trying to pull them back a little bit lastly i just want to touch on osha osha has in the past been somewhat collaborative in how they work with employers to ensure job site safety but they have very publicly advertised a much different approach which is really enforcement driven they're focusing on finding work site violations and issuing substantial fines instead of working collaboratively with us as employers to promote the overall safety of our workplaces this is pretty clear in the construction industry specifically this new approach is just another costly burden that we as a business have to deal with and it really creates a level of financial uncertainty for us that really requires us to hold back in terms of any sort of expansion the other issue is right now when osha finds a violation on a work site only the employer is fined for that violation i would encourage osha to look for collaborative ways to work with employers and employees who do have a level of responsibility in their own safety and the safety of those who they work with to come up with programs that will help to encourage that level of safety creating those types of programs instead of seeking to financially cripple businesses to coerce safety really i believe would result in safer workplaces overall so i would encourage congress again to look at ways to help osha to return to their collaborative and cooperative spirit of working with employers instead of the punitive approach that they are currently taking again i want to thank you for the opportunity to share some of these issues i do just want to point out vice chairwoman berkel you're my congressional representative and i'm thrilled that you are and i remember in your campaign you ran on the statement that government does not create jobs business does and it really is paramount that government realize that they are there to create the type of environment that we as businesses need to grow and prosper and contribute to the economy and i can't thank you enough for allowing us to bring some of these things to light in hopes that we can resolve them and work together to help to restore our economy so thank you very much for the opportunity to be here today thank you very much for your comments mr pollock good morning good morning and thank you for inviting me i'm the president of optimation technology which is a privately held esop owned company and we are in the business of designing and building factories so that puts us in the manufacturing sector during the period from two thousand to late two thousand and eight we grew the company from fifty employees to three hundred and fifty employees what we have discovered is that even when manufacturing isn't as strong as it could be if you have good automation and good tools that you can keep competitive manufacturing going in the united states and if you look at the statistic of course you know that monroe county is a great exporter of all kinds of manufactured goods around the world we can manufacture at optimation things which are sold competitively all over china and taiwan and japan and korea and singapore and other places so it is a good place to be here the difficulty as you've asked us to talk about is what is the government doing to hold us back that's what i like to talk about a bit today i can remember distinctly the morning of july 12th two thousand and ten and that was the morning i came into work early as usual ready to get going i opened my mail from the day before and there was a registered letter there from the department of labor the us department of labor and in the letter they had lots of big words and they talk about administration and enforcement and title one and how that they were established there to make sure that compliance was held now it's not only the case that there's plenty of compliance issues going on at the federal level there's lots of audits going on at the federal level this letter was announcing an audit of the optimation technology medical health care plan the secretary shall have the power in order to determine which person if any person has violated or is about to violate any provision of the title of a regulation now when i read that basically what it said was that they were there coming to audit our health care plan and that we had seven days to produce twenty eight documents and answer four pages of questions and of course we buy the health care plan from mvp or excellus we don't create the health care plan but now we have to take all the books read through become experts of the health care plan and we have seven days to respond to this or we're going to be subpoenaed in violation we asked for an extension we were told that three days was the maximum extension you could have now at that point in time when i got that letter i will be honest with you that was the first time i actually seriously considered throwing in the towel and i sent an email to my vice president saying it's really not worth it we should just give it up this letter was the seventh audit we have received from a governmental agency in two thousand and ten and we're only in july we were in the middle of an irs audit that had begun in may and when the irs auditor arrived i said to him first thing we gave him forty thousand pages of transaction files so he could peruse through and start looking for things how long are you going to be here he said six months and then began we gave him an office we gave him a coffee we moved him in began the ordeal every day i go down and he would ask questions and we produce more documents i will say at the end of the irs audit whilst partway through i thought we were almost wrapping up and he said no we've talked this over we'd like to audit another tax year they did stay for five and a half months at which point in time we got a letter from them which said that there were no findings and that everything was fine and in truth we got through the department of labor audit as well and all the other audits we had no fines and no punitive actions and in truth these audits were put there really in compliance issues they may have been looking to find money as becky has implied but they didn't find anything from us we are very good at responding to audits we are very good at staying in compliance we're very good at creating jobs and creating factories as well but when our energy is sucked off to do things which are counterproductive to the business essentially audits are just there to poke around and see what you've done wrong and there's a mindset that's put into these auditors as they're trained that businesses are essentially criminals they must be doing something wrong they must be abusing their employees otherwise how could they be so successful and i'll tell you that the reason we are successful is because our employees have my back all day every day and they do double and triple and quadruple what anybody would ever even consider reasonable in order to maintain the company but we have to deal with the department of labor and these are at the state level of course as well as the federal level with the irs the risks of health care with 401k audits with esop audits with the census bureau sending endless forms to be filled out under penalty if you don't with osha and other regulations sarbanes actually has lowered down to very very small businesses we hired two accounting firms one to provide counsel so that we can make sure we're in compliance when the audit firm comes in and then we have to have the two firms duke it out is what really says in the regulation so it isn't a simple business running a small business anymore i estimate that even on that irs audit myself last year i spent two hundred hours of my own time if that time had been freed up to do marketing and sales and work with clients we could have created six eight ten additional jobs instead of just dodging government bullets so i think the first piece that has to come down you have to look at every regulation and say is this reasonable is it practical but then above and beyond that how many others have been hired how large has the government bureaucracy been grown in terms of irs and osha and other people in order to force compliance and how much of that money is being spent as counterproductive to growing the economy because not only are those people sucking off of tax dollars in order to get their paychecks they are also sucking off of our backs and taking us away from the opportunity to grow our own companies and do other things i appreciate your listening to us i don't have any great expectations but we're going to survive one way or the other we don't ask for handouts we're not asking for support above and beyond let's be a little practical about how we go about this thank you very much and thank you to all three of our witnesses this morning for your very compelling comments we have had a number of these hearings down in washington dc and i have been so and i know my colleague mr kelly as well we've been so profoundly affected when you listen to a group of witnesses who have run small businesses and the question was asked to all of them if you knew now what you if you knew then what you know now regarding regulations and all of the impediments to job creation would you have gone into business and would you have done what you've done and each one of the members of that panel said no we would not and so we have reached a point in this country and when i listened to your testimony mr pollock what you went through with all of your audits we begin to wonder what's happened to the united states of america and our free enterprise system and our capitalist system where we have an understanding that the government can create jobs it is the private sector excuse me it's the private sector that is going to get this economy back on track it's the private sector that does the job hirings and expands businesses and buys more equipment and improves their technology so i want to tell you that this subcommittee and our entire oversight government reform committee is committed to doing that to recognizing and understanding the impediments that stand in the way of businesses and their success and we will do everything in our power to help small businesses do what they do best and that is to create and grow a business to work hard and be successful because that's the american way and that's the american dream for why many of you have gone into business so with that i would just like to talk a little bit about your testimony and then so i will i'd like to just start with the same question to all of you whether or not you would be in this business if you knew now what you if you knew then what you know now you can all answer and you can start sure the answer is yes i would and really the rewarding part is the employees in the company team i mean everybody needs jobs and if i can be a catalyst to help that happen then i would thank you well i am not the company owner actually but i'll speak for him and i don't think that he would not be an owner of a business simply because of the ability that being a business owner allows you to contribute to your overall community through job creation and things like that i think we as a company are very proud of what we do we're just looking for some assistance in making it a little easier to do what we do i think many people involved in small business are survivors and very creative and they're entrepreneurial and that's why they're doing what they're doing so certainly no matter the odds i think most would attempt to be successful as the odds are stacked against them or those that are actually are successful become fewer and fewer and certainly the migration of manufacturing jobs overseas in this country is appalling and certainly manufacturing can be profitable and it can grow in this country but we have to have some fortitude and we have to have some policies that help support that because manufacturing jobs are really generate on the order of seven other jobs once they're here they're highpaying optimex has high paying jobs these are career jobs you can have cars put your kids to college those types of things and they're not all gone they are here and they're actually growing but we have to support that and it's not we are not the adversary and the adversary is the global market space and we were competing against countries with policies that make it very easy to manufacture and i certainly would be i can speak for myself and my partner we would absolutely do what we're doing with optimex in spite of whatever the rules were how ridiculous they were but we created benefits to our growth and we may not be successful but that's just the nature of an entrepreneur not because we're being asked to do it thank you i just do want to comment mr pollock if this gives you any peace of mind the continual resolution that we voted on last week did stop the irs from hiring ten thousand additional employees so we were able to defer those positions thank you with that i'll yield my colleague mr kelly thank you chairwoman mr medina i think it's important because the general public doesn't understand what we're doing that's what i've done for a living if somebody asked me two years ago would you be in congress i'd say absolutely not i'm too busy raising my family and running my business so i have a little bit of an idea what it's like to deal with osha and everybody else that comes into our business that has absolutely no investment but is a partner that we really don't need to have on our back this itar because i've talked to other people in the same type of businesses kind of walk us through what itar is and what you have to do in order to compete and why it makes it so difficult for you firm in a foreign land beyond list if we are not on the list it's fine but most countries are on the list so israel i thought they're on the list when you define explain what the list is the list is now puts you to another list of questions that you now have to go and process this is for we're only at the manufactures since we quote tanks so we went about twenty five minimum to quote we now have to decide if we want to quote something so anyway there's a process so now you have to decide if you want to do the work on seventy five of inquiries that you know your not going to win so if this is real now i have to look at go through the list and ask questions on what is the use of this content so we have to go to our customer and in the technology space a lot of times they don't want to tell you because it's repetitive information they have to say what are you using this for what's the end product who's your customers they're wanting to know the customer who's your customer and what country are they in and what are they putting it in that's kind of ridiculous the idea is that if you would because most people don't understand this the idea is at the end of the assembly this product could possibly be used by a terrorist country or be used in a military special right so you're responsible for every little piece that goes out somewhere into the world as to finding out where its actual end use is going to be is that a correct example that's correct okay an example of that could be that it goes into a laser welding machine that is made in france only to be sold to china and use laser welding equipment to make weapons so that's if you just draw the dots everything goes everywhere so it's like well ultimately you can make weapons with a lot of things you need rubber bands to hold the paper just where do you stop and so you go through that prep you ask those questions you go back and forth to intimidate your customer and make them feel like they're having to divulge information they don't want to give you and then you book the job if you think it's oh then you can't actually get the license for it until you get the order and then once you get the order you then go on and ask for permission to sell if they're on that list and they can say no and it takes four weeks so meanwhile you've gone through the whole dance of going back and forth you've done the bid you somehow miraculous got an order they have to wait to see if you can move on the order you don't have to wait till you can move on the order and then they can say no so meanwhile your customer has gone eight weeks through a cycle and have to start over again because the us government said that this manufacturer could not sell this to you and how they make the decisions about what you can sell and what you can't i really have no idea and it's an absolute crapshoot we have decided we do almost twenty million worth of business a year we do almost zero overseas and we could sell overseas we get inquiries all the time and we've said no because we don't want to have to deal with the government or the uncertainty of the government it takes way too much extra work on our end and so it would probably five million worth of business a year that we're just turning our back on because of it what agency do you work with this who is responsible for the itar who does it go through it's the department of commerce or the oh there's a lot of them i know it's hard yeah i'm sorry i'll tell you what i was really fresh on this a year and a half two years ago when we decided not to do this because we're not doing it it's out of my mind and i'm into growth in the domestic market space and i think the bottom line of this whole thing is you're in a business that you have an opportunity to sell a certain product or pieces for a product that's going to be assembled you now have because of this overreach have decided to not even bid that business it's not worth the aggravation i would assume that in like everything else in business time is of the essence the process you have to go through would be a lot different than maybe a foreign competitor would have to go through and plus waiting for the licensing waiting for the okay it's just better for you and see it's the old story don't worry about the mule just load the wagon i think at this time they're most happy to walk away excuse me but i appreciate your testimony and i gotta tell you the american public really has absolutely no idea what you're going through on this not only what you're going through with itar but the other regulations i think that's the one thing that we're finding out on a daily basis that we have to find some way of amplifying this problem so that people understand this isn't just you coming here and complaining because you can't compete you're coming here and talking about the situation that makes it impossible for you to compete and unfortunately it's your own country so i appreciate you if i could add one more thing there's another part to that restriction as to employment we had one hundred and thirty people working at optimex and one was a parttime consultant canadian because that person did not have a green card and was not a us citizen we had to put in lock cabinets and create a whole infrastructure of security for this dangerous canadian consultant that we had working otherwise we're in violation the canadian quit because she didn't feel it was appropriate that we go through all that expense in order to keep her employed and now most companies in technology manufacturing companies will not hire anyone who does not have a green card or is a us citizen there are a lot of very smart people who don't have green cards or not us citizens that could really help generate wealth in this country that we can't hire because we would have to put these infrastructures in and it's most technology manufacturers certainly in optics and many machine shops and other places do some level of defense work and if you do some level of defense work you have this other barrier now that's in place so there's a lot of cost around this i would understand the reason for it there is certainly there's reasons for it but the way it's structured is so ridiculous it's actually impeding us export yeah i have friends in meadville to do the same thing and they're going through the same process and the same problems but i think what really disturbs all of us is who is it that makes up these lists and what's the criteria for somebody being on the list or not being on the list and it would be like me selling a car and before i sell the car i'd have to ask that person is there any time in the future that you think anybody could possibly be getting in or out of this car that could maybe be a problem for the country and if i couldn't answer that i couldn't sell the car so really i get it and i got to tell you it is the scope of overreach and over involvement that's killing all of us so i appreciate it please don't give up don't give up on us we're not going to quit till get it fixed thank you thank you all very much i have one last question then i'm not sure if you have anything left i do want to ask ms spiking i yield go ahead i'll yield to you and i know right now because of the events in wisconsin and around the country there's a renewed interest in and often has become too polarizing between organized labor and the private sector and i think that that's done a tremendous disservice to both sides and i would certainly think that for what we're interested in i got to tell you i have friends on both sides of it i have friends that do both the pla's are something that a lot of people don't understand i mean the people understand davisbacon the fact i think bacon is a republican from new york and davis was a republican from pennsylvania so when people say come on these republicans don't like unions those are the two guys that started it and they're both republicans but as we go forward and i think we would all agree that bargaining is part of the practice but bankrupting that entity is not and if you can cause i know you're very concerned and now richard your testimony with the pla's explain a little bit what that does to you and your ability to bid on a job you can bid a job using davisbacon but with the pla's that's a little different that's more exclusive is it not that's correct and in fact if we do bid a job that is a federal job we're required by law to follow davisbacon rules which in essence means that we're paying union scale wages and benefits and the whole principle of course behind davisbacon was to level the playing field if you will from a wage standpoint so when we bid and perform work at the federal level we do pay davisbacon wages you don't need a pla to level the playing field from a wage standpoint because you already have davisbacon or if we're talking new york state we have new york state prevailing wage a pla literally as i said in my testimony tells me that i cannot use my own workers and quite frankly we have crews that are supervised by very experienced foreman who work with these people day in and day out they develop processes and procedures to make us the most effective and cost effective contractor that we can be and when we have to put up people who have absolutely no vested interest in the success of our business and in fact have a vested interest in the shutting down of our business to eliminate us as competition to their signatory contractors i mean it's kind of like asking me to swim through a pool of alligators and hope i don't get bit you know it's ridiculous and i will honestly tell you that if we see pla language in a bid we aren't going to take the time to even bid it can we bid it absolutely we can but it sets up a scenario that from a business standpoint is completely and utterly impractical for us so we close the specifications and we throw them in the garbage and unfortunately that takes away opportunities from our current employees and takes away our opportunity to grow our business using taxpayer funded projects to do it correct can i comment on that as well sure we like radiac are a nonunion contractor we have over two hundred journeymen we have a new york state certified apprenticeship program where we're bringing up twenty four young men and women into the trades we're one of nine out of a hundred and something apprenticeship programs that's nonunion in new york state and we're one of the others and our principle and practice based on the regulations is that we simply do not bid any governmental jobs whether they're local state or federal we find our business entirely elsewhere because the compliance issues are immense it's not that we couldn't do it it's just that it's not costeffective to stay in line and in truth every single governmental job that we've ever done someone has guaranteed that we were audited the time spent was pretty humongous and so we backed away from it so our position maybe is different than theirs but similar we just find other work and we do as well but quite frankly in this economy the private sector has not been building as much as they used to so in many cases we're forced to look to markets that we might otherwise avoid simply to stay in business and the other thing if you would just comment briefly because i've been through osha audits and again it comes down to the public's awareness of what these mean and i've always been a little bit disappointed i've been through some msha reports remedial action would be something in my mind if you find something wrong in my workplace i want to make sure it's safe for my guys one of the things that our guys are supposed to wear if a car's up in the air they're supposed to wear a hardhat and goggles and again i don't know that you can mandate or legislate common sense in the workplace i think you can set guidelines but at the end of the day i don't know how you get one of the people that works for you to actually look out for their own good so having said that the remedial process is the one that i think is lacking in all these audits and we used to have something called the voluntary protection plan which makes sense when you sit down and you talk about these possible problems and how i would fix them but i know with msha when they come in and they do an audit most of these things there's no costbenefit analysis it's just this is wrong this is wrong this is wrong fine fine fine and it doesn't i don't think it accomplishes the same type of effect that the insurance company coming in trying to help you to eliminate possible losses or dangerous situations in your business too because they're actually there to do something with you to fix it i get the feeling when i hear folks talk that the government comes in the idea isn't to fix it it's to fine you so let me know am i reading this wrong in my little corner of the world i knew it was right you're reading it exactly correctly in fact and i will tell you that we recently had an osha inspector show up on one of our job sites this is an osha inspector that we have seen on other job sites and you're absolutely correct as an employer safety is paramount to us we want to make sure that every one of our people goes home every night to their family nothing is more important to us we had an osha inspector who has been on a number of job sites and we are a very safe contractor we do not have a lot of issues but this osha inspector confided in us that the directive from above from washington dc is that these inspectors are to go onto job sites and find violations that can result in fines because my understanding is that it's because osha is sort of selffunding and they need to generate the revenue to support all these additional inspectors and things that they have decided will be their approach to safety as opposed to the programs like the vpp program and things like that so it's a complete reversal from quite frankly what osha used to be in terms of being a collaborative agency they are now simply looking for ways to generate revenue to me that's counterproductive thank you we had osha in and we did hear their testimony and we were able to ask them the questions and we were really struck by the fact that one of the people one of the members from osha was there and he had mentioned the fact that employers will comply with osha regulations in order to prevent a visit because they fear osha going onsite to visit their business and i said to him fear this is the united states of america we shouldn't be fearing government agencies we should be working with them as you said that to find to ensure safe workplaces for our employees no one cares more about the employees than the employers not osha but the employers so we were struck by the fact that it has changed from being a partnership where we're both trying to work together to ensure safety to this punitive trying to look for and find offenses but i do think to a certain degree it goes back to the mentality that seems to be pervasive in government now that employers are bad and they are looking to profit on the backs of their workers at any cost and i think until we change that mindset quite frankly partnerships and collaboration between government and business is going to be hard to accomplish well then i think a good way to end our first panel here is to say to you to all of you and to all of the businesses in upstate new york that we appreciate you we appreciate your sacrifice we appreciate your entrepreneurial spirit we know that you're the job creators and we hope you'll work with us to continue giving us the information we need so we can go back to washington and begin to create an environment where businesses can do well can be successful and not be penalized for all of their hard work and their efforts i want to thank of all three of you on behalf of mr kelly and myself thank you for being here this morning and sharing your testimony with us with that we'll conclude panel number one and we'll see our second panel this morning thank you very much thank you