[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]





   HIRING MORE HEROES: A REVIEW OF SBA'S OFFICE OF VETERANS BUSINESS 
                              DEVELOPMENT

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

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                            NOVEMBER 8, 2017
                               __________









[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




                       

            Small Business Committee Document Number 115-047
              Available via the GPO Website: www.fdsys.gov
              
              
              
              
              
              
              
              
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                      STEVE CHABOT, Ohio, Chairman
                            STEVE KING, Iowa
                      BLAINE LUETKEMEYER, Missouri
                          DAVE BRAT, Virginia
             AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
                        STEVE KNIGHT, California
                        TRENT KELLY, Mississippi
                             ROD BLUM, Iowa
                         JAMES COMER, Kentucky
                 JENNIFFER GONZALEZ-COLON, Puerto Rico
                          DON BACON, Nebraska
                    BRIAN FITZPATRICK, Pennsylvania
                         ROGER MARSHALL, Kansas
                      RALPH NORMAN, South Carolina
               NYDIA VELAZQUEZ, New York, Ranking Member
                       DWIGHT EVANS, Pennsylvania
                       STEPHANIE MURPHY, Florida
                        AL LAWSON, JR., Florida
                         YVETTE CLARK, New York
                          JUDY CHU, California
                       ALMA ADAMS, North Carolina
                      ADRIANO ESPAILLAT, New York
                        BRAD SCHNEIDER, Illinois
                                 VACANT

               Kevin Fitzpatrick, Majority Staff Director
      Jan Oliver, Majority Deputy Staff Director and Chief Counsel
                     Adam Minehardt, Staff Director
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                     
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Steve Chabot................................................     1
Hon. Nydia Velazquez.............................................     2

                                WITNESS

Ms. Barbara Carson, Associate Administrator, Office of Veterans 
  Business Development, United States Small Business 
  Administration, Washington, DC.................................     3

                                APPENDIX

Prepared Statements:
    Ms. Barbara Carson, Associate Administrator, Office of 
      Veterans Business Development, United States Small Business 
      Administration, Washington, DC.............................    20
Questions and Answers for the Record:
    Questions from Hon. Knight and Hon. Bacon to Ms. Barbara 
      Carson and Answers from Ms. Barbara Carson.................    27
Additional Material for the Record:
    None.
 
   HIRING MORE HEROES: A REVIEW OF SBA'S OFFICE OF VETERANS BUSINESS 
                              DEVELOPMENT

                              ----------                              


                      WEDNESDAY, NOVEMBER 8, 2017

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 11:00 a.m., in Room 
2360, Rayburn House Office Building. Hon. Steve Chabot 
[chairman of the Committee] presiding.
    Present: Representatives Chabot, Luetkemeyer, Brat, Kelly, 
Blum, Marshall, Norman, Velazquez, Evans, Lawson, Clarke, 
Adams, Espaillat, and Schneider.
    Chairman CHABOT. Good morning. The Committee will come to 
order.
    As Veterans Day approaches this Saturday, this Committee is 
reminded of the incredible contributions those who have served 
have made to our country. Our Nation's veterans have made 
extraordinary sacrifices, put their lives on the line, and kept 
our country safe. Not only are they our fathers and mothers and 
sisters and brothers and friends, they are our heroes.
    Today, we will examine the Small Business Administration's 
Office of Veterans Business Development and ask ourselves, what 
can we do better for them? America's military men and women 
defend and protect our country, and they also learn many real-
world skills needed to operate a successful business. 
Leadership and discipline are instilled in every soldier from 
the day they start basic training. That is why many veterans 
choose to start a small business when they return home from 
service.
    However, veteran employment levels have historically fallen 
behind those of their nonveteran counterparts. This is often 
due to the difficulties veterans face when transitioning from 
the military to the workforce. Research shows that veterans 
face many barriers to employment that their peers do not, such 
as potential employers' difficulty in understanding a military 
resume or the result of a service-connected disability, for 
example. We can and must do better for our veterans.
    The SBA's Office of Veterans Business Development was 
established to help bridge this gap. They offer training and 
counseling programs, monitor Federal procurement for veteran-
owned small businesses and service-disabled veteran-owned small 
businesses, and assist with access to capital.
    However, as we know, there is always room for improvement, 
especially when it comes to our men and women in uniform. Today 
I hope that this hearing will reveal some of the ways we can 
get our veterans back into the workforce.
    Before we begin, I would like to take a moment to recognize 
some of my fellow colleagues who have served or are still 
serving in our military. Mr. Knight, Mr. Kelly, Mr. Bacon, Dr. 
Marshall, thank you for your service to our country. 
Unfortunately, a number of those folks are not here today, but 
as always happens, we have a number of Committees going on at 
the same time. We, again, want to thank them for their service.
    And I would now like to yield to the ranking member, Ms. 
Velazquez, for her opening statement.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman. And thank you for 
holding this important hearing regarding the SBA resources 
available to veterans.
    To help honor the sacrifices of our military in light of 
Veterans Day, this hearing gives us the opportunity to 
highlight veterans' economic contributions. Over the last 
century, these brave Americans have fought in Afghanistan, 
Iraq, Vietnam, Korea, and Europe, for not only our freedoms, 
but for the freedoms of others. We owe them a debt we can never 
fully repay. At minimum, we can help afford them the 
opportunity to build a new life after their many years of 
military service.
    Veterans possess unique skills and experience that make 
them ideally suited to entrepreneurship. Studies have shown 
that it is not the military training, but the personality 
traits and leadership attributes of our veterans that make them 
such strong business professionals. This is evidenced by the 
rate in which veterans start small businesses compared to the 
wider population. For instance, the share of young veteran 
business owners has grown while the rate of nonveteran owners 
has dropped in recent years.
    While veterans clearly have a knack for entrepreneurship, 
we must ensure they have the support they need to start and 
grow their businesses, whether it is help creating a business 
plan, navigating the procurement process, marketing a new 
product, or identifying international trade opportunities, the 
SBA's veterans entrepreneurial programs provide an array of 
services to help small firms flourish.
    One of the most important tools we have to accomplish this 
mission is the Service-Disabled Veteran-Owned Small Business 
Procurement program. In 2016, this initiative awarded more than 
200,000 contracts worth over $16 billion to SDB small firms. 
This amounted to twice as many contracting actions as we saw in 
2015. These awards accounted for over 3.9 percent of all small 
business eligible federal contracts meeting the statutory goal 
of 3 percent for the fourth year in a row. These 
accomplishments should be applauded.
    At the same time, we should note that we can do much 
better. There has been a decrease by 0.22 percent from 2015 to 
veteran-owned small businesses. Given that entrepreneurship 
remains a promising career path for many of these men and 
women, programs like the ones we are discussing today are 
critical to reducing the unemployment rate for veterans, which 
remain close to 6 percent for the most recent generation who 
serve in Iraq and Afghanistan. Recognizing the specialized need 
of veterans, the SBA has the Office of Veterans Business 
Development whose mission is to maximize the availability, 
applicability, and usability of all administration small 
business programs for veterans, service-disabled veterans, 
reserve component members, and their dependents or survivors. 
These are a range of SBA entrepreneurial development programs 
targeted at our veterans, most notably the Veterans Business 
Outreach Centers which serve over 600,000 clients each year.
    With respect to all of these programs, it is vital that 
taxpayer resources are being used wisely and to maximum effect. 
That is why this Committee has long pushed for clear metrics 
and accountability, especially among the newer pilot programs 
at SBA. However, promoting efficiency and ending duplications 
should not be an excuse to underinvest in entrepreneurial 
development. I think I speak for all the members here today in 
saying that we will do whatever it takes to help all veterans 
overcome the challenges they face in today's economy.
    I look forward to hearing how the SBA programs are helping 
meet the needs of veterans and what we can do to improve them. 
I thank the witness for being here today, and I yield back. 
Thank you, Mr. Chairman.
    Chairman CHABOT. Thank you very much. The gentlelady yields 
back.
    And if Committee members have opening statements prepared, 
I would ask that they be submitted for the record.
    And now I will take just a moment to review our timing 
rules with our one witness today, Ms. Carson. We operate under 
the 5-minute rule, and there are some lights in front of you. 
The yellow light will come on when you have got a minute to 
wrap up and then the red light will come on and that means your 
5 minutes are up. And if you could stay within that, you know, 
we will give you a little bit of leverage there if you need it. 
But we appreciate you being here today.
    And I would now like to introduce our very distinguished 
witness here this morning, Ms. Barbara Carson, who is the 
associate administrator for the SBA's Office of Veterans 
Business Development. She also oversees the office's staff and 
their programs, including counseling, access to capital, and 
Federal contracting for veteran, service-member, and military 
spouse-owned small businesses. And especially significant is 
Ms. Carson is a colonel in the U.S. Air Force Reserve and has 
served for over 20 years as an active duty and reserve officer. 
And we want to thank you not only for being here this morning, 
but especially for your service to our country. We greatly 
appreciate that.
    And without further ado, you are recognized for 5 minutes.

STATEMENT OF BARBARA CARSON, ASSOCIATE ADMINISTRATOR, OFFICE OF 
  VETERANS BUSINESS DEVELOPMENT, UNITED STATES SMALL BUSINESS 
                         ADMINISTRATION

    Ms. CARSON. Chairman Chabot, Ranking Member Velazquez, and 
distinguished members of this Committee, good morning. And 
thank you so much for this opportunity to testify today on the 
U.S. Small Business Administration's continuing efforts to 
empower veteran entrepreneurship and small business ownership 
through programs and policies that optimize SBA services for 
veterans, servicemembers, and their spouses, too. I am honored 
to work at the SBA and to empower veterans to be the next great 
generation of entrepreneurs.
    As a servicemember currently in the Air Force Reserve and 
the spouse of an Air Force officer for over 20 years so far, I 
know the challenges and the rewards that come with military 
life, and I know firsthand that entrepreneurship can be an 
incredibly rewarding endeavor for people like me.
    While I served on active duty and as a reservist, I have 
followed my husband through multiple moves and found that it 
was challenging to maintain my professional career and my own 
interests. While stationed in Okinawa, Japan, a veteran friend 
and I did start our own small enterprise. It was a fulfilling 
experience for me that I share with other veterans and military 
spouses to empower them to do what they love every day. It is 
that opportunity for their success that drives my service at 
SBA.
    On behalf of Administrator McMahon, I am pleased by the 
opportunity to represent SBA's Office of Veterans Business 
Development. More than half of my team has served in uniform 
and we are proud to serve veteran entrepreneur ourselves.
    In addition to our program office staff, I would like to 
thank and recognize the veterans who are currently working at 
SBA. We are fortunate to have almost 850 veterans employed at 
SBA now, and we are lucky to have these veterans in public 
service. In fact, Administrator McMahon, at this very moment, 
is hosting a recognition ceremony for these veterans at SBA.
    Mr. Chairman, thank you and the Committee for hosting this 
hearing today. The timing is perfect as we head into Veterans 
Day. This is an opportunity to highlight some of the great 
things that are happening at SBA thanks to your support and 
also the incredible talent and dedication of my colleagues in 
the field offices, as well as resource partners around the 
country. These include the Veterans Business Outreach Centers 
and their increased participation in transition assistance, 
which is where SBA serves transitioning servicemembers and 
military spouses through the Boots to Business program and 
veterans of all eras through Boots to Business Reboot.
    Outreach is incredibly important and we work hard to ensure 
that veterans are aware of and connected to SBA resources. 
These include three outreach grants focused on service-disabled 
veterans, women veterans, and veterans seeking opportunities in 
Federal procurement. In addition, SBA conducts robust military 
community outreach. By participating at the national level and 
regional as well, and by leading SBA's National Veterans Small 
Business Week, we ensure that veterans know about the success 
that they can achieve in small business ownership and 
demonstrate how SBA can get them started.
    There are 2.5 million veteran-owned small businesses in the 
United States at this time, and as we honor them this Veterans 
Day and thank them for their sacrifices, we at the SBA want all 
veterans and military families to know about those resources 
that are available to them and to help them follow their 
military service with small business ownership. Each year, more 
than 200,000 veterans connect with the SBA and its resources to 
start or expand small businesses. Many veterans report that 
owning a small business is a way to continue their mission of 
serving others, first their country and then their community.
    And we as a Nation continue to benefit from these 
contributions that they are making. Veteran-owned small 
businesses generated over $1.4 trillion in sales last year, 
making them an integral part of our Nation's economy and our 
identity. Research tells us that veterans do make great 
entrepreneurs. Military experience equips them with leadership 
and management skills they can apply to their civilian 
endeavors.
    I thank you again for this opportunity to be here today, 
and I welcome any questions that you may have.
    Chairman CHABOT. Thank you very much. And I will recognize 
myself for 5 minutes to begin the questioning.
    Something that we hear in this Committee a lot is the 
significance, the importance of access to capital. It is one of 
the greatest challenges that a lot of small businesses face, 
veterans as well, and that is one of the reasons the ranking 
member and I introduced the Veterans Entrepreneurship Act a 
couple years back, which was signed into law by the President. 
And basically what it does is to waive the upfront loan 
guarantee for 7(a) loan programs, the guarantee for veterans 
and military spouses under the SBA Express program. And in 
addition to waiving this fee, could you discuss what your 
office, the Office of Veterans Business Development does to 
help entrepreneurs to find financing that they need to create 
their dream, to create this business?
    Ms. CARSON. You are exactly right, sir. And thank you for 
the question on access to capital. That is a challenge for 
veteran entrepreneurs and, unfortunately, one that is not 
unique to aspiring entrepreneurs. It continues to be a problem.
    Many veteran small business owners do rely on personal 
credit and savings to start--and that is not a bad thing. That 
is bootstrapping. But many, to be successful and sustain, need 
that capital. And I am grateful for the Veteran 
Entrepreneurship Act of 2015, it has been very meaningful. 
Millions of dollars saved in fee relief has allowed folks to 
keep more working capital in their businesses and perhaps even 
hire others on their teams, rather than paying fees.
    Beyond that, we have recognized through more robust 
participation and transition assistance that a 7(a) loan or a 
504 loan may be a little further down the road for many of 
these new entrepreneurs. I have great hope for the successes we 
are seeing in the Community Advantage program, and also 
Microloans, for getting those smaller amounts of capital and 
building that great record of credit; that will help them be 
more prepared to take on growth through the 7(a) programs.
    Chairman CHABOT. Thank you very much.
    In the past, the SBA has stated that they are working to 
streamline efforts across their entrepreneurial development 
programs. How has the SBA streamlined efforts? And how does 
this affect veteran entrepreneurs particularly?
    Ms. CARSON. There are a couple of ways that we have 
streamlined. In the entrepreneurship programs, which I can 
speak to directly particularly in Boots to Business, we are 
making it easier for people to find us, so increased outreach, 
and making it easier for them to activate by finding that once 
I know about you I can connect with the programs that are 
meaningful.
    So we have introduced new technology in the past 2 years--
trying to better capture a veteran as soon as they know about 
us, get them to a program, and then ensure that they find the 
other resources across SBA to connect with and take part in 
programs. That is one.
    Another is recognizing our unique place in the ecosystem of 
resource partners and really understanding the Veterans 
Business Outreach Centers, our focus on that transitioning 
servicemember and their spouse.
    Chairman CHABOT. Great. Thank you very much.
    And finally, many Federal agencies, namely the Departments 
of Veterans Affairs, Labor, and Defense, have launched veteran 
assistance programs similar to those available at the SBA. In 
our view, how do SBA's programs meet a need that is currently 
unmet by other Federal programs? And how does the SBA engage 
with other agencies to see if duplication can be reduced? And 
that is one of the, I would say, the greatest inefficiencies in 
the Federal Government is duplication. What can you do about 
that?
    Ms. CARSON. I am confident that our interagency 
collaboration between Department of Defense, Department of 
Veterans Affairs, Labor, and SBA, is optimized. We have seen 
incredible capabilities contributed, and we are doing more 
referral among ourselves to our programs. One example is 
through transition assistance. I think that veterans and 
servicemembers now know that what DOL provides is unique and 
different than what SBA is providing. For example, I do want 
those American job centers. That is going to be the talent pool 
from where small business owners can hire new employees.
    At the Veteran Affairs, I am very well connected to the 
vocational, rehabilitation, and employment services for those 
who are eligible for self-employment. And I am ensuring that VA 
knows they do not have to train people on business plans. They 
are referring them to our SBA resource partners. That is the 
way it should work. We have a unique place in the government 
for small business and entrepreneurship and these agencies 
recognize it and send them to us, and I do not foresee that we 
are duplicating at this time, sir.
    Chairman CHABOT. Thank you very much. My time is expired.
    The ranking member is recognized for 5 minutes.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman.
    Ms. Carson, I commend your work to extend the reach of the 
VBOCs through instituting local initiatives such as VBOC on the 
reservations. Given the recent natural disasters that have 
taken place in Puerto Rico and the Virgin Islands, do you 
consider looking at that to assist veterans present in Puerto 
Rico and the U.S. Virgin Islands?
    Ms. CARSON. The role of the Veterans Business Outreach 
Center, as you said, yes, their primary mission is to serve 
transition assistance programs and the members that are 
eligible for that. But that local connection is valuable, as 
you have said, and they have contributed to training through 
both Boots to Business and Reboot in Puerto Rico.
    The Veterans Business Outreach Centers this past year for 
the first time have been a part of the continuity of operations 
plan of the Small Business Administration, and while they will 
not have a leading role in that effort, yes, they are engaged, 
and they do have a significant role that they can play in 
Puerto Rico.
    Ms. VELAZQUEZ. So going forward, will you be able to 
provide us any data as to veterans in Puerto Rico, in the 
Virgin Islands that have been served through these veteran 
centers?
    Ms. CARSON. Absolutely, I can.
    Ms. VELAZQUEZ. Okay. So Veterans Business Outreach Centers 
assist veterans in numerous areas such as business planning and 
management. How often does the SBA refer veterans to these 
centers? And do you have any data available for referral to 
VBOCs versus the other veteran-specific programs?
    Ms. CARSON. Thank you for that question. It is a valuable 
one to me and one that we have put a lot of time into. Just 
recently, I know it is just a form, but these are important 
because it is hard to gather data without having a way to 
collect appropriately, and so for the first time ever, Veterans 
Business Outreach Centers are on SBA's Form 641. And we have 
included where a client can say where they were referred from. 
However, all of this is voluntary, so we are also expecting our 
Veterans Business Outreach Centers and have made requests to 
the other resource partners, that they identify referrals. And 
not only the referral, but the follow-up. That is one part of 
our effort through a new management system. We are using a 
platform because I recognize now, with the transition 
assistance population particularly, small business ownership 
may not be their very next step. I need to know that I 
connected with them here and I have a way to stay engaged 
through their process of actually going to business creation, 
getting a loan, and getting that Federal contract.
    Ms. VELAZQUEZ. Do you have enough resources to keep up with 
the veteran client demand?
    Ms. CARSON. That continues to be a challenge with just the 
Veterans Business Outreach Centers. There are 20 around the 
United States at this time, with 50 counselors. And you see 
that they served 55,000 this year. I recognize, as I have said, 
that we serve a unique place in the ecosystem, particularly 
with transition assistance, which is their statutory mission, 
first and foremost. I want transitioning servicemembers to know 
all of the resource partners. So those referrals are important, 
and that is the way I stretch the value of the veterans 
program.
    Ms. VELAZQUEZ. So do you feel that there is a need to 
increase those 20 outreach centers----
    Ms. CARSON. At this time----
    Ms. VELAZQUEZ.--so that we could provide opportunities? 
After all, we are so grateful for their service.
    Ms. CARSON. At this time, there is a great opportunity to 
increase our service through Veterans Business Outreach 
Centers. And we have done the analysis as to where we would put 
additional if we had----
    Ms. VELAZQUEZ. Is that reflected in the budget submission?
    Ms. CARSON. I, at this time, have not submitted that in the 
budget request. We have just completed our analysis for fiscal 
year 2017, which was very instrumental in determining exactly 
what we need.
    Ms. VELAZQUEZ. We discussed access to capital, access to 
credit, so what are you doing in terms of increasing venture 
capital opportunity for some of the businesses, veteran 
business owners, who do not want to acquire debt financing, or 
maybe that is not the answer for them. What are you doing in 
that respect?
    Ms. CARSON. Thank you for that question. Primarily, I do 
rely on working with my colleagues in the Office of Innovation 
and Investment to find opportunities, and I do have a member of 
my team where he leads us in that portfolio in recognizing 
opportunities there.
    Ms. VELAZQUEZ. Okay. Thank you, Mr. Chairman. I yield back.
    Chairman CHABOT. Thank you. The gentlelady yields back.
    The gentleman from Missouri, Mr. Luetkemeyer, who is the 
vice chairman of this Committee, is recognized for 5 minutes.
    Mr. LUETKEMEYER. Thank you, Mr. Chairman. And thank you, 
Ms. Carson, for your work to help our veterans be able to 
assimilate back into society and be able to have an opportunity 
at the American dream they have helped protect and enable the 
rest of us to enjoy as well.
    I want to follow up on some of the points that the chairman 
made with regards to the duplication of efforts here. You know, 
there is a letter from SBA dated August 2013 to the Committee. 
It indicated that the SBA had created 22 programs without 
statutory authority from Congress. Of the 22, three fell under 
OVBD: Boots to Business, Veteran Women Igniting the Spirit of 
Entrepreneurship, and the SBA Veteran Pledge Initiative. And 
apparently, since 2013, SBA continues to produce more programs 
that are apparently unauthorized. And while I support what they 
are doing here, are you aware of the fact that you are 
unauthorized to do some of this?
    Ms. CARSON. Sir, thank you for your question. And I do 
receive direction through statutory guidance, and it is my role 
to implement it. And I have done just that. I believe of the 
programs mentioned, there are several in the veterans 
portfolio. I cannot speak for the rest of the agency, but I am 
providing transition assistance, and also outreach programs as 
indicated by statutory guidance.
    Mr. LUETKEMEYER. Okay. When you initiate a new program, 
what is the process you go through?
    Ms. CARSON. I first refer to the statutory guidance, which 
in this case, for Boots to Business, is the authority to 
provide transition assistance and participate in that.
    Mr. LUETKEMEYER. What initiates the process? Is there some 
thing or some incident or some group that comes to you and says 
we have a void here? And do you then go to the other agencies? 
I mean, the chairman indicated there are three other agencies 
out there that do the same thing. And so I am not trying to be 
negative about what you are doing. I am just looking at the 
concern that we have here of the overlap that would seem to be 
there. If you have four different agencies that provide 
opportunities for enhancing the veterans' abilities to get 
business up and running, and yet you have 22 different programs 
here that were created by your own letter, how can you justify 
continuing to put more and more and more programs on the books 
when there seems to be a plethora of programs, not only in your 
agency, but others as well?
    Ms. CARSON. Thanks for the opportunity to respond. I will 
respond with just Boots to Business because that is a clear 
example.
    In 2014, we did receive an appropriation that directed SBA 
to fund and execute a transition assistance program. It happens 
to be called Boots to Business. It is not duplicated anywhere 
else in Federal Government, but you are correct in saying that 
four agencies do participate in transition assistance by each 
providing their unique contributions to that servicemember's 
transition in one program.
    Mr. LUETKEMEYER. Okay. The President has an initiative 
right now for all agencies to review programs in each agency. 
Where are you in the process of reviewing your programs?
    Ms. CARSON. We are pretty far down the road. We have done a 
great job of optimizing where we can, looking for places where 
even within our agency we may be doing similar things that we 
could better optimize by having one----
    Mr. LUETKEMEYER. Can you give me an example?
    Ms. CARSON. Yes. We are looking at resource partners, for 
example, and the Veterans Business Outreach Center is one that 
I have looked at. So the differentiation I can clearly explain 
now. I think, and I hope, to demonstrate that we are acting on 
that differentiation.
    Mr. LUETKEMEYER. What kind of metrics do you use to measure 
the success of a program so it can continue or needs to be 
changed or needs to be eliminated?
    Ms. CARSON. I feel confident that what we are measuring for 
our programs are consistent across the agency both in how we 
define a data field and that we value its relevance so that it 
is meaningful. For the Veterans Business Outreach Centers in 
particular, we are looking at their reach. So outreach is 
important. The thing that I hear most frequently when I connect 
with veterans and military families is that they did not even 
know these resources existed for them. That is something that 
is very valuable.
    Business starts, of course that is a mission of our agency, 
to start and sustain businesses. That is another metric that we 
measure.
    Mr. LUETKEMEYER. Okay. Well, it would seem to me that not 
just starts, but the sustaining of that entity, of course, you 
can never--you know, it is always roll the dice sometimes on 
this. And so I understand there is going to be some successes 
and some failures, but I would hope that the analysis of the 
entity, the individual you are going to help and the entity 
they are going to create is something that is taken into 
account so that we can make sure we help people rather than 
hurt them. You know, to get somebody involved in a business 
that they cannot be successful in is probably more hurtful than 
saying no to them. I have been in the business for 35 years of 
loaning money to people and sometimes you do them a favor when 
you say no.
    But I appreciate all you have done to help our servicemen 
and -women to be able to acclimate themselves back into our 
society and be productive citizens in a different way and 
enhance their ability to be able to enjoy the successes that 
they have helped us with. So thank you so much, Ms. Carson.
    Ms. CARSON. Thank you, sir.
    Chairman CHABOT. Thank you very much. The gentleman's time 
is expired.
    The gentleman from Pennsylvania, Mr. Evans, who is the 
ranking member of the Subcommittee on Economic Growth, Tax, and 
Capital Access, is recognized for 5 minutes.
    Mr. EVANS. Thank you, Mr. Chairman.
    Good morning. It is a pleasure to meet you.
    Your Boots to Business program, I am very much interested 
in really how has their move proceeded at this particular 
point?
    Ms. CARSON. At this particular point, is there anything in 
particular, sir? Just an overview?
    Mr. EVANS. Overview, yes.
    Ms. CARSON. Okay. Just in this past year, for example, 
17,000 servicemembers at installations around the United States 
and across the globe have received this entrepreneurship 
training. It is provided through our resource partners and the 
local district offices and business experts. So, for example, 
we want to have, as you see in my written testimony, team 
teaching. The purpose of SBA's participation in transition 
assistance is to introduce servicemembers and military spouses 
to all of the resources available to them in this 
administration, and that is exactly what we do.
    Mr. EVANS. How successful in terms of a measuring stick at 
this point are you able to give some kind of response about how 
effective has it been?
    Ms. CARSON. We have several different evaluation activities 
going on at this moment. The one instrument that I have at this 
point is a survey that has been approved by OMB to check in 
with participants at the 1-year point. So as a survey, as you 
know, there are some limitations. I only can assess those who 
have responded, and at this time, about 34 percent of those who 
respond to the survey have started a business. And you will see 
that we use other indicators as well to see how did people feel 
about their ability to take that next step once completing the 
course is another assessment that we have done, which is 
provided in the written testimony.
    Mr. EVANS. Do you sort of target the program in certain 
communities--rural, urban--any special way? Do you target it?
    Ms. CARSON. Boots to Business is targeted to military 
installations where there is the transition GPS program offered 
at that installation. That is its purpose.
    Mr. EVANS. One other thing I observed in terms of 
Mississippi State University Lean for Main Street, can you talk 
a little bit about that?
    Ms. CARSON. Yes, there was a competition at SBA 2 years ago 
to use lean startup ideology to see if we could do that for 
Main Street businesses and not just the high-tech businesses. 
It was a successful effort indicated by the fact that 
Mississippi State University was chosen to take part in Boots 
to Business follow-on training, which is meaningful.
    If I may, sir, for just a moment, talk to you about follow-
on training?
    Mr. EVANS. Yes.
    Ms. CARSON. As was mentioned by the congressman just a 
moment ago, not everybody should start a business right away. 
It may not be the very next step, and we are working on how to 
measure that. Saving time and treasure until you are ready to 
start a venture is an important and good outcome. But for those 
who are ready to take the next step, we are offering 
servicemembers three opportunities. One is the Mississippi 
State option. Another is a combination effort from Syracuse and 
Cornell University. And the last one, that we emphasize just as 
strongly, is connecting with your local resource partner. That 
is for people who really think this could be my very next step.
    Mr. EVANS. From an evaluation standpoint, sort of like the 
same question I asked?
    Ms. CARSON. Thank you, sir. We have just finished one 
quarter of performance for those new grantees and we are 
evaluating that. And I should have some information to provide 
within 30 days as they are all new.
    Mr. EVANS. Thank you, Mr. Chairman. I yield back the 
balance of my time.
    Chairman CHABOT. Thank you. The gentleman yields back.
    The gentleman from Mississippi, Mr. Kelly, who is the 
chairman of the Subcommittee on Investigations, Oversight, and 
Regulations, is recognized for 5 minutes.
    Mr. KELLY. Thank you, Mr. Chairman. And thank you, Ms. 
Carson, for being here today, and thank you for your service to 
our Nation.
    Thank you, Mr. Evans, for a shout out for Mississippi State 
University. It is not in my district, but it is about that far 
from it.
    They are doing great things at Mississippi State University 
with their VBOC there. They are committed to our veterans as a 
university. I know the President personally is committed to 
that and all the members there. I think they are doing a lot of 
great things. And so I want to thank you all for having that in 
Mississippi.
    My first question is, of all the SBA's loan programs which 
are kind of targeting veterans, which ones are most popular for 
our veteran entrepreneurs?
    Ms. CARSON. Popular and useful, yes, sir. Thank you, 
Congressman, for the question.
    We have the most participation in the 7(a) program, but 
there has been almost 30 percent increase in just the last year 
in veteran participation in the Community Advantage program, 
which is what I would hope to see as we are starting more 
businesses coming out of Boots to Business. They start at the 
ideation and creation stage. Community Advantage or Microloan 
is maybe a good place to start, but I am seeing good 
participation in 7(a).
    Mr. KELLY. And this is probably maybe a little off topic, 
but I am very concerned about our veterans who are currently 
serving in the Guard and Reserve. We are about to mobilize 
somewhere between 3,500 and 4,200 Mississippians in the next 
year or so. Many of those are small business owners. What are 
we doing in the gap, and how are you counseling these veterans 
when they come in to get capital? When you know in a 3- to 5-
year cycle you may be redeployed, so it is very difficult to 
maintain that business. What training or what programs do you 
currently know of that we have that reach out and touch when 
those veterans are deployed, whether it is their wife or mother 
or father or daughter or brother, whoever, that takes care of 
that? What programs do we have that kind of help them through 
that process?
    Ms. CARSON. Again, our connection with Department of 
Defense is important here, as many of those members have the 
Yellow Ribbon program at the pre-deployment phase. And at the 
local level, the information they should be getting at this 
point is information about the Military Reservist Economic 
Injury Disaster Loan. And by looking at the numbers there we 
could improve, making sure that that outreach is more 
comprehensive, because that really can be the difference 
between a Guard or Reservist deploying and having their 
business still exist when they return.
    Mr. KELLY. So at places like the VBOC at Mississippi State, 
if a guy is a year and a half out and he has got his business 
plan in place, he is ready to start a small business, he or 
she, and they are ready to open it, are they counseled as that 
you may be deployed in the next year or 2 years and what impact 
that has on a business? Because that is very real.
    And some cannot be replaced. If you are a small private 
lawyer, your spouse or mother or father cannot pick that up 
unless they happen to be an attorney, also. So are you going 
through that in counseling these folks about this is the 
process? Because I think it is very important that they not 
think about that after the fact.
    Ms. CARSON. Congressman, you are exactly right. And we 
could do a sustained effort in that. Yes, we counsel on 
episodic basis as needed, but as you say, I do not know how 
many Americans are aware of how often the Guard and Reserve are 
called upon to depart and go serve overseas. And it is 
something that I need to focus on and provide more consistent 
and broad, so that all of us can support those people as it 
comes.
    Mr. KELLY. Yeah. I am not blaming you, but I think it is 
something that is devastating to a small business owner to be 
deployed, but we do it anyway. And so I have had friends.
    I notice that the VBOC centers, the amount of budget 
justification is lower in fiscal year 2015 and 2016 than in 
previous years. Do you see more veterans applying for SBA loan 
programs in the coming years?
    Ms. CARSON. I expect to see more loans being applied for, 
Congressman. And, honestly, for them to be better qualified to 
get those loans. Yes, we have increased our program quality and 
also the frequency of delivery.
    Mr. KELLY. And I just want to thank you again for your 
service. I want to thank you for serving both small business 
and also in our Air Force Reserve. And I also want to give one 
more shout out to Mississippi State University, which embraces 
our veterans like no university that I have seen, and that is 
top-driven. They are actually having Veterans Day, and I will 
be at their football game and I hope we will beat Alabama this 
weekend. Thank you.
    Chairman CHABOT. The gentleman yields back?
    Mr. KELLY. Yes, I do.
    Chairman CHABOT. The gentleman yields back, and we want to 
again thank the gentleman for his service to our country as 
well.
    The gentlelady from North Carolina, Ms. Adams, who is the 
ranking member of the Subcommittee on Investigations, 
Oversight, and Regulations, is recognized for 5 minutes.
    Ms. ADAMS. Thank you, Mr. Chairman, for calling this 
meeting today, and thank you, Ms. Carson, for your testimony 
and for being here, and for your service.
    You know, sometimes collaboration and referrals are 
required in order to provide business owners with the 
assistance they truly need to grow and become successful. Are 
you aware if the veteran applicants to nongovernmental training 
programs hosted by universities use SBA programs like SCORE or 
the Veterans Advantage Loan program in conjunction with their 
training courses?
    Ms. CARSON. We are working harder than ever, Congresswoman, 
to make sure that we know about where we have opportunities to 
introduce people wherever their program may be to the resources 
available at the Small Business Administration. And yes, a bit 
earlier we talked about our efforts to better track referrals 
and make sure that they are meaningful referrals, that the 
person is not just given a handoff to another resource. It is 
the right one and the originator follows up.
    Ms. ADAMS. Great. Thank you very much.
    Ms. CARSON. Yes, ma'am.
    Ms. ADAMS. So what differentiates private entrepreneurial 
training programs from those offered by the SBA's Veterans 
Business Outreach Centers?
    Ms. CARSON. That is a great question, Congresswoman. And 
there are many things that differentiate them. And I would say 
that the government does not have a role in every aspect and 
should not be providing all. I do expect our Veterans Business 
Outreach Centers to be aware of the other resources, whether 
they are private sector, academic, or other nonprofits, and to 
make referrals and work with those organizations and programs 
as required. I have an example if you would like any.
    Ms. ADAMS. Okay, well, yeah, I would like you to share some 
of that with me.
    Ms. CARSON. Okay. One place that we have found incredible 
connection is with the U.S. Chamber of Commerce Foundation's 
Hiring Our Heroes program. It is accepted by the Department of 
Defense as an element of the Transition Assistance Program. It 
is where hiring summits take place on military installations. 
They have recognized that there is a role for entrepreneurship 
as self-employment is one vocation that people may choose, and 
we have used that as a chance for our local district offices 
and VBOCs to participate, and we are seeing great conversion 
from that program, which is not government funded, to our 
participation in Boots to Business and resource partners.
    Ms. ADAMS. Okay, thank you.
    Pilot programs are getting much of the SBA's funding even 
though metrics are lacking. Considering the wide variety of 
veterans programs in both the private and public sector, what 
can we do to focus our efforts to grow the veteran-owned 
business population?
    Ms. CARSON. A few of the topics have been addressed today. 
Having access to capital is important to ensure that a business 
gets a strong start and has the capital they need to succeed. 
So continuing to work as we have been, and I agree with you 
that measuring our performance must take place before we 
continue to grow programs or diversify. And that is exactly the 
infrastructure work that we are doing at this time to find what 
is the right way. And I believe that when others see the 
opportunities provided by those who have taken our programs, 
that is an indicator of our value. Others are business starts, 
acquiring capital, or getting that first Federal contract. And 
those are measures that we are paying attention and can 
attribute to our programs.
    Ms. ADAMS. Great. Thank you very much, Mr. Chair. I yield 
back.
    Chairman CHABOT. The gentlelady yields back. Thank you very 
much.
    And the gentleman from South Carolina, Mr. Norman, is 
recognized for 5 minutes.
    Mr. NORMAN. Thank you, Colonel Carson. Thank you for your 
service to our country and for your service on the SBA.
    I will just emphasize what Congressman Luetkemeyer 
mentioned on regulations that do not work, calling the 
attention to the different agencies within the SBA. Secondly, I 
would say that I know on the bank board I serve, one useful 
tool that we did every year was a survey that was given to all 
the employees. It did not go to you; it went to an outside 
agency that could report back problems, duplication, a myriad 
of problems that were great. So I would urge you to look into 
that at least.
    And also, I would say saying no a lot of times is a great 
thing to do because a lot of groups that come to the SBA, 
either they have not had the experience or they have not had 
the seasoning to go into business and borrow money.
    Dodd-Frank, how has that affected lending for the SBA in 
your opinion?
    Ms. CARSON. I could not speak exactly to how that has 
affected our lending programs. I am not aware of that impact, 
but I would defer to my colleague in Office of Capital Access.
    Mr. NORMAN. Okay. Secondly, I know you mentioned there were 
20 outreach centers across the country. We do not have any in 
South Carolina. The closest is Fayetteville, which is 210 miles 
from our--well, no, 230 miles from the center part of the 
State. Has any thought been given to, I guess, reevaluating 
where the service centers are? And how is that based? How do 
you pick where a service center either closes or does not close 
and opens up?
    Ms. CARSON. Thank you for your question, Congressman.
    The location is important and it continues to be a 
challenge, as we have discussed earlier today. At this time, 
there are 20 Veterans Business Outreach Centers, and within the 
next month there will be a funding opportunity on grants.gov. 
We will be re-competing the entire program because every one of 
their agreements ends next year, in May of 2018. The criteria 
that we are evaluating as we search for new Veterans Business 
Outreach Centers is going to be the military installations in 
their area that are providing transition assistance, as that is 
the statutory direction and first priority for Veterans 
Business Outreach Centers is to serve transitioning service-
members. We are then looking at the veteran population in 
total. You have highlighted one of the challenge, which that is 
with the current resources we are stretching as much as we can, 
but most VBOCs at this time are covering three States. We are 
bridging that as best we can with technology and resource 
referrals within our resource partner network.
    Mr. NORMAN. Is the procedure to lease space, existing 
space?
    Ms. CARSON. We have a mix of academic hosts for the 
Veterans Business Outreach Centers and independent nonprofits, 
so if they are on an academic institution, space may be part of 
their indirect support, but others are leasing space.
    Did I answer your question, sir?
    Mr. NORMAN. Yes, ma'am. And I would urge, a lot of places I 
think, I do not know how many square feet you need, but a lot 
of places would donate space just to get your agency in there 
along with the feeling that to help a veteran out is a great 
thing and they would do that.
    Ms. CARSON. Thank you, Congressman. That is an excellent 
point. And you are right, our Veterans Business Outreach 
Centers are spending most of their time on military 
installations and covering that geographic territory. I would 
say that real estate is not something that they need a lot of.
    Mr. NORMAN. Right.
    Ms. CARSON. Yes, sir.
    Mr. NORMAN. Brick and mortar are not needed. Well, thank 
you again for your service, and thank you for what you are 
doing.
    Ms. CARSON. Thank you, sir.
    Chairman CHABOT. Thank you very much. The gentleman yields 
back.
    The gentleman from Florida, Mr. Lawson, who is the ranking 
member of the Subcommittee on Health and Technology, is 
recognized for 5 minutes.
    Mr. LAWSON. Thank you, Mr. Chairman. And welcome to the 
Committee.
    This year I have had the opportunity to introduce H.R. 
3345, the Veteran Job Opportunity Act, which provides tax 
credits for veterans who open businesses in underserved areas. 
I also had the opportunity to introduce a bipartisan bill with 
Congressman John Rutherford, H.R. 3965, the Veterans Armed for 
Success Act, which provides job training for our Nation's 
veterans, and worked with Republican Congressman Mike Bost to 
introduce a bill that provides resources to help veterans 
become involved in agricultural industry.
    Ms. Carson, I am heavily involved in the small business 
veteran space, and would like your thoughts on how Congress can 
better engage SBA to increase resources for veteran 
entrepreneurs.
    Ms. CARSON. Thank you for the opportunity to share an 
answer with that, sir.
    One is helping us ensure that the outreach is adequate, 
that people know about all the resources that currently exist, 
because they are meaningful and, in many cases, plentiful. I 
appreciate also your work with the agricultural opportunities 
for veterans. We are including, for example, U.S. Department of 
Agriculture information now in the Boots to Business program to 
ensure that there are some small business similarities in 
starting farms and also being in agricultural production. So 
that is another area where we intend to grow without creating 
another separate program. So looking for those synergies and 
hearing about where you think we have chances to do more is 
extremely helpful.
    Mr. LAWSON. Okay. And I am going to see if I can get in one 
other question. And I guess you did a little bit of it 
highlighting some of the SBA and other programs at other 
agencies that work particularly with serving veteran 
entrepreneurs.
    Ms. CARSON. I believe, Congressman, that we are unique in 
what we provide to aspiring business owners and that there is 
not another service that is similar to what the SBA does across 
the Federal Government. But I do know that there are some who 
provide services that could help them be more successful. And 
one example would be the Vocational Rehabilitation and 
Employment team at the Department of Veteran Affairs who I work 
closely with at both the national level and also local. It is 
not duplicative, but there must be meaningful referral, and to 
do that I need to know what they offer.
    I would say the same in the Department of Defense. For 
example, the Military Spouse Employment Partnership, they also 
offer employment options for military spouses. We offer 
entrepreneurship. They are very different, and we collaborate 
with them to ensure that our differentiated service, military 
spouses are aware of it and can participate in it, but we do 
not try to do the same thing as any other.
    Mr. LAWSON. And a quick question before my time runs out. 
Have you been able now to see more and more veterans that are 
coming in wanting to utilize the services that you provide?
    Ms. CARSON. We had a significant increase. And at this 
time, approximately 10 percent of the transitioning 
servicemember population is taking advantage of the Boots to 
Business program. And even more are following up through the 
Boots to Business Reboot, which is once a veteran is a part of 
their community that is how we reach them off a military 
installation. Yes, it is growing in interest, and we hope to 
see business success in start and sustainment.
    Mr. LAWSON. And real quick, are you able to keep records of 
the amount of success that some of them had in the past and how 
they have helped create job opportunities in the community?
    Ms. CARSON. It continues to be an area where SBA can 
improve and that is what we are working on, particularly with 
the Boots to Business program, is having a unique client 
identifier so that I can see when did you first connect with 
SBA? When did you connect with a resource partner, get that 
loan, or get a Federal contract? So yes, we are at the 
beginning of that process and I hope to continue improving.
    Mr. LAWSON. And finally, before I yield back, what can we 
do more to help you?
    Ms. CARSON. I am grateful for the support we have received 
so far, and continuing to work on the challenges and access to 
capital would be most meaningful to our population, sir.
    Mr. LAWSON. Okay. Thank you, Mr. Chairman. I yield back.
    Chairman CHABOT. Thank you very much. The gentleman yields 
back.
    The gentleman from Iowa, Mr. Blum, who is the chairman of 
the Subcommittee on Agriculture, Energy, and Trade, is 
recognized for 5 minutes.
    Mr. BLUM. Thank you, Chairman Chabot, and thank you, Ms. 
Carson, for being here today, and for your service to our great 
Nation.
    First question I have is, do you know what the overall 
labor participation force rate is for veterans?
    Ms. CARSON. I do not know that, sir.
    Mr. BLUM. Because I am curious as to if it is higher or 
lower than the labor participation rate of the country in 
general as a whole. Are you aware of that?
    Ms. CARSON. The unemployment rate for veterans has been 
falling dramatically. And I believe we are at least at parity 
with nonveterans, if not more successful in the employment 
arena at this time.
    Mr. BLUM. That is good to hear----
    Ms. CARSON. Absolutely.
    Mr. BLUM.--that the unemployment rate has fallen amongst 
veterans. But we are not sure about labor participation rate, 
because if they stop looking for a job, which some of them do, 
then they are not counted anymore, I do not believe.
    Ms. CARSON. That is an excellent point, sir, and I do not 
have that particular detail.
    Mr. BLUM. Are there programs in your area or in the SBA to 
increase the labor participation rate for veterans? Because I 
visit a lot of veteran shelters and volunteer centers and some 
of them, they have not given up hope, but they are giving up 
hope. And part of it is, I think, that they are out of the 
labor force. And I personally think it would be very helpful if 
we had programs to get them back into the labor force. Do those 
exist?
    Ms. CARSON. Yes, they do, Congressman. And one role that we 
play, particularly in the Boots to Business Reboot program 
where, as I mentioned, we are with veterans of all eras in 
their communities--if self-employment is not the right option 
and their next step is really to find a job, then we would 
refer them to the American Job Center through the Department of 
Labor. That really has been a great collaboration and a place 
where that is the right next step for them.
    Mr. BLUM. I noticed in the notes, Ms. Carson, that the 
veterans counseled fiscal year 2013 was around 50,000, and in 
fiscal year 2016, 50,000 had dropped to 19,000 and change. Can 
you comment on that, first of all?
    And secondly, how do you measure success? How do you know 
when you are successful? Does your Department have goals? And 
if they do, what are the big goals?
    Ms. CARSON. Thank you, Congressman.
    Mr. BLUM. That is a three-part question, I guess.
    Ms. CARSON. I will do my best to not miss any part of that.
    For the first question that you mentioned and the data, 
yes, over the years I would say we have been able to increase 
the performance expectations of Veterans Business Outreach 
Centers and align them with their statutory mission, which is 
transition assistance and which SBA defines as training. I 
expect their counseling numbers to drop as they are not going 
to have the long-term clients as they are on the road at 
military installations providing transition assistance. So that 
is the differentiation and why you see that number coming down, 
and you do see the number of trained going up or steady and 
their participation in Boots to Business increasing.
    Mr. BLUM. So the counseled number coming down is not reason 
for alarm?
    Ms. CARSON. Not at this time because they do have a unique 
role in the SBA resource partner network and I am counting on 
VBOCs to make connections and know the right resource for the 
veteran when they refer them to another partner.
    Mr. BLUM. Second part of the question?
    Ms. CARSON. Second part, if I recall, sir, was how do I 
know----
    Mr. BLUM. How do you measure success and goals?
    Ms. CARSON. Yes. Our goals are to participate, the Veterans 
Business Outreach Centers, 100 percent participation in Boots 
to Business within their home State at a minimum. And at this 
time, as they are stretched multiple States, to participate at 
least 50 percent of the time out of their primary territory. 
And yes, we do measure things such as business starts and 
capital acquired, but because of the mission alignment that I 
just described, that is going to be tougher for that group.
    Mr. BLUM. That is great you measure that. And the results 
have been?
    Ms. CARSON. The results have been increased participation 
in Boots to Business. So we are doing what we said we would do.
    Mr. BLUM. Increase, I mean, do you have that number? Do you 
have that statistic? How much has it improved?
    Ms. CARSON. An increase of 12 percent just in the last 3 
years, and 55,000 approximately were trained in this past year 
by Veterans Business Outreach Centers.
    Mr. BLUM. And the 55,000, is that an increase as well?
    Ms. CARSON. I would have to look at my numbers, sir.
    Mr. BLUM. Because what we measure in business we improve 
on, correct? So I am glad to hear you are measuring and you 
have a definition of success.
    Ms. CARSON. It is also meaningful to not have just 
throughputs, and I understand that, the difference between an 
output and an outcome. So understanding exactly what is the 
right outcome when we are working with clients who are 
primarily at ideation and deciding whether they should even go 
into business or not, that continues to be an area that we need 
to understand better and we are working on some program 
evaluation right now to decide what is the right way to measure 
success in a program such as that.
    Mr. BLUM. Very good.
    I would just like to say, Mr. Chairman, my day has been 
made with my colleague entering the hearing here with her 
colorful hat. It is always good to see and it makes my day. Her 
hat is beautiful today. And I yield back. It is beautiful. It 
makes my day. I yield back my time, Mr. Chairman.
    Chairman CHABOT. The gentleman yields back.
    And I think all members on both sides have had an 
opportunity to question the witness. And we want to thank you 
for your hard work, being a veteran yourself, and also in your 
capacity now helping those who have worn the uniform of our 
country come back here. Some are starting businesses. 
Hopefully, they will be successful. And those who need 
assistance, you are there to help them and we are there to help 
you.
    So if there is anything that you think this Committee 
should be working on, we are happy to do that. We want to work 
cooperatively. We look forward to continuing to improve the 
programs at the SBA so that they can continue to help our 
veterans who have paid the price to receive that help by 
wearing the uniform, putting their lives on the line.
    So to all the veterans on the Committee, all in the room, 
to yourself, thank you for being here.
    And all members will have 5 legislative days to submit 
statements and supporting materials for the record.
    Without objection, so ordered.
    And if there is no further business to come before the 
Committee, we are adjourned. Thank you very much.
    [Whereupon, at 11:56 a.m., the Committee was adjourned.]
                            A P P E N D I X


                 Testimony of Barbara E. Carson

                    Associate Administrator

            Office of Veterans Business Development

               U.S. Small Business Administration

                           Before the

                    Small Business Committee

                 U.S. House of Representatives

    Chairman Chabot, Ranking Member Velazquez, and 
distinguished Members of the Committee, good morning, and thank 
you for the opportunity to testify today on the U.S. Small 
Business Administration's (SBA's) continuing efforts to empower 
veteran entrepreneurship and small business ownership through 
programs and policies that maximize the availability of SBA 
services for veterans, service members, and their spouses. I am 
honored to work at the SBA and to empower veterans to be the 
next great generation of entrepreneurs.

    As a former small business owner, current member of Air 
Force Reserve, and the spouse of an Air Force officer, I know 
the challenges and excitement that come with both military life 
and entrepreneurship. I know firsthand that entrepreneurship 
can be an incredibly rewarding endeavor.

    Many military members have the skills to start and grow 
small businesses and the SBA provides resources for them to do 
just that. Today we will cover some of the great things 
happening at SBA, thanks to your support, and to our team of 
district offices and resource partners around the country. 
Those include the Veterans Business Outreach Centers (VBOCs) 
and their increased participation in transition assistance, as 
well as SBA's grant programs for service disabled veterans, 
women veterans, and those seeking opportunities in federal 
procurement. We have a number of success stories which I will 
highlight where these programs have made a real difference in 
helping veterans launch or grow small businesses.

    The SBA is dedicated to serving aspiring and existing 
veteran business owners. About 2.5 million businesses are 
majority-owned by veterans, and nearly all veteran-owned 
businesses are small businesses and contribute approximately 
1.4 trillion dollars to the nation's total sales/receipts per 
year. Many veteran business owners have gained important skills 
and leadership abilities that are often directly relevant to 
business ownership. The SBA promotes and supports veteran small 
business ownership by administering programs, formulating 
policy, and administering grants to Veteran Business Outreach 
Centers and other partners. The Agency ensures resources are 
accessible and available to veterans, active duty, National 
Guard and Reserve service members, and veteran or military 
spouses.

    The SBA provides direct assistance to veterans through our 
veteran business development officers stationed in 68 district 
offices and indirectly through a network of 20 Veterans 
Business Outreach Centers. As part of the Transition Assistance 
Program (TAP), provided alongside the Departments of Labor and 
Veterans Affairs, SBA serves transitioning service members 
through the Boots to Business (B2B) program. SBA also provides 
assistance to veterans of all eras through the B2B Reboot 
program. SBA also assists veterans through three grant 
programs: the Service-Disabled Veteran Entrepreneurship 
Training (SDVET) program, the Women Veteran Entrepreneurship 
Training (WVET) program, and the Veteran Federal Procurement 
Entrepreneurship (VFPET) program. In addition, SBA conducts 
outreach to connect veterans, service members, military 
spouses, and members of the Reserve and Guard with 
entrepreneurship resources and stakeholders, and by leading 
SBA's National Veterans Small Business Week.

    Veteran Business Outreach Centers

    The VBOC program provides entrepreneurial development 
services such as business training, counseling, and resource 
partner referrals to transitioning service members, veterans, 
National Guard and Reserve members, and military spouses 
interested in starting or growing a small business.

    Since 2014, VBOC's have taken a larger role in B2B 
training, and thanks to your increased support, the number of 
VBOCs grew from 15 to 20 in just three years and B2B 
participation has increased by 12 percent from FY 2015 to FY 
2017. Their role within the resource partner community has also 
been growing, as they are a source of referrals for clients to 
our other partners. SBA has instituted performance goals for 
the VBOCs to better align and track participation in transition 
assistance programs, the primary mission of the VBOC program. 
The VBOC performance goals track B2B participation, B2B and B2B 
Reboot events, and counseling interactions (including referrals 
to resource partners).

    In FY 2017, VBOCs extended their reach by instituting local 
initiatives such as VBOC on the Reservation (Native American 
Outreach), Commercial Supply Chain training, and VBOC on the 
Road (Rural Communities) while also incorporating technology 
platforms to provide consistent and meaningful support across 
their entire coverage area. To assist with this effort, SBA 
launched the VBOC 2.0 initiative. VBOC 2.0 is a one year pilot 
program that will provide select VBOCs with tools to help them 
better provide services across their geographic coverage areas 
and track client referrals to local SBA resource partners.

    Overall, in FY 2017, VBOCs provided counseling and training 
to more than 54,800 veteran small business owners and 
entrepreneurs. The centers are unique in their ability to 
address veteran-specific challenges while integrating SBA 
services and referring clients (when appropriate) to other 
organizations that provide specialized and needed services. 
VBOCs bring together local and regional service networks that 
are most effective in creating small business ecosystems and 
help augment SBA district office efforts.

    One challenge for VBOCs is the ability to provide 
counseling and training to veterans across assigned coverage 
areas with a total of 50 VBOC advisors nationwide. While the 
services that the VBOCs provide have resulted in many success 
stories and contributed to local economic development through 
business starts, approved loans, contracts awarded, and jobs 
created or retained, the average VBOC is responsible for 
service coverage in at least three states. To address this 
challenge, VBOCs are leveraging the support of, and reciprocal 
referrals among, other SBA resource partners, district offices, 
and non-profit, academic, and private organizations that serve 
veteran entrepreneurs.

    Boots to Business Program

    The Boots to Business (B2B) program is an entrepreneurial 
training program offered by the SBA as a training track within 
the Transition Assistance Program. In FY 2017, the SBA 
continued to sustain and develop the B2B Program; more than 
17,300 veterans, service members, and military spouses at 
military installations worldwide benefited from the B2B 
Introduction to Entrepreneurship course. In total, 70,000 
participants have benefited from B2B since the program began in 
2013.

    In FY 2017, the SBA conducted a competitive funding 
opportunity for the B2B program and sought proposals for 
curriculum development, outcomes assessment, follow-on 
training, and overseas instruction. Upon evaluating the 
eligible proposals, SBA determined no award was necessary to an 
outside vendor for curriculum development and outcomes 
assessment as those could be conducted with existing SBA 
resources, allowing us to focus on the other areas of need. The 
SBA awarded funding to two nonprofit organizations to provide 
follow-on training and overseas instruction:

           Syracuse University's Institute for Veteran 
        & Military Families (IVMF) in partnership with the 
        Cornell University's Johnson College of Business. IVMF 
        provides B2B instruction to service members and 
        military spouses stationed overseas at 34 military 
        installations in nine countries. Additionally, IVMF has 
        partnered with Cornell University to provide B2B 
        follow-on entrepreneurial instruction which will 
        include market research and business fundamentals to be 
        delivered globally via Cornell University's eCornell 
        platform. IVMF and Cornell University work with SBA to 
        develop specialty business development tracks such as 
        franchising or federal procurement based on participant 
        demand and market opportunity.

           Mississippi State University (MSU) delivers 
        B2B follow-on entrepreneurial instruction with a new 
        online training course, B2B Revenue Readiness. Based on 
        curriculum that MSU developed as part of their 2016 SBA 
        award for the ``Lean for Main Street'' challenge, 
        participants in this program will learn how to develop 
        a clear vision of their individual business model and a 
        multi-faceted business plan.

    Experience has shown us that a best instruction practice is 
teaching B2B modules with more than one instructor (``team 
teaching''), which often results in a more dynamic learning 
experience and helps foster class discussion. The B2B program 
encourages this practice as a way to introduce the 
transitioning service member population to the wide variety of 
SBA resources and partners throughout the nation. Eligible 
instructors include advisors drawn from SBA's resource partner 
network. SBA is refining the B2B curriculum by leading a 
collaborative effort to tap into the existing subject matter 
expertise among SBA's extensive resource partner network and 
instructors.

    In FY 2017, we developed a learning agenda with specific 
research questions which provides a framework for the B2B 
program's evaluation activities. As part of this effort, the 
B2B program continues to collect outcomes and course quality 
assessment data. To date, survey findings indicate that B2B 
graduates started over 400 business that have succeeded in 
staying in business for at least a year. This results beats 
national averages that indicate eight out of ten small business 
fail in that same time period.\1\ Additionally, B2B survey 
results indicate:
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    \1\ U.S. Small Business Administration, White Paper: Operation 
Boots to Business Veteran Entrepreneurship Assessment, Syracuse, N.Y., 
Jun. 2106 (https://www.sba.gov/sites/default/files/
b2b--vet--entrepreneurship--assessment.
pdf)

           92% of respondents are motivated to start a 
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        business;

           87% of respondents are confident in starting 
        a business; and

           57% of respondents participated in some form 
        of follow on training.

    Also, in FY 2017, the B2B program began two different types 
of program evaluations:

           In partnership with SBA's Office of the 
        Chief Financial Officer (OCFO), the B2B program is 
        undergoing a formative evaluation that aims to use 
        predicative analysis to determine how program design 
        elements and activities affect B2B course 
        participation.

           The US Military Academy at West Point 
        (specifically, the Office of Economic Manpower Analysis 
        or OEMA) is conducting an impact evaluation of Army 
        transitioning service members and veterans who have 
        used B2B services in order to determine the program's 
        impact on transition success by looking at employment, 
        education, and small business start-up numbers. 
        (Historically, the Army is the largest customer of B2B 
        services, compared to other service branches.) OEMA has 
        a number of established interagency memoranda of 
        understanding which can be leveraged to inform OEMA 
        analytical projects.

    Challenges remain with data sharing between SBA resource 
partners and other federal agencies and with the longitudinal 
tracking required to measure outcomes in the entrepreneurship 
domain. SBA continues to work with the DOD's Defense Manpower 
Data Center to refine a data-sharing business case, seek a 
unique identifier for individuals participating in SBA programs 
or counseling, and pursue other interagency agreements or 
research projects that will ensure the ability to study 
longitudinal outcomes on an individual level.

    Veterans Entrepreneurship Training Programs

    Veterans play an important role in stimulating economic 
growth in local communities. The SBA offers a variety of 
entrepreneurship training programs designed to assist 
transitioning service members, veterans, National Guard and 
Reserve members, and military souses in developing the skills 
and knowledge needed to start, grow, and succeed in business. 
In addition to the broader assistance provided via the Agency's 
VBOC and B2B program, in FY 2017 SBA administered three grant 
programs that serve veteran entrepreneurs in specially targeted 
demographic and business sectors:

           Service-Disabled Veteran Entrepreneurship 
        Training Program (SDVETP)

           Women Veteran Entrepreneurship Training 
        Program (WVETP)

           Veteran Federal Procurement Entrepreneurship 
        Training Program (VFPETP)

    SDVETP \2\ provides service disabled veterans, military 
spouses, and caregivers with entrepreneurial training, business 
development assistance, and counseling and management 
assistance.

    \2\ Release No. 16-72, US Small Business Administration (SBA 
Provides Grants to Support Entrepreneurship Training Opportunities for 
Service-Disabled Veterans (9/26/16), https://www.sba.gov/about-sba/sba-
newsroom/press-releases-media-advisories/sba-provides-grants-support-
entrepreneurship-training-opportunities-service-disabled-veterans).

    WVETP \3\ provides entrepreneurship training to women 
veterans and service members, as well as to women spouses of 
service members and veterans, who are interested in starting, 
growing and diversifying new and established small business 
---------------------------------------------------------------------------
concerns.

    \3\ Release No. 17-43, US Small Business Administration (SBA Awards 
Funding to Nonprofit Organizations Providing ``Boots to Business'' 
Entrepreneurship Training (6/19/17) https://www.sba.gov/about-sba/sba-
newsroom/press-releases-media-advisories/sba-awards-funding-nonprofit-
organizations-providing-boots-business-entrepreneurship-training)

    VFPETP \4\ is a vital component of the Agency's efforts to 
assist veteran and service-disabled veteran small business 
owners and entrepreneurs in securing federal government 
contracts. The three-day certification program is designed for 
veteran-owned companies to increase their ability to win 
---------------------------------------------------------------------------
government contracts by establishing best business practices.

    \4\ News Release 17-53, US Small Business Administration (SBA 
Awards Funding Grant for National Veteran Federal Procurement 
Entrepreneurship Training Program (9/6/17) https://
content.govdelivery.com/accounts/USSBA/bulletins/1b56ebb)

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    OVBD's Role in Government Contracting Oversight

    Small businesses are more likely to engage in federal 
contracting when barriers to entry are removed and the process 
is simplified. The federal government is the largest procurer 
of goods and services in the world, averaging $90 billion in 
small business contracts each year between FY 2006 and 2016.\5\ 
SBA provides support to veteran-owned small businesses (VOSB) 
and service-disabled veteran-owned small businesses (SDVOSB) 
who want to participate in the federal market through 
entrepreneurship training and counseling services, mentor-
protege programs, innovative research, set-aside programs, and 
engagement opportunities at the local level. SBA also works 
with other federal agencies to expand opportunities for small 
businesses to compete for and win federal contracts.\6\ SBA's 
oversight role reaches beyond merely monitoring and assisting 
other agencies in achieving the government wide goal of 
awarding 23 percent of all federal contracts to small 
businesses, to also helping ensure that 3 percent of all 
federal contracts are awarded to SDVOSBs. For the fourth 
consecutive year, federal contract awards to SDVOSBs surpassed 
the mandated 3 percent goal, resulting in 3.98 percent of all 
government contracts being awarded to SDVOSBs for a total of 
about $16.34 billion in federal procurement dollars.\7\
---------------------------------------------------------------------------
    \5\ Small Business Agency Scorecards 2016. U.S. Small Business 
Administration, May 2017 (https://www.sba.gov/contracting/finding-
government-customers/see-agency-small-business-scorecards).
    \6\ News Release 17-38, U.S. Small Business Administration (The 
Federal Government Achieves Small Business Procurement Contracting Goal 
for the 4th Consecutive Year, May 18, 2017, https://www.sba.gov/about-
sba/sba-newsroom/press-releases-media-advisories/federal-government-
achieves-small-business-procurement-contracting-goal-4th-consecutive-
year).

    \7\ Id.

    In addition to overseeing the programs detailed above, 
SBA's Associate Administrator for the Office of Veterans 
Business Development also advocates for full consideration of 
veterans in all of the Agency's programs.\8\ In this role, SBA 
ensures that SDVOSBs and VOSBs have access to a wide range of 
resources to help them succeed in the federal marketplace.
---------------------------------------------------------------------------
    \8\ The Veterans Entrepreneurship and Small Business Development 
Act of 1999, Pub. L. No. 106-50 (Aug. 17, 1999)

    SBA's All Small Mentor Protege Program (ASMPP) program and 
the VFPETP grant are two areas where SDVOSB participation in 
experiencing notable growth. The ASMP program was established 
to develop strong protege firms through mentor-provided 
business development assistance, and to help proteges 
successfully compete for government contracts. SDVOSBs are 
taking full advantage of this program. In its first year of 
operation, SDVOSBs make up the majority of protege firms in the 
---------------------------------------------------------------------------
ASMP program.

    The VFPETP provides business development and technical 
assistance support for SDVOSBs, both at the prime contractor 
and subcontractor levels. Program graduates have reported 
recent success in competing for awards on the U.S. Department 
of Veterans Affairs $25 billion VECTOR IDIQ contract.\9\ Of the 
68 VECTOR awardees, 23 (over one-third of all awardees) are 
VFPET graduates.
---------------------------------------------------------------------------
    \9\ Federal Business Opportunities.gov https://www.fbo.gov/spg/VA/
AFMLOVASS/VASSMD/VA119A16R0349/listing.html

    The SBA is committed to expanding business development 
opportunities for veterans, and convenes two federal advisory 
committees that provide guidance on veteran-owned small 
business development policy issues. The Interagency Task Force 
on Veterans Business Development and the Advisory Committee on 
Veterans Business Affairs meet regularly in public forums to 
address issues such as access to capital, federal procurement 
opportunities, barriers to marketplace entry, and 
---------------------------------------------------------------------------
entrepreneurial development and growth opportunities.

    In FY 2018, SBA will continue to support military community 
outreach to connect veterans, service members, military spouses 
and members of the Reserve and Guard with entrepreneurship 
resources by participating in national and regional 
entrepreneurial programs offered by stakeholders, and leading 
SBA's National Veterans Small Business Week.

    One area of concern is access to capital for veteran-owned 
businesses. Many entrepreneurs or small business owners do not 
have the same access to credit as larger businesses, especially 
on a new or innovative product.\10\ Veteran entrepreneurs often 
rely on personal savings or credit cards to sustain their 
business.\11\ SBA offers many loan programs for underserved 
populations, and assists veteran-owned small businesses by 
offering fee reductions, or zero-fees, on certain SBA loan 
products.
---------------------------------------------------------------------------
    \10\ Access to capital among young firms, minority-owned firms, 
women-owned firms, and high-tech firms. US Small Business 
Administration Office of Advocacy, April 2013 (https://www.sba.gov/
sites/default/files/files/rs403tot(2).pdf).

    \11\ Veteran-owned businesses and their owners--Data from the 
Census Bureau's Survey of Business Owners. US Small Business 
Administration Office of Advocacy, March 2012 (https://www.sba.gov/
sites/default/files/393tot.pdf).

    Thank you for the opportunity to testify before your 
committee today. I welcome any questions you may have.
                    Questions for the Record

                  Committee on Small Business

                 Hearing: ``Hiring More Heroes:

  A Review of SBA's Office of Veterans Business Development''

                        November 8, 2017

    Representative Knight:

    1. Can you please outline the process a veteran must go 
through to register their business with SBA as a veteran-owned 
small business or service-disabled veteran-owned small 
business. What is the average cost and time an entrepreneur 
must spend to receive this qualification?

    Firms do not currently register with SBA as a veteran-owned 
(VO) small business or service-disabled veteran owned (SDVO) 
small business. Instead, as authorized under the Federal 
Acquisition Regulations, firms self-certify their VO and SDVO 
status when they register in the System for Award Management 
(SAM) to do business with federal government agencies. SBA 
handles the protest and appeal processes for firms that use 
their self-certification to qualify as SDVO for procurements of 
agencies other than VA and FAA. There is no cost for self-
certification and time to self-certify is limited to the time 
spent to register on SAM. Note. Currently only the VA and FAA 
require VO and SDVO to be certified by the VA in order to 
compete for their respective procurements.

    2. Currently, the federal government has a statutory goal 
of awarding 3 percent of all prime contract dollars to service-
disabled veteran-owned small businesses. This goal has either 
been met or exceeded every year since FY2012. Has there been 
any discussion at SBA of raising the goal?

    SBA has not discussed raising the SDVO prime contract goal 
while other small business program goals are still not being 
attained consistently. For example, in FY 2016 the federal 
government did not meet the government-wide Women-Owned Small 
Business or HUBZone prime contract goals.

    3. The FY2017 National Defense Authorization Act (NDAA) 
directed the SBA and Department of Veterans Affairs (VA) to 
harmonize their definition of and regulations surrounding a 
service-disabled veteran-owned small business (SDVOSB). Has SBA 
been in contact with VA regarding this? What specific actions 
has SBA taken to collaborate with VA to comply with the NDAA?

    SBA and VA have met several times to discuss the proposed 
rule, and SBA has drafted a proposed rule with VA's assistance 
and input. The proposed rule is under SBA and VA review.

    a. On what date can we expect SBA and VA to reach a 
consensus?

    The SBA & VA have reached consensus. It is hard to predict 
when a rule will be published, because it depends on many 
factors. However, we are targeting completion this fiscal year.

    b. How will this affect government contracting decisions 
for service-disabled veteran-owned small businesses going 
forward?

    Once the rule is finali8zed and effective, the VA will 
apply the SBA rule to its certification decisions, the SBA's 
Office of Hearings and Appeals (OHA) will apply the SBA rule to 
VA protests and appeals, and SBA and OHA will apply the rule to 
SDVO protests or appeals with respect to non-VA procurements.

    4. Do you believe the SBA Office of Hearings and Appeals is 
equipped to handle appeal cases surrounding certification 
decisions for SDVOSBs?

    Yes. On September 28, 2017, SBA proposed new regulations 
that would enable the Office of Hearings and Appeals (OHA) to 
adjudicate these disputes. The proposed rules are published at 
82 Fed. Reg. 45212. Several comments were received, and SBA is 
in the process of reviewing those comments and preparing final 
regulations. OHA also has been evaluating its staffing and 
other needs to ensure that it has adequate resources to handle 
these new cases.

    Representative Bacon:

    1. What has SBA done to try to increase the labor force 
participation rate for veterans?

    SBA works with the Department of Labor's (DOL) Veterans' 
Employment and Training Service (VETS) to increase cross-
referral among VBOCs and the DOL-funded American Job Centers to 
better serve aspiring business owners as well as current 
business owners who seek to hire employees. SBA provides 
entrepreneurial training to veterans of all eras who choose to 
pursue self-employment as a vocation via the Boots to Business/
Reboot program.

    2. Walk me through the typical first visit of a veteran to 
a Veteran Business Outreach Center. How do they begin? Does SBA 
follow up with them after?

    Veterans and military service members will most likely meet 
Veterans Business Outreach Center (VBOC) staff at a Boots to 
Business (B2B) or Boots to Business/Reboot (B2B/R) program and 
follow-up on site or virtually with the VBOC to pursue the next 
steps. A typical first visit would start with a discussion of 
the veteran's goals and current business needs and the 
completion of the SBA Form 641 (client intake form). VBOC staff 
is prepared to offer long-term counseling and a variety of 
training courses to veterans and service members and also serve 
as a trusted referral source to other SBA resource partners, 
federal, state and local agencies, and organizations that 
support veteran entrepreneurship.

                                 [all]