[House Hearing, 117 Congress] [From the U.S. Government Publishing Office] ARE GOVERNMENTWIDE CONTRACTS HELPING OR HURTING SMALL CONTRACTORS? ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTEENTH CONGRESS SECOND SESSION __________ HEARING HELD JUNE 14, 2022 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 117-058 Available via the GPO Website: www.govinfo.gov ___________ U.S. GOVERNMENT PUBLISHING OFFICE 47-847 WASHINGTON : 2022 HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman JARED GOLDEN, Maine JASON CROW, Colorado SHARICE DAVIDS, Kansas KWEISI MFUME, Maryland DEAN PHILLIPS, Minnesota MARIE NEWMAN, Illinois CAROLYN BOURDEAUX, Georgia TROY CARTER, Louisiana JUDY CHU, California DWIGHT EVANS, Pennsylvania CHRISSY HOULAHAN, Pennsylvania ANDY KIM, New Jersey ANGIE CRAIG, Minnesota SCOTT PETERS, California BLAINE LUETKEMEYER, Missouri, Ranking Member ROGER WILLIAMS, Texas PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania CLAUDIA TENNEY, New York ANDREW GARBARINO, New York YOUNG KIM, California BETH VAN DUYNE, Texas BYRON DONALDS, Florida MARIA SALAZAR, Florida SCOTT FITZGERALD, Wisconsin Melissa Jung, Majority Staff Director Ellen Harrington, Majority Deputy Staff Director David Planning, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Nydia Velazquez............................................. 1 Hon. Blaine Luetkemeyer.......................................... 2 WITNESSES Ms. Amber Hart, Co-Founder & Co-Owner, The Pulse of GovCon LLC, Sterling, VA................................................... 5 Mr. Isaias ``Cy'' Alba, IV, Partner, PilieroMazza PLLC, Washington, DC................................................. 7 Ms. Lynn Ann Casey, Chief Executive Officer & Founder, Arc Aspicio, Washington, DC........................................ 8 Ms. Rebecca Askew, Chief Executive Officer & General Counsel, Circuit Media LLC, Denver, CO.................................. 10 APPENDIX Prepared Statements: Ms. Amber Hart, Co-Founder & Co-Owner, The Pulse of GovCon LLC, Sterling, VA.......................................... 35 Mr. Isaias ``Cy'' Alba, IV, Partner, PilieroMazza PLLC, Washington, DC............................................. 43 Ms. Lynn Ann Casey, Chief Executive Officer & Founder, Arc Aspicio, Washington, DC.................................... 52 Ms. Rebecca Askew, Chief Executive Officer & General Counsel, Circuit Media LLC, Denver, CO.............................. 56 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: Statement of Daniel Chow, Senior Economist, Minority Business Development Agency, Office of Policy Analysis and Development................................................ 63 ARE GOVERNMENTWIDE CONTRACTS HELPING OR HURTING SMALL CONTRACTORS? ---------- TUESDAY, JUNE 14, 2022 House of Representatives, Committee on Small Business, Washington, DC. The Committee met, pursuant to call, at 10:01 a.m., in Room 2360, Rayburn House Office Building, Hon. Nydia M. Velazquez [chairwoman of the Committee] presiding. Present: Representatives Velazquez, Golden, Bourdeaux, Carter, Evans, Houlahan, Kim of New Jersey, Craig, Luetkemeyer, Williams, Stauber, Meuser, Tenney, Garbarino, Kim of California, Van Duyne, Donalds, and Fitzgerald. Chairwoman VELAZQUEZ. Good morning. I call this hearing to order. Without objection, the Chair is authorized to declare a recess at any time. I would like to begin by noting some important requirements. Standing House and Committee rules will continue to apply during hybrid proceedings. All Members are reminded that they are expected to adhere to these rules, including decorum. House regulations require Members to be visible through a video connection throughout the proceeding, so please keep your cameras on. Also, remember to remain muted until you are recognized to minimize background noise. In the event a Member encounters technical issues that prevent them from being recognized for their questioning, I will move to the next available Member of the same party, and I will recognize that Member at the next appropriate time slot, provided they have returned to the proceeding. With that, we are going to start with the hearing. Ensuring access to federal contracting opportunities is one of this Committee's core priorities. Winning fair contracts allows small firms to create jobs, grow their businesses, and invest in their communities. That is why the recent decrease in the number of small firms doing business with the government is so concerning. From 2010 to 2019, the number of small companies providing common goods and services to the federal government shrank by 38 percent. This staggering decline not only hurts small businesses but it also leads to less competition in our federal marketplace and less innovation nationwide. One of the primary causes behind this trend is the Category Management Initiative. Since its implementation beginning in 2016 to 2019, the number of small firms serving as federal contractors shrank by 17 percent. Category Management is a nationwide procurement initiative that involves buying common goods and services as a single enterprise. It tries to make government purchasing more efficient, less redundant, and ultimately more cost-effective. However, the practice has produced many unintended consequences for small businesses. One of the most troubling consequences of Category Management is the reduction in the use of individual contracts in favor of governmentwide contracts and those designated as best in class. These larger contracts are structured to serve multiple agencies and require businesses to provide an extensive range of products and services. As a result, many small businesses are at an inherent disadvantage when it comes to winning governmentwide contracts. Yet the concerns do not end there. For example, these contracts last many years and essentially lock out those small businesses that are not included in them. Also, the costs and resources needed to bid on these contracts are substantial, and there are no assurances that the small business will receive an award. In fact, the procurement itself may not even come to fruition. This Committee has heard from numerous businesses that invested thousands preparing for a contract that failed to materialize. As if this was not enough, governmentwide and best-in-class contracts are relying on a self-scoring evaluation process that rewards those who come with vast experience, past performance, and certifications. Hence, only the biggest businesses or those that team up to collectively become the biggest can successfully compete. Given all the costs, hurdles, and uncertainty associated with these vehicles, many small businesses have been left wondering whether these are best-in-class contracts or worst- in-class. Today, I want to take a close look at the challenges that governmentwide contracts pose for small businesses and reforms Congress can pursue to ensure attempts to improve federal procurement aren't at the expense of small firms. I now would like to yield to the Ranking Member, Mr. Luetkemeyer, for his opening statement. Mr. LUETKEMEYER. Thank you, Madam Chair. I think we both agree there are many important situations in the federal procurement space that demand congressional attention. The issue we are exploring today rises to among the very top. Like Netflix disrupting the entertainment industry or Amazon fundamentally changing the way we shop, the federal government's use of multibillion-dollar governmentwide contracts might be permanently altering the way the government buys goods and services. It is important to keep in mind that these contract vehicles are not inherently good or bad. They are simply tools, and their use or misuse is what determines their impact on the contractor base. While I understand and even agree with the Office of Management and Budget's interest in maximizing cost savings and obtaining administrative efficiencies, there must be a thorough weighing of the balance. Choosing to procure with these vehicles must not result in devastating impacts to the small industrial base--a base which is, as this Committee has long documented, in decline at an alarming rate. The Department of Defense recently released a report coming to the bold conclusion that contract consolidation in the defense industrial market is a national security threat, recommending that the agency prioritize engagement with new entrants and small businesses. Unfortunately, one of the unintended consequences of the rising use of governmentwide contracts is the exclusionary impact this has on most small contractors and the ensuing negative ripple effects stemming from the loss of this critical cohort of business. Only a limited number of small contractors are awarded spots on these lucrative long-term contracts. This leaves the rest locked out of the lion's share of federal opportunities. No federal opportunity means no incentive to remain in the federal marketplace. The resulting loss of small contractors means less competition and, ultimately, higher costs to the taxpayers, less innovation, and risk of stagnation and may snowball into broader, more debilitating concerns, such as threatening our national security and economy. The high-stakes nature of these contracts also creates a whole set of issues for small businesses themselves. For instance, small businesses have only a limited pool of resources; thus, these resources must be diverted either to create the best possible bid or to meet other business needs. Small businesses may further feel the need to expend even more valuable resources protesting unfavorable contract terms or awards in order to protect their sizable investments, with no guarantee that the outcome will be in their favor. On a similar note, because these contracts are so sweeping in their requirements and highly competitive, many small businesses feel forced to give up their independence, pressured to partner with large firms via joint ventures for the best possible chance of winning a coveted spot on these contracts. This presents a whole host of issues, including that many large businesses are essentially legally granted access to federal dollars dedicated specifically to assist small businesses. Unfortunately, it seems at this point the genie is out of the bottle, and it is difficult to imagine a world returning to mostly individual, direct contract actions. However, we can be wiser, more thoughtful, and more intentional in seeking the appropriate balance. I will end with this thought. In the struggle to simplify and manage federal spending, the federal government should not lose sight of the importance of small businesses, nor should it disregard the impact that increased use of governmentwide contracts may have on the industrial base. The federal government must do more to ensure the majority of small businesses can thrive in this new environment. Briefly, on a separate topic, I would like to note that another week has passed and Secretary Young continues to fail to fulfill her statutory duty and appear before this Committee. Madam Chair, with that, I yield back. Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. I would like to take a moment to explain how this hearing will proceed. Each witness will have 5 minutes to provide a statement, and each Committee Member will have 5 minutes for questions. Please ensure that your microphone is on when you begin speaking and that you return to mute when finished. With that, I would like to introduce our witnesses. Our first witness is Ms. Amber Hart, who is the Co-founder and Co-owner of The Pulse of GovCon, an advisory firm in Sterling, Virginia, that provides business intelligence information, tools, and data to empower government contractors. Ms. Hart is a federal business developer and has over 12 years of experience in all aspects of selling to the federal government. She is an active member of the Professional Services Council, the president-elect of Women in Technology, and sits on the advisory board for the Center for Government Contracting at George Mason University. Welcome, Ms. Hart. Our next witness is Mr. Isaias ``Cy'' Alba, a partner with the law firm PilieroMazza in Washington, D.C. Mr. Alba counsels clients on a broad range of government contracting matters before government agencies and federal courts, which includes overall regulatory compliance with the Small Business Administration small-business programs. He also represents small and midsize government contractors looking to structure compliant teaming, joint venture, and mentor-protege agreements. Welcome, Mr. Alba. We greatly appreciate your expertise on today's topic. Our third witness is Lynn Ann Casey, the Founder and CEO of Arc Aspicio, a certified women-owned small business. Arc Aspicio is a consulting and solutions company that solves problems by applying integrated capability and strategy design data, human capital behavioral science, and technology. Ms. Casey founded Arc Aspicio in 2004 and has had a 29-year career driving innovation for government agencies. Welcome. Now I will yield to the Ranking Member to introduce our final witness. Mr. LUETKEMEYER. Thank you, Madam Chair. Our next witness is Rebecca Askew. Ms. Askew is the chief executive officer and general counsel for Circuit Media, and she is testifying on behalf of the Women's Procurement Circle. Having been founded 16 years ago, Circuit Media is a government-contracting small business that specializes in creative services, staffing, and communications. With offices in Colorado and Washington, D.C., Circuit Media and Ms. Askew are familiar participants of the SBA's contracting programs. Ms. Askew, thank you for once again testifying before this Committee and for your participation today. I would also like to thank all the witnesses for being here today and joining us, and I look forward to your conversation and discussion. With that, Madam Chair, I yield back. Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. Ms. Hart, you are recognized for 5 minutes. STATEMENTS OF AMBER HART, CO-FOUNDER AND CO-OWNER, THE PULSE OF GOVCON, LLC, STERLING, VIRGINIA; ISAIAS ``CY'' ALBA IV, PARTNER, PILIEROMAZZA, PLLC, WASHINGTON, D.C.; LYNN ANN CASEY, CHIEF EXECUTIVE OFFICER AND FOUNDER, ARC ASPICIO, WASHINGTON, D.C.; AND REBECCA ASKEW, CHIEF EXECUTIVE OFFICER AND GENERAL COUNSEL, CIRCUIT MEDIA, LLC, DENVER, COLORADO STATEMENT OF AMBER HART Ms. HART. Chair Velazquez, Ranking Member Luetkemeyer, and Members of the Committee, thank you for the opportunity to testify before you today. My name is Amber Hart, and I am the co-founder and co-owner of The Pulse of GovCon. The Pulse of GovCon is a self-funded, women-owned small business focused on empowering government contractors. We break down barriers across the contracting ecosystem and bridge the fundamental gaps surrounding federal procurement. Our day-to-day involvement has allowed us to not only observe the impacts of governmentwide contracts on our small- business clients but to actively participate in the realities of strategic sourcing and bear the brunt of its unintended consequences. In a world of uncertainties, small businesses just want clarity by way of clear, concise, and consistent regulations to ensure compliance. However, mixed messages in the usage of these procurement vehicles meant to simplify acquisition have resulted in increased challenges for small businesses. With limited resources and intense demands on time and money in the bidding process, contract cancellations can be catastrophic to small firms that have dedicated months and years to the process. Vague contract vehicles with never-ending technical functional areas often devolve into protests, with very little funding making it to small businesses. This creates two distinct consequences. First, the bundling and consolidation required by Category Management has required the industry to buy or be bought. Companies now must acquire their competitor to scale at a meaningful pace or buy into a sector to increase revenue. This increase in merger and acquisition activity has certainly reduced the number of small businesses eligible for prime contracts. Second, in the end, it is likely that the same vendors will be on GSA Polaris, HHS CIO-SP4, and GSA 8(a) STARS III due to little to no difference between the focus areas of the vehicles. As a result, the government will not gain access to a wide range of solutions and services from the wider federal marketplace. At its core, strategic sourcing initiatives minimize channels for acquisition and reduce lanes where contractors can supply services and products. Since its establishment in fiscal year 2016, Category Management has resulted in a 26-percent decrease in small-business utilization across best-in-class contracts. This is identical to its precursor, which shrunk the office supplies industrial base by 26 percent over 6 years. Furthermore, the number of small-business awards under best-in-class contracts in Category Management has decreased by 22 percent over the past 6 fiscal years. Simply put, small- business dollars have increased but have been consolidated into a shrinking competition pool of fewer vendors and even less contract opportunities. Under Category Management, governmentwide acquisition contracts serve as the motivating force through the utilization of best-in-class solutions. One of the most important pieces of the best-in-class criteria is having rigorous requirement definitions and planning processes. However, most best-in-class contracts are now being created to support the broadest spectrum possible, resulting in requirements gymnastics for small-business bidders. For example, GSA Polaris contract is supposed to serve as GSA's future small-business GWAC to deliver complex IT services. Many performance areas laid out in the final RFP do encompass these types of requirements, including cloud services, cybersecurity, and system design. However, the RFP also lists out ancillary support services, including construction, which does not constitute complex IT. Standardization of best-in-class criteria, how it is managed, and how small-business contractors get a seat on these vehicles is of critical importance. This includes establishing individual definitions for the federal, civilian, and defense markets. Current best-in-class contracts are all over the map when it comes to important small-business factors like size standard recertification, bid requirements, experience qualifications, ramping timelines and procedures, and how set-asides are tracked. These collective initiatives have resulted in less access and transparency into government procurement activity and opportunities and has increased requirement bundling, vendor consolidation, and market uncertainty. The unintended consequences of strategic sourcing and governmentwide contracts impact the critical elements that sustain the industrial base-- competition, innovation, and economic stimulus. Surviving in this marketplace is not easy for any vendor, but it is made especially difficult for a small business who could prove real value to our country. The move to Category Management, further contract consolidation, shrinking contracting offices, bundling of requirements, and a strict focus on socioeconomic spending, versus the quality of the small-business requirements being competed, has had a significant impact on small businesses. The U.S. economy is firmly dependent on a healthy market competition. Competition for federal contracts breeds innovative solutions and passes on cost savings to the taxpayer. To increase competition, there must be equal opportunity to contribute to each agency's unique missions. If the federal government wants small businesses to thrive, we need to rethink how new, innovative, and qualified players can enter the market, while structuring vehicles that allow agencies to procure the right solutions that truly fit their mission needs. Without these considerations, small businesses may flounder in the wake of large business conglomerates. On behalf of The Pulse, I thank you for your attention on this important issue, and I look forward to answering your questions. Chairwoman VELAZQUEZ. Thank you. Mr. Alba, now you are recognized for 5 minutes. STATEMENT OF ISAIAS ``CY'' ALBA IV Mr. ALBA. Thank you. Chair Velazquez and Ranking Member Luetkemeyer, Members of the Committee, thank you for this opportunity. My name is Cy Alba, and I am partner of the law firm of PilieroMazza, with offices in Washington, D.C.; Annapolis; and Boulder, Colorado. We serve clients that operate throughout the United States and around the world, spanning virtually all industries, but we have historical focus on government contractors. That said, my testimony today represents my own views and not those of PilieroMazza clients or the firm. I greatly appreciate the opportunity to share my thoughts with the Committee on changes that can better serve the small-business community, who make up the foundation of our economy. As the federal contracting landscape is difficult to traverse, companies of all sizes must invest a great deal of time and money to ensure compliance with applicable laws and regulations. For small businesses, this difficulty is only exacerbated by the mandated use of best-in-class contracts and large governmentwide acquisition contracts. Many of our clients have seen work vital to their businesses swept up into these large vehicles outside of their reach, their incumbent small-business work being consolidated with other requirements, forcing them to team with companies or become subcontractors, where their fate is dictated by a prime contractor with whom they have never worked and may not trust. That being said, it is important to note that GWACs and best-in-class contracts are not inherently problematic. Indeed, obtaining work on these contracts is a critical component of many small businesses' growth strategies, as companies can continue to qualify for task-order awards even after they have organically outgrown their size standards, instead of being unceremoniously thrown into the unrestricted space. These contracts can be used to help these companies survive long enough to learn the rigors of unrestricted procurement, which can include higher compliance challenges and lower profit margins. This struggle is very real, as even being 1 cent over your size standard means that your company must now compete with firms that may have revenues of $100 million, $100 billion, or more. There is no limit. Given this, we have to find a better way of using GWACs and best-in-class contracts to support small-business growth and development. For instance, GWACs and best-in-class contracts should have more frequent on-ramps, perhaps even every year or two. This would allow small businesses to participate and not lose out on 5- or 10-year vehicles based merely upon their status or ability to compete as of the date of the initial solicitation. On-ramps would greatly reduce the stress on companies to secure a spot on these large contracts, thereby reducing the incredibly high stakes of these procurements, reducing bid costs for small businesses, and avoiding locking out firms who come into existence mid-contract, outside of the on-ramp period. Additionally, prohibit removing requirements that have been previously set aside for small businesses onto these large vehicles without first performing some impact analysis of how the incumbent contractor and the small-business community would be harmed by the move. I cannot count the number of times I have had small-business owners beg for help when requirements their companies had performed for sometimes over 20 years are suddenly moved into IDIQ vehicles that they do not possess. Third, it should be made clear that the Rule of Two, which requires contracts to be set aside for small businesses when two or more such firms can perform the work, applies to task orders issued under IDIQ contracts pursuant to FAR Part 16 as well as GSA Schedule Contract task orders under FAR 8.4. Otherwise, contracting officers will continue to exploit this loophole to strip small businesses of procurement opportunities while enriching the largest companies. In addition to the ability for small businesses to survive the struggles of graduating to a midsize company, the SBA's Mentor-Protege Program is also an extremely important tool for growing the industrial base. The SBA's Mentor-Protege Program allows mentor firms to help proteges grow and develop using small-business set-aside contracts while allowing these teams protection from being affiliated and incentivizing larger businesses to truly mentor the small-business participants. This program is not without its faults, but with proper oversight by SBA, it can truly help build the next generation of our supply chain for the federal market. Many of these issues surrounding large contracts are due to shortsighted decisions by agencies to force Category Management upon the market without thinking about the negative consequences on small businesses. As a result, our entire industrial base is impacted, and it becomes increasingly difficult for new companies to enter the federal market. Every small-business federal contractor must be protected, and, as a nation, we cannot afford to lose more of our critical industrial base--a very real risk noted by the Department of Defense this past February and as noted earlier today. I applaud the Committee for holding this important hearing today to address these ongoing issues. Thank you for the opportunity to testify, and I look forward to answering any other questions. Thank you. Chairwoman VELAZQUEZ. Thank you, Mr. Alba. Now we recognize Ms. Casey for 5 minutes. STATEMENT OF LYNN ANN CASEY Ms. CASEY. Chairwoman Velazquez, Ranking Member Luetkemeyer, and the Members of the Committee, thank you for this opportunity to testify on behalf of small businesses as our governmentwide contractors and contracts. I am the CEO and founder of Arc Aspicio, a women-owned small business. We do have governmentwide vehicles, including the Human Capital and Training Solutions contract with GSA. And we made our way up to that by first subcontracting, then winning our initial contracts on Multiple Award Schedules before being able to compete on a large GWAC. We are also a small-business mentor to protege 2ndWave in the Mentor-Protege Program. And as a small business that helps other small businesses, we find it rewarding to help them grow as well. While Category Management broadly helps the federal government increase procurement efficiencies, our company has seen it reduce the number of small businesses and the type and number of opportunities that are available for small businesses, including us, to compete on. This reduces innovation that the small businesses can offer. Like other small businesses, we absolutely love to work for the government, and we simply want the opportunity to compete. Governmentwide vehicles shift small-business opportunities to very small pools of winning contractors rather than fostering competition among diverse companies under the GSA MAS schedules or other contracts. This reduces opportunities for newer small businesses who seek their first opportunities as a prime contractor. It also reduces opportunities for established small businesses who were high performers on incumbent contracts, essentially pushing these recompete opportunities to best-in- class vehicles and not allowing great small businesses to recompete for their current work. This actually places burden not only on the small business who can't recompete; it provides extreme additional administrative burden to the government, who has to transition and is forced to transition to new contractors, and this puts the mission at risk. Small businesses should be allowed to compete on their follow-on contracts. And the Committee can explore innovative best practices, such as permanent legislation rather than frequently changing policies at the agency level about these topics and mandates. This will spur competition, lower prices, and foster innovation. Another issue for the Committee to consider is the incredible cost to pursue governmentwide contracts. Arc Aspicio estimates that it costs us somewhere between $60,000 and $100,000 for each proposal for a governmentwide vehicle. In addition, we have to pay costs to get quality certification, such as the Capability Maturity Model and ISO 9000. And while these are great quality certifications, these certifications cost $60,000, $70,000, $80,000 and require annual audits. In addition, award timeframes and protests really delay any investment we make. We would love the Committee to consider the GSA Multiple Award Schedules and expanding use of these, helping companies to get their first opportunities at prime contracts. Based on our experience--and we have 18 years in the federal government--Arc Aspicio does not want to cede control of our work and enter into a joint-venture prime contract with a large firm. We have built our experience and really want to win on our own. However, this puts us at a disadvantage when competing with other small businesses who are backed by and often controlled by large businesses of a $100 billion or more. We want fair opportunities against other non-joint-venture small businesses. We look forward to the Committee exploring incentives for more established small businesses to help other small businesses grow. This might take the form of grants or encouraging the use of additional evaluation credit on task- order bids when a small business mentors a protege and they bid together. In conclusion, I want to thank the Committee and ask them to consider additional ideas to regrow the small-business base and help them recover from the unintended consequences. Thank you so much for your time. Chairwoman VELAZQUEZ. Thank you, Ms. Casey. Ms. Askew, you are now recognized for 5 minutes. STATEMENT OF REBECCA ASKEW Ms. ASKEW. Thank you. Chair Velazquez, Ranking Member Luetkemeyer, and Members of the Committee, thank you for the opportunity to testify before you today. My name is Rebecca Askew, and I am the owner and general counsel of Circuit Media, based in Denver, Colorado. I am testifying today on behalf of the Women's Procurement Council, which advocates for policies that strengthen women-owned companies that do business with the federal government. Women fought for 11 years to get the Women-Owned Small Business Federal Contracting Program in place and an additional 2 years to get sole-source authority. Yet the federal government has only met its 5-percent goal for contracting to women twice since 1994. As a new participant in governmentwide contracts, I hope to provide insight into the resources required to adequately respond to these opportunities. I started Circuit Media out of my basement with a focus on providing clear and concise communications to law and government. Circuit Media has since grown into a strong supplier of goods and services to local, State, and federal governments. With a diverse background in communications, creative services, and staffing, Circuit Media assists clients in creating cost-effective and compelling deliverables. Circuit Media had the opportunity to participate in SBA's 8(a) Business Development Program. This program allowed us to learn and develop expertise in the federal contracting arena. As we entered the transitional stage of the program, our plan for growth focused on differentiating our company through the continued use of set-asides and attempting to obtain slots on governmentwide contracts. For a small business to respond to an IDIQ, it takes significant time, money, and human capital. The response consist of hundreds of pages over multiple volumes and dozens of pricing categories. At Circuit Media, we dedicate at least one proposal writer and one financial analyst to manage the bulk of the submission. This removes these individuals from their normal work responsibilities and requires others to double up work. There are always multiple amendments and changes to the original solicitation, which demands extraordinary attention to detail and record-keeping, as errors or omissions are deductions. Winning a slot also in no way guarantees a company will win work with a federal agency. It only allows you to compete for the opportunities released on the IDIQ. I liken it to getting a fishing license. You can throw your line into the water, but no catch is assured. I would like to discuss our recent experience responding to GSA's staffing IDIQ, HCaTS. As Circuit Media provides staffing services to the government, we felt it was necessary to respond. We spent weeks preparing our submission. Our final proposal was hundreds of pages and included 168 different pricing categories. It had to be physically mailed to New York City and was only accepted on DVD disc. We submitted our response on March 20, 2020, the day we closed our offices to the pandemic. After submission, our first communication with GSA occurred 9 months later. Because of the significant lapse in time, GSA changed components of the evaluation criteria, which they applied retroactively. This subjective post-submission change in evaluation resulted in our company missing the award cutoff by 100 out of 28,470 points. Agencies fail to realize that delays in contract award and changes in midstream can be seismic shifts for a small business, making or breaking their ability to win work. My experience points to the need for simplification on the agency front. Congress can assist women in being more successful in securing government contracts by adopting the following actions proposed by the Women's Procurement Circle. Number one, increase awards to women-owned business, including increasing EDWOSB goals and raising the WOSB goal to 10 percent. Maximize WOSB awards on governmentwide contracts. Number three, expand sole-source contract opportunities for WOSBs. Number four, eliminate EDWOSBs to have access--allow EDWOSBs to have access to business development tools to grow and thrive. Number five, eliminate double counting for contract awards. And, number six, require agencies to fully utilize Made in America products. The federal government's acquisition practices are geared towards large companies competing on enormous government buying vehicles. Congress rightfully continues to require agencies to buy from small business. Over 90 percent of all women-owned businesses are small. Therefore, women are major stakeholders in these policy actions. Thank you for the opportunity to testify today, and I am happy to answer any questions. Chairwoman VELAZQUEZ. Thank you, Ms. Askew. Now I recognize myself for 5 minutes. Ms. Hart, so what you described in your opening statement, as well as the other witnesses, is consolation at its best, at the expense of small businesses, at the expense of taxpayers and innovation. GSA tracks small-business utilization through the Category Management Dashboard. What does the dashboard show regarding small-business utilization in more recent years? Ms. HART. Thank you for your question, Chair. So the GSA GWCM small-business utilization dashboard, which is under the dashboard you just referenced, shows 30-percent utilization consistently from fiscal year 2018 to today, which is about the only thing that is tracked. When compared to industry-wide, that is about consistent of about 29 percent. So it seems to be consistent with how industry is tracking. But there is very small--but you can see it--decrease, actually, in that utilization that is beginning to track. Chairwoman VELAZQUEZ. If the small business space has decreased substantially, how could you explain the federal government still meeting the small-business goals? Ms. HART. So the key statutory tracking for agencies is to actually focus on the small-business dollars, which has increased; we are all aware of that. However, the number has to be carefully looked at, because within each socioeconomic category, numbers can be counted double or triple, depending on the socioeconomic category. So that is how they are able to keep the numbers rising as well. So the business report can kind of exist for different vendors' transactions, and obligations can be counted triple times. One example of this metric could be the number of unique vendors receiving small-business dollars is how that really could be fixed, if we actually look at the number of vendors, unique vendors, getting that---- Chairwoman VELAZQUEZ. Thank you. Ms. HART.--those dollars. Chairwoman VELAZQUEZ. Thank you. Mr. Alba, not only are requirements being consolidated into a few best-in-class contracts, but these contracts use a self- scoring evaluation process that has its own set of unique challenges. What are some of the challenges the self-scoring evaluation process poses for some businesses? Mr. ALBA. Yeah. Thank you. I think the main thing with the self-scoring is, like has been talked about, a lot of businesses are just looking to tick boxes because you have to. That is the way the system is set up, right? And so companies are looking for either the large- business mentor; or they are looking for 10 or 15 different companies to joint-venture with; or if it is allowed by subcontractors, they do that. And they are forced to go after, not the best companies to do the job, but the companies to maximize the point scores--one person with a $7 million contract; one likely big guy who has an approved purchasing system; one person who has this skill; one person who has that skill set. So you get this ``jack of all trades, potentially master of none'' scenario instead of, I think, the best procurement for the best companies. Chairwoman VELAZQUEZ. Thank you. Ms. Casey, so you are a company that has served as a mentor for another small contractors. Can you please talk to us about the benefit to a small business of being mentored by a larger small business? Ms. CASEY. Absolutely. We mentor a company called 2ndWave. They are an 8(a) and service-disabled veteran-owned company. Because we have recently been a smaller company, yet we have 18 years of experience, we understand the challenges of newer entrants and newer and smaller small businesses. Our executives have the time to take to actually spend time with our protege company. We have done off-sites with them and helped them create strategies to pursue new business. We have pursued new business with them. We have helped build up their proposal process so they can actually compete. And they have since won more contracts. This idea of more established small businesses working with newer small businesses is a wonderful idea, because we have recently lived through it; it is very rewarding for me, as a CEO, to work with another small business. And small businesses are great both advocates and resources for other smalls who are newer entrants to the market. Chairwoman VELAZQUEZ. Thank you. Ms. Askew, in 20 seconds, in your perspective, what are some of the areas that must be improved? Ms. ASKEW. Thank you for the question. In my opinion, the areas that must be approved is clear and concise communications and standardization. If you are applying to one of the governmentwide contracts, that you can actually understand what the rules are and how they are being applied to you, as well as, you know, looking at opportunities for women- owned, other types of opportunities within those GWACs so that everyone can have a level playing field. Chairwoman VELAZQUEZ. Thank you. Now I recognize the Ranking Member. Mr. LUETKEMEYER. Thank you, Madam Chair. Ms. Askew, it seems the goal of these governmentwide contracts is to reach administrative efficiencies and cost savings through contract consolidation. This is something I agree with, but it seems to hinder small-business growth. Do you think it is possible for the government to find both efficiencies and save taxpayer dollars while also building a robust and healthy small-business base? Ms. ASKEW. Thank you for the question. In my estimation, it has been difficult to be able to balance both of those. It is sort of you throw the baby out with the bath water. You are trying to do consolidation, but that leaves small businesses in the lurch and unable to respond or even to be on the playing field. That example of us trying to respond to a governmentwide contracting opportunity really displayed that capability. You know, we put all of our resources towards that opportunity and still came up short. So I think that, you know, when you are looking at the best way to manage, you know, the balance between the two, I think it is best to realize that, being a small business, you aren't going to have that equal playing field, and there needs to be some kind of measurement for that. Mr. LUETKEMEYER. Thank you for that. Just a quick question with regards to the things that are going on in society today and how it is affecting your ability to bid on contracts here. With additional inflation and supply-chain problems and the reliability of the supply chain, do you have something built into your contracts to be able to allow the bidder to--is there flexibility in there with regards to inflationary costs, inability to, you know, to weather some of the supply-chain disruptions? How do you manage that situation? Ms. ASKEW. That is the $24 million question, actually. You know, when you enter into a contract and when you, you know, enter into a contract with the government, you are contracting at that moment in time, and there is not any kind of additional remedies that can occur. You know, an example of that is Juneteenth. We moved from having that not be a holiday to that being a federal holiday. And all contracts--you know, you needed to be flexibility during that period of time. So, you know, I---- Mr. LUETKEMEYER. Okay. The question, I guess, is: Is there enough flexibility in the contracts to allow you to be able to adjust and be able to--you know, if you are sitting there guessing at what inflation is going to be down the road, you don't have any firm commitments from people who are your suppliers, with supply-chain problems, how--is there enough flexibility in the contracts to be able to allow you--or do you have to bid up significantly higher in order to be able to, you know, be able to run the risk of not having enough built into there to be able to make some money on it? Ms. ASKEW. That is a great question. Actually, you know, with LPTA or some of the contracts where they look at lowest price or best value, you end up--your margins become pretty slim, they become pretty small, because you want to be competitive with all the other businesses. And so, you know, there isn't a ton of flexibility, to be honest. Mr. LUETKEMEYER. Well, one of the problems, it would seem to me, is the length of time some of these contracts take for you to be able to fulfill the contractual obligation. And so it may be weeks, months, years to be able to fulfill a contract. So how do you project out? I know I have some constituents that are stuck in the situation here where they bidded and now, with this runaway inflation that we have, they are going to be--you know, unless the government is willing to come back and help them arbitrarily, they are going to be in big trouble here, because they are not going to have enough income or enough equity in that contract to be able to survive. They are actually going to wind up losing money out of the deal. So I would think there needs to be some sort of clause or flexibility in there to allow the small businesses, who are probably not flush with tons and tons of cash--otherwise, they would be bigger businesses--to be able to survive. Ms. ASKEW. I think that is very astute. And I would say that it is a difficult problem. And I am not sure I have the solution. I would say that, you know, there are brief increases that occur every year with the contract. But, once again, you have to measure that increase with the ability or the need to win one of those contracts to continue to compete. Mr. LUETKEMEYER. Ms. Hart, did you--you heard my question. Do you want to--I mean, that is part of what you do, is consulting on these contracts. Would you have a comment on that? Ms. HART. Absolutely. So I believe there was a recent EO on inflation from the administration allowing flexibility, for at least defense contractors to take that into consideration. And then there are some IDIQ vehicles and GWACs that are now allowing you to compete at the task-order level on pricing, which means you don't submit pricing at the umbrella level, if you will, and---- Mr. LUETKEMEYER. So--I am sorry to interrupt, but I am out of time here--just a clarification here. So the executive order allows enough discretion by the agency to be able to work out a deal with the contractor, then, to make sure they don't go under? And, then, if they go under, they may not be able to actually provide the service or product. Although they probably have a bond to make sure that works. But we don't want to lose people in this process. Ms. HART. It is not my area of expertise, but, from what I understand, it does allow some flexibility for contractors to bring in inflation. Mr. LUETKEMEYER. All right. Thank you very much. I yield. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from Louisiana, Mr. Carter, for 5 minutes. Mr. CARTER. Madam Chair, thank you very much for the opportunity. I have a general question that any of you who would like to can address. We know that, during COVID, there was an extension for individuals that were 8(a) contractors to theoretically make up for the loss of opportunity because of [inaudible] that year there was an extension. It actually turned out to be less than a year. What value, if any, do you believe that extension gave? And how could we be able to perhaps grant even additional time for people who may have met on the time out, running out of time with the certification [inaudible] didn't fully get in the amount of time. Could someone share with me their views on how we can do better, how that worked, and your thoughts? Mr. ALBA. Yeah, I would be happy to answer that. I am a member of the board of the Bowie Business Innovation Center, which has an 8(a) accelerator program, in a historically black college and university, the only in the country, and so I deal with these issues often. And this is one of those things that I have heard repeatedly, where the companies have sort of begged to get an additional year. Given the way that COVID has extended itself out, they have not been able to meet with contracting officers as often. The events are only just starting to happen, conferences and whatnot. And so it has been difficult to interface with individuals in market. And that has been, I think, a major factor, in a lot of the 8(a)s that I have been talking to and who we work with in our program, in getting new contracts and growing, especially those who are towards the end and are looking to maybe get on some new contracts to weather this next challenging storm. Mr. CARTER. Ms. Casey? Ms. CASEY. I would say as mentor to an 8(a) company, since things are really only starting back, they would love an additional year to be able to build up their business. COVID has really hurt the opportunity to sell to the government. Mr. CARTER. So I think, more than them just loving to have an additional year, I think there is a case to be made that they did not get the full complement of what the program is designed to do, because even though there was an extension, the extension wasn't, in fact, a full year. But the effects of COVID and the supply-chain crises is very much still in effect, so people are still suffering. So I just wanted get your observations and your thoughts on that. I am happy to hear that it is consistent with what I hear from my constituents. And, Madam Chair and Ranking Member, I would like to ask that we include this in our further due diligence as we move forward on how we can really make these individuals whole who have suffered greatly at the hands of something that is beyond all of our control, COVID and supply chain. Quickly, pivoting from that, I would like to ask a question about the Mentor-Protege Program. What obstacles, if any, have you had in really getting to businesses that are out there that would benefit but aren't aware of the various resources? Mr. ALBA. Yeah, I am happy to take that too. So, you know, dealing with small businesses all over the country and things, I think it is--there is a disparity in information, I think, depending on where you are. So some places in the country, like around here, around the Beltway, there is a lot more knowledge of these programs, whereas when you go in other places--and I have a number of clients in the Huntsville area and things of that nature--they have fewer and fewer resources available to them, and there isn't as much, I think, outreach. Potentially, SBA could have more sessions in some of these areas and explain the benefits of the program with potentially all these great small-business mentors, like we heard about earlier, who are willing and offering this type of help. Mr. CARTER. Let me ask you real quickly before my time runs out. So this is something I hear from my constituents quite often, is some of the mentorship-protege programs, while they work financially, they don't always work in the vein of giving that protege a true opportunity to learn the business and really perform. How do we overcome the relationship that becomes one more of a financial partnership and less a partnership with that protege to actually learn the business to become a mentor to someone else? Mr. ALBA. So I would say there are already a number of rules in place that we could just do a better job of enforcing. So SBA looks at reports that proteges give every year as to how the mentor-protege relationship is going, but I haven't personally seen them do much with it. So potentially the SBA could take a closer look at these issues, go through the mentor-protege agreement, make sure the promises that are in that agreement are being met, specifically--not just joint- venturing, not just contracting. SBA says all the time that it is to develop your business, it is not a business development program. And to take that to heart and move that forward, I think, is what we need to do. Chairwoman VELAZQUEZ. The gentleman's time has expired. Mr. CARTER. Thank you very much. I yield back. Chairwoman VELAZQUEZ. The gentleman from Texas, Mr. Williams, Vice Ranking Member of the committee, is recognized for 5 minutes. Mr. WILLIAMS. Thank you, Madam Chairwoman and Ranking Member Luetkemeyer and witnesses, for being here---- [Audio interruption.] Chairwoman VELAZQUEZ. Can you please, the Members that are hybrid, mute yourself? Thank you. Mr. Williams, yes, I will give you more time. Mr. WILLIAMS. Thank you, Madam Chairman. This why we need everybody here and quit this nonsense we got going. Thank you all for being here today. And before I address small businesses' role in government contracting, I would like to take a minute to address the current state of our economy. I am probably one of the few--maybe Ranking Member Luetkemeyer--that was a small-business owner in the 1980s. I still own the same business I had in the 1980s, in 1981 and 1982, where we saw so many of the same issues we are facing today. If we keep going the way we are going, there are not going to be any mentor programs, I am just telling you. Let's go back to 1981. In 1981, we had inflation out of control. We had leadership that had no idea what to do about it except condemn our country. So we had inflation out of control; the federal reserve was raising interest rates. We had 20- percent interest--20-percent interest. So, if you were a small- business owner, you went to bank and you borrowed at 19 percent--19-percent interest. And if you had any money, you had a CD. Ranking Member Luetkemeyer's banks were paying 19 percent on 2-year CDs, if you can imagine that. So interest rates were out of control, and principal balances were so much different. Today, everybody is concerned about 6 percent, which we should be. We are paying 6-percent interest on--I am in the automobile business, and in 1981 you could buy a car from me for 3,000 bucks and finance it at 20 percent. But that same car now is $50,000, $60,000, $70,000, $80,000, you can finance it at 6 percent, and the principal balances are so much higher. It is just creating one heck of a problem for us. And homes, we see what is happening with homes. Homes you could buy for $40,000 now you buy for $400,000. Chain disruptions, we didn't have that in 1980. The one thing we had 1980 was product. We could sell our way out of it; we could claw our way out of this problem. But now there is no product. There is no--I don't have any cars to sell. There is no nuts and bolts and hardware stores. It is a mess. We have chain disruptions like we have never seen before. So at least we had debt. So 20-percent interest paved (ph) the 6-percent interest. That is a real problem. I have a concern for our economy. Our economy is in a serious, serious issue. And you all talk about growth and getting the government out of small business and talk about competition. That is what it is all about, but we don't have that now, you see. We need to get out of this by quit spending money we are printing that is worthless. And we need to let main street compete and be able to help get ourselves out of this mess. But we all need to have our eyes open of the situation we are in right now. We have the best workers in the world, and we are paying them to sit on the sidelines. So we need to make it easier on main street, we need to cut taxes, we need to reduce regulations, and we need to let the private sector and small business get us out of this mess. I am for that. I think all of you are, too, from what I hear with your testimony. So, with that, before I move into my other question, Ms. Askew, what is your general take on the economy? And how is it impacting your small business and the businesses you represent? Ms. ASKEW. Thank you for the question. At the end of the day, revenue is the driver that makes any small business successful. And, you know, obviously, no one wants higher taxes or inflation---- Mr. WILLIAMS. Thank you for saying that. Ms. ASKEW. That is--I think we would all agree to that. And so trying to figure out---- Mr. WILLIAMS. Not everybody. Ms. ASKEW. Well, trying to figure out a way in which you can manage that and still grow your business is really a challenge. Mr. WILLIAMS. Well, it is. And all American small businesses deserve an opportunity to compete, as we talked about, for government contracts against their larger counterparts. However, the current bidding process, we hear, is extremely resource-intensive and prevents small businesses from even attempting to break into this potential revenue stream. Businesses are having to make the decisions to commit significant resources to secure a spot for these federal contracts or take one more additional growth opportunity like hiring that additional employee or investing in new equipment. These two options should not be an either/or scenario. So every qualified small business should be able to have their opportunity to secure a contract without it being prohibitively expensive. So, again, Ms. Askew, you have experienced the same frustrations firsthand. Can you elaborate on the decisions your business had to make to decide to break into the contracting world? And what recommendations do you have that would allow smaller businesses with less resources the opportunity to compete? Ms. ASKEW. Thank you for the question. It is a day-by-day decision-making process that we go into at Circuit Media, trying to decide: There is this opportunity. How is that going to impact us? Who do we have to pull off of-- the opportunity to respond, just, you know, to respond, to get, you know, that opportunity to perhaps win? And how are we going to manage that with our current workload? And so it is a day-by-day decision-making process that my team and I go through to try to figure out--you know, it is, do we rob Peter to pay Paul? How do we manage that? Mr. WILLIAMS. Trying to figure out how to beat the government is tough. Thank you for being here. Appreciate it. Ms. ASKEW. Thank you. Mr. WILLIAMS. I yield back. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from Pennsylvania, Mr. Evans. Mr. EVANS. Thank you, Madam Chairperson. Ms. Casey, to what extent has engaging in joint ventures become necessary for small businesses to successfully navigate the federal procurement space, and why? Ms. CASEY. Well, we are an established small business, and we decided to enter into being a mentor to a smaller small business to be able to help them compete on additional contracts. Certainly we do get a benefit if we win any of those contracts, but that is really helping grow a small business. On the other hand, though, we have decided not to enter into a mentor-protege program with a large business. Arc Aspicio really likes to control our own destiny, manage contracts, and deliver on our contracts. And we have the experience to do that with the federal government and have worked on more than 150 projects. The current business environment, though, is pushing us to almost be forced into a joint venture with a large business in order to continue to be able to compete on contracts. And that is a big challenge for us, because we would like to not have to compete with joint ventures that are backed by hundred-million- dollar companies, because we can perform the work on our own. Mr. EVANS. Given the shift towards governmentwide contracts and best-in-class vehicles, what would be your number-one recommendation for new businesses interested in becoming federal contractors? Ms. CASEY. That is a great question. What helped us when we started out was the support of other small businesses. I think networking among small businesses will really help newer entrants navigate the complexities of today's business environment and the challenges of governmentwide contracts--networking to gain experience and knowledge of how to write proposals, how to get subcontract opportunities that lead to prime contract opportunities on things like GSA Schedules so that when the time comes you are ready to bid on a governmentwide contract. But it is a journey, and you can't just jump to a governmentwide contract. And I think smaller businesses can help other new entrants navigate that complex environment and build a business strategy that is lasting and could help these new entrants succeed. Mr. EVANS. Thank you, Ms. Casey. I yield back, Madam Chairperson, the balance of my time. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from Pennsylvania, Mr. Meuser, Ranking Member of the Subcommittee on Economic Growth, Tax, and Capital Access. Mr. MEUSER. Thank you very much, Madam Chairwoman, and I thank the Ranking Member. And I certainly thank the witnesses for being here on a not necessarily complicated but interesting set of circumstances, where you can see the benefits for these government contracts on the side of the purchaser, the government agencies, and you can certainly understand your point, because being on such government contracts is referred to as ``winning a golden ticket.'' That is not good. So, you know, the governmentwide contracts, you know, the benefits: less contracts--I mean, I was in State government; you know, none of them makes life easier, but it allows you to analyze things more so perhaps--less work, less contracting overall. The idea of consolidating purchasing, you have to appreciate that. That could create lower prices overall. The double-counting issue was misguided. I have a bill, actually, if you take a look at it, 7685, the Truth in Small Business Contracting Credit Act. So take a look at that. Maybe you could weigh in on the committee, Republicans and--both sides, and see if that is something you think that we should get behind and endorse. But, in the meantime, you know, solutions: you know, the joint venture. Okay. Latch on to someone who is already on a GWAC and then just reapplying. Now, Mr. Alba you mentioned the challenges in reapplying, but let me just start with Ms. Askew. So, if you are not on these GWACs and you do fit well but you--on one particular agency and you are active, to gain additional business, additional contracts, is that a virtual impossibility because the GWAC is already confined for a 5-year period? Ms. ASKEW. Thank you for the question. It is difficult, it is definitely difficult, as a small business when we are working within an agency, you know, trying to increase our exposure or our opportunities within that agency. You know, I think one of the other witnesses mentioned the fact that there is no way to communicate our market to those agencies really now going forward, because of the fact that everything is virtual and, you know, you aren't having an opportunity to really meet with anyone that could assist you. In my experience, trying to, you know, increase our exposure or our opportunities within a contracting vehicle or on a GWAC is difficult because, you know, you are out in the void; you are trying to respond to opportunities that you aren't aware that they are even coming. Mr. MEUSER. Yeah. And I was on the private-sector side, as well, trying to get contracts for a number of years, and there is no question, even though you work hard towards it and you have the right price point and right product, you feel almost lucky to get it in the end. It is like you are happy that you felt so fortunate that you spoke to the right person and they reviewed things right. So, being that is still the case, or maybe even worse-- because I am going back a good 10 years--what could each of you tell me, maybe the one thing that--or two things if you would like--that we really need to zero in on here? Because the goal is small businesses, women-owned businesses, diversity, but, at the same time, the highest quality and best price. So maybe, I don't know, Ms. Hart, if you want to start. Ms. HART. Sure, I can start. I can give two recommendations. I think we need to formally and legally define best-in- class contracts. Currently, it is a very objective five-point standard that is not really followed, and it is not in the FAR, and so it is very hard for small businesses to understand and comply. My second recommendation would be creating governmentwide IDIQs with explicit technical focus. As I mentioned, GSA Polaris has construction on there as a requirement, and that is not atypical. That is a very typical thing that you see now. Mr. MEUSER. And, Mr. Alba, to you. And, then, is there a particular agency that is the most difficult, that needs to really pick up their game? Mr. ALBA. I mean, CIO-SP4 was somewhat of a mess. I think I have written a lot about that. So that would be one, the NITAAC folks. But I think, just generally, if you could have these GWACs and, instead of this jack-of-all-trades idea, to narrow it down and maybe allow you to bid on different pools--each, like, contract line-item number or section of the contract--to get the best people for that section, as opposed to having to award someone who can do everything, because I don't think you get the best product that way. Mr. MEUSER. Thanks. I yield back, Madam Chair. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from Maine, Mr. Golden, Chairman of the Subcommittee on Underserved, Agricultural, and Rural Business Development. Mr. GOLDEN. Thank you. Ms. Hart, under the mentor-protege joint venture, as you know, a small business has to perform at least 40 percent of the work. Is that the appropriate share of the workload, in your opinion? And, if so, why? If not, why not? And if you think there should be changes, so if these joint ventures should be modified so that small businesses take home more of the work, what is the right mark? And what might be the pros and cons of increasing that? Ms. HART. That is a great question. So, in order to perform under these IDIQs or even task orders, the prime has to perform 51 percent of the work. So I do believe that increasing it from 40 percent to a little bit higher makes a lot of sense. I do understand that that puts some burden on small businesses, but I think you do get a better product and a better vendor out of that that is a little bit more qualified and maybe one that is a little bit more established to take advantage, as the witnesses have also said, of the large business offering those support services. So I would definitely take a look at increasing that. I think that that could definitely help. As the Mentor-Protege Program has kind of been taken advantage of over the past few years with these governmentwide contracts, people are just kind of forming them in order to compete. So I think to bring it back to an actual technical focus would be a good idea. Mr. GOLDEN. Thank you. I appreciate that. Ms. Askew, in your testimony, one of the things that really got my attention the most was when you said that you had to send in your application by mail, and then, of course, you had to wait 9 months, you said, to get any kind of a contact, even, from the entity that you were submitting your application to. So it seems like, in general, through the Q&A here, that what you have highlighted: One is that, for your business, even choosing whether or not to compete, there are a lot of staff hours that are going to go into even figuring out if it is the right move for your company, a lot of staff hours obviously into what is often, you know, a pretty burdensome application process, and then probably some significant challenges, just knowing that it could take a very long time before you even know if you are going to get the award and move forward. So, with that in mind, just knowing that you are here in front of the Committee and small businesses will be watching this: If you were in a situation where you were meeting with another business who was thinking about getting involved in best-in-contract-type work for the first time, what would your advice be to them on how to best prepare for that and what the challenges would be that they need to consider? Ms. ASKEW. Thank you so much. I think we have highlighted most of the significant challenges--the money, the time, and the resources. And when you are repurposing your resources, you are not doing the other work that you need to do in order to continue to have your business thrive. My advice to an organization, a company that might be interested in going after these larger vehicles is--you know, our position at Circuit Media is that that is where the opportunities are. And I would not be telling the truth if I told someone, Don't go after it because, you know, it is too much work or it is too hard. It is where the opportunity is, and I would be remiss to tell someone not to do that. Mr. GOLDEN. That is helpful. Do either of you two have any followup to that? Mr. ALBA. I will say--this might be a sad comment, but I would tell people to read the solicitation very carefully and just tick the boxes. And I think that is the biggest problem of all of this, but that is all you need to do. Read it very carefully, and find someone to tick every single box you can. Ms. HART. I would chime in on that, as a saying that we have is ``compliance is king,'' and if you are not compliant, it doesn't matter if you are compelling, in order to compete. Mr. GOLDEN. In general, where do you see small businesses try and fail? Mr. ALBA. I would say, when it comes to unclear language, I think a lot of companies are afraid to ask questions because they want to try to take advantage of any ambiguity, not really understanding, through the protest process and the laws that currently exist, if you don't get your questions answered, you lose the opportunity to challenge those things or deal with it. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from Wisconsin, Mr. Fitzgerald, for 5 minutes. Mr. FITZGERALD. Thank you, Madam Chair. I am over here, you guys, over in the corner. Ms. Askew, can you go back to--there was kind of a general discussion about the costs associated with just making the application. And this is not the first time we have kind of skirted around the discussion about, you know, is there the wherewithal, first of all, for a small business to kind of just come up with, not only the resources available through their own labor force, but being able to pull this stuff together. And I think you said there was, like, a $20,000 figure just imposed during the IDIQ. Can anyone talk about the costs associated with that? Ms. ASKEW. Yes. Thank you. Our costs--every time you decide to go after one of these contracts, you have to make a decision: Am I going to hire out or have a consultant assist me so that I know which boxes to tick? I think Mr. Alba had an interesting comment that, yes, in fact, it is really hard as a small business to try to figure out which boxes do you try to check off. And so, whether you are using a third-party vendor that can come in and say to you, here are the 18 boxes or, in our situation, you know, hundreds of boxes that you need to check, that really becomes a financial decision. You know, am I going to utilize my in-house staff--and we might not be as well- versed or as capable as a vendor might be able to help us. And that is where the money really comes in, whether you are choosing to hire someone to help you or whether you are doing it internally. Mr. FITZGERALD. The other thing--and any one of the panelists can talk about this, I guess--is, can you elaborate on the contracting officer's subjectivity and just how that plays into whether or not you get the contract as well? Go ahead, Ms. Askew. Ms. ASKEW. Sure. I can provide an example in our HCaTS opportunity. From the period of time that we submitted our application to after that period of time that we got our first response, they changed the evaluation criteria. And, in my situation, one of the things they evaluated were your reviews, your company reviews. They are called CPARs. And, in my situation, the CPARs--we had a change in contracting officer, who made a decision that they would not give ``exceptional'' CPARs; they would only give ``very good''s. It had nothing to do with the quality of our work. It was just a subjective decision by the contracting officer. And so, in that situation, our points actually dropped because we were--although same work, same company, we were evaluated differently during that period of time. Mr. FITZGERALD. And, again, any one of you can jump in on this. Because I know that, at some level, in the higher DOD contracting, you almost have this situation where sometimes those in charge on the technical level will become somewhat imbedded with the corporation, so there is a back-and-forth, that that exchange can develop into something that happens on a regular basis. How much contact was there with those that were overseeing, kind of, the process? Was there any exchange on a regular basis? Ms. ASKEW. I could respond to that. We had no exchange. Mr. FITZGERALD. Okay. Ms. ASKEW. The first contact we had was at 9 months, where they said: We are changing the criteria, and can you respond based on this new criteria? Mr. FITZGERALD. Yeah. So maybe a suggestion for you, Madam Chair. It would be interesting to see, like, at what level some of those, you know, exchanges start to happen. Because, obviously, at some point, there are many different resources being poured in by the government to develop these strategies, especially when they have to determine what kind of inclination or escalation, I guess--a better word--in labor force you would need to meet the needs of the contract. So I think it would be something great for the Committee to dig into and see if we can't get some better answers on that. But thank you very much for being here. I yield back. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentlelady from New York, Ms. Tenney, for 5 minutes. Ms. TENNEY. Hi. Am I on? Chairwoman VELAZQUEZ. Yes, you are. Ms. TENNEY. Oh, thank you. Thank you, Madam Chair. I greatly appreciate it. It is a very interesting hearing. And thank you to the witnesses. Because I think this is something that a lot of people don't understand, how complicated government contracting is, and the amount of money that we spend of taxpayer dollars, and how important it is to make sure that money is distributed in a way--or awarded in a way for contracts with reliable vendors and reliable people that are going to live up to the standards that we set by this code. But it is really interesting to show how--just listening to you all, it has been very interesting just to hear an awful lot of alphabet soup of terms that I think a lot of people don't understand. And I wanted to just go to Ms. Askew first, if I could, and just elaborate on what Representative Fitzgerald was getting into. And you are talking about the $20,000 that you needed for an IDIQ. And I am just going to say, this is an indefinite- delivery, indefinite-quantity type of contract, which may make somebody in business like me go, ``Agh.'' You know, how do you have a contract that isn't clearly defined? And I just wondered if you could talk about that $20,000 being a barrier to entry and getting new businesses, like your business and smaller ones, involved in the process and why that is sort of an undefined concept. Ms. ASKEW. Yes. Thank you. In our situation, being able to respond--and you might say, in the large scheme of things that $20,000 might not be a lot of money. But that only allows you to get on the--if you win and if you are successful, it only allows you to get onto the vehicle. You then have to respond to every one of the subsequent opportunities. You don't win anything. You just win, as I was saying, a license---- Ms. TENNEY. You just get to be in the bidding; that is it. Ms. ASKEW. That is---- Ms. TENNEY. Are there additional fees that you have to pay after that initial $20,000? Because this looks--I mean, am I interpreting this wrong? This looks like sort of an open-ended contract situation, because you are not reacting to a defined bid. It is just, you are in a situation where bids will emerge, and then you will eventually--you know, you are in the system. And then, if it is undefined, you know, there could be more coming up that would be available. Ms. ASKEW. Right. I mean, you do have that opportunity to respond. I just approximated $20,000 because that is how much it cost for us to use third-party assistance so that we wouldn't--we perhaps could win. You know, when we have done it ourselves, it is internal time, you know, which probably actually equals more than $20,000. But, for us, you know, once again, when we are looking at those opportunities out there, these best-in-class vehicles are where everything is going. And so you have to--you know, if I am going to continue to be a viable business, that is a decision we have to make. Ms. TENNEY. Yeah. It is interesting. I think, you know, for anyone watching this that is not a government contractor, just the idea that it is so complicated makes it look like there is room for subjectivity, and, therefore, the best contract is maybe not getting awarded. It is a contract being awarded based on, maybe, somebody with an inside relationship--which would be developed, obviously. If a contractor works with someone, they are going to end up getting a good relationship. But I wanted to ask--so, Ms. Hart, you mentioned something about defining ``best in class.'' And I just wondered if you could elaborate a little more. I didn't quite catch what you were saying about that. When you say ``best in class,'' what do you mean? And how can we legislatively make that easier so that contracts are more available to small businesses and they could break through some of the barriers that we are seeing with them getting into this? Ms. HART. So that is a great question. In my written testimony, I do expand upon this, on how GSA and OMB, currently, they define best-in-class contracts. But the question you just asked, what does this mean, is actually what industry is currently asking all the time, what best-in- class contracts are. It is very subjective, and it is very open-ended. And there is no legal definition in the FAR or anywhere that says, this is what a best-in-class contract is. So GSA very much gets to kind of make their own decisions on what that constitutes and what those definitions mean and then apply that to industry. And we have to adjust and pivot and basically be at that whim in order to respond. So, in summary, there is no definition of that currently. Ms. TENNEY. Right. So what would we--if we are legislators, we are supposed to be making laws, what would you say--how should we define ``best in class'' in legislation if we were to propose it? Ms. HART. Well, that is a really large question. I would have to probably think on that and get back to you, but the way that I would look at that is: Having a one-size-fits-all approach to procurement is not sustainable for the federal government or to meet their mission needs, and a one-size approach even for defense versus civilian is not a right way to approach this. I mentioned looking at creating governmentwide IDIQs with explicit technical focuses or looking at standalone contracts that have more of an incentive in order to use that. I think that that might be a better approach in looking at that, rather than trying to define what a best-in-class contract is, because I do think that that could easily be taken advantage of, and we might find ourselves sitting here again with the exact same problem in a few years. Ms. TENNEY. Yeah. Thank you. No, I can--the frustration--I know people in government contracting from the DOD side and a number of other areas where it is just a very frustrating process. And taxpayers don't really understand it as well. It is so confusing, and they are worried that, you know, everything is an inside deal. And I would just like to see it be more objective so that we can get good small businesses in that can provide excellent services at a lower cost and better quality to our government. And, obviously, that is the mission of our inquiry today. But thank you again to the witnesses, to the Chairwoman, and the Ranking Member. I appreciate the time. I yield back. Chairwoman VELAZQUEZ. The gentlelady yields back. Now we recognize the gentlelady from California, Mrs. Kim, Ranking Member of the Subcommittee on Innovation, Entrepreneurship, and Workforce Development. Ms. YOUNG KIM. Thank you very much, Chairwoman Velazquez and Ranking Member Luetkemeyer, for holding this important hearing to discuss many different ways [inaudible] contracting opportunities for small businesses. And I want to thank the witnesses for joining us today. Ms. Casey, let me start with you with my first question. I am concerned that the rising use of joint ventures in SBA's Mentor-Protege Program is creating a dependency among small businesses on them to be competitive. So what is your assessment of the Mentor-Protege Program and the formation of joint ventures and their impact on small businesses? Ms. CASEY. So I think that the Small Business Mentor- Protege Program, at its heart, has the spirit of intending to grow small businesses and help small businesses get their feet on the ground and get a good start. I think there are a lot of unintended consequences that have not yet been assessed or studied. And I think there is a great opportunity to provide additional help and oversight to the Small Business Administration so that they actually collect more data and understand the implications. How much of the revenue that is going to these joint ventures is really ending up in small business? And how successful are these small businesses, beyond the joint venture, in winning contracts and building up their corporate capabilities to be a great prime contractor on their own? And so I think this is a great opportunity to collect data to understand these unintended consequences so that you can seek to identify additional legislation that may actually take a program that has the spirit of helping small businesses and make that much more successful. Ms. YOUNG KIM. Thank you, Ms. Casey. You know, let me ask to all witnesses: There is currently no process in place allowing the government to gather data on the federal contracts that went to small businesses versus large mentors. So would you be in favor of having a process that could allow us to tap into that data? And, if so, how do you think having that data could improve federal contracting for small businesses? Any one of you can answer. Mr. ALBA. Sure. So, yeah, I mean, there are laws and regulations that dictate the performance of work and what is allowed as a maximum, but, yeah, you are absolutely right that there is no way of tracking internally what is happening in joint ventures. Some of these IDIQs, though, or other contracts do make you report back data on whether you are meeting the performance-of- work requirements, and perhaps expanding that and making sure that it is done correctly. But I would say not just the dollars, but also making sure you report who is doing what, so that you can show that the small business is actually learning from this experience, actually managing, actually doing the work, as opposed to just hitting some arbitrary number. Ms. YOUNG KIM. Yeah. Unless any other witness would like to respond to that, I have one other question, so let me throw it out there in the short period of time I have. It seems like there aren't many governmentwide contracts that offer very limited spots, although there are many qualified contractors out there. So do you have any thoughts on whether the government should open that pool to many more contractors and push competition [inaudible]? Maybe, Ms. Askew, you can answer this one. Ms. ASKEW. Thank you. I would say that opening it up to more spots could be an answer. The issue still becomes, how do you get on--you know, what resources and requirements do you need to be able to actually get onto that opportunity, no matter how many spots are open? And so I think that is really where the difficulty lies. Ms. YOUNG KIM. Well, I would like to hear more about the agency delays and amendments (ph) impacting small businesses' chance of success at getting on an award. So what is the typical timeline in which an award is made? And what potential factors delay these awards? And is there anything that can be done to mitigate the negative impact felt by small businesses? Ms. CASEY. I can cover that. In my experience with some of the governmentwide contracts, it takes between 1 and 3 years to get to an award. Delays come in multiple forms. One, it takes a very long time for the government to evaluate the proposals. Secondly, there is an increase in the number of protests, because maybe the requirements weren't as clear as they could have been. And then those protests create delays, as is seen in the examples of CIO-SP4 and recently in Polaris. So the time between making the investment and the time you actually get the award, if you are lucky enough to get one of these coveted spots, could be 3 years. And you could have spent, in our case, between $60,000 and $100,000 on a single IDIQ bid. So making sure that the government provides a near-final draft prior to releasing the solicitation, that would really allow businesses to know exactly what they are going to be bidding on, create a strategy, and reduce costs and time. So that could help quite a bit. Ms. YOUNG KIM. Well, thank you so much. I really look forward to working with my colleagues to improve the federal contracting process for small businesses. And thank you so much for letting me go over time, and I yield back my time. Chairwoman VELAZQUEZ. The gentlelady yields back. Now we recognize the gentlelady from Texas, Ms. Van Duyne, Ranking Member, of the Subcommittee on Oversight, Investigations, and Regulations. Ms. VAN DUYNE. Thank you very much, Madam Chair Velazquez and Ranking Member Luetkemeyer, for holding this hearing today. While large corporations might provide the manufacturing and scale to power our economy forward, our small-business industrial base provides the agility and innovation necessary to keep us leading the world. Our ability to protect the supply of entrepreneurs from government over-regulation and being crowded out by larger companies, who have a greater ability to tip the regulatory scales, will be crucial to the United States' ability to compete on the world stage in every industry. In the fiscal year 2020, the SBA announced that the federal government exceeded its small-business contracting goals, with $145.7 billion in federal contract dollars, up $13 billion from the previously year. And, while that number may sound good, it hides the fact that the number of small businesses contracting with the federal government is actually rapidly shrinking. One reason for this almost-40-percent decline in the government's small-business vendors is increased regulation and consolidation of contracts. Last year, Chairman Dean Phillips of the Oversight Committee and I held a hearing over the DOD's new cybersecurity assessment framework versus Cybersecurity Maturity Model Certification. And while the intent behind the framework was good, it left many small-business contractors scrambling trying to navigate massive compliance manuals, while large contractors could simply rely on their large legal teams to meet the new requirements. And if you want to talk about how important it is to have people come up here and actually testify, this guy held up a 3- inch binder that was multiple inches thick, and he says, ``For me to be able to implement this, I am going to have to hire a team of people. It is going to cost me about $100,000. And I, as a small-business owner, do not have those margins. Think about what you are doing when you pass these. For large corporations, no big deal. But for the small businesses, this is something that we cannot do.'' So I guess my first question is going to be to Ms. Askew. In your view, when competing for contracts with the federal government, is the scale tilted too far toward companies with greater compliance resources instead of businesses with the best product? Ms. ASKEW. Thank you for that question. We are actually engaging right now in deciding how we are going to manage the maturity model that we are required to comply with in order to continue to win contracts. And so, for Circuit Media, we really had to--you know, you are making a day-to-day decision about, am I going to do this or that? And, you know, the 3-inch binder is no joke. And so our position has been, how can we continue to compete but still be able to pay our bills? And that has really been, you know, something that you think about on a daily basis. Ms. VAN DUYNE. Does anybody else on the panel want to weigh in on that question? Mr. ALBA. Yeah, I will say a couple things dealing with regulations. Some of them are written so broadly and so vaguely, and it is really unfair. I mean, I deal with False Claims Act defense work as well, and I have situations right now where: Someone has a firm- fixed-price contract. The contract is not clear what that firm fixed price is for. And they billed the government on a firm- fixed-price basis. And the Department of Justice is now coming after them because they said, well, certain work wasn't done. It was firm-fixed-price. And so how is someone supposed to figure out what ``firm fixed price'' means if it doesn't mean firm fixed price? It is things like that that are causing needless problems for our small businesses. Ms. VAN DUYNE. Ms. Hart? Ms. HART. From a proposal standpoint--so I have been working on federal proposals for over a decade now, and I have never seen a request for proposal that was actually straightforward, that didn't involve a very large conversation on ``what does this mean'' several times. There are amendments that are put out that are ambiguous, that don't answer questions, that just say--when you ask a three-part question, their answer to that three-part question is ``yes,'' and it is, ``yes'' to what? And that is a common occurrence. That happens all the time. So I would say, absolutely, as someone that does support vendors in this, absolutely, there is a lot of time and money spent on us just figuring out what is being asked. Ms. VAN DUYNE. I don't know if we have another witness up there. If she wants to---- Ms. CASEY. Yeah. I would echo what Ms. Hart and Ms. Askew have said. The number of regulations when you are bidding on one of these proposals, it is extremely complex. Newer small businesses don't understand what some of these compliance requirements really mean. And you have to go through so much compliance to just put in the proposal, and then you have to make sure you comply during delivery. So I would say that the proposals could be significantly simplified and less complex. We have seen attempts to do that through SAM.gov. But I would say, you get one thing that gets better and three things that get harder, in terms of compliance and proposals. Ms. VAN DUYNE. Thank you. And I appreciate your--I appreciate your input. We had actually introduced a bill that would look at SBA, and any regulation that you add, it would have to be budget-negative or budget-neutral. I hope we can move forward with that bill. But I thank all of the witnesses for your testimony today, and I yield. Chairwoman VELAZQUEZ. The gentlelady yields back. Now we recognize the gentleman from Minnesota, Mr. Stauber, for 5 minutes. Mr. STAUBER. Thank you, Madam Chair, and thank you, Ranking Member Luetkemeyer. I just want to follow up on my colleagues' questions. Under this administration, there has been an additional $201 billion of additional regulations on small businesses. The four of you said exactly what we have been talking about. You cannot continue to punish the small businesses across this country. As a former small-business owner, that was one of the most devastating things that happens to small businesses. We always talk about ``the engine of our economy is our small businesses.'' In anywhere, main street, USA, our small businesses employ our friends and neighbors and make our economies grow. And this administration added an additional $201 billion to that. Mr. Alba, can you comment on those regulations? You just talked about some of them. How destructive are they, and how cumbersome? Mr. ALBA. So I think it probably depends on which regulations. You know, some are there to protect the government or protect others. But there are certainly a lot of issues that are very ambiguous. And the ambiguities, I think, are really what creates most of the additional cost---- Mr. STAUBER. Right. Mr. ALBA.--because they have to ask people like me what the heck something means. And sometimes the answer is ``I don't know.'' Like, what is the totality of the circumstances? How am I supposed to determine what I am supposed to do if an agency bases what I am doing as whether legal or illegal on a totality of the circumstances? Mr. STAUBER. Right. Right. Ms. Askew, would you like to comment on these additional $201 billion of regulations that are stifling and destructive to small businesses? What is your comment? Ms. ASKEW. Well, I would agree with Mr. Alba about the ambiguity. I think that anytime you can provide clear and concise information so that you can actually respond and respond accurately--because every time you don't respond accurately, it is counted against you. Mr. STAUBER. Right. Ms. ASKEW. And so being able to, I think, really look at the ambiguity and try to look at, you know, the language of what they are asking you to do would be very valuable. Mr. STAUBER. Ambiguity, bureaucracy--same thing here. So, recently, the House passed my bill, the Strengthening Subcontracting for Small Businesses Act. This bill will help incentivize prime contractors to comply with small-business subcontracting goals. To our witnesses: As we continue to study and examine federal contracting and subcontracting issues, where should we focus our attention? Ms. Hart, go ahead. Ms. HART. So, from my perspective, it would actually be providing more transparent data behind that. That information is currently not accessible and not reviewable for accuracy. So I think focusing on that--because there is a lot of reporting structured around that, but no one really knows what is being collected and how it is being collected and if it is being reported accurately by prime contractors. So I think talking to maybe subcontractors---- Mr. STAUBER. Right. Ms. HART.--about that and making sure that they are being represented correctly and that maybe the prime is not overinflating how much support they are giving would be a great place to start. Mr. STAUBER. Ms. Askew? Ms. ASKEW. I think being clear about the work performed. Often, on these small-business plans, what ends up happening is that you might be part of that team but you never see the work. And so I think, to that point of having clarity and accountability and transparency, that would be really valuable, because you aren't sure--although you might list a small business, you aren't sure that they are actually getting to be able to perform the work. Mr. STAUBER. Right. And it is well-known that there are high administrative costs associated with competing for and winning a large contract. Can you speak to your experience with this? And do you believe that the federal government acknowledges the unintended consequences these contracts have on small businesses? And, Ms. Askew, I will ask you first again. Ms. ASKEW. Yes. Thank you. I am not sure if they acknowledge the amount of work that is required. I can certainly talk about the impact that it has on the small business. Mr. STAUBER. Please. Go ahead. Ms. ASKEW. Being able to, you know, go back to your day-to- day operations and you are trying to, you know, manage a team and move your company forward and be successful, being able to adequately respond and to be involved in a contracting environment with the federal government really does take, you know, wherewithal and tenacity and all of the things that we do as small businesses, but being able to manage that and manage all the other things is really a difficult feat. Mr. STAUBER. Thank you. My time is out. And to the witnesses, thanks for your comments, and we appreciate that. Madam Chair, I yield back. Chairwoman VELAZQUEZ. The gentleman yields back. The gentleman from New York, Mr. Garbarino, is recognized for 5 minutes. Mr. GARBARINO. Thank you, Chairwoman, and to the Ranking Member for holding this hearing today. Actually, I wanted to follow up on my colleague Mr. Stauber. He just asked a question about, do you believe the federal government acknowledges the unintended consequences, the administrative costs associated with competing for and winning these large contracts, the effect on a small business? And, Ms. Askew, you answered that question, but I want to let the other witnesses. Ms. Hart, you talked about the administrative costs in your testimony, as well as some of the other witnesses. So I want to open that up to you, Ms. Hart, first, and then maybe the other two witnesses to talk about that. Ms. HART. So, like a lot of this, I think the answer is: It depends. Every contracting officer that puts out these requests for proposal, I think, has a different understanding of the practices of a government contractor. We most certainly communicate with a lot of them back and forth or have, kind of, you know, off-the-record conversations, and it ranges anywhere from they absolutely recognize the commercial practices and the cost of this, to ones who very much believe that we already have something put together and we are able just to slap it into a template and submit it. I think that is shown when requests for proposals are released on Fridays before holidays--on Christmas, on New Year's, and things like that--as well as the administrative costs for, you know, 25 amendments and what that means. So I think the answer is, it depends, since this is such a human-to-human type of selling process. Mr. GARBARINO. I appreciate that answer. Ms. Casey? Ms. CASEY. I think that some in government understand the unintended consequences and others don't. I think, though, senior government officials are really measured by their compliance to Category Management and say, We are meeting our Category Management goals, we are meeting our small-business dollars, so we are doing great; we are meeting our small-business dollars. But they are not measured on, like, how large the small-business piece is and whether it is shrinking or it is growing. So I think figuring out how to measure based on the size of the small-business space and its growth is also another metric that is critical for these agencies that are involved in major procurements. Mr. GARBARINO. I appreciate that. It sounds like they are just checking a box if the money is getting out the door, you know, and it might not actually be doing all it is supposed to be doing. Mr. Alba, did you have anything to add? Mr. ALBA. I think--I am not sure if the consequences are actually unintended. I think some of it is in order to reduce competition and reduce the number of proposals and things that have to be reviewed. The entire Category Management system is structured, I think, to look focusing primarily on reducing administrative burden as opposed to actually getting the best products. And I think that is part of the issue. Mr. GARBARINO. I appreciate all those answers. And it definitely paints a picture from what I have been hearing from some of my small businesses. Ms. Hart, I wanted to follow up with something that--I have to tell you, your testimony that you submitted was very detailed. I appreciate it. And you detailed in it numerous governmentwide acquisition activities, and you also outlined the number of protests associated with each. Why do you believe you are seeing these levels of protests? Ms. HART. So that might be a better question for Witness Alba. But what I do believe and what I see is: Because the business life depends on it. You need it to survive. So, if you aren't given that award, your business might go under. And so, in order to keep that alive or keep those task orders running, protesting sometimes is the only way that you can do that to continue revenue streams. Mr. GARBARINO. Mr. Alba? Mr. ALBA. Yeah, I think that is the number-one reason. Everything is do or die. And so it is the criticality of the requirement that is probably driving it more than anything else. Which is why things like on-ramps or rolling admission, things like that, I think, would greatly lessen that issue. Mr. GARBARINO. Okay. I appreciate it. So, Mr. Alba, just a followup for you. As we continue to look at this and study--as Members of Congress continue to look at this and study, examine federal contracting issues, if there is one thing--it is probably more than one thing, but if there is one thing we should absolutely focus on, what is it? Mr. ALBA. I think the big thing is clarity, and clarity in the regulations, and probably reducing the discretion of contracting officers in the process. Because that allows contracting officers to do things without any rhyme or reason. Like, for instance, requesting reconsideration of small- business status after--like, you are a year into the procurement. They have submitted proposals maybe a year ago you are still evaluating. You suddenly ask for recertification for some option or some amendment, and then people who submitted a year ago are no longer small. They wasted all those dollars, and they are thrown in the trash. Mr. GARBARINO. I appreciate it. I am out of time. I yield back. Thank you to all the witnesses. Chairwoman VELAZQUEZ. The gentleman yields back. I would like to thank our witnesses again for appearing before the Committee today. It is clear from your testimony that governmentwide contracts have changed how small firms do business with the federal government. While its goals are worthy, they are also forcing small contractors out of the marketplace and impeding new entrants. Today's hearing has not only shed light on the significant challenges that small contractors face, but it also has put forward potential solutions. I just want to acknowledge that this is an issue that falls also under the jurisdiction of Government and Oversight. I look forward to working with my colleagues on both sides of the aisle to advance policies that ensure small businesses have meaningful ways to contract with the federal government. Without objection, Members have 5 legislative days to submit statements and supporting materials for the record. If there is no further business to come before the Committee, without objection, we are adjourned. Thank you again. [Whereupon, at 11:44 a.m., the Committee was adjourned.] A P P E N D I X [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [all]