[Senate Hearing 112-722]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-722

 
 DISASTER RECOVERY: EVALUATING THE ROLE OF AMERICA'S SMALL BUSINESS IN 
                      REBUILDING THEIR COMMUNITIES

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

                                HEARING

                               BEFORE THE

            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 15, 2011

                               __________

    Printed for the Committee on Small Business and Entrepreneurship


         Available via the World Wide Web: http://www.fdsys.gov


                  U.S. GOVERNMENT PRINTING OFFICE
73-458                    WASHINGTON : 2013
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Printing Office. Phone 202ï¿½09512ï¿½091800, or 866ï¿½09512ï¿½091800 (toll-free). E-mail, [email protected].  



            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                      ONE HUNDRED TWELFTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                OLYMPIA J. SNOWE, Maine, Ranking Member
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     JAMES E. RISCH, Idaho
JOHN F. KERRY, Massachusetts         MARCO RUBIO, Florida
JOSEPH I. LIEBERMAN, Connecticut     RAND PAUL, Kentucky
MARIA CANTWELL, Washington           KELLY AYOTTE, New Hampshire
MARK L. PRYOR, Arkansas              MICHAEL B. ENZI, Wyoming
BENJAMIN L. CARDIN, Maryland         SCOTT P. BROWN, Massachusetts
JEANNE SHAHEEN, New Hampshire        JERRY MORAN, Kansas
KAY R. HAGAN, North Carolina
  Donald R. Cravins, Jr., Democratic Staff Director and Chief Counsel
              Wallace K. Hsueh, Republican Staff Director


                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana.     1
Snowe, Hon. Olympia J., Ranking Member, and a U.S. Senator from 
  Maine..........................................................     2
Brown, Hon. Scott P., a U.S. Senator from Massachusetts..........     4

                               Witnesses
                        A Panel, consisting of:

Sligh, Jr., Albert B., Associate Administrator, Mission Support 
  Bureau, Federal Emergency Management Agency, U.S. Department of 
  Homeland Security..............................................     7
Harrison, Brigadier General Theodore C., Director, National 
  Contracting Organization, U.S. Army Corps of Engineers, 
  Department of the Army.........................................    10
Woods, William T., Director, Acquisition and Sourcing Management, 
  U.S. Government Accountability Office..........................    18

                        A Panel, consisting of:

Bennett, Terri, Program Manager, Heartland PTAC..................    48
Davis, Sid, President, Big John's Heavy Equipment, Inc...........    55
Rentrop, Jr. Dale, President, Tiger Tugz, LLC....................    59
Nunez Airhart, Mindy, Marketing Director and Assistant to the 
  President, Southern Services and Equipment, Inc................    66

          Alphabetical Listing and Appendix Material Submitted

Bennett, Terri
    Testimony....................................................    48
    Prepared statement...........................................    51
    Response to post-hearing questions from Senator Landrieu.....   108
Brown, Hon. Scott P.
    Testimony....................................................    60
    Prepared statement...........................................    30
Davis, Sid
    Testimony....................................................    55
    Prepared statement...........................................    57
Harrison, Brigadier General Theodore C.
    Testimony....................................................    10
    Prepared statement...........................................    12
    Response to post-hearing questions from Senator Landrieu.....    94
    Response to post-hearing questions from Members..............   117
Landrieu, Hon. Mary L.
    Testimony....................................................     1
    Post-hearing questions posed to Albert B. Sligh, Jr., and 
      subsequent responses.......................................    82
    Post-hearing questions posed to Brigadier General Theodore 
      Harrison and subsequent responses..........................    94
    Post-hearing questions posed to Bill Woods and subsequent 
      responses..................................................   103
    Post-hearing questions posed to Dale Rentrop, Jr., and 
      subsequent responses.......................................   105
    Post-hearing questions posed to Terri Bennett and subsequent 
      responses..................................................   108
    Post-hearing questions posed to Mindy Nunez Airhart and 
      subsequent responses.......................................   113
Nunez Airhart, Mindy
    Testimony....................................................    66
    Prepared statement...........................................    68
    Response to post-hearing questions from Senator Landrieu.....   113
Orr, David W.
    Letter.......................................................   120
Rentrop, Jr. Dale
    Testimony....................................................    59
    Prepared statement...........................................    62
    Response to post-hearing questions from Senator Landrieu.....   105
Sligh, Jr., Albert B.
    Testimony....................................................     7
    Prepared statement...........................................     9
    Response to post-hearing questions from Senator Landrieu.....    82
Snowe, Hon. Olympia J.
    Testimony....................................................     2
Woods, William T.
    Testimony....................................................    18
    Prepared statement...........................................    21
    Response to post-hearing questions from Senator Landrieu.....   103


 DISASTER RECOVERY: EVALUATING THE ROLE OF AMERICA'S SMALL BUSINESS IN 
                      REBUILDING THEIR COMMUNITIES

                              ----------                              


                      THURSDAY, SEPTEMBER 15, 2011

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:07 a.m., in 
Room 428-A, Russell Senate Office Building, Hon. Mary L. 
Landrieu, Chair of the Committee, presiding.
    Present: Senator Landrieu, Shaheen, Hagan, Snowe, and 
Brown.
    Also Present: Senator McCaskill.

 OPENING STATEMENT OF HON. MARY L. LANDRIEU, CHAIR, AND A U.S. 
                     SENATOR FROM LOUISIANA

    Chair Landrieu. Good morning, and welcome to the Small 
Business Committee room and welcome to our hearing this morning 
entitled, Disaster Recovery: Evaluating the Role of America's 
Small Business in Rebuilding Their Communities. Welcome to my 
Ranking Member, Senator Snowe.
    Good morning, and thank you for joining us for this timely 
and important hearing. Today's hearing focuses on the role that 
small businesses play in helping their communities following 
disasters, but it is also going to focus on the role of the 
Federal Government in making sure that small businesses are 
actually a part of that rebuilding, not only for the benefit of 
the communities they serve but for their own individual 
benefit, many of them ravaged by flood waters, high winds, and 
in some cases, the trembling earth.
    For example, right now small business in the states from 
North Carolina to Maine are trying to rebuild their communities 
impacted by Hurricane Irene. With that in mind, today we hope 
to hear about the federal disaster contracting process, more 
about the details, how is it working to direct this work that 
can be done so ably, so well, and with such appreciation, I 
might add, by the small businesses in these communities.
    We know there are two sides to this coin. Small businesses 
often get frustrated trying to navigate the federal procurement 
process while the Federal Government struggles sometimes to 
work with these small businesses unfamiliar with these system 
of procurement for goods and services.
    Today we are going to hear from some of our experts at the 
federal level, and then we are going to hear from some of our 
experts from the field, actual small business owners who have 
had in some cases good experiences, in some cases terrible 
experiences, in this sphere.
    We want to present to you today the good, the bad, and the 
ugly. Senator Snowe and I are committed to help make this 
process better, to improve upon it. I believe we have made some 
improvements since Katrina and Rita, but today we will hear 
more about exactly how significant, if at all, if there were 
any improvements in the system and what remains to be done.
    This year marks the sixth anniversary of Katrina, the 
costliest disaster in the State of Louisiana's history with 
over $81 billion in damage. We are now experiencing the impacts 
of disasters in all but two states in the United States, 
federally declared disasters, which is really unprecedented.
    This issue is relative not only to the work continuing 
along the Gulf Coast but most recently along the East Coast 
which Senator Snowe, I am sure, will share with us today.
    According to the GAO who will testify before this 
committee, Gulf Coast small businesses received almost $2.9 
billion in contracts, 14 percent of the total, $20.5 billion in 
total federal contracts. We are happy to see that, but we hoped 
the number might be a bit higher. We are going to delve into 
some of those numbers today.
    On May 22nd of this year, winds engulfed Joplin, Missouri 
leaving large-scale damage on stretches of Main Street. Many 
businesses were either heavily damaged or destroyed.
    In the wake of the disaster, we counted on our 
entrepreneurs to repair damage to St. John's Regional Medical 
Center, one of the largest hospitals in the area. The Federal 
Government reached out to construction companies in Joplin to 
help pick up debris and remove it so the community could get 
back to work. We are looking forward to hearing how many small 
businesses played a part in that effort.
    I am personally particularly interested in the U.S. Army 
Corps of Engineers. They do a tremendous amount of work in my 
state, important work around the country, and I want to hear 
from the Corps about the ways that you all are working with 
small businesses to supply the rock, the sand, the levee 
construction materials, and other supplies that the Corps needs 
as we try to improve our levee system nationally.
    On our second panel, we will hear from members and small 
businesses from the Gulf Coast to Missouri to other small 
business communities. I think we have particularly strong 
testimony from Mr. Dale Rentrop, the President of Tiger Tugz 
from Louisiana. I am looking forward to hearing his story. It 
is not a happy one, but I think it will be informative.
    Thank you for your time. I will turn it over to Ranking 
Member Snowe, and then we will go to opening statements.

OPENING STATEMENT OF HON. OLYMPIA J. SNOWE, RANKING MEMBER, AND 
                   A U.S. SENATOR FROM MAINE

    Senator Snowe. Thank you, Chair Landrieu, for your 
continued and exceptional leadership of this Committee 
particularly on this timely issue of disaster recovery.
    I want to welcome our panelists who have taken valuable 
time out of your own schedules to be here today to testify.
    Our first panel of governmental witnesses will discuss what 
federal agencies are doing to aid disaster recovery, and our 
second panel of small businesses and local organizations with 
boots on the ground will tell us about their experiences 
working with federal, state, and local governments in ways to 
improve that process.
    Much of the Senate's work this week has been spent with 
policymakers debating FEMA's funding shortfall which has left 
the agency unable to support long-term rebuilding and 
mitigation projects because the depleted disaster relief fund 
can only cover damage costs immediately afterwards.
    As the Chair has pointed out, FEMA has had to stop disaster 
recovery projects such as rebuilding of roads, hospitals, 
schools, and public utilities because they have run out of 
money.
    Hurricane Irene has only compounded the problem because 
FEMA is quickly spending the remaining money in a disaster 
relief fund on immediate needs for those left without shelter 
and food in the aftermath of the storm.
    Let me be clear. There is simply no excuse for Washington 
continuing to fund disaster accounts on an emergency and ad hoc 
basis rather than preparing for them in advance. That is why 
today I am introducing the Safeguarding Disaster Funding Act 
with Senator Scott Brown.
    This bill would require that the President's annual budget 
request for disaster programs include funding levels equal to 
the average amount provided annually for the previous 10 years. 
Additionally, disaster funding that goes unspent in a given 
year will carry over to support years where additional funds 
are required.
    This common sense approach would alleviate the political 
haggling and brinksmanship that has become all too common place 
in Washington, while ensuring that taxpayer supported disaster 
funds are properly budgeted and offset moving forward.
    I hope my colleagues in this Committee will support this 
bill and help to secure its passage. Responsible budgeting for 
disasters is the right thing to do for the victims of 
devastation as the vivid images from the damage of Hurricane 
Irene has reminded us.
    As one of the Senate Committees responsible for overseeing 
federal disaster assistance, today we will examine the degree 
to which one tool, contracting opportunities for local 
businesses that want to participate in recovery and rebuilding 
efforts, is being utilized.
    Hurricane Irene caused more than 4.5 million homes and 
businesses along the East Coast to lose power, including 
185,000 in my home State of Maine which suffered flooding and 
washed out bridges in the western portion of the state.
    Now that the winds and rains have subsided, our cities and 
towns must rebuild from the devastation. Our local small 
businesses stand ready to aid in the rebuilding efforts, and 
the Federal Government should be partnering with these firms 
whenever possible in awarding recovery contracts.
    In response to the 2005 hurricanes, Gulf Coast small 
businesses received almost $2.9 billion in federal contracts or 
just over 13 percent of the $20.5 billion federal agencies 
directly awarded nationwide for recovery efforts related to 
Hurricanes Katrina and Rita.
    Key questions these statistics raise is, why are not more 
disaster recovery contracts going to local small businesses and 
is the Federal Government bundling many of the contracts out of 
convenience?
    This Committee has had a long history in trying to reduce 
unwarranted contract bundling to provide more opportunities for 
small businesses. In fact, the Small Business Jobs Act that was 
enacted last year contained a number of anti-bundling positions 
that had been passed unanimously out of this Committee.
    These provisions require bundled contracts to include small 
business teams or joint ventures. In certain cases, contracts 
are too large for many small businesses to compete and their 
only opportunity to participate in a project is to act as a 
subcontractor to a large business.
    In any construction contract over $1 million, a large 
business is required to submit a subcontracting plan to the 
agency before the contract is awarded. Unfortunately, in their 
report on Hurricanes Katrina and Rita, the GAO describes an 
alarming trend that federal agencies are not monitoring large 
business subcontracting plans which threaten small business 
participation in the rebuilding efforts.
    This morning that is one of the issues that I intend to 
explore in terms of what the federal agencies represented here 
today and others are doing to correct and to remedy these 
monitoring failures.
    So again, Madam Chair, thank you for your leadership and 
for this hearing here today.
    Chair Landrieu. Thank you so much, Senator, for being 
willing to help us try to solve this funding problem which is 
immediate. It is severe, and it is going to take our best 
efforts in the next few days to figure that out.
    So, thank you, and Senator Brown.
    Senator Brown.

 OPENING STATEMENT OF HON. SCOTT P. BROWN, A U.S. SENATOR FROM 
                         MASSACHUSETTS

    Senator Brown. Thank you, Madam Chair, and Ranking Member 
Snowe for scheduling this hearing.
    It, unfortunately, has grave importance not only to many 
parts of the country but, as you know, to my State of 
Massachusetts. We have had an unusual string of natural 
disasters, obviously the tornadoes that hit in May in the 
western part of the state. Then most recently Hurricane Irene.
    We have had to rely on SBA, FEMA, and the Army Corps to get 
back on our feet; and I want to thank you all for what you have 
done and continue to do. Obviously, we are here to try to learn 
how to do it even better because over the past several months 
since the May tornadoes, I have been urging my constituents 
through videos and newsletters and the like to utilize the 
resources provided by SBA, FEMA, and the Army Corps so that 
their homes and businesses can recover quicker.
    The issues the Committee is looking into today are not to 
attack the agency or the representatives but to make them 
better and more accessible to the citizens that need them most.
    I see two main areas of concern. First, the agencies need 
to do better at monitoring the contracts to ensure that the 
small businesses are truly getting our businesses to actually 
get out and do their jobs and have an opportunity to provide 
services and that the Federal Government is not being duped by 
the front facade contractors posing as small businesses.
    Most recently, speaking with many of the town 
administrators and mayors, when FEMA and other groups come into 
the area, they set up shop. They do their thing. They do it 
well. There is a lack of communication to the actual town 
administrators or mayors, and there is almost a duplicative 
chain like two trains going down parallel tracks and they are 
not really talking or communicating with each other. I think 
that is critically important. So, that is a suggestion I would 
certainly make.
    The second, in light of the discussions taking place where 
I know the chair has been very animated about a lot of the 
things that have been happening in the Senate, we need to take 
proper steps to budget better.
    It is common sense we do not properly budget for these 
types of disasters. When they happen and the money is gone, we 
are like, oh my gosh, where is the money? Well, we do not 
properly plan.
    Regarding the Senate's focus on this, I voted both times to 
move forward with the FEMA disaster relief bill as did other 
Republicans, because neighbors and constituents in 
Massachusetts have lost their homes and businesses, and quite 
frankly we need to do what we can to get them back on their 
feet so they can be contributing members of their towns and 
their communities and our state.
    Quite frankly, folks, you are Americans first and we need 
to start working together in these tough fiscal times as well 
as times when we deal with natural disasters. I, for one, will 
continue to work in a bipartisan, hopefully bicameral manner, 
to allow us to do it better.
    I am looking forward to cosponsoring a bill this week with 
Senator Snowe requiring the President's budget to include at a 
minimum a request for disaster funding based on the 10-year 
average on spending on disasters.
    We should not be getting insufficient budget requests for 
the disaster relief fund with agencies knowing full well that 
they can simply ask Congress for emergency supplemental funding 
or hope to count on a cushion from next year's surplus because 
we know disasters happen every year in your area especially and 
most recently in ours.
    Look what happened in Vermont, unheard of. Just speaking 
with our dear friends from Vermont, the senators from Vermont, 
they are just shocked.
    We need to plan. We need to do it better. I want to thank 
you for the hearing. Thanks for focusing on this issue, and 
let's get to work.
    Chair Landrieu. Thank you. I will introduce the panel in 
just a moment but I would like to respond just a second. I 
thank you, Senator, for those comments, and animated is a very 
kind word for these speeches I have been giving on the floor. 
So, I thank you. You were very careful in your selection of 
words.
    Senator Brown. That is how I am.
    Chair Landrieu. Let me say this. We have budgeted for 
disasters. The average that we budgeted in Homeland Security, 
and I just became the Chair two years ago, so prior to my 
becoming the Chair, was about $800 million a year. I can give 
you the charts to show this, but I do not have them with me.
    When I became Chair, I knew that was not sufficient, so I 
doubled the amount of money up to $1.8 billion out of the 
Homeland Security budget which is a total budget of $42 
billion.
    I have been resistant to budget any more out of Homeland 
Security because if I do that, it takes away grants from your 
states that help you to protect yourself against future 
disasters. I have said it is not right for the country to fully 
fund disasters out of the Homeland Security budget which is 
only $42 billion.
    So, I am looking for a solution. I think the solution that 
you and Senator Snowe have at least described to me just now in 
your bill that you intend to introduce might be one requiring 
the President to do a 10-year average. You take out the high 
and the low.
    The other problem with budgeting, Senator Brown, if I might 
say, in advance is sometimes events happen that no matter how 
well you planned just absolutely blow the roof off of any 
estimates and that is what happened in Katrina.
    Even if we had budgeted $10 billion which is going to be 
about what the average is, it was $43 billion. So, if one side 
continues to require offsets even when that happens, we are 
back in the same place we are now.
    I am willing to be open but we have got to find a way 
forward that allows in really extraordinary circumstances for 
there to be emergency funding because you will never, in my 
opinion, be as accurate as we need to be about it.
    We can prepare better. Absolutely. I think that might be a 
good approach, but we will see as we go on.
    Let's get our panel started.
    Mr. Sligh is the Associate Administrator for FEMA. I am 
looking forward to his comments today. He has more than 28 
years of experience in leading acquisition contracting and 
program management initiatives with the Federal Government.
    Next we will hear from Brigadier General Ted Harrison, 
Director of the Army Corps of Engineers. Previously, he was 
Deputy Director and also Chief of Staff for the Joint 
Contracting Command in Afghanistan and Iraq.
    And lastly but equally importantly, we have Bill Woods, 
Director of the Acquisition and Sourcing Management Team for 
the GAO.
    So, why don't we start, I guess, Mr. Sligh, with you? Go 
right ahead and I think you have five minutes each for opening 
statements.

  STATEMENT OF ALBERT B. SLIGH, JR., ASSOCIATE ADMINISTRATOR, 
 MISSION SUPPORT BUREAU, FEDERAL EMERGENCY MANAGEMENT AGENCY, 
              U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Sligh. Yes, ma'am. Good morning, Chairwoman Landrieu, 
Ranking Member Snowe, and Senator Brown.
    My name is Al Sligh, and I am the Associate Administrator 
for Mission Support Bureau at FEMA. I appreciate the 
opportunity to appear before this Committee today to discuss 
FEMA's efforts to increase contracting opportunities for local 
small businesses, especially in the wake of disasters.
    FEMA uses a variety of tactics to increase opportunities 
for small businesses. For example, we have a full-time small 
business specialist whose primary responsibility is to increase 
opportunities for small, minority, and the disadvantaged 
businesses.
    Using lessons learned from Hurricane Katrina, FEMA has 
implemented a local contracting strategy. With this strategy, 
prior to issuing a solicitation, FEMA does research to 
determine whether enough small businesses have the capability 
to meet program requirements. If they do, then the solicitation 
is structured either as a local small business set-aside or to 
provide competitive advantages based on small business status 
as allowed by the Federal Acquisition Regulation.
    I am proud to report that we exceeded the Small Business 
Administration goals for the Federal Government of 23 percent 
with 28.7 percent in fiscal year 2009, 26.9 percent in fiscal 
year 2010 of our procurement dollars going to small businesses. 
For fiscal year 2011, so far we are slightly above the federal 
goal.
    In the aftermath of a disaster, up to 40 percent of small 
businesses fail to recover which can significantly hamper the 
community's recovery efforts. While state and local governments 
issue the majority of contracts within the disaster environment 
using FEMA funds, FEMA is dedicated to help communities rebuild 
by awarding its contracts directly to local small businesses to 
the maximum extent possible.
    To aid local business contracting, local business 
transition teams are deployed to the field to encourage timely 
transition of contracts to local small businesses following the 
initial disaster response. These teams engage with the local 
business community to identify products and services that can 
be provided locally.
    In addition to the local transition teams, Disaster 
Acquisition Response Teams or DARTs provide contract 
administration and oversight to local contractors. The DART 
members help local small businesses with issues that arise 
during performance periods and the review and timely submission 
of invoices to facilitate prompt payment.
    These techniques were used with great success in the 
aftermath of the April 2010 tornadoes in the Southwest. In the 
eight affected states, FEMA staff worked with State partners 
before, during, and after the disasters to identify local 
businesses that can provide needed supplies and services.
    In Alabama, Mississippi, Tennessee, Kentucky, and Georgia, 
over $13 million was awarded to local businesses and 90 percent 
of the local procurement initiatives went to small businesses.
    In Joplin, Missouri, a DART member worked with a small 
local business to ensure that they would be eligible to compete 
for FEMA contracts. They did this by answering questions and 
providing advice such as the importance of central contracting 
registration. Not only was this an opportunity for this 
business to contract with FEMA, but it was also a chance for 
this business to gain skills and approvals needed to 
successfully compete for government contracts in the future.
    In addition to our efforts, it is essential that individual 
businesses have emergency plans. Having a plan can increase the 
speed at which a business can continue its operations following 
a disaster. It is especially important that small businesses 
have an emergency plan since their size alone make them the 
most vulnerable private sector entities.
    In order to raise awareness to small businesses about the 
need for emergency planning, DHS and the Ad Council launched 
the Ready Business Campaign in September 2004. This initiative 
helps owners and managers of small- and medium-size businesses 
by providing them with the practical steps and easy-to-use 
templates that prepare them for emergencies.
    FEMA will continue to do its part in the recovery by 
encouraging local businesses to be prepared prior to disasters 
and providing contracting opportunities for them as much as 
possible.
    This concludes my statement. I will be happy to answer any 
questions you may have.
    [The summary of Mr. Sligh follows:]

    [GRAPHIC] [TIFF OMITTED] T3458.001
    
    Chair Landrieu. Thank you.
    General, please.

  STATEMENT OF BRIGADIER GENERAL THEODORE HARRISON, DIRECTOR, 
NATIONAL CONTRACTING ORGANIZATION, U.S. ARMY CORPS OF ENGINEERS

    General Harrison. Madam Chair, members of the Committee, I 
am Brigadier General Ted Harrison, Director of the U.S. Army 
Corps of Engineers, National Contracting Organization.
    Thank you for the opportunity to testify before you today 
concerning the role of small businesses in disaster response. 
The Corps continues to work to support FEMA in carrying out a 
wide variety of missions in response to the natural disasters 
throughout the Nation and we strive to maintain transparency in 
our contracting activities and welcome the oversight of our 
actions.
    I fully recognize the value that small businesses bring to 
our national economy. I am personally committed to using small 
businesses in performing our work, both in the normal course of 
business and in times of major natural disasters.
    After a Presidential declaration of disaster, we work to 
support local communities using local area set-asides permitted 
by the amended Stafford Act.
    First, I would like to address pre-disaster contracting. 
Under the national response framework, the Corps has been 
designated the coordinator for emergency response function 
number three, public works and engineering.
    When tasked by FEMA, the Corps is responsible for providing 
ice, water, debris removal, and temporary power. The Corps is 
also a support agency for emergency response function number 
six, mass care and housing, providing temporary roofing in the 
wake of a disaster.
    Due to the necessity to lean forward in time of need, the 
Corps developed the Advance Contracting Initiative or ACI 
contracts to quickly respond to major disasters. We used our 
ACI contracts to support recovery efforts after Hurricanes 
Katrina, Rita, and Wilma; and we are now using ACI contracts 
again to respond to tornado recovery missions in both Missouri 
and Alabama.
    Although it is always our plan that our ACI contracts are 
ready to effectively respond to all natural disasters, we have 
learned that sometimes the magnitude of disasters requires more 
contract capacity or geographic coverage than is available 
under the scope of existing ACI contracts. For example, after 
Katrina, the Corps needed four additional contracts to remove 
debris in both Mississippi and Louisiana.
    The Corps of Engineers is dedicated to employing small 
businesses in response to disaster. Small business 
subcontracting data for the Corps of Engineers response to the 
Gulf region's recovery through March of 2007 made it very clear 
how vital small business participation was to the recovery 
effort with 88 percent of all subcontracted dollars in 
Louisiana awarded to small businesses and 84 percent of dollars 
awarded in Mississippi going to small businesses.
    In response to the Joplin recovery, the Corps of Engineers 
has awarded approximately 45 percent of total dollars in 
support of the recovery directly to small businesses.
    With regard to the Corps overall small business 
performance, as of September 9 the Corps is exceeding all 
fiscal year 2011 small business goals for prime contracts. And 
also to date, fiscal year 2011 data reflects the Corps' 
contractors have awarded 63 percent of subcontracted dollars to 
small businesses.
    In regard to the GAO report, 10-723, overall the Corps 
successfully ensures that small businesses are provided the 
best opportunities to participate in the rebuilding of their 
local communities after disasters occur.
    The Corps is in the process of fully implementing the GAO 
recommendation to provide improved oversight to ensure that our 
contracting officers are monitoring the extent to which our 
contractors are meeting subcontracting goals and submitting 
subcontracting plans.
    I will be the first to say, however, that we should have 
better accountability for tracking subcontracting reports 
through contract completion but we are on the path to getting 
this right.
    The Corps has undertaken a number of steps to ensure full 
accountability in subcontract reporting which has been 
submitted for the record as a part of my testimony.
    Looking forward, I am committed to the Corps' continuing 
partnership with local contractors in moving to local area set-
asides under the amended Stafford Act as soon as practicable 
and to local business contractors when market research 
indicates we have a viable small business within the local 
area.
    We will negotiate subcontracting plans with our large 
business contractors to enable small businesses in all social 
economic categories to support natural disaster response. Our 
contracting officers and small business specialists will ensure 
that proposed subcontracting goals from large businesses are 
both realistic and attainable but also challenge large 
businesses to reach higher and find great small businesses to 
assist in disaster response.
    The success of the federal small business program is a 
shared responsibility, and I applaud the efforts of the Senate 
Committee on Small Business and Entrepreneurship for holding 
agencies accountable to small business obligations.
    To close, I would like to thank you once again, Chairman 
Landrieu, for allowing the Corps of Engineers the opportunity 
to appear before this Committee to discuss our consideration of 
small business and local area small business awards in disaster 
response.
    Our Corps personnel continue to serve by helping response 
to natural disasters across the nation. We are proud to do so, 
and I will be happy to answer any questions that members of the 
Committee may have. Thank you.
    [The prepared statement of General Harrison follows:]

    [GRAPHIC] [TIFF OMITTED] T3458.002
    
    [GRAPHIC] [TIFF OMITTED] T3458.003
    
    [GRAPHIC] [TIFF OMITTED] T3458.004
    
    [GRAPHIC] [TIFF OMITTED] T3458.005
    
    [GRAPHIC] [TIFF OMITTED] T3458.006
    
    [GRAPHIC] [TIFF OMITTED] T3458.007
    
    Chair Landrieu. Thank you, General.
    Mr. Woods.

  STATEMENT OF BILL WOODS, DIRECTOR, ACQUISITION AND SOURCING 
       MANAGEMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Woods. Chair Landrieu, Ranking Member Snowe, Senator 
Brown, thank you for inviting the Government Accountability 
Office to be here this morning. I would like to address three 
areas in the time we have this morning.
    First, I would like to address the general statutory and 
regulatory framework for how the government responds to major 
disasters and that would, of course, include an important piece 
of legislation, the Stafford Act.
    Second, I would like to update the numbers that we reported 
on back in July of 2010 on how the obligations were distributed 
in response to the major hurricanes, and then thirdly, I would 
like to address the area of subcontract monitoring.
    When the President declares a national emergency with 
respect to a major disaster, that brings in the provisions of 
the Stafford Act. In the area of contracting in particular, the 
Stafford Act allows for and, in fact, requires that preferences 
be used with respect to local area businesses, those businesses 
that are located within the area of the major disaster.
    There are a couple of ways that the Federal Acquisition 
Regulation provides for those preferences to be implemented. 
One is through the use of set-asides where the competition for 
contracts can be restricted to firms that are located within 
that affected area, and secondly, the Federal Acquisition 
Regulation allows for evaluation preferences in those contracts 
that may be awarded competitively.
    Importantly, the Stafford Act provides for transition from 
pre-existing contracts. We encourage the federal agencies to 
have contracts in place prior to these disasters, but the 
Stafford Act provides that those contracts should be 
transitioned to local businesses as quickly as possible. That 
does not mean canceling contracts, terminating existing 
contracts, but it does mean looking for opportunities at option 
periods, for example, or when major portions of a contract are 
completed to move that work from the pre-existing contractor to 
local businesses.
    It is very important that small businesses register with 
the central contractor registration system or CCR. That is an 
important way and, in fact, a required way for any business, 
and particularly small businesses, to be eligible for any of 
these contracts.
    Let me move now to the numbers. As I mentioned, we issued a 
report in July of 2010 covering a number of areas. Let me start 
with $20.5 billion which was the total amount of contracts 
awarded for disaster relief in the Gulf region.
    I should mention that all of these numbers are taken from 
the federal procurement data system. We updated our numbers 
through September 1 of this year. Those numbers will always 
tend to fluctuate.
    If we look at any given point in time and we come up with 
one number, if we look a week or a month or a year later, we 
are very likely to come up with a different number. And the 
reason is that agencies are constantly updating the information 
in the federal procurement data system.
    Agencies may be adding new obligations to existing 
contracts to cover new work or they may be de-obligating money 
when they discover that they do not need as much work as 
originally planned for.
    Chair Landrieu. So just repeat, for the record, Mr. Woods, 
that was $20 billion in a snapshot taken in September of this 
year?
    Mr. Woods. September 1 of this year. That is correct.
    Chair Landrieu. This year.
    Mr. Woods. That is correct.
    Chair Landrieu. $20 billion out of? Or what was the 
reference?
    Mr. Woods. That was the total amount of obligated funds.
    Chair Landrieu. Currently obligated to small businesses?
    Mr. Woods. Currently obligated funds nationwide to all 
businesses.
    Chair Landrieu. Got it.
    Chair Landrieu. Okay.
    Mr. Woods. When we look just at small businesses, we find 
that roughly a quarter of that amount has gone to small 
businesses, and of that quarter, about $2.6 billion has gone to 
small businesses nationwide, not in the Gulf region. $2.7 
billion has gone to small businesses in the Gulf region.
    When we break that down a little bit further for state-by-
state, for example, we find that Louisiana is the largest 
recipient, small businesses in Louisiana are the largest 
recipients of that $2.7 billion. Louisiana businesses received 
about $1.4 billion of that amount.
    When we do further breakdowns, we look at the various 
socio-economic categories and we find that small disadvantaged 
businesses received $800 million of that $2.7 million. HUBZone 
firms, these are Historically Underutilized Business Zone 
firms, and they received about $560 million out of that $2.7 
million total Gulf region small business contracts.
    Women-owned businesses received about $381 million and 
veteran-owned businesses received about $270 million. There is 
much more detail in terms of these numbers in our prepared 
statement which I would like to submit for the record.
    Chair Landrieu. Thank you.
    Mr. Woods. Moving on to the third category about 
subcontracts, we looked at four agencies who had a major 
presence in helping address the disaster in the Gulf. These 
were the General Services Administration, the Department of 
Homeland Security including FEMA, the Corps of Engineers, and 
the rest of the Department of Defense.
    We broke out the Corps of Engineers from the rest of DOD 
primarily because we found at least three specific supplemental 
appropriations where the Congress provided money directly to 
the Corps and only for work in the Gulf. So we thought it 
appropriate to break out the Corps separately from the rest of 
DOD.
    We looked at 57 construction contracts. These were 
contracts that require subcontracting plans. Not all contracts 
require plans, but construction contracts that exceed $1.5 
million require the contractors to tell the agencies how they 
plan to address small businesses.
    Those large businesses are required to submit reports on a 
periodic basis to the agencies; and when we looked for those 
reports, we found that of the 57 contracts that I mentioned, 
the Corps of Engineers had 29 of those. But they were unable to 
provide to us those subcontract reports for 11 of those 29 
contracts.
    When we looked at DOD generally, they had 14 of those 57 
contracts and the rest of the department was unable to provide 
those reports to us for two of those contracts.
    We recommended that action needed to be taken to make sure 
that these agencies could monitor subcontract compliance by 
their prime contractors; and we understand, based on recent 
information, that those agencies have taken certain actions to 
do that.
    This concludes my prepared statement. I would be happy to 
take questions.
    [The prepared statement of Mr. Woods follows:]

    [GRAPHIC] [TIFF OMITTED] T3458.008
    
    [GRAPHIC] [TIFF OMITTED] T3458.009
    
    [GRAPHIC] [TIFF OMITTED] T3458.010
    
    [GRAPHIC] [TIFF OMITTED] T3458.011
    
    [GRAPHIC] [TIFF OMITTED] T3458.012
    
    [GRAPHIC] [TIFF OMITTED] T3458.013
    
    [GRAPHIC] [TIFF OMITTED] T3458.014
    
    [GRAPHIC] [TIFF OMITTED] T3458.015
    
    [GRAPHIC] [TIFF OMITTED] T3458.016
    
    [GRAPHIC] [TIFF OMITTED] T3458.017
    
    [GRAPHIC] [TIFF OMITTED] T3458.018
    
    [GRAPHIC] [TIFF OMITTED] T3458.019
    
    [GRAPHIC] [TIFF OMITTED] T3458.020
    
    [GRAPHIC] [TIFF OMITTED] T3458.021
    
    Chair Landrieu. Thank you very much. I really appreciate 
the reports, and I want to call to the Committee's attention, I 
am sure in preparation for this meeting you know of this, but 
the GAO has just put out a report of Hurricanes Katrina and 
Rita, Federally Funded Programs Have Helped To Address The 
Needs Of The Gulf Coast.
    I know we are very focused, as we should be, on the 
disasters that are occurring as we speak, but the lessons 
learned and the applications of what we forced or tried to do 
after Hurricane Katrina and the Gulf Coast can be very, very 
helpful as we move forward in trying to contract with as many 
small businesses as possible in North Carolina, New Hampshire, 
Maine, and Massachusetts.
    The lessons learned, that is why I called this hearing 
because we want to see what we have improved and what gaps 
still exist. I really hope that the next year or two will 
result in smoother operations in terms of contracting with 
small businesses, that they get to work if they deserve it and 
if they are quality contractors that they get paid, because 
then if they do not, that just adds insult to injury and pours 
salt on the wound of a business struggling and not being able 
to be paid. So, I call your attention to this report.
    Let me ask you, Mr. Woods, based on the report that you 
have submitted and the testimony you have given, would you 
either state again or state for the first time the one or two 
areas that you think this Committee, in our oversight posture, 
should really focus on? Is it looking to see that these 
contracts are including these subs and that the records are 
complete or what would you suggest?
    Mr. Woods. We think it is very important that agencies 
monitor these plans. The agencies are required to exercise 
oversight of all their contracts and particularly how well 
contractors adhere to their subcontracting plans.
    We do not think that there is any way that the agencies can 
do that unless they are getting sufficient information from the 
contractors about how well they are performing, and the 
mechanism for doing that is to require the contractors to 
submit those plans on a periodic basis.
    If there is no one making sure that those contractors 
submit those plans, the agencies are not going to be well-
positioned to exercise their oversight responsibilities.
    Chair Landrieu. In your opinion, and I would like you to 
jump in, General, does the Corps of Engineers have the 
administrative funding and resources necessary, in your view, 
Mr. Woods, and then I am going to ask you, General, to do the 
job we are asking them to do?
    Mr. Woods. I know that their budget has been very tightly 
stretched, at least in my view, for construction, new 
construction as well as operations and maintenance. I am not as 
familiar with their administrative line items.
    Chair Landrieu. In your review, is there a problem, in your 
professional opinion, with their lack of administrative 
capability or do you think that they have it, and they are just 
not doing it?
    Mr. Woods. We did not specifically address that issue in 
this report. However, I can tell you that we have constantly 
been looking at the capacity of agencies to carry out their 
responsibilities, practical oversight responsibilities in the 
contracting area. Across the government we have found that to 
be a huge challenge for all agencies.
    I will point out in particular, we did quite a bit of work 
looking at the response to Hurricanes Katrina and Rita very 
early on. In fact, I testified in New Orleans before you at 
that time and one of the issues we identified then was the lack 
of adequately trained personnel both in terms of training and 
numbers to carry out their responsibilities.
    We do not know whether that continues. Perhaps the General 
can address that. Certainly on a government-wide basis, we 
remain concerned about agencies having the right number of 
people trained to exercise oversight responsibilities.
    Chair Landrieu. Well, I think that is very, very important 
because in this climate of slashing budgets and saying there is 
a lot of fraud, waste, and abuse everywhere, which there is in 
some pockets, but you have got to be careful identifying it or 
you end up cutting the muscle that you need to carry out the 
work that we are requiring.
    General, can you add anything to that? Then I will have one 
question of Mr. Sligh and turn it over to Senator Snowe.
    General Harrison. Yes, Madam Chairman, in fact, as Mr. 
Woods pointed out, contract oversight and the resources to 
carry out that mission within the entire Department of Defense 
has been something that we have been challenged by over a 
period of at least 10 years.
    I think this was borne out in the Gansler Commission that 
came out in 2007 that looked at specifically Army contracting. 
The Department of Defense's ``Grow The Acquisition Workforce 
Initiative'' has put us on the road to help rebuild the 
contract oversight mechanisms within the department.
    The Corps of Engineers has been able to take advantage of 
that initiative to get 110 additional slots to be able to apply 
to contract oversight. So, I think that has been a factor.
    In the particular problem area of the oversight and follow 
up on subcontracting plans from contractors, you know, that has 
been part of the story. But we definitely had a problem in the 
Corps of Engineers. I think we are on the road to fixing that, 
both through leveraging the new electronic eSRS system that 
automates the reporting process and also to focus more and put 
command emphasis on follow-up of these reports.
    So, I think we are on the road to getting that fixed.
    Chair Landrieu. Let me ask you this. How long does a prime 
have to be in business before they can do work with the Corps 
of Engineers?
    The reason I ask is because right after a disaster I 
noticed that there are a lot more companies formed to start 
getting work, you know, from the Federal Government because, of 
course, they anticipate money being spent. Then companies that 
have been in business for a long time actually doing the work 
get passed over.
    Do you know if there is a requirement for somebody to be in 
business even 30 days before the disaster?
    General Harrison. Ma'am, to my knowledge, there is no 
period of time they have to be registered with the CCR.
    Chair Landrieu. I think this Committee should look very, 
very, very carefully at this. I do not know what the other 
members think, but I have real problems with companies that are 
not even in the business. I have problems with a furniture 
company, for instance, that has been in business for 50 years 
deciding overnight maybe that it can now be a levee-building 
company and submit bids to the Corps when there are any number 
of other companies that have been doing levee-building, and I 
think we should pursue that. So, there is no requirement now. I 
did not think there was.
    And finally, you mentioned that the Corps reporting 
requirement for prime contractors to report their subs, we 
talked about that having been improved.
    However, we are going to hear from one of our witnesses 
today that, in their opinion, it is still broken. Is it 
generally accepted practice to require subprimes to certify 
that it has paid their subcontractors? And if so, either yes or 
no or do you even care if these primes pay their subs?
    General Harrison. Ma'am, generally speaking, we focus on 
our prime contractors with whom we have privity of contract. 
There are a few occasions where we can enter into the payment 
of subcontractors where it is a construction contract and they 
are subject to the provisions of the Miller Act.
    However, for service contracts, generally speaking, we 
cannot get involved in that contractual relationship.
    Chair Landrieu. Okay. Let me ask you this. Do you have a 
website where subcontractors who have not been paid by their 
primes can register objections to further contracts being given 
to those primes until they get paid, almost like a lien against 
them?
    Mr. Woods. We do not, no, ma'am.
    Chair Landrieu. Okay. I think we should pursue that 
because, like Angie's list, if you want to hire a plumber you 
go to Angie's list. It is very simple. Technology allows that.
    You look to see the people that have used the service of a 
plumber. They like the service. A lot of people will use the 
plumber. If the plumber did not do a good job, most people will 
not use them.
    It is a very cost-efficient, effective way to try to 
separate the wheat from the sheaf, quality from, you know, 
fraudulent operators.
    So, let me turn it over to Senator Snowe. I think we are on 
the right path, Senator, but I am not sure we are there yet.
    Senator Snowe. I would agree, Chair Landrieu.
    Chair Landrieu. Thank you.
    Senator Snowe. Mr. Sligh, to follow up on the legislation 
that Senator Brown and I are introducing today as one way of 
ensuring predictability and stability as well as consistency in 
funding on disaster related events.
    Now, obviously you cannot always get it on the mark. It is 
a law of averages, but in this case, to provide a 10-year 
average. Can you speak to this question because, as I mentioned 
in my opening statement, obviously you have had to suspend 
certain efforts, due to the lack of funding, in order to 
provide for more immediate relief and the greater necessities 
as a result of a disaster. Also, how important are 
predictability and consistency when you have, on average, $11 
billion set aside for disaster related funds for all the 
agencies, as Chair Landrieu indicated, that cannot just be 
taken out of one agency such as Homeland Security?
    There are a variety of agencies that engage in disaster 
assistance. This would be on average $11 billion. Could you 
speak to that question and how this could help in some 
respects?
    Mr. Sligh. To some degree, ma'am. The financial aspects of 
running the agency is really not my area of responsibility. 
However, having a steady stream of funding is always helpful in 
planning and in execution so that, to the extent that we can 
have a constant stream of funding that can support our efforts 
with our partners, states, locals, and others, I think it is 
obviously beneficial and it obviously makes a lot of sense.
    Again though, that is really not my area of expertise in 
terms of the budget.
    Senator Snowe. I understand that. That would obviously be 
at the other level and certainly OMB and Congress are working 
on designing a budget as part of the budget process.
    Clearly in terms directly affecting your ability to provide 
the relief, both the immediate relief and then, of course, in 
tandem, the relief in beginning the rebuilding process.
    Mr. Sligh. Yes, ma'am.
    Senator Snowe. I was Chair of this Committee during the 
time of Hurricanes Katrina and Rita, so, I certainly understood 
the magnitude of these events and what was required, which was 
so much in the way of recovery.
    It was a very difficult process and we learned a lot from 
it, especially from our perspective. I think the issue that is 
pending on the floor is illustrative of the problems we are 
facing which is to have some kind of consistency and constancy 
with respect to funding so that it goes to the heart of what 
you are attempting to do.
    Mr. Sligh. Yes, ma'am.
    Senator Snowe. That is the issue, to get this all up and 
running now.
    You were mentioning that 40 percent of small businesses 
fail after a disaster. That is a high figure, almost 
staggering. Now, what can we do differently to avert that? Is 
there anything that we can do to mitigate that?
    For example, on this contracting issue which is what I want 
to get back to, this is so frustrating. I do not know how many 
hearings I have sat through on the issue of contracting, and 
the failure of agencies to do their due diligence when it comes 
to fulfilling their contracting responsibilities. It is truly 
frustrating.
    Can any of that help in this instance, particularly in the 
subcontracting requirements with small businesses? What can we 
do to change that, to help reduce the number of failures?
    Mr. Sligh. Well, within FEMA one of the things that we have 
done to help ourselves in that arena of subcontracting, we have 
established what we call DART teams. They are Disaster 
Acquisition Response Teams. Their entire focus is post-award. 
Once a contract is awarded, to make sure that it is 
administered properly and to make sure that the contractors 
live up to the terms and conditions of the contract.
    Prior to this year, we did not have that focus. Our 
contracting officers had both pre- and post-award 
responsibility, meaning they awarded contracts and they had the 
responsibility of doing contract administration.
    We found that that approach did not get us the result that 
we needed. So, we took resources from our pre-award pool of 
people who award contracts, move them over, gave them the sole 
focus of post-award, and these teams which are comprised of 
contracting officers who have had training and experience in 
post-award executing contracts and quality assurance 
specialist.
    They are deployed to the disasters. They take over the 
large major contract post-award activities. They review the 
subcontracting plans. They make sure that the contractors are 
staffing up in accordance with their plans; and when they are 
not, they are working with the contracting officers in 
Washington to take appropriate action with the contractor.
    They also have a focus which is with our local businesses 
in that they actually go out and work with the small local 
businesses to make sure that they are able to, as soon as 
possible, bid on our contract.
    One of the issues that we found is that a lot of the 
businesses do not plan for disasters. Therefore, when the 
disaster occurs, they have no strategy or plan for coming back 
online and being able to provide their services.
    So, one of the focuses that we have in the pre-disaster 
arena is to cause the businesses to start to think about, if I 
had a disaster, what do I do? How do I get my business back 
online?
    Senator Snowe. One question on the issue of payments, and I 
want to get to that in a moment as well with you General 
Harrison. Why are there such delays in payments to businesses?
    I cannot see in this age of technology why we cannot get 
this underway much more quickly, because obviously that could 
spell disaster in and of itself to small businesses just 
hanging on by barely a thread.
    We heard this testimony during the time of Hurricane 
Katrina. We had a series of small businesses come before the 
Committee, primarily from New Orleans, because that is 
predominantly a small business city.
    Why is it that we cannot get this done much more quickly 
and promptly?
    Mr. Sligh. One of the areas that we found was an issue for 
getting contractors paid, especially contractors who have not 
done business with the government before, and this goes to the 
heart of our local small businesses, probably have not done 
business with the Federal Government before.
    To a large extent, it is getting the paperwork right. It is 
submitting the right documentation to allow for payment to be 
made without having to re-submit that documentation.
    Part of the role of these DART teams that we have are to 
work with those small local businesses to help and educate them 
so that when they do submit their invoices, they go through the 
first time and do not get rejected or do not get held up for 
additional information.
    Senator Snowe. General Harrison, there will be a witness 
who will be testifying in the second panel, his name is Dale 
Rentrop with Tiger Tugz. He is a subcontractor to a prime 
contractor, and he was designated as a supply contractor; 
therefore, he was the prime contractor and did not have to have 
a bond.
    He is now out more than $1.4 million. This is a terrible 
issue because what it really does, as he indicates in his 
testimony, is give license to prime contractors to go out of 
business, and these poor small businesses that are doing this 
in good faith and diligence are now left holding the bag and 
they cannot even get reimbursed by the Federal Government for 
legitimate services or materials provided.
    General Harrison. Yes, ma'am. In fact, generally speaking, 
the contractors we do business with and their first-tier subs 
are good contractors.
    On occasion, you know, we run across those actors; and it 
is frustrating when we do not have privity of contract with the 
second or third tier sub. We are not in a position to be able 
to resolve a dispute between a subcontractor and one of his 
lower tier subs like the courts would be able to do. So, it 
puts us in an awkward position.
    Senator Snowe. I think that is a requirement we need to 
change. I think that anybody doing business with the Federal 
Government should be responsible; and the prime contractor, 
they are doing business with the Federal Government. They are 
responsible for everything. They should have to report, 
document and have a bond.
    This is not right, because these are trying times during 
these disaster-related issues. To have a contractor go out of 
business, is going to really deter others from getting 
involved.
    I think that is something we have to really look at very 
carefully and change.
    Thank you.
    Chair Landrieu. Absolutely. Thank you. Senator Brown.
    Senator Brown. Thank you. General, I find it kind of 
bewildering just listening to you testify. Some of these small 
businesses have been in business for generations. They pay 
their taxes. They are incorporated. They know what they are 
doing.
    Yet they cannot apparently complete paperwork to get paid 
by the Federal Government. So, what does that tell me? It tells 
me that there is something wrong with the process of filing a 
claim with the Federal Government. That it is either archaic or 
it does not make sense or it needs to be fixed or streamlined 
or something.
    I hear so much that the paperwork was rejected. Really. 
Why? It is not brain surgery. It just suggests that every 
government entity that deals in contracting needs to do a top 
to bottom streamlining review as to simplifying the paperwork 
so people can, in times of an emergency, have their business, 
they are flying by the seat of their pants anyway just trying 
to provide the service, make sure their families are safe, and 
then we are going to have them spend hours and hours and hours 
filling out paperwork.
    There has got to be an expedited process. That is my first 
suggestion.
    The second thing is that I have been dealing with Senator 
Carper on a lot of the waste, fraud, and abuse. I just got back 
from Afghanistan, contracting with the enemy. The biggest 
problem they are having now is the subs.
    You have people who are there from other countries who are 
now being left because many of the generals who are with U.S. 
corporations have taken their money. They have left the 
theater, and they are leaving these subs to fend for 
themselves.
    It seems to be very similar as to what is happening in 
situations here where you have prime contractors not paying 
their subs and the subs are left holding the bag.
    I would agree with both the Ranking Member and the Chair 
that we need to either have them all have a bond or have a 
certifying payment along the way.
    When they get paid, they have to have some type of 
verification or certification that, in fact, their subs have 
been paid; and if not, they should be barred forever for not 
doing their jobs and paying people.
    Getting specific now, General, new reports say many coastal 
communities in Massachusetts are having trouble with sea walls, 
obviously levees, beach scraping, and a whole host of things 
that the Army Corps has the authority to execute within their 
discretionary functions.
    Yet a lot of it has been frozen because of the backlog at 
headquarters. There always seems to be a backlog at 
headquarters. Sometimes when those projects get fixed, they get 
fixed the same way that they were, and then a big storm comes 
and they are broken again.
    Is there any discussion happening within the Corps that 
attempts to either remedy the backlog with the discretionary 
projects or re-evaluates the projects that are there to try to 
do it better so we do not continue this cycle?
    General Harrison. Senator, honestly, the question of 
prioritizing engineering projects is not really in my area of 
expertise. I would be happy to try to get some additional 
information.
    Senator Brown. Yes, I would like for you to submit it for 
the record, that would be great.
    General Harrison. Yes, sir.
    Chair Landrieu. Without objection.
    Senator Brown. Thank you.
    Mr. Woods I, like others, have been disturbed by the 
reported gaps in DOD and the Corps with regard to subcontracts 
during Katrina as I just mentioned.
    As I said, we deal with this stuff as Ranking Member of the 
Financial Management in HSGAC we deal with it all the time. How 
much would you say is reasonable to expect an agency to be 
familiar with the new online system?
    I ask this because when Katrina hit, all contractors were 
required to use the eSRS system, and I do not believe it really 
happened. Do you think that, given the glaring gaps in 
monitoring the several millions of dollars of contracts during 
Katrina, this was too gradual a phase-in or what?
    So, let us start with that.
    Mr. Woods. Well, you are right, Senator, there was a phase-
in. Agencies across the board were migrating toward the 
electronic subcontractor reporting system environment and that 
took some time, probably too long.
    One of the reasons we identified for the lack of reports is 
not enough use of the eSRS system.
    The indications that we have received from the Department 
of Defense and the Corps, however, indicate significant 
progress in that area.
    The Corps is now fully up and running in terms of using the 
eSRS system and also at the department level we know that they 
have conducted extensive training sessions on the use of eSRS. 
So hopefully that situation is getting better.
    Senator Brown. Has the DOD caught up with that technology 
do you think at this point?
    Mr. Woods. It looks as though they have, sir, yes.
    Senator Brown. Thank you.
    Chair Landrieu. Senator Brown, thank you.
    Senator Hagan.
    Senator Hagan. Thank you, Madam Chairman, and also thanks 
for holding this hearing especially in light of Hurricane Irene 
that has just hit the eastern seaboard.
    Brigadier General Harrison, as part of the Corps of 
Engineers, so much of what affects us in North Carolina is 
dredging, and I was curious as to whether, if this is in your 
area, concerning the amount of funding that we actually give to 
the Corps of Engineers on an annual basis, but I also hear over 
and over again that the number of people who are in the 
business of dredging is also very small, and the number of 
dredges, things like that, this is something that is of concern 
all the time on the coastal areas in North Carolina, and the 
channels.
    General Harrison. Yes, ma'am. In fact, I was in Wilmington 
Monday visiting our district contracting office down there.
    As you know, we have our own dredging capability in the 
Corps of Engineers and also there is a commercial capability 
around the country. Of course, we try to balance what we do 
internally to the Corps of Engineers with what the commercial 
vendor base offers.
    I do not have specifics. Perhaps on your question, if you 
would like more information on the role that the Corps plays 
internally with dredging, I can get you that for the record, 
ma'am.
    Senator Hagan. How many dredges do you all have?
    General Harrison. Well, I do not know the exact number 
either.
    Senator Hagan. Well, all I know is I hear over and over 
again about the need for dredging, and it always seems like 
there is not enough, the backlog, they are in a different spot 
of the country, and it is like the roads, the highway system 
and you cannot operate unless you have deep enough channels and 
the sand out of the way.
    General Harrison. Yes, ma'am.
    Senator Hagan. And it is really an issue.
    Now let me ask another question, Brigadier General 
Harrison. It appears that about 45 percent of total dollars in 
support of the recovery and response to the tornadoes in 
Missouri were awarded to small businesses and that nearly 90 
percent of subcontracted dollars after Katrina and Rita were 
also awarded to small businesses, and I know that with 
Hurricane Irene the recovery and reconstruction efforts are 
underway and ongoing. But according to your testimony, prime 
contractors are required to report weekly for the first 90 days 
of their subcontracting goals.
    Can you estimate how many and how much of the subcontracts 
awarded to the Army Corps in North Carolina have actually gone 
to small businesses? And I know it is very soon to report this.
    General Harrison. Ma'am, actually I do not have that 
information with me. As you said, the information is still 
coming in. I can get you that information as of this week for 
the record, if you like.
    Senator Hagan. That would be great. Thank you.
    We were just talking about the Electronic Subcontracting 
Reporting System, and this would be a question for any of you. 
How is this working now in light of Hurricane Irene as far as 
the electronic reporting?
    Mr. Woods, you were commenting a little bit on it to 
Senator Brown.
    Mr. Woods. I cannot speak to the recent implementation, but 
we do know that both the Corps and the Department of Defense 
generally have made progress since our July 2010 report on 
getting up and running with eSRS reporting.
    Senator Hagan. Brigadier General Harrison, any update from 
your respective?
    General Harrison. Yes, ma'am. Not so much particular to the 
response to Irene but I think eSRS has provided us a tremendous 
tool because, one, it is more real-time, and two, it provides a 
capability at headquarters to be able to better monitor how we 
are following up on our subcontracting plans.
    So, I think that is part of the answer. I think the other 
answer is that we focus on making sure that we follow up on 
these reports.
    Senator Hagan. Mr. Sligh, in your discussion about the 
filling out of the reports, are they updated? Have they been 
updated recently? I hear too that people are concerned about 
the depth, the amount of information. A lot of these businesses 
have been in business and I know that there are seminars on how 
to deal with the Federal Government. But are they that 
complicated? And what can we do about it?
    Mr. Sligh. A lot of information, ma'am, is required and it 
can be, in particular for someone who has not dealt with the 
Federal Government before, a little bit overwhelming.
    I mean, that is one of the reasons why we established the 
teams that we did to actually go out during disasters to help 
people understand what it is they need to be able to provide so 
that we get it right the first time and we do not get this back 
and forth in terms of invoices and those types of things.
    So, it is not necessarily the easiest thing in the world 
for somebody who has not dealt with the Federal Government----
    Senator Hagan. The problem with small businesses, they do 
not have a back room of all the staffers that have the time and 
are being paid to fill out that form. Typically, it is the 
owner who is also managing the project and staying up all night 
to be sure it gets done.
    It seems like maybe we need to look at revising the 
paperwork. And can it be done online?
    Mr. Sligh. Our registration, yes, ma'am.
    Senator Hagan. The paperwork can all be done online?
    Mr. Sligh. Yes, ma'am. And we do run into a problem 
sometimes that the small businesses do not have that capability 
in which we extend our capability to them. They can come in, 
fill out the paperwork and submit it online at our joint field 
offices as opposed to going somewhere else during generally a 
hectic period of time to be able to submit the paperwork.
    Senator Hagan. One of the problems, especially in rural 
areas, they have is a very, very slow dial-up, and that is 
something we obviously are working on, especially with the 
layout of broadband in the lot of our rural areas. But that is 
also a problem.
    It seems to me that we should be looking strictly for 
contracts that are dealing with small businesses and that we 
ought to figure out a way to revise the paperwork so it is at 
least readily understandable without having a bevy of staffers 
working on that.
    Mr. Sligh. Yes, ma'am.
    Chair Landrieu. Thank you, Senator.
    Senator Shaheen, and we are going to try to move to our 
second panel in about five or seven minutes, if we can.
    Senator Shaheen. Thank you, Senator Landrieu and Ranking 
Member Snowe. Thank you both for organizing the hearing today.
    New Hampshire, like so many states in the Northeast, was 
affected by Hurricane Irene. We had roads and bridges washed 
out. We had people lose their businesses and their homes; and 
so, we very much appreciate the effort that is going on through 
the various federal agencies to help the folks who have been 
affected. Thank you all very much for the work that you do.
    Mr. Woods, I came in in the middle of your testimony and so 
I missed part of it, and I just want to make sure I understood 
accurately what you had to say. You were talking about the 
requirement for contractors to submit plans if they had a 
project over $1.5 million. Is that correct?
    Mr. Woods. That is correct.
    Senator Shaheen. Do their plans have to encompass all of 
these subcontractors who are working for them or are these subs 
required to also submit plans?
    Mr. Woods. No. The subcontractors are not required to 
submit plans. This is just at the prime contract level. The 
threshold that I mentioned, the $1.5 million, that is just for 
construction contracts. There is a lower threshold generally. 
But for construction, it is a $1.5 million threshold.
    These plans basically will tell the agency how the 
contractors plan to engage with small businesses, and they are 
required to make their best efforts to comply with those plans, 
and that is why it is so important that they provide the 
reports to the agencies and that the agencies review those 
plans so that they can determine for themselves whether the 
contractors are, in fact, making good-faith efforts to fulfill 
those plans.
    Senator Shaheen. Well, and again, you may have addressed 
this in your testimony before I arrived, but how do we track 
the progress toward ensuring that small businesses get their 
required percentage of the work?
    Mr. Woods. Well, on a government-wide basis, the small 
business administration does that. On a contract by contract 
basis, it is these subcontract reporting reports from the prime 
contractors that are the mechanism for tracking that.
    Senator Shaheen. And so, under the Stafford Act do each of, 
the Army Corps for example, FEMA, Homeland Security, whoever is 
involved in a disaster, do you also track how many small 
businesses get those awards?
    Mr. Woods. That is tracked, yes. My colleagues are shaking 
their heads as confirmation of that.
    Senator Shaheen. Is that information available publicly 
anywhere?
    Mr. Woods. Do you know if eSRS is publicly available?
    General Harrison. I do not know if it is publicly available 
but it is certainly available within the government I would 
imagine. I do not know if it is public access. I would have to 
find out for you, ma'am.
    Senator Shaheen. That would be helpful. I am sure it is 
available to us as members of Congress. As we are trying to 
help communicate with people who are affected by the disaster, 
are there ways that we can let people know about contracting 
opportunities in local communities?
    General Harrison. I can answer that. With regard to the 
Corps of Engineers, we work closely with a lot of our PTACs as 
one way that we make sure that they help us advertise the fact 
that we have requirements, particularly after a natural 
disaster.
    We also have a website in the Corps of Engineers that is 
particularly focused on debris contractors where they can sign 
up and make themselves known to us so that after a natural 
disaster, you know, we can more expeditiously do market 
research and determine the capability within a general area.
    Senator Shaheen. Do you maintain a database of various 
small businesses that are able to do certain work?
    General Harrison. Yes, ma'am. They are able to sign up and 
list their capabilities and we maintain that database. Yes, 
ma'am.
    Senator Shaheen. And again, is that database available to 
the public?
    General Harrison. It is available to the public.
    Senator Shaheen. Thank you.
    Thank you, Madam Chair.
    Chair Landrieu. Thank you. Senator McCaskill, we are going 
to move to the second panel.
    Senator McCaskill. That is great.
    Chair Landrieu. Okay, because I understand you want to 
question the second panel.
    Senator McCaskill. Say a few things.
    Chair Landrieu. Say a few things. Okay.
    Thank you all very much. We are going to follow up, and I 
wish that you all could stay as long as you can to hear some of 
the testimony from the second panel. I think it would be very 
instructive as you seek to do your jobs even better.
    Senator Snowe and I are going to meet in the next couple of 
days to talk about what we have learned, because we really have 
these disasters under way right now in places like Missouri, 
flooding through the Midwest, and now most recently on the East 
Coast.
    We want the very best practices put forward for these 
communities, and we have even learned this morning that there 
potentially could still be some gaps. We are going to work 
very, very diligently and as quickly as we can and we ask you 
to do the same.
    For instance, and the last thing I will say, General, to 
you as you are giving out Corps contracts along the East Coast, 
although it is not a requirement yet from us, you might not 
want to give contracts to people who have never been in 
business and you might want to require some kind of bonding 
provision, just by rule to make sure that these subs are going 
to get paid so we do not see some of the same heartache that we 
have seen down in the Gulf Coast.
    Thank you, and I appreciate your attention.
    If we could move to the second panel and to save time as 
they are coming forward, I would like to go ahead and start the 
introductions. First, Mrs. Terri Bennett is Program Manager of 
the Heartland Procurement Technical Assistance Center (PTAC) in 
Joplin, Missouri. The PTAC currently assists businesses in 21 
counties in southwest Missouri and is the statewide program in 
Kansas. It is the only PTAC in the nation to cross a state line 
other than Native American PTACs. We are looking forward to 
hearing from you, Mrs. Bennett.
    Sid Davis is President and Owner of Big John's Heavy 
Equipment, Inc. Big John's was started in 1955 by his spotter, 
and Sid has run the family business since 1986. He is a former 
Marine officer. I would also note he is a certified Kansas City 
Barbecue Society judge. Thank you. I wish you would have 
brought us some barbecue today, Mr. Davis.
    Next, of course, is Dale Rentrop, Junior, Founder and Owner 
of Tiger Towing, Inc. and Tiger Tugz. He is from Berwick, 
Louisiana, and a second generation tug boat operator. I am 
very, very pleased, Dale, that you could be with us today.
    Finally, Mrs. Mindy Nunez Airhart, Marketing Director of 
Southern Services and Equipment. Her company is in a heavy 
construction, metal fabrication contractor in St. Bernard. She 
is a graduate of Tulane University and has a lot of interesting 
observations and information for us from her experience as her 
parish was completely destroyed after Hurricane Katrina.
    So, Senator McCaskill, do you want to ask the first 
question? We will open the panel.
    Senator McCaskill. I am so proud of the folks that are here 
from Missouri, and I thank you so much, Madam Chair, for giving 
me the opportunity to come in and sit with you today on your 
Committee and the important work you are doing.
    I have to leave at 11:45. So, I just wanted to ask if I 
could put a quick statement on the record right now.
    Chair Landrieu. That would be great, and then that way you 
can leave.
    Senator McCaskill. Then if I have to leave. Hopefully, I 
will not have to and we will get there but if we do.
    Let me just say that the people that you are going to hear 
from today are really important to your work. Particularly, the 
Manager of the Heartland Procurement Technical Assistance 
Center.
    Many people are not familiar with it, I am sure that the 
Chairman and the Ranking Member are, but back in the 1980s 
there was a bill passed in the defense authorization that 
creates these technical assistance centers to help people 
contract with the Federal Government.
    Primarily, this has been in the defense arena because that 
is where there are so many contracting opportunities. But it 
applies across the board in terms of the Federal Government. I 
think you will hear some very powerful testimony from two of 
our many heroes that we have in Joplin, from Teresa Bennett and 
from Sid Davis, both of whom can tell you how it worked in 
there with the technical assistance of the procurement centers 
coming into the area immediately and immediately beginning 
reaching out to FEMA.
    I think Teresa will tell you that FEMA did not reach out to 
her. She reached out to FEMA, but it allowed that capability of 
hooking up contractors that had worked with the Federal 
Government that are locally based that had navigated the very 
difficult terrain that has been referenced already in the 
hearing about how you work with the Federal Government.
    The other thing I want to say on the record is that this is 
a time of great discontent in our country about our government, 
and I think we are naive if we do not acknowledge and talk 
about it.
    I understand there are many reasons why people are cynical 
about the Federal Government and about our work here. But it 
was interesting to me in Joplin that on the heels of the most 
unbelievable tragedy, one that I am sure you can relate to, 
Madam Chairman, but unless you were there in the hours after it 
happened I think it is hard to describe the devastation that 
occurred in this community.
    The loss of life. When you have an entire one third of the 
entire community wiped out and all of the sudden when I go back 
to Joplin, and I will tell you candidly, Joplin is a place 
where I heard a lot of complaints about the Federal Government 
during my time in public office, going back there now and 
listening to the community leaders talk about the value of 
FEMA, the value of SBA, the value of CDBG, the value of EDA, 
the value of the procurement center that is also another 
federal program, it does reassure, I think, people at any 
moment they really need it, and this is not just a bunch of 
payrolls without a purpose.
    There are thousands and thousands of people who work for 
the Federal Government that care very deeply, like Teresa, 
about doing their job well in terms of being there at a time of 
disaster.
    I have been proud of what has been done in Joplin. Most of 
the credit, and I do not want to stop this statement without 
saying, goes to the people of Joplin. The citizens of Joplin 
that came together.
    They got a good assistance from the federal agencies, and I 
think it is a moment that we need to reflect on especially at 
this time of really heightened, heated rhetoric against the 
Federal Government on so many fronts.
    So, thank you for giving me the opportunity to speak. I 
know you will learn from the people from Joplin. I always learn 
from the people of Joplin when I take an opportunity to go to 
Joplin and listen, and I have been proud to try to assist in 
any way I can and we continue to be here for you guys.
    As the Chairman will tell you, the hardest part about any 
recovery is not in the weeks right after, the hardest part is 
making those commitments be real months and months after the 
tragedy has occurred, long after the cameras have cleared.
    So, I am here for the long haul as I know the community of 
Joplin is and thank you, Madam Chairman, very much for giving 
me the opportunity to speak.
    Chair Landrieu. Thank you, Senator McCaskill, I appreciate 
it and your very appropriate remarks.
    Ms. Bennett, why don't we go ahead and start with you?

  STATEMENT OF TERRI BENNETT, PROGRAM MANAGER, HEARTLAND PTAC

    Ms. Bennett. Okay.
    Chair Landrieu. If you could try to limit it to four 
minutes each, I know we gave you five, but let's see what you 
can do and we will try to be generous here as much as we can. 
We do want to get to a time of questions before 12 o'clock. 
Thank you.
    Ms. Bennett. I will read as fast as I can. Chairman 
Landrieu, Senator Snowe, distinguished Senators, thank you for 
the opportunity to testify today----
    Chair Landrieu. If you could pull the mike a little closer. 
All of you have to pull this mike a little closer and kind of 
lean into it.
    Ms. Bennett. Is that better?
    Chair Landrieu. Better.
    Ms. Bennett. I am honored to speak on behalf of the 
Procurement Technical Assistance Center at Missouri Southern 
State University in Joplin, Missouri along with my colleagues 
in 93 PTACs across the country and the small businesses that we 
serve.
    First of all, I would like to express my gratitude and 
appreciation for your leadership and efforts on the half of the 
businesses across the nation.
    Again, I am Terri Bennett and I am Program Manager for 
Heartland PTAC. Our sole purpose, and we are passionate about 
it, is to help businesses become capable government contractors 
to provide the highest quality and best value for the taxpayer 
and create a strong and vibrant economic base for our 
communities.
    Sid Davis with Big John's Heavy Equipment, Incorporated, 
who is also testifying today, happens to be one of our clients. 
We assist small businesses every day, offering training events, 
bid matching, and one-on-one counseling.
    We help them understand government contract and procedures 
and requirements. We guide them through the federal contracting 
registration process and much more.
    We assist the government agencies by locating and educating 
contractors which can provide the products and services that 
they need. As you might imagine, we have been intensely 
involved with the small business participation and disaster 
recovery over the last few months.
    Following such a disaster, awarding the right contracts to 
the right businesses can be daunting for the agency and the 
vendors. Time is short. Requirements are large and diverse. The 
lack of electricity and the phone service make it difficult for 
agencies to contact potential bidders and for the bidders to 
access and respond to solicitations.
    I would like to take just a minute to explain some of our 
activities and illustrate the challenges and some of the 
avenues for addressing them. We helped locate and contact 
appropriate vendors often upon short notice.
    Many of our clients records included cell phone numbers 
which are not accessible to FEMA and the Corps. So we helped 
them reach them. In one instance, we were notified by the Army 
Corps at noon one day about a contract that had to be awarded 
that day to begin work by that evening or the very next 
morning. We were able to contact a number of clients, one of 
whom was awarded a $492,000 contract that afternoon.
    We help businesses secure and expedite registrations. I 
know the first panel talked a lot about CCR. That is exactly 
what we do. We help them with that and we can expedite it for 
them.
    We helped access records for one client whose office, 
including his business records, were destroyed, and we had 
information to help him get his registration up and running 
again.
    We offered our resources, e-mail lists, and community 
forums to advertise solicitations. We provided computer access 
to businesses as they needed it.
    I applaud the Corps and FEMA for their efforts to contract 
with local firms and I am gratified by their willingness to 
work with us to that end.
    Our knowledge of local contractors coupled with the ability 
to assist additional businesses in quickly becoming contract 
ready resulted in significantly more local contract awards than 
would have otherwise been made.
    To date, our clients have reported to us almost $52 million 
in contracts for the disaster recovery. That being said, the 
situation is still far from perfect. As I mentioned earlier, 
many of these solicitations are far too large, diverse, and 
complex for small businesses to address alone.
    The very short turnaround time makes teaming almost 
impossible. In addition, a few major contracts that were 
awarded were canceled after a short time which can be very 
detrimental to small businesses.
    Accurate and timely information on upcoming solicitations 
can still be hard to come by. We would certainly welcome the 
opportunity to work with the agencies to explore how the 
process might be improved further.
    Having lived through the tornado and its aftermath, I have 
a greater appreciation for how difficult it is to make local 
awards after a disaster. But that realization simply 
strengthens my conviction that the PTACs can be a critical 
partner in disaster recovery efforts.
    We are pleased that FEMA and other agencies recognize this 
and hope the future collaborations will be even more 
comprehensive to truly maximize small business participation.
    Our position as established contracting assistance 
resources with deep roots in local communities makes PTACs 
ideal as a central clearinghouse for disaster contracting 
information.
    Particularly in the chaos following a national disaster, 
minimizing confusion and maximizing the flow of accurate 
information is paramount to success.
    Thank you for your time this morning, for your strong 
support of PTACs over the years, but most of all, thank you for 
your unceasing commitment to support our Nation's small 
businesses.
    [The prepared statement of Ms. Bennett follows:]

    [GRAPHIC] [TIFF OMITTED] T3458.022
    
    [GRAPHIC] [TIFF OMITTED] T3458.023
    
    [GRAPHIC] [TIFF OMITTED] T3458.024
    
    [GRAPHIC] [TIFF OMITTED] T3458.025
    
    Chair Landrieu. Thank you, Ms. Bennett.
    Mr. Davis.

STATEMENT OF SID DAVIS, PRESIDENT, BIG JOHN'S HEAVY EQUIPMENT, 
                              INC.

    Mr. Davis. Thank you, Chairwoman Landrieu, and Committee. 
Responding to emergencies in southwest Missouri is nothing new 
for us. One city always reinforces and helps another city, 
people, business. So, what happened on May 22 was just normal 
business down in our part of the country.
    Within minutes after the tornado hit, we immediately went 
out there and started doing recovery, opening roads, looking 
for victims, finding housing, shelter, reinforcing law 
enforcement, getting roads, communications open.
    So, with that as our basic framework, within the first week 
a group of us were selected as the cleanup contractors for the 
city of Joplin, and that is where Terri was making 
recommendations and how we came into the picture.
    The city of Joplin was divided into six areas, and I was 
fortunate and given the opportunity to cleanup the hardest hit 
area. Then, when we get to questions, I could sure add to some 
good stories about how the Federal Government interrelated and 
how they made that work and why we were successful.
    But within that two-month period that we did the cleanup, 
we moved the most product per day just simply because we made a 
commitment to excellence and quality control and work with all 
the federal agencies.
    The best aspect of small business in times of crisis are 
that we can bring our past experiences where we had help and 
support where we did for others as well as ourselves.
    Specifically, everyone who I worked with are just top-
quality people of character. What gave my area some credibility 
was the fact is I relied very heavily upon my experience as a 
Marine officer where I was trained to organize, direct, and 
control, just get in, get it done in the environment.
    We could easily work with FEMA. We could easily work with 
the Army Corps of Engineers. And, as the situation changed, we 
could respond to what their needs are.
    The second reason I think we were successful in southwest 
Missouri was because of our family values that we brought back 
in. I am a second generation in Big John's Heavy Equipment. The 
old-timers who trained us in character and integrity and in 
responsibility, we just stepped up and lived those out and not 
shrank back.
    But because small business has to be profitable every day 
to survive, that is why we are the best to be called on during 
emergencies. This entrepreneurial spirit cannot be duplicated 
by anyone who actually does not have skin in the game.
    And in fact, the folks that come in from out of town, they 
are not as dedicated as we were seeing to that our community 
was put back on its feet.
    Just as I take my responsibility as a Marine offers 
seriously, I took my responsibility as a small business serious 
and we placed our values along with the community's needs and 
that is why we were able to recover and do what we did.
    What the Federal Government provides us small businesses is 
an opportunity to use our existing talents for our community, 
and we have a lot of statistics and when you get to questions 
is that over 50 percent of our schools were destroyed, damaged 
but yet our schools opened up on time.
    We took a major hit in our medical facilities but yet our 
hospitals and medical facilities are open and going. We lost 
over 500 businesses. Within 60 days, over 70 percent of those 
businesses are reestablished and we will have an additional 20 
some percent back on its feet within an additional 30 days.
    So, it is things like this that we brought in in working 
with FEMA, the Army Corps of Engineers, the City of Joplin, and 
the Federal Government as well.
    [The prepared statement of Mr. Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T3458.026
    
    [GRAPHIC] [TIFF OMITTED] T3458.027
    
    Chair Landrieu. Thank you, Mr. Davis, and I am interested, 
very interested in hearing how FEMA worked with you on some of 
the things that they expedited and streamlined for that debris 
removal, et cetera.
    Dale.

   STATEMENT OF DALE RENTROP, JR., PRESIDENT, TIGER TUGZ, LLC

    Mr. Rentrop. Thank you for allowing me to be here today and 
speak with you all. I really appreciate it.
    I am here today to describe my experiences in working with 
the Corps of Engineers two times. First was in 2006. I 
chartered a tugboat to go to work on a Corps project in New 
Orleans.
    And the way we do business in the private sector is if Sid 
wants to hire me he will call me and hire me and I will go to 
work. If I do a bad job, he will fire me.
    But in any case, I have put a tug to work over there and I 
got paid for the first month's worth of work but then the 
second month's worth of work I did not get paid, $120,000.
    Now, this was not my boat. This was Sid's boat. I paid Sid 
for his boat. I took the hit. The job disappeared. The 
corporation disappeared. I found out later the corporation was 
formed 30 days prior to the letting of the contract and now 
they are gone.
    Somewhat of a similar situation is happening now where we 
have a contractor who is not a contractor but is made a 
contractor and he got a $68 million contract from the Corps.
    This contract was fatally flawed from the start. It should 
never have been allowed to proceed. But I was just so proud to 
put my tug boats to work rebuilding the levees around New 
Orleans. It meant so much to me that I would probably have went 
in there blindly, and I guess I did in retrospect.
    But in any case, I will tell you a little bit about it, and 
this is a 15-minute informational package that I am going to 
try to squeeze into four.
    We mobilized the project on January 4 of 2010. Our 
equipment sat there on payroll for approximately 90 days before 
we were instructed to begin the project.
    Now, we were called there for inspection purposes only. We 
sat there truly crewed, full barges, everything ready to go. We 
did not get paid $439,000 and a change.
    We started moving clay on March 6 and we moved all the way 
from March 6 to June 4. I have invoiced a total of $557,000 to 
my contractor. I have been paid $195 and change; the total 
outstanding $311,000.
    The project barges, I do not own barges. I chartered them 
from some people in New Orleans. I currently still owe them 
$38,000. These barges at the end of this project had to be 
cleaned, surveyed, repaired, and return to their owner.
    I was not contractually responsible for that, but as I was 
the charterer of the barges, the responsibility was left to me. 
I still owe those people that clean these barges $133,000, and 
they are from New Orleans.
    I also chartered to inland deck barges in which to put the 
excavators on top of for offloading. We started the operation. 
During the offload operation, the barges were basically damage 
to a point of--anyway they were damaged $214,000 in which the 
owner of the barges looks to me to pay. Excuse me.
    My contractor was terminated on June 3. The prime 
approached me to continue the project. I agreed to continue the 
project and went on a day-rate basis only. You paying me for my 
equipment on a per-day basis.
    At the end of nine days, I requested to get paid because I 
could not pay my captains and deckhands anymore. He refused to 
pay me. I left the job. That cost $149,000.
    The Corps terminated the marine portion of the project on 
or about August 5 of 2010. The project owes Tiger Tugz to date 
$1,400,000. There are also a first-tier sub and a second-tier 
sub that are about at the same level of debt.
    The Corps classified this contract as a supply contract, 
and this is not a supply contract. A supply contract is the 
provision of paper clips or glasses, from my point of view.
    All civil projects and construction projects are bonded. So 
if we do not get paid, we go lien the bond and we have an 
avenue to get paid. There is no bond here. I do not know why it 
was classified as a supply contract. Obviously, they were not 
supplying paper clips. This was a major, major construction 
project. It was worth $68 million. That is what the contract 
was let for.
    The prime contract in this case, like we spoke of earlier, 
is an attorney from North Louisiana. He has never been a 
contractor, does not own a piece of equipment. How could you 
manage a $68 million contract?
    There is a settlement proposal that we put together 
according to Federal Acquisition Regulations, we put it 
together. In fact, my other second-tier subcontractor with me, 
the offloader, submitted a settlement proposal directly to the 
Corps last week and they summarily rejected it.
    So, we are going through the proper procedures but still 
the Corps, and I can go back and talk about it. We have begged 
and pleaded and knocked on doors, and we even had meetings and 
it is a stone wall act. It is a complete stonewall.
    There are procedures that can be followed. But General 
Davis's statement, no, they cannot get involved, they cannot 
get involved. But they can get involved.
    The difference between what the General said and my case is 
that this case involves a termination for the government's 
convenience. It is not a normal circumstance; and under FAR 
49.108-7, it says that the contracting officer may get involved 
to settle problems between the prime and the sub.
    So, it is in writing. It is prefaced by case law. I have it 
here.
    There are not specific regulatory procedures allowing the 
Corps of Engineers to come in and get involved in settling 
these things. And so far to date, the Corps is refusing to do 
so.
    Last in closing, I am way over and I apologize. I thank you 
all for providing me this forum and this opportunity to voice 
what happens to small business and this happens in south 
Louisiana a lot, and I do not know why.
    Perhaps this testimony can be a catalyst that can lead to 
more small business contracting opportunities with our 
government and bring about a change in the Corps practices 
regarding the contracting of small businesses.
    Just right quick before I end, when I took this project, I 
had four tugs and employed about 32 people. I had my fifth tug, 
brand-new tug being built. I was going to employ six to eight 
more people. That would have brought me up to 38 people.
    At present, and in large part due to this contract, I have 
three tugs and I work 16 people because I am having to 
liquidate my assets just to stay in business and to pay the 
people I owe. Like I mentioned earlier, I owe from this project 
and it is a total of $693,000 that I owe in the process of 
executing my work for the government.
    And I brought along two examples of what happens when you 
cannot pay. Two lawsuits. I am being sued professionally and 
personally. And I thank you all very much.
    [The prepared statement of Mr. Rentrop follows:]

    [GRAPHIC] [TIFF OMITTED] T3458.028
    
    [GRAPHIC] [TIFF OMITTED] T3458.029
    
    [GRAPHIC] [TIFF OMITTED] T3458.030
    
    [GRAPHIC] [TIFF OMITTED] T3458.031
    
    Chair Landrieu. Mr. Rentrop, we are so sorry for what has 
happened here, and Senator Snowe and I are going to do 
everything we can to not only fix your situation as quickly as 
we can do but to make sure this never happens again to 
legitimate contractors such as yourself doing more than an 
honest days work, having legitimately been in business doing 
work that is desperately needed.
    It is a shame and a tragedy, and I personally am going to 
get involved to help you with your situation and any others 
similarly situated. I am aware of a few others, actually a 
dozen or more contractors, while the Corps is listening, and 
while FEMA is listening, out of Livingston Parish that do not 
have the amount of money on the line that you do, were engaged 
in different kind of work.
    It was a debris removal contract as opposed to a 
construction, levee construction contract. But I bet in my 
office alone I have a half a dozen sort of similar situations. 
We are going to work through each one, and we are going to see 
what the law allows and what the agency will do and absolutely 
see why legal actions can be brought against a prime contractor 
that has obviously not operated in good faith.
    Go ahead, Ms. Nunez Airhart.

   STATEMENT OF MINDY NUNEZ AIRHART, MARKETING DIRECTOR AND 
 ASSISTANT TO THE PRESIDENT, SOUTHERN SERVICES AND EQUIPMENT, 
                              INC.

    Ms. Nunez Airhart. Good morning, Chairwoman Landrieu, 
Ranking Member Snowe, and distinguished members of the 
Committee.
    My story is different but I still think it is important as 
well. My family owns a heavy construction and metal fabrication 
company in St. Bernard Parish. In 2005 our parish was decimated 
in the waters caused by Hurricane Katrina and the resulting 
failure of the federal levee protection system.
    My parents, myself, and every single one of our employees 
lost their homes. Our offices and our workshop were destroyed, 
and we lost about $1 million in machinery.
    Since then, our family has persevered and has rebuilt our 
entire business with help from the Federal Government.
    Making the decision to reopen our business in devastated 
St. Bernard Parish was not an easy one but it was the only 
option that we felt that we had. We did not know that the 
government would become our biggest customers in the years to 
come.
    Before the flood, our company was certified in the SBA's 
8(a) program for disadvantaged companies. After Katrina's 
landfall, the Corps of Engineers was able to sole-source 
emergency construction contracts to our company for the 
rebuilding effort. As the Corps personnel learned that our 
company performed tasks on time and on budget, we began to get 
a larger share of the hurricane recovery contracts.
    Although the 8(a) program is not designed to funnel work to 
small businesses in disasters, it certainly had its advantages 
for both our company and the Corps. They were able to quickly 
sole-source these contracts to capable small businesses without 
the delay of putting them up for competitive bid. This was 
especially important for the type of emergency projects crucial 
to New Orleans after the flood.
    However, federal regulations need to be re-examined 
regarding the SBA guidelines for 8(a) businesses in the event 
of a disaster. After catastrophes like Hurricane Katrina, 
government contracts are often the only work available to open 
and functioning 8(a) businesses.
    In our case out of over 100 clients, only one was open 
after the storm. Therefore, the majority of our revenue was 
earned from emergency government contracts. The unintended 
result of this was that we found ourselves with a 
disproportionate mix of revenue from the government which is 
prohibited by the SBA in that program. We were penalized for 
this by being deemed ineligible for sole-source contracts.
    We would like to propose that 8(a) companies located in 
devastated areas whose employees are also victims of the 
disaster be given a waiver for the revenue mix requirement for 
the remainder of their 8(a) term. This would ensure these 
businesses could continue fulfilling an important role in 
rebuilding their own communities and employing their own local 
workers who are also affected by that disaster.
    Furthermore, the most important thing the U.S. Government 
can do to spur the economy in these communities is to forgive 
commercial SBA loans. In our case, we used our loan to buy new 
machinery, new equipment, office furniture, computers. This 
loan must be repaid, and to have to make a loan to repurchase 
everything that was already paid for before the storm, is 
financially devastating.
    The $6000 monthly note on our SBA loan is a huge factor in 
the financial health of our company. On top of the astronomical 
taxes small businesses already pay, these loan payments are an 
incredible burden that we did not factor into our business 
plan. To forgive commercial SBA loans relating to the failure 
of the Federal levee system would not only be an ethical deed, 
but a smart economic move as well. It would spur business and 
job growth in those areas.
    In summary, it is important to note that while the 
government is vital to helping communities recover after 
disasters, the American small business owner will use their own 
blood, sweat, and tears to rebuild.
    Our story is not unique. It unfolded thousands of times 
throughout the Gulf Coast region and continues today. It was 
through hard work, persistence, and dedication of the people of 
southeast Louisiana, people like our family, that small 
businesses were able to return after the storm and become 
stronger and more successful.
    We only ask that the government be considerate and fair in 
realizing that small business owners carry a heavy burden under 
normal circumstances and deserve a helping hand while 
rebuilding their communities after a disaster. Thank you.
    [The prepared statement of Ms. Nunez Airhart follows:]

    [GRAPHIC] [TIFF OMITTED] T3458.032
    
    [GRAPHIC] [TIFF OMITTED] T3458.033
    
    [GRAPHIC] [TIFF OMITTED] T3458.034
    
    [GRAPHIC] [TIFF OMITTED] T3458.035
    
    [GRAPHIC] [TIFF OMITTED] T3458.036
    
    [GRAPHIC] [TIFF OMITTED] T3458.037
    
    [GRAPHIC] [TIFF OMITTED] T3458.038
    
    Chair Landrieu. Thank you. Your testimony, all four of you, 
has been terrific, very specific and clear, and I think we are 
going to be able to use a lot of what you said to beef up our 
efforts.
    So, let me just ask you each and then I will turn it over 
to Senator Snowe. Is there anything else that each of you would 
like to say for a minute to just either reemphasize a specific 
suggestion that you have that you think would go a long way in 
making sure that small businesses in areas that have been 
affected by disasters are included in that recovery effort 
under the contracting provisions with the Federal Government 
and is there anything else that you just would like to 
underline or emphasize, starting with you, Mrs. Bennett?
    Ms. Bennett. Thank you. I would like to emphasize, of 
course, what I do know that PTACs could help in a disaster. We 
are right there. We know the small businesses and the local 
businesses that can help in such a disaster, and that is what 
we did.
    We would like to work more with the Federal Government 
agencies in trying to help them find those businesses even more 
than what we do. I did some research, and I wanted to find the 
right person at FEMA who knew who to contact that was going to 
be in Joplin doing the work that needed to be done. I knew it 
is much better than to just leave a message with someone who 
does not know anything because we did not have time to wait.
    Chair Landrieu. But you reached out to FEMA. They did not 
try to find you?
    Ms. Bennett. Not that I know of.
    Chair Landrieu. That is something that we need to do.
    Ms. Bennett. I did reach out and found them. And then it 
was the next day, though, that they did return my phone call 
and we started working together.
    Chair Landrieu. Mr. Davis.
    Mr. Davis. In the questions you asked the preceding panel, 
a lot of the things I physically observed and lived through. 
For example, most of 8(a)s, WBAs, and DBAs were not qualified. 
When they would contact me for work in my strong period, they 
were just a name and one individual. They did not have 
companies. They would go to work for us.
    Chair Landrieu. Were they local 8(a)s that contacted you or 
people from all over the country?
    Mr. Davis. Both.
    Chair Landrieu. And you did not find that they were 
qualified? That is not what Mindy testified. She was obviously 
a qualified 8(a) and did good work, and I did not want you to 
misinterpret what I said.
    I said there are contractors out there that are not 
qualified. I did not say they were 8(a) or not 8(a). I am not 
trying to make a judgment about that. I just said there are 
obviously contractors that get work that are not qualified, 
whether they are large, in this case they had to be 
relatively--well, I do not know. The $68 million contract is 
not a small contract. It is not $1.5 million. It is not $5 
million. It is $68 million.
    But nonetheless, you were contacted by some companies that 
were 8(a)s or women-owned businesses that you thought were not 
qualified, and so, you did not include them in your bids.
    Mr. Davis. Well, in order to meet the requirement, I sort 
of knew a lot of folks and I found a lot of folks that were 
just simply titles.
    Chair Landrieu. Oh, that were trying, just newly formed or 
et cetera, et cetera, and they were not really in the business. 
Right. That is what I said.
    Mr. Davis. Right, that is what you were talking about 
earlier, and that is something I had to sort through very 
diligently in order to accomplish and put together a group that 
could actually to the work.
    The other thing I would like to emphasize is what Dale here 
was talking about on his side is that we have got to be very 
careful, as small businesses, who we go to work for as prime 
contractors because some of them just have a history of poor 
character and financial things that are not correct.
    And one of the clauses that those--and I do not know if you 
call them predatory prime contractors is that they put clauses 
in their contract that says that if you do not finish your work 
assigned, they do not have to pay you.
    So, what they will do is they will move, they will get you 
started, and then they will move something or they will take 
work away from you and just force you to move away, and then 
they say I do not have to pay you.
    Chair Landrieu. The predatory primes we need to be focused 
on. Dale?
    Mr. Rentrop. Yeah, just to add on to what he said. That is 
exactly what goes on because they move on from your subcontract 
and they find somebody else which is what happened in my 
instance. They moved on from me to the next one. They kept in 
the contract, and they just keep the Ponzi going.
    Just by way of point, the tug company that took my place 
lasted two weeks and it sank four barges full of earth and 
clay. That is just the way it goes.
    But just to further that, you know, I mean, that is what we 
have been given is the same, we cannot get involved, we cannot 
get involved in, we cannot get involved in, we cannot get 
involved in.
    And the more we look, and I am a tug boat operator. Last 
week, I was in an engine room changing out a main engine. So, 
we do not get involved in this. But there are ways they can get 
involved, and the more I look in the FAR and the CFRs it is 
right here.
    You can get involved in. So that the act of saying no, we 
cannot and just stopping it right there, I mean, we have been 
doing this, we have been going after this for a year.
    Chair Landrieu. We promise you, we are involved today, and 
we will help you. And I thank you and I would love to see you 
right after the hearing if we could for a minute.
    Ms. Airhart, is there anything else you want to add?
    Ms. Nunez Airhart. I do. In addition to my specific 
recommendations in my testimony, I want to state for the record 
that we have had nothing but good experiences with the Corps 
and good experiences with getting paid, and getting paid on 
time.
    They usually, in most instances, pay us within 14 business 
days because we are a small business. Now, we do know how to 
complete the paperwork so I guess that is a part of it.
    I also want to state for the record that we have had 
nothing but praise for the Louisiana PTAC which has helped us 
tremendously, Mr. Bob Dempsey specifically.
    In the earlier panel, you mentioned that maybe we should 
have more requirements for bonding. While I certainly agree 
with that, I just want to let you know that it is very hard for 
a small business to get bonding. You have to have money to get 
bonding. So, if you do not have any money, you cannot get a 
bond.
    It is sort of a Catch-22. We were lucky in our experiences 
right after the storm, we did not have bonding experience 
capability before the storm. After the storm, we found a large 
construction company that acted as a mentor. They introduced us 
to their bonding company, and eventually we did get bonding, 
and that is how we grew. But it is really hard for a small 
company to get bonding, especially if you do not have money in 
the bank.
    I agree with your thoughts that the government needs to 
maybe do some regulations to where you can get involved in the 
second and third tier subcontracts because currently exactly 
they cannot get involved in but I think that is because of the 
way the law is written.
    I have one third-tier contractor right now who is not 
getting paid by his second-tier contractor on my contract, and 
there is nothing I can do about it, not one thing. And I feel 
very bad for this man because he did the work, and it is not 
fair.
    But I paid the second the guy. The second guy did not pay 
the third guy. There is nothing I can do about it.
    I also agree that there should be a requirement that 
businesses have to be in business for a certain period of time 
before they can be awarded disaster contracts.
    That is it.
    Chair Landrieu. Senator Snowe.
    Senator Snowe. Thank you, Chair Landrieu, and I want to 
thank each and every one of you. I know you all have shared 
some extraordinary stories of perseverance and persistence and 
courage in the face of tremendous adversity and physical 
destruction in your respective communities and triumphed over 
tragedy.
    So, I thank each and every one of you for your 
contributions and the role that you have played. I am sorry, 
and I regret the hardships that you have endured. Mr. Rentrop, 
and I will certainly work with the Chair to see what we can do 
to resolve this terrible situation for you that should never 
have occurred.
    We have learned a lot from it. In the mean time, to resolve 
your specific situation which I know has to be an exceptional 
burden, we want to help you out in that regard.
    Ms. Bennett, you were mentioning, and I think the 
Procurement Technical Assistance Centers, the PTACs, do great 
work and obviously they did in this case in Joplin, Missouri, 
that we all saw the horrendous devastation that unfolded in 
Missouri and specifically in Joplin.
    I think it is absolutely remarkable that 50 percent of the 
schools were destroyed and yet that they opened on time. That 
is just an amazing story.
    You suggested that PTAC should be a disaster contracting 
clearinghouse for information. Are you making that 
recommendation?
    Ms. Bennett. I think that the PTACs could be very helpful 
in helping businesses understand what is needed by the Federal 
Government, and also helping the Federal Government get the 
message out to the small businesses.
    You know, we do counsel them one-on-one and we can help 
them understand information. We also have a network throughout 
the country of PTACs where we are all connected. We can talk to 
other PTACs. And Maine and Louisiana have very good PTACs as 
well, and I think it could be beneficial for all involved to 
have the PTACs in there a little more tighter and helping make 
sure that the disasters are taken care of the best we can with 
small businesses.
    Senator Snowe. Yes. I think that is an excellent idea, 
because it is basically a clearinghouse for all of that 
information. You can go to one location, one resource for all 
of that information that is required, especially during a 
disaster.
    Even having a data bank of, you know, registered vendors in 
communities in the event that there is a disaster. Again, 
getting back to some of the issues that Mr. Rentrop has 
confronted.
    And, Mr. Davis, you recognized, I gather, that some of 
these contractors just would not cut the mustard, as we would 
say in Maine. But you recognized that at the outset from their 
applications which makes me wonder why the Federal Government 
did not, in this case with Mr. Rentrop and a prime contractor, 
because you recognized that some just would not work. Obviously 
they had not been in the business. It was obviously temporary.
    Mr. Davis. Well, Senator, I have got an opinion and that is 
it is all based on money. In our case, we were doing a good 
job. We had carried 80 percent of the load of the cleanup and 
then they decided that what we were doing needed to be rebid. 
So, they set us off to the side for another set of contractors 
who would go to work. So, it is all based on money.
    Chair Landrieu. But you were local in Joplin?
    Mr. Davis. Yes, ma'am.
    Chair Landrieu. They set you aside because you were either 
too big or they wanted to give other people an opportunity or 
what was it?
    Mr. Davis. No. They said we were in violation of the 
Stafford Act, that we were an emergency response appointed to 
get in and get it done through Phillips Jordan, which was my 
prime contractor. And then, the Army Corps of Engineers came in 
and said that, because of the Stafford Act, they were required 
to rebid our project.
    So, our portion of it came to a close and they brought new 
contractors in.
    Chair Landrieu. I think I can understand that the Stafford 
Act may say in the early 30 or 60 days in an emergency you can 
issue contracts without bids, but at a certain point you have 
to bid the work.
    You would understand that for protection of the taxpayer 
that the taxpayers do not want to over pay. They might have to 
initially but I think the idea is that you would have to bid 
the work. So when you rebid the work, you were not awarded the 
contract. Is that what you are saying?
    Mr. Davis. Well, the type of contractor that Dale is 
talking about here were the people that were courting us, and 
it did not take very long after going on line and finding out 
their history to realize that I did not want anything to do 
with them.
    I would not bid with them. I just quietly went off to the 
side.
    Chair Landrieu. Okay. Dale, do you want to add anything?
    Mr. Rentrop. Nothing I can think of. I think Sid covers it 
pretty well. You see that there is a climate of disaster 
chasers. Mr. Sid operates a business, and so do you. A lot of 
times we just do not have the time or even the wherewithal. The 
first time I had ever heard of a CCR was yesterday, and it kind 
of shocked somebody.
    It is kind of hard because we are out there bidding 
projects and running tugs all over the southern United States 
and they are complicated just like yours is, and we do not know 
the opportunities are even there and even after.
    But we really have to be careful who we work for. You know, 
there are a lot of predatory primes out there. This is my 
second one in two tries.
    Senator Snowe. Thank you.
    Chair Landrieu. Thank you all so much. The meeting is 
adjourned and we appreciate it. The record will stay open for 
two weeks if anybody wants to submit any additional 
information. Thank you.
    [Whereupon, at 12:05 p.m., the Committee was adjourned.]

                      APPENDIX MATERIAL SUBMITTED

[GRAPHIC] [TIFF OMITTED] T3458.039

[GRAPHIC] [TIFF OMITTED] T3458.040

[GRAPHIC] [TIFF OMITTED] T3458.041

[GRAPHIC] [TIFF OMITTED] T3458.042

[GRAPHIC] [TIFF OMITTED] T3458.043

[GRAPHIC] [TIFF OMITTED] T3458.044

[GRAPHIC] [TIFF OMITTED] T3458.045

[GRAPHIC] [TIFF OMITTED] T3458.046

[GRAPHIC] [TIFF OMITTED] T3458.047

[GRAPHIC] [TIFF OMITTED] T3458.048

[GRAPHIC] [TIFF OMITTED] T3458.049

[GRAPHIC] [TIFF OMITTED] T3458.050

[GRAPHIC] [TIFF OMITTED] T3458.051

[GRAPHIC] [TIFF OMITTED] T3458.052

[GRAPHIC] [TIFF OMITTED] T3458.053

[GRAPHIC] [TIFF OMITTED] T3458.054

[GRAPHIC] [TIFF OMITTED] T3458.055

[GRAPHIC] [TIFF OMITTED] T3458.056

[GRAPHIC] [TIFF OMITTED] T3458.057

[GRAPHIC] [TIFF OMITTED] T3458.058

[GRAPHIC] [TIFF OMITTED] T3458.059

[GRAPHIC] [TIFF OMITTED] T3458.060

[GRAPHIC] [TIFF OMITTED] T3458.061

[GRAPHIC] [TIFF OMITTED] T3458.062

[GRAPHIC] [TIFF OMITTED] T3458.063

[GRAPHIC] [TIFF OMITTED] T3458.064

[GRAPHIC] [TIFF OMITTED] T3458.065

[GRAPHIC] [TIFF OMITTED] T3458.066

[GRAPHIC] [TIFF OMITTED] T3458.067

[GRAPHIC] [TIFF OMITTED] T3458.068

[GRAPHIC] [TIFF OMITTED] T3458.069

[GRAPHIC] [TIFF OMITTED] T3458.070

[GRAPHIC] [TIFF OMITTED] T3458.071

[GRAPHIC] [TIFF OMITTED] T3458.072

[GRAPHIC] [TIFF OMITTED] T3458.073

[GRAPHIC] [TIFF OMITTED] T3458.076

[GRAPHIC] [TIFF OMITTED] T3458.077

[GRAPHIC] [TIFF OMITTED] T3458.078

[GRAPHIC] [TIFF OMITTED] T3458.079

[GRAPHIC] [TIFF OMITTED] T3458.080

[GRAPHIC] [TIFF OMITTED] T3458.081

[GRAPHIC] [TIFF OMITTED] T3458.082

[GRAPHIC] [TIFF OMITTED] T3458.083

  

                                  
