[Senate Hearing 115-868]
[From the U.S. Government Publishing Office]
S. Hrg. 115-868
OPPORTUNITIES AND CHALLENGES
WITH THE SMALL BUSINESS ADMINISTRATION'S
FEDERAL CONTRACTING PROGRAMS
=======================================================================
FIELD HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
of the
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
JUNE 29, 2018
__________
Printed for the Committee on Small Business and Entrepreneurship
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
30-957 PDF WASHINGTON : 2022
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED FIFTEENTH CONGRESS
----------
JAMES E. RISCH, Idaho, Chairman
BENJAMIN L. CARDIN, Maryland, Ranking Member
MARCO RUBIO, Florida MARIA CANTWELL, Washington
RAND PAUL, Kentucky JEANNE SHAHEEN, New Hampshire
TIM SCOTT, South Carolina HEIDI HEITKAMP, North Dakota
JONI ERNST, Iowa EDWARD J. MARKEY, Massachusetts
JAMES M. INHOFE, Oklahoma CORY A. BOOKER, New Jersey
TODD YOUNG, Indiana CHRISTOPHER A. COONS, Delaware
MICHAEL B. ENZI, Wyoming MAZIE K. HIRONO, Hawaii
MIKE ROUNDS, South Dakota TAMMY DUCKWORTH, Illinois
JOHN KENNEDY, Louisiana
Skiffington E. Holderness, Republican Staff Director
Sean Moore, Democratic Staff Director
C O N T E N T S
----------
Opening Statements
Page
Risch, Hon. James E., Chairman, a U.S. Senator from Idaho........ 1
Sullivan, Hon. Dan, a U.S. Senator from Alaska................... 3
Murkowski, Hon. Lisa, a U.S. Senator from Alaska................. 271
Witnesses
Panel 1
Wong, Mr. Robb, Associate Administrator, Office of Government
Contracting and Business Development, U.S. Small Business
Administration, Washington, DC................................. 206
Panel 2
Jokiel, Ms. Carrie, President, ChemTrack Alaska, Inc., Anchorage,
AK............................................................. 224
Kompkoff, Mr. Gabe, Chief Executive Officer, Chugach Alaska
Corporation, Anchorage, AK..................................... 232
Marrs, Mr. Carl, Chief Executive Officer, Old Harbor Native
Corporation, Anchorage, AK..................................... 240
Peterson, Mr. Richard, President, Central Council Tlingit Haida
Indian Tribes of Alaska, Juneau, AK............................ 259
Miranda, Mr. Rolando, President, Miranda Electric, Inc.,
Fairbanks, AK.................................................. 264
Alphabetical Listing and Appendix Material Submitted
Afognak Native Corporation
Statement dated July 13, 2018................................ 398
Bristol Bay Native Corporation
Letter dated July 13, 2018................................... 404
Goldbelt
Issues Affecting Federal Contracting for Alaskan Native
Contractors dated June 2018................................ 407
Goldbelt, A History.......................................... 410
Jokiel, Ms. Carrie
Testimony.................................................... 224
Prepared statement........................................... 227
Report titled "DO NOT ENTER: Women Shut Out of U.S.
Government's Biggest Contracts"............................ 282
Kompkoff, Mr. Gabe
Testimony.................................................... 232
Prepared statement........................................... 235
Marrs, Mr. Carl
Testimony.................................................... 240
Prepared statement........................................... 243
Miranda, Mr. Rolando
Testimony.................................................... 264
Prepared statement........................................... 267
Murkowski, Hon. Lisa
Opening statement............................................ 271
Native American Contractors Association
Statement dated June 29, 2018................................ 412
Peterson, Mr. Richard
Testimony.................................................... 259
Prepared statement........................................... 261
Risch, Hon. James E.
Opening statement............................................ 1
Sullivan, Hon. Dan
Opening statement............................................ 3
Reports from Mr. Robert N. Rubinovitz and Dr. Jon Wainwright
submitted by Senator Sullivan.............................. 7
Wong, Mr. Robb
Testimony.................................................... 206
Prepared statement........................................... 220
OPPORTUNITIES
AND CHALLENGES WITH THE
SMALL BUSINESS ADMINISTRATION'S
FEDERAL CONTRACTING PROGRAMS
----------
FRIDAY, JUNE 29, 2018
United States Senate,
Committee on Small Business
and Entrepreneurship,
Anchorage, AK.
The Committee met, pursuant to notice, at 2:00 p.m., in the
Z.J. Loussac Public Library, Assembly Chambers, 3600 Denali
Street, Anchorage, AK, Hon. James Risch, Chairman of the
Committee, presiding.
Present: Senators Risch, and Sullivan.
OPENING STATEMENT OF HON. JAMES E. RISCH, CHAIRMAN, A U.S.
SENATOR FROM IDAHO
Chairman Risch. Welcome, everyone. I hate to break up a
social occasion. We're here to do some business today. Thank
you so much for coming. I want to thank all of you for showing
up today. We're here, taking the time on this Friday afternoon,
to discuss small business and the critical role small
businesses play throughout the Alaskan and U.S. economies.
I am joined here by Senator Sullivan and Senator Murkowski,
who is en route. We have a number of staffers from my office,
from Senator Sullivan's office, from Senator Murkowski's
office.
Also, I'd like to introduce Sean Moore. Sean, where are
you? All right. Sean is the staff director for the minority
through Senator Cardin on the Small Business Committee.
Obviously, I'm chair of the Small Business Committee. Senator
Cardin is my partner and is a minority member. He's excellent
to work with. He shares our same view and passion for small
business. He couldn't be here today, but he sends his best, and
sends his best in his staff director. So thank you for being
here.
I want to thank Senator Murkowski and Senator Sullivan for
their help organizing this hearing. The Small Business
Committee is here today at their invitation and their urging.
You have a remarkable congressional delegation in Senator
Murkowski, Senator Sullivan, and Representative Young. They are
renowned in Washington, DC for their passionate representation
of Alaska and Alaskans.
We are here in our oversight capacity to learn more about
the unique impacts small businesses have here in Alaska and are
having throughout the State, and taking advantage of this
opportunity to understand and work through some of the concerns
that you may have with the current Small Business
Administration Federal procurement programs. In short, we're
here in our oversight capacity. We want to find out what's
working and what isn't working.
As I mentioned, small business plays a crucial role in the
success of our economy, that is, America's economy. Small
businesses are a critical engine of our economy, and that is
especially true when it comes to job creation. With over 71,000
small businesses here in Alaska, it's no wonder that Alaskans
consistently display an attitude of self-reliance and the
entrepreneurial spirit that makes America great.
Alaska also has the unique distinction of being home to the
Alaska Native Corporations, which we all know were created
under the Alaska Native Claims Settlement Act of 1971 to
promote economic development and ensure that Native Alaskans
are able to fully participate in the economy. These
corporations have generally been considered a success, and the
8(a) program has been a significant part of that success by
directing Federal contracts to the corporations created under
this Act.
We continue to see growth in the amount of contracting
dollars that small businesses are receiving through the SBA
set-aside program. In the past year, small businesses were
awarded over $105 billion in prime Federal contracts. This is a
substantial increase of almost $6 billion of contracts awarded
to small businesses across the country over last year.
We saw growth in Alaska alone as well with a nearly $200
million increase in contracting dollars from the previous year.
Well, it is encouraging to see the success that this program
has had. We must continually work to make sure that small
businesses who are eligible to participate in the program are
able to do so in the most efficient and predictable manner. As
we strive to improve each small of the small business programs,
it is crucial to reach out and directly talk to small
businesses, like those that we have with us here today, to
learn more about what is working and what isn't working.
I would also like to commend Administrator McMahon on the
job she has done personally visiting 49 different districts in
39 different states, including Alaska last summer, talking to
small businesses and better understanding the challenges that
they face.
In addition to that, she cared enough to send one of the
very best, Jeremy Field. Where's Jeremy? Jeremy is the District
Director out of Seattle from the Small Business Administration.
Thank you for recognizing Jeremy. Jeremy had absolutely
outstanding training for this job.
How many years did you spend on the Risch team, Jeremy?
Mr. Field. Nine years.
Chairman Risch. Thank you very much. Jeremy, we're so glad
to have you.
Administrator McMahon testified in front of this committee
last month about her findings and the success small businesses
are having since abolishing many arcane and outdated
regulations that were restricting small businesses from
reaching their full potential. Administrator McMahon, along
with the committee and along with staff, have been working
diligently to reduce the regulatory structure that is so
difficult to work through.
This Small Business Committee has in recent months and
years been reforming SBA and the laws that govern its great
success. I was with the President just last week as he signed a
major piece of legislation we produced, and he was very
appreciative of this committee's efforts. We sincerely
appreciate his recognition of that.
In the time I have left as Chairman, which is through the
end of the year before I turn this over to Senator Rubio and I
move on to a different committee, it's my goal to continue to
level the playing field to provide more opportunities for small
businesses so that they can continue to compete at the highest
level possible.
I look forward to hearing from Associate Administrator Wong
and the five other small business representatives we have here
today. We're going to do two panels. First with Administrator
Wong, and then with the small businesses.
Thank you again, all of you, for your participation. Again,
I want to recognize the passion that the Senators and
Congressman from the State of Alaska share with us for small
businesses.
So, with that, Senator Sullivan, thank you for inviting us.
OPENING STATEMENT OF HON. DAN SULLIVAN, A U.S. SENATOR FROM
ALASKA
Senator Sullivan. Thank you, Mr. Chairman. It is such an
honor to have you here in the great State of Alaska. Now, it
took us a while to get there. We were flying together last
night and had a four- or five-hour layover delay in
Minneapolis. So if you're looking at a little bit of a sleepy
Chairman and number two, we got in just a couple hours ago, but
we look great.
Chairman Risch. It's not true that you can't get here from
there; it just takes awhile.
Senator Sullivan. It just takes awhile, but we're really
glad you're here.
I do want to mention, one of the most important things that
Senator Murkowski and Congressman Young and I try to do
representing all of you is bring important Federal Government
officials to our great State. We have an amazing State, but
we're very unique in so many ways. So bringing Cabinet
officials--some of you may have seen I had the opportunity to
bring Secretary Mattis up here last weekend. We have Secretary
Acosta coming in tonight for a few days of hearings and
roundtables, it's also really important to bring our fellow
U.S. Senators.
I can't think of anyone, in many ways, more important than
Senator Risch. He's being very humble here, but he's the
Chairman of this committee, Small Business Committee for the
United States Senate, and he's also number two Committee
Chairman on the Foreign Relations Committee, which he'll likely
be chairing after the elections in November, and number two on
the Senate Intel Committee. So this is one of the most
important U.S. Senators in the entire Senate, and we are very,
very deeply honored that you would come here and chair this
committee for our State and our small businesses.
I think it's safe to say certainly my number one priority
as Alaska's Senator is to bring back strong economic growth and
job opportunities for all of our State. You're probably seeing
in the Lower 48 the economy is really starting to crank. The
unemployment rate is at historic lows. That's in large measure
because of tax reform, rolling back unnecessary, burdensome
regulations, and unleashing a promise of American energy. All
of those areas can certainly help us.
We need and we're trying and I think we're getting there,
but we're lagging, let's face it, in terms of the economy, in
terms of some of the highest unemployment rates in the country;
but as the Chairman already mentioned, the key, whether it's
the U.S. economy or the Alaska economy, to real sustained
growth is through our small businesses, which are the engines
of growth in Alaska and throughout the United States.
So that's what this hearing in many ways is all about: The
economy, growth small businesses, and opportunities like
government-contracting programs, which I know we're going to
get into detail.
I'm very honored here to have Robb Wong of the SBA. I'm
honored also to have so many from Senator Risch's staff and my
staff, but it's so important to have all of them up here. I
want to extend to them a warm Alaskan welcome. Senator
Murkowski, we're hoping, is going to be here soon. She is
actually having her own traveling challenges right now. But
when she shows up here soon, we hope, we'll give her a nice
warm welcome as well.
To hammer home the importance of this hearing, I want to
submit for the record two expert reports on the historical and
contemporary disparities on government and commercial
contracting that were admitted to the court by the Department
of Justice.
Are you aware that minority-owned small businesses, which
is what the second panel is comprised of, those minority-owned
small businesses have a 30 percent lower chance in securing
government contracts than non-minority-owned businesses.
Further, there have been studies that show that small
disadvantaged businesses, SDBs, are statistically less likely
to win a contract in industries accounting for over 82 percent
of contract actions.
So I think these are the kind of disparities that we want
to look at and want to address. I'm going to have the honor
here in a little bit of introducing the members of the second
panel, who I'm very pleased could come here. I know they're all
so busy.
Small businesses are the backbone, as I mentioned, of our
economy and the Nation's economy. As part of encouraging small
business development and growth, the SBA and this committee,
Mr. Chairman, provide many resources for our small businesses
to thrive, including some of the programs we're going to talk
about, woman-owned small business Federal contracting programs,
service-disabled veteran small business programs, which are
something I'm very passionate about. I think, Mr. Chairman, you
probably know Alaska has more veterans per capita than any
State in the country.
Our Alaska Native community, which is almost 20 percent of
our population, serve at higher rates in the military--and
we're going to see some of those witnesses today--than any
other ethnic group in the country. So there's a strong
patriotism in this great State across all peoples. Having
service-disabled veteran-owned small business programs, I
think, is very important for the country and Alaska.
The 8(a) business development program, the HUBZone program,
and the Small Mentor-Protege Program, again, are all important
programs that extend to many different populations, not only in
Alaska, but in the United States. It's going to be exciting to
hear about these programs from the Administrator and challenges
and opportunities they present and, again, opportunities to
also take advantage of these and let our small businesses in
Alaska know about this.
I do want to spend a minute on an issue that I will be
asking the second panel about that relates to a program, Mr.
Chairman. You mentioned the importance of the 8(a) program that
was extended in the 1980s to Alaska Native Regional
Corporations and Village Corporations. These are corporations
that were actually set up in 1971 by the Congress. I had to
give a speech on the Senate floor last night because
unfortunately some of my colleagues have amnesia a little bit
about what we call ANCSA and how important that was.
We have a tremendous leader in the Alaska Native community,
actually throughout our whole State, Tara Sweeney, who last
night got confirmed by the United States Senate to be Assistant
Secretary of Indian Affairs at the Department of Interior. The
top official in the Federal Government in charge of Alaska
Native programs and Lower 48 American Indian programs; but
there were some Senators who were almost holding against her
the fact that she was a shareholder in an Alaska Native
Regional Corporation, despite the fact that Congress was the
entity that set up the program. So I had to go down on the
floor and explain a little bit to my colleagues on what they
were doing. It was very inappropriate to hold somebody based on
that criteria when the Congress was actually the one that set
up and created that criteria.
So there have been areas where, I think, some of the 8(a)
programs, Alaska Regional and Village Corporations, have been
misunderstood. There was a recent article in the Alaska--the
Anchorage Daily News about the 811 program and how we are
working to make sure that that program--it was air-dropped into
the National Defense Authorization Act in some ways as a way to
penalize Alaska Native and Regional and Village Corporations.
We are working to kind of reduce that. I think the Secretary of
the Army, the Navy and the Air Force have recognized the
importance of this. They put out recent memos on their views on
the contracting. So I think we can discuss that in the second
panel.
Again, overall I just want to say, Mr. Chairman, it's such
an honor to have you here. Small businesses in Alaska and
America are truly the success stories that drive our economy
here and throughout our great Nation. Small business
contracting can help add to that.
I do want to mention to everybody here--it's a great
turnout--that if you are interested, you can submit statements
to the record for the Chairman for this committee if you have
views that you think you want us to hear about in addition to
the witnesses. But I am just so honored that Chairman Risch is
here holding this hearing and that so many Alaskans and small
businesses have come out to participate.
So, Mr. Chairman, thank you again. I'm very much looking
forward to this hearing.
[Reports submitted by Senator Sulllivan follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Risch. Thank you so much, Dan. First of all, let
me say I share your view that Alaska certainly has unique
issues for a lot of different reasons. Interestingly enough,
some of them are not unlike Idaho's. Senator Sullivan and I and
Senator Murkowski share the same challenge, that is, trying to
explain to our brethren from the east coast what it's like to
have your State owned by the Federal Government. In Idaho, two
out of every three acres is owned by the Federal Government. I
know you're even higher here. I think about three-fourths or
something?
Senator Sullivan. It's 66 percent.
Chairman Risch. We have some counties that are actually 97
percent, and I suspect you've got the same thing. So that
creates really, really unique challenges because we are after
all sovereign states. We have joined together as a Federal
Government, and on some things the Federal Government is
premier and on some things the State is premier. There's a lot
of elbowing to get to the appropriate ground, but it is----
Senator Sullivan. We're partners in elbowing usually, so--
--
Chairman Risch. That's right. It's difficult to sit down
with somebody from Delaware or somebody from Maryland. To start
with, the first conversation you have if they've never heard
that before, they don't believe you. They say: Well, that can't
be. The Federal Government owns two-thirds of your state? How
can that be? Here's the map. It's crystal clear. So we share
some of the challenges.
I'd like to welcome Mr. Robb Wong to this hearing. He's the
Associate Administrator for the Office of Government
Contracting and Business Development at the Small Business
Administration. In the role at the SBA, Mr. Wong advocates for
small businesses who look to compete in the Federal contracting
market. Since being sworn in, Mr. Wong has worked to streamline
the Federal procurement process at the SBA in an effort to make
the process more efficient and effective for small businesses
to compete for Federal contracts.
We continue to work closely with Mr. Wong and his office. I
look forward to hearing an update about the SBA set-aside
program and where he thinks improvements can be made.
Mr. Wong, thank you for joining us today. The floor is
yours.
STATEMENT OF ROBB WONG, ASSOCIATE ADMINISTRATOR, OFFICE OF
GOVERNMENT CONTRACTING AND BUSINESS DEVELOPMENT, U.S. SMALL
BUSINESS ADMINISTRATION, WASHINGTON, DC
Mr. Wong. Thank you very much for the privilege of
appearing today. If I can read a statement: Chairman Risch,
Senator Sullivan, and Senator Murkowski. Thank you for the
invitation to testify today and for having me at this important
hearing to discuss Federal contracting programs at the U.S.
Small Business Administration. As the Associate Administrator
for the Office of Government Contracting and Business
Development, or GCBD as I call it for short, it is my job to
ensure that small businesses can compete for Federal
opportunities.
In fiscal year 2017 that included a record $1.57 billion in
set-aside awards to small businesses. As you mentioned, that's
$6 billion more than we've spent before. That's roughly another
50,000 jobs. We're very proud of that.
As part of that, my office oversees the 8(a) business
development program, which helps to provide a level playing
field for small businesses owned and controlled by socially and
economically disadvantaged individuals or certain specified
disadvantaged entities. Alaska Native Corporations, or ANCs,
are included in that program. As you know, ANCs play a unique
and integral part in the economic development here in Alaska.
We have been working hard to ensure their successful
participation in the 8(a) program.
Administrator McMahon and I share a passion for making
SBA's procurement-related programs, and particularly the 8(a)
business development program, more efficient and less
burdensome to both procuring agencies and our small businesses.
In a word, I want businesses to be able to get our
certifications easier so they can make more money. I want the
government to look at our programs as small business first and
SBA first and it's easier for them to provide supply and
government contracts to them.
For over 35 years I've been working in and around the 8(a)
program. My first experience was when I was 17 years old
working for an 8(a) company. Then I worked with the SBA to
write the regulations. I've been outside the agency in
commercial for 25 years consulting with small businesses, and I
have the opportunity to come back to SBA and to work with the
program that's been so central to my professional life and is
synonymous with SBA.
The best way to do that is to directly hear from our
customers and to learn from them what is working and what can
be done better. With that in mind, last year Administrator
McMahon brought her ninth tour to Alaska. Her trip included
meetings with business owners, ANC representatives, and other
entrepreneurs in Anchorage, Bethel, and Kwethluk.
She had the opportunity to see and hear firsthand the
issues facing small businesses in Alaska, including those
related to Federal contracting programs. Based on the feedback
she received, I've been focused on making sure the SBA is best
maximizing the delivery of the 8(a) program. I'd like to share
some of the progress we've made at the agency to improve the
program.
As previously mentioned, hearing directly from our partners
is imperative to me as a salesperson and as a business owner to
learning how our programs are functioning. This is my fourth
trip to Alaska as head of GCBD. I receive valuable insight and
feedback every time I'm here.
Last month I was here with my colleague, John Klein. We
held a tribal consultation session with the ANCs, their
shareholders, and tribal representatives here in Alaska in this
very room. We had excellent conversations about streamlining
and reducing specific regulatory burdens in a sensible way. I
appreciated the opportunity to interact with the ANCs during
the session and the positive feedback that the ANCSA Regional
Association provided.
Last week I spoke to the National 8(a) Association Annual
Conference here in Anchorage. I discussed the improvements that
we've been making, like making it easier to get qualified
companies certified and continue to receive valuable feedback
about what we can do better. In that regard, we brought six of
my personal staff from headquarters up here as well as our
district office here in Alaska.
I share the following examples to let you know that we
value the input we have received and that these meetings have
already resulted in program improvements from the comments we
have received in these meetings. We have added three business
opportunity specialists, BOSs, from the Alaska District office.
The BOS is a district office staff member who works directly
with small businesses and is responsible for implementing the
8(a) program at the SBA district office level.
The addition of BOSs in Alaska will allow SBA to be better
equated to help ANCs and others looking for Federal contracting
opportunities. I mentioned John Klein, senior member of our
Office of General Counsel. John has been to the Alaska District
office twice this year to assist in training the BOSs on the
rules pertaining to ANCs.
Additional training has been a key initiative. We're
empowering our field offices by giving them ongoing guidance on
program changes, processes, and policies. We believe that we
have a tremendous model of excellence here in the Alaska
District Office headed by our District Director, Nancy Porzio.
As noted, regulatory comments received during our tribal
consultation have been important to our program assessment.
We're in the process of drafting changes to the 8(a)
regulations that are a direct response to that feedback. We are
committed to our oversight responsibilities, and where
possible, we also seek to relieve unnecessary and excessive
burdens on the small businesses we serve.
This effort is not limited to the 8(a) program, but extends
to the HUBZone program as well. For our consultations here in
Anchorage as well as Albuquerque and Oklahoma City, we are
looking for ways to implement reforms that will make it easier
for small business concerns to understand and comply with
important program requirements.
Gentleman, my philosophy is small business first. Our
programs, like 8(a), HUBZone, and SDVO not only help small
businesses to grow and thrive, but equally importantly allow
the Federal Government to reach the quality solution it wants
rapidly, reliably, and immediately.
I'd love for the government contracting officer to think
small business first and to look at SBA-certified companies to
be their first choice to fulfill the government's needs for
products and services. The 8(a) program is synonymous with our
agency, SBA, and is widely used by Federal contracting officers
in every agency because of its ease of use of to identify a
quality solution and award it quickly and accurately to support
the public and the war fighter.
Alaska Natives, Hawaiian Natives and tribes are our power
users of our 8(a) certification. We value comments and rely on
them to help us to improve our certifications to make them more
useful in business and more useful to the Government. ANCs,
Hawaiian Natives, and Native Tribes have a greater
responsibility than a typical 8(a) since they must bear
responsibility to help preserve past, present, and future
generations of people and their lands.
From my visits here in Alaska and in DC, the commitment
that Alaskans have to Alaska and to each other is palpable. I
am so appreciative of their willingness to work with SBA to
help us improve our agency and our programs. It is an honor to
be able to help Alaska and All Small businesses for now and
also for the future.
Thank you, and I'll take your questions.
Chairman Risch. Thank you Mr. Wong, and thank you for
serving where you are. We know that you're aggressively
pursuing this. We want to encourage you to continue to do so.
It's the direction we all want to go.
With that, Senator Sullivan, do you have questions?
Senator Sullivan. Thank you Mr. Chairman. Mr. Wong, first,
thanks for coming up, not only for this hearing, but so
frequently with your team. It's really impressive and it's
really good for all of my constituents in this room to know
that and know how open and accessible you are.
On the BOSs, the business opportunity specialists here,
you've said that you increased the number in Alaska to three;
is that correct?
Mr. Wong. We have three new ones this year.
Senator Sullivan. That's three new ones that were in
addition so that's----
Mr. Wong. [continuing]. Some rotated off, but then I think
we also have--I think, speaking with Nancy Porzio, she has a
request for some additional ones.
Senator Sullivan. Do you anticipate granting those
requests?
Mr. Wong. Excuse me?
Senator Sullivan. Do you anticipate granting those requests
from Nancy?
Mr. Wong. Yes, I'm leaning that way.
Senator Sullivan. Good. That would be helpful.
I just want to thank you, your boss, Administrator McMahon,
who I know has a very good relationship with Chairman Risch and
with me and Senator Murkowski. She kept her commitment. When
she went through the Senate confirmation process, one of the
commitments I asked of her was to get to Alaska soon in her
tenure, and she did that. She, as you mentioned, traveled all
over the State.
So I'd like to begin just that with some kind of--I think a
really important element of this hearing is not only what
you've talked about in terms of your areas of focus, but just
to help educate Alaskans in general on some of the broader
issues that you're working on and then some of the more Alaska-
specific issues that you're working on that people can take
advantage of. So a lot of my questions for you are going to be
kind of educational.
So let me start with two very basic kind of questions for
you. Can you describe in more detail what the BOSs do, what
their role is, how small businesses can actually utilize them?
Second, again, in more detail, the HUBZone concept and
goals and, again, what that means nationally, but how can
Alaska's small businesses take advantage of those two general
areas of really help and reinforcement that you bring to the
table, but a lot of times my constituents or other Americans
don't know about it. So the business opportunity specialists
and the HUBZones.
Please feel free to go into as much detail as you would
like.
Mr. Wong. Well, I'll try to keep it shorter than what I'd
like.
Senator Sullivan. The floor is yours. In all seriousness,
these are really important and I think sometimes people don't
fully understand.
Mr. Wong. Sure. Not a problem. Thank you very much.
So if you look at the SBA, again, we've kind of divided, so
I try to look at this like a business. In general, we have a
product. The product is our basic four certifications: 8(a),
HUBZones, woman-owned businesses, and service-disabled
veterans. So 8(a) is our best product. When the program was set
up originally, if you want to look at it this way, we have two
things. We have GC and then we have BD. BD is supposed to be
the 8(a) to develop businesses.
Senator Sullivan. And BD?
Mr. Wong. In my title, government contracting and business
development.
Senator Sullivan. Okay. Business development is BD.
Mr. Wong. Yes. Then, in general, the BD is the 8(a)
program. Now, as a sales guy--and we'll get to this--I
generally think that we really don't have any BD, so we're
starting to train people on that. Basically, BD, to me, is once
we have this product, how do we use it to make money?
So what we also have is we have GC, government contracting.
Basically what that is, that's supposed to be SBA's ability
through our OSDBU and through working with our partner
agencies, we're basically trying to increase the supply of
contracts for small business. If I took one half-step
backwards, one of the primary missions of my job is to make
sure that out of the total Federal to spend, that 23 percent or
more goes to small businesses.
Senator Sullivan. And is that statutorily defined, or is
that just something that you put forward and Administrator
McMahon has as a target?
Mr. Wong. It's by statute, but then personally, if you're
asking me, I would say I would love to be able--during the time
I have, I would love to turn that into a floor and not a seat.
Senator Sullivan. Good.
Mr. Wong. So, in general, if you look at this, what we've
typically done when we walk in--and I talked to Mrs. McMahon
about this--typically we'd be making rules in headquarters. I
was part of that problem when I was working there in 1990. I
was an attorney, and I wrote some of the regulations. What we
would do is we would use our field offices kind of
sporadically.
When I came back to SBA and talked to Mrs. McMahon, we
realized that this is a business. Our district office now, in
my opinion, should be the point of sale. So the example that I
was saying before to people is that I like McDonald's in a
really unhealthy way. So what happens is that--but it's like
going to McDonald's at different points, 68 different places,
ordering the same sandwich, and getting 68 different results.
All right? That's a horrible way to run a business.
So, for example, what we're trying to do even then is we're
trying to have a first national BOS training, and that's going
to be--I think it's next week in Washington, DC. So we're
flying all of the BOSs in from the 68 different offices.
Effectively what we're doing, we're coming up with training
that will help them to identify, pursue, capture, and execute
Federal opportunities. We have to train our sales staff in the
way that we would like first, and they can, in turn, take that
information, and go to the people that have our certifications.
On the other side of what we have is to develop the supply
of contracts. In my opinion, the certifications are only part
of that. It's like having the spoon to eat, but if the food's--
so we're increasing the number of people that have spoons, but
if we only have a certain amount of food, eventually people
aren't--you know, there's going to be so many people with
spoons, if we don't increase that food supply, people are going
to have a terrible time with our product, right. So I have to
do a job over there to make sure that the government
understands the value of using the certifications under the
certified companies so that they can increase the supply of
contracts.
Senator Sullivan. Okay. And then how does that relate to--
are the HUBZones--I always get confused myself. Are those
physical areas that are designated, or is that more of a
concept that is part of you trying to get more service
contracts to minority-owned businesses and other entities under
the 8(a) program?
Mr. Wong. So they're real. They're kind of like what
Chairman Risch had said about the maps, right. So we have maps.
In general, based on a bunch of math--and I'm not good with
math--but the math will come up, and it will basically shine a
flashlight onto an area. For that year, that area will be
determined a HUBZone. So, in general, what we want is if it's a
HUBZone, for example, if you and I created a company. Well, we
went to 400 6th Avenue here in Alaska, if that's a HUBZone,
we'll build our business there.
Senator Sullivan. So do you have designated HUBZones that
are physically designated in Alaska right now?
Mr. Wong. Well, yes. I would say the majority of Alaska is
a HUBZone.
Senator Sullivan. Okay. So you can take advantage of all
that.
Mr. Wong. Well, yes, in theory you could. So this is one of
the reasons----
Senator Sullivan. Are we? When I say ``we'' I mean
collectively small businesses in the State. Could we do more
and, if so, how?
Mr. Wong. So, in theory, here's what I think could happen.
Assuming that the HUBZone program was a robust program, yes, it
would be actually a natural transition for even your 8(a)
companies who work under the ANCs to transition into the
HUBZones because--but, you know, as a businessperson having
worked under these programs in several companies, you know,
this is a target-rich environment, right. The problem is that
we have the HUBZone program; as I see it, for businesses, it's
sort of broken.
So I think one of the good achievements that you should
take from this meeting is that Mrs. McMahon, I convinced her to
put her shoulder behind HUBZone, and we're going to fix that.
One, it will give a lot of Alaskans a transitional company that
they can continue to work with, but, more importantly, it will
give the government contracting officer another reason to love
SBA-certified companies and keep pushing up contracts for them.
Senator Sullivan. Good. Excellent. Let me ask another
question that's a broad-based question that I know Chairman
Risch and I share a passion for. That is the challenge and, to
be quite frank, the problem of too many government Federal
regulations. So even the SBA, which is trying to help small
businesses in Alaska and throughout the country, you create a
bureaucracy that has as its intention helpful policies, but
when the policies get implemented, you have--and I'm not using
this team pejoratively--but the bureaucrats in the agency
promulgate an avalanche of rules and red tape to, quote,
unquote, help small businesses be able to obtain opportunities
through these programs, but you have small--but they're small
businesses. It's two or three or four people, and they have a
mountain of Federal regs that they need to get through. You
kind of squash the opportunity before they can even achieve it.
So what is the SBA now doing to streamline the regulatory
process to enable small businesses to actually take advantage
of the opportunities that you are presenting to Alaska
companies without creating so much red tape that you discourage
the very activity that your agency was designed by Congress to
help with?
Mr. Wong. That's a long question.
Senator Sullivan. But it's an important question. I hope
you have a good answer.
Mr. Wong. I do. I do. I have a good answer. So take
HUBZone, for example. If I could very briefly digress a little
bit.
Senator Sullivan. Do you recognize that this is a problem?
Mr. Wong. Oh, yes.
Senator Sullivan. Okay. And that more regs hurt small
businesses; that's just a given.
Mr. Wong. Absolutely.
Senator Sullivan. Okay. Well, that's a start.
Mr. Wong. Yes. As a little bit of background, so I worked
in an 8(a) company and then I came here and I wrote some of the
rules and regulations. Then I actually ran the program for
about six months. Then I went in and ran two of our district
offices. Then I quit SBA for a little while. Then I helped 16
companies with 8(a) programs to develop, okay. I had to live
under the rules that I created----
Senator Sullivan. Good.
Mr. Wong. [continuing]. To help, right. What's so helpful?
Senator Sullivan. So you've been on both sides of the
equation.
Mr. Wong. Yes, sir.
Senator Sullivan. Good.
Chairman Risch. That's really good. That's unusual for a
Federal bureaucracy. Everybody should have to do that. They'd
have a different view.
Mr. Wong. My mother called me unusual, but in a different
way.
Senator Sullivan. You don't need to go there.
Mr. Wong. So as an example, let's take HUBZone. I've said
this before. SBA is here to stay--SBA and 8(a) is here to stay,
absolutely. We're going to build on that, but HUBZone could be
another powerful tool. If you look at HUBZone, it has basically
four things that we've identified that we think we can fix this
year that prevent people from making investment to go into the
HUBZone and, therefore, prevents the government from being able
to use it.
So if I can digress real quickly. When the maps says a
special address is a HUBZone, you and I make an investment.
We're smart. We're going to go and take up a lease with--you
know, discounted leases don't start for less than five years.
So now we're paying full market rate. Here's the weird thing
with the HUBZone. Next year that flashlight, that out-zone map,
the math could recalculate and the HUBZones move. Now we're
immediately noncompliant.
We have another rule that says once you're in that HUBZone,
you have to hire 35 percent of your staff from that HUBZone or
another HUBZone in order to be compliant. The challenge often
is that you may find somebody that's willing to work with you
that's actually incapable of doing work. Then you have a timing
problem because we have a rule that also says that that you
have to be compliant at the time that you bid on your award and
also at the time when you receive it. So right now, for
example, we're in June--this is kind of cool. June 29th, this
is actually my 21st anniversary today and I'm here, by the way.
Chairman Risch. Glad you remembered that. It could be a
disaster.
Senator Sullivan. Between your mom and your wife, we're
learning a lot about you.
Chairman Risch. Who says bureaucrats aren't people?
Mr. Wong. The challenge you have is that, at this time
here, you and I are going to start a company. We're going to
make widgets. We're going to put out four bids around June, and
then they're going to be awarded probably starting in July and
August before the end of the fiscal year. Here's the challenge.
Let's say it's for 100 people who make widgets. We put out four
bids. All of the agencies are going to go through the time and
expense of competing with these things. Very expensive, its
very time consuming.
Then we are going to get our first award because we're
pretty good, right. We'll shake hands, go drink a beer, and
that'll be great. Except for the problem is that now we have to
hire the next hundred people. We've got to staff up, right.
We've to get 35 people from a HUBZone or within our HUBZone or
a HUBZone. That's not often easy to do. It's certainly not
fast. I know that from my experience.
So here's what happens. We win that first award January 1st
and we celebrate. Third week in January we're midway through
our staffing of that opportunity, and we win the second award.
But because of the rules that we have, we actually cannot
accept that award because we are out of compliance based on
that first award. So that means we can't accept the third award
or the fourth award.
So what happens, it's certainly disappointing to the small
business. That's another reason why we wouldn't want to invest
into that business. But, more importantly, it really annoys the
government because they're going to say: Hey, what was that
vehicle we used? HUBZone. We went through the time and expense
of competing this contract, and now we're not allowed to award
it? We're never using that again.
So we want to change that as well. I also have--if we're
successful with that, I have some ideas also for other ways to
make it easier regarding that 35 percent. There's another thing
we may want to work on later that says that if we have--if the
business has trouble hitting that 35 percent, we'd like to give
them a two-year exemption so they can use perhaps veterans,
Natives, or disabled individuals whether they live in a HUBZone
or not. That one's in the future.
The first three things I'm talking about, however, are
things that are already in the pipeline, and we should be able
to accomplish hopefully by early next year.
Senator Sullivan. Great. That's a really good answer. Let
me move to another kind of area that's related. It's the
education function that you're in charge of.
From my perspective, you kind of choose educational roles.
One, and perhaps most importantly--no, most importantly is to
educate the people who qualify for your programs.
The second--and I'll get to that in my nest line of
questions--is actually educate Federal officials, whether
they're Members of Congress or other Federal agencies, on the
programs as well.
Let's focus on the first kind of education mission that you
have. So let's say that you're a combat-wounded vet. You come
home from Iraq or Afghanistan. You have a good idea for a
business or you're an 8(a) Village Corporation and you're
trying to help your shareholders who live in parts of America
who don't have a lot of opportunity. And they're like: Hey, I'm
going to try and get the SBA to help me out.
Where do those individuals or companies, small businesses,
or you're a woman who graduated from college and you have a
great idea, but you're kind of struggling. Where do those
Alaskans, Americans go to get educated on the opportunities
that you provide?
Because in my experience, it seems like you might have all
these great ideas and great programs, and yet it's really hard
to get the word out. Nobody knows, and it's a big challenge,
and you're missing an opportunity. What are you guys doing to
make sure those examples, and all the other ones that I've
talked about that you're responsible for, to essentially get
the word out?
Mr. Wong. So obviously we have a website, but what we're
doing right now is----
Senator
Senator Sullivan. Well, you've got to be way more
aggressive than the website.
Mr. Wong. I'm just starting, yes. We've got to be loud and
proud, right. I think that to an extent--we've got our website
that we're updating because we looked at that and said, ``This
is kind of stale information. It's kind of like having a drawer
full of silverware and people just kind of threw it in there.''
So even if you could get into the drawer, it's like crazy; you
can't even make sense of it.
So what we're trying to do even with the website is make
sure that the information we have is orderly and it makes
sense, but I've even had a directive that said: I want to get
to something within three clicks. Its driving people crazy,
but, you know. Then we have our Small Business Development
Centers. In Washington, DC, at least, there is a slew of
consultants, right, who used this as an industry.
Senator Sullivan. Are they helpful or not helpful?
Mr. Wong. Well, it depends. When I used to be a consultant,
I thought I was very helpful. In all seriousness, sir, I think
that you shouldn't have to hire a consultant just to get into
the program.
Senator Sullivan. Absolutely. You're right.
Mr. Wong. And the promise I've made is when I go and say
that to people, that if we can do as an agency what I hope we
can do, you're going to have more people in business; and when
you have more people in business, you have real problems that
they can help. We're looking for every avenue where the public
looks to be able to provide that information for them.
So we even have, for example, the Veterans Administration
Office. What I'm trying to do, for example, is to work with to
leverage all of their existing depots, if you will, and points
of contact so that we can push that information out there.
Senator Sullivan. Okay. And do you think that you're making
progress on this?
Mr. Wong. I hope so.
Senator Sullivan. It's a really, really important element
of your job.
Mr. Wong. Yes. You know, I'm a sales guy by nature. So I do
firmly believe that if you have the better mousetrap, the world
will not beat a path to your door because if the world doesn't
know you have that mousetrap, nobody's coming.
Senator Sullivan. What are your metrics to help you measure
the extent to which you are achieving that mission, which I
think we would all agree is a really important element: Getting
the word out to the people who qualify for your programs that
they indeed qualify.
Do you have metrics by which the SBA is measuring that,
because, again you could doing all the greatest work in the
world, but if nobody knows about it, it's not really going to
be that impactful.
Mr. Wong. Right. One of the primary metrics is that we
spent $6 billion more on small business than we ever have
before. It's a basic metric, but I think that's important. I
think that at least some of the things we're doing are trending
up there.
Senator Sullivan. But that's an input; how about an output?
What are you looking at as an output?
Mr. Wong. So one of the things we're doing, and I've tried
to be active with this here, is we're trying to empower our
district offices, and their job with the BOSs, again, is to
service the portfolio of 8(a) companies that they have. So I'm
trying to provide the very simple metric. Again, we're trying
to provide training. We have to basically train our sales staff
on our points of sale, which is the business opportunity
specialists.
Then what I literally want them to do, if I have my way, is
to take the information that we have and then to hand it out to
at least 100 percent of their portfolios. Then I think what
we're also looking at--this is not exactly what you are asked,
but it's something that we're trying to spread through
government. One of the other metrics, again--we have something,
and I apologize for digressing. We have specter of something
called category management that's going to be--it's supported
by the government, but, in general, if we don't work with that,
it's very bad for small business. It will have the effect of
hitting all the money with a lot less people.
So what we're trying to do is, at the same time we're using
that as kind of the calling card, to go back to our district
office and portfolio, again to alert people. We're trying to
let people know that we exist. We're trying to continue to keep
the information fresh. We're trying to make sure that the
businesses that are there have different ways to sell to the
government, but then also--sorry. Then, in keeping with that,
every time we meet with the small businesses, now we're trying
to track literally how many businesses are you seeing with the
actual information.
Right now I think a lot of the BOSs, based on what we've
been talking about with them, a lot of them have been burdened
with compliance work. So once you get into this--once you get
the certification, then the BOSs are basically trying to make
sure that they stay in. So what we've done with the computer
system that we have, as part of the computer system, is to
relieve some of the burden that they normally have with this
compliance burden so it can be done by computer. So they'll
have more time to spend face-to-face with the certification
holders. Then, likewise, we're also trying to make sure that
when we fly them in, so that once they have that free time,
they'll know what to do with it.
Senator Sullivan. Great. Thank you. If you can remain
focused on that, I think that's going to be very important.
Mr. Chairman, I have just one more area of focus, and
that's in terms of questions. I'll try to be brief here because
I know we have a second panel to get to. That relates to the
role that you play in terms of not only educating those who are
qualified for the programs, but for Federal Government
officials. And that could be everything from U.S. Senators to
other Federal officials.
I've had experiences, and I won't name names, of certain
U.S. Senators talking about how, well, she wasn't going to be
that supportive of the 8(a) program for Alaska Native
Corporations because there's too many mansions on the Potomac
that relate to Alaska Village Corporation shareholders. I was
like: Wow, maybe you should come out to some of the villages
and see all the mansions out here. Unfortunately, some of the
highest poverty rates in the country. So very uneducated, to be
perfectly blunt. So that's an important role that I think all
of you have. But I mentioned--I touched on it briefly in my
opening statement, the Section 811 of the 2010 National Defense
Authorization Act clearly had a chilling effect on Alaska
Native Corporation contracting and the ability to bid on higher
valued government contracts.
One of the things as I looked into that law that was, I
thought, a misreading of the law was that the reading of the
contracting officers, particularly in the Department of
Defense, was that that law mandated that the secretaries of the
branches of the military had to personally sign off on any
contract just for Alaska Native Corporation above a certain
amount. It was 20 million: I think now it's 22 million. Well,
of course that has a dramatic chilling effect because a
contracting officer is not going to try to get in front of the
Secretary of the Army. He's a very busy man or woman.
So, as you probably saw, there was a GAO report in 2014
where those contracting opportunities for Alaska Native
Corporations essentially went to zero from hundreds of
millions. That hurt not just the corporations, but hundreds, if
not thousands, of Alaskans, Native and non-Native. Because if
you're looking here, you're kind of in the midtown section of
Anchorage. The Alaska Native Corporations, the Village
Corporations are a huge engine of growth for Alaska, for
everyone, Native, non-Native, veteran, nonveteran.
So in my discussions with the incoming secretaries of the
Army, Navy, Air Force, I asked them to take a look at this.
Hey, this is really important. I think it's been read wrong. I
don't think you, Mr. Secretary, Madam Secretary, need to
personally sign off. Once you get confirmed, go take a look,
and if you agree with me, get a memo out to your contracting
officer saying: This is not mandated that I do this. And, oh,
by the way, these are really good companies and good value for
military contracts.
They have done that. They have issued memos. They agreed
with that reading of 811, that it wasn't so restrictive. We're
hopeful that that won't have--that this chilling effect will be
kind of diminished. But is there anything that the SBA can do
to assist in these efforts to actually read the law correctly
and not have such a chilling effect with regard to the 8(a)
program as it relates to government contracting, particularly
with regard to the military services?
Mr. Wong. Yes.
Senator Sullivan. And what would that be?
Mr. Wong. Just kidding. So every month we have something
called OSDBU, Office of Small Disadvantaged Business
Utilization. They are individuals who work for other agencies
who often deal directly with the secretary. And they're with
the 24 largest procuring activities. Generally, I noticed when
they first came into our office, monthly, a couple of them
would start checking their watches and they'd kind of just
check the box.
I made a pitch to them and said: Listen, why don't we turn
this into a group where we--you know, our responsibility,
again, is to educate the government side--
Senator Sullivan. Yes. Good.
Mr. Wong. [continuing]. So that they know the importance,
right.
I'd like to say thank you very much for getting those
letters. Those letters, I believe, were signed. Kate gave those
to me maybe within the last three weeks.
Senator Sullivan. Yes. We finalized them all, Secretary of
the Army, Secretary of the Navy, Secretary of the Air Force.
They all pretty much say the same thing. We're hoping to get
them out to all the contracting officers to let them know that,
``Hey, this is a memo from the Secretary of the Navy and he
says you don't need to come to me.'' By the way, these are
valuable contracts. So if you can help make sure the whole
contracting community gets those memos and gets the right legal
interpretation, we think the chill that's happened, and it's
been dramatic and negative, will be diminished.
Do you commit to me to do that?
Mr. Wong. Yes. We are actually doing that. I believe we
passed them out at the last OSDBU meeting, so everybody has
them.
Senator Sullivan. Good. Well, I would continue to do that
that all the meetings.
Mr. Wong. And there's going to be additional follow-up.
This is something, again that will be another shift change for
the industry, but I think in a very, very good way.
Again, thank you very much for those letters. It was
tremendous.
Senator Sullivan. Absolutely. I think it's going to help
everybody, and I think the secretaries of the different
military services were, once they looked with their lawyers at
what I was talking about, I think they were fine and had to
sign them.
Let me ask one final question. It's just an educational
element. You made a really important point that it's really
hard for people to understand in the Congress, in the
government, maybe even people--some of my constituents, is that
you talked about how Alaska Regional Corporations, Native
Corporations, Native Hawaiian entities, they play a role on the
economy, but it's a broader role, and as you called it, even a
broader responsibility for them. I think it's a really
important point.
Can you unpack that a little bit? It's not just an economic
role, but in many ways a cultural role, a heritage role that is
very important to this State and Hawaii and other places.
Mr. Wong. Well, I won't speak for any of the Alaskans. I
can just tell you from what I know and what I've felt and how
I've been affected positively by that. So I'll do my best.
I do think that they have a much more difficult
responsibility and a much nobler mission than a typical 8(a). I
was a typical 8(a). So I think one of the things that kind of--
I think also that ANCs, all of the Native Tribes, and all the
Native companies, I think that they're often misunderstood by
the public. In general, you have Government contracting. Around
the Beltway, its like if you're fortunate to get into
government contracting, somehow that's this big boondoggle,
which is certainly not true. I think that with regard to
contracting, that's the way that we fulfill the products and
services that serve the public and protects the war fighter.
Among there, I think that we have the 8(a) companies
because historically these are underutilized and underserved
communities. Even then, you look at that as simply like a set-
aside; but those businesses, when I was in them, I had to take
care of my company, my employees, my family. If you look at the
Alaska Natives, the best thing I can say is that my wife is
from Japan, and I understand through her very much the value of
honoring the past, the present, and the future. And I'm Chinese
as well, and we were raised that way.
But working with the Alaskans, from what I understand, this
is the reason why ostensibly they have larger contracts is not
so they can buy mansions on the Potomac, but instead they have
a responsibility for economic development. They literally have
to take care of not only the generations today, but also
tomorrow, and they have to preserve the land.
Senator Sullivan. The shareholders who, you know, I hate to
say it, but in some communities are some of the poorest
communities in the country.
Mr. Wong. Yes. If I could digress a little bit, I took the
opportunity to go to Nome. I understand that is not a village;
it's a hub city. I feel that if I'm going to spend my time
here, I want to do some good. I want to make every second
count. So I'm a sales guy. So I want to make sure that the
people that use our product use it well, right. I believe that
if you have a product and it works, sometimes they'll tell
somebody. If they have a product that doesn't work, they'll
tell everybody.
The challenge we have with the ANCs is that they're often
misunderstood. Nobody really understands the noble mission and
the grave responsibility they have to take care of everybody.
So that's the simplest way that I can put it, and it doesn't do
it justice, but I'm trying to make sure that people know that.
So one of the things, for example, that I'm doing, Senator,
is when I have an opportunity to meet the ANCs--I think I've
met 7 out of 12. When I meet with the ANCs, I take a look at
their marketing packages and their sales packages. In general,
what I'm trying to get them to understand is what I would like
to see, if I was a contracting officer, you have all of the
information of how you take care of your generations.
One of the things, I think, that would increase the sales
potential for them, let the government contracting officer know
that you share. Let them know that this $22 million cap or
large amount, it doesn't just go back to Alaska. It stays in
your community. Turn it into a vehicle so that the government
contracting officer, it solves their problem. I have to get
these piles of requisitions down as quickly as possible. In my
opinion, I've been counseling the ANCs to say, ``Tell them that
with this vehicle, the added capacity that you have allows the
government contracting officer to protect the contractors that
it wants under that umbrella.'' Let them know, for example,
that in some cases you have 40 percent of the people on this
contract that have nothing to do with Alaska. I'm very glad to
work with them, and I think it changes the message and
increases the education.
Senator Sullivan. Great. Well, that's really impressive Mr.
Wong, and I appreciate that. I think you have a good
understanding of the uniqueness there and kind of the broader
goals than just economic. I appreciate that. I think your
testimony has been outstanding. So I want to thank you for
that.
Mr. Chairman, I'm done with my five minutes of questions.
Chairman Risch. I'm glad we're not in Washington. They
actually do measure five minutes.
Senator Sullivan. I know, but I figured you were going to
give me a little lead time here given that I'm in my own State.
Chairman Risch. Well, thank you so much. I think that line
of questioning was particularly helpful. Mr. Wong, thank you.
It's good to know that what we're trying to accomplish here is
in such competent hands. Thank you so much for being here;
thank you so much for answering questions and your pledges to
pursue the things that we'd like to see a little more focus on.
Thank you so much.
Mr. Wong. Thank you for having me.
[The prepared statement of Mr. Wong follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Risch. With that, we'll move to panel number two.
Senator Sullivan, would you introduce the members of panel
number two?
Senator Sullivan. Sure. The next panel can take its
position on the dais. As you're doing that, I'm going to take
the opportunity to introduce our next panel, which I'm very
pleased to have speak to the challenges and opportunities that
we face here in Alaska in particular.
So let me begin with Gabe Kompkoff. He is CEO of the
Chugach Alaska Corporation. Gabe had previously served as
president of Chugach's Commercial Division, member of the Board
of Directors. Prior to this, he served as vice president at
Bentall Kennedy Investment Management.
Next we have Mr. Carl Marrs, who is the CEO of Old Harbor
Native Corporation. Mr. Marrs has worked for Old Harbor Native
Corporation since 2005 under his projects in Alaska and
Washington, DC. Originally from Seldovia, Alaska, Carl grew up
as a commercial fisherman. He's a proud United States Marine.
Prior to joining Old Harbor, he had an extensive career at Cook
Inlet Regional Corporation, one of the large regional
corporations, CIRI.
We also have Mr. Richard Peterson, who is the President of
the Central Council of the Tlingit and Haida Indian Tribes of
Alaska. As President, Mr. Peterson began developing a cultural
immersion part in a language immersion daycare. He has helped
the Tlingit and Haida Tribal Business Corporation secure their
8(a) certification, which was a hugely important achievement.
He serves on the Native American Rights Fund Board and the
Alaska Federation of Natives Board and the Governor's Tribal
Advisory Council.
We also have Mr. Rolando Miranda, President of Miranda
Electric, Inc. Since establishing Miranda Electric in 1981, Mr.
Miranda has grown his business to 20 employees and has become
an expert in the electrical, data, communications, fire alarm,
life safety, and building sectors. His company attained its
first Federal contract in 1999 and successfully graduated the
8(a) program in 2009.
Then we have the President of ChemTrack Alaska, an 8(a)
small business company that does environmental engineering and
construction. Carrie is the president and has been in the
business in Alaska for 35 years. She brings unique expertise
and experience to the field.
So I want to thank everybody here for being here and we
will begin with testimony from left to right. So, again, thank
everybody. You have five minutes.
Chairman Risch. That's a for real five minutes, not Senator
Sullivan's five.
Senator Sullivan. If you have a more extensive written
statement, the committee will take that statement for the
record.
So, Carrie, why don't we begin with you?
Chairman Risch. For those of you who don't know this, the
way we do this in the Senate is there will be an official
record transcript of this available for people who want it.
There will be people who want it in Washington, DC. Our
commitment is that we will include the full length of your
testimony or anything else that you want to submit to us into
that record. Thank you.
With that, Carrie, go right ahead.
STATEMENT OF CARRIE JOKIEL, PRESIDENT, CHEMTRACK ALASKA, INC.,
ANCHORAGE, AK
Ms. Jokiel. Thank you very much. Chairman Risch, Senator
Sullivan, thank you for having me here today to testify. Though
I am an individually-owned 8(a), I'm speaking under the realm
of Economically Disadvantaged Women-owned Small Business today.
I'm the President of ChemTrack Alaska. We're an
environmental service company that cleans up dirty dirt around
the State of Alaska, most of it Federal agencies. I'm also the
managing member of ChemTrack/Cornerstone JV, which we newly
created under the All Small Mentor-Protege Program. ChemTrack
was formed in 1973 by my father, Sig Jokiel. I began working
there in 2002, became a part in 2008, and majority owner in
2010.
We're an office of 9 to 15 people. We grow to 25 in the
summer, depending on how much work we have. We played a large
role in the Exxon Valdez oil spill and peaked at about 250
employees at that time. As I said, I'm an Economically
Disadvantaged Women-owned Small Business and individual 8(a).
When I was asked to testify, the question that was posed to
me was: ``Where did you think you would be in ten years into
owning your own business?'' My immediate response was: ``A lot
further than this.'' I'm obviously starting to lose my moxie. I
feel as though I am questioning if my goals are attainable. I
feel too focused maybe on advocacy and education instead of
strategy and competition.
ChemTrack has been around for over 40 years. We've put our
houses in, 401(k)s, profits back into the company to stay
alive. We're survivors. That said, I want to do more than
survive. I want to thrive. I want to hire more people. I want
to perform larger projects. I want to help put the women-owned
small businesses on the map in this State.
Over the years I've had three concerns, three challenges
that have come around, and they're still here. It depends on
the business cycle of the season as to which rears its head,
but I'll start with the first one.
That's that women-owned small businesses are
underrepresented on multiple-award contracts. In 2017, the
WIPP, Women Impacting Public Policy, they came out with a
report where they looked at all sorts of different multiple-
award contracts. What they found is that some of them do have
set-aside caps they've put in for socioeconomic designations.
Three-quarters of those did not have any put in for women-owned
small businesses. This was based and inspired on a study that
was done by the U.S. Department of Commerce in 2016. That study
found that women-owned businesses are 21 percent less likely to
win a contract even when controlling for size, age, and past
performance.
ChemTrack is on a small business, multiple-award task order
contract right now. We compete against four 8(a) ANC
subsidiaries. We don't have the same infrastructure as ANC 8(a)
subsidiaries. This contract expires in six months. I have been
working with the Federal agency that I work with on this
contract for over 18 months now to look at putting in a track
for women-owned small businesses, so when it comes out to
recompete, I could compete apples to apples. It would allow me
to be more competitive and lined up with small business on our
multiple-award contract here in the State of Alaska.
The question that was posed to me was: If you could find a
roadmap to help me do that, show me another contracting officer
that's done that, that would be helpful. My question back is:
Why am I having to do the legwork on that when it's a known
national issue that there are policies in place to help meet
the 5 percent goal for women-owned small businesses? They have
only met them once in 16 years.
This segues into my second concern, which is the onus of
education of the programs having to be on the women-owned small
business. The women-owned small business program has been
around since 1994. So from 1994 through 2018 there's been many,
many changes. From four industries originally being thought
what were known small business to owner represented to the more
accurate 45 mixed codes of women-owned small businesses are
underrepresented and an additional 38 mixed codes for
economically disadvantaged women-owned small businesses to be
representative.
We originally had a woman-owned small business repository
where I put all my corporate documents, my passport to make
sure that I'm a legit owner of this company. That's now been
moved into the e-certified dot gov platform where we were the
first designation to go through and be guinea-pigged into that
program. All of these are education factors that I have to have
with contracting officers.
We've gone from rule of two to now being able to have sole-
source award authority. That award is used. It impacts
differently than it does for an 8(a) company.
So over the 10 years of educating folks, I have had
conversations with different Federal agencies, small business
offices. I've written and sent press releases, white papers to
chiefs of contracting and contracting officers. I've
facilitated meetings between the SBA and Federal agencies, the
chief of contracting officers to create more of a climate for
women-owned small businesses to take part in our Federal
contracting arena here in the State.
This gets me into my third concern. Okay, so we get the
work. How do we finance it? Lending access to capital is a real
issue for women-owned small businesses. Part of the gender pay
gap problem is that when we receive less income over our
careers, this allows us less leverage for receiving loan
amounts. As a 39-year-old single woman, they often want to see
guarantors on our loans. My father shouldn't have to sign on my
loan anymore. I run the business. But he probably would.
Venture capital----
Senator Sullivan. Is he here?
Ms. Jokiel. He's here.
Venture capital funding is at a minimum for women. So the
SBA bombs. It ties up our equipment. It ties up our building
for ten years. There needs to be a change to that. That makes
it difficult for me to look for other lending opportunities.
Traditional lines of credit, they focus on our accounts
receivable. So if I have a job down on the Aleutian Chain, and
I've got a barge that's at 30,000 bucks a day, that doesn't
help me with the beginning part of my project to get out there.
I don't have an invoice filling out yet, so I can't use my
accounts receivable line of credit yet.
I'd like to see more focus on mobilization loans and
possibly the Federal contracting use of the asset to offset
being able to get a mobilization loan to help the projects.
Quickly--I know I'm almost at my five minutes, I've timed
myself about ten times. I do want to talk about the successes,
though, because I think that's important for you to hear. The
Mentor-Protege Program being opened up to All Small businesses,
that was a really great move. I started a joint JV less than a
year ago. We've done market research in Hawaii for future work.
We bid on four projects from a short list and received our
first sole-source. That was very positive.
The ability for a JV to use each individual company's
experience as combined past performance was also very huge. It
helped remove that catch-22. So that's been wonderful for us.
Also, the addition of similarly situated entities to meet
performance goals, that's been very useful. I plan on using
that in the future, which means if there's a women-owned small
business target that I need to get and I can't do it all
myself, I can bring in another women-owned small business to
help me, which also raises the table as a whole women-owned
small businesses into the market.
Thank you so much for letting me testify. I appreciate it.
Chairman Risch. Thank you so much. Appreciate that.
[The prepared statement of Ms. Jokiel follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Risch. Mr. Kompkoff, the floor is yours.
STATEMENT OF GABE KOMPKOFF, CHIEF EXECUTIVE OFFICER, CHUGACH
ALASKA CORPORATION, ANCHORAGE, AK
Mr. Kompkoff. Thank you Chairman Risch, Senator Sullivan.
Have we seen Senator Murkowski come in yet?
Senator Sullivan. I think she's probably still struggling
with flight issues. I know she's trying to get here.
Mr. Kompkoff. Thank you for everyone who has come such a
long way to participate in this important discussion. It's my
privilege to testify before you, discussion opportunities and
challenges of the Small Business Administration Federal
contracting programs, in particular the 8(a) business
development program.
My name is Gabe Kompkoff. I'm a shareholder of Chugach
Alaska Corporation, and I also have the privilege to serve as
the Chief Executive Officer. It's incredible to think about how
far Chugach has come over the last 45 years in our history. It
began before I was born when the Alaska Native Claims
Settlement Act was passed in 1971. The Act was passed as an
attempt to settle land claim disputes in this State.
As you commented on, Chairman, we had the same issue in our
region trying to select land. Most of it had already been
selected by the Federal Government. When we looked at our map,
we had a choice of glacier and mountaintops. It took us until
1982 to have a subsequent settlement with the Federal
Government before we had some semblance of a just settlement of
land selection. So we feel your pain in Idaho as well as in our
small little nation.
What was amazing about this is the Alaska Native Claims
Settlement Act was a new model of economic development
opportunity that was a chance to try something different in the
tribal reservation system. Overnight, after this Act was
passed, we took the elders from our region, respected leaders
from our region who were subsistence hunters, great fisherman
and women, and they were elected to lead our companies in a
boardroom. It was an amazing experience if you look at that at
that time. Despite possessing little or no business experience,
they understood the importance of building a foundation that
would buy opportunities for that generation of shareholders and
into perpetuity in the future.
My uncle, who was the former chief of the Village of
Tatitlek, would always talk about taking care of the next seven
generations. That's how we think of things. Our business went
through valleys and peaks. Our early investments in the timber
and fishing processing industry were devastated by the Exxon
Valdez oil spill and eventually led us to declare bankruptcy in
1991.
Under the Alaska Native Claims Settlement Act, it was
recognized that Alaska Native Corporations were going to be
owned by historically disadvantaged people. This recognition in
ANCSA was linked through the modification of the SBA's 8(a)
program through changes in 1988. So those changes were a
significant link in the Alaska Native Claims Settlement Act.
It allowed us to participate as minority-owned economically
disadvantaged businesses. Based on those laws passed, we became
eligible to negotiate Federal contracts of any size through to
direct award and compete on contracts reserved for small
businesses and own more than one 8(a) company. The SBA's
business development proved to be the missing link to ANCSA in
that it provided an economic engine for all ANCs, including
Chugach, to generate profits that benefited entire communities
of Alaska Native shareholders.
It allowed Chugach to rebuild from our bankruptcy and grow
in the healthy Federal Government contracting business. When I
look back and I think about it, we were not trained. We did not
have MBAs sitting in our boardrooms. We did not have folks that
had the privilege of higher education to lead these
organizations. We had to bootstrap it just like all the
generations before us. When you look at our entry into the SBA
8(a) program, it allowed us to learn the business skills and
actually build processes, good processes and ways that allowed
us to build a sales team and understand what working capital
meant and expand to a diverse portfolio of businesses.
The 8(a) program served its intended purpose to be that
stepping-stone, affording small disadvantaged businesses the
opportunity to compete in the Federal marketplace. In 2016 the
12 ANCSA regional corporations brought in 8.2 billion in
revenue; 24 percent of that revenue was derived from 8(a)
Federal contracting. That shows that the ANCSA regional
corporations are responsible utilizing the 8(a) program to
ensure and diversify our businesses and position ourselves to
compete in the full and open competitive marketplace.
The 8(a) program is not only an economic tool for the
individuals but it drives the people whose social and economic
well-being are enriched by revenue generated by the
corporations.
As a Chugach shareholder, I had the opportunity to earn a
scholarship for my undergraduate degree from the Chugach
Heritage Foundation. Without the backing of the Heritage
Foundation, I would not have been able to afford to go to
school. My family's livelihood was tied to fish in Prince
William Sound, and our fishing business was devastated at the
same time the oil spill devastated Chugach's fish processing
business. Because of Chugach's support, I was able to earn my
bachelor's degree, my master's degree, and eventually serve on
the board of directors before being appointed as a leader of
the organization.
I'm proud to say that now we have endowed our foundation so
that every single shareholder and descendant that applies for a
scholarship will receive a scholarship from now into the
future.
John Brockman (ph), the Chugach founder, once said that he
hoped the younger and current generations understood that he
and his fellow founders fought hard for the corporations. Now
more than ever I understand and appreciate their dedication. I
feel pride in knowing that they and their sacrifices are part
of our heritage. I'm very proud to continue their cause. That's
why I'm here today.
While the SBA's Federal contracting programs are a success
story for Native communities, our U.S. economy and the agencies
we serve through this vehicle, ANCs still have a long way to go
in helping to more fully address the serious economic and
social issues and problems that are in our communities. We
believe maintaining a healthy Federal contracting assistance
program for small and disadvantaged businesses is critical to
our success, and we commend the efforts of the committee and
advocates such as Senator Sullivan and Senator Murkowski,
Congressmen Young, to keep the SBA moving in the right
direction.
We believe that protecting small business set-asides,
contracts from bundling, strengthening the PCR program, and
ensuring leadership is in place at the SBA office are important
pillars to moving in the right direction. As you know,
supporting and empowering small business and entrepreneurship
is part of the fabric of this country. We're proud to be part
of that legacy.
Thank you.
Chairman Risch. Thank you very much.
[The prepared statement of Mr. Kompkoff follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Risch. Mr. Marrs, the floor is yours.
STATEMENT OF CARL MARRS, CHIEF EXECUTIVE OFFICER, OLD HARBOR
NATIVE CORPORATION, ANCHORAGE, AK
Mr. Marrs. Chairman Risch and Senator Sullivan----
Chairman Risch. I think you need to push the button.
Mr. Marrs. How is that?
Chairman Risch. That's better.
Mr. Marrs. Thank you. I want to thank you for inviting me
to testify here today. My name is Carl Marrs. I'm proud to say
that I'm an Alaska Native, and have over the past 40-plus years
served the Alaska Native communities in various roles and
offices. I'm presently the Chief Executive Officer for Old
Harbor Native Corporation, which represents one of the small
villages on Kodiak Island, Alaska.
I'm here today to testify on the opportunities, the
challenges we as Alaska Natives face with the Small Business
Administration Federal contracting program. Congress enacted
the Alaska Native Claims Settlement Act, ANCSA, in 1971 to
accomplish a fair and just settlement of the original land
claims for Alaska Natives. Section 2 of ANCSA mandates that
this settlement should be accomplished in conforming with the
real economic and social needs of Natives.
ANCSA required Alaska Native Corporations--Alaska Natives
to form corporations to participate in the settlement. Almost
immediately it became apparent that the corporate form did not
always address the real economic social needs of Natives.
Congress recognized the critical role the SBA 8(a) program
has and will play for Alaska Native Corporations and their
shareholders through amendments to ANCSA in 1988, 1993, 1998,
and 2002, all of which were designed to permit and encourage
Alaska Native Corporations to participate in the SBA's 8(a)
program. Congress recognized that Alaska Native Corporations
and their shareholders have traditionally been and are
economically and socially disadvantaged and that the Federal
Government has a vested interest in providing them with a
process by which they can grow economically to a level equal to
other business entities that had not had the limitation,
restrictions, and disadvantages experienced by Alaska Natives,
American Indians, and Native Hawaiians.
Amending ANCSA to change and expand the Alaska Native
participation in the Section 8(a) program, Congress affirmed
that it was not just regulating Federal procurement in small
business concerns, but exercising its constitutional authority
to regulate commerce with Indian tribes. For example, in 2002
Congress amended ANCSA to confirm the intent of Congress that
Federal procurement programs for tribes and Alaska Native
Corporations are enacted pursuant to the authority under
Article 1, Section 8 of the United States Constitution
authorizing Congress to regulate commerce with the Indian
tribes.
The problem, as I see it, is not with Congress as its tried
through many attempts to set up their intent. The problem lies
with the Administration and its agencies that write regulations
to carry out congressional intent. Just by virtue of the many
times that we have been back to Congress to have Congress
reaffirm commitments to Alaska Natives, American Indians, and
Native Hawaiians shows that what Congress said is often
interpreted by agencies in a way that at best demonstrates a
reluctance to implement Congress' intent to benefit the
recipients of such legislation, or at its worse, flies directly
in the face of that intent.
I've submitted 16 pages of written testimony to the
committee that lays out our concerns with the Section 8(a)
program specifically and Federal contracting in general and
suggest ways of solving most of those problems; but in order
for us to move forward, we need commitments not just from
Congress as we have received in the past, but commitments of
the Administration and its agencies to carry out your
congressional intent.
This process of agency interpretation being different from
congressional intent is very stressful and expensive for both
the government and the Native corporations. It seems to us that
even when we have promises from the United States of America to
carry out its obligations to America's First People, there are
tiers and tiers of bureaucrats that make the process burdensome
and expensive, that they make the program fail or make us as
Alaska Natives and government contractors look bad.
We need solutions and not more discussion that leads
nowhere. We're not asking for a government handout. We do our
job and we do them well. When we have contracts, we normally
save the government dollars on the work we do. We simply want
to recognize the congressional intent behind ANCSA and the
inclusion of Alaska Natives in the 8(a) program, a path forward
allowing the United States Government to fulfill its fiduciary
obligation to Alaska Natives and implement this congressional
intent and goal for economic self-sufficiency of Alaska
Natives.
Sorry, I ran out of paper. I forgot that last page. It's
somewhere here.
In conclusion, I know the committee is aware that Alaska
Natives are rich in culture and tradition, but have very
limited economic means. Alaska Natives and American Indians are
still the poorest of the poor in the Nation. These suggestions
that we are giving the committee are not given lightly, and as
you have heard and will hear from other presenters today, there
are real problems and we have to have real solutions.
I thank the committee for the opportunity to testify. Thank
our good Senator Sullivan, Senator Murkowski, and Congressman
Young for their great work on this important issue. I would be
pleased to answer questions from the committee.
Chairman Risch. Thank you very much, Mr. Marrs. I think I
can speak for Senator Sullivan and I both. We are no strangers
to the difficulty of the laws we passed falling into the
bureaucracy and then coming out looking a lot different than
what they began. There's a good--one of the roles of this
committee, and virtually every committee, is oversight, to see
how those laws are actually working on the ground. Your 68
suggestions will be looked at, I guarantee you. We'll do our
best to try to make the law work. We have a shining example.
Senator Sullivan has just been dogged in getting the
bureaucracy to do what they were supposed to do in a recent
example. I know everyone in Alaska is familiar with that.
That's the kind of thing we do in oversight. That's why we're
here. Thank you very much.
Mr. Marrs. Thank you, Mr. Chairman.
[The prepared statement of Mr. Marrs follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Risch. Mr. Peterson, the floor is yours.
STATEMENT OF RICHARD PETERSON, PRESIDENT, CENTRAL COUNCIL
TLINGIT HAIDA INDIAN TRIBES OF ALASKA, JUNEAU, AK
Mr. Peterson. Thank you, Mr. Chair. Good afternoon, and I
want to extend my appreciation to you, Mr. Chair, and
especially to Senator Sullivan for the invitation to testify
here today.
For your benefit and that of the Internal Revenue Service,
my name is Richard Peterson, but I go by Chal Yee Eesh. I am a
Tlingit from the Kaagwaantaan clan, Eagle's Nest House. I grew
up in the small village of Kasaan, southern tip of Prince of
Wales Island. I was just recently in April unanimously
reelected for my third term as President of Tlingit and Haida
and by 100 delegates that make up our governing body. I have
been in this position now since 2014.
I'm excited to be here to speak, I think, with the tribal
voice. As my brethren Alaska Natives speak mostly for the ANCs,
I wanted to remind folks that the tribes also participate very
strongly in this program. It extends many benefits to our
communities. Senator Sullivan has pointed out quite a bit today
that many of your communities in Alaska are very economically
distressed. Really, it's these programs that help us to--
although we're very rich in culture, we are economically
distressed and it's these programs that really help us and help
us supplement some of the programs that we administer through
the Federal Government now.
Tlingit and Haida is a sovereign tribal government with
over 30,000 citizens worldwide, the majority of which are in
Alaska. We enjoy a government-to-government relationship with
the United States. Again, I appreciate this opportunity to
testify and share some of the challenges faced by Tlingit and
Haida and other tribes and Native organizations as we pursue
and administer contracts with the Federal Government.
As my colleague to my right mentioned, when we get these
contracts, we often do it and save the government money. So
we're very proud of that and proud of our contribution to this
great nation when we administer these contracts. So we
appreciate that.
After decades of experience in contracting with the United
States, Tlingit and Haida is today actively engaged in Federal
contracting through our Tlingit and Haida Tribal Business
Corporation. We refer to it as THTBC. We formed THTBC as a
federally chartered Section 17 tribal business under the
Department of Interior. It's wholly owned by Tlingit and Haida.
It has over a dozen subsidiaries that operate as LLCs engaged
in multiple lines of business.
The sole mission of the THTBC is to engage in, carry on,
and conduct business to improve the economic condition of our
tribes and citizens. THTBC is a highly diversified family of
8(a), HUBZone, large businesses, Mentor-Protege agreements,
joint ventures, and small business companies. Our companies are
engaged in many areas of government contracting, including
facility searches, base operations, aircraft repair and
maintenance, construction management, seaport operations and
maintenance, and consulting and managing services, computer
systems and data processing, IT engineering and cybersecurity
services, solid waste collection, site security, property
management, and maintenance services, and workforce training
programs.
Our companies are engaged in providing contract services
from Colorado to West Virginia, from Florida to Arkansas, and
from Washington State to Cuba, to Washington, DC and many
places in between. We have served many military bases and,
again, that's something that we pride ourselves on greatly.
I have several brief comments on SBA policy and practice.
Tlingit and Haida staff have reported to me that the recent
tribal consultation held by SBA in Anchorage in early May was
one of the best they've participated in. We hope SBA will
increase its good efforts to streamline and facilitate its
application process. Right now we find that application process
fairly cumbersome. We ask that SBA mitigate against disruptive
changes in HUBZone administration after each new census is
calculated every decade.
We request that SBA consider merging the All Small and the
8(a) Mentor-Protege Program into one program. We believe SBA
should streamline its approval process when tribally owned
companies change their management because the tribe remains the
owner and beneficiary. We ask SBA to consider allowing mentors
to have more than three proteges at one time.
In conclusion, I want to give a special thank you again to
Senator Sullivan for all you have done to ensure that Section
811, Federal approval authority, is streamlined for contracts
from 22 to 93 million. It makes common sense to delegate that
authority from the head of agency to lower-level officials who
are closer to the facts and circumstances of each approval
decision.
With that, I would, again, close with our traditional words
in Tlingit and Haida of gratitude, Gunalcheech, Haw'an. Thank
you for inviting me to share my tribe's perspective on these
issues. Please let me know if you have any questions.
Chairman Risch. Mr. Peterson, you made a couple of specific
suggestions there at the end. Do you have details of that in
your written testimony and, if not, could you provide that? I'm
going to leave the record open for a couple of weeks at the
end.
Mr. Peterson. Yes, sir. We will.
Chairman Risch. Thank you very much.
[The prepared statement of Mr. Peterson follows:]
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Chairman Risch. Mr. Miranda, you're up.
STATEMENT OF ROLANDO MIRANDA, PRESIDENT, MIRANDA ELECTRIC,
INC., FAIRBANKS, AK
Mr. Miranda. Good afternoon, Chairman Risch and Senator
Sullivan. My name is Rolando Miranda, but you can call me
Rollie. I'm the founder and president of Miranda Electric.
I'm originally from the Philippines and became a
naturalized American citizen in Hawaii then went on to graduate
from high school in San Francisco. Shortly after that I
enlisted in the U.S. Air Force and was stationed at Eielson Air
Force Base where I served for six years as an electrician and
separated in 1981. I continued in the Air National Guard for
four years.
I started Miranda Electric in 1981, working evenings and
weekends to earn additional income, while working full time for
the Federal Government as a facilities service electrician. I
wanted to make Miranda Electric my sole job, so I started
soliciting to the SABER contractor Eielson Air Force Base. It
took a few years before I was able to convince them to let me
look at a project, and when they did, I won my first Federal
subcontract and resigned from Federal service.
I heard about the SBA program through a seminar held in
Fairbanks and reached out to learn about more opportunities. As
you know, the 8(a) program helps social and economically
disadvantaged businesses gain access to Federal contracts. I
applied and was accepted in a program in 2001 and graduated in
2009. I found the training I need to learn Federal contracting
language. I received my Federal contracting certificate from
George Washington University at a reduced cost offered by the
SBA.
I used the savings to travel between North Pole and
Anchorage for the five courses. I went from having four
employees at enrollment to 35 at graduation. I was able to use
the training to further myself with Miranda Electric. Since my
graduation, my largest single Federal subcontract award is
about $10 million. The 8(a) program deserves some credit for my
success.
I didn't receive much in prime contracts while in the
program. The majority was subcontracts. I believe that once
entered into the program, I would be awarded contracts. This
was never told me directly by the SBA, but I was under the
impression I would get that. This meant that receiving awards
by signing up needs to be explained.
I recently enrolled in the SBA's Emerging Leaders
Initiative in April. It is a six-month program that provides
free entrepreneurial education and training for executives of
companies that are poised for growth and potential job
creators. While I find this initiative valuable, the entities
in the program have a wide variety of experience.
Chairman Risch. Rollie, excuse us just a minute. This is a
unique experience for me because usually I call her Madam
Chairman. Senator, I'm sorry you missed the enlightened and
profound remarks of Senator Sullivan. We'll be happy to repeat
them, but it will have to be later. Mr. Miranda is just
finishing up on this fine panel. Then we're going to open it up
to questions. Let's let him finish, and then you can give us
your opening remarks.
Mr. Miranda. Thank you for being here Senator Murkowski.
While I find this initiative valuable, the entities on the
program have a wide variety of experience. It might be more
helpful to all those participating to be grouped with companies
that have similar experience. I have been in business for
almost 40 years, and while I am not an expert, I have
participated in Federal contracts for over 15 years and have
been successful. It is much different for someone just
learning.
In 2013, I self-certified as a service-disabled veteran-
owned small business. It allows me to bid for set-aside
contracts and receive sole-source awards. Today I have not
received any sole-source awards. My status helps me meet SBA
goals, but it has not resulted in a prime contract for Miranda
Electric. I have not been able to mark my status directly at
Fort Wainwright and Eielson, which was recommended by the SBA.
I have reached out repeatedly. Even as a veteran at a military
installation, I'm lucky to get a call back for my efforts.
I have not seen veteran opportunities in the Federal
Business Opportunities website for my local area, and with all
the work in Alaska, you would think there would be one set-
aside for veterans. I'm not sure if other veterans are
experiencing this.
In the past, I won a prime contract--I won a bid for a
prime contract to perform as the subcontractor, so it could
meet its small business goals. I even received my letter of
intent and engaged in the contract process. Then, without
explanation, the prime contractor went with another
subcontractor. This leads me to believe that the prime
subcontractor checked the box naming Miranda Electric as a key
veteran subcontractor to win the project, then dropped us and
went with a nonveteran company once the award was given. I can
never recover the money and time I spent preparing this
contract. This is just one example of my experiences.
I contacted the SBA and was advised to contact the
contracting officer. After contacting the CO, I was told they
couldn't have any involvement in settling a case. I had to take
it up with the prime. There needs to be recourse for
misbehaving primes as well as a verification and follow-up from
contracting officers to ensure the contracts are using the
subcontractors listed on their bid at the time of award and
meeting their goals to win the project.
I believe the SBA can help. I know the SBA can't solve all
the problems, and I don't think I'm the only company
experiencing these issues. Can the SBA partner educate their
fellow agencies to ensure an honest process? I think these
partnerships can go a long way for small businesses like mine.
Lastly, I would like the SBA to look at contracts which
require the use of PLA agreements. I don't know how this helps
any small business who does not have a PLA, project labor
agreements. The PLA organizations are great for those employees
facing bad working conditions from bad employers. However,
there are many of us who really care about our employees, and I
am one of them. Can the SBA find a solution where the employee
is protected, but the small business isn't automatically
counted out of obtaining a bid based on the use of a PLA?
I'm very thankful for the opportunity and assistance the
SBA has provided me and my business to get to where I am today.
The 8(a) program, the emerging leaders initiative, and self-
certification as a disabled veteran were made possible by the
SBA. Again, I want to reiterate my appreciation for the SBA and
the many opportunities I've gained. Like any businesses,
including my own, there's always room for improvement. With
that, I thank you for the opportunity to testify today.
Chairman Risch. Mr. Miranda, thank you very much. We
appreciate the specificity that you had regarding those issues.
We'll include those in the record. I think those are things
that really deserve to be reviewed by this committee and by the
SBA because there are some very specific examples there that
are troubling. Thank you so much.
[The prepared statement of Mr. Miranda follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Risch. With that, Senator Murkowski.
OPENING STATEMENT OF HON. LISA MURKOWSKI, A U.S. SENATOR FROM
ALASKA
Senator Murkowski. Thank you, Mr. Chairman. I've been
around the Senate long enough to know that you don't come into
a hearing over an hour late and expect to give an opening, so
I'm not going to give one. I'm going to thank you for being
here as Chairman of the Small Business Committee. I'm going to
thank those who have traveled also to be with us, Mr. Wong, and
thank him for the work that he has done, as well as that of
Jeremy Field as our Region 10 administrator.
Thank you to those who have provided testimony here in
person today and the opportunity for us to query you further so
that we can build this record out. I think you know, Mr.
Chairman, Senator Sullivan has educated you well on this. We
are a State where we're all about small business. That is what
we do in this State. So finding the ways that we can best help,
whether it is through our women-owned, or disabled veterans,
our service-disabled veterans, whether it's our ANCs, our
tribes.
So the opportunity to have this hearing here in Anchorage
today is greatly, greatly appreciated. I would have been here
sooner, but my plane was diverted due to the practicing Blue
Angels.
Chairman Risch. Thank you, Senator Murkowski. I can report
to you, and I think Senator Sullivan would agree, that we've
had an excellent hearing today and heard some very specific
suggestions. When you get the transcript of this with the
testimony plus the other items that people have said they're
going to submit for the record, I think you're going to find it
very enlightening and target rich for some more work by this
committee.
Thank you so much.
Senator Sullivan for questions.
Senator Sullivan. Thank you, Mr. Chairman. It's great to
see my friend and colleague Senator Murkowski here. We're very
focused and aligned back in the Senate on a lot of these
issues, all of us are.
I'll start with a bit of a hard question, but I think an
important one that I'm going to throw out to the entire panel
for any of you or all of you. You do hear detractors that
government contracting programs such as the 8(a) program or
programs for disadvantaged populations or veterans, some people
criticize them as a government handout. It's certainly not my
view, but you do hear the criticism. And that taxpayer dollars
aren't getting a good value for the awarded contract, but,
again, what this hearing is meant to do is hear from you.
You're on the front lines. You, I'm sure, have a view on that
kind of criticism.
Would you care, any or all of you, to give an example or
address that these are actually good for the economy, good for
the country; they're not a handout. They're programs that are
good--result in good stewards of the taxpayer dollars.
Chairman Risch. Who wants to go first?
Mr. Kompkoff. I can go first.
Chairman Risch. You don't want to yield to the lady on the
panel?
Mr. Kompkoff. I'll yield.
Ms. Jokiel. I will address that. I'm an economically
disadvantaged women-owned small business. That's the panel that
I was coming here to speak under, that frame. I'm also an
individually owned 8(a). So in order for me to receive that, I
had to write a preponderance of evidence and show
discrimination in my field. In order to do that, I had to have
affidavits to go along with it.
So I had several conversations with folks in different
industries about the affidavits that I wanted to have, and one
was with my mentor. He is my neighbor across the street. Very
successful businessman here in town, He said: What about an
even playing field? Why should we have to have a special
designation for you if you've had discrimination in the
industry or as a woman-owned small business in order to receive
this 8(a)? I said: Listen, if you can run a seven-minute mile,
I can run a seven-minute mile. You are 200 meters ahead of me
just the way it is. What this does is allow me to get up those
200 meters and run the same seven-minute mile as you and have
the same opportunity as you do. That's why it's important.
He wrote the affidavit for me. He recognized that there is
discrimination in issues within the women-owned small business
arena. I totally got my individual 8(a), which again is not
what I'm here to speak under, because I do think there's a lot
of room for improvement in our women-owned small business
program for Federal contracting to come to that arena. So
that's my response.
Chairman Risch. Thank you.
Mr. Kompkoff, you seemed anxious to get your two cents
worth in here. You're up.
Mr. Kompkoff. Thank you, Mr. Chairman. We've heard that
quite a bit as we run around in circles and run around the
competitive marketplace, that you all are just getting a
handout. What is interesting is that even if it's a direct
award, we have to perform the work. We actually have to get the
job done.
What is amazing, if you look at all the organizations that
are at the table, is that we continue to win follow-on work
based on our performance record. I think if you just listen to
the tenor of the conversation today, the testimony today, there
is a deep passion coming through the loudspeaker here. That
passion--you know, some of the larger contractors, the kind of
work that we do is one little segment of work. You're not
hearing the excitement and passion about servicing the war
fighter or going above and beyond to service the customer.
What is interesting is we've looked at our organization. We
have this standard business metric that many other
organizations have. We look at retention rates of employees.
What we're finding is that the mission of our organization,
this thing that's bigger than ourselves, this organization
that's supposed to last forever, this organization that is
caretaking a community of people that is trying to live up to
this promise that was the Alaska Native Claims Settlement Act.
Our employees are excited to be in our organization.
They're excited to spend more time with us than they do with
their families. Time and time again when I go out to Fort Meade
or I go out to some of our distant project sites that don't see
folks from Alaska very often and we talk about our core values
of our business on these little cards that we hand out to
everybody that are derived from our Alaska Native values, I see
them on the walls. I go into these field offices up on Whidbey
Island, and there are all of our Native core values sitting
there right in the doorway.
Then I talk to the contracting officers and some of the
folks that we had on the site. So we'll take over a contract
from a prior company, and when we run through who we are and
what we stand for and what we're about and they change that
logo on their hat, they stand up a little taller and they're a
little more excited to go to work every day. They put in an
extra mile for that customer. So we believe the customer is
receiving better value for the type of work we do out there.
Chairman Risch. Thank you very much. Anyone else want to
take a run at it? Mr. Peterson.
Mr. Peterson. It's almost dangerous to follow Mr. Kompkoff
because a lot of what he said reflects what I wanted to say.
A couple things, I really resent that idea of this welfare
because, again, we have to deliver. When we get these
contracts, we have to perform at the highest standards and we
do. I'm really excited to say that some of the contracts that
we've gotten recently have gained a lot of media attention. It
was a full-on compete. It was our quality of our work and our
pricing that won the day. I think that could be said for any
one of my colleagues here.
As Mr. Kompkoff said, when we visit out sites, the
employees are so proud that they work for an Alaska Native
tribe, that they're giving back. They feel like they have a
social piece there. Not only are they doing a job for their
country which they're proud of, but it brings back to a tribe
in Alaska where they know we're underserved, where they know
that we're economically depressed.
And I want to say something else. Our tribal values are
reflected in the work we do. As many of you probably know,
maybe you don't, Alaska Native, Native Americans are the
highest serving in the military. In fact, Alaska Natives are
the highest serving. I think that's a reflection of our
commitment to our country.
So when we do government contracting, it's kind of that
same commitment. It's that same reflection of how we feel about
doing this good work and that we're helping stand up our
country, and we're doing it responsibly. We're delivering the
best product. We're not overcharging. It's very competitive.
Otherwise, without these programs we would not be able to
compete against the Lockheed Martins, the Boeings, and so on.
This really just kind of levels the playing field.
When you look at it, we're still only fighting for a
fraction of government contracting. In fact, because of the SBA
and the Mentor-Protege Program, we're able to work with those
companies like Lockheed Martin, Boeing, and others and get that
experience. So it's a great program.
Chairman Risch. Thank you. Mr. Marrs.
Mr. Marrs. Well, I think they've covered basically the
underlying fact of we do a lot of work for the government at a
great price. A lot of it's competitive bid among ourselves. The
thing that gets me is there are so many rules within all these
regulations by all the different agencies that make it very
difficult for us to compete in that environment. For every bid
we do, it costs us between 20 and $50,000 for a bid. It comes
out of the government and then it will sit there for a year, if
not longer in a lot of cases. It's a detriment with all these
regulations that we have to deal with to try and get work done.
People that say, you know, these are handouts. They're not
a handout. No, we deserve it. We were the first people in
America. We are the most--the poorest, most repressed group of
people in America even today. Why is that? Just trying to get a
leg up on a fair basis, the system just isn't fair in that
regard because, like I tried to say in the testimony, the
intent of Congress has been very strong of how these programs
should work. The agencies find ways to make it absolutely
difficult to carry out that intent. We need to fix that
problem.
We need these agencies that understand. Now, now SBA is
trying. They're trying hard. But when you get through all of
these other agencies--it's like a top-secret clearance. It's a
double-edged sword here. You can't file for a top-secret
clearance unless you have that job. You don't get that job, you
don't get a top-secret clearance. I mean, it's absolutely
ludicrous.
In fact, we lost a major contract because we were waiting
for a top-secret clearance. It took 18 months to get to that
point for that particular one. By then the contracting officer
gave it to somebody else because we couldn't--we eventually got
the top secret clearance. There was no problem; it just took 18
months to get there.
Every agency has a different criteria for the top-secret
clearance. I mean, why is that? It's the same government. I
mean, it's sort of stupid in my opinion. I've said enough.
Chairman Risch. I don't think there's anybody up here that
disagrees with you on that. Let me tell you, we're working on
that. There is a specific office within the SBA called the
Office of Advocacy. Their job is specifically to attack exactly
what you're talking about. That is, the onerous things
different agencies do that adversely affects small businesses.
Since I've taken over as chairman, we have done our best to
stand up even better the Office of Advocacy and make them truly
the independent agency they're supposed to be to say: Hey,
stop. Think about what you're doing here to small businesses.
Sometimes we're successful, sometimes we're not, but we will
keep after that. I commit that to you.
Mr. Miranda, did you want to take a run at this?
Mr. Miranda. There's a myth to that, that you automatically
get this and that, you know. I can honestly say that I have
worked really hard to get what I have. Really, it was the
education I got from the 8(a) program.
Chairman Risch. Thank you so much. Senator Sullivan.
Senator Sullivan. Sure, Mr. Chairman. I had a question for
Mr. Peterson. It's two questions and it relates to your
testimony, but one question is: Can you describe a little bit
of the difference--we've talked about ANCs and then we were
talking about tribally owned businesses and a little bit of the
difference as you see them. Tlingit Haida has a proud tradition
as you've talked about. Then, your participation in the HUBZone
program, and how did you get interested in that, and what
perceived benefit did you see from that program? As you saw, I
asked the Administrator a lot about that program in the first
panel, but having someone who's worked through it and seen the
pros and cons and ways to improve it, if you have any view on
that, that would be helpful as well.
Mr. Peterson. Well, thank you, Senator. I was sitting in
the back during that first panel and wishing I was able to
answer for him. I've got a lot to say on that. The HUBZone, I
think, can be a very great program, but it's frustrating
because in Alaska we're able--most of the state's a HUBZone,
but a lot of the work we do is outside of the State, onsite,
government.
So those employees have to be certified to live in a
HUBZone. If 35 percent of those employees have to live in a
HUBZone, if they move or that HUBZone moves, we're SOL. And
really we would like to see kind of like a three-year----
Chairman Risch. For the record, what does that stand for?
Mr. Peterson. Short on luck. You almost made me sweat
there. I have to be careful with my village. It will come out,
I'm sorry. Am I red?
Anyhow, we would like to see some changes in that HUBZone
program. If we can get certified and then have a three-year
certification period, then the program is great; but in Alaska
most of it's a HUBZone, so we have gotten creative, I guess,
where we've started businesses in Juneau, for example. We've
gotten into security, food service, maintenance, property, and
then all of our employees are HUBZone. It's great. It helps us
meet that 35 percent. Again, even when it's a struggle.
It feels a little disingenuous when really we're trying to
do the government a good service in those onsite contracts. So,
you know, if we could get certified, at the time of
certification we meet that criteria, but, again, because an
employee moves to a better neighborhood, a different
neighborhood, the HUBZone actually moves. In the Lower 48 a
HUBZone could be one block. Then you go over two blocks down
and it's not a HUBZone. So it makes it very difficult to
recruit and retain employees. It's just very cumbersome.
I hate to throw this at the government and say it's more of
your bureaucracy, but it really is. I know looking at our
wonderful delegation and our chair, we want to streamline
things so that we can work smarter, not harder.
Chairman Risch. Thank you. It's 35 percent. I'm sure some
bureaucrat on the banks of the Potomac had a great idea of how
to get 35 percent.
Mr. Peterson. Is that one of those mansions again? I
haven't seen those mansions.
Chairman Risch. That's a very specific recommendation that
we're going to take to heart. Both you and others have
underscored that.
Senator Sullivan.
Senator Sullivan. I had one other question. I wanted to
make sure my colleagues here get to the questioning as well.
Carrie, I thought your testimony was really powerful and your
ideas on the financing side, I thought, were also very
powerful.
Can you talk a little bit more about that? Then, I think
you stated that you've benefited or have views on the Small
Mentor-Protege Program, and I think of course the government
can't do everything, but having a mentor and proteges in all
different aspects of life is really helpful and powerful. In
small business, it's particularly powerful.
Are there things that the SBA can do more in the financing
and mentorship and protege side that you've touched on that can
help?
Ms. Jokiel. Thank you for the questions. It's an
interesting point. With the mobilization loan, which I'm
talking about, we were in our first sole-source award with
ChemTrack Alaska, the environmental company I have. The project
was down on the Chain, and I needed to figure out how I was
going to finance the beginning part of this project, which was
the trains, planes, and automobiles to get down there.
I was sitting actually at an 8(a) conference here in town,
and there was a lending institution that came in and started
talking about a mobilization loan. I started sneaking pictures
to my controller saying: This is what we need. We need to be
working with this mobilization loan. What they did was they
took the government contract as an asset and allowed us to use
that to be able to get kind of a gap financing tool to start
the beginning of our project.
That was extremely useful. Before that moment, I was
talking with my bank and my line of credit had been reduced. We
had a tough year before that had happened in the world of
business, and so my line of credit had been reduced down to
where I wasn't going to be able to access it as much to have
this first part of my project covered. So my point is, I
wouldn't have learned about that as a women-owned small
business unless I had been at the 8(a) conference. So I'd like
to see more effort, maybe business opportunity specialists or
more conversations for the women-owned small business program,
because it was fortunate that I have an individual 8(a) that I
was able to be in an arena to learn about this institution.
So that's the first part of the question. I think that's a
very useful tool, to look at mobilization loans and have
government contracts actually be the asset versus my house, my
business, my equipment, my first child.
On the second part of the question with the Mentor-Protege,
I appreciate what you said about having them in life as well.
My mentor owns a large construction company here. We have been
friends a long time. Through the SBA a lot of great
conversation was around: Make sure you trust your mentor,
because I never want to be viewed as a pass-through. I'm a very
strong, independent woman. I want my company to make it on its
own. So I want to make sure when I'm working with a large, that
I'm not being used, as Rollie said, to have your designation
box checked. I want to learn and I want to grow.
So we went to Hawaii to look at work there, and he got very
tired of me saying: Well, you may be my mentor on paper, but in
life I'm really our mentor and you know it. So I think that was
an important way for the SBA to make sure to help protect the
small, small. Then when you are looking for a mentor, maybe
some matchmaking and some more conversations around that. I
didn't know quite how to find my mentor. So I ended up working
with a friend of mine and that's worked out for me here
locally. I hope that answers part of your question.
Chairman Risch. Yes, great. Thank you.
Senator Murkowski.
Senator Murkowski. Mr. Chairman, I'm going to be very brief
and hopefully ask a more general question here. It follows on
Senator Sullivan's initial question about some of the
misconceptions that are out there. As you know, your delegation
deals with some colleagues that believe they know and
understand more than any of you the operations of an ANC and
what that means within the 8(a) program. We fight back against
those myths and misconceptions. You do as well.
Hearings like this are a great opportunity to put things on
the record. It's important to bring the Administrator to have
him understand firsthand hearing from you. What more do we need
to do to tell the story, to correct the record, to ensure that
the myths do not continue? Because it makes for an ongoing
legislative struggle, and it impacts your ability to have
certainty moving forward.
Do you have any suggestions for us? We have to do things on
our end. You have to do things on yours; but is there more that
we collectively can do?
Chairman Risch. Carrie, I think we'll start with you,
please.
Ms. Jokiel. Sure. I would say it's bringing people here to
see. I see people's eyes open up constantly when they get out
into the remote villages of Alaska and the remote areas. Seeing
what we're talking about. I don't know if there's a fly-in trip
that can happen, but I think that's been eye-opening for
everybody when they come and actually see what we're talking
about. Of course it's easy to make armchair decisions when--
unfortunately you can do that as a CEO or president of your
company. There's always that conversation between the field
crew and the people in the office and who's actually doing what
and what their roles are. But when you fly out and see--I fly
out to my project in King Salmon or I fly out to my projects
wherever they are. I can see what's going on. Now I understand
why I'm unable to move the dirt as quickly as possible or
whatever I need to figure out. And I can go back with that
understanding.
I think we can take that model all the way to the top and
bring people in to actually see our area, see what we're
discussing.
Chairman Risch. Thank you. Mr. Peterson.
Mr. Peterson. Well, Carrie said the same thing I was going
to. I agree, I think bringing people out here. This is the
cynic in me, I guess, Again, I hear about these mansions on the
Potomac. I'd like to--for your colleagues, they shouldn't be
able to brandish those kind of statements without producing
some evidence because, again, I don't know of any mansions on
the Potomac.
Senator Sullivan. Mansions on the Potomac in a State that
has over 30 communities where people have no clean water and
flush toilets. I mean, it's ridiculous. That's some of the
cluelessness we deal with in the Senate.
Mr. Peterson. Right. You hear about issues in Western
Alaska still with honey buckets and things like that. I'm from
a small village in Southeast Alaska right outside of Ketchikan.
There's many people in my community who still don't have
running water. You know, that's a statewide issue. We're
dealing with the opioid crisis and those kinds of things. I
would love to see some of the other colleagues that are saying
these things come out to our village and see for themselves
what it is and to see the work that we do.
I think in any business or in any area there's always going
to be abuse somewhere, but for them to brandish these
misconceptions or whatever you want to call them as the truth
is really detrimental to us. If it's one on a million that it
happens, it shouldn't be the one that's used as the example
over and over and over. Maybe someone does have a really nice
house on the Potomac that I don't know about, but I don't
believe that to be true at all.
Chairman Risch. Thank you. Mr. Marrs.
Mr. Marrs. Well, it's totally a misconception, that whole
idea that we're getting something for nothing and it's a
handout by the government. I think my testimony says we work
hard and work hard for the government. The problems that you
deal with is because it's government, you've got all these
rules, at least loads of bureaucracy, that we have to work with
yet we're a for-profit corporation. We try to streamline
everything we can within those corporations, but because of all
these rules, you're sort of hamstrung.
If you think about a--you know, the government can always
negotiate a good contract with an 8(a). If they don't like what
the 8(a) is doing in the contract, they can walk away from it.
There is no requirement for a sole-source. I would like to see
some requirements for sole-source, but there is no requirement
for a sole-source contract by the government.
So, you know, there are a lot of misconceptions out there
about how this program works. People are jealous because they
think we have some advantage over other contractors. I don't
see that because those guys negotiate sole-source contracts for
billions of dollars. Why is it that we're still limited and
restricted as to what we can do because we can to the jobs
good. We have good people. We have good managers. Yes, I think
I agree with Richard, there are times that somebody will go
awry and try to pull a fast one, but the bathwater shouldn't be
thrown out with the baby and then, hey, most of us do and try
hard and we really care.
We do it for our shareholders. That's what it's all about.
If I have $100 million in contracts, I'd put maybe $5 million
on the bottom line; that equates to a very small amount of
money for every shareholder. And you have profit in order to
keep your business going and reinvest. It's much less than
that. Yes, there are issues. Like I told the committee, I've
submitted 16 pages of them in writing so you'll have those.
Chairman Risch. We appreciate that.
Mr. Kompkoff, did you have any comments?
Mr. Kompkoff. Yes, I do. Thank you for the question,
Senator Murkowski. A couple quick things. One, Mr. Wong
mentioned a BOS training event, first that they've ever put
together. We'd like to volunteer to help educate the BOS group
on the program and how they can communicate to their customers.
I think we'd encourage the SBA to think about using those that
are in the program as a resource to help educate the broader
contracting community on how this program works. So that's one
specific example of something more that we can do.
The other thing to think about is there are customers that
can--you don't have to talk to us. I mean, we're biased. We're
in the program. We're benefiting from the program. We're going
through our own struggles, but there are the customers are the
ones who can sing the songs of our praises. I would encourage
and be glad to help set up tours of our customers' sites and
conversations with our customers about the type of work that we
do to kind of dispel the myth that we're just getting handouts
and we're not performing great quality work for our customers.
Senator Murkowski. That point I will share with my
colleagues. I had an opportunity some months ago to be
traveling over in the Pacific Islands. We stopped in Wake
Island, the first stop on the other side of the dateline there.
That entire island, that facility is managed by Chugach. So you
get off the airplane and you see the logo on the cap and hat. I
looked at it and I thought: That's so familiar. Here I am in
the South Pacific on this tiny little island. The opportunity
to speak to those who had worked there for as many years as
they have and the value that they create, but also the
extraordinary satisfaction that they have with the work that
has been done by Chugach out there in the middle of an
extraordinary ocean, as an Alaskan, it made me very, very proud
of the work that is done.
I thought: I should have captured that by video, because I
think it's stories like that that really can tell the true
value of what is being done. So I share that with you as one of
those really good news story, because sometimes the advertising
does itself, but you've got to go a long way to find it.
Chairman Risch. Rollie, did you have anything?
Mr. Miranda. Yes. I think your committee being here is a
start to getting the word out, and letting us all testify so
everybody can hear and be on record so everyone knows.
Chairman Risch. Thank you very much.
Without further ado, we're going to keep the record open
for two weeks, until 5 o'clock on Friday, July 13th. So if
anyone wants to submit anything further for the record, you may
certainly do so. Senator Sullivan, you mentioned a couple of
items earlier on. Those will be included in the record. I'm
given an email here: [email protected].
With that, I want to recognize a couple people. I didn't,
but I wanted to wait until the end to make sure this went well.
Those are the two who organized this. Skiffington Holderness is
the Staff Director for the Small Business Committee.
Meredith, who actually did all the work which Skiffington
could get credit for. So, Meredith, thank you.
It's always dangerous to do that because I know there were
lots and lots of other people that had input into this, so we
want to thank you. We have been just very well received here in
Alaska, as I knew we would be. Thank you to both my colleagues
for inviting us here. I think that this has been a very
substantive and productive hearing.
So, with that, without further ado, we will call the
meeting adjourned.
[The Hearing of the U.S. Senate Committee on Small Business
and Entrepreneurship adjourned at 4:30 p.m.]
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