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




 ENGAGING ENERGY: SMALL BUSINESS RESOURCES AT THE DEPARTMENT OF ENERGY

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

                                HEARING

                               before the

             SUBCOMMITTEE ON AGRICULTURE, ENERGY, AND TRADE

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                            JANUARY 18, 2018
                               __________




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                           

            Small Business Committee Document Number 115-052
              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
                    BRIAN FITZPATRICK, Pennsylvania
                         ROGER MARSHALL, Kansas
                      RALPH NORMAN, South Carolina
                           JOHN CURTIS, Utah
               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. Rod Blum....................................................     1
Hon. Brad Schneider..............................................     2

                                WITNESS

Mr. Charles R. Smith, Director, Office of Small and Disadvantaged 
  Business Utilization, United States Department of Energy, 
  Washington, DC.................................................     3

                                APPENDIX

Prepared Statement:
    Mr. Charles R. Smith, Director, Office of Small and 
      Disadvantaged Business Utilization, United States 
      Department of Energy, Washington, DC.......................    16
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    None.

 
                    ENGAGING ENERGY: SMALL BUSINESS 
                    RESOURCES AT THE DEPARTMENT OF 
                                 ENERGY

                              ----------                              


                       THURSDAY, JANUARY 18, 2018

                  House of Representatives,
               Committee on Small Business,
    Subcommittee on Agriculture, Energy, And Trade,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2360, Rayburn House Office Building, Hon. Rod Blum 
[chairman of the Subcommittee] presiding.
    Present: Representatives Chabot, Blum, Comer, Schneider, 
and Lawson.
    Chairman BLUM. Good morning. I call this hearing to order. 
Thank you for joining us at today's Subcommittee on 
Agriculture, Energy, and Trade hearing.
    The Department of Energy, or DOE, is tasked with ensuring 
America's security and prosperity by addressing its energy, 
environmental, and nuclear challenges through transformative 
science and technology solutions. This mission extends beyond 
solely the work of the Department to both the energy industry 
and the multitude of businesses that work with the DOE to 
fulfill this task.
    Small businesses are integral to the success of the DOE 
mission and the energy industry. However, the high costs and 
high technology required in the energy field often leave small 
businesses struggling to compete with large corporations.
    The issue is of key importance to me since the energy 
industry is booming in Iowa. My home State excels in production 
of renewable energy such as ethanol and wind-based renewables. 
Iowa's energy production accounted for roughly 54,000 jobs and 
added $5 billion to the State's GDP in 2016. As a small 
business owner myself, I understand the challenges that small 
firms working in a competitive and expensive field face, and I 
know these small businesses can make an astounding impact on 
energy if given the opportunity.
    Today's hearing will address the ways in which the 
Department of Energy is working to minimize the barriers that 
often exclude small businesses from succeeding in the energy 
field and highlight the resources the agency offers to small 
businesses looking to participate in the Federal contracting 
process. We will hear from the Department of Energy's Office of 
Small and Disadvantaged Business Utilization--that is a 
mouthful--or OSDBU, about the various programs and 
opportunities the agency offers in an effort to provide small 
businesses with the resources they need to compete and succeed 
in the energy industry. I look forward to hearing from our 
witness today and having a productive conversation on this 
issue.
    I yield to the Ranking Member of the Subcommittee on 
Agriculture, Energy, and Trade, Mr. Schneider, for his opening 
statement.
    Mr. SCHNEIDER. Thank you, Mr. Chairman. And Mr. Smith, 
welcome to the Committee.
    Since the Arab oil embargo in the 1970s, U.S. energy policy 
has been aimed at assuring a secure supply of energy, keeping 
energy costs low enough to meet the needs of a growing economy 
and protecting the environment while producing and consuming 
that energy. Technological advances, consumption changes in the 
modern economy, and continued interest in renewable energy have 
driven changes in energy investment. This investment serves as 
a catalyst to the Federal marketplace, giving small businesses 
more opportunities to compete through Department of Energy 
solicitations to help create a cleaner, renewable future.
    Each year the Federal Government procures more than $400 
billion in goods and services from businesses around the 
country. Through the vehicle of government contracts, in order 
to ensure that small businesses receive their fair share of 
Federal contracting opportunities, the Small Business Act sets 
forth a governmentwide 23 percent goal of Federal contracts 
that should be awarded to small businesses.
    In order to help increase the participation of small 
businesses in the Federal procurement marketplace, Offices of 
Small Business and Disadvantaged Business Utilization, or 
OSDBUs, have been created throughout the Federal Government. It 
should be noted that the DOE did not meet its 10.2 percent 
prime small business goal for fiscal year 2016 and has 
struggled in the past to provide optimal contracting dollars to 
small businesses. Needless to say, a concerted effort is 
critical to DOE fully participating in the Federal policy to 
engage and hire small businesses. I look forward to hearing 
more from Director Smith on his plans to reverse this trend 
permanently given his optimistic written testimony.
    OSDBUs promote small business inclusion within an 
individual agency's mandate, and also ensure that small firms 
are treated fairly and equitably in the contracting process. In 
this capacity, OSDBUs serve as one of the primary advocates for 
small firms and offer them information and guidance on 
contracting opportunities, both prime and subcontracting. 
Additionally, they work with the Small Business Administration 
and other agency officials to determine the small business 
goals for their agency.
    As evident by their unique positioning, OSDBUs enhance the 
ability of small businesses to compete more successfully for 
Federal Government contracts and serve a vital role in the 
procurement process. Within the recent growth and Federal 
contract spending, small firms should be receiving 
opportunities commensurate with this increase.
    The DOE OSDBU goal is to provide maximum practicable 
opportunities in the Department's acquisition to all small 
business concerns. It is the known policy of the DOE to provide 
timely information to the public regarding DOE's forecast of 
future prime contracting opportunities and subcontracting 
opportunities which are available via the Department's major 
site and facilities management contractors.
    The OSDBU creates its annual Small Business Forum and Expo 
to connect small businesses with various DOE offices and 
programs to enhance DOE's overall mission of ensuring America's 
security and prosperity. As an additional resource, the Energy 
Department runs a mentor-protege program designed to encourage 
DOE prime contractors to assist small disadvantaged businesses 
certified by the Small Business Administration. Through mentor-
protege programs, small businesses are able to receive a broad 
array of business development assistance through various 
methods, including training, obtaining certificates, and in 
some cases receiving loans or noncompetitive subcontract 
awards. These benefits not only help protege firms contract 
with the government, but also assist them in building up their 
capacity. Doing so enables them to successfully compete in the 
marketplace at the conclusion of the mentor-protege agreement. 
It is vital that the DOE participate in the Federal marketplace 
to the maximum extent practicable so they have access to those 
individuals who are able to combat the dangers of climate 
change that are before us already.
    Today's hearing will provide the background and ideas 
needed to understand the current state of our investment in 
small businesses participating in the energy economy and 
determine whether additional investments are needed to 
safeguard our aging infrastructure while at the same time 
bolster small businesses.
    I again thank Director Smith for being here and look 
forward to gaining more insight as to how we can make Energy 
Department offices more effective in meeting the mission to 
provide small businesses with acquisition opportunities.
    Thank you, and I yield back.
    Chairman BLUM. Thank you, Mr. Schneider.
    If Committee members have an opening statement prepared, I 
would ask that they be submitted for the record.
    I would like to take a moment to explain the timing lights 
for you. You will have 5 minutes to deliver your testimony. The 
light starts out as green. When you have 1 minute remaining the 
light turns to yellow, and at the end of the 5 minutes, guess 
what? It turns to red. And we ask that you try to adhere to 
that time limit.
    Our first and only witness today is Mr. Charlie Smith. Mr. 
Smith serves as the director of the Office of Small and 
Disadvantaged Business Utilization at the United States 
Department of Energy. Before his time with the DOE, Director 
Smith worked in various public and private sector roles, 
including as the director of New Jersey Department of Labor and 
Workforce Development and the executive director at JPMorgan 
Chase. Additionally, Director Smith served 5 years as an 
officer in the United States Navy, and we thank you for that 
service, both then and now, and for joining us today, Director 
Smith. The floor is yours.

 STATEMENT OF CHARLES R. SMITH, DIRECTOR, OFFICE OF SMALL AND 
               DISADVANTAGED BUSINESS UTILIZATION

    Mr. SMITH. Chairman Blum, Ranking Member Schneider, and 
members of the Subcommittee, thank you for the opportunity to 
testify here today on behalf of the Department of Energy on 
DOE's small business initiatives. I am the Director of the 
Department of Energy's Office of Small and Disadvantaged 
Business Utilization, more succinctly referred to as the DOE 
OSDBU. I began work in this role in September 2017, and have 
since been working to improve the agency's small business goal 
achievement through collaboration with the Small Business 
Administration and DOE's contracting activities.
    The Department of Energy awards billions of dollars to 
small businesses annually, and has met the prime and 
subcontracting small business goals established by the SBA 
since 2015. Moving forward my focus will be to continue meeting 
DOE's small business prime and subcontracting goals while 
improving the agency's engagement and performance in the four 
established socioeconomic subcategories.
    My brief testimony today will touch upon three topics. 
First, an overview of the DOE Management and Operating, M&O, 
business model. Second, current DOE OSDBU initiatives promoting 
small business engagement. And finally, examples of other DOE 
programs that aid small businesses.
    The Department of Energy Organization Act of 1977 created 
the Department of Energy, and continued the management and 
operating laboratory structure created for the Manhattan 
Project. This business model, unique in the Federal Government, 
continues today, utilizing the private sector through a network 
of independently managed laboratories to meet the agency's 
missions. DOE's unique laboratory structure created the need 
for a new small business-goaling approach because the small 
business administration relies on the Federal Procurement Data 
System, FPDS, to assess prime small business activity. However, 
since M&O's subcontracting accounts for 85 percent of agency 
spend, the FPDS calculations alone have historically 
underrepresented DOE's engagement with small businesses. To 
address this underrepresentation, the Consolidated 
Appropriations Act of 2014 authorized DOE to count first-tier 
M&O subcontracts awarded to small businesses towards its small 
business prime goals. These subcontracts were reported to the 
Small Business Administration through a data collection process 
named Management and Operating Subcontract Reporting 
Capability, MOSRC. For fiscal year 2017, MOSRC combined with 
FPDS, shows that DOE contributed over $3 billion to small 
businesses.
    The DOE OSDBU provides a broad range of resources to small 
businesses, such as posting an updated forecast of contracting 
opportunities. This posting is commonly referred to as the 
Headquarters Acquisition Forecast, and serves as a business 
development tool to help small businesses respond to agency 
needs. Small businesses seeking the full range of DOE needs are 
guided to research both the Headquarters Acquisition Forecast 
and the DOE M&O contractors' additional separate acquisition 
forecasts, which lists upcoming requirements unique to the 
respective facilities.
    The Department of Energy also hosts an annual Small 
Business Forum and Expo where small businesses can connect with 
DOE buyers, receive business development counseling, exchange 
best practices, and be introduced to various DOE small business 
initiatives. This year, the 3-day event will be in Houston from 
May 22nd through the 24th, and is expected to draw over a 
thousand attendees.
    In 2017, in an effort to improve service-disabled veteran-
owned small business subcategory performance, DOE hosted its 
first outreach event specifically targeted to veteran-owned 
small businesses and SDVOSBs. Over 200 attendees attended in a 
full day of training and matchmaking with DOE program elements.
    In fiscal year 2018, DOE OSDBU is planning additional 
forums to specifically advocate for HUBZone small businesses. 
These events will be held in HUBZones near DOE sites, and will 
provide businesses with business development training and 
matchmaking sessions to connect new businesses with DOE buyers.
    The Department's OSDBU office also has a Mentor-Protege 
Program for prime contractors to provide business development 
opportunities to small businesses. DOE OSDBU has a concerted 
effort underway to double the agency's 28 mentor-protege 
agreements by the end of fiscal year 2019.
    The Department's OSDBU office actively seeks to participate 
in other outreach events to grow our network of small business 
partners. In fiscal year 2017, the DOE OSDBU office 
participated in 32 outreach events for over 10,000 total 
attendees, spanning all small business socio economic 
categories.
    Other agency small business initiatives include the Small 
Business Vouchers program, which enables small businesses to 
tap into national laboratory intellectual and technical assets 
to overcome various commercialization challenges. Since March 
2016, the Department's Small Business voucher program has 
awarded vouchers to 114 businesses in 31 States, worth a total 
of $22 million.
    DOE's Gateway for Accelerated Innovation in Nuclear is 
another voucher program that provides vouchers to small 
businesses involved in the application to advance nuclear 
technologies. Additionally, the agency's small business 
innovation research and small business technology transfer 
programs spur technological innovation through DOE grants to 
small businesses. In fiscal year 2017, the programs awarded 
$242 million to small businesses.
    In conclusion, I share and appreciate the Committee's 
effort to ensure Federal Government engagement with small 
businesses. I welcome any questions and look forward to working 
with you, Mr. Chairman, and the Subcommittee to further any 
efforts towards that goal.
    Chairman BLUM. Thank you, Mr. Smith.
    I would now like to recognize the gentleman from Kentucky, 
Mr. Comer, for 5 minutes of questioning. And before you start, 
I would also like to recognize the Chairman of our Committee as 
a whole, Chairman Chabot. Thank you for being here today.
    Mr. Comer, you are recognized for 5 minutes.
    Mr. COMER. Thank you, Mr. Chairman. And welcome to the 
Committee.
    My first question, you mentioned in your testimony that 85 
percent of Department spending is done through the management 
and operating or M&O contractors to the DOE laboratories. Do 
the prime contractors offered to these DOE M&O contractors in 
any way differ from those offered directly from the agency?
    Mr. SMITH. I appreciate the question. You were asking if 
the contracts the agency has with the M&O operators differ from 
our headquarters?
    Mr. COMER. Yes.
    Mr. SMITH. I would not feel comfortable answering that.
    Mr. COMER. Okay.
    Mr. SMITH. I do not know the answer is what I should tell 
you.
    Mr. COMER. Okay. The next question. Many small businesses 
are hindered by excessive regulation, obviously. What does the 
process look like for small businesses to apply for an 
exemption to the Energy Conservation Standards program?
    Mr. SMITH. It is my understanding, Congressman, that to 
apply for that exemption a small business would contact the 
Department's Energy Efficiency and Renewable Energy, EERE, 
office, which administers those exemptions. The OSDBU office, 
in our mission to advocate on behalf of all small businesses 
that want to engage with the Department would be to refer any 
such inquiry to EERE.
    Mr. COMER. Okay. In the event a small business reaches out 
to your office with concerns about undue restrictions on 
contracting competition, how does the Office of Small and 
Disadvantaged Business Utilization advocate on behalf of the 
small business? What does the process look like?
    Mr. SMITH. I thank you for that question, Congressman. As 
you are likely aware, I am sure you are aware, that is section 
15(k)(17) of the Small Business Act. A recent GAO audit noted 
that was a deficiency in an audit they conducted prior to my 
arrival at the agency. We have worked hard over the past few 
months to correct that deficiency, and now there is a process 
in place. And if I could briefly describe that for you, it 
involves, we have placed on our site a mailbox that allows a 
small business to make a direct inquiry. That mailbox is 
monitored daily. Upon receiving such a notification, it is our 
office's job to communicate to the contracting officer, let 
them be aware of the situation and ask them for a response to 
the notice, and to also notify the competition advocate. We 
then communicate that to the small business, and also 
communicate that there are other avenues for them to pursue 
that. It is a written policy that is now in place. We have the 
mailbox available and these are things that we did not have 
before. And, I would just like to add, it was convenient that 
at the time we instituted this at the end of last year, we 
received such a complaint and I was pleased to say that the 
contracting officer and the competition advocate amended a 
request for proposal to the satisfaction of the contracting 
officer and the small business concern.
    Mr. COMER. I have a major DOE site in my district in 
Paducah, Kentucky, the Gaseous Diffusion Plant, and I get asked 
this question a lot, what is DOE's definition of a small 
business? What classifies as a small business versus a big 
business?
    Mr. SMITH. Well, it depends. It is the Small Business 
Administration and various NAICS codes will determine which is 
a small business. But I would certainly encourage any business 
that has that question to reach out to the office.
    Mr. COMER. And I believe, Mr. Chairman, it is somewhere 
around $30 million. Does that sound right, $30 million in 
sales? Would that be? But regardless, one of the complaints 
that I get from my small business vendors and contractors is 
once you get a dollar past the minimum definition, then you are 
competing against multibillion dollar publicly traded 
companies. So a lot of small businesses that contract with not 
just the DOE but the entire Federal Government suggest that 
maybe we should look at having different, you know, a second 
level. Because once you get past that first level, you are 
suddenly competing against multinational global companies that 
are hard to compete with if you are still between a small and a 
midsize business.
    So that is just one of the things that I think maybe we 
should look at in the Committee, Mr. Chairman in the future. 
But thank you for your testimony and I yield back, Mr. 
Chairman.
    Chairman BLUM. Thank you, Mr. Comer.
    Ranking Member Schneider is now recognized for as long as 
he would like.
    Mr. SCHNEIDER. Thank you. And again, Mr. Smith, thank you 
for your testimony this morning.
    I will start my questions. The mission statement for the 
Department of Energy talks about protecting our security and 
prosperity around energy, environment, and nuclear challenges, 
but concludes through transformative science and technology 
solutions. And small businesses at the cutting edge of 
innovation and entrepreneurship are often critical to that.
    So my first question is you are relatively new to this 
position. Have you found at all, could you describe the culture 
within DOE and how it values or emphasizes entrepreneurship and 
innovation?
    Mr. SMITH. Thank you, Congressman. And yes, I am new. I 
have been in the position 5-1/2 months. And your question was 
my question upon arriving there, and I will say that the 
Department is very aware that its small businesses are on the 
cutting edge of technology and innovation. And I would point to 
the SBIR/STTR programs that are prominent premier programs in 
the Department, as an example of the agency's efforts to seek 
out and assist small businesses on the cutting edge of research 
and development.
    Mr. SCHNEIDER. So one of the things I looked at, to promote 
opportunities the agency is required to assign small business 
technical advisers. My understanding is that has been a 
challenge. Two questions around that. The second question 
actually is how are you trying to expand that and address the 
challenge? But given that constraint, how have the Expos 
provided an opportunity to reach out and attract small 
businesses?
    Mr. SMITH. Thank you, Congressman. I will address the SBTA 
issue. It has been a challenge, but it has been a challenge 
primarily because we have taken it seriously. There are a 
number of requirements for an SBTA, namely that I, as the OSDBU 
director, would have supervisory authority, that the SBTA would 
be located in the contracting office, and that their primary 
responsibility would be to assist the Small Business 
Administration's Procurement Center representative. And general 
counsel, the OSDBU office, our Office of Acquisition 
Management, and Human Capital have worked in concert to finally 
put this together. It was in December that I signed the letters 
of assignment to our two non-NNSA SBTAs. The two NNSA SBTAs, 
small business technical advisers, they had been assigned in, I 
believe, November, and the position descriptions for those 
SBTAs are being finalized this week, actually. So, it has been 
a challenge, but I believe it has been worked out in a most 
thorough fashion, and I look forward to getting a review from 
either the SBA or GAO to confirm that for me and for the 
agency.
    Mr. SCHNEIDER. Okay, I do not want to give up on the Expos, 
but, again, I think the two pieces. In a culture that promotes 
and celebrates entrepreneurship, the SBTAs should be a champion 
of that and hopefully a desirable position that people are 
seeking. But absent that, you do the annual Expo. How many 
companies will typically come? You said over a thousand?
    Mr. SMITH. A thousand attendees. At last year's Expo we 
had, I believe, 741 business representatives, I should say, 
maybe less businesses than that. There might have been multiple 
members from a business. The others are internal stakeholders, 
our program managers from the various sites. So last year the 
total attendance was in the neighborhood of the high 800s.
    Mr. SCHNEIDER. Okay. And typically, this year is Houston. 
Where has it been in past years?
    Mr. SMITH. Last year it was in Kansas City. It has been in 
Atlanta. I believe it was in Phoenix one of these recent----
    Mr. SCHNEIDER. So it moves around the country quite a bit. 
How do you measure the success, the outcome, the ability of 
these Expos to generate--what we want is more contracts for 
small businesses, more small businesses saying this is an area 
I want to come into, more innovation that will give us the 
solutions we need for our future.
    Mr. SMITH. We measure that to a degree. I am not confident 
we measure it maybe as well as we can. We do have post-Expo 
Forum and Expo surveys to those who participated. We do ask if 
they have been introduced to acquisition opportunities. But as 
you can imagine, a survey that comes out 6 months after a Forum 
and Expo may be too short a time period; that maybe there needs 
to be a later reconnect. But there has been an effort to some 
degree to determine the efficacy of the event and the utility 
of the event.
    Mr. SCHNEIDER. Well, obviously, on this Committee, the 
Small Business Committee, we all have an interest in promoting 
small business growth and development. As Americans, we have a 
profound interest in our energy future, energy security, and 
having that entrepreneurship, having those small companies, 
startup companies find a way to develop new ideas and take 
those new ideas from concept to commercialization is crucial. 
Having access to these markets obviously is important to them.
    And I think if I can emphasize the point about a $30 
million company, a startup is different than a $10 million 
company; $10 million is different than $30; $30 is different 
than $100. The more we can do to help these companies grow, 
create American jobs, the better it is, I think, for our 
economy and our future.
    With that, I yield back.
    Chairman BLUM. Thank you, Mr. Schneider.
    Mr. Smith, you are new to this position. I think you said 
5-1/2 months, is that correct?
    Mr. SMITH. Yes, Mr. Chairman.
    Chairman BLUM. Can you give me just briefly your 
background?
    Mr. SMITH. Sure. When I left the Navy after college--I 
spent 5 years in the Navy--from there I went and served in New 
Jersey government and political positions. I was a deputy 
commissioner of banking and insurance. I was a director of 
intergovernmental affairs for Governor Christie Whitman. I most 
recently served in Governor Christie's administration as a 
director at the Department of Labor. In between that last 
position I served 13 years in the investment banking business. 
Small business is where it started out. For a couple years we 
formed a joint venture with Bear Stearns. Bear Stearns, as we 
all know, was subsequently----
    Chairman BLUM. You were working focused on small businesses 
then?
    Mr. SMITH. At that time I was focused on actually securing 
business from city and county governments, most specifically in 
the purchase of delinquent property taxes for the investment 
bank. There was a lot of headline risk associated with that 
type of business. And consequently, JPMorgan shut the business 
down. So that was----
    Chairman BLUM. How big is your department right now? How 
many people?
    Mr. SMITH. Eleven full-time employees including myself.
    Chairman BLUM. And you report to who?
    Mr. SMITH. I report to the deputy secretary.
    Chairman BLUM. Okay. And do you know how many employees are 
in DOE total?
    Mr. SMITH. We have about 105,000. I believe there are 
12,000 government employees and 90,000 contracted employees.
    Chairman BLUM. Wow. It takes my breath away. You have 11 
employees. Do you feel you have an effective voice? I know 5-1/
2 months is not a long time. I mean, are you being heard or 
have they got you in an office down next to the furnace in the 
basement, so to speak?
    Mr. SMITH. No. No, Mr. Chairman. We are being heard, 
certainly. There is a strong commitment to small business, 
because I think DOE has recognized, through its M&O business 
model, the great innovation in energy, no pun intended, that 
small businesses bring to our endeavors. Our budget, our office 
budget is $3 million, but for 11 full-time employees, we have 
90 small business program managers that, while they do not 
answer to me directly, we work closely with. They are all 
committed to expanding the engagement with small businesses. 
They are all extraordinarily knowledgeable in their respective 
areas of expertise at these labs and at these sites.
    Chairman BLUM. How many deputy secretaries are there in 
DOE?
    Mr. SMITH. There is one deputy secretary, sir.
    Chairman BLUM. And you report to that person, correct?
    Mr. SMITH. Yes.
    Chairman BLUM. Okay. Thanks for giving me your background.
    I still have a small company and I have owned small 
companies my entire business career. There are companies out 
there that charge six figures to small companies to help them 
navigate the maze that is the Federal Government and the 
bidding process, and the approval process is beyond belief, at 
least it was. And our company, a software development company, 
was trying to get involved in international trade. We wanted to 
sell more outside the United States. Now, I, as a small 
business owner, should spend $100,000 or more to become 
approved by the Federal Government to be an approved vendor to 
maybe get involved in a bid or letting? To me that is a barrier 
to entry. And very few small businesses, and I mean small 
businesses, less than $30 million, $50 million, they are going 
to shell out 100 grand for a maybe. Why should it be that way? 
Why should this be so difficult?
    And I get it. DOE and other agencies are like, well, you do 
not want to deal with a company that is here today, gone 
tomorrow. You have to do some checking. I understand that. But 
really, I should have to spend $100,000 where I could be hiring 
more employees, investing in my company, to navigate this? I 
mean, would you agree with that statement? Or just comment on 
that, would you please? And then what are you going to do to 
try to make that go away for the DOE?
    Mr. SMITH. Well, I appreciate that concern, Chairman. And I 
would agree that it is not right that a company would need to 
spend such an extraordinary amount of money in order to do 
business with the Federal Government. I will say this, that our 
office, our Small and Disadvantaged Business Utilization 
Office, and the other 24 Federal offices of Small and 
Disadvantaged Business Utilization, we offer a lot of the 
counseling, the direction, the instruction in how to interact 
or best interact with the Small Business Administration. I 
think between the OSDBU offices and the Small Business 
Administration, and maybe we need to make small businesses more 
aware of the services we provide, but----
    Chairman BLUM. The small businesses that do business with 
DOE or are trying to do business, do they have to be approved? 
An approved vendor? Is there an approval process? I am not 
talking about submitting a bid or trying to get a piece of the 
business. I am talking about I know on the trade side back when 
we did this 10 years ago, it was like you had to be approved 
first, which I understand part of that. Do you have to be 
approved to do business with the DOE? And if you do, how 
lengthy is that process? How complicated is that process? How 
many inches of pages is that process?
    Mr. SMITH. Mr. Chairman, approved, per se, I do not believe 
there is an approval process. I believe there may be 
requirements.
    Chairman BLUM. Could you check that if you are not sure, 
and you are new so I will give you a pass on that, but could--
--
    Mr. SMITH. I would be happy to check that, Mr. Chairman.
    Chairman BLUM.--you check that and get that back to me 
personally?
    Mr. SMITH. Yes, sir.
    Chairman BLUM. If you have to be approved and what that 
process is?
    Mr. SMITH. Yes, sir. Will do.
    Chairman BLUM. You are not aware of it, though?
    Mr. SMITH. I am not aware of that. I am willing to gather 
that specific projects will have specific requirements 
necessary for businesses to compete in them, but as far as an 
agency-wide approval, I am not aware.
    Chairman BLUM. I will reserve the balance of my time. And I 
will now yield to--I call him coach, but will yield to Mr. 
Lawson for 5 minutes.
    Mr. LAWSON. Thank you, Mr. Chairman. And Mr. Smith, 
sometimes when you come in a little tardy you might have asked 
the question. So I had a question for you and you can just tell 
me, you know, whereas if you have said something about it.
    One provision under the Small Business Act includes a 
requirement to respond to notifications and solicitations 
unduly restrict the ability of small businesses to compete for 
contracts. And so what I was concerned about, the initiatives 
that you have begun to help mitigate, any restricted contract 
practices in agents. And I think you referred to some of it a 
few minutes ago, but it would give you another chance to 
respond to it so I would have a little bit better knowledge.
    Mr. SMITH. Thank you, Congressman. I said earlier that the 
GAO report had noted as a deficiency the agency's 15(k)(17) 
undue restriction facilitating those for small business 
concerns. I believe we have adequately addressed that. It is 
what I consider an accomplishment in my short tenure, so far, 
at the agency. But, as of a couple months ago, we now have on 
our website a dedicated mailbox for small businesses to 
communicate directly with us regarding any concerns they have 
that a contracting opportunity may be unduly restrictive. We 
monitor that mailbox daily.
    We did receive an undue restriction notice that was 
submitted to us by a small business concern. We forwarded that 
small business concern to the contracting officer and to the 
competition advocate, and within 48 hours they had amended the 
request for proposal both to their satisfaction, because it 
became a better request for proposal, and to the small 
business' concerns satisfaction that they had been heard and 
responded to in an manner that they deemed helpful.
    Mr. LAWSON. Okay. And this is always the $10 million 
question. What can Congress do to support small business and 
DOE in helping DOE carry out the small business contracting 
goal?
    Mr. SMITH. In DOE, where we have been successful has been 
at the top line. We have been successful at hitting the overall 
small business prime and subcontracting goals. Where we have 
struggled, and many agencies have struggled, has been in the 
socioeconomic subcategories, specifically HUBZones and service-
disabled veteran-owned small businesses. The HUBZone 
frustration amongst my colleagues, as I have come to realize in 
other agencies, has been kind of the movement of the zones; the 
fact that when a business becomes successful in a HUBZone and 
people begin to receive greater compensation and move out of 
the HUBZone, and some of the difficulties in maintaining kind 
of an accurate business community that we can identify with and 
engage with that satisfies Congress' desire to assist these 
underutilized businesses and our desire to engage them. I think 
if we could find some stability in finding a way to make that, 
one, serve the purpose of the legislation, and two, maintain 
some stability, that would be extraordinarily helpful.
    Mr. LAWSON. Okay. And before my time runs out here, how 
does DOE define small disadvantaged businesses?
    Mr. SMITH. Thank you, Congressman. DOE, these businesses 
are defined for us by the Small Business Administration, and 
the four socioeconomic categories of women-owned small 
businesses; service-disabled veteran-owned small businesses; 
historically underutilized businesses, HUBZones; and the 8(a), 
the disadvantaged businesses. And those are the definitions 
that we use in the Department of Energy.
    Mr. LAWSON. Mr. Chairman, if I may for one second, are 
those businesses given preferential treatment?
    Mr. SMITH. Could you elaborate, Congressman?
    Mr. LAWSON. What I mean by that, once you have them in the 
system, do your staff take those businesses and say we kind of 
need to work with these businesses because they are now in the 
system that we have? Should we try to make sure that we do some 
contracting work with them because of the category that they 
are in?
    Mr. SMITH. The short answer to that is yes, we do. We work 
to advocate set-asides for those categories. In fact, there is 
an initiative that I intend to undertake here in the short 
term, in the form of a sample letter to our 90 or so small 
business program managers to ask that their program elements 
pledge to do two set-asides for HUBZones and service-disabled 
veterans and women-owned small businesses in order to retain 
their focus, if you will, on providing that preference.
    Mr. LAWSON. Okay. Thank you, Mr. Chairman. I yield back.
    Chairman BLUM. Thank you, Mr. Lawson. That is a good line 
of questioning. And toward that end, the subcategories, you 
know, service-disabled and women-owned businesses and minority-
owned businesses, is there a plan in place? You said we are 
missing the numbers. We are hitting at the top line for small 
business, but we are missing the numbers in the subcategories. 
Is there a plan in place or not today?
    Mr. SMITH. Thank you, Mr. Chairman. I have established 
three priorities for fiscal year 2017, and they are in order, 
one, improve socioeconomic subcategory performance; two, make 
it easier for small businesses to do business with our agency; 
and three, to improve our office's relationship, working 
relationship with our internal stakeholders, our small business 
program offices, and our contracting offices.
    And directly to the plan of socioeconomic improvement, the 
initiatives underneath that would be the set-aside, the request 
for two set-asides in the socioeconomic subcategories to each 
of our program elements, an initiative where I mentioned in the 
testimony, last year we had our first annual Service-Disabled 
Veteran-Owned Small Business Day. It was specifically dedicated 
to service-disabled veteran-owned small businesses, so that we 
could give them a day to interact with our program elements who 
were there to offer them opportunities and matchmaking 
sessions.
    What we are going to do with the HUBZones, our intention is 
to visit three HUBZones this year. At the moment we are looking 
at one near--we are seeking one near--I am going to say it 
wrong, excuse me--we are seeking one between Morgantown and 
Pittsburgh, where we have a lab and we have a facility.
    Chairman BLUM. So there is----
    Mr. SMITH. There is a plan.
    Chairman BLUM. There is a plan for the subcategories----
    Mr. SMITH. Yes.
    Chairman BLUM.--Mr. Lawson was asking about? Can you 
provide that plan to this Committee?
    Mr. SMITH. Yes, sir.
    Chairman BLUM. And it already exists you are saying?
    Mr. SMITH. Yes, sir.
    Chairman BLUM. Okay. So in the next 60 days you can provide 
us that plan and I will distribute it to the Ranking Member and 
Mr. Lawson and the other members, as well as you are going to 
provide us do companies have to be approved to even bid on 
business, and what is that approval process. And I am a little 
bit disappointed you do not know that after 5-1/2 months, if 
they have to be approved and what the process is, because I 
think that is a real barrier to entry, having to go through 
that process. At least what our small company had to do, it was 
onerous. It was unbelievable. And expensive. And most companies 
say, no, I cannot afford it. You have to get lawyers involved. 
Come on. They should not be, especially when we are talking 
about small business. I think you would agree.
    Mr. SMITH. Mr. Chairman, I appreciate and agree with that, 
and I apologize to the Committee for not having an answer for 
you on that.
    Chairman BLUM. Another question is small business, I know 
there are games that can be played out there and I have heard 
them throughout the years with small businesses and getting 
categorized certain ways by doing certain funny things. I 
assume a small business cannot be a subsidiary of a big 
business. You know, they set up this new small business and 
they go, hey, we are now a small business and we are going to 
go out and get a chunk of dough in addition to the other chunk 
of dough we are getting from the Department of Energy because 
now we are a small business, but they are not really because 
the ownership mirrors the ownership of the big corporation. I 
know you are new in the job. Are you aware of that game and, 
hopefully, that cannot be played at DOE? Do you know?
    Mr. SMITH. Yes, Mr. Chairman, I am new at the job and, yes, 
I am aware of that game. And I am not aware specifically, but I 
do know this concern is investigated to address specifically 
that type of situation you described. I would be happy to get 
back to you with the particulars on how that is done.
    Chairman BLUM. Women-owned business, minority-owned 
business, service-disabled businesses, these are great goals. 
And I hope your plan does not say we are going to do these 
things. I hope it says here is a number we want to hit. Here is 
how we measure this. I am a business guy, so far too often in 
government we do not measure things. And we just say, well, we 
are going to do X, Y, and Z. And as Einstein said, if X, Y, and 
Z is what we did today and we are going to do X, Y, and Z 
tomorrow and expect different results, that is insane. So I 
like to measure. You know, what is it today? Mr. Lawson's 
questions were good on that point. What are we at today? And I 
hope your plan says, and here is the goal. Now, granted, you 
may not hit it. We get that. Nobody is perfect, but it is nice 
to say here is where we are at today; here is how we are 
measuring this, especially on these subcategories. Any thoughts 
there?
    Mr. SMITH. Yeah, thank you, Mr. Chairman. And having spent 
many years in the investment banking world, I understand the 
need for measurement of performance. And in this initial period 
of my time at DOE, I am looking for baseline numbers. So the 
short answer to your question is yes, but there is some 
research that needs to be involved to see if we are indeed 
moving more businesses, the numbers as far as how much does the 
Forum and Expo contribute ultimately to the number of small 
businesses that are being engaged by the Department, et cetera. 
But we do have initiatives in place. There are some metrics, 
but I will be candid with you. There has not been a well-enough 
established baseline to give definitive metrics.
    Chairman BLUM. Well, I am happy to hear, and thank you for 
your candid answer. Candid is good. I am happy you are from the 
private sector, and I think the incentives in government, and 
you probably would agree with this, to me as a private sector 
guy, sometimes seem upside down totally. And so I think if you 
can bring some private sector thinking into your job that would 
be a good thing overall.
    And please let this Committee know if you feel like you are 
not being paid attention to sufficiently in the Department. I 
think it was Mr. Lawson asked about, what can we do as a 
government to help you out? It is our job to make sure they 
listen to you. So I am serious. If you get some great ideas and 
you feel like they are not being listened to, let us know, let 
me know, and we will go to bat for you.
    Do any of the members have any further questions?
    Mr. LAWSON. Mr. Chairman, I do not have a question, but I 
just want to say there is a big push I know since I have been 
here, and I am new, to really do something about getting 
veterans not only into the agricultural business, but into 
business in general that are coming out of the military. And so 
that is going to be a significant push by all members, you 
know, especially in our areas. And so I know that even though 
they are very disciplined, but there are some areas where they 
might fall down a little bit when you talk to the staff because 
they have never been into this before. They spent 4 years in 
the military or something of this nature, but I just wanted to 
bring it out that there is going to probably be a lot more 
concern about are we really working with our vets simply 
because, I mean, all over America they are saying we have got 
to do some more for our veterans.
    Chairman BLUM. Would you like to comment on that?
    Mr. SMITH. Well, I would like to say, Congressman, I could 
not agree with you more. I have been heartened in my short time 
to notice the Small Business Administration's focus, or at 
least attention, to this very issue. And I am confident with 
your eye on this, I think we will address what I agree is an 
appropriate concern. As a former Service member myself, I full 
well knew the feeling when I left, how do I do this? What do I 
do now? And there is extraordinary talent in that group of 
people. So I appreciate your concern on it.
    Chairman BLUM. Seeing no further questions, I would like to 
thank our witness, Director Smith, for being here today. I 
appreciate and acknowledge, I think we all do, 5 months on the 
job you are not going to have every answer. It is not easy. We 
appreciate your testimony and we also appreciate the Office of 
Small and Disadvantaged Business Utilization's continued 
efforts to provide small businesses in the energy sector the 
resources they need to compete. Hopefully, through continued 
efforts on behalf of the Department and the OSDBU, the 
processes and programs in place to assist small businesses will 
continue to become more effective and truly allow small 
businesses the opportunity to grow and scale in such a very 
important sector of the United States economy. As chairman of 
the Subcommittee on Agriculture, Energy, and Trade, I look 
forward to continuing to work with you and the Department of 
Energy to achieve this goal.
    Now, I ask the unanimous consent that members have 5 
legislative days to submit statements and supporting materials 
for the record.
    Without objection, so ordered.
    We are now adjourned.
    [Whereupon, at 10:34 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X


       Prepared Testimony and Statement for the Record of

       Charles R. Smith, Director, Department of Energy,

     Office of Small and Disadvantaged Business Utilization

                           Before the

             United States House of Representatives

 Small Business Committee Subcommittee on Agriculture, Energy 
                           and Trade

                        January 18, 2018
    Chairman Blum, my name is Charlie Smith and I am the 
Director of the Department of Energy (DOE), Office of Small and 
Disadvantaged Business Utilization (OSDBU) appointed in 
September 2017. I also serve as a council member to the Office 
of Small and Disadvantaged Business Utilization Council and 
committee member with the Small Business Procurement Advisory 
Committee. I have been working in this capacity with a focus on 
small businesses to move the needle on this Department's goal 
achievement through collaboration with the Small Business 
Administration (SBA) and DOE's contracting activities.

    DOE awards billions of dollars to small businesses every 
year and has successfully met the prime small business goals 
established by SBA since 2015. My focus during my time with 
this Department is to not only continue to meet our prime 
contracting and subcontracting goals, but also the subcategory 
goals like Woman-owned, HUBZone, Service Disabled Veteran and 
8(a) disadvantaged owned businesses.

    In my testimony, I will provide DOE resources available to 
small businesses as well as outline our business model and 
discuss the multi-lab focus on small busine4ss engagement. I 
will cover these topics in the following order:

           First, an understanding of our business 
        model

           Second, how that business model plays into 
        the labs that are foundational to the function of this 
        Department

           Finally, what resources those labs and the 
        Department as a whole provide to small businesses to 
        help them contract with our Department

    Department of Energy Business Model

    The Department of Energy Organization Act of 1977 created 
the cabinet-level US Department of Energy, combining defense 
responsibilities that included the design, construction, and 
testing of nuclear weapons dating from the Manhattan Project 
effort to build the atomic bomb; and a loosely-knit 
amalgamation of energy-related programs previously scattered 
throughout the Federal government. Neither the scientific 
expertise responsible for the physics underlying the 
development of the weapons nor the manufacturing and 
engineering expertise that produced the weapons had existed 
within the Federal government. The government thus acted as 
federal project manager, relying on scientists from academia 
and the engineering and construction skills of industry.

    This approach, unique in the federal government, has 
continued at the Department, effectively tapping into private 
sector expertise through the network of independent government-
owned, contractor-operated (GOCO) laboratories that meet the 
Department's evolving missions through the benefit of America's 
innovative and responsive business sector.

    These laboratories are run by management and operating 
contracts (M&O), a term used to describe the contracts that are 
central to the DOE's business model.

    DOE relies upon the M&O contractors for the performance of 
the substantial part of the Department's mission--approximately 
85 percent of DOE's obligations flow to the M&O contractors. 
That reliance on the private sector's expertise allows DOE's 
federal staffing to be a fraction of what would otherwise be 
necessary to conduct its diverse missions.

    M&O contracts have received special regulatory treatment in 
the Government. Federal Acquisition Regulation (FAR), at 
Subpart 17.6, recognizes and codifies the special identity that 
M&O contracts have with an authorizing Department. The FAR 
coverage recognizes and authorizes Department acquisition 
regulations that deal with the special nature of M&O contracts.

    As of December 30, 2017 DOE has achieved 8.64% of the 10.2% 
prime small business goal target. In the subcategories, we have 
achieved 3.08% of the 5.0% goal for Small Disadvantaged; 2.07% 
of the 5.0% goal for Woman Owned Small Businesses; 0.38% of the 
3.0% goal for Service Disabled Veteran Owned Small Businesses; 
and .34% of the 3.0% goal for HUBZone. DOE is projected to meet 
the 10.2% goaling achievement but unclear of the grade we will 
achieve due to the new scoring process being implemented by the 
Small Business Administration.

    The DOE Labs and Small Business

    Most of the Department labs are operated by M&O 
contractors. These contracts are reported through a data 
collection process called Management and Operating Subcontract 
Reporting Capability (MOSRC). The awards the M&Os make are 
considered subcontracting, however, because they are treated as 
an extension of DOE, their awards are counted as primes. The 
data collection of these subcontract awards being counted as 
prime awards is tracked through MOSRC.

    The core objective of having established MOSRC is to 
collect and provide the data in a manner acceptable to SBA that 
would enable DOE to receive full credit toward achievement of 
DOE small business prime contracting goals for its 1st-Tier M&O 
subcontracts.

    In measuring the engagement of federal agencies with small 
businesses, SBA relies on the Federal Procurement Data System-
Next Generation (FPDS-NG) to record all federal obligations 
flowing into prime contracts. As DOE's procurement model is 
that of a subcontracting Department, DOE believes the FPDS-NG 
calculations alone under-represents the Department's engagement 
with small businesses through their M&O's subcontractors, which 
account for approximately 85 percent of Department spending.

    This data-gathering approach enables DOE to more accurately 
portray the Department's ongoing commitment to working with 
small businesses. This capability is essential in achieving 
recognition for DOE's unique business model that leverages the 
resources of our M&O contractors to accomplish DOE's mission, 
creating the largest flow, upwards of $2 billion annually, of 
appropriated funds to small businesses of all the civilian 
agencies.

    To this end, the Consolidated Appropriations Act of 2014, 
Title III, Section 318 authorized DOE to count 1st-Tier 
subcontracts awarded by its M&O contractors to small businesses 
toward accomplishment of its annual small business goals. DOE's 
M&O contractors have independent, diverse business systems that 
they use to manage subcontracting activities. Managed by the 
external resource of DOE OSDBU, MOSRC centrally collects and 
reports the 1st-Tier small business activity of DOE's M&O 
contractors to SBA and the general public.

    DOE resources and regulatory support for small businesses

    There are several resources and regulatory support 
functions provided to small businesses. Some have been 
established for a while and some are new. We listen to the 
customer and continue to expand resources based on the 
communication and demand for process improvement.

    We ``advertise'' small manufacturer's exemption in each 
applicable consumer products energy conservation standards 
rule. Under the energy conservation standards program, the 
Secretary may determine via an exemption application if a small 
manufacturer (businesses with less than $8M in annual revenue) 
may be exempt from all or part of any energy conservation 
standard for up to two years. Although there have been a few 
exemption applications recently, we believe this exemption is 
important to highlight as a resource for small businesses 
constrained from entering a certain covered product market.

    We point out any small business impacts to SBA Office of 
Advocacy during the EO 12866 interagency review process. OSDBU 
works with the SBA Office of Advocacy to share proposed or 
final regulatory language with small businesses for their 
input.

    We recurrently post an updated forecast of contracting 
opportunities. Making forecasts available to identify upcoming 
Department requirements was established by Public Law 100-656, 
the Business Opportunity Development Reform Act of 1988, 
amending the Small Business Act to emphasize acquisition 
planning. The law requires agencies to compile and make 
available projections of contracting opportunities that small, 
minority, veteran-owned, and women-owned businesses may be able 
to perform. These rosters of planned service and supply 
requirements of the Department serve as a business development 
tool, guiding small businesses to adjust their capabilities to 
better meet evolving needs of the Department. Acquisition 
forecasts also serve small businesses in their use as an 
internal acquisition planning resource--as requirements are 
initially posted, stakeholders can contact the Department's 
Small Business Program Managers, to discuss their capabilities 
to perform the listed need. This engagement, in the early 
stages of acquisition planning helps procurement personnel 
shape the acquisition into a more small business friendly 
format. DOE has its legislated Headquarters Acquisition 
Forecast publically available, updated on a recurring basis. 
Small businesses seeking the full range of Department needs are 
also guided to research the 17 DOE M&O contractors' additional, 
separate acquisitions forecasts, which list upcoming 
requirements unique to their respective facilities.

    We provide business forms on our website, email, phone 
access so that companies can let us know when they feel that 
there has been an undue restriction on competition. When small 
businesses seek redress for alleged action or inaction of the 
Department, DOE OSDBU is charged with fielding such concerns. A 
challenge to the direct intervention and resolution of such 
issues is steered by the privity of contract held between the 
contracting officer and the contractor. As advocate for the 
small business in this case, DOE OSDBU guides and recommends, 
but does not direct a contractual action to take place, on 
behalf of the impacted small business.

    Our organization hosts an annual Small Business Forum & 
Expo. Each year, OSDBU hosts DOE's Small Business Forum & Expo, 
a multi-day conference that connects small business attendees 
with DOE offices, power administrations, prime contractors and 
subcontractors. The Forum & Expo offers a comprehensive roster 
of educational workshops, where attendees can learn about 
subjects such as how to respond to a sources sought notice, how 
to obtain grant funding, and more. Attendees have the option to 
participate in matchmaking exercises, in which small businesses 
are allotted one-on-one time with a DOE specialist to ask 
questions most pertinent to them.

    In 2017 we hosted our first Veterans Conference to 
emphasize the Department's commitment to Veteran-Owned Small 
Businesses (VOSBs) and Service Disabled Veteran-Owned Small 
Businesses (SDVOSBs). OSDBU is dedicated to assisting veterans 
who are interested in partnering with DOE. Over 200 business 
representatives and DOE acquisition staff participated in a 
full day of business development training, counseling, and 
matchmaking. OSDBU looks forward to future iterations of this 
annual event. To ensure DOE's ongoing support of VOSBs and 
SDVOSBs, I have assigned a veteran on my staff to serve as 
Veterans Liaison.

    Over the last few years we have co-sponsored the 
ChallengeHER Forum. This event emphasizes the Department's 
commitment to Women-Owned Small Businesses (WOSBs). OSDBU is 
co-hosting this year's event in partnership with Women 
Impacting Public Policy, a nationally active WOSB advocacy 
organization. The event will take place in Miami, FL and 
promote DOE contracting opportunities for women.

    In FY18 we are planning a HUBZone Forum to target this 
small business category. The road trip across the country will 
provide business development training, further advertise 
upcoming contracting opportunities, and connect new businesses 
with DOE buyers at our network of laboratories.

    We also have an established Mentor-Protege Program (MPP) to 
encourage seasoned contractors to provide business development 
and sub-contracting opportunities to small businesses 
interested in partnering with the Department. It is distinct 
from SBA's MPP, by being an agreement, not a contract-based 
business arrangement, enabling more flexibility of 
participation by small businesses. OSDU has a concerted effort 
underway to increase the Department's 28 MPP agreements in 
FY18. In FY17 DOE OSDBU had 28 participants in the program 
accomplishing about $10M in subcontracting.

    Our office actively seeks to participate in outreach events 
to continuously grow DOE's network of capable small businesses. 
We not only host and attend events but specifically partner 
with other OSDBU offices and share our resources for the 
benefit of the government as a whole. In FY17, OSDBU attended 
32 events, spanning all small business socio-economic 
categories. Over 10,000 total attendees were present at these 
events.

    The Department is very involved in engaging small 
businesses, and we look forward to including additional 
obligations to small businesses that are not currently included 
in SBA's goaling process and utilizing future goaling processes 
through our enhanced partnership with the SBA. Some of these 
include:

    The Small Business Vouchers program (SBV) is in DOE's 
Office of Energy Efficiency and Renewable Energy (EERE). This 
program is leveraging the world-class resources of the national 
labs with the SBV program. Through the program, eligible small 
businesses can tap into the reserve of national laboratory 
intellectual and technical assets to overcome critical 
technology and commercialization challenges. The program 
fosters a strong partnership between the labs and clean tech 
small businesses, benefiting both. While small businesses 
receive access to state-of-the-art facilities and experts, the 
national labs broaden their service to private-sector 
technological development, supporting small business 
development, job creation and American competitiveness. Since 
March, 2016, the SBV program has awarded vouchers to 114 
businesses worth a total of $22 million.

    The Small Business Innovation Research and Small Business 
Technology Transfer programs (SBIR/STTR) are operated through 
DOE's Office of Science, spurring technological innovation by 
investing in capable American small businesses. SBIR/STTR 
encourages participation by socially and economically 
disadvantaged small businesses, mirroring the Department's 
overall goal to involve these firms in DOE's missions. In FY16, 
SBIR/STTR awarded $216 million to small businesses to explore 
technological innovation and to perform R&D. In FY17, the 
programs awarded $242 million for those same purposes.

    The Federal Energy Management Program (FEMP) is operated by 
DOE's EERE office. FEMP helps federal agencies meet energy-
related goals by facilitating streamlined partnerships with 
small energy service companies. FEMP also hosts an annual in-
person training event titled Energy Exchange, which provides 
professional skill-building, training, and networking 
opportunities. In addition, FEMP offers small businesses a 
robust online training program free of charge.

    The Gateway for Accelerated Innovation in Nuclear (GAIN) 
program is operated by DOE's Office of Nuclear Energy to 
provide the nuclear community with access to technical, 
regulatory, and financial support. GAIN hosts workshops 
discussing regulatory review processes, licensing processes, 
industry consensus standards and Quality Assurance Program 
development. As part of its mission, GAIN looks to involve the 
American small business community in the innovation and 
application of advanced nuclear technologies. To achieve this 
goal, GAIN has implemented a small business vouchers program. 
In FY16, eight small businesses received vouchers totaling $2 
million.

    In conclusion, I would like to state that our organization 
is sensitive to the need for oversight of fair business 
practices that open doors for small businesses to access 
Federal contracting. I am personally focused, as a veteran 
myself, to help service disabled veterans re-engage the 
workforce through our Department's search for entrepreneurs, as 
they bring knowledge, skills, dedication and a strong work 
ethic to the agency. I appreciate Congress supporting the 25 
federal OSDBU offices that help our Federal contracting 
workforce assist capable small and disadvantaged businesses in 
performing these contracts. I welcome any questions and look 
forward to working with you, Mr. Chairman and this 
Subcommittee, to further any efforts that aim toward that goal.

                                 [all]