[Senate Hearing 111-775]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 111-775
 
         THE ROLE OF SMALL BUSINESS IN RECOVERY ACT CONTRACTING 

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 21, 2009

                               __________

    Printed for the Committee on Small Business and Entrepreneurship


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                                 senate

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED ELEVENTH CONGRESS
                             FIRST SESSION

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                OLYMPIA J. SNOWE, Maine, Ranking Member
JOHN F. KERRY, Massachusetts         CHRISTOPHER S. BOND, Missouri
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     JOHN THUNE, South Dakota
JOSEPH I. LIEBERMAN, Connecticut     MICHAEL B. ENZI, Wyoming
MARIA CANTWELL, Washington           JOHNNY ISAKSON, Georgia
EVAN BAYH, Indiana                   ROGER WICKER, Mississippi
MARK L. PRYOR, Arkansas              JAMES E. RISCH, Idaho
BENJAMIN L. CARDIN, Maryland
JEANNE SHAHEEN, New Hampshire
KAY HAGAN, North Carolina
           Donald R. Cravins, Jr., Democratic Staff Director
              Wallace K. Hsueh, Republican Staff Director





























                            C O N T E N T S

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                                                                   Page

                           Opening Statements

Landrieu, The Honorable Mary L., Chair, Committee on Small 
  Business, and a United States Senator from Louisiana...........     1
Snowe, The Honorable Olympia J., Ranking Member, Committee on 
  Small Business, and a United States Senator from Maine.........     3

                           Witness Testimony

Jordan, Joe, Associate Administrator, Government Contracting and 
  Business Development, U.S. Small Business Administration.......     5
Franco, Gerardo, Chief, Procurement Assistance Divisions Office, 
  Office of Small and Disadvantaged Business Development, 
  Department of Transportation...................................    13
Arnold, Sharon, Owner, SSACC, Inc................................    29
Flynn, Joe, President, Association of Procurement Technical 
  Assistance Centers (APTAC).....................................    35
Medina, Sylvia, President, North Wind, Inc.......................    43
Daytner, Theresa, President, Daytner Construction Group..........    54

          Alphabetical Listing and Appendix Material Submitted

Arnold, Sharon
    Testimony....................................................    29
    Prepared statement...........................................    30
Daytner, Theresa
    Testimony....................................................    54
    Prepared statement...........................................    57
Flynn, Joe
    Testimony....................................................    35
    Prepared statement...........................................    38
    Attachments..................................................    41
Franco, Gerardo
    Testimony....................................................    13
    Prepared statement...........................................    15
Jordan, Joe
    Testimony....................................................     5
    Prepared statement...........................................     8
    Attachments..................................................    12
Landrieu, The Honorable Mary L.
    Opening statement............................................     1
Medina, Sylvia
    Testimony....................................................    43
    Prepared statement...........................................    46
Snowe, The Honorable Olympia J.
    Opening statement............................................     3


         THE ROLE OF SMALL BUSINESS IN RECOVERY ACT CONTRACTING

                              ----------                              


                         THURSDAY, MAY 21, 2009

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:19 a.m., in 
Room SR-428A, Russell Senate Office Building, Hon. Mary L. 
Landrieu (chairman of the committee) presiding.
    Present: Senators Landrieu and Snowe.

OPENING STATEMENT OF THE HONORABLE MARY L. LANDRIEU, CHAIRMAN, 
           AND A UNITED STATES SENATOR FROM LOUISIANA

    Chairman Landrieu. Good morning. I would like to call the 
Small Business Committee of the Senate to order. I appreciate 
our witnesses this morning and looking forward to this hearing.
    Let me begin by apologizing. We were late because of a 
10:00 vote. And, unfortunately, I am going to have to slip out 
in about 30 minutes to testify before another committee, that a 
bill I am sponsoring is before the Commerce Committee this 
morning. But we are going to try to keep the hearing moving, 
and we think our subject is very, very important. I am going to 
begin with an opening statement, and then ask my ranking 
member, and then other members may be joining us as we move 
forward.
    This committee has been called to examine the role of the 
Federal Government in contracting with small business, and to 
hear from not only small business advocates, but from the Small 
Business Administration about how the Federal Government is 
meeting our obligations, our responsibility, and our own 
internal goals that we set to contract with small businesses. 
So I thank you all for coming today.
    This committee has held three hearings recently to assess 
access to credit issues by small business. And today we turn to 
another important issue, which is, is small business being able 
to sell goods and services required by the Federal Government 
to help not only sustain them through these difficult times, 
but actually to bring value to the Federal Government.
    It is one of the principal oversight responsibilities of 
this committee to ensure that Main Street businesses throughout 
America, small businesses that are in all of our districts and 
states, have the opportunity to sell their products, their 
ideas, their services to the Federal Government. Access to the 
federal market has made it possible for many of America's Main 
Street businesses to not only survive but to thrive, to grow, 
to prosper. Many of those business owners have told stories 
before this committee in the past.
    For example, Garnett Newcombe, owner of Human Potential 
Consultants, took a business from a high of $500,000 revenue to 
more than $14 million through her ability to bid and secure 
federal contracts. And then there is Lee Brown--Leah Brown, who 
decided to open a small business while grieving the loss of a 
close family member. She took that loss, turned it into 
something positive, motivated herself to open a business that 
supports the development of drugs to fight the same illness 
that took her family member's life. Having access to the 
federal marketplace allowed her company to grow and expand.
    These are just two stories of hundreds that we have heard 
from small business owners, that when they had access to 
federal contracts, they were able to expand, hire more workers, 
and expand their reach.
    There are many reasons why giving small business a chance 
to compete in the federal marketplace is important. Here are 
just a few.
    First, the Federal Government is the largest single 
purchaser in the world. According to the latest available Small 
Business Goaling Report, the Federal Government spent more than 
$378 billion on goods and services. According to our records, 
more than 83 billion of that was spent with small business.
    Second, a strong and diverse supplier base is critical to 
the government getting the best value from suppliers and to the 
American taxpayers getting the most out of their tax dollars.
    Third, having strong small businesses in communities large 
and small help to strengthen towns and cities one employee at a 
time.
    Fourth, government contracting to small business is 
important to national security. Since World War II, the 
government has made a concerted effort to ensure that it has 
multiple suppliers for its largest needs. By contracting out 
government projects to small business, we ensure that the 
country is not vulnerable to only a few suppliers.
    In these very challenging economic times, increasing 
contracting opportunities for small business will help them to 
keep their doors open to create new jobs and to get America 
back to work. These small businesses have especially been hit 
hard by the economic downturn. According to the Automatic Data 
Processing, Inc.'s, ADP, Small Business Report, more than 80 
percent of job losses since November come from small and 
medium-size businesses, which this chart clearly demonstrates.
    For this trend to change, small businesses need access to 
capital and they need increased sales volume, either from the 
private sector or from the public sector. This hearing is about 
what we can do as the Federal Government to increase the 
opportunity for federal sales volume to small businesses. So we 
are anxious to hear from the Department of Transportation and 
the Small Business Administration, one that has oversight 
responsibility of all contracting through all federal agencies, 
and the other from the department that seems to have the most 
money available right now for contracting with small business.
    President Obama has made this one of his top priorities. I 
know that Administrator Mills is also very committed to us 
reaching our goals. So I am looking forward to the first 
panel's testimony. Our second panel will include three business 
owners and an association that will tell us how they have been 
impacted, or not yet impacted, by federal Recovery contract 
provisions.
    So in closing, we need to keep the big picture in mind when 
we talk about federal contracting opportunities for small 
businesses. We are here to make sure that small businesses are 
as strong as they can be and that they are leading the way as 
we come out of this recession. We can help them in Congress in 
any number of ways. One of the more direct and immediately 
obvious ways is for the Federal Government to do its job, as 
Senator Snowe knows, to give them opportunities to compete in 
this time.
    So that is really the essence of our hearing today, and I 
turn to Ranking Member Snowe for her opening remarks.

 OPENING STATEMENT OF THE HONORABLE OLYMPIA J. SNOWE, A UNITED 
                   STATES SENATOR FROM MAINE

    Senator Snowe. Thank you very much, Chair Landrieu, for 
holding this very vital hearing this morning during our 
nation's Small Business Week and ensuring how small businesses 
can access their fair share. Roughly $575 billion in spending 
is still available within the stimulus package, otherwise known 
as the American Recovery and Reinvestment Act. In our 
respective leadership roles in this committee, Chair Landrieu 
and I firmly believe that the Federal Government must unleash 
the job creation potential of small businesses to drive our 
nation's economic recovery.
    I have to think that it sounds like a broken record, that 
we have had so many hearings on this question, and hopefully we 
can come to a final resolution as to how we can open the doors 
of opportunity for small businesses through federal 
contracting.
    This morning, we will probe whether the Federal Government 
is doing all it can to provide small contractors with the 
necessary tools, technical assistance, knowledge to which they 
can actively participate in the stimulus procurement 
opportunities. I supported this legislation back in February 
because I felt that it would achieve a critical equilibrium of 
creating jobs and assisting those displaced by the economic 
crisis through no fault of their own.
    Our nation is still in the throes of a very deep recession 
and the Labor Department has reported this week that the total 
number of unemployed jarring jobless benefits has risen to a 
record 6.56 million Americans. Since time is of the essence, 
the White House estimates that nearly 75 percent of stimulus 
funds will be committed by August of 2010. Well, now it has 
been 94 days since the Recovery Act was signed into law, and 
according to the administration, small business contractors 
across the country have received only 10.3 percent of the total 
stimulus dollars spent. And that means today, and looking at 
this chart here, large businesses are roughly getting 90 
percent of our nation's Recovery dollars even though small 
businesses represent 99.7 percent of all employers in the 
country, employing half the employees across America, 
representing three-quarters of net new jobs on an annual basis.
    This is simply unacceptable. I hope if anything that is 
learned from this hearing is that small businesses deserve 
their fair share of federal funds. That is at least 23 percent 
of federal prime contracting dollars throughout the entire 
Recovery Act process, and this is a good time to start.
    Furthermore, my home state of Maine has roughly received 
1.2 billion stimulus funding, including 130 million in highway 
development and bridge repair and 42 million for energy 
weatherization, for example. I am vexed as to why, according to 
the SBA, Maine small businesses have received zero Recovery Act 
dollars in terms of federal contracts.
    As Ranking Member of this committee, I have long been 
dismayed by the myriad ways that government agencies have 
repeatedly time and again egregiously failed to meet its 
statutory goal of awarding the 23 percent of all contracting 
dollars to small businesses. So the key question I pose this 
morning is why, since we have a 23 percent contracting goal, 
are only 10.3 percent of the stimulus dollars so far been 
awarded to small businesses? It is relatively early in the 
game. There is still time to make sure that this gets done 
right. But I must confess that I am not encouraged by the 
results thus far.
    So it continues to confound me while federal agencies 
consistently fail to meet its government-wide goals, and for 
that matter, why it continuously falls short of its targets: 
contracts to women, service disabled veterans, the businesses 
located in distress, low-income areas known as HUBZones.
    These pernicious trends must be reversed. And it is why 
Chair Landrieu and I sent a letter yesterday to all of our 
nation's governors, requesting they coordinate with the Federal 
Government to ensure that small businesses are aware of and are 
able to compete for government opportunities in the Recovery 
Act.
    We also work very closely with Senator Cardin, included in 
the stimulus provisions, to reform the SBA Surety Bond Program. 
As a result of the financial crisis, surety companies were 
rejecting bond applications because the applicants, usually 
contractors in the construction industry, were unable to show 
they had adequate financing. Our provision in the stimulus 
temporarily increases the SBA guarantees for participating 
sureties from 2 million to 5 million, which should also help 
small firms participate in growing our economy.
    So this morning, I look forward to hearing from both the 
Small Business Administration, Department of Transportation who 
received almost 47 billion Recovery funding--on specific and 
realistic solutions for achieving contracting goals for small 
businesses. In Fiscal Year 2007, the Department of 
Transportation awarded roughly 50 percent of its eligible 
contracting dollars to small firms.
    So I hope to learn today what practices the DOT is using to 
assist small business contractors and how those procedures can 
assist other agencies, like the Department of Defense, the 
nation's largest purchaser, to learn to better allocate a fair 
share of its contracting dollars to small businesses. At a time 
when our economy could not be more fragile and when job 
creation and economic growth could not be more front and center 
on the American agenda, the SBA, the DOT and all the remaining 
federal purchasing agencies have a pivotal opportunity to lead 
small businesses through this door of opportunity and to the 
realm of the federal contracting arena that will benefit all 
Americans in job creation.
    So, Chair Landrieu, I thank you for holding this hearing 
today and giving this perspective. I am looking forward to 
hearing from the witnesses and seeing how we can develop a 
bipartisan approach to get this job, once and for all, done on 
behalf of small businesses. Thank you.
    Chairman Landrieu. Thank you very much.
    Mr. Jordan, if you would start, please. And let me just say 
that he is the associate administrator for Government 
Contracting and Business Development for the SBA.
    Joe, if you could begin by giving just a brief 30-second 
background about your experience and how long you have been in 
the position, and then go into your testimony, if you would.

 STATEMENT OF JOE JORDAN, ASSOCIATE ADMINISTRATOR, GOVERNMENT 
   CONTRACTING AND BUSINESS DEVELOPMENT, U.S. SMALL BUSINESS 
                         ADMINISTRATION

    Mr. Jordan. Sure, absolutely.
    Chair Landrieu, Ranking Member Snowe and members of the 
Committee, I am Joseph Jordan, Associate Administrator for 
Government Contracting and Business Development at the Small 
Business Administration. I was appointed in March and have been 
on board since then. Prior to that, I worked in the private 
sector. I did consulting for a firm, McKinsey & Company, 
working primarily in our purchasing and supply management 
practice, as well as working with some state governments, 
including Governor Baldacci in Maine, looking at ways to help 
reduce cost and capture efficiencies. Before that, and before 
getting my MBA, I worked in a variety of industries and 
marketing, public relations and television, as well as some 
strategic consulting.
    Chairman Landrieu. Thank you.
    Mr. Jordan. Thank you.
    I am honored to be testifying before you both today to 
discuss SBA's role in the American Recovery and Reinvestment 
Act's contracting efforts. I know Administrator Mills testified 
before you recently and discussed the SBA's programs related to 
recovery. Today, I want to focus on the procurement side.
    The SBA is working hard to ensure that America's small 
businesses have a fair share of Recovery Act contracts and 
subcontracts. So far, Recovery Act contracting dollars to small 
businesses have been steadily increasing week to week. Although 
the obligation of contracts is in the early stages, dollars to 
small businesses currently total about $389 million, which is 
an increase of over $50 million since last week. We are working 
with all federal agencies in a variety of ways to meet the goal 
of issuing 23 percent of contracting dollars to small 
businesses.
    First, we work closely with the Office of Federal 
Procurement Policy to highlight small business performance 
programs in the guidance for Recovery procurement competitions. 
Guidance issued by the Office of Management and Budget on April 
3rd highlights the critical role small businesses play in 
stimulating economic growth and creating jobs. The guidance 
makes clear that all small business statutes and regulations 
must be followed.
    In addition, we are partnering with the General Services 
Administration to disseminate, via the Internet, information 
regarding large contracts that are available to small 
businesses. The Federal Business Opportunities Web site, or 
fbo.gov, lists all solicitations for Recovery contracts. SBA's 
Recovery Web site also links to that Web site as well as 
grants.gov.
    I am also very pleased that small businesses can now find 
Recovery Act specific subcontracting opportunities at sba.gov/
subnet. This is an important new resource which we announced 
this week throughout our subcontracting opportunity network. At 
the same time, we are reminding larger businesses of tools such 
as the Dynamic Small Business Search, which allow them to 
search, find and partner with the best small businesses for 
their subcontracting opportunities.
    SBA's Web site is very useful information for small 
businesses searching for Recovery contracts, including links to 
the sites mentioned above and a frequently asked questions 
document, available in both English and Spanish, that provides 
detailed information on Recovery Act contracting. We also 
intend to make other improvements to the contracting portion of 
our Web site in the coming months as new developments arise in 
connection with the Recovery contracts.
    All of SBA's Procurement Center representatives, or PCRs, 
have sent letters to the directors of their contracting offices 
offering assistance in finding small businesses for their 
Recovery contracts. Examples of recent contracting requests for 
proposals include small business set-asides by the Army, 
HUBZone set-asides by the Department of Labor and the Air 
Force, service-disabled veterans set-asides by the Department 
of Veterans' Affairs, and competitive 8(a) contracts by the 
U.S. Army Corps of Engineers, just to name a few.
    At the local level, our field staff is engaged with state 
and local officials, reminding them of the benefits of using 
small businesses for Recovery work. In fact, I was able to 
personally speak with our field office district directors 
yesterday since they are here in Washington for National Small 
Business Week. Those efforts were supported by letters sent 
from Administrator Mills to all the nation's governors, urging 
them to use small businesses for the products and services they 
procure when contracting with Recovery Act dollars. And I thank 
you both for the letter that you sent as well to the governors 
yesterday.
    Additionally, there are many field events occurring weekly 
relating to contracting and Recovery work. These events cover 
everything from helping firms locate Recovery contracts to 
basic training on how to do business with the government.
    Since the Recovery Act was signed into law, the SBA has 
directly participated in many events across the country. 
Examples of our outreach and training efforts include several 
workshops across Louisiana sponsored by the Louisiana 
Department of Economic Development in conjunction with Chairman 
Landrieu's office; in North Carolina, an Environmental 
Protection Agency workshop and training on SBA's small business 
procurement programs for its program managers; a Greater Dallas 
Asian American Chamber of Commerce construction, architecture 
and engineering forum event, entitled Implementation Workshop 
for the American Recovery and Reinvestment Act of 2009; the GSA 
Heartland region's Industry Day's Conference in Kansas City, 
Missouri; an event in Upstate New York sponsored by the Greater 
Syracuse Chamber of Commerce, entitled Accelerate CNY.
    The SBA is continuously looking for ways to increase small 
business participation of federal contracting. The Recovery Act 
offers both unique challenges and opportunities, but we are 
working to see that small businesses will be given the 
opportunities they deserve and play a key partner in our 
nation's economic recovery.
    Thank you very much, and I am pleased to take your 
questions and comments.
    [The prepared statement of Mr. Jordan follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Landrieu. Thank you. Mr. Franco, if you would 
proceed and just do a 30-minute--second brief introduction. 
Please not 30 minutes, 30 second brief introduction of your 
background. Thank you.

  STATEMENT OF GERARDO FRANCO, CHIEF, PROCUREMENT ASSISTANCE 
 DIVISIONS OFFICE, OFFICE OF SMALL AND DISADVANTAGED BUSINESS 
           DEVELOPMENT, DEPARTMENT OF TRANSPORTATION

    Mr. Franco. Good morning. My name is Gerardo Franco. I 
represent the Office of Small and Disadvantaged Business 
Utilization at the U.S. Department of Transportation. I have 
been in the Department of Transportation's Small Business 
Office for over 17 years. Prior to that, I was with the USDA, 
the Department of Agriculture, also in the Small Business 
Office. So I have about 25 years of experience of working with 
small businesses. And I can tell you that right now we are 
living in very difficult times, but at the same time very 
exciting times because of the many opportunities that we see 
coming down in the future.
    So Chairwoman Landrieu, Ranking Member Snowe, members of 
the Committee, I want to thank you for inviting the Department 
of Transportation to be here today. It is a great honor and a 
privilege to represent the Department at this hearing. I have 
written prepared remarks that I would like to submit for the 
record, but I would like to briefly state that at the 
Department of Transportation, we are fully committed to 
ensuring that small businesses continue to be an integral part 
of all of the contracting and subcontracting opportunities 
available from the Department of Transportation funds.
    No one better than DOT understands the importance of small 
businesses in the national economy. We have consistently ranked 
among the top federal agencies by SBA in terms of the share of 
our contracting dollars that go to small businesses, including 
women-owned, minority, HUBZone, service-disabled, and veteran-
owned businesses.
    As you pointed out, in 2007, half of our procurement 
dollars went to small businesses. What is not reflected in the 
SBA data is that the FAA, which is the largest agency within 
the Department of Transportation, adds another $3 billion to 
our procurement budget. Combined, in 2008, we will be awarding 
close to $1.7 billion to small businesses through our direct 
contracting program. In addition to our direct contracting 
program, the Department of Transportation, of course, has a 
very, very dynamic program known as the DOT DBE, Disadvantaged 
Business Enterprise Program, that is implemented by the 
recipients of DOT funds.
    In 2008, more than $3 billion of DOT funded projects went 
to the small business community, particularly the minority and 
women-owned business community. We know that under ARRA, we are 
almost doubling the amount of opportunities that will be 
available. We have taken significant steps to ensure that small 
businesses and minority businesses continue to be at the 
forefront of all this effort.
    DOT recently issued guidance to the program administrators, 
reemphasizing the importance of small businesses. More 
importantly, reemphasizing the fact that the DBE program 
applies to any new funding that comes their way on their ARRA. 
We have also stressed the fact that there are many, many small 
businesses waiting by the sidelines that need to be engaged in 
this procurement process. We are also increasing our outreach 
activities and technical assistance efforts at the national 
level to ensure that DBEs are well informed of all the 
opportunities.
    Now, I would like to mention that included in the Recovery 
Act, there is $20 million set aside for a bonding program to 
help DBEs reach or participate in this extreme additional funds 
at the state and local level. We are working very closely with 
the SBA to craft a program that would allow us to reach and 
assist DBEs directly. We are exploring potential opportunities 
to leverage the SBA's existing Surety Bond Guarantee program to 
benefit DBEs through ARRA.
    We are closing in on the final agreement as to how we are 
going to proceed, but everyone realizes that is a very, very 
critical piece of the puzzle to ensure that small businesses 
not only get the opportunities but also have the access to 
bonding as they perform through the increased levels of 
opportunities at the state and local level.
    With that, I would like to close my remarks and I will 
remain available for any questions that you may have.
    [The prepared statement of Mr. Franco follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Landrieu. Thank you very much.
    I am going to go right into my questions and then leave to 
testify, and then I will be back.
    But let me just make sure that we are starting with the 
right numbers in terms of what happened last year in 2007, 
according to the numbers that, Mr. Jordan, you must have to 
monitor the situation.
    According to the report that I have here, when you break 
down the overall goal of 23 percent, according to this report, 
the Department of Transportation spent 50 percent of its 
procurement dollars with small business. The Department of 
Defense did 20.4 percent. The Department of Energy did 6.2 
percent. The Department of Health and Human Services, 21.7; 
NASA, 15; and VA, 32. Now, those are not all of the 
departments, but the largest.
    Is that what your records show, to make sure we are 
starting off on the same page?
    Mr. Jordan. I do not have the going report in front of me, 
but none of those numbers sounded out of line. They all sounded 
about right, yes.
    Chairman Landrieu. And is that your number, Mr. Franco?
    Mr. Franco. Yes. Yes.
    Chairman Landrieu. So you are saying that of all the money 
that the Federal Government spends in the Department of 
Transportation, 50.8 percent is contracted with small 
businesses.
    Mr. Franco. Yes.
    Chairman Landrieu. And that is defined as businesses below 
500 employees?
    Mr. Franco. It is defined as business meeting the size 
standards based on the North American Industrial Classification 
Code, which vary.
    Chairman Landrieu. Which vary depending on the class they 
are in.
    Mr. Franco. On the industry, correct.
    Chairman Landrieu. Okay. Go ahead.
    Mr. Franco. In the direct contracting program, the 
Department of Transportation follows the Federal Acquisition 
Regulations and all the guidance set forth by the Small 
Business Administration for federal procurements.
    Chairman Landrieu. I mean, because if this is the case, and 
the goal is 23 percent, and you are exceeding it substantially 
by 50 percent, then we could excuse you from this meeting.
    Mr. Franco. Well, I will take it.
    Chairman Landrieu. And we may end up doing that, I do not 
know, because there would be no reason to call people if you 
are meeting your goals. But there evidently is some concern 
from some parts of the small business community that while 
these numbers reflect a robust effort, that there is some gap 
there.
    The same thing with the Department of Defense. I mean, with 
a little bit more effort, they could reach their 23 percent 
goal. The Department of Energy is concerning at only 6 percent. 
But the Department of Health and Human Services seems to be 
almost meeting their goal at 22 percent. And then, of course, 
you have NASA a ways away and VA exceeding theirs at 32. So I 
am going to be exploring the details of those numbers a little 
bit more.
    But let me ask you, Mr. Jordan, I appreciate the stepped-up 
efforts, the outreach that you have. I have participated in 
some of that myself. But can you be a bit more specific about 
how you and your office are actually tracking the results of 
what the agencies are doing now?
    When you talked about moving the number from 50 million one 
week to 389 million, could you describe a little bit about how 
that tracking system is working and what you are doing to push 
those numbers as high as possible?
    Mr. Jordan. Absolutely. And just a small clarification on 
those last numbers. It actually went from 335 to 389, so it 
went up by about 50, but did not jump up by 300.
    Chairman Landrieu. Oh, I am sorry. Okay.
    Mr. Jordan. So we are doing a number of things. On the 
front end, the outreach activities with the agencies and the 
small business community are intended for the agencies to be 
aware of the small businesses that are out there that can 
provide the highest quality, most innovative goods and services 
that they are going to procure. And the outreach to the small 
businesses is to direct them how to be contract ready, to be 
aware of these shovel-ready projects, where to look for 
procurements that they may qualify for so that they can take 
advantage of those opportunities.
    Because, as you know, one of the complications with the 
stimulus contracting is the speed at which these outlays need 
to happen. And so, we want to make sure that small businesses 
are ahead of the curve, so we are not looking back at the 
result numbers and saying, what could we have done on the front 
end. And that is where we are focusing on a lot of efforts with 
the PCRs that are at each of these agencies who are redoubling 
their efforts and some of the outreach that both of you have 
been involved with, that you refer to.
    Then the tracking. We track the solicitations. All federal 
solicitations must be posted on fbo.gov for at least 30 days. 
So we want to look there and say, okay, what is the government 
buying. One step before that, we want to look at their Recovery 
Act plans to see in a more broad picture what are they looking 
to procure and how can we educate the small businesses in those 
industries to get ready to provide those goods and services.
    Then the Federal Procurement Data System--Next Generation, 
FPDS-NG. That is the reporting tool that we use to look at all 
of the Federal Government procurement. The stimulus or the 
American Recovery and Reinvestment Act procurements all have an 
individual tag so they can be tracked and monitored separately. 
And so, that is where Ranking Member Snowe's chart that shows 
the steady increase of small business contracting percent--
although the absolute value is, of course, not where we want to 
get it. That is where we are pulling those numbers, and that is 
where we will continue to push.
    So we want to see that steady increase keep going and not 
plateau until it is at or above the 23 percent. And if we see 
indications that that is not the case, we will redouble again 
our efforts with each of the agencies to make sure that while 
we want to get this money in the hands of businesses to create 
and retain jobs and stimulate the economy, we also want to make 
sure that small businesses get their fair share.
    Chairman Landrieu. Okay. My final question is this. 
Although I have not had the opportunity to do this personally, 
my staff has reviewed the resources available at fedbizopps and 
found it thoroughly confusing, according to their report to me. 
And I have picked up anecdotally when I am out in the field 
that it is very confusing to people who have tried to access 
information in that way.
    So have you heard these complaints? If so, what are you 
doing about it? What other resources is the SBA making 
available for small business owners to help them get accurate 
and timely and useful information?
    Mr. Jordan. Absolutely. Yes, I have absolutely heard those 
frustrations from small business owners. Wading through the 
wealth of information that is on there to find specifically 
what is out for them is sometimes difficult when you are 
talking about a small business owner who is spending so much of 
their time trying to grow or, in these times, save their 
business, can be difficult.
    We understand that, and we have developed training 
resources accessible through sba.gov on how to do business with 
the Federal Government and how to use fbo.gov. We do not 
personally maintain that Web site, but we want to make sure 
that we educate all small businesses on how they can quickly 
and effectively use that so they can access all Federal 
Government procurements.
    Over the last----
    Chairman Landrieu. Who does maintain that Web site?
    Mr. Jordan. I believe it is the General Services 
Administration.
    Chairman Landrieu. Go ahead. I am sorry.
    Mr. Jordan. And so, over the last couple days at National 
Small Business Week, I held several forums with both small 
businesses and all of our field district directors who are also 
in town. And we are working to develop an even more simple how-
to guide for fbo.gov so that they can go search, access, 
compete for, and win contracts.
    Chairman Landrieu. Thank you very much. Senator Snowe.
    Senator Snowe [presiding]. Thank you, Madam Chair.
    Mr. Jordan, at these forums that you have held this week, 
did you hear similar complaints about the inability to access 
information or to navigate the process for federal procurement?
    Mr. Jordan. We did. And a lot of it is--what we are trying 
to do is what you mentioned in your opening statement, Ranking 
Member Snowe, which was there are best practices out there. A 
lot of it is, both from my private sector and since joining the 
SBA experience, syndicating those best practices. So educating 
the small businesses on how they can take advantage of the 
opportunities, where are the opportunities that are most 
pertinent to them, what do they need to do. But simplify it. 
They do not have time to go through all the regulations, and 
that is our job, and that is something we take very seriously.
    Then from the agency's standpoint, making sure that we are 
making it as easy as possible for them to know which small 
businesses are out there that are providing the goods and 
services they need, because as we all know, small businesses 
can really provide a level of performance, innovative product 
and service, quality customer service. That is great for the 
Federal Government and great for the taxpayer.
    Senator Snowe. Well, if I was running a small business, 
what would be the first step? For small business out there, 
what is the first step that they would take?
    Mr. Jordan. So I would first say, Madam Small Business 
Owner, get a DUNS number, then become registered in the Central 
Contractor Registration. Become registered in the Dynamic Small 
Business Search so large primes can find you for some of those 
subcontracting opportunities as well. And all of these you can 
link to from the sba.gov Web site if you go to our contracting 
session.
    Then I would say go to fbo.gov knowing your North American 
Industry Classification, your industry code, and search for 
opportunities there. Go on a regular basis. You can also set it 
up so it sends you the opportunities. And make sure that--you 
know, selling to the government has more similarities to 
selling to private sector enterprises, and a lot of these small 
businesses understand. So do the relationship building, do the 
networking, do the marketing, understand what these agencies 
are going to be providing. And absolutely walk into your SBA 
district office. Every city in America is covered by an SBA 
district field office, and the people there are ready, willing 
and able and help to educate that individual small business on 
what it can do.
    Senator Snowe. And there is no doubt about it, except that 
oftentimes they are overwhelmed running their business on a 
daily basis. They have very few employees, and it is just very 
complicated to think about, okay, now how do I approach the 
Federal Government. Maybe people are not aware that there is a 
district office or procurement technical representatives, which 
I think are very important as well. And I am going to get to 
that in a moment. But I think we need to figure out an easy way 
for people to access this information, whether it is on a Web 
site or 800 number.
    When you gave this response at the forum, what was the 
reaction? Did people find that logical?
    Mr. Jordan. Yes. And I think--as you have heard from 
Administrator Mills, investment in technology and making the 
use of sba.gov more streamlined is one of her top priorities. 
And as I talk to small businesses and they talk about some of 
the frustrations navigating these different Web sites and 
tools, and I point them to some of the training materials on 
sba.gov, they say, well, I did not realize that was there, is 
the most frequent response, and we do find that is helpful.
    So that is a way, like you are saying, from their own 
business, from their home, through the Internet, they can 
access a lot of this information quickly, and we hope in an 
effective and distilled manner.
    Senator Snowe. Well, it is interesting because CNN Money on 
April 20th noted that only 14 percent of small business owners 
expect a positive impact from the stimulus, but more than twice 
that number, 31 percent, expect the impact of the stimulus to 
be negative. One area where the Federal Government could 
obviously build support for the stimulus is through 
contracting. But as CNN Money noted, small businesses are wary 
of the Federal Government's contracting promises. And they have 
good reason, because they have not had a good experience one 
way or the other. And they have gone through it. They have 
spent a lot of time, money, and effort that oftentimes they can 
not afford because they are small businesses. And so, that in 
and of itself makes it difficult because they do not have the 
number of employees.
    So how do you overcome that? Because there has been a 
terrible track record on the part of the Federal Government. 
The Department of Transportation, as I will get to in a moment, 
has had a very good track record in veterans-owned businesses. 
But the point is, here, that the federal agencies have not been 
responsive or receptive and that has made it very difficult.
    So we have had a lot of small business owners before this 
committee that have told their stories, where there has really 
been a breach of trust on the part of agencies, the bundle 
contracting for example.
    So what do we do to overcome that? What are you going to do 
specifically, do you think, that will make a difference?
    Mr. Jordan. Absolutely. I hear the frustration from small 
business owners I talk to very frequently, and I understand 
there is a healthy skepticism of the government contracting 
process.
    First, let me just say in general what we do is the 
education outreach and then standing by what we say and proving 
that this is an agency that is going to stand by its word. 
Specifically what we are doing is creating simple, synthesized 
documents that we can post on our Web site in an easily 
accessible manner. It is almost a one-stop shopping, so they 
know where to go, and where all these opportunities are, and 
what they need to do. Like you said, it is very helpful when 
you hear step by step.
    Also, in education, what the process is. When you are 
talking about the contracting process, and especially in the 
context of today's hearing with the stimulus and the speed in 
which these dollars are intended to be obligated, contracting 
takes a long time. Usually four to 24 months is average for the 
contractor. So educate small business on how they can get ahead 
of that, how they can understand how to be contract ready, 
which you had asked about, shovelready; working with the 
agencies very specifically, data, the PCRs that you mentioned; 
leveraging the socioeconomic programs that you also talked 
about in your opening statement. I believe on the next panel we 
have an 8(a) graduate, and she will probably speak to some of 
the benefits of that business development program.
    So there are a number of things in addition to what the 
administrator is doing with outreach and what this committee is 
doing with outreach to the governors so that the statelevel 
funds are also going to small businesses.
    Senator Snowe. Have you yet had a response from the 
nation's governors regarding the stimulus plan and how they are 
going to incorporate small businesses? Is it too soon to expect 
a response? I mean, I think it is very important to make them 
aware.
    Mr. Jordan. Absolutely.
    Senator Snowe. Because it is critical that we do it now 
because of this number, before it is too late. This is a fair 
warning here on this issue. We just have a healthy dose of 
skepticism in this community about contracting simply because 
the Federal Government has failed to achieve the 23 percent 
goal, obviously, and all of the individual components.
    So I think that this is a good way to mitigate the issues. 
It is a good start if we can get this turned around and make 
sure that small businesses are included in this process. It 
means jobs. For every $140,000 that is spent in contracting 
dollars, it means one job. I have noticed that small businesses 
got $94 billion in prime contracts, $53 billion in 
subcontracts. That means saving or retaining 1.1 million jobs. 
So it is about jobs, and we desperately jobs right now.
    Mr. Jordan. Absolutely.
    Senator Snowe. And can you learn from the Department of 
Transportation? That is the other thing. What is the track 
record of the various agencies? Half of all the procuring 
federal agencies have yet to achieve the women's business 
contracting goal. And I am glad the omnibus legislation removed 
the rule of women's contracting goals of the SBA because it was 
not right. They failed to meet it in eight years.
    So we have got a lot of work to do. And I know you are just 
beginning, so this is a good time to start all of this. But can 
you learn on the track record of the Department of 
Transportation, for all intents and purposes, that says you are 
moving in the right direction here?
    Mr. Jordan. Absolutely. And I think that the training and 
syndication of best practices is one of my top priorities. As 
the administrator has said to you before, she is very much a 
data and metrics person. I come from a world of fact-based 
analysis. And so, what my team is going through now is looking 
at those percentages you talked about, looking at those metrics 
and saying why.
    There are some reasons why the Department of Energy is at 6 
percent. It is because they outsource to the labs as the prime 
contractors. And then the subcontracting performance is not 
that low for the Department of Transportation versus the 
Department of Defense. As the chair said, they are different 
numbers, but the Department of Transportation is not buying 
tanks and planes. So we really want to push on subcontracting 
there.
    But what we want to see is where are the similarities, and 
for the agencies that are performing well, how can we use their 
best practices and syndicate those to the other agencies to 
show everybody how it can be done so we exceed that 23 percent.
    Senator Snowe. So you do an agency-by-agency review?
    Mr. Jordan. Absolutely.
    Senator Snowe. How would we go about it?
    Mr. Jordan. We review and set individual goals with every 
agency every year and where they fall short on either the 23 
percent or their socioeconomic goals. They must develop a 
specific plan that is reviewed by our office on how they are 
going to achieve and meet that goal the next year.
    Senator Snowe. Well, I think with all exceptions on this 
contracting, go to 2007, the only area where we have achieved 
it was small disadvantaged businesses at this point. Women-
owned, HUBZones, service-disabled veterans, no. And so, it has 
not been a good track record.
    Mr. Franco, in the Department of Transportation, what would 
you recommend as the best way to attacking this from your 
perspective and experiences that has worked?
    Mr. Franco. Well, first of all, I would like to clarify 
that the 50 percent level is a very high standard. On an 
average, you can expect the Department of Transportation to be 
somewhere between 35 to 40 percent. Given the fluctuation in 
procurements and the types of things that we are buying, that 
could throw the numbers 5 percent one way or the other.
    If I were to summarize, I would say that not one specific 
effort but a combination of doing a lot of things well. At the 
Department of Transportation, we are highly committed. We have 
a very experienced staff on board. The support of the program 
goes all the way to the top, and it is filtered down to the 
working level.
    On a daily basis, we meet with our program officers, with 
our contracting officers. We provide guidance. We do a two-step 
approach. First, we go out there and make sure that the small 
business community is engaged, they are familiar with the 
regulations, with the requirements; that they know of the 
opportunities, they know how to do business with the Department 
of Transportation. We participate in a multitude of procurement 
conferences. We go out there and touch the flesh, if you will.
    At the same time, we work internally, making sure that all 
of our procurement officers are well versed on the goals and 
the requirements of the federal procurement process, and the 
importance of utilizing small businesses first in every 
procurement. At the Department of Transportation, our office, 
we review procurement. If a requirement is not going to be set 
aside, they must demonstrate to us why.
    So the first option is growing small businesses. I know 
that the Federal Acquisition Regulations provide for that, but 
in practice, it is very, very hard for the contracting officers 
to understand and realize that sometimes they will get a much 
better product from a small business than they will from a 
large business. So that is an ongoing process that we go 
through.
    But I think that, overall, is the commitment, if it is at 
the top and it is filtered down. As we speak, we are hosting 
the monthly meeting of the OSDBU directors, our counterparts in 
every federal agency. Secretary LaHood would make presence 
there. So he is making sure that people understand that is 
important for the Department.
    We also have included in our strategic plan, the long-range 
plan that we prepare every five years, increasing the 
contracting opportunities for small businesses, and 
particularly small disadvantaged businesses and women-owned 
businesses is included as a goal. And the top management at the 
Department of Transportation is measured on how well they do in 
each of the goals that the Department establishes as part of 
the strategic plan.
    So it is a combination of things. I would not be able to 
point to any one, but doing them all and doing them well will 
give you the results.
    Now, it is not all roses. There are many small businesses 
that are not able to perform the types of work that we do. And 
from our perspective, we tell our folks, tell them up front so 
they can be pursuing other types of opportunities. Be up front 
with the small businesses. To the extent that you can, you will 
help them and they would appreciate it better.
    The other program that receives the most attention at the 
Department of Transportation is the one that is implemented by 
the recipients of DOT funds. There is a completely different 
environment. Recipients set goals based on availability of 
ready, willing and able individuals, and we have heard a lot of 
complaints that there is not enough opportunities out there. So 
we are hoping that with this influx of money, there will be 
much more opportunities.
    It is going to take a while to filter down to the small 
business. For the most part, many of these projects are so 
large that it takes a large company to be the leader. Small 
businesses come along as part of their team, and they come in 
as subcontractors. So any of this data that we see here, it is 
going to take a little bit of time. But so long as you are in 
the front end of it, we will be able to identify those 
opportunities and make them available to the small business 
community.
    Senator Snowe. Well, I think that it is key to be at the 
front end of it to identify those opportunities and not when it 
is too late. I think that that is critically important.
    Why has it been difficult for the Department to meet the 
veteran's goal?
    Mr. Franco. The service-disabled, veteran-owned business is 
the newest of the goals. It was established as a goal in 2003. 
Every year, we have doubled our performance. And it is a matter 
of numbers. The entire Federal Government is looking for 
qualified firms that are service-disabled, veteran-owned 
businesses. We are competing for those qualified firms. 
However, we put a lot of effort. We are out there reaching out 
to the community. We are hopeful that within the next year, or 
if not this year--we are shooting to meet that goal this year. 
We have got a number of small business set-asides, specifically 
for service-disabled, veteran-owned businesses. So we are 
hoping to reach that plateau within either this year or the 
next year. That is our goal.
    The women-owned business, when we first included it in our 
strategic plan, it took us about three or four years to reach 
the 5 percent goal. So it is going to take a while, but we are 
definitely committed to making sure that we get there in the 
shortest amount of time.
    Senator Snowe. You know, the Washington Post did a story 
today on tracking stimulus spending. And they say that three 
months after the bill was signed, recovery.gov offers little 
beyond news releases and general breakdowns of spending and 
acronym-laden spreadsheets and time lines. And I have heard 
this from small businesses as well. It seems very convoluted, 
confusing. You are trying to figure out what programs apply to 
small businesses as opposed to something else or the 
differentiation between public and private sector initiatives.
    So how are you tracking in the Department of Transportation 
how the stimulus spending is working?
    Mr. Franco. Well, one of the things that we have done is 
that we have gone out to the Federal Procurement Data System, 
that you have indicated is very confusing for small businesses 
to find out what is going on. We go out there on a weekly 
basis. We pull the information specifically related to ARRA. We 
also pull the information specifically related to the 
Department of Transportation. Any small business that wants to 
do business with us can find out exactly what we are in the 
market for on any given day by just visiting our Web site.
    Senator Snowe. Is it separate? I mean, it is totally 
separate?
    Mr. Franco. Oh, yes. We have it separated in a way that you 
know exactly what opportunities are being set aside for small 
business. You know exactly what opportunities we have for 
construction, what opportunities are there for technical 
support services. And some people say it is redundant. People 
can get it at the fedbizopps. We say no. If somebody is trying 
to market to the Department of Transportation, they need to 
know what we are in the market for on any given day.
    Senator Snowe. And I think it is very important. And, Mr. 
Jordan, I think that is something that maybe could carry back 
to the administrator. I know she would be interested in this, 
but for all the agencies because it is a critical problem.
    I have heard that in a number of roundtables I have hosted 
in Maine. They have been saying--and going on our Web site to 
try to make a distinction between the public and private sector 
initiatives, small business initiatives, being aware of the 
initiatives that are in the stimulus plan that will benefit, 
and how all the other spending, especially on contracting 
issues or each agency. And perhaps it can be redesigned to be 
user friendly. That would be very helpful.
    Mr. Jordan. Absolutely.
    Chairman Landrieu [presiding]. Thank you. Just one more, 
and then we will usher the second panel.
    Mr. Jordan, is there anything that you have determined that 
you need additional legislative authority or additional 
resources to get this important job done, or do you feel like 
your department is well resourced and legislatively you have 
the authority that you need to fulfill this mission?
    Mr. Jordan. And if you do not want to answer now, you can 
submit it for the record. But it is important to get----
    Mr. Jordan. Absolutely.
    Chairman Landrieu [continuing]. That on the record. Because 
this committee is going to be very, very intense and focused on 
really making sure that the Federal Government over the next 
year or two, or three or four, is meeting these goals, and that 
we are not going to set goals that we have no intention of 
meeting and just put out press releases to make everybody feel 
good. We really, really believe that this government has to do 
all it can to help small businesses get through this tough 
time. And whether it is on the capital access piece or creating 
more opportunities to do more business with the government 
while people are struggling like this, it is our intention.
    So you can answer it now or you can submit something for 
the record.
    Mr. Jordan. I think that what I will do is I will take that 
for the record and come back to you only because I do not want 
to give a quick answer. I would like to sit down with a team 
and be more thoughtful and comprehensive with a response.
    Chairman Landrieu. Well, please do because we would be 
happy to, I think, assist you if you are lacking resources or 
authority to get your job done, because it is an important job 
to get done and get done correctly.
    Okay. With that, I would like to move to the next panel.
    Mr. Jordan. Thank you.
    Chairman Landrieu. Thank you.
    Mr. Franco. Madam Chairwoman?
    Chairman Landrieu. Yes? Go right ahead, Mr. Franco.
    Mr. Franco. I just want to share that the Department of 
Transportation just released our agency-wide Recovery Act plan 
of action that is very helpful for the small businesses to be 
aware of. It spells out how we are going to go about tracking 
the information and implementing the Act.
    Chairman Landrieu. Well, that would be very helpful, and I 
would like to submit that for the record.
    Mr. Franco. Okay, I will.
    Chairman Landrieu. And we are going to ask all the agencies 
to submit their documents like that for the record.
    Mr. Franco. Thank you.
    Chairman Landrieu. Thank you very much.
    Would the second panel come forward?
    Thank you all. As you-all are getting settled, let me go 
ahead and begin introducing the panel.
    Sharon Arnold is our first witness. Sharon is the owner of 
SSACC, Inc., a small landscaping subcontractor that does work 
in northern Illinois, related to highway construction. She will 
be speaking about the help that she received from the 
Disadvantaged Business Enterprise, a program that is run by the 
Department of Transportation that she has found to be 
particularly helpful, and she will explain her situation.
    Our next witness is Joe Flynn. He is president of the 
Association of Procurement Technical Assistance Centers, a 
nationwide network of procurement professionals dedicated to 
assisting businesses with the contracting process. Joe is also 
a program manager for the University of Tennessee Procurement 
Technical Assistance Center, UPTAC, and assists business in 
identifying and obtaining government contracts.
    Very interested, Joe, in what you have to testify to us 
today.
    Sylvia Medina is our next witness. She is here representing 
Women Impacting Public Policy, WIPP. Sylvia is visiting from 
Idaho, where she is president of North Wind, a women-owned SBA, 
that provides environmental and construction services. In 12 
years, North Wind has grown rapidly with offices located 
throughout the country. Its success is owed in great deal to 
innovative ideas and research. Their customers include the 
Department of Energy, EPA, the Air Force, Army, Navy, among a 
few.
    Our last witness is Theresa Daytner. Theresa is the 
president of Daytner Construction, a general contracting and 
construction firm based in Maryland, serving public and private 
sectors. I am very interested in hearing your testimony today.
    Ms. Arnold, why don't we start with you?

         STATEMENT OF SHARON ARNOLD, OWNER, SSACC, INC.

    Ms. Arnold. Good morning. My name is Sharon Arnold, and I 
am president of SSACC, Incorporated.
    Chairman Landrieu. Just pull the mic a little bit closer to 
you.
    Ms. Arnold. My name is Sharon Arnold, and I am president of 
SSACC, Incorporated. We are a landscaping subcontractor located 
in Pontiac, Illinois. My company is a small landscaping 
business that works throughout the northern third of Illinois. 
One of our specialties is the installation of pavement fabric, 
which is placed on the existing road surfaces before the new 
asphalt overlay is installed.
    My company is a certified disadvantaged business 
enterprise, DBE, since 1986. The DBE program is the only small 
business subcontracting program in highway, airport and transit 
construction. As most businesses go, we slowly made our name 
and became established as a company that was a reliable and 
dependable landscaping subcontractor. In 2007, we completed 90 
percent of the landscaping on the last 13-mile section of I-355 
southwest of Chicago.
    Less than one year later, in December of 2008, our work 
under contract was not at the volume level that would allow us 
to start up in 2009. With that in mind and after 22 years in 
business, there was little hope of a future. I had to lay off 
my entire staff of 11, including myself, in an attempt to 
minimize cost in an effort to try and salvage our business. All 
of my employees had to go on unemployment. My company averages 
250 union employees who are seasonal also.
    With the economy being what it was, the lack of highway 
construction work out for bid, my company was in dire straits 
with little hope of a future. In February 2009, under the 
leadership of President Obama and the United States Senate, the 
Stimulus Bill was passed. The Stimulus Bill has given the state 
of Illinois a much needed influx of highway construction 
monies, which has given us the opportunity to bid on a good 
deal of work.
    The three specialty highway lettings Illinois has had to 
date has benefitted us with enough work under contract to hire 
back all of our staff, including 90 percent of our permanent 
field employees. I am fully aware that the Stimulus Bill has 
saved my company.
    Madam Chairman and Committee, I truly commend the United 
States Senate for passing the Stimulus Bill. Undoubtedly, the 
passing of the Stimulus Bill has given us the opportunity to 
work yet another year. I know the Stimulus Bill has given the 
country and the highway construction industry the opportunity 
for the hope of a brighter future for ourselves, our children 
and our grandchildren. Thank you.
    [The prepared statement of Ms. Arnold follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Landrieu. Thank you, Ms. Arnold.
    Mr. Flynn?

 STATEMENT OF JOE FLYNN, PRESIDENT, ASSOCIATION OF PROCUREMENT 
              TECHNICAL ASSISTANCE CENTERS (APTAC)

    Mr. Flynn. Chairwoman Landrieu, Senator Snowe, 
distinguished senators, thank you for the opportunity to 
testify here today. I am honored to speak before you on behalf 
of the Association of Procurement Technical Assistance Centers 
and the small businesses that we serve across the country. 
First, I would like to express my gratitude and appreciation 
for your leadership and efforts on behalf of small businesses 
in Louisiana, Maine and all across the nation.
    My name is Joe Flynn. I am the director of the Center for 
Industrial Services, Procurement Technical Assistance Center, 
at the University of Tennessee. I am also president of the 
Association of Procurement Technical Assistance Centers. I was 
also the program manager in New Hampshire, where I first got to 
meet Senator Snowe a number of times up in Maine.
    It is nice to see you again, Senator.
    Our members are 89 PTACs across the nation with over 500 
dedicated procurement professionals helping small businesses 
compete for federal, state and local government contracts. We 
were created in 1985, funded and administered through the 
Defense Logistics Agency, and supported by the states and 
localities, which provide a non-federal matching of up to 50 
percent.
    The PTACs help small businesses to capably navigate 
government procurement systems, increasing our defense 
industrial base, and generating new suppliers for federal, 
state and local governments. The resulting competition 
translates into higher quality goods and services at a lower 
cost to taxpayers, while creating more jobs and economic 
opportunities for small businesses across the country.
    PTACs are the boots on the ground in the government 
acquisition process. We work with small businesses everyday, 
offering classes and seminars, sponsoring matchmaking events 
with government agencies and prime contractors, providing 
hundreds of thousands of hours of one-on-one counseling and 
support, all at little or no cost to the businesses. Not only 
do we help them prepare for and bid on these contracts, but we 
assist them in navigating post-award performance issues as 
well.
    Whenever possible, we collaborate with programs and 
organizations with complimentary missions such as the small 
business development centers, manufacturing extension 
partnerships, and the Center for Veterans' Enterprise, allowing 
us to be part of a comprehensive network of small business 
support. At the national level, we have had memorandums of 
understanding with all the three programs, and at the local 
level, I am actually housed with the Tennessee MEP at the 
University of Tennessee.
    Last year, the PTACs served well over 55,000 active 
clients, conducting over 175,000 counseling sessions, and 
sponsored or participated in over 3,600 classes, seminars and 
conferences attended by over 1.3 million people. There are 
classes going on across the nation today. We work with large 
prime contractors as well by assisting them in locating viable 
subcontractors, and we provide training on specific topics.
    One story I know is important to Chairwoman Landrieu is 
Louisiana PTACs work with Textron to identify small businesses 
and subcontractors in Louisiana. I just spoke with Sherrie 
Mullins before I came in, and she has a number of things she 
would like to tell you. I know you are very familiar with her 
center.
    Chairman Landrieu. I am. I was just going to mention her 
name. She is quite active.
    Mr. Flynn. She certainly is. Her staff, Liz Johnson, helped 
me a great deal today. Kelly Ford in Louisiana also has helped 
me a great deal, as has Pat Rice. Pat Rice is amazing up in 
Maine. We really love them all.
    As a result of our efforts last year, the PTAC clients were 
awarded over 86,000 contracts and subcontracts, worth in excess 
of $14 billion. This includes over 1 billion in Louisiana and a 
little over $212 million in Maine. The contracts created and 
retained almost 334,000 jobs, including 20,000 in Louisiana and 
over 4,000 in Maine.
    We also serve as an outreach vehicle for many government 
agencies on such procurement issues as RFI, IUID, wide-area 
workflow, and a whole lot more, as well as more local 
acquisition efforts by military bases, defense supply centers, 
DoD regional councils, and the Department of Interior Fire 
Service, to name just a few. We can get the information and 
training out to the small businesses that they need to succeed 
in this continually changing environment, and thereby help 
agencies identify suppliers that they can work with.
    Our nation's small businesses are hurting. Let me state 
that twice. They are hurting. They really, really are. With 
private sector investment continuing to decline, many small 
businesses are turning to the government.
    In preparation for this hearing, I did a quick random 
survey of 17 PTACs around the country, asking what impact the 
economic downturn had on demand for their services. Responses 
that I received tell a story I am sure you could guess. 
Overall, our initial counseling sessions, that is the first 
time we sit down with a new client, are up over 68 percent over 
the same period from last year. In Maine, they are up over 76 
percent. Madison, Wisconsin, they are up over 110 percent. In 
Tennessee, I am up over almost 200 percent. The demand for 
classes and seminars has increased well and attendance at 
PTAC's events is up over 40 percent from last year.
    Federal Government offers over $350 billion each year in 
procurement opportunities, in addition to the American Recovery 
and Reinvestment Act, which includes over 250 billion in 
additional procurement opportunities. I know each of you played 
a critical role in the passage of that bill. While some 
senators may disagree on its size and details, I think all 
would agree that small businesses must have access to these 
dollars. Businesses are contacting their PTACs for help in 
identifying and responding to the ARRA opportunities. PTAC 
staff take their duty to their clients very, very seriously. 
And in this time of crisis, we are simply buckling down and 
putting in the extra hours and extra miles to meet these needs.
    As you see, we are seeing increased activities, and we are 
responding. We see successes all across America, like Marc and 
Cheryl Nunez, owners of Southern Services and Equipment in St. 
Bernard, Louisiana. After losing their homes and businesses in 
Katrina and Rita, Marc and Cheryl worked with the local PTAC 
and has since secured over $12 million in federal contracts. 
Like Ann Yahner, who retired from a career in nursing in the 
U.S. Navy, and formed Penobscot Bay Media in Camden, Maine. Ann 
worked with Pat Rice and the Maine PTAC and their Bid Match 
service to secure contracts with USDA, U.S. Forest Service, as 
well as Maine DOT, Army National Guard and a few others.
    Our program works. We work with small businesses everyday--
--
    Chairman Landrieu. If you could just try to wrap up in 30 
seconds.
    Mr. Flynn. Okay. Well, thank you again for this honor and 
opportunity. I am happy to answer any questions that you might 
have.
    [The prepared statement of Mr. Flynn follows:]

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    Chairman Landrieu. Thank you very, very much. Ms. Medina.

    STATEMENT OF SYLVIA MEDINA, PRESIDENT, NORTH WIND, INC.

    Ms. Medina. Good morning, Chair Landrieu, Senator Snowe and 
members of the Committee. My name is Sylvia Medina. I am 
appearing today on behalf of Women Impacting Public Policy, or 
WIPP, representing over half a million women business owners 
nationwide. I serve on WIPP's Board of Directors and am 
president of North Wind, Incorporated, based in Idaho Falls. 
Our company provides environmental engineering and construction 
services throughout the United States.
    It is unthinkable that the government would spend $787 
billion in procuring goods and services without awarding a 
significant portion of it to the segment of economy that is 
critical to its recovery, small business. I want to commend 
this committee and the new administration for making a 
concerted effort to educate us on agency plans and involve us 
in discussions surrounding the Recovery Act.
    WIPP has dedicated much of its resources in the last 
quarter to educating the small business community on the 
Stimulus Bill and how to follow the funding, including holding 
regional meetings around the country, with the first one being 
held today in Chicago.
    From what we have seen, the agencies are putting their 
distribution plans into place, but they are scrambling to find 
enough contracting officers to push these procurements out the 
door. We see a double-edged sword with respect to this shortage 
of acquisition manpower. It will mean that they will use 
existing contracts in place. That is good news for small 
businesses with existing contracts but not for those who do not 
currently hold contracts.
    We are not advocating the stimulus money is held up until 
all new contracts can be put in place. We cannot afford long 
delays. Small businesses should be awarded the contracts that 
they are entitled to in current law that includes 23 percent of 
prime contracts plus the subcontracting goals that have been 
negotiated with the SBA and is envisioned in the 2000 Act, 5 
percent of prime contracts for women business owners. We are 
counting on congressional oversight to ensure that stimulus 
money meets these small business targets.
    As the committee knows, a large percentage of DOE, 
Department of Energy, dollars are awarded to top management and 
operating, or M&O contractors, who manage its national labs. 
Small businesses are, for the most part, second-tier 
subcontractors to the M&O. Therefore, stimulus funding 
primarily will be awarded to large prime contractors. So 
instead of directly contracting with small businesses, DOE will 
have to find a way to effectively work with its prime to ensure 
that meaningful work flows down to the M&O small business 
contractors.
    To express our concern, WIPP sent a leader to DOE Secretary 
Chu on April 3rd, which is attached to my testimony. We are 
still awaiting a response from the secretary. WIPP feels 
strongly that small businesses should not be relegated to low-
margin subcontracts.
    What I am currently observing, and have received as input 
from a number of other DOE small business contractors, is that 
few shovel-ready projects are being competitively bid or 
directly awarded to small business contractors. The DOE 
procurement process is inherently difficult for small business 
contracts to be bid and awarded in a timely manner. The problem 
is a need to obligate these stimulus funds in a very short time 
frame.
    These types of contracts do not promote sustainable, small 
business growth since the positions are not only temporary but 
often do not allow for sufficient profit to pay for employee 
benefits. In some cases, the M&O contractors are actually 
hiring staff away from small businesses to support their 
efforts rather than bidding out new project work. I want to 
caveat this by saying that not all DOE M&Os are operating with 
this business model, but we are seeing a trend in this 
direction.
    My company is a DOE small business protege of Bechtel 
National. Because of this relationship, we have been given the 
opportunity through directed and competitively bid procurements 
to receive stimulus dollars and have hired new staff to run and 
support these projects. I am able to subcontract work to other 
businesses, small and large, who are, therefore, benefitting 
from the stimulus money.
    This model should be an example of how DOE small business 
contracting of stimulus monies can be done successfully, 
helping small businesses grow in a sustainable manner and 
foster growth well after the stimulus monies have been 
expended. It really has a positive compounding effect for us as 
a small business.
    I am pleased to report that these projects that we are 
performing are being performed within their approved budget and 
on schedule. Half of my annual revenue is also based on work 
with other agencies. Many of these agencies are making positive 
strides in rapidly funding new and existing projects with 
stimulus money. In contrast to the DOE, many small businesses 
like mine are performing work as a first tier prime contractor 
for the agency.
    We would like to make the following recommendations: one, 
that this committee assess how federal departments are awarding 
subcontract dollars provided by the stimulus monies to small 
businesses; two, that in your stimulus reports, federal 
departments include the amount of dollars being subcontracted, 
including the profit margin data; and three, that DOE increase 
the number of contract opportunities directly with small 
businesses.
    The large dollars being contracted through the Stimulus 
Bill reiterate the need for the SBA to implement a women's 
procurement program which will assist federal agencies in 
meeting their 5 percent goal. WIPP thanks all the members of 
Congress who helped in stopping the SBA's onerous women's 
procurement program proposed in 2007. SBA took several long 
years to attempt to implement it, and what was proposed was 
completely unacceptable. We are asking today that the Committee 
move expeditiously to pass the legislation drafted last year by 
Senators Kerry and Snowe as an amendment to the DoD 
Authorization Bill.
    In closing, we are optimistic that with this committee's 
support, women-owned and small businesses will be able to help 
jump-start the economy by participating in the stimulus dollars 
made available through the Recovery Act. Thank you for inviting 
me to share my views. I am happy to answer any questions.
    [The prepared statement of Ms. Medina follows:]

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    Chairman Landrieu. Thank you very much.
    Ms. Daytner.
    Ms. Daytner. That is correct.

 STATEMENT OF THERESA DAYTNER, PRESIDENT, DAYTNER CONSTRUCTION 
                             GROUP

    Ms. Daytner. Thank you.
    Good morning, Senators Snowe and Landrieu, and the rest of 
the Committee and staffers. It was an honor to meet with 
Senators Landrieu and Snowe on March 16th at the White House 
with President Obama and Secretary of Treasury Geithner to 
discuss small business issues--nice to see you again--and hear 
about the President's plans to support the SBA and expand 
lending and surety guarantee programs. Thank you for inviting 
me today as a witness on behalf of small business owners across 
this amazing country of ours.
    My name is Theresa Alfaro Daytner, and I am an entrepreneur 
from Mt. Airy, Maryland. I grew up in nearby Greenbelt, 
Maryland, with an entrepreneurial father who owned several 
beauty salons and an cosmetology school on Main Street in 
Laurel. Mom studied geology in college when I was growing up 
and became a public high school teacher.
    I started my first business in 1989, a residential roofing 
company, while finishing my accounting degree at the University 
of Maryland, raising my first child, studying for the CPA exam, 
and embarking on my first real job with a highly respected D.C. 
CPA firm downtown on Connecticut Avenue.
    As a Latina, I am the oldest daughter. I was also helping 
Papi and Mami who had recently been diagnosed with prostate 
cancer and multiple sclerosis, respectively. I found the 
traditional career path of the corporate world did not share 
the same family values and creative resourcefulness that I was 
so passionate about. My generational Dagwood sandwich coincided 
with the need to support a family and leave an unsupportive 
marriage.
    I believe my experience is very similar to many women 
entrepreneurs, who are torn between raising families, caring 
for parents, economic survival, and, oh yeah, creating a life 
full of passion, purpose and joy. This experience confirmed in 
my mind that I made a terrible employee.
    As a single mother, dedicated daughter and rehabbing a 
rebuilt knee--that is a story for another day--I was working 
full-time for a general contractor that allowed me a short 
commute and paycheck job; that is, only 40 hours a week versus 
the 60 plus hours I was working at the CPA firm. This spare 
time allowed me to finish studying and sit for the CPA exam, 
which I passed in the first sitting.
    So not only did I get to see how a growing and reputable 
commercial general contractor operated from the inside out, but 
I also met the love of my life, my husband, Allen Daytner, and 
obtained the credentials and experience to start my next two 
businesses, a CPA practice that I operated for almost 11 years 
through four more newborns, a consolidated multi-generational 
home, a marriage, and an addition of a step-daughter, and my 
current company that I started in January of 2003, a commercial 
construction management and general contracting company, The 
Daytner Corporation, now doing business as Daytner Construction 
Group. And, yes, the total was six children. This is my 
daughter, Candace. They are now 23, 21, 14, 11 and we have twin 
eight-year olds. The older four are girls. The twin boys are 
the youngest two. And I have a daughter getting married in 
June.
    Many small businesses across this country have stories very 
similar to mine. Mostly we share a desire to create our own 
destiny. I spent years building a strong successful business 
before pursuing the Federal Government as a potential new 
client.
    In 2005, I became an SBA 8(a) certified company and was 
awarded our first federal contract with the U.S. Navy, 
utilizing this contract vehicle. Last year, 2008, my company 
grossed $1.4 million in gross revenue. All revenue was for 
construction management professional services, as we had not 
pursued bonding for at-risk general contracting projects, and 
less than 50 percent of that revenue was from federal clients. 
We do a lot of work in higher education and in the private 
sector.
    This year, with the combination of expanding into general 
contracting and federal opportunities in our region, many 
created by the President's stimulus and recovery plan, we will 
have a breakout year. To date, we have contracts in place for 
over 800,000 in services and are projecting at least 7 million 
in new contracts and general contracting. It is only May. This 
projection is based on proposals we are currently submitting 
and negotiating and does not include new opportunities arising 
between June and September 30th. We are extremely fortunate to 
benefit from the 8(a) Business Development Program.
    I am excited and honored to be a good steward of these 
public funds and projects. In fact, one recent day after 
contemplating being the recipient of U.S. tax dollars for 
projects on a U.S. military installation, I drove my Mazda to 
my local Ford dealer to discuss trading for a Ford Escape 
hybrid.
    I believe in walking the talk. We are a family-friendly 
workplace, providing a complete suite of benefits for our 
employees, including 100 percent employer-provided healthcare 
insurance for the entire family. The federal contracts in front 
of us, some being products of the stimulus package, will afford 
me the opportunity to hire more people and more subcontractors, 
purchase more goods from local merchants, and continue sowing 
seeds of hope through economic seepage back into my community.
    I could go on forever about the promotional products I just 
bought from my girlfriend in Boulder, Colorado who has hit hard 
times, or the service-disabled vet brother I just hired to 
drive here from Boise, Idaho, after being laid off, to finish 
my basement, not to mention the plumber, electrician and 
drywall finishers that we hired, or the sister I hired to paint 
in an effort to support her dream of completing cosmetology 
school. I do not have all of these contracts in hand yet, but I 
am willing to pay it forward, and I am optimistic about being 
well positioned to secure federal contracts and deliver 
excellent results.
    Finally, I am grateful to the support and guidance of my 
family and leaders and peers in programs such as the Make Mine 
a Million $ Business program, supported by Count Me In and OPEN 
from American Express; and Dartmouth's minority executive 
education programs at the Tuck School of Business in 
conjunction with MBDA. The opportunity to be included in these 
communities has given me the vision and strength to reach 
higher and dream bigger while developing a deeper sense of 
purpose to improve upon the quality of life for families in the 
U.S.
    Thank you for your time and attention, and I am happy to 
answer any questions you may have.
    [The prepared statement of Ms. Daytner follows:] 

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Landrieu. Thank you very much. All I can say is 
you are making both of us tired, but we are encouraged by your 
testimony. Thank you.
    Let me turn to Senator Snowe, who is going to have to leave 
for a meeting. So I am going to ask her to proceed with her 
questions first.
    Senator Snowe. Thank you, Madam Chair.
    Very impressive. Thank you all. And, Ms. Daytner, I do not 
know where you find the time. And I also understand you are 
nurturing a future presidential candidate, your daughter. She 
has a desire.
    Ms. Daytner. Yes, I am. I brought her with me.
    Senator Snowe. All right. We will not ask which party, but 
that is all right.
    Ms. Daytner. Quite all right. She is starting with student 
government.
    Senator Snowe. Good for her. Good for you, and I hope you 
follow your dreams.
    Ms. Daytner, and I would like to ask you, Ms. Medina and 
Ms. Arnold about how you access the information with respect to 
what is available in the stimulus plan, in the Recovery Act.
    Do you use the Web sites? As you heard earlier, the 
criticism that appeared in the paper today with respect to the 
information available. So I would be interested in how you 
found out what money was available and in which areas.
    Ms. Daytner. I used the Web sites today. The learning curve 
was steep. There was quite a bit of learning curve. And I 
certainly would love to talk to Mr. Jordan about 
recommendations on potentially dividing that site into novices 
and intermediate, and I think that would go a long way.
    Senator Snowe. Ms. Medina?
    Ms. Medina. Our business development group monitors the 
various Web sites, but primarily we get most of our 
opportunities through GSA, the contracting schedules that they 
put out, plus directed procurements through our existing 
contract vehicles.
    Senator Snowe. But have you found it helpful? I mean, if 
somebody was a novice in this attempt, how would you view the 
information available?
    Ms. Medina. Honestly, my business development people-- 
because I do not do--I mean, our company is about 370 people. 
They do not--very little do they go into the data--I mean, to 
those programs. We just kind of search it out and try to find 
out what is out there.
    Senator Snowe. And I appreciate the suggestions you have 
made about how each agency should account for how the stimulus 
dollars are spent and so on, because we should certainly have 
accountability in this respect regarding small businesses and 
the number of contracts that are issued, and size, and so on. I 
think that would be very useful and helpful in this process, 
and we will do that.
    Ms. Arnold.
    Ms. Arnold. Yes. The Web sites that SBA is talking about 
really could be formatted just to show what jobs are out for 
bid. If you do not have the job contract number, you cannot 
find anything. So, literally, they could just list the owner, 
the date of the bid, the phone number for the engineer, and 
then the contract number. Because when you look at the Web 
sites, that is what you need first. You cannot access anything 
without a contract number.
    But we get all of our work through the DOT Web site. And 
even though my company has the ability to survive another year, 
it is very, very competitive out there. And it is so 
competitive that even the prime contractors now are subbing 
their work to other primes because their intent is to put small 
business out of business.
    Senator Snowe. So you have discovered that as well.
    Ms. Arnold. Oh, yes. I worked 15 years for a prime 
contractor, so I understood the good old boy system really 
well. And the issue is that if the DBE program goes away, which 
is the backbone of our country, so will the majority small 
business companies that do under 17 million three years 
annually.
    Senator Snowe. Have you been able to identify which areas 
have a potential contract for you in the stimulus plan?
    Ms. Arnold. We are landscapers. But the reason that we are 
in the position we are is because the work that was contracted 
out is all asphalt and overlays, because that is what we had 
shovel-ready. I mean, Illinois has not had a capital bill for 
10 years almost, and Illinois is in terrible condition. Our DOT 
has been cut by 50 percent. We have a transportation secretary 
now that is an accountant instead of the man that was in there 
that we really need, who is an excellent engineer, professional 
engineer, and worked in the industry.
    There are just so many issues in Illinois that I have got 
work that we did in October, September and October last year, 
still not on pay estimates because they are so understaffed, 
they keep cutting the DOT budget, saying it has to come out of 
the state budget, which it does not because they are really 
federal employees and they are paid by the MFT funds.
    The other thing Illinois has done is put consultants on as 
engineers. Well, I am sorry, but that comes out of our highway 
fund, and that gives us less work to do. So Illinois really 
needs to readdress issues.
    Senator Snowe. Yes, it sounds serious. Yes.
    Ms. Arnold. It is major. And two weeks ago we were out here 
with our women's group, Women First, and 14 of our women were 
here from across the United States. I was the only one affected 
by it in a positive way. Most of them had seen nothing. A few 
had seen a little bit of the stimulus money. But it is just 
because we were fortunate enough to do this one type of work 
that we are in the position we are; otherwise, we would not be.
    Senator Snowe. So you expect that, through the stimulus 
work, that you can survive this year?
    Ms. Arnold. If I can get my pay estimates done in a timely 
manner, you know, and collect my money.
    Senator Snowe. That is the other part of the problem with 
the Department in Illinois.
    Ms. Arnold. We literally have consultants out there that do 
not speak clear enough English that you can understand them. 
There are major issues. I have had engineers tell me that they 
would call me when they had the chance to get back to me. It is 
not a friendly----
    Senator Snowe. It sounds horrible.
    Ms. Arnold.--user friendly----
    Senator Snowe. No, it does not at all. I am sorry that you 
are going through that.
    Ms. Arnold. It is very extreme.
    Senator Snowe. That is terrible, at anytime, but especially 
now.
    Ms. Arnold. Oh, yes.
    Senator Snowe. Mr. Flynn, what would you recommend, in all 
that you have heard here, in what we can do better? You 
mentioned the PTACs, which work incredibly well, and the 
relationship with the small business development centers. 
Unfortunately, they have been cut significantly. There has been 
flat funding. And even this President's budget, there is a 
further reduction, which Chair Landrieu and I had wanted an 
increase, and what you have mentioned for the statistics in 
terms of counseling demand. It has gone up exponentially, 
something I have seen across the country. It is universal now 
because of the economic situation.
    How do you think that impacts the ability of small business 
to access these contracts and stimulus dollars, and how helpful 
has it been to have that relationship and network with the 
SBDCs?
    Mr. Flynn. I think it impacts greatly. The PCRs for the SBA 
have been cut, almost totally eliminated. In my humble opinion, 
they are one of the most effective group of people that the SBA 
has. I think they need to be re-funded and increased. I think 
we need more of them out there.
    The SBDCs, they address businesses that are just startup. 
If a start-up business comes to me or somebody comes to me, and 
they have an idea and they want to start up a business, I 
cannot give them very much help, to be totally honest with you. 
I work with already existing businesses.
    As you have heard today and in other hearings, the systems 
that are out there are very complicated to work with. The Web 
sites that they have, that is typically how small businesses 
find the PTAC. They go to a Web site, try to navigate the CCR, 
or try to find out their NAICS code, or try to do anything 
minor, and after their head explodes, they find a PTAC. We 
assist them, and in a matter of maybe a half an hour, we get 
them through all of those databases correctly, a half an hour 
after they have spent sometimes weeks trying to figure out what 
they are.
    Some of the complaints or concerns that I hear from the 
small businesses are, wouldn't it be nice if small businesses 
designed these sites for small businesses? It looks like they 
were designed by a large business. Well, if a large business is 
designing a site that a small business has to get through in 
order to be competitive, does that limit competition? That is 
just a question. I do not know.
    Senator Snowe. No. You raise a very valid point. I mean, it 
is a serious problem. It is not user-friendly. That is what I 
hear. So I always wonder. If you are a company of 5 or 10 or 
20, it does not matter, I mean, you do not have those kind of 
resources or time----
    Mr. Flynn. You do not, no.
    Senator Snowe.--to manage all of that.
    How do they end up coming to you? How do they find a PTAC 
in all of that at the end of the day?
    Mr. Flynn. An awful lot of times, they find us by going to 
the SBA, and they will ask the SBA a question and the SBA says 
you need to talk to your local PTAC. Our relationship with the 
SBA in Tennessee is a marvelous relationship. We include them 
in all of our conferences.
    Senator Snowe. And speaking to the point that Ms. Arnold 
just raised about the prime contractors and other large 
companies to circumvent the goals and the rules of contracting 
is the issue of procurement representatives. We need more PCRs, 
without question, to look at and review these contracts, these 
bundled contracts, and unbundling them, because that is a huge 
issue. And, unfortunately, there has not been a great track 
record by the Small Business Administration in the years 
because of not enough personnel to review these contracts and 
to make sure that they are living up to the obligations and 
living up to the law.
    Mr. Flynn. Senator, the FAR allows for liquidated damages 
in the case where a large prime or an agency does not meet 
their goals. In my almost 40 years of government contracting, I 
do not know that I have ever heard that enforced. It may well 
have been. I am not totally knowledgeable of everything.
    Senator Snowe. Well, I do not think I would disagree with 
you on that one.
    Mr. Flynn. I would like to see every small business set-
aside have a footnote in there that they come to their local 
PTAC. There is a national Web site that we have so they can 
find us. I would like to see on small business plans a question 
asked on the two documents that the large businesses have--the 
primes have to submit. Have you worked with your local PTAC to 
find a small business? Those are very simple things that could 
be done.
    Now, yes, we are underfunded even though, thankfully, you 
and others have put forth the largest funding request for the 
PTACs ever. We appreciate that. But we want to help. You are 
not going to hear us say no we cannot, ever. You will never 
hear that from a PTAC. So, please, any way that you can 
identify us to small businesses, try to do that. We will help 
them be successful.
    Senator Snowe. Thank you. And I appreciate it. It is a 
great suggestion. Thank you, your can-do spirit in all of you. 
We want to help you, and we appreciate your suggestions. Thank 
you.
    Thank you, Madam Chair.
    Chairman Landrieu. Thank you.
    Let me continue, Mr. Flynn, and then I do have questions 
for the rest of the panel, and we are going to try to finish by 
12.
    Would you just spend one minute giving us a quick summary 
of PTAC and how they got started? I understand through the 
Department of Defense. Describe how large you are now, how many 
chapters you have. And are there areas of the country that you 
are more active than others because of lack of either 
authorization or budget?
    If you could do all that in about a minute and 30 seconds.
    Mr. Flynn. I do not know if I can say my name in a minute 
and 30 seconds.
    Chairman Landrieu. Well, let's try.
    Mr. Flynn. We were started back around 1985 or 1987. 
Congress created us to increase competition with government 
contracting. And we were mainly created with manufacturers 
only.
    Chairman Landrieu. Okay. So not in the Department of 
Defense. You were created federal-wide, not just in Defense.
    Mr. Flynn. We were initially created, I believe--and I have 
not been with it since the beginning--for DoD.
    Chairman Landrieu. For DoD.
    Mr. Flynn. Yes.
    Chairman Landrieu. And then expanded.
    Mr. Flynn. Then expanded. And we work with every government 
agency, federal, local state, municipal, and we even do some 
international procurement. Like I said, we are not going to say 
no to you. If you need the help, we are going to give it to 
you. There are 89 now across the nation. We just had a brand 
new one in Hawaii and a new one in Guam. The Commonwealth of 
Northern Mariana Islands, CNMI, they are looking for a PTAC to 
be established as well.
    The local areas that are most hard hit are the states that 
you would imagine, those states that have a lot of 
underdeveloped areas, big HUBZone areas. Senator Snowe has 
heard from Pat Rice and this committee has heard from Pat Rice 
and some of the issues with that program, that are still in 
existence since the last time she testified. It is a good 
program, but there are things that could make it a lot better.
    I do not know how to answer your question----
    Chairman Landrieu. Well, I would like you to submit for the 
record your suggestions as to if we could create some 
additional chapters. We have I think a request in for $10 
million for additional support; where you think, given the 
economic dynamics across the country--where those resources 
would best be positioned. That would be very, very helpful if 
you could submit that.
    My second question--and it really is to Mr. Jordan. I do 
not want him to come forward again, but just to throw this out.
    It would possibly be a very good idea for the SBA to look 
to see what PTAC is doing in terms of their advice and model 
some of that at your own site, so that it does not become a 
barrier, that you all are using some of the best practices that 
they have developed in-house to do the work. I mean, that would 
seem to me to be something that would be a no-brainer.
    But let me move on to my next question to Ms. Medina. You 
testified that the existing contracting vehicles will affect 
your small business.
    How is the usage of existing contract vehicles going to 
affect either your business or others? Could you remind me of 
what you testified? Is that a positive or a negative?
    Ms. Medina. Well, I think if you have the existing contract 
vehicle at a certain location where you are trying to work, you 
can get opportunities at those specific facilities. And I am 
specifically talking about like the different Department of 
Energy locations. Like, for example, I do not have any contract 
vehicles at Oak Ridge National Lab. And because of that, I 
cannot get any--I cannot even get on the request for proposal 
list. But I do have a number of contract vehicles at other 
locations, like Los Alamos and Hanford, Richland.
    But if you are a small business that does not have a 
contract vehicle, you cannot get an opportunity at any of these 
locations. And so, that is one reason--I did talk to some other 
small businesses who want to provide support to not just DOE 
but other government agencies, and that is really a problem. If 
they do not have a contract vehicle, they cannot get access to 
even putting together a proposal for the work.
    Chairman Landrieu. Ms. Daytner, you testified that you had 
started your business primarily in the private, commercial 
sector and then moved to the government sphere.
    How did you access government contracts initially? What was 
the most helpful to you that might be helpful for the record?
    Ms. Daytner. I believe the 8(a) contract vehicle and my 
relationship with my local district SBA office have been 
instrumental in helping us to scratch the surface. And, 
frankly, it has just been--someone mentioned that there was a 
similarity between marketing to private clients and marketing 
to the Federal Government, and it is very similar. I have worn 
out shoes, and you just pound the pavement and build those 
relationships.
    The learning curve, what is different about the Federal 
Government is that it really is wise to go in with someone who 
is there. So, for instance, I will be talking to Ms. Sylvia 
over here because she is in places that I am not, and we are a 
potential subcontractor. And part of that learning curve has 
come from my interviewing and working through people in the SBA 
who can give me that kind of guidance, because the commercial 
sector tends to be much more proprietary and individual, and 
you have to change the mind-set.
    So that is where the people in the Federal Government and 
those resources at SBA were very helpful in trying to wake me 
up to the idea of collaboration and teaming, and how beneficial 
that could be as a subcontractor to open new doors in the 
Federal Government.
    Chairman Landrieu. Had you been familiar with PTACs before?
    Ms. Daytner. I have. There was a woman, who I do not 
believe is with PTAC anymore, Rae Bradshaw. But we met with her 
and went through a GSA schedule's proposal, and she helped us 
just line by line figure that out and pull it apart. And with 
her experience and understanding how to respond to it, it was 
extremely helpful. So it was very specific, and we were looking 
at a specific proposal. And that is where PTAC was very 
helpful.
    Chairman Landrieu. And, Mr. Flynn, given the excellent 
testimony that we are receiving about your operation, from not 
just this panel and from yourself representing, but from others 
that I am hearing, how are PTAC officers identified? And when 
you all are trying to hire to establish PTACs, where do you 
look to find people that can come in and do the job that you 
are asking them to do? Are there particular fields you look to?
    Mr. Flynn. There are. First, how are we identified, you 
mean by the small businesses? Some of them identify us off of 
the DLA Web site.
    Chairman Landrieu. No. How do PTACs stand up their own 
employees?
    Mr. Flynn. Okay, I understand that. It is difficult to find 
good employees, and there are many times where I will interview 
20 or 30 people before I accept one. They need to have 
government procurement experience.
    I came out of the private industry. I was raised by a very 
strong woman very similar to Ms. Daytner over there. My mother 
had five children and she has been a self-employed----
    Chairman Landrieu. That is okay.
    Mr. Flynn. Excuse me.
    So I have come out of that industry. I came out of it.
    Chairman Landrieu. So you know how to be tenacious.
    Mr. Flynn. I have a passion for what I do and so do the 
rest. And what I want to see when I interview these people, and 
what we all want to see, is the kind of passion you are seeing 
from me now. We look for people who have a passion for small 
business, then we look for experience that ties into that 
passion. And we do not want somebody who is going to refer 
somewhere else.
    So we look for some really key qualities in the people that 
we are looking for, beyond their experience with government 
contracting. Because there are a lot of people with experience 
with government contracting, but I do not want somebody whose 
eyes glaze over when they hear that someone has got a problem. 
I do not want somebody that says, well, go talk to Charlie, or 
go talk to the SBA, or go talk to this person. I want somebody, 
and so do all of the other PTACs, who will work with that small 
business through every aspect of the problem until it is 
resolved. It is hard to find people like that.
    So, yes, they need the basic understanding of government 
procurement, of government law, the FAR, but they also need to 
have a bit of tenacity in them. They cannot accept no for an 
answer, and they have to be able to counsel businesses to be 
the same, because if the businesses take no for an answer, they 
will never succeed.
    Chairman Landrieu. Okay. Let me ask you, the Federal 
Government established you, and your primary mission is to help 
federal agencies access small businesses or give them 
opportunities to purchase.
    What about your relationship with state government and 
local government? Do you serve as a resource to them as well?
    Mr. Flynn. We do, and we do across the nation. Some states 
are more effective than others. It is difficult many times to 
get directly involved with the state procurement offices, but 
we do the best job that we can. Every state is different. Every 
locale is different.
    In Tennessee, I have a very good relationship with the 
economic development people. I have a less than a hundred 
percent relationship with the people who really post the 
contracts that the state is trying to gain solicitations on. 
But I have access to all those solicitations and I know their 
system. I can walk into the offices and work with anybody at 
anytime.
    Chairman Landrieu. Are you familiar with any state that has 
a PTAC system similar to the federal PTAC system?
    Mr. Flynn. I do not understand your question. I am sorry.
    Chairman Landrieu. I mean, the Federal Government has 
established these chapters to help with our procurement.
    Does any state have a very aggressive program that you are 
aware of that, that tries to link their state contracts to 
small businesses?
    Mr. Flynn. I am not aware of any state procurement 
technical assistance centers. Most of them team with the 
procurement technical assistance centers. That is part of their 
match when they provide that funding. So if they are really, 
really, really interested in working with businesses to make 
state opportunities available to them, it is typically done 
through the PTAC.
    Chairman Landrieu. Okay.
    Ms. Daytner, do you have anything you want to add? I am 
going to close out this panel. Any one or two points that you 
did not make that you would like to get on the record?
    Ms. Daytner. Yes. Actually, I wanted to share, with regard 
to surety and bonding, that the SBA program, having moved up 
the threshold and the limits from 2 million to $5 million, is 
going to be key in us being able to secure the work that we are 
qualified to do. We are a small business; we have a thin 
balance sheet. The surety companies in that industry tend to be 
very risk adverse, and I do not have any more house to put up 
on the line. I have offered a couple kids.
    Chairman Landrieu. There were no takers.
    Ms. Daytner. There are no takers.
    But I wanted to share with you, I have a document here from 
Frank Lalumiere, who is the director of Surety and Bonding for 
the SBA, who is doing a fantastic job and is tasked now with--
having been enabled with the program to get the word out about 
it. So I wanted to share that with you.
    Also, OPEN from American Express has teamed up with WIPP on 
a program called Give Me Five, specifically targeted at the 5 
percent goal for women-owned businesses and government 
contracting. And they are very, very aggressive in the 
educational component, from the basics of how to get a DUNS 
number and registered in CCR.
    I had the good fortune--they put together a booklet, and my 
company is featured in here. It is on government contracting, 
and I was very impressed with just the soup to nuts, how do you 
get started. And it is very, very real. It talks about the 
relationship building. So I just wanted to leave those with the 
committee and share them with you.
    Chairman Landrieu. Thank you very much.
    Ms. Daytner. Thank you.
    Chairman Landrieu. Ms. Medina, anything you want to add 
briefly?
    Ms. Medina. I was hoping you would come to me. There was 
one thing I did--it is also related to bonding. And I did put 
together something here, Issues Related to Bonding Requirements 
for the Department of Defense Construction Opportunities.
    I was thinking that we need to really look at it since 
small business bonding limits are typically very limited, and 
this will preclude many small businesses from bidding many of 
the stimulus projects that are being currently procured. And I 
was wondering whether or not the procuring agent--you know, if 
you guys can look at whether or not the procuring agency can 
somehow review bonding requirements for stimulus-related 
project requirements, and perhaps provide relief to small 
businesses in this area. So that was something I wanted to ask.
    Chairman Landrieu. Thank you.
    Ms. Medina. And thank you very much for the time, too.
    Chairman Landrieu. Thank you.
    Ms. Medina. And I have twins, too. They are two-and-a-half 
years old.
    Chairman Landrieu. Both of you are role models.
    Ms. Arnold.
    Ms. Arnold. Thank you very much. It has been an honor to be 
here. I felt very privileged my entire life to have this 
opportunity. Like I said, I worked 15 years for a prime. I was 
looking to start my own business, and the DE in our district is 
the one that suggested this program. And I know I would have 
never had the opportunity without the program being in place.
    Chairman Landrieu. Okay.
    Mr. Flynn, any final word?
    Mr. Flynn. Thank you. I would like to stress the bonding 
issue. And it is amazing that the SBA has been given more 
leeway in that area.
    There is one problem, especially in the state of Louisiana. 
I am sure you are aware of this. The large contracts that are 
out there right now, construction contracts, they are multiple 
award task order contracts. Those contracts are really being 
increased. Huge dollars are coming down into them, but the 
businesses that are getting that money are distributing it 
through current contractors. So you are not seeing an increase 
in small businesses getting at that money. It is staying in the 
same group of people. That is really not good. That is really 
not good. We have got to broaden that out so that other small 
businesses have access to that money.
    I could go on, but I am not going to. Thank you so much. I 
am so privileged to have been here. Thank you.
    Chairman Landrieu. Thank you very much. It has been a very 
informative hearing. Thank you very much.
    The record will stay open for two weeks. Thank you. Meeting 
adjourned.
    [Whereupon, at 12:01 p.m., the Committee was adjourned.]
  

                                  
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