[Congressional Record Volume 157, Number 71 (Monday, May 23, 2011)]
[House]
[Pages H3316-H3317]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PENALTIES FOR MISREPRESENTATION AS A VETERAN-OWNED BUSINESS
Mr. MILLER of Florida. Madam Speaker, I move to suspend the rules and
pass the bill (H.R. 1657) to amend title 38, United States Code, to
revise the enforcement penalties for misrepresentation of a business
concern as a small business concern owned and controlled by veterans or
as a small business concern owned and controlled by service-disabled
veterans.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 1657
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. DEPARTMENT OF VETERANS AFFAIRS ENFORCEMENT
PENALTIES FOR MISREPRESENTATION OF A BUSINESS
CONCERN AS A SMALL BUSINESS CONCERN OWNED AND
CONTROLLED BY VETERANS OR AS A SMALL BUSINESS
CONCERN OWNED AND CONTROLLED BY SERVICE-
DISABLED VETERANS.
Subsection (g) of section 8127 of title 38, United States
Code, is amended--
(1) by striking ``Any business'' and inserting ``(1) Any
business'';
(2) by striking ``a reasonable period of time, as
determined by the Secretary'' and inserting ``a period of not
less than five years''; and
(3) by adding at the end the following new paragraphs:
``(2) In the case of a debarment under paragraph (1), the
Secretary shall commence debarment action against the
business concern by not later than 30 days after determining
that the concern misrepresented the status of the concern as
described in paragraph (1) and shall complete debarment
actions against such concern by not later than 90 days after
such determination.
``(3) The debarment of a business concern under paragraph
(1) includes the debarment of all principals in the business
concern for a period of not less than five years.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Florida (Mr. Miller) and the gentleman from Minnesota (Mr. Walz) each
will control 20 minutes.
The Chair recognizes the gentleman from Florida.
Mr. MILLER of Florida. Madam Speaker, I yield myself such time as I
may consume.
Madam Speaker, I rise today in support of H.R. 1657, a bill to revise
the enforcement penalties for misrepresentation of a business concern
as a small business concern owned and controlled by veterans or as a
small business concern owned and controlled by service-disabled
veterans.
Madam Speaker, Public Law 109-461 created new opportunities for these
service-disabled veteran-owned small businesses and the veteran-owned
small businesses to be afforded contract work with the Department of
Veterans Affairs. However, this bill had the unintended consequence of
encouraging unscrupulous business owners to fraudulently claim to be a
veteran or service-disabled veteran-owned small business in order to
get those VA contracts.
H.R. 1657 would add teeth to the VA's enforcement abilities by
requiring the Secretary to debar any company that fraudulently claims
to be a service-disabled veteran-owned business for no less than 5
years. The debarment would also apply to the business' principals.
I want to thank the gentleman from Indiana (Mr. Stutzman) for
introducing this much-needed piece of legislation.
Madam Speaker, I reserve the balance of my time.
Mr. WALZ of Minnesota. Madam Speaker, I yield myself such time as I
may consume.
Once again, I also rise in support of H.R. 1657. It is absolutely
unconscionable that we would have folks taking the set-asides that we
have made specifically available to our veterans as they return home to
start small businesses. Again, it's certainly not a lottery they have
won. It is this Nation's commitment to them to make sure they get on an
equal footing and get going again; and anyone who is intentionally
stealing those funds, it certainly should be a serious matter.
I applaud the gentleman from Indiana for continuing on this very
bipartisan--in the last Congress, Congresswoman Herseth Sandlin and
now-Senator Boozman took this up, started it moving, and it looks like
you are going to get her across for us, Mr. Stutzman; and for that I am
very happy.
I hope all my colleagues will join me in making sure we improve the
protections for the veteran-owned enterprises and send a very clear
signal that this is certainly fraud for those individuals who are
engaging and taking those set-aside dollars because it is absolutely
critical for our returning veterans.
Madam Speaker, I reserve the balance of my time.
Mr. MILLER of Florida. Madam Speaker, I am happy to yield such time
as he may consume to the chairman of the Subcommittee on Economic
Opportunity, the gentleman from Indiana (Mr. Stutzman).
Mr. STUTZMAN. I thank the chairman for yielding.
Madam Speaker, I rise in strong support for H.R. 1657 that would
revise the enforcement penalties for misrepresentation of a business
concern as a small business concern owned and controlled by a veteran
or a small business concern owned and controlled by service-disabled
veterans.
Section 502 of Public Law 105-50 set a goal for all Federal agencies
to spend at least three percent of their procurement funds with small
businesses owned and controlled by service-disabled veterans. On
October 21, 2004, President Bush reinforced the Federal Government's 3
percent goals by signing Executive Order 13360. According to the Small
Business Administration, at the time of that executive order, the
overall Federal procurement from service-disabled veteran-owned small
businesses was about .38 percent, or about one-tenth of the goal set by
statute and executive order. Even the VA was short of the goal,
spending about 1.3 percent service-disabled veteran-owned small
businesses.
To help VA meet the goal, section 5 of Public Law 109-461 gave some
new
[[Page H3317]]
tools to the VA contracting staff that essentially gave service-
disabled veteran-owned small businesses preference in small business
set-aside contracts while not ignoring the VA's other statutory set-
aside goals such as for firms qualified as HUBZone and minority-owned
small businesses. As a result, SBA data for fiscal year 2009 shows that
overall Federal spending with service-disabled veteran-owned small
businesses was about 1.98 percent, and VA spent nearly 17 percent with
service-disabled veteran-owned small businesses.
Clearly, the law was having a positive result for veteran-owned small
businesses. Unfortunately, as James Earl Jones said in ``Field of
Dreams'': ``If you build it, they will come.'' The ``they'' in this
case are unscrupulous businesses that falsely claim veteran and
disabled-veteran-owned status and the veterans who front for them.
The GAO did a review of 10 firms claiming to be service-disabled
veteran-owned small businesses and found that none of them qualified as
service-disabled veteran-owned small businesses. Since then, staff has
continued to meet with the GAO and VA's Inspector General, and it is
fair to say that there is no shortage of businesses fraudulently
claiming to be veteran and/or service-disabled veteran-owned small
businesses.
The original legislation merely authorized the Secretary of Veterans
Affairs to debar these frauds for a period determined by the Secretary.
However, given the continuing exposure of firms trying to steal
contracts from legitimate veteran small businesses, I feel it necessary
to provide some teeth to the law. My bill will direct the Secretary to
debar these fraudulent firms and their principals for 5 years, and it
would also set a schedule to speed up that action.
Madam Speaker, I note that the VA did not support the bill, citing a
one-size-fits-all approach could harm firms who make an honest mistake
in claiming status as a veteran or service-disabled veteran-owned small
businesses. I again invite the VA to work with us to perfect a bill
that will discourage frauds while protecting these contracts for valid
veteran and service-disabled veteran-owned small businesses.
I believe that at a time when the economy is very difficult and
veterans are looking to either start their business or go back to work,
this bill will ultimately meet the need and protect those veterans and
the businesses that are available to them.
I thank my distinguished ranking member, Mr. Braley, for his
bipartisan support, as well as Chairman Miller and Ranking Member
Filner for bringing H.R. 1657 to the House. I urge Members to support
the bill.
Mr. WALZ of Minnesota. Madam Speaker, I reserve the balance of my
time.
Mr. MILLER of Florida. Madam Speaker, I yield 2 minutes to the
gentleman from Michigan, Dr. Benishek, an able member of our committee
and this subcommittee.
{time} 1650
Mr. BENISHEK. Madam Speaker, I rise in support of H.R. 1657. I want
to thank Congressman Stutzman for his leadership on this bill.
Before coming to Congress, I spent 20 years as a physician working at
the VA health care system at Iron Mountain, and I am fortunate at this
time to represent 68,000 veterans who call Michigan's First District
home. When those veterans in my district decided to serve their
country, they gave up the opportunity to pursue experience in a
civilian career. Recognizing this sacrifice, Congress enacted laws
giving service-disabled veteran owned small businesses preference when
competing for government contracts.
Unfortunately, in a 2009 report, the GAO estimated that more than
$100 million dollars had been awarded to firms that fraudulently
claimed service-disabled veteran ownership due to ``significant control
weaknesses'' within the Department of Veterans' Affairs and the Small
Business Administration. By expediting the debarment process and
strengthening the penalties for those who misrepresent their status,
this new bill provides more protection for service-disabled veteran
owned businesses.
I urge my colleagues to vote with me in support of this bill.
Mr. WALZ of Minnesota. Madam Speaker, again I thank the chairman of
the full committee, the chairmen of the subcommittees, Ranking Member
Filner, and the subcommittee ranking members.
We put together four good bipartisan pieces of legislation to serve
our veterans to make sure we strengthened the things that they have so
rightfully earned, making the commitment of this Nation stronger to
them. It's absolutely appropriate we do that as we move towards
Memorial Day. And again, as I said when we began, Mr. Chairman, I think
certainly one place where it's Memorial Day every year is in the
committee, making sure we're fighting for those veterans, their
families, getting it right. And I very much appreciate the sense of
bipartisanship as we get that done.
Madam Speaker, I have no further requests for time, and I yield back
the balance of my time.
General Leave
Mr. MILLER of Florida. Madam Speaker, I ask unanimous consent that
all Members have 5 legislative days to revise and extend their remarks
on H.R. 1657 and H.R. 1383, as amended.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Florida?
There was no objection.
Mr. MILLER of Florida. Once again, I encourage all Members to support
H.R. 1657.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Florida (Mr. Miller) that the House suspend the rules
and pass the bill, H.R. 1657.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. MILLER of Florida. Madam Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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