[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
LEVELING THE PLAYING FIELD: EXAMINING THE
LANDSCAPE OF VETERAN OWNED SMALL
BUSINESSES
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HEARING
BEFORE THE
SUBCOMMITTEE ON CONTRACTING AND INFRASTRUCTURE
JOINT WITH THE
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY
COMMITTEE ON VETERANS' AFFAIRS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JULY 23, 2024
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 118-057
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
56-208 WASHINGTON : 2024
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HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
BLAINE LUETKEMEYER, Missouri
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
MARIA SALAZAR, Florida
TRACEY MANN, Kansas
JAKE ELLZEY, Texas
MARC MOLINARO, New York
MARK ALFORD, Missouri
ELI CRANE, Arizona
AARON BEAN, Florida
WESLEY HUNT, Texas
NICK LALOTA, New York
CELESTE MALOY, Utah
NYDIA VELAZQUEZ, New York, Ranking Member
JARED GOLDEN, Maine
DEAN PHILLIPS, Minnesota
GREG LANDSMAN, Ohio
MARIE GLUESENKAMP PEREZ, Washington
SHRI THANEDAR, Michigan
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
JUDY CHU, California
SHARICE DAVIDS, Kansas
CHRIS PAPPAS, New Hampshire
Ben Johnson, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Nick LaLota................................................. 1
Hon. Hillary Scholten............................................ 3
WITNESSES
Mr. William J. Belknap Sr., President, AEONRG LLC, Downingtown,
PA............................................................. 9
Mr. Stephen G. Hayduk, P.E., Managing Member, Hayduk Engineering,
LLC, Ronkonkoma, NY............................................ 11
Ms. Stephanie Brown, Founder and Chief Executive Officer, The
Rosie Network, Ramona, CA...................................... 12
Mr. Jon Tellier, President, JetCo Solutions, Grand Rapids, MI.... 14
APPENDIX
Prepared Statements:
Mr. William J. Belknap Sr., President, AEONRG LLC,
Downingtown, PA............................................ 28
Mr. Stephen G. Hayduk, P.E., Managing Member, Hayduk
Engineering, LLC, Ronkonkoma, NY........................... 38
Ms. Stephanie Brown, Founder and Chief Executive Officer, The
Rosie Network, Ramona, CA.................................. 41
Mr. Jon Tellier, President, JetCo Solutions, Grand Rapids, MI 44
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Approval letters from Hon. Williams and Hon. Scalise......... 50
America's Credit Unions...................................... 52
LEVELING THE PLAYING FIELD: EXAMINING THE LANDSCAPE OF VETERAN OWNED
SMALL BUSINESSES
----------
TUESDAY, JULY 23, 2024
House of Representatives,
Committee on Small Business,
Subcommittee on Contracting
and Infrastructure,
joint with the
Subcommittee on Economic Opportunity,
Committee on Veterans' Affairs,
Washington, DC.
The Subcommittees met, pursuant to call, at 10:00 a.m., in
Room 2360, the Rayburn House Office Building, Hon. Nick LaLota
[chairman of the Committee on Small Business, Subcommittee on
Contracting and Infrastructure] presiding.
Present from the Committee on Small Business, Subcommittee
on Contracting and Infrastructure: Representatives LaLota,
Bean, Maloy, Scholten, McGarvey, and Chu.
Present from the Committee on Veterans Affairs,
Subcommittee on Economic Opportunity: Representatives Van
Orden, Levin, and McGarvey.
Also Present: Representative Williams.
Mr. LALOTA. Good morning, everyone. I now call the
Committee on Small Business to order. Without objection, the
Chair is authorized to declare a recess of the committee at any
time.
Prior to opening statements, I want to note that pursuant
to committee rule 3E, the Democrat witness for today's hearing
will be appearing remotely.
I ask unanimous consent to enter into the record the letter
of approval of the Majority Leader Scalise. And without
objection, so ordered.
I now recognize myself for my opening statements.
Welcome to today's joint subcommittee hearing entitled,
``Leveling the Playing Field: Examining the Landscape of
Veteran Owned Small Businesses.''
First, I want to thank all of our witnesses for joining us
here today. Your presence here and your time is very much
appreciated and we all look forward to your testimonies.
I would like to specifically give a shout out to Stephen
Hayduk, my constituent from Long Island from Suffolk County, a
Vietnam veteran and my own constituent. Thank you, sir, for
being here. We appreciate your service to our nation.
I would also like to thank the VA Subcommittee on Economic
Development for joining us in this effort today, specifically
Subcommittee Chairman, my friend and fellow Navy veteran,
Congressman Van Orden, who will be chairing from time to time.
We are going to swap out as we have other duties that require
us to be elsewhere.
Today our subcommittees will be focusing on how we get our
nation's veterans more involved in the contracting space and
more involved in main street in general. We must address the
alarming decline in the number of small businesses receiving
federal contracts, having been cut in half over the last 10
years, with the number of small businesses entering the federal
contracting system decreasing by nearly 60 percent in the same
period.
We all know the crucial role main street plays in
increasing competition, innovation, and stimulating our
economy. Yet, they have been systematically squeezed out of
federal contracting for decades. Unfortunately, this decline in
small business contracting comes as no surprise as the Biden
Administration actively steers our economy and national
security in the wrong direction.
Veterans should have abundant opportunities in this space
and our nation's veterans bring unique skills to the
marketplace. We must ensure they have the resources they need
to compete in the procurement marketplace. They possess innate
leadership and entrepreneurial skills and qualities that cannot
be taught.
Unfortunately, oftentimes a veteran's attempts to
transition back to civilian life, that journey can be extremely
challenging. Entrepreneurship is a fantastic way for veterans
to regain mission focus, but it is no easy process, especially
thanks to today's current economic landscape brought to you by
leaders in our administration.
Veteran-owned small business should be able to easily
operate in the contracting marketplace, too. Sadly, the
bureaucratic red tape, and there is a heck of a lot of it,
challenge small businesses who are forced to navigate this
extremely harmful and burdensome process. Needless to say, this
complexity of these barriers makes it even harder for small
business to enter the federal marketplace.
For example, involvement in federal contracting requires a
significant understanding of the long and cumbersome federal
acquisition regulations, defense federal acquisition
regulations, and the applicable regulations in the Federal
Register. Together these documents are over 94,000 pages long
and require thousands of staff hours to read. Veterans and
small business owners at large should not have to do this just
to merely compete. It is our job here in this subcommittee and
the joint committee and Congress as a whole to give veterans a
fighting chance after all that they have done for our great
nation.
This subcommittee's mission is to create a pathway for
small businesses to succeed and that is why today's hearing is
absolutely paramount. I hope today's discussion will lead to
real-world solutions that will enhance the lives and realities
of our veteran-owned small businesses, and I thank you once
again for joining us today. Your real-world experiences will
help us make meaningful improvements to ensure small businesses
are fully utilized in the federal procurement marketplace. We
must work together, both parties, to stop the decline of small
business contracting and fight to keep main street open for
business.
With that, I yield to my distinguished colleague, the
Ranking Member from Michigan, Ms. Scholten.
Ms. SCHOLTEN. Thank you, Mr. Chair. And I want to say
special thanks to the majority for allowing my witness, who I
will introduce later, to appear remotely. The major flight
cancellations that we have been experiencing across the country
have, unfortunately, impacted him and his ability to be here in
person today because he has got incredible perspective to
share, and I thank you for that.
I am glad we can come together to discuss the issues facing
our nation's veteran-owned small businesses as well as
celebrate their successes. We all know that small businesses
are the backbone of the American economy and veteran-owned
small business make up a critical part of that foundation. The
work these entrepreneurs do, all after serving our nation, is
nothing short of remarkable. Moreover, the impact these small
businesses have in our communities highlight the need for our
Small Business Administration to support them. The hearing
today affords us the opportunity to examine how well we in
Congress are doing our part to serve those who have sacrificed
so much for this great nation.
In order to determine how we can best serve our veteran-
owned businesses we need to understand where they are in the
landscape of Main Street America. According to the Census
Bureau data in 2020, approximately 300,000 employer firms were
veteran owned out of a total of approximately 6 million,
accounting for 5 percent of all employer firms.
Veterans own approximately 1.7 million non-employer firms
making up about 4.8 percent of non-employer firms nationwide.
These numbers show that veteran entrepreneurs play a
significant role on main street and historically they have done
so for decades.
Studies also show that older generations of veterans are
much more likely to be entrepreneurs compared to their civilian
counterparts. However, veterans such as those that served in
the first and second Gulf Wars are pursuing entrepreneurship at
a much lower rate when compared to civilians at a similar age.
This is why this hearing today is so important.
It is critical that we examine the barriers to
entrepreneurship through the lens of these business owners to
understand where the gaps in support exist. The Small Business
Administration has a number of resources for veterans who are
looking to start or grow their small business making
significant progress in providing guidance and resources to
veteran-owned small businesses.
The 7(a) Program for example provided more than $1 billion
in loans to veterans in fiscal year 2023 alone. Additionally,
the Small Business Administration received $8.5 million in
fiscal year 2024 to fund a number of programs supporting
veteran entrepreneurs, such as Boots to Business, the Women
Veteran Entrepreneurship Training Program, and the Service-
Disabled Veteran Entrepreneurship Training Program.
These programs provided support to thousands of veterans in
fiscal year 2023. Notably Boots to Business alone served over
23,000 veterans, military spouses, and servicemembers. Based on
the success of these programs it is no wonder that the current
administration requested $19 million for them in fiscal year
2025.
These programs are just a few examples of this critical
work the SBA is doing to serve our nation's veterans. However,
it is also important to examine where we can do more. As with
many entrepreneurs, access to capital remains a top issue for
veteran-owned small businesses as well. Studies have shown that
over half of veteran-owned small businesses don't receive the
amount of financing they request, over half. These realities
combined with the downward trend of young veterans pursuing
entrepreneurship highlight an area where more support from
Congress may be needed.
I look forward to hearing from our witnesses today with
their unique perspective on how we can address the challenges
faced by our veteran-owned small businesses. Thank you all.
Mr. LALOTA. I want to thank the Ranking Member for her
statement for a partnership on our subcommittee together. This
is one of the more functional committees in Congress that
actually gets a couple of good things done and I am pleased
that we have a good relationship.
I am going to pass the mic to my good friend who has a
depth of experience. We are blessed to have some good witnesses
here today who are going to help inform the subcommittee, but
this Subcommittee Chairman from the VA committee has a breadth
of experience himself, 25-year Navy man, retired senior chief
combat veteran, who probably has one of the most unique senses
of humor in Congress, too.
So, with that I pass it to my good friend, Congressman Van
Orden.
Mr. VAN ORDEN. Thank you, Mr. Chairman. It is really great
to be here. We have got some of our staff over here from our
Subcommittee on Economic Opportunity. From the VA I would like
to thank Mr. Levin, my Ranking Member, for being here. And I do
need to note for the record, though, when anyone comes to our
committee they are given cheese from the State of Wisconsin.
That is correct. You know that, Mike?
Mr. LEVIN. Yes, I do.
Mr. VAN ORDEN. Yeah. So, just throwing that out there if
anybody is taking notes.
I want to thank you guys for having us today. It is
incredibly important that we are here because we must work
together. And our committee, we do not run a bipartisan
committee, we run a non-partisan committee. And I think that
you guys have embraced that spirit and I really appreciate
that. There is so much tomato thrown around here in Congress.
It is about time we do some damn work together.
But veterans are the backbone of America's economy. They
have been for a very long period of time. And unfortunately,
the percentage of veteran-owned businesses in America has
decreased from about 11 percent of all businesses in 2014 to
just under 5.2 percent in 2021. And this downward trend
concerns me as it does all of you.
We at Congress have got to do a better job to ensure that
veteran-owned businesses are able to maintain a competitive
advantage in this economy and have access to all the tools they
need to take risk, to take the risk to start a business,
especially when veteran-owned businesses are contributing
almost $1 trillion to the economy annually.
Veterans should not be left behind by the broader
population when they have done so much to protect us in this
room now. The Subcommittee on Economic Opportunity that I Chair
has worked very hard to ensure veterans have the opportunities
they deserve in education, career development, and housing. And
now we need to focus our efforts on ensuring that veterans can
take full advantage of the programs that are available for
starting and running a business.
I have made improvements in the Transition Assistance
Program offered to servicemembers and one of my top priorities
of Congress for transitioning veterans aspiring to own a
business. The Boots to Business Program has proven to be an
invaluable pathway.
I am concerned, though, that the future of the Boots to
Business Program is uncertain because it is supposed to expire
at the end of this Congress. And I implore all my colleagues,
regardless of the side of the aisle you are on, to reauthorize
this program to ensure our veterans have the knowledge and the
skillset to succeed as entrepreneurs upon departure from the
service.
As a former small business owner myself, I understand the
difficulties associated with starting and running a small
business. And I want to ensure that the TAP, Transition
Assistance Program, is empowering veterans with the knowledge
and tools they need to make the decision that is best for them
to succeed.
I also want to ensure that when they leave TAP they are
aware of other programs established to ensure their success,
such as veterans mentoring and networking programs, SBA
assistance programs, and state programs for veteran-owned small
businesses.
Frequently the Committee on Veterans' Affairs hears about
how the application to apply to be a veteran-owned small
business or service-disabled veteran-owned small business is
filled with bureaucratic paperwork and overly complicated and
after three or four times they just stop trying to apply.
During the full committee hearing and the VA last year we
also heard about the lack of opportunities in rural areas for
veterans applying to be a VOSB or an SDVOSB. Wow, check that
out. Huge acronyms.
It is difficult to get questions answered or fill out an
application correctly when the nearest assistance available to
you is over 100 miles away. And in today's day and age these
government agencies must adapt to reach veterans or anyone
wherever we can, and we are going to see an example of that by
the Ranking Member's witness remoting in here.
Finally, the federal government has worked hard to create
specific programs to help certain individuals achieve the
American dream for various reasons, ensuring a veteran-owned
business receives every advantage the federal government can
afford should it be a priority for programs since just 1
percent of Americans serve in uniform.
These men and women should receive the same, if not
preferential, treatment when it comes to government
contracting, tax breaks, and streamlining the application
process. And I look forward to finding these solutions with my
friends and colleagues, Ranking Member Levin, as well as my
colleagues from the Small Business Committee.
I am very excited to hear your testimony today and see how
we can help you better.
And with that, Mr. Chairman, I yield back.
Mr. LALOTA. Thank you, Mr. Van Orden.
I said before that we have some great witnesses and we also
have some great Members here, too. Somebody who I got to know
about 8 months ago when we worked together. He represents the
Southern California, I think a Los Angeles area district. We
worked together about 8 months ago to ensure that his
constituent and a Navy man, Lieutenant Ridge Alkonis, was,
after 500-and-something days in a Japanese prison, was able to
get home rightfully to his family and met Mr. Levin along the
way, who was a champion in that effort. He is the Ranking
Member of the House Committee on Veterans' Affairs Subcommittee
on Economic Opportunity, Representative Mike Levin. I will
recognize him for this comments.
Mr. LEVIN. Well, thank you so much, Chairman LaLota and
thank you to Chairman Van Orden, Ranking Member Scholten, three
good friends in Congress, and this is how things are supposed
to work around here. And I am really, really pleased to see us
all getting together.
I had the honor to serve now in the Economic Opportunity
Subcommittee for 5-1/2 years. I can tell you it is the most
rewarding work that I have done in the House of Representatives
and it has, Chairman Van Orden said, it has been nonpartisan
work, working with Gus Bilirakis and Barry Moore and Chairman
Van Orden.
We have gotten a ton accomplished and I am really excited
to see this, you know, collaboration with the Small Business
Committee. This is great. We should have done this 5-1/2 years
ago, but better late than never.
Historically, veterans who have been more entrepreneurial
than non-veterans. And my experience representing the Marine
Corps Base Camp Pendleton has been that most of our veterans,
they just want to find new ways to serve, you know, when they
are transitioning from the military into civilian life, and
starting a business is one of the very best ways to do that.
According to the Census Bureau, some of these statistics
were given before, veterans own about 5.9 percent of all
business that employ 3.9 million people and have an annual
payroll of about $177 billion. Pretty amazing.
The last Congress I was honored to lead legislation that
was signed into law to expand veterans' eligibility for self-
employment in the Veteran Readiness and Employment Program. I
am really excited to work with the Committee on Small Business
to support veterans who want to start small businesses and
ensuring they have the resources available to support their
endeavors.
I also look forward to hearing from today's witnesses on
their experience as business owners and the resource they
provide to assist veterans in starting and growing small
businesses.
With that I yield back to my friend, the Chairman.
Mr. LALOTA. Thank you, sir. Just for time management's sake
we are going to take about the next 10 minutes or so to
introduce the witnesses and then we have been called to vote.
So, after that, we are going to take a brief recess so the
Members can vote and come back there. So, for staff and
witnesses, just for your time management, we are going to do
about 10 minutes and then take a break.
So, I want to introduce our witnesses. The first witness
here today is Mr. Bill Belknap. Mr. Belknap is the president of
AEONRG, LLC, located in Downingtown, Pennsylvania. Mr. Belknap
founded the LLC in 2012, a general contractor providing
construction on mechanical, electrical, and plumbing projects
and services largely to governmental clients include the VA
medical centers.
It is also certified as a service-disabled, veteran-owned
small business. Prior to founding the company, Mr. Belknap
served for 10 years as a global operations manager with Pfizer.
Before joining Pfizer, he completed a 20-year Army career,
thank you for your service, sir, including 10 years in the Tank
Division in the United States and in Turkey.
Mr. Belknap graduated from the United States Military
Academy at West Point, go Navy v. Army, sir, with a bachelor of
science and later graduated from Wayne State University with an
MBA in finance. Thank you for your service and we look forward
to the conversation ahead.
Our next witness here with us today is my constituent, Mr.
Stephen Hayduk. Mr. Hayduk is the founder and owner of Hayduk
Engineering, LLC, located on Long Island in Ronkonkoma, New
York. Founded by Mr. Hayduk in 1984 as a one-man operation,
Hayduk Engineering has now grown up to over 40 employees.
In 2015, Hayduk Engineering, LLC was certified as a
service-disabled, veteran-owned small business driving even
more growth for the company. Mr. Hayduk has served as the
commissioner of the Suffolk County Department of Public Works
where he oversaw a department of over 900 employees and $160
million operating budget.
A Vietnam veteran, Mr. Hayduk used the G.I. Bill to go to
college, earning his associate degree from the Suffolk County
Community College before attending the Rochester Institute of
Technology where he earned his bachelor of science and civil
engineering technology.
Mr. Hayduk, thank you for your service, sir, and for your
travels here to Washington, and we look forward to the
conversation ahead.
I want to recognize Chairman Van Orden to briefly introduce
our third witness appearing before us today.
Mr. VAN ORDEN. Thank you, Mr. Chairman.
I would like to introduce Ms. Stephanie Brown, who I have
known for, well, for quite a period of time. For a long time
she says. She happens to be the widow of one of my dear
friends, Admiral Tom Brown, who I served with and for on
multiple continents and multiple combat tours and he is a fine
man. And I thank you so much, Stephanie, for your service and
sacrifice to our country.
Stephanie is the founder and Chairwoman and CEO of The
Rosie Network, which is a group that has been established to
help alleviate some of the economic hardships that military
folks have and she has been helping hundreds and thousands of
military spouses start businesses and run them so that their
husband or wife can serve our country with a little less
stress.
So, I want to thank you dearly for coming here from San
Diego, California, for your testimony. And I am really looking
forward to the rest of these people hearing your story and what
you have done for our country, ma'am.
And with that, I yield back.
Mr. LALOTA. Thank you. I now recognize the Ranking Member
from Michigan, Ms. Scholten, to briefly introduce our last
witness appearing before us today.
Ms. SCHOLTEN. Thank you so much, Mr. Chairman, and again,
thank you for allowing this witness to appear remotely. I am
delighted to introduce our final witness, Jon Tellier. Mr.
Tellier is a constituent of my district in Michigan's third
congressional district. His company, JetCo Solutions, is based
in Grand Rapids.
It assists other companies in entering the federal
marketplace to bid on government contracts. JetCo Solutions
provides research proposal management, grant writing, and
business development for businesses, helping them win contracts
valued at over $4 billion.
Mr. Tellier is a former paratrooper and combat veteran,
retiring from the Army after 23 years of service as a
lieutenant colonel. He held a range of leadership positions in
the military, including a deployment to Iraq in support of
Operation Desert Shield and Storm.
Mr. Tellier is also deeply committed to his community
serving on boards and committees supporting youth, families,
veterans, and businesses. He represents several congressional
districts in Michigan as military academy liaison officer and
engages nationally on veterans and military issues.
I am grateful to him for his service to our great nation
and his leadership to West Michigan. Thank him for appearing
today and juggling through lots and lots of logistical hurdles.
I yield back.
Mr. LALOTA. Thank you very much. As I mentioned earlier,
votes have been called. The Committee stands in recess subject
to the call of the Chair. We will resume after votes.
[Recess.]
Mr. WILLIAMS. [Presiding.] The Committee will now come to
order and we will pick back up with the witnesses' testimony.
Now, before recognizing the witnesses, I would like to
remind them that their oral testimony is restricted to 5
minutes in length. If you see the light turn red in front of
you, it means your 5 minutes have concluded and you should wrap
up your testimony. And if the red light doesn't phase you, you
will hear this, okay? And that is a double red light.
All right. So, work with us on that and I know you will do
great.
I now recognize, Mr. Belknap for 5-minute opening remarks.
STATEMENTS OF WILLIAM J. BELKNAP SR., PRESIDENT, AEONRG LLC;
STEPHEN G. HAYDUK, P.E., MANAGING MEMBER, HAYDUK ENGINEERING,
LLC; STEPHANIE BROWN, FOUNDER AND CHIEF EXECUTIVE OFFICER, THE
ROSIE NETWORK; AND JON TELLIER, PRESIDENT, JETCO SOLUTIONS
STATEMENT OF WILLIAM BELKNAP, PRESIDENT, AEONRG, LLC
Mr. BELKNAP. Chairman LaLota, Chairman Van Orden, Ranking
Members Scholten and Levin, Subcommittee Members, thank you for
holding today's hearing.
My name is Bill Belknap, I am the president of AEONRG, LLC,
a VA-certified SDVOSB providing construction services for
federal clients. I am grateful to be here today on behalf of
the National Small Business Association testifying on an issue
that is vitally important to our economy, national security, as
well as to me personally.
Before my work in private sector, I completed a 20-year
Army career, graduated from the United States Miliary Academy
at West Point, and the Army's Ranger and Airborne schools
before serving 10 years in command and staff positions with
armor combat units.
Subsequently, I spent 10 years in the Army's Acquisition
Corps serving in positions as construction contracting officer,
deputy Army installation commander, assistant project manager
of the M1A2 Abrams Tank. I culminated my career as director of
the Army Science Board in the Pentagon.
My dream job, however, was starting and growing my own
company. The training, assignments, and experiences I received
in the military were a catalyst to becoming a veteran
entrepreneur.
As you know, veterans make up a substantial portion of the
small business community owning roughly 2 million businesses,
employing 5.5 million Americans, payrolls exceeding quarter of
a billion dollars. This substantial footprint illustrates the
appeal of veterans entrepreneurship. Despite this allure,
veteran businesses face unique and persistent challenges.
Actions that I recommend need to be taken, number one,
simplification of government solicitations and contracts. We
are competing against commercial entities. Many of the FAR and
agency-specific clauses that sometimes take up 50 percent of a
solicitation pages that maybe be up to 150 pages in length
should be migrated to periodic, one-time registration entities
such as SAM or SDVOSB renewal.
This relatively simple change will cut the paperwork
associated with federal contracts in half. The federal
government should also review corporate industry best practices
and incorporate more of these in contracting.
Number two, count military service towards proposal past
performance and experience. Too often federal agencies mandate
in their solicitations that prior government contracting
experience is required. But currently military service does not
count. The federal government must mandate that each agency has
a policy to ensure military experience and qualifications count
toward acceptability and competitiveness in evaluating
proposals.
Number three, accountability of federal agencies meeting
and facilitating set-aside goals. It is too easy for agencies
to lump services together into one very large contact that only
large businesses could legitimately propose and win. The
federal government should develop a carrot-and-stick approach
to incentivize agencies meeting their various small business
set-aside goals to include veteran set-asides. Make--hold them
accountable.
Number four, promote veteran entrepreneurship mentorships.
Leaving the military is a culture shock to many. In the
military servicemen and -women are told where they will serve,
what they will wear, how to address their superiors, et cetera.
A veteran entrepreneur will greatly benefit from mentoring
by another veteran that successfully transitioned. Congress
should mandate SBA or VA to organize a task force to develop
veteran entrepreneurship mentorships.
Number five, self-reporting performance, all agencies
incorporate modern, most efficient acquisition best practices.
During the execution of federal contracts, agencies should
emphasize contractors' self-reporting of their performance.
Most companies take great pride in their work and want to earn
the agency's trust and competence.
Number six, agency acquisition training, standardization,
and incorporation of modern acquisition best practices and
similar contracting and contract management methods among all
agency officials will promote the liquidity of veteran
entrepreneurs to serve during different agencies and increase
and spread the flow of talent among them.
And number seven, increase maximum SDVOSB sole-source
thresholds, use 8A regulations in SDVOSB sole-source award. The
5-year update schedule means that a sole-source contract
awarded now may be worth $1.5 million less if it were awarded
after October 1, 2025, when the thresholds update. That is more
than a 21 percent difference.
However, increasing the threshold without changing the
rules by which sole-source can be used for SDVOSB set-asides is
not effective or meaningful. Change the rules to match those of
8A sole-source requirements and you'll see the program become
more effective.
In addition, this is suggestion from NSBA also encourages
the Committee to look into. Development of the VOSB set-asides,
one possible area of improvement would be the development of
specific set-aside for VOSBs separate from existing SDVOSBs by
increasing total pool of set-asides we help veterans regardless
of injury status, ability to actively participate in federal
government contracting, and more importantly would not dilute,
disadvantage the currently SDVOSB program.
More detail of each of these items can be found in my
written testimony.
In conclusion, on behalf of the NSBA, I want to reiterate
that small business community's thanks to the Committee for its
attention and to these issues. I look forward to answering any
questions.
Mr. WILLIAMS. Thank you very much.
I now recognize Mr. Hayduk for 5 minutes, opening remarks.
Mr. HAYDUK. Good morning.
Mr. WILLIAMS. Can you turn your mic on?
STATEMENT OF STEPHEN HAYDUK, SENIOR PRINCIPAL, HAYDUK
ENGINEERING, LLC
Mr. HAYDUK. Good morning, and thank you to my congressman,
Nick LaLota, and to all of you for inviting me to appear before
you today.
I enlisted in the U.S. Army in 1968 and served as a
helicopter crew chief in the Army's 57th Assault Helicopter
Company in Vietnam, known as the Gladiators. I returned home,
attended college on the G.I. Bill, and founded my own
consulting engineering firm in 1984.
Hayduk Engineering is both a New York state-certified
service-disabled, veteran-owned business as well as a federally
certified service-disabled veteran-owned small business.
Our company is well-respected on Long Island in New York,
and has grown significantly as a result of the SDVOB program.
Under the state program, however, all contracts issued by
any state agency include a set-aside of about 6 percent,
usually 6 percent, for service-disabled veteran-owned
businesses. Under the state program, prime contractors have no
choice but to set out--to seek out an SDVOB to serve as a
subcontractor or a subconsultant in our case.
Our firm gets inquiries every single week from companies
pursuing contracts with the state asking if we will agree to be
part of them, on their teams, and many of these are very, very
large contracts beyond the size that we would go after as a
prime.
Getting work under the federal program has been much more
challenging. So, I wanted to emphasize, I am not here to
criticize the federal program, but instead to offer my
observations about the differences between the state and the
federal program and how the federal program might benefit from
following some of the examples set by the state program which
has been extremely beneficial to my firm.
The federal program apparently does not include the same
requirements as the New York State program for winners of all
contracts awarded to include an SDVOB on the project team.
Under the state program our firm has been awarded hundreds
of engineering contracts helping to create dozens of jobs that
Hayduk Engineering and helping to grow our firm from less than
10 employees in 2015 to nearly 50 today.
Under the federal program we have been awarded one contract
for technical design of an upgrade to the sewage treatment
plant at the VA medical center in Northport, New York. We
completed that work successfully and we have a great working
relationship with the staff at VA's Northport facility.
We would like to provide engineering support for other
federal agencies that operate on Long Island and I did a quick
search and we came up with a list of about 20 of the federal
agencies that we are aware of. Our firm is well-respected and
has been recognized for the high quality of our work on many
levels.
We are notified regularly by local governments about
opportunities for new work as it becomes available. Receiving
the same type of notice about federal procurements in our
region would be helpful. Instead, our staff is left to attempt
to identify pending federal projects by navigating their way
through the federal procurement notices on the internet.
That system, SAM.gov, is more complicated than it should
be. The search engine is cumbersome and when you apply
different search filters to try to identify opportunities by
region or by business classification it either yields sometimes
many irrelevant results or sometimes very few results. But not
often are they applicable or relevant to our type of business.
Because it uses a national database our staff are searching
through projects all over the world that we could never pursue.
For small businesses paying staff to dedicate that type of work
hours to that process is not an efficient or cost-effective use
of resources.
Another issue that's common to the program and is intended
to help small businesses is the need for sustained economic
growth. If a program helps create dozens of new jobs we should
have a shared goal of making sure that the people we hire can
rely on those jobs to continue. The issue I'm raising is the
need for a transition period from business that do grow as a
result of the program.
Right now, there is no glide path for a transition to
protect a business and its employees in the event that the
veteran owner passes on, retires, or leaves the business. The
intent of the program is to help business expand and create new
jobs.
But if state SDVOB or a federal SDVOSB certification is
lost abruptly the business could face instant reduction of
workflow meaning instant loss of jobs for those who have
benefited, but also for all the employees that work for that
firm.
A transition process to allow companies to reduce their
reliance on SDVOSB would protect businesses.
Mr. WILLIAMS. The gentleman's time is----
Mr. HAYDUK. In closing----
Mr. WILLIAMS. Go ahead, quickly.
Mr. HAYDUK. One, consider modifying the program to require
a broader set asides for the contracts issued on federal
agencies similar to approach taken by the state of New York.
Consider, two, consider establishing a proactive notification
system alerting SDVOBs of procurements.
Mr. WILLIAMS. The gentleman's time is up.
Mr. HAYDUK. Okay. Thank you.
Mr. WILLIAMS. Thank you.
And I now recognize Ms. Brown for her 5-minute opening
remarks.
STATEMENT OF STEPHANIE BROWN, CEO AND FOUNDER, THE ROSIE
NETWORK AND U.S. MILITARY SPOUSE CHAMBER OF COMMERCE
Ms. BROWN. Thank you for the invitation to be here. I'm
just going to jump right in. I am the daughter of a Vietnam
veteran turned small business owner. I was married to a retired
Rear Admiral Tom Brown, who served 30 years in the SEAL teams,
and I am the mother of two boys I raised in the military.
I founded The Rosie Network after Rosie the Riveter over 12
years ago and since then we have provided our national award-
winning, college-accredited Service to CEO Program and
mentoring to tens of thousands of transitioning servicemembers,
veterans, and military spouses, those that are seeking the
American dream of small business ownership.
We represent over 30,000 veteran- and military-affiliated
small businesses around the globe. While we serve Active-Duty
veterans and military spouses, today I would like to speak on
behalf of the 48 percent of military spouses who have chosen
small business ownership and entrepreneurship as a viable and
portable career.
Why? Because despite our best efforts, military spouse
unemployment and underemployment described by DOD leaders a
national security crisis has remained statistically unchanged
for over a decade.
At 20 to 24 percent, the unemployment rate for military
spouses is 4 times higher than that of the national average.
The cost to American taxpayers is between $700 million and $1.2
billion a year. More importantly, it causes financial
insecurity and stress on our military families and impacts
mission readiness, retention, and recruitment.
When we are employed, we are paid up to 25 percent less for
the same job as our civilian counterparts. However, small
business ownership is changing the landscape for military
spouse employment, but we need your help. Based on the U.S.
Military Spouse Chamber of Commerce internal data from over
4,000 of its members we know that 87 percent of our members are
women, 80 percent are married to spouses who are still serving.
Collectively, they employ over 120,000 people, 80 percent of
those are fellow military spouses and veterans, and they
generate over $1 billion a year in revenue.
The top challenges, you mentioned earlier, access to
capital, 88 percent of our members are self-funded. The 12
percent that sought funding, 90 percent were turned down.
Financial institutions often view military spouses as less than
favorable due to our nomadic lifestyles.
Lack of mentoring and training, right now The Rosie Network
has a 6-month wait list because we lack the resources to
provide and hire more qualified instructors.
Rather than the government building yet another program
that very few attend or would recommend, why not support
service organizations who are doing the hard work on the
ground? Hold them accountable, yes. But please do not make
these reimbursable grants that are often paid up to 90 days
later. No for-profit company would be expected to operate on
those terms. Seventy-three percent of military spouses want
government contracting opportunities.
Military spouses need to be designated as an economically
disadvantaged category that will open us up for access to
capital, contracting opportunities, and other resources.
I'd like to give a shout out to the Army's Office of Small
Business who right now, today, are actively doing business with
military spouse-owned companies and they're tracking their
spend.
We need more federal agencies to step up. No federal agency
will get credit for military spouse spend unless we are
recognized. Three years ago, the Military Spouse Chamber rolled
out the first industry standard certification for military
spouse-owned enterprises which we offer for free.
Today, we are the top 2 percent fastest growing chambers in
the country and a number of Fortune 500 companies recognize and
accept our certification, actively want to do business with
military spouses.
If the private sector will not accept self-certification
why should the government? There needs to be reciprocity with
vetted third-party certifiers. Military spouses have earned a
seat at the table through our silent service and sacrifice on
behalf of this nation. In my many decades in this space, not
one servicemember or veteran has ever said to me, don't help my
spouse.
In conclusion, investing in our military spouse small
business owners is an investment in our military families, it's
an investment in our country and our economy.
Thank you and I look forward to your questions.
Mr. WILLIAMS. Thank you very much.
And now we recognize Mr. Tellier for 5 minutes. How do we
have him set up? Okay. Mr. Tellier?
STATEMENT OF JON TELLIER, PRESIDENT, JETCO SOLUTIONS
Mr. TELLIER. Good morning. Mr. Chairman, Ranking Member
Scholten, and other Subcommittee Members, thank you for
inviting me to the Committee hearing and allowing JetCo
Solutions the opportunity to discuss the entrepreneurial spirit
of veterans and the challenges we face as small business
owners. I apologize for not being in person and the airlines
did not cooperate with me.
My name is Jon Tellier. I am a veteran business owner and a
soldier for life. My soldier journey began as far back as I can
remember, a young boy playing with green Army plastic men and
keeping a scoresheet of Army trucks and jeeps I sighted during
my annual visit to see my father at Camp Grayling in Northern
Michigan.
Football allowed me to attend the United States Military
Academy in 1985. That was the same year Army beat Michigan
State in the inaugural Cherry Bowl at the Superdome.
Ironically, my journey began the same leadership institution as
my namesake, Jon Edward Bokovoy, who was a USMA Class of 1957
and a friend that my father served with in Vietnam. This
learning experience was then followed by training at the Army's
Airborne and Ranger School.
My first assignment was with the 3rd Armored Division in
the Federal Republic of Germany, where I was to witness the
fall of the Berlin Wall and the curtailment of communism. I
also deployed to Iraq in support of Operation Desert Shield and
Storm, and very proud to participate in the offensive in
response to Saddam Hussein's invasion of Kuwait.
I also had the privilege of defending America's freedom as
a member of the 82nd Airborne Division. We had several 2-hour
recall notices and I exited active duty in the summer of 2000
after 8 moves in 11 years achieving the rank of major.
Some might say this is where my journey stops, but actually
a new chapter was forged.
My transition from the Army was a blur. My boss insisted
that I work 12-hour days up to my out-processing time, forcing
me to go on sick call in order to buy a suit for interviews.
I landed in Kalamazoo, Michigan, and began working for a
large, multibillion-dollar company. After a divorce and a move
to Grand Rapids, Michigan, I worked for a small manufacturer.
In 2005, I was let go as the automotive industry took a
dive. Faced with 6 months of unemployment, $214 a week in
subsidies, a kid in travel hockey, private school tuition, and
no real job opportunities, I made a decision to start a
business.
Echoes of, are you crazy, and do you know what you are
getting into, to why can't you just get a normal job, were
commonplace. In the early years there were a few supporters.
After developing my business plan, I briefed the cadre at the
Small Business Development Corporation, commonly referred to as
the SBDC. It went so bad that I almost decided to look
elsewhere.
Undeterred I made the changes and updates and continued on
my purpose of starting a business that would sell packaging
supplies to the Department of Defense.
Shortly afterwards, JetCo received its first order, a
$14,000 purchase order to McAlester Army Ammunition Plant for
ammunition bags. But how was I going to pay for it since JetCo
did not have a line of credit or any significant savings?
Jim Feeney, previously he had tried to hire me, told his
staff to grant JetCo a small line of credit. And we were able
to get our contracting officer, Susaneva Wade, her ammunition
bags on time. Similar instances occurred with the Census
Bureau, the United States Department of Agriculture, the
Federal Prison Industries, and at last count, today over 248
different state and local government agencies.
My military training and experience was invaluable for
problem solving and analysis. My mindset of if this, of this,
it fails in comparison to any patrol in the mountains of
Dahlonega, Georgia, or blocking positions near Basrah helped me
get up and go out and compete every day.
But I could never do it alone. My business partner and
spouse compliments my strengths and weaknesses. PTAC, now known
as APEX, was extremely helpful.
Mr. WILLIAMS. Twenty seconds, Mr. Tellier.
Mr. TELLIER. Today I believe I am living the American
dream. I still worry about payroll, taxes, and healthcare. I am
glad that I was fired in 2006 and forced to think creatively
and start JetCo as a matter of survival, an accidental
entrepreneur if you will.
I'm truly appreciative of all the programs, incentives, and
assistance we have received in our 18 years of business. In
some way, I feel like today is payment for serving in the Army
and protecting our freedom both in peace and in war.
My hope is to pay that debt forward and that the next
generation of veteran business owners share the same success we
have and are afforded an even greater opportunities and
resources. Thank you.
Mr. WILLIAMS. The reason I mentioned 20 seconds because he
asked for that. Okay. So, I didn't want you to think we were
doing anything different.
I will now move to the Member questions under the 5-minute
rule. I recognize myself for 5 minutes.
For the last 10 years, I have had the privilege of
representing Fort Hood, Texas, better known today as Fort
Cavazos. During my many visits to the base I found it was not
only the brave soldiers serving our country that are interested
in pursuing entrepreneurship, but also their significant
others.
Ms. Brown, your efforts to help military spouses are very
important. And can you briefly discuss some of the major
challenges military spouses face as small business owners?
Ms. BROWN. Thank you for that question. As I mentioned,
access to capital is, of course, a big challenge, like it is
for veteran-owned. Banks are hesitant because they're often--
they look at their resume, they see gaps in their resume.
Ninety percent of those that did--of our membership that did
attempt to get funding were turned down, so they see a nomadic
lifestyle access to capital.
Also, when it comes to--we find that over 70 percent of our
military spouse members want to do business with the
government, so getting access to capital, getting access to
some of the training and resources that are available to
veterans by designating--giving military spouses that
designation of an economically disadvantage category will open
that up to them.
So, I would encourage the Committee to consider that. It
was attempted before, but--and we were engaged in that effort.
It was the same time the SBA was taking over the CVE, the
veteran certification, and they felt that they couldn't manage
both. But I believe that now is the time to recognize our
military spouses. It just makes a stronger military family. So,
thank you.
Mr. WILLIAMS. Thank you.
Mr. Belknap, there are some programs, like Boots to
Business, within the SBA, and we talked about it this morning,
that look to teach servicemembers the basics of running a small
business.
However, I have noticed that many veterans often turn to
their friends and the people they served with for advice as
they look to enter the private sector. So, can you describe the
work you do in helping other veterans navigate small business
ownership, and what advice would you have for servicemembers
who are considering taking the leap of faith and starting their
own small business as they embark on their next chapter?
Mr. BELKNAP. Thank you, Congressman Williams. So, there's a
couple of thoughts about that. Number one is the veteran has
got to decide what type of business they want to offer and that
comes with what are their experiences, what are the skills they
offer--they have to offer the customer, in this case the
federal government.
Number 2, what is the passion they have to wake up every
morning and they're excited to do their business? Once they
have those two, of course, they need to come up with a business
plan, and the enormity of opportunities for vetting that
business plan for assistance needs to be more informed to
veterans.
And number 3, I would suggest that the mentorship program
that I talked about can have an enormous impact. You know, when
I was transitioning out of the military one of the things that
during the TAP program they said is talk to all your bosses to
ask them to be a reference to help you find a job, especially
the ones that liked you. And it worked out perfectly for me.
I talked to a boss and I ended up working for a large
corporation until I started my business 10 years later.
Mr. WILLIAMS. Some of you or most of you may not know but I
have been in the car business for over 50 years, 53 years, and
still in the car business. I took over the family business from
my dad and I am going to ultimately pass it along to my two
daughters who work in the business.
Small business ownership as we all know is a family affair.
And when veterans are thinking about passing along their family
business there are few more things they must consider. And when
a veteran retires the business risks losing their veteran
designation if they do business with the federal government.
While some protections exist for spouses who take over a
company, allowing a transition phase to the company to find
nonveteran business. However, this is not the case when a
veteran passes down their business to a child.
So, Mr. Hayduk, briefly in the time I have got left, do you
think we should look at expanding the surviving spouse
designation to include the children of veterans as well?
Mr. HAYDUK. Yes. I think that would be extremely beneficial
and that is absolute one of the four points that I made the
transition process. My son is sitting behind me and is a
licensed professional engineer in my consulting engineering
practice. It's a professional practice only another licensed
professional engineer can take over or be an owner, a
principal.
But although we had built it up to 50 people, and he is a
partner in the business, a short time after my demise the
business will cease to exist if he doesn't find a different
person to take over as the SDVOB owner.
Mr. WILLIAMS. Well, that is good and I would just say to
your son, father knows best, remember that.
Mr. HAYDUK. Oh, I know that.
Mr. WILLIAMS. Okay. I yield my time back.
Now I recognize Ranking Member Scholten for 5 minutes of
questions.
Ms. SCHOLTEN. Thank you so much Mr. Chair and Mr. Tellier,
that worked out quite well. I have some follow-up questions for
you if you are still there. It is wonderful to have a fellow--
--
Mr. TELLIER. Yes, I am still here.
Ms. SCHOLTEN.--West Michigander here providing some
incredible insights. Your business assists other companies in
winning contracts with the federal government, a critical
service.
What are the most common barriers that you see with small
businesses who are seeking a government contract?
Mr. TELLIER. There's really no playbook in terms of what
you should do, where you should start, and who you should talk
to, and it can be as simple as a SAM.gov registration and
getting your CAC and your UEI to inputting a SPUR score into
PIEE, into determining which agencies and departments are
actually buying products and services that you have to offer.
And then you are asked to write a multivolume proposal to
respond to an RFP or a solicitation and there's--you know,
unless you hire somebody to specifically do that, you know,
you're relying on your own skills.
So, in my mind it's almost like trying to eat an elephant
and trying to figure out where to start. And there's multiple
access points but I think that the enormity of the information
is definitely a barrier to a small business owner.
Ms. SCHOLTEN. And specifically, you know, do you feel that
veteran-owned small businesses face those same challenges to a
greater or lesser degree or about the same?
Mr. TELLIER. I think that--I think veteran-owned, veteran
businesses have the same challenges as small business owners. I
would like potentially see, you know, and there's been lots of
testimony about the different set-asides and small business
goals and diverse goals.
But really I think veteran businesses, if we had more
access to capital and the ability to fund, and it doesn't have
be an insurmountable amount of money, but, you know, right now
we help veterans, you know, buy homes. Could we help them
subside a business venture? And then talent and finding people
and getting them to participate in your business.
Ms. SCHOLTEN. Thank you so much. And in my remaining time,
Ms. Brown, I actually wanted to ask you a couple of follow-up
questions. I appreciate your testimony so much and your
incredible service to our country through your family, all of
you, your incredible service.
And I wanted to go back to something you said that just the
remarkably high unemployment rates among military spouses and
how you said that you contributed generally to an overall sense
of instability and military readiness. I can see clearly how
that could be the case.
I am wondering if you could share, you know, a few stories
to help us for the record here as we continue to look for ways
to support heroes like you?
Ms. BROWN. Well, thank you. Thank you for that question. I
can certainly share my own personal story, but I have many
others. I was a small business owner here in Washington, D.C.,
on that fateful day that I met what would become my husband a
year later. He received orders overseas to take command and I
had to exit my business.
So, I exited my business at a loss and then moved overseas
and found myself unemployed and unemployable. I can tell you
that while I proudly served alongside and supported my
husband's service to the nation, you can't help but have it
impact your marriage when you are, you know, trying to find a
job and you can't find one and you have no place or purpose and
money is tight and then kids come along.
So, I do think it impacts marriage and we know
statistically that it impacts retention and recruitment and I
think that all we're, you know, really looking for is an
opportunity, a seat at the table. And when I noticed other
military spouses that were unemployed like me, it became my
goal to then help them. Look, you have a college education, you
have a skillset, you have a passion, turn that into a business.
Right?
You're a teacher, licensed, you can't get a job teaching,
I'm going to help you turn it into a business. And we've done
that over and over and over again. So, it's been an absolute
honor, some of the stories and people that we've helped have
just--could write a book about it.
Ms. SCHOLTEN. Thank you. Thank you.
Ms. BROWN. Sorry, I went over.
Ms. SCHOLTEN. No. That is very, very helpful testimony. I
really appreciate you being here today. Thank you.
Mr. WILLIAMS. The lady----
Ms. SCHOLTEN. I yield back.
Mr. WILLIAMS. The lady yields back. I now recognize the
distinguish Chairman Van Orden for 5 minutes for questions.
Mr. VAN ORDEN. Thank you, Mr. Chairman.
Mr. Hayduk, you have been very clear that you have not come
here to criticize these federal programs and I would like to
take that burden for you.
You sat here and you are--I mean it is amazing that you are
praising the acumen of the government of the State of New York
and their ability to make sure that veterans are employed in
comparison to the federal government, which is--without using
vulgarity I don't know how to describe the federal government's
process at this point.
So, I just want to ask some stuff. Ranking Member Levin and
I were responsible for the Transition Assistance Program. And
that is how I have chosen to try to prevent veteran suicide,
taking people that are productive members of the military and
then immediately transition them to productive members of
society writ large as civilians. I think we are going to, if
that 24-month window where our men and women decide to take a
permanent solution to a temporary problem.
And so, I really want to know, I am going to ask all three
of you this, how do you think that Mike and I can change the
Transition Assistance Program using your subject matter
expertise? Because we don't have to ask the DoD. We can tell
them.
What could we possibly do if you could just have a couple
suggestions that Mike and I can take back to our Subcommittee
and put that into the TAP program so that we can help our
veterans become productive members of society. And I would like
to write these down if that is okay, Mr. Belknap?
Mr. BELKNAP. Sure. Thank you for this opportunity. You
know, thank you, Congressman, for this opportunity. You know, a
couple thoughts. Number one is transition program that you help
found is amazing and an incredible service to our departing
veterans from the service and transitioning into the commercial
world.
You know, I mentioned, I talked about the mentorship and
how that helped me find a job, a corporate job after I exited.
I would suggest that a similar way can happen with encouraging
veterans to become entrepreneurs after they leave as well. And
what that takes is a couple things.
It takes, number one, their realization that it's another
way to serve their country for all the right reasons. We need a
strong industrial base and they're contributing to our security
in another manner.
Mr. VAN ORDEN. Sir, I do not mean to cut you short.
Mr. BELKNAP. Oh, sure.
Mr. VAN ORDEN. But the coach there is going to whap me with
that gavel if we don't hit it. So, I have small business
mentorship.
Mr. BELKNAP. Sorry.
Mr. VAN ORDEN. So, do you have another suggestion?
Mr. BELKNAP. Yes. So, the mentorship is huge and letting--
informing, encouraging veterans that there is another way to
serve their country.
Mr. VAN ORDEN. Very well.
Mr. BELKNAP. That is huge.
Mr. VAN ORDEN. Mr. Hayduk, do you have any specific
recommendations for Ranking Member Levin and I to bring into
the TAP program?
Mr. HAYDUK. With respect to transition you are talking
about?
Mr. VAN ORDEN. That is correct, sir.
Mr. HAYDUK. I really don't know what the answer to that is.
It is one of the things I discussed with Mr. LaLota's staff
when they called and I spoke with them. It's a vexing problem,
especially in the case of a professional practice.
But I do think that there should be some consideration of
being allowed to keep the designation of SDVOB going for a
significant period of time that could allow the firm to
continue to exist both to members of the family and/or to
others that you may have started to transition into.
Mr. VAN ORDEN. Sir, thank you very much.
I would like to give Ms. Brown a minute. Ma'am?
Ms. BROWN. Thank you for that question. Yes. I absolutely--
so what you refer to, Derrick, is a sense of purpose. I sort of
feel like that is what we do is we are helping people find
their sense of purpose after service. First of all, I've been
to TAPS. I've been--they do offer an optional session on
entrepreneurship.
In my experience, whether it's good or not totally depends
on who is teaching it. I've literally been in one, ended up
stepping up and teaching the class myself because the person
that was assigned to teach it had never started a business and
didn't really know what they were talking about.
They were regurgitating government programs that were
available. Well, that's great and all well and good, but when
you're boots on the ground, you've got to make payroll, you
really--you need real-world answers and solutions.
So, my suggestion is engage. The government needs to engage
with organizations that are doing the work on the ground.
Right? There needs to be more of that collaboration. We're cut
off.
The SBA just launched a Pathways to Business for military
spouses. And I mean, nothing against my SBA partners, but they
are--it is not well attended and it's not--so why would they do
that?
The last thing really quick. Post the G.I. Bill, okay, not
all veterans and their family members want to go to college.
Right? Please start the conversation. Iver 80 percent of our
business owners right now, veteran-owned are over 70 years old.
Mr. VAN ORDEN. Ms. Brown, my time has expired.
Ms. BROWN. Thank you.
Mr. VAN ORDEN. I yield back.
Mr. WILLIAMS. The gentleman yields back.
I now recognized distinguished Ranking Member Mike Levin
for 5 minutes of questions.
Mr. LEVIN. Thank you, Mr. Chairman. And I just want to
associate myself with Chairman Van Orden's question and
obviously look forward to working together to figure this out.
Ms. Brown, I want to thank you for everything that your
company is doing, so much great stuff here, but I wanted to ask
a couple specifics.
One about younger veterans, so a recent SBA report
indicated that millennial veterans are less likely to start new
businesses than non-millennial veterans. What do you think we
need to do to ensure that younger veterans are starting small
businesses?
Ms. BROWN. Another great question. So, millennial spouses
are more likely to start a business than millennial veterans.
Okay. So, I would argue, again, it's a family affair, as you
described. Engage with those spouses.
Military spouses, whether veteran or Active Duty, make, we
all know, the majority of final decisions, housing decisions,
school decisions for military families. We are missing, we are
coming in the 9th inning when it comes to engaging military
spouses.
And again, the way to do that is not to create yet another
government program necessarily, but really engage and get
advice from those of us that have been doing it for almost 13
years. So, I think that's a huge part of it and the younger
ones are--you know, they have a lot of advantages that the
older folks like me in my 60s didn't.
We didn't have access to the internet or eComm and all that
come of stuff. That's really what they're gravitating toward.
So, build the TAP program and that training program to be
meaningful to them. Right? To meet them where they are, that's
my advice.
Mr. LEVIN. Yeah, any idea on further specifics? You know,
obviously we really appreciate the feedback.
Good segue to my next question, which is about military
spouses. We have been pushing the Bureau of Labor Statistics to
work with the DOD to better track monthly employment data for
military spouses over time similar to the data they collect on
veterans.
We don't currently have reliable monthly data on miliary
spousal employment. So, it is hard to track the success or
failure of policies to support them. Can you share--and I know
you work with tons of spouses. Can you share what barriers the
spouses are facing when they are trying to start a new
business?
Ms. BROWN. Well, as I mentioned before, access to capital
being embraces by the federal government since that's
definitely something that you can affect, but really at the end
of the day it is a network. We've been training, like I said,
tens of thousands for more than 12 years.
What we hear afterwards, those that graduate from our
program, it's not just the quantifiable impact that we've made,
right, helping them get started, make money. But it's the
qualitative impact. They feel like they belong to a community.
They're not afraid to, you know, move into becoming an
entrepreneur, creating that kind of support system is
overwhelming what we get from them that that's what mattered.
It was almost for them that impact was greater than making
money. And oftentimes these are just kitchen table small
businesses. They just want to bring in enough money so they can
make a car payment, maybe go on a family vacation.
We're not talking about the next Microsoft, although we do
have military spouse businesses that are in the--you know, a
lot of money, over millions, tens of millions, hundreds of
millions of dollars. So, they are out there.
So, I hope did that answer your question?
Mr. LEVIN. That is helpful. I am going to turn to Mr.
Tellier.
Can he hear me, maybe? There he is. Hello, can you hear me?
Maybe not. I think we are having communication trouble with Mr.
Tellier.
Mr. TELLIER. I can.
Mr. LEVIN. Oh, there. Can you hear me?
Mr. TELLIER. I can hear you.
Mr. LEVIN. All right. I will go----
Mr. TELLIER. Yes, sir.
Mr. LEVIN.--fast as I can.
Mr. TELLIER. I can hear you.
Mr. LEVIN. So, your company is a service-disabled veteran-
owned small business helping other businesses obtain contracts
with the federal government. Congress passed a law late last
year eliminating the ability of a small business to self
certify that it meets all the requirements of a service-
disabled, veteran-owned small business.
So, a question for you is have you heard any concerns about
SBA requiring businesses to submit their request for
certification by December, this December when the SBA currently
has no process to allow service-disabled veteran-owned small
businesses to submit an application.
Mr. TELLIER. Yes. It's problematic if you're requiring
certification and the body is--the agency does not have a
mechanism for you to certify. I went through certification----
Mr. LEVIN. I am out of time. Maybe we can take this back
for the record and work on it. And I appreciate it and yield
back.
Mr. WILLIAMS. The gentleman yields back.
And now I recognize Representative Maloy from the great
state of Utah for 5 minutes.
Ms. MALOY. Thank you, Mr. Chairman.
I am a Member of the Small Business Committee, so I am
interested in keeping main streets vibrant and economies
vibrant. I am also interested in supporting veterans so they
can thrive after service and military families, they can thrive
during service.
I am not a veteran. Two of my four brothers are. And I have
watched my family go through multiple deployments. I have seen
my brothers navigate two very different educational situations,
one educated by the military, the other one having his
education constantly interrupted by deployments. And I have
watched my two sisters-in-law navigate very different family
situations during service.
And so, I want to say thank you for being here. Thank you
for talking about this. It is really important. We thank
veterans for their service all the time and I think one of the
best ways we can thank veterans for their service and their
families for their sacrifice is to make sure that you can
thrive in our economy.
So, since this is something that my colleague, Mr. Van
Orden has a lot more experience with and I know he had
questions he didn't get to, I am going to yield the rest of my
time to him to follow up with you on the rest of the questions
he has so that we can get the right answers. Thank you.
Mr. WILLIAMS. The gentlelady yields.
Mr. VAN ORDEN. All right. Thank you, gentlelady.
As I said, Mr. Levin and I are on the Economic Opportunity
Subcommittee for the VA, Mr. Hayduk, and what we have noticed
is that the VA is at its core the bureaucracy is incredibly
incompetent. I get all my healthcare through the VA, including
these raging glasses.
And everybody that claims that VA facility, the folks that
check you in on the desk and provide medical care are aces.
They are just--I am so proud of them. But when we get up to
D.C., it becomes convoluted.
So, the VA is so dysfunctional that veteran suicide is
increasing although we have given them $120 billion since 9-11.
So, they recognize their dysfunction and they started something
called the Staff Sergeant Fox Grant Program, where we give the
VA money, and then they find organizations that are functional
and they give the money that we give them to the organizations
that are actually doing the work.
And although I do not encourage this, I would not like to
be an enabler, I am wondering if the small business--the SBA
were to have a program like that was specifically designed to
cater directly to veteran-owned businesses as a clearinghouse
to kind of skip all the rest of this noise and the static that
we hear.
Do you think that that would be beneficial to you guys? I
will start with you, Mr. Belknap.
Mr. BELKNAP. I can see some--I can see some benefits to
doing that, certainly. I think that a lot of this is awareness.
Veterans, you have to make veterans aware of the programs that
are out there. There are enormous amounts of opportunities, you
know, SBA, SBDC, VOPC, et cetera.
So, they need some awareness to it and they also need some
more awareness to some of the civilian organizations that offer
free counseling and facilitation of veterans to start business,
like NSVA, like National Veterans Small Business Coalition, I'm
on the board of both of them. You know, somebody asked me for a
scholarship to join an organization, as a Board Member I
wouldn't hesitate to help him. And I know others feel the same
way.
Mr. VAN ORDEN. Mr. Hayduk?
Mr. HAYDUK. I believe that this falls right into a project
that we have a proposal into the VA right now for privatization
of the operation and maintenance of the VA wastewater treatment
facilities at Northport.
I was in government for a 5-year stint as the commissioner
of Public Works, as the Chairman had mentioned. And I think
that there are many ways in which the private sector could do
some of the work that government does better than the
government does, and there some things that we shouldn't be
involved in, but I do think that there are things like that
that would work very well.
Mr. VAN ORDEN. I would love to follow up with you. Ms.
Brown, do you think that it would be beneficial if the SBA had
a cadre of people that are specifically assigned to helping
military veterans and after duty servicemen and -women to get
grants and facilitate starting and running small businesses,
ma'am?
Ms. BROWN. And military spouse, of course.
Mr. VAN ORDEN. Of course.
Ms. BROWN. Absolutely.
Mr. VAN ORDEN. Yeah. I am married to one or was. I mean, I
am still married to her, but I am not in the military any
longer. Did you hear that, Sarah? Write that down.
Ms. BROWN. That's called a veteran spouse. And yes,
absolutely. I mean I--again nothing against and I work closely
with the SBA's Office of Veteran Business Development. I have
applied multiple times to be on their advisory council and have
been turned down every time. As far as I know they've never had
a military spouse on that. So, that's one issue.
I also, again as I mentioned, there are the majority of--
sorry, I'm looking at the time. To answer your question, yes.
First of all, they need to be turning to the experts. Right.
Mr. VAN ORDEN. Yep. Ms. Brown, my time has expired. I will
take that as yes. I appreciate that greatly.
Mr. Chair, I yield back.
Mr. WILLIAMS. The lady and gentleman yield back.
I now recognize Representative McGarvey from the great
state of Kentucky for 5 minutes.
Mr. MCGARVEY. Thank you, Mr. Chairman. It is great to be
here today. I have the honor of serving on both of these
Committees, Small Business and Veterans. I am thrilled we are
meeting together and not just simply at the same time. It is
great to see this because I am going to take a little different
tact here.
I think between the Small Business and the Veterans we are
hearing about this a lot, but there is really a lot of synergy
that we can create between these two Committees and what we are
seeing with veteran entrepreneurs and veterans and what we are
seeing that makes the small business community great. Because I
know I am a little bit preaching to the choir here, but small
businesses not just are the backbones of our economy, they are
the ones who are spearheading innovation in this country. They
produce 14 times more patents than large businesses and
universities and they employ nearly 40 percent of America's
scientists and engineers.
Now, of course, why are they more innovative? They are more
innovative in large part because they are more agile than these
larger companies. They have the incredible ability to execute
new ideas quickly.
And I think these two Committees should consider how we
build the best qualities of small business, especially that
innovation, into federal agencies. And I think we should start
with not just veterans but the Veterans Health Administration.
The VA should embrace the opportunities to leverage small
innovative business solutions that can expand and go beyond
contracting preferences and entrepreneurship programs we have
heard about today. We should give the VA a fifth mission,
innovation. Think about it. The VA is the largest integrated
healthcare system in the country. It serves over 9 million
veterans, caregivers, and survivors.
The VA is also a massive medical research institution with
billions, billions in both public and private funding each
year, spearheading discoveries in health impacts of things like
toxic exposure, brain injury, and trauma, as well as developing
novel treatments for a variety of cancers and other chronic
health conditions.
VA is also our largest medical training organization,
training more than 75 percent of practicing clinicians in this
country. But the VA cannot do this alone. There needs to be a
complementary relationship between small businesses and large
systems like the VA. One brings agility, the other brings
scale.
So, Mr. Tellier, if the VA adopted innovation as a fifth
mission that was empowered to develop and invest in solutions
with small businesses more effectively especially service-
disabled, veteran-owned small businesses who know the veteran
and caregiver challenges best, what would that mean for the
SDVOSBs?
Mr. TELLIER. I think it's another opportunity for them to
pursue a federal contract especially with, you know, being
technology related. And there are several programs out there
right now, the small business innovation and research grants
that could be a model that you could use to develop
opportunities for SDVOSBs to partner and pursue technology
opportunities.
Mr. MCGARVEY. Just a follow-up question because those
traditional far-based acquisition, it offers helpful service-
disabled veteran-owned small businesses preferences, sole-
source and set-aside options, but those preferences are still
difficult to understand, access, and navigate.
What are some of the hardships that veteran-owned small
businesses face when seeking out a partnership with the federal
government?
Mr. TELLIER. They don't necessarily understand what the
requirements are. And if they--if the requirements are well-
documented, in many cases they don't have the depth and breadth
of providing the entire solution.
And so I think it was mentioned earlier that SDVOSBs in
many case can't pursue super large, very large contracts, and
so maybe if we take bite-size pieces in terms of scale and
deployability that might be a better course of action.
Mr. MCGARVEY. Thank you. And just with the 30 seconds we
have got left, Mr. Belknap, I will ask you the same question
about those SDVOSBs. What are some of the hardships they face
when seeking out these partnerships with the federal
government?
Mr. BELKNAP. Certainly, you know, access to capital is one
of them that has to be overcome. The second thing is, you know,
in seeking federal government contracts I have run across a
number of conditions where there wasn't funding for it, so when
I am sure there is funding for the contract or for the
initiative to come to fruition.
Mr. MCGARVEY. Thank you so much. Mr. Chairman, I yield
back.
Mr. WILLIAMS. The gentleman yields back. I now recognize
Representative Chu from the great state of California for 5
minutes.
Ms. CHU. Thank you. And I would like to address this to
Lieutenant Tellier. Lieutenant Tellier----
Mr. TELLIER. Yes.
Ms. CHU. Yeah. Okay. Good. Great. You mentioned that many
important initiatives catered specifically to veterans
sometimes reach veterans too late when they have been out of
service for years or even decades, when they have already been
rejected for lines of credit, or when their business have gone
under. Can you talk more about the importance of reaching
veterans who have long since transitioned from Active Duty?
What are some ways that we can better reach this population?
Mr. TELLIER. You know, that's a great question. And I've
observed this just recently where a veteran and a servicemember
who spent 30 years in the service, you know, retired and then
what they do is they find themselves on an island, if you will.
And I think if you look at the age and demographics of the
VA, the VFWs, American Legions, Moose, you know, their
memberships are dwindling and so the isolation is not
intentional. It's just we have an esprit de corps and a support
network while we're in the service and then that disappears
when we exit.
So, I think networking and finding partners that can reach
those veterans and whether they're starting a business or
they're just trying to integrate themselves back into the
community is a great start and once we can connect with them,
then we can educate, aware, mentor, and then help them whether
they are starting a business or they're trying to be a
productive member in the community. And I think it also has an
impact on suicide.
Ms. CHU. Thank you for that. Lieutenant Tellier, last year
the SBA established the L.A. regional Veterans Business
Outreach Center at Long Beach City College, which was the first
VBOC in Los Angeles County. This was actually a great step
forward because before that the closest center to my district
was hours away in San Diego.
But while Long Beach is still a long drive for my
constituents, we do have two small business development
centers, or SBDCs, within our district, each with great
relationships with the community.
How can the Veterans Business Outreach Centers, who help
administer this transition assistance program better,
coordinate with SBDCs to serve veterans, particularly in areas
that may not have a close-by center?
Mr. TELLIER. I think with the technology and I'm
definitely--because I called in for Zoom, I think the VBOCs,
you know, should develop partnerships with the SBDCs and make
sure that the growth groups and the people handling the
finances, the business plans are aware of veterans and
opportunities to connect. And we can do it virtually. Also, I
think it's a responsibility for veterans who are pursuing
businesses to seek out these types of resources and I also
throw the APEX in there as maybe a common glue.
And so, if we're all kind of working together towards a
common goal of helping veteran entrepreneurs I think that's a
good way to do it, and they don't necessarily have to come face
to face. We can do it virtually.
Ms. CHU. Got it. Lieutenant Tellier, as a small business
owner yourself, who is a veteran and someone who provides
assistance to so many small businesses, can you talk about the
obstacles you have seen veterans encounter in accessing
capital?
This is why I am a big proponent of community advantage
which specifically serves veteran-owned businesses. It helps
fill in the gaps. But can you talk more about these obstacles?
Mr. TELLIER. Absolutely. And the SBDC was actually
instrumental in us achieving a line of credit where they
actually helped us interview perspective financial institutions
and then ultimately make a decision on a line of credit.
But, you know, when you exit the service and as been
mentioned earlier that, you know, you don't have a very big war
chest. I moved 8 times in 11 years, didn't have a lot of money
when we came out of the service, and so if you go into a
lending institution that's going to be tough.
If you're going into some of the trades or construction,
you need bonding and so there's a lot of financial barriers
that you--that preclude you from pursing contracts----
Mr. WILLIAMS. The gentleman's time is up.
Mr. TELLIER.--because you're unable to do that.
Ms. CHU. Thank you. I yield back.
Mr. WILLIAMS. The lady yields back.
I would like to thank our witnesses today for your
testimony and for appearing. We appreciate you coming here. And
thank you for your service, all of you.
And without objection, the Members have 5 legislative days
to submit additional materials and written questions for the
witnesses to the Chair which will be forwarded to the
witnesses. I ask the witnesses to please respond promptly if
that happens.
And if there is no further business, without objection, the
Committee is adjourned.
[Whereupon, at 12:22 p.m., the subcommittees were
adjourned.]
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