[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]







  LARGE AND SMALL BUSINESSES: HOW PARTNERSHIPS CAN PROMOTE JOB GROWTH

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

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             MARCH 28, 2012

                               __________




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


            Small Business Committee Document Number 112-061
              Available via the GPO Website: www.fdsys.gov





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                   HOUSE COMMITTEE ON SMALL BUSINESS


                     SAM GRAVES, Missouri, Chairman
                       ROSCOE BARTLETT, Maryland
                           STEVE CHABOT, Ohio
                            STEVE KING, Iowa
                         MIKE COFFMAN, Colorado
                     MICK MULVANEY, South Carolina
                         SCOTT TIPTON, Colorado
                      CHUCK FLEISCHMANN, Tennessee
                         JEFF LANDRY, Louisiana
                   JAIME HERRERA BEUTLER, Washington
                          ALLEN WEST, Florida
                     RENEE ELLMERS, North Carolina
                          JOE WALSH, Illinois
                       LOU BARLETTA, Pennsylvania
                        RICHARD HANNA, New York
               NYDIA VELAZQUEZ, New York, Ranking Member
                         KURT SCHRADER, Oregon
                        MARK CRITZ, Pennsylvania
                      JASON ALTMIRE, Pennsylvania
                        YVETTE CLARKE, New York
                          JUDY CHU, California
                     DAVID CICILLINE, Rhode Island
                       CEDRIC RICHMOND, Louisiana
                         GARY PETERS, Michigan
                          BILL OWENS, New York
                      BILL KEATING, Massachusetts

                      Lori Salley, Staff Director
                    Paul Sass, Deputy Staff Director
                     Barry Pineles, General Counsel
                  Michael Day, Minority Staff Director















                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Sam Graves..................................................     1
 Hon. Nydia Velazquez............................................     1

                               WITNESSES

Matthew Slaughter, Ph.D., Associate Dean for the MBA Program, 
  Signal Companies Professor of Management, Tuck School of 
  Business, Dartmouth College, Hanover, NH.......................     3
William C. McDowell, Ph.D., Assistant Professor, Department of 
  Management, College of Business, East Carolina University, 
  Greenville, NC.................................................     5
Robert E. Bruck, Corporate Vice President, Intel Corporation, 
  Santa Clara, CA................................................     7
Paul Blackborow, Chief Executive Officer, Energetiq Technology, 
  Inc., Woburn, MA...............................................     9

                                APPENDIX

Prepared Statements:
    Matthew Slaughter, Ph.D., Associate Dean for the MBA Program, 
      Signal Companies Professor of Management, Tuck School of 
      Business, Dartmouth College, Hanover, NH...................    19
    William C. McDowell, Ph.D., Assistant Professor, Department 
      of Management, College of Business, East Carolina 
      University, Greenville, NC.................................    26
    Robert E. Bruck, Corporate Vice President, Intel Corporation, 
      Santa Clara, CA............................................    30
    Paul Blackborow, Chief Executive Officer, Energetiq 
      Technology, Inc., Woburn, MA...............................    44
Questions for the Record:
    Rep. Owens Questions for the Record..........................    49
Answers for the Record:
    Answers to Rep. Owens for the Record.........................    50
Additional Materials for the Record:
    Glaxo Smith Kline Statements for the Record..................    51

 
  LARGE AND SMALL BUSINESSES: HOW PARTNERSHIPS CAN PROMOTE JOB GROWTH

                              ----------                              


                       WEDNESDAY, MARCH 28, 2012

                          House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1 p.m., in room 
2360, Rayburn House Office Building. Hon. Sam Graves (chairman 
of the Committee) presiding.
    Present: Representatives Graves, Mulvaney, West, Owens, 
Schilling, Velazquez, Schrader.
    Chairman Graves. Good afternoon, everyone. We will call 
this hearing to order. And I want to thank all of you for 
joining us today as we examine the practice of large and small 
business partnering to create added-value jobs and economic 
growth.
    For many years, businesses have entered into agreements 
with other companies to supply a part for a larger product or 
provide a good and service. Increasingly, large companies 
create alliances with small firms to access their innovative 
ideas. These partnerships allow the larger companies to expand 
their current market or product offerings, enter into new 
markets, or simply gain a competitive advantage in a 
challenging economy. Small companies also benefit from these 
alliances by tapping into larger distribution networks, 
financing opportunities, and mentoring programs that larger 
businesses cannot supply.
    It should be noted that both large and small businesses can 
be very dependent on each other. A study produced for the 
Business Round Table by Dr. Matthew Slaughter, one of our 
panelists today, noticed that each type of company is deeply 
embedded in the overall U.S. economy with extensive connections 
to each other.
    Last week, the Committee held a hearing on the state of 
entrepreneurship. Heath Hall, co-founder of Pork Barrel BBQ 
here in Washington, D.C., testified that large businesses, such 
as Harris Teeter, Costco, and Safeway, took chances on stocking 
their unknown BBQ sauce and rubs, helping it to be stocked 
today in 3,000 stores in 40 states. This is an excellent 
example of the interdependence of small and large firms.
    And again, I want to thank all of our witnesses for being 
here today. And before I yield to the ranking member I want to 
note that it is her birthday today and I hope everybody will 
join me in wishing her a happy birthday.
    Ms. Velazquez. Thank you. Thank you, Mr. Chairman. That is 
very kind. And good afternoon to all the witnesses.
    America's nearly 30 million small businesses are central to 
the economy, representing 99.7 percent of all employers and pay 
nearly 50 percent of total private payroll. It is clear that as 
small businesses go, so goes the country. For many, this 
success is at least in part due to the symbiotic relationship 
that is enjoyed with their larger counterparts. During today's 
hearing we will examine this and seek to better understand the 
effect firm size has on the competitive landscape. Together, 
large and small businesses form a collaborative ecosystem that 
enables our economy to thrive. Small firms make up the vast 
supplier network that multinational companies rely on for goods 
and services. In fact, these corporations buy an estimated 1.52 
trillion annually from small firms which is about 12.3 percent 
of their total sales.
    Perhaps nowhere is this interdependence more evident than 
in the federal procurement marketplace. Total subcontracting 
dollars now eclipse $200 billion with small businesses 
receiving more than one-third of these dollars. Over the last 
15 years, several initiatives have supported this, including 
mentor prodigy programs. As a result, large companies are able 
to develop their supplier base, while small businesses obtain 
key experience that will enable them to grow stronger in the 
future.
    While there are real benefits to this cooperation, the 
truth is that large companies often enjoy many advantages that 
small businesses do not. This is due to the many structural 
benefits that come with having greater market power, including 
more influence over pricing and advantages in the capital and 
labor markets. Larger companies are often able to control the 
relationship with small firms, leaving small suppliers to 
provide accommodations. This absence of negotiating influence 
makes it more expensive for small companies to purchase the 
goods and services they need to remain competitive.
    Beyond their lack of equal bargaining power, small 
businesses face other obstacles in their quest for success. 
Even as the economy recovers, insufficient access to capital 
remains the number one challenge. Since peaking at $712 billion 
in the second quarter of 2008, small business lending has 
declined by $113 billion. Conversely, large businesses have 
actually seen an expansion in lending since the middle of 2010. 
It is clear that small businesses have been disproportionately 
affected by credit tightening, while large firms have emerged 
relatively unscathed.
    Tax policy is another area creating disparity between small 
and large businesses as corporations often have dedicated tax 
teams for this purpose. Small firms, on the other hand, spend 
more time and money simply preparing tax returns. According to 
a report issued by the SBA Office of Advocacy, the cost of tax 
compliance is 67 percent higher in small firms than in large 
firms. Finally, it is also important to note that large 
companies are illegally taking federal contracting 
opportunities away from their smaller counterparts. In several 
cases, large businesses have used a small business front to win 
contracts through small business set asides. Such abuses not 
only impair the integrity of the procurement system overall, 
but divert money away from true small companies.
    All of these issues, from tax treatment to access to 
capital to government contracts are critical to the 
relationship between large and small businesses. While there is 
little doubt that these companies can and do work in a 
collaborative manner, the reality is that it is often due to 
the costly concessions made by small businesses. During today's 
hearing we will explore this complex relationship and the many 
benefits and challenges that come with it. Ensuring that small 
businesses can continue to flourish without the seemingly 
inescapable exploitation that comes with it is critical. Doing 
so will not only result in a more robust small business sector, 
but a brighter economic recovery for the nation.
    Thank you, Mr. Chairman. And I yield back.

STATEMENTS OF MATTHEW SLAUGHTER, PH.D., ASSOCIATE DEAN FOR THE 
  MBA PROGRAM, SIGNAL COMPANIES PROFESSOR OF MANAGEMENT, TUCK 
  SCHOOL OF BUSINESS, DARTMOUTH COLLEGE; WILLIAM C. McDOWELL, 
 PH.D., ASSISTANT PROFESSOR, DEPARTMENT OF MANAGEMENT, COLLEGE 
    OF BUSINESS, EAST CAROLINA UNIVERSITY; ROBERT E. BRUCK, 
 CORPORATE VICE PRESIDENT, INTEL CORPORATION; PAUL BLACKBOROW, 
      CHIEF EXECUTIVE OFFICER, ENERGETIQ TECHNOLOGY, INC.

    Chairman Graves. Our first witness today is Professor 
Matthew Slaughter, who is the associate dean for the MBA 
program and the Signal Companies Professor of Management at 
Tuck School of Business at Dartmouth College. In 2010, 
Professor Slaughter authored a key study for the Business Round 
Table on small and large businesses working together, and we 
look forward to hearing more about your study today. And 
welcome, Professor.

                 STATEMENT OF MATTHEW SLAUGHTER

    Mr. Slaughter. Committee Chairman Graves, Ranking Member 
Velazquez, and fellow members, thank you very much for inviting 
me to testify.
    The topic of today's hearing is extremely important. 
Although the news for American workers has improved somewhat in 
recent months, America's labor market remains quite damaged. 
Today America has 110.7 million private sector payroll jobs. 
The first time the U.S. economy reached that number was in 
March of 2000. America has created no new private sector jobs 
in 12 years, during which time its civilian labor force has 
expanded by about 15 million people.
    In my remarks I will stress that to address this jobs 
challenge one of the most effective ways to support job growth 
in small businesses is to support job growth in big businesses. 
This is because of extensive connections between large and 
small businesses, especially through the supply change, selling 
to each other the goods and services used as inputs in product.
    Small and big businesses have long helped strengthen the 
U.S. economy and each other. Let me here emphasize the rule of 
multinational companies which, like Intel, tend to be among 
America's biggest. Both the U.S. parents of U.S.-based 
multinationals and also the U.S. subsidiaries of foreign-based 
multinationals enhance the American economy by the capital 
investment, exports, research and development, and good paying 
jobs. Though far less than one percent of all American 
businesses, multinationals in 2009 accounted for in the U.S. 
private sector 24 percent of jobs, 41 percent of investment, 71 
percent of goods exports, and a remarkable 84 percent of 
research and development.
    Neither small business nor large business operates in a 
vacuum; rather, each is deeply connected to the other in 
product markets, capital markets, and labor markets. One 
important connection is time. Small businesses of today can 
grow to become the big businesses of tomorrow. Many of 
America's largest and most successful companies started small. 
Indeed, as the quintessential person pursuing a dream from a 
garage or a dorm room. And many of those small start-ups were 
born and thrived because of having a big business as a major, 
if not the only customer.
    Another important connection is the supply chain 
partnership. Companies selling to others the goods and services 
used as inputs in production. To make their own goods and 
services, large companies buy many important inputs from small 
companies and vice versa. Input suppliers and their customers 
strengthen each other, not just by generating sales but through 
many other channels, such as sharing information and 
performance standards. Of particular note here are small 
companies selling inputs to U.S.-based multinational companies.
    In 2008, the U.S. parent operations of U.S.-based 
multinationals purchased over $6 trillion in inputs, of which 
almost 89 percent was bought from other companies in the United 
States, not from companies abroad. But of these trillions of 
dollars in domestic input purchases by U.S. multinationals, how 
much is bought from small businesses in America? Surprisingly, 
this question cannot be answered by any data collected by the 
various statistical agencies of the U.S. government.
    Given the statistical gap, in 2010, I worked with the 
Business Roundtable, an association of chief executive officers 
of leading U.S. companies to conduct an original survey of its 
members to learn about the role of small businesses and their 
supplier base. Taking these survey results as representative of 
all U.S. multinationals, I found that the U.S. parent 
operations of the typical U.S. multinational buys goods and 
services from over 6,000 American small businesses, buys a 
total of over $3 billion in inputs from these small business 
suppliers, and relies on these small business suppliers for 
over 24 percent of its total input purchases. Extrapolating 
from these surveys, I further calculated that U.S. 
multinationals collectively purchase about $1.5 trillion in 
inputs from U.S. small businesses, which is about 12 percent of 
the total sales of these small businesses. The bottom-line of 
this survey is that the supply chain partnership between U.S. 
small and big business is deep and essential to each other's 
economic success.
    Let me close by offering three policy implications of the 
supply chain partnership. One important implication is that 
government efforts targeted at just small businesses or just 
big business affect all firms, not just firms of a particular 
size. Think of exporting. Because of the supply chain 
partnership, there are lots of small U.S. businesses engaged in 
the global economy by supplying large U.S. exporters, even if 
these small businesses themselves do no exporting on their own. 
A second important policy implication is that the supply chain 
partnership between large and small businesses will almost 
surely become more important in the future. Large companies 
increasingly operate in large global networks in which final 
products are made in many stages that span many countries. As 
the global economy continues to grow in size and diversity, so 
too will the supply chain partnership between large and small 
businesses. And a final important policy implication is that to 
better support the partnerships between large and small 
businesses, U.S. government data need improving in various 
ways.
    Let me thank you again for your time and interest in my 
testimony and I look forward to answering any questions that 
you may have.
    Ms. Velazquez. Mr. Chairman, it is my pleasure to introduce 
our next witness, Dr. William McDowell. He is a Management 
Professor of Entrepreneurship and Family Business at East 
Carolina University. He received his Ph.D. from the University 
of North Texas in Management in 2006, and his research 
specializes in the area of small and medium-size enterprises 
and their relationship within larger organizations within the 
supply chain. Dr. McDowell is also vice president of the 
National Small Business Institute, an organization dedicated to 
field-based student consulting and outreach to small 
businesses. As a co-editor of the Institute Journal, Dr. 
McDowell has written scholarly research articles in the fields 
of small business management, entrepreneurship, and field-based 
learning. Welcome.

                STATEMENT OF WILLIAM C. McDOWELL

    Mr. McDowell. Good afternoon, Chairman Graves, Ranking 
Member Velazquez, and members of the Committee. Thank you for 
the opportunity to appear before you today to discuss this very 
important topic. The views and research that I will present 
today are my own and not necessarily those of East Carolina 
University or its Small Business Institute.
    Examining the potential benefits for large and small 
business collaboration is a very great thing but there are four 
key hurdles that small businesses face when trying to do 
business, especially with a large business. To be an effective 
partner, small businesses must be able to overcome these 
hurdles and obstacles in order to be effective.
    Access to capital compared to large businesses is the first 
area. Small business basically means fewer assets, which does 
translate into less capital and less money for operations for 
equipment and expansion. In addition, because of being a small 
business, oftentimes they have a smaller product and market 
scope which does translate to fewer revenue streams from which 
to be able to access capital. And of course in this rough 
economy that we have just come through, many of these small 
firms have completely depleted their cash and inventory levels 
creating much more difficulties. Thus, the difficulty in 
obtaining capital, especially for women, minority, and socially 
disadvantaged businesses can be a very serious issue when they 
are trying to work with larger businesses.
    In addition, small businesses, because of their size, are 
usually at the dependent stage when we look at the power 
dependency levels. Small businesses are often a niche supplier, 
sometimes supplying to only one business, and research shows 
that being a niche supplier actually works against these small 
businesses in retaining contracts with larger businesses and 
especially in retaining contracts with the federal government. 
These smaller businesses, because of their niche status, can be 
simply eliminated when the larger businesses find cheaper 
alternatives or other ways of reducing margins, and so in this 
case being a niche-market producer does create a problem for 
them. However, research does show that information quality, 
continued quality improvement programs, trust, communication, 
these all do aid the small business in being able to be 
effective in these supply chain relationships; however, most of 
these organizations, because of their size, do not take 
advantage of things such as continuous quality improvement 
programs. Flexibility, because of their size, can be a very key 
competitive advantage, but again, oftentimes they do not 
realize that that is their advantage and they do not go out and 
try to seek ways to emphasize that.
    Another disadvantage that they have is tax disadvantages. 
It is not necessarily the tax rate that is the problem but the 
difficulty in computing taxes for these small businesses. One 
major issue that has come up in a recent conference was that 
many small businesses do not have the experts on staff to find 
or take advantage of the tax credits that are available to 
them; therefore, they are missing out on those advantages. 
Large firms have large staff, large groups of individuals who 
are working to help them find these advantages and build on 
those, so that can be a problem. Recently, the National 
Federation of Independent Businesses indicated that the number 
one problem for small businesses is sales; however, this has 
come down to almost equal with taxes within the past few years. 
And right now the percentage point is only one percent between 
those two. But historically, taxes have been cited as the 
number one problem for small businesses over the last 25 years.
    And the final area is basically the access to qualified 
business experts for advice and direction. Large businesses 
have experts on staff to help maximize profits, reduce the 
cost, and streamline their processes, whereas, small businesses 
often do not have these resources on staff to be able to do 
these for them. Unfortunately, too many small businesses, and 
this is from experience, are not familiar with programs by the 
SBA from local SBDCs, which is literally to their detriment 
because these can be excellent programs for them to help. Thus, 
they begin to narrow their focus because of not being able to 
take an outsider's view of the situation. And this is often to 
their detriment. Really, the crisis of today that they are 
facing prevents them from positioning for tomorrow. A problem 
with this is that they can overestimate sales. Again, if we 
look at the NFIB's recent paper it shows that small businesses 
continually overestimate what their sales are going to be only 
to be disappointed when they have their actual sales numbers 
come in. Larger firms, they are amenable to stakeholders; 
therefore, they are able to have individuals to help them 
estimate those sales.
    So what are my recommendations? I think we need to continue 
to create a favorable lending environment for small businesses. 
We need to give better information for small firms to broaden 
their scope. We need to streamline the tax system so that all 
firms can take advantage of all the advantages that are 
available to them, but most importantly, we need to give small 
firms access to information and experts through the SBA, the 
SBDCs, SBCs, and even the organization I am familiar with, the 
SBI.
    I would like to thank you, Committee, for the opportunity 
to present my views of the current struggle of small business, 
and I welcome your questions.
    Chairman Graves. Thank you very much. Our next witness is 
Robert Bruck, who is Intel Corporation's corporate vice 
president and general manager of its Technology Manufacturing 
Engineering Division. Mr. Bruck is responsible for managing 
Intel's global capital expenditures, as well as government and 
industry relations related to technology and manufacturing. 
Intel, which is the world's leader in silicon innovation, was 
founded in 1968 to build semiconductor memory products. Intel 
introduced the world's first microprocessor in 1971. Welcome. 
Thanks for being here.

                  STATEMENT OF ROBERT E. BRUCK

    Mr. Bruck. Chairman Graves, members of the Committee, I 
appreciate this opportunity to discuss with you the significant 
mutual benefits that result from collaborations between large 
and small businesses in our industry. Like nearly all large 
firms, Intel began as a very small entity. We were founded in 
1968 by two scientists with only $2.5 million in venture 
capital to manufacture semiconductor memory products. Our 
growth began to accelerate in the early '80s when a large firm, 
IBM, adopted Intel's microprocessor for its personal computers. 
IBM helped provide additional investment and enabled Intel to 
expand our capital and R&D investments. Today, Intel is a 
Fortune 50 company with 100,000 employees and annual revenues 
in 2011 of $54 billion. In the last decade we spent $68 billion 
on our U.S. operations, research and development, and 
manufacturing capacity.
    A 2008 study found between 2001 and 2007, Intel contributed 
$758 billion to the U.S. GDP with $458 billion from direct 
operations and about $300 billion from companies that used our 
products. Intel has over 5,000 suppliers in the U.S. with more 
than 2,200 of them classified as small businesses. In 2011, 
Intel spent more than $3 billion on goods and services 
purchased from small businesses in sectors that range from the 
supply of chemicals and gases to construction services. All of 
these economic benefits are dependent upon the continuous 
development and innovation of semiconductor technology.
    I would like to make three points to illustrate how Intel 
partners with small businesses to meet competitive challenges 
in the global marketplace. First, small businesses play a 
critical role and benefit from basic university research as 
well as participating in Intel's own research and development 
programs. Due to the technical challenges involved in 
semiconductor product design, materials research, and 
development of advanced process technologies, upstream research 
must begin as much as 10 or more years before products enter 
the market. Semiconductor companies have a rich history of 
pooling their resources to form research consortia to address 
long-term technical challenges in a pretty competitive 
environment. These consortia, such as the Semiconductor 
Research Corporation are partially funded by various federal 
agencies, including NIST, DARPA, and NSF.
    Continued and expanded federal support for what Intel CEO 
emeritus Craig Barrett calls ``the greatest wealth creation 
machine in the world,'' the U.S. university research system, is 
critical to the U.S. maintaining our global lead in science and 
technology and gaining the related job creation benefits for 
both large and small businesses. Intel builds on the results of 
pretty competitive research with its own proprietary research 
in the technology development phase. Intel spends between 13 
and 15 percent of annual revenue on research and development, 
which in 2011 alone exceeded $8.3 billion, making Intel the 
third largest company in the world for R&D expenditures.
    Small businesses play a critical role in the research and 
development stage through their willingness to collaborate at 
the frontier of technology development to help commercialize 
new technologies. For example, Energetic Technologies, whom you 
will hear from next, receives significant technical assistance 
from Intel to develop specific light sources necessary for EUV 
lithography, a critical technology enabler. Energetic also 
received research grants from NSF, which were used to explore 
the potential for commercializing laser-driven light source 
technology in the life sciences areas. That same technology is 
also used to detect defects in semiconductor chip fabrication.
    My second point is that large companies like Intel can 
assist small businesses through direct investment. Intel's 
venture arm, Intel Capital, invests in small businesses to fill 
technology and supply chain gaps. In 2011, Intel Capital 
invested over $500 million in more than 80 small businesses to 
cover a broad range of industry from consumer Internet to clean 
tech to health sciences. As an example, between 2005 and 2008, 
Intel Capital and Tallwood Ventures invested $15 million into 
small business crossing automation. In 2009, another of our 
suppliers, Assist Technologies, went into bankruptcy. Intel and 
Tallwood invested another $7 million for crossing to finance 
the purchase of certain assets from Assist, saving crucial 
U.S.-based capability. The result was a very successful new 
product and about 180 high-tech jobs in California were saved.
    The last point I would like to make is Intel helps small 
businesses with educational, training, and quality programs 
that help make them stronger businesses with increased 
potential for job creation. For example, the president of a 
woman-owned, 19-employee visual communications company recently 
noted the following: ``We have worked for Intel for more than 
25 years. When the Intel supplier diversity and small business 
program took shape over a decade ago, we immediately 
experienced the value of its initiatives. Since then, we have 
significantly expanded our services and capabilities, made new 
business connections, and more importantly, have learned how to 
build a better company.''
    Our written submission contains more detail on the three 
points I have made. Thank you.
    Chairman Graves. Thank you, Mr. Bruck.
    Our next witness is Paul Blackborow, who is the chief 
executive officer of Energetiq Technology, Inc. Founded in 
March of 2004, the company is a developer and manufacturer of 
advanced light sources that enable the manufacture of nanoscale 
structures. These light sources are used in application for 
life science instruments and leading edge semiconductor 
manufacturing. Thanks for being here.

                  STATEMENT OF PAUL BLACKBOROW

    Mr. Blackborow. Chairman Graves and members of the 
Committee, I appreciate the opportunity to appear before you 
today to discuss various ways Energetiq technology, a small 
Massachusetts-based company and Intel, a large multinational 
corporation, collaborate. Our vibrant partnership has resulted 
in job creation and financial growth at Energetiq and technical 
solutions to pressing manufacturing challenges at Intel. 
Energetiq is a small, high-tech company based in Woburn, 
Massachusetts. We employ 20 people full-time, most of whom are 
engineers and scientists with advanced degrees. Energetiq 
specializes in developing advanced light sources for scientific 
and technical applications in the semiconductor, life sciences, 
and material science markets. Our staff focuses on research and 
development related to these technologies and to the assembly, 
testing, and marketing and sale of the products. The 
subassemblies of our products are manufactured by specialized 
companies primarily in Massachusetts and in New England. In 
2002 [sic], we expected a majority of our manufactured products 
to be exported from the United States.
    Our core competence lies in plasma physics. We manufacture 
two product lines based on patented technologies that we 
developed. The Extreme Ultraviolet Light Source product line is 
an enabling light source technology for next generation 
lithographic processes in the semiconductor industry. EUV 
lithography will allow the manufacture of chips with extremely 
small dimensions.
    The Laser-Driven Light Source, or LDLS product line, is 
used for advanced measurement and inspection applications in 
the semiconductor chip fabrication and a diverse array of 
applications in the life sciences and material sciences. Our 
EUV and LDLS products are all part of Intel's supply chain. The 
EUV light source products are bought by many companies which in 
turn sell EUV lithography tools and materials to Intel for its 
manufacturing plants. Energetiq's LDLS technology and products 
are used by Intel to detect defects on silicon wafers as they 
pass through the chip manufacturing process. We have licensed 
one of Intel's largest capital equipment suppliers to 
incorporate the LDLS technology into its inspection and 
measurement tools.
    Prior to the establishment of Energetiq, our founding team 
worked in high-level marketing and technical roles at a large 
supplier of process control products to Intel and to other 
semiconductor companies. In those roles we learned of Intel's 
technology road maps along with the EUV technical challenges 
that needed to be met by the supplier community. We were 
impressed with Intel's vision for EUV lithography, and even 
more by Intel's well publicized financial support of that 
vision through research funding and equity investments in its 
supplier companies. Intel made it clear that existing sources 
of EUV lights were lacking in performance. We were planning to 
start a new enterprise and Intel's public commitment to EUV 
lithography guided in large part the choice of our first 
product. Intel's lithography team leaders agreed to fund some 
research at Energetiq to better prove the technology we 
developed. In addition, they introduced us to Intel's venture 
capital arm and provided two rounds of financing and valuable 
coaching on the investment process.
    Financing from our investors, including Intel, allowed the 
further development of the EUV source technology and the 
development and introduction of the LDLS technology. Intel 
Capital has held an observer seat on our board of directors 
since 2006. This person has provided significant advice and 
resources to Energetiq, including assistance on resolving a 
complex legal and intellectual property issue. Our Intel 
Capital investment manager provides business development 
suggestions to Energetiq, and each year we are invited to 
attend the Intel Capital CEOs Summit. That event brings 
together the CEOs of the Intel Capital portfolio companies with 
senior executives from large public companies from around the 
world. We have been able to make many useful connections at 
that summit.
    On the technical side, the senior lithography staff at 
Intel have monitored our technical progress on our two 
technologies and guided us toward certain business 
opportunities. We have been able to showcase our technologies 
to Intel's engineers and scientists at events held at Intel's 
development operations in Portland, Oregon. We regularly attend 
Intel Supplier Days where we can continue to learn the 
technical needs and challenges of Intel's manufacturing 
operations.
    As a result of the technical and investment relationship in 
a small company, two technologies critical to the manufacture 
of Intel's present generation and future-generation 
semiconductor chips have been developed and commercialized. 
These particular technologies were not developed by Intel's 
large capital equipment suppliers, whose focus on making 
supremely reliable and productive chip manufacturing equipment 
has, perhaps, made them less capable to aggressively pursue new 
technology. Small companies like us can rapidly develop such 
technologies if we have a technical problem clearly defined.
    In summary, Intel provided the inspiration for the first 
product for Energetiq followed by R&D funding and equity 
financing. Our relationship with Intel provides us significant 
credibility to our customers, suppliers, and our investors. We 
have continued to receive valuable technical and commercial 
guidance and support from Intel, and Intel's adoption of our 
EUV and LDLS technologies has helped drive our revenues from 
product sales. Our biggest customer is a large U.S. 
semiconductor capital equipment company, a major supplier to 
Intel, which represented about a quarter of our sales in 2011.
    Thank you very much.
    Chairman Graves. We will now start with our questions. We 
will start with Mr. West from Florida.
    Mr. West. Thank you, Mr. Chairman. Also, ranking member 
thank you. And thanks for the panel for being here.
    First question I would like to go to Dr. Slaughter and Dr. 
McDowell. As I was listening to you speak and read your 
testimony I was writing down what seems to be some negative 
factors that you listed which are driving our small firms to go 
into partnerships with larger firms, such as capital access, 
sales, taxes, favorable lending environments, streamline tax 
code, access to business experts on staff, and access to 
research assistance. So if I could get your insights, where are 
the places where legislators such as ourselves have added to 
these negative factors and how can we alleviate some of these 
negative factors as we move forward?
    Mr. Slaughter. That is a great question, Congressman West.
    Mr. West. Thank you.
    Mr. Slaughter. So a couple thoughts come to mind. One is 
clearly on the tax code. I mean, I think folks on both sides of 
the aisle here in Washington and in the business community 
acknowledge America has one of the most complex, high-burden 
effectively tax codes around the world. It is a challenge for 
the Intels, but as Dr. McDowell and others know from their 
scholarship and others, the order of magnitude and the degree 
of the complexity for the small business community is massive. 
So it is not just for C corporations. I think one of the things 
to keep in mind then with tax reform is a lot of these small 
businesses, especially when they start, they are S 
corporations, they are partnerships, they have got a lot of 
different legal entities where a lot of taxable events flow 
through on the personal side.
    So one is mindset. When you are thinking about business tax 
reform, corporate tax is important but it has to be linked up 
with a lot of individual tax issues. And then again, the broad 
issues that a lot of economists from all parts of the political 
spectrum will acknowledge, broadening the base, reducing the 
complexity, lowering the rates. That is one.
    I think the other thing, I am not sure what the policy 
implication is but I will just point out on the issue of 
capital access, clearly in the wake of the world financial 
crisis there is an issue about how the banking system is 
working. Some people will look at large corporations in America 
and they wonder to complain about the large amount of near-cash 
assets that large corporations have on their balance sheets. 
But as we just heard in the testimony, a great advantage of 
that actually is as our financial system struggles to heal, 
paradoxically it can be the business sector that provides a lot 
of the key financing needs for small businesses.
    Mr. McDowell. I would agree that when we look at the tax 
issues over the past 25 years, that has been the number one 
issue. So I think just the complexity of it, all the new taxes, 
the green credits, different things like that, they only add to 
the burden of the small business in comparison. I mean, it is a 
burden to the large business as well but they have the 
resources to take care of those things. Small businesses do not 
have those resources. So that is one major issue that we have 
to look at.
    But also when we think about the legislation, what they 
have done to help or hurt with the access to capital, you know, 
recently there was just so much uncertainty out there. Banks 
make their money by lending money. I mean, that is how they 
want to make money. They want to do that. But yet with all the 
regulations and the changes that occurred there is just a lot 
of uncertainty. And some of the bankers that I work with in my 
regular work with small businesses, you know, they want to 
lend. They want to do things that will help them make money. 
But of course, the regulations are very difficult for them and 
for small businesses, of course, with the less access to 
capital or assets. I mean, to utilize as collateral, more 
guarantees, more things like that from the SBA can be very 
helpful and beneficial in those situations.
    Mr. West. Thank you. Mr. Bruck and Mr. Blackborow, you 
know, as I was listening it seems like this is like the second 
and third generations of a great thing about small firms 
partnering with bigger firms. You talked about Intel with IBM 
and now Energetiq with Intel. So if you could, just briefly 
talk about what you saw as the lessons learned, the best 
practices in that relationship that you all experienced over 
these couple machinations.
    Mr. Bruck. Well, I suppose I could begin with the alignment 
on very long-term programs, and I want to commend the Committee 
for looking at research and development in particular and the 
partnerships between large and small companies because unlike 
many short-term issues that work with intellection cycles, 
these issues may take many, many years. And if you look at 
NASA's investments in the '60s and they have reported many 
times to Congress on the spinoff of businesses from health care 
and telecommunications and energy that have come out of that 
program, these things have to survive multiple administrations 
and have bipartisan support. So when we see that, like we have 
seen in Congressman Velazquez's state with the Center for 
Nanoscale Science and Engineering, you can attract global 
companies. Some of the best companies in the world have come 
there now for the GE450C development and are matching the state 
funds that come in and they are working to try to get some 
federal matching as well. And the members that participate are 
committed to small and minority-owned businesses getting a big 
part of the participation there. So you can see this kind of 
synchronization and cooperation is really critical to yield 
long-term success.
    Mr. Blackborow. I would just echo the long-term aspect of 
it. I think one of the things that has helped us really with 
working with Intel is Intel's long-term vision. This differs 
actually from the vision of venture capitalists who are the 
main source of funding for people like us. Intel can take a 
much longer view partly because it is a corporation. And so the 
relationship we have, we can go through peaks and troughs and 
Intel will stick with us because they value the technology over 
the long term. So it is really long-term investment for us, 
patient investment which we perhaps we would not get from the 
venture capital community, and we will not get a look from the 
banking community. At this point in our company's development, 
sources of loan capital are simply not available at all and 
that is something, of course, that would be helpful to us as we 
want to grow.
    Mr. West. Thank you, Mr. Chairman. I yield back.
    Chairman Graves. Ranking Member Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Dr. McDowell, due to the recession, demand for both 
products and services dropped dramatically, and for the small 
business that weathered the storm and survived, how can they 
prove to lenders that they are creditworthy after a prolonged 
period of below average cash flow?
    Mr. McDowell. This is a major issue because, again, they 
depleted their cash and inventory levels and now we are trying 
to help them to work with larger businesses and that can be a 
major problem and hurdle for them to overcome. One thing that 
we can do is to help them to better plan for their future. 
Business planning is a very difficult thing and sometimes 
overlooked by small businesses. If we can have a greater 
business plan in place on the part of these small businesses 
then they will be able to better show where their revenue 
streams are going to come from, how they are going to help pass 
the cash that will enable them to be able to get credit. So 
that can be a very major plus and bonus for them.
    Ms. Velazquez. How can we help, you know, you mentioned 
that we have technical assistance through SBA, and in putting 
together a business plan or helping them prepare for the future 
in terms of having a business plan in place, how can--what can 
we do to get information that is available through SBA get to 
small businesses? Do you have any idea?
    Mr. McDowell. Well, I do believe this is a situation where 
really they need to be aware of what is available. And so 
therefore, the SBA and other organizations have not been doing 
a good job of marketing their own services to these small 
businesses. I think that the more education that we can give to 
small businesses and even to small business owners starting at 
the university level when they go through their training at a 
university if they are at a university or college, if we have 
more entrepreneurship programs such as, you know, 
interdisciplinary entrepreneurship programs or small business 
programs, so no matter what industry they are going into--arts, 
science, anything else--the more education they can have up 
front will help. But of course, at a later state we need to get 
them as much help as possible, and that is where I think 
universities can help if we will continue to push university 
systems and other aspects like that to help create an awareness 
of what is out there. Even things such as a lot of small 
businesses utilize social media as a marketing tool. You know, 
maybe the SBA and other resources need to look at where the 
small businesses are going for marketing to market their brands 
as well.
    Ms. Velazquez. Thank you. Dr. Slaughter, the report that 
you made reference to that you prepared was done in 2010. 
Right? Since then a lot of things have happened. We have an 
economy that is creating jobs and consumer spending is up. 
Given those indicators would you revisit your report and will 
it be different if you have those counter into your analysis 
those factors?
    Mr. Slaughter. I think two things come to mind. One is sort 
of at the company level of the surveys, in informal 
conversations with some of the companies that were involved in 
the survey in the first wave a couple of years ago, their sense 
is things have not changed very much. You know, I think that 
speaks to a couple things. One is the size of the companies 
that were involved in the survey. They were the Intels of the 
world and a lot of larger corporations. And again, on average 
when they have established over 6,000 small business supplier 
relationships, even amidst the financial crisis and the turmoil 
that created, a lot of those relationships still persist. And I 
think that some of the earlier testimony we heard speaks to 
that. The long-term nature of those relationships, both the 
large companies and the suppliers try to maintain those. The 
one thing the numbers would be different is thanks to some 
modest, though still fragile economic recovery, the overall 
magnitude that one would infer from the survey that we 
conducted of the amount of input to purchase it, for example, 
would hopefully be a bit larger today than it was two years 
ago.
    Ms. Velazquez. Okay. According to the Bureau of Labor 
statistics, large multinational companies have cut their 
workforces in the U.S. by 2.9 million since 2000, while 
increasing overseas employment by 2.4 million over the same 
time period. By contrast, small firms created and net 14.5 
million jobs in the 15-year period from 1993 to 2008. Why do we 
see such a disparity in the contributions of large and small 
firms in creating jobs here in the U.S.?
    Mr. Slaughter. So the broader answer is much faster 
economic growth abroad. There is a lot of academic research by 
me and others that have shown when U.S.-based multinationals 
expand abroad, that expansion in hiring and capital investment 
tends to support more hiring and more capital investment in 
America. So there is sometimes a presumption that more abroad 
means less in America, but when that growth abroad, as it has 
been with the tremendous growth in the BRIC and beyond 
countries is driven by really fast economic growth, a lot of 
that tends to be down to America.
    Ms. Velazquez. So you do not agree that the data for 
suggests that the outsourcing of jobs contributed to a higher 
unemployment in America?
    Mr. Slaughter. The outsourcing played some role but the 
prevailing scholarship to date shows that it is a very modest 
role. And if I may, the numbers that you cited, the more 
revised numbers from the BEA show U.S. employment declines that 
are not quite as large in the U.S. paired operations of U.S. 
multinationals. And it was entirely concentrated in a handful 
of manufacturing industries. Services, for example, in the U.S. 
over the 2000s, U.S. parent employment growth was several 
hundred thousand in conjunction with fast employment growth in 
services companies abroad.
    Ms. Velazquez. Thank you. Mr. Blackborow, when small 
businesses are awarded contracts through the small business 
contracting programs, they are allowed to subcontract a certain 
percentage of their work. However, there have been numerous 
reports that have detailed the abuses with these limitations on 
subcontracting. In your experience, what part of the contacting 
process makes it susceptible to contracting abuse?
    Mr. Blackborow. Honestly, I could not say. We have been the 
recipient of SBIR grants and we have been very happy with that. 
The comment I would make with regard to SBIR grants is not with 
regard to any elicit practices; simply that it takes too long 
to get between phases in the SBIR programs. So if you have a 
phase one program, getting to phase two where there is more 
money is often a big gap. And so shortening the timeline for 
SBIR programs for small companies like us would make the 
program much more supportive of our business goals. We have 
done very little subcontracting and only to universities, and I 
do not believe they are corrupt.
    Ms. Velazquez. We are not implying that.
    Mr. Blackborow. Okay.
    Ms. Velazquez. Mr. Bruck, the semiconductor industry is 
among the most capital-intensive in the world. By the way, we 
have asked GAO to do investigations. Those reports have been 
released right here and it shows that a lot of large companies 
that do not qualify and violate the eligibility requirement to 
apply for contracts that are awarded to small businesses have 
been awarded to large businesses and that is my question. What 
is that about?
    The semiconductor industry is among the most capital-
intensive in the world, both with research and manufacturing 
costs running well into the hundreds of millions of dollars. If 
these costs continue to escalate, how will small and medium-
sized companies manage to secure adequate investment to allow 
them to innovate and keep pace with large companies like Intel?
    Mr. Bruck. Yes. It is a challenge and it is one of the 
reasons that we have developed such a closely integrated 
relationship with our small business partners. And this extends 
not only to our direct supplier but to the suppliers of our 
suppliers of our suppliers. We find that, you know, many of the 
issues around innovation or quality breakthrough or cost 
breakthrough happen many levels down in the supply chain, and 
that is where the big opportunity is for small businesses. And 
I think as the testimony here has shown, those companies are 
more agile in many ways and can move to invest first before 
markets are mature.
    The other point I would like to make is with that 
investment, it does help us keep high paying jobs here in the 
U.S. The more capital intensive our industry, the more the 
labor cost, which is a relative cost to the total product, 
diminishes, which is why we have 75 percent of our revenue is 
exported to the rest of the world. Sixty percent of our jobs 
are here in the U.S. and they all average well over $100,000 at 
all sites.
    Ms. Velazquez. Thank you. The R&D tax credit is of great 
importance to the technology and manufacturing industries. It 
provides businesses of all sizes the ability to invest and 
innovate research. How in your view could this credit be 
simplified to make it more business friendly, and why should it 
be made permanent?
    Mr. Bruck. Yes. A great point. And I think our view is 
making it permanent would be wise and helpful for U.S. job 
creation. In terms of its usefulness, I think expanding on the 
discussions we are having today to understand how R&D 
investment creates a broader impact in the U.S. job market and 
in U.S. GDP growth would be helpful I think to the overall 
narrative of why the R&D tax credits should be made permanent.
    Ms. Velazquez. Thank you. Thank you, Mr. Chairman.
    Chairman Graves. Mr. Schilling.
    Mr. Schilling. Thank you, Mr. Chairman. And welcome, 
fellows.
    One of the things that--I own a small business in Moline, 
Illinois. It is just a small S corporation. One of the things 
that right now we are really hurting because, of course, the 
disposable cash with the high gas prices, of course, which we 
are trying to get under control, but one of the questions I 
have is do you believe that more regulation and higher taxes 
will help hold American companies here or will that be an 
incentive for them to move outside the United States?
    Mr. Bruck. To me?
    Mr. Schilling. Yes.
    Mr. Bruck. Okay. Well, obviously it is a disincentive for 
investment here. Our view, and let me contrast between large 
and small companies because on both the tax issue and the 
regulatory issue, but we have a global economic competition 
that is going on. The main thing that we would look at as a 
large company is a level playing field. So I think trying to 
look for ways that, as I mentioned, 75 percent of our revenues 
is exported into other markets. So our competition is coming 
largely from Taiwan or Korea or Japan or places like that that 
may have more favorable tax treatment. But it is even more 
important for the small business. And if you look at the amount 
of money they can reinvest into research and development, 
reinvest into hiring and expanding operations, that really will 
have a very long-term return on investment. And so providing 
that assistance is critical.
    The regulatory question, if you look at something like 
Sarbanes-Oxley, I certainly understand why we need to protect 
investors especially with companies as large as Intel. But as a 
percentage of overall revenue, the administrative cost for 
small business to comply with Sarbanes-Oxley is a crippling 
cost and again, takes away from investment and innovation and 
job creation. So looking at the regulatory framework and maybe 
contrasting the difference for large versus small businesses 
would be helpful.
    Mr. Schilling. Very good. Mr. McDowell, this is kind of 
tied into the same thing. In your written testimony you say 
that lack of awareness of available tax credits rather than 
high tax rates may be the problem for small firms. According to 
the NFIB, high tax rates are a problem because they siphon 
capital that entrepreneurs need to invest back into their 
companies to create jobs. And I can relate to this firsthand 
because right now our taxes in our city, in Moline, Illinois, 
continue to go up and then the business is constantly dropping. 
And one of the problems is we have some equipment that needs to 
be replaced and instead of being able to replace the equipment 
we cannot and we are having to let people go. So it is kind of 
a tough situation here. Basically, how do you respond to 
something like that, sir?
    Mr. McDowell. I am not saying that tax rates are not high 
for small business. I am saying that oftentimes, if we look at 
the trends over years, the taxes, you know, whether they have 
been up or down it always seems to be the number one problem 
for small business. I am not trying to deviate from that. But I 
am saying that what we are seeing today is that as more and 
more tax credits or different ways of even organizing your 
business are developed, too many small businesses are not 
taking advantage of the credits that are available to them. So 
I am not trying to imply that the taxes are not high and 
burdensome for businesses at all; it is just oftentimes there 
are too many things that are missed. And there are actually 
firms now that go out and specialize and go into small 
businesses such as yours and saying, look, we will do what we 
can to save your business and we will charge you a percentage 
of those tax savings as our fee. But again, the uncertainty for 
most businesses, whether or not it is going to be beneficial to 
them to explore different advantages or disadvantages can be 
difficult.
    Mr. Schilling. Okay. Very good. I appreciate that. I yield 
back my time, sir.
    Chairman Graves. Mr. Mulvaney.
    Mr. Mulvaney. Very briefly. Thank you, Mr. Chairman.
    Mr. Blackborow, you mentioned access to capital and you 
said you are participating in the SBIR program. Have you ever 
had occasion to try and get any other SBA financing, more 
traditional SBA lending, that type of thing?
    Mr. Blackborow. No, we have not. We have approached various 
banks from time to time to sense whether they would lend money 
to a company like us and they have not been very interested. 
Honestly, they do not feel that we are at a point in our growth 
that makes them feel comfortable enough. And thank goodness 
that we have people like Intel around.
    The biggest challenges we have are really not around 
financing, honestly. Or taxes at this point in our growth. Our 
biggest issue is access to good, talented people. And so the 
things that I would point out to the Committee, our focus on 
STEM education in this country needs to be really emphasized. 
We have trouble finding good, qualified scientists and 
engineers now that are born in this country or educated in this 
country. And when we advertise for a job we often get 
applicants from China, from Russia, from India, and many of 
them require visas which we cannot always get. And so I would 
say--and equally we have grad students at MIT down the street 
from us who when they get a Ph.D. have to go home when we just 
educated them in this country. This does not make any sense to 
me at all. So I would say the things that we need to do is to 
keep the talent here in this country and then it will fuel the 
creativity of companies like ours.
    Mr. Mulvaney. Thank you. I appreciate that comment. You 
mentioned also about the SBIR program and shortening the time 
between the phases. I am trying to keep the topic of 
conversation to the jurisdiction of this Committee. Is there 
anything else that the Small Business Committee, the Small 
Business Administration can do to help any of you gentlemen? I 
am trying to figure out what it is that we should be 
specifically focusing on in this room.
    Mr. Blackborow. Let me just answer as a small business to 
say that I believe I am not very aware of what the Small 
Business Administration does and I think that in itself is a 
challenge. We have not been reached out to. I probably could go 
find it if I dug into it but it has not been something that has 
been obvious to me that I should go chasing after because I am 
not sure what I would get when I would get there.
    Mr. Mulvaney. You would be surprised, by the way, at the 
number of times we hear that, which is frustrating, us serving 
on the Committee. And recognizing the time, I am curious. I 
seriously have a question that is just of interest to me, 
probably not to the rest of the Committee, how do you all 
handle intellectual property? How do you handle proprietary 
information? When you do these partnerships between these big 
businesses and these small businesses, are you relying heavily 
on legal documents or is there something else that allows you 
to function but still allows you to sort of trust each other 
not to steal each other's ideas?
    Mr. Bruck. Well, no, it is very carefully controlled. And 
again, one of the points I would like to make about investment 
in small businesses and technology fields is that we can create 
high value products in this country that we can export to the 
rest of the world, but you need that intellectual property 
protection to be able to do that. And so what we will tend to 
do in a relationship like we have with Energetiq is to find 
what we want is the process technology, the technology related 
to building chips. We are not in the equipment business per se 
and so they should expect to own the IP around the hardware. 
And we bring in what is all of our background IP so we are not 
mixing that up. And then there is a very careful chain of 
custody as we create new technology together. But that allows 
them to go off and build products and serve an equipment market 
and us to go off and serve the chip market.
    Mr. Blackborow. Yes, I would say it is quite sophisticated, 
the relationship we have both with Intel and our other large 
customer in this business. We have very good intellectual 
property lawyers on our side and theirs, and we carefully carve 
it out. We both want to own what we need and we do not want to 
jointly own things that we do not need because it gets 
cumbersome. So it is easier if we own our intellectual 
property, they own theirs, and we carefully spell it out in the 
contractual arrangements that we have between the companies.
    I would also say that Intel and the other companies are 
very respectful of our intellectual property and they need it, 
which is why they do not want to be seen to be taking it 
generally.
    Mr. Mulvaney. Gentleman, thank you very much. Thank you, 
Mr. Chairman.
    Ms. Velazquez. Mr. Chairman, I just would like to share 
with the panel that SBA not only offers a series of different 
economic development programs through technical assistance to 
helping put a business plan together to matching borrowers with 
lenders. But last year when large financial institutions were 
not lending to small businesses, the SBA stepped up and we 
injected--the federal government injected close to $30 billion 
into the economy. Where would this economy be today if it was 
not because of the role that we played in helping small 
businesses access affordable capital. So you have been lucky 
that you did not need their service, but a lot of businesses in 
this country, small businesses depend on the kind of services 
that the Small Business Administration provides.
    Thank you, Mr. Chairman.
    Chairman Graves. Thank you all very much for participating 
today. We appreciate it.
    I would ask unanimous consent that members have five 
legislative days to submit statements and supporting materials 
for the record. Without objection, so ordered. And we 
appreciate it again.
    Thank you. This hearing is adjourned.
    [Whereupon, at 2:01 p.m., the Committee was adjourned.]



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