[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
LEVELING THE PLAYING FIELD: FOSTERING
OPPORTUNITIES FOR SMALL BUSINESS
CONTRACTORS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON CONTRACTING AND INFRASTRUCTURE
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
SEPTEMBER 10, 2025
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 119-019
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
61-897 PDF WASHINGTON : 2026
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HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
JAKE ELLZEY, Texas
MARK ALFORD, Missouri
NICK LALOTA, New York
BRAD FINSTAD, Minnesota
TONY WIED, Wisconsin
ROB BRESNAHAN, Pennsylvania
BRIAN JACK, Georgia
TROY DOWNING, Montana
KIMBERLYN KING-HINDS, Northern Marina Islands
DEREK SCHMIDT, Kansas
JIMMY PATRONIS, Florida
NYDIA VELAZQUEZ, New York, Ranking Member
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
LAMONICA MCIVER, New Jersey
GIL CISNEROS, California
KELLY MORRISON, Minnesota
GEORGE LATIMER, New York
DEREK TRAN, California
LATEEFAH SIMON, California
JOHNNY OLSZEWSKI, Maryland
HERB CONAWAY, New Jersey
MAGGIE GOODLANDER, New Hampshire
Lauren Holmes, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Nick LaLota................................................. 1
Hon. Gil Cisneros................................................ 2
WITNESSES
Mr. Rao Anumolu, President & Chief Executive Officer, ASR
International Corp., Hauppauge, NY............................. 6
Mr. Michael Ramos, President, Raymond Global, Conyers, GA........ 8
Ms. Sue Tellier, President and Owner, JetCo Federal, Grand
Rapids, MI..................................................... 10
APPENDIX
Prepared Statements:
Mr. Rao Anumolu, President & Chief Executive Officer, ASR
International Corp., Hauppauge, NY......................... 29
Mr. Michael Ramos, President, Raymond Global, Conyers, GA.... 33
Ms. Sue Tellier, President and Owner, JetCo Federal, Grand
Rapids, MI................................................. 41
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Associated Builders and Contractors (ABC).................... 46
Aleto, Inc................................................... 48
Karrington Clinical Laboratory............................... 49
CMGT......................................................... 51
Consulting Corporation....................................... 53
DEFUTEK...................................................... 54
Engineering/Remediation Resources Group, Inc. (ERRG)......... 56
Government Acquistions, Inc. (GAI)........................... 57
Metis Technology Solutions, Inc.............................. 60
Kilda Group, LLC............................................. 62
CarINTech, LLC............................................... 65
AdNet........................................................ 66
First Principles & Concepts (FP&C)........................... 67
Millennium Health & Fitness.................................. 69
Bridges System Integration................................... 71
Patricio Systems, LLC........................................ 74
Sygnetics Inc................................................ 76
Coalition Letter............................................. 78
Mid-Tier Advocacy (MTA)...................................... 86
The American Small Business Chamber of Commerce (ASBCC)...... 88
National Veteran Small Business Coalition (NVSBC)............ 89
U.S. Women's Chamber of Commerce (USWCC)..................... 90
National Congress of American Indians (NCAI)................. 91
Professional Services Council (PSC).......................... 94
Workplace Solutions Association (WSA)........................ 98
Women Construction Owners & Executives, USA (WCOE)........... 102
Greater Los Angeles African American Chamber of Commerce
(GLAAACC).................................................. 105
UpState New York Black Chamber of Commerce................... 108
Center for Entrepreneurial Opportunity....................... 112
Purple Jay, LLC.............................................. 114
Coleman-Anderson, LLC........................................ 116
The Regional Affiliate Councils of NMSDC..................... 118
San Francisco African American Chamber of Commerce (SFAACC).. 122
Small Business Majority Letter............................... 126
Minority Business RoundTable (MBRT).......................... 131
Native American Contractors Association (NACA)............... 132
National Ramp Letter......................................... 148
EA Engineering, Science, and Technology Inc., PBC Letter..... 150
Southeast Cherokee Construction, Inc......................... 152
SJS Executives, LLC.......................................... 155
B&T Construction Logistics, Inc.............................. 157
IMPRES Technology Solutions, Inc............................. 159
X&T Enterprise Company....................................... 161
Information Systems Solutions (ISS).......................... 163
Venatore, LLC................................................ 164
Airport Minority Advisory Council (AMAC)..................... 166
AvantGarde, LLC.............................................. 170
GovEvolve Letter............................................. 172
HUBZone Contractors National Council......................... 177
ITVAR Modernization Coalition................................ 182
The Montgomery County Chamber of Commerce (MCCC)............. 185
Planate Management Group (PMG)............................... 189
The Women's Procurement Circle (WPC)......................... 194
LEVELING THE PLAYING FIELD: FOSTERING OPPORTUNITIES FOR SMALL BUSINESS
CONTRACTORS
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WEDNESDAY, SEPTEMBER 10, 2025
House of Representatives,
Committee on Small Business,
Subcommittee on Contracting
and Infrastructure,
Washington, DC.
The Subcommittee met, pursuant to call, at 9:33 a.m., in
Room 2360, Rayburn House Office Building, Hon. Nicholas LaLota
[chairman of the Subcommittee] presiding.
Present: Representatives LaLota, Meuser, King-Hinds,
Williams, Cisneros, Scholten, Morrison, Latimer, and Tran.
Chairman 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.
I now recognize myself for an opening statement.
Small businesses are the economic engine of America. They
make up 99 percent in this country and provide over half of all
jobs. Yet, when it comes to contracting with the federal
government, small businesses are too often shut out. The facts
speak for themselves. Less than 30 percent of federal
contractors are small businesses, and while the total dollar
value of federal contracts going to small business firms has
gone up, the number of small businesses winning those contracts
has gone down, meaning fewer local employers, fewer innovative
solutions, and less competition for taxpayer dollars.
The reasons are not hard for us to see. The federal
procurement system is riddled with barriers, including onerous
compliance costs, agency rules that favor the biggest firms,
and solicitations written in dense, legal, and technical jargon
that all discourage small businesses from even applying.
Compliance alone is crushing.
Over the past 4 years, Washington piled on nearly $2
trillion in new regulatory costs and 359 million new hours in
paperwork. For small businesses, that translates to about
$15,000 per employee per year, over 20 percent more than what
the larger firms pay. For small businesses working with the
government, the burden has doubled. Not only do they have to
comply with 100,000 pages of federal regulations, they also
have to navigate more than 2,000 pages of the federal
acquisition regulations and the defense supplement.
These rules and requirements add up, and some of the small
firms decide it is simply not worth their time or money to bid
on federal contracts. This means America continues to lose out
on the innovative, cost-effective solutions small businesses
are known for, and taxpayers pay the price. On top of that,
practices like contract bundling, that combine multiple smaller
contracts into one larger solicitation, effectively sidelines
small businesses that could have delivered those services
directly. Instead of competing as prime contractors, they are
pushed into subcontractor roles. That is not leveling the
playing field.
One of the most common complaints I hear from small
business owners is about the language itself. federal contracts
are written in a way that is nearly impossible to understand
without a lawyer or consultant. In fact, a Naval Postgraduate
School study reviewed more than 1 million Department of Defense
solicitations and found that fewer than 3 percent were written
in plain English. Most required at least a college education to
understand. Even seasoned small business contractors told
researchers they couldn't tell what the government was really
asking for. I think that is totally unacceptable.
If a business owner can't even figure out what product or
service the government wants to buy, how can they fairly
compete to provide it? That is why I introduced the bipartisan
Plain Language Contracting Act. This bill requires federal
agencies to write solicitations clearly and concisely. The best
part is it doesn't cost taxpayers a single dime but lowers the
barriers to entry and increases competition.
When contracts are written in plain language, small
businesses can make faster and more informed decisions. They
don't need to hire expensive lawyers just to submit a bid, and
more competition means better value for the government and for
the taxpayer. The House has already passed this bill with
strong bipartisan support, and now I call my colleagues in the
Senate to take up this commonsense legislation.
Together with the Trump administration's deregulatory
agenda of cutting red tape, reducing paperwork, and simplifying
the federal acquisition regulations, this legislation will make
federal contracting accessible again to America's small
businesses.
The bottom line is simple: government contracts should be
written so that everyone can understand them. If we remove
unnecessary barriers and insist on fairness and transparency,
we can unleash the full potential of America's small
businesses, strengthen our industrial base, and deliver better
results for taxpayers.
I look forward to hearing from our witnesses today about
their experiences and their ideas on how we can keep leveling
the playing field for small business contractors.
I now recognize my good friend, Ranking Member Cisneros,
for his opening remarks.
Mr. CISNEROS. Thank you, Mr. Chairman.
And I want to thank our witnesses for being here with us
today.
The federal government obligated $755 billion in contracts
in fiscal year 2024, $183 billion of which was awarded to small
business government contractors. These dollars highlight the
critical role small businesses play in supporting federal
agency missions, but they do not paint a complete picture or
reflect the health of the industrial base.
Over the past decade, as the dollars have gone up, the
number of small vendors in the government's ecosystem has been
cut in half. The government has a recruiting and retention
problem when it comes to small business. We must address both
issues. Too few are signing up and too many getting out.
Today's hearing is especially timely as the government is
rewriting its procurement rules. We can almost all agree that
the government acquisition process has become too cumbersome,
too burdensome, and needs to be simplified.
During my time at DOD, I saw a system that does not produce
the best outcomes with many projects not being delivered on
time or on budget. Well-thought-out reforms that will make the
process quicker, smarter, and deliver the best results would be
welcomed. Unfortunately, I do not believe we are seeing that
now, and we have reasons to be concerned. Previous efforts have
shown what happens when reforms are imposed without small
business involvement. For example, category management
practices have saved taxpayer dollars, a goal we all share.
Yet, many believe they directly contributed to the shrinking of
the industrial base.
The administration recently mandated required use of
certain contracting vehicles, but requiring the use of certain
contracting vehicles may create barriers to entry and barriers
to competition for small businesses. We need the administration
to provide clarity on how this will be implemented and how it
will impact small federal contractors. I am worried that the
lack of transparency from this administration and the lack of
involvement from the SBA means we may end up in a situation a
decade from now needing to hold an urgent hearing on how to
reverse the decline of the industrial base.
This committee cannot allow small businesses to become an
afterthought. We need to ensure that they are heard and their
concerns are addressed. Small businesses are the ones driving
innovation and bringing in talent and solutions that deliver
real value to the government customer. Their success is a win-
win for them and for the government.
In the past 7 months, SBA has testified once before our
committee. I expressed my frustration at the time that we do
not have the opportunity to hear from the decisionmakers and
discuss these issues directly. I hope we will again soon. When
I asked the Administrator about the FAR changes, and
specifically the Rule of Two in the hearing, it was unclear if
the SBA had been involved.
This is a troubling pattern. Rather than advocate for small
business government contractors, the SBA has been AWOL. The SBA
did not take any action as service-disabled veterans saw their
VA contracts canceled, and many small businesses took hits from
DOGE. There was no action from the SBA to support women-owned
small businesses as they got kicked off contracts due to the
administration's misguided DEI claims.
The SBA did, however, lower the goals for contracts awarded
to some small businesses, like those on our panel, and has
targeted the 8(a) program in an attempt to decrease use of
these critical business development tools. The SBA is also
gutting the office whose job it is to maximize small business
prime and sub contracts across the government.
I will close by adding that I hope today we can counter
some of the attacks we hear on small business programs. They
are not handouts--that small firms could not otherwise compete
if we did not have these in place. Nothing could be further
from the truth. Small businesses don't need handouts, nor do
they want them. They want a level playing field with a fair
shot to compete.
I look forward to hearing from each of our witnesses about
how we can help them do that. Thank you very much. I yield
back.
Chairman LALOTA. The gentleman yields.
I now recognize the full committee Chairman Roger Williams
for his opening remarks.
Mr. WILLIAMS. Thank you, Mr. Chair.
And I can barely see all of you, my chair is sitting so
low. I am really not 5-foot 6, I promise. Anyway, thank you,
Mr. Chairman, and, everybody, for being here today, for holding
this hearing on the issues small businesses face when competing
for valuable federal contracts. I look forward to hearing about
our witnesses' experience navigating a cumbersome federal
procurement process.
It can be difficult for small businesses to compete when
agencies make it unnecessarily difficult to even understand
what a product and service is being asked for. This discussion
comes at a critical time in this country as our nation
continues to prioritize economic growth under President Trump,
and we must ensure that small businesses have a fair and
meaningful opportunity to compete for and win federal
contracts.
One of the simplest ways to empower small business in the
government contracting is to ensure contract solicitations are
written in plain language. When the government clearly and
concisely communicates its needs, small businesses can prepare
proposals that meet the agency's demands. This not only
improves competition by removing the unnecessary barrier but
also reduces the cost of hiring compliance attorneys.
And, moreover, we must streamline the procurement process
to produce administrative overhead. Small businesses often find
themselves overwhelmed by redundant forms, under submission
procedures, and rapidly shifting deadlines. By simplifying and
standardizing these procedures, we will ultimately deliver
greater value to taxpayers and more innovative solutions for
government agencies. Small businesses shouldn't be at the
disadvantage just because they don't have the same resources
that large firms have to hire massive teams of lawyers. In a
truly competitive market, very qualified businesses, every
qualified business, big or small, should have a fair and
transparent shot at competing for success.
I look forward to working with my colleagues and hearing
from today's witnesses on how plain language and streamlining
the procurement process can ensure the best products and
services are selected.
With that, Mr. Chairman, I yield back.
Chairman LALOTA. Thank you, Mr. Chairman. To summarize, the
Chairman endorses the Plain Language Act, is what I think I
heard. Thank you, Mr. Chairman.
Mr. WILLIAMS. [Inaudible.]
Chairman LALOTA. Yes, sir, I will. And this big seat is
pretty nice over here, Mr. Chairman. Thank you very much.
I will now introduce our witnesses. Our first witness here
today is my constituent, Mr. Rao Anumolu. Mr. Anumolu is the
president and chief executive officer of ASR International
Corporation on Long Island in New York. Mr. Anumolu founded ASR
International in 1986 and has over 40 years of experience in
aviation manufacturing, engineering, and program management for
major aircraft programs like the A-10, F-14, and the F-18.
Mr. Anumolu was awarded the 2010 Ellis Island Medal of
Honor, which recognizes recipients for outstanding
contributions to their communities, the nation, and the world.
Mr. Anumolu earned a master's in industrial engineering and a
master's in business administration from Illinois Institute of
Technology. He is also a graduate of the Owner/President
Management Program at Harvard Business School.
Thank you for joining us today, sir.
Mr. ANUMOLU. Thank you.
Chairman LALOTA. Our next witness here today is Mr. Michael
Ramos. Mr. Ramos is the president of Raymond Global in Conyers,
Georgia. Prior to becoming president at Raymond, he was the
executive vice president and federal lead. In these roles he
led Raymond's engagement and presence in the federal market.
Additionally, Mr. Ramos serves as a Board Member for
Raymond Global and oversees their continuous improvement
initiatives. Mr. Ramos formerly served as a director of
analysis for DBNA and as a senior associate of Booz Allen
Hamilton. Mr. Ramos received a bachelor of science in chemical
engineering from the Massachusetts Institute of Technology and
a master of science in chemistry from Tufts University.
We appreciate you being here today.
Mr. RAMOS. Thank you.
Chairman LALOTA. I now recognize my friend, Ms. Scholten,
to briefly introduce her constituent, who is the last witness
appearing here today.
Ms. SCHOLTEN. Thank you so much, Mr. Chair. I am so pleased
that we were able to get this really important hearing
rescheduled.
And I am so proud to introduce Sue Tellier, owner of JetCo
Federal and a constituent of mine in Michigan's Third
Congressional District. JetCo is a packaging storage and
distribution company headquartered in Grand Rapids, Michigan.
It began in 2007 and won its first federal contract in 2009. It
is an SBA WBENC-certified woman-owned small business. Woo.
Prior to founding JetCo, Sue ran supplier diversity and
business outreach for the Michigan Department of Management and
Budget. In this role, she trained more than 4,300 small and
underrepresented companies teaching them how to bid on and win
State government contracts.
Sue volunteers time to support the defense industrial base
and is an advocate for small and woman-owned small businesses.
She serves as the first Vice Chair of the Board for Women
Impacting Public Policy, WIPP. She is also the immediate past
Chair of the Women in Defense National Council and the
immediate past president of the Michigan Chapter of Women in
Defense. She is a longtime Member of the National Defense
Industrial Association and participates in their logistics,
small business, and manufacturing divisions.
Sue is heavily involved in the small business community in
Michigan, and we are all the better for it. She was recently
appointed by Governor Whitmer to begin her third term on the
Michigan Strategic Fund Board, which has broad authority to
promote economic development and create jobs. Sue has also
served as Board Chair for the Small Business Association of
Michigan, the largest statewide small business advocacy
organization in the country. She is a graduate of Michigan
State University and Wayne State University.
Welcome, Sue.
Chairman LALOTA. Thank you.
Before recognizing the witnesses, I would like to remind
them that their oral testimony is limited to 5 minutes. If you
see the red light turn on, that means your 5 minutes is up. We
won't necessarily play the music like they do in the Emmys and
the Grammys, but that means wrap it up and we will get into
more detail afterwards.
Ms. SCHOLTEN. Nobody wants Nick to sing.
Chairman LALOTA. Definitely don't want that. Not good for
America.
I now recognize Mr. Anumolu for his 5-minute opening
remarks. The floor is yours, sir.
STATEMENTS OF RAO S. ANUMOLU, PRESIDENT &CEO, ASR INTERNATIONAL
CORP; MICHAEL RAMOS, PRESIDENT, RAYMOND GLOBAL; AND SUE
TELLIER, PRESIDENT AND OWNER, JETCO FEDERAL.
STATEMENT OF RAO S. ANUMOLU
Mr. ANUMOLU. Am I at the right place here, too?
Good morning to you, ladies and gentlemen. Thank you for
this illustrious committee for giving me this opportunity.
After 38 years of grueling work in the small business
arena, our Chairman, Congressman LaLota, gave me the
opportunity to speak in front of you our experiences, good and
bad. Some are very good; some are to be improved. I won't call
them as negative, but I almost echo what you both Chairmen
spoke. They are realities of life we face. We don't have 55
lawyers to fight with the government or others to get up there.
We want to do the right work for you is and want to be a very
productive company to serve the nation. We have been doing like
this. We have got the exemplary [inaudible] person effort all
the federal contracts we have run in the last 38 years.
Sir, Congresswoman McCarthy has recognized us in 2003 for
the 9/11 area services that this company has supported, honored
us in the same building. Only one small business was recognized
by Congress. I am terribly, you know, humbled by that
experience. So we doubled up our work. We invested more
ourself, and we work night and day from Long Island and
throughout the nation supporting the country's efforts both in
Navy--38 years we work for Navy.
We worked for Air Force, Scott Air Force Base during the
Iraq War, and we worked for the Army, Eagle Program, the big
programs. And we have been pioneering many areas. And the
creativity and the innovative tactics we have engaged or
employed have been copied by the Chinese. I don't want to tell
this loud, but we got patents. We help process patents. I see
also somewhere else those processed patents. They were first
generated in U.S.A.
So I just want you to know the level of effort that was put
in and the kind of contribution we were able to make as a high-
technology, knowledge-based company in this country. Now, to
this advantage, I want to suggest the contracting officers
still gravitate towards Big Business, which Congressman LaLota
has already mentioned. They go and give massive contracts to
big businesses, very small contracts to small businesses, with
LCTA rating, that is lowest cost technically acceptable. You
must recognize that should be abolished from our scene.
Lowest cost, yeah, we will be lowest cost, true. But
technically they say it is acceptable. It is in their
perception they are not getting the quality of the product.
This must be understood by this committee and the contracting
officers. Very important. Similar things we could have done in
a big way as the Big Business has been awarded, and those
contracts go to--gravitate to big businesses.
A request our Chairman also brought up is you need team of
30 lawyers and 20 CPAs to fight the battle. We don't have to
fight the battle. We fight intellectually. We still win. Don't
think we don't win. We still win some contracts. We win against
the Big Business. We won against Rockwell International at Hill
Air Force Base on the Minuteman missile. First contract. We won
against certain big companies--I don't want to mention it--on
our own without any [inaudible] and we got exceptional rating
on those things.
Sixty percent of our contracts are exceptional ratings. To
that we propel forward. On the contractual side, there are many
improvements they can do from contracting side. One of the
preliminary things I would like to suggest is the SCA
justification. They just randomly throw on the contractors, you
know, ``Hey, this is a service contract act. Do it your way.''
Many people very unaware of, you know, exemptions of the
SCA contract. I think government should fix the norms, give the
correct SCA accord, and then we all will be on the level
playing field. [Inaudible] the way that contracting officer
wants. When will we learn the contracting officer will do the
right thing? Most of them do--please don't mistake me--but many
have to be trained. That is my request on the contracting side.
The other thing I would like to bring up is banking side.
We all need funding, no question. As you are doing more work
and more work, the funding needs are there. However, they only
tie you in as long as you can provide your house as the
collateral or your building as the collateral or the other
things. I want them also to think with us, join the people that
are serving the nation, understand the business, develop
themselves, train themselves into it. Yeah.
Chairman LALOTA. Thank you for your testimony, sir. We are
going to get into a lot of these back and forth. This committee
is going to be----
Mr. ANUMOLU. Yes.
Chairman LALOTA.--very interested to hear some of those
details.
Mr. ANUMOLU. Just, I will be only one second, sir. They
should be trained with the small business people. We are
willing to train at no cost to the bankers. They are called
relationship managers. And they are never trained. They are
just released on us like birds, and they come and land on us. I
request you to do that.
Finally, there are other attributes that are involved. We
will discuss when you are asking us the questions.
Chairman LALOTA. Thank you very much, sir.
Mr. ANUMOLU. Thank you. Thank you.
Chairman LALOTA. The gentleman's time has expired.
Mr. ANUMOLU. Thank you.
Chairman LALOTA. I now recognize Mr. Ramos for his 5-minute
opening remarks.
Mr. ANUMOLU. Thank you, sir.
STATEMENT OF MICHAEL RAMOS
Mr. RAMOS. Chairman LaLota, Ranking Member Cisneros,
Members of the subcommittee, thank you for the opportunity to
testify today. My name is Michael Ramos, and I am the president
of Raymond Global. What began in 1992 as a small roof
consulting practice in Greater Atlanta started by my father has
steadily grown into a family owned, full-service architecture
and engineering firm. Beyond my role at Raymond, I also serve
as the Chair of the GovCon Small Business Coalition, a group of
small and midsized contractors that advocate for policies that
support business growth and strengthen the defense industrial
base.
For its first decade, our company focused largely on K-12
schools and municipal projects. In 2005, we expanded beyond a
one-person consultancy and have since averaged nearly 20
percent year-over-year growth. By the end of this year, 2025,
we expect to employ 120 professionals with expertise in
architecture, interior design, structural engineering,
mechanical, electrical, plumbing services, civil engineering,
and building envelope services.
The SBA's 8(a) program and our certification as a service-
disabled, veteran-owned small business provided crucial
development support and opportunities that helped us build up
performance and diversify into broader markets, including the
federal market. Although we have since graduated from these
programs, Raymond continues to work extensively with the DOD
and actively participates in the SBA's Mentor-Protege Program.
This hearing comes at an especially pivotal moment. With
significant changes underway in the federal acquisition
landscape, it is imperative for small businesses to remain at
the center of innovation and competitiveness. I would like to
highlight several pressing issues that are impacting firms like
mine and the broader small business community.
First, cybersecurity is critical to national security, but
the rollout of DOD CMMC 2.0 has been costly and uncertain, and
those burdens fall hardest on the smallest firms with limited
resources. At my company, compliance with a Level 2
certification will cost approximately $0.5 million, which is
not a one-time cost.
The acquisition process: Federal solicitations are often
too unclear, inconsistent, and overly complex. This frequently
leads to protests that small businesses can least afford.
Recently, we pursued a federal procurement; this contract was
awarded three times, protested twice, and ultimately canceled
for all firms. That means months and sometimes years of lost
opportunity and valuable resources.
The Mentor-Protege Program: This program has been
transformative for my company and our growth. However, the
rapid expansion of joint ventures has tilted the competitive
landscape. Increasingly, contract scoring criteria favors
mentor-protege joint ventures, leaving independent small
businesses with fewer opportunities to prime.
New SBA rules: Published at the end of last year, a recent
SBA rule requires small businesses sold after January 2026 to
recertify their size status within 30 days. What this means is
they are now ineligible for future task orders under their
existing contracts. This will result in reduced company
valuations and shareholder equity, discourage investments, and
will have a chilling effect on the mergers and acquisitions
market. Left as--the impact on a small business' ability to
sell will be severe.
The contracting cliff: Right now, firms are classified as
either small or large. There is no middle ground. This binary
system forces companies that grow just beyond the small
business threshold to compete directly with billion-dollar
primes. A structured transition program for midsized firms is
urgently needed.
The FAR rewrite: As GSA and OMB undertake the monumental
and necessary task of rewriting the FAR, it is critical that
reforms do not strip away small business protections,
streamlining regulations that should not be synonymous with
eliminating safeguards, which is why the Rule of Two should be
codified into law. Protecting this foundation will preserve
small business competitions and enable small contractors to
inter-compete and remain vital participants in the defense
industrial base.
And, finally, inflation and size standards: Rising
construction costs have inflated revenues without reflecting
true growth. SBA size standards based on outdated 2017 data
don't reflect current market conditions. That misalignment
threatens competitiveness for many small businesses.
These challenges add up. Rise in compliance costs,
inefficient acquisition processes, structural imbalances in
programs, and poorly calibrated regulations all weaken
competition. And when competition suffers, so does innovation,
and so does our defense industrial base. Small businesses bring
agility, economic strength, and the ability to respond quickly
to evolving needs. But, to keep playing that role, we need a
contracting environment that works for us, not against us.
Thank you again for the chance to share my perspective, and
I am happy to answer any questions.
Chairman LALOTA. Thank you, Mr. Ramos.
I now recognize Ms. Tellier for her 5-minute opening
remarks.
STATEMENT OF SUE TELLIER
Ms. TELLIER. Good morning Chairman LaLota, Ranking Member
Cisneros, and Members of the subcommittee. As mentioned by my
fantastic Congresswoman, my name is Sue Schweim Tellier. I am
the president of JetCo Federal, an SBA-certified women-owned
small business. I also serve as Vice Chair of the Board for
Women Impacting Public Policy, a national nonpartisan
organization advocating on behalf of women-owned small
businesses. Thank you for the invitation today. It is a
tremendous honor.
JetCo Federal is a prime contractor. We are freakishly
obsessed with efficient warehouses. Our government and industry
partners rely on my team to design, produce, and deliver
complex packaging solutions, perform storage and distribution
services, and transport into secure facilities. JetCo Federal
won our first DOD contract in 2009, and we have continuously
increased our role in supporting the missions of the Defense
Logistics Agency, the Army, and the Navy.
Eighty percent of our work right now supports the defense
industrial base in some capacity, usually very much behind the
scenes. We joke that we are the least interesting, maybe boring
part of the manufacturing cycle, yet we play a critical role in
protecting DOD parts for storage and distribution. My employees
are incredibly proud to support the warfighter, and I am
clearly comfortable putting my Midwestern humility aside to say
that we have really earned a strong reputation as a reliable
partner for our DOD agencies.
The committee's focus today is timely and important. The
number of small business federal contractors is shrinking.
Since 2010, the number of small businesses winning federal
contracts has decreased by 50 percent even as contract spending
has increased. This results in a more stratified federal
contractor pool.
Our conversation today, as all of you have mentioned in
your opening remarks, really should focus on strong small
business strength and the importance of opportunities for us.
We are job providers in all of your districts, significant job
providers. It is equally important, though, that we talk about
good government. And expansive market research, the Rule of
Two, and small and socioeconomic set-aside programs are not
acts of charity. Instead, they ensure that government benefits
from the innovation, competition, flexibility, and values small
businesses bring.
Shrinking the pool of qualified contractors will leave
agencies increasingly reliant on a narrower group of large
incumbents, directly reducing the government's leverage. It is
not good business or good government to have a stratified
contractor pool. There is no benefit to pushing small companies
out of federal contracting.
As a small business leader, I factor risk into my business
decisions. This includes how I use my time, how I manage
unpredictability in my customer base, and how I price my
solutions. I must have some degree of confidence that I have a
chance at winning an opportunity to justify pursuing it.
Otherwise, I am wasting precious time and resources from my
small but mighty team.
Any threat or even a potential threat to the Rule of Two
increases risk for small businesses and federal contracting.
The Rule of Two has historically been a bedrock protection for
us. Its erosion results in a less welcoming environment,
reducing opportunities for small, innovative firms, and instead
accelerating consolidation.
The FAR rewrite presents a pivotal opportunity to address
these challenges. Retaining and codifying the Rule of Two--
making it a true ``shall'' requirement applied consistently
across vehicles--is essential to keeping small firms engaged in
the federal marketplace.
The transformation of FAR Part 10 and the new direction for
market research is also concerning. The drastic streamline
proposed effectively trims market research down to three very
limited situations. More prescriptive triggers, such as those
related to bundling consolidation and small business outreach,
have been removed. References to small business consultation
and set-aside considerations have been stripped.
For experienced contractors like JetCo, this increases
risk. There is no longer a mandated pause to engage small
business advocates, notify incumbents, or explore set-aside
potential. Instead, agencies may proceed quickly, potentially
overlooking small business opportunities. Under pressure to
move fast, agencies may default to expedience.
If there is one thing I hope you take away from my words
today, it is that small businesses are not just beneficiaries
of federal contracts, they are essential partners to agencies.
We bring innovation, agility, and cost savings while providing
the government and taxpayers with options to meet mission needs
quickly and effectively. The innovation we deliver strengthens
America's competitive edge in the global marketplace.
Protecting and expanding our role in federal procurement is
both sound policy and strategic imperative, and if we continue
to face unpredictability and competition challenges, you should
not be surprised when fewer of us remain engaged in federal
contracting.
Again, I appreciate the opportunity to testify today, and I
look forward to answering any questions. Thank you.
Chairman LALOTA. Thank you.
Thank you to each of you for your awesome 5-minute opening
statements.
Now here comes the fun part. We are going to move to the
Member questions under the 5-minute rule, and I recognize
myself for 5 minutes.
Mr. Anumolu, it is great to see you here in D.C. The more
Long Islanders in D.C. the better, I say. I think the last time
we saw each other was at your workplace when you allowed me to
visit about a year ago.
Mr. ANUMOLU. Yes.
Chairman LALOTA. Your testimony, sir, reads like the
American Dream and what you have done in this great country.
Mr. ANUMOLU. Yes.
Chairman LALOTA. You came here, you studied at top
universities, went on to build a company that has delivered
critical services to our military, enhanced our national
security, kept our troops safe, all right from Long Island. I
was hoping that you can share with the committee what you
think, sir, has made that dream possible.
Mr. ANUMOLU. Two inspiring things. I found when I came here
first a good study, intellectual penetration into the American
arena will allow you to grow properly, bring our families
together nicely, and also I have an interest to settle in our
community. I achieved all those dreams on my own in a modest
way, not in a big way but modest way. I brought my family well.
My children went to top schools, and I am able to settle in the
community by doing real, hard, intellectual work. And that is
what elevated us.
To add to that, Congress also somewhat recognized me right
when we did the best things for the Hill Air Force Base and the
Iraq War. And, since then, we propelled farther. That
[inaudible] is serving in Navy, and also winning their
contracts against Big Business with all the odds is what we are
fighting. If you can level the playing field slightly, I can
tell you, the intellectual stamina we are offering will be
exponentially greater.
The AI contribution we are doing as a company will be
enormous. The cost reduction to the U.S. Government will be
tremendous. We want to achieve those things. We want to feel
satisfied when we go home in the night that I achieved
something for my nation, for my people, for my house.
Chairman LALOTA. We love it. Here in the committee, we want
to harness dedication, innovation, perseverance. That is what
we believe to be the American Dream, and I think that is a
Democrat and Republican principle here. We want to help unleash
that everywhere in every corner of America.
Mr. ANUMOLU. Yes. Yes.
Chairman LALOTA. We are here today--and you alluded to this
in your opening testimony, you are going to tell us some of the
tough things you have been through and how sometimes government
has made things a little more difficult for you. Can you tell
us, sir, a little bit about the application process for some of
these contracts and some of the roadblocks you have suffered
through throughout your many decades experience----trying to
earn those contracts, sir.
Mr. ANUMOLU. Yes.
Mr. ANUMOLU. In 38 years, when we see a contract coming
with 2,000 pages, even before we read, we--this is the earmark
for somebody. That is a bad word we use in our lingo in the
company. Hey, that is set for somebody else. Somebody is there,
you know. So we don't even try to beat it. That should not be
our feeling when we are willing to spend our valuable time
night and day.
And there are many contracts that come. All the service--
intellectual contracts--I request the contracting officers to
try and level field with the simple language as [inaudible]
coming from both the Chairmen. If you do it, 50 percent of the
more [inaudible] will be there, more competition, and we can
beat Big Business.
Chairman LALOTA. To my left here is the federal acquisition
regulation, 2,000 pages here.
Mr. ANUMOLU. Yes, sir.
Chairman LALOTA. Sorry, we hurt some trees to do this, but
I think the point is well worth it to demonstrate to the
audience here, folks watching from home, that these
regulations, in our view, are onerous, that when--a
hardworking, dedicated, principal business like you has to
apply for a contract--you have to consult these pages.
Mr. ANUMOLU. Yes, sir.
Chairman LALOTA. My question--and I only have about 30
seconds remaining.
Mr. ANUMOLU. Yes, sir.
Chairman LALOTA. My final question is, what would the Plain
Language in Contracting Act do for you, an effort to simplify
the language in these contract applications? What would a
simpler application process mean for your company, sir?
Mr. ANUMOLU. All that they have to do is define what type
of people they want us to use, SCA, very important. Then tell
us, ``Hey, this is what we are expecting as an ultimate
objective from your productivity or from our schedules,'' you
know, what we do to the government, and that is all we need.
Chairman LALOTA. Thank you.
My time has expired. I hope that we can get a second round
and maybe some more questions in. I want to talk to some of you
folks in a second round. But I am going to yield and recognize
Mr. Cisneros for 5 minutes.
Mr. CISNEROS. Thank you, Mr. Chairman.
And thank you again, all, for being here today.
And I am going to start with Ms. Tellier. As I said in my
opening remarks, we should welcome reforms that simplify the
government's procurement process, but there are concerns that
this administration is making changes that will drive small
businesses out of the industrial base. This is highlighted by
the potential elimination of the Rule of Two, that both you
mentioned, as well as Mr. Ramos mentioned.
What happens to small businesses and the industrial base if
the Rule of Two goes away?
Ms. TELLIER. So we have to have some degree of confidence
as small business owners or leaders or business developers that
we have a shot at winning. The Rule of Two gives us confidence
in that. Changes to the Rule of Two that would only apply to
certain sizes of solicitations doesn't help with that. My
contract portfolio is not conducive to me only going after
$249,000 opportunities because they are under the SAT. I need
to have confidence that I can compete well on solicitations
well over that.
Market research really allows contracting professionals to
understand whether two or more small companies can compete
effectively. It decimates us. There are small businesses that
will leave federal contracting if they don't have that
confidence.
Mr. CISNEROS. Mr. Ramos, I would love to hear your comments
on that.
Mr. RAMOS. I do think that, if we remove the Rule of Two,
that will be damaging to the defense industrial base. I think
that is pretty critical to understand. If you remove that rule
and you do not codify it, you have this scenario where not only
will small businesses leave, but you will just create massive
entrenchment of the existing large or small businesses. Also,
to a certain degree, it is a land grab by the larger companies
that are in the market. And it is an opportunity right now to
codify it and make sure that small businesses are protected for
larger contracts and when they are qualified. A lot of Sources
Sought are to make sure that is happening, and there are
opportunities for Rule of Two to be applied today.
Mr. CISNEROS. Mr. Chairman, I request unanimous consent to
insert for the record these letters and statements of support
for the Rule of Two.
Chairman LALOTA. Without objection.
Mr. CISNEROS. Thank you very much.
Ms. Tellier, some claim that small business-only
competitions or SBA programs like 8(a) or the Women-Owned Small
Business Program are not based on merit and award contracts to
businesses that otherwise could not compete on price or
quality. Can you lay out why these comments are misguided, and
tell us, you know--or why they are a misguided view of federal
contracting and how these programs actually level the playing
field.
Ms. TELLIER. Yes, Congressman. I think I can even do that
without swearing, although it takes a little bit of restraint
on my part, candidly. I have never won a contract because I am
a WOSB. I have won the opportunity to compete on a contract
because I am a WOSB, but every contract I have won it is
because I have strong CPARS; I can do the work well; and I have
proven that with my write-up in my pricing.
My small business owner peers are the same way. And,
candidly, Mike has made some comments so far about how this
affects the defense industrial base. When we look at whether or
not government benefits from small businesses fleeing or from
the socioeconomic set-asides not being deployed, if we don't
bid, the agility leaves, the innovation leaves.
I have a contract with NSWC Corona, and the crate that I am
producing for munitions has a one-eighth-inch tolerance. I
guarantee you, none of my large competitors would bother with
that, but I care deeply about it. You lose the passion in that,
too.
Mr. CISNEROS. Thank you.
And, Mr. Ramos, in your testimony you mentioned that
Raymond is an 8(a) program graduate?
Mr. RAMOS. Yes, sir.
Mr. CISNEROS. What are some of the positive outcomes for
your firm resulting from your participation in the 8(a)
program?
Mr. RAMOS. We entered the federal marketplace, and
specifically Department of Defense, because we were an 8(a)
firm. We were able to get certified. That is how we entered
into federal contracting. We saw an opportunity where we knew
we could perform the work, but we needed a way, as Sue Tellier
was saying, to have an avenue where we could be competitive
with entrenched players. The way procurements are done today,
it is all about past performance. It is not what I can do, it
is what I have done for that specific agency. 8(a) has been
incredibly helpful, as well as service-disabled veteran-owned
small business, in order to allow us that opportunity to have a
shot at competing. Highly qualified firm, but, you have got to
have someone open the door for you, so to speak.
Mr. CISNEROS. I think we have heard from these witnesses
today the importance of the 8(a) program as well as the Rule of
Two. I just hope the SBA administration is listening today and
will follow up and support these programs into the future.
Thank you very much. I yield back.
Chairman LALOTA. The gentleman yields.
I now recognize the gentleman from Pennsylvania, my good
friend and small business owner, Mr. Meuser, for 5 minutes.
Mr. MEUSER. Thank you very much, Mr. Chairman.
And it is very nice having you all here. Thanks for your
testimony. It is quite important. It is important to us. It is
extremely important to you. So we appreciate your detail and
your specifics.
I was in business for well over 20 years and engaged in
some federal contracting. So I know what it is like. That was a
few years back. Sometimes things get a little bit more
regulatory over time, but it is always difficult, right. And we
grew as a small business into a somewhat larger business, but
it was difficult, right. It was a lot of gambits, a lot of
traps, a lot of paperwork, a lot of visits to the different
agency that you needed to win the contract from and all that.
But I would like to focus on what was unfair, particularly for
small business, because we are all small business advocates.
What was unfair--and I will start with you, Mr. Anumolu. What
was unfair, and, specifically, what would you like to see us
correct?
Mr. ANUMOLU. I will give you two, three examples for
verification purposes.
Mr. MEUSER. And, Mr. Ramos, I am going to come to you with
the same question.
Mr. ANUMOLU. Yeah. Two, three examples. If there is a job
for, say, eight people, they still give it to the Big Business
because the Big Business has done that before, and they have
performed well.
Mr. MEUSER. So it is a little bit lazy. They are not
looking to--when you say you have----
Mr. ANUMOLU. Well, I don't want to use--that is your
terminology----
Mr. MEUSER. Yeah, well, but----
Mr. ANUMOLU.--which I will endorse it. I will accept you.
Because just giving it to a Big Business--I don't want to name
names. I can give you five names. They just give it to Big
Business because----
Mr. MEUSER. Does the contracting officer visit your sight?
Mr. ANUMOLU. They don't, sir.
Mr. MEUSER. Okay.
Mr. ANUMOLU. Very rarely. And so are banks, by the way.
Don't leave them out. They don't care as long as you are paying
their bills.
Mr. MEUSER. That is very important access to capital, and
that is largely our other committee, and believe me we are, in
this Congress, working on that.
Mr. ANUMOLU. They should be--they have to be trained, sir.
They are good people, but they are not trained.
Mr. MEUSER. As a former businessperson, I want to try to
make a difference from this. So anything that you can provide
us, we will get in the hands of those whom need to see it and
where the corrections could be made. That is our role,
oversight, not, unfortunately, implementation, although we can
help force that.
Mr. Ramos, same question.
Mr. RAMOS. I would say the entrance into the industry is a
huge historical challenge. Getting into federal contracting can
be the biggest win. If you win your first contract, that gives
you a shot to maybe prolonging it long-term, and that is what I
would say historically. But I would say, right now, the biggest
issue might be CMMC. This will be an incredible barrier, an
incredibly costly barrier for small businesses to enter even--
we are not talking about five-person companies. We could be
talking about a 100-person company. That is a huge cost to bear
just for the opportunity to compete on a contract.
Mr. MEUSER. Okay. And you did mention in your testimony how
service-disabled veteran-owned small business was crucial if
your company's early growth. Just expand on that a little bit.
Mr. RAMOS. Yes. So it is basically a socioeconomic
category; certain contracts are set aside for SDVOSB firms--to
actually compete. And so if you look at the Department of
Veterans Affairs, as a veteran-owned company, we were allowed
access to a number of different projects that we could bid on
individually or umbrella contracts. And, because the
competition pool is a little more limited, there is a better
opportunity to actually win some of those contracts--and that
is not to say that is an unfair advantage. I do think it is
important to prioritize our veterans, and, most importantly,
all of the firms that are going after those contracts are
highly qualified and it is still very competitive.
Mr. MEUSER. Sure. If you are sitting in my seat, what are
you working on later today, tomorrow to improve the situation
within contractors, federal--particularly defense for small
business?
Mr. RAMOS. I do think there is an opportunity to simplify
procurements. And, potentially on the flip side, on the
backside, if we are going to do a government efficiency model
and we are going to reduce workforce, there is absolutely a
need to change the process so that we are efficient enough to
still carry out the mission.
Mr. MEUSER. Okay. Great.
Ms. Tellier, same question.
Ms. TELLIER. I lost track of the question. I am so sorry,
sir.
Mr. MEUSER. The question was, you are sitting in our seat,
and you are focused on this, and you want to make some
differences, what are the top one or two or three things you
are focused on?
Ms. TELLIER. Codify the Rule of Two. Make it a shell.
Mr. MEUSER. All right. Very good.
I am about to run out of time, so I am afraid if I hand it
over to you, Mr. Anumolu, we may go over time. But I am going
to risk that. Go ahead.
Mr. ANUMOLU. It is an interesting thing you are asking me
to do. A few things.
Mr. MEUSER. We may have to hold off. My apologies, sir.
Mr. ANUMOLU. Yeah.
Mr. MEUSER. I yield back, Mr. Chairman.
Chairman LALOTA. We will give some deference to the
gentleman if in 30 seconds you can answer Mr. Meuser's
question. What would you do if you were a Member of Congress to
help small businesses, in 30 seconds?
Mr. ANUMOLU. If I am there, you know, I would certainly
take notes of who are the players and where to correct them. I
can give you two, three examples so that that can be made as a
universal thing. Plus, I would add one small thing, sir, a team
of bankers, contracting officers, and a small business person
should be put and trained for, say, 3 days.
Chairman LALOTA. Thank you.
Mr. MEUSER. I am going to join the Chairman on the next
visit to your place out in Long Island.
Mr. ANUMOLU. You must, sir.
Mr. MEUSER. Thank you, Mr. Chairman. I yield.
Mr. ANUMOLU. I am at Long Island University, just to add. I
didn't take their permission. I am trusted there. I can talk to
the president and the Chairman. Sir, it is open. I can teach
them. I am willing to teach that.
Mr. MEUSER. Thank you. Our time has expired.
Mr. ANUMOLU. After 38 years, you should allow me to do
that.
Chairman LALOTA. The gentleman's time has expired. Thank
you.
I now recognize the gentleman from California, former small
business owner, Mr. Tran, for 5 minutes. But, if he needs 6, we
will give him that instead.
Mr. TRAN. Thank you, Chairman and Ranking Member, for
convening today's very important hearing.
And, to the witnesses, I appreciate you traveling to be
with us and sharing your testimony.
Ms. Tellier, in April of this year, the Department of
Health and Human Services fired almost their entire Office of
Small and Disadvantaged Business Utilization, also known as
OSDBU, staff, leaving only the executive director, despite
requirements in the Small Business Act that the office have a
minimum of 13 personnel. We have heard that the State
Department has fired almost all of their staff as well, and
there are draft proposals for reductions at other agencies or
changes that would weaken OSDBU's authorities or independence.
Can you discuss the role of OSDBUs and how your firm has worked
with them?
Ms. TELLIER. Absolutely. The acronyms are fun sometimes,
aren't they?
Mr. TRAN. Leave it to the government to come up with them.
Ms. TELLIER. Well, I haven't worked with HHS directly
because so much of my work is within the defense industrial
base. I can speak heavily about the level of professionalism
and the level of helpfulness that I have gotten from especially
DLA and Army OSDBU offices. The help that they give in guiding
in the pre-solicitation or during the solicitation process,
like the opportunity process, is very helpful. But I think a
lot of people forget how much help they provide post award.
Last week--oh, my gosh. I am blanking on her name, which I
am mortified by--the head of the OSDBU office for DLA
distribution helped me get paid. DLA was behind about 60 days
on a contract that was valued at $187,000. So I had already
obviously incurred all of those costs. They helped pull the
trigger to get the contracting personnel to make sure that the
items were received. On a post-award basis, they are helpful;
on a pre-award basis, they are helpful. They make sure they are
guiding us. I actually think they need more money, not less.
Mr. TRAN. Thank you.
And, if the other two witnesses has any dealings with it, I
would love to hear your testimony.
Okay. Ms. Tellier, in your testimony, you state that you
must have a level of confidence that you can win an award to
invest the time and resources to develop a proposal and bid. If
a small business did not know their competitors were also small
businesses and understood that they might be competing with a
much larger corporation, how does that change the calculus
around whether a small business bids on that contract?
Ms. TELLIER. The bid decision is heavily influenced by
whether or not we perceive that we have a probability for a
win, not a guarantee of a win. These aren't guarantees in any
capacity. It is just the level playing field. If I don't--if I
feel like an opportunity is wired for someone else, including a
large business, I am not going to waste the time bidding. It is
somewhere between 8 and 40 hours of my time, and that doesn't
include the time of my employees to put together a complex
proposal response. And I am good at it. I am quick at it. So
there is companies that are newer to this space that would have
a lot more of a time investment to do it well. It is not worth
the time.
Mr. TRAN. Thank you.
Mr. Ramos, anything to add?
Mr. RAMOS. I wholeheartedly agree with those comments. It
is critical that the government does understand there is a true
business cost to putting together a procurement response. We do
have to play a little bit of a numbers game, but at the end of
the day, if I am going up against large or unrestricted size
companies, it is a huge deterrent for me to pursue those
opportunities.
Mr. TRAN. And, as Members of this committee, we are very
concerned about small businesses, entrepreneurs, and the
communities where your firm pays taxes and create jobs, but
small business policies are a win-win for small businesses and
the government. Can you, any one of you, talk about the
benefits of your government customers when we have a robust
small business industrial base?
Mr. ANUMOLU. Can I?
Mr. TRAN. Yes, please.
Mr. ANUMOLU. So we helped create several hundreds of jobs
throughout the communities. Our business model is create jobs
in the community that has awarded us the contract. For example,
if I got in San Diego, people in San Diego are hired by us,
positioned by them, and we pay them the wages that we derive
from that contract. In other words, we are building the local
communities. That has been our business model for 38 years.
Very successful.
The same thing we did everywhere in the nation, not in one
place. We are a nationwide company with nationwide contracts
trying to help the local community with big wages. Whatever we
bid, if I bid with three-person, two-person margins, the rest
of it is going to my employees. And this is not done by Big
Business--overheads are 80 percent. They pay, I mean, less. I
mean, I don't want to comment that way, but their overheads are
bigger than us.
Mr. TRAN. And I thank you all for your testimony. I think I
am running out of time here, but congratulations on the success
of your business, and you can count on this committee to help
support you.
Thank you, Mr. Chairman. I yield back.
Chairman LALOTA. The gentleman yields.
Next up in the batting order is the gentleman from Texas,
the small business owner, the full committee Chairman, Chairman
Williams, for 5 minutes.
Ms. WILLIAMS. Thank you, Mr. Chairman.
And thank all of you for your testimony. It is a good
hearing, and we appreciate you being here.
On this committee, we have repeatedly heard that government
contracts and solicitations are often overly complex making
them difficult for many businesses to respond to successfully,
and we have seen the pile there at the Chairman's desk. As
Chairman LaLota has stated, less than 3 percent of the
contracts the Department of Defense were written in plain
language.
So, Mr. Ramos, to you, what steps has your firm taken to
understand and respond to overly complex solicitations, and if
contract solicitations were written in plain language, would
this encourage small businesses like yours to compete more for
government contracts?
Mr. RAMOS. Yes, sir. We almost have a full in-house lawyer
at this point. That is required. We engage with our general
counsel, who is a third party today, on a very regular basis on
a number of issues related to federal contracting. That has
been critical. That has also included training for our
personnel so that we can become better experts.
But this is an art at figuring out federal contracts. And I
will say that, if you figure out that art, you have an
entrenched competitive advantage in order to continue going
after contracts. So, if we can simplify the language, then more
small businesses will have an opportunity to compete.
Ms. WILLIAMS. Lawyers and accountants can get expensive,
can't they?
Mr. RAMOS. Just a little.
Ms. WILLIAMS. Yeah.
Regulations and red tape in government contracting can be a
major strain on small businesses--that we have heard all day
this morning--forcing them to redirect their limited resources
towards the cost of compliance rather than growing and
expanding their businesses.
So, Mr. Anumolu, how do these burdensome regulations and
complicated solicitations impact your business and your bottom
line?
Mr. ANUMOLU. Substantially, sir. So we try to avoid them to
the extent we can and improvise ourself to see if we can bid
in. We did some bids like that. We did partial success.
However, the strain we had to go through is horrendous. But we
did it, sir. We have won against big businesses. But that is
not the solution. That is what is survival we are doing,
survival techniques, you know, which I learned at Harvard. But
we have to prepare ourselves to be trained fully, to work with
plain language contracting like you mentioned in your opening
speech----
Ms. WILLIAMS. Okay.
Mr. ANUMOLU.--and----
Ms. WILLIAMS. Thank you.
Mr. ANUMOLU.--Congressman LaLota also mentioned. They
should be simplified. They can be--it is very easy to simplify,
sir. I don't know why they don't do it.
Ms. WILLIAMS. Because it is the government. They don't
understand simple, but we do, and I appreciate your testimony.
Mr. ANUMOLU. Thank you, sir.
Ms. WILLIAMS. The Biden-Harris administration shackled
businesses an additional $1.8 trillion in regulations and $350
million additional paid man hours, we will call them, for
compliance. That is just unbelievable. And, thankfully, the
Trump administration has already been able to eliminate over
$75 billion in costly regulations.
So, Mr. Ramos, to you, how do regulatory costs impact your
business and staffing decisions as you move--as you go to work
everyday?
Mr. RAMOS. Actually, just yesterday, we were having our Q3
management team meeting, and hiring is something we talk about
at all of these, and hiring is based on profitability,
strategic growth, and direction of the company. I will tell
you, regulations like CMMC have absolutely impacted how we are
handling our business and not for the better. This is a
tremendous constraint. It is one example of the regulations
that you are citing. And, if we can work towards actually
simplifying some of these regulations, like the administration
is aiming to do, then we are all for it. We project fewer
regulations equals better growth.
Mr. WILLIAMS. It is more fun to be on offense than defense.
Mr. RAMOS. Yes, sir.
Ms. WILLIAMS. When you are on offense, it translates to
productibility and profits and more jobs.
Mr. RAMOS. Yes, sir.
Ms. WILLIAMS. We appreciate your testimony.
Mr. Chairman, and I yield my time back.
Chairman LALOTA. The gentleman yields.
I now recognize Ms. Scholten, my good friend from Michigan,
and the former Ranking Member of this committee, for 5 minutes.
Ms. SCHOLTEN. Wonderful. Though I have moved onto a
different ranking position, I am still honored to be a part of
this fine committee.
When the government contracts directly with small
businesses, there are some things they can do only when the
small business is a subcontractor. One of the ways Congress has
encouraged fair treatment and proper utilization of small
businesses that some contract with larger primes is to include
certain criteria in the prime contractor's past performance
ratings. The most important of these criteria, I bet everyone
would agree, is did the contractor make timely payments and
whether they met their subcontracting goals.
Ms. Tellier, my first question is for you. How important
are those accountability mechanisms for small business
subcontractors?
Ms. TELLIER. It is critical. The example that I used with
Congressman Tran: We have to get paid. I can't wait 90 days to
receive almost a quarter-million dollars from the government. I
also can't do that with the prime contractors. The example that
I used, by the way, is a little atypical. My government
agencies usually pay me in a more timely manner than the prime
contractors do. It would also be helpful if we had an
understanding of how those ratings affected our customers who
were prime contractors. So, if I am a sub under somebody and I
have the option of subbing under two different companies, I am
probably going to take the one that on a dashboard would
reflect they cared about me enough to pay me.
Ms. SCHOLTEN. Yeah.
Ms. TELLIER. Yep.
Ms. SCHOLTEN. Thank you. Very helpful.
Question two: Currently federal law requires that contracts
under a certain amount be automatically set aside for a small-
business-only competition, and yet a surprising amount of
spending under that threshold is not awarded to small firms,
the reason for which is still unclear. It is something we are
trying to get to the bottom of. Some have pointed to things
like software licenses and other products or services that
can't be purchased via a small business. I have submitted an
amendment to the NDAA that can get to the bottom of this issue
and ensure that this spending is making its way to the small
business, as intended by federal law. Very pleased that it made
it into the final round.
Ms. Tellier, again, coming to you, can you talk a little
bit about how small businesses utilize contracts under the SAT,
and why it is important to ensure that those opportunities are
going to small businesses as intended?
Ms. TELLIER. Absolutely.
The simplified acquisition threshold allows me to kind of
fill my pipeline that is outside of my larger contracts. So the
BPA or IDIQs that I have that are larger are wonderful for
predictability and stability.
But the stuff under the simplified acquisition threshold
allows me to grow, too. So, if it is a $240,000 opportunity, I
would like that to go to small businesses.
I have been at this a while, right. So, as a company who is
18 years old now, I can still remember what the early days of
trying to win my first contracts were like, and those were all
under the SAT.
And so, for companies that are just emerging into the
federal marketplace--and we want them to stay, and we want them
to grow, and we want their innovations, and we want their
engagement--we have to make sure that they feel welcomed, and
those under SAT contracts really allow them to do that.
Ms. SCHOLTEN. Thank you.
This is not about giving a disadvantageous priority to the
underdog. It is about making sure that our more nimble small
businesses can actually compete in this space, which is what we
want. The competition ensures we are getting the best quality
product and the lowest potential price. It is good for
business. It is good for national security.
I see that you maybe wanted to weigh in or had some
additional thoughts. I would love to hear. I was going to toss
it down that way.
Mr. RAMOS. Well, I appreciate that. I am just very engaged.
Using the $240K example, I would challenge any large
business in how they are going to manage their overhead so that
it is actually cost-effective and best cost for the government.
Ms. SCHOLTEN. Thank you. Thank you.
My last question in my last minute, and we will stick with
you, Ms. Tellier. In your testimony, you mentioned that a small
fraction of the dollars counted toward the women-owned small
business goal are through WOSB contracts. Instead, the majority
of those contracts are open competitions with WOSB competing
against other small businesses or sometimes large businesses
and winning that work. I thought that was a really important
point that was worth revisiting.
What can we do to ensure agencies are using these tools as
intended and bringing in more women-owned small businesses to
compete for contracts, not necessarily automatically be granted
them?
Ms. TELLIER. That is a great question.
I think there is an educational component both on the side
of industry and the side of government. Contracting
professionals have a huge administrative burden, and each of
the socioeconomic programs are different.
The WOSB program is the only one that is NAICS limited.
They each have their quirks. Making sure that contracting
professionals understand that they can and when they can set
contracts aside keeps us competing. It keeps us in the pool.
And then, you know, making sure that industry is educated
well so that they can beat their large counterparts, which I
like to do.
Ms. SCHOLTEN. Thank you. We appreciate it so much.
And thank you for your comments, too, sir.
I yield back.
Chairman LALOTA. The gentlelady yields.
I now recognize my new friend, Dr. Morrison from Minnesota,
for 5 minutes.
Ms. MORRISON. Thank you, Chairman LaLota and Ranking Member
Cisneros, for holding this hearing.
And thanks to our witnesses for being here to take the time
to testify. It has been a really interesting and illuminating
conversation. I am grateful for your testimony.
Contracting with federal agencies is an important avenue to
help small businesses grow. Unfortunately, as we have heard,
the number of small businesses participating in government
contracting has decreased over the past decade, and I worry
about how this administration's random termination of contracts
and abrupt firing of federal employees will impact small
businesses' decision to enter into government contracts.
These once secure sources of revenue may now seem too risky
for some small businesses. The Trump administration has
proposed cutting the Small Business Administration's
Contracting Office budget by almost a third. This includes
reducing the number of SBA Procurement Center representatives
who are critical to ensuring the contracts are written in ways
that enable small businesses to compete for them.
Without SBA performing this critical role, agencies are
likely to make contracts that are too large for small
businesses or have more requirements than small businesses can
meet, essentially making them inaccessible to small businesses.
Ms. Tellier, could you describe how SBA employees have
assisted your small business over the years and how cutting
members of SBA's Contracting Office, such as Procurement Center
representatives, could impact small businesses?
Ms. TELLIER. Yes. It is a great question. Thank you for
asking it.
The Procurement Center representatives often are behind-
the-scene, unknown advocates to those of us who are small
business contractors. They are ensuring that subcontracting
plans are adhered to, and they are ensuring competition is
maximized practicably within agencies.
The SBA Office of Government Contracting has done a lot
with a little for quite a few years. Any further cuts, it
affects certification programs. It affects the ability to
retain the PCR staff that directly affects small businesses
even if many small businesses don't know they are being
protected and advocated for by those PCRs.
Ms. MORRISON. Thank you. I share those concerns.
I am also worried about other ways that federal agencies
are making it harder for small businesses to compete for
contracts. For example, when federal agencies consolidate
multiple contracts into a single, larger contract, that puts
the contract out of reach for a small business.
So this one is again for Ms. Tellier and Mr. Ramos, too.
Both of your testimonies highlight recent changes to how the
government conducts market research before a contract can be
consolidated. Can you elaborate on the impact on small
businesses when billions in contracts are consolidated every
year?
Mr. Ramos, we can begin with you.
Mr. RAMOS. That is a fantastic question.
Bundling probably has some place in driving better
efficiency in government contracting, but if you are bundling
that volume of contracts, that puts it completely out of reach
for a small business.
I would say the opportunity, if you want to consolidate
contracts, there are a lot of zombie contracts in existence,
and the market research should be a little bit more thorough so
that those don't come into existence. They cost us money in
order to actually secure. No awards actually happen under those
contracts.
And so that would be more preferred, in my opinion, if we
are taking a consolidation approach.
Ms. MORRISON. Thank you.
Ms. Tellier?
Ms. TELLIER. I would agree with his comments. Category
management or bundling just generally goes to the perception.
If, as a small business, I don't think I can compete to win, I
am not going to spend 75 grand trying to get on a Best-in-Class
vehicle that I am not going to get spent on.
I haven't heard it called a zombie before, but I love that
word now, and I am going to keep using it. So thank you.
Mr. RAMOS. You are welcome.
Ms. MORRISON. It is apt.
Ms. TELLIER. Yes.
I do think the market research goes a little bit further on
that, too. Being able to have that market research involved,
engaging with small businesses would allow that input to come
into it to avoid the consolidation in the first place.
Ms. MORRISON. Yes.
If a small business' contract is consolidated, what
resources or assistance are available for that business from
the SBA or the contracting agency?
Ms. TELLIER. I mean, I would start with the OSDBU office
within the agency, and then I would rely heavily on the PCR for
that region as well. And, if that didn't work, I would call
Congresswoman Scholten.
Ms. MORRISON. Good idea.
Thank you so much for your testimony.
And I yield back.
Chairman LALOTA. The gentlelady yields.
After consulting with the Ranking Member, we will now move
to our second round of questions under the 5-minute rule.
I now recognize myself for 5 minutes.
Mr. Ramos, I was quite impressed by your resume, including
a couple of degrees you have.
Mr. RAMOS. Thank you.
Chairman LALOTA. Chemical engineering degree from MIT.
Mr. RAMOS. Yes, sir.
Chairman LALOTA. And a master of science in chemistry from
Tufts. Pretty impressive.
Mr. RAMOS. Thank you.
Chairman LALOTA. When one googles that, one reads that
earning a chemical engineering degree at MIT is widely
considered as one of the toughest academic paths in higher
education.
Yet, even with that strong academic background, you said in
a previous round of questioning you had to hire a lawyer in
order to go through these massive government applications. You
have to consult with 2,000 pages in the FAR.
Even a guy who graduated from MIT in a degree that I don't
even understand at all has to do those things. So the point is,
how can a regular American go through these processes if the
MIT chemical engineering grad has to outsource and bring on an
attorney to go through that?
So can you share with me some of the frustrations,
experiences, or whatnot you have been through as an MIT grad
whose has got a chemical engineering degree and going through
some of these onerous government contracts? What burden has it
placed upon you personally?
Mr. RAMOS. Well, the first thing is, if an average person
wants to do that, they can do it, but they quit their day job.
This has to be the only thing that they do. They are not
running a company. They are not performing on contracts. They
have to spend all of their time doing something like this. A
lawyer is necessary.
And some of the frustrations: We see a tremendous amount of
variability as well. It is not just that you have a 1,000-page
contract or something like that. The next procurement that may
come from the next office over may be completely different for
the same level of services or the same types of services being
provided.
This is a problem because now you may have brought in your
lawyer. You may have brought in some friends or colleagues that
are former contracting officers in order to try and get through
it. You now have the same problem the next day. It continually
repeats itself.
Chairman LALOTA. And I want to be very transparent in this.
Yes, this Committee wants to make life easier on small
businesses. That is, you know, part of our--it is in our
wheelhouse. It is not just out of charity and benevolence; we
are just being good guys, that we want to make things easier on
you. It is out of wanting to have more applications. When we
have more applications, the government gets a better price,
arguably a better product that can be more on time and a higher
quality.
Selfishly, government should want to make it easier on
applicants to be a part of the process. We shouldn't want to
drown you in paperwork. We shouldn't want you to have to give
up your specialty to now become a government applicant
specialist.
So tell me a little more about how you have had to
outsource that and it affects your ability to focus on what is
most important for your business.
Mr. RAMOS. Well, one of the first things you have to
remember is, if we have less that we have to do in a
procurement, that means we can respond to more, which means we
can actually take shots on goal at innovating. We can't do that
today. We have to focus solely on the evaluation criteria,
which is incredibly rigid.
And so, having to outsource this, we hire a general
counsel. There is a tremendous amount of cost that comes with
just having lawyers. We have to actually go to our partners
that are typically bigger businesses or maybe teaming partners
on those. Those are things that we might be able to get just
because we are a good firm, and we have got good connections in
order to rely on those resources.
Or we might have to hire a complete third-party consultant
not only to write that proposal but also have a consultant to
help us actually navigate the federal landscape and actually
doing business development outside of the procurement process
so that we can be positioned just to have a shot at those
procurements.
Chairman LALOTA. Ms. Tellier, do you have a similar
experience that--the bipartisan Plain Language in Contracting
Act is meant to address these issues for all small businesses,
either anecdotally or whatnot. Do you have a similar experience
as Mr. Ramos?
Ms. TELLIER. I think we all do, candidly. I think we all
have an understanding that when we are comparing a commercial
opportunity that is 4 pages with a 158-page solicitation, that
the risk/reward ratio comes into play there. If we can
simplify, that certainly helps.
I would offer that it might not be the most important
barrier to entry for small companies, but it is certainly one.
Chairman LALOTA. Thank you.
I am going to yield the rest of my time back and recognize
my friend from California, Mr. Cisneros, for 5 minutes.
Mr. CISNEROS. Thank you very much.
Ms. Tellier, I just kind of want to follow up on a previous
question that you got, right. Previous efforts have sought to
consolidate contracts through initiatives such as category
management, consolidating efforts that put contracts out of
reach for many small businesses, including some that have
previously performed the work.
Can you elaborate more on the cost and requirements for
small businesses to get on certain contracting vehicles before
you can compete?
Ms. TELLIER. Absolutely.
Any of the multiple award vehicles have a pretty intensive
either application process or proposal process. If you do that
in-house, that can take somewhere between 20 and 100 hours of
time. In a small business, that is, unfortunately, sometimes
the owner of the company.
And, to Mr. Ramos' point, that is innovation leaving, and
there is a focus on just submitting the process. There is an
opportunity cost to my time.
Once I get on that vehicle--now that I know the word
``zombie contract,'' which I am smitten with, clearly--once I
get on that vehicle, I might never get spent. There might not
be opportunities that come out through it, but I am still
responding to task orders on that. If I get on that vehicle, I
am still responding to task orders on it.
It is an intense outlay of time and money at the beginning
and then it just continues.
Mr. CISNEROS. Mr. Ramos?
Mr. RAMOS. I would maybe amplify the comment. When we have
our umbrella contracts, we go after task orders. I have had
years where we have hit over a hundred task orders we have had
to respond to on contracts that we already own and that we have
already won, in addition to trying to secure new work on other
federal procurements or even in a non-federal realm.
And so, there is a huge cost outlay in order to do this.
Mr. CISNEROS. All right.
Ms. Tellier, DOGE cuts led to prime contracts, terminating
subcontracts with smaller firms, including those by women-owned
small businesses, veteran-owned businesses, minority-owned
businesses. What was the impact of these terminations for small
businesses? What have you heard from your other small business
owners?
Ms. TELLIER. It has been quite devastating. Thank you so
much for that question. It really hasn't come up.
Having contracts canceled mid-cycle means that there are
people that lost their jobs. Those contracts had employees
associated with them. The performance of the work statement
required bodies. It required input. Some of those inputs had
fixed costs that were already sunk into them.
So small business contractors, some of them closed. Some of
those contracts were substantial, and they couldn't survive.
But what it did for the rest of the contracting community is
inject unpredictability, and unpredictability for a small
business is just inherent risk.
So I didn't get DOGE'd. You know the verb DOGE'd? I didn't
get it. But it is still injected on predictability and to my
decisions as a federal contractor.
Mr. CISNEROS. No, I think that is what we heard from many
small businesses, right, is that they didn't know what was
going to come next. They didn't know. And it doesn't matter
whether it was the small businesses. I would say the school
districts, everybody, the local governments. We just want to
know what is going to happen, right. Just tell us what is going
to happen. This unpredictability does not help us at all.
And, if I could just throw one last question in there, and
I open this up to the panel. What advice would you give to a
small business either just starting out or an existing
commercial firm that is interested in contracting with the
federal government for the first time? What advice would you
give them?
Mr. RAMOS. This is a very expensive endeavor. So, make sure
you have your cash flow lined up. The entry-level regulations
that you are going to have to meet in order to enter into the
federal marketplace is almost insurmountable. For small
companies, even established commercial companies, this is a
very big challenge.
Mr. CISNEROS. Ms. Tellier?
Mr. ANUMOLU. I would like to give an answer.
Mr. CISNEROS. No, I will get you, sir. I will get you, sir.
Ms. TELLIER. I would weigh in very quickly that there are
some fabulous resources that you fund for small businesses who
are entering the APEX Accelerators, and the Small Business
Development Centers are a great starting point as well, but it
is expensive.
Mr. CISNEROS. Thank you.
And, sir, please.
Mr. ANUMOLU. My only request is if they want to start off,
be prepared to spend 24 by 7 on this project in a committed
way. Otherwise, there will be two losers. One is the person who
started the business and also the government.
Mr. CISNEROS. All right.
All right. With that, I yield back my time.
Chairman LALOTA. The gentleman yields.
And we are going to adjourn in a minute, but I want to
thank our witnesses for traveling to Washington, for being a
part--Mr. Latimer, do you----
Mr. LATIMER. No, thank you.
Chairman LALOTA. Okay.
I do want to thank our witnesses for traveling to
Washington. This is insightful. We spent about 1 hour and 20
minutes together having a good dialogue. We read your bios. We
read your testimony, but the dialogue that we will be able to
have afterwards is productive for this Committee. It does a lot
of decent, bipartisan work. We have some differences about some
of the things on the fringes, but, for the most part, we agree
on a lot, and your testimony helps illuminate some of the
things that we are most focused on. So I definitely want to
thank you for being a part of that.
Without objection, Members have 5 legislative days to
submit additional materials and written questions for the
witnesses to the Chair, which will be forwarded then to the
witnesses. And I would ask the witnesses, if you get that
correspondence, to please reply promptly.
If there is no further business, without objection, the
Committee stands adjourned.
[Whereupon, at 10:51 a.m., the Subcommittee was adjourned.]
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