[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
MARKUP OF: H.R. 4093, H.R. 4094, H.R. 2751, H.R. 2882, H.R.
776, H.R. 4121, H.R. 2452
=======================================================================
MARKUP
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MARKUP HELD
MARCH 5, 2014
__________
[GRAPHIC] [TIFF OMITTED]
Small Business Committee Document Number 113-056
Available via the GPO Website: www.fdsys.gov
________
U.S. GOVERNMENT PUBLISHING OFFICE
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HOUSE COMMITTEE ON SMALL BUSINESS
SAM GRAVES, Missouri, Chairman
STEVE CHABOT, Ohio
STEVE KING, Iowa
MIKE COFFMAN, Colorado
BLAINE LUETKEMEYER, Missouri
MICK MULVANEY, South Carolina
SCOTT TIPTON, Colorado
JAIME HERRERA BEUTLER, Washington
RICHARD HANNA, New York
TIM HUELSKAMP, Kansas
DAVID SCHWEIKERT, Arizona
KERRY BENTIVOLIO, Michigan
CHRIS COLLINS, New York
TOM RICE, South Carolina
NYDIA VELAAZQUEZ, New York, Ranking Member
KURT SCHRADER, Oregon
YVETTE CLARKE, New York
JUDY CHU, California
JANICE HAHN, California
DONALD PAYNE, JR., New Jersey
GRACE MENG, New York
BRAD SCHNEIDER, Illinois
RON BARBER, Arizona
ANN MCLANE KUSTER, New Hampshire
PATRICK MURPHY, Florida
Lori Salley, Staff Director
Paul Sass, Deputy Staff Director
Barry Pineles, Chief Counsel
Michael Day, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Sam Graves.................................................. 1
Hon. Nydia Velaazquez............................................ 2
APPENDIX
Additional Material for the Record:
The Associated General Contractors of America................ 40
The American Legion.......................................... 41
The American Institute of Architects......................... 42
The American Subcontractors Association, Inc................. 44
The American Society of Civil Engineers (ASCE)............... 46
Independent Electrical Contractors (IEC)..................... 47
Maralina Corporation......................................... 49
Minority Business RoundTable (MBRT).......................... 51
NORBIC....................................................... 55
The Surety & Fidelity Association of America (SFAA).......... 56
Veterans' Entrepreneurship Task Force (VET-Force)............ 63
Women Impacting Public Policy (WIPP)......................... 65
H.R. 4093, ``Greater Opportunities for Small Business Act of
2014''..................................................... 66
H.R. 4094, ``Contracting Data and Bundling Accountability Act
of 2014''.................................................. 68
H.R. 2751, ``Commonsense Construction Contracting Act of
2013''..................................................... 74
H.R. 2882, ``Improving Opportunities for Service-Disabled
Veteran-Owned Small Businesses Act of 2013''............... 77
H.R. 776, ``Security in Bonding Act of 2013''................ 84
H.R. 4121, ``Small Business Development Centers Improvement
Act of 2014''.............................................. 86
H.R. 2452, ``Women's Procurement Program Equalization Act of
2013''..................................................... 92
Amendment to H.R. 4093 Offered by Ms. Chu of California...... 96
Amendment to H.R. 4094 Offered by Ms. Chu of California...... 97
Amendment to the Amendment in the Nature of a Substitute to
H.R. 2882 Offered by Ms. Kuster of New Hampshire........... 98
Amendment to the Amendment in the Nature of a Substitute to
H.R. 2882 Offered by Ms. Hahn of California................ 99
Amendment to the Amendment in the Nature of a Substitute to
H.R. 2882 Offered by Ms. Velaazquez of New York............ 100
Amendment to H.R. 4121 Offered by Mr. Murphy of Florida...... 101
Amendment to H.R. 4121 Offered by Mr. Payne of New Jersey.... 103
MARKUP OF: H.R. 4093, ``GREATER OPPORTUNITIES FOR SMALL
BUSINESS ACT OF 2014'' H.R. 4094, ``CONTRACTING DATA AND
BUNDLING ACCOUNTABILITY ACT OF 2014'' H.R. 2751, ``COMMONSENSE
CONSTRUCTION CONTRACTING ACT OF 2013'' H.R. 2882, ``IMPROVING
OPPORTUNITIES FOR SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESSES ACT
OF 2013'' H.R. 776, ``SECURITY IN BONDING ACT OF 2013''
H.R. 4121, ``SMALL BUSINESS DEVELOPMENT CENTERS IMPROVEMENT
ACT OF 2014'' H.R. 2452, ``WOMEN'S PROCUREMENT PROGRAM
EQUALIZATION ACT OF 2013''
----------
WEDNESDAY, MARCH 5, 2014
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 1:00 p.m., in Room
2360, Rayburn House Office Building. Hon. Sam Graves [chairman
of the Committee] presiding.
Present: Representatives Graves, Chabot, Coffman,
Luetkemeyer, Mulvaney, Tipton, Herrera Beutler, Hanna,
Huelskamp, Schweikert, Bentivolio, Collins, Rice, Velaazquez,
Schrader, Clarke, Chu, Hahn, Payne, Meng, Barber, McLane
Kuster, and Murphy.
Chairman GRAVES. We will go ahead and call the meeting to
order and get everybody in. We have got a vote at approximately
1:15, which we will have to postpone or at least we will have
to recess for a short period of time during the markup. But
with that we will just kind of play it by ear.
Today, what we are going to be doing, we are marking up
several bills. The Federal Government routinely spends
approximately half a trillion dollars through prime contracts
each and every year, and surely that small businesses can
compete for these contracts offers several benefits. One,
business growth. Another, job creation. Greater competition,
lower prices, and innovation. And over the past four years I
have made it a priority to enact some reforms to increase small
businesses' ability to compete in the federal marketplace, and
I am proud of some of our legislative accomplishments.
In the 112th Congress, the Committee reported out 11
contracting reform bills, many of which are now law, and I
believe that through those efforts, the legislation we passed
last year and the bills that we are going to mark up today, it
is going to improve the ability of small contractors to
successfully compete.
We focused on a lot of what I will call the 3 C's--clarity,
competition, and consequences. In terms of clarity, our efforts
ensure that small business contracting laws are understandable,
comprehensive, and they promote transparency, and to that end
we have passed reforms addressing and improving the roles of
small business advocates, the process for determining which
firms are small, the way SBA reports on goals, the way the 13
mentor-proteegee programs interact, the way small business team
on contracts, and the rules around suspension and debarment.
Further, together we have helped small businesses compete.
We have required that all acquisition plans address the use of
small businesses. We have increased the role of small business
advocates in the acquisition planning process, and we have
expanded the number of contracts counted towards the small
business goals, which means more opportunities for small
businesses.
And finally, we worked on consequences, which are holding
businesses and agencies responsible. And to that end, we have
made it easier to suspend and debar bad actors. We have also
imposed penalties on firms acting as fronts for large
businesses in an attempt to misuse the SBA's contracting
programs. We have required agencies to create mitigation plans
when they fail to meet their goals. We have held large
businesses accountable for their subcontracting plans, and we
have tied senior executive bonuses to small business goals.
Today, we are going to continue our work on clarity,
competition, and consequences, and we will be marking up five
contracting bills introduced by the Majority-Plus Contracting
Bill and a bill addressing Small Business Development Centers,
which is introduced by the ranking member. I believe that this
is a very collaborative effort and is a testament to the
importance of government contracting for small businesses and
it is a tribute, I believe, to the bipartisan nature of the
Committee.
And while we will briefly discuss each of the bills
individually before we mark it up, I want to emphasize how
important these issues are to both small businesses and the
taxpayers. When small businesses compete for these contracts
something important happens and that is jobs. Jobs are created.
Innovation occurs, competition brings down prices, and in
short, when small businesses win, I think that we all win.
I now recognize Ranking Member Velaazquez for her opening
statement.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
This committee has worked well together on procurement
issues, exposing fraud, waste, and abuse and improving how SBA
functions. It is my hope that today's discussion will further
that tradition. For small businesses, federal agencies can be a
great client. Last year, the federal government spent $461
billion purchasing goods and services, everything from
paperclips, to airplanes, to landscaping, to construction are
required throughout the public sector, and small companies are
vital to meeting these needs.
Congress, and this committee in particular, have long
recognized the benefits that stem from small business
participation in the federal marketplace, helping small firms
secure these opportunities foster job growth, help small
businesses grow into larger ones, and create greater overall
economic prosperity.
At the same time when entrepreneurs are enlisted to meet
government's procurement needs, American taxpayers' dollars are
well spent. Small businesses provide excellent services and
quality products at competitive prices. Moreover, bringing
additional small companies into the procurement fold increases
competition, raising the quality of services and products
available to the government.
Given the benefits of having government do business with
small enterprises, it is important that federal agencies meet
their contacting goals. Unfortunately, this has not happened.
The 23 percent small business contracting goal has not been met
in many years, although it appears that objective may finally
be met this year. Similar initiatives aimed at helping women-
owned businesses have fallen short. The Service-Disabled
Veteran-Owned Small Business program has also not kept pace.
The SBA is responsible for ensuring other agencies are
proactively working to meet their small business contracting
goals.
Through hearings, oversight, and investigations, this
committee has carefully examined why the SBA has repeatedly
failed in this regard. Our efforts also help identify possible
solutions. It is my hope that the committee can work together
in crafting legislation that will make these programs function
more effectively.
We also must not ignore other elements of the SBA
portfolio. At a time when our economy is still struggling with
job creation, entrepreneurship is vital. As such, we must
endeavor to ensure SBA's entrepreneurial development programs
remain up-to-date, providing the tools that help Americans
launch new businesses. I look forward to that discussion today
as well.
Mr. Chairman, our economy remains in a difficult spot. We
all acknowledge that. While progress has been made, we have a
long way to go. Congress will be remiss to ignore the absolute
vital role small businesses will play in restoring our nation's
prosperity. Today's actions should provide a starting point in
addressing some of the policy obstacles that are impeding small
business growth.
I thank the Chairman again, and I yield back.
Chairman GRAVES. Thank you.
Do any other members wish to be recognized for the purpose
of an opening statement?
Seeing none, we will move on.
We are going to be marking up seven bills today, and we are
going to do it in the order that they were noticed.
H.R. 4093
The first bill is H.R. 4093, the Greater Opportunities for
Small Business Act 2014, which I did introduce with Mr. Hanna,
Ms. Herrera Beutler, and Mr. Murphy. This bill does three
things. What it does is raise the Federal Government small
business prime contracting goal from 23 percent to 25 percent.
It raises the subcontracting goal from 35.9 to 40 percent and
ensures that only prime contracts are counted towards the prime
contracting goal. Last year, the government spent $460 billion
through prime contracts, and the preliminary data shows for the
first time in seven years, the percentage awarded to small
businesses exceeded 23 percent, and I believe this demonstrates
that the tools we have given agencies to meet the small
business goals and the focus we are placing on federal
contracting, I think it is working.
Given that federal spending failed by $40 billion during
the same period, it also illustrates that doing more with small
businesses is good for taxpayers. Thus, raising the goals will
help small businesses compete. It is going to help taxpayers,
and it is going to help the government operate more
efficiently. And I urge support for the bill.
I recognize Ranking Member Velaazquez for her remarks on
4093.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
I support this bill. It would be difficult to overstate the
significance of the federal marketplace to the small business
sector. As of now, it appears that in 2013, small firms were
awarded $83.2 billion in federal contracts. While these numbers
could see revision before SBA releases its annual scorecard,
this preliminary data suggests that for the first time since
2005, the federal government may finally reach its goal of
awarding 23 percent of contracts to small firms. While this
constitutes progress, it is well past due and it is certainly
not enough. Let us remember, every single year federal agencies
miss their contracting goals amounts to billions of dollars in
lost revenue for entrepreneurs.
In that regard, the issue raised by H.R. 4093, raising the
federal government's statutory small business procurement goal,
is a timely one. The bill also increases the government's
subcontracting goals and it eliminates a loophole that has
inhibited small business participation in the Department of
Energy contracts. Given the real tangible benefit that stems
from using small businesses for federal projects, it makes
perfect sense to discuss raising this threshold. Small
businesses deserve better. It is my hope that the committee and
Congress will work to ensure agencies do more to incorporate
entrepreneurs into the procurement effort. It is a win-win for
government, for taxpayers. It is a win-win for the small
business sector.
I yield back.
Chairman GRAVES. Well said.
Are there any other members that wish to be recognized for
a statement on H.R. 4093?
Seeing none, the Committee now moves to consideration of
H.R. 4093. Will the clerk please report the title of the bill?
CLERK. H.R. 4093, to amend the Small Business Act to raise
the prime and subcontract goals and for other purposes.
Ms. HERRERA BEUTLER. Mr. Chair?
Chairman GRAVES. What is that?
Ms. CHU. I have an amendment at the desk.
Chairman GRAVES. Without objection, H.R. 4093 is considered
read and open for amendment at any point.
At this point I think we will just recess and we will come
back. We have two amendments on 4093. Amendment 1 from Ms. Chu
and Amendment 2 from Ms. Clarke. We will pick those up just as
soon as we get back.
So we will recess. I think we have got three votes, so we
will recess temporarily. Thanks.
[Recess]
Chairman GRAVES. We will go ahead and call the markup back
to order. And we are presently on Bill 4093.
The first amendment up is Ms. Chu.
Ms. CHU. Yes. I have an amendment at the desk.
Chairman GRAVES. Clerk, please report the amendment.
CLERK. Amendment 1 to H.R. 4093 offered by Ms. Chu of
California. Add at the end of the bill the following: Section
4----
Chairman GRAVES. Without objection, the bill or the
amendment, I mean, is considered as read, if that is all right.
No objections?
The gentlelady is recognized for five minutes.
Ms. CHU. Thank you, Mr. Chair.
I strongly support the efforts of the Committee in ensuring
that small businesses receive a greater share of government
contracts. Providing more opportunities for small businesses to
compete for contracts will create jobs and strengthen our
economy. We must ensure that government contracting money is
spent in such a way that maximizes the potential economic
growth. This is why I am introducing this amendment, which
would increase the federal contracting goal for women-owned
small businesses to 6 percent, and I am proud to have the
support of my colleagues, Representatives Clarke, Hahn, Meng,
Barber, Kuster, and Murphy.
Women make up 50 percent of the workforce, but the current
goal for women-owned businesses is only 5 percent. Also, women-
owned businesses lag behind male-owned businesses. The average
revenue of women-owned businesses is only 27 percent of the
average revenue of male-owned businesses. By granting a larger
share of government contracts to women-owned small businesses,
we will encourage women in the workforce to start their own
firms. As business owners, not only will they be able to earn
more for themselves and their families, they will also create
jobs and contribute more to the economy. Increasing this
contracting goal to 6 percent will give women-owned small
businesses the opportunity to access billions more in federal
contracts. It is imperative that the government spends its
contracting dollars where they can do the most good and women-
owned small businesses offer us great potential for growth.
With that, I ask for the Committee's support, and I yield
back.
Chairman GRAVES. Does any other member wish to be heard on
the amendment?
Mr. BARBER. Mr. Chairman, I move to strike the last word.
Chairman GRAVES. Who said that? Go ahead.
Mr. BARBER. Thank you, Mr. Chairman. And thank you,
Congresswoman Chu, for this amendment, which I am pleased to be
a cosponsor.
I strongly support this concept of increasing the
contracting goal for women-owned small businesses from 5 to 6
percent, and I was a proud cosponsor of this amendment with the
congresswoman. I know that we have to do more to help women-
owned businesses in this country, and the Federal Government
must lead by example when it comes to supporting women-owned
businesses across the nation. This amendment is one small step
that we can take to help women-owned businesses succeed, and I
encourage my colleagues on both sides of the aisle to support
this amendment.
Thank you, Mr. Chairman. I yield back.
Chairman GRAVES. Does any other member----
Mr. Murphy?
Mr. MURPHY. Mr. Chairman, I move to strike the last word.
Chairman GRAVES. Sure.
Mr. MURPHY. Thank you.
I support the distinguished lady from California, Ms. Chu's
amendment to increase the federal contracting goal for women-
owned small business. With March as Women's History Month, it
is the perfect time to recognize the irreplaceable
contributions women make to our economy. For example, women
have improved the average education level of America's
workforce, and women lead some of the most innovative companies
in the nation. Women like Shirley Brostmeyer and Denise
Castronova run vital businesses in my district. Ms. Brostmeyer
is CEO of Florida Turbine Technologies, which develops cutting-
edge jet engine innovations, and Ms. Castronova is owner and
founder of Castronova Chocolates, which produces some of the
best chocolate I have ever had. In addition to recognizing
women's equal role in the workforce, we must acknowledge that
women still are paid a fraction of what men earn for identical
work.
Representative Chu's amendment is one step in the right
direction to level the playing field for women in business, and
I trust my colleagues will support it unanimously. When women
succeed, America succeeds.
Thank you, Mr. Chair.
Chairman GRAVES. Any other member wish to be heard on the
amendment?
Ms. HAHN. I do.
Chairman GRAVES. Ms. Hahn?
Ms. HAHN. Thank you, Mr. Chairman.
I move to strike the last word. And I want to thank my
colleague, Congresswoman Chu from California. I am proud to
join her in offering this very important amendment. Government
contracts offer small businesses of all kinds an opportunity to
grow, to hire, and contribute to their local economy, but too
often certain groups of small business owners are left out of
these benefits. The lack of federal contracts going to women-
owned small businesses is well documented and unacceptable, but
we are making progress, and I am proud to offer this amendment
with my colleagues that pushes us further. I am happy to
support the Greater Opportunities for Small Business Act, and I
hope that we can make sure that while we increase contracting
with small businesses, we ensure that women small business
owners see more opportunities as well.
Thank you, and I yield back.
Chairman GRAVES. Any other member wish to be heard?
Ms. MENG. I move to strike the last word.
Chairman GRAVES. Ms. Meng?
Ms. MENG. I want to thank Congresswoman Chu for her
leadership on this amendment. As we move to increase the small
business contracting goal, it is important to secure additional
opportunities for women and not leave contracting parity to
chance. March is Women's History Month, and I cannot think of a
better way for the Committee to do its part than by passing
this amendment. A 1 percent increase can result in billions of
dollars of federal contracts for women-owned businesses.
Thank you. I yield back.
Chairman GRAVES. Any other member?
Ms. CLARKE. Mr. Chairman? Mr. Chairman, I would like to
strike the last word.
I, too, would like to take a minute to thank Ms. Chu for
authoring, and my democratic colleagues who, along with myself,
joined Ms. Chu as cosponsors of this amendment. Ever mindful
that when women succeed, America succeeds, more and more women
are swelling the ranks of our nation's entrepreneurs. As such,
it is important that we, as legislators, adjust our
expectations to better reflect the diverse assortment of
entrepreneurs and assist them as they create the jobs that will
assist them as they create the jobs that will sustain our
economy.
Again, I would like to thank Ms. Chu, and I urge my
colleagues to support this common sense amendment. And I yield
back, Mr. Chairman.
Chairman GRAVES. Ms. Kuster?
Ms. KUSTER. Thank you, Mr. Chairman. I move to strike the
last word.
I also thank Congresswoman Chu for her leadership on behalf
of women entrepreneurs and small business owners across the
country. I am proud to partner with you on this common sense
amendment.
Just two weeks ago, I hosted the first in a series of
roundtables with women business leaders in Salem, New
Hampshire. We discussed obstacles facing women entrepreneurs,
including limited access to capital, technical assistance, and
federal contracting opportunities. We can all agree that when
women succeed, our entire economy and our country succeeds. By
helping to level the playing field for women-owned businesses,
this amendment would foster greater competition in contracting
marketplaces and result in greater savings and options for
America's taxpayers. I urge all of our colleagues to support
this common sense amendment, and I yield back.
Chairman GRAVES. Does any other member wish to be heard on
the amendment?
Ms. VELAAZQUEZ. Mr. Chairman?
Chairman GRAVES. Ranking Member Velaazquez?
Ms. VELAAZQUEZ. I rise to strike the last word.
I just want to thank Congresswoman Chu for this amendment.
The reality is that women employ more than 13 million people,
are generating $1.9 trillion in sales, and women businesses are
here to stay, and they play an important role in our economy.
The women-owned business contracting goal is now 20 years old.
With women's role in the small business sector growing, we must
take steps to update the federal contracting policy so that it
reflects the new realities.
On that note, I urge support of this amendment. Thank you.
Chairman GRAVES. Does any other member wish to be heard on
the amendment?
As chairman of the Small Business Committee, I have always
tried not to favor one particular group over another, or
picking winners and losers. And we actually have four
subcategories of small business goals. And I think that if we
are going to increase the overall small business goal and there
is going to be an extra $10 billion out there to compete for, I
think that all small businesses ought to have that opportunity
instead of trying to single out and give an advantage to one
subcategory over another. So I do not support the amendment.
And with that, the question is on the amendment offered by
Ms. Chu, which is Amendment 1, to 4093.
All those in favor say aye.
All those opposed no.
It is the opinion of the chair the noes have it.
Ms. CHU. Mr. Chair, I ask for a recorded vote.
Chairman GRAVES. A recorded vote has been called.
Clerk, please call the roll.
CLERK. Mr. Graves?
Chairman GRAVES. No.
CLERK. Mr. Graves votes no.
Mr. Chabot?
Mr. CHABOT. No.
CLERK. Mr. Chabot votes no.
Mr. King?
[No response]
Mr. Coffman?
Mr. COFFMAN. No.
CLERK. Mr. Coffman votes no.
Mr. Luetkemeyer?
Mr. LUETKEMEYER. No.
CLERK. Mr. Luetkemeyer votes no.
Mr. Mulvaney?
Mr. MULVANEY. No.
CLERK. Mr. Mulvaney votes no.
Mr. Tipton?
Mr. TIPTON. No.
CLERK. Mr. Tipton votes no.
Ms. Herrera Beutler?
[No response]
Mr. Hanna?
Mr. HANNA. No.
CLERK. Mr. Hanna votes no.
Mr. Huelskamp?
Mr. HUELSKAMP. No.
CLERK. Mr. Huelskamp votes no.
Mr. Schweikert?
[No response]
Mr. Bentivolio?
Mr. BENTIVOLIO. No.
CLERK. Mr. Bentivolio votes no.
Mr. Collins?
Mr. COLLINS. No.
CLERK. Mr. Collins votes no.
Mr. Rice?
[No response]
Ms. Velaazquez?
Ms. VELAAZQUEZ. Aye.
CLERK. Ms. Velaazquez votes aye.
Ms. Clarke?
Mr. Schrader?
Mr. SCHRADER. Aye.
CLERK. Mr. Schrader votes aye.
Ms. Clarke?
Ms. CLARKE. Aye.
CLERK. Ms. Clarke votes aye.
Ms. Chu?
Ms. CHU. Aye.
CLERK. Ms. Chu votes aye.
Ms. Hahn?
Ms. HAHN. Aye.
CLERK. Ms. Hahn votes aye.
Mr. Payne?
Mr. PAYNE. Aye.
CLERK. Mr. Payne votes aye.
Ms. Meng?
Ms. MENG. Aye.
CLERK. Ms. Meng votes aye.
Mr. Schneider?
[No response]
Mr. Barber?
Mr. BARBER. Aye.
CLERK. Mr. Barber votes aye.
Ms. Kuster?
Ms. KUSTER. Aye.
CLERK. Ms. Kuster votes aye.
Mr. Murphy?
Mr. MURPHY. Aye.
CLERK. Mr. Murphy votes aye.
Chairman GRAVES. Are there any other members that wish to
vote?
Ms. Herrera Beutler?
Ms. HERRERA BEUTLER. Aye.
CLERK. Ms. Herrera Beutler votes aye.
Chairman GRAVES. Does any other member wish to be heard on
the amendment?
Seeing none.
Ms. HERRERA BEUTLER. I request that you change my vote from
aye to nay.
Chairman GRAVES. Ms. Herrera Beutler requests from aye to
nay.
CLERK. Ms. Herrera Beutler changes from aye to nay.
Chairman GRAVES. Any other members wish to be recorded?
Seeing none, please report the vote.
CLERK. The noes are 11, the ayes----
Mr. CHABOT. Mr. Chairman, how was I recorded?
Chairman GRAVES. How was Mr. Chabot recorded?
CLERK. As a no.
Chairman GRAVES. Any other members wish to be recorded?
CLERK. Mr. Schweikert?
Mr. SCHWEIKERT. No.
CLERK. Mr. Schweikert votes no.
Chairman GRAVES. All right.
CLERK. The ayes are 10, the noes are 12.
Chairman GRAVES. Last vote, the ayes are 10, the noes are
12. The amendment is not agreed to.
The next Amendment 2, Bill 4093, Ms. Clarke.
Ms. CLARKE. Mr. Chairman, I have an amendment at the desk.
Chairman GRAVES. Clerk, please report the amendment.
CLERK. Amendment 2 to H.R. 4093 offered by Ms. Clarke of
New York. Add at the end of the bill the following----
Chairman GRAVES. Without objection, the amendment is
considered read.
The gentlelady has five minutes.
Ms. CLARKE. Thank you, Mr. Chairman.
My very straightforward amendment is simply an amendment of
the socially and economically disadvantaged small businesses
participation. To ensure that our national recovery enjoys
strong and robust growth, it is essential that all of our
nation's small businesses are fully engaged and active
participants. Given the steady growth and participation, it is
essential that we recognize this growth and make adjustments to
reflect this reality.
I urge my colleagues to support this common sense
amendment, and I yield back, Mr. Chairman.
Chairman GRAVES. Any other member wish to be heard on the
amendment?
Ms. VELAAZQUEZ. Mr. Chairman?
Chairman GRAVES. Ranking Member Velaazquez?
Ms. VELAAZQUEZ. I rise in support of this amendment.
One area where the federal government has made some
progress in its procurement goal is in regards to economically
and socially disadvantaged individuals. This standard has
historically been set at 5 percent, yet in recent years the
federal government has supplied as much as 8 percent of its
outsource projects to this class of business. Ethnic minorities
and people of color benefit from this program, as do female
entrepreneurs. The program is also important in encouraging
entrepreneurs from lower income backgrounds to succeed. As
federal agencies are regularly exceeding the goals set for this
program, it only makes sense that we would ask them to do more.
As the face of American small business changes, so too should
our federal policies that govern contracting for small
businesses.
I believe the gentlewoman's amendment is a good one that
fits well with the overall intention of the broader bill. I
therefore thank my friend from New York and yield back the
balance of my time.
Chairman GRAVES. Does any other member wish to be heard on
the amendment?
Mr. CHABOT. Mr. Chairman?
Chairman GRAVES. Mr. Chabot?
Mr. CHABOT. Move to strike the last word.
Mr. Chairman, I will be very brief. I would just like to
reiterate the chairman's comments that I think the purpose--
those that are voting no are not opposed to any of these
particular groups having access, equal access to the contracts
that are available, but we think it ought to be an equal
opportunity and we ought not to pick winners and losers. And
that is why I think the folks on this side are voting no, not
because we have any antipathy or opposition to various groups
getting these contracts.
And each one of these, Mr. Chairman, I would ask the chair
a question. Each one of these groups would have an equal
opportunity to get access to these funds, is that correct?
Chairman GRAVES. Absolutely.
Mr. CHABOT. Okay. Thank you very much. I yield back my
time.
Chairman GRAVES. Mr. Tipton?
Mr. TIPTON. Move to strike the last word.
I do have a question actually for the sponsor of the
amendment. If you would be so kind, what is the dollar amount
that you are designating as economically disadvantaged? Where
is that reflected in the amendment?
Ms. CLARKE. I am sorry, what do you mean by dollar amount?
Mr. TIPTON. Well, your amendment states ``economically and
socially disadvantaged.''
Ms. CLARKE. Right.
Mr. TIPTON. So what is the dollar amount that is
economically disadvantaged?
Ms. CLARKE. It is already set in statute, sir.
Mr. TIPTON. What is it?
Ms. CLARKE. So we are going based on the statute.
Mr. TIPTON. So we are already protecting the economically
and socially disadvantaged in statute now? So, thank you. I
yield back.
Ms. CLARKE. Yes, it is already in statute.
Chairman GRAVES. Any other member wish to be heard on the
amendment?
As I stated before, I do not like singling out individual
subgroups. I like the idea that all small businesses get to
compete for this money. It does not prevent anyone from getting
an opportunity under this. And so I am opposed to the
amendment.
And with that, the question is on the amendment offered by
Ms. Clarke, Amendment 2.
Ms. CLARKE. Will the gentleman yield just a moment, Mr.
Chairman?
Chairman GRAVES. Yes.
Ms. CLARKE. I am sorry. I did not mean to disturb you, but
I just wanted to point out that we are only talking 5 percent
here. We are not talking the entire--so there is 95 percent for
just about everybody. You know.
Chairman GRAVES. Five percent of the total. And the fact of
the matter is, if we increase that 2 percent, we actually back
up on every other small business that is out there. We are
worse off.
Ms. CLARKE. What do you mean we ``back up''?
Chairman GRAVES. Well, every other small business is worse
off in terms of----
Ms. CLARKE. How are they worse off, Mr. Chairman, if they
are already in contracts? How are they worse off?
Chairman GRAVES. Because you take away everything that we
are trying to do.
Ms. CLARKE. I am not clear on what you mean but I yield
back, Mr. Chairman.
Chairman GRAVES. The question is on the amendment offered
by Ms. Clarke, Amendment 2 to 4093.
All those in favor say aye.
All opposed votes no.
The opinion of the chair is the noes have it.
The amendment is not agreed to.
Ms. CLARKE. Can we get a recorded vote, Mr. Chairman?
Chairman GRAVES. A recorded vote has been requested.
Clerk, please call the roll.
Clerk. Mr. Graves?
Chairman GRAVES. No.
CLERK. Mr. Graves votes no.
Mr. Chabot?
Mr. CHABOT. No.
CLERK. Mr. Chabot votes no.
Mr. King?
[No response]
Mr. Coffman?
Mr. COFFMAN. No.
CLERK. Mr. Coffman votes no.
Mr. Luetkemeyer?
Mr. LUETKEMEYER. No.
CLERK. Mr. Luetkemeyer votes no.
Mr. Mulvaney?
Mr. MULVANEY. No.
CLERK. Mr. Mulvaney votes no.
Mr. Tipton?
Mr. TIPTON. No.
CLERK. Mr. Tipton votes no.
Ms. Herrera Beutler?
Ms. HERRERA BEUTLER. No.
CLERK. Ms. Herrera Beutler votes no.
Mr. Hanna?
Mr. HANNA. No.
CLERK. Mr. Hanna votes no.
Mr. Huelskamp?
[No response]
Mr. Schweikert?
Mr. SCHWEIKERT. No.
CLERK. Mr. Schweikert, no
Mr. Bentivolio?
Mr. BENTIVOLIO. No.
CLERK. Mr. Bentivolio votes no.
Mr. Collins?
Mr. COLLINS. No.
CLERK. Mr. Collins votes no.
Mr. Rice?
Mr. RICE. No.
CLERK. Mr. Rice votes no.
Ms. Velaazquez?
Ms. VELAAZQUEZ. Aye.
CLERK. Ms. Velaazquez votes aye.
Mr. Schrader?
Mr. SCHRADER. Aye.
CLERK. Mr. Schrader votes aye.
Ms. Clarke?
Ms. CLARKE. Aye.
CLERK. Ms. Clarke votes aye.
Ms. Chu?
Ms. CHU. Aye.
CLERK. Ms. Chu votes aye.
Ms. Hahn?
Ms. HAHN. Aye.
CLERK. Ms. Hahn votes aye.
Mr. Payne?
Mr. PAYNE. Aye.
CLERK. Mr. Payne votes aye.
Ms. Meng?
Ms. MENG. Aye.
CLERK. Ms. Meng votes aye.
Mr. Schneider?
[No response]
Mr. Barber?
Mr. BARBER. Aye.
CLERK. Mr. Barber votes aye.
Ms. Kuster?
Ms. KUSTER. Aye.
CLERK. Ms. Kuster votes aye.
Mr. Murphy?
Mr. MURPHY. Aye.
CLERK. Mr. Murphy votes aye.
Chairman GRAVES. Are there any other members that wish to
vote?
Seeing none, please report the vote.
CLERK. The ayes are 10 and the nays are 12.
Chairman GRAVES. On this vote, the ayes are 10, the nays
are 12. The amendment is not agreed to.
Are there any other amendments?
Seeing none, the question is on agreeing to H.R. 4093.
All those in favor say aye.
All opposed votes no.
The opinion of the chair is the ayes have it. H.R. 4093 is
agreed to.
Without objection, a quorum being present, the bill is
favorably reported to the House. And without objection, the
Committee staff is authorized to correct punctuation and any
other necessary technical corrections conforming changes.
H.R. 4094
With that we will move on to H.R. 4094, the Contracting
Data and Bundling Accountability Act of 2014, which I
introduced with Mr. Hanna, Ms. Chu, Ms. Meng, and Mr. Murphy.
Contracting bundling is a top complaint that I receive from
small business contractors all over the country, and
unjustified bundling and consolidation precludes small
businesses from competing, along with all the other benefits
that accrue from their participation.
In a recent hearing, the Subcommittee on Contracting and
Workforce and a recent GAO report found that contracts are not
being properly identified as bundled or consolidated. Without
this preliminary identification, agencies are not required to
justify the decision to consolidate or bundle, nor are they
required to mitigate the effects of their consolidation or
bundling. And in short, this is as if the laws that were passed
to limit contracting bundling simply do not apply.
This bill attempts to address the problem by requiring the
SBA or the Office of Federal Procurement Policy and other
agencies to work together on a plan to improve the quality of
the data, and it further requires that after the plan is in
place for a year, then GAO will audit the process and look for
further areas of improvement. This is not simply a bureaucratic
exercise. Some agencies have gone 17 years without reporting a
single contract as bundled when it is clear that they are
bundling. Multi-billion dollar procurements have been awarded
in the last week that are clearly consolidated but were not
treated as such, and this is going to provide a measure of
accountability that has been sorely lacking. And I would urge
support of the bill.
And I yield to Ranking Member Velaazquez for her remarks.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
One of the most daunting challenges facing small firms
seeking federal work is the issue of contract bundling. Last
year, $50 billion worth of federal contracts, nearly 10 percent
of the entire federal marketplace was awarded through bundled
or consolidated projects. Indeed, as a result of contract
bundling, small businesses miss out on opportunities worth more
than $50 billion. I remember when President Bush came into
office, he issued a report and identified some of the contract
bundles, and yet nothing happened. Still today, nothing really
has been happening, and this is why this bill is important.
It is critical that we have a full grasp of the extent and
prevalence of this problem. In that regard, H.R. 4094, the
Contracting Data and Bundling Accountability Act, will
aggregate data on bundled and consolidated contracts, giving a
clearer picture of how this problem shapes the procurement
process. It is also important that officials in charge of
addressing this practice explain what concrete steps they're
taking to prevent unfair bundling.
In this committee, we often hear how the deck is stacked
against small firms seeking federal work. Bundling is one of
the most troublesome hurdles, shutting off large segments of
federal work from entrepreneurs with the skill and experience
to meet government needs. And it is important for small
businesses. It is important for taxpayers. We should promote
competition, and one way to do that is by providing a level
playing field for small businesses to participate in the
federal procurement marketplace.
Thank you, Mr. Chairman.
Chairman GRAVES. Are there any other members that wish to
be recognized for a statement on 4094?
Seeing none, the Committee now moves to consideration of
H.R. 4094.
Clerk, please report the title of the bill.
CLERK. H.R. 4094, To direct the administrator of the Small
Business Administration to develop and implement a plan to
improve the quality of data reported on bundled and
consolidated contracts and for other purposes.
Chairman GRAVES. Without objection, H.R. 4094 is considered
read and open for amendment at any point.
Does anyone have an amendment?
Ms. CHU. Yes, Mr. Chair. I have an amendment at the desk.
Chairman GRAVES. What reason you rise? Okay. You did.
Clerk, please report the amendment.
CLERK. Amendment 1 to H.R. 4094 offered by Ms. Chu of
California, page 3----
Chairman GRAVES. Without objection, the amendment by Ms.
Chu is considered as read.
Seeing none, the gentlelady is recognized for five minutes.
Ms. CHU. Mr. Chair, last year, the Small Business
Subcommittee on Contracting and Workforce had an insightful
hearing on the negative impact that unjustified contract
bundling and consolidation has on small businesses. We learned
that when federal projects are consolidated or bundled into
larger contracts, fewer opportunities remain for small
businesses. The extent to which, however, small businesses are
negatively impacted is impossible to determine because the
Federal Government has not met its requirement to self-report
contract mergers over the past decade.
Since that hearing last October, my staff has collaborated
with Chairman Graves's staff on this important issue and the
development of this legislation which requires the SBA, in
conjunction with other agencies, to develop and implement a
plan to improve data reporting and mitigate unjustified
contract bundling and consolidation in the Federal Government.
This will bring more accountability to federal contracting and
increase opportunities for small businesses. And as such, I
support it.
My amendment is very simple. It requires the Small Business
Administration to brief the House and Senate Small Business
Committees on the plan 90 days before they begin implementing
it. This will give us an opportunity to give the SBA input on
the plan before implementation begins.
I ask for the Committee's support, and I yield back.
Chairman GRAVES. Do any other members wish to be heard on
the amendment?
Seeing none, I support the amendment. I think it gives the
Committee, our Committee, some more oversight over contract
bundling. I think any time that happens it is a good thing.
So with that, the question is on the amendment offered by
Ms. Chu, Amendment 1 to 4094.
All those in favor say aye.
All opposed votes no.
The opinion of the chair is the ayes have it.
The ayes do have it.
The amendment is agreed to.
Does anyone else have an amendment?
Seeing none, the question is on agreeing to H.R. 4094 as
amended.
All those in favor say aye.
All opposed votes no.
The opinion of the chair is the ayes have it.
H.R. 4094 is agreed to.
And without objection, and a quorum being present, the bill
is favorably reported to the House.
Without objection, the Committee staff is authorized to
correct punctuation and make other necessary technical
corrections and conforming changes.
H.R. 2751
With that, we will move on to H.R. 2751, the Common Sense
Construction Contracting Act of 2013, introduced by Mr. Hanna,
Ms. Meng, and myself. And I now yield to Mr. Hanna.
Mr. HANNA. Thank you, Chairman. And thank you, Ranking
Member Meng for your support.
This bill seeks to repair a problem that has been around
quite a while. In a normal auction, there are multiple buyers.
In a reverse auction, there are multiple sellers. So what
happens is it works well----
Chairman GRAVES. Can the gentleman yield just so we can get
clarification?
Mr. HANNA. Yeah, I am sorry.
Chairman GRAVES. This is H.R. 2751.
Mr. HANNA. That is correct, 2751. Thank you.
Chairman GRAVES. I think I misread it earlier, so I just
want to make that clarification.
I yield.
Mr. HANNA. In a normal auction, there are multiple buyers
bidding for a single item or project. In a reverse auction,
there are multiple sellers. But what we have discovered is it
works very well with nonsubjective items like pencils, pens,
office supplies, a whole host of things that are commonplace
and definable. Where it works very badly, and the Army Corps of
Engineers conducted two studies showing the government does not
save money when it uses reverse auctions because a lot of the
things that are purchased are subjective. For example, design
work, architectural work, construction work where it is much
more complicated, reverse auctions have actually in many cases
reversed competition and caused a race to the bottom because
people literally keep bidding and bidding and bidding. And in
many cases they wind up with a project that they wish they had
not received. So what this does is it keeps a reverse
auctioning alive where it works and it seeks to correct it and
change it where it has not shown to work in those areas like
designing architectural work and construction.
Chairman GRAVES. I now recognize Ranking Member Velaazquez
for any remarks you might have on 2751.
Ms. VELAAZQUEZ. I am in total agreement and support the
gentleman's legislation to H.R. 2751.
Chairman GRAVES. Do any other members wish to be heard on
H.R. 2751?
Ms. MENG. I do.
Chairman GRAVES. Go ahead.
Ms. MENG. Concerns across the construction industry from
subcontractors and prime contractors have been raised about the
effectiveness of reverse auctions. It has become apparent that
reverse auctions for construction projects are not a wise use
of taxpayer dollars. While money can be saved in the short
term, the quality of projects and the contractors are often
questionable. The bidders on many of these projects engage in a
race to the bottom in an attempt to save their failing
businesses. I look forward to continuing to examining these
race to the bottom problems in other areas of federal
procurement.
I was happy to be an original supporter of this
legislation, and I want to thank Mr. Hanna and Mr. Graves for
sponsoring this important legislation which rids taxpayers of
this wasteful procurement method.
Thank you, and I yield back.
Chairman GRAVES. Does any other member wish to be heard?
Seeing none, the Committee now moves to consideration of
H.R. 2751.
Clerk, please report the title of the bill.
CLERK. H.R. 2751, to amend the Small Business Act to
prohibit the use of reverse auctions for design and
construction services procurements.
Chairman GRAVES. Without objection, H.R. 2751 is considered
read and open for amendment at any point. Does anyone have an
amendment to offer?
Seeing none, the question is on H.R. 2751.
All those in favor say aye.
All opposed say no.
The opinion of the chair is the ayes have it, and H.R. 2751
is agreed to.
And without objection, a quorum being present, the bill is
favorably reported to the House.
Without further objection, the Committee staff is
authorized to correct punctuation and make other necessary
technical corrections and conforming changes.
With that, our next bill for consideration is H.R. 2882,
the improving opportunities for Service-Disabled Veteran-Owned
Small Businesses Act of 2014, which was introduced by Mr.
Coffman, Ms. Flores, Mr. Miller, Mr. Roe, Mr. Hanna, Mr.
Connolly, Ms. Herrera Beutler, and myself.
And I now yield to Mr. Coffman to speak on H.R. 2882.
H.R. 2882
Mr. COFFMAN. Thank you, Mr. Chairman.
I would like to thank the Chairman and Ranking Members for
bringing H.R. 2882, Improving Opportunities for Service-
Disabled Veteran-Owned Small Business Act up for discussion in
today's markup. I am proud to have introduced this proposal
with both Chairman Graves and Chairman Miller of the House
Veterans Affairs Committee.
As many of you know, the Small Business Administration and
the Department of Veterans Affairs operate procurement programs
for service-disabled veteran-owned small businesses. However,
in my role as a member of both the House Small Business
Committee and the House Veterans Committee, I have heard from a
lot of veterans about problems with the current process, most
notably regarding inconsistency between the SBA and VA. The SBA
hears challenges for service-disabled veteran-owned small
business status decisions for all agencies other than VA. In
contrast, VA verifies all potential service-disabled veteran-
owned small business companies applying for special procurement
preferences for VA contracts. The difference is in the
definition. Processes, and interpretation between the VA and
SBA cause inconsistent decisions regarding which firms qualify
for contracts. Under the current system, a service-disabled
veteran-owned small business can qualify at one agency and not
another for procurement purposes. This inconsistency often adds
cost, confusion, and opens the door to fraud. Moreover, the
current process requires the VA to make decisions that are
outside their expertise, such as determining business
structures. In fact, VA told us that over 98 percent of the
firms they reject are rejected not because the individual is
not a veteran or service-disabled veteran, but because of the
business structure. This has caused numerous conflicts because
the SBA has identified numerous cases they would have decided
differently than the VA. The process is cumbersome, expensive,
and does not work for our veterans. Therefore, H.R. 2882 will
transfer the VA verification process for firms to the SBA,
unify the definitions of service-disabled veteran-owned small
business, and veteran-owned small business, and add
transparency. Additionally, the legislation will increase
predictability by creating an appellate process by which a
service-disabled veteran-owned small business can challenge an
agency decision.
I want to be clear that the legislation does not change the
vet's first preference at VA; rather, it works to make sure
that only qualified firms are able to benefit from the vet's
first preference by adding transparency and clarity to the
process.
I want to again thank the chairman for bringing this issue
up, and I yield back.
Chairman GRAVES. Are there any other members that wish to
be recognized for a statement on 2882?
Seeing none, the Committee now moves to consideration of
H.R. 2882.
Clerk, please report the title of the bill.
CLERK. H.R. 2882, to amend the Small Business Act and Title
38 United States Code to provide for a consolidated definition
of a small business concern owned and controlled by veterans
and for other purposes.
Chairman GRAVES. Without objection, H.R. 2882 will be
considered read and open for amendment at any point. And I do
have an amendment in the nature of a substitute.
Clerk, please read the amendment.
CLERK. Amendment in the nature of a substitute to H.R. 2882
offered----
Chairman GRAVES. Without objection, the amendment can be
considered as read.
Without objection, the objection in the nature of a
substitute should be considered as the base text for the
purpose of amendment.
I do support 2882 as I outlined before because it does help
legitimate service-disabled veterans and veterans compete for
federal contracts, and it is going to allow the government to
operate more efficiently. The bill reflects a concerted effort
between this Committee and the Committee on Veterans Affairs to
craft a balanced solution. The Veterans Affairs Committee has
agreed to waive their jurisdiction on this bill, and I am
offering this amendment in the nature of a substitute based
upon some changes that were negotiated with the ranking member
and myself. Furthermore, this Committee does not have
jurisdiction over Title 38 of the United States Code, so
changes to definitions in Title 38 have been removed from the
bill in the amendment.
The Department of Veterans Affairs should focus on deciding
which individuals or veterans and service-disabled veterans and
providing them with the benefits that they have earned. The
SBA, on the other hand, should determine whether firms owned by
veterans and service-disabled veterans are small for the
purposes of the federal contracting program. What H.R. 2882
does is it realigns the functions of each agency so that they
can each focus on what they do best, rather than perpetuating a
broken system.
I personally feel our veterans deserve a little bit better,
and H.R. 2882 is a good step.
I now recognize Ranking Member Velaazquez for her remarks
on the amendment in the nature of a substitute to 2882.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
Time and again, this committee has seen how skills learned
in the military are vital to a career in entrepreneurship,
whether it is familiarity with the government procurement
process, leadership abilities, tireless discipline, or a
willingness to take risks, we have seen countless examples of
veterans entering civilian life to become small business owners
and create jobs in their community.
Today, there are 22 million veterans who sacrificed for our
nation, 5.5 million of whom were disabled from service-
connected injuries. These brave individuals deserve our ongoing
gratitude and our profound respect. Efforts to channel
contracts to service-disabled veteran-owned small businesses is
one way that we can show our commitment to them. Regrettably,
lax verification of firms receiving these very contracts is
undermining these efforts. GAO has done significant work
finding that ineligible firms have won contracts that should
instead have gone to service-disabled veterans. This abuse
includes front companies posing as veterans, pass-throughs
where the bulk of the work and revenue went to nonveteran
entities, and in some cases, outright fraud. As a result,
veterans lost out on millions of dollars in government
projects.
The bill before us today, H.R. 2882, takes steps to improve
this process. It moves the vets first verification initiative
from the VA to the SBA. Ideally, doing so should take advantage
of SBA's experience in certifying firms in other contracting
programs. The result should be fewer noneligible entities
receiving contracts intended for America's veterans.
Unfortunately, H.R. 2882 uses an odd funding mechanism to
reimburse the SBA. Instead of just authorizing funds as it is
customary through Congress and the government, it relies on a
complicated system of intergovernmental transfers. A similar
system was put in place to fund small disadvantaged business
certifications but it did not work, resulting in an end to the
program. Putting in place a discredited idea to support our
nation's veterans makes no sense. In fact, it is a slap in the
face to America's war fighters, treating them like second class
citizens, relying on external intergovernmental transfers as
the underlying bill does puts the entire program at risk. If
there is not enough funding or if there is a disagreement
between the VA and SBA, the program could shut down. That means
no service-disabled veteran-owned small businesses will be
certified. It means that existing firms will not be examined.
This is precisely when fraud and abuse takes hold, when no one
is watching. Why are we taking this risk, especially when it
comes to protecting veteran-owned contractors?
While I support the bill, I will be offering an amendment
to improve upon this flawed funding structure and ensure that
veterans receive the full support they need. For this reason,
my amendment is supported by the American Legion. Regardless,
we must make every effort to ensure that imposters cannot
defraud the government and deprive legitimate service-disabled
veteran entrepreneurs their fair share of federal contracts.
Addressing this failing is long overdue.
I look forward to working with the chairman and my
colleagues on this shared goal, and I yield back the balance of
my time.
Chairman GRAVES. Does anyone have an amendment to the
amendment in the nature of a substitute?
Mr. SCHRADER. Mr. Chairman, a point of inquiry, please?
Chairman GRAVES. Mr. Schrader?
Mr. SCHRADER. Just on the substitute, just so I understand
what the substitute does, I notice that it eliminates the
original section 2 of the bill and wondered why that was,
whether that defined the bill, what a qualifying veteran-
disabled enterprise was, and just wanted to understand why that
was eliminated.
Chairman GRAVES. Counsel, do you want to explain what
exactly?
Mr. PINELES. The reason that the amendment in the nature of
a substitute removed the section was because of the issues
between the definitions at the Department of Veterans Affairs
and the SBA, and we were trying to draw a bright line to ensure
that the SBA would be simply ruling on what constitutes a small
business.
Mr. SCHRADER. Okay. I understand. I just hope that that is
a good definition that they have because that has been a
problem that we have observed in our Committee and want to make
sure that a legitimate small business veteran-owned are the
ones we are funding here.
Second question if I may, Mr. Chairman. Just, again, for my
edification, talk a little bit about the funding mechanisms.
There is a six-year timeline that is in there and what is the
rationale behind the six years?
Chairman GRAVES. It is a six-year timeline. It does allow
for continued funding beyond that point but it is a six-year.
And what we are doing is moving the funds out of--it is a
Veterans Affairs slush fund is what it is, and that is what we
are trying to do under the bill and that allows us to at least
have input on directing how that money is going to be spent.
The SBA is going to be making the determination. Right now
there is no oversight over that slush fund money. It is not
appropriated. It is their money to do as they please.
Mr. SCHRADER. Okay.
Chairman GRAVES. At least from the Veterans Administration.
We would rather the SBA be making the determination on whether
or not those businesses qualify or not.
Mr. SCHRADER. I certainly agree with the base bill in Mr.
Coffman and your endeavor here. It also says ``any cost.'' So
is this like whatever this program costs under the SBA, they
will reimburse us, and there is enough in the fees that they
collect to make sure that the small business administrator is
completely reimbursed for the cost of the program?
Chairman GRAVES. We think so. The problem with it is though
if we appropriate money, then we are going to have to find an
offset and that will kill the bill right up. And everything
will stay just exactly the way it is and the VA will continue
to use their slush fund.
Mr. SCHRADER. One last question, Mr. Chairman, because I am
trying to understand, and maybe it has to do with that offset.
It seems like if we are saying $15 million, that we do not need
an offset; right? I mean, it is money that has already been
appropriated. SBA is going to do a better job.
Chairman GRAVES. If it has to be appropriated, we have to
find an offset. That is the way the rules are right now. And
like it or not, it will kill the bill, so, which, you know, if
that is what your intent is, then that is your prerogative.
Mr. SCHRADER. I appreciate it. Thank you, Mr. Chairman.
Chairman GRAVES. Does anyone have an amendment to the
amendment in the form of a substitute?
Ms. Kuster?
Ms. KUSTER. Mr. Chairman, I have an amendment at the desk
and offer that amendment at this time.
Chairman GRAVES. Clerk, please report the amendment.
CLERK. Amendment 1 to the amendment in the nature of a
substitute to H.R. 2882 offered by Ms. Kuster of New Hampshire.
Page 4, line 1----
Chairman GRAVES. Without objection, the amendment is
considered as read.
The gentlelady, five minutes.
Ms. KUSTER. Thank you, Mr. Chairman.
In addition to this panel, I am very fortunate to also be a
member of the Veterans Affairs Committee, and there is no
greater honor for me than serving the brave men and women who
have served our country. While I am not a veteran, both my
father and my husband's father served in World War II. In fact,
my father-in-law was landing on the beaches of Normandy while
my father flew cover overhead. My father flew a P-47 fighter
plane and was shot down over the battle of the bulge on
Christmas Eve of 1944. He spent the last six months of the war
in a German prisoner-of-war camp, and when he returned home
safely, he helped to start a new business, Wildcat Mountain Ski
area in Pinkham Notch, New Hampshire. It is my goal with this
amendment to help ensure that all veterans have the resources
and support they deserve if they decide to follow in my
father's footsteps and start their own businesses.
As amended, the underlying bill requires the Veterans
Affairs secretary and the Small Business Administration
administrator to meet twice a year to discuss how to increase
opportunities for veteran-owned businesses. My amendment would
expand this provision to also require the secretary and
administrator to consult with veterans service organizations on
how to achieve that goal. Republican and democrat alike, we can
all agree that the best ideas do not come from Washington,
D.C.; they come from individuals and communities in New
Hampshire, Colorado, Missouri, New York, and across our
country. My amendment would help ensure that the voices of
veterans are heard as our government discusses how best to
support veteran-owned small businesses and service-disabled
veteran-owned small businesses.
The American Legion and AMVETS have expressed support for
this simple one-page amendment. I commend Congressman Coffman,
Congressman Hanna, the chairman, and the ranking member for
advancing the underlying bill, and I urge the adoption of my
amendment.
Thank you, Mr. Chairman. I yield back.
Chairman GRAVES. Does any other member wish to be heard on
the amendment to the amendment in the form of a substitute?
Seeing none, I support the amendment. I think it makes
sense.
So the question is on the amendment offered by Ms. Kuster.
All those in favor say aye.
All those opposed votes no.
Seeing none, the opinion of the chair is the ayes have it
and the amendment is agreed to.
With that, Ms. Hahn, do you have an amendment?
Ms. HAHN. Thank you, Mr. Chairman.
I have an amendment at the desk and offer that amendment at
this time.
Chairman GRAVES. Please report the amendment.
CLERK. Amendment 2 to the amendment in the nature of a
substitute H.R. 2882 offered by Ms. Hahn of California. Page 4,
line 14----
Chairman GRAVES. Without objection, Amendment 2 is
considered as read.
Gentlelady, you have five minutes.
Ms. HAHN. Thank you. Thank you, Mr. Chairman.
First off, I would also like to thank Mr. Coffman for
sponsoring this legislation. As another war comes to an end and
we welcome our brave men and women back home, we must ensure
that we afford them every resource at our disposal to ensure
that they can live life the way they want to when they return
from serving our country. For many veterans, this may mean
starting and running their own small businesses, supporting
themselves with their innovative and hard-working spirit and
contributing to their local economies.
In the legislation as amended, I was happy to see in the
Memorandum of Understanding that the secretary of Veterans
Affairs and the Small Business administrator will begin a
discussion on ways to improve collaboration between the two
agencies in order to increase opportunities for veteran- and
service-disabled veteran small business owners. This
partnership is promising, and should this legislation pass, I
am looking forward to this discussion being the foundation for
new progress to better serve the men and women who have served
us all so well.
But if we are going to have this discussion, I think it is
important that we include two groups of veterans who have had
less access and less opportunities as small business owners--
female veterans and minority veterans. Today, women and
minorities are serving their country more than ever before, and
in the coming decades we are going to see them make up a
greater and greater percentage of our veterans. Yet, women make
up just 4 percent of veteran small business owners despite
making up almost 8 percent of the veteran population, and
minorities make up more than 20 percent of the veteran
population but just 14 percent of veteran small business
owners. They make up just 7 percent of veteran owners of small
business with employees.
There is clearly significant room for improvement, and the
resources we have available in both the VA and the Small
Business Administration can go a long way in closing these
gaps. My amendment is simple. It ensures that in the secretary
and administrator's upcoming discussion, they are sure to
include ways to increase opportunities for women and minority
veteran small business owners. I hope that the Committee will
ensure that the SBA and the VA will report back to us on their
progress regarding these issues.
I am happy to support this legislation, and I hope we can
work together to develop a productive collaboration with the VA
so that we can best serve all the groups of the veterans.
Thank you. I yield back.
Chairman GRAVES. Does any other member wish to be heard on
the amendment to the amendment?
Mr. Coffman?
Mr. COFFMAN. Thank you, Mr. Chairman.
Having served 21 years in the military and as a combat
veteran, I can tell you that for our disabled veterans, the
enemy does not discriminate on who they fire upon. And for us
to break them up into categories based on race and gender is
the wrong direction for this country. Our military has made
tremendous progress on the issues of race and gender, although
certainly concerned about the sexual assault issue now before
the Congress. But it absolutely makes no sense to identify them
beyond that of being veterans or disabled veterans. So I
certainly strongly oppose the amendment.
Chairman GRAVES. Do any other members wish to be heard on
the amendment?
Mr. Luetkemeyer?
Mr. LUETKEMEYER. Yes, Mr. Chairman.
Maybe I am out of order here with regards to point of
order, but can you explain how we can have two amendments
amending the same section at the same point? We have already
got a substitute. That would be the third agreement if I am not
mistaken. Besides that, we are amending the same place
according to the language of this amendment. I do not have a
problem with the amendment, just the procedure here because
both of them state on page 4, line 14, insert after this
section.
Chairman GRAVES. The first one amended line 4. The second
one amends line 14, does it not?
Counsel, is it drafted correctly?
Mr. PINELES. Yes. Ms. Hahn's amendment amends page 4, line
14, not line 4.
Mr. LUETKEMEYER. Okay.
Ms. VELAAZQUEZ. He has the old version of the amendment.
Mr. LUETKEMEYER. Okay. My mistake.
Chairman GRAVES. Does anyone else wish to be heard on the
amendment?
Yes, Ms. Herrera Beutler?
Ms. HERRERA BEUTLER. I just have a quick question, Mr.
Chairman, for the sponsor.
Chairman GRAVES. Sure.
Ms. HERRERA BEUTLER. This is not setting a specific number
goal or it just--am I reading this correctly? In the meeting
they are to discuss ways to improve collaboration under the
memorandum, to increase opportunities? So we are not setting a
floor or a ceiling?
Ms. HAHN. No, we are not. And we are certainly not really
breaking them into any categories that are unreasonable. I am
just saying in their conversation, just let us make sure that
when we discuss about outreach and opportunities we definitely
are finding ways to help women veterans as well.
Ms. HERRERA BEUTLER. Okay, thank you.
With that, I yield back.
Chairman GRAVES. Does anyone else wish to be heard on the
amendment?
I do support the amendment.
Ms. HAHN. Hallelujah.
Chairman GRAVES. I think that anytime we can improve that
collaboration I think it is important.
So with that----
Ms. HAHN. Hallelujah.
Chairman GRAVES. Mr. Coffman?
Ms. HAHN. Thank you, Sam.
Chairman GRAVES. The question is on the amendment offered
by Ms. Hahn to the amendment in the nature of a substitute.
All those in favor say aye.
All opposed say no.
The opinion of the chair is the ayes have it.
The amendment is agreed to.
With that, Ms. Velaazquez--and we possibly have a vote in
five minutes.
Ms. VELAAZQUEZ. Okay.
Chairman GRAVES. Which does not make any difference. We
will come back.
Ms. VELAAZQUEZ. Sure.
Mr. Chairman, I have an amendment at the desk.
Chairman GRAVES. Clerk, please report the amendment.
CLERK. Amendment 3 to the amendment in the nature of a
substitute to H.R. 2882 offered by Ms. Velaazquez of New York.
Chairman GRAVES. Without objection, the amendment will be
considered read.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
Ensuring that our nation's veterans are able to build a
career after their military service is a priority. After all,
with 2.6 million veterans from the wars in Afghanistan and Iraq
alone, these men and women have the skill and leadership
qualities necessary to help our economy continue to grow. The
bill before us takes a step in the right direction. It will
help ensure that only service-disabled veteran-owned small
businesses qualify for contracts intended for them at the VA.
However, the legislation relies on an unstable funding
structure to support this important verification program. As
worded in the bill, these intergovernmental transfers are no
more than vague promises that the VA will reimburse the SBA for
its costs.
What happens if the VA does not collect enough fees from
its contractors as the underlying bill requires? What happens
if the SBA cost of operating this entity is greater than the
amount of fees that the VA collects or wants to transfer to the
SBA? These are important questions, and while OMB is directed
to get involved, the true answers, ``we do not know,'' and ``we
hope everything works out.'' This uncertainty only serves to
create openings for nonveterans to defraud the government and
take contracts away from actual service-disabled veterans.
This is just not good for our veterans. Simply put, they
deserve more than these loose promises. They have fought for
our nation's freedom, defended our democracy, and helped those
in need throughout the world. We owe it to them to make sure
that they have a dedicated funding stream that guarantees
contracts intended for them actually go to them. My amendment,
which is supported by the American Legion, and Mr. Chairman, at
a given time I would like to ask unanimous consent for this
letter from the American Legion in support of my amendment, to
be entered into the record.
Chairman GRAVES. Without objection.
Ms. VELAAZQUEZ. My amendment, which is supported by the
American Legion, provides such assurances, and by doing so,
ensures that funds are authorized for the program each year. In
their letter, the American Legion states that they believe this
program needs to be properly and permanently funded. As the
representative of 2.4 million veterans in 14,000 posts, those
are strong words from the American legion.
With this in mind, I ask unanimous consent, that the letter
is entered into the record. This is necessary because as we all
know, the eligibility verification process requires resources.
Certification relies on application screening, examinations,
regular oversight, and site visits. To put it more
straightforward, if we are going to channel contracts to
veterans, we have to make sure that it is really veterans that
are actually getting them. It is also important to realize that
we have been down this path before and have seen the problems
that intergovernmental transfers cost when relied upon for
program funding. The Small Disadvantaged Business program
relied on such a scheme 10 years ago, but due to problems with
this structure, the program was unable to sustain itself. If
the funding structure in the bill is maintained, it would not
be a surprise to see the Vets First program cease operation in
a few years altogether. What my amendment does is no different
than what is already provided for the HUBZone and the 8(a)
minority-owned firms. We talk about the importance of a level
playing field, but what the underlying bill does is penalize
veterans by giving them an unreliable program.
Because of these reasons I urge you to vote yes on my
amendment and fully fund this important initiative for our
country's veterans. We owe this to our veterans and it is time
that we do right on their behalf.
Thank you, Mr. Chairman. I yield back.
Mr. BARBER. Mr. Chairman?
Chairman GRAVES. Who called?
Mr. BARBER. Mr. Chairman, I move to strike the last word.
Chairman GRAVES. Go ahead.
Mr. BARBER. As the son of a veteran of World War II, of
Korea, and Vietnam, and as a member who represents over 85,000
veterans, I am going to rise in support to this amendment.
The funding structure of the bill in its current form is
too unstable as it hinges on two agencies which we have asked
to work together in the past with little success. They have to
come to an agreement on paying for this program, and what they
have done in the past does not hold great promise for the
future. We need to ensure that veteran-owned businesses do not
become a bargaining chip if the VA and the SBA cannot reach an
agreement. And the only way to do this is to provide a
straightforward appropriation for the program.
Rather than hoping that these agencies will somehow
magically reach an agreement, we need to ensure from the outset
that this vital program has the right funding. Small businesses
invest time and money to enter into the federal marketplace, so
we need to provide them with a certainty that the program will
be operational so that they can and will make an investment.
This Committee has appropriated the other contracting programs,
such as HUBZone and 8(a) programs, and we should not treat our
veterans who have served our country valiantly--we should not
treat them any differently.
The bill in its current form fails to address what would
occur in the likelihood that the agencies failed to reach an
agreement for the initial funding or in the event of an
extension of the program. The vast majority of veterans'
businesses who are denied certification through the current
system have been denied because of their business structure,
not their status as veterans or service-disabled veterans.
Providing straightforward funding for this bill allows OHA, the
expert in determining whether or not a business is small, the
ability to hear appeals immediately.
I urge unanimous consent for Congresswoman Velaazquez's
amendment, and I yield back.
Mr. COFFMAN. Mr. Chairman?
Chairman GRAVES. Mr. Coffman?
Mr. COFFMAN. I move to strike the last word.
Chairman GRAVES. Go ahead.
Mr. COFFMAN. Mr. Chairman, the bill as currently written
respects not only the veterans of this country, I being one of
them, but also respects the taxpayers of this country in that
it merely continues an existing funding source that this
particular function has already been operating under.
Chairman GRAVES. Anyone else?
Mr. Schrader?
Mr. SCHRADER. Thank you, Mr. Chairman.
Big supporter of our veterans' community. Big supporter of
the underlying intent of this bill. I think it will go a long
way hopefully to improving what our veterans deserve as far as
small business opportunities.
And to the end, I mean, for the sake of efficiency, it just
seems odd to me that we have to go through kind of a byzantine,
arcane funding mechanism which slightly tarnishes the great
work that the Committee has done, the chairman and ranking
member. I mean, I do not understand why we need an offset for
something that saves you half the cost of the program. That
goes against common sense at the end of the day. There is no
constitutional, statutory, administrative rule that requires us
to do that, and it seems for the sake of the veterans
community, as has been state here by members of the Committee,
we want to make sure the money gets to the veterans so that
this program is done right, so there is no fraud in the
program, that these men and women that have served our country,
like Mr. Coffman, who I really appreciate, can actually get the
opportunities that they richly deserve. The offset thing has
been violated, if you will, in a number of other areas. Members
of this Committee, both republican and democrat, have voted for
the Skills Act, the Hazard Preparedness Reauthorization Act of
2013, the VA Major Medical Facility Bill, the Poison Control
Center. All those things are the same. I mean, I would like
just to have a clean deal here where, hey, we are cutting the
program cost in half. That is a huge win for the taxpayer. I
think to your point, to Mr. Coffman's point, let us just
appropriate the $15 million and make sure the money gets there
and call it good.
Ms. VELAAZQUEZ. Would the chairman----
Mr. SCHRADER. I yield back actually.
Ms. VELAAZQUEZ. Mr. Chairman, I would just like to add,
look, I have a list of the members, Republican members on this
committee, right here, you have voted on legislation that
contained no offset authorizations for new programs. This
amendment does not violate the Cut Gov't in containing House
Rule 21 plus 10. And it applies only to mandatory spending.
Discretionary spending is not mandatory.
Ms. HERRERA BEUTLER. Mr.----
Chairman GRAVES. Go ahead.
Ms. HERRERA BEUTLER. I do not know who I am asking. I am
asking Mr. Chairman for just a moment.
Chairman GRAVES. Sure.
Ms. HERRERA BEUTLER. So does this bill--I realize what I
heard cited a couple times was last year's bill is when we were
not operating under an agreed-to bipartisan, bicameral budget.
Are the bipartisan, bicameral budget that we enacted for
appropriations levels for this year, would this amendment
violate that enacted budget? Last year we did not--I mean, the
House passed a budget but there was nothing agreed to that we
were operating under. Would this violate that budget?
Let me ask that question to the sponsor.
Ms. VELAAZQUEZ. This is an authorizing committee. This is
not an Appropriations Committee. What we are doing is
authorizing a program. And in fact, we asked the
parliamentarian yesterday and he said you are correct. With
regards to the leadership protocols, you are correct that they
are not enforceable with a point of order. Additionally, budget
act points of order are not enforceable in committee.
Ms. HERRERA BEUTLER. No, I am not trying to get all
parliamentarian on you. I just want to know, are we violating
the spirit of the budget that we passed? That is all I want to
know.
Ms. VELAAZQUEZ. And I know that we do not. This amendment
does not.
Chairman GRAVES. Here is the reality, and I think everybody
in the room obviously supports veterans and want to make sure
that as, to Mr. Barber's point, anyone that has been denied, it
has been based on business models or business practices. That
is the reason we are trying to bring the SBA into this. That is
the purpose of this. And we want to use a slush fund. We think
they can do it for $10 million. There is $2 billion in this. It
is unappropriated dollars. We cannot touch it, and the fact of
the matter is, the reality is we have to have an offset. If we
take this to the floor with a $15 million authorization, we
have to have an offset or it is not coming to the floor.
Ms. VELAAZQUEZ. Mr. Chairman, what would happen if VA does
not collect the fees?
Chairman GRAVES. Well, the fact of the matter is no money
transfers until there is an agreement, until they come to a
conclusion. So if there is none, then nothing changes. Nothing
has changed. But what we are trying to do, at least at this
point, is attempt to fix this for those veteran-owned
businesses and allow them to be able to move forward. So the
bottom line is if there is no agreement, then no money
transfers and it stays exactly the way it is. If it works, and
I think it will work, and the fact of the matter is the last
time it did not work is because Congress did not reauthorize
it. That is the reason it did not work.
Ms. VELAAZQUEZ. It did not because we did not have the
oversight mechanism in place. It did not work because we did
not provide a funding stream like we do for other programs.
They deserve better. Veterans in this country deserve better.
Chairman GRAVES. I agree. And that is the reason we are
trying to fix it. OMB will have oversight over this, and the
fact is if we have to go with an offset there will not be a
bill. So nothing will change. So at least we are trying to fix
it.
So with that, does anyone else wish to be heard on the
amendment to the amendment in the form of a substitute?
Seeing none, the question is on the amendment offered by
Ms. Velaazquez to the amendment in the form of a substitute.
All those in favor say aye.
All opposed votes no.
The opinion of the chair is the noes have it.
Ms. VELAAZQUEZ. Mr. Chairman, I ask for a recorded vote.
Chairman GRAVES. A recorded vote has been requested.
Can we recess in the middle of that process, counsel?
Because I do not think we have time. That is going to delay us.
So everybody needs to--that is going to make everybody come
back.
So with that we will go ahead and recess. We will get the
vote out of the way and then we will come back and we will
finish with the recorded vote which we are in the process of
having. So we are in recess.
[Recess]
Chairman GRAVES. I will go ahead and call the markup back
to order.
We have had a recorded vote called. Clerk, please read the
roll.
CLERK. Mr. Graves?
Chairman GRAVES. No.
CLERK. Mr. Graves votes no.
Mr. Chabot?
Mr. CHABOT. No.
CLERK. Mr. Chabot votes no.
Mr. King?
[No response]
Mr. Coffman?
Mr. COFFMAN. No.
CLERK. Mr. Coffman votes no.
Mr. Luetkemeyer?
Mr. LUETKEMEYER. No.
CLERK. Mr. Luetkemeyer votes no.
Mr. Mulvaney?
Mr. MULVANEY. No.
CLERK. Mr. Mulvaney votes no.
Mr. Tipton?
Mr. TIPTON. No.
CLERK. Mr. Tipton votes no.
Ms. Herrera Beutler?
Ms. HERRERA BEUTLER. No.
CLERK. Ms. Herrera Beutler votes no.
Mr. Hanna?
Mr. HANNA. No.
CLERK. Mr. Hanna votes no.
Mr. Huelskamp?
Mr. HUELSKAMP. No.
CLERK. Mr. Huelskamp votes no.
Mr. Schweikert?
Mr. SCHWEIKERT. No.
CLERK. Mr. Schweikert votes no.
Mr. Bentivolio?
Mr. BENTIVOLIO. No.
CLERK. Mr. Bentivolio votes no.
Mr. Collins?
Mr. COLLINS. No.
CLERK. Mr. Collins votes no.
Mr. Rice?
Mr. RICE. No.
CLERK. Mr. Rice votes no.
Ms. Velaazquez?
Ms. VELAAZQUEZ. Aye.
CLERK. Ms. Velaazquez votes aye.
Mr. Schrader?
Mr. SCHRADER. Aye.
CLERK. Mr. Schrader votes aye.
Ms. Clarke?
Ms. CLARKE. Aye.
CLERK. Ms. Clarke votes aye.
Ms. Chu?
Ms. CHU. Aye.
CLERK. Ms. Chu votes aye.
Ms. Hahn?
Ms. HAHN. Aye.
CLERK. Ms. Hahn votes aye.
Mr. Payne?
[No response]
Ms. Meng?
Ms. MENG. Aye.
CLERK. Ms. Meng votes aye.
Mr. Schneider?
[No response]
Mr. Barber?
Mr. BARBER. Aye.
CLERK. Mr. Barber votes aye.
Ms. Kuster?
Ms. KUSTER. Aye.
CLERK. Ms. Kuster votes aye.
Mr. Murphy?
Mr. MURPHY. Aye.
CLERK. Mr. Murphy votes aye.
Mr. Payne?
Mr. PAYNE. Aye.
CLERK. Mr. Payne votes aye.
Chairman GRAVES. Are there any other members that wish to
vote?
Seeing none, please report the vote.
CLERK. The ayes are 10, the nays are 13.
Chairman GRAVES. On this vote the ayes are 10 and the noes
are 13. The amendment is not agreed to.
Are there any other amendments?
Seeing none, the question is on agreeing to the amendment
in the nature of a substitute to H.R. 2882 as amended.
All those in favor say aye.
All opposed votes no.
The opinion of the chair is the ayes have it.
The ayes do have it.
The amendment in the nature of a substitute is agreed to.
And without objection, a quorum being present, H.R. 2882 as
amended is favorably reported to the House.
And without objection, the Committee staff is authorized to
correct punctuation and to make other necessary technical
corrections and conforming changes.
H.R. 776
Chairman GRAVES. Our next bill for consideration is H.R.
776, the Security and Bonding Act of 2013 introduced by Mr.
Hanna, Ms. Meng, and myself. And I yield to Mr. Hanna to speak
on H.R. 776.
Mr. HANNA. Thank you, Chairman Graves.
I would like to thank Ranking Member Meng for her support,
Congressman Luetkemeyer, and Congressman Collins.
This bill has to do with the Miller Act, which requires
prime contractors to provide the government with a surety bond
when bidding construction projects. The overall purpose of a
surety bond is to protect the taxpayer, contractors, whoever
the agency may be in charge, ultimately, the owner.
What has happened in the past is that the assets behind
some of these surety bonds which ultimately back up the bond
itself have been specious assets and have not been claimable in
any format that we would recognize. This tightens that up and
requires certain assets that are liquid and discernable and
attachable.
I am happy to answer any questions about it but these bonds
have been a net increase to the treasury. There is a surplus in
there now and it is a very simple fix to a problem that could
be turned into a very large problem. It also expands the
program to allow for more small businesess to use these bonds.
Chairman GRAVES. Do any other members wish to be recognized
for a statement on H.R. 776?
The Committee now moves to consideration of H.R. 776.
Clerk, please report the title of the bill.
CLERK. H.R. 776, to amend Title 31, United States Code to
revise requirements related to assets pledged by a surety and
for other purposes.
Chairman GRAVES. Without objection, H.R. 776 is considered
read and open for amendment at any point. I have an amendment
in the nature of a substitute.
Clerk, please read the amendment.
CLERK. Amendment in the nature of a substitute to H.R. 776
offered by Mr. Graves of Missouri. Strike all the----
Chairman GRAVES. Without objection, the amendment is
considered read.
Without objection, the amendment in the nature of a
substitute shall be considered as the base text for the purpose
of amendment.
Surety bonds protect taxpayers and contractors alike, and
they ensure that the government is not left with unfinished
buildings and to make sure that subcontractors are paid in the
process. H.R. 776 as introduced strengthens those protections.
However, much of 776 falls within the jurisdiction of the
Judiciary Committee, which has not waived jurisdiction on this
bill. Therefore, my amendment and the nature of the substitute
ensures that we will not consider anything or any language that
is out of our jurisdiction, only the language that is within
our jurisdiction. I believe the bill as a whole and in part
deserves our support. The portions of H.R. 776 and this
Committee's jurisdiction is going to allow more small
construction companies to compete for federal contracts, and in
turn, bring down the prices, I think, at least on federal
construction projects. Based on data provided by the SBA, I am
convinced that we can accomplish this without putting taxpayers
at risk. And therefore, I would urge support of the bill.
I now recognize Ms. Velaazquez for her remarks.
Ms. VELAAZQUEZ. Yes, thank you, Mr. Chairman.
We often discuss the SBA's role in helping small firms
access capital by guaranteeing private loans. Less attention
has been paid to the SBA surety bond initiative, which performs
a parallel function in the area of bonding contractors. Current
law requires that any contractor doing construction or repair
work in excess of $150,000 must have a performance bonus,
essentially guaranteeing work will be completed in accordance
with the contract's terms.
In Fiscal Year 2013, the SBA's Surety Bond program
guaranteed 6,151 bonds on final bids. Absent this backstop, it
is likely that many small firms will struggle to find private
market companies willing to guarantee their work. Recent
analyses have suggested that women-owned and minority-owned
firms face greater challenges in finding private market surety
companies to bond them. As a result, this initiative is
particularly useful for many companies Congress has targeted
for greater involvement in the federal marketplace.
With this in mind, as we seek ways to foster small business
participation in the federal marketplace, the SBA Surety Bond
program will likely need to be part of that equation. With
projects growing in complexity, scope, and scale, it only makes
sense that bonds provided will seek larger guarantees for their
exposure.
This committee and the House have previously recognized the
economic value in the SBA Surety Bond program. As part of the
American Recovery and Reinvestment Act, we increase the program
site limit to encourage smaller firms to take on larger
projects. It is my hope the committee continues working
together to find ways to maximize the value of this initiative.
I thank the chairman for this legislation. And I yield back
and I support it.
Chairman GRAVES. Does any other member have an amendment to
offer?
Seeing none, the question is on agreeing to the amendment
in the nature of a substitute to H.R. 776.
All those in favor say aye.
All opposed votes no.
The opinion of the chair is the ayes have it.
The ayes do have it.
The amendment in the nature of a substitute to H.R. 776 is
agreed to.
Without objection, the Committee staff is authorized to
correct punctuation and make other necessary technical
corrections and conforming changes.
H.R. 4121
Our next bill for consideration is H.R. 4121, the Small
Business Development Centers Improvement Act of 2014, which is
introduced by Ranking Member Velaazquez.
I now yield to Nydia to speak on 4121.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
In every state, the SBA's network of 900 Small Business
Development Centers help would-be entrepreneurs build and
launch new enterprises. They also assist existing business
owners who are seeking to expand and grow their operations.
Whether it is how to construct a business plan, market
research, manufacturing assistance, or guidance for firms
seeking to begin exporting their goods abroad, SBDCs are
absolutely vital to small companies' success.
H.R. 4121, the Small Business Development Centers
Improvement Act gives SBDCs the tools and resources they need
to continue providing these invaluable services to our nation's
entrepreneurs. During this period of fiscal restraint, it is
important that we continue to look to proven programs like the
SBDCs. Doing so allows us to more efficiently allocate further
resources to those programs that have proven benefits.
SBDCs have a strong track record of success. In fact,
previous analyses have found that for every dollar invested in
them, $2.87 is returned to the treasury. It is rare to see such
a strong return on investment in any governmental program. That
document of financial return does not even include the very
extensive job creation and local economic development benefits
SBDCs bring to their communities.
At the same time that the SBDC program has demonstrated
such success, SBA has recently experimented with a series of
unproven programs that have neither been approved by the
committee, by Congress, nor adhere to the same performance
metrics as SBDC or other existing SBA entrepreneurial
development initiatives. Given that SBA and the rest of the
federal government is operating under significant budgetary
pressure, we must ensure the agency's resources are used
wisely.
It is with this in mind that I am putting forward H.R.
4121. It will ensure that any new entrepreneurial development
services will be offered through the agency's 16 networks. With
budgets tight and sequestration still in effect, we simply
cannot afford ``pie in the sky'' experimentation and
duplication in the SBA programs. The SBA's 16 entrepreneurial
development works, including not just SBDC but also Women's
Business Centers and SCORE as well, are positioned to channel
any new assistance to business owners. Using these existing
networks, rather than creating new, duplicative ones, will
ensure that the entrepreneurs receive the resources they need
without wasting taxpayer dollars on an unproven scheme. We must
also work to ensure that the SBDCs are freed up to do what they
do best--assist small business owners. In that regard, the
legislation makes a number of important changes that will
streamline their operations and reduce their administrative
burden. By granting SBDCs authority to better market their
services, the bill will expand outreach to small firms that may
not be aware these services exist. In addition, the legislation
ensures that SBDC grants are targeted to the not-for-profit and
higher education institutions that have proven to be such
viable partners in the SBDC program to date.
Mr. Chairman, in every economic downturn our nation sees a
spike in entrepreneurship. As more Americans turn to
entrepreneurship to support their families, we must ensure the
assets are in place to help them succeed. The legislation I am
presenting will improve the SBDC program and help new
entrepreneurs and existing businesses flourish and create new
jobs.
I urge my colleagues to vote yes, and I yield back the
balance of my time.
Chairman GRAVES. Thank you.
Are there any other members that wish to be recognized for
a statement on H.R. 4121?
Seeing none, I support the ranking member's bill for all
the reasons that she provided. Repeatedly, this Committee has
expressed concerns regarding SBA's creation of new and
unauthorized entrepreneurial programs in this already
overcrowded space, and this bill reflects the Committee's views
and estimates of the last three years. Both Ranking Member
Velaazquez and I have repeatedly stressed the need for SBA to
strengthen authorized programs, such as SBDCs, rather than
create initiatives that duplicate or overlap existing programs.
So with that, the Committee now moves to consideration of
H.R. 4121.
Clerk, please report the title of the bill.
CLERK. H.R. 4121, to amend the Small Business Act to
provide for improvements to Small Business Development Centers.
Chairman GRAVES. Without objection, H.R. 4121 is considered
read and open for amendment at any point.
Now with that----
Mr. MURPHY. Mr. Chairman?
Chairman GRAVES. Do you have an amendment?
Mr. MURPHY. I have an amendment at the desk.
Chairman GRAVES. Clerk, please report the amendment.
CLERK. Amendment 1 to H.R. 4121 offered by Mr. Murphy of
Florida.
Chairman GRAVES. Without objection, the amendment is
considered as read.
Gentleman, you have five minutes.
Mr. MURPHY. Thank you, Mr. Chairman.
I offer a common sense amendment to help small businesses
get back on their feet in the wake of natural disasters.
Currently, Small Business Development Centers are required by
law to assist only small businesses in the same state as them.
This makes sense most of the time, but not in the aftermath of
natural disasters, like Hurricanes Sandy and Katrina. More
often than not, SBDCs in areas hit by natural disasters are in
no position to assist their community because they themselves
are in the midst of recovering. My amendment would allow
unaffected SBDCs to assist small businesses in areas where the
president has declared a natural disaster.
I am sure you will all agree that this is a straightforward
fix to a needless problem. I ask my colleagues to support this
amendment, as well as the bipartisan bicameral Small Business
Disaster Reform Act where I first introduced this provision and
which has the support of multiple members of this Committee.
I yield the balance of my time.
Chairman GRAVES. Does any other member wish to be heard on
the amendment?
Ms. VELAAZQUEZ. Mr. Chairman, I strongly support the
gentleman's amendment. I, myself, have seen the work the SBDCs
have done right after 9/11 and right after Sandy, and it is
worth having the opportunity to be able to allow for personnel
from New York's SBDCs to go to Florida. They have the
experience. They have the expertise. They will help small
businesses navigate the bureaucratic processes with FEMA and
SBA. So it is a good amendment and I am very proud to support
it.
Chairman GRAVES. Do any other members wish to be heard on
the amendment?
With that, I think the amendment makes all the sense in the
world. I wish that members of Congress could do the same thing
that we are trying to allow the SBDCs to do in times of
emergency. I do not know if you know it, but members of
Congress cannot use their office personnel or their funds to be
able to help out another member of Congress if they have lost
their office in a natural disaster. So this makes all the sense
in the world.
So with that, the question is on Amendment 1 offered by Mr.
Murphy.
All those in favor to 4121, all those in favor say aye.
All opposed no.
The opinion of the chair is the ayes have it.
The ayes do have it.
The amendment is agreed to.
Mr. Payne?
Mr. PAYNE. I have an amendment at the desk.
Chairman GRAVES. Clerk, please report the amendment.
CLERK. Amendment 2 to H.R. 4121 offered by Mr. Payne of New
Jersey. Add at the end of the bullet the following: Section 1
inclusions----
Chairman GRAVES. Without objection, the amendment is
considered read. And with that, Gentleman, you have five
minutes.
Mr. PAYNE. Thank you, Mr. Chairman.
Prior to getting into the amendment, I have been listening
to the discussion this afternoon and I feel that my colleagues
offered some very good amendments around women and minorities
because historically they have been disadvantaged in those
areas.
I used to work for my uncle at one time in a printing
company and we went through the GSA process and the business
grew and we flourished. And when we got into the private
sector, the larger printing companies colluded to have the
paper companies, not sell this one company, the only minority
firm in that industry, not to sell us paper. We had to go to
our senator at that time in New Jersey and compel the paper
companies to start selling us the raw material again.
So the amendments that were offered by my colleagues
earlier to strengthen the focus on women and minorities are not
about equality but equity. The problem with equality in this
sense is that it addresses all groups without regard of the
historical privilege that one group has had and continues to
have.
Equity on the other hand acknowledges the unfair treatment
that has disadvantaged certain groups in attempts to level the
playing field. Even with the proposed increases in contracting
goals for women and minorities, we would not even begin to see
the equity.
I hope my colleagues can begin to understand equality
versus equity as we move forward, and my amendment addresses
the unemployed, another group facing tough times. The amendment
looks at the current unemployment rate at 6.6 percent, but for
every one job available there are three people actively
searching for employment. Since 1995, small businesses have
generated over 65 percent of the net new jobs and over 50
percent of the working population is employed by small
business.
As we look to strengthen the SBDCs and expand support for
entrepreneurs through Ranking Member Velaazquez's bill, we
should also look to expand the pathway to entrepreneurship
specifically for the unemployed. My amendment ads
entrepreneurial education and support for the unemployed
individuals to list the services provided by Small Business
Development Centers. Entrepreneurship is one of the most viable
career and economic growth opportunities, and as we shore up
our efforts to support entrepreneurs, we must include the
unemployed as well. And I hope this is one subgroup that we can
understand we need to support. So I urge my colleagues to
support this amendment.
Chairman GRAVES. Do any other members wish to be heard on
the amendment?
Mr. BARBER. Thank you, Mr. Chairman. I want to
wholeheartedly support Congressman Payne's amendment and thank
him for his work to spur entrepreneurship in our communities.
And I also want to say how much I appreciate his preliminary
comments and what he had to say about equity.
We had an opportunity several times today to bring equity
to groups in our country that have been disadvantaged and we
fail to do so. I hope we can reconsider and do a better job in
the future, but I certainly want to commend the congressman for
making that very clear to all of us.
As a former small business owner, my wife and I ran a small
business in our community for 22 years. We know, as Congressman
Payne pointed out, that small businesses are our best job
creators, and I believe that is why we must do more to ensure
that potential entrepreneurs--people who are currently
unemployed would be in that group--have the tools and the
knowledge they need to succeed.
I encourage all my colleagues on the Small Business
Committee to support this amendment. I believe it is the right
thing to do and hopefully we will all agree and vote yay on
this amendment.
Thank you. I yield back.
Chairman GRAVES. Do any other members wish to be heard on
the amendment?
Seeing none, just to clarify real quick, the amendment
continues to promote entrepreneurship as an option for the
unemployed, and it does so by just using already existing
resources that the SBDCs have. And with that, I do support it.
The question is on the amendment offered by Mr. Payne,
Amendment 2 to H.R. 2141.
All those in favor say aye.
All opposed no.
The opinion of the chair is the ayes have it.
The ayes do have it.
The amendment is agreed to.
Does any other member wish to seek recognition with an
amendment?
Seeing none, the question is on agreeing to H.R. 4121 as
amended.
All those in favor say aye.
All opposed no.
The opinion of the chair is the ayes have it.
H.R. 4121 is agreed to.
Without objection, a quorum being present, the bill is
favorably reported to the House.
Without objection, the Committee staff is authorized to
correct punctuation and make other necessary technical changes
and conforming changes.
With that, the last bill that we have is H.R. 2452, the
Women's Procurement Program Equalization Act of 2014 introduced
by Ranking Member Velaazquez.
I now yield Nydia for her remarks on H.R. 2452.
H.R. 2452
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
Despite the increased presence of women-owned businesses in
our economy, the federal government has continually failed to
meet its 5 percent procurement goal for women-owned small
businesses. Data for Fiscal Year 2013 indicates that only 4.3
percent of eligible federal contracting dollars were awarded to
these businesses. Failure to meet this goal deprived women-
owned businesses of over $2 billion in contracting dollars.
Through the Women's Procurement program, women-owned small
businesses are eligible for contracts in 83 industries that
have historically had underutilization of women-owned
businesses. However, since its inception, the program has faced
obstacles as it took over a decade to adopt rules that would
put the program into effect.
While its implementation was great progress, it by no means
fixed the inequity that exists as the Women's Procurement
program continues to lag behind. Simply put, contracting
officers lack the options under this program that exist under
other programs. To address these issues, H.R. 2452, the Women's
Procurement Program Equalization Act of 2013 seeks to give
federal agencies the tools to award more contracts to women-
owned businesses.
Let me be clear. The bill does not create new tools solely
for women-owned businesses, but rather allows contracting
officers to use the tools that are currently available under
existing programs, such as the HUBZone and 8(a) initiatives.
The main issue here is about parity.
The disparity in the tools available to contracting
officers to award contracts to women-owned businesses has
limited the effectiveness of the program. In the last fiscal
year, there were only 807 contracting actions worth $40 million
awarded through the Women's Procurement program. This amounts
to only .0004 percent of dollars awarded to small businesses
and only .0001 percent of eligible contracting dollars. The
program has also been hindered by flaws in its certification
process. Existing law has asked businesses to certify their
eligibility for the program and then be verified by the agency
or third parties. With agency procurement officers acting as
the certifiers, the certification process has become bogged
down. These officials should be focused on awarding contracts
to women-owned small businesses, not spending resources on an
extensive certification process. To address this issue, the
legislation puts SBA in charge of certifying participants. If
unable to do so, the SBA may continue to approve third-party
certifiers to carry out such responsibilities. Until we can
ensure a uniform certification process, female business owners
will never reap the full benefits of the Women's Procurement
program.
We continually hear that what small businesses need most in
this economy are customers. Well, our own federal government
continues to be the largest customer that a small business can
have, yet the federal marketplace remains largely untapped by
women-owned businesses. Additionally, by ensuring that these
businesses receive their fair share of contracting dollars, we
could further increase job creation. If the 5 percent goal was
met, women-owned businesses could create over 673,000 new jobs.
Strengthening this initiative is critical to the almost 8
million women-owned businesses in the United States. Making up
nearly 30 percent of all businesses across the country and
generating $1.2 trillion in revenue, they are a rapidly growing
part of our national economic fabric. Ensuring that they have
access to government contracts is essential for their continued
growth and that is exactly what this bill will do.
Thank you, Mr. Chairman. I yield back.
Chairman GRAVES. Do any other members wish to be recognized
for a statement on 2452.
Mr. BARBER. Mr. Chairman, I move to strike the last word.
Chairman GRAVES. Go ahead.
Mr. BARBER. I want to thank Ranking Member Velaazquez for
introducing this important legislation, and I am proud to
cosponsor the bill which provides additional support to women
business owners in their efforts to make contracts or have
contracts with the Federal Government.
We can and must do better. We have a goal for women-owned
businesses under the law which we are not meeting, and we have
to do better to bring women-owned businesses into contracts
with federal agencies. Women-owned businesses are a critical
part of the economy in my Southern Arizona district, and of
course, nationwide. And the steps we take to help these small
businesses will boost the overall economy as we continue
working to improve the jobs market. This bill gives procurement
personnel the authority they need to expand the number of
women-owned businesses being awarded contracts and allows the
SBA to meet the goal of 5 percent.
I encourage my colleagues on both sides of the aisle to
support and vote for this important bill.
Thank you, Mr. Chairman. I yield back.
Chairman GRAVES. Any other members wish to be recognized on
H.R. 2452?
Seeing none, I do support 2452. I think the legislation
does bring some parity among the SBA's contracting programs,
and that is something this Committee has long supported.
So the Committee now moves to consideration of H.R. 2452.
Clerk, please report the title.
CLERK. H.R. 2452, to amend the Small Business Act with
respect to procurement program for women-owned small business
concerns and for other purposes.
Chairman GRAVES. Without objection, H.R. 2452 is considered
read and open for amendment at any point.
Does anyone wish to offer an amendment?
Seeing none, the question is on agreeing to H.R. 2452.
All those in favor say aye.
All opposed votes no.
It is the opinion of the chair the ayes have it.
The ayes do have it.
H.R. 2452 is agreed to.
Without objection, a quorum being present, the bill is
favorably reported to the House.
And without objection, again, the Committee staff is
authorized to correct punctuation and make other necessary
technical changes and conforming changes.
And with that, I thank everybody for coming back. And the
markup is adjourned.
[Whereupon, at 4:28 p.m., the Committee was adjourned.]
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