[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]




 
                  SBA MANAGEMENT REVIEW: OFFICE OF 
            GOVERNMENT CONTRACTING AND BUSINESS DEVELOPMENT

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

                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                             JUNE 23, 2022

                               __________

  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                             
                               

            Small Business Committee Document Number 117-059
            
            
            
            
                             ______

             U.S. GOVERNMENT PUBLISHING OFFICE 
47-840                  WASHINGTON : 2022            
            
            
            
             Available via the GPO Website: www.govinfo.gov
                   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
                     CHRISSY HOULAHAN, Pennsylvania
                          ANDY KIM, New Jersey
                         ANGIE CRAIG, Minnesota
                        SCOTT PETERS, California
              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..........................................     2

                                WITNESS

Ms. Bibi Hidalgo, Associate Administrator, Office of Government 
  Contracting & Business Development, U.S. Small Business 
  Administration, Washington, DC.................................     4

                                APPENDIX

Prepared Statement:
    Ms. Bibi Hidalgo, Associate Administrator, Office of 
      Government Contracting & Business Development, U.S. Small 
      Business Administration, Washington, DC....................    31
Questions and Answers for the Record:
    Questions from Hon. Luetkemeyer to Ms. Hidalgo and Answers 
      from Ms. Hidalgo...........................................    37
Additional Material Submitted for the Record:
    None.


                   SBA MANAGEMENT REVIEW: OFFICE OF 
            GOVERNMENT CONTRACTING AND BUSINESS DEVELOPMENT

                              ----------                              


                        THURSDAY, JUNE 23, 2022

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:02 a.m., in Room 
2360, Rayburn House Office Building, Hon. Nydia Velazquez 
[chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Davids, Mfume, 
Bourdeaux, Carter, Chu, Evans, Houlahan, Craig, Luetkemeyer, 
Williams, Stauber, Meuser, Tenney, Garbarino, Young Kim of 
California, Van Duyne, Donalds, and Fitzgerald.
    Chairwoman VELAZQUEZ. Good morning. I call this hearing 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. Standing House and Committee rules and practice 
will continue to apply during hybrid proceedings. All Members 
are reminded that they are expected to adhere to these rules 
including decorum.
    House regulations require Members to be visible through a 
video connection throughout the proceeding, so please keep your 
cameras on. Also, remember to remain muted until you are 
recognized to minimize background noise.
    In the event a Member encounters technical issues that 
prevent them from being recognized for their questioning, I 
will move to the next available Member of the same party and 
will recognize that Member at the appropriate time slot 
provided they have returned to the proceeding.
    With that, let's start this hearing.
    When a small firm wins a federal contract, it creates a 
ripple effect that creates jobs, invests in communities, and 
generally boosts the economy. The presence of small firms also 
helps drive innovation nationwide and competition in the 
federal marketplace.
    Congress recognized these benefits in 1953, when they 
created the Small Business Administration and tasked the agency 
with ensuring that a fair proportion of contracts and 
subcontracts are awarded to small businesses.
    Today, SBA's Office of Government Contracting oversees this 
mission and works to create an environment where small 
businesses can compete on a level playing field in federal 
procurement.
    In addition to supervising governmentwide contracting 
goals, the office is also responsible for administering 
multiple programs like the 8(a) program, the Service-Disabled 
Veteran-Owned Small Business program, the Women-Owned Small 
Business program, and the HUBZone program. These initiatives 
help create contracting opportunities for disadvantaged small 
businesses and are instrumental in helping the government reach 
its overall small business contracting goal.
    Given its critical mission of maximizing small business 
participation in the federal marketplace, we must take steps to 
ensure the Office of Government Contracting and Business 
Development operates as effectively as possible.
    Today, I hope we can take a close look at the office's 
challenges and actions Congress can take to alleviate them. For 
instance, despite the federal government consistently meeting 
its goal of awarding 23 percent of eligible federal contracting 
dollars to small firms, small business participation has been 
steadily declining. Last week, we held a hearing detailing the 
severe impact of category management and governmentwide 
contracting vehicles to small firms. I would like to hear what 
steps SBA is taking to minimize these effects and safeguard the 
small business base.
    While the government has met the overall small business 
contracting goal in recent years, the goals for programs like 
HUBZone and the Women-Owned Small Business program were not 
met. In fact, the goal for the Women-Owned Contracting Program 
has only been met twice, and the HUBZone goal has never been 
met. It is important that we address these shortcomings and 
ensure that program participants are getting an adequate number 
of opportunities.
    I also want to discuss IT challenges. As reported by the 
SBA's Office of Inspector General, SBA abandoned 
Certify.SBA.gov alleging it was unsustainable in the long term 
and intended to replace it. Given the importance of having an 
IT platform that can successfully and efficiently service all 
of the contracting programs, I am interested in examining SBA 
plans and timelines related to this initiative.
    These are just a few important issues we will cover today. 
I would also like to hear more from our witness about staffing 
resources, strengthening internal controls, and implementing 
key legislation related to contracting programs.
    When small contractors can thrive, our nation's small 
businesses, government, and economy all benefit. I look forward 
to hearing from Associate Administrator Hidalgo about the ways 
Congress and the agency can work together to protect the role 
of small businesses in the procurement process.
    I would now like to yield to the Ranking Member, Mr. 
Luetkemeyer, for his opening statement.
    Mr. LUETKEMEYER. Thank you, Madam Chair. And thank you for 
having this important hearing with the associate administrator 
of SBA's Government Contracting and Business Development 
Office.
    Now, more than ever, small businesses deserve to hear from 
agency officials that administer some of the most important 
small business programs within the government, including 
federal contracting programs. These are incredibly challenging 
times for small businesses, their employees, and their 
communities. Inflation is running rampant across the nation and 
impacting nearly every product and service. In fact, the 
Consumer Price Index is at a 40-year high, and wholesale 
inflation is in the double digits. This is unacceptable for our 
nation and for Americans.
    Surging prices and runaway costs have direct and immediate 
impacts on main street. Not only is inflation one of the top 
concerns for small business owners, but also has direct effects 
on the entire small business supply and demand ecosystem. 
According to the most recent survey out of NFIB, nearly three-
quarters of all business owners are increasing prices. This 
matches the highest percentage on record.
    In addition to red hot inflation, the nation's smallest 
firms continue to experience sharp supply chain issues and an 
ongoing labor crisis that is hindering the busy summer season.
    It is for these reasons why it is so important for this 
Committee to hear from Treasury Secretary Yellen. This 
administration has the ability to talk directly to small 
business through one of the federal government's most important 
cabinet-level agencies, the Department of Treasury. Despite 
being legally required to testify before this Committee last 
year and twice this year, Treasury Secretary Yellen is a no-
show. Small businesses employ approximately half of all workers 
in America; yet, she cannot find the time to speak to us.
    COVID programs, including the PPP, which the Treasury 
Department assisted with by bringing in new lenders, is 
currently in the loan forgiveness stage. Secretary Yellen 
refuses to talk to us and talk directly to small business 
owners. This continues to be unacceptable and a violation of 
the law. It is my hope she stops ignoring the loss to small 
businesses on this Committee and testifies soon.
    When it comes to contracting, small businesses are a 
critical player in helping to strengthen the nation's 
industrial base. They act as prime contractors and 
subcontractors on numerous projects that span the federal 
government.
    Billions of dollars are processed through federal 
contracts, and small businesses have a significant role to 
play. Unfortunately, their impact is waning and this Committee 
must continue to study a balanced approach when it comes to 
cost savings and consolidation.
    I look forward to having a thorough conversation on this 
very important topic. Additionally, I look forward to 
discussing the federal government's practice of setting and 
measuring goals within federal contracting, the role of 
subcontracting, and various other issues related to small 
businesses that participate in federal contracting programs.
    As I mentioned, these are difficult times for small 
businesses, their owners, and their workers, as well as the 
nation's businesses that supply the federal government with 
goods and services.
    With that, Madam Chair, I yield back.
    Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. The 
gentleman yields back.
    I would like to take a moment to explain how this hearing 
will proceed. Ms. Hidalgo, you will have 5 minutes to provide a 
statement, and each Committee Member will have 5 minutes for 
questions. Please ensure that your microphone is on when you 
begin speaking and that you return to mute when finished.
    With that, I would like to introduce our witness.
    Ms. Bibi Hidalgo is the Associate Administrator of the 
SBA's Office of Government Contracting and Business 
Development. In this role, Ms. Hidalgo oversees and reviews 
procurement-related policy for small business contractors 
hoping to work with the federal government. Before joining the 
SBA, she was a co-founder of Future Partners, LLC, which 
advised Fortune 500 corporate executives on procurement and 
minority business strategy and created a model for how to 
facilitate significant opportunity for both. She also served in 
the White House where she managed a government-wide initiative 
with 24 cabinet agencies to position the federal government to 
meet the 23 percent small business goal for the first time in a 
decade. Ms. Hidalgo has a Master's in Public Policy from the 
John F. Kennedy School of Government at Harvard University.
    Welcome, Ms. Hidalgo. You are now recognized for 5 minutes.

 STATEMENT OF BIBI HIDALGO, ASSOCIATE ADMINISTRATOR, OFFICE OF 
  GOVERNMENT CONTRACTING AND BUSINESS DEVELOPMENT, U.S. SMALL 
                    BUSINESS ADMINISTRATION

    Ms. HIDALGO. Thank you, Chairwoman.
    Good morning, Chairwoman Velazquez and Ranking Member 
Luetkemeyer, and distinguished Members of the Committee. On 
behalf of our Administrator, Isabella Casillas Guzman, and the 
SBA, thank you for the opportunity to appear before you today 
to discuss the important role that government contracting plays 
in empowering small businesses across the United States.
    The federal government is the largest purchaser of goods 
and services in the world, leveraging its immense spending 
power of over $500 billion annually on everything from 
biopharmaceutical research to cybersecurity improvements to 
green building architecture. And time and again, it is our 
nation's small business contractors who are driving these 
innovations, strengthening our supply chains, moving our 
economy forward, and keeping our country secure.
    For small businesses, there is real power that comes with 
getting to say that the United States Government is one of 
their clients.
    Under the leadership of President Biden, we have seen an 
overhaul in how federal agencies approach and promote small 
business procurement. This administration has shown that it 
believes in advancing small and socioeconomic business 
contracting not only for the sake of our congressional goals, 
but also for the health, security, and prosperity of our 
industrial base. I am proud to be a part of the 
Administration's work to ensure that innovative businesses can 
engage in the federal marketplace.
    By way of background, I am the daughter of Cuban exiles who 
came to the United States after the Cuban Revolution. The day 
of the Bay of Pigs invasion, the Cuban militia stormed into my 
grandparents' house in Havana and took my grandfather, my mom, 
who was only 17 years old, and her two sisters to prison. 
Though my mom and her sisters were deprived of their freedoms 
for 39 days, America soon offered an open door for a better 
future, a future for my mom and dad to start their family, 
raise five children, and teach each of us about grit and 
determination. And based on our deep Ignatian faith, we were 
taught the importance of working in service of others.
    I have worked to promote small business interests under two 
U.S. Presidents. I was a small business owner myself, starting 
a business with my younger brother Patrick to serve Fortune 500 
companies in developing strong supply chains. During this time, 
I faced many of the same challenges that I hear about from 
small business owners across the country, from making payroll 
to landing that first contract.
    And I faced devastating loss at the start of the pandemic. 
My brother Patrick, who was my best friend and business 
partner, passed away suddenly in March of 2020.
    As Associate Administrator of SBA's Office of Government 
Contracting and Business Development, I am deeply aware of the 
impact the pandemic has had on small businesses. My team and I 
work daily to widen the doors of access and opportunity by 
monitoring the progress of all agencies towards the 
congressionally mandated goals for small business contracting. 
Collectively, these goals translate to almost $150 billion in 
small business contracts per year.
    As part of the Administration's commitment to equity in 
procurement, SBA worked last year with the White House, OMB, 
and our partner agencies to develop five major policy changes 
for federal contracting to ensure that socioeconomic firms have 
a strong footing on which to compete in the federal 
marketplace. These changes included incorporating all 
socioeconomic firms into Tier 2 credit of category management, 
tracking all new entrants into the federal marketplace, 
publicly releasing FY20 disaggregated contracting data, adding 
small business goals to SES performance evaluations, and 
increasing the small disadvantaged business goal to 15 percent 
by 2025 with an initial goal of 11 percent for this fiscal 
year.
    At the same time, we have spent the past year working to 
modernize our certification IT systems. These changes have come 
in two forms. First, as client-facing improvements to the 
system itself, such as making the application process easier to 
navigate. And second, as staff facing system improvements that 
have cut down on processing times.
    Our reforms are making a difference. Across the board, SBA 
is processing certification applications over 20 percent faster 
than statute requires. And the new Veteran Certification 
Program that Congress entrusted to us and is slated to begin at 
SBA next year will be leading our technology-forward approach 
across SBA. As we work to support a new generation of 
entrepreneurs, it is more important now than ever to ensure 
that small businesses can access the exceptional resources of 
SBA and the opportunities afforded through federal contracting.
    Thank you again Chairwoman Velazquez, Ranking Member 
Luetkemeyer, and distinguished Members of the Committee for the 
opportunity to appear before you today. I look forward to your 
questions and our conversation today.
    Chairwoman VELAZQUEZ. Thank you, Ms. Hidalgo.
    I now recognize myself for 5 minutes. I am very sorry for 
your loss.
    Last Tuesday, we held a hearing here on category management 
and the impact that it is having on small businesses, so it is 
great that we have achieved the 23 percent small business goal. 
That is a good thing. However, the overall participation of 
small firms in federal contracts has declined significantly 
over the past years, largely because of initiatives such as 
category management.
    My question to you is, based on the anecdotal data stories 
that we have heard and the numbers that are showing a decline, 
what is SBA doing to counter defects of category management?
    Ms. HIDALGO. Well, thank you very much, Chairwoman, for 
that important question. That is the top issue that the White 
House and Administrator Guzman wanted us to address. And so 
right out of the gate we started to meet with everybody across 
the White House, OMB, and the largest contracting agencies to 
figure out how we could reverse that trend, realizing that 
category management was one of the biggest issues. And so as a 
result, we negotiated with OMB and the White House to have all 
the socioeconomic firms, that includes service-disabled 
veterans, women-owned businesses, all place-based HUBZone 
firms, and small disadvantaged businesses into Tier 2 of 
category management, which is the rating system that they had 
created. So that means that 33,000 more firms are part of that 
higher level tiering category which will create more access for 
contract opportunities.
    Chairwoman VELAZQUEZ. So we have followed-up with OMB to 
obtain more information about this change, Tier 2 Category. We 
have not received a response. Do you have a sense of the impact 
this change is having thus far, and would you please share with 
them that we are awaiting a response?
    Ms. HIDALGO. Absolutely, Chairwoman. I will share with them 
that you are awaiting response. What I do with my team is check 
initially for anecdotal information while we also track the 
data, and we are seeing positive trends. We are hearing from 
business owners that they have been contacted for the first 
time in years. We are seeing an increase in new entrants, which 
is one of the things that we are tracking to make sure that it 
is not only an increase in dollars but that we are bringing 
back the industrial base, that we are lifting it up.
    Chairwoman VELAZQUEZ. In fiscal year 2020, the federal 
government also failed to meet the 5 percent prime contracting 
goal for the women-owned businesses program and the 3 percent 
goal for the HUBZone program. In fact, the women-owned small 
business goal has only been met twice as I mentioned in my 
opening statement and the HUBZone goal has never been met. What 
is SBA doing to ensure agencies make use of these programs and 
meet the goals?
    Ms. HIDALGO. Thank you for that great question, Chairwoman.
    This is really important to us, and so now we have the 
women-owned business goal and the HUBZone goal in the 
performance evaluations of not just acquisition staff but all 
senior executive program managers. So this is part of 
essentially their KPIs. And so we are seeing a difference. They 
are now reaching out more and more, the agencies. My staff was 
just telling me this yesterday, across the board agencies are 
reaching out to identify more businesses across all the 
socioeconomic categories.
    Chairwoman VELAZQUEZ. Are you optimistic that the 3 percent 
and the 5 percent goal will be achieved?
    Ms. HIDALGO. I am optimistic that we are approaching closer 
to getting to the goal. I cannot say where we will be this year 
but I am optimistic of the trend that we are seeing.
    Chairwoman VELAZQUEZ. Okay. Let me ask you about an 
important concern that I have, and that is that the agency now 
has performed a strategic review of certified.sba.gov. Could 
you please share with us what the plans are and associated 
timelines to implement an IT platform that achieves this goal?
    Ms. HIDALGO. Thank you, Chairwoman.
    We are very pleased that the systems are fully functioning 
and that was the number one thing I asked my team was to make 
sure that it is functioning and that we gain small wins along 
the way. Rather than doing an outright overhaul, we wanted to 
see that it would become much more user friendly for the 
customer. And I am pleased to say that we just recently 
released a rollout----
    Chairwoman VELAZQUEZ. Okay, so to be clear, will SBA have 
one IT platform for all of the contracting programs or is the 
plan to improve each of the existing certification applications 
IT sees?
    Ms. HIDALGO. Yes. We are working towards one contracting 
platform. But in the meantime, we wanted to make sure that it 
was fully functional, what we have, so that applicants are not 
unduly burdened in the process.
    Chairwoman VELAZQUEZ. My time has expired. Now I recognize 
the Ranking Member, Mr. Luetkemeyer, for 5 minutes.
    Mr. LUETKEMEYER. Thank you, Madam Chair. And thank you, Ms. 
Hidalgo, for being here today. And for your compelling personal 
story. It is always great to hear people's willingness to come 
to this country and participate in our process. As a capitalist 
and entrepreneur, you were able to take advantage of the 
economic freedom this country presents and start your own 
business and do well with it. I congratulate you and your 
family on that.
    Along those lines, as a small business owner, I am sure you 
understand the effects of things that go on with regards to 
what is going on right now with our economy, with inflation, 
for instance, taxes and things like that. So in your position, 
you know, the Consumer Price Index right now is at 8.6 percent, 
and as I go home, that is the number one concern I hear from 
small businesses. With regards to contracting, I have heard 
from several businesses that seem to be stuck with a situation 
where they signed a government contract pre-COVID and because 
of runaway inflation and supply chain problems now they are 
stuck. There is not enough flexibility in the contracts to be 
able to recover the increased costs that are there due to 
inflation or delays. So my question I guess is do the 
government contracts have some type of clause or flexibility to 
allow small businesses who more than likely do not have a large 
cash flow to survive in these instances?
    Ms. HIDALGO. Thank you, Ranking Member, first of all for 
your acknowledgement of my family's story. We are so proud to 
be in this country and my parents taught us that all our lives, 
to be proud of being able to become and be American citizens.
    This issue is top of mind for me and so as a result I met 
with all of my Procurement Center Representatives to ask them 
what can we do to solve these challenges for our businesses? 
Contracting affords an incredible opportunity to contract with 
the largest purchaser in the globe and so we realize that this 
helps to serve as a strong buffer during these challenging 
times. And apart from that, I have been asking my team how we 
can adjust for inflation, and they have been giving me a number 
of recommendations, some of which we are working into our 
regulations now to provide additional relief to small business 
contractors.
    Mr. LUETKEMEYER. I asked this question last week of one of 
our witnesses and they said that there was some flexibility in 
some of the contracts. They were making changes to allow that 
to happen. I know that I have got some of my constituents who 
are working to try to get that done because there apparently is 
not any flexibility in theirs. So the reason for the question I 
guess is it does not seem to be consistent across the board and 
do you find that there is flexibility? And if not, are you 
working to try to fix the problem immediately so that they can 
exist? Otherwise, it is going to run the small businesses out 
of business.
    Ms. HIDALGO. Yes, thank you. So fortunately, given that 
small business contracting is a big priority of the President, 
we are in constant conversations with the Office of Federal 
Procurement Policy that issues guidance to address 
systematically all of these issues. And so together with OFPP, 
the White House, and the largest seven contracting agencies, we 
are trying to find ways to make sure that we can be consistent 
across the board in our guidance and allow for more variability 
in the costs associated with the contracts.
    Mr. LUETKEMEYER. One of the things that the Government 
Accountability Office and SBA's Inspector General originally 
criticized the SBA for their lack of controls on these programs 
leading to potential fraud risks. Can you tell us what new 
measures you have implemented or plan to implement to combat 
the fraud risks? There seems to be a lot of problems with it, 
and from the IG report, there does not seem to be a lot of 
concern.
    Ms. HIDALGO. So we are pleased that we have closed out many 
of those reports. We do have a couple of management challenges 
which we have been addressing and have proposed to the IG now 
to move them to green. So making sure that we have all the 
firms that Congress intended for us to have in the program. And 
I am really pleased to share that our Size Protest program 
issues a formal size determination when contractors' size is 
questioned by another bidding firm or a contracting officer. 
And in fiscal year 2021, because of these reviews, GCBD, or my 
office, was able to identify 66 companies that were not 
legitimate small businesses.
    Mr. LUETKEMEYER. I have got one real quick question for 
you. How many of the recommendations from GAO and IG are still 
outstanding?
    Ms. HIDALGO. We have two that are outstanding from the IG.
    Mr. LUETKEMEYER. Okay.
    Ms. HIDALGO. And those are what we are working on right 
now. One, of course, is on business development for 8(a) firms 
which we are pleased to be working on that and really 
strengthening----
    Mr. LUETKEMEYER. Do you have a date where you think you 
will get those fixed or can be compliant with?
    Ms. HIDALGO. We are working diligently with IG daily. I 
actually hired a top team to address these issues and as you 
know, the Administrator has increased vigilance through the 
Fraud Risk Management Board of which we are very much a part in 
it.
    Mr. LUETKEMEYER. Thank you. My time has expired.
    Thank you, Madam Chair.
    Ms. HIDALGO. Thank you, Ranking Member.
    Chairwoman VELAZQUEZ. The gentleman yields back. Now we 
recognize the gentlelady from Kansas, Ms. Davids, Chairwoman of 
the Subcommittee on Economic Growth, Tax, and Capital Access.
    Ms. DAVIDS. Thank you, Chairwoman Velazquez and Ranking 
Member Luetkemeyer for holding this hearing today. And thank 
you, Ms. Hidalgo for testifying before us today.
    The SBA is charged with ensuring that a fair proportion of 
contracts and subcontracts for the federal government are 
placed with small businesses, which we have been discussing. 
And while the federal government has met its overarching goal 
of awarding 23 percent of contracts to small businesses, as we 
have been talking about there has consistently been a failure 
to meet the contracting goals for the Women-Owned Small 
Business program and HUBZone program. And one of the things 
that I have been made aware of more recently in part because 
the Kansas 3rd happens to have a really strong entrepreneurial 
ecosystem, is that the federal contracts we are seeing are 
largely going to small businesses in concentrated areas. Forty-
three percent of the contracts went to around 17 congressional 
districts, 12 of which are located in Maryland and Virginia. 
And I, of course, want to make sure that all the amazing 
businesses that we have in Kansas that could absolutely provide 
the services and expertise that federal contracts require are 
able to do that.
    So I am curious if you are aware of or can speak to some of 
the factors that have lead to this kind of high geographic 
concentration as it relates to these small business contracts.
    Ms. HIDALGO. Thank you, Congresswoman, for that very 
important question.
    We are deeply concerned about the issue of contract 
bundling and it favors companies that tend to be larger or that 
are working with larger corporations, and so as a result, that 
is part of the reason why we are seeing that concentration as 
well as with category management. And so, we are quite often 
looking at, studying the maps, including in your district to 
figure out what we can do to unleash more opportunity. And that 
is part of the reason why we are now tracking new entrants and 
we are hearing from agencies constantly what they can do to 
connect with new small businesses or small businesses that have 
not been contracting with the federal government. And recently, 
I signed a rule that also provides a lot more NAICS codes for 
set-asides for women-owned businesses. So now 92 percent of all 
federal spend can qualify as a set-aside for women-owned 
businesses. So we are hopeful that that will have an impact on 
women-owned business contracting as well.
    Ms. DAVIDS. Thank you. That is really good to hear and I am 
sure our office will follow up so we can figure out if there 
are ways that we can be helpful in making sure that 
geographically diverse small businesses are able to access the 
government contracting.
    I am curious if you could talk a little bit about the $5 
million funding, most recent funding request for HUBZone and 
8(a) and the Women-Owned Small Business program for staffing 
resources. Can you just share with us a little bit about how 
you hope to use that funding to increase the effectiveness and 
efficacy of those programs?
    Ms. HIDALGO. Yes, definitely. Thank you for that question, 
Congresswoman.
    When I arrived, there were historic lows in some of our 
staffing, particularly around the Procurement Center 
Representatives who monitor the contract awards as well as the 
Commercial Market Representatives who monitor subcontracts. So 
this is one of the areas where we want to make sure we can get 
back to more historic levels of staffing. Each one of the PCRs, 
I asked my team to give a ballpark figure of what that 
represents in the return and value on contracts to small 
businesses. Each one represents about a billion dollars in 
additional contracts for small businesses. So we will leverage 
that $5 million in staffing to be able to increase significant 
opportunity for small businesses.
    Ms. DAVIDS. Thank you. And we will follow up about that as 
well. Thank you for your time today and Madam Chair, I yield 
back.
    Chairwoman VELAZQUEZ. The gentlelady yields back.
    Now we recognize the gentleman from Texas, Mr. Williams, 
Vice Ranking Member of the Committee, for 5 minutes.
    Mr. WILLIAMS. Thank you, Madam Chair. And thank you for 
being here. I appreciate it.
    You probably know the president. Well, you do know the 
president much better than I do. You probably see him or you do 
see him more than I do. I am a small business owner. Tell him a 
couple things. Tell him that he needs to quit talking about tax 
increases. He needs to be fixing inflation. Okay? And he also 
needs to quit burdening small business owners with regulations 
through adding to compliance costs that are destroying profits 
in small business. If you would tell him that I would 
appreciate it.
    And thank you again for being here. And as a small business 
owner for over 50 years--actually 52 years now--I still have my 
business. I employ about 330 people back in Texas. I can tell 
you that the Biden administration is completely out of touch 
with Main Street America. Main Street America is what this 
country is about and small businesses across the country are 
concerned with supply chain disruptions that are leaving 
storage shelves empty. And in my personal situation, I have no 
cars to sell on my lot. I cannot get cars. Excessive government 
regulations cause an increase in compliance. We just talked 
about. And the inability to find qualified workers and the 
constant threat of tax increases coming from Democrats in 
Washington are really hurting small business.
    However, when I talk to my business owners back in Texas, 
they are most concerned about the out-of-control inflation we 
are all experiencing. And instead of taking and faking steps to 
bring down energy costs and bring relief to families and small 
businesses, the only thing the Biden administration is doing is 
making excuses. The best I have ever seen. They have switched 
between blaming the Russian invasion of Ukraine to corporate 
greed as the main cause of inflation but I can tell you, Texas 
are not buying that. And Americans see the reckless government 
spending and the hostile posture towards our energy companies 
as the main factor in these record levels of inflation that are 
killing small businesses and owners who must drastically alter 
their operations.
    So we have talked a little bit about this but I would say 
what is your office doing to help small businesses struggling 
with inflation. We talked about that earlier. But has 
Administrator Guzman asked you to examine inflation's impact on 
the federal contracting? Now, you did talk about the impact but 
you did not have the answer to the problem. And you mentioned a 
focus group I think that give you ideas and so forth but we 
have not talked about what are they saying? What are they 
saying that you need to do to fix this problem?
    Ms. HIDALGO. Well, thank you----
    Mr. WILLIAMS. You have got the problem and then you have 
got to have the fix.
    Ms. HIDALGO. Thank you very much, Congressman, and I really 
deeply appreciate your perspective as a very successful small 
business owner.
    So this is top of mind for the Administrator and the White 
House. And so as a result, that is why I met with all of my 
team members that are very much on the ground working with 
small businesses every day to get contracting opportunities to 
say what can we do to alleviate any of these challenges. So 
allowing for more variable price adjustments is one of the 
issues that we are looking at. Looking at thresholds to match, 
adjust for inflation are other areas. And so we are meeting 
regularly as a team to put together a package of fixes that 
will help to alleviate challenges----
    Mr. WILLIAMS. Well, that's good. I hope you have some small 
business owners giving you some real world experience to help 
you do that.
    And small business contractors are some of the hardest hit 
businesses by runaway price increases. And if a contractor's 
resource costs are rising each month, their margins will get 
smaller and smaller. And additionally, every business I speak 
to has told me how hard it is to find workers. We talked about 
that. Everyone knows that. And this is delaying the timelines 
on projects when they can be completed and then the project 
drags out. And with high inflation the cost goes up. So 
unfortunately, there is rarely any flexibility within these 
contracts to ensure they can still get the job done at a 
reasonable cost when these economic factors outside of their 
control are biting into their margins. So how is your office 
working with small businesses that have been awarded a federal 
contract? Before inflation, employers' shoulders were 
calculating the original bid. And I think one of the biggest 
things, too, is payment terms. Are you all paying them on time? 
How long does it take to get payment from the federal 
government?
    Ms. HIDALGO. So we are actually----
    Mr. WILLIAMS. That is one of the biggest things you can do 
right now to help. My experience with the federal government 
has been pretty much a slow pay.
    Ms. HIDALGO. And we are working now to get back to during 
the Obama era where we fast-tracked payment. And so with the 
Prompt Pay Act, it is a 30-day requirement and we are trying to 
get that back to 15 days so that businesses will have more of a 
capital flow during these circumstances. And we are continuing 
to look at all the tools that are available at our disposal to 
ensure that small businesses can compete and that is where our 
strong relationship with OFPP and the White House has been 
critical in allowing us to provide those recommendations.
    Mr. WILLIAMS. Thirty-day pay is good. Ninety-day is bad.
    Thank you for being here. I appreciate it.
    Ms. HIDALGO. Thank you, Congressman.
    Chairwoman VELAZQUEZ. Time has expired.
    Now we recognize the gentlelady from Pennsylvania, Ms. 
Houlahan, for 5 minutes.
    Mr. HOULAHAN. Thank you, Madam Chair. Just making sure you 
can hear me okay. Can you hear me?
    Chairwoman VELAZQUEZ. Oh, I am sorry. Yes, Ms. Houlahan, we 
can hear you.
    Mr. HOULAHAN. Excellent. Excellent. And thank you so much, 
Administrator Hidalgo, for your really compelling testimony 
today.
    And as a women entrepreneur myself, increasing 
opportunities for government contracting and business 
development for women-owned businesses is obviously 
particularly important to me and it very much informs my work 
on this Committee. I also happen to be a systems engineer and 
so I really believe in measuring what matters, and I am 
grateful to hear some of your KPIs and some of your emphasis on 
systems and systems change.
    My Women-Owned Small Business Program Transparency Act, or 
the WOSB Transparency Act, passed the house earlier this month 
with very strong bipartisan support which would allow Congress 
and the SBA to gather necessary data that would improve this 
really important program that we have been talking about. I 
look forward very much to continuing to work with your office 
on ways to make sure that the SBA is able to reach their 5 
percent prime contracting goal for women-owned small businesses 
and I am really pleased that the Chair and also Representative 
Davis have also highlighted this really important goal that has 
only bee met twice in history in their remarks.
    I am particularly interested in hearing more from you about 
how the certification process for that program can be improved 
because as I understand it, according to the latest data from 
the SBA's Office of the Inspector General, SBA initially 
received 15,000 applications for that WOSB program and 12,000 
were screened apparently and returned to the applicant for more 
information. Do you know what the primary reasons were that so 
many applications were, in fact, return. And what actions is 
the SBA able to take to improve this process so that applicants 
can get to this process, get this process correct from the 
beginning?
    Ms. HIDALGO. Well, thank you very much, Congresswoman, for 
that important question. And also, for your perspective as well 
as a business owner.
    This has been top of mind for me since day one. We need to 
get women-owned businesses in the pipeline certified as soon as 
possible so that they can get access to set-asides. And so this 
is partly why immediately I asked my team to figure out what is 
going on in the system that leads to incomplete applications.
    And I will give you an example. We learned that the way it 
was set up is they would ask applicants for all of their 
documents at once. But it turns out if they did not upload them 
individually, then it would only accept one of the documents. 
So I said, this is unacceptable and we need to fix this right 
away. And my team got right on it, fixed it to at least inform 
the business owner that they needed to upload one at a time. 
And as a result, we are seeing differences like that are having 
an impact. We have now certified well over 5,700 firms. We are 
on pace to certify over 6,000 this year. Any incomplete 
applications, I have my pre-screeners working directly with the 
applicants to make sure that their application is not rejected 
and that they can work towards a complete application as soon 
as possible.
    Mr. HOULAHAN. I look forward to learning more of kind of 
the reason codes for why those things are happening and that is 
a really obvious glitch that you are talking about that I have 
experienced personally myself in submitting paperwork for 
health care as an example.
    With what remains of my time, similarly, I am really 
interested in exploring the proposals that exist to benefit 
economically disadvantaged women-owned small businesses. While 
there are clearly requirements to participate in the 
Economically Disadvantaged Women-Owned Small Business 
contracting program or the very easy to remember EDWOSB such as 
income and net worth requirements, there really does not seem 
to be currently a separate and dedicated contracting goal that 
is EDWOSB's which would likely further maximize the utilization 
of such firms. Given the administration's commitment to these 
kinds of causes, I am wondering how the SBA is working to 
increase contracting opportunities for Economically 
Disadvantaged Women-Owned Small Businesses. For instance, do 
you believe a separate contracting goal might be beneficial?
    Ms. HIDALGO. Thank you very much, Congresswoman, for that 
question and concern for EDWOSB firms. Fortunately, a lot of 
the firms will benefit from the President's emphasis on 
increasing Small Disadvantaged Business contracting and my team 
negotiated with all 24 agencies so we can get to 11 percent for 
fiscal year 2022. And so between that and the recent rule that 
I signed that allows for a significant number of more NAICS 
codes to be used for women-owned and economically-disadvantaged 
women-owned set-asides, as I mentioned, 92 percent of federal 
spend now falls under those NAICS codes. So we are hopeful that 
we will see an increase in both EDWOSB as well as WOSB set-
asides.
    Chairwoman VELAZQUEZ. Time has expired.
    Mr. HOULAHAN. Thank you. I have run out of time, Madam 
Chair. I appreciate it and I yield back.
    Chairwoman VELAZQUEZ. Thank you.
    Now we recognize the gentleman from Pennsylvania, Mr. 
Meuser, Ranking Member of the Subcommittee on Economic Growth, 
Tax, and Capital Access, for 5 minutes.
    Mr. MEUSER. Thank you very much, Madam Chairwoman. And 
thank you, Ms. Hidalgo for being with us and testifying today.
    I am very concerned about the health of our small 
businesses. I am sure you folks at SBA are quite concerned and 
have a sense of alarm and urgency because small businesses are 
facing this tattered economy and the repercussions of it 
certainly more than large businesses. Now, first, gasoline 
prices, fuel in general, diesel, heating oils as you well know 
are doubling in people with homes anyway, and so businesses, 
instead of paying $3,000 or $2,000 a year, they will be paying 
$4,000 a year. Gasoline is costing $5,000 more a year. Diesel, 
many businesses are concerned diesel is going to be rationed. I 
mean, it is that bad. And yet, the Secretary of Energy just 
yesterday very alarmingly said what we need to do is go to EVs 
and renewables which the administration should know that even 
if every country in the world hit its carbon reduction targets 
over the next 10 years, it still will only account to about 25 
percent of the energy needs of the country and the world. And 
at increased demand, we need more of the current energies that 
we produce here domestically in 10 years. So it really was an 
unfortunate, I think, thing to say and kind of foolish. Because 
it is simple math on how that works. And so for the energy 
secretary administration to say something like that I think 
that raised a lot of fear in small businesses and certainly to 
our economy as a whole.
    Small businesses are dealing with workforce issues, right, 
as well know. Access to capital. Supply chain disruptions. I 
mean, it is crazy. You go into a small business and they are 
waiting on things. They will have excess inventory or too 
little inventory and that is what throws off their cashflow to 
much. Regulations, taxes.
    You know, it was disappointing when I asked Administrator 
Guzman a few meetings ago, Committee meetings ago, what she 
thought if she goes to the president and asks, informs him as 
the advocate for small business, that raising taxes is not a 
good thing. And she said she does not deal with taxes. You 
know, taxes are very important, keeping them as low as 
possible. We need to be a competitive nation. And you know, 
when you increase taxes, you reduce revenues, not just for the 
business but for Treasury, for government. Or inflation will do 
that. But you are reducing their net income. So therefore, you 
will be receiving less revenues and particularly with 
inflation.
    Now, I went through that whole list and then let's just 
talk about inflation, which is definitely, as you know, the 
number one concern and problem small businesses are facing. And 
you did not mention anything about that in your opening. So I 
just have a couple of questions on that.
    When businesses are dealing with, and why it should be very 
relevant to you, inflation, when businesses are paying more for 
goods and abiding by the contracts that they have with the SBA, 
they therefore, are squeezing their margins, their 
profitability. Are you in kind in the process of raising the 
contracted prices by 8.6 percent, the highest level of 
inflation in 40, 50 years, whatever it is? Are you doing that?
    Ms. HIDALGO. Thank you very much, Congressman, for that 
question. And we are actually studying the data to figure out 
where we can provide relief for small business contractors. 
Fortunately, what is amazing about these congressionally 
created programs is that it is close to $150 billion a year 
that is contracted through small businesses which helps, has a 
significant impact on the well-being of contractors and firms, 
small businesses around the country during uncertain economic 
times. And so we are looking to see where we can adjust 
thresholds working with the Office of Federal Procurement 
Policy to issue guidelines, as well as adjust any of our rules 
or regulations that will provide relief on inflation for small 
businesses and our contractors.
    Mr. MEUSER. I have limited time. I was going to ask about 
the technology contract that you are engaged in. I am sure that 
is a lot of fun. But good luck with it and I will have follow-
up questions on that in writing. Thank you.
    Ms. HIDALGO. Thank you.
    Mr. MEUSER. I yield back, Madam Chair.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentleman from Louisiana, Mr. Carter, 
for 5 minutes. Mr. Carter?
    The gentleman from Pennsylvania, Mr. Evans will be 
recognized for 5 minutes.
    Mr. EVANS. Thank you, Madam Chair.
    In the latest budget request, SBA is sort of thumbing--for 
a new initiative known as the Manufacturing Hub proposal. Could 
you please expand on the scope of this issue and how SBA 
envisions it will work?
    Ms. HIDALGO. Thank you very much, Congressman, for that 
question.
    The president has been very focused on increasing 
manufacturing within the United States, and he and our 
Administrator see small business manufacturers as being the 
pioneers in bringing back manufacturing to our shores. And so 
as a result, this is why we responded with the proposal to 
create a Manufacturing Hub office focusing more of our 
technical assistance and outreach to manufacturing firms, 
understanding some of their challenges and ways that we can 
leverage, for example, some of the contracting tools so that 
they can get the much needed supplies that they need to partner 
with our federal agencies. And so basically, our proposal is 
taking a laser focus on the ways that we can support our 
nation's pioneers in manufacturing and ensure that more of our 
products are made right here in America.
    Mr. EVANS. Contracting vehicles have only gotten larger and 
more complex in recent years. What is SBA doing to make sure 
that these vehicles are not hurting small businesses and 
chances of winning contracts?
    Ms. HIDALGO. This is an excellent question, Congressman, 
and it is top of mind for us every day. Most recently, we saw 
an award, a bundled contract that was going to be a total of 
$7.7 billion without any small business set-asides. And so my 
office immediately negotiated with the agency, was very 
steadfast, and as a result, we were able to negotiate $2.85 
billion within that bundled contract just for small business 
set-asides. But the reality is this is our PCRs and our 
government contracting team and policy teams were critical to 
the success but the PCRs are so critical for monitoring 
contracts like these and if we are able to be able to get an 
increase in staffing, we will be able to have more of the PCRs 
monitoring these contracts across the government to ensure that 
there will always be a large amount of set-asides for small 
businesses and that we continue to adhere to the Rule of Two 
across the federal government in setting aside contracts for 
small businesses.
    Mr. EVANS. How is SBA working to make sure agencies hold 
larger contracts accountable to the subcontracting plans and 
how is SBA supporting small businesses especially new entries 
as they work as subcontractors?
    Ms. HIDALGO. Thank you for that great question. It is 
something that we know needs to change as far as ensuring more 
accountability around subcontracting plans. With limited 
resources, we are trying to figure out administratively what we 
can do to ensure more of that accountability from having, for 
example, potentially firms indicate to the small businesses if 
they included them in their subcontracting plan, to having 
potentially, for example, I just recently met via satellite 
with a number of contractors in Guam who suggested that they be 
able to indicate what the cost involved was for them to help 
support a bid proposal and be able to attach that to those 
plans.
    So we are looking at all the administrative tools that we 
have to make sure there is more accountability. The ESRS 
system, unfortunately, does not allow for real-time data 
analysis and that would be of significant support if we were 
able to find a way to enhance that system operated through one 
of our partner agencies to be able to track in real-time 
whether or not major contractors are following through on their 
subcontracting plans.
    Mr. EVANS. Thank you. I yield back the balance of my time. 
Thank you, Madam Chair.
    Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
    Now we recognize the gentlelady from California, Ms. Kim, 
Ranking Member of the Subcommittee on Innovation, 
Entrepreneurship, and Workforce Development for 5 minutes.
    Ms. YOUNG KIM. Thank you, Chairwoman Velazquez, and Ranking 
Member Luetkemeyer, for holding this important hearing. And I 
want to thank you, Ms. Hidalgo, for joining us and testifying 
before our Committee. And also for sharing your inspiring 
story.
    Like you, I am an immigrant from South Korea, and I can 
tell you that America has also opened the door for me for, you 
know, a better future for me and my family now. And I am a 
grandma, so I am working really hard to ensure that we leave 
America better for our future generations. So I hope we can 
work together to preserve that American dream for all 
Americans, but especially for small businesses to prosper and 
succeed because small businesses are the backbone of our 
economy as we heard this millions of times.
    But unfortunately, according to the National Federation of 
Independent Businesses survey, small business owners, their 
expectation for better business conditions over the next 6 
months are at their lowest in nearly 50 years. And small 
business owners are increasingly pessimistic about the economy 
because of the increasing costs, rising inflation, supply chain 
disruptions, and chronic workforce shortages. As a Ranking 
Member on that Subcommittee on Innovation, Entrepreneurship, 
and Workforce Development, this is really a critical and 
important issue for me.
    And given the economic headwinds main street is facing, it 
is extremely important that SBA is laser focused in fulfilling 
existing mandates and providing business development assistance 
in a timely manner.
    There was an IG report February 2022, this year. The 8(a) 
program found that SBA has regularly misused mandated deadlines 
to report to Congress on program performance because the data 
reliability issues would certify. Additionally, the report also 
states that SBA does not have established standardized 
procedures for business opportunity specialists to use to 
monitor program participants.
    So, have you met with the inspector general to discuss the 
findings of that report?
    Ms. HIDALGO. Thank you very much, Congresswoman, for those 
important questions. Business development is really top of mind 
for our team, our dedicated team of civil servants and everyone 
across the agency. And I am very grateful for the plus-up that 
we received in 7(j) technical assistance funding from Congress. 
We have requested additional resources as well for fiscal year 
2023 so we can continue to enhance our technical assistance and 
business development.
    But that said, as you mentioned with the data and the 
report to Congress, given that there was a conversion from 
paper to digital in 2018, now our team has been catching up in 
their data analysis and we are on track to catch up with the 
reports this year.
    Ms. YOUNG KIM. Is that the reason for the delay in coming 
up with a solution, conversion from paper to digital?
    Ms. HIDALGO. That is one of your questions in terms of 
reports, you know, reporting out to Congress, that was the 
reason for the initial delay was that conversion. And now we 
have actually addressed that and the team is on track to catch 
up on our report to Congress on business development for 8(a) 
firms.
    And then apart from that, the wonderful issue that you 
mentioned of Business Opportunity Specialists, we see that 
there is a great opportunity there. And this is top of mind for 
Administrator Guzman. And so my team just recently met with the 
leads of all 68 offices around the country to develop an 
approach for more training with Business Opportunity 
Specialists to support our small business contractors.
    Ms. YOUNG KIM. Thank you. You know, I am also hearing that 
SBA's service to small contractors may be falling. For 
instance, the 8(a) small business was referred to the wrong 
specialist, an economic development specialist, rather than 
business opportunity specialist when seeking contracting 
assistance. District offices also may be more preoccupied with 
SBA's other programs like its lending programs. Failing to 
realize they also have a duty to offer business development 
assistance to small businesses. So my question is, are you 
aware of these issues?
    Ms. HIDALGO. We are very aware that over time there has not 
been as much emphasis at the district level on business 
development and more on compliance. And so we would like to 
strike more of a balance to ensure that across the board there 
is more support for business development. And connection with 
our PCRs and CMRs. So we are making sure that there is that 
streamlined communication across offices.
    Chairwoman VELAZQUEZ. The gentlelady's time has expired.
    Ms. YOUNG KIM. Thank you. My time is up. I yield back.
    Chairwoman VELAZQUEZ. Now we recognize the gentleman from 
Louisiana, Mr. Carter, for 5 minutes.
    Mr. CARTER. Madam Chair, thank you very much for the 
opportunity.
    Ms. Hidalgo, can you share with me the percentage of 
African-American contractors in the 8(a) program?
    Ms. HIDALGO. So, in terms of percentage, we have well over 
1,000. About 1,500, I believe, African-American firms owned in 
the 8(a) program.
    Mr. CARTER. And can you share with me the percentage of 
contracts that are awarded to these African-American 
contractors?
    Ms. HIDALGO. So for the first time in history, we released 
disaggregated data on race and ethnicity. And of all federal 
contracts, 1.67 percent are awarded to small businesses that 
are African-American owned.
    Mr. CARTER. How many have you lost? My understanding is 
that the program has been somewhat diminished and there has 
been a decrease in the amount of African Americans that 
actually participate in the 8(a) program. Can you share with me 
some light on that?
    Ms. HIDALGO. We are trying to make sure that across the 
board small businesses can compete in federal contracting. So 
the programs that Congress has created, the five contracting 
goals are really important for ensuring that all small 
businesses can participate, including African-American owned 
firms. And so as a result, we are making sure that we are doing 
outreach across the board in urban areas, as well as in rural 
areas. We are trying to figure out ways that individually owned 
businesses can participate in more of these ordering vehicles, 
the contract vehicles. Our work in trying to dismantle contract 
bundling also has an impact on African-American owned 
businesses, and especially African-American women-owned 
businesses in being able to compete for these opportunities.
    But what we wanted to do is have transparency and establish 
a baseline so that we have an understanding of where we are and 
where we need to go to ensure that there is access across the 
board for all small business contractors.
    Mr. CARTER. And forgive me. I do not want to appear to cut 
you off but we have limited time, so if I do, please forgive 
me. It is not being rude.
    Share with me very quickly what plans you have or what you 
are doing to increase African-American participation not only 
in the program but for those that are in the program to ensure 
that they are getting a fair share of contracting 
opportunities. What are your aggressive steps or marketing 
efforts?
    Ms. HIDALGO. Well, part of it is certainly marketing but 
also it is providing more assistance to applicants across the 
board, making sure, I have asked to make sure that our pre-
screeners work with all the businesses. So if we receive any 
incomplete applications, rather than being rejected, we are 
having our prescreening and screening team work with them to 
make sure that they can get all the important documents in for 
the application.
    And then I asked my team to think about Certify in the same 
way that you would when you get your iPhone and it guides you 
through the process in setting it up. So they should not have 
to----
    Mr. CARTER. Ms. Hidalgo, could you share with us in writing 
the percentages that I asked in question, if you can submit 
them to the Committee for our review, the percentages of 
African-Americans and other minorities that are in the program 
against what percentage of contracts are being awarded to them, 
that would be very helpful.
    Lastly, before my time elapses, I mentioned this before. 
8(a) program was disrupted greatly during the pandemic. I know 
there was a restoration of theoretically a year. That year was 
actually truncated. It was not a full year. We know that the 
impacts of COVID still exist and it hurt 8(a) contracts. I have 
consistently asked for some relief that we consider how we can 
yet again advance and grant additional time to those 8(a) 
contractors so they can enjoy the full complement of their term 
of an 8(a) contractor.
    Can you share with me any actions that are being taken 
along those lines and your thoughts?
    Ms. HIDALGO. Thank you very much, Congressman. That is a 
very important question and I am asked all the time by small 
business owners if we will extend it an additional year. We 
would welcome that opportunity to extend it. I have asked my 
team if there is anything we can do administrative, and 
unfortunately, we cannot. It would need to be by statute. And 
so we welcome any opportunity to extend it an additional year 
and we would be pleased to work with your office or with any of 
the Members of the Committee here for that purpose.
    Mr. CARTER. I would love to visit with you on that and to 
work with our Chair and our Ranking Member to come up with a 
bipartisan measure that will give us the opportunity to extend 
it to make up for the tremendous loss that many of our small 
and emerging businesses had to suffer at the hands of something 
that was beyond any of our control, COVID>
    Thank you very much.
    Chairwoman VELAZQUEZ. The gentleman yields.
    Mr. CARTER. If you could get back to us with that 
information, particularly those areas of interest relative to 
contracting opportunities and percentages, I would greatly 
appreciate it.
    Ms. HIDALGO. I would be happy to. I will have my team 
circle back with you promptly, Congressman.
    Chairwoman VELAZQUEZ. The gentleman's time----
    Mr. CARTER. As well as the (8)a opportunity extensions. 
Thank you so much.
    I yield back, Madam Chair. Thank you.
    Chairwoman VELAZQUEZ. The gentleman from Florida, Mr. 
Donalds, is recognized for 5 minutes.
    Mr. DONALDS. Oh, my apologies, Madam Chair. Thank you so 
much.
    Ms. Hidalgo, thanks for being here. We really do appreciate 
it here in the Committee. I also commend you on everything you 
have done personally in your life. You know, this country, I 
think people sometimes think that success is easy. Success is 
really, really hard. It requires a ton of sacrifice. So that is 
a credit to you and to your family. But it also requires an 
environment that allows for these sacrifices to come to 
fruition. And it is crystal clear that examining the globe, it 
is just not possible in so many other places the way it is 
possible here in the United States. So it is really a credit to 
you, your family, and it is a credit to the bedrock of our 
society here in America.
    Obviously, dealing with governmental contractors, can you 
speak to some of the inflationary pressures that the 
contractors are having to face right now considering the fact 
that I think it was said earlier in the hearing that the 
contracts are what they are from the federal government. Yet, 
business owners have to procure product or deliver services, 
whether that is procuring employees to do the work, whether it 
is procuring other products to assemble for the federal 
government to use. Can you speak to the inflationary pressures 
that the contractors are faced with today?
    Ms. HIDALGO. Thank you very much, Congressman, for that 
important question and for your initial comments. I much 
appreciate it regarding my family and their coming here to this 
country.
    So this is very top of mind for us and we have been looking 
at any which way that we can provide relief for our small 
business contractors.
    I will give you an example of a firm that, for example, is 
having trouble getting retractor bags and they are on the 
cutting edge of fighting super bugs, a small business. And the 
costs are high. And so one of the requests we got is, are there 
ways that we can look to using some of the schedules, even 
though they have impacted the small businesses, but could we 
use some of the schedules to get supplies at lower costs for 
small businesses, particularly since they are part of our 
government contracting portfolio. So we are looking across the 
board at all types of solutions to address any type of 
inflationary pressures that businesses are facing at this time.
    Mr. DONALDS. Have you guys had an opportunity to engage the 
administration to talk about potential regulatory relief, 
frankly, in the economy overall. I understand the purpose of 
this hearing is with governmental contractors but, you know, if 
it works for a government contractor, it will work for any 
other business in the United States. Have you guys had an 
opportunity to engage the White House about proposals on 
regulatory relief which would actually really open up a lot of 
these issues that businesses across the country are facing?
    Ms. HIDALGO. Yes, definitely. Thank you. That is a great 
question. And that is one of the reasons why I met across the 
board with our PCR team and other staff to figure out how we 
can use regulations to provide relief to businesses. And we are 
working now on that and hope to be having relief sometime soon 
working with OMB to provide relief on some of the thresholds.
    Mr. DONALDS. Switching gears, back under Section 1683 of 
the NDAA from fiscal year 2013, the SBA has to submit a report 
on suspension and disbarment to Congress. What is the status of 
that report? How come that report still has not been provided 
to Congress? Is there any discussion within SBA about that 
report actually getting to the Hill?
    Ms. HIDALGO. Yes. We are right now working on updating all 
of our reports. It is top of mind for the Administrator and me 
to make sure that we follow through on our duty to Congress to 
report back. And so the team has been working extremely hard in 
updating and getting our reports to you and being timely going 
forward. That is of utmost importance to me and the leadership 
at SBA.
    Mr. DONALDS. Final question and I will turn you back over 
to the Committee, I guess.
    The 2019 OIG audit of SBA's suspension and disbarment 
process found that SBA had not established sufficient 
guardrails to prevent ineligible entities from participating in 
small business programs. What is happening right now at SBA to 
address the OIG's findings?
    Ms. HIDALGO. Thank you, Congressman. This is really 
important to us and to the Administrator. And I will give you 
an example. Because of our reviews in fiscal year 2021, we were 
able to ensure that $5.28 billion in contracts were redirected 
to legitimate small businesses because of some small businesses 
that were no longer legitimate small businesses. So this is an 
example of the kind of work we are doing to make sure. And I 
have a top team in place that is very focused on this to make 
sure we have the controls in place, working with the Fraud Risk 
Management Board that Administrator Guzman also recently 
created, to make sure that the businesses that Congress 
intended to benefit from these programs are, in fact, 
benefitting from the programs.
    Mr. DONALDS. All right. Thank you.
    Thank you, Madam Chair.
    Chairwoman VELAZQUEZ. Time has expired.
    Now we recognize the gentlelady from California, Ms. Chu, 
for 5 minutes.
    Ms. CHU. Ms. Hidalgo, from 2010 to 2019 we saw a steady 
decline in the number of firms participating in the 8(a) 
program. That was under the previous administration. And I 
asked your predecessor what steps the office was taking to 
address this decline. However, since then, data does show that 
under the Biden administration, the SBA was able to reverse 
this downward trend in 2021. And for the first time in 10 
years, increased the number of small businesses in the program.
    So Ms. Hidalgo, can you talk about what factors contributed 
to last year's growth? And what steps your office is taking to 
ensure that we keep up that growth and continue to bring more 
firms into the program?
    Ms. HIDALGO. Thank you very much, Congresswoman. This is 
such an important issue, and we are all working, the dedicated 
team of civil servants and staff are working diligently to try 
to reverse this trend. And so, by tracking new entrants, we now 
have a requirement across the federal agencies to track new 
entrants. And as a result, we are seeing results. The agencies 
are reaching out to us on a regular basis asking for lists of 
firms that are new to the federal marketplace. We want to make 
sure that we are being welcoming to firms that want to contract 
with the federal government because of the opportunity it 
provides contracting with the largest purchaser in the globe. 
And so by tracking and also putting the goals and performance 
evaluations, the KPIs of our senior executives across all 3,000 
buying offices, that is where we are seeing a whole of 
government approach to ensuring that we do not only increase 
the dollars but we also increase the number of businesses that 
can benefit. That is what is so extraordinary about these 
programs is just the impact that it can have on our small 
businesses across the country in communities and our nation.
    Ms. CHU. Well, thank you for that because it has truly made 
a turnaround. But however, I did want to ask about other 
programs. I know under the previous administration the federal 
government failed to meet the subcontracting goals for three 
programs--the Small and Disadvantaged Business Program, the 
Service-Disabled Veteran-Owned Small Business Program, and the 
HUBZone program. These subcontracting goals are so critical to 
ensuring these underserved small businesses have a fair shot at 
competing for federal contracts. And I had asked your 
predecessor under the previous administration what they were 
going to do to remedy this. Now, I do not know what the current 
results are for those goals under the current administration. 
Nonetheless, what do you know about whether you are meeting the 
subcontracting goals for these three areas and what steps your 
office is taking to make sure that we do meet these goals going 
forward?
    Ms. HIDALGO. Thank you very much, Congresswoman. We are 
trying to figure out what we can do to have more accountability 
with the major primes' subcontracting plans. And we have 
limited resources in terms of direct monitoring, so we are 
looking at ways to issue more administrative guidance on this 
front. And we are working closely with the White House and 
office of Federal Procurement Policy now to take a more laser 
focus on subcontracting in particular. If we were able to track 
in real time through the ESRS system, whether or not primes are 
following through on their subcontracting plans, that would 
make quite a significant difference. But my understanding is 
that system would need a lot more additional resources in order 
to be able to do real tracking. And I think if we were able to 
do that we would see an increase in billions of dollars going 
to our nation's small business subcontractors.
    Ms. CHU. Well, in fact, I know that the SBA requested an 
additional $5 million to be divided between 8(a), HUBZone, and 
Women-Owned Small Business programs for staffing resources. Can 
you explain the purpose of this and how this funding would be 
divided between three programs and whether you think it will 
increase participation in these programs.
    Ms. HIDALGO. Yes. Thank you very much. And definitely, we 
want to make sure----
    Chairwoman VELAZQUEZ. Ms. Hidalgo, time has expired. Will 
you please send a written answer to the Committee in response 
to that question?
    Ms. HIDALGO. Yes, I would be happy to follow up on that, 
Congresswoman. Thank you.
    Chairwoman VELAZQUEZ. Thank you.
    The gentleman from Minnesota, Mr. Stauber, is recognized 
for 5 minutes.
    Mr. STAUBER. Thank you, Madam Chair, and Ranking Member 
Luetkemeyer for holding this. Ms. Hidalgo, thanks for being 
here and presenting your testimony.
    I think you have a very tough job to try and defend this 
disastrous administration with the inflation and materials, 
increase in materials pricing for small businesses that are 
being devastated today.
    Do you know how many billions of dollars of additional 
regulations the Biden administration has put on small 
businesses last year alone?
    Ms. HIDALGO. Congressman, thank you very much for your 
question and for your support of the programs. I do not----
    Mr. STAUBER. I can answer that for you. It is $201 billion 
of additional regulations that you put on small business. That 
is just unacceptable.
    So in the fiscal year 2022 National Defense Authorization 
Act, I was able to successfully add an amendment that will help 
reduce fraud in government contracting programs. The amendment 
requires firms to update their status in SAM within 2 days if 
they have received a final adverse decision against their 
status. If they do not, SBA is required to update it.
    Could you tell me how the implementation of this provision 
is going thus far?
    Ms. HIDALGO. Thank you very much, Congressman. We have 
implemented that and my team has briefed me on that. Exactly as 
you said. They have 2 days, and if they do not put the 
information in SAM.gov then my team does.
    Mr. STAUBER. I appreciate that.
    What other controls have you put in place to reduce the 
number of government contracts from going to ineligible firms?
    Ms. HIDALGO. So as I mentioned, I hired a team that is very 
focused on this issue in particular. We are pleased that most 
of the IG audits and GAO audits on any of this have been closed 
out. And as I mentioned, the Administrator created the Fraud 
Risk Management Board so that we are cohesive as an agency in 
addressing any issues related to fraud. And I am pleased that 
in fiscal year 2021, we were able to redirect $5.28 billion in 
contract dollars to legitimate small businesses that had been 
previously awarded to businesses that were not legitimately 
small.
    Mr. STAUBER. One of the things that I hear from small 
businesses back home, again, as I said, the regulations and the 
frustrations of government interference, and to me it is 
unacceptable having been a small business owner myself for 31 
years.
    Do you actively seek out feedback from small contractors on 
the regulations which are holding them back?
    Ms. HIDALGO. Thank you, Congressman. That is very important 
to me. I have met with many small businesses around the United 
States. And asked them regularly for their feedback on what we 
have been doing, how we can provide relief. For Administrator 
Guzman, it is very important that any regs we adopt are not 
overly burdensome for our firms, and that is what she often 
asks us to look at, how we can relieve any burdens for the 
businesses.
    Mr. STAUBER. And do you have a list of those that you can 
send the Committee here----
    Ms. HIDALGO. A list of----
    Mr. STAUBER.--the recommendations that the small businesses 
around the country that you spoke to?
    Ms. HIDALGO. I am happy to circle back with you, 
Congressman, to see what I can provide to you. Yes.
    Mr. STAUBER. So when you circle back, what timeframe would 
you be circling back?
    Ms. HIDALGO. I am happy to get you any additional 
information on ideas that we have heard from businesses 
sometime in the next few weeks.
    Mr. STAUBER. Few weeks?
    Ms. HIDALGO. Mm-hmm.
    Mr. STAUBER. Okay. I appreciate that.
    And the last thing is, on the regulations, when you are 
listening or hearing the small business feedback on the 
regulations that are opposite of what this administration has 
put forward, for example, the WOTUS rule. Are you pushing back 
on behalf of small businesses?
    Ms. HIDALGO. I am sorry, Congressman----
    Mr. STAUBER. Waters of the United States rule, are you 
pushing back on behalf of small businesses?
    Ms. HIDALGO. We are looking at, the President wants to make 
sure that all of our regulations are fair and balanced. And so 
we are looking across the board at making sure that whatever we 
do, the regulations are reflective of being fair and balanced 
to all of our small businesses.
    Mr. STAUBER. We are seeing that WOTUS is one rule that is 
definitely disastrous for farmers and small businesses.
    Madam Chair, I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentlelady from New York, Ms. Tenney, 
for 5 minutes.
    Ms. TENNEY. Thank you, Madam Chair and Ranking Member 
Luetkemeyer. I really appreciate--I am over here. I am live 
over here. Yeah, thank you much. I want to just echo the 
sentiments of my colleague. Your personal story is really 
compelling and as Americans, we love freedom, and we love the 
idea of entrepreneurship in the small business community and 
what they bring. And I am a small business owner as well. And 
we have seen just incredible issues facing our small business 
community in light of the pandemic.
    And I also have to echo the sentiments of Mr. Stauber. I 
cannot imagine trying to explain what you have to explain for 
this administration. I understand that you have got to defend 
it but, I mean, our small businesses are suffering under 
incredible inflation. And that is the biggest tax that you can 
have on any business right now, the inflation that we are 
seeing at such a high percentage. Among the highest that we 
face is our sales tax burden in the State of New York. But the 
inflation rate is now even higher than our sales tax burden. So 
that is even a bigger tax on us.
    We also have supply chain issues. Energy is a huge issue 
for our business, especially my cousins in farming and others 
are suffering under the huge costs of fertilizer who is also 
affected by that.
    But also, you know, we are talking about taxes, inflation, 
excessive burdens that are put on small businesses that cannot 
afford to bear the costs of government and compliance like the 
big competitors have. So when it comes to government 
contracting, you know, we see the small business at a huge 
disadvantage.
    And one of the questions I wanted to ask you about on the 
small business contracting side is often these small businesses 
do not end up getting the higher value contracts. They get the 
smaller contracts. What is your plan for trying to get these 
small businesses that are now overburdened by inflation, supply 
chain problems? How do we get them access to higher value 
federal contracts? Is that something you are specifically 
working on? If you could give me one or two ways that the 
administration is doing that so I can get an opportunity to 
actually be in this ecosystem.
    Ms. HIDALGO. Thank you, Congresswoman, for that excellent 
question.
    We are often discussing ways that through competition--so 
for example, the limitations on the 8(a) program, the sole 
source cap, if it is competed through an ordering vehicle, then 
they are able to qualify for a higher value contract award. I 
also understand that Congresswoman Salazar has introduced 
legislation on increasing the cap on the 8(a) sole source 
award. And so we welcome the opportunity to work with the 
Committee in ushering or providing any technical assistance on 
that legislation. But higher value contracts are really 
important to ensure that we not only increase small business 
contacting but that the businesses themselves can continue to 
generate wealth and employ people in more meaningful jobs. And 
contract bundling is another issue that really impacts the 
question that you have stated of higher value contract awards. 
When contracts are no longer set aside for small businesses and 
bundled, that decreases the opportunity for the firms. And so 
we are every day on the frontlines monitoring these contracts 
and trying to make sure that the agencies are following the 
Rule of Two.
    Ms. TENNEY. Okay. While I say that I want to just also ask 
you, you stated in your testimony that the top priority of the 
Small Business Administration is to boost the number of 
certified small businesses receiving federal contracts behind 
the current goal of 23 percent. Are you concerned at all that 
by expanding this goal, it may cannibalize contracting 
opportunities for some of the medium-sized businesses and also 
some of the growing emerging businesses that are also in 
competition for those as we continue to try to make sure that 
we always talk about quality and the ability of these companies 
to do those contracts.
    If you just answer quickly because I have one follow-up 
question on that for you.
    Ms. HIDALGO. Thank you, Congresswoman.
    We want to make sure that all businesses have the 
opportunity to continue to grow and compete. Given that we are 
the largest purchaser in the globe with over $500 billion in 
opportunity each year, we feel that there is significant 
opportunity for all businesses that want to compete. And so, 
you know, we feel that we want to continue to see the firms 
grow. We also recently released our 5-year review of the NAICS 
codes, so that 59,000 small businesses are eligible for small 
business set-asides. So we are doing----
    Ms. TENNEY. I want to just say one thing because I know you 
have got to go back to the president of the United States and I 
would just wish he would please, to our small business 
community which provides 94 percent of the jobs in our 
community, stop playing the blame game. Help us out. We are 
paying record high gas prices, inflation. It is affecting 
everyone across our agro communities, our small business 
community, and every sector. Let's solve these problems. And I 
think SBA can be part of the solution but stop blaming these 
small business owners. We are struggling just like everyone 
else.
    And thank you. I appreciate your testimony.
    Chairwoman VELAZQUEZ. The gentleman from Wisconsin, Mr. 
Fitzgerald, is recognized for 5 minutes.
    Mr. FITZGERALD. Thank you, Madam Chair.
    Ms. Hidalgo, the Small Business Act requires the SBA to 
compile an annual report on the government-wide bundling and 
its impact on small businesses. But what we are hearing is that 
the SBA has indicated that the report is either difficult to 
compile or is oftentimes incomplete due to the challenges in 
and around getting this information. A lot of times either the 
agency is just flat out declining to compile this information 
and provide it. So, let me ask you this first. Is this 
accurate? I mean, is this really happening? And if it is, what 
I would like the Committee to do and I am working on a bill to 
force them to actually compile this and provide it for SBA.
    Ms. HIDALGO. Thank you very much, Congressman. This is 
critical to ensuring that more contracts are set aside for 
small businesses. And I have asked the White House if we can 
make sure that we take an even more laser focus now that we 
have issued the reforms on category management on contract 
bundling. And what would make a significant difference is if 
our PCRs and the OSDBU offices are on the front end of these 
contract ends rather than the back end. Otherwise, we are given 
30 days' notice to contest any bundled contracts. However, if 
we are on the front end before any of the bundling takes place, 
we are going to be able to negotiate quite significantly much 
more opportunity for small businesses. And so I welcome to work 
with you and your team to ensure that we have more 
accountability around this and that we get more opportunity to 
the small business contractors.
    Mr. FITZGERALD. So Madam Chair, I would suggest, I think it 
is a laudable thing for the Committee to work on and probably a 
pretty simple bill to just once again put a directive in place 
that all that information should be provided.
    Let me just switch quickly to in my district, the 5th 
District in Wisconsin, DoD is in the middle of that 
implementation on the cybersecurity maturity model. And along 
with that, what I am hearing from some of the DoD contractors 
or those that participate in that process, that what they are 
finding is that the compliance costs are so astronomical that, 
especially those that are on the smaller end of the scale, are 
almost throwing up their hands saying it is not worth it 
because it is such an abstract kind of program and they are 
having difficulty in not only participating in the program but 
also, you know, kind of getting across the finish line saying 
we have done everything we have been asked to do. So is this 
something you are aware of? And is it something that you are 
working on?
    Ms. HIDALGO. Yes. Thank you very much, Congressman. This is 
so critical for our small business contractors. And the 
Administrator has talked with the Deputy Secretary of Defense, 
and I talk regularly with the head of the small business office 
to make sure that whatever is ultimately implemented is fair 
and supportive of our small businesses and the costs associated 
with this. So my understanding is DoD has been taking quite a 
strong look at ensuring that ultimately whatever is adopted 
does not unfairly hamper the businesses. And they are also 
getting additional resources to support them on these costs 
associated with these requirements.
    Mr. FITZGERALD. So Madam Chair, once again, I think it is 
another issue that this Small Business Committee could deal 
with. And if my office is getting a steady stream of these 
contacts, I am sure there are other Members of Congress that 
are getting the same thing. So I would hope it would be 
something that we could take a look at related to small 
business. And I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentlelady from Texas, Ms. Van Duyne, 
Ranking Member of the Subcommittee on Oversight, 
Investigations, and Regulations.
    Ms. VAN DUYNE. Thank you very much, Madam Chairwoman.
    So I want to follow up on those questions about the 
cybersecurity maturity model certification. You said that they 
were working on it. That they were taking steps. Can you give 
us more detail? What steps are they taking?
    Ms. HIDALGO. Thank you very much, Congresswoman.
    We have talked extensively with DoD about how this could 
unfairly burden the small business owners. We have been hearing 
from them as well, their concerns directly. And so DoD has 
promised to keep us apprised of any ultimate steps that they 
are going to take. But one, they are well aware of the costs 
involved and are trying to figure out ways to alleviate those 
costs and where they can provide extensions on implementing the 
program to make sure that ultimately it does not unduly burden 
the businesses but that we continue to keep national security 
top of mind. And so----
    Ms. VAN DUYNE. And I appreciate that. I appreciate that. 
But what can we do to expedite that? Because they cannot wait 
years. I mean, some of these companies are already coming off, 
you know, the pandemic, 2-1/2 years of, you know, falling 
revenues. They cannot wait that long. What can we do to be able 
to expedite that?
    Ms. HIDALGO. Well, one of the things DoD has done is 
contracted with a firm to provide free training to any small 
business contractors on this issue, and so part of it is 
getting the word out on those resources and the training that 
the DoD is providing. And then additional technical assistance 
for the firms would make a significant difference. So any 
resources that Congress can provide on that would have an 
impact on ensuring that the firms are CMMC ready.
    Ms. VAN DUYNE. Okay. According to NFIB's May Jobs Report, 
the labor shortage continues to be a challenge for small 
businesses with over half of them reporting job openings that 
they could not fill. And I have seen this directly in my 
district up in North Texas. This is up four points from April. 
Can you tell me what the SBA is doing to address this growing 
labor shortage?
    Ms. HIDALGO. Thank you very much, Congresswoman.
    It is really important for our small business contractors 
to continue to create very meaningful jobs. And as a result in 
the increase that we are seeing in contracting and new 
entrants, they are able to create more meaningful job 
opportunities and so that is very top of mind because we know 
that this incredible resource through congressional goals has 
an impact on ensuring that more small businesses can employ and 
provide meaningful job creation in districts all----
    Ms. VAN DUYNE. I appreciate that you saw it but I want to 
make sure, we have a very short time, what are the steps that 
you are doing? I see that you understand the problem but what 
exactly are the steps that SBA is doing to address the labor 
shortage?
    Ms. HIDALGO. Well, thank you, Congresswoman. This is a very 
important issue for the Administrator and for the President. We 
want to make sure that small businesses have the support they 
need to be successful.
    Ms. VAN DUYNE. And I appreciate that. But what are the 
steps that you are taking?
    Ms. HIDALGO. We are looking at everything from where we can 
focus on rules and administrative guidance to provide relief to 
small businesses. Every day it is top of mind that we use the 
vast resources that Congress has provided us to provide support 
and technical assistance to our firms.
    Ms. VAN DUYNE. And I appreciate that. But when I get calls 
from, you know, our businesses, what can I tell them that you 
are doing?
    Ms. HIDALGO. So we have very much focused on creating the 
opportunities that lead to more meaningful job creation, and as 
a result, allows for the businesses to provide excellent 
opportunities for their employees. And that----
    Ms. VAN DUYNE. So we have the jobs. The jobs are available. 
It is not job opportunities. It is actually the labor shortage 
that we are looking. We have got a number of job openings. The 
problem is filling those.
    Ms. HIDALGO. Yes. And that is why government contracting is 
so critical because as the labor market is looking for 
meaningful opportunity, that is what government contractors 
provide.
    Ms. VAN DUYNE. Okay. Thank you very much.
    Chairwoman VELAZQUEZ. The gentlelady's time has expired.
    Now we recognize the gentleman from New York, Mr. 
Garbarino.
    Mr. GARBARINO. Thank you, Chairwoman, and the Ranking 
Member for holding this hearing. Thank you for the witness for 
her testimony.
    I will follow up on Ms. Van Duyne's questions. I would love 
to actually find out what SBA is doing to help. I am hearing 
from every different aspect, every small business and they are 
all having the same problem. And this is where I think the SBA 
needs to help them. So if you actually do have a list of things 
that you are doing and I can send them to your office for that 
would be very helpful. So I want to thank my colleague for 
asking those questions.
    Last hearing, the witness was questioned whether pursuing 
access to the SBA's contracting programs was worth it. And in 
light of her observation that an increasingly higher proportion 
of small business opportunities are found through 
governmentwide contracts rather than individual set-aside 
opportunities. What is your response to her observation?
    Ms. HIDALGO. We see that the increasing reliance on these 
governmentwide vehicles does have an impact on small 
businesses' ability to compete because as you heard in the 
hearing last week, it's fewer and fewer firms that are able to 
get onto these contract award vehicles. We are working closely 
with GSA to figure out if there is a way to have more frequent 
onramps, which is another issue that you heard last week. And 
so that more small businesses can participate in these ordering 
vehicles.
    And then apart from that, by our success in getting all the 
socioeconomic firms onto Tier 2 of category management. So as 
these agencies are rated in their performance, it includes 
contracting with small businesses that are separate from the 
ordering vehicles.
    Mr. GARBARINO. Okay. So you heard what she said and you 
guys are actually coming up with issues to address it. So I 
appreciate that.
    Another question, according to payroll data, head counts at 
companies with fewer than 50 employees declined in 3 of the 
past 4 months. In your opinion, why do you believe this decline 
is happening and what can the administration do to reserve the 
decline?
    Ms. HIDALGO. We are very focused on making sure that we 
leverage all the tools that we have at our disposal, from the 
socioeconomic programs to the small business set-aside to our 
technical assistance programs, to make sure that the small 
businesses can compete and they have the employees and staff 
and resources to do that. And fortunately, because of these 
programs and the enormous impact it has on the U.S. economy. 
They are able to create meaningful jobs. And these jobs are 
key, are critical in addressing the labor shortage.
    Mr. GARBARINO. I mean, the jobs are there, and my colleague 
made this point before. It seems the employees are not. The 
jobs are there. There are signs everywhere, you know, jobs 
available. So, I mean, what, again, this goes back to my 
previous colleagues, why are people leaving the companies? Why 
are the headcounts going down and what is the administration 
doing to change it? Is it a payroll problem? I mean, what is 
the issue. The jobs are there; it is the employees that are 
not.
    Ms. HIDALGO. Right. And I think part of it is when I am 
talking about or referencing meaningful jobs that the firms are 
able to provide more competitive opportunities to employees and 
that makes a difference in being able to hire and find top 
quality talent.
    Mr. GARBARINO. All right. I appreciate your answer.
    One last question. I am concerned that the rising use of 
joint ventures for the SBA's Mentor-Protege Program is creating 
a dependency among small businesses on them to be competitive. 
It is a problem since up to 60 percent of the work performed by 
a joint venture and corresponding revenues can be obtained by a 
large mentor. These are dollars specifically designated for 
small businesses that large businesses can now easily access. 
Please share your own assessment of the Mentor-Protege Program 
and the formation of joint ventures' impact on these small 
businesses.
    Ms. HIDALGO. Well, it is definitely an important tool for 
our small businesses to be able to partner with other companies 
to go after contract opportunities and create more value. We 
have seen a marked increase in applicants to the Mentor-Protege 
Program thanks to the All Small Mentor-Protege Program. We are 
now tracking regularly the impact that it is having and we are 
seeing a significant increase in revenue for the small 
businesses as a result. So it is yielding outcomes and we are 
continuing to monitor all the rules and regulations to ensure 
that ultimately the small business benefits most from this 
important resource that the SBA is able to provide.
    Mr. GARBARINO. I appreciate it. I am out of time.
    Chairwoman VELAZQUEZ. Time has expired.
    I would like to thank Associate Administrator Hidalgo for 
appearing here today.
    Strengthening the ability of small businesses to compete 
for and win federal contracts is one of this Committee's top 
priorities. A robust Office of Government Contracting and 
Business Development is integral to achieving this goal. Today, 
we have covered issues facing the office, and we will work on a 
range of potential solutions to help the office operate more 
efficiently and effectively.
    Without objection, Members have 5 legislative days to 
submit statements and supporting materials for the record.
    If there is no further business to come before the 
Committee, without objection, we are adjourned. Thank you.
    [Whereupon, at 11:44 a.m., the committee was adjourned.]
    
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