[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
MARKUP OF: H.R. 7352, H.R. 7334, H.R. 7622,
H.R. 7664, H.R. 7670, H.R. 5879, H.R. 7694
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
MAY 11, 2022
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-054
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
47-737 PDF WASHINGTON : 2022
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Nydia Velazquez............................................. 1
Hon. Blaine Luetkemeyer.......................................... 3
APPENDIX
Additional Material for the Record:
H.R. 7352, ``PPP and Bank Fraud Enforcement Harmonization Act
of 2022''.................................................. 23
H.R. 7334, ``Covid-19 EIDL Fraud Statute of Limitations Act
of 2022''.................................................. 25
H.R. 7622, ``Small Business Workforce Pipeline Act of 2022''. 28
H.R. 7664, ``Supporting Small Business and Career and
Technical Education Act of 2022''.......................... 31
H.R. 7670, ``Women-Owned Small Business Program Transparency
Act''...................................................... 34
H.R. 5879, ``HubZone Price Evaluation Preference
Clarification Act of 2021''................................ 38
H.R. 7694, ``Strengthening Subcontracting for Small
Businesses Act of 2022''................................... 40
MARKUP OF: H.R. 7352, ``PPP AND BANK FRAUD ENFORCEMENT HARMONIZATION
ACT OF 2022'' H.R. 7334, ``COVID-19 EIDL FRAUD STATUTE OF LIMITATIONS
ACT OF 2022'' H.R. 7622, ``SMALL BUSINESS
WORKFORCE PIPELINE ACT OF 2022'' H.R. 7664, ``SUPPORTING SMALL BUSINESS
AND CAREER AND TECHNICAL EDUCATION ACT OF 2022'' H.R. 7670, ``WOMEN-
OWNED SMALL BUSINESS PROGRAM TRANSPARENCY ACT'' H.R. 5879, ``HUBZONE
PRICE EVALUATION PREFERENCE CLARIFICATION ACT OF 2021'' H.R. 7694,
``STRENGTHENING SUBCONTRACTING FOR SMALL BUSINESSES ACT OF 2022''
----------
WEDNESDAY, MAY 11, 2022
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:05 a.m., in Room
2360, Rayburn House Office Building, Hon. Nydia M. Velazquez
[chairwoman of the Committee] presiding.
Present: Representatives Velazquez, Davids, Golden, Crow,
Mfume, Phillips, Newman, Bourdeaux, Carter, Evans, Houlahan,
Craig, Luetkemeyer, Williams, Stauber, Meuser, Tenney,
Garbarino, Young Kim of California, Van Duyne, and Fitzgerald.
Chairwoman VELAZQUEZ. Good morning. With a quorum being
present, I call this morning's meeting of the Committee on
Small Business to order.
Without objection, the Chair is authorized to declare a
recess at any time.
I would like to begin by noting some important
requirements. Let me begin by saying that standing House and
Committee rules and practice will continue to during hybrid
proceedings. All Members are reminded that they are expected to
adhere to these standing rules.
House regulations require Members to be visible through a
video connection throughout the proceeding, so please keep your
cameras on. Also, please remember to be muted until you are
recognized to minimize background noise.
Today, we will be considering seven bipartisan bills that
are a product of our legislative and oversight work over the
course of this Congress. It has been a difficult couple of
years. The pandemic has inflicted unprecedented harm on the
small business community throughout the country. This Committee
and its Members have worked diligently to provide both
emergency and recovery support, and we are beginning to see the
fruits of our labor.
In 2021, Americans launched more than 5 million new
businesses, higher than any previous year on record. Our
economy has added more than 7.4 million jobs and unemployment
is down to 3.6 percent. Small businesses will continue to lead
the way in our recovery, and it is important that our committee
remain focused on moving legislation to support small business
growth for years to come.
Just 2 weeks ago, we passed five bipartisan bills through
the House in anticipation of National Small Business Week, and
now we are back today to consider seven more bipartisan bills
dedicated to promoting policies that encourage economic
prosperity on main street in a variety of ways.
First, we have two bills setting the statute of limitations
for fraud in cases related to PPP and EIDL of 10 years. These
bills will give law enforcement more time to investigate and
prosecute pandemic-related fraud. I am proud to have partnered
with the Ranking Member to take common sense steps to root out
fraud and recover billions of dollars.
Next, we will consider two bills to help small firms
attract and retain qualified workers. Our committee has held
numerous hearings over the past year and the bills represent
what we have consistently heard from witnesses, the importance
of utilizing apprenticeships and career and technical education
programs.
Finally, we will consider three contracting bills to
improve the federal procurement process and promote
opportunities for small businesses.
Each of these pieces of legislation are critical to making
it easier for employers to do what they do best, operate their
business and create jobs.
With that, let's turn to the bills under consideration.
H.R. 7352, the ``PPP and Bank Fraud Enforcement
Harmonization Act of 2022,'' introduced by myself and
cosponsored by Ranking Member Luetkemeyer.
H.R. 7334, the ``COVID-19 EIDL Fraud Statute of Limitations
Act of 2022,'' introduced by the Ranking Member and cosponsored
by myself.
H.R. 7622, the ``Small Business Workforce Pipeline Act of
2022,'' introduced by Mr. Crow and cosponsored by Mr.
Fitzgerald, Ms. Houlahan, and Mr. Garbarino.
H.R. 7664, the ``Supporting Small Business and Career and
Technical Education Act of 2022,'' introduced by Mr. Williams
and cosponsored by Ms. Newman.
H.R. 7670, the ``Women-Owned Small Business Program
Transparency Act,'' introduced by Ms. Houlahan and cosponsored
by Ms. Tenney.
H.R. 5879, the ``HUBZone Price Evaluation Preference
Clarification Act of 2021,'' introduced by Ms. Newman and
cosponsored by Ms. Salazar.
And H.R. 7694, the ``Strengthening Subcontracting for Small
Businesses Act of 2022,'' introduced by Mr. Stauber and
cosponsored by Mr. Mfume.
These bills have bipartisan support and I urge Members to
support them.
I would now like to recognize the Ranking Member for his
opening statement.
Mr. LUETKEMEYER. Thank you, Madam Chair, and thank you for
calling this markup to discuss seven bipartisan bills that
address a few different needs of the nation's job creators.
Frankly put, the nation's small businesses, entrepreneurs,
innovators, and startups, are facing some of the strongest
headwinds in decades. Unfortunately, this morning's Consumer
Price Index report highlights more of the same, from price
increases that impact everything from food to gas, to not being
able to find employees, to the continued supply chain issues,
it is difficult to be a small business owner today. Inflation
alone is a top challenge facing small businesses according to
the surveys published by the Job Creators Network.
Unfortunately, because small business owners operate on the
thinnest of margins, dealing with inflation often is limited
and results in raising prices themselves. This is a continuous
cycle that puts the nation's smallest firms at a disadvantage.
We must stop reckless spending in Washington and must stop it
now.
Pro-growth initiatives have worked in the past and they
will work again. A low tax environment for small businesses,
combined with a smart regulatory environment will allow
businesses to return to operating independently. I look forward
to returning to an economic environment that allows small
businesses to grow, expand, and create jobs. Through this same
lens, it is the responsibility of this committee to examine
issues through congressional testimony and hearings and present
prudent and responsible solutions. Today's slate of bills
accomplishes this.
Before us today are bills that tackle fraud and the
recoupment of wasted dollars, bills that enforce workforce
development of our country, and bills to strengthen the SBA's
federal contracting programs. All three of these topics have
been discussed widely by our Members and it truly represents
how we, as a committee, should follow regular ardor.
I want to thank the Chair for bringing these bills forward
and they represent the work and devotion of many of our
committee Members. I support each and every one of these bills
and recommend a yes vote across the board.
With that, Madam Chair, I look forward to today's markup,
and I yield back.
Chairwoman VELAZQUEZ. Thank you, Ranking Member. The
gentleman yields back.
Before we get into the individual bills, are there any
Members present who seek recognition for the purpose of making
an opening statement?
H.R. 7352
Seeing none, we will now move to the consideration of the
first bill on the agenda, H.R. 7352, the ``PPP and Bank Fraud
Enforcement Harmonization Act of 2022,'' introduced by myself
and cosponsored by Ranking Member Luetkemeyer.
The bill sets the statute of limitation for all cases of
PPP fraud at 10 years, consistent with the statute of
limitations for bank fraud.
I will now recognize myself briefly.
Under current law, bank-originated PPP fraud is being
prosecuted as bank fraud, which has a 10-year statute of
limitations. Yet, fintech originated PPP loans are prosecuted
as wire fraud which only carries a 5-year statute of
limitations. Given the volume of PPP loans and the diligence
required by our investigators to identify and build cases
against bad actors, my bill addresses this discrepancy by
creating uniformity for all PPP loans. It gives prosecutors 10
years to prosecute all cases of PPP fraud regardless of whether
the lender was a bank or fintech company.
This is important because SBA's Office of Inspector General
identified over 70,000 loans totaling over $4.6 billion in
potentially fraudulent PPP loans. Reports have found that
fintechs handled 75 percent of PPP loans connected to fraud
despite originating only 15 percent of the loans overall. Given
the magnitude of the potential fraud in this program, we must
ensure prosecutors have sufficient time to fully investigate
and bring these cases forward.
Currently, nonbank PPP loans secured in April 2020 will
expire in 2025, less than 3 years away. This is simply not
enough time given the complexity of these fraud schemes and the
reality that we are only beginning to learn the full scope of
fraud during the loan forgiveness process.
I take our committee's oversight role over the SBA and this
program very seriously. That is why I introduced this bill
which will go a long way towards enhancing oversight and
accountability for the biggest program in the agency's history.
Let's be clear, Democrats and Republicans agree anyone who took
advantage of this once-in-a-lifetime crisis to commit fraud and
line their own pockets must be held accountable. It is
unacceptable to allow anyone to get off the hook simply because
the statute of limitations expired. We must give law
enforcement the time they need to bring the fraudster to
justice.
I would now like to recognize the Ranking Member for an
opening statement.
Mr. LUETKEMEYER. Thank you, Madam Chair.
When Members of Congress created the Paycheck Protection
Program, we focused on ensuring dollars were delivered to small
businesses in an effective and efficient manner. This was
accomplished by requiring private sector lenders to play an
important role in the program.
The success of the program cannot be diminished. By the end
of the program, nearly $800 billion in forgivable loans were
delivered to the nation's small businesses. To this day, I
continue to hear from small business owners that this program
saved them and their employees.
Unfortunately, and with any federal program, especially one
of this magnitude, fraud will develop and occur. According to
the most recent numbers from the Small Business
Administration's Inspector General, there is approximately $4.6
billion in potentially fraudulent loans within the PPP. While
limited as compared to the SBA's direct EIDL program, fraud is
fraud and it must be addressed swiftly and comprehensively.
While most private sector lenders performed admirably and
ensured oversight defenses were strong due to the federal
financial rules and regulations such as Know Your Customer,
independent studies and reports continue to highlight that some
fintech lenders were more associated with fraudulent loans than
other lenders. To ensure law enforcement officials have the
tools and time at their disposal to track down all fraudulent
activity, H.R. 7352 harmonizes the statute of limitations for
all PPP loans out to 10 years.
Without this important legislation, that statute of
limitations within PPP will be different based on the type of
lender involved. For example, bank fraud, which encompasses
most lenders would stand at 10 years, but wire fraud, which is
associated with fintech lenders, would stand at 5 years. Given
the disparaging timelines, it was essential to move the statute
of limitations for all PPP loans out to 10 years.
As Congress continues to examine and analyze the COVID-19
relief programs, it is critical that we examine all lending
participants. Importantly, Congress required the Treasury
Department and the Secretary of the Treasury to bring new
lenders into the program and to help reach the nation's small
businesses.
As we continue to look into this, I assure you that we will
have very important questions that need to be asked of the
Secretary of the Treasury. Unfortunately, she continues to
ignore the law and not appear before this committee. I hope
this issue can be resolved soon as we have important work to do
with examining lender participation within PPP. In the
meantime, this is an important bill that will allow law
enforcement to do their job.
I want to thank the Chair for working with me on this
legislation and urge my colleagues to join us and ensure fraud
is tracked down no matter where, when, or how it occurred.
With that, Madam Chair, I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Are there any other Members who wish to be recognized for a
statement on H.R. 7352?
I want to thank the Ranking Member for his bipartisanship
on this bill and I urge a yes vote.
If there is no further discussion, the committee will move
on to consideration of H.R. 7352.
The clerk will report the bill.
The CLERK. H.R. 7352, the PPP and Bank Fraud Enforcement
Harmonization----
Chairwoman VELAZQUEZ. Without objection, H.R. 7352 is
considered as read and open for amendment at any point.
Does anyone seek recognition to offer an amendment?
Seeing none, the question is now on H.R. 7352.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7352
is agreed to.
The question now occurs on reporting H.R. 7352 favorably to
the House.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7352
is reported to the House.
Without objection, committee staff is authorized to correct
punctuation and make other necessary technical corrections and
conforming changes.
Without objection, Members have 2 business days to file
additional supplemental, dissenting, and minority views.
H.R. 7334
We will now consider H.R. 7334, the ``COVID-19 EIDL Fraud
Statute of Limitations Act of 2022,'' introduced by Ranking
Member Blaine Luetkemeyer and cosponsored by myself.
Similar to the PPP and Bank Fraud Enforcement Harmonization
Act, this bill extends the statute of limitations for COVID
EIDL fraud cases to 10 years to allow prosecutors more time to
investigate these cases and bring charges.
I would now like to recognize the Ranking Member for an
opening statement.
Mr. LUETKEMEYER. Thank you, Madam Chair. And thank you for
working with me on H.R. 7334, the ``COVID-19 EIDL Fraud Statute
of Limitations Act of 2022.''
Similar to the previous bill, H.R. 7334 will ensure law
enforcement has the runway to conduct investigations and bring
to justice any illegal behavior that occurred with the SBA's
Economic Injury Disaster Loan program. Unfortunately, the SBA's
Inspector General has flagged this program as one that has
experienced an increased level of fraud and activity. According
to numerous government reports, of the approximately $400
billion in loans and grants directly handed out by the SBA,
more than $80 billion could be potentially fraudulent. This
represents a fraud rate of approximately 20 percent. These are
taxpayer dollars on the line. This is unacceptable.
Moreover, the SBA recklessly continues to allow small
businesses to defer their payments within the EIDL program. We
will not see the true performance of the program, nor will we
understand the true extent of fraud within the program until
payments are required. Each month of the deferment period
represents time that law enforcement officials need to catch
criminals.
My bill, H.R. 7334, the ``COVID-19 EIDL Fraud Statute of
Limitations Act of 2022'' will lengthen the statute of
limitations for all EIDL loans and grants out to 10 years. As a
sole lender, the SBA is not a depository institution, and
therefore, crimes were on a much shorter statute of
limitations. With more than $80 billion in fraudulent lending
within one program, it is obvious the SBA does not know how to
administer, nor underwrite loans on their own. H.R. 7334 will
allow law enforcement to correct some of these wrongdoings.
With that, I urge my colleagues to support H.R. 7334, and
Madam Chair, I yield back the balance of my time.
Chairwoman VELAZQUEZ. The gentleman yields back.
I would now like to recognize the gentlewoman from New
York, Ms. Tenney, for an opening statement.
Ms. TENNEY. Thank you, Madam Chairwoman, and Ranking Member
Luetkemeyer, for introducing this legislation.
Since the onset of the pandemic, Congress has passed
several COVID-19 relief bills totaling an unprecedented $5.3
trillion. While some of this spending was unwise, other
programs, like the Paycheck Protection Program and the COVID-19
Economic Injury Disaster Loan program provided much-needed
relief to employers and businesses devastated by the pandemic.
However, since these measures were passed, we have learned
about many alarming cases of fraud, waste, and abuse in the
funding programs that these bills authorized. This is one
reason I introduced the House version of the Transparency in
COVID-19 Expenditures Act which should require an audit of all
federal COVID-19 relief spending.
There is, obviously, room for improvement in providing
additional oversight and returning fraudulently awarded funds
back to the taxpayers. The COVID-19 EIDL Fraud Statute of
Limitations Act of 2022 will help fix part of the shortcoming
by expanding the statute of limitations for the Economic Injury
Disaster Loans from 6 years to 10 years as the Ranking Member
mentioned. This is the same as in bank fraud. This will give
the officials a greater window to track down fraudulent
activity and hold these bad actors accountable on behalf of the
taxpayers. No one should be wrongly profiting from the need to
distribute during the pandemic. The American taxpayers deserve
better. That is why I fully support this legislation and urge
all of my colleagues to support it as well.
And with that I yield back. Thank you.
Chairwoman VELAZQUEZ. Thank you. The gentlewoman yields
back.
Are there any other Members who wish to be recognized for a
statement on H.R. 7334?
Mr. MEUSER. Madam Chair?
Chairwoman VELAZQUEZ. Yes.
Mr. MEUSER. Thank you, Madam Chair. And thank you to the
Ranking Member.
The EIDL Loan Program----
Chairwoman VELAZQUEZ. The gentleman is recognized for 5
minutes.
Mr. MEUSER. Oh, I am sorry. Thank you, Ma'am.
The EIDL Loan Program was another relief program, as we all
know, that provided relief for struggling small businesses
during the pandemic. The EIDL program, unlike the Paycheck
Protection Program, was a direct loan program administered by
the SBA. The SBA's Inspector General, as the Ranking Member
mentioned, estimates that approximately $84 billion of the EIDL
loan activity, nearly 20 percent, perhaps over 20 percent, was
potentially fraudulent. With this massive level of potentially
fraudulent activity, it is imperative that we pass Ranking
Member Luetkemeyer's bill to extend the 5-year statute of
limitations that currently exists for SBA grants and loans. In
doing so, we can allow for authorities to investigate the
egregious amount of potential fraud in the EIDL program and
ensure accountability for those who took advantage of the EIDL
program to defraud the American people.
I urge my colleagues to support this important legislation
and look forward to its swift consideration on the House floor.
I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Are there any other Members who wish to be recognized on
H.R. 7334?
I would now like to recognize myself for 5 minutes.
Congress notified the EIDL program at the outset of the
pandemic to allow small businesses facing economic injury due
to COVID to apply for SBA disaster loans. Overall, the COVID
EIDL program has approved almost 4 million loans totaling over
$378 billion. The program was a lifeline to millions of small
businesses as they recovered from the COVID-19 disaster
economic impacts.
Early in the program, SBA lowered guardrails and disbursed
funds quickly to provide stability to the small business
economy, which has led to the fraud we are seeing today.
Throughout the pandemic, our committee held numerous oversight
hearings with the SBA Inspector General. Most recently, he
testified it will be a decades-long effort to fully investigate
an estimated $78 billion in potentially fraudulent activity as
well as over $6 billion in loans and grants related to identify
theft.
Given the magnitude of this program and the degree of
potential fraud, we need to give prosecutors more time to hold
these pandemic fraudsters accountable, and this bill will do
just that.
I thank the Ranking Member for his introduction, and I am
pleased to support it.
If there is no further discussion, the committee will move
on to consideration of H.R. 7334.
The clerk will report the bill.
The CLERK. H.R. 7334, the COVID----
Chairwoman VELAZQUEZ. Without objection, H.R. 7334 is
considered as read and open for amendment at any point.
Does anyone seek recognition to offer an amendment?
Seeing none, the question is now on H.R. 7334.
All in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7334
is agreed to.
The question now occurs on reporting H.R. 7334 favorably to
the House.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7334
is reported to the House.
Without objection, committee staff is authorized to correct
punctuation and make other necessary technical corrections and
conforming changes.
Without objection, Members have 2 business days to file
additional supplemental, dissenting, and minority views.
H.R. 7622
We will now consider H.R. 7622, the ``Small Business
Workforce Pipeline Act of 2022,'' introduced by Mr. Crow, the
Chairman of the Subcommittee on Innovation, Entrepreneurship,
and Workforce Development, and cosponsored by Representatives
Fitzgerald, Houlahan, and Garbarino.
This bill empowers Small Business Development Centers to
help small firms improve their apprenticeship and job training
programs.
I would now like to recognize the gentleman from Colorado,
Mr. Crow, the sponsor of the bill for an opening statement.
Mr. CROW. Madam Chairwoman, thank you for the opportunity
to speak in support of H.R. 7622, the ``Small Business
Workforce Pipeline Act of 2022.''
Just last week, I visited the Aurora South Metro Small
Business Development Center which provides training and
counseling to hundreds of small businesses in Colorado's 6th
Congressional District. During this visit, I heard about the
issues facing local small businesses, including small
businesses and their difficulty finding qualified workers. We
also spoke about solutions for small businesses like the Small
Business Workforce Pipeline Act.
The Small Business Workforce Pipeline Act aims to empower
Small Business Development Centers, like Aurora's South Metro
SBDC in my district, to help small businesses establish and
improve their apprenticeship programs, or pre-apprenticeship,
or job training programs. Work-based learning opportunities,
like apprenticeships, help small businesses fill job openings
and get the workers the skills that they need to succeed, not
just individually but also within the business context.
Offering work-based learning opportunities is a great way
to attract quality candidates who may not be able to attend
traditional education models and provide skills-based knowledge
necessary to fill critical jobs. Basically, what we want to do
is allow people to earn while they learn. People already have
families, they have obligations, they have mortgages, they have
a rent payment. Most people who are upskilling or reskilling do
not have the ability to go back to school and earn nothing, and
apprenticeship programs are very critical to fill this gap.
I want to thank Representatives Fitzgerald, Houlahan, and
Garbarino for their partnership on this bill, and I urge my
colleagues to support H.R. 7622. I thank the Chairwoman for the
opportunity to speak on its behalf. I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now I would like to recognize the gentleman from Wisconsin,
Mr. Fitzgerald, for an opening statement.
Mr. FITZGERALD. Thank you, Madam Chair. I want to thank my
colleague, Mr. Crow, for inviting me to co-lead H.R. 7622. The
bill would allow Small Business Development Centers to provide
information and assistance to small businesses on how to
establish and improve work-based learning opportunities,
apprenticeship programs, pre-apprenticeship programs, and other
job training programs.
I hear all the time in Wisconsin, in my district's small
businesses every day about how the country's labor shortage is
affecting the recruitment of skilled employees, particularly in
the manufacturing sector. I have a lot of small, manufacturing,
light manufacturing in the 5th Congressional. The latest NFIB
Small Business Economic Trends Report showed that while
optimism is recovering to pre-pandemic levels and it has been
increasing, more than 60 percent of manufacturing firms report
unfilled job openings.
Apprenticeships and other job training programs provide a
solution to address the needs of the manufacturing sector.
Apprenticeships are among the most successful forms of
workforce development through paid, on-the-job training, along
with classroom education.
This bill will directly benefit manufacturers and other
businesses in Wisconsin's 5th District by having apprenticeship
and other job training materials readily available to them. I
support the passage of the bill and I would yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now I recognize the gentlelady from Pennsylvania, Ms.
Houlahan, for an opening statement.
Ms. HOULAHAN. Thank you, Chairwoman Velazquez, and Ranking
Member Luetkemeyer, for the opportunity to speak on H.R. 7622,
the ``Small Business Workforce Pipeline Act of 2022.'' I am
very proud to help introduce this strong, bipartisan effort
alongside my colleagues, Representatives Crow, Fitzgerald, and
Garbarino.
H.R. 7622 makes a very timely and much-needed change that
allows Small Business Development Centers to be able to provide
apprenticeships, pre-apprenticeships, and job training programs
that will assist our small businesses. In traveling throughout
my community in Pennsylvania, small business owners in Chester
and Berks counties have shared over and over again that they
simply cannot find workers with the technical experience needed
to fill their abundant job openings. Through this legislation,
business owners will be able to provide apprenticeship and on-
the-job training that would be able to do just that through
accessing critical entrepreneurial development resources at
their Small Business Development Centers.
Additionally, it will allow workers to reskill, to upskill,
and to gain the experience that they need to be able to succeed
in our 21st century economy. This is critical as our small
business owners, our entrepreneurs, and our workforce continues
to recover from this pandemic.
So, I eagerly and enthusiastically encourage all of my
colleagues to support H.R. 7622, the Small Business Workforce
Pipeline Act. With that, Madam Chair, I yield back the balance
of my time. Thank you.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Are there any other Members who wish to be recognized for a
statement on H.R. 7622?
Now I recognize the gentleman, the Ranking Member, Mr.
Luetkemeyer.
Mr. LUETKEMEYER. Thank you, Madam Chair.
I would like to thank the gentleman from Colorado,
Congressman Crow, as well as Congressman Fitzgerald,
Congresswoman Houlahan, and Congressman Garbarino, for working
on this legislation.
This Congress, the committee has heard from Small Business
Development Centers (SBDCs) and small businesses who have
benefitted from SBDC services. This legislation will improve
the SBDCs in their mission to serve small businesses.
Specifically, this legislation will empower SBDCs to assist
small businesses in establishing and improving work-based
learning opportunities and apprenticeship programs. It also
allows SBDCs to share information from the Department of Labor
and other federal agencies related to work-based learning and
apprenticeships.
This legislation comes at a critical time as our small
business community faces labor and skill shortages. NFIB's
recent survey of small business owners found that 23 percent of
owners report labor quality as a top business problem. Further,
of those owners hiring or trying to hire, 93 percent of owners
reported few or no qualified applicants for the positions they
are trying to fill. Apprenticeships and learning opportunities
help American workers gain new skills and support small
business growth.
With that, Madam Chair, I urge my colleagues to support
H.R. 7622, and I yield back the balance of my time.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now I recognize myself briefly.
The SBDC program is the SBA's largest resource partner
delivering free and low-cost counseling and training through
its network of 62 lead centers and nearly 1,000 subcenters
throughout the country. One particular area that small firms
need assistance with is how to retract, retain, and train
skilled workers. Small businesses have been hit hard by tight
labor markets, often struggling to compete with their larger
counterparts. With a record number of jobs available in the
economy and an unemployment rate of just 3.6 percent, employers
are finding it harder and harder to find qualified applicants.
H.R. 7622 directs SBDCs to assist small firms that are
struggling to find employees by sharing information regarding
apprenticeships, pre-apprenticeships, and other forms of job
training. Programs like this are highly successful workforce
development programs with an average starting salary of $72,000
and an employee retention rate of 92 percent. Apprenticeships
not only provide a pathway into the middle class but high-
quality employees to businesses. With the assistance provided
by the SBDC network, more small firms will have access to the
resources they need to attract high-quality talent.
I want to thank Representatives Crow, Fitzgerald, Houlahan,
and Garbarino for their work in helping small businesses
attract highly skilled and qualified workers. I urge a yes
vote.
If there is no further discussion, the Committee will move
on to consideration of H.R. 7622.
The clerk will report the bill.
The CLERK. H.R. 7622, the Small Business Workforce Pipeline
Act----
Chairwoman VELAZQUEZ. Without objection, H.R. 7622 is
considered as read and open for amendment at any point.
Does anyone seek recognition to offer an amendment?
Seeing none, the question is now on H.R. 7622.
All in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7622
is agreed to.
The question now occurs on reporting H.R. 7622 favorably to
the House.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7622
is reported to the House.
Without objection, committee staff is authorized to correct
punctuation and make other necessary technical corrections and
conforming changes.
Without objection, Members have 2 business days to file
additional supplemental, dissenting, and minority views.
H.R. 7664
We will now consider H.R. 7664, the ``Supporting Small
Business and Career and Technical Education Act of 2022,''
introduced by Vice Ranking Member, Mr. Williams, and
cosponsored by Ms. Newman. This legislation directs SBDCs and
WBCs to assist small businesses in hiring graduates from career
and technical education programs and helps graduates launch
their own businesses.
I would now like to recognize the gentleman from Texas, Mr.
Williams, the sponsor of the bill, for an opening statement.
Mr. WILLIAMS. Thank you, Madam Chairwoman. I want to thank
the Chairwoman and Ranking Member for including my bill in
today's markup, H.R. 7664, known as the Supporting Small
Business and Career and Technical Education Act. It is an
important piece of legislation that will provide career and
technical education graduates with additional support as they
enter the workforce or start their own business.
The growing skills gap is hitting small businesses across
the country extremely hard, and our country needs more
plumbers, electricians, mechanics, and other skilled
professionals who are the lifeblood of this economy. A
traditional 4-year college degree is not always for everyone,
and we need to ensure students know that there are other
providers that will provide them with good-paying jobs and a
successful career.
My bill directs Small Business Development Centers and
Women's Business Centers to assist small businesses in hiring
graduates from career and technical education programs, as well
as assisting CTE graduates in starting up a small business of
their own. America is in a critical need of skilled workers,
which is why we should encourage younger generations to pursue
a career in technical education paths. CTE programs prepare
individuals for high-demand occupations that earn good wages
and allow individuals to provide for their families. CTE is a
return on investment by setting students up to learn a skill
which they can master over the years and hopefully turn into
their own small businesses one day.
I want to thank Chairwoman Velazquez, Ranking Member
Luetkemeyer, and all the staff who have helped in getting this
bill brought up in the committee. It is important that we
support the CTE professional in developing the necessary skills
to become a business owner and assist in connecting graduates
with an existing business in need of their unique skillset.
I urge all of my colleagues to support H.R. 7664, and I
yield back the balance of my time.
Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
Now, I would like to recognize the gentlelady from
Illinois, Ms. Newman, for an opening statement.
Ms. NEWMAN. Thank you, Madam Chair, and thank you, Ranking
Member Luetkemeyer, for having this very important hearing. I
would like to talk about H.R. 7664.
I join my colleague today, Rep. Williams, in strong support
of H.R. 7664, the Supporting Small Business and Career and
Technical Education Act. This bill would increase CTE programs
so it is very important. It would direct Small Business
Development Centers, otherwise known as SBDCs and Women's
Business Centers, WBCs, to assist small businesses in hiring
graduates from career and technical education programs, in
addition to the existing services which are amazing.
As a prior small business owner, I know firsthand the
importance of strengthening trade and issues which are a key
component of building a 21st century economy that actually
works for everybody, everywhere.
While a 4-year degree remains an important path to
rebuilding our workforce with skills, we also have to remember
all of our other folks that do great work in the trades. This
bill also relies on our valuable resource partners including
WBCs. WBCs are designed from entrepreneurs who are socially and
economically disadvantaged. In starting and growing small
businesses through education and training, WBCs have spread
across the country and will continue to be a factor as we grow
our solutions and our workforce. It is critical to ensure that
all of our youth have the opportunity that they need and the
resources to develop critical skills that will lead them to
good paying jobs--our skilled workforce is vital to a strong
economy. I am proud to introduce H.R. 7664 with Rep. Williams
and I urge my colleagues to support the bill.
Thank you, and I yield back.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Are there any other Members who wish to be recognized for a
statement on H.R. 7664?
Ranking Member?
Mr. LUETKEMEYER. Madam Chair?
Chairwoman VELAZQUEZ. Yes. The Ranking Member is
recognized.
Mr. LUETKEMEYER. Thank you, Madam Chair. And thank Mr.
Williams and Ms. Newman for their work on this great
legislation. Vice Ranking Member Williams is a strong advocate
for small businesses and the American worker, and I appreciate
his work on this legislation to engage with the career and
technical education community to support small business growth.
Career and technical education programs are so important
for individuals across the nation because they help high
school, community college, and trade school students obtain the
hands-on experience they need for jobs in a broad range of
industries. This legislation directs the Small Business
Development Centers (SBDCs) and Women's Business Centers (WBCs)
to assist small businesses in hiring graduates from career and
technical education programs. Additionally, this legislation
supports career and technical education graduates by directing
SBDCs and WBCs to assist them in starting a small business.
With that, Madam Chair, I urge my colleagues to support
H.R. 7664, and I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Are there any other Members who wish to be recognized for a
statement?
I would now like to recognize myself briefly.
Whether it is accessing capital, developing a business
plan, or assisting in a marketing strategy, SBA resource
partners play a crucial role in helping small businesses
thrive. Over the past few years, we have heard about the
struggles that many small firms face in finding a skilled
workforce. A poll of over 6,000 small businesses throughout the
country found that roughly three in five are having issues
hiring talent. H.R. 7664 utilizes SBDCs and WBCs by assisting
small firms looking for talent and recent graduates interested
in becoming entrepreneurs. It requires SBDCs and WBCs to build
awareness of career and technical education programs among
small business owners and develop close partnerships to help
bridge the gap between training programs and small firms
struggling to find workers. I applaud the work of
Representatives Williams and Newman on this bill connecting
graduates of career and technical education programs with small
businesses, and I urge a yes vote.
If there is no further discussion, the committee will move
on to consideration of H.R. 7664.
The clerk will report the bill.
The CLERK. H.R. 7664, the Supporting Small Business----
Chairwoman VELAZQUEZ. Without objection, H.R. 7664 is
considered as read and open for amendment at any point.
Does anyone seek recognition to offer an amendment?
Seeing none, the question is now on H.R. 7664.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7664
is agreed to.
The question now occurs on reporting H.R. 7664 favorably to
the House.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7664
is reported to the House.
Without objection, committee staff is authorized to correct
punctuation and make other necessary technical corrections and
conforming changes.
Without objection, Members have 2 business days to file
additional supplemental, dissenting, and minority views.
H.R. 7670
We will now consider H.R. 7670, the ``Women-Owned Small
Business Program Transparency Act'' introduced by
Representative Houlahan and cosponsored by Representative
Tenney, Ranking Member of the Subcommittee on Underserved,
Agricultural, and Rural Business Development.
This bill establishes a reporting requirement for the
Women-Owned Small Business Contracting Program.
I would now like to recognize the gentlewoman from
Pennsylvania, Ms. Houlahan, the sponsor of the bill, for an
opening statement.
Ms. HOULAHAN. Thank you.
First, I would like to thank you, Chairwoman Velazquez, and
Ranking Member Luetkemeyer, for organizing this bipartisan
markup and for bringing H.R. 7670, the ``Women-Owned Small
Business Program Transparency Act'' before our committee
alongside these other very important bipartisan measures.
I also want to thank Representative Claudia Tenney for her
partnership in introducing this legislation.
The SBA's Women-Owned Small Business Contracting Program
helps to level the playing field by reserving federal
contracting opportunities for qualified women-owned small
businesses in underrepresented industries. Through this
program, the SBA aids other federal agencies in meeting the
statutory goal of awarding 5 percent of all prime federal
contracts to women-owned small businesses.
While the SBA has made great strides towards improving the
program in recent years, including transitioning to full SBA
certification for businesses that participate in the program,
additional transparency and oversight is needed to address
ongoing program challenges.
The WOSB program has only met its 5 percent statutory goal
twice, most recently attaining 4.85 percent in fiscal year
2020. In addition to the underutilization of the women-owned
companies in federal contracting, the SBA is also facing a
significant backlog of applications and there is very little
visibility into how many firms are being certified by the four
national certifying entities that are approved by the SBA. The
Government Accountability Office has also issued concerns
regarding the needed improvements to program examinations and
to contracts that are being awarded to businesses in eligible
industries.
To address these concerns, H.R. 7670 requires the SBA to
submit to Congress an annual report which would benchmark
crucial data, including the amount of contracting dollars that
are awarded through the program, the number of certifications
that are being issued, the amount of program examinations being
conducted, the number of companies that are being decertified,
and the number of contracts that are incorrectly awarded, as
well as any other actions taken by the SBA to properly train
personnel in other agencies.
The bill will increase transparency and oversight, allowing
Congress and the SBA to further improve the program, to work
towards efficiencies, and to properly allow for program
administration, and ultimately, of course, to benefit women in
securing government contracts, especially those in
underrepresented industries.
Improvements to the SBA's Women-Owned Small Business
Contracting Program are especially needed as our business
owners are continuing to recover from the pandemic. As
additional federal contracts are issued through the historic
implementation of the bipartisan Infrastructure Investment and
Jobs Act, it is critical that Congress has access to the data
which will be required by this legislation.
Women-owned businesses are still underutilized in federal
contracting and greater oversight must be established to ensure
that the program is working as it is intended.
I urge my colleagues enthusiastically to support H.R. 7670.
With that, I yield back the remainder of my time, Madam Chair.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Now we recognize the gentlelady from New York, Ms. Tenney,
for an opening statement.
Ms. TENNEY. Thank you, Chairwoman Velazquez and Ranking
Member Luetkemeyer. I, too, echo the comments of my colleague,
Representative Houlahan. And having this bipartisan markup, it
is great for our small business community. Also, I am just
pleased to be cosponsoring 7670, the ``Women-Owned Small
Business Program Transparency Act'' because I think it is
really important.
For over 2 decades, the Women-Owned Small Business Program
has set aside at least 5 percent of federal contracting dollars
for certified women-owned small businesses. This plays a small
part, but important part, ensuring that the federal government
does not leave our nation's small businesses behind and that we
continue to have a robust and competitive contractor ecosystem
to pull from.
In New York's 22nd Congressional District, small businesses
make up 94 percent of all employees, and I have seen the
tremendous impact that women-owned small businesses had.
Whether it is my good friend Gina Curcio, who runs Curcio
Printing in the Southern Tier or a wonderful company called
AeroMed Technologies in Utica, our communities and our
taxpayers benefit from women-owned businesses, especially when
they thrive. My family business, which has been around since
1946, is also a women-owned business.
However, even with this proven track record, the Women-
Owned Small Business program has room for improvement. The
Small Business Administration still does not transparently
disclose some in-depth performance metrics that would allow us
to ensure the program meets the needs of small business owners.
That is why I was glad to partner with Representative
Houlahan earlier this month to introduce this bipartisan Women-
Owned Small Business Program Transparency Act. This legislation
will require the Small Business Administration to annually
disclose the total number of businesses that are certified as
women-owned by the SBA, the number certified by third-party
certifiers, and the fees charged by third-party certifiers, the
dollar amount, and the percent of contracts to Women-Owned
Small Businesses and the information on contracts incorrectly
awarded. This is going to be essential in ensuring that we have
transparency and that we can ensure that this program works
effectively and efficiently for the small businesses and for
taxpayers and the women who are out there putting their all in
courageously trying to thrive as small business owners and
entrepreneurs in our communities.
With that, I want to again thank my cosponsor and also the
Ranking Member and our Chairwoman for doing a great job in this
markup and for bringing this important bill to the floor. I
yield back.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Are there any other Members who wish to be recognized for a
statement on H.R. 7670?
I now recognize the Ranking Member, Mr. Luetkemeyer.
Mr. LUETKEMEYER. Thank you, Madam Chair.
Part of our congressional duties and responsibilities is
proper oversight of federal programs. H.R. 7670, the ``Women-
Owned Small Business Program Transparency Act'' will enhance
and strengthen the oversight requirements of the SBA on
important federal contracting programs. The more information
that is at our disposal will lead to more efficient and
effective policymaking.
I want to thank Ms. Houlahan from Pennsylvania, and Ms.
Tenney from New York, for working in a bipartisan manner to
increase transparency within one of SBA's federal government
contracting programs.
With that, Madam Chairwoman, I want to thank you for
working with me to advance this bill. I urge my colleagues to
support this bill to ensure the SBA has a clear lens to view
the Women-Owned Small Business Contracting Program. Thank you.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now I recognize myself.
Combatting the continuous barriers women entrepreneurs face
in accessing federal contracts, I led Congress in creating the
Women-Owned Small Business Contracting Program in 2000. The
program has greatly improved since it was first implemented.
However, there are a number of issues that require
congressional oversight to ensure it is working as intended.
For example, even though the program is supposed to help
agencies in meeting the 5 percent women-owned small business
goal, this goal has only been met twice despite it being 2022.
The SBA just recently started providing formal certifications
to program participants. While progress is being made, there is
still a significant backlog of applications. In considering the
GAO reports issued regularly on the program, Congress must keep
an eye on program examinations and any contracts incorrectly
awarded.
H.R. 7670 requires SBA to provide Congress with the
necessary data to oversee these matters and more. This bill
furthers transparency and accountability by creating a
reporting requirement for the Women-Owned Small Business
Program. This is an issue we should never lose sight of.
I thank Ms. Houlahan and Ms. Tenney for their bipartisan
work on this bill, and I urge a yes vote.
If there is no further discussion, the committee will move
on to consideration of H.R. 7670.
The clerk will report the bill.
The CLERK. H.R. 7670, the Women-Owned Small Business
Program----
Chairwoman VELAZQUEZ. Without objection, H.R. 7670 is
considered as read and open for amendment at any point.
Does anyone seek recognition to offer an amendment?
Seeing none, the question is now on H.R. 7670.
All in favor say aye.
All opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7670
is agreed to.
The question now occurs on reporting H.R. 7670 favorably to
the House.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7670
is reported to the House.
Without objection, committee staff is authorized to correct
punctuation and make other necessary technical corrections and
conforming changes.
Without objection, Members have 2 business days to file
additional supplemental, dissenting, and minority views.
H.R. 5879
We will now consider H.R. 5879, the ``HUBZone Price
Evaluation Preference Clarification Act of 2021,'' introduced
by Ms. Newman and cosponsored by Ms. Salazar, the Ranking
Member of the Subcommittee on Contracting and Infrastructure.
This bill clarifies that the HUBZone Price Evaluation
Preference applies to orders.
Are there any other Members who wish to be recognized for a
statement on H.R. 5879?
I would now like to recognize the gentlewoman from
Illinois, Ms. Newman, the sponsor of the bill for an opening
statement.
Ms. NEWMAN. Thank you, Madam Chair and Ranking Member
Luetkemeyer.
I rise in strong support of the bipartisan bill H.R. 5879,
the ``HUBZone Price Evaluation Preference Clarification Act of
2021.'' This legislation is designed to expand contracting
opportunities to small businesses located historically in
underutilized sectors. This bill would amend current trends to
ensure more federal spending is devoted to SBA's HUBZone
program, which could then be used to expand the number of
federal and private contracting opportunities for local
entrepreneurs and small businesses.
The SBA's historically underutilized empowerment
contracting programs, also known as the HUBZone program, is
designed to provide small businesses located in low-income
areas or with obstacles for high unemployment with contracting.
Currently, the HUBZone price evaluation preference is not
widely used because some agencies have incorrectly interpreted
that the preference does not apply to order. As the federal
government drives its spending through indefinite means a
significant opportunity for HUBZone spending is being lost
because the HUBZone price evaluation is not being applied to
award awarders. This bill would clarify the program's
evaluation language to ensure the federal government is driving
its spending toward HUBZone small businesses.
I urge that my colleagues support this bill and I yield
back my time.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Are there any other Members who wish to be recognized for a
statement on H.R. 5879?
I would now like to recognize the Ranking Member.
Mr. LUETKEMEYER. Thank you, Madam Chair.
I would like to thank you for bringing this bill forward
and the sponsors of the bill, Ms. Newman from Illinois, and Ms.
Salazar, the Ranking Member of the Subcommittee on Contracting
and Infrastructure from the State of Florida.
Further consolidation within the federal government's
contracting space will continue to disadvantage the nation's
smallest contractors. This bill takes an important step and
ensures important HUBZone businesses have an opportunity to
compete. It is critically important that we continue to examine
this issue and propose solutions, like H.R. 5879, the ``HUBZone
Price Evaluation Preference Clarification Act of 2021.''
With that, I urge a yes vote, and I yield back the balance
of my time.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now I recognize myself briefly.
The HUBZone program promotes economic development by
providing small businesses located in distressed areas greater
access to federal contracts. One of the main incentives of the
program is the HUBZone Price Evaluation Preference which will
help level the playing field when a HUBZone firm is competing
against a large business for a federal contract. Unfortunately,
this incentive is not widely used because some agencies have
incorrectly interpreted regulations to mean that the price
evaluation preference does not apply to orders. To eliminate
any uncertainty, H.R. 5879 amends the Small Business Act to
explicitly state that the price evaluation preference applies
to orders. Doing so opened the doors to many more procurement
opportunities for HUBZone firms, and therefore, paving the way
for economic growth in their communities. Thanks to the devoted
efforts of Congressmembers Newman and Salazar, there is a path
to improve the HUBZone program and provide clarity to federal
agencies seeking to hire small contractors. I urge a yes vote.
If there is no further discussion, the Committee will move
on to consideration of H.R. 5879.
The clerk will report the bill.
The CLERK. H.R. 5879, the HUBZone Price Evaluation----
Chairwoman VELAZQUEZ. Without objection, H.R. 5879 is
considered as read and open for amendment at any point.
Does anyone seek recognition to offer an amendment?
Seeing none, the question is now on H.R. 5879.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 5879
is agreed to.
The question now occurs on reporting H.R. 5879 favorably to
the House.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 5879
is reported to the House.
Without objection, committee staff is authorized to correct
punctuation and make other necessary technical corrections and
conforming changes.
Without objection, Members have 2 business days to file
additional supplemental, dissenting, and minority views.
H.R. 7694
We will now take up the final bill on the agenda, H.R.
7694, the ``Strengthening Subcontracting for Small Businesses
Act of 2022,'' introduced by Mr. Stauber and cosponsored by Mr.
Mfume, the Chair of the Subcommittee on Contracting and
Infrastructure. This bill ensures that the past compliance with
subcontracting plans is considered when determining an
offeror's past performance.
I would now like to recognize the gentleman from Minnesota,
Mr. Stauber, the sponsor of the bill, for an opening statement.
Mr. STAUBER. Thank you, Chairwoman Velazquez and Ranking
Member Luetkemeyer.
A common theme we have heard in the contracting space is
that prime contracting opportunities for small businesses are
dwindling at an alarming rate. This means that subcontracting
opportunities are more important than ever for small business
contractors. While large prime contractors are statutorily
required to have subcontracting plans, there is little
incentive for a prime contractor to comply with such plans.
Further, there is no requirement that a contracting officer
take into consideration a large prime contractor's performance
in subcontracting with small businesses when deliberating new
contract awards.
While it is laudable that prime contractors have
subcontracting plans, these plans seem to have minimal
influence on a large prime contractor's motivation to award
work to small business subs.
My bill, the Strengthening Subcontracting for Small
Businesses Act addresses this problem in a few ways. First, the
legislation will require contracting officers to consider a
contractor's proposed utilization of small businesses in its
proposed subcontracting plan. Second, the legislation will
require contracting officers to consider the contractor's past
performance in meeting its previous subcontracting plans. In
short, the bill creates a strong incentive for large prime
contractors to comply with their own subcontracting plans since
it will now impact their ability to win new work.
I would like to thank my colleague, Congressman Mfume, for
his collaboration on this bill, and together, I believe we have
created meaningful legislation that will make a real and
significant impact on the way small business contracting is
conducted throughout the federal procurement environment.
I urge my colleagues to support this legislation. Madam
Chair, I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now I would like to recognize the gentleman from Maryland,
Mr. Mfume, for an opening statement.
Mr. MFUME. Thank you very much, Madam Chair. Good morning.
I want to thank you for calling this markup for today and for
your leadership on small business issues over many, many years.
At a time when many of those same small businesses are at
risk of being pushed out of the federal procurement space due
to forces that are outside of their control, it is imperative
that we unite across the aisle to stand up for small business
concerns and to help support and grow their presence in the
small business federal contracting space.
I am very pleased to have worked with Mr. Stauber, the
distinguished gentleman from Minnesota, and with those Members
of the Small Business Committee staff on this bipartisan,
common-sense bill that protects small businesses by
incentivizing large prime contractors to adhere to this
contracting plan. This bill as you heard requires any agency
that is considering proposals for contract to assess the extent
to which an offer complied with its subcontracting plan in the
past. By amending existing language of the Small Business Act
and also by expanding its scope, the legislation will benefit
contractors that interact with and treat small businesses in
the right way. It will incentivize them to do the right thing,
and it will strongly urge and encourage improvement by those
contractors that have failed to properly include and protect
small businesses.
And so as such, I respectfully ask that my colleagues on
the committee support H.R. 7694, the ``Strengthening
Subcontracting for Small Businesses Act of 2022,'' and I yield
back the remainder of my time. Thank you, Madam Chair.
Chairwoman VELAZQUEZ. The gentleman yields back.
Are there any other Members who wish to be recognized for a
statement on H.R. 7694?
I would now like to recognize the Ranking Member.
Mr. LUETKEMEYER. Thank you, Madam Chair.
I support H.R. 7694, the ``Strengthening Subcontracting for
Small Businesses Act of 2022.'' While the government has
certain requirements in place supporting small businesses
subcontracting, we are missing a vital piece of this puzzle.
Specifically, there is a lack of incentive among large prime
contractors to use small businesses as subcontractors in the
federal sphere in a way that promotes true and lasting
behavioral change. I believe this bill gets us there and I urge
my colleagues to support it.
With that, Madam Chair, I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now I briefly recognize myself.
The Small Business Act seeks to promote opportunity for
small contractors to participate in the federal procurement
process, whether at the prime or subcontracting level. It
requires offerors to submit subcontracting plans for contracts
that have a certain threshold and will be awarded using
negotiated procedures. The law ensures compliance with
subcontracting requirements by allowing the imposition of
liquidated damages if a contractor fails to engage in good
faith efforts to meet them. Yet, this standard is ambiguous and
not always enforced, resulting in contractors not facing any
consequences for noncompliance. What most people do not
understand is just how important subcontracting plans are for
small firms. In many instances, they represent the only method
to gain a foothold into the federal marketplace. That is why it
is important that we keep looking for ways to encourage
compliance. Thanks to the diligence of Mr. Stauber and Mr.
Mfume, we have an important piece of legislation ensuring that
previous compliance with subcontracting plans is considered
when evaluating an offeror's past performance.
I support this bill and I urge a yes vote.
If there is no further discussion, the committee will move
on to consideration of H.R. 7694.
The clerk will report the bill.
The CLERK. H.R. 7694, the Strengthening Subcontracting----
Chairwoman VELAZQUEZ. Without objection, H.R. 7694 is
considered as read and open for amendment at any point.
Does anyone seek recognition to offer an amendment?
Seeing none, the question is now on H.R. 7694.
All in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7694
is agreed to.
The question now occurs on reporting H.R. 7694 favorably to
the House.
All those in favor say aye.
All those opposed say no.
In the opinion of the Chair, the ayes have it and H.R. 7694
is reported to the House.
Without objection, committee staff is authorized to correct
punctuation and make other necessary technical corrections and
conforming changes.
Without objection, Members have 2 business days to file
additional supplemental, dissenting, and minority views.
My thanks to all the Members for their participation today.
If there is no further business to come before the committee,
without objection, this meeting is adjourned. Thank you.
[Whereupon, at 11:14 a.m., the committee was adjourned.]
A P P E N D I X
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