[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



 
 THE MINORITY BUSINESS DEVELOPMENT AGENCY: ENHANCING THE PROSPECTS FOR 

                                SUCCESS

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


                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON COMMERCE, TRADE,

                        AND CONSUMER PROTECTION

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE

                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 15, 2009

                               __________

                           Serial No. 111-71


      Printed for the use of the Committee on Energy and Commerce

                        energycommerce.house.gov





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                    COMMITTEE ON ENERGY AND COMMERCE

                 HENRY A. WAXMAN, California, Chairman

JOHN D. DINGELL, Michigan            JOE BARTON, Texas
  Chairman Emeritus                    Ranking Member
EDWARD J. MARKEY, Massachusetts      RALPH M. HALL, Texas
RICK BOUCHER, Virginia               FRED UPTON, Michigan
FRANK PALLONE, Jr., New Jersey       CLIFF STEARNS, Florida
BART GORDON, Tennessee               NATHAN DEAL, Georgia
BOBBY L. RUSH, Illinois              ED WHITFIELD, Kentucky
ANNA G. ESHOO, California            JOHN SHIMKUS, Illinois
BART STUPAK, Michigan                JOHN B. SHADEGG, Arizona
ELIOT L. ENGEL, New York             ROY BLUNT, Missouri
GENE GREEN, Texas                    STEVE BUYER, Indiana
DIANA DeGETTE, Colorado              GEORGE RADANOVICH, California
  Vice Chairman                      JOSEPH R. PITTS, Pennsylvania
LOIS CAPPS, California               MARY BONO MACK, California
MICHAEL F. DOYLE, Pennsylvania       GREG WALDEN, Oregon
JANE HARMAN, California              LEE TERRY, Nebraska
TOM ALLEN, Maine                     MIKE ROGERS, Michigan
JANICE D. SCHAKOWSKY, Illinois       SUE WILKINS MYRICK, North Carolina
CHARLES A. GONZALEZ, Texas           JOHN SULLIVAN, Oklahoma
JAY INSLEE, Washington               TIM MURPHY, Pennsylvania
TAMMY BALDWIN, Wisconsin             MICHAEL C. BURGESS, Texas
MIKE ROSS, Arkansas                  MARSHA BLACKBURN, Tennessee
JIM MATHESON, Utah                   PHIL GINGREY, Georgia
G.K. BUTTERFIELD, North Carolina     STEVE SCALISE, Louisiana
CHARLIE MELANCON, Louisiana
JOHN BARROW, Georgia
BARON P. HILL, Indiana
DORIS O. MATSUI, California
DONNA CHRISTENSEN, Virgin Islands
KATHY CASTOR, Florida
JOHN P. SARBANES, Maryland
CHRISTOPHER S. MURPHY, Connecticut
ZACHARY T. SPACE, Ohio
JERRY McNERNEY, California
BETTY SUTTON, Ohio
BRUCE BRALEY, Iowa
PETER WELCH, Vermont

                                  (ii)
        Subcommittee on Commerce, Trade, and Consumer Protection

                        BOBBY L. RUSH, Illinois
                                  Chairman
JAN SCHAKOWSKY, Illinois             CLIFF STEARNS, Florida
    Vice Chair                            Ranking Member
JOHN SARBANES, Maryland              RALPH M. HALL, Texas
BETTY SUTTON, Ohio                   DENNIS HASTERT, Illinois
FRANK PALLONE, New Jersey            ED WHITFIELD, Kentucky
BART GORDON, Tennessee               CHARLES W. ``CHIP'' PICKERING, 
BART STUPAK, Michigan                    Mississippi
GENE GREEN, Texas                    GEORGE RADANOVICH, California
CHARLES A. GONZALEZ, Texas           JOSEPH R. PITTS, Pennsylvania
JIM MATHESON, Utah                   MARY BONO MACK, California
G.K. BUTTERFIELD, North Carolina     LEE TERRY, Nebraska
JOHN BARROW, Georgia                 MIKE ROGERS, Michigan
DORIS O. MATSUI, California          SUE WILKINS MYRICK, North Carolina
KATHY CASTOR, Florida                MICHAEL C. BURGESS, Texas
ZACHARY T. SPACE, Ohio
BRUCE BRALEY, Iowa
DIANA DeGETTE, Colorado
JOHN D. DINGELL, Michigan (ex 
    officio)


                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     1
Hon. Phil Gingrey, a Representative in Congress from the State of 
  Georgia, opening statement.....................................     3
Hon. Kathy Castor, a Representative in Congress from the State of 
  Florida, opening statement.....................................     4
Hon. G.K. Butterfield, a Representative in Congress from the 
  State of North Carolina, opening statement.....................     5
Hon. Bruce L. Braley, a Representative in Congress from the State 
  of Iowa, opening statement.....................................     6

                               Witnesses

David Hinson, National Director, Minority Business Development 
  Agency, United States Department of Commerce...................     8
    Prepared statement...........................................    11
    Answers to submitted questions...............................   142
Cindy Ramos Davidson, President and CEO, El Paso Hispanic Chamber 
  of Commerce....................................................    30
    Prepared statement...........................................    33
Sheila Hill, President, Chicago Minority Business Development 
  Council........................................................    43
    Prepared statement...........................................    45
Susan Au Allen, President and CEO, U.S. Pan Asian American 
  Chamber of Commerce............................................    50
    Prepared statement...........................................    52

                           Submitted Material

Report entitled, ``The State of Minority Business Enterprises,'' 
  dated August, 2006.............................................    89



 THE MINORITY BUSINESS DEVELOPMENT AGENCY: ENHANCING THE PROSPECTS FOR 
                                SUCCESS

                              ----------                              


                       THURSDAY, OCTOBER 15, 2009

                  House of Representatives,
           Subcommittee on Commerce, Trade,
                           and Consumer Protection,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 1:42 p.m., in 
Room 2322, Rayburn House Office Building, Hon. Bobby L. Rush 
[chairman of the subcommittee] presiding.
    Present: Representatives Rush, Sarbanes, Gonzalez, 
Butterfield, Castor, Space, Braley, and Gingrey.
    Staff Present: Michelle Ash, Chief Counsel; Angelle Kweme, 
Counsel; Timothy Robinson, Counsel; Will Cusey, Special 
Assistant; Aaron Ampaw, Fellow; Brian McCullough, Minority 
Senior Professional Staff; Shannon Weinberg, Minority Counsel; 
and Chad Grant, Minority Legislative Assistant.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. The hearing will be called to order. This is a 
hearing of the Subcommittee on Commerce, Trade, and Consumer 
Protection. The hearing is entitled, ``The Minority Business 
Development Agency: Enhancing the Prospects for Success.''
    The Chair yields himself 5 minutes for the purposes of an 
opening statement.
    The 111th Congress took extraordinary steps to turn around 
our moribund economy when it passed the American Recovery and 
Reinvestment Act of 2009. Back in October 2008, I told Senators 
in my district and also across the Nation that I had just begun 
to ensure that the concerns of people living on Main Street 
would not be ``eclipsed by the excesses on Wall Street.'' 
Today's hearing is a continuation of my pledge.
    This hearing is more than just about the Minority Business 
Development Agency. It really is about the larger matter of 
what we as Members of Congress can do to assist the executive 
branch in coming up with a prescription to help cure our fiscal 
and economic ails. As part of that prescription building, we 
will have a frank discussion today regarding the MBDA's 
reformulated vision from its new National Director, Mr. David 
A. Hinson, and whether it makes sense to endow MBDA with more 
resources to pursue that vision.
    In listening to the testimony and ideas of our 
distinguished panel of guests, we witnessed some of what MBDA 
could do, in conjunction with the Department of Commerce, to 
help reverse the devastation that has touched down on many of 
our formerly hardworking and historically blue collar and 
minority communities. These communities have suffered 
disproportionately under the yoke of this recession.
    I am of the belief that the MBDA can be an engine for 
positive change not just on Wall Street, but on Raleigh Road in 
Wilson, North Carolina; or on South Cresler Street in San 
Antonio, Texas; and West 74th Street in my hometown of Chicago, 
Illinois.
    To make sure of that change, the Federal Government and the 
States must authorize more spending of stimulus dollars and 
Recovery Act contracting with minority businesses--businesses 
that, I might add, are proving time and time again that they 
can complete projects on time and within budget. There can be 
no other fairer outcome.
    Minority firms have a greater tendency than nonminority 
firms to train future minority entrepreneurs, recruit and hire 
minority workers, and set up operations in minority 
communities. African Americans have a greater tendency to hire 
African Americans, women tend to hire women, Hispanic Americans 
tend to hire Hispanic Americans, and so on and so on and so on 
it goes. This is how the real world operates. Really, to 
understand this aforementioned dynamic one need not look any 
further than the halls of Congress.
    Since the start of the recession in December 2007, 
unemployment rates for all the major working groups are much 
higher. The unemployment rates for minority workers are even 
higher than those for white workers, by as much as 15 percent.
    According to the most recent Department of Labor employment 
statistics, the unemployment across race, sex, and age for 
African Americans is 15.3 percent; in 2007, it was 8.6 percent. 
For Hispanic Americans, it is 12.2 percent; in December 2007, 
it was 6.3 percent. For Asian Americans, it is 7.4 percent; in 
2007, it was 3.7 percent. For Indian Americans and Alaskan 
Natives, it is 15 percent; in 2007, it was 7.8 percent. And for 
Native Hawaiians, it is 14.4 percent; in 2007, it was 2.8 
percent.
    These are horrifying statistics. They paint a picture of 
the underutilization of minority workers, which is a harbinger 
of worse things to come.
    In closing, I want to thank the witnesses for coming here 
to offer us your perspectives. You are serving more than 
minority businesses through your appearances. You are also 
helping to uplift the U.S. from the severely economically 
distressed position it now finds itself in.
    I want to thank you, and I yield back.
    Now it is my pleasure and honor to recognize the Ranking 
Member, Dr. Gingrey, for 5 minutes for the purposes of an 
opening statement.

  OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF GEORGIA

    Mr. Gingrey. Chairman Rush, thank you. Thank you so much. I 
appreciate you calling today's oversight hearing regarding the 
Commerce Department's Minority Business Development Agency. 
Most businesses in this country, as we all know, are small 
businesses, and the value of small companies is significant. 
They provide the lifeblood of our economy. They employ more 
than half of all workers in this country. In fact, they have 
provided more than 14 million net new jobs created over the 
past 15 years.
    Small firms are the bedrock of American capitalism and they 
should be encouraged. Some of our most creative and valuable 
enterprises have started in someone's garage, with nothing more 
than an idea. While we can't guarantee successful outcomes, we 
can and we should work to ensure the path to small business 
contains as few hurdles as possible. And for small businesses, 
regulatory compliance is an enormous hurdle.
    For small businesses, regulatory compliance is a much 
greater burden than it is for a larger firm that has economies 
of scale and they can absorb these costs much more easily. As 
expected, the effect for small businesses--let's say one with 
fewer than 20 employees--is even greater. The cost of 
compliance with Federal regulations for firms with fewer than 
20 employees averages 45 percent more per employee than it does 
for large firms.
    These small businesses spend approximately $7,647 per 
employee to meet Federal environmental, economic, workplace, 
and tax compliance requirements. These costs are real and they 
can be disastrous to many small businesses that are, in some 
cases, home-based businesses. We have heard from many who close 
their doors because they were affected by the unforeseen 
regulatory cost of the Consumer Product Safety Improvement Act 
which made it too expensive to conduct business.
    As we look at the Minority Business Development Agency and 
its priorities, I would suggest that we focus on facilitating 
small business entry into the market by limiting unnecessary 
regulatory cost and roadblocks. Creating an environment 
conducive to job creation is always good policy, and I will 
always support it.
    Our country is a world leader in providing the opportunity 
to succeed, and the result has been a pipeline of small 
businesses and entrepreneurs that are invaluable to this 
dynamic United States' economy. Given the state of the world 
economy, addressing obstacles that hold back many of our small 
businesses is a good idea; indeed, an excellent idea.
    The Commerce Department's Minority Business Development 
Agency is one Federal initiative that seeks to promote minority 
business opportunities and the continued growth of their 
businesses.
    Currently there are over 4 million minority-owned 
businesses in the United States. They range in background from 
Native-born Americans to recent immigrants from many different 
ethnicities. Their common thread is they came to America to 
pursue a better life in a land of limitless opportunities. I am 
proud to say that many of the residents have used this 
opportunity to start successful businesses.
    So I am very interested in how the Minority Business 
Development Agency seeks to promote small businesses and to 
ensure opportunities exist for everyone who has the will and 
the determination to pursue the American dream.
    As I said at the subcommittee's first trade hearing back in 
March, often the difference that turns a struggling business 
into a successful one is the connection between buyers and 
sellers. Those networking opportunities and connections can be 
aided by our government's promotional efforts. Expanding the 
market of potential buyers often leads to new export and trade 
opportunities that are beneficial to our entire economy.
    It is not our role to ensure--we can't, really--whether a 
particular business is successful. That is up to the business 
and its ability to execute its own level of entrepreneurship. 
But we can seek to ensure that our existing resources that 
enhance small business growth are available to all Americans.
    Mr. Chairman, I look forward to the testimony of the 
witnesses, and I yield back at this time.
    Mr. Rush. The Chair thanks the gentleman.
    The Chair now recognizes the gentlelady from Florida, Ms. 
Castor, for 2 minutes for an opening statement.

  OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF FLORIDA

    Ms. Castor. Thank you, Chairman Rush, very much and welcome 
to our witnesses here today.
    We find ourselves in the worst economic downturn in a 
generation and the challenge now with the recovery plan and all 
of our efforts is to ensure that we save jobs and we create 
jobs.
    It is most important throughout our neighborhoods and 
communities that these are the hardworking folks that keep the 
economy going, our small businesses and folks that may be 
particularly vulnerable in these type of downturns.
    So we need your help and we need your advice on what we do 
make sure the Recovery Act is implemented as effectively as 
possible. I would like to hear how we use the new tools of 
modern technology to communicate, because you all understand 
better than anyone how difficult it is to get the word out. 
That is the challenge for many of these businesses and business 
owners. They want to compete, and they can compete very well, 
but they have to know about the opportunities.
    I found myself back home in Florida being a conduit, 
explaining what some of the opportunities are under the 
Recovery Act. But it is difficult. It is so vast and expansive.
    Next weekend we are going to have a big seminar and invite 
all of our small businesses, disadvantaged businesses, women-
owned, veteran-owned, service-disabled, to come hear from the 
U.S. GSA and small business folks and bring in other 
representatives from local government in our neighborhoods to 
spread the word. But we need to do more. And I want to hear 
from you all, with all of your expertise, how we can do a 
better job to keep people working and make sure our businesses 
have every opportunity to compete.
    Thank you.
    Mr. Rush. The Chair now recognizes the gentleman from Ohio, 
Mr. Space, for 5 minutes.
    Mr. Space. I just would like to thank you, Mr. Chairman, 
for your leadership on this issue and thank the witnesses for 
taking the time to prepare and offer your testimony today.
    It seems one of the unfortunate ironies of difficult 
economic times is that those who oftentimes need the most help 
are the first ones to get cut. I think the SBA's cuts have been 
a reflection of that maxim. That certainly applies to other 
areas as well.
    My district happens to be a very rural one, a very poor 
one, and the services that normally would be applied to areas 
like ours to help stimulate economic development, the areas 
like ours that need the help, are the services that have 
diminished or disappeared in the wake of difficult economic 
times. It oftentimes can become a vicious, cyclical pattern.
    So I'm again grateful for your taking the time to prepare 
and offer your testimony today, and look forward to hearing it.
    Thank you. I yield back.
    Mr. Rush. The Chair now recognizes the gentleman from 
Texas, Mr. Gonzalez, for 2 minutes.
    Mr. Gonzalez. I will waive opening, Mr. Chairman. Thank 
you.
    Mr. Rush. The Chair now moves to the gentleman from North 
Carolina, Mr. Butterfield, for 2 minutes.

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE STATE OF NORTH CAROLINA

    Mr. Butterfield. Thank you very much, Mr. Chairman, for 
convening this very important hearing today. When I first came 
on this subcommittee a few months ago, you told me that this 
was your passion and this was something we could expect. I want 
to thank you very much for living up to your promise.
    I, too, have a very profound interest in minority business 
development. I have had that passion for a very long time. And 
so I want to thank all of you four witnesses for coming and 
thank you for what you do to make this a reality.
    I must say at the outset that I have a bias, Mr. Hinson, 
toward the Department of Commerce. My daughter started this 
week as an appointee in the Trade Administration, so we now 
have something in common. And I look forward and welcome you as 
you take on this responsibility.
    Mr. Chairman, as I mentioned a minute ago, I represent a 
very poor, low-income, rural district in eastern North 
Carolina. My district is the fourth poorest district in the 
United States of America. My district is about 50 percent 
minority, and most of those minorities are African Americans. I 
can tell you that we have literally hundreds if not thousands 
of businesses in my district who are positioned to thrive if 
they could just get the financial resources and the technical 
expertise to make this happen. And so I want to encourage you 
to do more with the resources that you have at your disposal to 
try to make this happen.
    There is a parallel agency in my State, and I think most of 
you may be familiar with it, it is the North Carolina Institute 
of Economic Development, led by a friend of mine, Andrea 
Harris. I have known Andrea for at least 40 years. She wouldn't 
want me to say that. But she's a dynamic individual. That 
institution is helping minority businesses in my district do 
things that they need to do.
    And so I welcome you. I pledge to work with you. I am going 
to work with the Chairman and the Ranking Member and anyone in 
this Congress who wants to promote minority business 
development.
    The Congressional Black Caucus is totally committed to this 
effort. It has been for many years. Now that we have new 
leadership in the White House and in this Congress, hopefully 
we can make it a reality.
    Thank you very much. Thank you for coming.
    I yield back.
    Mr. Rush. Mr. Sarbanes from Maryland is recognized for 2 
minutes.
    Mr. Sarbanes. Thank you, Mr. Chairman. I look forward to 
the hearing. In particular, as has been mentioned by a number 
of folks, the role that is played in terms of reaching out and 
providing service and support to minority-owned businesses and 
small businesses, that role is ever more important in these 
difficult times that we are facing right now.
    What tends to happen, of course, is in a tough economy, 
particularly when you have a stimulus effort like we have and 
you are trying to move quickly to get the stimulus distributed 
through the economy, you can tend then to overlook small 
businesses and go to kind of the big players. At the same time, 
the mid-size and larger contractors, from what I have heard, 
because they are relatively desperate to get work, are kind of 
muscling in on some of the space traditionally occupied by the 
smaller businesses.
    And so I look forward to hearing the testimony today and 
maybe having some of those issues addressed.
    I yield back my time.
    Mr. Rush. The Chair thanks the gentleman.
    The Chair now recognizes the gentleman from Iowa, Mr. 
Braley, for 2 minutes.

OPENING STATEMENT OF HON. BRUCE L. BRALEY, A REPRESENTATIVE IN 
                CONGRESS FROM THE STATE OF IOWA

    Mr. Braley. Mr. Chairman, thank you for holding this 
important hearing. In the 110th Congress I was Chair of the 
Subcommittee on Contracting and Technology on the Small 
Business Committee and we talked a lot in our hearings about 
how to improve the effectiveness of programs like the HUB zone 
and 8A business development programs and level the playing 
field for minority-owned small businesses.
    One of the things that stood out during those hearings with 
the SBA was that the Federal Government was not keeping its 
promise to make sure that a certain percentage of contracts 
were going to minority-owned businesses. At that time, I 
pushed, and I will continue to push, to make sure the 
government is providing the tools and resources to help small 
businesses flourish and making sure that government contracts 
are going to a diverse group of businesses.
    One of the other things I learned during those hearings was 
that growing businesses have a difficult transition period once 
they exceed SBA size standards and are no longer eligible for 
programs offered by the SBA. That is why the Minority Business 
Development Agency is so important.
    For the past 40 years it has been providing technical 
assistance, education, and training to help these minority-
owned businesses as they move into this next stage of 
development. It is especially important as a resource as this 
Nation continues its economic recovery.
    While I'm certainly appreciative of all the great work that 
the MBDA is doing, I also believe that one of the greatest 
challenges this agency faces is that it is grossly underfunded. 
In fact, it is the smallest funded government agency, having 
received just $29 million last year.
    We need to make business development a greater priority and 
to make sure agencies like MBDA have the resources they need to 
create more procurement opportunities for minority business 
owners and jobs for minority workers. This is an investment 
that pays for itself through job creation and an increased tax 
base.
    I also think greater effort should be made to coordinate 
with the SBA so there is a smoother transition for these 8A 
graduates and these entrepreneurs to continue to have access to 
tools and expertise they need so their businesses can grow and 
compete globally.
    Minority-owned businesses make up 20 percent of all U.S. 
businesses but continue to be overlooked by many prime 
contractors in landing contracts with the Federal Government. 
Great strides have been made in the private sector to expand 
opportunities for minorities. It is time for the Federal 
Government to do its share.
    Thanks again, Mr. Chairman, and thank you to all the 
witnesses for joining us today. I yield back.
    Mr. Rush. The Chair thanks the gentleman. Now it is my 
distinct honor and privilege to recognize the visitors and also 
those who are in the audience--I want to acknowledge you--but I 
want to give special recognition to those who are witnesses 
before this subcommittee. I will begin on my left.
    On my left is Mr. David Hinson. He is the National Director 
of the Minority Business Development Agency for the Department 
of Commerce.
    Next to Mr. Hinson is Ms. Cindy Ramos Davidson. She is the 
President and CEO of the El Paso Hispanic Chamber of Commerce.
    Next to her I am very, very delighted to have with us 
someone from my hometown, Ms. Sheila Hill. She is the President 
of the Chicago Minority Supplier Development Council.
    Next to Ms. Hill is Ms. Susan Allen. She is the President 
and CEO of the U.S. Pan Asian American Chamber of Commerce.
    Before I proceed any further, it is the common practice of 
this committee that I swear in the witnesses. So would you 
please stand and raise your right hand.
    [Witnesses sworn.]
    Mr. Rush. Please let the record reflect that the witnesses 
have all answered in the affirmative.

TESTIMONY OF DAVID HINSON, NATIONAL DIRECTOR, MINORITY BUSINESS 
DEVELOPMENT AGENCY, UNITED STATES DEPARTMENT OF COMMERCE; CINDY 
RAMOS DAVIDSON, PRESIDENT AND CEO, EL PASO HISPANIC CHAMBER OF 
  COMMERCE; SHEILA HILL, PRESIDENT, CHICAGO MINORITY BUSINESS 
  DEVELOPMENT COUNCIL; AND SUSAN AU ALLEN, PRESIDENT AND CEO, 
          U.S. PAN ASIAN AMERICAN CHAMBER OF COMMERCE

    Mr. Rush. Now the Chair is delighted and pleased to 
recognize the Director of the MBDA, Mr. Hinson. Before Mr. 
Hinson begins, let me just state something for the record as 
the Chair. Mr. Hinson, you are certainly welcome here at any 
point in time. I met you in my office, and you are a delight. 
But I am woefully disappointed that we did not have an 
assistant secretary or someone that will really have the 
authority to speak across the board.
    I know you have the authority to speak for the Department, 
but I am just astounded that at this hearing, which is the 
first hearing that this subcommittee has had on this matter in 
a while--and it has been almost 40 years of the inception of 
MBDA--I'm really astounded that there is not enough interest, 
or what I perceive is interest, in the Department of Commerce.
    Will you please send the message back that I am absolutely 
determined that the next hearing that we have, that we have an 
assistant secretary or higher, because this MBDA is getting 
ready to grow in significance as far as I'm concerned and as 
far as the U.S. commerce is concerned. So it won't be the 
smallest agency in the U.S. Government if I have anything to do 
with it and other members of this committee.
    So please get back and tell them to get their act together 
now and increase their own responsibility and sensitivity 
toward the issue that your agency is concerned about and your 
agency has as its mission.
    We will have another hearing soon and we expect to have not 
only you present, but someone who is an assistant secretary 
present also, or, if not, the Secretary of Commerce.
    OK. Thank you so much.
    Mr. Rush. Now, it is my pleasure to recognize the National 
Director of the MBDA, Mr. Hinson, for 5 minutes for opening 
statements.

                   TESTIMONY OF DAVID HINSON

    Mr. Hinson. Good afternoon, Chairman Rush and Ranking 
Member Gingrey and members of the subcommittee. Thank you for 
inviting the Minority Business Development Agency here today to 
discuss how MBDA and the Department of Commerce is helping 
create wealth and jobs in the minority business community and 
the global economy.
    My name is David Hinson. I was appointed as National 
Director of the Minority Business Development Agency by 
Commerce Secretary Gary Locke on July 15, 2009.
    MBDA has been in existence for over 40 years. The agency 
was originally established through executive order by President 
Richard Nixon on March 5, 1969. The agency is currently 
authorized by Executive Order 11625, as amended, and receives 
annual appropriations from Congress.
    MBDA's vision is economic prosperity for all American 
business enterprises. The agency's mission is to foster the 
growth and global competitiveness of U.S. businesses that are 
minority-owned. It is my mission that each Member of Congress 
comes to understand the economic contributions that MBDA makes 
both in their local communities and to the entire Nation.
    MBDA works with minority firms of all sizes during all 
stages of their business lifecycle. MBDA aims to create a new 
generation of businesses with $100 million in annual revenue, 
which in turn generates higher economic activity and job 
creation.
    Based upon the needs of the client, MBDA provides the 
following business services through our nationwide network: 
business consulting; procurement matching; private equity and 
venture capital sourcing; bonding assistance and loan 
packaging; strategic partnering; and market promotion.
    MBDA funds a nationwide network of 46 centers, which are 
operated as public-private partnerships. The centers are 
staffed by professional consultants who have the knowledge and 
practical experience necessary to operate profitable 
businesses.
    Clients of the centers include businesses owned and 
operated by Native Americans, Hasidic Jewish Americans, Native 
Hawaiians, Alaska Natives, Asian Americans, Pacific Islanders, 
Hispanic Americans, and African Americans.
    MBDA's performance is evaluated annually on the number of 
new jobs created, the total dollar value of contract awards, 
and the total dollar value of financing transactions generated 
by the agency.
    In fiscal year 2008, MBDA generated over $1 billion in 
contracts, more than $1 billion in financial transactions, and 
generated 5,316 new jobs. Preliminary results for fiscal year 
2009 look to be equally as positive.
    So, as you can see, MBDA's programs increase the economic 
activity at the local, regional, and national level. This 
economic activity translates into reduced unemployment, 
stronger businesses, expanded tax bases, the creation of wealth 
and community investment.
    Congress has conducted numerous hearings and received 
numerous reports that demonstrate the persistence of 
discriminatory barriers that continue to limit contracting 
opportunities for minority businesses. As part of my written 
testimony I am submitting Appendix A, a list of hearings and 
materials that have already been presented to Congress; and 
Appendix B, a list of State and local government disparity 
studies.
    MBDA is an important catalyst in building stronger minority 
business communities. More than 18 percent of all U.S. 
nonpublicly traded firms are minority-owned. Yet, these firms 
represent only 7.5 percent of the total gross receipts 
generated by all U.S. businesses. This disparity underscores 
the opportunity gap that still exists in the U.S. economy.
    If the minority business community were performing at 
economic parity, the U.S. economy would benefit from an 
additional $1.8 trillion in annual gross receipts, 11.4 million 
new jobs, and an additional tax base exceeding $100 billion per 
year.
    A more comprehensive discussion regarding economic parity 
for MBEs and on the business characteristics of MBEs is 
available in two MBDA publications which have been provided to 
the subcommittee staff.
    In conclusion, MBDA has identified the following three 
strategic priorities and continues to implement programs to 
achieve these goals: Improve marketplace access and 
opportunity; improve access to traditional and nontraditional 
sources of capital; serve as a knowledge center and valuable 
resource for minority business stakeholders.
    I would like to thank Chairman Rush and Ranking Member 
Gingrey and the entire subcommittee for allowing me to testify 
before you today. I respectfully request the Chairman to enter 
my full written testimony, along with the two MBDA reports 
mentioned, as well as appendix A and appendix B, in the 
official hearing record.
    Mr. Rush. There has been unanimous consent request. Hearing 
no objection, the aforementioned articles and reports will be 
included in the record. So ordered.
    [The information appears at the conclusion of the hearing.]
    Mr. Hinson. On a final note, Mr. Chairman and distinguished 
members of the subcommittee, the Department of Commerce and 
MBDA are encouraged by this opportunity to testify. We look 
forward to working with you to create an environment where 
minority firms have an equal opportunity to participate in the 
marketplace.
    Thank you very much.
    Mr. Rush. The Chair thanks the gentleman.
    [The prepared statement of Mr. Hinson follows:]
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    Mr. Rush. I recognize for 5 minutes for the purposes of 
opening statement Ms. Ramos Davidson.
    Mr. Butterfield. Mr. Chairman, would you allow me to ask a 
question of the Chair, please?
    Are any of the Minority members of the committee going to 
join us today; have you received any word?
    Mr. Rush. It was the Ranking Member, Mr. Gingrey. They keep 
changing Ranking Members on us. He was here. I can't speak for 
the Minority.
    Mr. Butterfield. How many Republican members are on this 
subcommittee?
    Mr. Rush. There are 12.
    Mr. Butterfield. Are any of them represented by staff 
today?
    Mr. Rush. Yes, sir.
    Mr. Butterfield. Thank you, Mr. Chairman.
    Mr. Rush. Ms. Ramos Davidson.

               TESTIMONY OF CINDY RAMOS DAVIDSON

    Ms. Ramos Davidson. Good afternoon, Mr. Chairman and 
members of the subcommittee. Thank you for the opportunity to 
testify today on recommendations to enhance the prospects of 
success through the Minority Business Development Agency.
    I am Cindy Ramos Davidson, President and CEO of the El Paso 
Hispanic Chamber, a nationally and statewide recognized Chamber 
that not only serves our market but small, minority- and women-
owned businesses in our borderplex in our region.
    I am here today to testify on behalf of the United States 
Hispanic Chamber of Commerce, the world's largest business 
federation representing more than 3 million Hispanic-owned 
businesses and organizations of every size, sector, and region, 
as well as the El Paso Hispanic Chamber of Commerce, which is 
an affiliate of the U.S. Hispanic Chamber.
    I'm in a unique position to be able to provide you some 
testimony, because you're looking at the real face on the 
street every day who utilizes these programs to move 
opportunity forward.
    The El Paso Chamber of Commerce has successfully operated 
an SBA-funded Women's Business Center for the past 8 years. 
More recently--and I'm proud to say--as an operator of a 
Minority Business Enterprise Center in partnership with MBDA 
and the U.S. Department of Commerce for the last 18 months.
    I think it's important to note that I tried five different 
times to be able to be awarded the Center, because I understood 
and recognized the need for the services the Center offered in 
our market. And each time we applied and we didn't get 
selected, we kept going back and going back. So a lot of that 
tenacity and sweat equity that we do every day is what we teach 
in our Centers.
    It's of interest to note that the El Paso Hispanic Chamber 
and the Arizona Hispanic Chamber are the only two minority 
Chambers in the country currently operating Minority Business 
Enterprise Centers in partnership with MBDA.
    In addition, we operate a satellite PTAC in partnership 
with our community college, which is partnered with the 
Department of Defense, Defense Logistics Agency; a HUB 
Development Center of Excellence for State and Federal HUB 
certification; an Empowerment Zone Technical Assistance in 
partnership with the city of El Paso and HUD; and our newest 
one that we are going to open on the 28th, which is our Texas 
Department of Transportation Business Opportunity Center in 
partnership with TXDOT and the Federal Highway Administration.
    We are honored to be associated with each of these agencies 
and confident that we can provide testimony as an effectiveness 
of these Centers for minority business populations we serve.
    Our efforts are grassroots, provided bilingually, with 
technical assistance and development, for every phase of 
startup and growth industry businesses would not be possible 
without the support of all these agencies.
    From January 1, 2003, to July 31, 2009, we have served 
through our counseling and training centers 28,101 individuals; 
assisted in financing projects totaling $51 million; provided 
successful procurement and bid matches totaling $61 million; 
helped assist in the startup of 316 businesses; most notably, 
assisted 3,668 expanding businesses which helped to create and 
retain over 11,000 jobs.
    As a veteran community, with our military base, Fort Bliss, 
we have serviced 747 veteran and service-disabled clients; 722 
home-based businesses; and 14,152 female clients--all of these 
Centers providing an estimated impact to our community of $362 
million.
    Being on the street and in the trenches every day, we 
understand firsthand the needs of minority business and feel 
that these agencies work in tandem with MBDA to complement each 
other's services.
    The SBA has been a primary agency for startup businesses, 
providing much-needed support in the area of accessing hard-to-
find capital through guarantee loan programs, business plan 
development, and marketing strategies. But MBDA is the core of 
opportunity for the market we serve. That is where the strength 
of economic viability is going to come, is through those growth 
industries, those businesses that we help through the MBDA.
    MBDA's Minority Business Enterprise Centers, their Native 
American Business Enterprise Centers, and their Minority 
Opportunity Centers provide a much deeper level of assistance 
to small businesses to grow through larger, more complex 
traditional lending avenues, such as bonding assistance; 
guidance on procurement strategies, such as joint ventures and 
teaming agreements; and providing networking and contracting 
opportunities through its wide network of resources.
    The diversity of services and clients enables all minority 
entrepreneurs who need assistance to receive it with our 
support, to be able to champion their own destiny and catch a 
part of the American dream through free enterprise.
    To date, the El Paso MBEC has received and worked through 
companies in our area $528,398,207 from the American Recovery 
and Reinvestment Act. I do have a copy here of all of those 
jobs through AAR that we have done if anybody needs a copy of 
those.
    With the support of our MBEC and the U.S. Department of 
Commerce, we have been able to ensure that minority-owned 
businesses in our community are able to successfully bid and 
perform on these jobs. The report has also shown there's a 
significant support avenue in terms of helping these companies 
not just to stay small, but be able to grow.
    We have seven Centers within our organization and each one 
of those Centers works hand in hand with the MBEC to be able to 
provide what is necessary to grow these businesses.
    We feel that consideration should be given to making MBDA 
have a much greater influence in this country because you're 
looking at the face who works day and day with the company who 
wants to start a business, has a wonderful idea, and doesn't 
know where to get started.
    The resources we have are great, but we could do so much 
more if we had more resources. And I am with you, Mr. Chairman; 
MBDA is the smallest but yet it does the best work. It's got 
the biggest heart, more compassion than anybody I've seen, but 
we can certainly triple that if we had more dollars and more 
resources.
    I thank you, because I see my time is up, for the 
opportunity to testify.
    [The prepared statement of Ms. Ramos Davidson follows:]
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    Mr. Rush. The Chair will entertain a unanimous consent 
request that the aforementioned reports that Ms. Ramos Davidson 
mentioned in her testimony, that they be entered into the 
record. Hearing no objections, so ordered.
    Mr. Rush. Now it is my pleasure, again, to recognize the 
Chicagoan among the group, Ms. Hill. Ms. Hill, you're 
recognized for 5 minutes. Welcome.

                    TESTIMONY OF SHEILA HILL

    Ms. Hill. Thank you so much, Congressman. Good afternoon. 
I'd like to thank the Honorable Bobby L. Rush, Chairman of the 
Subcommittee on Commerce, Trade, and Consumer Protection and 
the distinguished committee members for giving me the this 
opportunity to speak.
    I am Sheila Hill. I'm President and CEO of the Chicago 
Minority Supplier Development Council, a 42-year old not-for-
profit organization founded on the basic principle that all 
should have equal access to participate in the commerce of this 
country.
    I have been in this industry for more than 20 years and I 
have been an entrepreneur, a Fortune 500 corporate 
professional, and now the leader of the Minority Supplier 
Development Council.
    The Chicago Minority Supplier Development Council is the 
founding member council of the National Minority Supplier 
Development Council, and it represents over 37 affiliate 
councils, 16,000 certified minority businesses, and more than 
3,500 major buying organizations. The mission of the Council is 
to create an environment that maximizes business opportunities 
between buying organizations and certified MBEs and to provide 
development services to foster the creation of mutually 
beneficial business relationships. Therefore, our relationship 
with MBDA is a perfect marriage.
    CMSDC has maintained a 40-plus year relationship with the 
Minority Business Development Agency, MBDA, U.S. Department of 
Commerce, and has been the operator of the Chicago Minority 
Business Opportunity Center for 6 years. We also operate the 
Gary Minority Business Opportunity Center and co-operate the 
Chicago MBOC.
    Our relationship with MBDA is unique, and it in conjunction 
with this relationship the minority business community has 
benefited and business opportunities have prospered. Through 
this relationship, the operation of the MBOC has created jobs; 
access to contracts, both public and private sector; increased 
financial transactions, including but not limited to mergers 
and acquisitions. In fact, the MBOC has generated approximately 
$1 billion in contracts and financial transactions over the 
past 3 years.
    The Chicago model is an excellent model. It is a good 
working model and it is one that I hope will be replicated 
across the country.
    MBDA provides vital resources to the business community, 
and although the name says minority, its policies far outreach, 
far exceed the minority business community. And for the record, 
committee members, public policy dictates private behavior and 
policy. MBDA's initiatives impact all Americans, not just 
minority Americans. It is an American agency, not just a 
minority business agency.
    Parity for people of color in business does not exist. 
Discrimination is still extremely widespread. Access to 
contracts, financing, and bonding, which lead to growth, 
prosperity and employment, continue to be limited. Minority 
businesses need access and business development. It is through 
the support of MBDA that these things happen.
    At approximately $29 million, the Minority Business 
Development Agency is the smallest federally funded agency 
within the government. Nevertheless, for the last 5 years the 
citizens of America have realized a minimum return of 54 times 
and a maximum return of 74 times. I think that is pretty 
substantial.
    As a business professional committed to the growth and 
development of minority businesses, the growth and development 
of this country, it is mission critical for MBDA to be better 
funded.
    Had the MBDA budget remained flat over the past 40 years, 
it would be, minimally, a $300 million agency.
    As operator of the Chicago MBOC, this would allow me to 
serve more MBEs. Larger, more successful MBEs would hire more 
employees; more employees would positively contribute to the 
economy, pay more taxes, and build our country.
    MBDA is the only Federal agency specifically devoted to 
growth and development of minority businesses. It was created 
back in 1969, as you all know, by executive order. It needs to 
have statutory authority.
    Transparency and accountability to ensure a level playing 
field is still needed. A perusal of FedBizOps would confirm 
that minority businesses are not widely being included in the 
stimulus, TARP, or ARRA. MBDA is critical to enhancing the 
prospects for success.
    Thank you so much for this opportunity.
    [The prepared statement of Ms. Hill follows:]
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    Mr. Rush. The Chair thanks the witness. And now the Chair 
recognizes Mrs. Allen for 5 minutes for the purposes of opening 
statement.

                  TESTIMONY OF SUSAN AU ALLEN

    Ms. Allen. Thank you, Mr. Chairman and distinguished 
subcommittee members. The U.S. Pan Asian American Chamber 
Education Foundation welcomes this invitation and opportunity 
to speak before this subcommittee on the subject of enhancing 
the prospects for success for the Minority Business Development 
Agency and the Minority-owned Business Enterprise Community in 
the United States.
    I would like to ask, Mr. Chairman, that my more lengthy 
written statement be incorporated in the official record.
    Mr. Rush. So ordered.
    Ms. Allen. To start, we did apply for the opportunity to 
run a center, and we didn't get it either.
    In 1984, 11 Asian Pacific Americans from Maryland, 
Virginia, and Washington, D.C., had an idea. We wanted to bring 
together the very diverse Asian Pacific business owners for the 
common purpose of developing a national business and 
professional network. That was also the year I received my law 
degree. As the only lawyer in the group, I was asked to form 
the U.S. Pan Asian American Chamber of Commerce Foundation.
    My goal then was to create for the Asian American business 
community a strong voice in our Nation's capital and in the 
rest of the country that would speak to their talents, 
capabilities, aspirations, concerns, challenges, and the 
contributions that they have made to this country since the 
year 79 A.D.
    Since our founding, we have been working to help Asian 
American businesses to succeed and thrive, including providing 
certification to qualified Asian American businesses that want 
to do business in the minority business community and in the 
mainstream marketplace. This is a very important program for 
Asian Americans to get involved in. In order for them to get 
into this area, they have to be certified as a minority 
business. And I will talk about that further.
    Today, USPAACC has expanded its nationwide reach with 
national headquarters in Washington, D.C., and six regional 
chapters in California, Texas, Georgia, Illinois, and the D.C.-
Maryland-Virginia area. We have the largest database that 
contains information about the most important, innovative, and 
cost-effective Asian American suppliers across industries.
    Our small business transportation resource center in the 
southwest region, based in San Francisco, helps to prepare 
small businesses, that include Hispanic, African American, 
Asian, Native American, women, veterans, and disabled veterans-
owned businesses located in Arizona, California, Hawaii, 
Nevada, and Utah, so they could have an equal opportunity to 
participate in U.S. Department of Commerce and related 
contracts at the local, State, and Federal levels.
    Through our unique one-on-one prescheduled business 
matchmaking meetings, we were the first to introduce the 
platform that allows suppliers to build business connections 
and strengthen relationships with potential customers, and, 
along with our summits, seminars and workshops, we continue to 
educate and nurture our members.
    Asian Americans now account for approximately 15.2 million 
of the U.S. population, with the majority born overseas. As an 
ethnic group we are diverse and complex, with origins from 
countries in East Asia, Southeast Asia, the Indian 
subcontinent, and the Pacific Islands, speaking over 100 
languages and dialects.
    By the year 2050, Mr. Chairman and members of the 
committee, the Asian American population is projected to climb 
to over 40 million people, or 10 percent of the U.S. 
population.
    We have now enjoyed the highest median household income in 
the United States, with a buying power of $526 billion a year. 
Today, Asian Americans are relatively young, well educated, and 
the most wired, Internet savvy, bilingual ethnic group with 
deep pockets--and technologically savvy, too, Ms. Castor.
    Among U.S. small businesses, MBEs are the fastest growing 
sector, and Asian American businesses are the fastest growing 
in this group. Over 1.1 million Asian American businesses 
generated more than $393 billion in revenue in 2002 and hired 
2.5 million employees, the largest among all ethnic groups.
    Most Asian American businesses, however, do not fit the 
stereotypical high-tech garage setups or mom and pop 
operations. The biggest share of businesses fall into the 
service category, such as technical services, health care, 
transportation, construction, and so on.
    What are the issues and challenges that Asian American 
businesses face? Despite the large positive numbers registered 
by American business in the past several years, many continue 
to struggle in today's competitive global economy. In the area 
of diversity, a program that encourages the utilization of 
businesses owned by minorities and women, Asian American-owned 
businesses continue to be underrepresented in all sectors 
except for information technology and telecommunications.
    Contract bundling is a major hurdle for small businesses 
and all minority businesses. Getting certification accepted is 
a major hurdle for Asian American-owned businesses.
    What do I suggest that we could do with MBDA? I suggest 
that MBDA work with organizations such as us, USPAACC, such as 
MBDC, such as the U.S. Hispanic Chamber of Commerce and its 
many, many affiliates to reach out to the nooks and crannies of 
the country, because we are the people in the grassroots. We 
have our ear on the ground. We know where the footsteps are 
coming. With us, we can help MBDA reach down to all corners of 
the country and perform the services that are so much needed 
and send information out about opportunities that will truly 
benefit and bring prosperity to the country.
    [The prepared statement of Ms. Allen follows:]
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    Mr. Rush. The Chair thanks you. The Chair has been generous 
in the time allocated to you, but we do have to move on. Did 
you bring your statement to a conclusion?
    Ms. Allen. Yes. I shall be happy to answer any questions.
    Mr. Rush. Thank you so very much. There is a vote that is 
occurring on the floor as we speak, but we are going to try to 
move as fast as we can.
    The Chair recognizes himself for 2 minutes for questions.
    Director Hinson, it is unfortunate that MBDA is a largely 
unknown agency. Can you outline some steps that you plan to 
take to raise the profile of the only agency designed to assist 
and promote minority businesses?
    Mr. Hinson. Thank you for that question, Mr. Chairman. The 
Minority Business Development Agency, as is the Commerce 
Department, is moving aggressively to expose the activities of 
MBDA to our constituents nationwide. We are doing quite a 
number of things to increase our visibility in conjunction with 
the Department of Commerce.
    We are going around and meeting with many of the 
stakeholders that are across the Nation. They have expressed an 
interest in meeting with me personally. I have taken on that 
task to meet with them and to listen to all of their concerns. 
We are actively pursuing technology.
    We actually are one of the first agencies in the Commerce 
Department to begin to use social networking to expand our 
messaging around the Nation. We are engaging with many of the 
other Federal agencies. This is in partnership with the Small 
Business Administration under the economic stimulus activity to 
ensure that they are aware of what we are doing and what our 
agency is doing.
    So we are taking quite a number of steps.
    Mr. Rush. Let me ask you this. There's a new Office of 
Innovation and Entrepreneurship in the Department of Commerce. 
What kind of relationship do you intend to have with that 
office?
    Mr. Hinson. Thank you again, Mr. Chairman, for that 
question. We expect to have a very close relationship with that 
new area.
    Mr. Rush. That office is not going to supplant you and your 
mission?
    Mr. Hinson. No, sir. It is a separate group that has a 
separate mission, and it is a vital mission. What it is doing 
is bringing the best--and this is under the leadership of 
Secretary Locke--is bringing the best of what the Department of 
Commerce has to offer to early stage and startup businesses and 
providing a variety of technical services and support for those 
businesses. So it is a complementary effort.
    Mr. Rush. The chairman's time has expired.
    The Chair now recognizes Ms. Castor for 2 minutes.
    Ms. Castor. Thank you, Mr. Chairman. Director Hinson, what 
is the extent of MBDA's cooperation with the Small Business 
Administration in assisting small minority-owned businesses 
that grow too large for SBA programs? Does SBA communicate with 
MBDA and identify enterprises that they might not be able to 
help any more but could benefit from the assistance of your 
agency?
    Mr. Hinson. Thank you for that question. Many of those 
firms--you're talking about, I think, specifically about firms 
that graduate from the 8A program. We actually interact with 
quite a number of those firms through our 46 centers 
nationwide, and we actively engage them to help them prepare to 
actually compete in the open market.
    We have a great relationship with SBA. Our missions are 
different. We serve, in some respects, a different 
constituency, in that MBDA works with minority-owned firms of 
all sizes at all levels in their growth cycle. SBA tends to 
work with more early stage companies. And so what happens is 
many of the companies that we work with actually exceed the 
size standards of the SBA.
    But, with that in mind, we have worked closely with them, 
again, particularly on a point you made earlier, on promoting 
economic stimulus contracting for small and minority business. 
We are engaged, under the leadership of Secretary Locke and 
Administrator Karen Mills, to make sure that small and minority 
businesses gain their fair share of economic stimulus 
contracts. We have been engaged in quite a number of activities 
in that regard.
    If I might take a moment to share some of them with you. 
There have been--under their leadership there have been near 
200 different information and outreach sessions nationwide on 
economic stimulus. We have engaged in pulling together actual 
lists of shovel-ready companies that we can present--and this 
is us on the State level--that we can present to State 
procurement people and to the State government to make them 
aware that companies are ready to participate in these 
contracts.
    We, in conjunction, again with the leadership, have 
developed a tracking system to help begin to track the results 
of contracts. We have now begun to see some of the results of 
those efforts in terms of contracts that come from the Federal 
agencies.
    We have been engaging all of the Federal agencies to make 
them aware of the importance of working with minority and small 
businesses relative to economic stimulus contracts. We have 
done quite a number of B-to-Bs, business-to-business programs, 
to engage, particularly in the construction industry, prime 
contractors with subcontractors and build those relationships--
and relationships are critical to making sure that 
subcontractors are added to the prime contractor structure 
under economic stimulus.
    So we've done quite a lot with SBA in that respect.
    Mr. Rush. The Chair now--we have votes occurring on the 
floor and I think there are less than 5 minutes for the vote. 
So I'm going to ask the witnesses, if you can, would you be 
willing to remain until after we conclude? I think there are 
two or three votes. And then we will reconvene this committee 
hearing after the votes.
    Mr. Hinson. We'd be delighted to, Mr. Chairman.
    Mr. Rush. This committee stands--did you have something?
    Ms. Ramos Davidson. I've got a very special opportunity to 
meet Judge Sotomayor this evening and I have to be at the 
building by six o'clock.
    Mr. Rush. We intend for you to be there a long time before 
six o'clock. So the Chair will reconvene the hearing within 5 
minutes after the last vote. Thank you.
    [Recess.]
    Mr. Rush. The subcommittee will come to order.
    The Chair now recognizes the gentleman from Texas, Mr. 
Gonzalez, for 5 minutes for questioning.
    Mr. Gonzalez. Thank you very much, Mr. Chairman, for the 
generous amount of time you have provided me.
    Welcome one and all. And your testimony has so much in it 
for later use by us. What we do with the statements of course 
and staff is we refer to them as resource materials in the 
future. I just ran over here. I am not what I used to be. I 
will tell you that.
    But I do have a couple of observations. There is a 
statement in here, and it is Ms. Hill's statement, that 
basically tells us why we are here today and why we have within 
departments and agencies certain sections that are devoted to 
the proposition that the world just may not be all that fair 
and that government has a responsibility to right a wrong and 
to pursue justice. And your statement is: ``Parity for people 
of color in business does not exist. Discrimination is still 
widespread. Access to contracts, financing, and bonding, which 
lead to growth, prosperity, and employment, continues to be 
limited. Minority businesses need access and business 
development.''
    And this is not one of these ``woe is me.'' I think we are 
just recognizing a fact of life and what we need to do and what 
we are all seeking is that opportunity, and I just wanted to 
pay special emphasis to those couple of--three sentences that 
you have that really gives us the guidance.
    I don't know if there is a member on this subcommittee, Mr. 
Chairman, that hasn't at one time or another served on the 
Small Business Committee. So we have had a lot of experience 
with the Small Business Administration, and I will tell Mr. 
Hinson that you are quite lucky because in every hearing that I 
ever attended when I was on Small Business when we either had 
the Administrator or someone in one of the sections from the 
Small Business Administration and we had other witnesses from 
the small business community, they were never greeted with 
words of praise and looking at a promising future to be working 
with you. So I just think you are doing something right and 
just to continue on that path.
    It appears to me that every one of the witnesses here had 
great emphasis on the Minority Business Enterprise Centers. So, 
of course, the first thing is do we have something like that in 
San Antonio? We are blessed. It is not necessarily for the 
auspices of our Chambers of Commerce but rather our University 
of Texas at San Antonio. And I guess that is going to be Mr. 
Hinson. You have how many--was it 46? I can't remember.
    Mr. Hinson. Forty-six centers, sir.
    Mr. Gonzalez. Forty-six. And they seem to be a highly 
valued service that you provide with partnering up with 
individuals in these communities. And you may have touched on 
it, but what do you view as your biggest asset, your most 
effective tool, because you seem to have identified that as one 
of them, and what do you propose to do to expand on that which 
has already been identified as quite valuable?
    Mr. Hinson. I thank you for the question. I frankly think 
our biggest asset is the leadership at the senior levels in the 
Commerce Department who have demonstrated a commitment to the 
Minority Business Development Agency. I think a very solid 
asset is the support we get from the White House, and quite 
candidly, another solid asset is this committee right here 
because you are illuminating in a very great way both the 
issues that minority businesses face and the opportunities to 
the Nation if we can eradicate the obstacles that prevent 
minority firms from competing successfully and effectively in 
all industries.
    What we will do at MBDA is to continue to do what we are 
doing, with one caveat, and that is we will certainly continue 
to integrate ourselves more into the Department of Commerce, 
taking advantage of agencies like the International Trade 
Administration, taking advantage of NIST and NOAA and building 
strong relationships there. In addition to that--and what that 
means is--for our clients is really a greater focus on 
globalizing the minority business community, and there are 
tremendous opportunities around the world that we haven't--we 
typically don't even discuss in a normal course of discussion 
on minority businesses. We are going to continue to focus with 
the resources that we have on attempting to build a generation 
of substantial minority businesses.
    I mentioned in my oral comments the importance of building 
minority businesses that are $100 million or larger. That is 
typically the size that you need for these firms to compete as 
primes. The other unique component of that is that these firms 
create the vehicle from a relationship standpoint and from an 
access standpoint to help smaller firms actually grow and 
prosper.
    We will continue to focus on the President's initiative to 
move minority firms into frontier industries, which is very 
important, technology, alternative energy, health care IT. And 
so we will focus on that as a part of our relationship both 
with our centers and as a part of the activities that are going 
on inside the Department of Commerce.
    So that just gives you a thumbnail of the things that we 
are thinking about and focusing on.
    Mr. Gonzalez. Again, I just appreciate your testimony here 
today.
    And I think, Mr. Chairman, I have about 40 seconds, but I 
will yield back to you.
    Mr. Rush. Thank you very much.
    Let me ask Mr. Hinson, and then I am going to ask the other 
witnesses also. The Chair recognizes himself for as much time 
as he may consume and the Chair will for the second round 
extend that to the gentleman and any other member of the 
subcommittee.
    Mr. Hinson, in the Secretary's announcement of this new 
Office of Innovation and Entrepreneurship and also his comments 
there were mirrored in a statement that you made in the 
Minority Enterprise Development news conference where you 
alluded to the idea that minority businesses must move away 
from service-oriented businesses and embrace huge innovative 
opportunities such as clean energy, smart grid technology, and 
health care IT.
    How involved are you at MBDA and how involved will you be 
in terms of making those types of transitions, and are you 
suggesting then that small businesses need to abandon their 
service-related industries?
    Mr. Hinson. Thank you for that question, Mr. Chairman. I 
will answer the second part.
    No, I am not suggesting that minority firms exit service 
industries. I am suggesting that minority firms have 
traditionally been concentrated in several industries. Those 
industries don't fully embrace the frontier industries that 
will be really the next generation for job growth. I mean 20 
years, 30 years from now we will be talking about, you know, 
alternative energy not as something that is new and innovative 
but something that is part and parcel to our day-to-day 
vocabulary.
    So, no, I am not suggesting that at all. But it is 
important as, frankly, the Commerce Secretary has outlined, as 
President Obama has touched upon, that minority firms do move 
more into the frontier industries, and it is a commitment 
certainly on our part, and certainly it is of a great interest 
to the Department of Commerce, that these companies be helped 
to move into these industries in larger numbers. So it is 
important that this occur and we are here to make that happen.
    Mr. Rush. Now, let me ask the other three witnesses. Given 
what the Director has said, first of all, are you prepared, 
each one of you, are you prepared, or your businesses, are they 
prepared to move into the, quote, frontier industries, as he 
has indicated, and what are the obstacles and what do you think 
we can as members of this committee, as the Congress, can do in 
order to help you to overcome the obstacles?
    Ms. Ramos Davidson. I will start if you don't mind, Mr. 
Chairman. I would say most definitely, yes, our businesses are 
ready to move into frontier with services and opportunities 
that MBEC in our market provided that allows us to do that. We 
have been teaching our market for the longest time how to 
diversify their people, their product, and their service. And 
that means looking for a different type of customer than they 
normally do.
    The challenge for the small minority women--minority market 
in our avenue is that there is so much opportunity that they 
are so busy working in their business as opposed to on it that 
it is challenging for them sometimes to be able to utilize the 
resources that the MBEC has. And that is what our challenge is 
on the grassroots floor is getting all the wonderful resources 
from our MBEC and getting the business to use it and get them 
out of working in their business and on it, and working on it 
is finding ways to get into that new frontier.
    What I hear from a lot of our businesses is when they get 
into there, what is the Federal Government going to do to help 
to give them additional resources to do that, whether it be in 
tax incentives or lessening the burden of rules and regulations 
they have to go through and all the hurdles they jump through 
every day just to be able to find a widget and identify a new 
market and, oh, by the way, find a new growth industry and a 
new frontier.
    So it isn't that they don't have the capability and the 
imagination to do it. It is about the resources available to 
help them to do that. And you can see with MBDA being one of 
the smaller agencies in terms of funding and all that they have 
been able to do with what they have, they are truly 
entrepreneurs because they are constantly doing more and more 
with less and less. But you can certainly see what they could 
do if more resources and influence was given to the agencies.
    Mr. Rush. Ms. Hill.
    Ms. Hill. Absolutely we have businesses that are poised 
right now and are looking for new opportunities. One of the 
businesses in your district, in fact, Congressman, is Funk 
Linko. They are out in the south suburbs and they are poised 
for energy and new technology. One of their challenges, quite 
frankly, oftentimes, though, is money. You know, access to 
capital still continues to be a problem for minority 
businesses. Whether they are small, mid-size, or large, you 
know, money is an issue and especially as you are transitioning 
into a new business.
    I would like to see this group, this committee, focus on 
getting us more access to money. And also because MBDA is not 
focused on a business that is of any particular size, it may be 
small and may be very large, I am a firm believer that the 
larger the businesses--and I am not ignoring is small business 
because we certainly have to do that, but the larger businesses 
can help the smaller businesses. So if they don't have access 
to capital, then it affects us all down the pipeline.
    So when you ask what are the challenges, the challenges, 
quite frankly, are access, access to opportunity and access to 
money.
    Mr. Rush. Ms. Allen.
    Ms. Allen. Yes, chairman. First of all, sure, there are 
lots of Asian-American-owned companies who already have the 
innovation. They need help to put that into a full prototype. 
One of our companies is called Rabbit Air in southern 
California. He has created--from a very simple device, he 
created a bigger device that will help to clean the air within 
buildings, and he is now selling to the veterans hospital, but 
he wants to expand that market and he needs some extra money to 
take him there or some new business.
    Another company in Virginia and in New York has come up 
with an innovation that will help to retrofit some of the 
government buildings, and he has lined up some potential 
contracts with many Federal agencies, but he needs somebody who 
will have the confidence to ``try my building first.''
    So what I think I suggest is that MBDA consider having a 
program such as the SBIC, Small Business Innovation Investment 
Corporation, type, so that MBDA will be able to have access to 
that type of working capital or innovative capital for minority 
businesses to take whatever they have already created to the 
market.
    I also want to take this opportunity, Mr. Chairman, to say 
that my testimony beginning was intended to give all the good 
news first before I come to the bad news or the sobbing story. 
And I want to say despite all the good numbers about Asian-
American businesses, there are still a major portion of them 
who are underrepresented in the minority business community.
    And I was beginning to talk about contract bundling. I 
think this is an issue--and I myself personally have fought for 
10 years, 10 years, and I remember my husband used to tell me, 
Don't do it, Susan. It is a fact of life. Don't cry over 
spilled milk. And I said, We could change it. And I think 
hopefully with this administration and your leadership we could 
actually take a look at contract bundling because this 
consolidation practice, although sometimes it makes sense, 
unless it has reasonable grounds for bundling all the 
contracts, it is going to bundle all the minority businesses 
out of the market.
    What I suggest also is that we do work with MBDA. MBDA 
works with us. And there is lots of programs that the MMSCC, 
the Hispanic Chamber of Commerce, and we, the only national 
organization that represents this umbrella group of minority 
businesses, come to our events and be our partner. When we have 
our conference, be there with us so that we can further promote 
the MBDA's programs and practices.
    One thing you could do is to work with the agency, not just 
the SBA or IT but all agencies, and work through the top. Go to 
the procurement offices and ask them to account for their spin, 
their contract opportunities, because the buyers are not going 
to listen to you unless the decision comes from the top.
    Similarly, I also suggest that MBDA also work with the 
major corporations and go all the way to the top and ask the 
CEO of all these companies, who many of them are dressing in 
small business costumes and going to the Federal sector and get 
small business contracts--ask them to make sure that their 
procurement offices will absolutely take supply diversity or 
doing business with minorities seriously and give the CEO 
report.
    I think with the new interest in minority businesses and, 
Mr. Chairman, your interest and the current administration's 
interest, I think there is a lot we could do to influence 
corporate America to spend more money in minority businesses 
because we are good. We are very flexible. We can turn 
overnight and make things happen when major corporations have a 
hard time turning. Just like a barracuda turning around in the 
Pacific Ocean, it would take about 3 days, but we would take 
about 30 seconds.
    Thank you.
    Mr. Rush. All right.
    Director Hinson, the MBDA was really created under the 
administration of President Nixon, was created to be, as Ms. 
Allen characterized it, as being one barracuda. But now today 
in today's climate, one barracuda in terms of the Federal 
Government, or the main barracuda, the big tuna, a big 
barracuda in the Federal Government, but now it is swallowed a 
lot of little mini barracudas. As a matter of fact, every 
agency, every department, has its own version of MBDA, its own 
office of minority procurement and its own operations. So that 
means that minority interests, business interests in terms of 
creation and expansion, growth and opportunities, that there is 
such a divergence of focus among the different departments, and 
different departments have uneven application levels and 
achievement levels. Some are doing great, some are doing not so 
great, and some are doing actually poor.
    Do you see that as being a problem, or do you think that 
there should be more of a centralization of the resources and 
the mission approach to MBDA, that it should return back to its 
original mission and with that should it be--I mean the whole--
I think MBDA is still operating under the original directive in 
1969 and it hasn't been updated at all.
    Mr. Hinson. There was amendment, but generally, yes.
    Mr. Rush. Generally, yes. Even to the point where ``Negro'' 
is still being used to describe African Americans in its 
directive.
    So let me just ask you should it be renewed, should it be 
reinvigorated, reformed, and should it have more of a 
centralized responsibility as it relates to minority 
businesses?
    Mr. Hinson. Let me just say--thank you for that question, 
Mr. Chairman. And let me just say that, you know, we welcome 
all of your views and all your wisdom and all of your advice on 
these types of issues and your leadership in that respect. The 
fact that there are multiple government agencies that provide 
exposure, if you will, and have offices for minority businesses 
could be looked at as a source of dispersion, which would then 
be deemed negative or to be looked at as an opportunity. I look 
at it as an opportunity. I think that anywhere there is an 
opportunity for minority businesses to engage the Federal 
Government through any office is a good thing. What we need to 
do better and what we have initiated at MBDA is an effort to 
try to coordinate these efforts.
    Keep in mind that Commerce Secretary Locke has been very 
much interested and forceful in trying to create better 
coordination, and it is that leadership that we have taken to 
heart and that is the direction that we move in. And as a part 
of that, we want to better coordinate our activities with all 
governmental agencies that focus on the issues that minority 
businesses face.
    So I look at that as an opportunity, and we are taking the 
steps to coordinate ourselves with the other Federal agencies 
in that respect.
    Mr. Rush. Mr. Gonzalez.
    Mr. Gonzalez. Thank you very much, Mr. Chairman. And I will 
be brief because I know Ms. Ramos Davidson does not want to 
miss meeting with Sonia Sotomayor. I don't blame you. She is 
incredible, by the way.
    But Ms. Allen brought something up, and, Mr. Chairman, you 
have heard it, as you have been here longer than I have, the 
dreaded word ``bundling'' and the disadvantage it plays in 
small business. But even if we graduate from, let's say, small 
business category and we are where Mr. Hinson is more relative 
to that size business, you still have that issue because I 
don't think that minority-owned businesses, even after they 
graduate from the small business category, are free of some of 
the same problems that you have referenced already. And this 
could have been a Small Business hearing in part because I just 
think it is a cousin of the same problem. It just kind of 
follows.
    So it leads me back to the Director. Staff will always 
prepare memos and they are so good and I want to go over the 
last sentence of the memo because--and I do not want to 
discourage you from thinking big because you are thinking big 
and maybe it is a new way of looking at things, but MBDA 
National Director David Hinson has laid out three strategic 
goals for fiscal year 2010: One, increase the number of 
businesses that are minority owned at the $1 billion level; 
establish MBDA as the agency of choice for businesses that are 
minority-owned, policymakers and the private sector; and, 
three, implement operational efficiencies. In addition he has 
explained that minority businesses, quote, ``must move away 
from service,'' and we went over this but I want to hit on the 
three, ``and embrace the innovative opportunities of clean 
energy, smart grid technology, and health care IT.''
    But those areas are hugely capital intensive, even in San 
Antonio, and it is not a really small firm but it is an IT 
firm, and they are incredible. And it is minority owned, a 
woman, and you may know Ms. Mendosa, Elaine, a Ph.D., and she 
has a difficult time competing. And I hate to tell you, just 
the big enterprises out there in the IT world and heaven knows 
when we get into the clean energy and smart grid, how will a 
minority-owned business that just doesn't have that kind of 
leverage, doesn't have that size, doesn't have the access to 
capital and such, how do you envision bringing them in? 
Because, like I said, I don't want to discourage. You are 
ambitious, you are young, you are thinking differently than 
many other people, and we need that. And what can we do to 
assist you to accomplish what is a very ambitious goal but one 
that we would love to be successful in?
    And I am going to leave that question with you, Mr. Hinson, 
and then for the three witnesses if they have any suggestions.
    Mr. Hinson. Thank you for that question. When you start 
talking about--and I appreciate your point, and you make an 
excellent point. When you start talking about the growth of 
capital-intensive businesses within companies that are smaller, 
it does raise the specter of extreme difficulty. But what it 
does is--what it also does is it necessitates a reevaluation of 
the growth model of the company, and it necessitates a 
reevaluation of the growth model away from organic growth 
strategies, which are typically part and parcel to companies 
that are more service oriented and, therefore, less capital 
intensive. And it forces the entrepreneur, the business owner, 
to consider growth strategies that perhaps they would not 
consider before.
    Those strategies include growth through merger and growth 
through acquisition, as Ms. Hill alluded to in her opening 
statement, growth through strategic partnership and growth 
through joint venture. Those growth models allow for smaller 
businesses to acquire the scale to then obtain the capital to 
then go into these industries in a bigger way.
    And so size of firm is not really the limiting factor if 
the business owner or the management team is willing to 
consider alternative growth models.
    Mr. Gonzalez. Thank you. I can start with Ms. Allen, since 
I referenced your bundling issue.
    Ms. Allen. Yes, sir. Most of the innovation in the United 
States did not come out of major corporations. They came out of 
small and minority businesses. They are the laboratory of 
innovation. If you look at the patents that are filed with the 
U.S. Patent Office, many of them were filed by small business 
and therefore the minority business community. I have a--one of 
our members, and he doesn't want me to talk about him; so I 
would leave his name alone. He has a product that can put out 
fire very quickly. But he is afraid--he wants to expand into 
the national market but he does not want to have any major 
company coming to his business because he is afraid that once 
his formula is utilized, is exposed, he will lose that secret.
    So maybe we could put our heads together and find out how 
to protect these small and minority businesses who came up with 
innovation and ideas so they do not have to be absorbed and 
taken over by major companies.
    So going through partnership, joint ventures, and at the 
same time making sure that whatever they have spent their hard-
earned savings, their mortgaged house to create that 
innovation, will stay with them for some time just like with 
the patent, 12 years, let me have it, and then you can take it 
somewhere else. That will probably give the minority businesses 
the ability to go into more capital-intensive markets where 
they can bring the idea in and become a partner with major 
corporations.
    I also want to say that in a way America has become a place 
where making widgets is no longer our strength. There will be 
these competing economies in China and India who are together--
the world population such that China has the highest 
population. The second is India and third is the United States. 
And in the next 10 years, these three countries will dominate 
the population of the world, and China and India are rapidly 
growing in the global marketplace. They are our trading 
partners, but they are also our fiercest competitors. So we 
need to look at that as well and find out how we can partner 
with them. But that is where the market is. As they have more 
business in the country, there will be consumers who love the 
``made in USA'' label, and it is up to us to go across the 
Pacific Ocean and sell to them.
    So we ought to be thinking about what Americans are best 
at, what is in our head, brain, our brain power, and that comes 
with service, and our technology, the latest innovation.
    Mr. Gonzalez. Thank you.
    Ms. Hill.
    Ms. Hill. I have to agree with Director Hinson. There is a 
way for us to grow larger businesses but it is not the 
traditional model. You know, we have to start thinking 
differently than we have always thought. But before that I want 
to say there is a place in the marketplace for everybody. Some 
businesses might want to be lifestyle businesses. They might be 
small and that might be the best place for them to be, and they 
contribute to the economy, and that is a good thing. You know, 
some might be mom and pop and small businesses, and that is 
really oK.
    On the other hand, businesses that want to grow and compete 
and be in a larger space ought to be able to do that as well. 
But in order to do that, you can't do that organically. You 
can't just get a contract and a contract and a contract and 
expect that you will grow to be a billion dollar business or 
even a hundred million dollars or even a $10 or $20 million 
business. You have to do something differently.
    The reason I am so strongly and so adamant and so much in 
support of MBDA is because those strategies exist. There is a 
natural marriage between my organization and MBDA because we 
have businesses of all sizes that want to serve the entire 
community. What happens, however, when we start talking about 
small and we just talk about small businesses, then it doesn't 
allow the businesses to grow and to contribute to their best 
ability.
    I mentioned Funk Linko, for example. Funk Linko is already 
in the space that we are talking about, in that new energy 
space. They are, in fact, trying to build--trying to engage in 
opportunities in the Chicagoland area now, but in fact they 
tried to get a loan. They were denied a loan to fund and 
develop a wind farm in Chicago, you know. So, again, there are 
businesses that are there that are poised and ready to grow. We 
just need to help support them and to help find a way that they 
can continue to grow. Strategic alliances, buying businesses, 
mergers, acquisitions, joint ventures, that is the way to grow 
if you are not going to grow just organically.
    Thank you.
    Mr. Gonzalez. Thank you.
    Ms. Ramos Davidson.
    Ms. Ramos Davidson. Well, I would agree with everyone on 
the panel, but I am going to add a few more things. Mentor-
protege programs are a great opportunity, especially in the IT 
arena. We have a company in El Paso that attended a conference 
last year, and this company now has major, major contracts with 
companies here in the D.C. Area because of what this individual 
learned at one of the conferences about the benefits of mentor-
protege. It also taught the mentor what it takes to be a 
mentor, and it taught the protege how to create this 
relationship of trust because that is what it is all about. Had 
it not been for the MBDA conference and their affiliation with 
our chamber and them coming in to us, this individual would 
never have understood the dynamics of what it takes to get to 
that component.
    I think elevating the awareness of the critical components 
of MBDA across the board from every agency is very important 
because there is a disconnect in terms of understanding what 
SBA offers, what MBDA offers, and what other agencies offer.
    I have been doing small business minority development for 
over 30 years, and the biggest challenge is always how to 
better communicate, inform, and educate the market we are 
trying to serve to access and capitalize on these programs. The 
Federal Government makes it a little challenging because there 
is so much bureaucracy, there are so many rules and regulations 
and some unclear communications about what agency does what.
    SBA is a great start place for someone who has an idea. 
MBDA is critical to taking that idea once they have gone to the 
year 5 and growing it larger than anything. But I think because 
people still don't understand what the two agencies do and how 
they can help, that that tends to be a stopgap.
    I would agree with both these ladies that the most critical 
mass for minority business is capital access. I am very 
fortunate to sit on the board of the Federal Reserve Bank in El 
Paso, Texas, which is our local branch, and I create a true 
face in terms of reality on that board with the more 
conservative bankers on that board. The challenge we face all 
the time is they will not lend unless there is a relationship 
with that individual. And it is teaching our market, 
specifically our minority market, how to build that 
relationship.
    And from a Hispanic perspective, my grandmother used to 
keep her money under the mattress because she didn't trust the 
bankers, but yet she had a hair business. So it is how to teach 
them, you know, to do these things and be able to create that 
trust. Had she had centers like the MBEC, God knows where she 
would have been back then in terms of her business.
    So the critical mass here is looking at how to create more 
resources through MBDA to allow us what we need on the ground 
floor to grow these minority businesses because the heart and 
soul is definitely there, but the resources sometimes are 
lacking.
    Mr. Gonzalez. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Rush. Yes. The Chair is really just bursting to ask one 
final question. I think I will if you don't mind.
    The American Recovery and Reinvestment Act, what kind of 
impact is that? You mentioned bundling sources.
    Ms. Ramos Davidson. To date we have helped a quite a few 
businesses to the total of $528,398,207, and I have a list of 
all the projects. These are projects from a construction 
perspective, from building roads to schools to revamping 
industries to all kinds of different things. The challenge with 
helping these businesses, and get this, which is a lot of money 
in our market, was helping them work through the maze of where 
it starts and where it ends because it started up here but it 
is filtered through the States and then the States filter it to 
the cities but then the cities filter it through agencies but 
then some cities don't and some States just do it through the 
agencies. So you can see, I got to make a widget. I have to 
find a customer. I have to get it out the door. I have got 
employee rules and regulations. I have taxes I have to pay. And 
you want me to go through a maze of information to have shovel-
ready projects?
    You can see how challenging it is. Without the resources of 
what we do through our MBEC and all the other six centers, the 
businesses in our market would have never been able to 
capitalize on this because the maze of trying to find this has 
been absolutely grueling.
    Mr. Rush. Anybody else want to comment on that?
    Ms. Hill. I hate to be the naysayer among the group again. 
ARRA has been wonderful and many have benefited from it, but I 
wanted to make a particular point today to talk about some of 
the people that are in our space that are particularly being 
served by the MBECs and the MBOCs but that didn't have 
opportunity, that were stymied for one reason or another. 
Escendant IT Staffing, it is an African American firm. 
Clerysys, a $21 million IT Asian Indian firm. Weld Tech, a 
Hispanic-owned firm. VCT, an Asian firm that is about $40 
million.
    All these people--and I have others here. I won't list all 
of them. But all of them were looking for opportunities and 
particularly, again, access to capital. The banks aren't 
lending. You know, the money's supposed to be there. And in 
Illinois you know how it works, is come into Illinois and then 
it goes to the cities, and then sometimes the money is held up 
at the State level. So the people from--as much as we can 
determine--that are getting the opportunities and the contracts 
are the same old people that have always gotten the contracts 
and the opportunities. The shovel-ready projects for us were 
shovel ready, and even though they may have had DBE goals in 
them or some minority goal, actually the minorities didn't get 
benefit of those projects. At least so far they are really not 
getting benefit.
    There is a lot of opportunity and all the money in Chicago 
or in the Illinois area hasn't actually been let as of yet, but 
that that has been let we have not substantially benefited 
from.
    Thank you.
    Ms. Allen. We just held two regional conferences on ARRA, 
particularly on transportation related, in San Francisco and in 
San Gabriel, which is right outside of Los Angeles, 2 weeks 
ago. We had folks coming from different parts of a Federal 
agency. Here is what we found out: First of all, recovery.gov, 
that Web site was created. It was so confusing they have to 
redo it again. So people tried to navigate, and they all gave 
up, and now we are spending I think another $10 million to redo 
the Web site. But once that is done, hopefully the American 
people will be able to get a better grasp of how to drill down 
that Web site and go to the local, State and city.
    One-third, Mr. Chairman, as you know, of the Recovery--of 
the ARRA is only for stimulus. The rest are tax cuts and also 
State tax relief. So one-third. And that for this year, most of 
the money was spent on health IT. Construction had not--is just 
beginning to get out this quarter. So I think the jury is still 
out whether they are reaching America. I have talked to 
somebody from OPM--OMB when they came to our conference in Los 
Angeles to speak, and she said that--and I understand it 
because the President wants this program to be abuse proof, 
waste proof, and fraud proof, and therefore the government 
folks are very, very careful for, and we endorse that. What we 
are looking to us now is for the current quarter of next year 
how the recovery money will be coming through. It would be good 
if we could have more transparency in how things are done.
    It is still an old boys network. And here is the truth, ok? 
They need to spend the money within the next 18 months. They 
are in a hurry or the money will be gone. So what are they 
going to do? They are going to look at a minority business and 
say I don't know who you are. I can't trust you. I am going to 
go to my same old supplier and use them. Good-bye. That is what 
we are hearing right now.
    Now, what we are--go to our suppliers, minority businesses, 
is go to find the prime contractor, find out who has been 
awarded those contracts, who has been doing business with the 
Federal Government or the major companies who are going to be 
doing business with the government through ARRA or continue 
with ARRA, and knock on their door. And here is where MBDA 
could come in because MBDA has been given the responsibility to 
monitor contracts. Maybe we could give some more teeth to that 
role and as--like what the SBA does. They have small business 
specialists in every agency and say how much are you doing 
business with small businesses, and if you don't do well the 
Inspector General from--I think from SBA will write a letter to 
the corporation--the president, and the president will send a 
letter to the general counsel. Everything will move around. I 
think that you have that capability. You may be able to move 
some--move the chess a bit over.
    Mr. Hinson. Under the leadership of the Commerce Secretary, 
as you know, Vice President Biden tasked the Department of 
Commerce and SBA to work with minority and small businesses to 
ensure they get their fair and equitable share of economic 
stimulus contracts. I will tell you we are already there. We 
have in our 46 centers people who are focusing almost 
exclusively on creating opportunities, creating contract 
relationships for minority businesses. We have, as I indicated 
in my prior comments, been engaging in B-to-B relationships, 
particularly in the construction industry. We are actually 
doing the work to find out who--what primes are getting 
contracts and we are engaging with minority subcontractors to 
ensure that that relationship is there that will lend itself to 
them getting a subcontract from a prime contract.
    So we are actually already doing what you suggested, and I 
thank you for your suggestion. We have been tasked with also 
doing tracking, and so we are completing the final stages of 
computer software capability that will allow us to track on the 
State and local level. We actually already have our first run, 
if you will, which once we complete an evaluation I would be 
delighted to give you, of what minority firms have achieved 
from economic stimulus on the Federal level. And so we are 
right now scrubbing these numbers to make sure that there is a 
high level of accuracy and therefore a high level of 
confidence. But we think these numbers are extremely 
encouraging.
    So all of the things that have been outlined that MBDA, the 
Department of Commerce should do, we are doing as it pertains 
to making sure that, again, minority firms achieve their fair 
and equitable share of economic stimulus contracts.
    Mr. Rush. I will be looking forward to that report as soon 
as you complete it, and we will make it available to all the 
members of the subcommittee.
    That concludes this hearing. Again I want to thank all the 
witnesses for the generous use of your time. You have been 
extraordinary and you really have helped this committee move 
this ball along.
    So it has been pretty exciting and informative to hear your 
testimony, and I will just ask you to keep up the good work. 
You are doing a magnificent job, and we will do all that we can 
to make sure that you are able to accomplish your goals and 
your mission as your organizations deem fit. So thank you so 
very much.
    And Director Hinson, thank you so much for your time, and 
please pass my dissatisfaction somewhat to the Secretary. You 
have done--maybe the next time you will be promoted to 
Assistant Secretary and we won't have any beef. No comment on 
that, ok?
    Mr. Hinson. I appreciate that.
    Mr. Rush. Thank you very much. God bless you, and this 
committee now stands adjourned.
    [Whereupon, at 3:53 p.m., the subcommittee was adjourned.]
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