[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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