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SUBCOMMITTEE HEARING ON FEDERAL

GOVERNMENT EFFORTS IN CONTRACTING

WITH WOMEN-OWNED BUSINESSES

SUBCOMMITTEE ON CONTRACTING AND 

TECHNOLOGY 

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF 

REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MARCH 21, 2007

Serial Number 110-9

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

HOUSE COMMITTEE ON SMALL BUSINESS

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman

JUANITA MILLENDER-McDONALD, 

California 

WILLIAM JEFFERSON, Louisiana 

HEATH SHULER, North Carolina 

CHARLIE GONZA ́ LEZ, Texas 

RICK LARSEN, Washington 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

HENRY CUELLAR, Texas 

DAN LIPINSKI, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

BRUCE BRALEY, Iowa 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

STEVE CHABOT, Ohio, Ranking Member 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

STEVE KING, Iowa 

JEFF FORTENBERRY, Nebraska 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KEVIN FITZPATRICK, Minority Staff Director 

SUBCOMMITTEE ON CONTRACTING AND TECHNOLOGY

BRUCE BRALEY, IOWA, Chairman

WILLIAM JEFFERSON, Louisiana 

HENRY CUELLAR, Texas 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

JOE SESTAK, Pennsylvania 

DAVID DAVIS, Tennessee, Ranking 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

MARY FALLIN, Oklahoma

(II) 

C O N T E N T S 

OPENING STATEMENTS 

Page

Braley, Hon. Bruce .................................................................................................. 1

Davis, Hon. David .................................................................................................... 3

Vela ́zquez, Hon. Nydia M. ....................................................................................... 23

WITNESSES 

PANEL I 

Carranza, Hon. Jovita, Deputy Administrator, Small Business Administration ........................................................................................................................ 4

Spampinato, Frank, Department of Energy .......................................................... 5

Warder, Larry, Department of Education ............................................................. 7

Luedtke, Thomas, National Aeronautics and Space Administration .................. 8

PANEL II 

Dorfman, Margot, CEO, U.S. Women’s Chamber of Commerce .......................... 27

Lomasney, Christina Ann, President & CEO, ISOTRON Corporation ............... 29

Smith, Karyl L., Iowa Valley Appraisal ................................................................. 31

Roberts, Sheryl, CEO, CCSI LP ............................................................................. 33

APPENDIX 

Prepared Statements: 

Braley, Hon. Bruce .................................................................................................. 41

Davis, Hon. David .................................................................................................... 43

Vela ́zquez, Hon. Nydia M. ....................................................................................... 44

Carranza, Hon. Jovita, Deputy Administrator, Small Business Administration ........................................................................................................................ 46

Spampinato, Frank, Department of Energy .......................................................... 48

Warder, Larry, Department of Education ............................................................. 53

Luedtke, Thomas, National Aeronautics and Space Administration .................. 57

Dorfman, Margot, CEO, U.S. Women’s Chamber of Commerce .......................... 60

Lomasney, Christina Ann,President & CEO, ISOTRON Corporation ................ 62

Smith, Karyl L., Iowa Valley Appraisal ................................................................. 67

Roberts, Sheryl, CEO, CCSI LP ............................................................................. 71

Statements for the Record: 

Women Impacting Public Policy ............................................................................. 75

Women Construction Owners & Executives, USA ................................................ 82

Rossi & Meagher LLP ............................................................................................. 86

(III) 

(1)

SUBCOMMITTEE HEARING ON FEDERAL 

GOVERNMENT EFFORTS IN CONTRACTING 

WITH WOMEN-OWNED BUSINESSES 

WEDNESDAY, MARCH 21, 2007

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON CONTRACTING & TECHNOLOGY

Washington, DC. 

The subcommittee met, pursuant to call, at 10:00 a.m., in Room 

2360 Rayburn House Office Building, Hon. Bruce Braley [Chairman of the Subcommittee] presiding. 

Present: Representatives Braley, Vela ́zquez, Jefferson, Clarke, 

Sestak and Davis. 

OPENING STATEMENT OF CHAIRMAN BRALEY 

Chairman BRALEY. I can this hearing to order. 

This is the very first hearing of the Subcommittee on Contracting 

and Technology ever. And we are pleased to have our guests with 

us today, and also the members who joined us. 

I would like to begin by reading an opening statement. 

Women-owned small businesses are an important part of the 

economy. They employ 7.1 million people and their annual payroll 

is almost $175 billion. These firms are deriving future growth and 

job creation in our communities. 

One of the best ways for these and other small businesses to 

grow is to have the Federal Government as a customer. The U.S. 

Government is the biggest buyer in the world with purchases of 

$340 billion per year. It buys everything from aircraft to road construction to computer services. Even with this large market at 

their disposal, businesses owned by women are still not getting 

their fair share of opportunities. 

In 2005 only 3.3 percent of Federal contracts went to firms 

owned by women, the Government’s highest achievement to date. 

In order to increase the likelihood that women-owned businesses 

would be able to participate in Government contracts, Congress set 

a 5 percent goal in 1994 as part of the Federal Acquisition Streamlining Act, also known as FASA. It quickly become apparent, however, that without a specific procurement mechanism for achieving 

that goal real progress would be hard to achieve for women-owned 

businesses. Between 1994 and 2000 the Federal Government never 

came close to meeting this 5 percent goal. 

To address this inequity the Chairman of our Committee, the 

Honorable Nydia Vela ́zquez introduced the Equity In Contracting 

2

for Women Act, which Congress passed into law on December 21, 

2000. This important Act requires the Small Business Administration to conduct a study to identify particular industries where 

small businesses owned and controlled by women were underrepresented in Federal procurement contracting. It also required the 

SBA to establish procedures to verify eligibility to participate in a 

procurement program. 

More than 6 years have passed and the SBA has not yet implemented the program. We are here today to ask why. 

We are also here to talk about the impact of this failure on 

women-owned businesses in this country. Since the establishment 

of the 5 percent target the number of women- owned businesses increased by nearly 20 percent, and today they continue to represent 

one of the fastest growing segments of small businesses. Unfortunately despite their numbers, growth and contributions to the economy, the 5 percent goal has yet to be accomplished. 

If the goal had been accomplished, women-owned businesses 

would have received an additional $5.2 billion in contracts in 2005 

alone. In the past 5 years women would have received more than 

$27 billion in additional Government contracting opportunities. 

If these companies had realized this additional revenue, they 

would have created at least 750,000 jobs in communities throughout the country, shoring local economies and improving people’s 

lives. 

Today’s hearing will provide us with a forum to examine the obstacles that have prevented women-owned businesses from achieving the 5 percent and how the Federal Government can increase 

its contracts with women-owned small businesses. 

We will also investigate whether there are any actions that this 

Committee and the Congress should take to reinforced the importance of including women-owned businesses in Government work. 

We have called upon four agencies to testify; the SBA, the Department of Energy, NASA and the Department of Education. 

These four agencies as buyers represented $36 billion in Government contracting in fiscal year 2005, almost 12 percent of the Federal marketplace. There are some common themes to their purchases from women-owned companies that we would like to evaluate, and we would like to hear about their use of these businesses 

in their respective agency’s contracts. 

The Subcommittee is concerned about the delays that have this 

program stuck in a peculiar regulatory limbo. More than a year ago 

in November of 2005, the U.S. District Court in the District of Columbia decided that the SBA had an unreasonably delayed the implementation of the program in violation of the Administrative Procedures Act. And yet here we are today with the women’s procurement program still not up and running. We need to work together 

to create these inequities and removed the obstacles to participation that currently exist. 

In order to better understand the challenges that women-owned 

businesses are facing today our second panel will consist of women 

who own businesses from around the country. They exemplify the 

type of companies that Federal agencies should be including in 

their contracts. 

3

I am particularly please to welcome Ms. Karyl Smith, owner of 

Iowa Valley Appraisal from my congressional district in Iowa. 

Women business owners are one of the fastest growing segments 

of the small business population and are expanding at twice the 

rate of other companies. Great strides have been made in the private sector to expand opportunities for women. It is time for the 

Federal Government to do its share. 

And with that I recognize my friend, the Ranking Member Mr. 

Davis for his opening statement. 

OPENING STATEMENT OF MR. DAVIS 

Mr. DAVIS. Thank you, Bruce. 

Good morning. I would like to thank Chairman Braley for holding this hearing. I am looking forward to working with you on this 

Subcommittee. And I appreciate the witnesses coming here to testify today in what promises to be an interesting hearing. 

I would especially like to thank the SBA Deputy Administrator 

Jovita Carranza, because I understand this is your first appearance 

before a congressional hearing since your confirmation. 

I will keep my opening statement brief so we will be able to get 

down to our panel. 

I think everyone here can appreciate the vital role that small 

businesses play in this country. They are what drive the economy. 

Since its inception the Small Business Administration also known 

as the SBA has been charged with, among other things, ensuring 

that small businesses receive their fair portion of the Government 

contracts and sales. The SBA has done a lot of good work towards 

that end. But there’s a lot more work that needs to be done. 

In the year 2000 Congress passed and the President signed into 

law legislation mandating that the SBA establish a program to increase federally procurement contracts with women-owned businesses specifically in industries in which women are historically 

underrepresented. I was not here when that legislation was passed, 

but 7 years later the program still has not been implemented. 

According to the SBA, prime contracting dollars going to womenowned businesses increased from $4.6 billion in fiscal year 2000 to 

$10.5 billion in fiscal year 2005. While progress has been made toward having a minimum of 5 percent of Federal prime contracting 

dollars go to women-owned businesses, that goal has not been 

achieved. Based on the data that I have seen, some departments 

do better than others. 

I understand the challenges faced by SBA in establishing the 

areas in which women-owned businesses are underrepresented. But 

what I would like to better understand is what causes such sufficient delays in the evaluation of the initial study, the contracting 

of the second study and the publication of the rules. 

It is my belief that when a mandate is given to an agency by 

Congress it is incumbent on that agency to take all necessary steps 

to expeditiously as possible implement the mandate. I look forward 

to hearing from the witnesses today in that regard. 

Thank you for being here. And thank you, Mr. Chairman. 

Chairman BRALEY. Thank you, Mr. Davis. 

Are there any other members who wish to make an opening 

statement? 

4

For the benefit of our witnesses, let me explain the 5 minute rule 

that applies at this hearing. Witnesses will be allowed 5 minutes 

to deliver their prepared. And the way the lights work you will 

have a yellow light that will come on when you have one minutes 

remaining, and when your time is up the red light will come in. 

Chairman BRALEY. I would like to begin with our first witnesses, 

Mr. Jovita Carranza. Ms. Carranza is the Deputy Administrator for 

the United States Business Administration. And she was confirmed 

in December of last year. 

Welcome. 

STATEMENT OF JOVITA CARRANZA, DEPUTY ADMINISTRATOR, 

SMALL BUSINESS ADMINISTRATION 

Ms. CARRANZA. Good morning, Chairman Braley, Ranking Member Davis. Thank you for inviting me to testify today on behalf of 

the U.S. Small Business Administration regarding Federal Government efforts in contracting with women-owned businesses. 

Federal contracts can be a significant sourceof revenue for small 

businesses and women-owned small businesses. SBA is working to 

ensure that small businesses and women-owned small businesses 

have a seat at the table when competing for Federal contracts. 

In 1994, through the Federal Acquisition Streamlining Act Congress established a statutory goal of not less than 5 percent of the 

total value of all Federal Government prime contract and subcontract awards for each fiscal year going to women-owned small 

businesses. Statistics do show that there has been growth in the 

area of contracting to women-owned businesses. Federal prime contract dollars going to women- owned small businesses increased 

from $4.6 billion in fiscal year 2000, or 2.88 percent, to $10.5 billion, and that is to say 10.5 in fiscal year 2005, or 3.342 percent. Subcontracting dollars have increased from $3.6 billion in fiscal year 2000 to over $6 billion in fiscal year 2003 based on the latest 

validated data available. 

Although we have seen an increase in the number of contracting 

dollars going to women-owned small businesses, the Federal Government still has not reached the statutory goal. SBA’s Office of 

Government Contracting and Business Development, GCBD is 

working closely with Offices of Small Disadvantaged Business Utilization in the major Federal procuring agencies to promote the use 

of women-owned small businesses and encourage them to reach the 

5 percent goal. 

In addition to these efforts, SBA’s GCBD office collaborated with 

SBA’s National Women’s Business Council to develop a website for 

women business owners, and it’s known as the womenbiz.gov. This 

website contains in-depth information for women business owners 

that are interested in doing business with the Government. It also 

provides over 100 links to current procurement information. 

In December of 2000, Congress created the framework for a 

Women-Owned Small Business Federal Contracting Program. SBA 

has been, and remains committed to implementing the statutorilymandated set-aside for women-owned businesses, but doing so in a 

way that would be upheld by the courts as constitutionally valid. 

Consistent with the requirement in the legislation for SBA to determine the utilization of women-owned small businesses in the 

5

Federal marketplace, SBA itself conducted a study to establish the 

findings. Once completed, an independent panel of experts at the 

National Academy of Sciences reviewed the study to assess the sufficiency and validity of SBA’s methodology. Ultimately, the NAS 

panel concluded that the original SBA study was flawed. The NAS 

recommended a sound methodology for performing a study that 

would more effectively withstand legal scrutiny. 

While SBA was moving forward in its efforts to conduct a valid 

and constitutionally sound study, the U.S. Women’s Chamber of 

Commerce brought suit against SBA to expedite implementation of 

the Women’s Procurement Program. The U.S. District Court for the 

District of Columbia is currently monitoring SBA’s progress. 

On February 21, 2006, SBA awarded a contract to the Rand Corporation and it commenced work to study all industry groups to determine those industries in which women are underrepresented 

and substantially underrepresented in accordance with the methodology recommended by the NAS. Although there were some unavoidable delays, the disparity study is now in the final stages of 

clearance and should be published sometime in April. 

I speak on behalf of the Agency and on behalf of Administrator 

Preston when I say that SBA is focused on this issue and ensuring 

the implementation of the program. 

I want to thank you for the opportunity to testify today. I look 

forward to any questions that you may have. 

[The prepared statement of Ms. Carranza may be found in the 

Appendix on page 46.] 

Chairman BRALEY. Thank you. 

Our next witness is Dr. Frank Spampinato. Dr. Spampinato is 

the Chief Acquisition Officer for the Department of Energy. 

Welcome. 

STATEMENT OF DR. FRANK SPAMPINATO, CHIEF ACQUISITION 

OFFICER, DEPARTMENT OF ENERGY 

Dr. SPAMPINATO. Thank you. 

Good morning, Mr. Chairman and Members of the Committee. I 

am pleased to appear before you today to discuss the Department 

of Energy’s use of women- owned small businesses in DOE contracts. Let me begin by stating that DOE has established increasing contracting opportunities for women-owned small businesses as 

an objective in its FY ’07 Strategic Plan for Small Business. As 

such, we’ve established agency strategies, prime and subcontracting objectives, and education, training and outreach objectives 

for DOE’s Women-Owned Small Business Program. Before addressing these strategies, I would like to discuss DOE’s business procurement model, which will demonstrate the nature of DOE’s procurements and the level at which DOE’s small business prime and 

subcontracting goals are established. 

DOE’s business or procurement model includes two distinct types 

of contracts: Facilities Management Contracts and non-Facilities 

Management Contracts. The Facilities Management Contracts are 

the primary procurement vehicle utilities at DOE for the operations of its network of Government-owned contractor operated laboratories and other facilities. 

6

FMCs have historically represented from 85 to 90 percent of the 

Department’s procurement dollars. As directed by statute, DOE establishes its prime contracting goals annually. Small business goal 

for FY ’06 was established at 828.7 million or 4.3 percent of an estimated procurement base of 19.1 billion. And the women-owned 

small businesses goal, which is a portion of that, was established 

at 65.1 million. The Department exceeded its women-owned small 

businesses goal by achieving 160.1 million. 

DOE also experienced growth in its subcontracts to womenowned small business concerns. From the period FY 2000 through 

FY 2005, the latest fiscal year for which data is available, subcontracts to women-owned small businesses grew from 485 million 

to 668 million, a 35 percent increase. 

Women-owned small business concerns are a key focus in all of 

DOE’s efforts to improve contracting and subcontracting opportunities for small businesses. Forty-one percent of the proteges 

mentored by DOE prime contractors in its Mentor-Protege program 

are women-owned small business concerns. Women-owned small 

business concern serve on DOE’s Small Business Advisory Team; 

and DOE designates an annual Secretarial Award for offices and 

facilities that achieve outstanding performance in contracting and 

subcontracting to women-owned small businesses. 

In past years several facilities have won the Small Business Administration’s ‘‘Frances Perkins Vanguard Award’’ for outstanding 

achievement in contracting with women-owned small businesses. In 

addition to your Strategic Plan requirements, DOE has specific 

prime and subcontracting objectives for women-owned small businesses, such as: 

To include a prime contractor’s past performance in contracting 

with women-owned small businesses as an evaluation factor in solicitations and to incentivize Mentor Protege relations with womenowned small businesses. 

In addition, DOE holds monthly Advanced Monthly Acquisition 

Team meetings to review the Department’s major acquisitions for 

the purpose of maximizing the utilization of small businesses, including women-owned small businesses. 

In summary, let me assure that DOE recognizes the important 

role that women-owned small businesses play in our national and 

local economies and we will continue to support and promote opportunities for women-owned small businesses to assist them in becoming viable and dynamic entities. DOE will continue to advocate 

for a strong Federal program for women-owned small businesses in 

prime contracting, subcontracting, and inclusion in financial assistance opportunities. 

Thank you for the opportunity to appear before this Committee. 

That concludes my prepared remarks. I would be pleased to answer 

any questions you may have. 

Thank you. 

[The prepared statement of Dr. Spampinato may be found in the 

Appendix on page 48.] 

Chairman BRALEY. Thank you. 

Our next witness is Mr. Larry Warder. Mr. Warder is the Chief 

Financial Officer for the Department of Education. 

7

STATEMENT OF LARRY WARDER, CHIEF FINANCIAL OFFICER 

FOR THE DEPARTMENT OF EDUCATION 

Mr. WARDER. Thank you, Mr. Chairman and Members of the 

Committee. 

I would like to take the opportunity to discuss our efforts in attempting to increase our effort to contract with all women-owned 

small businesses. 

To put in perspective what the Department of Education is, is we 

are a very large grant making and loan making organization. We 

have a budget of nearly $100 billion, virtually all of which is spent 

on grants and aid to secondary education and loans to students. So 

58 percent of the dollars that we spent in fact go to secondary institutions in forms of grants or they go directly to loans to students 

or to support those loans. 

Another 36 percent is spent on elementary and secondary education. 

We have another 5 percent of grants that go for various purposes 

such as research and discrimination of research information to various organizations. 

Only less than 2 percent of the budget of the Department is actually spent on administering and managing these activities. And as 

part of that we contract, again we’re a fairly small contracting organizations with contracting of slightly over a billion dollars a year, 

unlike many of the other organizations. 

So while we are small, we are also small in people. We have 4200 

employees that manage this flow of one billion dollars. And we do 

that through a significant amount of outsourcing of our large systems to accomplish this activity. And those systems would include 

some such things as the grant making process; everything from discriminating the information about grants that will be awarded 

through the application, the awarding and then the distribution of 

funds of those grants. We also outsource our large loan servicing 

business which administers a $400 billion loan portfolio of student 

loans. And these require some very large multinational or at least 

national in many cases, multinational organizations most of which 

are publicly held. 

So what do we do to try and encourage small business? We have 

taken as many of those as we can and have segregated out the 

pieces of those contracts that we in fact could contract directly with 

smaller organizations. And have been successful in doing that and 

increasing our small business by more than double over the last 

three or four years. 

We also will take our large systems development efforts and segment those. For example, we typically use an IV&V contractor, 

which would be a small business contractor, in order to help accomplish these activities. 

So we have attempted to take our very large complex projects 

and find places where we in fact can contract directly with small 

businesses. 

Now, in the area of the small business we have had a huge increase in areas of network equipment and telecom and maintenance and other such services. 

In terms of contracting with women-owned small businesses, we 

also have made substantial improvement. We have not yet hit our 

8

5 percent goal, however we have made substantial progress. If you 

look at 2005, our volume of direct contracting was small and 

women businesses was slightly under 3 percent. We ratcheted that 

up to over 4 percent in 2006. We are running well ahead of last 

year’s pace in 2007. And my testimony says that we are running 

currently at 9 percent; that is a little deceptive. We will not hit 9 

percent this year. In fact, we will be fortunate to hit 5. Some of 

those very large contracts are yet to be let that typically go to these 

large national/multinationals. We will improve substantially over 

2006. We hope to meet our 5 percent target. We will get close to 

it, but we may not quite reach it this year. 

So we are committed. We are doing the best we can to identify 

the opportunity for women-owned small businesses. And we are 

confident that over the next year or two we are going to get to our 

5 percent. 

Thank you for this opportunity. And I will be happy to address 

any questions. 

[The prepared statement of Mr. Warder may be found in the Appendix on page 53.] 

Chairman BRALEY. Our next witness is Mr. Thomas Luedtke. Mr. 

Luedtke is the Assistant Administrator for Procurement at the National Aeronautic and Space Administration, also known as NASA. 

Welcome. 

STATEMENT OF THOMAS LUEDTKE, ASSISTANT ADMINISTRATOR FOR PROCUREMENT AT THE NATIONAL AERONAUTIC AND SPACE ADMINISTRATION 

Mr. LUEDTKE. Thank you, Mr. Chairman and Members of the 

Committee for the opportunity to testify concerning the participation of women- owned small businesses in NASA. 

Consistent with NASA policies supporting other small business 

programs, the Agency is committed to providing women-owned 

small businesses the maximum opportunity to participate in acquisitions at the prime contract level. Additionally, the participation 

of NASA prime contractors in providing subcontracting opportunities to women-owned small businesses is an essential part of the 

Agency’s commitment to increasing the participation of womenowned businesses in NASA contracts. 

It is important to note that NASA is focusing on participation of 

women-owned businesses in high technology areas. 

Pursuant to the Small Business Act, NASA negotiates the goals, 

as do the other agencies, with SBA in implementing our womenowned business program. The Office of Procurement and the Small 

Business Programs work together. 

In addition, at each of our ten field locations the Agency has designated small business specialists to provide a central point of contact women-owned and other small businesses in identifying specific contracting opportunities. 

Since the Executive Order in May 2000 the efforts of our field 

centers have resulted in an increase in women-owned business participation in NASA programs. In fiscal 2005 NASA expended approximately $263 million in direct awards to women-owned businesses and another 516 million to women-owned small businesses 

as subcontracts. Preliminary results for 2006 show that NASA exVerDate 0ct 09 2002 17:48 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33618.TXT LEANN
9

pended approximately 280 million in direct awards to womenowned small businesses and another 573 million in subcontract 

awards. 

As previously stated, NASA places particular emphasis on ensuring that women-owned and other small businesses have the opportunity to complete for the high technology opportunities that encompass a large pat of our Agency procurement action. In this regard, our Center Small Business Specialists work in cooperation 

with the contracting officers and technical people to seek and develop the information on technical competence of women-owned 

small businesses for research and development contracts, and ensure that this information is available to the acquisition community during acquisition planning. Let me give you a few specific examples. 

Recently at NASA’s Langley Research Center, Science Systems 

and Applications, a woman-owned small business, was awarded the 

Center’s Science, Technology & Research Support Services contract. 

A contract valued at $140 million over 5 years will provide support 

to Langley’s atmospheric analytical studies, operational data processing and archiving, instrumentation development, field studies 

and other activities. 

Hernandez Engineering, a woman-owned business, has been selected by NASA’s Marshall Space Flight Center to provide safety 

and mission assurance support, a contract valued at approximately 

$370 million over 5 years. 

Analytical Services, a woman-owned small business and SBA’s 

Region National Contractor of the Year provides engineering and 

technical support to NASA’s Dryden Flight Research Center with 

a contract valued at approximately $51 million over 5 years. 

Finally, a few of the women-owned small businesses that helped 

us in our return to flight efforts were Bay Systems of Oakland, 

California, AMTI of Rosslyn, Virginia and Hernandez Engineering 

of Houston. 

NASA believes that these examples represent the types of expertise that women-owned businesses can provide in support of the nation’s space program. NASA will continue to seek ways to provide 

opportunities for women-owned small businesses including the consideration of additional tools that may assist the Agency in meeting 

our women-owned small businesses goals. 

Again, thank you for the opportunity to appear before the Committee today. I would be pleased to respond to any questions you 

have. 

[The prepared statement of Mr. Luedtke may be found in the Appendix on page 57.] 

Chairman BRALEY. Members will have 5 minutes each for questioning of witnesses. And we may do more than one round of questions. 

Deputy Administrator Carranza, let me begin with you. Prior to 

your confirmation what experience did you have with either the 5 

percent contracting goal of FASA or the Equity in Contracting in 

Women Act. 

Ms. CARRANZA. Working for one of the world’s largest package 

distribution companies, and working closely with the corporate office in oversight of contracting for that company. I was responsible 

10

for several projects, construction projects. And one of my roles as 

a VP in that company was to ensure that I complied with the requirements of recognizing contracts to the under served. We didn’t 

call them under served at that point, but it was a particular program that the corporate office had to ensure that we had not only 

women businesses given job bids, contracting bids, as well as minorities of all ethnicities. So I was very familiar with the process. 

I was not familiar with the particular program, per se, but our responsibility for compliance gave me some insight on our responsibility to perform a due diligence to get equal opportunity to contractors. 

Chairman BRALEY. Did those responsibilities involve actually 

working to make sure that women-owned businesses were receiving 

a portion of the contracts that your company was involved in? 

Ms. CARRANZA. Yes. 

Chairman BRALEY. And can you give us some indication of the 

types of success you had in meeting those objectives? 

Ms. CARRANZA. Well, it was a company-wide perspective and 

goal. I had a small part of it, being part of the airline operation. 

I did have significant size projects. And if they gave me a particular list of contractors, I had to recognize women businesses and 

minority businesses and hold the prime contractors responsible for 

ensuring that they also respected the subcontracting. 

So from a perspective of having a plant engineering manager, I 

was responsible for a plant engineering manager and he was responsible for the compliance as well as I. 

So that was my experience. I could not give you a percent effective, if that is what you are asking. 

Chairman BRALEY. One of the requirements of the Equity in 

Contracting for Women Act of 2000 was for SBA to conduct a study 

to identify industries in which small businesses owned and controlled by women were underrepresented. Has SBA completed that 

study? 

Ms. CARRANZA. It has completed the study and we are in the 

stage of having the Rand Corporation going through its analysis. 

So if I can use the term, it is in play. We know that it is in the 

process stage, and we should realize it this year. And I am very 

much encourage that I will see it in my lifetime in this particular 

role to its fruition. 

We are very anxious for the Rand Corporation to bring the results to us. They are performing their due diligence, however the 

Administrator and I are not going to try to push the analyses to 

where we would jeopardize the quality of it as well it withstanding 

the constitutionality issue. 

Chairman BRALEY. Well, you may be encouraged that you may 

see it in your lifetime, but there are literally thousands of womenowned business who, like me, cannot comprehend why it takes 6 

years to complete a study of this nature. 

Is it your testimony today that the only barrier has been a dispute as to the methodology that is being used to complete that 

study? 

Ms. CARRANZA. Based on the information that I have received, 

Mr. Chairman, and the review of the chronology of the particular 

either studies, data analysis, the recommendations by several adVerDate 0ct 09 2002 17:48 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33618.TXT LEANN
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ministrative bodies in the body to ensure that whatever studies 

SBA performed were accurate and could withhold constitutional 

oversight or insight. At this point based on from 1994 through 2006 

it has gone through several reiterations. And they can be substantiated as it relates to who is involved during what period. 

Am I in agreement and support the delay factor and the gaps? 

I am going to tell you as part of my testimony there are some 

shortfalls in that whole process. But it is very encouraging to learn 

that—I did not mean to be lighthearted when I said ‘‘in my lifetime.‘‘ I am very much encouraged to learn that in this particular 

period this year, early part of this year we will be able to address 

this particular program in a viable manner with concrete data that, 

once again, would stand the scrutiny of a legislative body. 

Chairman BRALEY. Well, and that is where I am confused, too. 

Because one of the things that I did when I went to law school is 

I studied the Constitution. And it seemed to me that the directive 

of the Equity in Contracting for Women Act gave SBA the responsibility to identify industries in which small businesses owned and 

controlled by women are unrepresented. That is simply an identification of a problem. That has nothing to do with the awarding of 

contracts that would give rise to a potential concern about whether 

they were being awarded in a constitutionally permissible fashion. 

So I am at a loss as I sit here today to understand why the first 

component of that directive was held up because of concerns about 

constitutionality. 

Ms. CARRANZA. My understanding is, Chairman, that the first 

study performed by SBA had a discrepancy in the compilation of 

NEAC and what they call the Standard Industrial Codes, the identification of the industries. And so there were definite flaws identified in the first study. That is my understanding. 

The particulars of how many flaws and could they have been 

remedied at the time, I could not answer to that. But where there 

are concrete documented flaws in the study that would have hampered the progress of a particular program, I believe can be quantified. 

Chairman BRALEY. Was that first study ever officially completed? 

Ms. CARRANZA. It was completed 18 months after the 2000 law 

was executed. And, yes, it was completed within the SBA body, not 

by subject matter experts. 

Chairman BRALEY. Was that study ever published? 

Ms. CARRANZA. I could not answer about it being published. But 

I do know that it had been submitted for review by the OSDBU 

group, advisory group to look at the industries that were being represented, how the data was being compiled. And it went through 

several reiterations. Reviews I should say, not reiterations but reviews. And ultimately the OMB Office recommended that they 

would have an external study performed based on the findings of 

close to about a year’s worth of review. 

Chairman BRALEY. And when did OMB make that recommendation? 

Ms. CARRANZA. I do not know exactly what the date was. But I 

do know that the National Academy of Science in 2003 conducted 

the study. 

12

Chairman BRALEY. A study of the methodology or a study of the 

underlying objective? 

Ms. CARRANZA. They reviewed the data that was compiled by 

SBA and validated that there were flaws in the study that SBA 

performed. 

Chairman BRALEY. And did the National Academy of Science 

publish their results? 

Ms. CARRANZA. I could not tell you that, Chairman. I cannot answer that. 

Chairman BRALEY. Would you be willing to check into that and 

report back to the Committee? 

Ms. CARRANZA. Absolutely. Yes, absolutely. I am sorry. 

Chairman BRALEY. Do you know who made the ultimate determination that the initial study was not valid and would have to be 

redone? 

Ms. CARRANZA. I would have to get back to you on the particulars 

of the governing body or the group of personnel or who particularly 

pulled back that study. 

Chairman BRALEY. Well, was it your understanding from the language of the Equity in Contracting for Women Act of 2000 that the 

ultimate responsibility for completion of the study would have been 

at the feet of the Administrator of the Agency? 

Ms. CARRANZA. I could not attest to that, but I am familiar that 

the study had to be the responsibility of SBA, which would be the 

Administrator. So I agree. 

Chairman BRALEY. The second component of the requirements 

from the Equity in Contracting for Women Act required the Agency 

to establish procedures to verify eligibility to participate in the procurement program. Do you know whether that phase was ever completed? 

Ms. CARRANZA. I could not comment on that, Chairman, and I 

would have to get back to you on it. 

Chairman BRALEY. Are you aware of any procedures that have 

been proposed by the Small Business Administration to verify eligibility to participate in the procurement program? 

Ms. CARRANZA. Yes. Although I am not overly familiar with the 

regulations, but we do have the regulations addressed. Have been 

addressed, Chairman. 

Chairman BRALEY. And what does that mean? 

Ms. CARRANZA. To be exact, Chairman, the day before yesterday 

the regulations have been submitted or to the agencies for review. 

Chairman BRALEY. And was that done in some official capacity 

under your jurisdiction or who would have been responsible for releasing the regulation for interagency review? 

Ms. CARRANZA. Yes. It is through our contracting office as the administration office. 

Chairman BRALEY. Mr. Warder, I want to ask you a few questions. I come from a long line of teachers. My wife is a teacher, my 

mother has been teaching for 50 years, my grandmother was a 

teacher, my great grandmother was a teacher. And one of the 

things that concerns me when I look at the 2005 achievements of 

the Department of Education was that an agency that has jurisdiction over a profession that as literally built on the backs of women 

was doing such a poor job of meeting this 5 percent procurement 

13

requirement. And I understand that based on your 2006 statistics 

it appears that the Agency has made significant progress and it 

sounds like 2007 is also encouraging. But can you give me some 

sense of what the Department of Education’s commitment is to recognizing the long history of contributions by women to this profession and how that will be reflected in the awarding of contracts by 

the Department of Education to women-owned businesses? 

Mr. WARDER. Mr. Chairman, thank you for the opportunity. 

Obviously as you point out so well, women have been such an important part of the education process, and something that we support very highly. 

Our commitment to improving our performance in this contracting activity, and again we are relatively small contracting activity, is to attempt to identify those segments where in fact we can 

directly contract out those activities that we do. One of the difficulties is so much of our total dollar volume is spent on a few contractors operating our very large systems and processes that we 

outsource. Those by definition are typically publicly held companies. These publicly held companies will account for something like 

70 or 75 percent of the volume of contracting we do. 

So we work very hard to try and reach that 5 percent threshold. 

In fact, our objective is to exceed it. As I said, I do not think we 

will quite make it this year. We are going to get awfully close. And 

I would expect in the next year or two we will exceed the 5 percent. 

So we are absolutely committed to doing it. Our problem is how do 

we segment out the pieces of our very large contracts in a way that 

we can actually do them with small businesses in total, however 

they are owned. So that is our challenge. And that is how we are 

attacking it first; is how can we in fact take these pieces of very 

large work and be able to contract any of it with a small business 

and then identifying those women-owned businesses that we can 

contract with. 

Chairman BRALEY. And what efforts has the agency undertaken 

to try to reach out and broaden its audience to potential small businesses owned by women who may not be on the radar screen of 

some of the other information systems that give rise to knowledge 

about these opportunities? 

Mr. WARDER. We do research around, again, I will make it a 

broader research activity, it is around small businesses including 

the women-owned small businesses to identify those and what segments they are in to see if in fact we can contract with them. And 

then we look at our contracts and we try and get the request for 

quotes out to those specific organizations and get them into our 

normal flow of contracting activities. 

Chairman BRALEY. Mr. Luedtke, one of the questions that I have 

for you deals with what we have seen as concentration in terms of 

the vendors who are providing the services who quality as womenowned businesses in terms of the types of companies that are doing 

that and the geographic distribution of those companies. I think 

one of the things that concerns many people is that it appears that 

a lot of these contracts to many Federal agencies are awarded to 

businesses that are inside the beltway or close to the beltway. Can 

you talk to us a little bit about efforts made on the part of NASA 

to try to reach and expand some of the contract opportunities for 

14

women-owned businesses that aren’t located near your major facilities? 

Mr. LUEDTKE. Yes, Mr. Chairman, although I would make a distinction if I may in terms of those inside Washington or near 

Washington and those near our facilities since our facilities are located across the country. And, in fact, many of our contractors locate either originally or a large part of their business close to our 

facilities in order to better support us. 

We have in general attempted to reach out to the small business 

community including women-owned small businesses. We have also 

felt that it is critical because of the nature of our business where 

we have a couple of very large contracts, for instance, the Orion 

spacecraft, the Aries launch vehicle, the space shuttle operations, 

that a large portion of our work is basically driven to very large 

businesses, actually. And to work with them in subcontracting opportunities as well. I think it is important from our point of view 

that we not only reach out to small businesses that can do the entire effort, but also small businesses that can do a portion of effort. 

And we’ve had success in the past with other small businesses in 

bringing them in, then developing their capabilities as subcontractors and then going on to become very viable prime contractors for 

us. 

So we are working with various women-owned business organizations. We’re working also internally to ensure that our folks are 

aware of the kinds of skills and expertise that women-owned small 

businesses provide to make sure that they don’t just focus on those 

businesses that are local and that are more well-known because 

they have dealt with them in the past. 

Chairman BRALEY. According to the latest information that I had 

available, in 2005 only 2.1 percent of NASA contracts went to 

women-owned businesses. Can you explain why that is and what 

steps NASA is taking affirmatively to raise that number? 

Mr. LUEDTKE. Yes, sir. One of the major reasons is we have a 

few very large contracts in my agency. We have contracts that are 

multibillion dollars in nature that make up a substantial portion 

of our portfolio. So part of the problem we have or the challenge 

we have with any small business goal is that a large portion of our 

dollars are locked up in a very few contracts for the major systems 

that we buy and operate. 

That said, we are again reaching out trying to help develop. We 

have a mentor protege program as well which is focused very heavily on small businesses and small disadvantaged businesses and 

women-owned small businesses. We are expanding that. In fact, we 

are retooling it to make it more effective. We are working very diligently to identify women-owned businesses that would be able to 

provide the kinds of services and goods that we use. 

We are also working, as I said, with our prime contractors. Because we have a few of these very large contracts, a large part of 

our effort is necessarily through those companies. In fact, in our 

subcontracting goals we have exceeded those. Those are at 11 percent of our subcontracts for women-owned businesses, and we have 

exceeded those the last several years. 

So we are attempting to address the prime contractor issue, but 

also to make sure that as a community the women-owned busiVerDate 0ct 09 2002 17:48 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33618.TXT LEANN
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nesses have an opportunity to participate. In some cases, that is 

more viable in the subcontracting role. 

Chairman BRALEY. Dr. Spampinato, I would like to ask you a little bit about the history at the Department of Energy. In your testimony you indicated that increasing opportunities for womenowned businesses was an objective of your agency. And I think one 

of the concerns that I have, and I think one of the concerns a lot 

of the women-owned small businesses have is getting beyond objectives to results. 

When I looked at the information from 2005 your agency had 

only awarded .57 percent of contracts to women-owned businesses. 

What is your explanation for why that number is so low and what 

can you tell us about the efforts being made to move beyond an objective and achieve an actual designed result? 

Mr. SPAMPINATO. Mr. Chairman, first of all, thank you. 

And what I would like to say in response to your inquiry, we 

have a couple of things going for us and a couple of things not 

going for us. I thing I would like to talk about is our legacy. For 

better or for worse, we talk about these M&O contracts that we 

have, these facilities management contracts. Now, the challenge on 

that side of the house is to look at these contracts, which we do 

at these APAT meetings, and try to take segments out of these contracts that will be opportunities for small businesses and womenowned small businesses specifically. That is our big challenge. Because, you know, over the last ten years or so if you look at the 

number of M&O contracts, we have cut them in half. And so we 

are making progress in that area. But that is one of our big challenges. 

Okay. But a couple of other things we are doing, too, to make 

this better. We try to do just some specific things. We go out all 

over the U.S. at our sites, we go out prior to issuing any requests 

for proposals and we send a notice of interest and we ask for specific participation by small businesses. 

Now understanding that there is not a requirement for womenowned small businesses, a regulatory requirement, they have to fall 

into one of the categories of 8A or a small business, or an 8A or 

a HUB Zone or something like that. But we do afford opportunities 

and look specifically for small businesses, and we list all the socioeconomic groups. Okay. So we are doing that. 

We are reaching out to these businesses through our conferences. 

We have our big small business every year. This year it is in Washington, D.C. I personally make myself available. I have talked to 

several small businesses. You know, I have been on board for a 

short time, but I talk to them individually. And our OSDBU talks 

to them specifically. I mean, we make ourselves available to them. 

We have a lot of online resources. 

When I go out and talk to large businesses or small businesses, 

I go out and tell them about the resources that we have available. 

They can look, see what efforts we have out there. They can look 

at the scopes of work. They can look what they think is appropriate 

for them to bid on them. Okay. They can see what is out there, 

what is coming up, what is going to expire. They can look. We have 

all that information. 

16

We are very strong in this Mentor Protege programs. Okay. Both 

DOE is and SBA is. We go out there. When we are talking to large 

businesses we tell them this is very important, this is critical, to 

do these Mentor Protege to help small businesses along. Critical. 

We also have the offices set individual goals. And we make each 

individual office accountability. 

And this visibility goes all the way up to the Secretary and the 

Deputy Secretary. So we got high visibility on that. 

The last thing I want to say on that is, and I do not want to 

make this excuse. It is not an excuse about the M&O contract. We 

are doing our best to look at that work and what I would like to 

say is I just want to also give credit to SBA on this. They have 

been working very closely with us trying to understand these M&O 

contracts and our specific problems that we face trying to break up 

these contracts. So they work closely with us. 

Chairman BRALEY. If I am a woman who owns a business and 

wants to get more information about participating in a DOE procurement program, what is the easiest thing for me to do? 

Mr. SPAMPINATO. I think there are many things you could do. 

But I would say the easiest thing you could do, Mr. Chairman, is 

to contact our small business staff, our OSDBU. Contact them or 

contact the SBA and we can lead you whatever direction you want 

to go on. Wherever you need to go. 

Chairman BRALEY. Well, you mentioned the website. Is there a 

link on your website where women-owned businesses can go to find 

out information about procurement opportunities? 

Mr. SPAMPINATO. I would say yes, there are. It is not specific to 

them, but it is available to everybody out there. All businesses, 

small and large. 

Chairman BRALEY. I will reserve any additional questions I have. 

I also would like to recognize the Chairwoman of the Committee, 

Nydia Vela ́zquez has now joined us. 

And with that, I will turn it over to the Ranking Member for his 

questions. 

Mr. DAVIS. Thank you, Mr. Chairman. 

And I would like to start with questioning Deputy Administrator 

Carranza. I thank you again for being here. 

And if you could just help me understand again, just to get some 

base points, how long have you been with SBA? 

Ms. CARRANZA. I started December 15th. 

Mr. DAVIS. Okay. So you were not in here 7 years ago when the 

original legislation was passed? 

Ms. CARRANZA. Correct. I have been here 3 months. 

Mr. DAVIS. Okay. And part of the original legislation that we are 

talking about today and the failure of SBA to move forward and 

do what needs to be done talks about underrepresented and substantially underrepresented industries. How do you go about determining which industries are underrepresented or substantially 

underrepresented? 

Ms. CARRANZA. My understanding and we are going through that 

Rand study that is supposed to be addressing those particular indices, Ranking Member. And with that they will be able to substantiate which industries are underrepresented. At this point my understanding is that the 5 percent is a Federal goal target, manVerDate 0ct 09 2002 17:48 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33618.TXT LEANN
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dated. And so that each agency is to strive to attain that percent 

performance for Government contracting. 

To answer your specific questions about how we identify underrepresented and under served, we have tools with respects to the 

HUB Zones and the small businesses women’s programs and small 

business programs. But the mechanics of that I could not answer 

that at this point. 

Mr. DAVIS. It is my understanding that was not built into the 

legislation. 

Ms. CARRANZA. Correct. 

Mr. DAVIS. What was underrepresented and then moving from a 

congressional definition what is underrepresented then to implementation of 5 percent. It was actually left up to the Administration to determine. And I think that is where we have had the failure. 

I know in the past there has been a study that was started. That 

didn’t work. And if the study is not done correctly, would the study 

misidentify those business sectors which women are underrepresented? Is that a possibility? 

Ms. CARRANZA. That is correct. That is correct. If the data is not 

analyzed correctly, we could have greater shortfalls. And that is 

why the Administration is taking a very cautious position to make 

sure that, once again, although the delay is not acceptable and cannot be supported other than the incremental interventions that 

took place since 1994 and then year 2000, that we want an accurate, a viable product that again could withstand any type of legislation insight. Because then the program could be held up, more 

often than not, if it is not well written. 

Mr. DAVIS. When do you think we will have the results of a good 

study? 

Ms. CARRANZA. Our expectations, as the Administrator has indicated in previous presentations, we are shooting for the end of 

April. So if everything administratively goes well, then we are anticipating material, information to develop a program. 

Mr. DAVIS. Okay. You mentioned in your testimony earlier that 

there were some constitutional concerns that the SBA has. Could 

you talk me through and help me understand what your concerns 

are about the constitutionality of this piece of legislation? 

Ms. CARRANZA. My understanding is that Adarand v. Pena was 

a court case in 1995 that was race-based and it was not dealing 

with gender-based criteria or sex- based criteria. And at this point 

as an advocate of small business in general with a focus on the 

under served, we want to make sure that all under served markets 

are being considered level playing field. And once again constitutional would mean that it would be not further scrutinized or 

upheld, but would meet all of the criteria for equal opportunity for 

all indices. All participants, I should say. 

Mr. DAVIS. Okay. It is my understanding back in 2001 that there 

was proposed regulations and SBA withdrew those. I know you 

were not there, but can you help me understand why SBA withdrew their regulations back in 2001? 

Ms. CARRANZA. It would be premature for me to answer that 

question, but I can get back to you on that with a particular chronology of actions that took place. 

18

Mr. DAVIS. I understand that we are going to have a study coming forth in April. When do you think that the Women’s Procurement Program will be fully up and running? 

Ms. CARRANZA. Ranking Member, I want to acknowledge your 

particular question, but I would also like to precede that the Women’s Program or Procurement, I believe, has made gains. My observation is that they have made gains as it relates to attraction of 

progress. Have we met our goal? No. Are we satisfied with that 

goal level? Not the goal level but the performance level? We are 

not. However, with regards to a program as it relates to procurement program or Women’s Procurement Program, I believe that we 

would have that in play for this year, and it would be well understood, if I am not speaking out of line. 

Mr. DAVIS. Thank you for your candor. 

I would like to move now to Mr. Luedtke. Thank you for being 

here today. I appreciate that. 

You mentioned in your testimony the actual dollar amounts 

awarded to women-owned businesses. Can you translate that into 

percentage for me? 

Mr. LUEDTKE. For the prime contracts it works out to, I think, 

about 2.1 percent. The subcontracts we measured that against the 

dollars available for subcontracting, and I think we are at between 

11 and 12 percent of the subcontract dollars. 

Mr. DAVIS. Thank you. 

I understand that the business that you are in and the Department you are in has very high technology demands. And can you 

help me understand how small business plays a part in what you 

do and how much percentage all small business plays in what you 

do and how technology demands effect that percentage? 

Mr. LUEDTKE. Yes, sir. 

We had, I think in the last year that we have validated data, 

about $1.8 billion that went to small businesses of all kind, both 

prime and subcontracts. So small businesses actually provide a fair 

amount of what we do, and much of that is on the high technology 

area. 

The difficulty we have with the prime contracts is we tend to 

have a very few large contracts. For the space station and for the 

shuttle, those kinds of things, are multibillion dollar contracts. And 

that when you look at a percent then, obviously, takes away a fair 

amount of dollars that would even be available for any kind of 

small business. 

We have made efforts over the last several years to particularly 

seek small businesses both at the prime and the subcontract level. 

A fair number of them are fairly innovative and they bring in new 

ideas, and so we think there are some real opportunities. In fact, 

we awarded through another transaction type opportunity, two contracts to firms for alternate access to space, to actually build 

launch vehicles that will take cargo and possibly astronauts to the 

space station. Both of those companies, although this was outside 

the normal procurement process, were small businesses. And so we 

are very open to ways that we can attract new people into the community. 

We also have a problem, and I think the Defense Department 

shares that since we share a lot of the same suppliers, is that with 

19

the consolidation in the aerospace industry and also in the suppliers in the aerospace industry, we are seeing fewer and fewer 

companies available to bid. And so we are looking for small businesses including women-owned small businesses that could fill that 

role. We want to bring new companies in, and we think a fair number of them either have or are developing the technology that 

would allow us to use them. So both from meeting our small business goal, but also from a selfish point of view of just trying to get 

more people in that would provide more competition and innovation, we are looking and trying to reach out to new firms and small 

businesses in particular to provide that. 

Mr. DAVIS. And that leads me right into my next question. Of all 

the women- owned businesses seeking contracts with NASA, how 

many have actually been awarded? Do you know how many have 

sought a contract? 

Mr. LUEDTKE. No, sir. We can try and provide that. I am not 

sure we would have all of that data in terms of keeping records of 

unsuccessful bidders. 

Mr. DAVIS. But you would have the total amount of womenowned businesses that have applied? 

Mr. LUEDTKE. We may. Because in a large number of cases small 

businesses bid in open competitions. And so we would not be tracking the size standard of a company unless they were awarded or 

unless it was a small business set aside. 

Mr. DAVIS. Okay. Thank you. 

Mr. Spampinato, just like to ask you a few questions, if I may. 

Thank you for being here. 

What is the process that the Department of Energy currently 

uses in procuring contracts with women-owned small businesses? 

Mr. SPAMPINATO. Yes, sir. A couple of things that I mentioned, 

I do not know if you can call it a process so to speak. But a couple 

of things that I mentioned previously. 

We try to go out prior to issuing any RFPs so that small businesses, all small businesses have plenty of notice that we have efforts out there. 

We make available to them, like I said, we have a lot of online 

resources where businesses can look to see what is available, the 

scopes of work, what kind of work it is, what kind of skills they 

will need. We have all that out there for them. We make that available. 

I mean I do not know if it is appropriate to talk about the 

goaling, about the internal processes that we do. 

Mr. DAVIS. Please. 

Mr. SPAMPINATO. Well, what we do is we call upon the offices, 

they are in the best position, to look at the work, the kind of work 

that they have coming up in the next fiscal year. We go to them 

and work with them and their small business program managers, 

which that person is crucial to this process. And what they do is 

they work and they come up with a number. Then looking at their, 

you know, the skills they need, the kind of work they need, what 

contracts are expiring, what new work is coming up; all these kinds 

of things that programs look at. And they will say this is the 

amount of work that we think we would like to go out with small 

businesses. 

20

Then what will happen is all of those requirements from every 

program throughout the Department will be floated up to the top, 

at the top levels. We will look at that goal. We involve everybody 

in the process. We keep the program and the small business program managers involved. And then we also involve talking with the 

SBA. Like I said, they have been working with me, working 

through the dilemmas we have with the big contracts. And we will 

negotiate our goals with them. And that is kind of how that process 

works. 

But we also keep the programs accountable, hold them accountable for meeting their goals. And what we do is every quarter we 

have a report that comes out with green and red, you know how 

they are doing, if they are meeting their goals. And what we will 

do if they are not meeting their goals, we will go to the Program 

Office and say ‘‘Look, you know, this is critical. This is important. 

This maintains high level visibility. You have to do this. Why are 

you not doing it?’’ And then we work with them to come up with 

innovative, creative approaches so that they can meet their small 

business goals. 

And that is kind of basically the process we go through. 

Mr. DAVIS. Okay. I am going to ask just one quick question to 

wrap this up. You mentioned a moment ago that you are going to 

have your conference this year in Washington, D.C. 

Mr. SPAMPINATO. Yes, sir. 

Mr. DAVIS. Do you think Washington, D.C. is the best place to 

have a small business conference where we have a lot of people 

that are very smart and bright connected to Government, but most 

small businesses are located out in America, outside the beltway? 

Mr. SPAMPINATO. Well, sir, that is a good point. And as a matter 

of fact, a lot of the small businesses that do business with us are 

located all over the United States. Now what we do as far—I don 

not know in two years ago, but last year we held this in Seattle. 

So what we do is we try it around every year so that different people—you know, some small businesses cannot really maybe afford 

to travel to some of these conferences that are far away. So if we 

keep moving it around, we give small businesses opportunities to 

come to the conference. 

Mr. DAVIS. That is what I wanted to hear. Thank you. 

Mr. SPAMPINATO. Thank you. 

Chairman BRALEY. The Chair recognizes the Chairwoman of the 

Committee, Ms. Vela ́zquez for 5 minutes. 

Ms. VELA ́ ZQUEZ. Ms. Clarke was here first. 

Chairman BRALEY. The Chair recognizes Ms. Clarke. 

Ms. CLARKE. Thank you, Ms. Chair. And thank you, Madam 

Chair. 

Good morning to each and everyone of you. 

One of the things that I am a bit concerned about is the level 

of, I guess, advertising, the level of outward approach and the ferocity at which we go about seeking individual, women- owned 

businesses to participate with the Federal Government. I think 

often times we believe that through, you know, notice prior to an 

RFP that is going to be the best way—well, it is probably just the 

way that we have been doing it to attract business. But what I notice in the private sector whenever there is an urgency behind 

21

whatever product that is trying to be sold, there is an all-out blitz 

that takes place. 

And I know in communities like mine in New York City and in 

Brooklyn, access to contracts has been very allusive for many 

years. And we probably have more activity involving the Federal 

Government in New York City than a little bit. 

My question to you is thinking outside of the box what measures 

do each of your entities see in concert, perhaps, with one another 

and then separately can be done to really truly attract businesses 

that we know are already engaged in the private sector to want to 

partner with Government to expand upon the base and the pool of 

valuable businesses out there that are capable, quite capable of 

doing business with your agencies? And that is to everyone on the 

panel. 

Ms. CARRANZA. I will begin first. And thank you for the opportunity to answer your question. 

What we do in the Procurement Advisory Council, and it is 

chaired by the SBA, is to engage all of the agencies, the OSDBU, 

to share best practices. We have taken it to another level where 

business as usual is discussed, and then discussion of where do we 

need to go next because it is attaining the performance levels that 

we are shooting for. 

The next level is transparency in our measurement tools. In 

other words, we are developing an internal scorecard, and it was 

alluded to earlier. But it is going to be a scorecard that will track 

the performance of the agencies, and it will be made public. So 

wherever there is a shortfall, it will be know. So we are now having 

transparency as a unit. 

In addition to that we recognize that we work as the watchdog, 

we oversee and we advocate, and we try to engage and much more 

aggressively all of the outreach opportunities that we have from 

the Small Business Administration, whether it is the SBDCs, the 

SCORE in addition to the Women’s Business Centers. And we need 

to take those entities to another level of Government contracting 

knowledge and skill as well. 

In addition to that it is also improving, increasing not only the 

skill level, but the numbers of PCRs so that they could interact and 

be accessible to all of the agencies as well and work stronger as a 

conduit. 

And we understand that the agencies take ownership for their 

strategic planning on how they are going to meet their goals. But 

if we could use the Procurement Advisory Council to push forward 

much more aggressively the agendas to be much more visible to the 

Women’s Program community, then that how we are engaging and 

how we are going to take it to the next level. 

Ms. CLARKE. Thank you. 

Mr. SPAMPINATO. Ma’am, thank you for that question. 

If I might add, I mean I agree 100 percent. I think one of the 

frustrations is sometimes we like to go out there and say ‘‘Hey, we 

have all these systems. Why do you not find the contracts?’’ And, 

you know, this is not acceptable. And, of course we have man 

power issues where we really cannot get out there as much. 

22

But, you know, I guess in its simplest form what I see in our department we have a very good group of OSDBU people. We are out 

there all time making themselves available. 

You know when I came on board I went to an Indian American 

Conference. And, you know, it is funny but at the basic level people 

like to put a face on the Government. And I walked around that 

conference and I must have taken 50 or so business cards and 

talked to people face-to-face. And I think that is the big challenge; 

getting out there, putting a friendly face on the Government. Because a lot of times people say ‘‘I do not know who to contact.’’ People just do not exactly know to go to the webpage and say doing 

business with DOE and click on it. And not everybody knows that. 

So what I try to do, and I know what we try to do, is we try to 

get out there as much as we can. You know, we extend ourselves 

as much as we can and get out to small businesses and large businesses and say, ‘‘Look, here we are. This is us.’’ And, you know, you 

can call me. I have had so many people call me with questions on 

what to do or how to do it. And I mean they do not ask me anything that is procurement sensitive. I am the Chief Acquisition Officer. But, you know, it is just very easy to talk to them and to tell 

them ‘‘Look, this is how you find out what is available.’’ And I 

know that is not going to get the entire population, but that is my 

simple approach. Just to put face-to-face with as many people as 

we possibly can. And I know my OSDBU takes that approach also. 

That is basically my thing. 

Chairman BRALEY. The time has expired. But Mr. Warder, Mr. 

Luedtke, if you would like one minute to respond to Ms. Clarke’s 

question. 

Mr. WARDER. Congresswoman Clarke, thank you for the question. 

In our case we have aggressively worked to try to identify all 

small business potential candidates, but also women-owned small 

businesses. And we have heavily researched and continue to try 

and identify those businesses that in fact can satisfy our requirements, put them on our list and make sure that they do get notification we do have bid opportunities. 

So we are reaching out to try and expand that list. And then as 

part of that over the last couple of years we have been growing our 

small business contracting by over 40 percent a year. The last year 

in 2006 we grew the women- owned small businesses portion of 

that by approximately 60 percent. 

So we are pushing it hard. Our people are very aware of it and 

we are doing our best to expand our knowledge of what is available 

out there. 

Chairman BRALEY. Mr. Luedtke? 

Mr. LUEDTKE. We do similar things. Let me just add a couple of 

things that we do that may be of interest. 

One is we provide, recognizing that it’s not always easy to understand how to do business with the Government for somebody that 

is new to the Government world, we provide training classes at 

various locations around the country to small businesses that are 

interested, think they have something to offer so that they can understand what is involved and how best they can pursue opportunities. And being a high tech organization, we also developed an 

23

Internet system that allows people to register and be notified of 

any opportunities we have, either globally or where they are located, what they are interested in. In fact, that become 

FedBizOops, the Government system. And it was developed in 

order to reach small businesses because we knew the large businesses would figure out what was going on. 

Ms. CLARKE. Thank you very much for your indulgence, Mr. 

Chair. 

I just wanted to say that, you know, that the issue for me really 

is how many people are really aware. And it is an awareness campaign that I am talking about, casting a very wide net. We know 

that there is a weeding out process. We know that there is an educational training, a cultivating, a mentoring issue. But when this 

Government wants to recruit individuals to join its military, you 

cannot pass a community that does not have a billboard. 

So I am saying why are we not advertising in women’s magazines? Why are we not at women’s physical fitness facilities where 

they are? Why are we not at the beauty saloon where women congregate? And I am sure women of all stripes are there, many who 

are starting their own business or who have already entered the 

business realm in the private sector. 

I am thinking creatively. I am saying let us go directly to the 

population that we are trying to reach in as many avenues as we 

can. 

Certainly not everyone is going to meet the standard for participation. But the knowledge that they have that they can share with 

others. Our religious institutions dominated by women. Dominated 

by woman. Why are we not there where we can begin the conversations that then spread through our communities and identify the 

entrepreneurs that we are targeting? 

I think often times we are not thinking about how we really 

zoom in and capture that audience. And that is what I am trying 

to impress upon you. 

I know all of the tools that exist. What is missing is that connection with the environment that will produce the results we are trying to accomplish. 

Thank you very much, Mr. Chair. 

Chairman BRALEY. The Chair recognizes the gentlewoman from 

New York Ms. Vela ́zquez for five minutes. 

STATEMENT OF CHAIRWOMAN VELA ́ ZQUEZ 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. And I want to thank 

you and the Ranking Member, Mr. Davis, for holding this important hearing. And I want to thank you all for taking time to be 

here. 

Look, we could be here today, we could be here next week, next 

month, two months from now to discuss all the average that the 

different departments are doing and all the business cards that you 

are collecting. But those numbers and those average are meaningless if you cannot achieve the goal of 5 percent for women businesses. And this is exactly why we passed legislation six years ago 

to create this Women Procurement Program to address what we 

are discussing here today. 

24

So my question to you, Ms. Carranza, is when this program is 

going to be up and running? 

Ms. CARRANZA. Thank you for the question, Chairwoman. I now 

have an opportunity to tell the phases that we’re looking forward 

to having this women’s program implemented this year. 

The first phase is the RAND study has been completed and so 

we should have the opportunity to offer for public view, public 

input the end of April. And then based on the public comments 

that are accumulated and then compiled, we should have the program soon after that. April—

Ms. VELA ́ ZQUEZ. When? 

Ms. CARRANZA. I can’t tell you how—I can tell you that the study 

itself will be—our goal is to have it in hand for public consumption 

in April. 

Ms. VELA ́ ZQUEZ. If you know that it is going to be ready by April 

for public consumption—

Ms. CARRANZA. Yes. 

Ms. VELA ́ ZQUEZ. —then after that what is the time table? The 

Administrator was here. I asked him exactly the same question. 

And if I’m not mistaken, he said it would be up and running by 

the summer. I want to hear that. 

Ms. CARRANZA. Yes, ma’am. 

Ms. VELA ́ ZQUEZ. Is this going to be up and running by the summer? 

Ms. CARRANZA. If that was the commitment he made, then we 

will do everything that we possibly can to make it in the summer. 

The one thing that I want to not go out on point and fall short of 

the commitment, Chairwoman Vela ́zquez, is that if for some reason 

the public comments proceed a little bit longer than anticipated, 

and we’re expecting summer to be the end date, then we will keep 

you informed on a timely basis, keep your staff informed and, obviously, just expose to you the progress of that. 

Ms. VELA ́ ZQUEZ. So it is your commitment to work to make this 

happen? 

Ms. CARRANZA. Absolutely. 

Ms. VELA ́ ZQUEZ. To have this program up and running? 

Ms. CARRANZA. Absolutely. Yes. 

Ms. VELA ́ ZQUEZ. Well, let me just say that by issuing press releases like the one that you issued yesterday questioning the constitutionality of the program, that doesn’t help. 

My question to you is why is it that you didn’t raise the constitutionality issue when the SBA raised its concern when the SBA did 

their finding with the U.S. District Court for the District of Columbia? How come when you did your finding, didn’t raise that issue? 

Ms. CARRANZA. Chairwoman Vela ́zquez, I want to make sure that 

the statements that I make to you are as accurate and represent 

as accurate the status of the particular reference that you’re making. 

It is not so much about the constitutionality, and I may have 

misspoken earlier. It is about the accuracy and the sufficiency of 

the detailed information that should be recognized before—or 

should support the Government needs, the particular Government 

interests or the preference interest also. So you are talking about 

the constitutionality as it relates to the accuracy of the detailed inVerDate 0ct 09 2002 17:48 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33618.TXT LEANN
25

formation that is necessary to identify either the preference group 

that we are addressing or, for that matter, to support the compelling interest of the preference group that we are addressing. 

Ms. VELA ́ ZQUEZ. My original question to you was why did you 

raise that now or you did not raise it when you filed? 

Ms. CARRANZA. Chairwoman Vela ́zquez, I am not in a position to 

answer that, and I can give you—

Ms. VELA ́ ZQUEZ. That is why I wanted the Administrator to be 

here. 

(Applause). 

Ms. Carranza, in the press release that the agency issued yesterday it identifies the 8A program and the HUB Zone program as option for women entrepreneurs. All women entrepreneurs are not eligible for the 8A program nor for the HUB Zone program. Is the 

SBA suggesting that these programs are sufficient for the needs of 

women entrepreneurs? 

Ms. CARRANZA. Chairwoman, with all due respect, 8A program 

and the HUB Zone programs are valuable strategic tools. They are 

in addition to the women’s programs, Procurement Program. And 

it is just an addition to make the opportunities much more comprehensive. They are not singularly—

Ms. VELA ́ ZQUEZ. Well, I will invite you to read the press release 

that your agency issued yesterday with the intent to prove the 

point that since we have the 8A program and the HUB Zone, then 

the Women’s Procurement Program is not needed. 

If the Women’s Procurement goal of 5 percent was accomplished in 2005, women would have received an additional $5.2 billion in 

contracts. Is the agency suggesting in this press release that the 

Women’s Procurement Program will not help agencies accomplish 

their goals? 

Ms. CARRANZA. Thank you for the question, Chairwoman 

Vela ́zquez. 

It would be—I would be remiss to not acknowledge the loss of 

revenues by not having this particular program already in play. 

However, I also recognize that to move too expeditiously now that 

we have a viable study it could add significant value to a program, 

I think there is—that we may miss other opportunities and 5 billion may be a base and not the full capacity of a potential quality 

driven program. 

Ms. VELA ́ ZQUEZ. Well, as you can see in the line of my questions 

to you or maybe my expression, I am frustrated. And I resent the 

fact that after six years this programs has not been implemented. 

My message to the Administrator is it will be back in this Committee until this program is implemented. 

And to the agencies that are here, this is sound policy and is fair 

policy. Women business owners should have an opportunity to do 

business with the Federal Government. And we will continue to 

issue our scorecard report every single year. And we will go and 

check to see how your average efforts are working or if they are 

failing. So you have to do a better job. And you have to go back 

and assess the fact that whatever you are doing is not working is 

not fair. This is a way to protect taxpayers’ money, and this is the 

way to show that we do care about providing every economic opportunity that we can through the Federal Government so that women 

26

business owners and small businesses have the opportunity to do 

business in the Federal marketplace. 

Thank you, Mr. Chairman. 

(Applause). 

Chairman BRALEY. Thank you. 

I just have one follow up question. Only two of the agencies 

present here today, NASA and the Department of Education, have 

awarded contracts to women-owned companies located in my State 

of Iowa in 2005. These two businesses received contracts totaling 

$66,000 and yet your four agencies represent $36 billion in contracts. That means that women- owned businesses in Iowa received 

.00018 percent of your agency contracts. And I would like to know 

for the women- owned business owners in my state how something 

like that can happen. 

Mr. SPAMPINATO. Mr. Chairman, I would say there is no reason 

for that. There is no discernable reason. It should not be happening. And I think as the Madam Chair said, outreach is probably 

the issue. There has to be more outreach and especially in smaller 

areas of the country. We have just got to do more outreach. And 

the information is just not getting out there. That is the only thing 

I would say for us. 

Chairman BRALEY. Deputy Administrator Carranza, there are 

currently no SBA procurement center representatives located in 

Iowa. And yet when the Administrator came and testified before 

us, he talked about the new PCRs that are going to be put in place. 

Does the SBA plan on placing one of the new PCRs in Iowa to correct this imbalance? 

Ms. CARRANZA. In our—excuse me, Chairman. Thank you very 

much for the question. 

With the new goal of putting on approximately 11 new PCRs, we 

are accessing based on the potential procurement opportunity the 

PCRs. And we are taking a beltway look as well on considering for 

the rural reach, and that is a market we are assessing currently. 

How many and when, I could not profess at this point. But there 

are 11 that we are actually considering to be assigned. 

And I will take your concern under strict consideration. 

Chairman BRALEY. Well, when taxpayers represent 1 percent of 

the total population of the country and they receive .000.18 percent, it is a reason for them to be concerned about whether they 

are getting a proper return on their tax dollars. 

Ms. CARRANZA. I agree, Chairman. 

Chairman BRALEY. Thank you. 

Member Davis, do you have any further questions for the panel? 

Mr. DAVIS. Mr. Spampinato, you mentioned in your testimony, 

UT-Batelle and Oak Ridge is a success story. 

Mr. SPAMPINATO. Yes, sir. 

Mr. DAVIS. Could you take just a moment and do you know 

enough about that to talk about it a little bit? 

Mr. SPAMPINATO. Sir, I do not have the information at this time, 

but I could get it back to the Committee and make it a part of the 

record. 

Mr. DAVIS. That would be good. And thank you for having businesses there in east Tennessee. Thank you. 

27

Chairman BRALEY. That will conclude the testimony of our first 

panel. I want to thank you all for taking time from your busy 

schedules to appear today. I think we all would like to see us move 

beyond objectives to results. And I am encouraging everyone of you 

to work with this Committee to make that happen. 

Thank you. 

Ms. CARRANZA. Very good. Thank you. 

Mr. SPAMPINATO. Thank you. 

Chairman BRALEY. Now I would like to call up the members of 

our second panel. 

If witnesses would take their seats, we will begin. 

We have a very distinguished group for our second panel, and let 

me begin by introducing our first witness, Ms. Margot Dorfman. 

Ms. Dorfman is CEO of the U.S. Women’s Chamber of Commerce 

based in Washington, D.C. The Chamber represents 500,000 

women-owned companies throughout the country. 

Welcome, and please share your opening statement. 

STATEMENTS OF MARGOT DORFMAN, CEO, U.S. WOMEN’S 

CHAMBER OF COMMERCE 

Ms. DORFMAN. Thank you very much, Chairman Braley, Ranking 

Member Davis, and the members of the Subcommittee on Contracting and Technology. 

My name is Margot Dorfman and I am the CEO of the U.S. 

Women’s Chamber of Commerce. I am here today on behalf of the 

millions of American women business owners to draw the line in 

the sand and say enough. 

It has been more than a decade since Congress established a 5 

percent goal for contracting with women. This goal was set because 

in 1994 Congress recognized there was a disparity between the 

number and capability of women-owned firms and their commensurate access to Government contracts. In all this time, the Federal 

Government has NEVER met the paltry 5 percent goal. This inexcusable shortfall remains in spite of the incredible surge in the 

number and capability of women-owned firms over the last 10 

years, a growth of 42 percent. 

Let me briefly review the time line as it applies to women-owned 

small businesses and Federal contracting: 

In 1994 the Federal Acquisition Streamlining Act of 1994 set an 

overall goal of 5 percent for women-owned businesses. The Act did 

not, however, establish a specific procurement mechanism for accomplishing that goal. And between 1994 and 2000, the Federal 

Government never even came close to meeting this 5 percent goal. 

In 2000 to address the ongoing shortfall of contracts with 

women-owned firms, Congress passed the Equity in Contracting for 

Women Act of 2000, and that was on December 21, 2000. This Act 

was to give agencies the ability to limit certain competitions to 

women- owned small businesses. It required the Small Business 

Administration to: 

(1) ‘‘Conduct a study to identify industries in which small business concerns owned and controlled by women are underrepresented with respect to Federal procurement contracting’’ and, 

(2) ‘‘Establish procedures to verify eligibility to participate in the 

procurement program.’’

28

To date, the SBA has not implemented this program. 

2004. On October 29, 2004, the U.S. Women’s Chamber of Commerce, in support of its 500,000 members, brought suit against the 

SBA for its failure to conduct the study of underrepresented industries and publish the regulations necessary to implement the women’s program. 

2005. In 2005, finally a victory. While the SBA filed a Motion to 

Dismiss, it was denied by the court on December 8, 2005. The court 

found that the SBA had unduly delayed the Women’s Federal Procurement Program and further noted that the SBA, and this is a 

quote, ‘‘...had sabotaged, whether intentional or not, the implementation of a procurement program...’’ and concluded that, another 

quote, ‘‘a deadline is in order.’’

2006. On March 6, 2006, the SBA notified the court that it would 

finally complete the disparity study within 9 months or by November 21, 2006. No study has been produced to date. The Federal 

Government still has not reached the 5 percent goal for contracting 

with women. Instead, contracting with women-owned small businesses hovers around 3 percent. This contracting shortfall costs 

women-owned small businesses over $5 billion every single year. 

2007. The USWCC petitioned the court on February 9, 2007 for 

a Status Report and that the SBA report on its progress every 45 

days. 

The result of this travesty is that a culture of failure has taken 

hold. Year in and year out the SBA sets goals with agencies, knowing that certain agencies will not meet their goals. Year in and 

year out the SBA claims they are going to implement the 6 year 

old Women’s Federal Procurement Program. But they don’t. The 

SBA has failed to step up to serve their true role on behalf of 

women-owned small businesses. 

We are here today to call for an end to the culture of failure that 

has become pervasive at the SBA and all the Federal agencies that 

are not meeting their goals. 

We are here today to call for the implementation of P.L. 106-554 

the Women Federal Procurement program. 

We ask that we stop blindly setting goals that are never met; the 

SBA stops that. And tat the agency acquisition leaders commit to 

and meet goals for contracting with women-owned firms by 

leveraging acquisition strategies that will achieve the congressional 

mandated 5 percent goal. 

Many, many agencies have proven that they can meet and exceed 

the 5 percent goal. It is time for the culture of failure to end and 

for our Federal Government to open its doors to the dynamic 

women-owned small business marketplace. 

And upon listening to some of the testimony, I have to say that 

our members know how to do their research. They know what the 

websites are, they go to the websites. They know their small business representatives. They respond to proposals. And the fact remains they do not have access to these contracts because they cannot compete. The competition that they are expected to compete 

with are the large corporations, the Lockheed Martins of the world. 

And women-owned firms are usually a third the size of their male 

counterpart cannot hold to that. We must get this law implemented. 

29

We are tired of waiting and we will not let this issue rest. Women-owned small businesses lose over $5 billion dollars annually. We are taxpayers, we are voters, we are community and family leaders. I ask that our representatives in Congress step up for 

us. I ask the Federal acquisition leaders act now to advance opportunities for women-owned firms. And I ask that the SBA end their 

culture of failure and finally step up to leadership on behalf of 

women-owned small businesses. 

Thank you very much. 

[The prepared statement of Ms. Dorfman may be found in the 

Appendix on page 60.] 

Chairman BRALEY. Our next witness is Christina Lomasney. She 

is President and CEO of Isotron Corporation headquartered in Seattle, Washington. This company is in the material science engineering and nanotechnology industry. 

Welcome. 

STATEMENT OF CHRISTINA LOMASNEY, PRESIDENT AND CEO, 

ISOTRON CORPORATION 

Ms. LOMASNEY. Thank you very much. 

Mr. Chairman, Ranking Member and Members of the Subcommittee, I want to thank you for allowing me this opportunity 

to appear before you this morning. 

My name is Christina Lomasney. I am the CEO of Isotron Corporation and Modumetal, Inc., both Seattle-based, woman- owned 

and operated small businesses. 

Modumetal and Isotron exist today due to the contributions of 

highly trained technical individuals, the vast majority of whom 

have advanced degrees in science and engineering. Thirty percent 

of my technical teams are women. Isotron and Modumetal deal in 

very advanced fields of material science and engineering that involve applications of nanotechnology to polymer composites and 

metal alloys respectively. Current and past clients include the Department of Defense, the Department of Homeland Security, the 

Environmental Protection Agency, the Department of Energy and 

commercial partners such as General Dynamics and the Ford 

Motor Company. 

This morning I have been asked to address concerns related to 

the Women’s Federal Procurement Program, and specifically the 

Equity in Contracting for Women Act of 2000. 

Let me first state that I have been the grateful beneficiary of the 

support of the Federal Government and the American taxpayers for 

a great deal of the advanced research and development carried out 

at Isotron and Modumetal. I am always mindful of the tremendous 

responsibility that I have to be a wise steward of the resources that 

have been entrusted to us to develop cutting edge technologies that 

are intended to serve this nation in both public and private sector 

applications. 

Furthermore, as the proud sister of 3 Marines, one of whom is 

currently active duty and deployed in Iraq, I believe the core mission of both Isotron and Modumetal is to identify creative technologies to enhance the personal safety, protection and success of 

our nation’s citizens and the men and women who defend our freedom in the field. It is for this reason and for many others that my 

30

exposure to the shortcomings of certain Federal contracting programs brings me here today. 

Most importantly, I want to offer one person’s humble opinion on 

how we can make the Women’s Federal Procurement Program 

more successful in the future. 

In 2003, Isotron was funded to provide the feasibility of an advanced, removable vehicle coating for the Department of Defense. 

Despite letters of support provided directly from the United States 

Marine Corps recommending a Phase II effort to advance the demonstrated system, the program stalled at the very stage where the 

technology would have been transaudient to a prototype product. 

We did not give up in the face of this obstacle, however. We have 

over the past 3 years worked directly with a commercial partner, 

a major military vehicle manufacturer, to continue requirements 

definition and testing internally. And today the Joint Services 

Chemical and Biological Defense Program has stepped up to put 

their full support behind this vision. 

It is my hope that we will provide a product to the field within 

the next two years that will measurably improve the survivability 

of our men and women in the field. The frustration and, indeed, 

the tragedy is that in a more efficient market we might have delivered this critical product to the field three years ago. 

As part of my testimony this morning I believe it is incumbent 

upon me to do more than just offer my concerns about what has 

not worked in the context of the Women’s Federal Procurement 

Program. 

Given, and the facts bear out, that the Federal Government has 

not met its self-imposed 5 percent procurement goal and that over 

the last 5 years alone women have lost an estimated $25 billion in 

contracting opportunities, I expect that it is time we had a frank 

talk about changing or enhancing the status quo. 

Federally funded research and development is unquestionably 

very effective at developing high risk early stage technologies 

which hold great promise to serve the public. It is, however, my 

humble opinion that federally funded transition of that research 

into products is often inefficient. The reality, in fact, has become 

so common, it has its own name: The Valley of Death. 

It is time that these inefficiencies are directly addressed. And I 

hope to use my time here to offer some thoughts on what might 

work. 

We have an opportunity today to try a new approach which compliments the old that will provide women-owned businesses an opportunity to compete in specific areas in which we have been historically underrepresented. We have an opportunity to try something that will help women-owned small businesses lead the charge 

in crossing the Valley of Death. 

My interests, and I believe the interests of a vast majority of a 

women-owned businesses is to create a dynamic market in which 

the investment in our expertise, our creativity and our technology 

creates more investment because of the power of our business 

model alone. AS a woman small business owner and operator, the 

opportunity to forge a partnership with major corporations or customers to bring products to market is often a missing piece of my 

economic puzzle. The Federal Government can help complete the 

31

puzzle by developing or expanding programs such as the procurement program before you, the mentor protege program or focus tax 

credits in which major commercial partners receive significant incentive to invest in women-owned small businesses. As incubators 

of growth, as employers of skilled innovators, as developers of new 

products such an approach will create new markets and new opportunities not only for innovative small businesses like mine, but also 

for the major corporations that invest in our potential and for the 

markets that we serve. 

Additionally, if such programs are expanded we may have created a bridge against the Valley of Death that any small business 

can safely and successfully cross. 

The current Women’s Federal Procurement Program was intended to provide women-owned businesses an opportunity to compete where we have been underrepresented. The proposed approach 

continues the same philosophy and takes it one step further: To establish a competitive field of women-owned businesses addressing 

the national challenge of transitioning advanced research into 

product. 

In conclusion, I hope my testimony today is of some value and 

benefit to this Subcommittee. As I indicated in the beginning of my 

remarks, I am grateful for the opportunity to be the beneficiary of 

the trust of the Federal Government and taxpayers who support 

programs that serve to incentivize innovation. But I hope that we 

will not stop there, that we will not see more technologies and companies flounder in the Valley of Death. I hope that with your support we can bridge this valley and in our execution realize the objective of a marketplace where women and minority-owned businesses play a competitive role with their technological rivals to the 

benefit of the military, education, energy and other Federal and 

commercial customers that we serve. 

[The prepared statement of Ms. Lomasney may be found in the 

Appendix on page 62.] 

Chairman BRALEY. Thank you. 

Very pleased to recognize and welcome one of my constituents to 

the panel. Karyl Smith is the owner of Iowa Valley Appraisal located in Waverly, Iowa, which is a real estate appraisal company. 

Welcome to the hearing. 

STATEMENT OF KARYL SMITH, IOWA VALLEY APPRAISAL 

Ms. SMITH. Thank you. Good morning. 

I am honored to appear before you today to offer an insight into 

my profession, to address the concerns regarding the delay of the 

implementation of the Women’s Federal Procurement Program, and 

to ask for your help to intercede on behalf of women-owned small 

businesses like mine, and hold those Government agencies and individuals accountable for their failure in implementing this program in a timely manner. I would also like to offer suggestions that 

I feel would enable other women-owned small businesses the opportunity to participate in this program. 

As a certified general real estate appraiser I presently contract 

with the USDA and provide appraisals on small, single and multifamily homes. For several years I was not aware that the USDA 

hired or contracted privately with real estate appraisers. Then 

32

while attending a continuing education program and in a seminar, 

a woman from the USDA office in Des Moines stood and asked if 

anyone was interested in appraising for the USDA. She handed out 

her business cards, told the attendees to reply by e-mail, provide 

her with the required information and we would be placed on the 

list or roster of eligible appraisers. Now I must annually register 

on the CCR in order to be eligible to receive contracts from the 

USDA. 

How the USDA utilizes this system is very simplistic. Once registered in a county the appraiser’s name is placed on a list and 

each appraiser is given a turn or contract. It is a simple repeating 

process. The simplicity of this system does not acknowledge 

women-owned small businesses nor does it track the percentage of 

contracts awarded to them. Let me repeat, this system my business 

is currently registered in with the USDA does not acknowledge 

women-owned small businesses nor does it track the percentage of 

contracts awarded to them. 

The USDA is the only agency that I presently contract with. My 

concern in regards to my profession is how many Government 

agencies have needed or required the services of real estate appraisers in the past, present or future that I am not aware of? 

With the devastation that Hurricane Katrina left on our south 

and southeastern coastal areas, I am sure that there are numerous 

agencies of Government, perhaps FEMA, Homeland Security or 

HUD, who could have and may even still need appraisal services, 

but there is no centralized system or depository for businesses, 

such as mine, to bid or access this information. Without an outreach program or depository in place there is a significant amount 

of research and time required to locate buyers or users of any product or service, monitor any bids that they submit, accumulate all 

the associated data relevant or required in order to bid, then prepare and submit the bid. With all service businesses, time is 

money. The tremendous amount of time involved would take resources that many small businesses simply do not have. I know I 

do not have the time to do extended researches, continue my education, run a small business and maintain a home. 

According to the US Women’s Chamber of Commerce, womenowned small businesses have annually lost $5 billion dollars worth 

of contracting opportunities. Over these past 6 years this amount 

totals a staggering $30 billion dollars. Without the implementation 

of the Women’s Federal Procurement Program this amount continues to grow. We need to ask ourselves how many women-owned 

small businesses have shut their doors and folded when they could 

have been awarded a small piece of this $30 billion dollar pie? We 

need to ask ourselves, how many women-owned small businesses, 

and specifically real estate appraisers, could assist in the timely rebuilding of our Gulf Coast had we been solicited through the Women’s Federal Procurement Program? And, how much of that ‘‘lost’’ 

$5 billion could have been injected to a small business like mine? 

In my profession I am required to follow the laws and the procedures established by the Appraisal Standards Board and the Iowa 

Professional Licensing Division. If I fail in following this set of procedures and laws I would be disciplined. This discipline could posVerDate 0ct 09 2002 17:48 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33618.TXT LEANN
33

sibly include the loss of my license. Why isn’t the Federal Government held to the same standards it expects its citizens to abide to? 

Why is it that 6 years after the Equity in Contracting for Women 

Act of 2000, which passed on December 21, 2000, is still not implemented? This Act required the Small Business Administration to 

do two things. Is it not one of the SBA’s main purposes or jobs to 

aid and assist small businesses? Why then would it not be a priority for them to get this program up and running? What was so 

difficult in this task that it would 6 years and counting to complete? Who is being held accountable for this delay? 

My suggestions for taking this negative and turning it into a 

positive include making the SBA develop strategies that would assist women-owned small business in acquiring governmental contracts. Also that these strategies be placed on a time line and if or 

when they have failed in being implemented, that someone is held 

accountable. 

Another suggestion which would greatly impact all business owners would be a centralized or depository for governmental contracts. This system would allow both users and providers of products and services easy access to information including a listing of 

eligible women-owned small businesses. It would also include a 

publicized listing of who and where contracts are awarded, by what 

agencies and the monetary amount of the contract. 

The system then would be able to track the percentages of contracts awarded to designated women-owned small businesses. If 

there is a similar system in place, it is not easily accessible or public knowledge. I have no idea of one. 

Lastly, the number of women-owned business continues to grow 

daily.: This is a good thing. However, the revenue generated by us 

pales by comparison. With the assistance of the Women’s Federal 

Procurement Program we could add to the vital economy of this 

country, bring additional dollars to our community and ensure our 

families live the American dream. 

Thank you for this opportunity to appear before you today and 

be a voice for women-owned small businesses. 

[The prepared statement of Ms. Smith may be found in the Appendix on page 67.] 

Chairman BRALEY. Thank you. 

Our last witness is Ms. Sheryl Roberts. She is the Chief Executive Officer of CCS Holdings, LP in Irving, Texas. CCS company is 

a Third Party Administrator specializing in workers’ compensation 

claims and risk management services. 

Welcome. 

STATEMENT OF SHERYL MENDENHALL-ROBERTS, CHIEF 

EXECUTIVE OFFICER, CCS HOLDINGS, LP 

Ms. MENDENHALL-ROBERTS. Thank you. 

Good morning again. My name is Sheryl Mendenhall-Roberts and 

I am a founding principal and the Chief Executive Officer of CCS 

Holdings, LP of Irving, Texas. It is woman-owned and operated 

small business. Please accept my appreciation for permitting CCS 

to offer requests and comments before this distinguished committee 

CCS companies have been in business for 10 years. Our companies are Third Party Administrators, providing workers’ compensaVerDate 0ct 09 2002 17:48 Dec 19, 2007 Jkt 033615 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\33618.TXT LEANN
34

tion claims and risk management services to the Government and 

to the private sector. We provide unique expertise with the Federal 

Employees Compensation Act, otherwise known as FECA and have 

years of experience working with the Department of Labor. Our 

FECA program allows us to represent the Agency, to support the 

injured employee through the claims process and to provide information to the Department of Labor to facilitate a satisfactory resolution of the claim as soon as medically possible. 

In 2005 annual report to Congress, the U.S. Department of 

Labor/OWCP indicated an annual benefit charge back to Federal 

agencies of $2 billion dollars and administrative expenses of nearly 

one $140 million dollars. Adverse trends identified by OWCP were: 

A 6 percent increase in the number of workers’ compensation 

claims reported from the previous year; 

A 30 percent increase in serious injuries reported since the fiscal 

year 2000, and; 

A 22 percent increase in total disability days during the continuation of pay period. 

The report also states that the Department of Labor projects a 

gross liability for the Federal Government for future FECA benefits 

at $26 billion. As we specialize in the analysis and administration 

of workers’ compensation, and these expenditures and trends are 

alarming to us. We believe our track record shows that our services 

not only reduce the costs and trends, but we have found it challenging to tell our story. 

Since 1998 we have knocked on the doors or submitted unsolicited proposals to approximately 25 or more agencies and departments but our success ratio is small. After obtaining our GSA 

Schedule, we were excited that GSA FSS contracted with us. The 

GSA FSS contract, over a period of five years, produced conservative savings of $13 million. Our fee was only $150,000, that produced a return on investment of $86.66 for every $1.00 paid in our 

fees. Despite the savings, the contract ended when the GSA took 

the program back in house. There has been no additional contract 

awarded since. 

Another example: We were awarded a Federal contract in 2001 

for FECA administration. And we were told by the Department of 

Commerce that their internal department costs were reduced by 

more than 50 percent due to this privatization. Due to the success 

of the contract, the Department of Commerce gave us 29 of their 

most difficult cases in a pilot project. The project produced savings 

of more than $35 million. The original contract was then amended 

the following year to include 75 similar claims annually for a fee 

of $49,999. In spite of savings averaging $1,206,896 per file in future liabilities, the Department of Commerce could not get the 

funds appropriated to outsource additional cases and the following 

year the amendment was terminated. Fortunately, the Department 

of Commerce has maintained its contract for new claims and will 

continue to see a suppression in future liabilities on these claims. 

Considering our successes, however, the lack of contracts is not 

only frustrating to us as a small woman-owned business, but also 

as taxpayers. Taxpayers are paying unnecessarily for claims that 

could be negotiated or eliminated by using services such as ours. 

And, by using a woman-owned small business, most Government 

35

agencies could drastically improve their goals toward the Federal 

Women’s Procurement Program. 

Our business involves providing a service, an Agency Human Resources function for outsourced FECA administration. We do not 

produce a widget. 

In many instances, our attempts to contact Government entities 

go unheard. We have found it difficult to find legitimate opportunities to present our program. They do not see the innovative ‘‘out 

of the box’’ concept of moving toward outsourcing and dismiss the 

service without truly investigating its value. Despite the proven 

savings, we have been told by some agencies that they are simply 

not interested, for example, the Department of State. 

When we are provided an audience, as with Commerce and the 

General Services Administration, we are ordinarily met with positive feedback and genuine interest. Unfortunately, we are most 

often told that while there is tremendous value in our service, the 

uniqueness of the program makes it difficult or impossible to get 

funds appropriated. Agencies such as the U.S. Army and FEMA 

fall into this category. 

We ask, why would Government agencies not be interested in 

doing business with a small business who can produce these kinds 

of result? Why is it so difficult to get an audience with anyone who 

can make a decision that the services brought before them are worthy of consideration? 

What is the value of certification and contract processes that are 

not utilized? 

How does a small business stand a chance of bringing new and 

innovative ideas in areas that were previously not considered, if 

Government entities are not willing to try a new approach? 

When will the Government as a whole, not only recognize, but 

reward small women-owned businesses that are capable of producing worthy products and services? 

Where is the real push to see greater business, 8A, small business that’s woman-owned business set asides included? 

We ask for an open door policy with an open door; for participation: for parity; for organized effort: for a real rapport with Government: for a unified front from all of you; for a turning point: a newness of resolve: for your tenacity: for an initiative to create our participation; 

We ask for meaningful opportunity. 

Thank you. 

[The prepared statement of Ms. Mendenhall-Roberts may be 

found in the Appendix on page 71.] 

Chairman BRALEY. Thank you. 

Let me start with you, Mr. Dorfman. Can you explain based upon 

input from your members why the Women’s Procurement Program 

would be helpful in increasing contracting opportunities for womenowned businesses. 

Ms. DORFMAN. Yes, I would be glad to. Thank you. 

The members that we have, this is not just a women’s issue for 

one thing. It is a family issue. It is a community issue. 

The majority of women-owned firms, as you mentioned earlier, 

we employ quite a few people in the community. And without this 

being implemented, we are unable to access the contracts that will 

36

bring the monies back into the business and into the communities. 

So it is very important that this is implemented. 

Chairman BRALEY. How do you respond to people who say that 

the lawsuit filed by the U.S. Women’s Chamber of Commerce has 

slowed down the implementation of the Procurement Program? 

Ms. DORFMAN. I would say that nothing has happened without 

the court direction to the SBA. The SBA has not taken any action 

without court direction. And this is what we need to do to make 

it move. This is what we are doing. We have got the court involved 

and, thankfully, we have got the House Committee on Small Business doing the oversight that is needed to bring forth, hopefully, 

speedy implementation. 

Chairman BRALEY. You were here when the Deputy Administrator testified today. 

Ms. DORFMAN. Yes. 

Chairman BRALEY. What was your reaction to her justification 

about why the program had not been implemented? 

Ms. DORFMAN. I have heard many of the justifications over the 

years, and the facts remain that the law was passed six years ago. 

That the law must be implemented. It is a law. And that the 

SBA—it is not in the SBA’s authority to disregard the law, to make 

changes to the law. When they came out with the first set of draft 

regulations they actually changed the intention of the law from 

what Congress had intended. And we, of course, responded to that 

as well. But what we see that needs to happen is that the law must 

be passed as it was intended by Congress and the results are to 

get the contracts to the women-owned firms so that they have access that they can compete in the market, they can grow their businesses and we can grow the economy of the United States. 

Chairman BRALEY. In your view will the agencies meet their 5 

percent goal for contracting with women-owned businesses without 

this Women’s Procurement Program? 

Ms. DORFMAN. Absolutely not. When we first started to talk to 

our members and ask them how is it that you would like us to help 

you to grow our business, they said we need access to Federal contracts. We don’t have access currently. We met with every single 

small business director for every single agency. And whether they 

were appointed or not, doors would shut. But that is what they 

said. If you really want us to be able to assist and grow the numbers of women-owned firms that we can help get contracts, this law 

must be implemented. And it was upon those two requests that we 

started the process of meeting with the SBA, started the testifying 

here at House Committee on Small Business to really bring the 

issue to light and ultimately meet the Administrator, at the time, 

Hector Barreto who said to us in quote ‘‘This Administration has 

no intention of implementing this program.’’

When we sent out our release to our members to say this is what 

we have done, this is what the response is, what do you want us 

to do next we had hundreds of thousands of responses saying it is 

time to fight. We have to sue. That is when our pro bono attorney 

Covington & Burling stepped up to assist us and we filed the lawsuit. 

So this is imperative. It is a good tool for the agencies. I heard 

other issues that were needed. One was the whole bundling concept 

37

which is a whole number issue that once we get through this, get 

this implemented, we will have to go back and start the 

unbundling. But we need to get this. Without this tool those agencies’ hands are fairly well tied. 

Chairman BRALEY. In June of last year the SBA issued proposed 

regulations for the Women’s Procurement Program and suggested 

that establishing a certification program whereby SBA would certify all companies as women-owned, does that seem reasonable to 

you? 

Ms. DORFMAN. Well, I think what needs to happen is they need 

to go back to the letter of the law that Congress implemented and 

follow that. 

What they were proposing was that through this certification 

process that they would take in house, they would not also acknowledge DOT certification which is already in play, that they 

would be able to get 2,000 certifications for woman-owned firms 

done a year. There is 76,000 woman-owned firms registered in 

CCR. This would 38 years more to actually complete and get implemented. I don’t think that is reasonable at all. I think we need to 

stick to what the letter of the law is and follow that. 

Chairman BRALEY. Ms. Smith, during your testimony you talked 

about some of the problems you had experienced in delaying the 

implementation of this program and also talked about suggestions 

you might have to offer other women-owned businesses who face 

challenges in gaining access to these procurement programs. I just 

wanted to give you the opportunity to share some of those suggestions with us. 

Ms. SMITH. I think one really good suggestion was, and it was 

brought before you about outreach. The SBA can go to different organizations. They can go to conferences held by women-owned businesses. They can implement a program that would allow a centralized system so that we can access it easily. Because the research 

now, I don’t have time to sit in front of my computer and research 

for hours on hours. That I think the biggest key for me is getting 

a centralized location so that they know who we are and that we 

are women- owned and we are all small businesses. And that they 

can even come to us as opposed to us always going to them. 

Chairman BRALEY. All right. One of the things you talked about 

in your testimony was the amount of research required to identify 

contracts to bid. Have you taken advantage of any of the electronic 

systems that we talked about, such as the FedBizOpps? 

Ms. SMITH. Actually, I was not aware of that until I started 

doing research to appear here today. Weekly I get e-mails from 

companies that offer me the service to research for me at a fee of 

$120 a month. But they cannot guarantee any results or return on 

my investment of $120 a month. So I have not taken the time. 

Once again, it is simply because as a woman I have several hats. 

I have the hat of a mother. I have the hat of a wife. I also am a 

partial owner of two additional businesses. But I also registered 

with the CCR. Why could not the CCR come back to me and offer 

me suggestions of where I can get governmental contracts. 

Chairman BRALEY. One of the concerns I mentioned earlier in 

the hearing was this issue of geographic imbalance. The Department of Education has 88 percent of its contracts awarded in the 

38

greater D.C. area. The Small Business Administration has 90 percent of its contracts awarded in the greater D.C. area. 

As someone who has participated out in the heartland, can you 

talk to us a little bit about the specific challenges of small businesses owned by women who do not have access to some of the information and resources available here in this area? 

Ms. SMITH. That was really disheartening for me to read also 

when I started doing research. Let me just state that 2 percent of 

my income comes from the Government for contracts with USDA. 

My taxes on that, I pay well over 400 percent of that back in taxes. 

It is very disheartening for me. 

The problem that women-owned small businesses have out there, 

especially in rural Iowa, and this is very sad to say, but even in 

my profession we call it ‘‘the good boys club.’’ We are not always 

allowed access. We are kept out of a lot of professions in a lot of 

areas, which even makes it even more difficult. 

There are some companies and institutions, the University of 

Northern Iowa for example, offers an excellent outreach program to 

help women get into business, help them meet their goals of their 

business. I applaud them. But once again, it is a time factor. I do 

not know how many women can take out 2 to 3 weeks out of their 

lives and go and learn a lot of this and yet still try to keep this 

business that they started up and running. 

Chairman BRALEY. Ms. Lomasney, in your testimony you talked 

about what has not worked and you mentioned specifically the federally funded transition of research into products is inefficient, and 

you described as the Valley of Death. Can you give us a little bit 

more insight into your experience with that particular problem? 

Ms. LOMASNEY. Absolutely. I would be happy to. 

My company does a lot of contract research and development for 

the Department of Defense. And in general we are trying to develop technologies that will result in innovative products. Unfortunately, the SBIR programs tend to stop at a particular point in the 

development process. And the result of that is that we do not actually get to procurement contracts. So we do not realize that transition from an interesting technology that shows promise to an actual product that can realize benefit in the field. And it is that 

transition that is our challenge. And I think it is the Valley of 

Death that we need to address. 

Chairman BRALEY. And so as you walk in the shadow of the Valley of Death and you fear no evil what suggestions do you have for 

this Subcommittee on how we can eliminate that obstacle? 

Ms. LOMASNEY. Well, I think there are a lot of things that we 

can do. Certainly being aware of the Valley and trying to focus initiatives towards realizing that transition within the Government is 

one way. 

Another way is to look to the commercial sector. And I think that 

is where we are trying to innovate and I think women-owned small 

businesses could lead the way in trying to partner with larger corporations, the mentor protege program being one way of realizing 

that, to realize that transition. The commercial markets are very 

efficient at transitioning technologies into products. And so we can 

leverage, I think, a lot of the expertise that already exists to do 

that. 

39

The question is how do we incentivize corporations that have already crossed the Valley of Death to work with small businesses 

and women-owned small businesses to make that transition or to 

bridge that gap. 

Chairman BRALEY. Based on your testimony it is clear that your 

company had contracts that could be considered both prime and 

subcontracts, correct? 

Ms. LOMASNEY. Yes. 

Chairman BRALEY. And given that, some people might argue that 

your company is not in need of the additional assistance that might 

be available from this type of procurement program. How do you 

respond to that? 

Ms. LOMASNEY. Well, first of all, I will say we will never sit on 

our laurels and say good enough is good enough. I would welcome 

anyone to come and visit our library in Seattle. We keep copies of 

all of the proposals we have ever written in our library. And from 

visiting you might think we would be a much larger corporation. 

My statistics show that approximately 1 in 10 to 1 in 12 of the 

proposals we write actually result in some sort of awards. So there 

is a lot of room for improvement. 

I will also mention that I have never ever received a contract 

from the Federal Government that was the result of a well known 

small business set aside. So we work very hard to compete in full 

and open competitions. If that were not the case, I think our statistics might be quite different. The number of jobs that we can create 

as a result would also be. 

Chairman BRALEY. Ms. Roberts, listening to your testimony I felt 

a great deal of frustration at what you must have gone through in 

providing a valuable service that provided a good return to the taxpayers of this country only to have door slammed in your face. I 

wondered if you could comment about what that does to women 

business owners who are trying to capture a piece of this important 

market by having to go through the hoops of countlessly reselling 

the value of your services to the Federal Government? 

Ms. MENDENHALL- ROBERTS. Well, you are quite correct. There is 

a high level of frustration that goes into something that you pour 

your life into. There is a high level of frustration when what you 

can give back, and has been proven that you can give back, is certainly valuable to us all for many reasons. 

I think what it says to women, quite often, is what chance do we 

really stand. I think it says that perhaps there is a lot of lip service 

but there is not much beyond that. 

I think it says that there is an awful lot of rhetoric but there is 

very little accountability that really goes behind. You can enact all 

the laws you want to. Someone is going to have to enforce it. You 

can make all the good Committee hearings and let us get on the 

air and let us put facts before you, but unless you decide that you 

are going to take this back and try to do something with it with 

your peers that is accountable, then we are rather stymied 

We keep trying. I think that you will find most women business 

owners, and I am sure most business owners in general, we are 

quite tenacious people. I was called a she-wolf one time by a peer 

of mine, that if I ever got my teeth into something, I would never 

let it go. And I have never let go of the dream that this business 

40

that means I think so much to what could happen here. Because 

think about it. If we could produce savings on 29 files in excess of 

#35 million, then what really is there to be accomplished? How 

many programs have you and your peers wanted to see go forward 

that you had to cut because of budget restraints. Those funds 

might have kept lunches in children’s tummies instead of having 

to have it cut. 

I think women believe in what they do. I think we believe that 

you people must care. I think you are probably somewhat frustrated sometimes to know what to do for us. And the only thing 

that we can ask you to do is to keep being innovative. Keep hearing. And keep being willing to carry that ball down the field. A 

touchdown is possible. 

Chairman BRALEY. Thank you. 

And with that, I will yield to the Ranking Members. 

Ms. DORFMAN. Thank you, Mr. Chairman. I have no questions. 

Chairman BRALEY. I want to thank the panel for your courage 

in sharing these observations with us. I want to thank everyone 

who came to the hearing today to be part of the very first hearing 

of the Contracting and Technology Subcommittee of the Small 

Business Committee of the United States House of Representatives. 

We have heard a lot of important testimony. We have a lot of follow up work that needs to be done. And I will be working with the 

Chairwoman of the Committee and the Ranking Member to make 

sure that there is greater accountability to see that this program 

not only gets off the board, but it starts to have the type of impact 

in the lives of women-owned businesses around this country and 

achieves the dream that was first set out in 1994. 

Thank you all for coming. 

This meeting is adjourned. 

[Whereupon, the Subcommittee meeting was adjourned at 12:30 

p.m.]

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