Rep. Meng holds first hearing on Small Business Subcommittee

U.S. Rep. Grace Meng (D-Queens) today took part in her first hearing as the top Democrat on the Small Business Subcommittee on Contracting and Workforce. The hearing, entitled “Consistently Inconsistent: Challenges for Service-Disabled Veteran-Owned Small Businesses” was held with the Veterans’ Affairs Subcommittee on Oversight and Investigations. It examined the challenges facing small businesses owned and controlled by service-disabled veterans seeking federal contracts using both the Small Business Administrations and Department of Veterans Affairs contracting programs. The following are Meng’s opening remarks:

 

“Over the last century, brave Americans have fought in Afghanistan, Iraq, Vietnam, Korea, and Europe for not only our freedoms, but for the freedoms of others. Over 635,000 men and women have died in these and many other wars. The surviving 22 million veterans include 5.5 million who were disabled while in the service. These courageous individuals deserve not only our enduring gratitude, but also the opportunity to build a new life after their many years of military service.

 

One of the most important tools we have to accomplish this mission is the Service-Disabled, Veteran-Owned Small Business procurement program. In 2011, this initiative awarded more than 100,000 contracts worth over $11 billion to SDV small firms.

However, these awards accounted for only about 2.6 percent of all federal contracts – well below the 3 percent statutory goal. Efforts have been made to increase this level, but challenges remain.

 

Among the most pressing issues are the on-going problems in verifying firms participating in this SDV program. Previously, GAO has found that non-SDV firms have won SDV contracts. This included front companies posing as veterans, pass-throughs, and outright fraud. As a result, millions of dollars were diverted away from legitimate service-disabled veteran-owned small businesses.

 

To prevent these abuses, GAO recommended that a verification system be implemented. But, given the overlapping roles of both the Small Business Administration and the Veterans Administration in administering this program, this reality has been slow to materialize. Regardless, we have to continue to make every effort to ensure that non-SDV firms cannot continue to steal these opportunities from service-disabled veteran firms.

Given the recent sequester, it is now more important than ever to correct these flaws. This across-the-board cut will cause SDVs to lose out on more than 7,500 contracts worth more than $1 billion, making it critical that only eligible firms compete for the remaining opportunities.

 

Addressing these failings and ensuring SDV procurement programs work as intended is long past due. With an unemployment rate of more than 11 percent for veterans of the wars in Iraq and Afghanistan, it is essential that all veterans’ resources are properly managed and overseen.

 

Given that entrepreneurship remains a viable career path for many of these men and women, programs like the one this hearing is on today are critical to reduce this high unemployment rate. I think I can speak for all of the Subcommittee members here today in saying that we will do whatever it takes to help service-disabled veterans overcome the challenges they face in today’s economy.

 

As a result, I am glad that, in addition to the federal agencies here with us today, that we are hearing directly from the veterans community. With that, I want to thank witnesses on both panels for appearing before our Subcommittee this morning. Thank you and I yield back.”

 

Witnesses for the hearing included:

Panel 1

 

Mr. Joseph Wynn, Special Advisor, VET-Force

Mr. Davy Leghorn, Assistant Director, National Economic Division, American Legion

Mr. Marc Goldschmitt, PMP, CEO, Goldschmitt and Associates, LLC

Mr. Jonathan T. Williams, Partner, PilieroMazza, PLLC

 

Panel 2

 

Mr. William Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office

Mr. A. John Shoraka, Associate Administrator, Office of Government Contracting and Business Development, U.S. Small Business Administration

Mr. Tom Leney, Executive Director, Veterans and Small Business Programs, U.S. Department of Veterans Affairs