman and distinguished members of the 
Subcommittee.
    Let me first thank you for the opportunity to come before 
you today to share some of my views and the collective views of 
many veterans and service-disabled veteran businessowners, 
veterans who served with honor and many who received 
distinguished honors for displaying valor and courage during 
their periods of military service.
    Though my time of service was many years ago, as a veteran 
of the U.S. Air Force with the 66th Strategic Missile Squadron, 
I still have a very vivid memory of the military experience. As 
a lifetime Member of the National Association for Black 
Veterans, I have spent the past 16 years or more assisting 
veterans and, in recent years, serving as a Commissioner of the 
congressionally appointed Veterans Disability Benefits 
Commission, Treasurer for the Veterans Entrepreneurship Task 
Force, and as President of the Veterans Enterprise Training and 
Services Group, referred to as the ``VETS Group,'' which is a 
nonprofit, community-based organization providing supportive 
services to veterans seeking to start or expand their own small 
businesses.
    Since the Vietnam era, America has been involved in 
numerous conflicts, missions and peacekeeping endeavors, and 
since the tragedy that overtook America on September 11, 2001, 
we are still engaged in the global war on terrorism, primarily 
in Iraq and Afghanistan where the death toll continues to rise 
despite the best efforts to end this ordeal.
    Now a new generation of veterans exists. They are well-
trained, loyal, battle-tested, and underemployed. Those who 
return with loss of limbs, mental disorders and / or other 
severe disabilities face the greatest challenges of all.
    In the past few months, since the difficulties of service 
members' transitioning from their active duty military under 
the DOD, Department of Defense, system through the Walter Reed 
Army Medical Center into the VA system have come to light, it 
is now evident that we have been unsuccessful in providing the 
originally promised assistance our veterans have earned, 
deserve and require so that they would have the opportunity to 
be as successful in their civilian pursuits as they were in 
their military assignments.
    I commend this 110th Congress and its leadership for rising 
to the occasion from both sides of the aisle, as evidenced by 
the many hearings, round table discussions and over 200 pieces 
of legislation related to veterans introduced in your first 5 
months. Some have already passed the House or Senate, but only 
a few have been directed toward veterans entrepreneurship, 
which is the focus of this hearing today.
    So let me summarize my views on this topic, relative to the 
assistance veterans have to work with, in my remaining few 
minutes, though I hope that a more detailed discussion of the 
issues will be considered before actions are taken.
    If veterans and service-disabled, veteran-owned businesses 
are to succeed, it will more than likely take place in the 
public sector where there are trillions of dollars in contract 
opportunities from a multitude of goods and services. But 
veteran businesses will have to overcome a number of 
impediments, some of which are resistant to change across all 
agencies--no enforcement of prime subcontracting plans, 
inaccurate agency data, miscodings, double counting, and the 
perception that procurements are based on just who you know and 
that the pie for small businesses is shrinking, not to mention 
there is contract bundling.
    As we all know, two major pieces of legislation really set 
the stage for the emergence of today's veteran entrepreneurs. 
You, Congress, did an excellent job of laying the foundation 
for veterans entrepreneurship to succeed in America when you 
passed the Veterans Entrepreneurship and Small Business 
Development Act 1999, referred to as Public Law 106-50. Public 
Law 106-50 also created some new entities and the restructuring 
of some existing ones in order to assist veterans in pursuit of 
entrepreneurship. These three entities were the Small Business 
Administration's Office of Veterans Business Development, the 
VA Center for Veterans Enterprise, and the National Veterans 
Business Development Corporation.
    There was another piece of legislation that came later, 
Public Law 108-183, which essentially made it mandatory that 
agencies and prime contractors procure a minimum of 3 percent--
it made it mandatory to procure a 3 percent minimum of goods 
and services from service-disabled, veteran-owned businesses.
    Following that, we also had Executive Order 13360, which 
many of you are familiar with now, which essentially directed 
agencies to carry out the laws that previously came before it, 
but of the three government entities created to deal with this 
situation, The Veterans Corporation appears to be somewhat 
misdirected.
    The Office of Veterans Business Development is still buried 
in the shadows of the Small Business Administration, while the 
Center for Veterans Enterprise is continuing to show some 
promise. These entities should collectively be assisting in 
identifying and registering the capabilities of veteran 
businessowners, developing relationships with agency 
procurement officers, matching veteran businesses with prime 
and subcontracting opportunities, expanding the pool of capable 
and qualified veteran-owned small businesses, while alleviating 
barriers to discrimination and demanding that agencies follow 
the law.
    Much has been said about the seemingly poor performance of 
the National Veterans Business Development Corporation. Let me 
just say that, in essence, the heart of the matter seems to 
come down to the amount of appropriations received over a short 
number of years, some $14-plus million, with no contracts for 
service-disabled veterans to really speak of.
    Bottom line, a business has to get business to survive. So 
we can count Web sites, hits on a Web site, we can talk about 
the number of contact visits, we can talk about the number of 
training sessions; but the bottom line is, businesses have to 
get some contracts.
    Many veterans still do not know that The Veterans 
Corporation even exists, and this may be partly because of the 
facility and the location, where they are. There is no really 
visible, public way for people to know that it is located 
there. It would be nice at some point, though, if that 
particular organization had a portion that was open to the 
public wherein it could have a state-of-the-art facility where 
veterans could come and learn about small business and exchange 
information and network with other small businessowners.
    Right now, it seems as though The Veterans Corporation 
provides duplicative services and limited funding for four 
Veterans Business Resource Centers. Now, these services and 
centers are needed, but it is just that we also have 1,400 
other small business centers operated by the Small Business 
Development Center, each having access to Web sites, and most 
are affiliated with colleges and universities. We also have 
access to one-on-one counseling, training, workshops, and 
seminars through the Procurement Technical Assistance Centers, 
which are located throughout the country.
    There is also a lack of Federal contracting assistance for 
veteran businessowners, and this has been a major issue because 
as you heard from some of the witnesses on the first panel, the 
real issue with the veterans and contracting right now is with 
the Federal marketplace; and unless we have a true advocate 
that is actually speaking up on behalf of the veterans in the 
Federal marketplace, it continues to be very difficult for 
veterans to move forward and receive the contracts that they 
deserve.
    It was thought in the beginning, when TVC was first 
founded, that it would, in fact, be that national veterans 
advocate for veteran businessowners, particularly in light of 
the fact that their board of directors is appointed by the 
President. It was thought that this organization would be able 
to go head-to-head with agency heads throughout the government, 
speaking on behalf of veteran businessowners.
    Let me just move quickly to a couple of comments about the 
Office of Veterans Business Development under the SBA.
    Ms. Herseth Sandlin. Mr. Wynn, if you could, just wrap up 
within about another minute as they are going to call votes on 
us probably; and I would like to get through the other two 
witnesses' testimonies before we may have to go.
    Mr. Wynn. I sure will.
    I will just quickly say that the Office of Veterans 
Business Development has been doing a tremendous job with 
limited resources to reach out to veterans here. Recently, they 
expanded their staff to include an experienced person to help 
with Federal contracting.
    As far as the Center for Veterans Enterprise is concerned, 
they have been doing a tremendous job as well. As you know, 
they also maintain the database for veteran businessowners, and 
they have been doing a tremendous job of outreach to veterans 
in the community in terms of helping them understand and 
navigate the Federal marketplace.
    Let me, just on that note, mention that, while we applaud 
the VA with becoming the first Federal agency soon to implement 
legislation that will prioritize the use of service-disabled 
veterans and veterans in Federal contracting, we still need to 
better understand the role that CVE plays in relationship to 
the Office of Small Business and Disadvantaged Business 
Utilization under the VA. They work together, and there are 
still some aspects of that that would be helpful. That can 
conclude my statement.
    Thank you.
    [The prepared statement of Mr. Wynn appears on p. 60.]
    Ms. Herseth Sandlin. Thank you, Mr. Wynn.
    I would just remind all of our witnesses on this panel and 
the next one that your full statements will be made part of the 
record, and I never like interrupting anyone in their 
statement. Given that we have just gotten notice that there may 
be votes, I just wanted to make sure that we were able to get 
through the testimony of the other two panelists.
    Mr. Wynn, I appreciate all of the recommendations that you 
included in your full statement, and we will be taking a very 
close look at those in addition to those that you articulated 
in the last few minutes.
    Let me now move to Mr. Sharpe. You have 5 minutes for your 
opening statement.

               STATEMENT OF JOSEPH C. SHARPE, JR.

    Mr. Sharpe. Madam Chairman and members of the Subcommittee, 
I appreciate this opportunity to share the views of the 
American Legion on the state of veterans entrepreneurship and 
self-employment, obstacles faced by veterans, and the programs 
they rely on.
    The American Legion views small business as the backbone of 
the American economy. It is the mobilizing force behind 
America's past economic growth and will continue to be the 
major factor as we move well into the 21st century.
    Presently, more than nine out of every ten businesses are 
small firms which produce approximately half of the gross 
national product. Currently, over one-half of the Nation's work 
force is employed by a small business with the average company 
employing approximately 11 persons. Small businesses create, by 
some estimates, 60 to 80 percent of all net new jobs, thereby 
providing an essential element for strong economic growth.
    Government should assist in the creation of new jobs by 
encouraging qualified entrepreneurs to start and expand their 
small businesses. No group is better qualified or deserving of 
this type of assistance than our veterans. Congress enacted the 
Veterans Entrepreneurship and Small Business Development Act 
1999, Public Law 106-50, to assist veteran and service-
connected-disabled, veteran-owned businesses by creating the 
National Veterans Business Development Corporation.
    In the beginning of its inception, The Veterans Corporation 
created a veterans entrepreneur training program to promote and 
foster successful veteran entrepreneurship within the veteran 
business community, but this program no longer operates. 
Currently, the organization's main efforts have been to provide 
distance-learning education, veteran entrepreneur training in 
how to start and expand their own businesses, to include 
training in finance, accounting and contracting.
    The Veterans Corporation has gone through a number of 
mission and staffing changes since its inception. Its latest 
version is to assist Guard and Reserves and transitioning 
members of the Armed Forces and their families with the 
establishment of their own businesses.
    TVC has, in the past, stressed creating online education 
programs to assist veterans with obtaining basic literacy 
skills, hosted by other third-party organizations. Their 
current plans are to create an online platform to match 
veterans with entrepreneur education and career opportunities 
and to provide grants to Small Business Development Centers 
around the country and to other business development 
organizations to specifically assist veterans.
    In conclusion, the American Legion realizes the National 
Business Development Corporation created through Public Law 
106-50, was uniquely positioned to provide American veterans 
with superior entrepreneur training and business resources that 
show them how to start or to grow their businesses and, in 
turn, to contribute to the economic well-being of the Nation.
    The American Legion believes that TVC has not fulfilled the 
mandates of Public Law 106-50 and is actively moving away from 
those mandates of the public law by focusing their efforts and 
funding on online entrepreneur programs that they believe would 
maximize their available resources and reach more returning 
veterans. Therefore, the American Legion strongly recommends 
that the Small Business Administration Office of Veterans 
Business Development be the lead agency to ensure that veterans 
returning from Iraq and Afghanistan, particularly, are provided 
with entrepreneur development assistance.
    Comprehensive training should be handled by SBA and 
augmented by TVC's online training.
    The American Legion strongly supports the mandates of 
Public Law 106-50 that were designed to assist all veterans 
wishing to start, expand or protect their businesses. If there 
is a true desire to assist veterans, especially those returning 
from Iraq and Afghanistan, in developing small businesses, we 
must work together to enforce the mandates of Public Law 106-
50.
    Madam Chairman, this concludes my testimony. I appreciate 
the opportunity to present the American Legion's views on these 
important, timely topics.
    [The prepared statement of Mr. Sharpe appears on p. 67.]
    Ms. Herseth Sandlin. Thank you very much, Mr. Sharpe, for 
your testimony and for being here today.
    Mr. Weidman, you have 5 minutes. Although that was our 15-
minute bell, that will be just right for you to give us your 
opening statement and then for us to return for questions that 
we may have for all three of you.

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. Madam Chairwoman and Mr. Boozman, 
distinguished Members of Congress, thank you very much for the 
opportunity for Vietnam Veterans of America to present our 
views here today on this extraordinarily important question.
    And I say ``extraordinarily important question'' because 
veterans getting into business with assistance from the Federal 
Government, and particularly disabled vets, are much, much more 
likely to hire other disabled veterans. If you want to do 
something about veterans' employment, do something about 
growing veteran-owned and service-disabled, veteran-owned 
business. That is who will reach out to the young people coming 
home from the wars today all torn up; give them the break and 
recognize the ability instead of seeing the disability, give 
those folks a break to really realize all they can contribute 
to American society in civilian life.
    In regard to the major entities that are supposed to be 
assisting us in growing that pie, if you will, of veteran-owned 
and service-disabled, veteran-owned business, the VA has done 
far and away the best job. We believe that is for a variety of 
reasons. The previous Secretary was very strongly committed to 
helping veterans enter business and succeed at business. When 
Secretary Nicholson came on board, on his second day on the 
job, the executive directors of the ``big six,'' which includes 
me from Vietnam Veterans of America, met and had breakfast with 
the Secretary. The first thing I brought up to him was the need 
to make that 3 percent and exceed that 3 percent and set an 
example for the entire U.S. Government and for all departments 
and agencies that it could, in fact, be done.
    What happened is, while we had had great cooperation out of 
CVE and had the establishment of the vendor information pages, 
that were a tremendous tool that continues to prove to be more 
and more valuable as the place where you can find folks, it was 
the commitment from the Secretary and the establishment of 
Executive Order 13360 which forced every agency to produce a 
plan and to designate a senior designated official.
    Now, in agencies like VA, where they designated the Deputy 
Secretary, as a senior designated official, as the Chief 
Operating Officer, you had someone you could go to who could 
actually make something happen. In other agencies where they 
designated the Director of the Office of Small and 
Disadvantaged Business Utilization, they have no line authority 
whatsoever. Therefore, we did not have anybody to work with at 
a senior level.
    Since that time, folks are asking about how do we get 
accountability. Creating ombudsman offices at each of the 
Federal agencies, we do not believe, is the right way to go. 
Frankly, the way to go, in our view, is by continuing to bring 
public light on the issue.
    We ask for your assistance from this committee in the way 
of a bipartisan letter from the chairwoman and the ranking 
member to the head of SBA, asking for a legal opinion as to why 
the 294s and 295s--294s are the plans filed by major 
contractors as to what subcontracting they are going to do, and 
they are bound to 3 percent of their subcontracts going to 
service-disabled, veteran-owned businesses; the 295s are the 
actual results of what they actually did at the end of the 
contract.
    The SBA continues to sandbag us on this. This is something 
we have brought directly to the administrator, have told him we 
are going to file a Freedom of Information Act (FOIA). If by 
Memorial Day we do not have access to same, we will file a 
FOIA. If that does not work, we are going to Federal court in 
order to seek that information.
    It is being sandbagged on the grounds that it is 
proprietary information. It is not proprietary information. We 
are talking about taxpayer dollars and the United States Code 
and enforcing here.
    So the issue of accountability is, frankly, that the task 
forces fill that role. The Center for Veterans Enterprise was 
not in a position to do that. The SBA, until we got our new 
administrator--who, I might add, we have more confidence in 
than anybody who we have had in 20 years in that role as 
administrator of SBA; in terms of what appears to be the 
evidence toward doing something useful for vets, SBA has been 
irrelevant.
    Frankly--I am not going to spend any time talking about The 
Veterans Corporation because, frankly, they are irrelevant to 
most of the things that we are interested in in terms of either 
the delivery of direct services to veterans, in terms of 
helping them, preparing them to succeed in business; and they 
are totally irrelevant in terms of getting accountability from 
the agencies in terms of contracting.
    I see I have 30 seconds, Madam, and I just want to wrap up 
by saying VA is doing a great job, and they can do a better 
job, but that is because of commitment directly from the top.
    The SBA, we believe, is doing a mediocre job, but heading 
in the right direction and, with the new administrator, will do 
the right thing.
    The Veterans Corporation instead of giving them $25 
million, we should divvy that up between the Office of Veterans 
Business Development and the Center for Veterans Enterprise and 
get on with the serious business of helping veterans succeed in 
business, particularly when it comes to Federal procurement.
    I want to thank you very much for the opportunity to offer 
comments here today, and I look forward to answering any 
questions anyone may have from this distinguished panel.
    Thank you.
    [The prepared statement of Mr. Weidman appears on p. 71.]
    Ms. Herseth Sandlin. Thank you very much.
    There is just one vote. We will head down for this one vote 
and be back momentarily for questions to the panel.
    Thank you.
    [Recess.]
    Ms. Herseth Sandlin. Thank you for waiting for us to make 
that trip over to the Capitol and back. Let me just start out 
with a question for all of you.
    Can you tell me what you know of the DOD Mentor Protege 
Program that Ms. Halfaker mentioned in her testimony and how 
long that has been around and how well it has worked for 
veterans who you have worked with in the past? Also, any 
thoughts on Mr. Jimenez' testimony with regard to advocacy and 
opportunity, in addition to training financial assistants, and 
the relative weight of importance for new businesses / 
established businesses for veterans and, specifically, service-
connected disabled veterans and their businesses?
    Mr. Wynn. Thank you.
    With regard to the DOD Mentor Protege Program, I do not 
know all of the exact specifics about it, but I am familiar 
with it somewhat.
    It has been around for a while, and it seemingly has been a 
very effective program. As a matter of fact, we have often 
asked and inquired as to why don't they have these programs 
within each of the agencies. They have them in some of the 
others, but not all; and it seems to be a very effective way to 
get a small entrepreneur business that is up and growing--to 
really get them over to that next level by working with a more 
established company.
    With regard to advocacy, I think that is a very key and 
fundamental piece in this whole picture here with service-
disabled and veteran businessowners and its 3 percent goal, 
because so often we are hearing that within the agencies there 
is disagreement about the interpretation of the law.
    We have got veterans--I hear from veterans who have tried 
to establish themselves within a particular agency only to be 
told that even though they are capable and qualified, 
seemingly, in that particular region, they are the only 
service-disabled vet who could do that particular work, so they 
are reluctant to set it aside for that particular service-
disabled vet's company with contradictions about whether to 
sole-source, or the Rule of Two which--we have asked that they 
eliminate that because of the confusion. So the advocacy role 
is very important.
    As I mentioned, too, we thought that there would be some 
entity that would be nongovernmental to work with the veteran 
business community, to serve as that advocate; and for the most 
part, over the past few years, it has turned out to be the 
Veterans Entrepreneurship Task Force, and the members of that 
task force comprise various veteran service organization 
representatives.
    You also have veteran small businessowners, and you have 
other interested persons and supporters who just come together 
and provide support and advocacy.
    Mr. Sharpe. I know of the protege program only through Mark 
Gross. He has always spoken favorably of it, and through him, I 
have met other entrepreneurs who would like to have that same 
sort of experience. So it sounds like that would be a 
worthwhile program.
    It appears that the biggest problem that a lot of these 
businessowners have, who want to do business with the 
government, is in not having access to certain individuals 
within the government who could probably help them or mentor 
them; and I could see that as being something that you would 
probably want to expand and build on.
    As far as advocacy, you know, I thought that could be a 
role of The Veterans Corporation since most Federal agencies 
cannot lobby and do that themselves, that that would be a niche 
kind of mark for them where--since they are here in Washington, 
that that is something that they could follow up on as far as 
working with the Federal agencies. They seem to know everyone 
on the Hill anyway, and that would be a good--it would probably 
help the veterans community if they could fill that role or to 
have some organization fill that role, that niche role of 
advocacy, because it is important.
    Mr. Weidman. I think that the question of advocacy, if I am 
not mistaken, Madam Chairwoman, had to do with advocacy before 
the agencies--to try to get the agencies to do what they are 
supposed to be doing.
    In terms of advocacy on the Hill, it is our reading of the 
law that The Veterans Corporation because it is virtually 100 
percent federally funded, is precluded from being up here 
lobbying for more Federal dollars.
    There was a question about that from a Republican counsel 
yesterday, and so we went to legislative counsel yesterday and 
reviewed that section, and the section of the law that says 
that The Veterans Corporation may seek funding from Federal, 
State or local organizations is clear and is based on a 
Committee report that what it meant is, you can seek grants 
from those existing entities, not that you can come up here 
and, unfettered, using Federal dollars 100 percent, lobby the 
Congress for new laws and for additional dollars, which is 
clearly precluded under the United States Code.
    Now, in regard to advocacy before the agencies, the good 
Lord helps those who get their act together and start to do it 
for themselves. We have invited the gentleman from the previous 
panel to join us before on the task force because that is what 
we do. We meet regularly and have regular contact with OFPP.
    Now we have somebody who is actually responsive at the SBA, 
at the top of the SBA, both the chief of staff and the 
administrator we are in contact with there. We reach out to all 
of the major agencies in terms of contacting about how can we 
work with them to help them do what they are supposed to be 
doing in the first place, and all of those things; and we would 
certainly invite all three of the previous panel members to 
join us.
    We meet monthly with the task force, and it has work that 
is ongoing daily with most of the major veterans and military 
service organizations and many independent businessowners; and 
we would urge them to join us. We are meeting again tomorrow 
with DOD, with the Deputy Under Secretary of Defense, and I 
have already supplied this to your staff about the seven 
talking points that we are going to be going over there. We met 
last Friday, and we are meeting again tomorrow to see some 
things that they can do at DOD.
    We are very grateful for the pressure applied by Senator 
Kerry and Senator Snowe at a hearing from January 31st. The 
mere fact of this hearing today will apply pressure to many 
other agencies; and it is up to us to work closely with those 
of you on the Hill who are friends and advocates in order to 
either change legislation or to get people to do what they were 
supposed to be doing in the first place in terms of publicity 
and in letters.
    On June 14th, the task force is, with the Center for 
Veterans Enterprise, cosponsoring a Veterans Accountability 
Conference, to which I would like to personally invite you; and 
you will get a letter, in addition to that, plus all other new 
members of this distinguished panel. And on that day, I am 
going to be issuing a report card to the Nation on how well 
each of the agencies is doing both in terms of actual numbers 
of contracting out, but also in regard to how that squares up 
with the plan that the agency had to file under Executive Order 
13360.
    Last but not least, under the whole question of advocacy, 
it has become clear to us--and I want to publicly express again 
how grateful I am to you and to Mr. Boozman for the bipartisan 
leadership of this Committee in establishing the section of 
Public Law 109-461 which gives additional tools to the VA. We 
are using that as a model in approaching other Members of 
Congress on both sides of the Hill, asking them in their 
Committees to make that apply to the Interior Department, to 
make that apply to DOD. We are actively discussing that even 
with the Deputy Under Secretary of DOD.
    This is the kind of tool that DOD needs to have because 
that is who the agencies listen to. They do not listen to the 
SBA, and they really do not even listen to OFPP. Who they 
listen to are their authorizing and appropriating Committees. 
That is who gets their attention and keeps it; and therefore, a 
whole series of laws that gives those kinds of tools and forces 
them to report back every year to their authorizing and 
appropriating Committees is the way we believe we need to go.
    So last but not least, we are certainly not looking to The 
Veterans Corporation and we are not looking to someone else to 
do what we already can do together, meaning the veterans 
service organizations, military service organizations, the task 
forces, and those individual veterans businessowners who have a 
rubric already to come together.
    I might also add that we have increasingly reached out to 
the U.S. Chamber of Commerce, and--that is where the real big 
bucks are anyway and not with doing business with the Feds--and 
they are using VIP as the model. And at the Small Business 
Summit at the end of this month, they are going to be using the 
brochure that was prepared by Scott Denniston and his staff 
with private employers, to get them to go use the vendor 
information pages at the Center for Veterans Enterprise for 
Fortune 500 companies to start reaching out and doing 
contracting with veteran-owned and service-disabled, veteran-
owned businesses.
    Those the kinds of advocacy efforts, frankly, that you 
cannot rely on someone who is in a bureaucratic position, as 
ombudsman, to do. Those are the kinds of things where we have 
to have the leadership coming from the community to get things 
done.
    I, once again, want to thank you for your leadership and 
for that of your distinguished colleague on the other side of 
the aisle for keeping this process moving.
    Ms. Herseth Sandlin. Thank you all for your responses.
    Mr. Boozman, do you have questions for the panel?
    Mr. Boozman. Just a few.
    I think that really is a good idea. Again, in working with 
the chairwoman, we might provide the model law. Many of us--in 
fact, all of us--are on other committees. I am on the 
Transportation Committee. To go to the Foreign Affairs, to go 
to the State Department and to go to the others and then try 
and do through our Committees, what we have done here; I think 
that is an excellent idea.
    I would like, with your permission, Madam Chairwoman--Mr. 
Weidman has referred several times to different statutes or 
whatever he feels like is not being done. I would like to enter 
into the record the White House Service-Disabled Veterans 
executive order. I think this was around October 21st of 2004; 
and it is excellent.
    In looking through this--and this is the first time I have 
seen it in a while--we really are not doing a very good job of 
meeting what the President asked us to do, and so I think this 
just kind of piggybacks on the statement that you had.
    Ms. Herseth Sandlin. Without objection, so entered.
    [Executive Order 13360--Providing Opportunities for 
Service-Disabled Veteran Businesses To Increase Their Federal 
Contracting and Subcontracting, dated October 20, 2004, appears 
on p. 95.]
    Mr. Boozman. Thank you.
    The other panel felt like senior procurement officials were 
certainly key, and I think we would all agree with that. Do you 
all have any suggestions on how you feel like we could 
influence the senior procurement officials to do a better job 
of advocacy and things? How do you do that, from your 
perspective?
    Mr. Wynn. Thank you, sir, for allowing me to respond to 
that question.
    I think, quite frankly, without a doubt, Congress has a 
great deal of influence that could be leveraged on the agencies 
to actually come forward and do the things that have been 
required of them under the law.
    I am glad you mentioned, too, about the Executive Order 
13360. That order, to me, in my opinion, laid out a very clear 
directive of how we could possibly increase contracting 
opportunities for service-disabled veterans, and veterans, as 
well. The problem with it, though, is that very few of the 
agencies have actually been following that executive order 
where it calls for them to actually develop a specific, 
strategic plan; to name a particular senior-level official who 
will oversee that plan for that particular agency; and it also 
calls for SBA to be involved with the monitoring of that plan, 
which has been really difficult in that regard for that to 
happen.
    We have had some discussions here recently with the SBA 
about beginning to provide some oversight of these strategic 
plans and calling for the agencies to present them because, 
each year, each agency was supposed to, at the end of the year, 
submit a report indicating what progress they had made within 
their agency and, in addition to the report, revise the plan 
based on how well they had done and, actually, publicly display 
a new plan so that we, all of us, could follow along and see 
what they intended to do for each year.
    To my knowledge, these plans have only been published one 
time since that executive order came out, and we still 
encourage the agencies to do it because it actually lays out a 
road map as to how you are going to increase these 
opportunities, and if it is not working, we have got some 
checks and balances, something to look at, a guide, to say, 
``Okay, that is not working. Let us try this.''
    So, yes. I think Congress, if they would continue, as you 
are holding these hearings here today, to discuss the issues 
and give us an opportunity, too, to broaden this discussion 
either by additional hearings or a series of round tables or 
independent study groups to look at the issues so that we could 
actually come forward with some real recommendations, that 
would improve the process and increase the number of contracts 
to service-disabled veterans and veterans.
    Thank you.
    Mr. Boozman. Thank you, Mr. Wynn.
    Mr. Weidman. Just, if I may, tack onto that, at the VA, 
things really started to change, and Scott Denniston started to 
get the support that he needed when we realized we were not 
getting anywhere and went to the deputy secretary and said, 
``Put it in their performance evaluations, by God; then they 
will care about it because they will not get their bloody bonus 
if they do not make the 3 percent.''
    With the howls and the screams from those 21 visiting 
directors, I am surprised you could not have heard them back in 
Arkansas when you were home for the work period, because they 
did not want to do it. They all said they were trying, and all 
of a sudden, as soon as it was in their performance 
evaluations, that is how the VA made the 3 percent.
    So it not only needs to be in the managers' evaluations; it 
needs to be in the contract officers' evaluations, whether or 
not they are making the effort in the 3 percent of the 
contracts that they write; and the subcontracts of the 
contracts they write really are for service-disabled, veteran-
owned businesses. It is amazing how reasonable people can be 
once you have their full attention, Mr. Boozman.
    Mr. Boozman. Thank you.
    Ms. Herseth Sandlin. I have some additional things I want 
to explore, but I also know, with the third panel waiting, that 
we want to get to them. I think that your testimony here has 
provided us some additional ideas. I am pleased that Ranking 
Member Boozman is inclined to pursue working together, as we 
have in the past and have continued to do so, as we tried to do 
under Mr. Buyer's leadership, as Chairman of the full Committee 
last Congress. We need to look at information technology and 
data security and the changes that need to be made in response 
to the problem that we had last year. We can share, as you 
mentioned, Mr. Weidman, the tools that we authorized with our 
chairmen and ranking members of Full Committees, of the others 
on which we serve and of others throughout the Congress, too. 
Perhaps making reference to the executive order and getting the 
administration's support in working with all of the Committees 
to try to encourage the same kind of commitment among the 
Cabinet secretaries of the other agencies and providing the 
tools and the lines of authority to deputy directors.
    This is another example of how important your input is to 
us, and we will look forward to following up with you on some 
other areas.
    One that I would like to follow up on with you is the issue 
mentioned by Mr. Wynn, and I saw your head was nodding, Mr. 
Weidman. It is this loophole in the sole-sourcing issue, in 
terms of the contractor requirements and different 
interpretations of if, indeed, there is one identified business 
that is a service-connected disabled, veteran-owned business.
    I do not want to follow up now, because I think it is an 
area that would be better served by a more informal discussion 
and getting a more complete explanation on from what the two of 
you know on how we might be able to address that in the fuller 
context of some of these other areas. Whether it is the larger 
companies using the smaller companies as fronts, and a whole 
host of things that we may want to work on with the Small 
Business Committee.
    We thank you for your testimony and for your insights 
today.
    I now would like to invite our third panel up that we have 
participating with us, and I want to thank them for their 
patience as they make their way forward.
    We have Mr. Walter Blackwell, President and Chief Executive 
Officer for The Veterans Corporation; Mr. William Elmore, 
Associate Administrator for Veterans Business Development of 
the U.S. Small Business Administration; Mr. Scott Denniston, 
Director of Small and Disadvantaged Business Utilization for 
the U.S. Department of Veterans Affairs; and Mr. Louis Celli, 
Chairman of the Advisory Committee on Veterans Business Affairs 
for the U.S. Small Business Administration.

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

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

                STATEMENT OF WALTER G. BLACKWELL

    Mr. Blackwell. Thank you, Madam Chairwoman, Ranking Member 
Boozman, distinguished Members of the Subcommittee and, of 
course, Congresswoman Davis.
    Good afternoon. I thank you for the opportunity to testify 
before you today. In addition to my written testimony, I would 
like to add TVC's fiscal year 2006 annual report to the record, 
if I may, that was made available to both Congress and the 
President.
    [The TVC 2006 Annual Report has been retained in the 
Committee files.]
    My name is Walter G. Blackwell. I am the President and CEO 
of The Veterans Corporation and a Navy veteran. It has been a 
long afternoon, and we have heard from several sectors 
supporting veteran entrepreneurship. Each of us is committed, 
well-intentioned, although we do not always agree, as you have 
heard.
    The one topic on which we all find common ground, though, 
is that Congress must continue to support veteran 
entrepreneurship and self-employment. Veteran entrepreneurs 
need assistance in quickly finding and accessing business 
information and mentorship--programs like Mentored Access to 
Capital, Mentored Access to Bonding with no Caps, Start-Up and 
Growth Business Paths--resources delivered through TVC staff, 
as well as our public-private partnerships, providing the 
business knowledge and support that is essential to standing up 
and running successful businesses.
    In my written statement, you will find details on each of 
these programs that TVC is currently pursuing. Two new, key 
programs that I would like to call your attention to are Boots 
to Business for Transitioning Veterans, and Deploy-Proofing 
your Business for our Nation's Guard and Reserve. However, the 
delivery of these programs alone, without direct mentorship and 
casework follow-up, is an empty promise for our veteran 
entrepreneurs. That is why TVC staff and our partners are 
actively engaged in the mentorship of veteran entrepreneurs no 
matter what program they are currently going through.
    Within the veteran entrepreneurship community that now 
spans 6-plus decades, needs differ greatly based on the type of 
business they want to start, based on geography that they are 
located in, and on their education and business experience. 
Therefore, there is no one cookie-cutter solution, no one 
program, no one opportunity, no one government agency or 
organization, no one way to impact education that will be able 
to answer the wide range of questions that veteran 
entrepreneurs ask daily; and certainly no one way to distribute 
past and current hard and soft business tools that will be 
needed by each of them.
    For these reasons, The Veterans Corporation delivers, 
through the abilities of its funding, a diverse range of 
programming and multiple delivery methodologies of business 
education from face-to-face learning to online learning, all 
leveraging technology, delivery and tracking.
    The important work of our Veterans Business Resource Center 
hubs, that the TVC finances through noncompetitive grants in 
Boston, Massachusetts, St. Louis, Missouri, and Flint, 
Michigan, is a valued link of TVC's outreach into the veteran 
community. However, each of these centers has a limited reach 
based on the urban area they serve. For veterans outside their 
reach, TVC staff, working once again through public-private 
partnerships, provides support services to disabled veterans 
unable to travel to that hub, or frankly, to rural veteran 
populations anywhere.
    Public-private partnerships are possible through TVC's 
status as a 501(c)(3) entity. This important difference permits 
TVC to form these partnerships for enhanced veteran programming 
where government agencies are limited or prohibited by law from 
increasing the critical elements of business support, 
especially to capital and bonding.
    So how is TVC making a difference? TVC has a handout, which 
we have provided, that samples some of the veterans we are 
currently working with--one with a microloan need, another 
currently in Iraq who found us via TVC's website with a major 
capital requirement, a third with a bonding need, and finally a 
veteran who wishes to do business with the Federal Government.
    In addition, I am submitting for the record, our letters of 
support for the ongoing efforts of TVC from the Disabled 
American Veterans and the Iraq and Afghanistan Veterans of 
America.
    Madam Chairwoman, in my prior 25-year career in corporate 
America and now having spent the last 14 years of my 
association leadership career working with entrepreneurs on 
five continents and in 65 countries, I can say with certainty 
there is no one single answer, no one single solution to the 
issue before this Committee today.
    Veteran entrepreneurship and self-employment demand each of 
today's panel members to come together and consistently and 
constantly explore the best practices for and develop a deep 
mentorship relationship to help the survivability of veteran 
entrepreneurial efforts.
    TVC has invested a great deal of time in intellectual 
capital, monitoring and working with leaders from the education 
and business communities. The TVC, limited by both funding and 
reach, makes every attempt to provide both broad-brush 
solutions and targeted programming and services a reality for 
veterans.
    In the true spirit of entrepreneurship, TVC has embraced 
existing services both inside and outside the government, 
expanding its reach through technology, and stands ready to 
provide solutions to meet the increasing demands and needs of 
veteran entrepreneurs so that they are not left alone.
    Madam Chairwoman, thank you for this opportunity, and this 
concludes my testimony.
    Ms. Herseth Sandlin. Thank you, Mr. Blackwell.
    [The prepared statement of Mr. Blackwell, and attached 
referenced letters of support, appears on p. 74.]
    Ms. Herseth Sandlin. Mr. Elmore, you are recognized for 5 
minutes.

                 STATEMENT OF WILLIAM D. ELMORE

    Mr. Elmore. Chairwoman Sandlin, Ranking Member Boozman and 
other distinguished Members of the Subcommittee, thank you for 
the opportunity to appear before you today to share information 
on the state of veteran entrepreneurship and self-employment 
and the efforts of the U.S. Small Business Administration to 
assist and support veterans, service-disabled veterans and 
Reserve component members who are self-employed or small 
businessowners.
    I am William Elmore, the Associate Administrator for 
Veterans Business Development.
    As expressed in the January 24, 2007, memorandum for heads 
of departments and agencies, jointly issued by SBA 
Administrator Preston and the Office of Federal Procurement 
Policy Administrator Bennett, the administration is broadly 
committed to enhancing all of our entrepreneurial programs and 
services for veterans and reservists, especially those 
returning from duty in the global war on terror and for those 
service members injured or disabled in service to America.
    As the Associate Administrator for Veterans Business 
Development, I manage our National program for veterans and 
support administration programs and policies for veterans and 
reservists. I coordinate SBA activities with other Federal, 
State and local government programs and with not-for-profit and 
private partners. Each year, my office delivers direct 
assistance to over 25,000 veterans and reservists through five 
Veterans Business Outreach Centers and through special 
competitive funding for our district office Veteran Business 
Outreach Initiatives coordinated by R-68 Veterans Business 
Development Officers.
    SBA's Veterans Business Development Office acts as a 
liaison and as a technical expert to our Federal partners and 
agencies with procurement authority, and I do act as an 
ombudsman for full consideration of veterans in every 
administration program. Each year, SBA provides reportable 
direct and indirect assistance to more than 100,000 veterans 
and reservists who participate in every SBA program.
    While improved services are being delivered, Administrator 
Preston and Deputy Administrator Carranza have tasked each 
office within SBA with reviewing their programs and how they 
support veterans' small business success. We are identifying 
additional steps that every program can take to better deliver 
SBA assistance to veterans, reservists, discharging service 
members, and family members.
    Recent examples of improved services to this important 
population is inclusion as a target market in our community 
express loan program that offers expedited loan processing with 
mandatory business planning and technical assistance. We have 
recently improved our surety bond guarantee program for 
service-disabled veterans and veterans, and we are exploring 
new ways to further target the veteran, Reserve and Guard 
community through our lending programs. Thus far, the results 
have been good. The numbers of new loans being made to veterans 
has increased significantly. The number of new loans to 
veterans has grown from 4,800 in fiscal year 2000 to 
approximately 8,000 in fiscal year 2006.
    Public Law 106-50 established a 3 percent Federal 
procurement goal for prime contracts for small businesses owned 
and controlled by service-disabled veterans and established a 
``best efforts'' clause for veterans in Federal procurement at 
the subcontracting level. While the government has yet to 
achieve the required 3 percent goal for Federal procurement, we 
are making progress toward it. In 2004, the President issued 
Executive Order 13360, and preliminary data shows that both SBA 
and the Department of Veterans Affairs each exceeded their 
respective 3 percent goals for fiscal year 2006. Leading by 
example, this represents a significant improvement for both 
agencies over achievements in fiscal year 2005.
    Each year, our Office of Entrepreneurial Development and 
our resource partners provide small business counseling and 
training for approximately 1.5 million aspiring start-up and 
growing small businessowners. Annually, close to 90,000 of 
these customers are veterans, service-disabled veterans, 
Reserve component members, and active duty personnel. Our SBDC 
national office provides program design, core operational 
funding and oversight to almost 1,100 Small Business 
Development Centers.
    In addition, we deliver assistance through the expertise of 
almost 400 SCORE chapters, with approximately 11,000 
experienced SCORE business counselors, and through 100 women's 
business centers. We also provide a robust range of online 
business counseling and training opportunities, supporting 
everything from start-up and early-stage decision-making to 
significant expansion and growth assistance.
    Let me turn my attention to our efforts on behalf of small 
businessowners who are members of Reserve components of the 
U.S. military and who have been or may be activated for the 
global war on terror. In August 2001, we began offering our 
Military Reservist Economic Injury Disaster Loan as one tool 
that can be of great assistance to an activated reservist. We 
have implemented a comprehensive outreach program that includes 
veterans and reservists, and we have strengthened our business 
counseling and training programs to inform, develop and deliver 
pre- and post-mobilization business planning that can be 
critical to the economic success and survivability of reservist 
small businessowners.
    After the September 11th, 2001 attacks on America, we 
established an SBA Committee to coordinate outreach and service 
delivery to reservists. We created and had distributed more 
than 400,000 SBA Reserve and Guard fact sheets, and we 
established special Web pages for reservist small 
businessowners in 2002, with over 700,000 visits since then. 
Now we know Web is not enough as well.
    Two years ago, we requested and secured the authority from 
Congress to include reservists in our definition of ``veteran'' 
for purposes of our comprehensive outreach effort, and we 
included ``veteran reservist'' in our community express loan 
program to provide additional access to capital beyond our 
Military Reservists Economic Injury Disaster Loan program.
    Again I thank you for this opportunity to testify before 
you today. I am proud of the progress we have made and of our 
knowledge and assistance for aspiring and existing veteran 
entrepreneurs, and I look forward to continuing to enhance 
these efforts.
    This concludes my testimony and I welcome your questions.
    Thank you.
    [The prepared statement of Mr. Elmore appears on p. 81.]
    Ms. Herseth Sandlin. Thank you Mr. Elmore. I welcome Mr. 
Denniston. You have 5 minutes.

                STATEMENT OF SCOTT F. DENNISTON

    Mr. Denniston. Thank you.
    Madam Chairman, Mr. Boozman, Mrs. Davis, thank you for 
convening the hearing today. I am honored to represent 
Secretary Nicholson, Deputy Secretary Mansfield, and the 
dedicated employees throughout the Department of Veterans 
Affairs who serve our veterans daily.
    I have good news to report. The veterans business program 
is working well at VA. Last fiscal year our procurement budget 
was $10.3 billion. Of this, we spent approximately $651 million 
or 6.35 percent with veteran-owned small businesses. Of that 
$346 million, or 3.38 percent of the total, was with service-
disabled veteran-owned small businesses.
    We attribute VA success to several factors. Our leadership 
demands commitment to veterans in business. Program executives 
personally report their accomplishments at our quarterly senior 
managers meeting. VA applied the strategies in our Executive 
order plan and they have worked. Veterans doing business 
throughout our Department have proven themselves to be solid 
performers. The VA Office of Small Business and the Center for 
Veterans Enterprise have been effective catalysts in working 
partnerships to educate and assist both buyers and sellers, and 
the Center for Veterans Enterprise is a very effective resource 
for both veterans and the contracting activities.
    As a result of Public Law 109-461, which I would like to 
thank you for your leadership on, the VA is now the first 
agency to place service-disabled veterans and veterans at the 
top of our priority source list. In addition, this law provides 
VA with direct sourcing authority--a tool unique among Federal 
agencies. With this new program, VA expects a marked increase 
in expenditures for service-disabled vets and veterans in 
fiscal year 2009.
    As you know, VA operates the Center for Veterans 
Enterprise, which has 16 employees, 12 of whom were veterans. 
CVE staffs a national call center to assist veterans interested 
in businessownership or expansion; talks to veterans, and their 
families and business partners daily. VA CVE also hosts the 
VetBiz.gov Web portal and manages the VetBiz.gov information 
pages, a database containing information about products and 
services offered by veterans and service-disabled vets.
    Veterans in this database may elect to receive daily 
extracts from Fed Business Ops and extracts from VA's Forecast 
of Contracting Opportunities. We also use the database to 
conduct market research and to blast early alerts about 
upcoming requirements or conferences.
    We partner with other organizations. Our first partnership 
was with the Association of Procurement Technical Assistance 
Centers. The PTACs educate owners new to the Federal 
marketplace. We refer many veterans to PTACs to help owners 
learn how to be successful Federal contractors.
    Another steadfast partner is the General Services 
Administration. We have cosponsored regional conferences with 
GSA and assisted in the Veterans Technology Service 
governmentwide Acquisition Contract called GWAC. We look 
forward to using that within VA in coming years.
    At all of our outreach programs we distribute a tool kit 
for veteran-owned small businesses which is jointly developed 
and co-branded by GSA and VA. It contains legislation and 
policy documents, information on how to market to Federal 
agencies, a list of Federal veteran and business advocates and 
templates to assist businessowners. This tool has proven to be 
so successful it is now in its fourth edition.
    We are continuing our joint outreach efforts with the 
military services, conducting road shows with the Air Force, 
Army Corps of Engineers, to reach military program managers. 
The Corps routinely dispatches advanced procurement 
announcements of forthcoming opportunities to owners in the 
VetBiz information database. The Corps of Engineers has awarded 
several Indefinite Delivery Indefinite Quantity contracts using 
service-disabled vets set-aside authority. As a result you will 
see many of those offices honored at our annual Champion of 
Veterans Enterprise Award program.
    We also have a very effective partnership with the Army 
Small Business Office, through comprehensive support of the 
military community, defense contractors, volunteers from a 
range of Federal agencies and the businessowners community. We 
have jointly organized the National Veteran Business Conference 
for the past 3 years. This year's program will be June 25 
through 28 in Las Vegas. Last year more than 1,200 participants 
joined together to focus on how to improve opportunities for 
veterans, especially service-disabled vets, in prime and 
subcontracting. In the commercial marketplace, more than 300 
franchise owners have joined the VetFran program which VA and 
the International Franchise Association refreshed in 2002.
    Currently, more than 700 veterans have opened franchises 
under this program. Through VetFran, veterans are eligible for 
reduced franchise fees and other support.
    With that I will conclude my remarks and submit my written 
testimony for the record.
    [The prepared statement of Mr. Denniston appears on p. 84.]
    Ms. Herseth Sandlin. Thank you very much, Mr. Denniston. 
Mr. Celli, you are recognized for 5 minutes.

                STATEMENT OF LOUIS J. CELLI, JR.

    Mr. Celli. Thank you. Well, good afternoon, Chairwoman 
Herseth Sandlin, Ranking Member Boozman and Congresswoman 
Davis, Members of this Subcommittee. Thank you for the 
invitation to come before you and discuss veterans 
entrepreneurship.
    It has been 7 years since the unanimous passage of Public 
Law 106-50 and this Subcommittee now asks basically, how are we 
doing? My name is Louis Celli and I am a 22-year veteran of the 
United States Army, a service-disabled veteran. I started two 
businesses and I am the chairman of the SBA's Veterans Small 
Business Advisory Committee.
    You have assembled before you today some of the most 
renowned names in the veterans community. You have heard their 
testimony and you have listened to the needs of your 
constituents. So now what do we do? We know that the program 
hasn't quite hit the mark, not yet. We know that the Federal 
agencies and federally funded programs charged with carrying 
forth this plan to promote and defend veterans entrepreneurship 
all believe that they are hitting the mark. We know that 
veterans aren't so sure.
    But what does this mean and what can we do about it? It 
means that when you set your own goals and standards by which 
success is measured, success is easily achieved.
    I retired in 2002 as an Army master sergeant. When I was on 
Active Duty, it was my job to take care of soldiers. When I was 
working with Army Recruiting Command, my job was to reassure 
parents of the new soldiers coming into the Army that their 
sons and daughters were going to be protected and taken care 
of. I was then, and I am still today, proud of our Armed Forces 
and proud to have worn our Nation's uniform.
    One of the hardest things for me now is to be working with 
the returning veterans as they process through Walter Reed. I 
feel a deep sense of guilt. I feel that I have let them down 
because I am not personally out there today in a Humvee 
protecting them. I have to keep reminding myself that it is not 
my job anymore. I have tried to go back but I can't. I am 40 
percent disabled. I am no longer qualified to serve in the 
Army. This is very hard. The men and women are hurt and in some 
cases they are hurt bad.
    Seven years ago we passed a law that was meant to address 
the needs of American servicemen and women who wanted to 
compete as businessowners in the American economy they fought 
so hard to protect. Seven years ago we were riding high on a 
nation at peace and at full strength militarily. Seven years 
ago, we knew that we hadn't done enough to assist veterans--
particularly service-disabled veterans--in serving a greater 
role in the economy of the United States by forming and 
expanding small business enterprises directly from Public Law 
106-50.
    Seven years later we are still not there. Why? No 
coordination. We created the right tool, but put in place no 
measures for success, oversight, or accountability. You charged 
the VA, SBA, TVC with building programs, told all the Federal 
agencies to support this effort and then closed the book. No 
one was put in charge. Since no one was in charge, no standards 
were set.
    Who could say whether the agencies or corporations were 
complying or not? Based on the fact that we are here today, and 
this is the third congressional hearing in almost as many 
months regarding the same issue, it is apparent that your 
constituents are not satisfied, veterans and nonveteran alike. 
It has become such an important issue, that congressional 
leaders are working together in uncommon fashion, as 
represented here today by the Honorable Congresswoman from 
California, Congresswoman Davis, who has been asked to attend 
as a guest of this Subcommittee.
    It may be time that we take a good look at restructuring 
this program and assembling all of these independent moving 
parts into a cohesively high-functioning machine. We would save 
money, effort and time, and finally put an end to the turf wars 
which have plagued this program from the beginning.
    Congress needs to establish an office to organize and 
coordinate this program, Veterans Business Program Management 
Office, and it should be an office with Federal authority. This 
office should be responsible for monitoring, assisting, 
organizing and coordinating oversight of the Veterans 
Entrepreneurship Advocacy, Veterans Entrepreneurship Training, 
Veterans Professional Skills Certification, Veterans Federal 
Procurement, also assisting with Veterans Procurement at the 
State level, promotion of public and private partnerships with 
regard to Veterans Entrepreneurship, Small Business and 
Employment, Entrepreneurial Vocational Rehabilitation Case 
Management, and Comprehensive Work Therapy and Training 
Directorate.
    This office should report directly to the President of the 
United States and to Congress and either this Committee or the 
Small Business Committee, or a new Committee comprised of 
representatives of each. I have been approached by companies, 
small businesses and entrepreneurs, both veteran-owned and 
nonveteran-owned, who have offered to build complete companies 
with the sole intention of employing only service-disabled 
veterans. We need a program which assists them as well.
    Members of Congress, I can't protect these veterans 
anymore, but you can. Help us. Help us build a program that 
will work and that will be around long after we are gone, 
benefiting American warriors, wounded and whole, the men and 
women who have suffered so much and to whom we owe so much in 
return. We are not all Democrats, Republicans, or veterans, but 
we are all Americans. And each and every one of us in this room 
have benefited from the sacrifices of time, sweat, and blood 
that our American service members have made and continue to 
make for us each day.
    Thank you for holding this hearing. Thank you for your 
continued interest in veterans entrepreneurship.
    [The prepared statement of Mr. Celli appears on p. 87.]
    Ms. Herseth Sandlin. Thank you very much, Mr. Celli, and 
thank you to all of you. I am trying to figure out the best way 
to begin the questioning here, so let me begin with a preface, 
one I hope we all share. I have met some of the individuals 
that each of your agencies or that The Veterans Corporation 
works with and I don't think that there is any disagreement in 
regards to the various services you have provided, and some 
individuals that you have worked with, that there have been 
success stories, and that there are people, veterans and their 
families, who are enormously grateful to the people that work 
with you in your different organizations.
    But I think that Mr. Celli makes a very good point about 
the issue of oversight, coordination and accountability, and 
that has seemingly been the overarching theme of much of the 
testimony we have received today. We are focused on how to best 
deliver services and administer the benefits that veterans have 
earned in a way where someone is in charge of at least 
overseeing how this is all working, when Congress passes new 
authorities, establishes new entities, makes changes along the 
way but, again, wanting to do it in the most efficient way 
possible.
    When Mr. Sharpe from the previous panel mentioned The 
Veterans Corporation in particular and observed, I think as he 
put it, there have been numerous mission adaptations or changes 
over time, that I think we need to explore a little bit.
    I do want to pose my first question to you, Mr. Blackwell, 
with regard to some of the programs that you have consistently 
offered, some of the new programs that you have described. Let 
me ask you, in particular, about the bonding programs and 
access to capital. If The Veterans Corporation didn't offer 
those programs, where would a veteran go? Mr. Elmore, you can 
jump in here too. Is there any coordination of activities 
between The Veterans Corporation and the Small Business 
Administration as it relates to bonding? I believe, Mr. Elmore, 
there is the surety bond guaranty program through SBA. If you 
can begin perhaps, Mr. Blackwell.
    Mr. Blackwell. Thank you Madam Chairwoman. I would be happy 
to enumerate on your first part of that, which is why so many 
changes, why so many tacks, why so many approaches. The issue 
is we are, as we said earlier, a six-plus generation community. 
We are bifurcated on self-interest. We are bifurcated on the 
main mission accomplishments of those organizations. And it 
makes it very, very difficult to come together on any one 
particular thing.
    TVC is tasked to start and grow businesses. And one of the 
things this particular panel shares in common is you have 
before you two ex officio members of our board of directors, 
and you have Mr. Celli who is a funded arm of TVC's local 
provision through Boston, Massachusetts. I can tell you that we 
work very closely together as a board to look at opportunities 
that exist within the current agencies. And certainly the 
seven(a) loan program and the 524 program that SBA offers are 
addressed in addition to--by the National Economic Opportunity 
Fund (NEOF), and in fact Jim mentioned the president of that 
organization is here today. And we look specifically at what is 
the best issue for that veteran and their funding issues.
    In addition to SBA's express program we have an agreement 
with ACCION nationally for mini-micro loans from $500 to 
literally $25,000, that are nice loans that are available. So 
we really see the work we do with National Economic Opportunity 
Forum and Access to Capital, a combined program with both 
Bill's program and the seven(a) program, and then when veterans 
aren't able to use those programs, we can go and work with them 
either in the mini-micro loan program or with another lending 
agent, usually within their community.
    Why it is important to express the mentorship part of this 
is that many veterans applying for capital go ill-prepared. 
Either their business plan isn't ready, they haven't thought 
through transitions. And our approach is that we mentor those 
early steps through the NEOF program and TVC to prepare them to 
best have their capital plan in place.
    In terms of access to bonding, SBA's bonding program is 
capped at $2 million. One of the other duties that I serve, as 
vice chair of GSA's Small Business Advisory Council, we talk 
about the issue of bonding. We talk about the programs that are 
currently available through SBA, which is why in concert with 
our other ex officio Member, DOD, we established a program, 
Outside Partnership with Surety and Fidelity Association of 
America, now almost a year ago. And that program allows us to 
have a 50 State coverage with no caps. That means that a 
company with either a single or aggregate bond level of $18 
million doesn't have to worry about losing that current bonding 
level to go tackle new projects or, in effect, Mentor Protege, 
a new veteran company, which is often the case, to use and 
leverage their current bonding level to start a new company, 
receive bonding, and work at the State and Federal levels.
    I would just say in general the reason we have seen so many 
different programs come across is that we have learned a great 
deal. We have learned that one size doesn't fit all. Face-to-
face works in certain groups. Face-to-face doesn't work with 
our current returning Iraq and Afghanistan members. Bill 
Ferguson, also here today with Iraq and Afghanistan's Veteran 
Association, and his team and I have talked at great length 
about how we best address these young men and women.
    We had a wonderful phone call from Iraq just a week and a 
half ago from a young first lieutenant who is literally opening 
a restaurant in New Orleans, Louisiana, and needed extensive 
funding. We were able to work with him very quickly to make 
that happen. His restaurant opens literally in 30 days, before 
he even returns back from assignment.
    So I will tell you that we must continue face-to-face 
relationships. We have entered into a Memorandum of 
Understanding with the ASBDC, Association of Small Business 
Development Centers. Mr. Don Wilson is also here today. I think 
that is an incredible leveraging tool as we work with not 
three, not eight, not 12, but literally 1,100-plus 
organizations to make that possible to reach more veterans and 
drive more veterans into existing facilities.
    So that is my short version of how we think we are doing 
it. I will just tell you we are very, very excited about this 
new Boots2Business program and Deploy-Proof, because their all-
electronic tools that are all SCORE-compliant, can be used in 
the field in Iraq, in South Dakota, in California, in 
Washington, D.C., for important veteran entrepreneur business 
to be transacted.
    Mr. Elmore. Let me try to help address where I think Walt 
was going, and we will talk about capital, at least at this 
point. If you look at SBA programs, we have what you can argue 
is sort of a continuum of access to capital, starting at the 
smaller end with our microloan program, which has technical 
assistance associated with it, average loans about $11,000. It 
goes up to $35,000.
    Then you get into our seven(a) range. And then you get into 
our 504, which tends to be more of a community development 
corporation engagement with structural kinds of things, buying 
or building buildings, securing equipment, those kinds of 
things; and then, ultimately, the venture capital world, which 
has been supported to a great degree or started through SBA's 
Small Business Investment Corporation program historically.
    So we provide access to this full range of capital, but at 
the same time we are nowhere near the majority lender for small 
businesses in America nor should we be.
    If you think of this community and you think of what we now 
know are the approximately four million existing veteran 
businessmen and women in America, the approximately three 
million aspiring, Walt is right; there is no one answer. Every 
business is different. Every existing or prospective 
businessowner is different. And every idea that they want to 
pursue is their own. And if you don't have this full range, 
public and private, the majority of our lending, other than our 
disaster loans, are through thousands of private bankers.
    So as an example, as we design initiatives--and we are 
working right now on some more lending initiatives specifically 
for veterans, reservists, discharging service members and 
others, we have to not only design to meet our constituency, we 
have to design so that our lending partners understand this as 
a valuable, usable productive tool for them as well. And 
ultimately our role is not really to enable public success--
because in my view, entrepreneurial success in America 
predominantly lies in America's private sector, not in the 
public sector. So while procurement is an incredibly important 
arena and a huge market, it is one part of the American market. 
And our engagement is with the American market. Federal 
procurement, as an important part of that, is a third of our 
agency, but that is not where we focus all of our activity and 
effort. It really is out into this private side. So I hope that 
helps answer the question, ma'am.
    Ms. Herseth Sandlin. It does. It may lead to others from 
other members of the Subcommittee or some follow-up that I may 
want to pursue. I am going to come back, just to put you on 
notice Mr. Celli, I would like to get your thoughts and 
responses to both what Mr. Elmore and Mr. Blackwell had to say. 
I just wanted to put you on notice, because I want to recognize 
the Ranking Member for questions he may have, and Ms. Davis and 
I will come back to you after they are finished with their 
questioning.
    Mr. Boozman?
    Mr. Boozman. Thank you, Madam Chairwoman. Mr. Blackwell, 
you mentioned that, you went through a variety of different 
ways you were trying to meet the needs of veterans. We have 
heard a little bit of criticism regarding the way things are 
going. At the very least, do we need to--based on your 
experiences as CEO, rework the law? Do we need to help you in 
that way or----
    Mr. Blackwell. There is one answer and one answer only. The 
answer is ``yes.'' Mr. Celli said it well. When this law was 
being crafted, we were in a different time in our Nation's 
financial history, and certainly at a different time in our 
peace-war status.
    All of the framers that I have spoken to of Public Law 106-
50 are still very supportive, Bill Elmore being the one who 
wrote that particular piece for that particular group. The 
issue isn't so much how we do what, when. It is how flexible we 
are to provide what we need now and tomorrow.
    I still believe in face-to-face education. I know that is a 
slow methodology. I know that only works for certain groups of 
people. I know that is expensive, not only in terms of 
providing that service, but also in terms of the time it takes 
out of a veteran-owned small business, to leave their business 
for any particular period of time and / or take people out of 
their business for any particular period of time: lost revenue, 
lost ability to sell.
    So in terms of just the simple answer ``yes,'' I think what 
we need to do is completely look at the issues you have heard 
of today.
    And if I may, Madam Chair, I would say I would be happy to 
in a formal way issue a rebuttal to what I have heard today and 
to the other testimony. There are some inaccuracies, and I will 
correct that in my rebuttal.
    But to close on your question, Congressman, I would just 
say that we really do need to look at the now 1.6 million Iraqi 
/ Afghanistan veterans that we have--will break the two million 
mark, the number in Vietnam, very shortly--we have with 300,000 
young men and women coming back this year. We have 350,000 come 
back in the next year. So when you look at those numbers, this 
is a technologically savvy group of people. This is a group of 
people that are used to gathering information in a different 
way. They are as different from the caveman as we are today, 
and I hope GEICO doesn't get upset, but the bottomline is we 
have to continue to be flexible in our delivery system and not 
held to a specific period of time.
    I would love very much either to look at a rewrite or, in 
the case of a bill currently being drafted, an entire 
authorization of both the mission and vision of TVC.
    Mr. Boozman. Thank you.
    Mr. Denniston, can you tell us what the status is of 
implementing the provisions of Public Law 109-461?
    Mr. Denniston. As you know, the law requires that it become 
effective 120 days after signature--180 days after signature. 
That gives us until June 20th. So right now we are on target to 
meet that. The draft rules have been written and they are going 
through the internal clearance process. The Privacy Act issues 
are being addressed at the Office of Management and Budget and 
we will be ready on June 20th to kick the program off and make 
the announcement.
    Mr. Boozman. Thank you. I agree with you, Mr. Elmore, that 
the answer really is the private sector and yet it is not too 
much to ask that the public sector do what we ask them to do. 
And when we talk to them individually, everybody is for this, 
but it just doesn't filter down. It just doesn't get where it 
is going so.
    And then you have a situation we learned from the previous 
panels. It really is a big deal if you can get some people to 
get their foot in the door, and then they go out and mentor 
others, and then they might have a different avenue that they 
are interested in some other business, but it really does help, 
pushing that thing forward.
    So I guess my question is, Mr. Denniston, Mr. Elmore, could 
you all possibly do a symposium where you really educated the 
procurement officers? And I know you are trying to do this now.
    But there is a--I think that again in hearing the other 
panel, I think in hearing personal reference, there really is 
not--and I don't mean this bad again--as one of the panelists 
said, these guys are working hard, and they are overworked, but 
in many cases there is an ignorance of what the President has 
directed, and what the law is trying to direct.
    If we could just get aggressive with some sort of mandatory 
seminar, some sort of check the box, to help understand this, I 
think that would be helpful. Is anything like that a 
possibility?
    Mr. Elmore. Sir, I think it is. There is actually a couple 
of things I would like to share with you about this. Our new 
administrator--and I am pleased that he is there, has been 
there now 9 months--he came in, he put a number of initiatives 
in motion. I have been with SBA almost 7 years now. Hard for me 
to believe. And he came in and he actually engaged the 
employees. He engaged our field people. He engaged our CPRs and 
he engaged our district directors. He asked them what worked 
and what didn't. He took all of that input and he designed a 
number of special initiatives and created a number of internal 
agency task forces, and amongst those are initiatives that look 
at exactly what you are talking about.
    We have responsibility for service-disabled veterans, we 
have responsibility for women as well. We have responsibility 
for 8(a) for HUB Zone, for small and disadvantaged business, 
and we also do some work in the Native American community and 
the international trade arena. All of these are being touched 
by these task forces that are developing special and new 
efforts to go out and do exactly what you talked about.
    What kind of reporting do we get? How can we do it 
electronically? Anybody that knows SBA knows we don't operate 
at the scale of our friends at VA or Department of Defense. Or 
Department of Labor for that matter. We are not a huge agency. 
We have third parties we have to work through. So we are trying 
to get our hands around contemporizing how we do exactly what 
you ask, education for the procurement system, reporting for 
that procurement system, and how others, myself included, gain 
access to real time outputs from that procurement system so 
that I don't have to sit in front of you a year and a half 
later and report 2005 data.
    Now, the 2006 data is not SBA's data. It comes from 
somewhere else. And I am not trying to throw rocks at any of 
our partners, but I am hampered without access to real-time 
data about what is really happening out there. That is a real 
frustration for not only me but the other professionals inside 
SBA that want to do their job, want to do it right and want to 
do it well.
    So back to the point, the Administrator is leading this new 
effort himself. I am doing 12-hour days. He is doing 14-hour 
days. I can't keep up with him. I am grateful he is doing it, 
although he is wearing me out, I will say that.
    Let me go to the mentoring thing. I want to touch on that. 
I think the one most important thing that our Nation can do is 
engage what I call our military alumni business community. And 
there really hasn't been a process to do that. What Walt talked 
about, what my five centers do, what the centers that he funds 
do, what CBE does, what Lou Celli does, the more that we engage 
the men and women who went before us, the more we are going to 
be able to engage the men and women who come behind us because, 
by and large, anybody that knows this community--and, sir, you 
know this--it is our kids that are going to carry the burden 
next time. There are families that produce warriors in this 
society and families that don't. And the best mentors at Walt's 
program in St. Louis are two very successful veteran 
businessmen whose sons have served in Iraq. These come from 
families that don't have to serve in Iraq but these families 
produce warriors, and they help their sons and daughters when 
they come home.
    So if I had a broad policy approach, I would suggest let's 
get our hands around how do we engage this huge asset of the 
already successful private business community that is out there 
waiting to be mobilized in ways--and this is where the caveat 
comes in. These men and women don't like the Federal 
Government, by and large, very much.
    So we have to do it in a way that really comes from that 
community and is managed by that community. Because the first 
woman on your first panel said it best: Mentorship is easy to 
say, it is hard to do. It is based on personal relationships, 
expertise sharing, and a willingness of people with ability to 
take that ability and infuse it into people that they are 
really now just getting to know. But if we could turn that on 
it wouldn't take much money, but it would take coordination, we 
could turn this whole arena in a way where 5 years, 2 years, 
perhaps a year from now, we would be talking about how do we 
manage the phenomenal growth and success of this whole arena, 
not just including small business procurement from the Federal 
Government.
    Mr. Denniston. If I may, let me address your question from 
the standpoint of procurement because I think that we are 
making strides. As an example, the President's executive order, 
one of the requirements in there was for DOD to have training 
of all contracting and personnel in the government.
    Within a week of the executive order being passed, the 
Defense Acquisition University had an on-line course. That was 
done. We in the Center for Veterans Enterprise have worked with 
just about every large agency and what the requirements are for 
Public Law 106-50 and Public Law 108-183. And we do that in a 
lot of ways. A lot of times we are invited into the agencies to 
train staff, on the requirements. We also go to a lot of events 
in particular States. We work very closely with the Procurement 
Technical Assistance Center that you have in Little Rock, that 
one does a great job. We have done a number of events in San 
Diego that bring in SPAWAR, which is obviously the largest 
buyer, and all the contractors that support SPAWAR. We do it in 
conjunction with the Procurement Technical Assistance Center, 
we do it in conjunction with Bob Mulz who runs the Elite DVEV 
network so that we have the opportunities to bring people in. 
And I think that has gone well.
    I have to tell you about yesterday. Yesterday, this week, 
GSA has had their expo, which is where all the contractors that 
are on the Federal supply schedule have an opportunity to 
display their wares to buyers throughout the government 
marketplace. On Tuesday, we had a whole veterans day down 
there. In the expo we had a section of nothing but the service-
disabled vets that have won the GWAC contracts. And I wish you 
could have been there to see the excitement that they had.
    And Lurita Doan, the Administrator of GSA, and I walked 
through there in the afternoon and talked to the veteran 
owners. And one of the questions that we asked was: Now you 
have the vehicle, what are you going to do to make it 
successful? And every one of those companies had target 
opportunities that they have identified in their marketing with 
different agencies--and we are proud to say VA was the most one 
mentioned--but they are excited about what we have got.
    If you could see the excitement that we have when we have 
the conference in the end of June in Las Vegas, or if you could 
see the opportunities that are going to come out when we do the 
accountability day--yeah, we know we have agencies that aren't 
coming to the forefront the way they should. But you know what? 
You also have to remember that contracting officers in the 
government are overworked. It is a cultural issue. For the last 
30 years, we have beat on contracting officers to make small 
business opportunities available for minorities and women. Now 
all of a sudden we are changing the dynamics and we are saying, 
you did a great job there; now we want you to take care of 
veterans and service-disabled vets, and the contract officers 
and the program managers say, wait a minute, I have developed 
this cadre of minority- and women-owned businesses that you 
have asked me to support and I have done that. I don't want to 
change. I have missions. I have risks that I have got to deal 
with in delivering services to whoever my constituents are. And 
now you are asking me to bring in a whole group of people. I am 
not willing to take that risk.
    So a lot of this is culture. That is why the importance of 
having the people at the top be supportive of it the way our 
Secretary and Deputy Secretary have done and say, by golly, we 
are going to make this work one way or another, that is what it 
takes.
    I think we have enough of us to make this program 
successful. I think it is now an issue of accountability.
    Mr. Celli. May I dovetail on to that?
    I was very excited to hear Scott talk about the change in 
culture. I was asked to sit on a Committee--and I don't want 
this to sound like it is a jab to GSA, I love GSA and I think 
they are doing wonderful work. I was asked to sit on a steering 
Committee for Veterans Procurement Day by the GSA. And the 
regional administrator was there. Many of the experts you have 
called today sat there and were part of that steering and 
planning Committee.
    In the meeting, they brought in some of their own 
procurement officers to sit around so we could talk about how 
to best do outreach to service-disabled veterans. That was 
really the goal. What breakout sessions do we want to have, and 
what is the best way to market and reach them? And that is my 
expertise. I am not in procurement. I am not an expert in 
procurement. I have been thrust into this arena because of the 
work I do. But my expertise is in building businesses, 
marketing, outreach, that is what I do best.
    And as we started to go around the table, there was a pause 
and one of the procurement officers asked if he could say 
something. And his question was: Please explain to me the 
service-disabled veteran thing. Is that 8(a)? And there was a 
strong silence in the room. And there were three procurement 
officers. A second one looked over and nodded in agreement and 
the third one, who was very knowledgeable about veterans, said 
no, that is not it. And the regional administrator at that time 
stopped and said, you know, I am really glad that you asked 
that question because what that does is tell me that we need to 
do more training within our agency, with our procurement 
officers.
    So this is 2007. And you know we still have procurement 
officers who don't understand the program. So I guess my 
question would be: Is that a lack of emphasis from the top? Or, 
I guess I am not sure. And I will leave it at that.
    Ms. Herseth Sandlin. Thank you, Mr. Celli.
    Ms. Davis do you have questions for the panel?
    Mrs. DAVIS. Thank you, Madam Chair. Thank you to all of 
you. I appreciate that, and I know it is late and I will try to 
be very brief.
    I just wanted to thank Mr. Blackwell. I appreciate your 
being here and the work you did on behalf of at least one of my 
constituents. And I know there are many more. I enjoy having 
the opportunity to work on these issues and we certainly want 
to continue to do that.
    And I think that the overriding theme here in many ways has 
been on accountability. We often ask, you know, it is the law, 
what is the problem? Why can't we do a better job in oversight 
and in trying to have enough enforcement so that people believe 
that, in fact, there is a job to be done and that they know 
that someone is out there to make sure that it happens.
    But I wanted to just focus on one or two things quickly. 
You mentioned the mentoring, and certainly Ms. Halfaker was 
benefited by that. Are there programs in your respective 
programs in which you have an opportunity to link experienced 
veteran business entrepreneurs with newcomers to small 
business, and has there been any evaluation on how that is 
going? And what role would you like to see the Committee play 
in trying to expand on that and, I guess, guarantee that that 
element is working?
    Mr. Elmore. Let me try to start and share at least the work 
that we have done.
    The five centers that I provide funds to, that provide 
assistance to about 11,000 veterans and reservists a year, all 
of those have a mentoring piece in the things that they do. 
That is not the only thing they do, but that is one of the 
elements in the agreement that they have with us.
    Okay, how well does that work? I think it really probably 
depends, more than anything else, on the skills of the 
counselors in those specific programs and their ability or 
their connection with the private business community, not just 
the veterans looking for assistance. So I think it is pretty 
spotty.
    I think our SCORE volunteers, better than half of which are 
veterans, some of them do take on a mentoring relationship with 
their customers. Not all of them. Not every SCORE counselor is 
capable of taking on a mentoring relationship. It is almost a 
personal sort of a thing that has to happen.
    Our Small Business Development Centers and our Women's 
Business Centers also have mentoring, but it is not a specific 
program. It is not a program that you can impose. It almost has 
to be led by the community itself. And I think you saw evidence 
of that at your first panel. Nobody said to Mark, help her. For 
some reason, Mark began helping her. And there is no empirical 
evidence in this, but I believe this in my heart and in my gut, 
that veterans, probably more than any other group of 
entrepreneurs in America, have an interest in, and have almost 
a compulsion to a degree, to go back and provide this 
assistance to those who come behind us.
    I am not sure that I know how to do it. I just know that if 
we can figure out how to unleash the private business 
community, that is not looking for help. They do what I call, 
``they want to help.'' There is a quiet pride there that we 
have to give them an opportunity to exercise.
    If I had a suggestion for Congress, it is not build another 
Federal program, because most of these veterans aren't really 
interested in helping the government do something again. Okay. 
But you can help, because you are visible and you are leaders 
in the American community, in your communities where you come 
from.
    One of the things I have tasked my district office 
directors to do at our district outreach is to begin to develop 
local volunteer lending Committees that would do exactly what 
Walt said. Instead of a veteran going to a bank with a business 
plan that isn't really ready, maybe isn't thought through, 
isn't completed, didn't understand exactly what should be 
there, whatever, develop these local volunteer Committees; let 
our veterans come before them once a month, what I have 
suggested, get their plans reviewed.
    I think there are a number of things that come from that. 
One is you get better business plans because the bankers, as 
volunteers, are going to say. This isn't ready, this is--you 
need to fix this, this will never work. Take it back and look 
at it some more.
    The other thing it will do is it will begin to build our 
community inside America's lending community. One of the 
strengths of us, our community, is that we are everywhere. But 
at this point, the only ``everywhere'' we are talking about is 
the Federal part of it. And you can help us lead an open 
America to come back and help our sons and daughters come along 
behind us and succeed. We are going to succeed, with or without 
the government. We already do. government's role is to maximize 
our resources and help succeed. But, ultimately, most that have 
success is in the private sector.
    And I would love to be part of a no cost--not another law--
let's figure out how to do this and finally unleash this 
potential of these millions of men and women that are in 
America.
    Mr. Denniston. I would argue that it is already happening. 
One of the dilemmas that we all had when we started our 
respective programs is that nowhere could we find an 
identifiable source of veteran-owned small businesses, so we 
started from scratch and we started sort of building this up.
    As an example, in San Diego, the elite DVD networking. One 
of the reasons we have these community support groups of 
networks of veteran-owned small businesses is to do exactly 
that; is to help each other. Whether it is mentoring with 
financing, whether it is mentoring from a standpoint of joint 
venturing on prime contracts with the Federal Government, it is 
happening. I think, as Bill mentioned, it is happening without 
the government.
    One of the misnomers, I think, of the Mentor Protege 
programs that we have in the Federal agencies, that is not for 
a start-up business. If your going to be a protege of a 
mentor--remember, these mentors are the big guys. It is the 
Northrops, it is the Boeings, it is the General Dynamics, and 
there are huge expectations. And they are not going to enter 
into a Mentor Protege relationship unless they have an 
experience with you as a subcontractor.
    One of the differences between doing business with the 
government working as a prime contractor with us and as a sub, 
we look at contracting from a government perspective; we are 
dating you. We look at it from a contract-by-contract basis, 
and if we find somebody better. Then we are going to go to 
them.
    The prime contractors, on the other hand, their philosophy 
is more of a marriage. And if I am going to work with you, by 
golly, I am going to make sure you grow and develop and I have 
someone I can count on in future years.
    And I think when small businesses get into Mentor Protege 
agreements, what they find is there is a lot more that is 
required of them than what is expected. So the really good 
Mentor Protege programs we do in the government are for 
companies that have been in existence, have some financial and 
production wherewithal, and have experience in that 
marketplace.
    But, again, I think what is happening is we have a 
groundswell of this mentoring thing of veterans wanting to help 
other veterans. One of the new programs we hope to start in CVE 
with our database of 15,000 veterans is twofold. One is to put 
out a call to step up and volunteer to help another veteran 
start a small business, and the other is the huge areas of 
employment, because we know that veterans hire veterans.
    Mr. Celli. First of all, I would like to recognize 
Congresswoman Davis and her State as being an industry leader 
in the way veterans procurement works at the State level. I 
work with a couple of veterans from the State of California and 
they couldn't be--they couldn't be happier at the way that 
program has really spearheaded veterans procurement at the 
State level.
    When we talk about the mentoring and the coaching, similar 
to what we heard Dawn Halfaker and Mark Gross, their 
relationship, the question that you asked was if we have that 
type of program established within the existing programs that 
we now service. And, really, the answer is no. Any type of 
mentoring that is done company to company, you know, neophyte 
company or fledgling company to established company, is done on 
the fly. It is done on the cuff. And it does happen, but it is 
not evaluated because, again, it is--you know, there is a lot, 
there is a lot there.
    And one of the things I would really like to point out, and 
I was waiting until you got back to me, is that something that 
really may have been alluded to but wasn't really touched upon 
in all of the testimony that you heard today, is that we are 
essentially--really we are talking about two customers. We are 
talking about new business start-ups as one customer base which 
has its whole set of training and of assistance that it needs, 
and then we are talking about established customers which have 
companies that are trying to grow, whether that is through 
procurement, whether that is through marketing and outreach at 
the State level, where that is just trying to reach regular 
commercial customers. So you really need to think about this 
program as a two-pronged program, at a minimum, and look at 
those two finite sets of customers with two very specific 
needs.
    As we set up conferences around the country, we always have 
to identify, first, who is our base customer and core customer 
going to be? Is it going to be the new customer or is it going 
to be the established customer? And when we do that, that is 
the way we market, and that is the way we set these programs 
up.
    I would like to respectfully disagree with Bill when he 
talks about young veterans not liking the government. That was 
in the original part of my testimony, in the executive summary, 
I talk a little about the history of veterans through World War 
II, and up to today, and how the prevailing sentiment has been 
carried through with respect to how veterans are perceived, and 
which directly relates to their success not only in the 
marketplace but in the job market.
    And though my colleagues here--they were raised in a 
different time. And veterans now don't have that same, I think, 
distrust of the government. I am not going to say that it 
doesn't exist. But the prevailing questions that I hear when I 
first get someone who is freshly off Active Duty is, isn't 
there a government program to help me?
    So it is more inquisitive and not how come the government 
isn't there, or I don't want the government's help; it is more 
of an expectation. Where is the government? And one of the 
biggest misnomers within the community is how do I sign up for 
the VA business loan, which they are confusing the home loan 
with, and we have to tell them that it absolutely does not 
exist.
    So I think that veterans today absolutely expect the 
government to be there for them with regard to some of the 
programs we are talking about today.
    Mr. Blackwell. If I may cap this in kind of a crass way, so 
you will forgive my directness. Mentorship first. Mentorship 
comes in as many different flavors as there are businesses. 
Sometimes it is just an arm around a shoulder, saying, I am 
here for you, pal, I can answer your questions; I can't get 
involved in your business plan right now, but you call me if 
you need me. That is one form of mentorship.
    In Protege kind of activity, you are really talking about 
the more technical sides of our business, the IT world, where 
it makes sense to leverage and partner and do all those things. 
And from a sheer outreach standpoint, where you can help us 
most--and I mean, this in the most sincere way--you are looking 
at a very small group of people today. But between Bill's group 
and Scott's group, my staff, our staffs out in the field, you 
are talking less than 50 people. You are talking less than 50 
people to address the needs of over eight million veterans who 
are either in business or want to start a business, not 
counting all the Iraqi-Afghanistan veterans. If you want to 
help us, stand with us. Help us have the oversight that is 
needed from a congressional standpoint for you to give us 
money.
    We are delighted to report back to you. It was the most fun 
I have ever had to do, and that is writing my fiscal year 2006 
accomplishments to you and the President. I was amazed myself.
    Will they get better? Absolutely. But we need your support. 
No private-sector money is going to be given to us as TVC 
without the partnership of the U.S. Congress, because the 
private sector folks believe that it is in your responsibility 
realm to stand with our veterans.
    So as crass as it may sound, we are a little tiny group. We 
don't get along all the time, I promise you that. We have very 
differing opinions on the services we can and, frankly, are 
able to provide, given that limited funding outreach.
    I don't know who my customer is. Scott does, because he 
keeps the database. But he is not allowed to share that with 
me. So I am in the reactive mode more than the proactive mode. 
As a business person, I think you will understand how 
frustrating that can be. Bill has the same problem. Out of the 
567 new business starts from TVC last year, Mr. Celli has 222 
of those. He has four people.
    Mr. Celli. I have two full-time people and two part-time 
people.
    Mr. Blackwell. So how much more can we do? I don't know. 
Fund us. Give us a shot. We have a plan. It is working. We have 
leveraged technology. You cannot find more dedicated people 
than you have heard today on these panels, I promise you.
    The team is here. Play with us. Thank you.
    Mr. Celli. I also have another recommendation I would like 
to bring to your attention with regard to promoting the 
mentorship that we heard so much about. In the 2006 Small 
Business Advisory Group report, one of the suggestions that we 
had was to have the SBA create Regional Finance Bonding and 
Security Veterans Small Business Advisory Councils. And what I 
mean by that is having the SBA look at their regions and their 
districts and say, go out and find some bankers and bonding 
folks and create an advisory council to help vets.
    When they do that, come back with recommendations, meet and 
go out and find ways to promote veterans. When these public-
private partnerships start to develop and these bankers start 
to come up with recommendations, they are going to own them. 
And they are going to endorse them. And they are going to push 
that down, you know, push back from the top down. And the next 
thing you know, veterans will become important in the banking 
community. Veterans will become important in the bonding 
community. Veterans will become important in the business 
community over all.
    Mr. Elmore. Can I say one thing, Madam Chair?
    Ms. Herseth Sandlin. Yes, because I have a number of 
thoughts I still want to share with you too. Go ahead.
    Mr. Elmore. This is my second testimony today, and so far I 
haven't gotten in trouble. And I am kind of disappointed in 
that.
    Ms. Herseth Sandlin. Don't speak too prematurely.
    Mr. Elmore. I won't go too far, I promise.
    One of the things that was talked about when the community 
came together, really years ago, but in 1997, 1998, 1999, to 
create what became Public Law 106-50, none of us knew that that 
was going to pass. The 1997 statute did not pass in the form 
that we wrote it. Neither did the 1992 statute or the 1991 
statute or the 1990 statute that we wrote. None of those 
passed.
    One of the things we talked about in 1998 and 1999 was the 
Community Reinvestment Act. That is not within SBA's purview, 
and this is where I get in trouble. But you know what? It is in 
America's purview. That is where most capital comes from, is 
from the banking community, the private equity markets out 
there in the real world, not just the Federal part of this. 
Perhaps that is as far as I will go, but I hope you get my hint 
and I hope I didn't get in too much trouble.
    Ms. Herseth Sandlin. I appreciate the hint. And I 
appreciate--I am sure Ms. Davis and Mr. Boozman would agree 
that we have a lot that we can work on here. But some of my 
thoughts, if I might, because I think, Mr. Celli, you 
ultimately got to the question I wanted to come back to you on. 
What is the most immediate thing that you think the 
Subcommittee can do to facilitate our common objective? And I 
do want to come back to a point that you made, Mr. Elmore, just 
to clarify, but also to respond, because I think Mr. Celli 
addressed it, but what I heard you say wasn't maybe so much the 
young veterans having this distrust, but the established 
military alumni that are out there of that older generation. I 
think that while that may be true, and I think there are a 
variety of factors for where that distrust--from where it 
stems--but I think one of them has to be a disappointment when 
they see Federal agencies not living up to a modest 3 percent 
set-aside in contracting.
    While I understand, some of what you said previously as 
well, that there is all this private sector opportunity. We 
know that. The focus of the Office of the SBA isn't so much 
just on the public contracting side, I think. As I said before, 
the theme here is the issue of enforcement and accountability. 
I think that there are things that we can do, working together 
on the Subcommittee, that isn't passing more laws, but working 
with our colleagues to figure out the best mechanism and the 
best model to ensure that level of accountability beyond our 
oversight hearings, that is very important--but beyond that, to 
establish the commitment that can help erode over time that 
distrust that I don't think is there to the same degree with 
the younger generation, but to go to that point with the 
younger generation.
    It goes to the point Mr. Blackwell was making: How do we 
best adapt our agencies and our programs to meet, to 
transition, to serve different constituencies?
    I do want to commend what you have been doing with that, 
Mr. Blackwell, but while you have been doing that the mission 
has changed. People observe that questions get raised that 
aren't always answered to everybody's satisfaction. I hear what 
you are saying about the small group we are dealing with the 
dedicated group we are dealing with, the results and the 
outcomes I think we have had in many cases.
    But I think you will find a receptivity from me anyway, 
more focused initially as it relates to enforcing laws we have 
already on the books. I would like to work with you to figure 
out ways--and I think I was going to ask you a question, Mr. 
Denniston, about the PTACs and working with the veterans 
themselves. But clearly we have got some work that we can 
pursue on training procurement officers.
    And I would be more comfortable at this stage--I am not 
saying I am not willing to seek additional resources in a 
pretty tight budget environment for additional programmatic 
funding, but I also think, if people are overworked and if we 
have procurement officers who do not know the difference 
between 8(a) and the other programs that are geared toward our 
service-connected disabled veterans, that there are some issues 
here that we can focus on immediately in making sure we are 
adequately resourcing that as we then work with you to identify 
the best coordination of services and how we deliver those 
benefits to different constituencies, whether they are based on 
generation or, in terms of pursuing some of what we were just 
talking about with the mentorship and the proteges.
    So, Mrs. Davis, thank you for your time.
    Thank you to all of our witnesses on this panel and the 
preceding panels. I want to thank staff for their work in 
getting us prepared for this hearing, but I am also going to 
thank staff in advance for all of the work that we are going to 
undertake in following up on all of the information we have 
gathered at the hearing today.
    With that, I will be around to visit with you maybe a 
little bit more following the hearing, but again, thank you for 
the statements, and for the information. We value your insight 
and your ideas.
    The hearing stands adjourned.
    [Whereupon, at 5:42 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

 Opening Statement of the Hon. Stephanie Herseth Sandlin, Chairwoman, 
                  Subcommittee on Economic Opportunity
    Good afternoon ladies and gentlemen. The Veterans's Affairs 
Economic Opportunity Subcommittee hearing on veterans entrepreneurship 
and self employment will come to order.
    Some of the panelists might recall a joint hearing we held with our 
colleagues on the Committee on Small Business in May 2005 on the 
subject of veteran small businesses. Today's hearing will build upon 
that hearing as we receive testimony to explore the current state of 
veterans' entrepreneurship and the every day problems they may face.
    Small businesses are an essential component to the implementation 
of strong economic development plans, especially in rural states like 
South Dakota. Time and again, veterans have continually assisted in 
preserving this critical element of our nation's economic prosperity. 
In my home state of South Dakota, more than 17,000 veteran-owned small 
businesses are operating. These brave men and women add tremendous 
value to our economy when given the opportunity to start and manage 
their own businesses.
    Starting and growing a small business is no easy task and can be a 
difficult challenge. I have heard of the many difficulties that 
disabled veterans face when starting and developing a small business. 
In addition, I have also heard from many members of the National Guard 
and Reserve in South Dakota who find it challenging to maintain their 
small businesses when deployed overseas to Iraq and Afghanistan.
    I look forward to working with Ranking Member Boozman and Members 
of this Subcommittee to focus our efforts on assisting our nation's 
veterans with these challenges.
    I look forward to working with Ranking Member Boozman and Members 
of this Subcommittee to focus our efforts on assisting our Nation's 
veterans with these challenges.
    I would like to welcome our panelists testifying before the 
Subcommittee today.
    Joining us on our first panel is Ms. Dawn Halfaker, President and 
Chief Executive Officer of Halfaker and Associates, LLC; Mr. Mark 
Gross, President and Chief Executive Officer of Oak Grove Technologies; 
and Mr. Anthony Jimenez, President and Chief Executive Officer of 
MicroTech, LLC.
    Joining us on our second panel of witnesses is Mr. Joe Wynn, 
President and Chief Executive Officer of the Veterans Enterprise 
Training and Service Group, Incorporated; Mr. Joseph Sharpe, Deputy 
Director for the National Economics Commission of the American Legion; 
and Mr. Richard Weidman, Director of government Relations for the 
Vietnam Veterans of America.
    Participating on our third panel is Mr. Walter Blackwell, President 
and Chief Executive Officer for the Veterans Corporation; Mr. William 
Elmore, Associate Administrator for the Veterans Business Development 
of the U.S. Small Business Administration; Mr. Scott Denniston, 
Director of Small and Disadvantaged Business Utilization for the U.S. 
Department of Veterans Affairs; and Mr. Louis Celli, Chairman of the 
Advisory Committee on Veterans Business Affairs for the U.S. Small 
Business Administration.
    We thank everyone for their statements this afternoon. We value 
your insight and interest on this topic. This hearing stands adjourned.

                                 
Opening Statement of the Hon. John Boozman, Ranking Republican Member, 
                  Subcommittee on Economic Opportunity
    As one who started and successfully grew a small business, I know 
first hand the difficulties and challenges faced by entrepreneurs. It 
is almost a cliche that entrepreneurship is not for everyone and I 
would hasten to add that it is not for the faint of heart. Building a 
small business is hard work. It often pays less than working for 
someone else. I suspect it usually involves sacrifices by the family 
more often than working for corporate America. Did I mention that it is 
hard work?
    That is why, Madame Chairwoman, I thank you for taking time today 
to review the performance of The Veterans Corporation. Judging by the 
written testimonies we have received, there is a level of 
dissatisfaction and disappointment with TVC's performance, especially 
in its early days.
    Public Law 106-50 established several purposes for TVC in stating, 
``The purpose of the Corporation shall be (1) to expand the provision 
of and improve access to technical assistance regarding 
entrepreneurship for the Nation's veterans; and (2) to assist veterans, 
including service-disabled veterans, with the formation and expansion 
of small business concerns by working with and organization public and 
private resources, including those o the Small Business Administration, 
Department of Veterans Affairs'', . . . and several other private and 
public institutions. Among the specifics, TVC was to develop a 
``network of information and assistance.''
    In a sense, the existence of TVC is an example of frustration with 
the lack of services for veterans and disabled veterans by the Small 
Business Administration. Public Law 106-50 also established the 
Associate Administrator of Veterans Business Development at SBA and 
charged the position with ``formulation, execution, and promotion of 
policies and programs'' that benefit veterans and disabled veteran-
owned small businesses. Unfortunately, with a budget of only $900 
thousand, the Associate Administrator is not in a position of power 
within the agency and I look forward to hearing from him today.
    The original legislation also terminated public funding for TVC 
after Fiscal Year 2003. However, the Corporation has continued to 
receive appropriated support through Fiscal Year 2006. So, the question 
becomes, if TVC is not able to become self-supporting and does not 
garner additional appropriations, what is the loss to the veteran-owned 
small business community? I hope each of today's witnesses will take 
the opportunity to address that specific question.
    Finally, as those entrusted with making public policy we must ask 
ourselves a couple questions. First, are we just reinventing the wheel, 
and second, are existing Federal small business-related organizations, 
if properly funded and lead, the appropriate place to promote veteran-
owned small business?
    Madame Chairwoman, thanks again and I yield back.

                                 
    Prepared Statement of F. Dawn Halfaker, Owner / Chief Executive 
         Officer, Halfaker and Associates, LLC, Washington, DC
    Chairwoman Herseth Sandlin, Ranking Member Boozman and Subcommittee 
Members, I greatly appreciate the opportunity to testify at this 
hearing regarding Veterans Entrepreneurship and Self Employment and am 
honored to represent a newer generation of entrepreneurs and Wounded 
Warriors. I am CPT (Ret) Dawn Halfaker, Owner and CEO of Halfaker and 
Associates, LLC. We are a Woman-Owned, Service-Disabled Veteran Owned, 
HUB Zone Small Business providing national security consulting services 
to the Federal Government. We are focused on mission support for the 
War on Terrorism in the areas of Force Protection / Anti-Terrorism, 
Homeland Security, Emergency Management, Physical Security and Chem / 
Bio Defense Operations.
    I started the company in 2006, a year and a half after I was 
severely wounded in action in Iraq. As a result of my injuries, I lost 
my right arm at the shoulder and even more devastating; I lost my 
career as a military officer. Like most of the wounded warfighters who 
are medically retired off active duty, I had no idea what I wanted to 
do with my career but knew that I wanted to remain close to the fight 
and continue my service to the country in some capacity.
    As a business owner, my company enables me to do just that. I have 
the opportunity to use my military skills and expertise to continue my 
service as well as the ability to work with and provide jobs for other 
veterans. My company competes for work within the Federal Government, 
primarily DoD, and targets contracting opportunities based not only on 
our aforementioned core competencies but our ability to hire wounded 
warriors to perform the work; thus giving them back a career they lost.
    However, in the short year and a half I have been doing business 
with the government, I have learned that my vision is not easily 
realized or necessarily shared. As it pertains to this hearing, I 
believe there are significant improvements to be made in the 
procurement system with regard service-disabled veteran-owned 
businesses and the ability of agencies to achieve the 3 percent goal. I 
will identify the main obstacle I have encountered that I believe to be 
an unfortunate systemic problem.
    I was recently at a meeting with one of my clients in the Pentagon 
and was introduced to another individual who happened to be a 
contracting officer. It was mentioned that my company is a service-
disabled veteran-owned business and the individual replied, ``Yeah, you 
and everyone else.'' I believe this remark illustrates a general 
attitude toward service-disabled veteran-owned businesses that implies 
we do not deserve a separate small business category are should not be 
entitled to special treatment. I would like to contend that we are not 
seeking special treatment but fair treatment. Additionally, we are not 
like everyone else in that we have served our country proudly and made 
significant sacrifices in doing so. With that said, there should be 
incentives to do business with veterans, and proportionately, we should 
have the ability to not only compete for business in our own category 
but have the privilege of a non-competitive sole-source award. This 
procurement tool would enable service-disabled veteran-owned businesses 
to be looked upon favorably and allow businesses like mine to present 
our customers with a fast and effective contract solution.
    Though there has been a concerted effort by veterans, VSOs, 
businessowners and lawmakers to push agencies toward the 3 percent 
goal, we will never achieve it by simply hoping that contracting 
officers do the right thing. It is my belief that service-disabled 
veterans and wounded warriors should have the same consideration and 
opportunities at least equal to anyone else in America.
    I thank you again for this opportunity to appear before you today. 
This concludes my testimony and I welcome your questions.

                                 
    Prepared Statement of Mark Gross, President and Chief Executive 
              Officer, Oak Grove Technologies, Raleigh, NC
    Good afternoon Chairman Herseth-Sandlin, Ranking Member Boozman and 
Members of this Subcommittee. Thank you for the invitation to come 
before you and share my experiences and work within the veteran 
business owner community.
    I am a veteran of the United States Army, and founder of Oak Grove 
Technologies, a Service Disabled Veteran owned small business, founded 
at my kitchen table 5 years ago this past August. Today, I am proud to 
say I employ over 140 employees, over 70 percent of those are veterans, 
and 16 percent are service disabled veterans. Geographically we are 
dispersed in 16 states, as well as supporting both OEF and OIF in both 
Afghanistan and Iraq.
    I am here today to offer testimony on behalf of the Veterans 
Business Community as well as to offer you the benefit of research and 
the opinion of our Veterans Small Business Advisory Committee, which 
was established under PL 106-50.
    The question before this Committee today is, ``What is the State of 
Veterans Entrepreneurship, obstacles faced by aspiring entrepreneurs, 
programs being relied upon by Veterans and the current status of 
Federally funded programs to assist the Veterans''
    I feel that I am uniquely qualified to answer that question as I 
have not only built a very successful business in this economic 
climate, but I have also taken on the task of mentor to a number of 
other Service Disabled Veteran Owned Businesses.
    In my opinion Congress has done an outstanding job in passing 
legislation such as 106-50 and 108-183, both of which established 
Service Disabled Veteran goals and mandates in Federal contracting. 
Some of the problems today revolve around accountability within 
Agencies to meet these goals. I am here to offer my views on what can 
be done to ensure the state of veteran's entrepreneurship within the 
Federal Government.
    Congress and specifically this Committee have been working for 
veteran businessowners for years. This issue is as important to our 
veterans as it is to you. What we've seen thus far from many Federal 
Agencies has been a cavalier attitude toward the 3 percent goal, 
believing that this mandate doesn't apply to them. You have heard a lot 
of numbers and data today so I don't want to overstate what you have 
already heard, but suffice to say despite all of these mandates 
establishing the governmentwide 3 percent contracting goal with SDVOBs, 
no agency has met this standard. In 2005 alone, the Department of 
Defense awarded 0.499 percent of contracts to SDVOBs. DOD accounts for 
roughly 70 percent of all government procurement spending, yet its 
repeated inability to meet service-disabled veteran contracting goals 
makes it all but impossible for the Federal Government as a whole to 
meet the 3 percent goal.
    I would like to offer Six recommendations to meet the 3 percent 
procurement goal;

      Eliminate the ``Rule of Two'' wherein a contracting 
officer has to know of two or more SDVOB's before a sole source 
contract award can be made. This is the only similar requirement for 
any of the statutory programs.
      Create a level playing field between the statutory 
programs by changing the use of ``MAY'' to ``Shall'' when using 
restricted competition for SDVOB's.
      Small business subcontracting plans, including all 
details of the plans, required by large prime contractors, should be 
made public and accessible electronically or on forms 294 / 295 upon 
request. Mandate that contracting officers impose liquidated damages, 
as predicated in FAR Part 19.705-07 for those large companies that fail 
to demonstrate good faith efforts to fulfill the requirements of their 
subcontract plans.
      Close loopholes in the GSA Schedule (FAR Part 8) wherein 
large businesses are allowed to take away business intended for small 
business, or mandate that the Federal Agencies disclose percentage of 
overall contracting dollars procured to small business' through the GSA 
Schedules.
      Reward / Penalize those agencies that meet or don't meet 
the 3 percent SDVO requirement
      Strengthen the SDVOB program by increasing contract 
awards, resources, and support without including SDVOBs into the 8a 
program. The 8a program was created to assist minorities with a 
business development program. This program concentrates on 
socioeconomic factors which SDVOBs simply do not fall into as a whole. 
The SDVOB program is a program earned by each and every Service 
Disabled Business Owner based on the sacrifices they made and tenacity 
they have displayed by becoming entrepreneurs.

    The one Federal program that Congress did create was the Veterans 
Corporation. I am quite familiar with them as at one point were 
collocated in the same building in Alexandria. I initially sought 
assistance from them in 2003, I was left then, and am still left today 
questioning what they do, and more importantly, value they bring to the 
veteran entrepreneur community. Much of the Veterans outreach is 
provided by both the Department of Veterans Affairs Small Business 
Office and the Army Small business office.
    Some of the offices that should be recognized for taking the lead 
in outreach are the VA and the Army Small Business Office. They took 
the lead 3 years ago to create the National Veterans Conference, which 
is a conference held annually in June in Las Vegas, NV. I am proud to 
say that we have sponsored this event every year, and this year's total 
numbers for attendees will be in the neighborhood of 2500 people and 
veteran business.
    We are proud to say we are the first SDVO small business in the DOD 
Mentor Protege Program as created by 108-183, and this year were 
awarded the DOD Nunn Perry Award.
    As an entrepreneur and Veteran, the climate certainly has gotten 
better over the past 7 years, and we still have a long way to go, but 
I'm confident that Congress, many of the Federal Agencies such as 
Department of the Army, and the Department of Veterans, are committed 
to this cause.
    I thank you for your time and your efforts to improve the Federal 
contracting climate for Service Disabled Veteran Businesses.

                                 
Prepared Statement of Anthony R. Jimenez, President and Chief Executive 
                  Officer, MicroTech, LLC, Vienna, VA
    Good morning. It's a privilege to be here today. I want to thank 
the Committee for allowing me to share my thoughts regarding veterans' 
entrepreneurship, Veteran-Owned Small Business and Service-Disabled 
Veteran-Owned Small Business opportunities in the Federal Government, 
and in particular, current programs funded by the Federal Government. I 
believe that helping veterans build successful businesses is not just 
right for veterans, in recognition of the service and sacrifice they 
have given this country, but it also right for the country as a whole. 
Veteran-Owned Small Businesses and Service-Disabled Veteran-Owned Small 
Businesses can, and should, become a powerful job creation engine and 
force for economic development.
    I'd like to begin today by clearing up what I believe to be a 
misconception about the primary obstacles facing Service-Disabled 
Veteran-Owned Small Businesses. My sense is that there is a widely held 
belief that what Service-Disabled Veteran-Owned Small Businesses need 
most to succeed is access to training, capital and other elements that 
support business development goals.
    The Small Business Administration's Advisory Committee on Veterans 
Business Affairs has repeatedly reported on a number of issues facing 
Veteran-Owned Small Businesses and Service-Disabled Veteran-Owned Small 
Businesses: The most significant of these issues included lack of 
sufficient representation for businesses owned by veterans at the SBA, 
lack of access to capital and surety bonding and a need for training 
and education of veteran entrepreneurs. These factors are all 
significant and real, and should be addressed. But in my view, they are 
not the most significant factors.
    In response to these perceived needs, the Veteran's Corporation was 
created to provide training and business development assistance to 
veterans starting businesses. The Veteran's Corporation provides many 
useful tools for veterans looking to start a business, such as help 
with business plans, advice about contracting with the government, 
assistance with obtaining financing and so on. These are all critical 
elements in the success of any new business and I am sure this type of 
assistance has helped many businesses owned by veterans grow and 
develop and has been gratefully received. But, these are not the 
primary factors holding back businesses owned by veterans, especially 
Service-Disabled Veteran-Owned Small Businesses that are already 
established and are interested in working with the Federal Government.
    These companies need advocacy and opportunity more than they need 
startup support or business instruction.
    In fact, there are already over 9,600 Service-Disabled Veteran 
Owned Small Businesses and over 37,000 Veteran-Owned Small Businesses, 
which have negotiated all the hurdles required to become registered in 
the CCR. Based on my personal knowledge and experience competing with 
these companies, I believe that the majority of these small businesses 
stand ready to deliver quality services to the government right now.
    I believe that what Service-Disabled Veteran-Owned Small Businesses 
need most are genuine opportunities, which allow them to demonstrate 
and grow their capabilities. To date, the government's record of 
identifying, setting-aside opportunities and then awarding work to 
Service-Disabled Veteran-Owned Small Businesses is disappointing at 
best. The law mandates that the governmentwide goal for participation 
in government awards by Service-Disabled Veteran-Owned Small Businesses 
is three (3) percent of the total value of all contracts awarded each 
year. To date, the government has fallen far short of that goal. In 
fact, between 2001 and 2005, the Department of Defense, an agency one 
would think would be especially sensitive to veterans issues and 
opportunities for veterans, has never awarded even one half of one 
percent of its contract awards to Service-Disabled Veteran-Owned Small 
Businesses; in some of those years it was significantly less than one 
half of one percent. The performance of other government agencies in 
this area is similar. To date, only a small number of Federal Agencies 
have successfully reached the prime contracting goal of 3 percent for 
Service-Disabled Veteran-Owned Small Businesses.
    Let's contrast the experience of the approximately 9,600 registered 
Service-Disabled Veteran--Owned Small Businesses to that of the 
approximately 9,900 or so businesses currently certified as 8(a) small 
disadvantaged. The legally mandated goal for 8(a) set-asides is also 3 
percent of the total value of government contracts awarded. For 8(a) 
businesses, this target is met consistently through-out the government, 
nearly across the board.
    These circumstances translate into a non-level playing field for 
the Service-Disabled Veteran-Owned Small Businesses. Turning again to 
the SBA figures for DoD for the years 2001 through 2005, we find the 
total targets for both 8(a) and SDVOSB spending was over $31 billion. 
This target was essentially met for the 8(a)'s. The actual amount 
awarded to Service-Disabled Veteran-Owned Small Businesses was just 
under $7B. This represents a deficit of nearly $25 billion in 
opportunities to perform and grow that were never offered to the 
Service-Disabled Veteran-Owned Small Businesses
    Despite this disparity, according to the SBA, veteran entrepreneurs 
are successfully self-employed at a higher rate than any other group of 
American citizens. Imagine what this group could do with the 
opportunities that have been afforded to 8(a) small businesses! If we 
create the opportunities, veterans will respond.
    Why does this disparity of opportunity occur and what can be done 
about it?
    I believe it has to do with two factors: a lack of commitment to 
provide mechanisms for Service-Disabled Veteran-Owned Small Businesses 
to become successful large businesses; and, a lack knowledge of and 
current perceptions about Service-Disabled Veteran-Owned Small 
Businesses among the government contracting community. Contract 
Officers and their customers are simply not aware of the depth and 
breadth of options available to them that can be provided by Service-
Disabled Veteran-Owned Small Businesses. I believe Contracting Officers 
are reluctant to set large, complex efforts aside for Service-Disabled 
Veteran-Owned Small Businesses for fear that the pool of respondents 
will be too small or their offerings too expensive or non-competitive. 
This reluctance is felt by the general business community. Large 
businesses are less likely to want to partner with and mentor Service-
Disabled Veteran-Owned Small Businesses if they perceive resistance on 
the part of the contracting community or if it seems the commitment to 
develop, grow, and mentor Service-Disabled Veteran-Owned Small 
Businesses is not genuine.
    With respect to the Service-Disabled Veteran-Owned Small 
Businesses' ability to compete, I know from experience it can be 
significant. To win our second largest contract, which was a Service-
Disabled Veteran-Owned Small Business set-aside; my company had to 
compete against 50 other Service-Disabled Veteran-Owned Small 
Businesses to win the work. We have successfully completed our base 
year of performance and are now in our first option year. Our customer 
is receiving top-notch service at a very competitive price and, having 
seen our capabilities first hand, understands the value of setting-
aside opportunities for Service-Disabled Veteran-Owned Small 
Businesses. We were also one of 40-plus companies to receive an award 
on the U.S. General Services Administration (GSA) Veterans Technology 
Services (VETS) GWAC (Government-Wide Acquisition Contract). Over 200 
Service-Disabled Veteran-Owned Small Businesses bid on that opportunity 
in a very competitive selection process. Another outstanding example of 
veteran entrepreneurship is the National Aeronautic and Space 
Administration (NASA) SEWP (Solutions for Enterprise-Wide Procurement) 
GWAC (Government-Wide Acquisition Contract). Often referred to as one 
of the best GWACs in the Federal Government, SEWP provides the latest 
in Information Technology (IT) products for all Federal Agencies. Until 
recently, SEWP had only large, small and 8(a) primes providing the 
latest in Information Technology (IT) products. On May 1, 2007 with the 
award of SEWP IV, six (6) Service-Disabled Veteran-Owned Small 
Businesses are now prime contractors on SEWP IV. This means that 
Federal agencies now have the ability to procure the latest in 
Information Technology (IT) products from Service-Disabled Veteran-
Owned Small Businesses at a very competitive price.
    This is where advocacy comes in. These success stories need to be 
told. government Program Managers, Contracting Officers and the 
business community at large should understand the significance and 
importance of supporting small businesses owned by veterans; and, they 
need to hear concrete examples of success stories where businesses 
owned by veterans have delivered excellent results. I think this type 
of educational advocacy should become an important part of the charter 
of Federally funded programs like Veterans Corporation as well as the 
Small Business Administration.
    Another important resource that could help create opportunities for 
Service-Disabled Veteran-Owned Small Business is the value that is 
gained when a large business partners with a Service-Disabled Veteran-
Owned Small Business to create or generate opportunities. For many 
years there has been an 8(a) Mentor Protege program at the Small 
Business Administration (SBA) that enhances the capability of 8(a) 
participants to compete more successfully for Federal Government 
contracts. The program encourages private-sector relationships and 
expands SBA's efforts to identify and respond to the developmental 
needs of 8(a) clients, but today there is nothing similar at for 
Service-Disabled Veteran-Owned Small Businesses at the Small Business 
Administration (SBA).
    I know personally how well it can work when government and large 
businesses partner together to facilitate opportunities for Service-
Disabled Veteran-Owned Small Businesses. Our largest contract is with 
the U.S. Department of Veterans Affairs. As a prime contractor, we 
provide Enterprise Solutions for Microsoft products and associated 
services to the entire U.S. Department of Veteran Affairs. The contract 
is valued at over $56 million per year and is the largest contract of 
its kind ever awarded to a Service-Disabled Veteran-Owned Small 
Businesses. This contract would never have happened had it not been for 
VA's Office of Information and Technology (OIT). In particular, Mr. 
Craig Niedermeier and the people in his office, coupled with the great 
efforts from the Contracting Officer, Mr. Daniel Nascimento, and all of 
the great people in his office went the distance to find ways to offer 
this significant opportunity to service disabled veteran owned firms. 
This contract is an example of VA's commitment to Service-Disabled 
Veteran-Owned Small Businesses and was awarded by VA using a GSA 
schedule 70.
    Mr. Niedermeier and Mr. Nascimento were able to identify several 
Service-Disabled Veteran-Owned Small Businesses that could not only 
provide the Microsoft products, services and solutions VA needed, but 
were capable of successfully delivering on such a large and complex 
opportunity. Once potential Service-Disabled Veteran-Owned Small 
Business bidders were identified each business worked hand-in-hand with 
the Enterprise Solutions Team from Microsoft led by Brian Roach, Geary 
Brummell, and Marc MacDonald. Several Large Account Resellers (LARs) 
were partnered with qualified Service-Disabled Veteran-Owned Small 
Businesses and a number of very competitive bids were submitted. My 
company worked with Software Spectrum, who understood the three (3) 
percent governmentwide goal and the need to mentor and assist Service-
Disabled Veteran-Owned Small Businesses to meet that goal. Our 
relationship with Software Spectrum continues to expand and the skill 
transfer and knowledge transfer that VA has hoped for has in fact taken 
place. We completed our base year of performance last month and are now 
in our first option year. VA is receiving top-notch products and 
service at a very competitive price and is very pleased with both our 
services and our process for delivering products and solutions. This 
contract continues to be a sterling example of what can happen when the 
big business works with small business to create and / or expand 
business opportunities for Service-Disabled Veteran-Owned Small 
Businesses. Without large businesses participation and support and 
without the government's commitment to identify opportunities and set-
them aside for Service-Disabled Veteran-Owned Small Businesses the 
likelihood that Service-Disabled Veteran-Owned Small Businesses will 
become successful large businesses is significantly diminished.
    I hope that my words have provided additional insight into 
veterans' entrepreneurship and in particular, the need to define the 
mission of current programs funded by the Federal Government. With the 
right focus, many of these programs can serve as opportunity advocates 
and can help ensure Veteran-Owned Small Business and Service-Disabled 
Veteran-Owned Small Business have the opportunities they need to be 
successful. I am convinced that the harder the government works to 
identify opportunities for Veteran-Owned Small Business and Service-
Disabled Veteran-Owned Small Business the more success stories there 
will be.

                                 
 Prepred Statement of Joe Wynn, President, Veterans Enterprise Training
      and Services Group, Inc. (VETS Group), and Member, Veterans 
                Entrepreneurship Task Force (VET-Force)
EXECUTIVE SUMMARY
    In the past few years, two major pieces of Federal legislation have 
really set the stage for the emergence of today's veteran 
entrepreneurs. When Congress passed the Veterans Entrepreneurship and 
Small Business Development Act 1999 (Public Law (PL) 106-50), it stated 
in its findings that America had not done nearly enough to `assist 
veterans, particularly service-disabled veterans, in playing a greater 
role in the economy of the United States by forming and expanding small 
business enterprises.'
    PL 106-50 thus called for the creation of new entities and the 
restructuring of existing ones in order to assist veterans in pursuit 
of entrepreneurship. Under this law, SBA's Office of Veterans Business 
Development, the Department of Veterans Affairs' Center for Veterans 
Enterprise, and the National Veterans Business Development Corporation 
were created.
    While PL 106-50 also established a 3 percent procurement goal for 
federal agencies and prime contractors to purchase goods and services 
from service-disabled veteran owned businesses, it did not go far 
enough in giving contracting officials a vehicle by which to achieve 
the goals. Thus, a second piece of major legislation was enacted as 
part of the Veterans Benefits Act of 2003 (Public Law 108-183). section 
308 called for the creation of a Veterans Procurement Program and made 
it mandatory, that Federal agencies and prime contractors procure a 
minimum of 3 percent of all of their goods and services from service-
disabled veteran owned businesses.
    The insertion of that mandatory language into the legislation 
effectively created quite a stir in the Federal procurement community. 
Wherein agencies were still paying little attention to veteran owned 
small businesses, the mandatory language has caused them to stop and 
take notice.
    And to bring further fuel to the fervor, the President of the 
United States issued an Executive Order in October 2004, directing 
agencies to carry out the law now! Agencies have been instructed to 
designate a senior-level official, to be held accountable for 
submitting a strategic plan showing how and when they will achieve the 
3 percent contracting goal for service-disabled veteran owned 
businesses.
    The VETS Group is proud to have been a part of the collective 
effort of those veterans' advocates who pushed for the development and 
implementation of these landmark decisions to expand veterans' 
entrepreneurship.
    But after more than 7 years, two new laws and a Presidential 
Executive Order, Federal agencies and prime contractors are still 
scrambling to find service-disabled and veteran owned businesses that 
are capable and qualified to satisfy their requirements. And 
unfortunately, of the 3 government entities created for veteran 
businessowners, one appears to be misdirected, the other is still 
buried in the shadows, while the third is just beginning to show some 
promise.
INTRO:
    Good Afternoon, Chairwoman Herseth-Sandlin, and other members of 
this Subcommittee.
    Let me first thank you for the opportunity to come before you today 
to share some of my views and the collective views of many Veterans and 
Service Disabled Veteran businessowners; veterans who served with 
honor, and many who received distinguished honors for displaying valor 
and courage during their periods of military service for this country. 
Though my time of service was many years ago, as a veteran of the U.S. 
Air Force with the 66th Strategic Missile Squadron, I still have a very 
vivid memory of the military experience.
    As a lifetime Member of the National Association for Black 
Veterans, I have spent the past 16 years assisting Veterans, and in 
recent years serving as a Commissioner of the Congressionally appointed 
Veterans Disability Benefits Commission, Treasurer for the Veterans 
Entrepreneurship Task Force (VET-Force), as Senior Advisor to the 
Vietnam Veterans of America, and President of the Veterans Enterprise 
Training & Services Group (VETS Group).
    In serving in these roles, I have seen that veterans often risk 
their lives to preserve the American Dream of freedom and prosperity. 
However, too little is being done to assist veterans, particularly 
service-disabled veterans, to achieve the American Dream they fought so 
hard to protect. It is well known that one of the best ways to get 
ahead is by obtaining a good job. But by starting or expanding your own 
small business, you may achieve financial independence.
    Since the Vietnam Era, America has been involved in numerous 
conflicts, missions, and peacekeeping endeavors. And since the tragedy 
that overtook America on September 11, 2001, we have been engaged in 
the Global War on Terrorism, and even now continuing to increase the 
number of troops in Iraq and Afghanistan despite the overwhelming 
opinion to the contrary. A new generation of veterans now exists; they 
are well trained, loyal, battle-tested and under-employed. `As a 
nation, we have been unsuccessful in providing the originally promised 
assistance our veterans have earned, deserved, and required so that 
they would have the opportunity to be as successful in their civilian 
pursuits as they were in their military assignments.' (VET-Force Report 
to the Nation 2005).
    If veterans and service-disabled veteran owned businesses are to 
succeed in the public sector they will have to overcome a number of 
impediments: (1) The pervasive ignorance of the law and resistance to 
change across all agencies; (2) No enforcement of prime subcontracting 
plans; (3) Inaccurate agency data, miscodings, and double counting; (4) 
The perception that the procurement pie for small businesses is 
shrinking; and (5) Contract Bundling.
    Veteran service providers must assist in identifying and 
registering the capabilities of veteran businessowners where required, 
become knowledgeable of all prime contractors and their subcontractor 
needs, develop relationships with agency procurement officers, and 
develop the ability to match veteran businesses with procurement 
opportunities.
    Though the legislation referred to above has created an urgent need 
for service-disabled and veteran owned businesses, it did not create a 
business development program for veterans. However, it did create the 
Veterans Corp, the Office of Veterans Business Development and the 
Center for Veterans Enterprise to fill that need.
THE VETERANS CORPORATION (TVC)
    The entity that was supposed to be the National Advocate for 
Veteran businessowners, has just not measured up to the task and 
continues to be struggling for the right direction. Much has been said 
about the seemingly poor performance of the National Veterans Business 
Development Program, aka the Veterans Corporation (TVC) to implement a 
program to assist veterans across the Nation with starting or expanding 
their own small businesses. And seemingly, there has been even less 
evidence of TVC providing support for those Service-Disabled Veteran 
Owned Businesses participating in the Federal marketplace.
    TVC's performance continues to be viewed by many as less than 
adequate in light of the more than $14 million appropriated to TVC by 
Congress over the past few years. This has continued to be the big 
point of controversy within the veteran's community--just how much 
should or could have been done with that much money in 6 years. Since 
TVC started, it has been under the leadership of at least four 
Executive Directors, had three strategic plan changes, and at least two 
program changes. Staff levels have since been reduced and the service 
offerings are still mostly contracted out or performed by other 
organizations. Most of the Board members have been very distant and 
detached from the veteran's community.
    Many veterans still do not know that the Veterans Corporation even 
exits, partly because they have no physical facility in the community 
that bears the name of the Veterans Corporation nor any public space 
where veterans are welcomed to come and obtain information about their 
services or their business needs. Their new offices are now located on 
`Lobby Row' (downtown K Street N.W., Washington D.C. where many of the 
highest paid lobbyists are reported to have offices).
    By working in the veterans community for more than 16 years as a 
Member of several veteran service organizations, including the Veterans 
Entrepreneurship Task Force (VET-Force), and President of the Veterans 
Enterprise Training and Services Group, here are some of the concerns I 
continue to receive from veterans, veteran businessowners, and others 
familiar with TVC and Public Law 106-50.
    The number of veterans visiting a website (hits), whether for 
information or education, is not a true measurement of the number of 
new veteran entrepreneurs, nor does it indicate the number of veteran 
businesses that expanded. Folks want to know did TVC do something to 
expand the pool of capable and qualified veteran and service disabled 
veteran owned businesses or were they instrumental in helping a veteran 
obtain a contract. And if so, who are these veteran businessowners, how 
many are there, what types of businesses increased or were created, and 
where are they located?
    There are a lot of websites on the Internet that provide 
information about starting or expanding a small business. Is adding the 
TVC website to the list the big difference for veterans? The SBA has 
been recognized for its excellent website for providing small business 
information and training for years. And since PL 106-50 directed the 
SBA and its SBDCs to provide more services to veterans, why should TVC 
duplicate what is already available and funded?
    There are already more than 1400 small business development centers 
around the country, each having access via a website and most 
affiliated with a college or university. The small business development 
centers also provide one-on-one counseling, classroom training, 
workshops and seminars. TVC provides limited funding for 4 Veteran 
Business Resource Centers via other service providers. At the rate of 4 
limited centers in 6 years, how long will it take them to match the 
1400 centers already in operation by the SBDCs? In addition, the number 
of veterans contacting these centers is counted as success instead of 
the number of veteran businesses started and contracts awarded.
    Since Congress established a 3 percent goal for Federal Contracting 
with Veteran and Service Disabled Veteran Owned Businesses, including a 
3 percent goal for Prime Contractors. (Primes are those large 
businesses that have contracts over $500,000 with the Federal 
Government), it's not hard to see why many veteran businessowners and 
potential veteran businessowners were looking to learn how to do 
business with the Federal Government. After all, there are only a 
couple of states that support a percentage goal directed toward 
veterans.
    So TVC should consider developing more programs to offer assistance 
in Federal contracting. Many members of the veteran's community viewed 
PL 106-50 as an inside track to federal contracting. However, from the 
perspective of the Federal contracting community, the OSDBUs, the 
Contracting Officers, and the Procurement Officials, it was just viewed 
as another program with a ``nice idea.'' When veteran businessowners 
began to pursue Federal contracts they were told all to often, ``PL 
106-50 is just a goal. There are no teeth in it. We still don't have 
the mandatory authority to set contracts aside just for veterans.'' And 
with no apparent help from TVC the veterans community turned to the 
Veterans Entrepreneurship Task Force (VET-Force) and other veteran 
service organizations.
    So VET-Force, the nonprofit, informal, organization comprised of 
representatives from veteran service organizations, veteran 
businessowners, and other members of the community, the group that had 
initiated the movement to push for and oversee the implementation of PL 
106-50, began to call for additional legislation to correct the 
apparent shortcomings regarding Federal contracting for veteran 
businessowners.
    As a result of their efforts, of which TVC representatives were 
always invited to participate in the planning meetings of the Task 
Force, corrective language was drafted and inserted into the Veterans 
Benefits Act of 2003 under section 308 (PL 108-183). That language 
called for the creation of a Veterans Procurement Program and made it 
``mandatory'' that the Federal Government and its Primes procure a 
minimum of 3 percent of all of its goods and services from Service 
Disabled Veteran Owned Businesses. Yet even after passage of this new 
legislation, which was obviously an extension of what was called for 
under PL 106-50, TVC continued to stay on the track of small business 
start ups with no special assistance for veteran or service disabled 
veteran businessowners seeking to enter the Federal marketplace.
    In the winter of 2004, President Bush issued an Executive Order, 
13-360, through the Office of Federal Procurement Policy and the SBA, 
directing Federal agencies to develop and implement a strategic plan to 
increase contracting opportunities for service disabled veteran owned 
businesses so that they could begin to receive the intended benefits of 
PL 108-183 and PL 106-50. After several months of delay, many agencies 
began to develop and make public their strategic plans. But many of 
them would point out that: ``even though PL 108-183 created a mandatory 
requirement to contract with service disabled veteran owned businesses, 
it did not provide any funding to assist with the development of 
veteran businesses.''
    So agencies and veterans turned to the Veterans Corporation for 
assistance with developing veteran businesses for Federal contracting, 
only to be disappointed. TVC now promotes programs for Surety Bonding 
and Access to Capital, but they have indicated that only a few veterans 
are even in the process of applying for these programs. And it appears 
that each veteran must pay a $99 referral fee to TVC to find out even 
if these programs will work for them.
    As part of the directives of the Executive Order, agencies were 
told to increase their outreach efforts to veteran businessowners to 
make them more aware of the procurement opportunities that exist within 
the Federal marketplace. So many agencies have been organizing 
procurement conferences, expos, trade shows, and so forth. targeted to 
SDVOBs. Yet the Veterans Corporation with its $14+ million in 
appropriations, has yet to organize a conference on behalf of the 
thousands of veteran businessowners across the nation.
    Even after many veterans were complaining about the ineffectiveness 
of the government sponsored events, TVC still never stepped up to the 
plate to organize a veterans procurement event from the perspective of 
the veteran businessowners. Yet they did cosponsor a DOD procurement 
event for veterans last year (by default), and planning to co-sponsor a 
DOE small business event this year which is not targeted to veterans. 
However, the VA and the Army have responded with 2 national veterans 
procurement conferences based on the feedback of the veterans business 
community and a 3rd one is already scheduled. Other agencies have since 
done likewise.
    If you talk to anybody from the OSDBUs to the contracting officers 
to the small business specialists to the small business ownerys 
themselves, they all will tell you that building relationships with 
government customers is key and often essential to obtaining government 
contracts. But veteran small businessowners are not unlike other small 
businessowners when it comes to time and resources and the shortage 
thereof. So it becomes a challenge to track down and spend time 
developing relationships with potential government customers while 
attending to the present workload
    Since there are very few veteran sponsored conferences, the 
government-sponsored conferences become a way to meet several potential 
customers all in one place. But often what is missing is a voice of 
authority preceding or backing up the veteran businessowner when they 
interact with a Federal agency representative who can help clarify and 
reinforce the requirements of the legislation and the importance of 
contracting with SDVOBs. Since TVC has not been that voice, that 
support, that advocate, veteran businessowners have turned to the VET-
Force and now also NaVOBA (the National Veteran-Owned Business 
Association).
    And finally, on cash flow and access to capital, many believed in 
the beginning that PL 106-50 would provide some actual cash to veteran 
owned businesses. TVC started to promote access to capital also. But 
when it became clear that direct cash loans were not included, veterans 
were referred to the SBA loan guarantee programs instead. Now TVC will 
refer you to their Access to Capital Program, but it requires a $99 
referral fee to TVC before services will be provided.
THE OFFICE OF VETERANS BUSINESS DEVELOPMENT (OVBD)
    The SBA, the agency responsible for the development of U.S. small 
businesses, has received very little in Federal dollars to assist 
veterans in pursuit of entrepreneurship. Other agencies have only 
received dollars for promotional activities, such as conferences, 
exhibits, and materials but not for veterans' business development, 
education, and training. Thus veterans wanting to enter the Federal 
marketplace must work their way through a maze of disassociated and 
often disinterested and sometimes untrustworthy business resource 
providers in order to get what they need to compete. Not to mention 
dealing with the inconsistency of fees for services from one resource 
provider to another.
    An even more compelling reason to develop programs to assist 
veterans interested in entrepreneurship is the War on Terrorism being 
waged in Afghanistan and Iraq. This war has dislocated thousands of men 
and women in the Armed Forces, National Guard, and Reserves. Many of 
these veterans have sustained debilitating injuries, which will limit 
their ability to return to or obtain meaningful occupations. These are 
our new service-disabled veterans. With the veterans procurement 
legislation, a viable alternative for many is entrepreneurship or some 
form of self-employment. But without some business development 
assistance, this alternative will be more than difficult to achieve.
    The SBA Office of Veterans Business Development (OVBD) which was 
created under the legislation (PL 106-50) also created a position of an 
Associate Administrator. OVBD has increased its headquarters staff size 
but has been given limited resources to operate four veteran business 
outreach centers and to provide assistance to veteran businessowners 
with Federal contracting, though efforts have been made to educate the 
veterans of the Guard and Reserves.
    The OVBD is located in the headquarters building in Washington, 
D.C. But it is not situated in such a way that it is easily accessible 
to the public. As a matter of fact, very few people even know that the 
office exits. Usually when SBA veteran's representatives participate in 
a small business outreach event, they are from the SBA District Office 
in that City or State.
    Each District Office throughout the country has a person who is 
designated as the veteran's rep. But the level of assistance they 
provide varies by location and their other assigned duties. However, 
under the leadership of the newly appointed Administrator, Steven 
Preston and his Chief of Staff, Joel Szabat, SBA is starting to direct 
some resources toward assisting veteran businessowners as evidenced by 
the increase in staff for the Office of Veterans Business Development 
and their open working relationship with the Veterans Entrepreneurship 
Task Force, SDVOBs, and members of the Guard and Reserves.
    Recently, the SBA Associate Administrator, reported increases in 
the number of loans to veteran businessowners, including disaster 
relief loans, as a measure of SBA's success for veterans. Yet it is 
noted in a March 2007 report from Senator Kerry of the Senate Small 
Business Committee, that `as the loans have gone up, they are not 
proportional to the loans made to small businesses as a whole.'
    There's very little information provided by SBA regarding the 
success of the business relative to the amount of the loan received. 
However, here recently, I have spoken to several veterans of the 
National Guard, who have had difficulties after receiving loans. But 
they seem to be having even more difficulty getting someone to address 
their concerns.
    One of the benefits of having the OVBD as part of the SBA is that 
it can draw from the variety of offices already established to assist 
small businessowners. And since Veteran businessowners represent the 
diversity of Americans: male, female, young, old, Black, White, 
Hispanic, Disadvantaged or Other; many may qualify for other small 
business programs offered by the SBA.
    The SBA has its cadre of Small Business Offices and small business 
resource partners located throughout the U.S., i.e., the Small Business 
Development Centers, SCORE, Business Information Centers, and Women 
Information Centers. However, none of these resource providers are 
veteran-specific. While they are accessible to veterans, they are 
primarily designed to address the small business needs of the entire 
community.
    I believe this often leads to the lack of identity of the OVBD. 
More often than not, when referring to the OVBD, people refer to the 
SBA. And when you access the SBA website for services, those for 
veterans are not obvious. So if services via the SBA for small 
businessowners are less than adequate, then the same will probably be 
said of those services for veterans.
THE CENTER FOR VETERANS ENTERPRISE (CVE)
    Under Public Law 106-50, the Center for Veterans Enterprise (CVE) 
was created under the Dept. of Veterans Affairs Office of Small and 
Disadvantaged Business Utilization Office. CVE is located in the 
District of Columbia and serves as an information resource for veterans 
primarily interested in the Federal marketplace. Since its inception 
over 5 years ago, CVE is the entity that is showing the most promise 
and has managed to create a unique role among the 3 primary government-
assisted veterans entrepreneurial programs.
    The VA will soon be the first Federal agency to implement 
legislation that will prioritize the use of Service Disabled Veteran 
businessowners and Veteran businessowners in Federal contracting. Under 
PL 109-461, Sec 502-503 (recently passed legislation to increase 
contracting opportunities for VOBs & SDVOBs within the Dept. of 
Veterans Affairs) the VA will: (1) Establish Contracting Goals & Review 
Mechanisms; (2) Noncompetitive, Sole Source, & Restricted Competition; 
(3) Required Registration in the VIP Database--VetBiz.gov; (4) 
Verification of Veteran Status & Ownership, Penalties for 
Misrepresentation; (5) Survivorship--10 yrs if 100 percent disabled; 
(6) Contracting Preferences & Priority; (7) Annual Reports & 3-Year 
Study.
    CVE is the office that has developed and manages the VIP database 
that contains thousands of records of data on veteran and service-
disabled veteran owned businesses and accessible to the public, 
agencies, and primes. VIP stands for Vendor Information Pages though 
some refer to it as the Veterans Information Pages; because, to be 
registered in the VIP database, the company must be owned and operated 
by a veteran or service-disabled veteran. And soon the verification of 
veteran and disability status will be mandatory.
    CVE has followed the directives of the Executive Order 13-360 since 
it was first initiated. They used their site to post all of the 
Strategic Plans required by each agency. Though there has been some 
confusion by SBA as to the annual revisions and reporting requirements 
under the Execution Order, CVE continues to post the plans.
    CVE has several program analysts that assist veteran businessowners 
with understanding the Federal procurement process and the VA's Federal 
procurement requirements and supply schedules. Though these analysts 
are not clearly identified on their website, they have recently started 
to provide more assistance to Agencies and Prime contractors seeking to 
identify capable and qualified service disabled veteran owned 
businesses.
    CVE participates in a number of small business conferences, events, 
and training sessions to reach out to veteran businessowners all across 
the country. This will be there 3rd year of Co-sponsoring the National 
Veterans Small Business Conference and Expo. And each year for the past 
5 years, CVE has organized an event to pay special recognition to 
veteran businessowners, agencies, and large prime contractors that have 
demonstrated their support for the veterans procurement program.
    As program manager of SDVBs first Federal contract for facilities 
management and operations at the Veterans Administration Headquarters 
Building in Washington, D.C., I shared the honor of receiving a 
Distinguished Service Award in 2002 from the Center for Veterans 
Enterprise for providing excellent service while creating over 40 jobs 
for veterans and other people with disabilities.
    The Service Disabled Veterans Business Association (SDVB), is a 
non-profit, community rehabilitation program that provides employment 
and entrepreneurial opportunities for service disabled veterans by 
identifying procurement contracts for services in accordance with the 
Javits-Wagner O'Day Act (JWOD Program) and creates partnering 
arrangements with corporate and established business entities referred 
to as ``Patriot Partners.''
    CVE works in association with the VA's Office of Small and 
Disadvantaged Business Utilization (OSDBU) under the leadership of 
Scott Denniston, who has been very supportive of the VET-Force, the 
VETS Group, and other organizations actively promoting the use of 
veteran businessowners. By utilizing the services of the VA OSDBU and 
outside resource partners, CVE greatly expands its outreach capacity.
In Summary:
    The Federal marketplace is a trillion dollar industry. And 3 
percent of that annual budget is easily in the billions. Not to mention 
the prime vendors procurement budget and other non-federal 
procurements. Both Federal agencies and commercial vendors are faced 
with the time consuming task of identifying and screening capable and 
qualified veteran owned small businesses to meet their requirements. 
And veteran businessowners need as much help as they can to be ready.
    Following the recently publicized events related to the treatment 
of veterans at Walter Reed Army Medical Center, it should be abundantly 
clear to all that our service members, their families, and citizens 
throughout the United States are taking note of how this new generation 
of service members are being treated. The actual and perceived 
treatment of our Nation's Veterans, especially those returning from the 
War on Terrorism, will be a symbol of how valued their sacrifice was 
and a clear signal to any future enlistees on the ultimate value of 
their service to the Nation.
    The veteran businessowners not only need access to capital, 
resources, technical assistance, and training, they need an entity that 
can advocate on their behalf before our law-makers, our government 
Agencies, and the White House. They need an entity that will help to 
ensure that the laws are implemented once they have been passed; and an 
entity that can ensure that services are provided as advertised.
    As stated in the Report to the Nation, developed by members of the 
VET-Force, `the presence of successful and prominent veterans within 
and across our Nation's business communities is a testimony of a 
grateful nation--a nation that honors and respects the sacrifices made 
by Veterans in behalf of our country, both today and tomorrow. Veterans 
are uniquely qualified to work as contractors to the Federal Government 
because of their service experience and their dedication to providing 
quality products, on time and at a reasonable cost. Effective 
legislation such as PL 106-50, PL 108-183, and Executive Order 13360, 
has provided a good beginning in allowing America to honor the service 
of Veterans who continue to serve by helping to build a stronger 
economy. More needs to be done.'
RECOMMENDATIONS:
     1.  TVC, OVBD, and CVE should include veteran service 
organizations, community based organizations, and veteran 
businessowners in the decisionmaking process regarding outreach 
programs and services.
     2.  TVC should establish at least one state-of-the-art training 
facility for veteran businessowners seeking to start or expand their 
own small commercial or Federal contracting business. TVC should not be 
required to build new resource centers across the country until they 
have at least matching funds to operate them. And both OVBD and CVE 
should make accommodations for veterans easily access program offices.
     3.  Congress should require a Strategic Operating Plan from any 
program office for veterans that is funded by tax-payer dollars, PRIOR 
to receipt of the funding. And the agency head and senior level 
designated official responsible for the operation of the program should 
be held accountable.
     4.  Since TVC is a government funded program but moving toward a 
full non-profit organization, the Board of Directors should hold at 
least 4 public meetings per year and not always in Washington, D.C. The 
veteran's community should know the Board. And Board members should 
participate in veteran business outreach events (whenever possible).
     5.  Members of the TVC, SBA, and CVE Executive Staffs should 
participate in federal acquisition council meetings with the heads of 
all Federal agencies and report their findings back to the veteran's 
business community regularly.
     6.  As TVC is the quasi-governmental entity, they should serve as 
an advocate for veteran businessowners and become more aggressive in 
alleviating barriers to Federal contracting opportunities for veteran 
businessowners.
     7.  Neither TVC, SBA-OVBD, or CVE should continue to receive 
millions of taxpayer dollars to implement programs that do not support 
the primary goals and objectives of the majority of the veteran's 
business community. There has to be more accountability and penalties 
for waste, abuse, and of course fraud.
     8.  Clarify the ``Rule of Two.'' The Rule of Two as introduced 
under PL 108-183 is contained in Part 19 FAR, and the Code of Federal 
Regulations (CFR) 13 CFR, Part 125. The Rule of Two states if a 
contracting officer knows of two or more SDVOBs that can do the work, 
then the requirement must be competed. But if only one SDVOB is 
available to do the work, then a sole source award can be made.
     9.  Create a level playing field for veteran businessowners as 
with the 8a and HUB Zone programs. The use of ``May'' for SDVOBs should 
be changed to ``Shall'' as with 8a and HUB Zone owners. The order of 
priority for contracting preferences among the three groups should be 
equal.
    10.  Strengthen the SDVOB program by increasing contract awards, 
resources, and support without including SDVOBs into an inefficient 8a 
program. The 8a program was created to help alleviate the more than 100 
years of wrongful discrimination and exclusion of minorities from the 
full benefits of American society, including the Federal marketplace. 
The SDVOB program is intended to be inclusive of any American who 
served in this country's armed forces, guard or reserves. The SDVOB 
program should retain its own identify for ``those who have borne the 
battle.''
    11.  Congress should consider appropriating funds in the form of 
grants to be directly awarded to community-based organizations that 
provide supportive services and programs for veterans seeking to become 
entrepreneurs. TVC could be designated as the administrator of those 
funds.
    12.  Congress should also consider adapting a program for service-
disabled veterans that would be modeled after the JWOD program. Under 
the JWOD program, federal agencies are required to make every effort to 
procure their goods and services from small businesses that have agreed 
to hire at least 60 percent of their labor force from people with 
severe disabilities. This could prove to be a win-win for the 
government, service disabled veteran owned businesses, and seriously 
disabled veterans.
    13.  TVC, OVBD, and CVE should establish partnership agreements to 
share small business resources and information to improve the outreach 
efforts to target veteran businessowners and to increase the pool of 
capable and qualified veteran businessowners around the country.

    Thank you for your attention to these matters. This concludes my 
statement.

                                 
Prepared Statement of Joseph C. Sharpe, Jr., Deputy Director, Economic 
                      Commission, American Legion
    The American Legion appreciates this opportunity to comment on the 
current state of veteran entrepreneurship and self employment, to 
include obstacles faced by aspiring entrepreneurs, programs being 
relied upon by entrepreneurs and to review current programs funded by 
the Federal Government that assist veterans.
    The American Legion views small business as the backbone of the 
American economy. It is the mobilizing force behind America's past 
economic growth and will continue to be the major factor as we move 
well into the 21st Century. Presently, more than nine out of every ten 
businesses are small firms, which produce approximately half of the 
Gross National Product. Currently, over one-half of the nation's work 
force is employed by small business, with the average company employing 
approximately 11 persons.
    America has also benefited immeasurably from the service of its 24 
million living veterans, who made great sacrifices in the defense of 
freedom, in the preservation of democracy, and in the protection of the 
free enterprise system. According to the Small Business 
Administration's (SBA) Office of Veterans Business Development in 
Washington, DC, the number of small-business-owning veterans has 
increased to more than four million nationwide with more than 235,000 
being service-connected disabled veteran owned. They range from home-
based sole proprietorships to high--tech global corporations.
    In addition, due to the experience veterans gain in the military, 
the success rate of veteran owned businesses is higher than other non-
veteran owned businesses. The current War on Terror has had a 
devastating impact on the military and has contributed to exacerbating 
this country's veteran unemployment problem, especially within the 
National Guard and Reserve components of our military. The present 
unemployment rate for recently discharged veterans is double the 
national average. Unfortunately, many of the thousands of service 
members who are currently leaving the service are from the combat arms 
and non-skilled professions that are not readily transferable to the 
civilian labor market.
    One way of combating unemployment is through the creation of new 
jobs. Small business creates by some estimates 60 percent to 80 percent 
of net new jobs, therefore providing a central element for strong 
economic growth. government should assist in the creation of new jobs 
by encouraging qualified entrepreneurs to start and expand their small 
businesses. No group is better qualified or deserving of this type of 
assistance than the veterans of this nation.
    Increasingly, the growth and stability of this nation's economy is 
dependent on the long-term success of the small business networks 
across the country. However, during a time of war there is much to be 
accomplished. Ironically, for too many years, the very men and women 
who served in uniform and who stood ready to fight, and if necessary to 
die, in order to protect and preserve our free enterprise system, were 
completely ignored by the Federal agency responsible for meeting their 
small business needs. Therefore, The American Legion welcomes the 
recently passed amendment 216 that seeks to increase the SBA's budget 
by $78 million, to $671 million and Veterans Outreach Program by $1.5 
million. Funding levels have a crucial impact on the scope and quality 
of programs and services delivered by SBA to veteran-entrepreneurs, 
effecting possible success or failure of some veteran owned businesses.
Reaffirm Support of the Small Business Administration's Office of 
        Veteran's Business
    The American Legion supports increased funding of the Small 
Business Administration's Office of Veterans' Business Development in 
its initiatives to provide enhanced outreach and specific community 
based assistance to veterans and self employed members of the Reserves 
and National Guard. The American Legion also supports legislation that 
would permit the Office of Veterans' Business Development to enter into 
contracts, grants, and cooperative agreements to further its outreach 
goals and develop a nationwide community-based service delivery system 
specifically for veterans and members of reserve components of the 
United States military. For FY 2008 estimated funding for this office 
would be estimated to be $5 million, in FY 2009 $10 million, and FY 
2010 15 million to enable it to implement a nationwide community-based 
assistance program to veterans and self employed members of the 
Reserves and National Guard.
The National Veterans Business Development Corporation:
    Congress enacted the Veterans Entrepreneurship and Small Business 
Development Act of 1999 (P.L. 106-50) to assist veteran and service-
connected disabled veteran owned businesses by creating the National 
Veterans Business Development Corporation and with the assistance of 
the SBA. The Veterans Corporation (TVC) created a Veterans 
Entrepreneurial Training (VET) Program to promote and foster successful 
veteran entrepreneurship within the veteran business community, but 
this program no longer operates. Currently, the organization's main 
efforts have been to provide distance-learning education in how to 
start and expand existing businesses, to include training in finance, 
accounting and contracting. The Veterans Corporation indicates it has 
established a foundation for a 10-year plan to reach all four-five 
million veterans interested in entrepreneurship. Its latest vision is 
to assist Guard / Reserve and transitioning members of the Armed Forces 
and their families with the establishment of their own businesses. The 
American Legion is working with the Veterans Corporation to ensure the 
best method or methods of assisting these deserving veterans. TVC has 
in the past stressed creating online education programs hosted by other 
third party organizations to assist veterans with obtaining basic 
literacy skills. This current plan would create an online platform to 
match veterans with entrepreneurial education and career opportunities 
and to provide grants to Small Business Development Centers around the 
country and other business development organizations to specifically 
assist veterans.
On Line Development Programs
    The current staff of the Veterans Corporation has focused on 
employing the use of the worldwide web to reach veterans. According to 
TVC representatives a combination of services, online and distance 
learning will serve the largest number of veterans needing 
entrepreneurial services in all fifty states. TVC expects to launch a 
Virtual Veterans Business Center in cooperation with SBA's Service 
Corps of Retired Executives (SCORE) to provide a nation-wide, market 
specific, person-to-person counseling service to veterans not only in 
America, but deployed overseas as well.
    TVC has also launched a Virtual Business Incubator with the 
specific aim of helping National Guard and Reservists who own 
businesses and are currently deployed in Afghanistan, Iraq or any place 
else in the world. ``Deploy Proof Your Business '' is another online 
program specifically designed to assist members of the National Guard 
and Reserve components in protecting their businesses prior to 
deployment.
    The American Legion fully supports these progressive programs aimed 
at the technologically astute veteran.
Small Business Development Centers
    The Small Business Development Centers (SBDC) are already funded 
almost $90 million a year by SBA and our understanding is their written 
agreements with SBA provide direction for their specific creation or 
operation of veteran, service-connected disabled veteran and reserve 
component Member entrepreneurial assistance. Why does the SBDC need an 
additional, third party organization such as the Veterans Corporation 
to provide them additional funds from Congress to perform what they are 
already funded to deliver by SBA? If SBDCs require additional resources 
to enhance, improve, develop or deliver specialized assistance to 
veterans and reservists that funding process should be through their 
normal funding channel of the SBA. Additionally, should Congress choose 
to provide additional resources to SBA to enhance SBDC programs 
specifically for veterans and reserve component service members, the 
Office of Veterans Business Development should be part of the program 
design, selection and oversight process to ensure that the expertise of 
veterans, including the policy and program delivery and reporting 
requirements, are designed and developed by the SBA office whose 
responsibility by law is veterans' business development.
Public Law 106-50
    The American Legion acknowledges that the requirements of Public 
Law 106-50 as originally envisioned are not being met by TVC at the 
present time due to the scope of the mission and funding requirements. 
The American Legion agrees with the view that forcing TVC to duplicate 
or replicate preexisting services such as those provided by the Small 
Business Development Centers (SBDC), Procurement Technical Assistance 
Centers and Department of Labor One Stop Centers does not prudently use 
taxpayer funds or the limited dollars given to TVC.
    Therefore, The American Legion recommends that the resource-
training centers (St. Louis, MO; Flint, MI; and Boston, MA) that TVC is 
currently providing funding for be given to the jurisdiction of the SBA 
veteran's development office.
    The SBA's veterans development office is presently funding five 
such centers around the country and should be given the additional 
three. In addition, the SBA office should take on theresponsibility of 
partnering with military and Veterans Affairs hospitals, Transition 
Assistance Programs (TAP), State Departments of Veterans Affairs, 
Procurement Technical Assistance Centers, Military Family Support 
Centers, and Veterans Service Organizations to provide employment and 
entrepreneurship programs along with the addition of funding and 
necessary senior staff to oversee the implementation and development of 
such a program. TVC would operate more effectively acting as a liaison 
with existing associations of small businessowners and, by working with 
SBA programs, ensure the involvement of private and successful military 
alumni from the business community to help support SBA's successful 
(re) integration ofveteran and reserve component entrepreneurs into the 
private and public American marketplace.
SBA Special Veterans Small Business Loan Program
    Many veterans who want to become entrepreneurs either do not 
qualify for the direct or guaranteed loan through the SBA or do not 
apply for such a loan because of the red tape involved in obtaining an 
SBA loan. In 1973, VA's small business lending authority was rescinded 
by Congress for lack of use and Congress passed legislation in the 
early eighties that amended Chapter 37 of Title 38, United States Code, 
to establish a pilot Veterans' Small Business Loan Program that was to 
be administered by the Department of Veterans Affairs (VA). The VA's 
Small Business Loan Program was never funded; however, the SBA did 
implement a direct Vietnam-Era Veteran and special disability loan 
program that was delivered to veterans and disabled veterans until 
1995. P.L. 106-50 required GAO to examine if VA should create a small 
business loan program for veterans, and GAO determined in 2000 that VA 
should not create a business loan for veterans but that perhaps SBA 
should with VA involvement. With the current number of active duty 
service members leaving military service SBA research finds that 22.1 
percent of veterans are purchasing, starting, or considering a startup 
or acquisitions of a business. Access to capital is the number one 
issue of concern for these veterans followed closely by the lack of 
knowledge of or access to veteran's business development programs. 
These findings lead us to the recommendation that SBA:
    Create a Special Small Business Administration (SSBA) 7a Vet 
Express Loan Program targeted to and aggressively marketed to veteran 
and reserve component service members:
    This loan would:

      Provide for maximum loan amount of $750,000
      Identify means to reduce fees
      Provide full 75 percent-85 percent guaranty
      SBA provide counseling, training mentoring / Technical 
Assistance as required or requested
      Priority Loan processing by Lenders and SBA
      Add Sec 7, 15 USC 636 (if called provisions) for reserve 
component members

    In addition, a new program would also assist Reserve and National 
Guard entrepreneurs who are mobilized for active duty service by 
cushioning the impact of activation on their business. A report (to the 
Committees on Armed Services of the Senate and the House of 
Representatives) on the effects of activation in support of Operations 
Desert Shield and Desert Storm on members of the National Guard and 
Reserves who were self employed or owners of smallbusinesses indicated 
that a sizable percentage of activated reservists may be expected to 
experience economic losses and that an ever greater percentage actually 
experienced losses during the Persian Gulf Conflict. Another report's 
findings, the May 2004 status of forces survey of reserve component 
members tabulations of responses (Defense manpower data center), 
included:

      The primary consequence of a reservist being activated 
was lost business.
      Replacement was only partially effective. When the 
reservist was replaced, the company incurred additional costs 
associated with its search, hiring, and training. But even companies 
that were able to replace the reservist experienced a loss of business 
from the activation.
      For many small businesses, loss of a key employee to 
active duty is virtually a catastrophic event. This was true whether 
the employee was a skilled professional or an experienced blue-collar 
worker.

    Presently, SBA offers a program billed as Military Reservist 
Economic Impact Disaster Loans. For companies that meet certain 
eligibility criteria, these loans help offset the economic consequences 
of the loss of their reservist personnel. To qualify, a company must be 
able to show that the activated reservist is critical to the success of 
the company. The extent of losses must be documented with financial 
data and the company must provide certain supporting information.

                Reservists Economic Injury Disaster Loan

    Enhance the SBA Military Reservists Economic Injury Disaster Loan 
(MREIDL) Program specifically for reserve component members who are 
entrepreneurs / small businessowners:

      Offer MREIDL as a pre-mobilization and post-mobilization 
loan (now available only after mobilization orders are received).
      SBA provides mandatory Technical Assistance through 
existing SBA providers as part of loan application package prior to, 
during and following return from mobilization.
      Ensure availability of additional credit or capital to 
small businesses owned by activated and de-activated reserve component 
members, based on pre-mobilization profitability of business with 
approved plans.
      SBA provide prioritized loan application, approval and 
disbursement processes.
      Explore equity / guarantee / fee / insurance subsidy with 
DOD and other partners.
      Deferral of repayment of direct loans until 1 year after 
release from active duty.

    SBA would administer the new loan due to its expertise, experienced 
staff, and business loan guarantee program administrative 
infrastructure. VA and DOD could be part of this program. They have the 
ability to provide facilities for entrepreneurial training; BRAC bases 
could be used for small business incubators; VA and DOD could provide 
lists of small business concerns owned by veterans and reservists; and 
DOD could provide prioritized contracting opportunities to service-
disabled veteran, veteran and reservist owned small businesses focused 
on producing the goods and services that are procured by the U.S. 
Government necessary to fight and win the Long War.
    The American Legion believes that programs listed above are 
necessary in order to develop and retain the critical skills contained 
in reserve component service members, especially those service members 
who have been or will be activated for the Long War, and thereby help 
to retain and recruit reserve components service members with the 
professional skills which are critical to the reserve missions as part 
of the Total Force.
    The American Legion seeks and supports legislation that would 
reauthorize and fund a SBA Small Business Loan Program specifically for 
service-disabled and reservist small businessowners and prospective 
entrepreneurs.
In Conclusion
    The American Legion's National Economics Commission mission is to 
take actions that affect the economic well-being of veterans, including 
issues relating to veterans' employment, home loans, vocational 
rehabilitation, homelessness and small business. The American Legion 
realizes that organizations, like the National Business Development 
Corporation were created through P.L. 106-50 to provide America's 
veterans with superior entrepreneurial training and business resources 
that allows them to start or grow a business; and in turn, contribute 
to the economic well-being of the nation. However, The American Legion 
would like to reiterate that TVC has not fulfilled the mandates of P.L. 
106-50 (creating new resources centers, adequately funding the three 
that they have and creating a board to oversee licensing and 
certification issues) and is actively moving away from those mandates 
of P.L. 106-50 by focusing its efforts and funding on online 
entrepreneurial programs that they believe would maximize their 
available resources and reach more returning veterans. Therefore, The 
American Legion believes the Small Business Administration's office of 
Veterans' Business Development should be the lead agency to ensure that 
veterans returning from Iraq and Afghanistan are provided with 
Entrepreneurial Development Assistance.
    Comprehensive training should be handled by the SBA and augmented 
by TVC's online training. Resource Training Centers should include DOD 
and VA faculties. Currently, many military families are suffering 
financial hardship while their loved ones are recuperating in military 
hospitals around the country. Many spouses leave their jobs to be with 
that disabled service Member only to watch their finances deteriorate. 
Seamless transition in many cases is just a wishful thought; however, 
if business development training was offered to military members, a 
small home based business that is flexible could be the answer in 
guaranteeing a constant source of revenue for the family, in turn 
making them less dependent on the Federal Government.
    The American Legion strongly supports the mandates of P.L. 106-50 
that were designed to assist all veterans wishing to start, expand or 
protect their business. If there is a true desire to assist veterans 
returning from Iraq and Afghanistan in developing small businesses we 
must work together to enforce the mandates of P.L. 106-50.
    Thank you, Mr. Chairman, for allowing The American Legion to 
provide written comments on this very important issue.

                                 
Prepared Statement of Richard F. Weidman, Executive Director for Policy 
          and Government Affairs, Vietnam Veterans of America
    Madame Chairwoman, Ranking Member Boozman, and distinguished 
members of this Committee, thank you for the opportunity for Vietnam 
Veterans of America (VVA) to present our views here today regarding 
veterans' entrepreneurship and small business development. VVA 
appreciates the bi-partisan leadership this Subcommittee continues to 
show on this important set of issues. VVA also appreciates the tenacity 
and positive tone that you have been able to set and maintain in the 
face of the continued passive aggressive behavior toward veteran owned 
and service disabled veteran owned businesses and self employment of 
veterans on the part of so many in the Executive branch. We truly 
admire that you have not only kept a positive perspective, but that you 
persevere on our behalf.
    The overall view of efforts to assist veterans, particularly 
disabled veterans, to start and successfully operate their own small 
business is a decidedly mixed picture. Certainly those of us who have 
been at this for decades thought that we would have much more in the 
way of substantive services in place for the young men and women 
returning home form military service today than currently exists.
    It has been almost eight (8) years since the passage of Public Law 
106-50 ``Veterans Business Act 1999'' which gave a goal of 3 percent of 
ALL business done by ALL agencies of the Federal Government to go to 
Service Disabled Veteran Owned Businesses (SDVOB), and which among 
other things set up of The National Veterans Business Development 
Corporation which is now generally known as The Veterans Corporation 
(TVC). Yet at this time both the agencies and the TVC have yet to meet 
their goals.
    Without men and women ready, willing and able to serve in the Army, 
Navy, Marine Corps, Air Force or Coast Guard the Department of Defense 
(DOD) would not be in existence. Without those willing to serve to 
defend our Constitution against all enemies foreign and domestic, and 
place their life and limb on the line in order to do so, we as a nation 
would be in dire straights. More importantly, our Nation would be 
vulnerable to the many enemies of our democracy and the western way of 
life.
    When men and women separate from the Armed Forces, and thus become 
veterans, not all will need additional medical services nor educational 
benefits nor other important services, at least not immediately. They 
will each need a job, or a way to be gainfully employed. For some that 
will mean that they will work for a private company or a government 
agency. For some, particularly disabled veterans, self-employment may 
well be the best option unless they can secure ``niche'' employment.
    As to how the various elements that are supposed to be assisting 
veterans, by far the most useful to the most veterans is the Center for 
Veterans Enterprise (CVE) at the United States Department of Veterans 
Affairs (VA). The CVE has counseling and referral services that are 
generally very useful to most veterans, and the Veterans' Information 
Pages (V.I.P.) that are maintained by the CVE staff. Furthermore, the 
Center for Veterans Enterprise, after some initial problems getting off 
of the ground, seems to be not only effective in conceiving and 
building practical programs like the ``VET-FRAN'' program that creates 
business options available to veterans on favorable terms, but appears 
to be striving to learn how to do a better job in each of its aspects, 
on an on-going basis. The CVE recently initiated a contract with an 
outside vendor to do nationwide focus groups to learn more about the 
problems that are operated by the VA and by CVE directly. While we know 
that the final ``de-briefing'' on this work and report has been 
delivered to CVE, we do not know the results. Hopefully some of this 
data will be shared with you today.
    The real point about CVE is that they are doing a good job, and 
trying to do a better job. Part of the reason that they are able to do 
this is the unwavering strong support of the Secretary of Veterans 
Affairs, R. James Nicholson, and Deputy Secretary of Veterans Affairs 
Gordon Mansfield.
    The Veterans Entrepreneurship Task Force or VET-Force is 
cosponsoring a ``Veterans' Accountability Conference'' with the CVE on 
June 14, 2007, at the Grand Hyatt Hotel in Washington, D.C. As you 
know, June 14 is not only the birthday of the United States army, but 
is also observed as Flag Day. Among other activities that day will be a 
Awards Luncheon with Secretary of Veterans Affairs as the featured 
speaker, delivery of the ``Report Card'' on how well Federal Agencies 
have performed (or not performed) in regard to the long standing 
requirement to ensure that a minimum of 3 percent of all contracts and 
3 percent of all sub-contracts go to Service Disabled Veteran 
businessowners, workshops on key business skills, and we will end the 
day with a VET-Force planning meeting, which will be open to all 
participants and the public. Staff from both personal offices as well 
as Committee staff has been invited to participate without charge, and 
we hope that your staff can join us for at least part of the day, even 
though it is likely that your busy mid-week schedules will preclude any 
of the members being able to attend.
    It is worth noting that VA is till struggling to change the 
corporate culture when it comes to procurement, particularly in 
construction and in acquisition of goods and services by the Veterans 
Health Administration. As you know, the regulations are still pending 
that will implement the provisions of Public Law 109-461 giving VA 
additional tools in order to increase the number and dollar amounts of 
contracts and sub-contracts that go to Veteran Owned Businesses (VOB) 
and Service Disabled Veteran Owned Businesses (SDVOSB). While it is our 
hope that this will help enormously, and we thank you for your strong 
leadership in promulgating this statute.
    It is worth noting that the VA, on the orders of Deputy Secretary 
Mansfield and with the whole hearted support of Secretary Nicholson the 
VA has put achievement of the 3 percent goal in procurement into the 
performance evaluations of key managers. This has helped a great deal 
in focusing attention on this issue. VET-Force contends that every 
department and agency needs to emulate this strong leadership, and do 
the same thing with their key managers at each Federal agency. We are 
having serious discussions now with the Department of Defense in regard 
to doing a similar move.
    One troubling development that seems to be cropping up at VA 
however is that some contract managers appear to be rushing contracts, 
particularly multi-year contracts, toward consummation prior to the new 
regulations taking effect next month, in order to circumvent the new 
regulations and to avoid having to contract with qualified SDVOSB and 
VOB. We are frankly not sure how widespread this phenomena is (and we 
hope it is only the few incidents we have documented), but have asked 
VA to investigate. If this is in fact happening, it is our view that 
those involved should be appropriately sanctioned, in addition to VA 
stopping these improper actions.
    Additionally, VVA would certainly like to see much more overt and 
concerted activity on the part of the VA Vocational Rehabilitation 
sections across the country in regard to assisting veterans who wish to 
become self-employed or start a small business, particularly those with 
significant disabilities.
    In sum, one has to give the VA high marks for virtually all aspects 
of their activity for veteran owned business and service disabled 
veteran owned businesses.
SBA
    The Veterans Business Development Office of the Small Business 
Administration (SBA) is more problematic. While since the arrival of 
new Administrator Steve Preston at the SBA last September the SBA as a 
whole has become much more responsive. It certainly appears that both 
Administrator Steve Preston and Chief of Staff Joel Szabat are engaged 
and committed to making SBA much more veteran friendly, but it would 
appear that it is more than a bit of an uphill struggle. I must say 
that they are both open to reasonable communication, and have been 
extraordinary in reaching out to the veterans' business community, 
particularly to VET-Force participants.
    For the first time in recent memory, top SBA officials spoke about 
our common duty as Americans to assist veterans, and especially service 
disabled veterans, who are in business or attempting to start their own 
business during Small Business Week early this month. While there still 
are very few awards or no awards for VOB or SDVOSB categories in 
comparison to other groups, particularly in regard to contracting and 
subcontracting, their efforts were clearly visible and I believe 
genuine. Only time will tell whether they are able to follow this up 
with concrete action.
    The addition of a person in the Veterans Business Development 
office who does contracts full time is a significant addition, and it 
has been an aid to some businesses. It is still, however, far short of 
the efforts extended by SBA for other categories of small businesses 
such as 8(a) and women owned businesses.
    As to what steps can be considered useful steps and concrete 
actions that can be taken by the SBA, those include the following 
steps:

        1.  Create a dedicated section in the contracts office with at 
        least the same number of contract specialists devoted to eight 
        (a) contracting. (It is worthy noting that there are 12,700 
        service disabled veteran owned businesses listed on the VIP at 
        VA, while there are less than 7,400 certified 8(a) businesses. 
        Since there are many more SDVOSB than 8(a), having the same 
        number of contract specialists does not seem to be too much to 
        ask.)
        2.  The Administrator should take steps to create a capital 
        formation program specifically for VOB, with an emphasis on 
        SDVOSB. This should not be just for ``start up capital'' but 
        also for so-called ``mezzanine funding'' to help businesses 
        expand to a sustainable phase beyond the first few years of the 
        small start phase.
        3.  As noted below, the $25 million dollars that The Veterans' 
        Corporation people have been running all over Capitol Hill 
        seeking should be added to the budget of the Veterans Business 
        Development Office for use primarily as grants to localities to 
        operate projects and expand existing services to better reach 
        veteran entrepreneurs and would-be entrepreneurs. These grants 
        should go to expand services of particularly effective Small 
        Business Development Centers, to ensure that there is continued 
        funding for such efforts as the fine project in St. Louis 
        operated by Pat Heavey, and for special projects reaching out 
        to wounded service members or to veterans for purposes of 
        helping them become self-employed or to start micro businesses.
        4.  The Administrator should issue a long overdue 
        Administrator's Order implementing all of the statues that have 
        been enacted in the past 8 years, plus putting more teeth into 
        Executive Order 13-360 in regard to services delivered by SBA 
        or funded through SBA.
        5.  The Administrator should undertake a review of all SBA 
        programs to ensure that veterans, particularly disabled 
        veterans, are receiving full and proper access and maximum 
        services from each of the SBA services and programs for which 
        those individuals would otherwise be eligible. In other words, 
        for example, this internal review, and appropriate corrective 
        action as needed, would determine if women veterans were being 
        properly reached in numbers commensurate with their incidence 
        in the population and given the full range of services 
        available to the maximum extent legally permitted.
        6.  The Administrator should specifically review all that is 
        being done for those citizens serving in the National Guard or 
        Reserves who activated, and determine what more can be done 
        under existing law to better assist these individuals, and work 
        with the Congress and The White House to determine what else 
        can and should be done by changing the law or by Executive 
        Order.
        7.  Closely related to the above point, but slightly different, 
        is that we as a nation have to figure out how we can better 
        support those businesses who have National Guard and Reserves 
        members as employees who are now subject to frequent 
        deployments for longer periods of time. This is a matter of 
        national defense, but it is also a veterans re-employment and 
        employment issue because the negative side of hiring and 
        employing those who serve in the National Guard and Reserves is 
        being disproportionately borne by a relatively small segment of 
        the employer community. It is also having a negative impact on 
        veterans' employment and on the advancement of those who are 
        employed within their company. This is the real world, where 
        the bottom line must be addressed, and not the ideal world of 
        what is fair, so we must find practical ways to solve this 
        problem.
        8.  The Associate Administrator for Veterans Business 
        Development and all other officials of the SBA (and other 
        agencies for that matter) should by this point know better than 
        to keep saying in public and in private that ``there are not 
        enough service disabled veterans to do the 3 percent 
        contracting, they are not sophisticated enough to do the work, 
        and we have to teach these poor old veterans how to compete'' 
        before we can move forward on contracting and sub-contracting 
        goals, or with other programs that would better enable veterans 
        to have access to capital or international markets. Frankly, 
        none of this is true, and these negative stereotype ``straw 
        men'' set up by those who continue to say these things are a 
        manifestation of ``VETism'' or an ugly set of prejudices and 
        stereotypes that is every bit as ugly and inappropriate as 
        sexism or racism.

    While there are many more specifics that I could list here, suffice 
it to say that there is much that can and should be done by and at the 
SBA, but VVA has confidence in the top leadership of SBA in regard to 
doing right by America's veterans for the first time in a very long 
period of time. I personally have more confidence in Administrator 
Steve Preston than any Administrator since James Sanders departed, and 
that was in 1985. I pledge that both VVA and on behalf of the VET-Force 
to work cooperatively with him and his management team to accomplish 
much in the next two years. However, time will tell. We shall keep you 
posted of any and all progress.
The National Veterans Business Development Corporation
    The National Veterans Business Development Corporation more 
commonly known as The Veterans Corporation or TVC, was set up by the 
same PL 106-50 and formed in 2000. Frankly, the actual mess that we 
have today, and for much of the existence of TVC, is so far a field 
from what some of us hoped would be a vehicle for positive changes, 
that I feel like one of a team of surgeons known as Drs. Frankenstein.
    The bottom line is that what started out as a noble experiment has 
been an utter failure, and TVC should be either radically changed in 
regard to governance, or just eliminated from wasting any more taxpayer 
dollars or the efforts of any more good people in the veterans' 
community on this debacle.
    Since that time TVC has gone through numerous management changes 
and Board upheavals. AT one point, under the current President, they 
fired all of the veterans on staff, including at least two who were 
special disabled veterans in favor of hiring non-veterans. Under the 
current Board composition and management they have not only not raised 
any appreciable outside funding, as required by the law, but have been 
saying that they do not think this is the direction they wish to take!
    In the past year or so, the officers and the staff of TVC, which is 
virtually 100 percent funded with Federal dollars, have been running 
all over Capitol Hill seeking legislation that would relieve them of 
the mandate to raise private funds, and seeking more Federal dollars. 
Frankly, the last time VVA looked, spending Federal dollars to brazenly 
seek more Federal dollars and pay lobbying staff is just plain illegal, 
not to mention just a wrong thing to do.
    The only section of their mission that has been accomplished is 
partially funding two ``Veterans Business Resource Centers'' that were 
not started by the TVC and to which TVC has no appreciable expertise to 
contribute. The funding for these two projects should come from the 
Veterans Business Development Office at SBA, and eliminate the needless 
overhead and the six figure salaries of the TVC.
    I will not waste the time of this distinguished panel by reviewing 
their ``accomplishments'' because we believe there frankly are no 
accomplishments. There is nothing that is ``value added'' here that 
cannot be accomplished by the SBA and the CVE at VA. Let us please stop 
this charade, give the TVC $250,000 in funds to either close it down or 
to find private resources to continue, but let us invest the hard 
earned cash of $ 25 Million in taxpayer dollars in something that will 
yield a return on investment, and that is certainly not at The Veterans 
Corporation.
    Madame Chairwoman, thank you again for the opportunity to appear 
here today to share our views. I would be pleased to answer any 
questions you or your distinguished colleagues may have.

                                 
 Prepared Statement of Walter G. Blackwell, President / Chief Executive
      Officer, National Veterans Business Development Corporation,
                        The Veterans Corporation
    Chairwoman Herseth Sandlin, Ranking Member Boozman, and 
distinguished members of the Subcommittee, good afternoon and I thank 
you for giving me the opportunity to testify before you today. My name 
is Walter G. Blackwell; I am the President and CEO of The Veterans 
Corporation and a Navy Veteran.
    Today you have asked us to present our views on Veterans 
Entrepreneurship and Self Employment. As the only Federally chartered 
501 (c) (3) whose mission is to help Veterans start or grow their own 
business, we would like to share with you today what we view as the 
biggest obstacles that Veteran entrepreneurs face and what programs we 
have created to enable Veterans, Service-Disabled Veterans, members of 
the Guard and Reserve as well as their family members to start, stay 
and succeed in business.
    The Veterans Corporation is positioned to assist all of our 
nation's Veterans. The business needs of Veterans returning from the 
current conflict are really no different from the needs of Veteran 
entrepreneurs from past conflicts; however, it is clear that this 
generation of Veterans is more technologically savvy than even those 
who returned from Desert Storm in 1991. They have the opportunity to 
decide how they want to spend the rest of their lives, and roughly 15 
percent of these Veterans--maybe more--will decide they want to become 
Entrepreneurs. These Veterans have seen the world. They know about hard 
work and grueling hours. They are returning home to be with their 
families and start their own businesses to support themselves and their 
communities.
    Since 2001, more than 1.4 million American service members have 
served in the wars in Iraq and Afghanistan. Approximately 410,000 of 
these troops were National Guardsmen and Reservists. As of April 5, 
2007, about 26,000 troops were serving in Afghanistan and 154,000 
troops were serving in Iraq. The force currently in Iraq or deploying 
in the next few months represents half of the Army's combat brigades.
    At least 420,000 troops have deployed more than once, including 
170,000 Army soldiers, 169,000 Marines, and 84,000 National Guardsmen 
and Reservists. As many as nine National Guard combat brigades will be 
sent on their second combat tour this year. More than 600,000 Iraq and 
Afghanistan Veterans have left the military and are now eligible for VA 
care.
    These Veterans, like Veteran entrepreneurs from all generations, 
have three critical business needs:

      Access to Capital
      Bonding
      Education through coursework, mentoring and counseling

    In response, TVC has developed comprehensive programs; face-to-
face, by telephone or online, to directly address and fulfill those 
needs in Veteran entrepreneurs nationwide. Many of these programs are 
the result of valuable partnerships with private sector organizations. 
Madam Chairwoman, TVC's status as a 501(c) (3) organization has allowed 
us to form important public / private partnership relationships, which 
provide significant assistance to our Veterans.
    These overarching programs coupled with traditional face-to-face 
mentoring and counseling delivered directly through TVC's staff and 
three Hub locations in St. Louis, Missouri, Flint, Michigan and Boston, 
Massachusetts form a strong base in supporting our Veterans whether 
they are in rural or urban environments and even if they are a current 
businessowner and are serving overseas in Iraq or Afghanistan.
Access to Capital
    From startup businesses to established businesses looking to 
expand, The Veterans Corporation understands that financing is an 
essential need for any businessowner. In fact, it is the number one 
question we receive from our members. To address the issue, TVC and the 
National Economic Opportunity Fund (NEOF) have created a public / 
private partnership that provides access to capital for Veterans and 
Service Disabled Veterans beyond the funding capability of the Small 
Business Administration.
    The core of TVC's Access to Capital program is building and 
maintaining a set of relationships with lenders such as ACCION USA and 
other lending institutions. The spirit of the program is borrowed from 
the military: NEOF has pledged to ``leave no Veteran entrepreneur 
behind.'' The theory is simple, when someone asks for help, you help 
them, whether its reviewing their business plan, talking to a bank for 
them, or just giving them friendly advice, guidance and encouragement. 
The most important thing, though, is not to give up on anyone.
    Let me give you a couple of examples of two Service-Disabled 
Veterans currently taking advantage of the Access to Capital Program:
    David Barker is an Army Reservist currently in San Diego, CA, where 
he is recovering from injuries sustained while fighting in Iraq on June 
11, 2005. His goal, when he leaves the military, is to return to his 
hometown and run a custom paint operation. David's hometown of El Paso, 
Illinois, located more than 2 hours from Chicago, is the quintessential 
American small town and the place where David plans to run his own 
business. After a few conversations between TVC and David, it was clear 
he needed capital in order to make his business dreams come true, so 
Jim Mingey headed out to El Paso to help. Rather than provide the 
impersonal service that has become too common in business nowadays, Jim 
wanted to meet Mr. Barker first hand in order to provide the best 
service possible. Jim met with David and his family to discuss his 
business plan and financial needs. David estimated that he needs 
approximately $40,000 for the building and $225,000 for 2 years of 
salaries and expenses. Jim walked the family through the steps to 
securing a loan, and David expects to be back in El Paso early this 
summer to achieve his goal and start his own business. TVC and NEOF 
will continue to assist David and his family over the next few years as 
his business needs evolve.
    Dawn Halfaker is a 2001 West Point graduate and an all-American 
basketball player and soldier. In Iraq, on June 19, 2004, a rocket-
propelled grenade was shot into the armored Humvee carrying Dawn, 
leaving her badly wounded and causing her to lose her right arm. 
Following recovery from her wounds, Dawn set up Halfaker and 
Associates, LLC. Her company focuses on mission support for the War on 
Terrorism in the areas of Homeland Security, Emergency Management, 
Physical Security, Force Protection / Anti-Terrorism, Intelligence and 
Border Security. Dawn's strong background has been a tremendous asset 
to her business, but she needed financial assistance and strategic 
financial advice. Through TVC, Dawn began working with Jim Mingey, who 
is providing her with the financial insight and counseling she needs. 
TVC will continue to support and mentor this Veteran and her business.
Access to Bonding
    If you are a Veteran contractor or subcontractor seeking to do 
business with the state or Federal Government, the ability to obtain a 
surety bond is essential.
    In partnership with the Surety and Fidelity Association of America 
(SFAA), TVC has a fifty state program where Veterans can participate in 
a bonding education curriculum and a three step fully mentored process 
to secure the bonding they need on government contracts. Bonding is 
especially critical to those Service-Disabled Veteran Entrepreneurs who 
wish to contract with the Federal Government, and, if the 3 percent 
goal mandated by the President's Executive Order is to be achieved, 
this program must support as many eligible Veterans as possible.
    John McGreevy, the President and Owner of Freeport Technologies in 
Herndon, Virginia, is one example of a Service-Disabled Veteran owned 
company that TVC is working with to obtain the bonding critical to 
ensuring his business flourishes.
    Freeport Technologies specializes in audio / visual installation in 
conference and situation rooms located throughout different government 
agency buildings. Recently, Freeport Technologies secured a number of 
government contracts and are looking to be pre-approved for $2 million 
in surety bonding to do the work. Through TVC's partnership with SFAA, 
John McGreevy is working with local surety bond producer John Hughes of 
Construction Bonds Inc. in Dunn Loring, Virginia and is now beginning 
to understand the bonding process and what it takes to be bonded for $2 
million. We're happy to report that John Hughes has successfully 
prepared Freeport Technologies to be eligible for a smaller bond worth 
$800,000 needed for a GSA contract.
TVC's Hub--St. Louis, Flint and Boston
    For Veterans who prefer a face-to-face learning experience, TVC 
staff and its sites in Boston, Massachusetts, St. Louis, Missouri and 
Flint, Michigan offer, counseling, seminars, workshops and multi-week 
programs to assist in starting or growing your small business.
    An example of the work our hubs do is found below in a story of 
Harrison, Michigan residents Billy and Terry Brown:
    When VetBizCentral (our Flint, Michigan CBO) called Terry, she 
fought back tears when she answered the phone. The normally upbeat 
resident of Harrison, Michigan feels as if the world sits on her 
shoulders as she tries to keep her family business, Timberlane 
Cleaners, operating. Her son, Billy, deployed to Iraq last July with 
the 144th M.P. unit from Owosso, Michigan. Billy was the key employee 
at the family owned business, and his absence has left a huge void. To 
make things worse, Terry's husband, Russell, suffered a stroke, and 
there have been multiple equipment failures at the family owned 
Laundromat and dry cleaner. ``Billy was vital to the business,'' Terry 
said to Ed Ronders, the director of TVC's CBO. ``He's due to come home 
on leave this summer, but I don't know if we can make it,'' she said, 
fighting back the tears. ``I've contacted Senator Levin's office and 
Senator Debbie Stabenow's office. We need help.'' TVC is working hard 
to provide the help that Terry and Billy need to keep their business up 
and running. Terry has just started working with VetBizCentral and is 
researching the possibility of an SBA Military Reservist Economic 
Injury Disaster Loan along with other bridge loan possibilities.
    TVC is happy to announce that in addition to the annual operational 
financial support we provide to each of our three Hubs in the form of 
non-competitive grants and the 200 scholarships to Boots2Business for 
their local use, TVC will be providing a special grant of $10,000 to 
the St. Louis Hub to support the administrative costs associated with 
their new program ``Boot Strap''. The first session will be conducted 
in June of this year and will educate 20 Veterans interested in 
starting a business. Each Veteran will be required to participate in 
the Kauffman entrepreneurial education program and prepare a business 
case. At the completion of the Boot Strap program, 15 company programs 
will each receive $5,000 in business startup funding. Funding for these 
startup grants is through St. Louis' Board of Directors. Boot Strap is 
a yet another great way for Veterans to experience a mentored 
entrepreneurial educational and have the ability to obtain startup 
funding.
Small Business Development Centers
    TVC has signed an MOU with the Association of Small Business 
Development Centers (ASBDC) to create a national TVC / ASBDC strategic 
alliance with the goal of working cooperatively to enhance outreach and 
services to Veterans through both organizations. Veterans will be able 
to visit nearly 1000 local SBDC service Centers for free, face-to-face 
business consulting and low cost training.
Owner-Operator Class--Becoming an independent owner operator
    Today there are excellent opportunities for Veterans in over-the-
road transportation. TVC, Metropolitan Community College-Blue River, 
and the Owner-Operator Independent Drivers Association (OOIDA) have 
formed a partnership to provide Veterans and Service-Disabled Veterans 
with entrepreneurial training through a 3-day seminar designed to 
assist Veterans seeking to become owner-operators. The seminar provides 
information about the process of becoming an owner-operator, helps 
potential owner-operators overcome challenges they face, and helps 
Veterans form reasonable expectations about being an owner-operator. 
The seminar is taught by experts in each field through OOIDA's 
experienced staff. Earlier this year we conducted the first seminar. 
With the success of this event, a second seminar is planned for the 
fall of 2007.
    In addition to the programs I have already described, TVC is 
currently providing Veterans with a wide range of tools and resources 
to match their specific business needs and goals directly through TVC's 
web portal. These programs are designed to quickly address Veteran 
business questions and issues in an environment where Veterans and 
their family members, particularly those returning from the current 
wars in Iraq and Afghanistan, are increasingly becoming more 
technologically savvy. The home page is formatted with direct links to 
both TVC offerings and important partner links with agency ex-officio 
members, including VA's Center for Veteran Enterprise, the SBA, DoD and 
other key providers of service.
Business Matchmaking
    Through a partnership with SMA Global, a Veteran owned and operated 
business, TVC is now a cosponsor of their series of Business 
Matchmaking conducted in concert with SCORE. There are four events 
conducted during each calendar year with an additional two events 
delivered to OSDBU and the Department of Energy. The first two events 
for 2007 have been held in Atlanta and Maryland. The event draws more 
than 1,000 companies seeking contracts with the 160 plus contracting 
sources in attendance. In Atlanta 2,200 interview sessions were 
conducted. Of the 1,000 companies 200 were owned by Veterans and 
Service-Disabled Veterans. Our partnership with SMA Global will bring 
TVC closer to Veteran and Service Disabled Veteran companies that have 
participated over the past 3 years and allow TVC to offer services 
quickly and directly to companies ready to activate their business 
plans.
Boots 2 Business--Transitional Skills for Sucess
    Boots2Business www.boots2business.com is a comprehensive online 
resource, providing education and workplace training that is uniquely 
tailored to meet the needs of America's military personnel including 
those in theater in Iraq and Afghanistan, as well as Veterans, members 
of the National Guard and Reserve, Service-Disabled Veterans, and their 
families. Boots2Business combines elements from successful programs 
used independently in thousands of vocational schools, job-training 
centers, community colleges, detention and correctional facilities, Job 
Corps centers and adult education programs nationally. TVC has 
integrated these elements into a cohesive and interactive online 
program that provides support to the basic, transitional, workforce, 
family and entrepreneurial needs of Guard and Reserve Veterans, 
Service-Disabled Veterans, and their families.
    This program has five key areas:

      Basic Skills, Catching up / Stepping up
      Transition Skills, Job and Career Preparation
      Work force Success Skills, Getting a job and keeping it
      Entrepreneurial Skills, Start and Grow a small business
      Family Resource Center, Life and family support

    Within these five sections are 31 clusters with 1,000 course 
lessons and many tutorials to guide the student through their specific 
needs. Access to this site is in the form of a scholarship to the 
Veteran and their family. Each scholarship is for 1 year and is 
provided by granting organizations or by TVC directly. The cost for 
each scholarship is $100. Were a Veteran to purchase access to all the 
elements of Boots to Business without TVC, the cost would exceed 
$132,000 per year.
    TVC currently has 300 scholarships for Veterans and Service-
Disabled Veterans in New Jersey that are provided by the Henry H. 
Kessler Foundation. As I have already pointed out, TVC is directly 
sponsoring a block of 600 scholarships divided equally between its 
three hubs. Each hub will coordinate a statewide outreach giving Boots 
to Business a four-state network. An additional 200 scholarships have 
been made possible through a grant from NEC Foundation of America for 
national outreach. TVC is currently working with a number of 
corporations and foundations to extend this valuable scholarship 
program to all Veterans and their families.
d-VETS (Disabled Veterans Entrepreneurial Training Solutions)
    Through a grant from the Henry H. Kessler Foundation, TVC is 
providing New Jersey's Service-Disabled Veteran entrepreneurs with 
comprehensive support in starting or growing small businesses. The 
mission of the program is to foster and promote opportunities for 
Service-Disabled Veterans to gain self-sufficiency through 
entrepreneurship by providing participants with education, mentoring, 
access to capital, and access to surety bonding. This program is 
designed as a state model that can be replicated nationwide to serve 
America's Service-Disabled Veterans. As mentioned earlier, the Kessler 
grant provides 300 Boots2Business scholarships to New Jersey Veterans.
Deploy Proof Your Business
    TVC has launched a comprehensive new program, Deploy Proof Your 
Business, designed to assist members of the National Guard and Reserve 
in protecting their businesses when they are deployed. ``Deploy Proof 
Your Business'' includes sections on suspending and sustaining your 
business as well as a comprehensive section comparing the two options 
side-by-side.
    With helpful tools, links, checklists and other online resources, 
this site is developed as a complete program to answer the questions 
and frustrations many National Guardsmen and Reservists have when they 
leave their businesses. Based on the premise that the earliest 
preparation is the best preparation, this program will assist both new 
and established businessowners in modifying their business plans, 
creating training plans, and managing inventory prior to leaving their 
business for an extended and often indefinite period of time. This 
program in no way replaces instruments from SBA or other organizations. 
It does, however, place in one location access to all the current 
programs available.
    Jim Clair, of Cranberry Township, Pennsylvania is a business owner 
and Member of the National Guard who realizes that he must prepare his 
business for deployment. Jim, a former United States Marine, 1983-1987, 
is the owner of Ultimate Defensive Driving School. Jim joined the 
Pennsylvania Army National Guard last year at age 40 specifically to 
fight the War on Terror. He and his company are looking at Deploy Proof 
Your Business as we speak to prepare for his possible deployment to 
Iraq and or Afghanistan. As Jim says, ``While I have yet to be deployed 
to Iraq or Afghanistan, I realize that deployment is a very real 
possibility and something I must prepare for as a businessowner. After 
all, my family and business count on it.''
ConnectVets Business Forum
    ConnectVets Business Forum is a mentored online meeting place for 
Veteran entrepreneurs to interact with each other through a peer 
network. The Forum is a place where Veterans can post business 
questions, offer advice, and share business experiences. The program 
launched the second week of March, and reports show that 68,000 unique 
hits resulted in its first two weeks alone.
Virtual Business Incubator
    The Veterans Virtual Business Incubator (VBI) created for TVC by 
Knowledge Industries is a complete one-stop resource for Veteran 
entrepreneurs starting or growing a small business. The VBI guides 
Veterans through businessownership with customized support tools and 
the ability to search by state for local business resources. In FY 2006 
this online tool saw 8,000 direct business connections through its 
300,000 unique hits.
Vitual Business Resource Center
    TVC, in partnership with SCORE, created a Veteran front-end portal 
to assist Veteran entrepreneurs in getting the one-on-one support they 
need to become successful in their business ventures. Through this 
direct link on TVC's website, Veterans are able to access SCORE's 
network of experienced and qualified mentors who can answer business 
questions, provide advice, and offer guidance. TVC is seeing between 
350-600 links daily through this portal partnership.
Transition Assistance Program (TAP)
    TVC was asked by the Department of Defense (DoD) last August to 
write a new section of the TAP Manual for Active Duty and members of 
the Guard and Reserve. Information about entrepreneurship and the 
assistance available from TVC and SBA is now included in the ``Active 
Duty Preseparation Guide,'' as well as the ``Transition Guide for the 
Guard and Reserve''. As a result, all separating military members will 
have the opportunity to learn about the programs and services TVC 
provides and actually start planning their business venture prior to 
their separation from the service. Active military can already access 
this information on the DoD's TurboTAP Web site www.TurboTap.org, while 
members of the Guard and Reserve can begin accessing this information 
on May 31, 2007. We understand that DoD plans a formal rollout of these 
programs on June 9th.
``Veteran's Business Video Library''
    This is a first for TVC: an online, streaming, six-video segment 
containing key coverage (4\3/4\ hours) of ``Veterans Doing Business 
with the Department of Defense''. Taped last December in Dallas, Texas, 
this compendium is now available for all to recap the event or, for 
those unable to attend, to participate and gain the important 
information that was provided to attendees. It is our hope that future 
events conducted by TVC or any agency or Veteran organization will also 
be available through this vehicle.
TVC FY 2006 Annual Report to the President and Congress
    In TVC's Strategic Plan for FY 2006, staff members were directed to 
reach 10,000 Veterans directly and through TVC's partner network. TVC 
is pleased to report that the goal was met and exceeded. Through TVC's 
headquarter staff and partners, TVC attained 140 percent of the goal by 
supplying face-to-face services to 14,026 Veterans. In addition to this 
direct interaction, it should be noted that during the final 5 months 
of FY 2006, TVC has achieved more than one million hits to its new web 
presence at www.veteranscorp.org including 17,586 downloads of TVC 
materials from 224,284 page views. That equates to 100,000 unique 
visits, each lasting more than five minutes, an eternity in web time, 
yielding significant electronic outreach and support to Veterans 
online. Combined, it can be said that the investment made by Congress 
toward TVC's FY 2006 funding has reached 119,431 individuals, oralmost 
12 times the FY 2006 goal of 10,000.
    The appropriation of $1.5 million to TVC for FY 2006 provided 
significant benefit to Veterans through TVC's outreach, education and 
mentoring, in addition to the Access to Capital and Access to Bonding 
programs outlined above. Analysis of FY 2006 expenditures indicates 
that 21.83 percent on spent on G&A, 10.15 percent on fundraising and 
68.02 percent were spent on program services.
    I would like to submit a complete copy of our 2006 Annual Report to 
the President and Congress for the record.
Authorization Legislation in 110th Congress
    Legislation is currently being drafted by Representative Susan 
Davis of San Diego that would provide for a 5 year authorization of The 
Veterans Corporation that would include direct program services while 
acting as an entrepreneurial catalyst / clearinghouse / facilitator / 
broker for Veterans, Service-Disabled Veterans, and members of the 
Armed Forces transitioning from military service in Iraq and 
Afghanistan into the business community. In addition, Members of 
Congress and their staff would like TVC to provide the Reservists, 
National Guard members, and their families with pre / post-deployment 
assistance to preserve family owned businesses, like our Boots2Business 
and Deploy Proof Your Business programs. TVC would like to establish a 
grant-making program to assist organizations at the national, state and 
local levels in these important efforts.
Conclusion
    Madam Chairwoman, 2007 finds Veteran entrepreneurship alive and 
well; however, the programs defined under PL 106-50 are not able to 
step up to the increasing demand. We have seen thousands of servicemen 
and servicewomen return from the Iraq and Afghanistan theaters and will 
see these numbers grow in the coming months and years. These new 
Veterans and Service-Disabled Veterans along with a large number of 
Guard and Reservists will return to the country that they fought to 
defend. TVC is ready, willing and able to assist them whether they have 
to spend some time in a hospital to recover from their wounds or choose 
to settle in the streets of an urban environment or the countryside of 
a rural local.
    TVC's strength is in its ability to bring together the best in 
public and private entities to leverage scarce Federal dollars in 
effectively and efficiently assisting Veterans, Service-Disabled 
Veterans, and members of the National Guard and Reserves, who want to 
start or grow small businesses. By benefiting from the strong resources 
already available from national business networks, and by eliminating 
duplication of efforts through strategic partnerships, TVC has the 
programming and the capacity to serve the needs of Veterans in all 
fifty states.
    Thank you Madam Chairwoman. I will be happy to answer any questions 
you or the Committee might have.

                          [LETTERS OF SUPPORT]

                                 Disabled American Veterans
                                                    Washington, DC.
                                                     April 20, 2007
Dear Representative Davis:

    On behalf of the 1.3 million members of the Disabled American 
Veterans (DAV), I encourage you to support the authorization and fiscal 
year 2008 appropriations funding for the National Veterans' Business 
Development Corporation (the Veterans' Corporation) programs and 
services to expand entrepreneurial opportunities for disabled veterans.
    The 1.3 million members of our organization are veterans who became 
disabled by injuries or illness during wartime military service to our 
Nation. Disabled veterans seeking a viable livelihood face far greater 
challenges and a higher unemployment rate than nearly any other 
category of citizens in the United States.
    Despite federally mandated provisions to assist disabled veterans 
in overcoming barriers to gainful employment, many employers remain 
unable to accommodate some of the most severely disabled for a variety 
of reasons. For example, some veterans require frequent medical 
treatments that prohibit them from maintaining regular working hours. 
These veterans often choose to operate their own businesses where they 
need not conform to the demands of a set schedule. Many other disabled 
veterans choose entrepreneurship as a form of livelihood as a matter of 
preference.
    It is our duty as a grateful nation to ensure that those who have 
sacrificed so dearly in the name of freedom have the opportunity and 
support needed for self-sufficiency. In addition to improving the lives 
of disabled veterans and their families, we are fortifying our Gross 
Domestic Product and economic vitality. Small businesses create 
millions of new jobs and generate billions of dollars annually.
    We believe the Veterans' Corporation created by P.L. 106-50, is 
uniquely positioned to provide disabled veterans with superior 
entrepreneurial training and business resources that allows them to 
start or grow a business; and in turn contribute to the economic well-
being of your district and state. The Veteran's Corporation's numerous 
programs and services have resulted in the following accomplishments:

      Veterans served--8,055 to date, or on average a 1,000 
Veterans a month
      Courses / class hours completed--Over 8,000 trainings 
hours provided and 96,388 student hours
      Business Start Ups since initial contact with client--552 
Veteran owned businesses started (average cost to TVC $1,000.) Business 
growth as a result of interface with client--469 jobs retained, 667 
jobs created
      Funding as a result of work and / or facilitation with 
client--OVER $86 million
      Teaming / Mentorship of clients with other companies--68 
Veteran owned businesses now partnering

    In addition, TVC is now offering new services related to--

      Surety Bonding for Veteran owned businesses looking to do 
work with the government through a partnership with the Surety 
Association of America
      Access to Capital through a financial services desk for 
micro loans and larger capital needs too Veterans'
      Virtual Business Incubator in partnership with Score to 
provide Veterans anywhere in the country, tools and resources to start 
their businesses

    I am sure you will agree with me that the Veterans' Corporation 
offers an impressive array of services to disabled veterans and that it 
should be continued as thousands of wounded service-members return from 
the War on Terror.
    Thank you for supporting our Nation's disabled veterans and their 
families.
            Sincerely,
                                          Brian E. Lawrence
                            Assistant National Legislative Director

                                 

                   Iraq and Afghanistan Veterans of America
                                                      New York, NY.
                                                       May 10, 2007
Honorable Susan Davis
1526 Longworth House Office Building
Washington, DC 20515

Congresswoman Susan Davis:

    Soldiers and Marines are natural innovators. They are required to 
overcome every obstacle and complete the mission no matter what. When 
soldiers are not hard-charging to their objectives, they spend almost 
all their time doing one thing: thinking about, dreaming about, and 
talking about what they will do when they get home. The countless hours 
spent sitting in a Humvee has become has a fertile playground for ideas 
and innovations. I will never forget the months of planning my driver 
and team leader, SPC Langley and SGT Fabacher, spent laying out every 
detail of their future lawn mowing business.
    The Veteran's Corporation (TVC) is a Federally chartered nonprofit 
organization charged with creating and enhancing entrepreneurial 
business opportunities for Veterans, including service-disabled 
Veterans. By providing access to capital, business services, 
entrepreneurial education, surety bonding, insurance, prescription 
coverage and by creating a veterans business directory, TVC has strived 
to help soldiers like SPC Langley and SGT Fabacher achieve their 
dreams.
    TVC has overcome some tough obstacles and become an invaluable 
resource to veteran entrepreneurs. TVC has greatly expanded its online 
resource center and programs like ``Deploy Proof Your Business'' are 
powerful tools for deploying servicemembers. The Iraq and Afghanistan 
Veterans of America (IAVA) strongly supports any efforts to bolster the 
TVC and give it the opportunity to help turn those Humvee daydreams 
into a reality.
    We applaud the work of Congresswoman Susan Davis and her work to 
expand the scope and mission of the TVC.
            Sincerely,
                                           Patrick Campbell
                                               Legislative Director

                                 

   Prepared Statement of William D. Elmore, Associate Administrator, 
   Veterans Business Development, U.S. Small Business Administration
    Chairwoman Sandlin, Ranking Member Boozman, and other distinguished 
members of the Committee, thank you for the opportunity to appear 
before you today to share information on the state of Veteran 
entrepreneurship and self employment, and the efforts of the U.S. Small 
Business Administration (SBA) to assist and support veterans, service-
disabled veterans and Reserve Component members who are self-employed 
or small businessowners who have been or may be called to active duty 
for the Global War on Terror. I am William Elmore, the Associate 
Administrator for Veterans Business Development (AA VBD). I am pleased 
to be here representing SBA Administrator Preston and the many 
dedicated SBA employees who assist veterans and reservists every day. I 
am grateful for this opportunity to share with you some of the 
initiatives and accomplishments on behalf of veterans and reservists 
the SBA has made over the past 6 years. As expressed in the January 
24,2007, Memorandum For Heads of Departments and Agencies jointly 
issued by Administrator Preston and Office of Federal Procurement 
Policy Administrator Denett, the administration is broadly committed to 
enhancing all of our entrepreneurial programs and services for veterans 
and reservists, especially those returning from duty in the Global War 
On Terror, and for those service members injured or disabled in service 
to America.
    The very nature of SBA' s mission necessitates coordination, access 
and delivery of a full range of resources and program activities that 
support successful entrepreneurship. We deliver most of our lending 
assistance through thousands of private lenders, and we provide most of 
our business counseling, training, and planning assistance through our 
resource partners, which includes approximately 15,000 third party 
business development specialists and experienced business men and women 
volunteers. SBA is the central policy and program manager for the 
Federal procurement programs for service-disabled veteran-owned-small 
businesses, women-owned small businesses, small and disadvantaged 
businesses, and socially and economically disadvantaged small 
businessowners. This is accomplished through a programmatic, policy, 
and regulatory framework established by Congress and our technical 
experts, including procurement goal setting, oversight, and 
intervention with Federal agencies, and facilitating public and private 
matchmaking initiatives. To accomplish the SBA mission, we maintain a 
nationwide network of 68 district offices (each one with an assigned 
Veterans Business Development Officer, VBDO), 10 regional offices, 
various servicing centers for lending oversight and loan processing, 
and over 100 field procurement assistance experts. Weare America's 
disaster assistance lender for both homes and for small businesses; and 
we provide support for international trade initiatives. Our 68 district 
offices and other field offices coordinate and deliver local and 
national support, provide oversight, and help carry out our National 
program responsibilities.
    As the Associate Administrator for Veterans Business Development, I 
manage our national program for veterans and support Administration 
programs and policies for veterans and reservists. I coordinate SBA 
activities with other Federal, state and local government programs, and 
with not-for profit and private partners.
    Each year, my office delivers direct assistance to over 25,000 
veterans and reservists through five Veterans Business Outreach Centers 
and through special competitive funding for District Office-Veterans 
Outreach Initiatives coordinated by our 68 VBDOs. SBA's Veterans' 
Business Development Office acts as a liaison and technical expert to 
our Federal partners, including the Departments of Defense, Labor, 
Veterans Affairs and other agencies with procurement authority, and, I 
act as an ombudsman for full consideration of veterans in every 
Administration program.
    Each year, SBA provides reportable direct and indirect assistance 
to more than 100,000 veterans and reservists who participate in every 
SBA program. While improved services are being delivered to veterans, 
reservists and discharging service members in most of SBA's core 
programs, Administrator Preston and Deputy Administrator Carranza have 
tasked each program office at SBA with reviewing their programs and how 
they support veterans' small business success. We are identifying 
additional or more specific steps that every program can take to better 
deliver SBA assistance to veterans, reservists, discharging service 
members, and family members.
    Recent examples of improved services to veterans, veteran 
reservists and discharged service members is inclusion as a target 
market in our Community Express Loan program that offers expedited loan 
processing with mandatory business planning technical assistance. We 
have recently improved our Surety Bond Guarantee program for service-
disabled veterans and other veterans, and we are exploring new ways to 
further target the veteran, reserve and guard community through our 
lending programs. Thus far, the results have been good; the number of 
new loans being made to veterans has increased significantly. The 
number of new loans to veterans has grown from 4,800 in FY 2000 to 
approximately 8,000 in FY 2006.
    Public Law 106-50 established a 3 percent Federal procurement goal 
for prime contracts for small businesses owned and controlled by 
service-disabled veterans (SDV) and established a best-efforts clause 
for veterans in Federal procurement at the subcontracting level. While 
the government has yet to achieve the required 3 percent goal for 
Federal procurement, we are making progress toward it. In 2004, the 
President issued Executive Order # 13360, and preliminary data shows 
that both SBA and the Department of Veterans Affairs each exceeded 
their respective 3 percent goals for FY 2006. Leading by example, this 
represents a significant improvement for both agencies over 
achievements in FY 2005. This growth toward achieving the 3 percent 
goal is due to the ongoing efforts by VA, SBA, Federal agencies and 
their many contracting officials that are making serious and diligent 
efforts to identify and contract with SDV small businesses.
    In 1999, when HR 1568 became P.L. 106-50, there was a serious gap 
in basic knowledge about and data on veteran businessowners in America. 
For almost 15 years, no effort had been undertaken to understand what 
this community of existing and prospective entrepreneurs represented or 
required. Beginning in FY 2001, the SBA's Office of Advocacy, with the 
support of my Office of Veterans Business Development, initiated 
research into veterans' entrepreneurship, and Advocacy's initiatives 
continue. We have learned that prior to 2003, veteran and service-
disabled veteran participation in Federal procurement was seriously 
undercounted and underreported for a variety of reasons. We have 
learned that there were no good or reliable databases of veteran and 
service-disabled veteran businessowners that existed nationally in the 
public or private sectors. We have learned that approximately 15 
percent of veterans are successfully selfemployed or small 
businessowners and that another 22 percent of veterans are taking steps 
to become small businessowners or are thinking seriously about doing 
so. We learned that, like all small businesses, access to capital and 
access to and knowledge about business development programs are key 
needs of veterans. We have learned that military service is important 
in leading to veterans' success as entrepreneurs, and that private 
sector experience is even more important for veterans' success as 
entrepreneurs. We have learned that the difference between successful 
self employment rates for veterans and service-disabled veterans is 
explained in part because some service-disabled veterans do not 
participate in the private labor market.
    As a part of our efforts to increase understanding of the veterans 
and service-disabled veteran community of entrepreneurs, and at the 
request of the SBA Office of Advocacy and the veterans' advocacy 
community, the Census Bureau included two questions in their 2002 
Survey of businessowners regarding the veteran and SDV status of small 
businessowners with employees. The 2002 Census Survey marks the first 
time we have an accurate estimate of the number of SDV small 
businessowners in America. This 2002 Census survey found that 
approximately 0.7 percent of small businesses in America with employees 
are owned by service-connected disabled veterans and that 14.1 percent 
of small businesses with employees in America are owned by veterans.
    Each year, our Office of Entrepreneurial Development (ED) and our 
resource partners provide small business counseling and training for 
approximately 1.5 million aspiring, startup and growing small 
businessowners. Annually, close to 90,000 of these customers are 
veterans, service-disabled veterans, reserve component members and 
active duty personnel. One of our ED programs is our Small Business 
Development Center (SBDC) program. Our SBDC National Office provides 
program design, core I operational funding and oversight to almost 
1,100 SBDCs. In addition, we deliver assistance through the expertise 
of almost 400 Service Corps of Retired Executives (SCORE) chapters and 
approximately 11,000 experienced SCORE business counselors, and through 
100 Women's Business Centers, whose services are not restricted to 
women only. We also provide a robust range of online business 
counseling and training opportunities supporting everything from start 
up and early stage decisionmaking to significant expansion and growth 
assistance.
    Let me turn my attention to our efforts on behalf of small 
businessowners who are members of reserve components of the U.S. 
Military and have been or may be activated for the Global War on 
Terror. In August 2001, we began offering and continue to promote the 
availability of our Military Reservist Economic Injury Disaster Loan 
(MREIDL) program as one tool that can be of great assistance to an 
activated reservist small businessowner. We have implemented a 
comprehensive outreach program that includes veterans and reservists, 
and we have strengthened our business counseling and training programs, 
most notably our SCORE, SBDC, VBOC and District Office programs to 
inform, develop and deliver pre and post mobilization business planning 
assistance that can be critical to economic success and survivability 
to reservist small businessowners. We continue to work with various 
offices and programs of the Department of Defense, including the 
National Committee for Employer Support of the Guard and Reserve 
(ESGR), with the Assistant Secretary for Reserve Affairs, Military 
Family Support Centers and 676 Committee, and we continue to support 
the Department of the Army in the envisioning and development of the 
proposed Army Advantage program. After the September 11, 2001 attacks 
on America, we established an SBA Committee to coordinate outreach and 
service delivery to Reservists. We created and have distributed more 
than 400,000 SBA Reserve and Guard fact sheets; and we established 
special web pages for reservist small businessowners, and began working 
with the Department of Defense. We have and continue to produce 
detailed business planning guides as part of our comprehensive Reserve 
and Guard Business Planning kits and have distributed more than 40,000 
of these kits directly to Reserve and National Guard units, to 
reservists, to SBA Resource Partners, to Federal, state and local 
partners, and at hundreds of SBA sponsored events. Two years ago, we 
requested and secured the authority from Congress to include reservists 
in our definition of veteran for purposes of our comprehensive outreach 
effort, and we included veteran reservists in our Community Express 
Loan Program to provide additional access to capital beyond our MREIDL 
program.
    Again, I thank you for this opportunity to testify before you 
today. I am proud of the progress we have made in our knowledge of and 
assistance for aspiring and existing veteran entrepreneurs and I look 
forward to continuing to enhance these efforts.
    This concludes my testimony, and I welcome your questions.

                                 

Prepared Statement of Scott F. Denniston, Director, Office of Small and
    Disadvantaged Business Utilization, and the Center for Veterans
            Enterprise, U.S. Department of Veterans Affairs
    Madame Chairman and Committee Members, thank you for convening this 
hearing to assess the current state of the Federal Veterans' 
Entrepreneurship Program. I am honored to represent Secretary 
Nicholson, Deputy Secretary Mansfield and the dedicated employees 
throughout the Department of Veterans Affairs who serve our veterans 
daily.
    I have good news to report. The Veterans' Business Program is 
working well in VA. Last Fiscal Year, our procurement budget was $10.3 
billion. We spent $346 million with Service-Disabled Veteran-Owned 
Small Businesses (SDVOSBs), approximately 3.38 percent. We spent 6.35 
percent of our total procurement dollars with Veteran-Owned Small 
Businesses (VOSBs). This amounts to approximately $651 million. I am 
even more pleased to report that VA will be the first Cabinet agency to 
sustain and increase our achievements.
    We attribute our success to 4 principal factors. First, we are the 
Department of Veterans Affairs. Supporting veterans is our mission. 
Second, and most significantly, our leadership demands commitment to 
veterans in business. Third, our partners share our passion for 
ensuring veterans' success. Fourth, veterans doing business with our 
Department have proven themselves to be solid performers. We are now 
building on their successes.
    As you know, VA puts veterans first. Our personnel are focused on 
veterans' success. Self-employment and businessownership are natural 
outcomes for the work accomplished in our healthcare and benefits 
administrations. VA offers numerous opportunities for new businesses 
through our micro-purchase program. We have thousands of actions under 
the simplified acquisition threshold where young businesses have the 
opportunity to flourish. We have regional and national contracting 
opportunities for more robust businesses. We also require large prime 
contractors to tell us how they will utilize veterans and service-
disabled veterans in their performance. We have creative contracting 
officers who are recognized for their support of veterans in business. 
All these factors together have helped us achieve prominence in this 
program.
    Small business programs are leadership-driven. VA was the first 
Federal agency to implement procurement goals for veterans and service-
disabled veterans. We did this in 1984. VA was the first Federal agency 
to implement the landmark set-aside provisions of Public Law 108-183. 
This tool made a significant difference in VA's ability to comply with 
the mandatory 3 percent Service-Disabled Veteran-Owned Small Business 
procurement goal. VA organized the Executive Order 13360 Work Group to 
encourage alignment of Federal agency strategic plans to increase 
utilization of service-disabled veteran-owned small businesses. Our 
leadership requires that program executives personally report their 
accomplishments at our quarterly Senior Managers' Meetings. As a result 
of Public Law 109-461, VA is now the first agency to place service 
disabled veterans and veterans at the top of our priority source lists. 
Plus, this law provides VA with direct sourcing authority, a tool 
unique among Federal agencies. With this new program, we expect a 
marked increase in expenditures with service-disabled veterans and 
veterans in Fiscal Year 2009.
    Visionary leadership is not exclusive to VA. Many of our 
accomplishments would not have been possible without the teaming 
provisions in the Small Business Administration's (SBA) Service-
Disabled Veterans' rule. Also important are the Corporate Teaming 
Agreement guidelines from General Services Administration (GSA) and 
their Acquisition Letter #V-05-12, which permits evaluating 
socioeconomic status as a primary factor when making a best value 
determination when using the Federal Supply Schedules. This is evidence 
that support for veterans is wide-spread.
    We celebrate and applaud the work of our partner organizations. Our 
first partnership was with the Association of Procurement Technical 
Assistance Centers (PTACs). Funded by the Defense Logistics Agency, 
these offices educate owners new to the Federal marketplace. We include 
referrals to PTACs in our solicitation documents to ensure that owners 
understand our Federal and VA rules before they sign an offer or a 
contract with us. The PTAC program is fundamental to our success.
    As you may know, VA operates the Center for Veterans Enterprise 
which staffs a national call center to assist veterans interested in 
businessownership or expansion. This office has 16 employees, 12 of 
whom are veterans. The staff in CVE talks with veterans, their families 
and their business partners daily. CVE's business coaches routinely 
refer callers to our partner organizations or to the volunteers who 
form the government or Corporate Advocates for Veterans Enterprise. One 
of our steadfast partners is the General Services Administration (GSA). 
We have cosponsored regional conferences with GSA and assisted in their 
Veterans Technology Services (VETS) governmentwide Acquisition Contract 
(GWAC). We look forward to using this vehicle for years to come when VA 
personnel need information services support. At all of our outreach 
programs, we distribute the tool kit for veteran-owned small 
businesses, which was jointly developed and co-branded by GSA and VA. 
It contains legislation and policy documents, information on how to 
market to Federal agencies, a list of Federal Veterans' Business 
Advocates and templates to assist businessowners. This tool has proven 
to be so successful it is now in its fourth edition.
    We have received great support from the military services. The U.S. 
Air Force was the first department to offer assistance to us in 2000. 
They shared their resources with us, giving us several sessions on 
their cable television program, Opportunities Showcase. Mr. Tony 
DeLuca, then the Small and Disadvantaged Business Utilization Director, 
carried our message to audiences in each of his numerous presentations. 
Since then, we've continued our joint outreach efforts, conducting road 
shows with the Air Force, the SBA and VA to reach military program 
managers. We are in conversation about FY 2009 and beyond activities.
    The Army's Small Business Program Office also has a sustained 
partnership with VA. We have jointly organized the National Veterans' 
Business Conference for the past 3 years. This year's program will be 
June 25-28 in Las Vegas. With the comprehensive support of the military 
community, a broad-base of its defense contractors, committed 
volunteers from a wide range of Federal agencies and the 
businessowners' community, last year's program was well-attended. More 
than 1200 participants joined together to focus on how to improve 
opportunities for veterans, especially service-disabled veterans, in 
prime and subcontracts. More importantly, the owners' community spread 
the word that the National Veterans' Business Conference is a must-
attend event due to the caliber of program managers and executives and 
the quality of information exchanged in that forum. We are very pleased 
to assist in organizing the 3rd annual conference which we hope will be 
even more successful. Efforts with the Army continue throughout the 
year. The Corps of Engineers routinely dispatches advance announcements 
of forthcoming service-disabled veteran set-asides to owners in the 
VetBiz Vendor Information Pages database. These personnel conduct 
advance briefings to the community. As a result, you'll see many of 
their offices honored in our annual Champions' awards program.
    We are seeing an explosion of exhibitors proudly displaying 
``SDVOSB'' or ``VOSB'' on their conference banners. Some firms are 
enjoying rapid growth. GSA recently hired Len Johnson of JDG 
Communications for their Federal Supply Schedule advertising needs, a 
$25 Million award. SBA also hired JDG for their support in Business 
Gateway promotions. Quality Support won a $38.5 Million award from the 
State Department to process visa applications. The Army Corps of 
Engineers has awarded several Indefinite Delivery Indefinite Quantity 
(IDIQ) contracts using the Service-Disabled Veteran-Owned Small 
Business set-aside authority. VA recently awarded a Microsoft license 
support contract to MicroTech, using the Corporate Teaming Agreement 
provisions under Federal Supply Schedules. This award is valued at $56 
Million a year for 7 years. As a result of matchmaking facilitated by 
the Center for Veterans Enterprise, a service-disabled veteran-owned 
joint-venture was established that successfully pursued a large 
construction project. VETCON1 won a $30 Million award to build a 
facility in Menlo Park. This is important to VA because many of our 
engineers mistakenly believe that disabled veteran-owned businesses 
cannot obtain bonding for our larger projects. Big awards help us get 
the attention of program managers who too often will say, ``no small 
business can do my project.'' We also celebrate the smaller successes, 
like Joe Marchesani of Markee Distributors. We met Joe several years 
ago. He was trying to sell medical device batteries to VA but was 
having difficulty getting in. Now, he's happy to report he's in more 
than 100 of our locations, doing business on purchase cards.
    VA's Center for Veterans Enterprise hosts the VetBiz.gov web portal 
which enables veterans to quickly link to our partner organizations. 
CVE manages the VetBiz.gov Vendor Information Pages (VIP), a database 
containing information about products and services offered by veterans 
and service-disabled veterans. Veterans in this database may elect to 
receive daily extracts from FedBizOpps and extracts from VA's Forecast 
of Contract Opportunities. We also use the database to blast early 
alerts about future requirements or education conferences, such as the 
3rd National Veterans Business Conference. Last month, the State of 
Washington announced a new program to promote utilization of service-
disabled veterans in their state requirements. They will use the VIP 
database as their sourcing program. We hope to see other states adopt 
similar measures.
    CVE offers free market research, training and other services as may 
be requested by our Federal partners and their prime contractors. We 
recognize their hard work in our annual Champions of Veterans 
Enterprise Awards program each June.
    I am proud to report that our work is being well-received. The 
Veterans Business Journal is considered the premier trade magazine in 
the veterans' business community. Last September, it conducted its 
first readers' survey. CVE was voted the organization that provides the 
best support to veterans in business. We appreciate this vote of 
confidence and will strive to repeat this honor in 2007.
    To promote awareness and utilization of veterans in business, CVE 
distributed more than 3,000 posters to prime contractors and government 
offices last October.
    To expand awareness of startup assistance, we dispatched Operation 
businessownership DVDs for use in Transition Assistance Program 
briefings. Both SBA and CVE are highlighted under ``Small Business 
Resources'' in the Vocational Rehabilitation and Employment Program 
pocket guide produced by VA's Veterans Benefits Administration. In the 
annual Federal Benefits for Veterans and Dependents' book, information 
about CVE appears under Transition Assistance. In addition, each year, 
VA's Compensation and Pension Service mails cost-of-living adjustment 
letters to disabled veterans. Veterans receive information about 
startup and expansion assistance from CVE in this letter. Army 
Knowledge Online's Web site reaches 660,000 personnel. Our web portal 
link is prominently displayed on that site, which we understand will 
soon become a DoD-wide site. We are also prominently displayed on 
Military.com's site which is generally used by veterans for a variety 
of information. The VetBiz.gov link also appears in USA.gov and on the 
OSDBU.gov web portals. We greatly value the assistance from these 
partner organizations as it expands our reach beyond our limited 
resources. We teach owners that business is about successful 
relationships. We think we have built some good ones.
    In the commercial marketplace, more than 300 franchisors have 
joined the VetFran program, which VA and the International Franchise 
Association refreshed in 2002. Currently, more than 700 veterans have 
opened franchises under this program. In VetFran, veterans are eligible 
for reduced franchise fees and other support. One example is Little 
Caesar's Pizza. In November, they began a 12-month program of benefits 
to veterans and service-disabled veterans to help them open pizza 
shops. The benefit to a disabled veteran approaches $70,000. We are 
seeing renewed interest from the corporate community to outreach to 
veterans. At our June conference, we will be renewing partnership 
agreements with several Federal prime contractors who recognize that 
veterans in business are solid performers.
    Before closing, I know you are interested in what more needs to be 
done. We encourage other Federal agencies to continue, and increase, 
their use of the service-disabled veteran set-aside tool. I would also 
recommend increased attention to conducting and documenting training of 
Federal agency personnel in using the tools available through the 
Federal Veterans Entrepreneurship program. Only when we have 
comprehensive awareness and buy-in for this program will we see global 
successes. Agencies are required to post their strategic improvement 
plans for enhancing achievements with service-disabled veterans in 
business. Veterans who call us want to see these plans, and the annual 
reports, posted in an easy to identify location. Many contracting 
activities are still struggling with a lack of capable businesses in 
specialized industries. A method to incentivize prime contractors to 
incubate new small businesses in these underrepresented fields will 
benefit all parties. Others will address, I'm sure, the chronic problem 
of access to capital. VA will also focus on subcontracting 
accomplishments.
    I hope you will agree that opportunities for veterans in business 
are abundant and that there is widespread support for this program.
    Madame Chairman, thank you again for convening today's hearing. I 
will submit my written statement for the record. I welcome your 
interest and I am prepared to answer any questions that you or the 
members may have.

                                 

Prepared Statement of Louis J. Celli, Jr., Chairman, Advisory Committee
for Veterans Business Affairs, U.S. Small Business Administration, and 
  Chief Executive Officer, Northeast Veterans Business Resource Center

                           EXECUTIVE SUMMARY

    Veterans' entrepreneurship has come a long way over the last few 
years. In the 1930's and 1940's veteran status was highly regarded by 
the local, national and most importantly, the business community. 
Veterans' issues and veteran status usually follow the trend of the 
prevailing national climate.
    In the late 1960's and early 1970's America, as a nation continued 
to grow and mature. As we did we experimented, tested boundaries and 
struggled for our sense of identity as individuals. As this evolving 
generation of Americans sought to be independent as individuals, we 
believed it necessary to rebel against authority. 200 years earlier 
America was a nation of rebels and in 1970 we were a nation of 
individuals rebelling.
    One of the very unfortunate casualties of that time period was the 
American GI. Service members represented the closest thing that 
American individuals could identify with as the ``government'', and 
subsequently misdirected their anger and hostility toward American 
service members. This misguided stigma damaged the image of the 
American military for decades and residual damage from that time period 
can still be felt today.
    While most of mainstream America understands the dedication, 
commitment and sacrifice of today's armed forces, transitioning service 
members and military veterans still face discrimination and missed 
opportunities with regard to employment and self employment endeavors.
    When Congress passed the Veterans Entrepreneurship and Small 
Business Development Act 1999 (Public Law (PL) 106-50), it stated in 
its findings that America had not done nearly enough to `assist 
veterans, particularly service-disabled veterans, in playing a greater 
role in the economy of the United States by forming and expanding small 
business enterprises.'
    There are seven parts to PL 106-50 which were all designed to 
operate independently while working toward one common goal. Each of 
these entities; the SBA office of Veterans Business Development, the VA 
Center for Veteran Enterprise, the SBA Advisory Committee, the Veterans 
Corporation the Veterans Representative for SCORE and all of the 
others, would theoretically work cooperatively toward the common goal 
of assisting veteran businessowners AND SUPPORT EACH OTHER while 
WORKING TOGETHER. 106-50 was a 4 year plan, and at the pinnacle of the 
4th year all of these agencies, idealistically would have been working 
together and supporting each other so they might serve a greater 
population of veterans as a team.
    Herein lies the problem. Rather than work together, each of the 
agencies chose their own path and developed their own mission 
accordingly. Congress had intended that TVC be the core element at the 
center of this initiative and lead the veteran entrepreneurship mission 
with the assistance and support of the Federal agencies into the 21st 
century and beyond. What they could not have predicted was that in the 
absence of direct supervision, none of these separate entities felt 
obligated or responsible to cooperate. Thus, the VA went in their 
direction, the SBA in their direction, DoD never even showed up and TVC 
was left an orphan. A 12 million dollar orphan without any 
entrepreneurs or nonprofit experience to build this new business.

                             Oral Testimony

    Good morning Chairwoman Herseth Sandlin, Ranking Member Boozman and 
Members of this Subcommittee. Thank you for the invitation to come 
before you and discuss veteran entrepreneurship.
    It's been 7 years since the unanimous passage of Public Law 106-50, 
and this committee now asks ``How are we doing?''
    My name is Louis Celli and I am a 22 year veteran of the United 
States Army, a Service Disabled Veteran and have started two 
businesses. I am the Chairman of the SBA's Veterans Small Business 
Advisory Committee
    You have assembled before you today some of the most renowned names 
in the veteran community, you have heard their testimony and you have 
listened to the needs of your constituents.
    So now, what do we know? We know that the program hasn't hit the 
mark, not yet. We know that the Federal agencies and Federally funded 
programs charged with carrying forth this plan to promote and defend 
veteran entrepreneurship all believe that they are hitting the mark. We 
know that the veterans aren't so sure.
    What does that mean and what can you do about it? It means that 
when you set your own goals, and standards by which success is 
measured, success is easily achieved.
    I retired in 2002 as an Army Master Sergeant. When I was on active 
duty, my job was to take care of my soldiers, and when I was working 
with Army Recruiting Command, my job was to reassure the parents of the 
new soldiers joining the Army that their sons and daughters were going 
to be protected and taken care of. I was then, and I am still today 
proud of our armed forces and proud to have worn our uniform.
    One of the hardest things for me now, is to be working with 
returning veterans as they process through Walter Reed and I feel a 
deep sense of guilt; I feel like I have let them down because I am not 
out there today in a hummvee protecting them. I have to keep reminding 
myself that it's not my job anymore, I've tried to go back but I can't, 
I am 40 percent disabled and I am no longer qualified to serve in the 
Army, and it's hard. These men and women are hurt and in some cases 
hurt bad.
    Seven years ago, we passed a law that was meant to address the 
needs of American Service Men and Women who wanted to compete as 
businessowners in the American economy they fought so hard to protect.
    Seven years ago we were riding high on a nation at peace and a full 
strength military.
    Seven years ago, we knew that we hadn't done enough to assist 
veterans, particularly service-disabled veterans, in playing a greater 
role in the economy of the United States by forming and expanding small 
business enterprises (PL 106-50).
    Seven years later, were still not there.
    Why? No program management.
    You created the right tool but put in place no measures for 
success, oversight or accountability. You charged the VA, the SBA, TVC 
with building programs, told all of the other Federal agencies to 
support this effort and closed the book. No one was put in charge. 
Since no one was in charge, and no standards were set, who could say 
whether the agencies or the corporation was complying or not?
    Well, based on the fact that we are here today and this is the 
third Congressional hearing in almost as many months regarding the same 
issue, it's apparent that your constituents are not satisfied, veterans 
and non veterans alike. This has become such an important issue that 
congressional leaders are working together in uncommon fashion as 
represented here today by the Honorable Congresswoman from California, 
Congresswoman Daily who has been asked to attend as a guest of this 
Committee.
    It may be time that we take a good hard look at restructuring this 
program and assemble all of these independently moving parts into a 
cohesively, high functioning machine. We would save money, effort and 
time and it would finally put an end to the turf wars which have 
plagued this program from the beginning.
    Congress needs to establish an office to manage the program, a 
``Veterans Business Program Management Office'' and it should be an 
office with Federal authority. This office should be responsible for 
monitoring, assisting, management and oversight of;

      Veterans Entrepreneurship Advocacy
      Veterans Entrepreneurship Training
      Veterans Professional Skills Certification
      Veterans Federal Procurement
      And, assist and promote Veterans Procurement at the state 
level) Promotion of Public / Private Partnerships with regard to 
Veterans Entrepreneurship, Small Business and Employment
      Entrepreneurial Vocational Rehabilitation Case Management
      Compensated Work Therapy Training Directorate

    This office should report directly to The President of the United 
States and to Congress. Either This Committee, the Small Business 
Committee or a new Committee comprised of representatives of each.
    I have been approached by companies, small businesses and 
entrepreneurs, both veteran owned and non veteran owned who have 
offered to build complete companies with the sole intention of 
employing only disabled veterans. We need a program which assists them 
as well.
    The written portion of this testimony contains detailed programs 
and suggestions for implementation. I would be happy to continue to 
work with your offices to build upon this very important and very 
necessary program.
    Members of Congress, I can't protect these veterans any more, but 
you can. Help us. Help us build a program that will work and that will 
be around long after we are gone, benefiting Americas warriors wounded 
and whole, the men and women who have sacrificed so much and to whom we 
owe so much in return.
    We're not all Democrats, or Republicans, or Veterans, but we are 
all Americans. Each and every one of us in this room have benefited 
from the sacrifices of time, sweat and blood our American Service 
members have made and continue to make for us each day.
    Thank you for holding this hearing and thank you for your continued 
interest in veterans entrepreneurship.

                                 

          National Veterans Business Program Management Office

                      Program management office of

    National Institute for Entrepreneurial Research and Development

    (this is a very simplified overview of this suggestive program)

    The National Institute for Entrepreneurial Research and Development 
will be the headquarters for the Entrepreneurial Doctrine Command.
    The Entrepreneurial Doctrine Command will be the national authority 
for entrepreneurial development. This command will be assembled from a 
co-operative group of sources of both government and non-government 
representation.
    All ``policy'' will be the result of recommendation from the 
advisory board but will be ultimate decided on by the command director.
Organizational Structure:
    Office of Economic Research
    Office of the Small Business Administration
    Office of Minority Development
    Office of Veteran's Affairs
    Office of Veterans Service Organizations
    Office of Federal Procurement
    Office of State Procurement
        Department of Federal representation
        Department of Defense
        Department of the Interior
        Department of Transportation
        Department of (all)
    Procurement preparation and strategic positioning

Major training commands:
    Federal Procurement
    State Procurement
    Small business startup
    Small business growth
    Independent contractor structure
    Facilitator certification
    Non-profit organization development
    Leadership College
    Severely Disabled Self-Employment Directorate
    Previously Incarcerated training Directorate
    Community Outreach Development and Community Based Organization 
Develop-
    ment program
    Inventors and New Market Product Concept College
    Real-estate
    Home based business
    Compensated Work Therapy
    Office of Public / Private Partnership
Training Programs:


Business start up                                        Business etiquette (speaking, eating, dressing)
Business Growth                                          Public speaking
Networking                                               Presentation delivery
Time Management                                          Asking for money
Sales                                                    Applying for a loan
Marketing                                                Seeking funding from people you know
Leadership                                               Seeking funding from investors
Business finances for the sole proprietor                Business structure (legal structure, corp)
Business finances for the small business                 Small business and taxes (state and Federal)
Business financial management                            Professional licensing, certifications and permits
Federal contracting start-up                             Small business resources
Marketing to Federal agencies                            Registering your Small business (Veteran,
Grant writing                                            Minority, Woman)
Concept Paper Writing                                    The Federal Register
Proposal Writing                                         Understand Fed Biz Ops
Answering an RFP (Request for Proposal)                  Small Business Liaison Officer Relationship
Developing a Board of Directors                          Management
Public Relations                                         Understanding the FAR (Federal Acquisition
Benchmarking techniques and tracking                     Regulation)
Small business discovery laboratories
Small business communications (letter writing and
 business etiquette)



                                                         [GRAPHIC] [TIFF OMITTED] 35642A.001
                                                         

Veteran Owned Business Development Action Plan
    Extended deployment of our national Guard and Reserve forces has 
caused extreme hardship and has closed the doors of many of American 
Veteran Owned Business. This program is designed to assist the Veteran 
Small Business Owner to prepare for the businesses continued operation 
and sets forth an action plan to assist and support the Veteran and 
their business should the businessowner be called upon to serve.
    A detailed action plan will be developed as an Operations Order 
setting forth and addressing critical operational issues. At a minimum, 
the plan will have;

      A notarized Letter Of Instruction from the Veteran
      Business Owner
      An up to date business plan
      Checks and or bank cards
      Power of attorney
      Alert roster and contact phone numbers
      Financial template
      Assets and liabilities
      A video tape of the businessowner conveying his / her 
wishes and directives in their absence Copies of insurance policies, 
promissory notes, deeds, titles, articles of incorporation, etc.
      A Last Will and Testament
      Copies of deployment orders (where applicable)
      Contact numbers for military unit of assignment and 
branch manager
      Copies of all keys, access codes and combination numbers
      Back up electronic media data
      Any additional information or object that will assist in 
the smooth running of daily operation for the business

    It is understood that successful execution of this plan will depend 
on the structure of the business having been built in the franchise 
model as a ``Turn Key'' business. In order to facilitate this, a well 
planned and detailed organization chart will be documented. Each duty 
and responsibility entered into the Organizational chart must have a 
complete job description and ``employee manual'' which details and 
explains the duties and responsibilities assigned that position.
    The education and construction process of this program will require 
a unique commitment from the businessowner as well as a solid 
educational / mentorship program.
    While the commercial programs exist to accomplish the intended 
results, these programs are lengthy (18 to 24 month programs) and 
expensive ($450.00 / month X 24 months = $10,800. / person). A 
streamlined, accelerated and more cost effective program can be 
developed. The resulting program would allow the Veteran to complete 
the process in 6 to 12 months.
    Additionally, a Memorandum of Understanding or contract would be 
developed between the Veterans Business Resource Center (VBRC), the 
mentored business and the Small Business Administration (SBA) as a 
method of registering and tracking these businesses.
    Eventually, businesses who successfully complete the Action Plan 
and have their plan registered with the VBRC and SBA would be available 
for emergency funding special tax consideration to assist and defray 
any costs associated with extended military deployment.

         Guard and Reserve Business Tax Forbearance Initiative

    Concept:  protect Veteran businessowners who become activated 
pursuant to military orders IAW section 101 Title 10 United States Code 
from Business Tax Liability which may result in extreme financial 
hardship on the business and the veteran.
    Action: To authorize a business tax forbearance whereby allowing 
the selected category of duty status military Member to deposit their 
estimated Federal business tax liability payments into an interest 
bearing trust account, thus authorizing tax forbearance for a period of 
time equal to the amount of active duty time performed plus 180 days. 
This forbearance is to begin upon the effective date of the service 
Member's orders and all tax obligations are to be satisfied in full no 
later than 180 days following the termination of such orders.
    Intrest--Any and all interest realized from the deposits of this 
program are to be retained by the corporation and will not be 
considered capital gains or profit and should subsequently be tax 
exempt. The maximum allowable deposits subject to this protection shall 
not exceed two times the actual tax liability. Any deposits enjoying 
interest in excess of two times the finally established tax liability 
will be subject to standard taxation IAW the corporation's tax burden. 
(I allowed for up to two times the tax burden for two reasons, one--
businesses pay an estimated tax based on sales forecasts and two--to 
provide businesses in this category an incentive to establish a savings 
that will help to revitalize the business when they return to the 
business.
    Failure--Failure to satisfy the existing tax obligation by the end 
of the 180th day following the return of the businessowner will result 
in the businesses being subject to the standard interest and penalties 
subject any business who fails to satisfy its tax obligation. The date 
that such interest and penalties will be assesses will be the 181st day 
following the termination of the duty orders to which the Member 
entered this forbearance.
    Multiple and concurrent assignment--Each period of active duty will 
be treated as separate and independent actions if separated by more 
than three duty days (the establishment of a duty day needs to be 
addressed. This is important because in an effort to maximize training 
funds, a military unit may issue a consecutive series of active duty 
orders for 5 day periods to be paid for from one accounting method and 
pay the military member for the weekends using another payment account 
which does not necessarily require active duty orders. Further, home 
station active duty may be restricted to 5 day increments, again due to 
budget considerations). At no time will a unit create or extend active 
duty requirements for the sole purpose of qualifying a businessowner 
for participation in this program.

                Inclusion of Veteran Owned Companies to

                Section 7 (j) of the Small Business Act

Recommendation
    Draft resolution for amendment to U.S. Small Business Act 1953, 
section 7 (j), to include ``Veterans'' and ``Veteran Owned or 
Operated''.
Justification 
    Congress finds the following:
    The United States has done too little to assist veterans, 
particularly service-disabled veterans, in playing a greater role in 
the economy of the United States by forming and expanding small 
business enterprises.
    And
    The United States must provide additional assistance and support to 
veterans to better equip them to form and expand small business 
enterprises, thereby enabling them to realize the American dream that 
they fought to protect. [PL 106-50, ``Veterans Entrepreneurship and 
Small Business Development Act 1999'']
    And
    It is the declared policy of the Congress that the government 
should aid, counsel, assist, and protect, insofar as is possible, the 
interests of small-business concerns in order to preserve free 
competitive enterprise and to insure that a fair proportion of the 
total purchases and contracts or subcontracts for property and services 
for the government be placed with small-business enterprises. [The U.S. 
Small Business Act 1953]
Program Overview
    http://www.sba.gov/gcbd/7j.html
    The Program
    The mission of the U.S. Small Business Administration's (SBA's) 
Office of Business Development (BD) is to assist economically and 
socially disadvantaged businesspersons achieve competitive viability in 
the marketplace. To that end, SBA has been authorized, under section 
seven(j) of the Small Business Act, to enter into grants, cooperative 
agreements or contracts, with public or private organizations that can 
deliver management or technical assistance to individuals and 
enterprises eligible for assistance under the Act. This assistance is 
delivered through the seven(j) Management and Technical Assistance 
Program to 8(a) certified firms, small disadvantaged businesses, 
businesses operating in areas of high unemployment or low-income or 
firms owned by low-income individuals [add ``or firms owned or operated 
by veterans'' here].

                                 

                  SBA Regional Finance and Bond Surety

               Veterans Small Business Advisory Councils

Recommendation
    The Administrator of the SBA charges each Region to require their 
districts to assemble SBA sponsored Veterans Small Business Finance and 
Lending Advisory Councils consisting of a consortium of commercial 
lenders, bonding agents and Veteran businessowners for the purpose of:

    1.  Review, coordinate, and monitor plans and programs developed in 
the public and private sectors that affect the ability of small 
business concerns owned and controlled by veterans to obtain capital, 
credit and bond surety.
    2.  Promote the collection of business information and survey data 
as they relate to veterans and small business concerns owned and 
controlled by veterans regarding small business financing and bonding 
ability.
    3.  Develop and promote initiatives, policies, programs, and plans 
designed to foster small business financing and bonding programs owned 
and controlled by veterans.
Program Outcome
    By getting finance and bonding professionals directly involved with 
the building and planning stage of Veteran Small Business Financing 
programs, they will instinctively support and promote Veterans Small 
Business Interests. The theory is the same as when a Non-Profit company 
invites community members to sit on their Board of Directors. The Board 
members take a personal interest in the promotion of the organization 
and put added emphasis into networking and the promotion of these 
organizations to assist in the organizations success.
    The same theory applies here. The lending and bonding institutions 
responsible for developing ``suggestions'', ``incentives'', 
``programs'' and other work on behalf of veterans will have a personal 
and professional stake in the success of the program thus giving the 
programs ``top down'' emphasis.
    This Council would be by invitation only and participants should be 
``recognized'' by the administration in a creative way which may 
include:

    1.  Certificate of participation signed by the President of the 
United States
    2.  Annual invitation and award recognition at the national SBA 
Small Business Week celebration
    3.  SBA Co-branding opportunities, SBA funded brochures
    4.  SCORE recognition and partnership opportunities

    There are a number of more aggressive ``incentives'' these are some 
of the more cost effective and least legally cumbersome. Other 
incentives could include a more favorable rate for lenders who choose 
to participate or ``preferred'' processing incentives or discounted 
processing fees.

                                 

                       SUBMISSION FOR THE RECORD
      
   Prepared Statement of Eric A. Hilleman, Deputy Director, National 
   Legislative Service, Veterans of Foreign Wars of the United States
    MR. CHAIRMAN AND MEMBERS OF THIS COMMITTEE:
    On behalf of the 2.4 million members of the Veterans of Foreign 
Wars of the U.S. (VFW) and our Auxiliaries, I would like to thank you 
for your invitation to testify at today's important hearing on 
veterans' entrepreneurship and self-employment.
    Capitalism is one of the defining pillars of our culture and our 
democracy. The efficiency and ingenuity inspired by competition has 
driven the growth of our economy and the diversity in our marketplace. 
Small businesses make up the bulk of the American business landscape 
serving as a testament to the American dream. One person with an idea 
and the right mix of innovation, creativity, and dedication can rise 
from humble beginnings to build the Wal-Marts and Microsofts of 
tomorrow.
    Starting, owning, and operating a business can be a daunting task. 
Service members need a set of transition tools to aid in moving from 
active duty military to civilian entrepreneur. Veteran entrepreneurs 
return home to take on a role in the family business, purchase a 
franchise, or strike out on their own to build their business one brick 
at a time. Regardless of how they embark upon the road of 
entrepreneurship or at what stage of their lives, our Nation benefits 
from their efforts. The challenges this community of entrepreneurs face 
are particular and unique.
    As the bulk of service members separate from the military, they 
benefit from: Transition Assistance Programs, employment center help, 
and veterans' hiring preferences. Veteran entrepreneurs, being a 
smaller sector of this population, lack such assistance. Many veteran 
entrepreneurs are able to benefit from government efforts to assist 
small businesses in general, but there is not a centralized source of 
information to aid the veteran entrepreneur population. Many of the 
sources of information are peppered throughout these sites: 
www.vetviz.gov, www.sba.gov, www.business.gov, www.dol.gov, 
www.acq.osd.mil, and www.veteranscorp.org. The VFW believes a 
comprehensive Web site containing the depth and breadth of information 
on veterans small businessownership would be ideal.
    Along similar lines, we must also examine the assistance available 
to--and the specific needs of--Guard and Reserve members. By 
activating, they leave their businesses behind in order to do the work 
of their government. Currently the Small Business Administration (SBA) 
provides debt relief on SBA-direct or guaranteed loans, but education 
and outreach could provide assistance before a loan goes into default. 
We must carefully consider how and what we provide for this distinct 
group of service members. The Uniformed Services Employment and 
Reemployment Act (USERA) protects the jobs of deployed service members; 
so too, we need measures to prevent Guard and Reserve entrepreneurs 
from losing their livelihoods.
    In the past, Congress has ordered Government Accountability Office 
studies of veterans' small business. However, these studies have often 
focused more on the efficacy of the National Veterans Business 
Development Corporation than on businessowners. We believe that the 
best interests of the country are served in launching a comprehensive 
review of the make-up of veteran-owned small business, the available 
programs, and the needs of this community.
    The VFW feels it is prudent to consider legislative changes that 
will aid small businesses; and these changes must be developed and 
disseminated in a manner that is user friendly. Comprehensive changes 
to government contract standards, outreach programs, loans, service 
centers, web-based tools, education benefits, and mentorship programs 
are best considered once the veteran-owned small business community is 
better understood.
    Understanding the veteran-owned small business community is 
essential to moving forward with both fundamental and substantive 
changes. We encourage Congress to examine the challenges and barriers 
that veteran entrepreneurs encounter. The study should address the 
existing programs that answer these questions, as well as how the 
government may deliver the benefits and services addressed in these 
questions:

      Where can one find information on starting a business?
      How to develop a sound business plan? Where / how to 
obtain financing for my business?
      How to grow a business and launch a marketing plan? What 
about client / customer development?
      What education benefits are available for building a 
business?
      How does one obtain contracts with the Federal 
Government?
      Where / when is bonding and / or insurance necessary for 
government contracting?

    The Guard and Reserve members who own and operate small businesses 
face intense challenges in the lead-up to frequent deployments. A 
different set of concerns are addressed with the repeated, unexpected, 
and extended activations in Iraq, Afghanistan, and / or providing 
disaster relief:

      Who will run the business when the service Member is 
deployed?
      How does one care for a family with the loss in income 
from activation?
      The business is failing; what assistance is available?
      The current industry standards and information has 
changed during the deployment; what training is available to bring the 
service Member up to speed?
      Will the government provide training for a spouse to run 
a business?
      How does one rekindle a business? Are there loans or 
grants available to get back to work?

    In studying the types of Guard and Reserve Member businesses, we 
can better provide remedial industry training, access to capital, and 
bridge assistance to the families of deployed members.
    This hearing is an excellent step in the right direction. In order 
for Congress to act to on behalf of veterans and a grateful nation, we 
must clearly understand who these veterans / small business owners are. 
We must further understand the types of business that are affected by 
assistance programs and which types are excluded. Any barriers to 
assistance and / or challenges exclusive to the veterans' small 
business development must be addressed. The VFW urges careful 
consideration of these issues, keeping always at its heart, the best 
interests of America's veterans.

                                 

                   MATERIAL SUBMITTED FOR THE RECORD
      
  Executive Order 13360--Providing Opportunities for Service-Disabled 
     Veteran Businesses To Increase Their Federal Contracting and 
                             Subcontracting

                         Presidential Documents

    Title 3--The President [Executive Order 13360 of October 20, 2004]
    By the authority vested in me as President by the Constitution and 
the laws of the United States of America, and in order to strengthen 
opportunities in Federal contracting for service-disabled veteran 
businesses, it is hereby ordered as follows:
    Section 1. Policy. America honors the extraordinary service 
rendered to the United States by veterans with disabilities incurred or 
aggravated in the line of duty during active service with the armed 
forces. Heads of agencies shall provide the opportunity for service-
disabled veteran businesses to significantly increase the Federal 
contracting and subcontracting of such businesses. To achieve that 
objective, agencies shall more effectively implement section 15(g) of 
the Small Business Act (15 U.S.C. 644(g)), which provides that the 
President must establish a goal of not less than 3 percent for 
participation by service-disabled veteran businesses in Federal 
contracting, and section 36 of that Act (15 U.S.C. 657f), which gives 
agency contracting officers the authority to reserve certain 
procurements for service-disabled veteran businesses.
    Sec. 2. Duties of Agency Heads. To implement the policy set forth 
in section one, heads of agencies shall:
    (a) develop a strategy to implement the policy set forth in section 
one;
    (b) make the agency's strategy publicly available and report 
annually to the Administrator of the Small Business Administration on 
implementation of the agency's strategy;
    (c) designate a senior-level official who shall be responsible for 
developing and implementing the agency's strategy;
    (d) include development and implementation of the agency's strategy 
and achievements in furtherance of the strategy as significant elements 
in any performance plans of the agency's designated agency senior-level 
official, chief acquisition officer, and director of small and 
disadvantaged business utilization; and
    (e) include in the agency's strategy plans for:
    (i) reserving agency contracts exclusively for service-disabled 
veteran businesses;
    (ii) encouraging and facilitating participation by service-disabled 
veteran businesses in competitions for award of agency contracts;
    (iii) encouraging agency contractors to subcontract with service-
disabled veteran businesses and actively monitoring and evaluating 
agency contractors' efforts to do so;
    (iv) training agency personnel on applicable law and policies 
relating to participation of service-disabled veteran businesses in 
Federal contracting; and
    (v) disseminating information to service-disabled veteran 
businesses that would assist these businesses in participating in 
awards of agency contracts.
    Sec. 3. Additional Duties of Administrator of the Small Business 
Administration. The Administrator of the Small Business Administration 
shall:
    (a) designate an appropriate entity within the Small Business 
Administration that shall, in coordination with the Veterans Affairs' 
Center for Veterans Enterprise (CVE), provide to service-disabled 
veteran businesses information and assistance concerning participation 
in Federal contracting;
    (b) advise and assist heads of agencies in their implementation of 
section two of this order; and
    (c) make available to service-disabled veteran businesses training 
in Federal contracting law, procedures, and practices that would assist 
such businesses in participating in Federal contracting.
    Sec. 4. Additional Duties of Administrator of General Services. The 
Administrator of General Services shall:
    (a) establish a governmentwide Acquisition Contract reserved for 
participation by service-disabled veteran businesses; and
    (b) assist service-disabled veteran businesses to be included in 
Federal Supply Schedules.
    Sec. 5. Additional Duties of the Secretary of Defense. The 
Secretary of Defense shall direct the Defense Acquisition University 
(DAU) to develop training on contracting with service-disabled veteran 
businesses and make this training available online through the DAU 
continuous learning program.
    Sec. 6. Additional Duties of the Secretary of Veterans Affairs. The 
Secretary of Veterans Affairs shall assist agencies by making available 
services of the CVE and assist in verifying the accuracy of contractor 
registration databases with regard to service-disabled veteran 
businesses.
    Sec. 7. Additional Duties of the Secretary of Labor and Secretary 
of Veterans Affairs. The Secretary of Labor and Secretary of Veterans 
Affairs shall, respectively, direct the Transition Assistance Program 
and the Disability Transition Assistance Program to educate separating 
service members as to the benefits available to service-disabled 
veteran businesses and as to potential entrepreneurial opportunities.
    Sec. 8. Definitions. As used in this order:
    (a) the term ``agency'' means an ``executive agency'' as that term 
is defined in section 105 of title five, United States Code, excluding 
an executive agency that has fewer than 500 employees, the government 
Accountability Office, or a Government corporation;
    (b) the term ``service-disabled'' means, with respect to 
disability, that the disability was incurred or aggravated in the line 
of duty in the active service in the United States Armed Forces;
    (c) the term ``service-disabled veteran'' means a veteran, as 
defined in 38 U.S.C. 101(2), with a disability that is service-
connected, as defined in 38 U.S.C. 101(16);
    (d) the term ``service-disabled veteran business'' means a small 
business concern owned and controlled by service-disabled veterans, as 
defined in section three(q) of the Small Business Act (15 U.S.C. 
632(q)); and
    (e) the term ``small business concern'' has the meaning specified 
in section three(a) of the Small Business Act (15 U.S.C. 632(a)) and 
the definitions and standards issued under that section.
    Sec. 9. General Provisions. (a) Heads of agencies shall carry out 
duties assigned by sections three, four, five, six, and seven of this 
order to the extent consistent with applicable law and subject to the 
availability of appropriations.
    (b) To the extent permitted by law, an agency shall disclose 
personally identifying information on service-disabled veterans to 
other agencies who require such information in order to discharge their 
responsibilities under this order.
    (c) An agency that consists of a multi-member commission shall 
implement this order to the extent it determines appropriate to the 
accomplishment of the agency's mission.
    (d) This order is not intended to, and does not, create any right 
or benefit, substantive or procedural, enforceable at law or in equity 
by any party against the United States, its departments, agencies, 
instrumentalities or entities, its officers, employees or agents, or 
any other person.

    GEORGE W. BUSH
    THE WHITE HOUSE,
    October 20, 2004.

                                  
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