[House Hearing, 118 Congress] [From the U.S. Government Publishing Office] LEVELING THE PLAYING FIELD: THE STATE OF SMALL BUSINESS CONTRACTING ======================================================================= HEARING BEFORE THE SUBCOMMITTEE ON CONTRACTING AND INNOVATION OF THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTEENTH CONGRESS FIRST SESSION __________ HEARING HELD MAY 11, 2023 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 118-012 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 52-169 WASHINGTON : 2023 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS ROGER WILLIAMS, Texas, Chairman BLAINE LUETKEMEYER, Missouri PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania BETH VAN DUYNE, Texas MARIA SALAZAR, Florida TRACEY MANN, Kansas JAKE ELLZEY, Texas MARC MOLINARO, New York MARK ALFORD, Missouri ELI CRANE, Arizona AARON BEAN, Florida WESLEY HUNT, Texas NICK LALOTA, New York NYDIA VELAZQUEZ, New York, Ranking Member JARED GOLDEN, Maine KWEISI MFUME, Maryland DEAN PHILLIPS, Minnesota GREG LANDSMAN, Ohio MORGAN MCGARVEY, Kentucky MARIE GLUESENKAMP PEREZ, Washington HILLARY SCHOLTEN, Michigan SHRI THANEDAR, Michigan JUDY CHU, California SHARICE DAVIDS, Kansas CHRIS PAPPAS, New Hampshire Ben Johnson, Majority Staff Director Melissa Jung, Minority Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Nick Lalota................................................. 1 Hon. Hillary Scholten............................................ 2 WITNESSES Mr. Robert Schroder, Founder and Managing Partner, SteerBridge, Vienna, VA..................................................... 5 Ms. Jackie Ferrari, Founder and Chief Executive Officer, American Fashion Network, East Syracuse, NY............................. 7 Ms. Jacqueline K. Lopez, President, Premier Enterprise Solutions, Upper Marlboro, MD............................................. 8 APPENDIX Prepared Statements: Mr. Robert Schroder, Founder and Managing Partner, SteerBridge, Vienna, VA.................................... 24 Ms. Jackie Ferrari, Founder and Chief Executive Officer, American Fashion Network, East Syracuse, NY................ 29 Ms. Jacqueline K. Lopez, President, Premier Enterprise Solutions, Upper Marlboro, MD.............................. 34 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: GovEvolve.................................................... 38 GovSmart, Inc................................................ 46 Ho-Chunk Incorporated........................................ 51 HUBZone Contractors National Council......................... 55 The Montgomery County Chamber of Commerce (MCCC)............. 60 LEVELING THE PLAYING FIELD: THE STATE OF SMALL BUSINESS CONTRACTING ---------- THURSDAY, MAY 11, 2023 House of Representatives, Committee on Small Business, Subcommittee on Contracting and Infrastructure, Washington, DC. The Subcommittee met, pursuant to call, at 2:00 p.m., in Room 2360 of the Rayburn House Office Building, Hon. Nick LaLota [chairman of the Subcommittee] presiding. Present: Representatives LaLota, Molinaro, Bean, McGarvey, Scholten, and Thanedar. Also Present: Representative Williams. Chairman LALOTA. Good afternoon, everyone. I now call the Subcommittee on Contracting and Infrastructure to order. Without objection, the Chair is authorized to declare a recess of the Committee at any time. The Committee is here today to hear testimony from three small business owners engaged in federal procurement. And I now recognize myself for my opening statement. Good afternoon, again, and welcome to today's hearing. First, I want to thank our witnesses for being here today and joining us. Your time here is very much appreciated and I look forward to hearing your testimonies. Today, the Subcommittee on Contracting and Infrastructure will focus on several critical issues facing Main Street America. We must address the alarming decline in small business federal procurement. Small businesses eligible to contract with the federal government declined by nearly 40 percent from 2010 to 2019 and new businesses entering the procurement marketplace declined by 79 percent from 2005 through 2019. Members of this Committee from both sides of the aisle understand the crucial role small businesses play in increasing competition, innovation, and stimulating our economy, and yet, they have been systematically squeezed out of our federal contracting for decades. This decline is exacerbated by the Biden administration steering our economy and national security in the wrong direction. At a time when the country needs a robust defense industrial base, small businesses are getting pushed out of government contracts in this space. It is also crucial that we ensure small business contracting goals are accurately reported by the government. As we have seen in countless cases, the government does not have a true representation of small businesses in contracting. For example, contracting methods like the SBA's SCORE card portray inaccurate assessments by allowing things like double counting which leads to inflated numbers. Finally, we must examine the effects of ineligible firms by reevaluating issues such as self-certification. Just like any small business program across the federal government, we must ensure structure and guidance is in place to ensure firms are accurately represented. Fraud is rampant in these self- certification problems, and yet, the Biden administration seeks to expand rather than correct these actions. Our goal on this Committee is to create a pathway for small businesses to succeed. We understand the value and substance that make up each of these businesses in our hometowns and vow to continue to advocate for their successes. In my district, Long Island is home to so many incredible small businesses and hardworking entrepreneurs who serve our community and provide exceptional goods and services. When traveling around the district, I hear each of these small businesses about the issues they are facing and the actions we can take in Congress to provide a better future for main street. Small business contractors play a vital role in America's industrial base and national security apparatus. Your real world experiences will help the Committee work to make meaningful improvements to ensure small businesses are fully utilized in the federal procurement marketplace. It is my fear that the decline of small business contracting will continue until steps are taken to improve competition and accuracy, and accurately report on the true status of the state of small businesses in federal procurement. Thanks again for joining us today. And I am looking forward to the conversation ahead. With that, I yield to my distinguished colleague, the Ranking Member from Michigan, Ms. Scholten for her opening remarks. Ms. SCHOLTEN. Thank you, Mr. Chairman, for holding today's important hearing. Thank you so much to our witnesses for taking time out of your busy days to come and share your experience. The federal government is spending almost half a trillion dollars annually on the purchase of goods and services for its needed daily operation. In Fiscal Year 2021, 6.5 billion in defense contracting dollars were spent in Michigan alone. At least 359 million of those dollars were spent in my district. This money brings well-paying jobs to West Michigan and stimulates local economies. The U.S. Government remains a consistent and reliable client. Yet, the federal marketplace is a hard space to break into, especially for small businesses. Recognizing the need for a diverse market, Congress included goals for small business participation in federal procurement and created a variety of contracting programs to help small firms compete in that marketplace. The SBA plays a vital role in this process. The SBA works with agencies to help them meet the small business goals. It also implements and oversees programs used by many small firms to start contracting with the federal government, and they have been successful in these tasks. In recent years, the government has consistently surpassed the small business goal, allowing the government to receive quality goods and services at competitive prices and strengthen its industrial base. The SBA also plays an important role in ensuring that small businesses owned by women, veterans, and economically disadvantaged individuals are able to compete in the federal procurement space. However, there is always room for improvement, and it is the role of this Committee to make sure that the SBA is doing the best it can. Oversight is a critical component of this and the hearing today will help us to help the SBA do the best job that it can. The government as a whole and some agencies have failed to meet all of the small business participation and several individual goals, such as women-owned small business. These failures deprived small businesses of billions in contracting dollars. Additionally, the Committee has seen the average contract size increasing. On first take, this appears to be promising as larger contracts may be more profitable for small business companies. However, it might suggest that more contracts are being consolidated, resulting in fewer opportunities for small businesses. I am particularly interested in the witnesses' perspective today on this issue. The ability of small businesses to compete in the federal marketplace has also been adversely affected by the lack of staff in critical roles. Sadly, there are openings in the roles of procuring center representatives and commercial marketplace representatives overseeing millions of contracting actions. Small businesses cannot be adequately advocated for with such few Members promoting their use and ensuring that agencies are following the small business set-side procedures. Lastly, the government steps, such as developing and implementing category management to deliver savings to federal agencies and eliminating unnecessary redundancies. Yet, the approach has also contributed to a decrease in the small business industrial base. I welcome discussion like today so we can identify the many factors challenging our small business contractors and develop thoughtful actions together. What is important for this Committee to keep in mind is that these developments are part of a bigger picture, which is that the federal procurement marketplace is always evolving. Small firms bring new ideas to the table which in turn generate new jobs and even new industries. We must take steps to ensure that they can access the federal marketplace. I thank all of the witnesses for being here today, and I yield back the remainder of my time. Chairman LALOTA. Thank you. I now yield to the Chairman of the Full Committee, the gentleman from Texas, Mr. Williams, for his brief opening remarks. Mr. WILLIAMS. Thank you very much. And you heard him say brief, so they will be brief, Chairman. I want to say again thanks to our witnesses. It is good to be able to say hello to you and visit with you. And I want to thank my colleague, Chairman LaLota for holding today's Subcommittee hearing that will highlight the current state of small business contracting, and as I have said earlier, I am a small business also and very familiar with some of these problems. Small business plays a vital role in America's industrial base and national security apparatus. As we saw during the pandemic, it is detrimental when our country is too relied on other nations to source goods that keep America moving. The government contracting system helps solve this problem. The sides for the small businesses keep key opportunities available to build out our industrial base and diversify our supply chains. Unfortunately, the number of small businesses contracting with the federal government has been decreasing for the last decade, and this is not a missed opportunity for small businesses to expand their business operations but also weakening the overall economy. I hope that this hearing will begin to shine light on these problems and will help guide us to find solutions to strengthen or solve business contractors. So with that, Mr. Chairman, I appreciate, again, you calling this hearing and I yield back. Chairman LALOTA. Thank you, Chairman. I will now introduce our witnesses. Our first witness here today with us is Mr. Rob Schroder. Mr. Schroder is a 1993 graduate of the finest of our nation's service academies, the Naval Academy in Annapolis and he is a retired Marine Corps harrier pilot. After the Marines, Mr. Schroder founded SteerBridge, a veteran-run company that provides technological and professional run services to the U.S. Government and private entities. Mr. Schroder prides himself on having a special emphasis on elevating the stature of veterans in the private sector by integrating their experience into federal projects. Rob lends his operational, congressional, and acquisition expertise developed in the Marine Corps with his management success while at the U.S. Chamber of Commerce to deliver effective results for SteerBridge customers. Mr. Schroder also holds master's degrees from the Industrial College of the Armed Forces, the Marine Corps University, and the Indiana University Kelly School of Business. Mr. Schroder, sir, thank you for your service to our country and for being here today. We look forward to the conversation ahead. Our next witness is Ms. Jackie Ferrari. Ms. Ferrari is the founder and CEO of American Fashion Network located in Syracuse, New York. In 2005, Ms. Ferrari built AFN to be a trusted apparel supplier to major retail brands and small businesses across the country. AFN serves their partners with trend right apparel from manufacturers across the globe and prides themselves on being a reliable federal contractor. Ms. Ferrari graduated from the University of Arizona where she studied journalism and then went into apparel design and manufacturing. Ms. Ferrari, thank you for being here today and we look forward to the conversation ahead. I now recognize my colleague, Representative Scholten to briefly introduce their constituent who is before us today. Ms. SCHOLTEN. Sadly, not a constituent though. I wish that we could claim her. We are happy to have our witness, Ms. Jackie Lopez with us here today. Thank you, Mr. Chairman. It is my pleasure to introduce our final witness, Jackie Lopez. Ms. Lopez is the president of Premier Enterprise Solutions, a company specializing in cybersecurity, information technology, and program management. Premier is a service- disabled, veteran-owned, and women-owned small business participating in the SBA 8(a) development program. She cofounded Premier in 2012 after serving in the Air Force. And we thank you for your service. Prior to her time in the military, Ms. Lopez served as the director of Defense Department programs at the GSA Federal Systems and Integration Center where she oversaw the acquisition and management of large-scale enterprise information technology contracts. Jackie received her BS from the University of Southern Missouri and studied business administration as a post-graduate at Embry Riddle Aeronautical University. She is a graduate of the VA Women, Veteran-Owned Small Business Initiative, an ACTIAC fellow, and an active Member of the Women Impacting Public Policy. Ms. Lopez is also a graduate of the Veterans Institute for Procurement, Grow, and VIP Advanced Programs and he SBA's Emerging Leaders program. I am thrilled to have you here today, Ms. Lopez, and look forward to your testimony. Thank you so much for being here. Chairman LALOTA. And once again, thank you to all of our witnesses for being here today. I now recognize Mr. Rob Schroder for his 5-minute opening remarks. STATEMENTS OF ROB SCHRODER, FOUNDER AND MANAGING PARTNER, STEERBRIDGE; JACKIE FERRARI, FOUNDER & CEO, AMERICAN FASHION NETWORK; JACQUELINE K. LOPEZ; PRESIDENT,PREMIER ENTERPRISE SOLUTIONS. STATEMENT OF ROB SCHRODER Mr. SCHRODER. Chairman LaLota, Ranking Member Scholten, Chairman Williams who recently just left, and distinguished Members of the Subcommittee. Thank you for inviting me to appear before you to discuss the importance of small business in the federal procurement, a system and how this legislative body can help to secure government agencies are fully engaging and utilizing these vital partners. My name is Rob Schroder. As mentioned, I am the founder of SteerBridge, a government services provider and a Service- Disabled, Veteran-Owned Small Business. Our company specializes in delivering best in class solutions to the federal government. As mentioned, I graduated from the Naval Academy. I had a career with the Marine Corps, where I also served not only as a harrier pilot but as an acquisition professional. So I got to see this from the government side. Following that career, I spent time at the U.S. Chamber of Commerce as the vice president of International where it is there that I learned the true value that the private sector can provide to the federal government. I launched SteerBridge with two goals in mind. One, supporting the veteran community, while providing top tier technology solutions for the federal government. I knew from my career that the best and most underutilized talent in the country can be found right here in our veteran community. I wanted to showcase and leverage that talent, acknowledge, and expertise that is largely underutilized. Secondly, I had a deep personal knowledge of the critical need to modernize and make private sector solutions available for the federal government. Being part of the solution to these issues for the government is the focus of SteerBridge. Currently, I am very proud of our work to help modernize the GI bill at the VA. Alongside our VA partners and as a subcontractor to Accenture, we have taken a 30-day GI bill approval process and turned it into a 3 second button click. This has been a huge win for the VA, but more importantly it has been a big win for our veterans. And more importantly, it also shows what a small business is able to do working alongside our government partners. Speed, agility, and mission focuses, our advantages of not just SteerBridge but our small business peers in the industry. We recently are working on an innovative solution and groundbreaking work utilizing artificial intelligence and machine learning for the Marine Corps. This shows the vital advantages that we can provide to one of our best customers. We are applying these advanced techniques to better supply the F35 on deployments. We have been successful in this contract because we are agile, we are flexible, and we are innovative at a speed only a company of our size, absent a big bureaucracy can accomplish. While the federal government, including Congress, has spent a lot of time advocating or small businesses, those efforts many times come up short. Even though Congress sets well- intentioned goals for agencies to hire small businesses, the fact is that it has not resulted in more small businesses winning the government's businesses. For goals and good intentions to be effective, they must have teeth to them. Instead of the government creating small business goals, I would implore this Subcommittee to consider legislation that outlines specific requirements for small business contracting. Taking this route will be more effective than advocacy and ultimately, less costly for the government. SteerBridge deep values the partnerships we have cultivated with large businesses and the expertise we have gained by working as subcontractors is invaluable. And let's be clear; there is an absolute need for the value that big business brings to the federal government. But as I look forward to discussing with you further today, it is in the best interest of the United States Government and the industrial base to have more small businesses engaging with the government and delivering be spoke and ``best in class'' solutions that are difficult to find at a large company. For Congress to truly level the playing field I would implore you to consider the following: Completely eliminate the Mentor-Protege Joint Ventures (MPJV) program. The program was created with all the best intentions but has been warped into simply being a path for big business to drive revenue under a small business banner. Additionally, MPJVs result in never-ending protests, confusion, and hampering the government's ability to modernize. Second, require a specific certification process for subcontracting. While eliminating self-certification for SBA set-aside programs, but not reporting, was addressed in the most recent NDAA. There continue to be loopholes and delays that allow companies to misrepresent their ownership. Third, clean up SBA's government-wide contract reporting. Congress should consider passing a policy that allows agencies to only count their contract spending against one category for a small business. By bringing smaller and innovative companies further into the federal government, we will ensure the United States is leveraging the best of what small businesses have to offer. While increasing competition for contracts, which will lead to better prices for the American taxpayer. Thank you, and I look forward to taking your questions and discussing the importance of small business in the federal government. Chairman LALOTA. Thank you. I now recognize Ms. Jackie Ferrari for her 5-minute opening remarks. STATEMENT OF JACKIE FERRARI Ms. FERRARI. Chair LaLota, Ranking Member Scholten, and Members of the Subcommittee, it is an honor to appear before you today. My name is Jackie Ferrari, and I am the founder and CEO of American Fashion Network, a women-owned small business based in Syracuse, New York. I am also a Member of the Women's Procurement Circle, which advocates for policies that strengthen women-owned companies that do business with the federal government. Over the last decade, I have seen first-hand how congressional and presidential attention to domestic manufacturing policies can significantly benefit small businesses like mine. I am particularly pleased that this seems to be, at least from where I am sitting, a bipartisan effort. It has always been my goal to keep manufacturing in the United States. Born and raised in Los Angeles County, California, I was able to experience the glory of American made products in the 1970s and 1980s before many of the jobs moved overseas. Together with the U.S. Government, I believe we can keep American manufacturing alive. I founded AFN in 2005 and we have since grown into a full manufacturing enterprise providing clothing, fabric, and promotional specialty products to the world's most prestigious retailers, corporations, and now the federal government, which happens to be my favorite customer. At the beginning of the COVID-19 pandemic, AFN made the decision to pursue federal work as we watched the retail industry suffer under economic strain of lockdowns. When millions of dollars in sales were canceled, I knew I had to pivot to keep my business and employees afloat. We began producing masks, COVID-19 protection from design to shipping in just 5 days. Policies like Buy American encouraged domestic preferences and small business participation that allow my business to thrive. Federal contracting opportunities give small businesses the prospect for security and long-term stability which is important in the apparel industry where there is a constant ebb and flow of business. In 2021, AFN won a $52 million contract to produce a new line of fitness training uniforms for service members. I cannot express enough how grateful and proud I am for the opportunity to provide garments for the U.S. military personnel. This gave me the ability to hire five additional employees at our headquarters, keep 70 workers in California and 56 workers in Mississippi employed with a workforce of 76 women waiting to work there if we have the business to give them, largely single mothers. This contract does not come without its challenges. We anxiously wait for the contract to kick in after 2 years of delays. Speaking to my peers across industry, I know delays are commonplace. As a small business, they are also difficult to manage. To date, we have provided two wear tests and a total of 300 samples, all using AFN's resources. For apparel designers and manufacturers, delays disrupt our supply chain because we cannot hire or keep employees without a promise of work. For example, a 5-year IDIQ contract like the one I won provides greater opportunity, but since there are no guaranteed orders or ship dates, it is challenging to finance. When we receive an order typically with a 6 month lead time delivery issue, it is difficult to find a financial partner that can accommodate the need for such significant capital in such a short amount of time. Since you do not know what to expect from delivery to delivery, it makes planning capital and employee retention challenging. From my point of view, there are a number of changes Congress can make that would help small companies thrive in the federal market. Better utilization of all small business federal contracting programs is top of our list. According to the SBA, the government has only met its women-owned contracting goals which was established in 1996 two times and has never met its HUBZone goals. If the government is serious about doing business with small companies, firms should no longer be allowed to self- certify their socioeconomic status, instead, requiring an SBA certification. Additionally, the overall small business goals should be increased as well as the goals for SBA's contracting assistance programs. And finally, sole source thresholds must be raised and SBA's procurement resources for small businesses adequately funded. Broad bipartisan support for increasing small business participation dictates changes are needed to bolster these businesses. I applaud the Committee's effort to address these issues and look forward to providing further input on ways Congress can support small manufacturers. Thank you, and I look forward to answering your questions. Chairman LALOTA. Thank you. I now recognize Ms. Jacqueline Lopez for her 5-minute opening statement. STATEMENT OF JACQUELINE K. LOPEZ Ms. LOPEZ. Thank you, Chairman LaLota, Ranking Member Scholten, and distinguished Members of the House Small Business Committee on Contracting and Infrastructure. Thank you for the opportunity to testify today on federal contracting programs important to the small business ecosystem and strategies to improve those programs. I am Jacqueline Lopez, president and owner of Premier Enterprise Solutions, a company specializing in cybersecurity, information technology, and program management services in the federal sector. Premier is a service-disabled veteran and women-owned small business participating in the SBA 8(a) development program. Premier has grown into a successful firm employing personnel in six states and the District of Columbia. Much of my success is directed attributable to the 8(a) women-owned small business and service-disabled, veteran-owned small business programs, as well as many of the free resources for socioeconomic programs, the government owns or supports. These programs are not perfect but crucial to removing barriers, creating growth opportunities, and bringing together stakeholders with private sector innovators. I believe there are challenges to the socioeconomic programs. One of the challenges is category management which conflicts with the government's goal to increase the industrial base. While well- intended, the net effect has been a shrinking of the small business industrial base. Best in class vehicles (BICs) play a key part in category management but it is very difficult for small businesses generating less than $10 million annually and new entrants to win an award on many the BICs. Very few small businesses can compete for an award on several of the BICs without a large or mid-size joint venture partner. As BICs are recompeted or new vehicles created, they should take into account businesses that have $10 million in revenue or less and new entrants. We need more vehicles, especially GWACs, like 8(a) Stars which has a simple and inclusive bid process and the criteria is designed to get more businesses on the vehicle rather than keep them off. We also need more vehicles to include a GWAC available for women-owned small businesses. The 8(a) and service-disabled, veteran-owned programs have access to GWACs. Having such a vehicle for the women-owned small business program would help more women-owned small businesses pursue larger contracts and help federal agencies achieve their contracting goals. The 8(a) development program has been the catalyst for many small businesses entering the federal market. However, anecdotal data has shown it takes several years for 8(a) firms to actually gain traction and win contracts. An extension of the 8(a) program from 9 to 12 years would allow 8(a)s more time to understand the complexities of the federal procurement process, increase their working capital, and sharpen competitive skills, ensuring a sustainable business upon exiting the program. Lastly, the whole source threshold for 8(a) firms currently stands at 4.5 million except for Native American tribes and Hawaiians in which case the sole source threshold for civilian agencies is $25 million without justification, and DoD, $100 million without justification. Ideally, the threshold would be equal across all 8(a)s. But even a modest increase to the threshold for non-Native and Hawaiian firms, 10 to 12 million or more would be impactful. An increase to the threshold would promote larger awards which means more revenue for the company and subsequent job creation. Despite these barriers, success is attainable. With these programs, my business has been successful. Without them, my ability to grow and create jobs would have been significantly decreased. These programs provide invaluable opportunities for the businesses that are able to successfully navigate them and can be significantly more impactful with improvements. I want to see small businesses have an opportunity to be engines of job creation and economic growth. Once again, I wish to express my deepest gratitude to this Subcommittee and the Full House Small Business Committee for its continued efforts to support America's women-owned businesses and for inviting me to share my story and thoughts. Chairman LALOTA. Thank you. And thank you to all of our witnesses for your opening remarks. We will now move to the Member questions under the 5-minute rule, and I recognize myself for 5 minutes. Mr. Schroder, the first question is going to be for you, sir. Small businesses are vital to America's industrial base, especially when it comes to providing goods and services for our military. Unfortunately, fewer small businesses are choosing to do business with the government, resulting in a 79 percent decline in new businesses entering the federal procurement space from 2005 through 2019. My question is, what did you do that helped prepare you for the federal government contracting space knowing that fewer entrepreneurs were getting involved? Mr. SCHRODER. Thank you, Mr. Chairman. I did it by small steps. And that would be my advice to any entrepreneur or small business that is looking to start work with the federal government. The barriers are so high and the process is so lengthy that you cannot go full into it in one step. It is an incremental approach. And, so, that would be my advice is that you start slowly, pick any customer that you have some expertise with and go at it that way in terms of your initial start. Chairman LALOTA. Were there dialogues that you had with the SBA, websites that you referenced, other ways that you learned tricks of the trade to get you off the ground the right way? Mr. SCHRODER. So I did not find the SBA particularly helpful. I went straight to the agencies and started working directly with the programs as opposed to an advocacy. Every time I went to a particular advocacy group or, you know, a vendor management or any sort of, you know, technology path or innovation path or vendor path, none of those proved useful at all. The only thing that mattered was the program entity, the end user, the customer, if you will, and what they needed and what their requirements were. It was not that it could be pushed on to them. Chairman LALOTA. Thanks. And if any of the witnesses want to add in some of their experiences I think we have a moment or two for that. Ms. FERRARI. Sure. I would love to. Thank you. We read a book. We decided during COVID to jump into the contracting space because we were a women-owned business and we knew that in the federal contracting arena that that was important. So we actually read a book called Government Contracts Made Easy and took a 15-minute consultation with the woman who wrote it. So we did a lot of homework and we looked at the landscape. And then we went to the DOD and presented some product that we thought that they would like and that really started our path. So we aggressively pursued the process. Chairman LALOTA. Thank you. And Ms. Lopez, did you want to add anything? Ms. LOPEZ. Absolutely. I was fortunate enough to have an understanding, some understanding of government contracting so that was very helpful. But quite frankly, what I learned even though I was a very experienced government contractor. If you are a new entrant into the government space there is still a lot you have to do. For instance, you have no access to ``vehicles,'' right? Because you do not have past performance, though I could run $100 million projects, it did not matter to the government when it comes to actually doing them because I did not have that past experience, past performance. One of the things though that honestly I have seen--I mentor a lot--in government contracting is that a lot of individuals cannot get started because the government is a very complex thing to navigate. I know CIOs, individuals who have been CIOs in industry, they tried and they said ``forget it''; right? Because of all the procurement rules. So one of the things that really worked for me and works for others is having programs, like the Veterans Institute of Procurement, Emerging Leaders, things like that that give significant, substantive information for free. Those programs are free but they give you every detail you need to really begin to understand and grow in the federal space. Chairman LALOTA. Thank you. I want to change gears for a second about self- certification and Ms. Ferrari, I want to direct the initial question to you. The Committee is concerned about self-certification of firms and the potential for fraud or misrepresentation. And I would like for you to take a first shot at this. But what are your views on self-certification of firms? Ms. FERRARI. Thank you, Chairman. I think that it needs to go away. There is rampant fraud across so many areas of contracting in general, but to self- certify, there are so many companies that, you know, will list their wife as the owner of the company and that person not being involved in the day-to-day business. It happens full stop so much. So we really think that that would be a very big step in helping small businesses to actually thrive in this space by having the program where you have to be certified by the SBA with a stringent certification process. That really is a critical move. Chairman LALOTA. Thank you. And if the Ranking Member will indulge me for 30 more seconds, Mr. Schroder, if you would not mind, the same question. Mr. SCHRODER. Sure. And thank you for the question. I would say that there are two reasons not to certify. Number one, you are not capable of certifying because you do not have the ownership structure and so you should be ineligible. The second reason, you are just lazy. You do not want to go through the process. And I would say either one of those reasons are enough to require the certification process. We have encountered it multiple times and, you know, there is nothing worse than losing to someone that is misrepresenting themselves. Chairman LALOTA. Thank you. I appreciate your feedback. My time is well expired. I recognize Ranking Member Scholten from Michigan for 5 minutes. Ms. SCHOLTEN. Thank you so much, Mr. Chair. And thanks again to our witnesses. As you all know, last week was National Small Business Week, and I had the opportunity to be out and about in the district visiting a number of small businesses, one of them was R&R Mechanical, a Latino-owned HVAC business. R&R Mechanical started like so many other small businesses that grow into great businesses in Grand Rapids in a garage. It has now grown to a thriving 42 employee operation and is continuing to grow. As they grow, they have expressed interest in breaking into the federal contract's space. As the Ranking Member of this Subcommittee, it is a top priority of mine to ensure that minority-owned businesses like R&R Mechanical are able to enter and navigate the federal contracting marketplace. As such, I am committed to protecting and strengthening the 8(a) program. Ms. Lopez, you participate in the 8(a) program, as well as the women-owned small business program. Have these contracting programs helped your small business compete in the federal procurement space? Ms. LOPEZ. They have. One of the things that is really good about the 8(a) program is because, again, even though you do not have significant past performance, if you can convince the customers that you can do the work you can get sole source awards. So my first multimillion dollar sole source award was critical in providing me capital that helped me to compete. So, I mean, I am proud to say most of my work is not 8(a), it is not direct, it is competed, but yes, it was very valuable. Women-owned small business, honestly, I do have some women- owned small business work, but I would really like to see more vehicles and more efforts for sole sources for women-owned small businesses. Ms. SCHOLTEN. Thank you. And in your view, what would you say if there is anything missing or additional elements that could help the program, what would those be? Ms. LOPEZ. For 8(a), I think you really need to raise the ceiling on 8(a) programs and you need to extend the number of years. Unfortunately, because there is, it takes a while to really get to know the federal sector begin to ramp up. And a program, even like myself, you know, I have done pretty well in it but I am really just at a place where I could do exceptionally well. With women-owned small business, again, I think a GWAC would be amazing. That is missing for us, a vehicle that is dedicated to women-owned small business for women-owned small businesses. Ms. SCHOLTEN. Thank you. Another issue that I consistently hear about as an impediment to small business contracting is category management which is a procurement initiative, as we know, led by the Office of Management and Budget. Category management poses a barrier for many small businesses in making federal contracts too big for a small business to handle. Ms. Ferrari, if you could talk a little bit more about how consolidation and bundling of contracts through category management has impacted your business, and talk just a little bit more in detail about what you found in terms of the lack of women-owned business small set-asides in your industry. Ms. FERRARI. Well, thank you for the opportunity to talk about it. A vehicle like that, category management, I am frightened to death of this coming. And when you talk about the manufacturing base shrinking, that might send me running the other direction when I have spent the last 2-1/2 years of my life advocating for small business and federal contracting. I do not believe that it works in the apparel industry because there are so many different things that our warfighters need for their safety and their security and their comfort, and I just do not think it works, number one, from a high level. From not so high a level in so many of the agencies under these contract vehicles, they are not meeting the set-asides. They have lists and lists of set-asides that they are supposed to meet, and I do not believe that there is any governance to make sure that they are meeting those. So it really knocks the small business out of the loop. We do not get the opportunity to compete because it is owned by this large vehicle. And I can tell you it will absolutely decimate small business when it comes to apparel. Ms. SCHOLTEN. Thank you so much. And just at time. Perfect timing. Chairman LALOTA. The best Ranking Member. I now recognize Mr. Bean from Florida, the home to so many former New Yorkers, for 5 minutes. Mr. BEAN. Mr. Chairman, thank you very much. Good afternoon, Small Business Committee. Chairman, you do look very stately in the Chairman's chair. So well done. Congratulations. And Ranking Member Scholten, you, too. Of all the Ranking Members in this Committee you are one of them. I want to welcome our panelists to Washington, D.C. I read your bios. They are very impressive. What you have built is amazing and that is why you are here. You will be able to add you testified before Congress, which is impressive, too. We have heard today the declining number of small businesses that are doing business with the federal government. It is getting harder to do it, especially when government is competing and government launches its own business to handle that whatever it needs, procures it itself. What if there was a law that said before the federal government could enter this marketplace it should bid out to see if there is some small business or an entrepreneur that could do that service or procure that goods cheaper or more effectively? Would that be a good idea or a great idea? Mr. Schroder? Mr. SCHRODER. Congressman, thank you for that question. I would offer the VA as an example. So there is a law, a decision that was handed down a few years ago that required the VA Rule of Twos. So the VA is required to seek out service- disabled, veteran-owned small business. I would say its effect is mixed. And so, I would look to that to a guide. In theory, yes, absolutely agree it would not be good; it would be great. It would be awesome. Mr. BEAN. It would be great. Very well said. Thank you so much. Ms. Ferrari, what say you? Would that be a good idea or a great idea? Ms. FERRARI. A great idea. Mr. BEAN. That is the correct answer. Thank you so much. You nailed it. Ms. LOPEZ. Well, I do not have any other choice. So you are saying actually putting it out to socioeconomics first? Mr. BEAN. That is exactly right, Ms. Lopez. Ms. LOPEZ. Well, I think that is absolutely fantastic. I love it. Mr. BEAN. I will accept fantastic to the idea, too. It just so happens I have filed that bill. How about that to say to the federal government before we put our toe in that water, let's see what small business, see what Ms. Lopez's business can do. Let's see what Ms. Ferrari is up to. Maybe she could procure or provide that good or service cheaper, more effectively, and you are hiring people. All of you are hiring people. So I say that not only for you but I am plugging, shamelessly plugging my own bill for our Committee Members to jump onboard. There is lots of room to co-sponsor this bill. But seriously, we want to know, and you have already hit on a handful of things, the barriers, what barriers do we need removed? What pathways do we need to clear? I know the VA, Mr. Schroder, you have already had some experience and we want to make sure this bill does not run into the same trap that is currently out there. We really want them to focus on it because small business, the entrepreneurship of small business is the heartbeat of America. It is what makes America great. I throw that out there as a tossup question. Anybody want to jump in? Barriers to remove or pathways to clear to make it easier for small business to do business with the federal government? Ms. Ferrari, jump in. Ms. FERRARI. I am going to jump in for a second. I just want to say, you know, there are so many barriers to entry. We are talking about them here where we can have Rule of Two. So same thing in my industry. The Rule of Two is exceptional, and if it were being adhered to it would create the pathway that you are trying to create. Mr. BEAN. Now, everybody knows what the Rule of Two is but for those that might not know what it is, tell us about the Rule of Two. Ms. FERRARI. They have to go out, Procurement has to go out and find two--if they can find two companies that can manufacture, let's just say it is a physical training uniform. Two companies that can do it that are small business, it has to go to small business. So it cannot go to a large vehicle. It cannot even go to prison industries because there are two small companies who can do this. So that is critical, and I love your great idea. And if I could be here to vote for you I would. I believe when there are these large contract vehicles, we have had several through our industry come out and say the large contract vehicle company is saying this cannot be made in America. Can this be made in America. And by the year, here is the number you should call at DHS and tell them. And we have had four of these things in the last 2 months where we come back and say absolutely. And I will make a sample. It will be on your desk by Friday. In the fabric, with the yarns that are barrier amendment. It is doable. But the agencies just do not know. And I had an opportunity to attend an industry days at HHS 2 weeks ago for 2 weeks ago for PPE. You know, there is a law now that says--I am getting the light--there is a law that says you have to make---- Mr. BEAN. We both are getting the light but finish that one sentence and hopefully they will not know. Hopefully they will not know that we are over. Chairman LALOTA. Finish that objection. You have another 90 seconds. Ms. FERRARI. They have to make it in America so it has been passed. But we sat in front of a panel of all these people from the VA to HHS to DHS. They do not even know how to go about it. So I think there has to be something that says, something from the SBA, maybe it is a trade show where we all go and we say, hey, we exist. Here is what we do. Like, it is here and we just need to let people know we are here. Mr. BEAN. Thank you very much. Last thing. I was going to call this the Yellow Page bill. If it is offered it is in the Yellow Pages. But people under 30 do not know what the Yellow Pages are. Mr. Chairman, I yield back. Chairman LALOTA. Thank you. I now recognize Mr. McGarvey from Kentucky for 5 minutes. Mr. MCGARVEY. Thank you, Mr. Chairman. Thank you, everyone, for being here today. I really appreciate it, especially those of you who served. Thank you for your service to our country. We appreciate that as well. I am going to continue on some things that Mr. Bean was talking about, in fact, and you could tell he used to be an auctioneer before he came up here. He might still be available to birthdays and bar mitzvahs if you all want to. But he was talking about some good things and how we continue to get more small businesses involved in subcontracting. I think that is something we are all interested and something we all want to see. We also all serve on other Committees. I serve on the Veterans Committee. One of the things I am working on right now in the Veterans Committee is ways to find more training opportunities for companies so that we can get more veteran-owned businesses opportunities in the space. So Mr. Schroder, I will just start with you. You talked about the Rule of Twos already. We have heard the great idea from Mr. Bean. Give us a little bit more right now. What are some ways that we can create more contracting opportunities particularly for veteran-owned businesses and for service- disabled veterans and their businesses. Mr. SCHRODER. Congressman, thank you for the question and the opportunity. I would say I would focus less on training companies and I would focus more on training contracting officers because that is where the rubber meets the road. And there are two ways that goes about. Number one is how they put the procurement out, because they construct it. They can follow multiple paths. The second is that they hold the big businesses accountable to the small business goals in each contract. They are considered goals but if you make the contracting officers hold them accountable contractually, that is when you will see a difference there because there are two areas where small businesses play both as sub and as prime. And I would offer it is more of training and holding contracting officers accountable for that. And then there is a whole laundry list of things, you know, specific barriers. We mentioned best in class. I mentioned the Mentor-Protege program. There are several things, you know, mechanically and structurally that can be changed to help bring in businesses. That would be my suggestion as opposed to training the businesses. Mr. MCGARVEY. What is an example that comes to mind of ways to hold contracting officers accountable to you? Mr. SCHRODER. Number one, I would have them report their small business set-asides, and then I would force them to ensure that they are reporting accurately as to why different contracts did not come out. Congressman, there are so many ways that you can put a contract out. The myriad of ways is just astronomical and every consultant advisor that you go to, they all come back with the same answer. The federal government will do whatever the federal government wants to do. Not necessarily what they should be doing. And so there is all sorts of different ways you can get around the different small set-aside programs in order to contract. Mr. MCGARVEY. Thank you very much. And I will ask Ms. Lopez sort of the same thoughts on the same topics. Ms. LOPEZ. I have to say that I agree that contracting officers, they need a lot of training. But I honestly also agree with you in that small businesses also need training because one of the things that happened is they do not know how to navigate the market. My business partner and spouse here is a former contracting officer. I cannot tell you how many times that helps us when it comes to negotiating with the government or speaking to what our rights are. We truly understand them. The procurement laws and the acquisition regs are the heart of how we do business with the government. To help educate small businesses on that would be to give them a very powerful tool. Mr. MCGARVEY. Thank you very much. And just in the quick time we have left for both Ms. Ferrari and Ms. Lopez, describe some of the challenges that women-owned businesses face in this space, and how can we create more contracting opportunities for companies like yours? Ms. FERRARI. I would like to give a shout out to the DLA. I think they have done a really good job with awarding awards to small business. And we have been the recipient of four of them. So I really think that they are taking the general, you know, sentiment in the country to do that. But that is for small business. So I won four awards as a small business; not one single award as a women-owned small business. So like I said in my opening remarks, since 1996, when that was put in place, they have only met the set-aside twice, met their goals twice. So I would like to see more effort be put toward women-owned small business but not double counting it. So putting the award out as small business but then not being able to say, oh, since it is a woman we will check that box, too. So I think not only women-owned small business but service-disabled, women-owned small business, just hit those goals would help us tremendous. Mr. MCGARVEY. Mr. Chairman, I know I am past time. Would Ms. Lopez be able to answer that question quickly? Thank you. Ms. LOPEZ. What she said. I absolutely agree with her and I think also partnering with other agencies. Even outside of the government. I have to say organizations like WIPP really have helped me understand more about procurement. They help us navigate the government more, so partnering with those agencies which SBA does has been very helpful to me as well. Mr. MCGARVEY. Thank you, all. And I yield back, Mr. Chairman. Chairman LALOTA. Thank you. We are having a good productive dialogue so I want to open it up to a second round if the Members would like. Ms. Ferrari, especially, I was interested in your opening statement where you discussed making uniforms for our military. And I wanted to ask you about some of the sourcing that you have experienced over the last couple of years, especially post-COVID with supply chain issues. How has that sourcing been? You are making uniforms for our men and women in uniform who are fighting for our country for the flags that are behind us right now. Are you still able to source those materials from the United States? And can you describe any challenge you have had along the way? Ms. FERRARI. Yes. Thank you for the question. We have had no supply chain issues whatsoever because it is made domestically. So from every component that goes into it, it is made domestically for Barry Amendment compliance and it has been great. And I can go back and say like look what happened during PPE and this is the value of the small business. During COVID, and we needed PPE and companies were standing in line waiting to get Chinese masks that were being sold out of warehouses for cash, you know, it boggled my mind. Why would we even want to be buying these? And I can tell you every single aspect of our domestic supply chain kicked it into gear and started shipping masks to everybody that needed them. It is such a long story but we did it. T-shirt factors turned upside down to become hospital gown factories and, you know, woven dress uniform factories were making masks and boot covers and all of these things. So with the resiliency of Americans and the resilience of small business in this country, we answered the call. And what we need to continue to do is keep these companies in business so that we can answer this call. But from yarn to thread to every aspect of a uniform, we are able to get it when the government needs it. We just need the government to need it more and more consistently so we can keep our factories going. Chairman LALOTA. And it sounds like it is productive for you to source inside the United States and from our perspective we appreciate that as well. Ms. FERRARI. One thousand percent. Chairman LALOTA. That ends my questioning and I yield to Ms. Scholten for some questions as well. Ms. SCHOLTEN. Yeah, thank you so much. Thank you for your additional time. Ms. Lopez, you mentioned raising the sole source threshold level to the playing field. I would like to give you an opportunity to elaborate on how increased thresholds can help not only your business but other small businesses and any examples that you can give would be welcome. Ms. LOPEZ. Absolutely. Thank you. I will give you an example. When I first came into the federal space, there was a cybersecurity program. I knew it inside and out. Right? There was no one, honestly, who could do a better job than us just because of the expertise I had in that the work I had done in the agency. But that project was $7.5 million, which meant it cannot be sole sourced to me. As a matter of fact, it was sole sourced to someone else, you know, because it was on a GWAC, really. And honestly, they did not do the kind of job I would have done. The client was not as happy. I just think that raising the threshold also allows 8(a)s as we go along. As we increase in our ability do work, to do more work for a given agency. A lot of times quite frankly agencies will give you a $4.5 million this year, $4.5 million next year, right? or $4.5 million for 2 years. Because you have done a great job they want to do work with you. Why should we be limited in that threshold? Why could it not be at least 22, 4.5 million a year for 5 years, 22.5, or 25? It only makes sense. I think the government would get better value out of the 8(a) programs and the contracting officers would honestly have less work to do rather than more. Ms. SCHOLTEN. Thank you. That is very helpful. I also wondered if you could elaborate on what you learned through the VIP program and the SBA's Emerging Leaders program. Ms. LOPEZ. Wow. Both programs are absolutely phenomenal. VIP is, I have to say, probably the best program I have ever seen and it is free. I mean, everything about doing business with the government they teach you and they teach you in stages as you grow. There is a start. If you are a new entrant, you learn so many of the things that are barriers here. Right? You learn how to navigate those up front, whether it is financing or contracting, partnering, all those things. Then there is Grow; right? As you grow. And then there is Advanced. So, that program was very, very significant for me because even though I knew about the government space it gave me significantly more detail, especially on financing. Emerging Leaders was a 6-month program which accumulated in a growth plan. By the time you finished, you had gone in-depth in every single area of your business and I was able at that point to put together a really sterling growth plan with smart goals. I use it now all the time. I use it for all my strategic planning. So many of my fellow businesses, when they see it, they want to use it. But those programs really gave me a lot of great education and information which helped me to not only grow but it helped me mentor others. Ms. SCHOLTEN. That is wonderful. And in the last minute, if you have any thoughts on how we could better integrate these programs into the contracting process that would be hugely helpful. Ms. LOPEZ. Honestly, you could give more funding for both or either, especially VIP is free. I was actually just at a meeting where Senator Cardin helped get $2 million more so they could get 1,000 more individuals in the program. So anything you can do to get funding, those are programs that are already there. It is just a matter of getting it through. Creating a program, SBA had begun, I am not sure what happened to it but it had looked at doing what is called an 8(a) Academy. I think you can take 8(a) Academy, which was awesome and VIP, you know, create a baby and almost all socioeconomics should be able to learn and go through something like that so that new entrants can understand how to navigate the market and how to grow quickly. Ms. SCHOLTEN. Thank you so much. I yield back. Chairman LALOTA. Thank you. I now recognize Chairman Williams, small business owner from the great state of Texas for 5 minutes. Mr. WILLIAMS. Thank you, Mr. Chairman. Again, I want to thank all of you for being here. I appreciate you taking the time to do that. Recently, I spoke with a small business owner from Texas, my state, who lost out on a federal contract to a business that was a subsidiary of a large, multinational corporation. They did not win the contract and the decision was challenged because the winning business was part of an international company. The decision still was upheld. So Mr. Schroder, is this type of situation common where larger companies have effective control over small businesses that compete for some of these government set-asides and what can we do to fix this issue? Mr. SCHRODER. Mr. Chairman, thank you for the question. And I would say, yes, we absolutely do run into that and I would emphasize my number one recommendation for this Committee would be the elimination of the Mentor-Protege program which allows the large business to take 60 percent ownership and then, thereby, competing on the small business side with 60 percent ownership of that joint venture. And so that is an immediate way to address what is a large problem in the procurement system. It causes a lot of confusion, a lot of delays, and a lot of unfair practices with the large taking advantage of the small. Mr. WILLIAMS. Good. Inflation has been hurting small businesses across the country, and for contractors I fear that this issue has an even more larger impact. And if you are awarded a contract that you bid on months and suddenly all your suppliers' costs have increased by 10 percent--we have all got this story, don't we? Your margins are getting squeezed tighter and tighter and it makes it harder to stay in business. So Ms. Ferrari, how has your business been dealing with the inflation over the past year? Ms. FERRARI. Thank you for giving me the chance to talk about it. We got hit hard with our Air Force contract. It came to us just at the time inflation hit and we went from being in the black to being in the red. And rather than putting it out for recompete or saying to the DLA that we could not do it, you know, in fear that if we said that we would never get another program again, we just looked deeply into the whole supply chain and actually went back to the DLA and asked if we could change the packing and double the amount of pieces we put in the box. And after a couple of weeks they vetted it through their sources and when they said yes, it put us back into the black, slightly. But yes, very much, it has affected small business, and four contracts that I know of went back into recompetition because they just could not handle the disparity in price. Mr. WILLIAMS. I have talked to many small businesses who have said the federal contractor is so time consuming and expensive they stopped even trying to even hire people to try to get it done. So Mr. Schroder, what advice would you have for these small businesses? And how can we in Congress simplify the process to bring more small businesses into the system? Mr. SCHRODER. Mr. Chairman, I would say the best advice you can have is for them to start small and then encourage through the contracting officers with large primes, encourage those contracting goals to be requirements because then they will be out farming for the small businesses. And you can start out with just one single contract gets you up and off your feet and it is a process to get going. Little contract, by little contract, by little contract, gets to a bigger one. And so the advice is to start small. But if you are requiring small businesses set asides as opposed to just goals, you set requirements, that will force the system to be able to encourage small businesses to join. Mr. WILLIAMS. Good. I appreciate that. Mr. Chairman, I yield my time back. Chairman LALOTA. Thank you, Chairman. I now recognize Mr. Thanedar from Michigan for 5 minutes. Mr. THANEDAR. Thank you, Mr. Chairman. As a former business owner, I believe it is important that the federal government provides opportunities for small businesses to thrive and grow. As we all know, they contribute greatly to hiring and creating jobs and innovation, and certainly, paying taxes. To that end, we must ensure that contracting opportunities are available for small business owners in my district and those across our country. Despite more dollars being awarded to small businesses, what is concerning really is the overall participation of small firms in government contracting has declined over the years. Now, in Congress, we remain concerned, Ms. Lopez, especially, we remain concerned about category management. And the consolidation of requirements into a limited number of government-wide contracts. And what I am afraid of is consolidation means, what does this mean for small businesses? And is this going to keep the new small businesses out of running because the more established small businesses are going to be able to compete better in this situation. What does that do to the new small businesses coming in, especially the Black and Brown community, the small Black-owned businesses? Ms. LOPEZ. It does absolutely make it more difficult for new entrants. Quite frankly, for those of us who are already in the federal space, we have seen the shrinkage and so we have to find more resourceful ways to compete. But for new entrants, there are very, very limited opportunities, which is why with category management, again, the keys are BICs; right? Those best in class vehicles which are tier three. Even though they give you tier two socioeconomic credit, the BICs, the tier three, that is still the highest level. So why not take those BICs, the best in class vehicles, and as we put them in place, ensure that there is a way for entrants; right? New entrants to bring in their past experience rather than just their government past performance. You can create a vehicle that allows them to participate. So I would like to see more of that in addition to thinks being so stringent. The Mentor-Protege program, honestly, and Joint Ventures, has worked well for me and I think I have utilized it correctly, but some people absolutely have been taken advantage of. One of the trends we are seeing is that you have to be very large, almost a Joint Venture to participate in a lot of these BICs and to get awards. So I really see a large part of the answer as creating vehicles where everybody has the opportunity. Mr. THANEDAR. Thank you. Now, the Biden administration announced it would increase the share of federal contracts being awarded to small and disadvantaged businesses to 15 percent by 2025. And I certainly applaud this commitment by the administration. As small business owners in my district often find it difficult to pursue government contracting. Others on this panel have commented on that difficulty in obtaining capital and navigating the rules and regulations mandated by SBA. And that is a general concern that I hear in my district. But Ms. Lopez, do you think this will expand participation or will existing businesses receive more contracting opportunity at the expense of the new small business entrants? Ms. LOPEZ. I do not know if it at the expense of the new small business entrants. I can tell you that I have absolutely, positively seen more opportunity personally. So, I cannot honestly say that I know or can say definitively that it is at the expense of new entrants. Again, I think what limits a lot of new entrants are the vehicles and some of the procurement rules. Mr. THANEDAR. All right. Thank you, ma'am. I yield back. Chairman LALOTA. Thank you. I now recognize Mr. Molinaro, my good friend from New York for 5 minutes. Mr. MOLINARO. Thank you, Mr. Chairman. I do not know if there is some rule about having two Members from New York in the same place at the same time, but I do appreciate your leadership with the Subcommittee, and thank you all for joining us. As I know has been noted, we are confronting a real challenge among small businesses entering the procurement marketplace, if you will. As was noted, the Biden administration has made several reforms to contracting policy, including those benchmarks mentioned to diversify a small business supplier base. However, without question, our small businesses continue to face both challenges and obstacles. Finding those opportunities and preparing the bids and many times lose out to larger businesses. We have covered all of this. We know that 70 percent of new jobs are created by existing small businesses, and so the federal government doing more to break down those barriers and create opportunities for small business access to procurement is critically important. To narrow my questions I was going to start with Ms. Ferrari, if you would not mind. We know that some of the major challenges applicants face, there are significant challenges applicants face within the economically disadvantaged women- owned small business program. Could you speak I hope a little bit to those programs and how might they be simplified, streamlined, and maybe with some note in particular rural communities? Ms. FERRARI. Yes, thank you. Thank you for the question. You know, small business, that is where innovation comes from. It is the heartbeat of American and it is the heartbeat of manufacturing in America. The government needs our innovation. They need what we are bringing to the table. We need to hear the cry. We need uniforms that data moves through and how can we get there? We hear it and we develop it. And when we go to the government we just need access by adhering to the rules that are there. What could disadvantaged businesses and women-owned businesses get? We just need orders. And we can get those orders if those set asides are met and they are not. And you know, quite often I sit and I hear things about, well, you know, can we give you a grant? What do you need? We do not need your money; we just need the orders. And it is so convoluted. It is like the rules are there, the infrastructure is there, but there is just no oversight and they are not hitting these set-asides so it is going to other things that my counterparts here are talking about. So, what can you do? Just hit the set asides and just give us the orders based on those things. Again, I go back to 1996, they have hit that set aside twice, and never hit HUBZone. So, for me it is that. And going back to the innovation piece, like how can we bring innovation if we do and then we do not even get the contract. So, you know, it prohibits you from wanting to go out and give your best foot forward to help our warfighter in my case when it comes to apparel and say, oh, that is great and we love it and now it is going out to bid. And by the way, you are not getting the contract and they are not hitting the set- aside. So I do not want to be just complaining all the time. They are doing some great things and they are trying. It is just we have to work harder and try harder. Mr. MOLINARO. I appreciate that. It is very helpful. Thank you. Mr. Schroder, I am sure others have but I want to thank you for your 20 years of service to this country. We obviously celebrate that and all those who have served. I know an area of importance is welcoming veterans into the same space. As we discuss what further reforms can be made to the SBA's role in small business contracting and its future, what are some of those important reforms the Committee might take up to modernize the federal procurement process specifically for veterans? Mr. SCHRODER. Congressman, thank you for the question. I would say a couple things the SBA could do in order to help veterans specifically. Number one, the SDVO speed program, which they just took over, ensure that that program is run effectively. That is kind of a pejorative statement but make that thing run effectively. It is a tough process to get through but to date it has gone rather smoothly. But that is going to take constant focus because that is the number one step that veterans take to get into federal contracting is to get themselves certified. So that is step one. Step two is SBA has got to be constantly educating across the federal government the SDVO speed requirements, as well as the certification process. There is a lot of, based on the NDAA that went into effect with self-certification, there is still a lot of loopholes and there is a lot of ambiguity and a lot of misunderstanding. When it comes to veterans, specifically, Congressman, I would say those are the two biggest things they could do to drive home the requirement and drive home the certification process and get rid of the self-certification. Mr. MOLINARO. Thank you, sir. I yield back. Thanks, Mr. Chairman. Chairman LALOTA. Thank you. And as we close I would like to thank all of our witnesses for being here today, for sharing your insights with us. It helps us as a Committee gain the right amount of information as we craft and vote on legislation. I appreciate it. To my Ranking Member for a productive and smooth meeting that helps inform us as well. And without objection, Members have 5 legislative days to submit additional materials and written questions for the witnesses to the Chair which we forwarded to the witnesses, and I ask the witnesses to please respond promptly. If there is no further business, without objection, the Committee is adjourned. [Whereupon, at 3:15 p.m., the subcommittee was adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]