[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]


           CONTINUING TO SERVE: FROM MILITARY TO ENTREPRENEUR

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                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             JULY 10, 2019

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 116-032
             Available via the GPO Website: www.govinfo.gov
             
             
                             __________
                               

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
36-965                      WASHINGTON : 2019                     
          
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                          JUDY CHU, California
                           MARC VEASEY, Texas
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                        TRENT KELLY, Mississippi
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania

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

                           OPENING STATEMENTS

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

                               WITNESSES

Mr. Davy Leghorn, Assistant Director, The American Legion, 
  Washington, DC.................................................     5
Mr. Scott M. Davidson CPT, USA, Retired, Managing Principal & 
  CEO, The GCO Consulting Group, McLean, VA......................     6
Ms. Torrance Harrington Hart, Owner, Teak & Twine, Springfield, 
  VA.............................................................     8
Ms. Laurie Sayles, President and CEO, Civility Management 
  Solutions, Greenbelt, MD.......................................     9

                                APPENDIX

Prepared Statements:
    Mr. Davy Leghorn, Assistant Director, The American Legion, 
      Washington, DC.............................................    35
    Mr. Scott M. Davidson CPT, USA, Retired, Managing Principal & 
      CEO, The GCO Consulting Group, McLean, VA..................    40
    Ms. Torrance Harrington Hart, Owner, Teak & Twine, 
      Springfield, VA............................................    45
    Ms. Laurie Sayles, President and CEO, Civility Management 
      Solutions, Greenbelt, MD...................................    47
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    Statement from Hon. Ross Spano - Speech on Veterans 
      Entrepreneurship Act of 2019...............................    57
    IFA - International Franchise Association....................    58

 
           CONTINUING TO SERVE: FROM MILITARY TO ENTREPRENEUR

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                        WEDNESDAY, JULY 10, 2019

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The committee met, pursuant to call, at 11:32 a.m., in Room 
2360, Rayburn House Office Building, Hon. Nydia M. Velazquez 
[chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Finkenauer, Golden, 
Kim, Crow, Davids, Veasey, Schneider, Delgado, Houlahan, Craig, 
Chabot, Radewagen, Kelly, Balderson, Hern, Hagedorn, Stauber, 
Burchett, Spano, and Joyce.
    Chairwoman VELAZQUEZ. Good morning. The committee will come 
to order. I am pleased to be chairing this hearing today to 
discuss ways the Small Business Administration can help our 
nation's veterans transition from the military to civilian life 
by launching and growing a successful small business. Every 
year, more than 200,000 of our nation's heroes make the 
transition out of our military. Some pursue employment 
opportunities, others go back to school or learn a new trade. 
Some decide to pursue the American dream and launch a small, 
innovative business. For these returning servicemembers, the 
Small Business Administration can play a key role in helping to 
turn their small business dreams into a reality.
    Through their commitment to serving our country, veterans 
develop an unwavering mindset that often makes them uniquely 
suited to take on the challenges of starting a new business. 
They are leaders, doers, and remarkably driven. Today's 
veterans are the most educated and technologically trained 
servicemembers ever, and often, they have firsthand exposure to 
the government procurement process. This means we have a sector 
of the population that is primed to be the innovators and 
business owners of tomorrow. They have the potential to 
strengthen our nation's economy, create jobs, and drive 
economic growth.
    Yet, despite the rich tradition of owning a small business, 
starting and running a business can be challenging. Veterans, 
like other entrepreneurs, face many obstacles. Finding 
affordable access to capital, getting products to market, 
developing a network, and finding new customers can prove to be 
steep undertakings.
    Even more troubling, we have witnessed the share of new 
veteran entrepreneurs decline steadily from 12.49 percent in 
1996, to 4.16 percent in 2016. Clearly, more needs to be done 
to help our nation's veterans launch, grow, and succeed in 
entrepreneurship.
    For that reason, I am committed to improving the Small 
Business Administration's programs to ensure they are 
effectively serving our nation's heroes. I am pleased to 
support a number of these measures--from lending to contracting 
to training and counseling--that will make it easier, not 
harder, for our veterans to get their businesses up and 
running.
    With approximately 2.5 million veteran-owned businesses 
generating over $1 trillion, it is clear for many men and women 
leaving the service that entrepreneurship provides a promising 
path to continue serving their country, creating jobs in their 
local communities while supporting their families. I am pleased 
that we will have an opportunity at today's hearing to hear 
from several veteran entrepreneurs about their firsthand 
experiences with these programs.
    I commend each and every one of you for your service to our 
country. It is my hope that they can highlight for us what they 
found beneficial, where improvements can be made, and identify 
gaps in how these services reach veterans.
    I thank all the witnesses for being here today. Your 
testimony will help inform the committee as we work toward the 
goal of supporting veteran small business ownership. With that, 
I thank each of the witnesses for joining us today, and I look 
forward to your testimony. I would now like to yield to the 
Ranking Member, Mr. Chabot, for his opening statement.
    Mr. CHABOT. I thank the Gentlelady for yielding, and for 
holding this hearing today, and we want to thank the witnesses 
for being with us. Today we are asking for input on what I 
believe is a strong bipartisan package of bills that we hope to 
mark up later this month. Again, I thank the Chairwoman for 
conducting this process with bipartisanship. Each of these 
bills has a member of both parties as an original sponsor and 
co-sponsor.
    One of this Committee's main goals when considering Federal 
contracting matters is to streamline and reduce the red tape 
small businesses must endure. So I would like to thank Mr. 
Kelly and Mr. Crow for sponsoring H.R. 1615, the VA-SBA Act, 
which will help accomplish that goal for veteran-owned and 
service-disabled veteran owned small businesses. I would also 
like to take this time to thank our colleagues at the House 
Veterans Affairs Committee for their close collaboration with 
this Committee on that matter.
    H.R. 1615 eliminates duplication in contracting programs 
between the SBA and the Department of Veterans Affairs. Both 
operate separate, yet conflicting, verification programs with 
different eligibility rules and regulations. These two 
disparate programs create inconsistent outcomes and confusion 
among veteran entrepreneurs. Last year, the House Small 
Business Committee and House Veterans Affairs Committee held a 
joint hearing exploring whether government-wide verification by 
a single entity would be a viable solution. This legislation is 
the culmination of those efforts.
    I would also like to hear our witnesses' thoughts on my 
bill, H.R. 499, which is designed to align how the VA and the 
rest of the Federal Government treat surviving spouses of 
service-disabled veteran small business owners. This bill 
ensures that the surviving spouses of service-disabled veteran 
small business owners can retain the company's special status 
for a certain period of time after the death of the veteran 
spouse. This policy is already codified in Title 38 of the 
United States Code. However, there is a lack of parity between 
Title 38 and the Small Business Act. I have heard from several 
small businesses, including one in my district, that this 
discrepancy creates legal uncertainty and confusion in the 
application of this important policy. The bill aims to rectify 
that.
    Additionally, we will examine how the SBA administers 
disaster loans to businesses that experience hardships and 
economic losses because their employees enter military service. 
Led by Representative Andy Kim of New Jersey, and 
Representative Tim Burchett of Tennessee, the National Guard 
and Reserve Entrepreneurship Support Act expands the businesses 
eligible for a military reservist economic injury disaster loan 
for those that have employees called to Active Duty to those 
called for active service.
    Finally, our Committee hopes to advance H.R. 3537, the 
Veterans Entrepreneurship Training Act of 2019. This bill, 
offered by Committee Members Schneider of Illinois and Spano of 
Florida, amends the Small Business Act to authorize for 5 years 
the Boots to Business program which helps transitioning 
servicemembers launch and grow small businesses. This is 
another example of how we can come together to advance 
bipartisan legislation to serve those who served our nation so 
proudly. I want to thank Mr. Spano and Mr. Schneider for their 
work on that bill. And I am looking forward to the discussion 
today, and I yield back, Madam Chairwoman.
    Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. The gentleman 
yields back. And if committee members have an opening statement 
prepared, we will ask that they be submitted for the record.
    I would like to take a minute to explain the timing rules. 
Each witness gets 5 minutes to testify, and the Members get 5 
minutes for questioning. There is a lighting system to assist 
you. The green light will be on when you begin, and the yellow 
light comes on when you have 1 minute remaining. The red light 
comes on when you are out of time, and we ask that you stay 
within that timeframe to the best of your ability.
    I would now like to introduce our witnesses. Our first 
witness is Mr. Davy Leghorn. Davy Leghorn is the Assistant 
Director of the Veteran Employment and Education Division of 
the American Legion, the largest veteran service organization 
in the United States. Mr. Leghorn oversees employment and small 
business portfolios and administers the American Legion's 
national veteran hiring initiative. He previously worked as a 
National Appeals Representative for the American Legion at the 
Department of Veterans Affairs' Board of Veterans' Appeals, 
where he provided representation to veterans, their spouses, 
and dependents in appellate hearings before the veterans law 
judges. Mr. Leghorn also served as a mortar infantryman in the 
Army. Thank you for your service and thank you for being here 
today.
    Our second witness is Mr. Scott Davidson. Mr. Davidson is 
the Managing Principal and CEO of the GCO Consulting Group, a 
growing service-disabled veteran owned small business. Mr. 
Davidson provides specialized consulting expertise in GSA 
schedule contracting compliance. Mr. Davidson served honorably 
in the United States Army as an enlisted soldier, non-
commissioned officer, and a commissioned officer, and served 
multiple combat tours throughout southwest Asia to include Iraq 
and Afghanistan. He was medically retired from the United 
States Army as a captain for injuries sustained during his tour 
in Iraq in July 2007 while he was working as a counter-IED and 
convoy security officer.
    Mr. Davidson continues to serve the veterans community as 
the co-founder of the Bourbiz, a professional and personal 
resource networking event for veterans, military spouses, and 
caregivers in which the events connect attendees with a wide 
range of resources to grow. Thank you for your service and all 
that you are doing to support veterans in our country.
    Our third witness today is Ms. Torrance Hart. Ms. Hart is 
the founder of Teak and Twine, a small business that designs 
beautifully made and thoughtfully packaged gifts. After serving 
8 years in the Air Force, Ms. Hart connected with a Veterans 
Business Outreach Center to help launch her small business. She 
attended Boots to Business, where she learned valuable 
information about entrepreneurship and was connected to local 
entrepreneurial resources. Thank you for your service. I am 
really looking forward to hearing your experience in the Boots 
to Business program.
    I would now like to yield to the Ranking Member, Mr. 
Chabot, to introduce our final witness.
    Mr. CHABOT. Thank you, Madam Chair. Our next witness is 
Laurie Sayles, President and CEO of the Greenbelt, Maryland 
company, Civility Management Systems, or Civility MS, for 
short. Ms. Sayles started her career by enlisting in the Marine 
Corps, serving there for 10 years, and achieving the rank of 
Staff Sergeant. A woman minority, service-disabled veteran 
owned small business, Civility MS provides project, program, 
financial, and grants management, training, conference 
logistics, acquisition, and administrative support through 
contractual work for several Federal agencies.
    Sergeant Sayles obtained her bachelor's degree in social 
science from the University of Maryland University College. She 
also received a business project management certificate from 
UMUC, and is a member of the Project Management Institute, 
Women Impacting Public Policy, Women Marines Association, 
National Veterans Owned Business Association, and the National 
Marine Corps Business Network.
    Sergeant Sayles, thank you for your service to our country, 
and thank you for being with us today. We look forward to 
hearing your testimony as we do all the testimony from all the 
witnesses, and I yield back.
    Chairwoman VELAZQUEZ. Thank you.
    Mr. Leghorn, welcome back to the committee. You are 
recognized for 5 minutes.

 STATEMENTS OF DAVY LEGHORN, ASSISTANT DIRECTOR, THE AMERICAN 
LEGION; SCOTT M. DAVIDSON CPT. USA, RETIRED, MANAGING PRINCIPAL 
  & CEO, THE GCO CONSULTING GROUP; TORRANCE HARRINGTON HART, 
  OWNER, TEAK & TWINE; AND LAURIE SAYLES, PRESIDENT AND CEO, 
                 CIVILITY MANAGEMENT SOLUTIONS

                   STATEMENT OF DAVY LEGHORN

    Mr. LEGHORN. Chairwoman Velazquez, Ranking Member Chabot, 
and distinguished members of the Committee, on behalf of our 
national commander, Brett Reistad, and the 2 million members of 
the American Legion, we thank you for the opportunity to 
testify this morning.
    We are privileged to present our position on several pieces 
of legislation up for consideration. Our written testimony is a 
matter of record, so we will briefly summarize our discussion 
on just two bills.
    The American Legion supports expanding eligibility for SBA 
programs that permit loan assistance to businesses when 
deployments are not part of a military conflict, and allow loan 
recipients to defer repayments of principal and interest on 
disaster loans when they are ordered to active service for more 
than 30 consecutive days. Currently, these programs are 
underutilized because their eligibility restrictions do not 
fully reflect current deployment practices.
    Both the Guard and Reserve have transitioned from a 
strategic Reserve into an operational force to meet the need of 
an all-volunteer force in an era of persistent conflict in 
which Active Duty and Reserve component alike are expected to 
deploy regularly. The American Legion Resolution No. 17 
positioned on the operational Reserve urges Congress to reform 
laws and policies governing the Reserve components to provide 
them programmatic sustainability as an operational force. The 
proposed Patriot Employer Protection Act is in line with our 
resolution. Members of the Guard and Reserve are an integral 
part of our national defense, and the Nation should do 
everything we can to support their service.
    Next, we will discuss the VA-SBA Act. Last year, the 
Federal Government aligned the regulations governing SDVOSB 
definitions, but even with the deconflicted regulations, the 
maintenance of two Federal certification programs for veteran 
small businesses still continues to be a source of confusion.
    The American Legion Resolution No. 155, Support 
Verification Improvements for Veteran Businesses, concurs with 
H.R. 1615's proposal to have SBA absorb the responsibility of 
VA's CVE. Currently, VA requires businesses applying for SDVOSB 
status to address size, ownership, and control issues prior to 
certification. In contrast, SBA allows businesses to self-
certify that they meet the regulatory threshold. Self-
certification permits businesses to qualify for all Federal 
contract awards with the exception of the Veterans First 
contracting program at VA.
    The problem with two SDVOSB identification processes is 
simple: It creates confusion for contracting officers seeking 
to award contracts, and for veterans seeking certification. To 
compound the confusion, many State and Federal agencies now 
inquire whether veteran-owned businesses are VA certified, 
resulting in many veteran firms acquiring VA certification when 
it isn't necessary.
    The American Legion believes we should finish the work that 
began when we moved toward the single set of SDVOSB definitions 
by consolidating the accrediting process to a singular 
certifying agency. SBA has a proven workflow platform that can 
potentially handle SDVOSB certifications. VA will likely 
continue validating veteran and service-connected disability 
status, but SBA is aptly poised to verify size, ownership, and 
control standards.
    Moving the verification program is not a punitive measure. 
The Vets First program under VA's stewardship has successfully 
demonstrated SDVOSBs as a credible workforce. VA can be proud 
of the work they did in overcoming many programmatic hurdles. 
Their efforts and investments prove to State and Federal 
agencies the value of veteran businesses as a preferred 
contracting group.
    However, for the veteran small business industrial base to 
grow beyond just the Vets First program, verification must 
leave the confines of the VA. So with a move towards a singular 
standard for SDVOSB definition, the shifting of appellate cases 
to SBA's Office of Hearing and Appeals and SBA's successful 
integration of certified.SBA.gov, this is the right time to 
move verification to the SBA and sunset the system of self 
certification.
    Chairwoman Velazquez, Ranking Member Chabot, and 
distinguished members of the Committee, we thank you for the 
opportunity to explain the position of the 2 million members of 
the American Legion, and we look forward to any questions you 
may have.
    Chairwoman VELAZQUEZ. Thank you, Mr. Leghorn.
    Mr. Davidson, you are now recognized for 5 minutes.

                 STATEMENT OF SCOTT M. DAVIDSON

    Mr. DAVIDSON. Thank you.
    Chairwoman Velazquez, Ranking Member Chabot, and 
distinguished members of the Committee, on behalf of GCO 
Consulting, a service-disabled veteran owned business, and my 
fellow servicemembers, I thank you for inviting me here today 
testify to this morning.
    I had the honor and privilege of serving my country in the 
United States Army as an enlisted soldier, a non-commissioned 
officer, and a commissioned officer in both peace and wartimes. 
I was not afforded the opportunity during my military 
separation to participate in the transition assistance program, 
or the Boots to Business program, due to my medical retirement.
    Starting a business was not on my mind as my military 
career abruptly ended, due to injuries sustained during a 
combat tour in Iraq. I had no time to plan my exit and prepare 
for transition back into the civilian world, because a medical 
evaluation board was convened to decide my future in early 
2007. I was abruptly notified of the results of the proceedings 
while recovering at Eisenhower Medical Center.
    My career in the Armed Services officially ended, and less 
than 6 weeks later, I was back at home. I had never attended 
any military transition assistance programs in that short 
period of time before I was released from the hospital care and 
the warrior transition unit.
    Although I fumbled through this time in my life, I learned 
a lot regarding the stress and rigors of transitioning, and 
then ultimately starting a business. Eventually, I was able to 
attend the Boots to Business program years after I started my 
own business, thanks to some great veteran mentors in my 
network like Jack Manderville (ph) and Pat Baker.
    I immediately recognized the value of this course. While my 
company is more than a decade old, the company continues to 
grow, because of programs like Boots to Business and 
Entrepreneurship Boot Camp for Veterans at Syracuse University. 
The road to entrepreneurship has shaped a unique transition 
experience for me from my military experience to becoming a 
veteran entrepreneur. I am proud that I can share my experience 
and insight today as they directly relate to the matters 
discussed regarding veterans business ownership.
    It is important for me to note, though, at this time, that 
throughout my entire time in that transition process, and even 
today, that I have never changed my steadfast affinity for the 
United States Army, and the pride and privilege that I have and 
I feel every day that I was given the opportunity and I was 
able to serve.
    The first point I would summarize is Boots to Business. 
First, I would like to focus on the importance of codifying 
Boots to Business as an integral part of transition assistance 
program for servicemembers who may be deciding to choose 
entrepreneurship as a path after leaving the service. Boots to 
Business may be the first exposure to entrepreneurship for the 
servicemen who are receiving actual baseline of what the 
requirements are to start and run a business. Boots to Business 
provides real insight and an opportunity for servicemembers to 
understand what it takes to start a business in the civilian 
world, and how to make it successful.
    This program would have assisted me in several areas as I 
stumbled through early on in my transition, processing, and 
starting my business. Transitioning from the military is always 
going to be stressful. Any insight the Armed Services can 
provide to a transitioning servicemember will alleviate the 
stressors and allow for a business plan to be laid.
    Recently, it is my understanding that in the NDAA 2019, a 
portion of Boots to Business curriculum has been made mandatory 
for transitioning servicemembers. This is a great change that 
will expose servicemembers to resources and knowledge that may 
encourage them to take the step in the direction of 
entrepreneurship and channel the Warrior Ethos that has had 
them succeed in the military, and also focus on boots and 
success in the boardroom.
    The Army builds soldiers. Boots to Business educates these 
patriots so they can successfully establish and grow veteran 
businesses from now and in the future.
    The next item I will talk about is moving the 
responsibility of the VACB functions to the SBA. Over the last 
11 years, my firm has been on the operational front lines of 
assisting veteran business owners with the CVE process. From 
the VIP system to the dysfunctional VEMS system, I have heard 
countless stories of frustration and near defeat from veteran 
business owners in working with the VA over the years to become 
CVE certified.
    In the end, after all the day-to-day system and customer 
service issues my clients and consultants face, at CVE, we are 
often asked the following question: Why do we have the VA, 
which is a separate agency certifying veteran business size and 
control determination, when the SBA is responsible for the size 
control determination for all businesses to even include the 
self-certifying veteran-owned and disabled service veterans 
systems through the SAM system?
    The answer is simple. It is not necessary. And the solution 
to the issue of size and control determination certification 
already exists inside the Small Business Administration. The 
SBA possesses a certification system that mirrors other 
programs like the SBA is already administering successfully, 
like the 8A business development program. The SBA also has a 
certification program that is available through 
certified.SBA.gov. It would only make logical sense to adopt 
the SBA's existing system and adapt it to the certification 
process for veteran businesses instead of risking significant 
amounts of taxpayer dollars on trying to fix a system that is 
broken, or attempting to build one from scratch.
    Veteran businesses should not have to take on any 
additional burden or separate certification requirements that 
may stifle growth and strain resources. A single certifying 
agency and system determining the size standard for all 
businesses should fall under the responsibility of the very 
agency it is tasked for to build and grow the Nation's economy, 
and that is the Small Business Administration.
    I thank you for your time today, Chairwoman Velazquez, 
Ranking Member Chabot, and distinguished members of the 
Committee. I look forward to answering any of your questions.
    Chairwoman VELAZQUEZ. Thank you, Mr. Davidson.
    Ms. Hart, you are recognized.

             STATEMENT OF TORRANCE HARRINGTON HART

    Ms. HART. Chairwoman Velazquez, Ranking Member Chabot, and 
distinguished members of the Committee, thank you for giving me 
the opportunity to speak today.
    I am an Air Force veteran, former military spouse, and also 
the founder of Teak and Twine, and I am here to talk about my 
involvement in Boots to Business, and to lend support for this 
valuable program, its role in empowering military veterans, and 
especially for military spouses to try entrepreneurship.
    Like Mr. Davidson, starting a business after I left the Air 
Force was definitely not my first choice. The whole time I was 
in the military, I had wanted to go to business school, but 
once my time in the Air Force was winding down, I was also a 
military spouse. And the thought of taking 2 years to move away 
to another city and go to business school, and after that, how 
was I supposed to get a job? Would we be separated for even 
longer? And so, ultimately, after a lot of soul searching, I 
decided I am just going to skip business school and dive 
straight into entrepreneurship, and just try to figure it out 
myself.
    I attended Boots to Business a few months before separating 
from the Air Force, because a lot of my friends in the military 
had recommended the program to me. While I was already well on 
my way in my entrepreneurial journey, the course validated many 
of my early decisions, and would have been especially valuable 
if I had wanted to raise capital as the course does a great job 
of laying out options for how to raise money from angel 
investors, as well as getting loans.
    Even better for me is that it put me in touch with my local 
Veterans Business Outreach Center, or VBOC, which continued to 
be a resource after Boots to Business was over. For the next 
coming months and even years, I continued to reach out to my 
VBOC representative whenever I had an issue in my business, or 
a big question that I was struggling to tackle.
    In the 4 years since I left Active Duty, I have moved my 
business two times across the country due to the military, and 
my customers have never even known. To be honest, I have grown 
Teak and Twine bigger than I ever thought I would, and have 
done so in the most remote and isolated duty locations 
imaginable. We may not have had a target, but I always had a 
local VBOC representative that I knew I could reach out to.
    My business allowed me, even as a military spouse, to build 
a career that I absolutely love, and I am so grateful that I 
wasn't able to pursue my first choice. Even better, everywhere 
I have been, I have gotten to hire from a group of the most 
hungry and talented and incredible people, the military spouses 
that are stationed at the same duty location as me.
    For many of the military spouses I have talked to, being a 
military spouse means giving up completely on their career 
ambitions. Frequent moves to remote locations make it hard to 
establish what many of us think of as a real career. I see 
entrepreneurship as the secret weapon for military spouses. It 
is a way to create something that can support your family, give 
you flexibility you need during deployments, give you the 
freedom to do something that you love, and it moves with you 
when needed, and even allows you to give back to other military 
spouses. It is an incredible career that is open to anyone, no 
matter where you are.
    The Boots to Business program is vital to giving military 
spouses the resources, information, and the foundation they 
need to unleash the amazing possibilities of entrepreneurship. 
Thank you so much for the opportunity to speak today.
    Chairwoman VELAZQUEZ. Thank you, Ms. Hart.
    Ms. Sayles, you are recognized.

                   STATEMENT OF LAURIE SAYLES

    Ms. SAYLES. Good morning, Chairwoman Velazquez, Ranking 
Member Chabot, and members of the Committee. My name is Laurie 
Sayles. I am a veteran who served 10 years in the United States 
Marine Corps and the owner of Civility Management Solutions, a 
professional consulting company supporting government as well 
as commercial.
    Civility provides various professional services, training, 
and support for Department of Homeland Security, HHS, Air 
Force, Army, NASA, GAO, as well as the Department of Veterans 
Affairs, also on both prime and subcontracts. Civility has 
clients, thanks to the contracting programs through both the 
SBA and the VA. I am a verified service-disabled veteran owned 
small business, SBA certified economically disadvantaged, and 
woman-owned small business, and certified 8A.
    I, like many, have my share of experiences with both SBA 
and the VA to acquire the proper certifications. Thus, my 
testimony today will address the requirements of the veterans 
programs with the hope of providing recommendations to the 
Committee that will assist and enable the SBA to obtain the 
desirable outcomes for veteran business owners.
    I have always been an entrepreneur, and I have tried many 
ventures from an early age. Thanks to the Marine Corps, I 
increased in leadership, integrity, teamwork and being 
steadfast, which is essential in entrepreneurship. I also 
earned respect as an African American woman in a man's world 
and now am an outspoken advocate, actively involved in Vet 
Force and WIPP. As an officer on Vet Force, I have heard the 
frustrations of many veteran small business owners regarding 
certification and contracting opportunities within the VA.
    For many veterans, returning to civilian life can be 
difficult. It is a process, and it takes time to adjust. We 
depend upon the VA for all of our benefits, and we need them to 
operate in excellence as we were trained to do.
    However, the confusion of acquiring a verification from the 
VA, while being able to self-certify with the SBA is baffling. 
The issue is that the two agencies have different definitions 
and standards of control.
    For example, we have seen the VA require that a veteran 
exercise with absolute control over the business. Meanwhile, 
the SBA recognizes non-veteran owners as having a say over some 
matters of the business. Recently, the SBA spearheaded efforts 
to address this, and several other issues, by publishing rules 
on September 28, 2018 which require service-disabled veterans 
work at their company during normal business hours, and this 
leads to a rebuttal presumption that veterans are not actually 
in control. The SBA would also prefer veterans work closer to 
their headquarters, or job sites as published rules mention 
that if a veteran is not located within a reasonable commute to 
the company, there is a rebuttal presumption that he or she 
does not control the firm.
    For most veterans who may have hoped that using the SBA 
regulations would eliminate some of the more cumbersome VA 
requirements, the SBA's adoption of those requirements may be 
disappointing. Since the SBA has both the specialty and 
expertise in developing, certifying, and maintaining their 
programs, it was never clear to me why the VA manages small 
business verifications for veterans.
    While attending my third Vet Force meeting, I inquired 
about why would I focus on being verified by the VA if the Vets 
First program was not applicable at all Federal Government 
agencies, especially since most of the attendees were 
complaining about its difficulty. To keep it simple, the VA 
should do what they do for veterans, and that is care for our 
benefits, and the SBA should do what they do for small business 
owners, and that is provide us with certifications, training, 
and resources.
    The newly appointed VA Office of Small Business Development 
Utilization Leadership announced an effort to create a pilot 
program for women veterans as they have realized a shortage of 
women veterans participation in VA contracting awards, because 
since the institution of the Vets First program, the VA's 
women-owned small business goals have not been met.
    While H.R. 190 was a great step in its passage in the 
House, it is my recommendation that Congress put also economic 
and earned status veterans contracting programs on equal 
footing. One group should not have a variance over another. The 
work should be on the business owner to market their companies, 
offerings just like 8A companies, and deliver the offerings 
timely, and at the best cost.
    The VA continuously meets the goals of service-disabled 
veterans, basically due to the Vets First program, but as we 
see the growth of more veteran small business owners, the value 
of all Federal agencies, at least meeting the 3 percent goal, 
may be possible once the SBA has the oversight of the VA 
verification.
    I urge the Committee to ensure that we make the contracting 
program a priority, and strengthen the veterans small business 
program so that we have the ability to grow. That concludes my 
testimony, and I am happy to answer any questions.
    Chairwoman VELAZQUEZ. Thank you to all the witnesses. I 
recognize myself for 5 minutes. After listening to you, I 
believe that the committee is on the right path to harmonize 
programs that have been put into law to help veterans, 
especially those returning or transitioning from military 
service to civilian life, and our role here is to help you 
realize your dreams and aspirations.
    I would like to hear from you in your own words why it is 
so important that we codify the Boots to Business program? Mr. 
Leghorn.
    Mr. LEGHORN. Thank you for your question, ma'am. The 
American Legion supports Boots to Business, and because we 
support robust transition programs in general, I mean, it takes 
the military years to train someone to become a servicemember, 
but they expect a week of transition courses to suffice when it 
is time for reintegration in the private sector. You know, Mr. 
Davidson's story of his transition is a prime example of 
everything that the Army could have gotten wrong.
    The American Legion is committed to any additional 
resources we can give to servicemembers as they transition to 
put them on better footing and to prevent another instance 
where a servicemember has to endure something like Mr. Davidson 
has gone through.
    Chairwoman VELAZQUEZ. Mr. Davidson. Thank you.
    Mr. DAVIDSON. Thank you, Ms. Chairwoman. Boots to Business 
is important because having seen it after the fact and not 
having the ability to go through it the first time and then, 
you know, having been afforded that opportunity, it levels the 
playing field in a sense. It gives the servicemember the 
ability to understand what they are in for, if they are going 
to go down the path of transition with regards to 
entrepreneurship. It is very important. It may not be the full 
toolbox that they need, but what it will do is give them pause 
and establish a baseline for them to understand this is what is 
required if I am going to go down this path of 
entrepreneurship. I can start my plan now. If it is 24 months 
prior to when they are leaving the service, it is very 
important, because they get to see exactly what is required 
with regards to just the lift of it, right, to build the 
business plan, to go ahead and look at what the assets are that 
they have to acquire, to understand what access to capital is. 
To go through that curriculum, they understand that part, and I 
think that is a very important piece.
    So with Boots to Business, absolutely. That is why it needs 
to be codified, because if you give them that opportunity, and 
they are able to see it and have that type of lead time, it 
will absolutely make a difference in their life with regards to 
the path they choose with transition. And transition is hard 
enough as it is, but at least let's have them be able to lay a 
plan with educated, you know, responses that they can, you 
know, have access to.
    Chairwoman VELAZQUEZ. Thank you.
    Ms. Hart.
    Ms. HART. I think the Boots to Business program is so 
valuable because you have so many questions when you are 
starting a business. You just really don't know anything, and 
it is also this time in your life that you could really go into 
a huge amount of debt without moving in the right direction. So 
the last thing that I would want to see is military members 
trying to transition out, acquiring a ton of debt for a 
business that hasn't been thought about correctly, where they 
have issues with product market fit that they haven't thought 
of.
    So it is this way where you can kind of--if you already 
have an idea, you can solidify your idea and get the resources 
you need to be heading in the right direction without wasting 
time or money. And if you are not sure if entrepreneurship is 
right for you, then it has a great portion at the beginning of 
the course where you can kind of have this gut check to see if 
it might be a good fit for you.
    Chairwoman VELAZQUEZ. Thank you.
    Ms. Sayles.
    Ms. SAYLES. Ma'am, when I got out, it was not offered. No 
training was being provided. It would have been wonderful to 
have the opportunity, to have that opening. When I joined the 
Marine Corps, I was 21. I had already done several 
entrepreneurial journeys before I even joined the Marine Corps. 
College was not an option for me in my mindset, off the top; I 
was accustomed to making my own money as an independent woman.
    However, the Boots to Business program has allowed veterans 
now to get out, military personnel to get out and get opened up 
to what is available to them. I went from being a receptionist 
after leaving Active Duty in the Marine Corps, being a Staff 
Sergeant leading people in order to enter into the corporate 
America world. Secretary, admin assistant, operations manager, 
program manager, before I became President and CEO of Civility 
Management Solutions. That was a very long journey, and it 
would have been nicer to have some support along the way prior 
without wasting 20 years of my time at that time. Thank you so 
much, ma'am.
    Chairwoman VELAZQUEZ. Thank you.
    Maybe any of you could answer this question, or comment on 
it. We know how many veterans are coming back from Iraq and 
Afghanistan, and yet, what we have seen recently is a decline 
in entrepreneurship among veterans. Do you have any insight--is 
there is any underlying reason? What more can we do when we 
have programs like this, and we are going to take action to 
codify the program and to make it easier for veterans to access 
those type of entrepreneurial programs? Do you have, or do you 
know of any facts that are related to the issue of the 
declining of entrepreneurship among veterans?
    Mr. LEGHORN. Thank you for the question. I will try to 
answer it. I believe the reason we saw a dip in veteran startup 
is because we are still kind of climbing out of the recession. 
And as the economy gets better within the coming years, I think 
we are going to see an uptick in veteran entrepreneurship in 
general.
    Mr. DAVIDSON. I agree with Mr. Leghorn with regards to the 
recession, but the other thing I do see, and it is somewhat 
anecdotal. In working with a lot of young veterans as they 
transition out now and what we have been doing, a lot of times 
I hear things like, and it might also be related to the 
recession, is they have trouble with access to capital. They 
have trouble with actually understanding most of the process. 
They say Boots to Business is a great start for them, but they 
also feel like there is still a convoluted process on the after 
part of that. So once they transition out, for some reason, 
they are not connecting to the programs that are available to 
them to help them continue on in all those difference types of 
programs.
    Chairwoman VELAZQUEZ. Thank you. My time has expired. I 
recognize the Ranking Member, Mr. Chabot.
    Mr. CHABOT. Thank you, Madam Chair.
    Before asking questions, I just want to, again, thank all 
the panelists for their service. We really do appreciate that, 
and thank you so much for that.
    This Committee is always evaluating whether the SBA's 
programs are effectively and efficiently meeting the needs of 
the small business owners that they are intended to help. Mr. 
Leghorn, in your testimony, you stated the Guard and the 
Reserve have transitioned from a strategic Reserve into an 
operational force. With this in mind, does the SBA military 
disaster loan draft legislation that we are working on better 
align with today's military forces as they currently exist? Is 
that your understanding?
    Mr. LEGHORN. Congressman Chabot, thank you for your 
question. We absolutely think that this is a step in the right 
direction. Over the years, we have been using Guard and Reserve 
components like we never have before in terms of the tempo of 
their deployments, and you know, they have become an integral 
part of our Armed Services and national defense at this point, 
and just across the board, we need all the programs to catch up 
to that. And so, we appreciate everything you folks are doing 
to improve that for the servicemembers.
    Mr. CHABOT. Great. Thank you very much.
    Mr. Davidson, could you talk a little bit about how 
important it is for programs, and we have discussed it to some 
degree already, the Boots to Business, to be exposed to 
separating servicemembers early in the process?
    Mr. DAVIDSON. Yes, Congressman. So I would say that it is 
kind of like a wide range of the importance of programs. I 
think Boots to Business is very important, but I also believe 
that we need to also push the curriculum with regards to how 
they network and mentorship pieces with regards to how they are 
developing those networks with entrepreneurship.
    So there is incredible programs out there that are free, 
non-profits, you know, whether it is--I mean, we could run the 
gamut, American Corporate Partners. That is probably the best 
known one out there, and that is staged for people who are on 
Active Duty?
    But I think that is one of the things that I believe that 
is one of the items that if not missing, it needs to be pushed, 
is that they need to be able to understand the social part of 
the network. They need to be able to have that mentorship with 
regards to how they actually reach and interact with 
individuals and work that part, and that is something that 
especially, again, interacting today with most people, those 
types of programs have to be integrated.
    Boots to Business, great baseline, absolutely, but then you 
have all the other, I would say, aspects that need to be kind 
of combined, because I think Boots to Business is a great 
program, but everything we know can always be improved.
    So, I always think there is a 2.0 and a 2.1 and a 3.0 that 
is going to be out there, that you have to take these other 
programs that are very important parts of that entire process. 
Even if it is not entrepreneurship, it is something else, they 
still have to understand how to network. They still have to 
understand the importance of mentorship and things of that 
nature, so I think those programs are----
    Mr. CHABOT. Thank you very much. I have got 2 minutes left 
and two questions to go through.
    Ms. Hart, in your testimony you mentioned, again, the Boots 
to Business program, that it does a nice job outlining the loan 
process and how to raise capital. When you were going through 
this process, did you find that accessing capital was 
challenging and any specifics about that?
    Ms. HART. I bootstrapped my business off of sales from the 
beginning, so I thought the information was really helpful, but 
I didn't take advantage of it myself.
    Mr. CHABOT. Okay. Thank you. And finally, Ms. Sayles, 
regarding the VA-SBA Act, do you think housing the 
certification function at the SBA and eliminating the VA's 
separate program will help decrease any confusion and encourage 
more small business owners, women, and veterans to pursue their 
certifications and enter the Federal marketplace?
    Ms. SAYLES. Yes, sir. Without a doubt, it will make a 
difference because currently, the certified.SBA.gov website has 
done an outstanding job in general for us. I am a woman-owned 
small business as well, and just because I am also certified as 
an 8A, a lot of the questions that were requested previously 
from self-certifying myself as a woman-owned was no longer 
necessary, because they already had the information.
    So in the end, it was a good possibility that it will 
eliminate many of the questions that the VA is asking us within 
the SBA because they will have all the required documents 
previously from other certifications. The only thing they will 
really need is a DD-214.
    Mr. CHABOT. Thank you very much.
    And I have got 13 seconds left, so in that time, I just 
want to, again, thank you for your service. We really do 
appreciate it, and yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back, and now we 
recognize the gentlelady from Iowa, Chairwoman of the 
Subcommittee on Rural Development, Agriculture, Trade, and 
Entrepreneurship, Ms. Finkenauer.
    Ms. FINKENAUER. Thank you, Chairwoman Velazquez. And I just 
want to, again, say thank you all for being here today, thank 
you for your service, and thank you for your advocacy as well. 
This is just an incredibly important hearing to be having, and 
I am very supportive of the Boots to Business program, and to 
hear your perspective is invaluable, so thank you.
    And one of the things--I am going to take it in a little 
bit different direction, you know. I know we are working to 
create an environment that helps veteran entrepreneurs succeed, 
but weeding out fraud also should be part of the conversation. 
We hear about predatory lenders and dishonest vendors, but our 
veteran entrepreneurs also face other sources of fraud we need 
to be paying attention to as well which was very much brought 
to my attention, you know, since my time in Congress, but 
before this as well.
    And even, you know, this Monday, I was with a veteran in my 
home district at a press conference about something that he 
went through himself, you know. Jeff was, again, a veteran in 
my district, who was actually defrauded by a dishonest 
university. He attended a for-profit university, ITT Technical 
Institute, in pursuit of a bachelor's degree that he hoped 
would further his career and give him the skills that he 
needed, and he worked hard, and he did everything right.
    His story is absolutely heartbreaking. He did everything he 
was supposed to do, and then the school actually closed right 
before he was completing his last course that he needed to 
graduate. Now, you know, he is stuck with thousands in debt. He 
is struggling to get the relief that he deserves, and actually 
is spending time and resources he could have used to further 
his business aspirations.
    And today, actually, I am working with some of my 
colleagues to introduce the Relief for Defrauded Students Act 
of 2019. This bill would help folks like Jeff who are lied to 
about the training they would receive, and how much they would 
pay and whether their credits would be recognized. The 
Department of Education actually has rules on the books already 
to cancel the Federal loans of students who were defrauded by a 
university but is actually not enforcing those rules, 
unfortunately. So this bill would actually require the 
Department to follow through on the obligations and codify 
that.
    We know right now there is 158,000 veterans and student 
borrowers in the exact same situation as Jeff who are waiting 
for the Department to act. In fact, I mean, some of the stories 
we have heard, we have had predatory for-profit universities 
going and talking to our Marines who have had brain damage or 
traumatic brain injuries, knowing that they wouldn't even be 
able to complete the courses but getting them to sign up.
    I mean, these are the types of stories we have heard. They 
are heartbreaking. It is not how our country should be working, 
and we need to get that relief to the folks who deserve it and 
need it.
    And what I am wondering, you know, what would that relief 
actually do? I mean, Jeff himself is sitting--I think he said 
$15,000 in Federal student loans that could be canceled, and 
should be canceled, because of the rules we already should 
have, we do have on the books that are not codified yet and are 
not being enforced. What would that mean for somebody who is 
wanting to start their own business to have that relief? Mr. 
Leghorn, would you be able to touch on that?
    Mr. LEGHORN. Sure. Thank you for your question. Having 
$15,000 in the pocket when you are looking at starting a 
business is a windfall, and one of the good things that Boots 
to Business does is it helps you identify whether there is--it 
makes you do market research and helps you identify if your 
product is actually needed, so it guides you in how you spend 
that money. So going back to your question, yeah, that would be 
wonderful.
    Ms. FINKENAUER. Anybody else want to touch on it all? I 
know I am about out of time.
    Mr. DAVIDSON. Thank you for the question. Again, I echo his 
sentiment. I mean, if we have--and I am sure everybody knows, 
especially if you bootstrapped your business from your own 
generated sales. If you can avoid having $15,000 in debt, that 
is a significant issue with access to capital, as we know, and 
that actually leads to additional predator lending practices, 
because what will happen is you have to go to high-risk lenders 
that will take absolute advantage of you at APR rates, you 
know, loan rates that are beyond belief which we see all over 
the place. They claim they are veteran-friendly, but we all 
know where they are actually--what their rates are and how they 
are getting that claw back from individuals.
    So it does put you in a significantly, you know, 
unfortunate position, because in order to get the business off 
the ground, if you don't have the ability to kind of bootstrap 
and then build your sales, you are going to wind up with those 
predatory lenders, unfortunately. So, yeah, I think that that 
is a great way to be able to alleviate that type of stress-
related access to capital and debt.
    Ms. FINKENAUER. Thank you, Mr. Davidson. I know we have a 
few more seconds. Ms. Sayles or Ms. Hart, do you have any 
comment?
    Ms. SAYLES. I actually don't have much of a comment 
regarding fraud on that matter, but I do want to talk about 
subcontracting, which is also in the way of fraud, to the point 
that what needs to actually happen is that the Federal 
Government should become a little bit more responsible to 
helping the new small businesses on any subcontract work that 
you have so that if you are removed from the contract and 
receiving zero dollars of revenue from helping a prime get a 
contract, then there should be some action within the Federal 
Government, specifically the Office of Small Business. They 
should be able to be able to support you during that time.
    Ms. FINKENAUER. Got it. Thank you all so much and thank you 
all for being here again, and thank you for your service. This 
is a great hearing to have. I yield back.
    Chairwoman VELAZQUEZ. The gentlelady's time has expired. 
Now we recognize the gentlelady from American Samoa, who is the 
Vice Ranking Member of the committee, Mrs. Radewagen, for 5 
minutes.
    Mrs. RADEWAGEN. Hello, friend. Good morning. I want to 
thank Chairwoman Velazquez and Ranking Member Chabot for 
holding this important hearing today, and I particularly want 
to thank you all for joining us today with your important 
information.
    I am proud to represent American Samoa, which has the 
highest enlistment rate out of any State or territory in the 
United States, and also proud and humbled to be Vice Ranking 
Member. Ensuring that veterans have the opportunity for 
economic advancement after serving our country is one of my top 
priorities, and we have some very successful veteran-owned 
small businesses in American Samoa.
    So my time is short, but my first question is for the 
entire panel. Can you describe if the current two-system 
structure at SBA and VA causes problems among contracting 
officers in choosing to award contracts with veteran-owned 
small businesses? In other words, are contracting officers 
declining to award contracts to veteran-owned small businesses 
because of the confusion arising between the two existing 
programs? Mr. Leghorn.
    Mr. LEGHORN. Thank you for your question. So with regards 
to contracting officers and how they award contracts, 
currently, there is only one front end certifying system, and 
that is at the VA, and only for a limited scope, and it is only 
used at VA for one program. And, so, if you are a contracting 
officer at another agency, usually your job requires you to 
verify that an SDVOSB or a VOSB is who they say they are 
yourself. But it is a shortcut for you to just straight up ask 
them are you certified by VA CVE. And this causes a lot of 
problems and confusion with veterans because veterans don't 
realize that to do business with the Federal Government, they 
only need to be self-certified. But for the purposes of Vets 
First, they need to be CVE certified. I hope that answers your 
question.
    Mrs. RADEWAGEN. Mr. Davidson.
    Mr. DAVIDSON. Thank you for the question. I also echo Mr. 
Leghorn's sentiment. The confusion is just that. The reality is 
that there are two sets of rules, and they are often asked that 
question: Are you CVE certified? And I know people who 
absolutely do not do business with the VA but they do business 
with 15 other agencies, and they don't require the CVE, and 
they say no. In some cases, after they have done market 
research, they are passed over for those types of 
opportunities. I have actually had those unfortunate 
conversations with vendors. So yes, it does cause confusion 
because they don't answer it the right way, and they say well, 
I am not because I don't do business with the VA. I do business 
with the Department of Defense. I do business with the 
Department of Homeland Security and everybody else, so I never 
felt the need to be CVE certified. So that does cause that type 
of confusion and unfortunately can cause issues with business. 
Thank you.
    Mrs. RADEWAGEN. Ms. Hart.
    Ms. HART. I am not the best person for this one. Thank you.
    Mrs. RADEWAGEN. Ms. Sayles.
    Ms. SAYLES. Yes, ma'am. I was biting at the edges here to 
have a comment about this. I love your country, by the way, 
your part of our world.
    Now, I can say that contracting officers have an issue with 
providing contracts to veterans outside of the VA specifically 
because of some of the way the rules are set up where you have 
to have two or more in order to be able to provide them for the 
SDVOSB set aside where that doesn't apply so much to the 8A 
opportunity. And as a woman that has worked with about 128 
employees, $11.5 million in revenue for another woman-owned 
small business before I started mine, and people knew me, my 
reputation was there, my work performance was there, but they 
were not able to access Civility Management Solutions through 
me being a service-disabled veteran owned small business. And I 
was a little disheartened with the fact that that program 
really doesn't have strength to it as 8A does.
    Mrs. RADEWAGEN. Thank you, Madam Chairwoman. I yield back.
    Chairwoman VELAZQUEZ. The gentlelady yields back, and the 
gentleman from Maine, Chairman of the Subcommittee on 
Contracting and Infrastructure, Mr. Golden, is recognized for 5 
minutes.
    Mr. GOLDEN. Thank you, Madam Chair. The first thing, Mr. 
Leghorn, I wanted to welcome you here, and thanks to all of you 
for your service. But Mr. Leghorn, I want to let you know I am 
a member of the Corey Edwin Garver American Legion. We call it 
the Mighty Post 202. It is where the new State commander for 
Maine comes out of, so you should look him up. A great guy and 
pretty active, I think, on the national level.
    So I just wanted to ask you to make sure I understand your 
testimony that you think that the VA's certification process 
where they are making sure that businesses are what they say 
they are, you know, before awards are contracted, the VA's 
process is preferable, but that you do want to see that process 
adopted by SBA, and then have SBA take the lead on CVE as an 
example.
    Mr. LEGHORN. Yes. That is exactly what we are saying. We 
absolutely want that process to move over to the SBA and sunset 
self-certification, because, again, just having two certifying 
processes is not only confusing to contracting officers, but 
veterans seeking certification as well.
    Mr. GOLDEN. So go with the SBA as the lead but have them 
adopt the VA process?
    Mr. LEGHORN. Correct.
    Mr. GOLDEN. All right. Thank you. I just wanted to make 
sure. I appreciate that.
    Ms. Hart, I wanted to ask you. You, I think, talked about 
how you were connected with a Veterans Business Outreach 
Center. How close were you to that business outreach center? 
Was it close to where you were living? Was it far away? Could 
you talk a little bit about that experience?
    Ms. HART. Sure. So when I started Teak and Twine, I was in 
Destin, and they were an hour away in Panama City. So I did go 
and visit a couple times, but most of the answers they provided 
were over the phone. When I moved to New Mexico, they were 
hours away, and they were still able to be helpful, just over 
the phone.
    Mr. GOLDEN. All right. That is reassuring to hear. The 
closest one we have is in Rhode Island, which is a ways away 
from Maine, so I have always been a bit concerned by that, but 
it sounds like you feel like a lot of what they do can be done 
over the phone, and by email, and social media.
    Ms. HART. I do think that the VBOC would be--their services 
would be improved by going to bases on a regular basis, and 
establishing a program where there is kind of a community 
element to it, and a mentorship element to it. You can reach 
out to the VBOC, but we all know that sometimes you just need 
people to come to you, and so I do think that it should be more 
localized. If they are not traveling, then there needs to be 
someone closer.
    Mr. GOLDEN. And whenever possible, the presence near bases 
is what you are saying.
    Ms. HART. Right, or even a non-VBOC person on that base who 
is kind of a rep, like a business owner who is further down the 
line, just happens to be stationed there. They could foster a 
community there, not necessarily being part of the VBOC.
    Mr. GOLDEN. Yeah. That is helpful.
    Mr. Davidson, this is kind of off topic, but I wanted to 
ask you. You went through a MEB. Did you get some kind of 
separation payment as part of your medical separation?
    Mr. DAVIDSON. Thank you for the question. I was medically 
retired, so I did. So, I mean, I eventually--in a perfect 
world, DFAS works at the speed of business, but it didn't.
    Mr. GOLDEN. It didn't.
    Mr. DAVIDSON. And I eventually did start to get my pay.
    Mr. GOLDEN. I am actually curious if you came across any 
issues later down the road with VA and the disability rating 
and a lump sum payment there being offset in some kind of 
clawback?
    Mr. DAVIDSON. So there wasn't--so the interesting thing, I 
was rated, you know, by the Physical Disability Evaluation 
Board first so I have a rating from them, you know. The MEB 
does its process, and you go to the disability evaluation 
board. I have the rating from them, and they retired me, so I 
didn't go to the VA until a very long time after, because I was 
already retired, and I didn't look at it. And when I did that, 
yes, there was a part of an offset, but as you know, because if 
it is related to a combat injury, if you are retired, you are 
exempt even from the military retirement, not the VA. We know 
the VA is tax-free, but my regular Army military retirement, I 
do not pay taxes on that. So that has kind of helped, I think, 
with the alleviation of things, and they kind of got that, but 
no. There was hiccups up and down that lane, and I did have to 
work with DFAS for a very long time to correct a lot of those 
issues.
    Mr. GOLDEN. Yeah. I have just come across some veterans 
that have found themselves in some pretty tough places and 
didn't understand what was going to happen to them, and so they 
weren't prepared for it when it came.
    Mr. DAVIDSON. I wasn't, but I will say that I did find 
people, especially with the Wounded Warrior transition type 
group that did help tremendously, and they did work very hard 
in order to help me, but again, it did take a long time.
    Mr. GOLDEN. All right. Thank you very much. I yield.
    Mr. DAVIDSON. Thank you.
    Chairwoman VELAZQUEZ. The gentleman yields back, and we 
recognize the gentleman from Mississippi, Mr. Kelly, for 5 
minutes.
    Mr. KELLY. Thank you, Chairlady, and thank you, Ranking 
Member, for holding this very important. I want to thank each 
of you witnesses, first of all, for your service in uniform to 
this great Nation; and second, I want to thank you for coming 
here and taking time to give your testimony; and I also want to 
thank you for supporting my bill, the VA-SBA Act.
    As we have heard today, the VA proactively verifies 
service-disabled veteran owned small businesses, while the SBA 
allows business owners to self-certify. This process creates 
inconsistent outcomes, such as businesses qualifying as a 
service-disabled veteran business for VA contracts, but not 
other Federal agency contracts or vice versa.
    While the SBA certified business awards are subject to 
scrutiny, the lack of front-end verification also leaves the 
door open for fraud and abuse. We have already made significant 
strides in the right direction. The National Defense 
Authorization Act for fiscal year 2017 has struck at SBA and VA 
to unify the definitions for service-disabled veteran owned 
small businesses, and begin moving regulatory responsibilities 
from the VA to the SBA.
    President Trump's reform plan for the Federal Government 
released last year cited the need for a one-stop shop for small 
business Federal procurement programs. The SBA has already made 
headway through the launch of their website certified.SBA.gov, 
and we are committed to working with them to see it through. 
The VA-SBA Act marks the next significant step towards 
unification of the two programs under one umbrella. At the SBA, 
and as Ranking Member Chabot mentioned earlier, will reduce red 
tape and confusion for veteran small business owners.
    I also serve as the Ranking Member on the Military 
Personnel Subcommittee of the Armed Services Committee. We work 
very hard on many of these issues on that Subcommittee, and 
passed down a nonpartisan through the mark. I am on that 
Subcommittee with Chairwoman Speier. We focused on soldiers and 
sailors and airmen and Marines transitioning to business when 
they leave the service, assistance to spouses who have to move 
quite frequently and to do things that help them to perform a 
career as opposed to just a job at a base moving to another 
job, things that would do that.
    Some of those things are, like, certificates, so they cross 
State lines and that they are able. We also focused on day care 
and many of those things that are issues for our soldiers. We 
will continue to focus on that. This Committee, Small Business, 
is very bipartisan in nature, and I thank the Chairwoman and 
the Ranking Member for making that both last term and this term 
in Congress. We will continue to look for solutions for our 
veterans because it is very, very important.
    I also am very focused on surviving family members, 
especially those Gold Star family members, and there are 
several issues that cross those lines when a veteran dies. I 
have a veteran small owned business, how we transition, and 
make sure that we don't take it away from those spouse and 
children because they are not a veteran. Because you guys all 
know, especially you, Ms. Hart, that the family members serve 
also. My wife has served all 33 years with me, and it is 
probably been harder on her than it has me, and so we have a 
responsibility to those spouses and those children, especially 
the Gold Star members who we lost in combat, but for all 
veterans who pass on.
    So with that, Mr. Leghorn, just very briefly, are you 
familiar with H.R. 499, and do you have any thoughts on the 
bill, whether you think that treatment of surviving spouses of 
service-disabled veterans small business owners with the SBA in 
extending the program to take them when they pass on? Do you 
have any experience with that, Mr. Leghorn?
    Mr. LEGHORN. Congressman Kelly, thank you for your 
question. You know, it is funny you mention that, because the 
American Legion actually has a resolution that supports 
allowing Gold Star spouses to take on the certification, the 
SDVOSB certification of their deceased spouse, so we would 
absolutely support something like that.
    Mr. KELLY. You know, and that is just an area--I think 
sometimes we lose sight of the spouses, and their opportunities 
and professional careers are set on the sideline so that our 
soldiers and sailors and Marines can go forward and do their 
jobs. And so, I think we need to look at some SBA things that 
help those surviving spouses and also actual spouses to do 
that. And with that, Ms. Chairman, I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back, and now we 
recognize the gentleman from Colorado, Mr. Crow, who is the 
Chairman of the Subcommittee on Innovation and Workforce 
Development.
    Mr. CROW. Thank you, Chairwoman, and thank you to all of 
you for your testimony and your leadership. I really appreciate 
it. This is helpful hearing from all of you.
    One of the most common things that I hear about from 
veterans in my community is this chicken-or-egg problem about 
having to have a track record before being able to access 
capital and secure loans. And, of course, they say, Well, how 
do I get the track record if I don't have the money to start my 
business?
    So, I would love to hear from you on any additional things. 
I know there was some discussion earlier. Several of you 
mentioned this in your opening statements. I would love to have 
any additional thoughts or ideas on this. And Ms. Sayles, I 
would love to start with you.
    Ms. SAYLES. Thank you so much, sir. As far as having past 
performance, which is what determiners in the Federal 
Government space, hence, the whole thing about subcontracting, 
the Federal Government advisors, PTAC advisers, VBOC, anyone 
that you are actually going through with your training, VIP, 
Veterans Institute for Procurement, by the way, they also would 
advise us to start with subcontract opportunities in order to 
get past performance. If you don't have past performance, then 
you are not going to have opportunities within the Federal 
Government. And here is why some of the rules and regulations 
need to be stricter when it comes to being a subcontractor 
within the Federal Government holding the prime responsible.
    As far as capital, without a doubt, and as a woman as well, 
there is a lot of difficulty when obtaining capital. I was 
fortunate to be attached to WIPP, Women Impacting Public 
Policy, and they advised me of someone that has actually done a 
lot of advocacy work to help us as women as well as veterans 
and as minorities being able to obtain capital. I was just 
fortunate to have that connection, but many people are 
struggling with that.
    Ms. HART. I thought this was one of the places where Boots 
to Business really excelled. They went through many different 
resources available between loans and getting investors. I 
mean, as high level as, like, venture capital firms they even 
talk about. I ended up renting out a guest room in my house on 
Airbnb, and starting that way and then bootstrapping the rest 
of the way, so kind of being creative. But I think that there 
is definitely kind of a romancing of, like, starting on credit 
cards, and then, you know, your business is just going to do 
really well and come in and save the day. You hear that story 
over and over from really big companies now, that that is how 
they started. They maxed out a couple credit cards, and so that 
is what they hear. And so having someone tell you that that 
definitely isn't the way to go is also helpful.
    Mr. DAVIDSON. I think it sets the stage, unfortunately, for 
what we talked about earlier, predatory lending practices, and 
a lot of people we have seen, especially in the space in 
working with veteran entrepreneurs, I have seen people, 
specifically organizations focus on veterans and claim veteran 
friendly because they know they are actually somewhat of a 
vulnerable population because they are in a very stressed 
situation when you are transitioning.
    And when someone entices you with Hey, I am going to give 
you $25,000. It is going to be a high-risk loan. I am going to 
put you at 22 points, potentially, at APR. You are going to 
take it. But that is where I think it is important that the 
education process is there for these veterans and these 
servicemembers, so they understand that. So I think it is a 
significant problem. I hear horror stories, and I am 
considerably worried about that because the practice continues. 
And just like Ms. Hart had said, you hear these stories about 
credit cards and things of that nature. I see on the other side 
where there are a lot of these predatory lenders out there that 
are under the guise of being veteran-friendly, and they are 
targeting that population. And we have seen it time and time 
again with incredible rates that put them at significant 
disadvantages with regards to being able to advance their 
business as they start to even grow it.
    Mr. CROW. Thank you.
    Mr. DAVIDSON. Thank you for the question.
    Mr. LEGHORN. Congressman Crow, I think what you said in the 
beginning was absolutely true. You have got to have money to 
make money, but you also need money to just even borrow money, 
because what we have seen with either private equity banks or 
anything else, if you are looking for money to scale, you need 
collateral, and that is something that transitioning 
servicemembers do not have, because the military lifestyle, the 
nomadic nature and the unpredictability, it is not conducive to 
amassing collateral for when you need money later.
    So one of the things I was thinking that we can do is to 
administer Boots to Business earlier in a servicemember's 
career, to get them thinking about entrepreneurship, letting 
them know early on that if this is a path that you want to go 
down, that you need to start amassing collateral early in your 
career.
    Mr. CROW. That is helpful. Thank you.
    Chairwoman, I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back. And now we 
recognize Dr. Joyce from Pennsylvania. He is the Ranking Member 
of the Subcommittee on Rural Development, Agriculture, 
Entrepreneurship, and Trade.
    Mr. JOYCE. Thank you, Madam Chairwoman, and thank you, 
Ranking Member Chabot, for sponsoring this today. This is 
important for us. What you bring to the table, the information 
you bring to us, we all attentively listen to. I am the spouse. 
My wife is former United States Navy. She is a small business 
owner. She also is a member of the American Legion. I look out, 
thank you, and have walked this walk with you. This is so 
important, what information you bring to us here today.
    My first question is for you, Mr. Leghorn. You mentioned in 
your testimony that sometimes the Boots to Business training 
leads to transitioning of servicemember to understand, or 
realize, that it is not the right time or course for them to 
start their business. Do you feel that offering alternative 
vocational and trade training programs for our veterans that 
make that determination could be similarly beneficial for 
transitioning our servicemen and servicewomen?
    Mr. LEGHORN. Dr. Joyce, thanks for your question. I 
absolutely do think that is crucial, and one of the things that 
happened with the TAP revamp that happened with the VOW Act in 
2011 is that they created the transition GPS, which has three 
Capstone courses. One of them is entrepreneurship, known as 
Boots to Business, but there is a vocational training portion, 
and there is also an educational training portion for folks 
that are college bound. So you know, the American Legion 
believes that all three of those Capstone courses should be 
made mandatory during a servicemember's transition.
    Mr. JOYCE. Mr. Davidson, do you feel that vocational 
training also has an importance as we transition, what Mr. 
Leghorn just alluded to?
    Mr. DAVIDSON. Thank you, Doctor. I do, because 
entrepreneurship, of course, it may not be for everybody, but 
that vocational training, I think as we have seen a decline in 
the United States over the years, and I think it is missing. It 
is a very important component to how we grow the economy. I 
think if you do offer those alternatives, because not everybody 
is going to want to own a business, and not everybody is going 
to want to go and be, you know, a program manager or be stuck 
to something that they are not there for. And let's say they 
had some type of vocational skill inside the military, I do 
think it is an important skill that they have the ability to 
explore that type of career and type of additional training. I 
would say not voc rehab, but vocational training.
    Mr. JOYCE. Mr. Leghorn, currently we see workforce 
development as an important need as our economy is booming, and 
we realize that many people who go into heating and air 
conditioning, welding, plumbing can go on and develop their own 
businesses. In your experience, have you seen this occur?
    Mr. LEGHORN. Yes. Absolutely. The American Legion works 
with a lot of feeder programs that gets people scholarships to 
go into the skilled trades, and we hear phenomenal stories 
about people earning a lot of money in the trades because you 
are dealing with jobs that can't be outsourced, you know. You 
can't send jobs of, you know, people coming into your home and 
fixing your dishwasher or air conditioner to another country. 
It has to be done in America, and it has to be done by someone 
you trust, and there is nobody more suited for that job than 
veterans.
    Mr. JOYCE. I think you raise a very important point that 
has not fallen on deaf ears here at this Committee. Your 
service to the United States has been incredible, but your 
insights, what you bring us to the table today, your own 
personal experiences, your development of business as being the 
entrepreneurs, as understanding that what we need is to be able 
to transition from military to the workforce, that has been 
incredible. I thank you all. I thank you for your service.
    Madam Chair, I yield my time.
    Chairwoman VELAZQUEZ. The gentleman yields back, and the 
gentlelady from Kansas, Ms. Davids, is recognized for 5 
minutes.
    Ms. DAVIDS. Thank you, Madam Chairwoman.
    Well, first, I want to thank the witnesses for being here 
today and coming to testify before the Committee and for your 
years of military service. My mom served in the Army for 20 
years, so you know, I appreciate the commentary from multiple 
people about the impact on family members. I mean, I certainly 
was proud to be raised by a strong, single mom who was a Drill 
Sergeant. I have got the pushups to prove it.
    But you know, growing up with a parent in the military, I 
know how hard it can be frequently moving. It can be hard on 
building those personal networks that sometimes people, when 
they go into entrepreneurship, depend on, and also that has 
second- and third-order effects, especially on accessing 
capital and, you know, networks and accessing capital are some 
of the major barriers that veterans face. And even veterans who 
are successful at starting their own businesses can continue to 
struggle.
    A constituent of mine, Mr. Walter Justice, is an Air Force 
Special Forces veteran who was in Vietnam, and owns Tendou 
Martial Arts Academy in Kansas City, Kansas. I am also a 
martial artist, so a special place in my heart for all of that. 
Mr. Justice has been in business for 20 years, and one of his 
main concerns is addressing some of the changing atmosphere 
around marketing, around the technologies that are coming up.
    And I know that hearing some of the comments that you all 
have made, Mr. Leghorn, I thought it was, you know, the idea 
that it takes years to get trained up and then the expectation 
that a week of transition time is enough.
    Can you speak a little bit to maybe the ways that--and 
maybe it is already happening, so I would love to hear more 
about it, but the ways that Boots to Business or some of the 
other SBA programs are helpful in getting veterans up to speed 
or at least knowledgeable about some of the changing landscape 
that we are seeing because certainly I imagine that is 
impacting the businesses that you all are seeing and 
participating in. We will start with Mr. Leghorn.
    Mr. LEGHORN. Thank you for your question, ma'am. One of the 
things that is good about TAP is that I think by law, it has to 
be updated every 2 years. I believe Boots to Business may not 
be on that same cycle, but I think with the current bill, it 
reauthorizes every 5 years, so that would give you folks time 
to make them relook at their curriculum to encompass all the 
advancement that has happened because I mean, I am pretty sure 
everyone here as seen marketing change rapidly within the last 
couple of years from email to digital and content marketing, 
and it is just that that learning curve is huge. I personally 
hear a lot of demand for learning that.
    Ms. DAVIDS. So you are looking at a couple of the other 
programs. There might be some updates that we could do to, like 
a Boots to Business program.
    Mr. LEGHORN. Uh-huh.
    Ms. DAVIDS. Okay. Thank you. And then if anyone else has--
please.
    Mr. DAVIDSON. Yeah. I would just echo that sentiment. It is 
going to be probably solely focused on the social media and 
marketing aspect. We see that a lot of times, and I know Mr. 
Leghorn and I have worked on several different projects. That 
experience needs to be integrated and updated on a constant 
basis, because it can make or break significant businesses. And 
when done well, it is done well. Again, it is not an overnight 
thing, but we have seen significant successes in those types of 
strategies, which I think should be updated and taught and 
improved inside of those TAP programs. Thank you.
    Ms. SAYLES. Yes. I also attended Veterans Institute of 
Procurement in Beltsville, Maryland, which a program that is 
overseen by Barbara Ash in Montgomery County that is 
specifically focused on veterans interested in doing work 
within the Federal Government space, and we are brought in, 
free of charge, as far as our stay and our food. We have to 
just pay for our transportation to arrive. So I think that is a 
great, great program that should continue and be expanded.
    Ms. HART. When I moved to a very rural location, I wanted 
to help other military spouses at that location, and social 
media has been a huge part of growing my business. And I 
thought it would be so cool if I could come into a Boots to 
Business class as, like, a one-hour guest speaker and talk 
about what has worked for me. I went in, and it basically 
didn't work, and so, I think that having something like that 
where you bring in local knowledge would be awesome.
    Ms. DAVIDS. Thank you very much. I appreciate your service 
and your testimony here today. And with that, I yield back.
    Chairwoman VELAZQUEZ. The gentlelady yields back, and now 
we recognize the gentleman from Tennessee, Mr. Burchett, for 5 
minutes.
    Mr. BURCHETT. Thank you, Chairlady, and I appreciate the 
leadership you and the Ranking Member have shown in promoting a 
very good bipartisan working environment for our Nation's small 
business, and I want to thank you for that, ma'am. And I want 
to thank our distinguished panelists today, both for your 
service to our country as members of our military. My dad 
fought in the Corps in the Second World War, and ma'am, his 
colonel was a man named Chesty Puller on an island called 
Peliliu. I am sure you have heard of that. He was the First 
Marine Division and then went on to Okinawa and then went to 
China for a short while to fight the communists.
    My mama actually did not serve technically, but she flew an 
airplane during the war. She had lost a brother fighting the 
Nazis, so my family has a very good history, rich history in 
our military service, and they are both buried at Veterans 
Cemetery, and I am honored to be their little boy.
    But I want to thank you all for what you what you did, and 
I want to apologize to you for some of treatment you have 
received. You took an oath to uphold our Constitution, and we 
made some promises to you all, and frankly, we haven't kept 
them. And dadgumit, it kind of ticks me off, and that is not in 
my notes, but that is just from the heart, so I will get back 
to my notes before I create an international incident and get 
visited by some four star general somewhere.
    But Mr. Leghorn, you state in your testimony that the SBA's 
current disaster loan program has strict eligibility 
requirements for those in our military. How will expanding the 
definition from Active Duty to active service better assist 
those small business owners that have an essential employee 
called up to serve their country?
    Mr. LEGHORN. Congressman, thank you for your question. So 
currently, Guard and Reservists are only eligible for what we 
call MREIDL, the loan program, when they deploy under Title X. 
And the change from Active Duty to active service in statutory 
text will allow, let's say, a National Guardsman that is called 
up by the governor under Title 32 for disaster relief to 
receive that loan, take advantage of that loan. It will allow a 
business who maybe employed several National Guardsmen that 
deployed for that disaster relief to also receive that loan. So 
that is the main gist of what would happen when we change that 
statutory text.
    Mr. BURCHETT. Okay. I am very optimistic that the Patriotic 
Employer Protection Act, which I was happy to work with my 
colleague, Mr. Kim, on will help protect our employees who are 
National Guard and Reservists when they are called upon to 
serve their country. I want to thank you all again for your 
service, and I will not ask any more boring questions for you 
all, so you all can get on some more important things. 
Chairlady, thank you again, ma'am, for your consideration and 
your bipartisanship.
    Chairwoman VELAZQUEZ. Thank you. The gentleman yields back, 
and we recognize Mr. Hern, Ranking Member of the Subcommittee 
on Economic Growth, Tax and Capital Access from Oklahoma.
    Mr. HERN. Thank you, Madam Chairwoman. It is great to be 
here. I thank our witnesses for being here as well. Thank you 
for your service to our country. Like many on this panel, I am 
the son of a 22-year Air Force veteran, 1955 to 1977, so my dad 
turned 84 on the 4th of July, so I can never forget his 
birthday.
    I thank you for being here today and testifying to the 
challenges of transitioning from military careers to a new 
career in a civilian life. As a small business owner for over 
34 years, I certainly know firsthand of how difficult it is to 
become a successful entrepreneur. I also know that veteran 
entrepreneurship is declining, and it can be extremely 
difficult for our veterans to transition from the military into 
a career entrepreneurship.
    Because of this, myself and several of my colleagues 
support the programs, organizations, and people who help 
provide our veterans with the resources they need to start 
their careers and become successful. We actually have 115,000 
veterans in northeast Oklahoma where I serve. In my district, 
this includes organizations and people like Pete Lewiler, who 
was my veteran of the month in March, and Rachel Runfola from 
Oklahoma Veterans Connection, a referral network which assists 
them in finding various benefits; Mark Lownsberry from 
Volunteers of America, an employment service organization which 
helps veterans to find gainful employment; and Jonathan and 
Jessica Shepherd and Stacey Hester from Eagle Ops, an active 
outreach to veterans which provides relational and resource 
connections to veterans, and there are many, many, many more. I 
could spend the rest of my time talking about the wonderful 
organizations that are veteran-led to help veterans.
    My first question as the Ranking Member of the Subcommittee 
as the Chairwoman spoke about, it is my goal to help provide 
access to capital to the transitioning servicemembers who need 
that resource.
    Ms. Hart, in your testimony, you discuss the Boots to 
Business program, and you said it does a good job outlining the 
loan process and how to raise capital. I know you just touched 
on it with Congresswoman Davids, but could you elaborate more 
and describe the challenges you experienced? You started to 
touch on it on accessing capital and how this program helps to 
overcome these challenges?
    Ms. HART. Well, I bootstrapped, so I didn't use any of the 
programs that the business talked about, but I think one of the 
most important things that it does is tells you also bad ways 
to raise money, one of which would be running up credit card 
debt or predatory loans, as folks have talked about. So in that 
way, that was certainly helpful to, you know, steer me towards 
staying very lean and not relying on credit cards.
    Mr. HERN. Sometimes we make the access too easy and create 
bad behaviors that are not conducive to being successful, and 
not only does that not--that happens in the veterans world in 
transition, it happens in the civilian world, and so it is 
great to have organizations that work to help prevent that. So 
it is great to have folks that are sitting on either side of 
you that have experienced things as we go across the veterans 
community.
    Anybody else want to talk about the Boots to Business 
program, because we have talked about it a lot over the past 7 
months in here as it relates to our veterans. Any positives or 
negatives?
    Mr. DAVIDSON. I will just reiterate positives, sir. It is 
just--I think it gives tools and it educates the individuals to 
create a baseline for them to understand what they are getting 
into, and just like with access to capital, making good 
judgment. It will help them foster that good environment to 
hopefully make decisions that will avoid catastrophic mistakes 
with predatory lenders and things of that nature, but also give 
them what the reality of is that it is not an easy thing to 
start a business as yourself knows as a small business owner, 
and that it will help them at least to start to focus on 
structure because going from a structured environment to what 
would be the civilian world of unstructure and building it 
yourself, I think those types of things bring that--Boots to 
Business kind of shows a little bit of a life of reality with 
its curriculum, and it educates the servicemember enough to say 
is this for me, or is it not for me? Or at least it plants a 
seed for them to start to think am I going to be a veteran 
entrepreneur?
    Mr. HERN. Ms. Sayles, that kind of leads me into my last 
question here. What advice would you give this Committee to 
help future veteran entrepreneurs themselves as we aim to 
tackle the issue of accessing capital to finance small 
businesses?
    Ms. SAYLES. I think that there needs to be some information 
in the literature that is shared within the banking industry, 
specifically on finding better means to work with small 
businesses as a whole when they are new. A lot of them are not 
interested in working with you if you don't have $10 million 
revenue, or $5 million revenue, and so that puts us in a 
position where we have to go to alternatives.
    There are definitely alternatives including some non-
profits to get some lending, but most importantly, they need to 
enforce something that will open the doors a little bit more, 
force small businesses to be able to get capital, so they don't 
have to use credit cards.
    And in my case, it was not so much credit cards, but it is 
called factoring in the Federal Government space, and some of 
them can be very much predatory as well. However, I had an 
advocate at the table with me that fought on my behalf which 
made a difference which I know is an exception.
    Mr. HERN. I thank each of you. I am also in the banking 
world, so I know kind of the transition in government 
regulations that have occurred over the last decade, and it 
does make it very difficult for banks to meet some of the 
capital requirements they have in order to work with small 
businesses that don't have a lot of history. So duly noted that 
things we need to work on. Madam Chairwoman, I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back. Now we 
recognize the gentleman from Minnesota, Mr. Stauber, Ranking 
Member of the Subcommittee on Contracting and Infrastructure.
    Mr. STAUBER. Thank you very much, Madam Chair. To the 
witnesses, thank you for your time and attention, and I want to 
thank each and every one of you for your service. That is not a 
cliche that comes, you know, lightly. You have given us the 
opportunity to live in a free country. My wife is also a 
veteran, and she attempted to get a VA loan, and there were 
some difficulties in 2010.
    So you are speaking to a member that has been involved in 
potentially going into small business and having that roadblock 
because as a female veteran, we want our veterans, and in 
particular, our female veterans to have that opportunity, the 
entrepreneurial spirit that you all have, and be successful in 
America.
    I am just--I want to say that I am a co-sponsor of the VA-
SBA Act. I know that you have the--it is going to work. I know 
that we need--there is some tweaks right now, but the testimony 
that I have heard is incredible. And it is so interesting for 
us to hear because many of us on this panel have experienced, 
or been told firsthand there is not a better example than to 
hear it firsthand, and your witnesses have told us some of the 
concerns you have had.
    We are going to make this better. It is our job to make 
sure that our veterans are taken care of during their service, 
and make sure that upon or prior to separation, you have the 
ability to continue living the American dream if you want to be 
an entrepreneur.
    Now, Ms. Sayles, you talked about your leaving and going 
into a position that you did. Was it the desirable one at that 
point? I want to tell you that to have the VA-SBA Act go 
through, it is going to give you all the opportunity and future 
veterans the opportunity to succeed.
    I am proud to be a member of the Small Business Committee 
on Subcontracting and Procurement. It is an extremely important 
that as Member Hern said, that the financial part of it is 
available. You shouldn't have to climb over mountains to be 
given that opportunity to get lending your way. I am excited to 
be able to move this forward. And I don't really have any 
questions, per se, because many of them have been asked.
    As a member, one of the last to speak, I mean, I think that 
it is important that we thank you for your service. Thank you 
for being witnesses today and know that the Small Business 
Committee is here to represent you. And I am looking forward to 
this Act going through, and thank you once again.
    Thank you, Madam Chair, and I yield back.
    Chairwoman VELAZQUEZ. Thank you. And the gentleman yields 
back. We are going to go into a second round of questions, and 
I will recognize the gentleman from Maine, Mr. Golden, for 5 
minutes.
    Mr. GOLDEN. Maine, Colorado. They are both cold. Not this 
time of year.
    But you know, real quick, while I know that my Ranking 
Member, Congressman Stauber is here, I wanted to ask Ms. 
Sayles. You talked a little bit about--actually, my friend here 
from Colorado that was sitting next to me, Congressman Crow, 
called this--I am going to borrow the term, rent a vet problem. 
And you talked about it, and Representative Stauber and I are 
on the--you know, we Chair and are a Ranking Member of the 
Subcommittee on this. I would like to hear how prevalent is 
this issue of, you know, subcontractors who are vets being used 
to get the contract and then kind of hung out to dry?
    Ms. SAYLES. Well, actually, sir, it is two different 
issues. A rent a vet is when we are referring to a veteran that 
has actually accepted a nice six-figure income to sit in the 
position as a President and CEO of a company, and yet, someone 
else is actually running the company.
    But as far as subcontracting, it is a big issue because it 
is, you know, the means of getting into the Federal Government 
space. I have an example of offering up an opportunity through 
my relationships within the Federal Government. They trusted 
me. They knew that I could bring the work. They knew that I 
could perform.
    However, I did not have the certification at that time 
which was 8A, in order for a sole source opportunity to land, 
so I utilized another company that had it. Unfortunately, that 
company, as far as being equitable in the share, was not 
completed. I was able to stay on the contract until the end, 
but upon a 6-month extension, for an example, they removed me 
from the contract. They took 40 percent of my revenue. I had to 
lay off three people, and I had to reduce salaries across the 
board in my corporate office.
    Mr. GOLDEN. Do you have any ideas about how we can improve 
the oversight of that?
    Ms. SAYLES. The idea I would have would be Office of Small 
Business Development Utilization Office, which is the overseer 
of any small businesses working within the Federal Government. 
Let them be involved. Instead of telling us if you are a 
subcontractor, we can't do anything about it, they should be 
able to intervene in some way and be able to support the 
contracting officer in getting some type of filing of a report 
that they are doing what they said they were going to do with 
supporting a subcontractor to come on to the contract, instead 
of removing them.
    Mr. GOLDEN. Thank you. I would be interested in continuing 
to talk. Maybe we can connect, and I will have my staff ask to 
get you.
    Ms. SAYLES. Yes, sir. Thank you.
    Mr. GOLDEN. Thank you. I also just wanted to ask quickly 
for anyone out there. Do any of these offices or opportunities 
help veterans, including those looking to start a business with 
dealing with, you all know this problem, State licensing and 
certification, you know. When you get out, and you have got the 
skill sets, maybe even a skill set you learned in the military 
that you could use to launch a business, but we have got these 
50 States with different licensing requirements, certification 
processes. Like, do any of these programs help veterans 
navigate that and figure out how to cut through some of that 
red tape?
    Mr. LEGHORN. Thank you for your question, sir. I think the 
VBOCs, because they are regionally located, they provide that 
specific service in counseling veterans as they go back to 
where they came from, or where they lived prior to joining the 
service. When they connect with the VBOCs, the VBOCs are going 
to be able to tell them what licenses and certifications you 
need to start a business in the industry that you desire to be 
in.
    Mr. GOLDEN. Thank you. I mean, this is a problem I think 
among spouses, too, who have to sometimes relocate, but it is 
just one that, you know, I have tried to work on at a State 
level, but tough to do at a national level. So it is just a 
huge problem that holds people back, so I don't know. If you 
all have any ideas, share them with us.
    And lastly, I would just ask. The great programs that you 
are all talking about, I have never heard of them, you know. 
TAPS is wonderful, but when I was getting out, I was infantry, 
I just wanted to get out. And so, it is nice to hear that there 
is, like, a reboot program out there, but still, I never heard 
of it. And I am just one veteran, but I am sure I am not 
unique.
    So real quick, we have got, like, 30 seconds. Does anyone 
have anything to say about what is the best way, in your 
experience, to get word about these programs out to veterans on 
the street?
    Mr. DAVIDSON. Thank you, sir. It is going to be social 
media, right. You are going to have to--especially you talked 
about going to rural areas. I think that is one of the biggest 
complaints that I hear is that people feel like they are left 
out, especially when they relocate to Butte, Montana, or 
somewhere along those lines. They feel like they are outside 
of, let's say, a large city, and they don't have those 
resources. There is ways that we can connect, and I think that 
is where we are failing them is through those programs. They 
need to be able to socially connect them.
    Mr. GOLDEN. We always hear about veterans being lost in a 
sea of goodwill. If we can't get the word out to them about the 
programs, they can't take advantage of them. So thanks for that 
feedback.
    Chairwoman VELAZQUEZ. The gentleman yields back, and now we 
recognize the gentleman from Ohio, Mr. Balderson, for 5 
minutes.
    Mr. BALDERSON. Thank you, Madam Chair, and thank you all 
for your service, and thank you all for being here today. My 
question is for Mr. Davidson. The SBA has the 8A program to 
provide business training, counseling, marketing, and technical 
assistance to small businesses that have been certified. The 
certification is intended for organizations that are owned and 
controlled by socially and economically disadvantaged citizens. 
Do you believe disabled veterans, small business owners, are 
socially or economically disadvantaged after having given so 
much for this Nation?
    Mr. DAVIDSON. Sir, thank you for that question. I want to 
start by saying that it is an interesting question with regards 
to veterans being socially and economically disadvantaged, 
because the one thing I would say about veteran-owned 
businesses and disabled service veteran-owned businesses, it is 
the only status you have to earn, if you think about it.
    So there is nothing else out there. Everything else is done 
either by birthright or affinity in a sense, but for veteran-
owned businesses, let's say--take the service disabled part out 
of it, it is an earned benefit. So with that in mind, I would 
say unfortunately, in some cases, let's say a service disabled, 
there would be an economic or social disadvantage to them.
    And I know individuals, even in the 8A program, that have 
actually gotten in on the 8A program from experiences that have 
occurred from their military service, especially with regards 
to if you are, you know, isolated in an area for a certain 
period of time would qualify you for those types of things.
    And, of course, if you are looking at, and I will tell you 
from experience that you get a stigma attached to you with 
regards to if you are a service-disabled veteran or veteran. So 
I do think there are disadvantages, unfortunately, with regard 
to being certified that way and how we are viewed in a certain 
manner.
    So I do believe that there is a very--there is absolutely a 
parallel, and I also know, like I said, veterans that have 
become 8A certified with their experiences that they have had 
from being a service-disabled veteran.
    Mr. BALDERSON. Let me follow up with you on that great 
response. What would be the benefits of allowing all service-
disabled veterans and small businesses to receive equal 8A 
treatment?
    Mr. DAVIDSON. I think it is--we see it now. I see how the 
8A program grows, right? You have your build-up phase, phase 
one, years 1 through 4, and then you graduate to phase 5 
through 9. I think it is the same thing. I think they would 
receive the same benefit. But I do caution, and I believe, you 
know, Ms. Sayles, same thing. She would be a part of the 8A 
membership program.
    One of the failures that I see all the time in 8A programs 
is that there is a--you have a set-aside program, right, that 
works very well with the 8A, but it is only for 9 years. A lot 
of programs I see, you see that revenue drop because they no 
longer have that advantage once they graduate from the 8A 
program, and they are no longer sitting there and having that 
one lane.
    So I think if we are going to apply it to the veterans, I 
think the same thing has to be improved with the 8A program, is 
that you need to properly prepare them for that graduation 
phase. And I know that the SBA does a good job of it now, but I 
think they also have to recognize that one day, essentially, it 
shuts off, right. I mean, you lose that advantage, and I think 
that is an important part of how we would probably want to 
develop that program a little bit, so they understand that 
after the 9 years, you may no longer have this benefit, and you 
should be absolutely ready to be able to market and compete in 
a certain market. It is going to be a free market, essentially, 
that you are not going to have this benefit anymore.
    Mr. BALDERSON. Okay. Thank you very much.
    Madam Chair, I yield back my remaining time.
    Chairwoman VELAZQUEZ. The gentleman yields back, and Mr. 
Stauber is recognized.
    Mr. STAUBER. Thank you, Madam Chair.
    Just another question for those, obviously, you are 
separated. Could this government have done better by giving you 
some education, either at the end, or just before you separated 
from service? And I will ask this for everyone. Just give us a 
20-, 30-second answer. Mr. Leghorn.
    Mr. LEGHORN. Thank you for your question, sir. I think it 
is crucial that we not only give classes regarding transition 
assistance at the end of a servicemember's career in the 
military, but we should do it in the middle and towards the 
beginning as well. The more you allow somebody to plan for 
their separation, the better footing they are going to be.
    Mr. STAUBER. Mr. Davidson.
    Mr. DAVIDSON. Thank you, sir. In my personal experience, 
unfortunately, I was in a very unique place where I was 
abruptly, you know, retired because of a medical injury. I 
didn't have time to transition or plan at all, so I was within 
a 6-week period, and I believed that I was going to be a career 
military person. So, I believe just even from a little bit of 
education, there was a great benefit. And just again, having 
the ability to go back and see it now, and I was able to 
observe Boots to Business, thanks to some friends of mine, and 
even the Boots to Business reboot. Absolutely it is an 
invaluable tool that they need.
    Mr. STAUBER. Ms. Hart.
    Ms. HART. I knew 2 years before I was going to get out that 
I thought I would start a business when I did get out, and I 
actually started my business a year before I separated and was 
doing the two concurrently, and that runway was invaluable. It 
made it so that by the time I got out and lost my income, I had 
another income. If I had started my business the day after, it 
would have been a huge gap financially.
    And so, I wish I had taken Boots to Business earlier. 
Taking it when I did solidified some of the things that I had 
done, but it definitely could have helped taking it before.
    Mr. STAUBER. I would say you are probably the exception. 
You were preparing for your exit, and that is why you were 
successful.
    Ms. Sayles.
    Ms. SAYLES. Thank you, sir, for the question. My thoughts 
on it actually is that yes, it is definitely something that is 
required, something that was not offered at all during the time 
in the 10 years that I served in the military. Also, I was a 
Marine, you know. We were operating under different rules and 
regulations than every other branch of the military, as far as 
I am concerned. They are strictly focused on you being a Marine 
while you serve, so you are not trying to do a lot of outside 
activities.
    However, her story is a great story because there was time 
to prepare having a year in and getting some training and some 
insight. It is hugely valuable for her, and it would be for 
anyone that is interested in entrepreneurship. And also, sir, I 
must add. When you think about someone who has put in 20-plus 
years, getting out of the military and then deciding to go off 
and get a 4-year college degree is not something you would 
think that they would be interested in doing. So 
entrepreneurship is a great option for them.
    Mr. STAUBER. I expected those answers. Ms. Hart, yours was 
a little bit different, but I think you were forward-thinking 
enough to do that. My wife was 24 years, and it was the end, 
the end date. With that transition, it is hard.
    So, I think, we, as elected members, need to ensure that 
that is put in place. We owe that to you, and as Mr. Davidson 
just said, you have earned that. We owe and honor your service.
    Thank you, Madam Chair. I yield back.
    Chairwoman VELAZQUEZ. Thank you. I have one further 
question for either Mr. Davidson or Ms. Sayles. In the Federal 
contracting space, so the government, the Federal Government is 
the largest purchaser of goods and services around the world. 
The most effective way we can empower veteran-owned businesses 
is facilitating for them to do business with the Federal 
Government. What is the number one challenge that you can share 
with us that you are facing when you are doing business with 
the Federal Government?
    Mr. DAVIDSON. So thank you for the question, Madam 
Chairwoman. I think the biggest issue is education. Not just 
for me, I am just saying for in general. I think if we look at 
a hole in the contracting population, commercially speaking, 
Main Street businesses, you are looking at 95 percent of that 
is the type of businesses that veterans run. We are stuck in a 
Beltway where about 5 percent makes up the majority of what 
government contracting opportunities are. They are all sitting 
here in the hub. So when we leave this area of the Beltway, the 
rest the businesses for veterans are Main Street. They are not 
even thinking about that they have these opportunities. So it 
is a matter of us educating them and letting them know of the 
government procurement opportunities.
    I will give you a perfect example. We have very large 
veteran-owned businesses that I know that are commodity 
brokers, right. Black Rifle Coffee Company is a perfect example 
of it. They want to work in the Federal space. They have no 
idea. They are doing an incredible job, but they don't know how 
to get into the space, and they even tried to come in. I am 
just saying as an example, I am not saying they are the end 
all, be all, but the success they have had on a Main Street 
type business selling coffee, right, how does that translate to 
contracting? Well, we know there is a lot of different ways 
with regards to how, you know, people buy coffee, especially 
for the military, but they don't know how to get in.
    And I always use that example is that they have tried and 
they have tried to learn, but it is the education process. But 
I think that is where we are missing our gap. We are stuck in a 
bubble in a 5 percent that represents the most of the buying 
power for the Federal Government through veterans here, and 
maybe San Diego and a couple other spaces, but it is mostly 
generated here. We are forgetting about Main Street or the 95 
percent.
    Chairwoman VELAZQUEZ. Thank you very much.
    Let me take this opportunity to thank all of you for taking 
time to be here today. I know you all have busy schedules, but 
what you have shared with this committee today is so important. 
Veteran-owned small businesses and entrepreneurs play a key 
role in strengthening our economy and creating jobs. With 
200,000 servicemembers transitioning from the military to 
civilian life each year, the need for additional counseling 
resources, access to capital, and contracting opportunities 
will increase.
    The testimony we heard today provides invaluable insight 
into the challenges and benefits of being a veteran 
entrepreneur in this country, and will help guide the committee 
as it moves forward with legislation to prepare veterans for 
entrepreneurship. I want to thank all of you for being here and 
for your tireless and undying service to our country.
    I would ask unanimous consent that members have 5 
legislative days to submit statements and supporting materials 
for the record. Without objection, so ordered. And if there is 
no further business to come before the committee, we are 
adjourned. Thank you.
    [Whereupon, at 1:18 p.m., the Committee was adjourned.]
                            
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