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20–702 2017

READY FOR LIFTOFF: THE IMPORTANCE OF 

SMALL BUSINESSES IN THE NASA SUPPLY CHAIN 

HEARING 

BEFORE THE

SUBCOMMITTEE ON AGRICULTURE, ENERGY AND 

TRADE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

JULY 12, 2016 

Small Business Committee Document Number 114–068 

Available via the GPO Website: www.fdsys.gov 

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Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

CHRIS GIBSON, New York 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

CARLOS CURBELO, Florida 

CRESENT HARDY, Nevada 

WARREN DAVIDSON, Ohio 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

YVETTE CLARK, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRENDA LAWRENCE, Michigan 

ALMA ADAMS, North Carolina 

SETH MOULTON, Massachusetts 

MARK TAKAI, Hawaii 

KEVIN FITZPATRICK, Staff Director 

JAN OLIVER, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

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(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Carlos Curbelo ................................................................................................ 1 

Hon. Grace Meng ..................................................................................................... 2 

WITNESSES 

Mr. Chris Carberry, CEO and Co-Founder, Explore Mars, Inc., Beverly, MA ... 5 

George Davis, Ph.D., President and Founder, Emergent Space Technologies, 

Greenbelt, MD ...................................................................................................... 7 

Ms. Carol Craig, President and CEO, Craig Technologies, Cape Canaveral, 

FL .......................................................................................................................... 8 

Mr. Stephen Gorevan, Chairman, Honeybee Robotics, Ltd., Brooklyn, NY ....... 10 

APPENDIX 

Prepared Statements: 

Mr. Chris Carberry, CEO and Co-Founder, Explore Mars, Inc., Beverly, 

MA .................................................................................................................. 21 

George Davis, Ph.D., President and Founder, Emergent Space Technologies, Greenbelt, MD ............................................................................... 25 

Ms. Carol Craig, President and CEO, Craig Technologies, Cape Canaveral, FL .......................................................................................................... 29 

Mr. Stephen Gorevan, Chairman, Honeybee Robotics, Ltd., Brooklyn, NY 31 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

Letter from David A. Nesbitt, President, Matrix Composites, Inc. .............. 36 

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(1) 

READY FOR LIFTOFF: THE IMPORTANCE OF 

SMALL BUSINESSES IN THE NASA SUPPLY 

CHAIN 

TUESDAY, JULY 12, 2016 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON AGRICULTURE, ENERGY AND TRADE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 11:00 a.m., in Room 

2360, Rayburn House Office Building, Hon. Carlos Curbelo [chairman of the Subcommittee] presiding. 

Present: Representatives Curbelo, Brat, Meng, and Lawrence. 

Chairman CURBELO. Good morning. I call this meeting to 

order. 

Thank you all for joining us today as we examine some of the 

challenges small businesses face when doing business with the National Aeronautics and Space Administration, or NASA. We have 

an excellent panel of witnesses, and I look forward to hearing their 

testimony. 

During the 114th Congress, the Small Business Committee has 

held numerous hearings on government contracting and subcontracting issues, always seeking ways to make it easier for small 

firms to do business with the Federal Government. What we have 

learned over this time is disturbing. Over the last 5 years, the 

number of contract actions with small businesses fell by almost 60 

percent, and one of the more disturbing figures is that there are 

over 100,000 fewer small firms registered to do business with the 

Federal Government than there were in 2012. This data means we 

have a real problem. 

Another disturbing trend is that, starting in 2008 and continuing 

to this day, we are seeing more business deaths than we are business births each year. Small businesses are the canary in the coal 

mine. When their role in Federal contracting declines, we lose innovation, job creation, and competition, leading to higher costs to the 

Federal Government. This is obviously untenable going forward, 

and we at the Committee remain dedicated to finding solutions to 

stop these trends, be they regulatory, tax, capital access, or government contracting related. 

When most people think about the way NASA works, they think 

of Cape Canaveral in Florida and the Kennedy Space Center in 

Houston. While those certainly are main hubs, the small businesses that work with NASA, be they prime contractors or subcontractors, are located in all 50 States and in nearly every single 

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2 

congressional district. NASA’s presence throughout the United 

States is larger than many might think. Back in my home state of Florida, NASA spent nearly $487 mil- lion last year with $120 million of that going to small businesses. 

In my congressional district, $1.1 million in small business contracts have been signed for fiscal year 2016. Flagship space programs, such as the current Space Launch System, or SLS, and the 

Orion Spacecraft, are increasingly important in providing opportunities for the small business community. However, over the past 

few years, with the retirement of the space shuttle program and 

the starting and stopping of the Constellation program, we have 

seen signs of uncertainty crop up in the supply chain. Too often 

small firms are unsure as to what an administration will do with 

their priorities or what Congress may or may not choose to fund 

moving forward. These challenges discourage some small shops 

from signing space contracts, instead opting for more reliable general aviation contracts. 

Certainty is essential in any business endeavor but is absolutely 

mission critical for an exceptionally innovative and forward-thinking space program. Designing next-generation spacecraft requires 

time and, in recent years, thankfully, there has been bipartisan 

consensus on the path forward for human exploration of deep 

space. With a new administration taking office in January, we 

must build upon that commitment and provide the certainty the industry needs to continue growing, innovating, and building our 

economy to ensure our Nation continues its preeminence in human 

space flight. 

Thank you again, and now I would like to yield to the Ranking 

Member, Ms. Meng, for her opening remarks. 

Ms. MENG. Thank you, Mr. Chairman, for holding this hearing 

today. Since its inception, NASA has been providing young children 

with aspirations of going to space. While not everyone can make it 

through the vigorous training required to be an astronaut, the missions undertaken by the agency have opened up many opportunities for research businesses. Small businesses have had many successes at NASA as various projects within the agency have provided a platform for allowing these firms to come up with inventive 

research and technologies that have permitted us to explore deeper 

into space. 

The space shuttle program in particular provided a long-term 

project in which small businesses would continue developing technology and to explore other uses of this technology. As a result, 

there have been many small business contributions that have now 

been incorporated into our daily lives. For example, tiny LED chips 

originally used to grow plants on the space shuttle and the International Space Station have made their way into a noninvasive, 

handheld medical device that provides relief for muscle and joint 

pain, and can also help reduce certain side effects of chemotherapy. 

Additionally, the autonomous rendezvous and docking technology 

used to assist the space shuttle in servicing satellites resulted in 

an eye-tracking device used in Lasik vision correction surgery. 

Yet, as we will hear today, the end of this program in 2011 and 

the changes in the space industry, have left many small businesses 

in the supply chain looking for ways to continue participating in 

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the marketplace. This is particularly troubling since small businesses affiliated with NASA are found in every state across the nation. 

In 2014, commercial space activities accounted for more than 76 

percent of spending in the industry. The United States in particular has seen its share of commercial activities increase. Of 86 

global launches in 2015, 26 percent globally were commercial, 

while 40 percent of U.S. launches were commercial. 

With this new reliance on commercial space providers and many 

of these companies performing much of the manufacturing themselves, it is vital that NASA ensure that its supply chain is maintained for future space missions. This means renewed emphasis on 

subcontracting opportunities and inclusion of small businesses’ 

technologies and new projects. 

NASA has been successful in including small businesses in its recent missions. Some of our witnesses here today have been involved 

in the various Mars missions, and there are more than 800 small 

businesses contributing to the Orion mission designed to carry astronauts further into the solar system than ever traveled before. 

However, we are seeing a decline in small business participation 

overall at NASA. Since fiscal year 2013, the agency has seen a decrease in dollars awarded to these firms. Although NASA surpassed its prime small business goal of 17 percent, the dollars 

awarded to these firms did not grow despite NASA seeing an increase of nearly $1 billion in dollars eligible for award to small 

businesses. 

In the other small business categories, NASA failed to meet its 

goals for all groups except that of small disadvantaged businesses. 

Additionally, while NASA surpassed its overall small business 

subcontracting goal, the agency still saw a decline of over 30 percent from its fiscal year 2014 goal. We can also expect participation 

to decrease in the current fiscal year as the fiscal year 2016 goals 

set by the agency, in conjunction with the Small Business Administration, have been set lower than the previous year’s goal. That is 

lower than NASA’s actual achievement level. 

During today’s hearing, I look forward to hearing about challenges facing small businesses contracting with NASA and its 

primes and how we can ensure that the new innovative ideas small 

firms bring to the table continue to play a role into the future of 

space exploration. 

I thank all of the witnesses for being here today, and I yield back 

the balance of my time. 

Chairman CURBELO. Thank you, Ms. Meng. 

If Committee members have an opening statement prepared, I 

ask that they be submitted for the record. 

I would like to take a moment to explain the timing lights for 

you. You will each have 5 minutes to deliver your testimony. The 

light starts off as green. When you have 1 minute remaining it will 

turn yellow. Finally, at the end of your 5 minutes it will turn red. 

We ask all witnesses to do their best to abide by the time. 

Now, I would like to start introducing our witnesses. First is Mr. 

Chris Carberry, CEO and co-founder of Explore Mars, Inc., a nonprofit which was created to advance a goal of sending humans to 

Mars within the next two decades. The organization also encourSBREP-219A with DISTILLER

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ages the use of STEM curriculum in the classroom to instill a desire to pursue space exploration for future generations. As CEO, he 

acts as the main liaison for efforts in project ventures. He has been 

an international spokesperson on behalf of various space-related 

entities on numerous occasions. 

Prior to joining Explore Mars, Mr. Carberry served as executive 

director of the Mars Society. In his early career, he acted as a 

member of the steering committee where he organized congressional outreach efforts around the country. An author of dozens of 

articles and op-ed pieces concerning space policy and politics, Mr. 

Carberry has been featured on NBC Nightly News, BBC World, 

NPR, and many other news outlets. Thank you for being with us 

today, Mr. Carberry. 

Up next we have Dr. George Davis, president and founder of 

Emergent Space Technologies in Greenbelt, Maryland. He received 

a Ph.D. in Aerospace Engineering from the University of Texas at 

Austin for his research into the precise orbit determination of low 

altitude satellites using the Global Positioning System. His M.S. in 

aerospace engineering, also from the University of Texas, was on 

on-orbit assembly operations for lunar and Mars spacecraft. His interests include GPS applications, autonomous spacecraft navigation, and orbit determination. 

Prior to starting Emergent, he worked for the Technical Services 

Division of the Orbital Sciences Corporation as a support contractor 

at the NASA Goddard Space Flight Center. Dr. Davis worked in 

the GPS Technology Group providing systems engineering, algorithm development, receiver testing, and data analysis support to 

a variety of missions, including the International Space Station. 

Thank you for being here, Dr. Davis. 

Next, we have Ms. Carol Craig, founder and CEO of Craig Technologies in Cape Canaveral, Florida. A self-described accidental entrepreneur and unconventional CEO, Carol grew Craig Technologies from 1 person in 1999 to nearly 400 associates today. 

Craig Technologies offers high-end custom engineering and technical support services to include software design and development, 

systems engineering and integration, multidisciplinary engineering, 

training, and courseware development, modeling and simulation, 

information technology support, and integrated logistics support. 

She holds a B.A. in Computer Science from Knox College, a B.S. 

in computer science engineering from the University of Illinois, and 

a M.S. in electrical and computer engineering from the University 

of Massachusetts at Amherst, and is currently pursuing a Ph.D. in 

systems engineering at Florida Tech. Thank you for your participation in this hearing, Ms. Craig. 

I now yield to Ms. Meng for the introduction of our next and final 

witness. 

Ms. MENG. It is my pleasure to introduce Mr. Stephen Gorevan. 

Mr. Gorevan is the chairman of Honeybee Robotics located in 

Brooklyn, New York. After only 3 years in operation, Honeybee received its first NASA contract in 1986, and since then has continued to design and develop innovative, reliable systems for space. In 

fact, the company has supplied NASA with critical technologies for 

its last three Mars missions. Mr. Gorevan currently serves as a coinvestigator on the science teams for the Mars exploration rovers 

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and the Mars Science Laboratory SAM instrument, and is a member of the Venus Science Definition Team. Welcome, Mr. Gorevan. 

Chairman CURBELO. Well, with that, we will begin our testimony, but I should say first that this is probably the most impressive panel that I have been able to listen to since arriving in Congress, so this is very exciting, and I am sure Ms. Meng shares that 

sentiment. 

Mr. Carberry, you may begin. Thank you. 

STATEMENTS OF CHRIS CARBERRY, CEO AND CO-FOUNDER, 

EXPLORE MARS, INC.; GEORGE DAVIS, PH.D., PRESIDENT 

AND FOUNDER, EMERGENT SPACE TECHNOLOGIES; CAROL 

CRAIG, PRESIDENT AND CEO, CRAIG TECHNOLOGIES; STEPHEN GOREVAN, CHAIRMAN, HONEYBEE ROBOTICS, LTD. 

STATEMENT OF CHRIS CARBERRY 

Mr. CARBERRY. Thank you, Chairman Curbelo, Ranking Member Meng, and members of the Subcommittee, for the invitation to 

testify at today’s hearing. I am honored to be here to discuss the 

importance of small businesses to NASA supply chain and the significant contribution such companies make to our Nation’s space 

program. 

Explore Mars is a small, nonprofit space advocacy organization 

that communicates regularly with industry, including small businesses. As such, we are well-positioned to report on fluctuations, as 

well as progress, space policy, and how uncertainty impacts American business. 

When the space shuttle was retired in 2011, it was not to retreat 

from human space flight but because of safety concerns in the wake 

of the Columbia accident and to free up funds to build new launch 

systems for access to low Earth orbit, as well as to take our Nation 

to destinations such as the Moon and Mars. Unfortunately, uncertainty caused by politics and budgetary fluctuations resulted in a 

growing gap between the space shuttle program and these followon programs. 

NASA’s annual procurement numbers show that the space program funding goes to small businesses in every State. Small businesses received about $5 billion in contracts in fiscal year 2015 and 

about $2.5 billion were awarded directly to small businesses and 

prime contracts. 

According to two recent NASA small business reports, more than 

800 small businesses from 47 States played a role in the Orion 

crew capsule program, NASA’s next-generation spacecraft and, 

similarly, more than 800 small businesses in 43 States have supported the Space Launch System, or SLS, NASA’s new exploration 

class rocket. With these vehicles and other capabilities, NASA 

hopes to land humans on Mars beginning in the 2030s. 

But Mars is not a new goal. It has been one of NASA’s official 

goals under multiple administrations and Congresses, as demonstrated by the enactment of the NASA Authorization Acts of 

2005, 2008, and 2010. Most recently, the House passed its version 

of the NASA Authorization Act of 2015, stating that the goal of the 

administration’s exploration program shall be to successfully conduct crude missions to the surface of Mars beginning human exploSBREP-219A with DISTILLER

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ration of that planet. Recent national polling also suggests very 

strong support from the general public, particularly when they are 

made aware that NASA accounts for less than half of 1 percent of 

the Federal budget. 

Today NASA, along with U.S. industry, international partners, 

and others, is gearing up to achieve this goal. While much work 

needs to be done, we are on the verge of restoring American access 

to space for our astronauts. Hardware for deep space missions is 

actually being built, and the first workshop to discuss the potential 

landing zones for humans on Mars actually just recently took place. 

Thanks to Congress, NASA’s budgets have achieved some stability 

in growth recently, but only a few years ago budgetary uncertainty 

hit NASA and the space industry particularly hard, leaving the 

space community, including large and small businesses in crisis. 

I recall meeting with a high-ranking NASA official a few years 

ago who did not know whether his directorate budget would be increased by $2 billion or reduced by $1 billion the following year. In 

other words, he had $3 billion in budgetary uncertainty, which is 

a tremendously large amount for any NASA directorate. Needless 

to say, this directly impacted industrial partners and subcontractors along the supply chain. In the same timeframe, I spoke to numerous prime contractors who also mentioned that this budgetary 

uncertainty impacted their decision-making. They were hesitant to 

spend funds, which once again resulted in a disproportionate impact on small businesses. 

Space exploration is clearly not just the business of large corporations as I am sure will be made clear by the other witnesses. 

Small businesses play an essential role in the success of our space 

program, producing a myriad of products and capabilities. To assure support for these businesses, we must not be a penny wise 

and a pound foolish with NASA’s budget. It makes absolutely no 

sense to allow an even modest reduction in NASA’s budget, while 

at the same time removing any prospect of NASA achieving its 

mandate for Mars, particularly when only a little more and consistent funding will serve taxpayers in a manner that will provide 

tremendous benefits to our entire society and be remembered for 

millennia. There are not too many Federal programs that can 

achieve anything comparable. 

We are approaching another major hurdle with the upcoming 

change in administrations. Will we shift directions again and throw 

our space program into turmoil or embrace our current policy of 

sending humans to Mars? We have come so far in recent years and 

it benefits no one if we radically change course again, not NASA, 

not large businesses, not small businesses, and certainly not the 

taxpayers of the United States. 

In closing, Explore Mars would like to thank you for holding this 

hearing to highlight this Nation’s small business innovations. We 

will be sending humans to Mars in the very near future and it will 

be accomplished in large measure based on the support we show 

for, and the efforts of, small businesses around the United States. 

Once again, thank you. 

Chairman CURBELO. Thank you, Mr. Carberry. 

Dr. Davis, you are recognized. 

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STATEMENT OF GEORGE DAVIS 

Mr. DAVIS. Chairman Curbelo, Ranking Member Meng, and 

members of the Committee, thank you for giving me the opportunity to speak to you today. 

Emergent Space Technologies, which I founded in 2001, is a 60- 

person aerospace engineering and software development firm 

headquartered in Greenbelt, Maryland, with employees in Maryland, Virginia, Texas, New Mexico, Colorado, and California. We 

provide technical services and perform research and development 

for NASA, NOAA, the Air Force, and DARPA. 

NASA is our primary customer, and it is known for large, complex space programs, so one might think that only large businesses 

are capable of supporting its missions. In fact, small businesses 

form a vital part of NASA’s contractor workforce. Simply look at 

the Orion Crew Vehicle, the Space Launch System, the James 

Webb Space Telescope, and the Mars 2020 Rover, NASA’s latest engineering marvels. You will see that we are providing unique, technical expertise and innovative engineering solutions. 

Nonetheless, small businesses in the NASA supply chain face 

many challenges. Chief among them is a diminishing supply of 

small business set-asides. This is sometimes driven by contract 

bundling in which smaller prime contracts are combined with or 

bundled into larger contracts that are required under full and open 

competitions, but is also due to the manner in which NASA uses 

NAICS codes to establish prime contracting and subcontracting opportunities for small businesses. 

The North American Industry Classification System, or NAICS, 

is used by federal agencies to classify businesses when collecting, 

analyzing, and publishing statistical data related to the U.S. economy. The Small Business Administration has established size 

standards that are matched to the NAICS codes, and they specify 

how large a business can be and still qualify as small for federal 

contracts. These contracts are expressed in either millions of dollars or numbers of employees. For example, the NAICS codes for 

engineering services uses a standard of $38.5 million in revenue for 

small businesses. The NAICS for computer programming services 

uses a standard of $27.5 million in revenue. These codes are most 

relevant to my company and hundreds like us. However, their size 

standards are roughly equivalent to a 150- to 250-person company, 

or about 3 to 4 times our size. The NAICS code for research and 

development is used most frequently by NASA for small business 

contracting considerations. 

In February 2016, the SBA changed the standard from 500 employees to 1,000. This is 15 times larger than Emergent. For another comparison, consider the U.S. Census Bureau’s 2013 statistics of U.S. businesses, which shows that 99 percent of our country’s 5.7 million firms have less than 500 employees. 

I recently studied the NASA prime contracts whose primary requirements are science, engineering, or software, and are strategically aligned with Emergent’s business interests. There are roughly 

50 of such contracts. Of these, only 35 percent are full and open 

competitions for companies of any size. That is the good news. The 

bad news is only 14 percent are set aside using the NAICS codes 

for engineering services or computer programming services. 

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The standards set by the NAICS codes and the way they are 

used by NASA to establish prime contracting opportunities for 

small businesses is important. In government contracting, size does 

matter. The more billable employees you have, the more you can 

spread your G&A costs over those hours, and so your rates are 

lower which makes you most cost competitive. Moreover, you can 

afford more nonbillable employees for business development and 

proposal writing, which is the lifeblood of our industry. 

Given these advantages, it is extremely difficult for companies of 

our size to compete with those that are 10 times larger, especially 

when you have so few chances to develop experience as a prime 

contractor. Emergent and other small businesses like us have had 

to adapt to the shrinking opportunities for prime contracting by focusing more on subcontracting. The downside of being a subcontractor is that we have less control over our own business destinies. 

We have to work on multiple proposals with multiple primes, usually simultaneously, just to increase the statistical likelihood that 

we maintain our businesses, let alone grow them. Growing a company through subcontracting alone is very difficult. As a result, the 

most stable, successful small businesses in NASA’s supply chain 

are able to prime contracts. This is where we want to be. 

Two changes that NASA could make to help small businesses 

are, one, expand its use of small business set-asides under the engineering services and computer programming NAICS codes; and 

two, use a size standard for emerging small businesses, which is 

defined as 50 percent of the NAICS standard. This would help create new small businesses and also give existing ones like ours more 

opportunities to gain experience as a prime contractor. Otherwise, 

it is virtually impossible to compete for the larger set-asides under 

research and development. 

In closing, I would again like to thank you for your time today. 

I know you understand the importance of small businesses as the 

backbone of our economy. All the great large businesses, from 

Lockheed Martin to Boeing, to Microsoft and Apple started out as 

small businesses at one time. In order for this trend to continue in 

the aerospace industry, we need for NASA to expand small business opportunities through set-asides targeted for companies our 

size, not just the large small businesses. 

Working on NASA projects is a dream come true for me and for 

my employees. It is why we get up in the morning and go to work, 

to play a role, even a small one, in advancing our nation’s knowledge of the universe and exploring our solar system. 

I have touched on some of the challenges in being a part of the 

NASA supply chain, and there is more that I could discuss, and I 

would therefore be happy to follow up with you and your staff at 

your convenience. 

Chairman CURBELO. Thank you, Dr. Davis. 

Ms. Craig, you are recognized. 

STATEMENT OF CAROL CRAIG 

Ms. CRAIG. Thank you. Good morning, Chairman, Ranking 

Member Meng, and the members of the Committee. I appreciate 

the opportunity to testify today. 

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In 1999, I started Craig Technologies at my kitchen table. My 

husband is a Navy officer and our repeated moves and transitions 

led me down the entrepreneur path. By 2010, the company was 

successful, profitable, and reputable. With revenues topping $20 

million and through strictly organic funding I knew there was more 

opportunity to serve both commercial and government clients with 

our brand of superior service, and so I made the move into manufacturing. 

My foray into manufacturing started small. I had a need for 

quick and quality work and realized I could do it internally with 

the correct approach. I purchased the assets of a small machine 

shop and then invested wisely in supplemental equipment, providing the company with a nimble production facility that quickly 

garnered interest from existing NASA supply chain members. 

When KSC, Kennedy Space Center, leadership decided to pursue 

a non-reimbursable Space Act Agreement with a company in order 

to take over the remains of the NASA Shuttle Logistics Depot, 

Craig Technologies bid on and eventually won the opportunity to 

house and maintain the manufacturing equipment for a period of 

5 years and utilize it for any commercial purpose. Now, keep in 

mind this was a non-reimbursable Space Act Agreement, and so no 

money was exchanged, no contracts, it was purely an entrepreneurial opportunity. 

Since that time, I made the conscious decision to utilize the profits from the successful engineering and technical services division 

to fund the emerging aerospace solution side. I did not utilize outside capital in order to preserve the culture and autonomy that 

makes Craig Technologies so different than other government contractors. We grew from $20 million in 2010, to $45 million today. 

We continue to provide outstanding service and product to all of 

our customers with NASA as the largest. As the commercial space 

industry grows around Cape Canaveral and KSC continues to pursue public-private partnerships through commercial crew and commercial cargo contracts, the feature for astro and aerospace manufacturing in Brevard County is poised for explosive growth and relevant economic impact. 

I tell you this backstory because it leads to where I am today, 

at a crossroads of how to keep the manufacturing side afloat while 

waiting for delayed payments, extended NASA contract decisions, 

and lack of access to working capital because of stringent banking 

regulations imposed by the federal government. I have effectively 

robbed Peter to grow Paul. I did so because it was the right thing 

to do, for our business, for our employees, and for our community. 

I believe in our free market system and always strive to offer the 

very best product and service for the price agreed upon. 

Unfortunately, the cards remain stacked against the small business entrepreneur, even one who overcomes the odds and makes it 

to the next level. Unforgiving and uninformed covenants by lending 

institutions lead to myopic attitudes towards growth in the government sector and the milestones that point toward long-term stability and success. 

Creating valuable employment opportunities in my community 

still remains my number one goal and priority, but money has to 

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come in the front door on a logical and planned timeline in order 

to properly budget and ensure the books remain solvent. 

Manufacturing built this country. We lost it to cheaper and inferior overseas suppliers and then we complained when the jobs went 

away. Now there are numerous folks like myself who are laying it 

all on the line to recover the industry. We need help and we need 

it now. We do not want handouts, but rather a fair and predictable 

system that ensures that payments are made and contracts are satisfied without political whim. What if more and more companies 

my size, like myself, are unable to succeed and close their doors? 

The impact on communities and our nation will be devastating. 

NASA continues to explore and innovate and their supply chain 

remains critical to both long and short-term success. 

I urge you to report to the full body that commitment to a clear 

path and mission with 10-year budget cycles is crucial to the continuation of small business partnerships with NASA, and collaboration with lending institutions through small business offices within 

the agency will allow the banking world to understand the nuances 

of our government contracting and work. 

Pursuant to your questions, I offer my thanks for your time. 

Chairman CURBELO. Thank you, Ms. Craig. 

Mr. Gorevan, you are recognized. 

STATEMENT OF STEPHEN GOREVAN 

Mr. GOREVAN. Mr. Chairman, Ranking Member Meng, and distinguished members of the Subcommittee, thank you for the opportunity to share my perspective as a small business contractor to 

NASA. NASA, working with small businesses, is creating amazing 

technologies for flight, for our exploration, and together we help 

keep American innovation the envy of the world. 

Honeybee Robotics is a company I cofounded in 1983. The company has been supporting NASA from our headquarters in the 

Brooklyn Navy Yard and from our facilities in Colorado and California. We build robots and mechanisms for tough environments, 

such as planetary exploration spacecraft, and we have worked for 

most of NASA’s centers. To get an idea of the kinds of things we 

do, I point to the Mars program, where Honeybee Robotics has designed, built, and integrated vital devices onboard all four spacecraft NASA has landed on the surface of Mars since the year 2000. 

We have achieved several firsts, including developing the first tools 

to break into rocks on Mars and the first tool to sample ice on 

Mars. 

Now I will take a little time to humbly make some observations 

and suggestions with respect to NASA and small businesses. First, 

while manned programs such as the Shuttle and Orion are important to small business, NASA’s Earth science, planetary science, 

and exploration R&D are also critical areas where small business 

can contribute to the agency’s mission. 

Second, the ability for small businesses to deliver useful technologies is dependent on long-term mission clarity. Unfortunately, 

even when a small business has its technology selected for flight, 

delays are frequent and project cancelations are an ever-present 

risk. Small business contractors often bear that risk and pay the 

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price when the nation’s political leadership changes NASA’s mission priorities. 

Third, small businesses face significant headwinds competing for 

contracts that require matching investment. This is because most 

space exploration innovations lack immediate commercial application and matching requirements, which effectively boxes out small 

businesses in favor of more highly capitalized large businesses. 

Eliminating or reducing matching investment requirements for 

small businesses, particularly new small businesses, will liberate 

NASA to choose from companies with the best technology, not only 

from those with sufficiently large internal budgets. 

Finally, I would like to say a word about the terrific Small Business Innovation Research program, a program that has proven 

vital to both small businesses and NASA. I submit here two suggestions to improve the program, neither of which requires new appropriations. First, if Congress would gradually increase the share 

of funding that federal agencies allocate to SBIRs from the current 

rate of about 3 percent up to 5 percent, it would provide for a dramatic lift, I think, especially if the new funding were spent to support technology once it exits the phase two program. At that point, 

a company often finds itself having developed a functional system 

but facing the so-called valley of death before it can demonstrate 

commercial viability or flight readiness. 

Second, the SBIR program’s success depends on the ability to 

match NASA’s needs. NASA currently places a communication ban 

between companies and the agency when it releases its solicitation. 

Instead, I suggest NASA take a page from the Department of Defense, which holds a month-long prerelease period when a small 

business can ask questions about the technology requests. I believe 

that having this window of dialogue prior to the formal NASA 

SBIR solicitation release will produce higher quality, better targeted technology development. 

Today, Honeybee Robotics has grown and works in many different fields for Uncle Sam and for private industry around the 

world. We are having a fantastic run, actually, but in my heart it 

all stems from NASA. I was one of those first graders marched into 

our school cafeteria with the rest of the student body and set before 

a stage-mounted television to watch the launch of Friendship 7 carrying John Glenn to orbit. I have never forgotten it and I was 

hooked hard. I wanted to work for NASA ever since. 

Blessedly, my childhood dream has come true, and now as a professional and adult I have found NASA understands very well the 

ways in which the small business community can help it succeed 

with its mission. Thank you. 

Chairman CURBELO. Thank you very much, Mr. Gorevan. Now, 

we will begin the first round of questions. I will recognize myself 

for 5 minutes. 

Mr. Carberry, let us go big picture first because I think it is important for our constituents to understand why we are here and 

why we are having this conversation. Why is it so important for the 

United States to push the limits of science and space exploration? 

How does society broadly benefit from this exercise? 

Mr. CARBERRY. Frankly, it would be a much different world if 

we had not done that. If we had not had the space program, if we 

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12 

had not gone to the Moon, and done all the other things we have 

done in space, and exploration in general. It has benefited society 

enormously. One of the main reasons we should push is to try to 

inspire kids to get a STEM education, get into technical fields that 

benefit our entire society. It is not just the economics that are affected directly by hiring small businesses that are very important, 

but also think by inspiring goals. Big goals like going to Mars or 

going back to the Moon or elsewhere. It shows the country, and it 

shows the world that we are still capable of big things, and I think 

this translates into the economy as well. When the country has a 

positive outlook and, can see that we are doing great things, that 

translates directly to our economy. We have all seen that economies are largely based on psychology; anybody watching the stock 

market can see that. When the country feels that we are doing exciting, bold things, and we are pushing the boundaries, I think that 

has a dramatic impact on the overall feel of the country and the 

economy as well. 

But as for actual programming, I think it is very important that 

we have to find a way, stick with the program, and show people 

that we actually mean it. We have had a problem over the last, 

well, multiple decades, actually, when starting programs, then 

there is a change in administration, then we shift directions and 

we start from scratch again, and we never seem to make traction. 

People begin to lose faith that we are actually going to get it done. 

As a number of people have mentioned, we are at a very pivotal 

moment right now going into the next administration. If we can 

really continue the momentum and start accelerating that momentum into the next administration, I think we can achieve some 

really remarkable things that will impact the country dramatically, 

as well as the entire world. 

Chairman CURBELO. Thank you, Mr. Carberry. 

Dr. Davis, you mentioned something about prospective employees 

and their preferences for small firms, particularly younger workers. 

What do you think they find attractive about working at small 

firms as opposed to the larger, better-known firms? 

Mr. DAVIS. That is an experience I had. Before I started Emergent, I was working for a large company, and then I took a hiatus 

from the aerospace industry and I worked for an IT company for 

a couple of years. It was a very different environment over there. 

Aerospace is a very top-down, military style chain of command, 

with lots of rules and regulations. I go to an IT company where 

people wear shorts and flip-flops, and I can just go walk into the 

president’s office and have a conversation with him. That would 

never happen in the company I worked for. 

When I started Emergent, I wanted to have that same kind of 

atmosphere and feel. This was in the early 2000s. I noticed it was 

not as hard to recruit young engineers to a small aerospace company, and I think it is because growing up with the Internet and 

social media, they just have this idea that work should not be as 

formal as the way mom and dad did it. They want to go to these 

smaller companies where culture is very important. 

So I am sure at your company, Craig Technologies and at Honeybee, we know our employees. We know their children. There is 

this sense of camaraderie and teamwork, and that is what young 

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13 

people want at work. It is the kind of place that we wanted to start 

and have as our businesses. I think it is increasing, you know, I 

started out having to make comparisons between, hey, you come 

work for me and it might be a little more risky than going to the 

larger companies but at least you will have more say in what you 

do. That is another aspect of it. 

I have to make that case less and less now. I just tell them, hey, 

come work for Emergent. We do really cool stuff. We do cuttingedge research. We work for these customers on these projects. They 

walk around our building and they talk to people and they just say, 

you know what? This is the kind of firm that I want to be in. I 

think for recruiting the younger engineers who have advanced degrees, 60 percent of our employees have a master’s or a Ph.D. in 

engineering or computer science, they want to come work for these 

smaller businesses. It is critical for the aerospace industry, is recruiting that high-tech talent to the space program. 

Chairman CURBELO. Thank you, Dr. Davis. 

Now I would like to recognize Ms. Meng. 

Ms. MENG. My question is for Mr. Carberry, or anyone can probably answer. Like many other agencies, and as you have all mentioned, NASA has seen its budget reduced and fluctuated. Mr. 

Carberry, in your testimony, you discuss how budget uncertainty 

results in cautious spending from major contractors. Do you have 

examples of how this has disproportionately impacted small businesses, and do you believe that NASA has made necessary adjustments to ensure that small businesses still receive their fair share 

of contracting opportunities regardless of the budget, and what 

more should NASA do? 

Mr. CARBERRY. I can send you specific examples, but I think 

one of the biggest problems was, and this was a few years ago, 

largely coming out after the retirement of the shuttle, but also 

after the change in administrations we shifted course again. For a 

while, because there was a lot of disagreement within the space 

community itself, everybody was in limbo. It was similar in the 

budget itself. The budget was fluctuating at the time, so people 

were not as anxious to invest money in NASA. We did not quite 

know where we were going, when there is not a clear path, it is 

difficult. At least from the experience I had talking with the prime 

contractors, they are not quite sure which direction, if we are going 

to go to the Moon, we are going to go to Mars, we are going to go 

to an asteroid. If we are not quite sure what the direction is and 

what the timeline is on that, it is very difficult for them to plan. 

If they are not planning, they are very hesitant to actually invest 

the funds. 

I can actually get you more specific information directly on it, as 

it filtered down or did not filter down to small businesses, but I recall very clearly in all these conversations, how worried everybody 

was and they did not know where we were going. In addition to 

budget, it is overall direction and keeping clarity in policy because 

even if you have a full budget, if you do not know where you are 

going, it is hard to make these investments. 

Ms. MENG. Do you think NASA has done an adequate job, or 

what more should it do in helping transitioning these small businesses from programs that have concluded, like the shuttle proSBREP-219A with DISTILLER

14 

gram, to its newer missions? In terms of more clarity in policy and 

vision, do you all feel that that is the major issue? 

Mr. DAVIS. There is a number of missions that are much smaller and less visible than the shuttle, the station, SLS, and those 

kinds of things, the planetarium missions, Earth science and space 

science missions. All of those missions feed the NASA pipeline, and 

cancellation of any of those missions can have a devastating effect 

on a small business. Much larger businesses who have deeper pockets might be able to ride out a cancellation while they find work 

elsewhere. Maybe they lose some profit. Small business can have 

its subcontract canceled and people can lose jobs. When someone 

loses their job, they may exit the industry and not come back. 

I go back to what Mr. Carberry said about having certainty in 

the planning of how, these missions are funded and how, they are 

appropriated. We even look into the legislation to see what is coming, and we expect those to be there, and we plan on those being 

there. Our customers, NASA and their primes, expect all those 

things to be there. When those get suddenly canceled, there is not 

much NASA can do about that, it is out of their control sometimes. 

So I would have to say that the budgetary certainty is just critical. 

Mr. GOREVAN. This is a very tough problem and I really cannot 

point to a specific solution, but the cancellations are especially difficult. 

I worked on a joint U.S.-European mission, and I can tell you, 

there are some things about the way the European Space Agency 

works with respect to competition that I do not really like myself, 

but there is a reputation among the Europeans, for some reason, 

they are more consistent. When they say they are going to do a 

mission, they finish it. I am not an expert on why that is, but I 

think that NASA or Congress should try to look into why this is 

so. 

Back when the Rosetta Mission started, NASA was part of it, 

and I was part of the JPL version of that mission, and it was a 

little embarrassing. I mean, we had terrific technology, and we 

went down the road and we were canceled. I mean, the American 

segment. Rosetta went on to glory, but the American segment was 

canceled and it was in stark contrast to the Europeans continuing 

on for 12 more years to a very successful mission. 

Ms. MENG. Thank you. I yield back. 

Chairman CURBELO. Thank you, Ms. Meng. 

Mr. Brat, you are recognized for 5 minutes. 

Mr. BRAT. Chairman, I yield my time to the chair. 

Chairman CURBELO. I thank the gentleman. 

Ms. Lawrence, you are recognized for 5 minutes. 

Ms. LAWRENCE. Thank you. 

Many people do not associate the State of Michigan, which I am 

from and represent, as being associated with the space exploration, 

but small businesses in my state play a major role in manufacturing products. In the fiscal year 2015 alone, NASA awarded contracts to over 50 small businesses in the State of Michigan. One 

example is SpaceX, a major design and manufacturing company focusing on rockets and spaceships, which spent over $22 million 

with suppliers in Michigan, including $3.3 million to businesses in 

my district. More importantly, 75 percent of Space X suppliers are 

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small businesses, so that is something I am very proud of. Your 

comments today really resonate with me because it has a direct impact on my small businesses. 

Dr. Davis, I co-chaired a bipartisan caucus, the Congressional Investment in American Skilled Trade Workforce. You spoke of the 

educational level of your employees. I am always looking for ways 

to get younger Americans interested in the STEM professions. I am 

sure you employ, all of you, skilled trade workers, and you also 

know that the average skilled trade workers are in their fifties, and 

we are not generating the next workforce to replace them when 

they decide to retire. Many of us grew up and got excited about the 

space industry by being forced in our classes to sit down and watch 

it on TV, like you Mr. Gorevan, but in your opinion, what are the 

best ways to attract young individuals to pursue a career in your 

field? 

Mr. DAVIS. I serve on the External Advisory Committee for the 

Aerospace Department at the University of Texas at Austin, so I 

get to interact with students quite a bit. One change I have seen 

in the last 10 years at the university level has been hands-on engineering experience building CubeSats and small UAVs. The students are working on these projects. We did not do this back in the 

1980s when I was in school. They come out with hands-on experience building things and are learning how to solder and learning 

how to wire, and learning how these systems work so when they 

are done they have significant confidence and experience and they 

want to go do bigger things. 

Now you see high schools are building CubeSats. Thomas Jefferson High School in Virginia has been building CubeSats for about 

5 to 7 years, and I have been to the International Space Station 

Utilization Conference a couple of times. Last year it was in Boston 

and they had a whole panel session on high school students from 

Chicago and other cities that were working on CubeSats and 

projects that would go up into the station as part of a hosted payload experiment. So I think pushing that further down into middle 

schools and into elementary schools, and it does not have to be a 

CubeSat. You know, building a model plane and then going outside 

and flying it, the technology, the products are there. You go to a 

hobby shop and you can buy things now and build it yourself that 

was not available to us 20, 30 years ago. So I think it is that 

hands-on. Kids need to be engaged. 

My kids look at the space program as what Dad does. That is 

cool, but when they go on the Internet or they go to the movie theater they see things that look almost real, they say, how come you 

are not doing that? And I am like, well, son, that is not real, but 

some day it will be if people like you get the education and go on 

and do it. We need to start early, earlier than we thought. High 

school is not early enough. You need to get them in middle school, 

and if you can, in elementary school. 

Ms. LAWRENCE. I thank you for your understanding of our 

challenge in America. To sustain your economy and your industry, 

we must invest in the skilled trade workforce. I encourage you to 

not only talk individually to your family, but also provide opportunities to connect to your local communities. Have a day in your facility where you bring in young people and expose them to what 

SBREP-219A with DISTILLER

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you do. We do have to connect it to the movies or else they do not 

get it. Say, you can go into this field and create what you see on 

the movies. 

I heard what you said about the changes in administration, and 

that is something that has resonated. I thank you for bringing that 

to our attention because I think about the funding and sources that 

are available but not about how that change of administration that 

directly impacts the investment into your company. Thank you so 

much for being here. 

I yield back. 

Chairman CURBELO. Thank you, Ms. Lawrence. 

I recognize myself for 5 minutes. 

I think at least one of you said that your firm was starting to 

look at other sources of business, such as general aviation, because 

it is more stable and because it is more predictable. Is this prevalent among small firms like yours, like these? What are the risks 

for NASA if that trend continues? Ms. Craig, maybe do you want 

to take that? 

Ms. CRAIG. Sure. Actually, since I started the company, diversity was very, very important to me for that very reason. You cannot count on necessarily the Department of Defense or NASA with 

all the different budgets. In our manufacturing facility, we were 

kind of a victim of the same thing we have been talking about, the 

planned programs and budget cuts that you expected. Everyone 

was excited because the shuttle capability could be maintained and 

we are today where we are now 4 years later. We should have been 

there 2 years ago. But we absolutely had that plan and have done 

it where you need to diversify. 

The problem that happens at NASA is they are counting on the 

timelines. They are counting on their suppliers to deliver. Even if 

the timeline is solid, there might be changes in specifications, design engineering, and you have to be held, a requirement by NASA, 

they still need those timelines to be met. There is no flexibility for 

a supplier to say, oh, but I have another customer that needs this 

done at this same time so you are going to have to slide to the side. 

I think that is the challenge, and that is why we start to look for 

diversification into other areas. But what is going to happen is 

pretty soon no one is going to want to do business with NASA at 

the expense of the other customers. 

Chairman CURBELO. So yours is not the only firm that is doing 

this, you are seeing this from colleagues? 

Ms. CRAIG. Yes. I have colleagues who have said I will not do 

business with some of the large tier one suppliers to NASA anymore. They are smaller organizations but their are varied reasons. 

One is the regulations, all the paperwork, the certifications and, all 

that, but also the sliding timelines, lack of payment, and things 

like that. There are a lot of those decisions being made. 

Chairman CURBELO. Do you consider this a midterm or longterm threat to NASA’s ability to meet its mission, if suppliers are 

focusing on other business opportunities? 

Ms. CRAIG. I would say so because it also takes NASA time to 

build up a supplier, then if the supplier no longer wants to do business or can no longer do business, now they have to move and find 

more suppliers. So it is costing them money as well. So yeah, I 

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think that is a significant problem. The budgets are a significant 

problem, too, because quality is important, set-asides are somewhat 

important, but it all becomes dollars. 

Chairman CURBELO. Does anyone else want to add to that? Dr. 

Davis? 

Mr. DAVIS. Yes, I would like to add to that. 

We have looked at diversifying our customer base. The DOD and 

the intel communities have much larger budgets than NASA, and 

space situational awareness is becoming an increasingly big part of 

what these organizations are looking at, so it is a natural place for 

us to go. It is difficult, but when you are faced with uncertainty 

with NASA and, not a lot of opportunity to prime, at least we know 

that the DOD budgets are going to be stable and funded over long 

periods of time. If we are going to make that commitment, there 

is probably some payoff. It may take a while to get to there, but 

we are also looking at branching out into health care and other sectors just because, again, the budgets there are much bigger and 

seemingly more reliable. 

I have talked to young people, high school and college age, who 

are aware that NASA’s budget changes with administrations and 

there is uncertainty in that. And so they are like, well, I am not 

going to go into aerospace engineering. I am going to go into civil 

engineering because my parents have told me that NASA is just 

not a reliable place to go work. To me, it is sad that our nation and 

the young people who are getting the education to become the 

workforce of tomorrow cannot rely on the space program as a place 

to get good, high-paying, high-tech jobs that are going to be there. 

Chairman CURBELO. Let me take you back to NAICS, which 

you mentioned during your testimony as well. Do you think that 

is a potential quick fix for some of the challenges firms like yours 

are facing? Do you have any specific recommendations on how we 

may reclassify these firms or come up with new definitions? 

Mr. DAVIS. Sure. I think the biggest challenge is a company of 

my size, if we are going to compete for a proposal, you are going 

up against three or four other companies and it is knock-down, 

drag-out competition. To take on a company that is much, much 

larger than us is an unfair fight. It is like putting a featherweight 

against a heavyweight, you are not going to win that battle very 

often. Using those NAICS codes, the engineering services and the 

custom computer programming services more often as a small business set-aside gives us more of those chances. But even then, if you 

want to start new businesses, you have to create a new code or a 

standard that is even smaller than that. Right? A 250-person company is still 4 times larger than mine, so if I am going to compete 

with them for a proposal, they are going to have 4 times the advantage in my opinion. But if there was a smaller code that, say, limited the size to 100 or maybe $15 million, $10 million in revenue, 

that would make the competition a lot more fair and balanced, and 

I think that would encourage new small businesses to start up. 

It is intimidating to write a proposal, the transaction cost to 

write a NASA proposal is quite high. You have to put together a 

100-, 150-page book that has technical, management, costs, past 

performance, and then all the plans that go along with that. Obviously, larger companies have a big advantage in that. If you want 

SBREP-219A with DISTILLER

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the new small businesses to come up, you have to narrow the competition down and you have to make the transaction costs lower. 

Chairman CURBELO. Thank you, Dr. Davis. 

Ms. Meng, do you have any additional questions? 

Ms. MENG. I just wanted to inquire about the online resources 

that NASA has to help individuals and small businesses interested 

in working with NASA. Are small businesses using these resources 

at all or do you rely on trade associations for guidance? How can 

the online resources be improved if they are not being used 

enough? Maybe Ms. Craig or Mr. Gorevan? 

Mr. GOREVAN. I am sorry, online resources for finding people 

to work for you? 

Ms. MENG. Business opportunities with NASA. 

Mr. GOREVAN. Oh, business opportunities with NASA. 

Ms. MENG. Yes. 

Mr. GOREVAN. Of course,we use online resources at my company. The SBIR program is heavily based online and we make 

quite a bit of use of these types of things. I think since 2013 alone 

we have had 61 NASA contracts that all came from online sources, 

so I would say that they are very useful. I cannot really point to 

any improvements that are really necessary except I think perhaps 

maybe identifying some of the contacts that we could talk to. As 

I mentioned in my testimony, sometimes when these online solicitations are released we are not allowed to speak to anyone, and as 

I said, the Department of Defense does allow a month period where 

you can talk to people. I think it would be better for both parties 

if that was allowed to happen at NASA. 

Ms. CRAIG. I will comment on that, also. When we were about 

10 employees, I had initially tried to pursue what you are talking 

about, the online resources, whether it was for—there is one 

FedBizOpps or it is the NASA, trying to find opportunities, but increasingly was told if you are looking there you are behind the 

power curve. We had to invest in third-party companies or products. There are some other, GovWin, e-pipeline at the time, and 

then you are able to get all the information to really more effectively bid on opportunities. There is somewhat of an issue and that 

may be government-wide, globally when it comes to finding those 

opportunities, and that is some of the struggles of small business. 

You have to be out there making your case and it takes 18 months 

or more to be able to make that case, understand what the customer wants, go in and speak with them and be intelligent enough 

to bid on a particular opportunity. A lot of that is done through 

subcontracting, but that is a long timeline, and a lot of companies 

cannot survive that long, especially on the uncertainty of whether 

or not you are going to have that opportunity. So there could be 

ways to improve by providing more information and more opportunity to come in and discuss, like you said, with the SBIRs. They 

do it very well. That would be helpful, but, it is a challenge, especially for the really small companies that cannot afford third-party 

companies. 

Mr. DAVIS. I would like to add to that. We use GovWin, which 

is a third-party service, and then the NASA online resources are 

kind of secondary. So you start with GovWin and then you go to 

the online resources. The one online resource that NASA could imSBREP-219A with DISTILLER

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prove is the forecast, and that forecast needs to be updated regularly. It is supposed to be updated quarterly. That does not always 

happen. Then the information that is in there has to be true and 

accurate. They do not always update who the person is, who is the 

CEO or the COTAR or whatever. I will see an opportunity on 

GovWin and I will get all I can get from GovWin, but then I will 

also go to this forecast for the various NASA centers and then try 

to match that up with what I see from GovWin. Just having that 

more accurate and updated timely would be good. 

I think the biggest challenge is that in government contracting 

there is no how-to manual for us to start our businesses. No one 

said, hey, this is what you do, step one, step two, step three. This 

is how you do business with NASA. When I have read those things 

I am like that is not how you do business with NASA, if you did 

that you would have no business. They should probably engage 

with some small businesses that have some real war stories to tell 

that can say this resource is not really useful, and neither is this 

one. You get these small business specialists, and bless their heart, 

they are trying to work hard and help us out, but a lot of times 

I just feel like they do not really know the challenges that we face 

and the things that we have to overcome, and the actual information that we do need. 

For example, when I started my company, I was blissfully ignorant of the need for a contract vehicle. I just thought you could 

start a company and be smart and have good ideas, and somehow 

you would be connected up to this money that would come to you 

to do work. It turns out, no, you have to have a contract vehicle, 

you have to have a prime contractor. That prime contractor may 

or may not let you on their contract. Even if NASA wanted that 

company, I need that company, the prime contractor may say, no, 

they were on my proposal team so I do not need to have them on. 

I have seen that happen. That has happened to me, and that is a 

barrier. The blocking and tackling of being a small business in the 

government contracting world, that kind of information could be 

very useful to small businesses. I do not see that in the online resources. 

Ms. MENG. Thank you. I yield back. 

Chairman CURBELO. I want to thank all of you for your time 

this morning. We have learned a lot, and our goal here is to make 

sure that the small business community in our country can thrive 

and grow and create opportunities for every American, but especially for those who need them the most. Young people who are 

looking for work, immigrants, low-income people, small businesses 

have unique access to those types of individuals, and I am very 

grateful to all of you and to all of our colleagues who participated 

today. 

For more than 50 years, American global leadership in human 

space exploration and space science has been a bright shining light 

of innovation, technological advancement, and scientific achievement. Small businesses are the foundation of the industrial base 

needed to maintain and build upon that advantage. We here at the 

Small Business Committee are committed to expanding small business opportunities to conduct business with NASA and throughout 

the Federal Government. 

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I ask unanimous consent that members have 5 legislative days 

to submit statements and supporting materials for the record. 

Without objection, so ordered. 

We are adjourned. 

[Whereupon, at 12:06 p.m., the Subcommittee was adjourned.] 

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A P P E N D I X 

Ready for Liftoff: The Importance of Small Businesses in the NASA 

Supply Chain 

United States House of Representatives 

Committee on Small Business 

Subcommittee on Agriculture, Energy, and Trade 

Testimony of Chris Carberry 

Chief Executive Officer, Explore Mars, Inc 

July 12, 2016 

Thank you Chairman Curbelo, Ranking Member Meng, and 

Members of the Subcommittee, for the invitation to testify at today’s hearing. I am honored to be here to discuss the importance 

of small businesses to NASA’s supply chain and the significant contributions such companies have made in the past and will continue 

to make to our nation’s space exploration programs. 

Explore Mars is a small, non-profit, space advocacy organization 

that communicates regularly with industry, including small businesses, on an ongoing basis. As such, we are well-positioned to report on the fluctuations, as well as progress, in space policy over 

the last few years and how budgetary and policy uncertainties impact American businesses, in particular, small businesses. 

When the Space Shuttle was retired in 2011, it was not to signal 

an American retreat from human space flight. Rather it was because of safety concerns in the wake of the Columbia accident as 

well as to enable the United States to transition to new generations 

of more cost-effective launch vehicles and to build systems capable 

of taking our nation beyond Low Earth Orbit (LEO) to destinations 

such as the Moon and Mars. Unfortunately, uncertainty caused by 

politics and budget fluctuations caused a gap between the Space 

Shuttle program and these follow-on programs. 

NASA’s annual procurement numbers show that space program 

funding supports small businesses in each and every state. Small 

businesses received about $5 billion in contracts during Fiscal Year 

2015, including about $2.5 billion awarded directly to small businesses in prime contracts. According to two recent NASA small 

business reports, more than 800 small businesses from 47 states 

have played a role in the Orion crew capsule program—NASA’s 

next generation spacecraft designed to carry astronauts to deep 

space destinations. Similarly, more than 800 small businesses in 43 

states have supported the Space Launch System (SLS)—NASA’s 

new exploration-class rocket. This supply chain is not limited to 

human space flight. Innumerable small businesses have supported 

SBREP-219A with DISTILLER

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other valuable programs at NASA, such as the Mars Science Laboratory, with the Curiosity rover that has been robotically exploring Mars for the past four years, as well as other science and technology programs. 

Indeed, NASA’s supply chain provides tens of thousands of jobs 

around the country. These are good, high-paying jobs that contribute in many ways to their local economies. In addition, opportunities to work on NASA’s space programs—to accomplish that 

which humanity has never accomplished before—serve to inspire 

our nation’s youth to go into science, technology, engineering, and 

math (STEM) fields, building the highly-skilled workforce of the future. 

NASA currently hopes to land humans on Mars beginning in the 

2030s. Landing humans on Mars is not a new goal. It has been a 

priority since the days of the Apollo Program, and it has been one 

of NASA’s official goals under multiple Administrations and Congresses, as demonstrated by the enactment of NASA Authorization 

Acts of 2005 (P.L. 109-155), 2008 (P.L. 110-422), and 2010 (P.L. 

111-267). Most recently, the House of Representatives passed its 

version of a NASA Authorization Act of 2015, stating in Section 

201(a) that ‘‘Human exploration deeper into the Solar System shall 

be a core mission of the Administration. It is the policy of the 

United States that the goal of the Administration’s exploration program shall be to successfully conduct a crewed mission to the surface of Mars to begin human exploration of that planet...’’ Recent 

national public opinion polling has also shown that there is overwhelming support by the American people for this goal. This is particularly true when they are made aware that our space program 

is not (as is the subject of myth) an expensive luxury, but actually 

accounts for less than one-half of one percent of the federal budget 

while providing critical benefits to our economy, our national security, and our leadership position in the world. 

Today NASA, along with U.S. industry, international partners, 

and others, is gearing up to achieve this goal. We are on the verge 

of restoring American access to space for our astronauts, while 

hardware for deep space missions is now actually being built, and 

the first workshop to discuss potential landing zones on Mars was 

recently held (with more to come). We are bringing our nation back 

to deep space with American innovation, ingenuity, and technical 

prowess and manufacturing—U.S. industry is hiring highly-skilled 

engineers and technicians, building state-of-the-art facilities, bending metal and test-firing engines that will get humans back to beyond Earth’s orbit for the first time in over 40 years. As CEO of 

Explore Mars, I am afforded the opportunity to work with NASA, 

academia, and industry that together are developing architectures 

our nation needs to regain access to deep space and get to Mars 

within our lifetimes. Explore Mars hosts several events every year 

to not only bring space exploration stakeholders together to review 

potential architectures, but these events also inform the public and 

our elected officials of how deep space exploration inspires innovation, technology development, and job growth throughout the nation—from large corporations to small businesses. We need to continue with this momentum and work with our elected officials to 

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ensure we continue on this Journey to Mars with NASA supported 

by America’s small businesses. 

In order to sustain this momentum, however, adequate funding 

is critical. But almost equally important is budgetary and policy 

stability. Without all three, it will be impossible to move forward. 

Thanks to the support of Congress, NASA’s funding has achieved 

some stability and growth recently. But only a few years ago budgetary uncertainty hit NASA and the space industry particularly 

hard—leaving the space community—including businesses, both big 

and small—in crisis and in a state of immense uncertainty. I recall 

meeting with a high ranking NASA official several years ago who 

didn’t know whether his directorate’s budget would be increased by 

$2 billion or reduced by $1 billion the following year. In other 

words, he had $3 billion in budgetary uncertainty—which is a tremendously significant amount for any NASA directorate. Needless 

to say, this directly impacted industrial partners and subcontractors along the supply chain. Such uncertainty and fluctuations are 

especially tough on small businesses that often get hit the hardest 

by cutbacks. In this same timeframe, I was told by more than one 

of the major contractors that because of an unclear policy and 

budget director, they were forced to be very cautious about spending and investing funds, which results in a disproportionate impact 

to the small businesses in the supply chain. This is no way to run 

a long-term project, let alone a space program. 

Space exploration is not JUST the business of large corporations—as I am sure will be made clear by the other witnesses. 

Small businesses play an essential role not just in the success of 

our space program, but in the nation’s aerospace and defense industries overall. The major players in space procurement do not 

make all the nuts, bolts, pins, fabric, windows, switches, wiring 

harnesses and the other myriad parts in a spacecraft inside their 

own factories. These items are contracted out, much of it to small 

businesses that can make these parts in bulk at a much cheaper 

rate and for other customers as well. Unlike many other contracts, 

NASA contracts often have more value than just the ‘dollar value’ 

would indicate. An example if this appeared in an article in the 

San Jose Mercury News a few years ago. It highlighted the pride 

a worker felt for his contribution to the Apollo Program that landed 

humans on the Moon. He had not worked on life support, propulsion, or some other major system. He had installed some hooks 

that supported the astronaut’s hammocks while on the surface of 

the Moon. Yet he felt, and rightfully so, that he had contributed to 

humanity’s first voyages to the Moon. 

One thing is clear: We must not allow the uncertainties of the 

past to prevail again. We must advance—and accelerate—into the 

next administration. There is strong bi-partisan support for the 

goal of sending humans to Mars, and there is clear excitement 

about that goal from the general public. We must harness that 

strong consensus. 

We must not be ‘‘penny wise and pound foolish’’ with the NASA 

budget. It makes no sense to allow even a modest reduction in 

NASA’s budget, while at the same time removing any prospect of 

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NASA achieving its mandate. Particularly when only a little 

more—and consistent—funding will serve the taxpayers in a manner that will provide tremendous benefits to our entire society and 

be remembered for millennia. There are not many federal programs 

that can achieve anything comparable. 

We are approaching another major hurdle, and that is the uncertainty that traditionally accompanies a change in Administrations. 

Will we once again shift directions and throw our space program— 

and the small business community upon which its success depends—into turmoil, or will we fully embrace our current policy of 

sending humans to Mars? We have come so far in recent years, and 

it benefits no one if we radically change course again. Not NASA, 

not large businesses, not small businesses, and certainly not the 

taxpayers of the United States. 

In closing, Explore Mars would like to thank you for taking the 

time to hold this hearing and highlight this nation’s small business 

innovations! We WILL be sending humans to Mars in the very near 

future. And it will be accomplished in large measure based upon 

the support that we show for, and on the efforts of, those small 

businesses around the United States. 

Again, thank you! 

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Testimony of 

Dr. George W. Davis, CEO 

Emergent Space Technologies, Inc. 

before the 

U.S. House of Representatives Committee on Small Business 

Ready for Liftoff: The Importance of Small Businesses in the 

NASA Supply Chain 

July 12, 2016 

Chairman Chabot, Ranking Member Vela ́zquez and members of 

the Committee on Small Business, thank you for giving me the opportunity to speak to yo on the importance of Small Businesses in 

the NASA Supply Chain. 

Emergent Space Technologies is a 60-person aerospace engineering firm headquartered in Greenbelt, Maryland. With additional locations in Texas, New Mexico, Colorado, California and Virginia, 

we provide technical services and perform research and development for NASA, NOAA, the Air Force and DARPA. Our offerings 

include space mission design, development, and integration and 

test services, as well as flight and ground software technology development. 

NASA is known for large, complex programs such as the Space 

Shuttle, the International Space Station, the Hubble Space Telescope and the Mars Science Laboratory, so one might think that 

only Large Businesses are capable of supporting its missions. In 

fact, Small Businesses form a vital part of NASA’s contractor workforce. Simply look at today’s engineering marvels: Orion Crew Vehicle, Space Launch System, James Webb Space Telescope and 

Mars 2020 rover, as well as dozens of smaller, lesser known programs. You will see that we are making unique contributions to 

NASA’s most challenging missions. 

Small Businesses typically start up around their founders’ technical expertise. For Emergent, it was my background in spacecraft 

Guidance, Navigation and Control, or GN&C. GN&C is critical for 

any space mission, but especially for those that require, for example: precise pointing; rendezvous, proximity operations and docking; 

deep space navigation; and entry, descent and landing. NASA and 

its Large Businesses prime contractors once had a monopoly on 

GN&C expertise, but many of today’s engineers, especially the 

younger ones, prefer smaller companies. This is also true for software engineering. When I started Emergent in 2001, I had taken 

a hiatus from the aerospace industry to work in the IT industry. 

It is there where I saw how modern software was developed. I 

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wanted to combine it with expert GN&C algorithms to help NASA 

and the Air Force enable autonomous space missions. This takes 

great software, so you need great software developers, most of 

which are lured to Silicon Valley, rather than NASA. 

Emergent responded to this ‘‘scarcity of talent’’ problems by developing a network that spans both industry and academia and 

leverages modern social media such as Facebook and LinkedIn. As 

a result, we have found a niche in the aerospace industry by finding top talent in both GN&C and in software development, often 

in the same person. These are a rare breed, so you have to be intentional about your search. In this manner, Emergent, and Small 

Businesses like us, play a vital role in recruiting new and necessary talent to NASA programs. 

Small Businesses are also critical sources of innovation for 

NASA. Over the last 20 years, NASA’s R&D budget has been drastically reduced. NASA’s budget is largely driven but its missions, 

and missions largely do not pay for R&D. They pay for low-risk, 

flight-proven space technology, particularly when it comes to the 

spacecraft bus, the launch vehicle and the ground system. As a result, NASA has increasingly relied on Small Businesses to come up 

with innovative solutions to challenging problems through the 

Small Business Innovation Research (SBIR)/Small Business Technology Transfer Research (STTR) program. Emergent is an active 

participation in this program, generating roughly 15% of our revenue. The SBIR-STTR program helps pay for NASA research while 

also creating good, high-skilled jobs for our economy. 

Despite our role in the NASA Supply Chain, Small Businesses 

face many challenges. Chief among them is the diminishing supply 

of adequate Small Business Set-Asides, especially for Emerging 

Small Businesses. This is often driven by contract bundling, in 

which smaller prime contracts are combined with, or bundled into, 

larger contracts that are acquired under full and open competitions 

that only Large Businesses can realistically prime. While it might 

seem more efficient for NASA to do so, it is our experience that 

economies of scale generally do not apply to government contracting. More importantly, it takes away opportunities to grow 

from the Small Businesses, especially new ones and those without 

the ‘‘disadvantaged’’ designation. A good way to look at this issue 

is through the federal government’s use of NAICS codes. 

The North American Industry Classification System, or NAICS, 

is the standard used by federal agencies in classifying businesses 

for the purpose of collecting, analyzing, and publishing statistical 

data related to the U.S. economy. The Small Business Administration (SBA) has established Small Business Size Standards matched 

to the NAICS codes. The size standards are expressed in either 

millions of dollars or number of employees and specify how large 

a business can be and still qualify as a Small Business for federal 

government contracts. Engineering Services are assigned the 

NAICS code 541330, and the associated SBA standard limits the 

Small Businesses to $38.5M in revenue when using the Military 

and Aerospace exception. Similarly, Custom Computer Programming Services are assigned NAICS code 541511 and this limits the 

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Small Business to $27.5M in revenue. These codes are roughly 

equivalent to 150-200 employee companies, or 2-4 times the size of 

Emergent. The more frequently used standard for small-business 

set-asides is NAICS code 541712, or Research and Development in 

the Physical, Engineering, and Life Sciences. As of February 2016, 

this standard limits Small Business at 1,000 or 1,250 employees, 

depending on the requirement. This is 8-10 times larger than the 

standard set by the 541330 and 541511 codes. According to the 

U.S. Census Bureau’s 2013 Statistics of U.S. Businesses, 99% of 

the United States’ 5,775,055 firms have less than 500 employees. 

This seems inconsistent with the Small Business size standard set 

by NAICS code 541712, which limits Small Businesses to 1,000 or 

1,250 employees! 

I recently studied the NASA prime contracts whose primary requirements are science-, engineering- or software-related and are 

strategically aligned with our business capabilities and interests. 

There are roughly 50 such contracts. Of these, 60% are Small Business Set-Asides. That is the good news. The bad news is that over 

half are set aside with the 541712 NAICS code. Only 4 are setaside using 541330 and 3 are set-aside using 541511, and these 

numbers appear to be dwindling over time. For example, a contract 

at NASA Kennedy Space Center was recently changed from a small 

business set-aside under 541330 to full and open competition. This 

contract has been successfully managed by Small Businesses for 

more than a decade, but was for some reason changed despite there 

being more than adequate competition. 

The standards set by the NAICS codes and the way they are 

used by NASA to establish prime contracting opportunities for 

Small Businesses is important. In federal contracting, size does 

matter. The bigger you are, the lower your rates, which makes you 

more competitive in cost-driven competitions. Moreover, the bigger 

you are, the more personnel you can afford to develop your business opportunity pipeline and write proposals, which is the lifeblood of our industry. It is extremely difficult for companies of our 

size to compete with those that are 8-10 times larger, especially 

when you have so few chances to develop past performance experience. 

Emergent and other Small Businesses like us have had to adapt 

to shrinking opportunities for prime contracting within by focusing 

more on subcontracting and also by looking to Department of Defense opportunities. For many companies, the latter is just not 

practical or even feasible. The downside to being just a subcontractor is that we have to work multiple proposals, usually simultaneously, just to increase the statistical likelihood that we maintain, 

not grow, our revenue. Losing contracts and therefore personnel 

can put you out of business. 

Two changes that NASA could make to help us out are to (1) expand its use of small business set-aside under the 541330 and 

541511 NAICS codes, and (2) use the size standard for Emerging 

Small Business, which is 50 percent of the NAICS standard. This 

would give more opportunities for companies like Emergent to gain 

experience as a prime contractor and grow our base so that we can 

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eventually pursue the larger set-asides that use the 541712 NAICS 

code. It comes down to risk versus reward. I can spend a tremendous amount of time and money trying to beat out a 1,000-person 

company for a prime contract, assuming I can assemble a credible 

team for the broad scope typically associated with these large contracts, or I can try to get on multiple prime contractor teams as 

a subcontractor teammate and hope we win one or more of the opportunities being pursued. In the latter case, I have little to no control over the destiny of my company. 

Another challenge Small Businesses face in supporting NASA is 

the long-term stability of the SBIR-STTR program. Many U.S. 

Small Businesses rely on the SBIR/STTR program for seed funding 

in developing a unique product. Others, like Emergent, rely on it 

to perform strategic R&D for NASA, Air Force and DARPA. Ultimately this funding translates into jobs, both now and in the future. As Albert Einstein once said, ‘‘if we knew what we were 

doing, we would not call it research.’’ Congress can help Small 

Businesses by continuing its strong support of the SBIR-STTR program, especially when it comes to reauthorization in FY2020. Any 

delay or disruption in this vital program could result in the loss of 

thousands of job across the country. Specifically, for NASA, I would 

like to see the well-known ‘‘valley of death’’ problem addressed. As 

you may know, a Phase I SBIR contract is 6 months in duration 

and results in a proof-of-concept demonstration. A Phase 2 SBIR 

contract is 24 months in duration and results in a prototype. While 

the Phase 1 contract is being executed, however, the performing 

firm has to write and submit its Phase 2 proposal. The time it 

takes to evaluate and award the Phase 2 proposal takes months, 

causing a funding gap which in turn causes the Small Business to 

redeploy its personnel, or worse, lay them off. The Department of 

Defense SBIR/STTR program addresses this funding chasm by requiring the Small Business proposers to also bid a 4-month Option 

Period as part of their Phase 1 proposal. If awarded Phase 2, the 

Option Period contract provides continuity until the Phase 2 contract can be executed. This would prevent loss of revenue and valuable personnel, which as I have previously stated is not easy to 

find. 

In closing, I would again like to thank Chairman Chabot, Ranking Member Vela ́zquez and members of the Committee for giving 

me the opportunity to testify on the importance of Small Businesses to NASA’s Supply Chain. Working on NASA projects is a 

dream come true for me and my employees. It’s why we get up in 

the morning and go to work: to play a role, even a small one, in 

advancing our nation’s knowledge of the universe and in exploring 

our solar system. I have touched on some of the challenges in being 

a part of the NASA Supply Chain, and there is more that I could 

discuss that my brief time will not allow. I would therefore be 

happy to follow-up with you and your staff at your convenience. In 

the meantime, please continue to give NASA your legislative support. 

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Ms. Carol Craig, President and CEO of Craig Technologies, Cap 

Canaveral, FL 

In 1999, I started Craig Technologies at my kitchen table. My 

husband is a Navy officer and our repeated moves and transitions 

led me down the entrepreneur path. By 2010, the company was 

successful, profitable and reputable. With revenues topping $20 

million and strictly organic funding, I knew there was more opportunity to serve both commercial and government clients with our 

brand of superior service. My foray into manufacturing started 

small. I had a need for quick and quality work and realized I could 

do it internally with the correct approach. Purchasing the assets of 

a small machine shop and investing wisely in supplemental equipment provided the company with a nimble production facility that 

quickly garnered interest from existing NASA supply chain members. When KSC leadership decided to pursue a Space Act Agreement with a company in order to take over the remains of the National Shuttle Logistics Depot, Craig Technologies bid on and eventually won the opportunity to house and maintain the manufacturing equipment for a period of 5 years and utilize it for any commercial purpose. Since that time, I made the conscious decision to 

utilize profits from the successful Engineering and Technical Services Division to fund the nascent Aerospace Solutions side. I did 

not utilize outside capital in order to preserve the culture and autonomy that makes Craig Technologies so different than other government contractors. We grew from $20 million in 2010 to $45 million today. We continue to provide outstanding service and product 

to all of our customers with NASA as the largest. As the commercial space industry grows around Cape Canaveral and KSC continues to pursue public/private partnerships through Commercial 

Crew and Commercial Cargo contracts, the future for astro- and 

aero-space manufacturing in Brevard County Florida is poised for 

explosive growth and relevant economic impact. 

I tell you this back story because it leads to where I am today— 

at a crossroads of how to keep the manufacturing side afloat while 

waiting for delayed payments, extended NASA contract decisions 

and lack of access to working capital because of stringent banking 

regulations imposed by the Federal Government. I’ve effectively 

robbed Peter to grow Paul. I did so because it was the right 

thing to do—for our business, for our employees and for our community. I believe in our free market system and always strive to 

offer the very best product and/or service for the price agreed upon. 

Unfortunately, the cards remain stacked against a small business 

entreprenuer—even one who overcomes the odds and makes it to 

the next level. Unforgiving and uninformed covenants by lending 

institutions lead to myopic attitudes towards growth in the government sector and the milestones that point toward long term stability and success. Creating valuable employment opportunities in 

my community remains my number one goal and priority. But 

money has to come in the front door on a logical and planned 

timeline in order to properly budget and ensure the books remain 

solvent. Manufacturing built this country. We list it to cheaper and 

inferior overseas suppliers and then complained when the jobs 

went away. Now there are numerous folks like myself who are laySBREP-219A with DISTILLER

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ing it all on the line to recover the industry. We need help and we 

need it now. We don’t want handouts, but rather a fair and predictable system that ensures payments are made and contracts satisfied without political whim. What if more and more companies like 

myself are unable to succeed and close their doors. The impact on 

communities and our nation will be devastating. 

NASA continues to explore and innovate. And their supply chain 

remains critical to both long and short term success. I urge you to 

report to the full body that commitment to a clear path and mission with 10 year budget cycles is crucial to the continuation of 

small business partnerships with NASA. And collaboration with 

lending institutions through small business offices within the agency will allow the banking world to understand the nuances of government contracting and work. Pursuant to your questions, I offer 

my thanks for your time. 

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Written Testimony of Stephen Gorevan 

Chairman and Co-Founder of Honeybee Robotics, Ltd. 

The Brooklyn Navy Yard 

Building 128, Suite 121 

63 Flushing Avenue, Unit 150 

Brooklyn, NY 11205 

Subcommittee on Agriculture, Energy, and Trade 

House Committee on Small Business 

‘‘Ready for Liftoff: The Importance of Small Businesses in the 

NASA Supply Chain’’ 

July 12, 2016 

Mr. Chairman and Members of the House Subcommittee on Agriculture, Energy, and Trade: 

Thank you for the opportunity to share our perspective as a 

small business contractor to NASA. We believe that NASA and 

small businesses have a strong and mutually beneficial relationship. Organizations such as ours play an important role in creating 

enabling technologies for NASA while doing our part to keep American innovation the envy of the world. 

I co-founded Honeybee Robotics in 1983, and my company has 

worked as a small business contractor to NASA for 30 years. Our 

headquarters is in New York, and we maintain satellite offices in 

Longmont, Colorado and Pasadena, California. Our specialty is in 

building robotic and electromechanical systems that operate reliably in the toughest environments, such as planetary exploration 

and spacecraft systems. Over the years we have worked with the 

majority of NASA’s research and space flight centers, winning contracts for pioneering early-stage development as well as flight missions that range from planetary exploration to the Orion spacecraft. 

We have been fortunate to contribute flight hardware to all the 

spacecraft that NASA has landed on Mars since 2000, and in the 

process Honeybee has achieved a succession of firsts on Mars. Our 

Rock Abrasion Tools on the 2003 Mars Exploration Rovers Spirit 

and Opportunity were the first tools to access the inside of rocks 

on Mars. The Rock Abrasion Tool on Opportunity is operating in its 

thirteenth year, some fifty times its original mission life. Our Phoenix scoop for the 2007 Phoenix Mars Lander was the first tool to 

sample water on Mars. Our Sample Manipulation System for the 

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2011 Mars Science Laboratory acts as a robotic laboratory assistant, moving samples to the rover’s instruments so it can detect 

even traces of molecules associated with life. We designed and built 

all these systems in our New York headquarters—and as a lifelong 

New Yorker, I would venture that our facility’s clean room was the 

most pristine place in all of New York City. 

Flagship manned space programs such as the Space Shuttle and 

Orion are certainly important in providing opportunities for the 

small business community, but NASA has set up a robust system 

for technology development outside these high-profile programs. 

From our perspective, the opportunities for small businesses outside these flagship programs—in areas such as Earth Science, 

Planetary Science, and Exploration Research and Development— 

are more numerous and in some ways more important for the sustained attention necessary for technology development. As a result, 

I would encourage the members to consider the effects of all 

NASA’s programs, not only its highest-profile human space missions, in considering how small business can support NASA’s mission. 

The Small Business Innovation Research (SBIR) program is an 

excellent mechanism by which small businesses are encouraged to 

deliver relevant technologies to NASA in a competitive manner. 

NASA also supports many other specific funding mechanisms that 

allow small businesses to grow and commercialize new technologies. The funding in these contracts is almost always spent 

quickly by the contracting company on skilled domestic labor, materials, and direct expenses. We believe this is an effective use of 

public resources to spur economic activity and innovation. 

Honeybee Robotics is a testament to the mutually beneficial relationship between NASA and the small business community. But, 

there are areas for improvement that will serve three purposes: to 

deliver better technologies to NASA; to strengthen the growth and 

commercial prospects for innovative small businesses; and to maintain the technology and economic leadership of the United States 

into the next generation and beyond. 

In preparing this testimony, Honeybee consulted several of our 

friends and business associates in the small business community. 

The statements to follow affect many of us, and reflect a shared 

perspective of ways that NASA could enhance the ways it engages 

small businesses. The goal is to level the playing field such that 

small businesses can compete with larger companies on technology 

and cost-effectiveness so that NASA can be as successful in its mission as possible. 

First, the ability for small businesses to develop and deliver relevant, cost-effective technology is highly dependent on long-term 

mission clarity. As resource-constrained organizations, we are sensitive to the prospect of developing technologies for missions that 

are cancelled in the next political cycle. The preparation and execution of mission requirements can take a decade or longer. It is exceptionally difficult to develop a technology to flight readiness. 

Unfortunately, when a small business does manage to get its 

technology selected for a flight program, the uncertainty, delays, 

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and outright cancellation of funding remains a very real risk. 

Sometimes these delays are a result of Congressional budgeting, 

such as continuing resolutions that delay funding. Sometimes funding is at risk due to reductions in directed expenditures, the effects 

of which can flow through prime contractors and lead to small businesses losing subcontracts. And sometimes interruptions are a result of inconsistency in program development roadmaps, which can 

lead to long breaks between program stages that cause small businesses to lose talent and momentum while they wait months or 

years for the next phase to take effect. The net effect of uncertainty 

is that too often the small business contractors for NASA bear the 

risk and pay the price when Congress or the Executive branch 

changes the priorities it directs NASA to focus on. 

Second, I want to highlight the headwind small businesses face 

when they seek to develop flight technologies or commercialize systems through contracts that require private matching investment. 

I would recommend such investment be eliminated for small businesses due to the chilling effect it places on technology development and the inherent advantages more highly capitalized businesses have in this situation. 

As an example, NASA’s 2016 Next Space Technologies for Exploration Partnerships (NextSTEP) is a public-private partnership 

model that seeks commercial development of space exploration capabilities for human missions beyond low-Earth orbit. This Broad 

Agency Announcement solicitation requires a minimum cost sharing threshold, i.e. private company investment, for businesses to be 

eligible. The details of this requirement pose problems. The solicitations often restrict the eligible in-kind investment to resources 

spent within the last year, so investments from years prior are not 

considered. They also require that a portion of the actual contract 

contain a matching investment (such as 50% of the investment 

must be made during execution of the contract). As a result, NASA 

is limited in the size of the award it can grant to a small business 

with relatively little capital to invest, independent of the value that 

NASA would get from the technology. 

Some form of private investment requirements can make sense 

for a device or technology that can be utilized in other industries, 

where a small business can make a ROI calculation. But in practical terms, much of the technology for space exploration does not 

have immediate commercial application. The effect of the cost-sharing model is to box out small businesses in favor of more highly 

capitalized large businesses that have more significant R&D budgets, even if those businesses do not make as efficient use of NASA 

funds for technology development. 

I would suggest that Congress consider the benefits of making 

small businesses exempt from the ‘‘in-kind’’ contribution requirement that now discourages and limits small, innovative companies 

from participating in projects that NASA has identified as important to its mission. To further enhance the extent that small businesses can participate, I would also suggest that the amount of 

money a large company contracts to a small business be directly 

deducted from the large company’s contribution requirement. The 

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effect of this change will be that large companies gain an incentive 

to work with small, innovative companies. Another option would be 

to include any money NASA has invested in SBIRs as deductible 

from a small business’s private contributions, which is consistent 

with the spirit of the SBIR program and NASA’s charter to encourage industry and innovation. 

Finally, with regard to the SBIR program, I would make two recommendations to strengthen this program that has proven critical 

to both small businesses and NASA alike. Neither requires new appropriations for Federal research and development budgets. 

First, the SBIR program is budget-neutral, but a critical source 

of funding for small business innovation. I recommend that Congress increase the share of funding that Federal agencies allocate 

to SBIR from the current sub-3% up to 5%, with increases enacted 

gradually over the next decade. The most effective use of these 

funds would be to direct most of the increase to maturing technology after the initial Phase II program. Small businesses such as 

Honeybee face what’s known as a ‘‘valley of death’’ between Phase 

II, when we have a functional prototype, and commercialization or 

flight readiness. It is rare for us to find an immediate need at 

NASA where our SBIR-funded technology satisfies a specific problem. Instead, often the technology waits for a mission, or requires 

more investment to prove viability in a commercial or NASA application. Enabling a transition to greater technology development 

after Phase II, rather than straight to commercialization, would 

help small businesses contribute more to flagship projects. 

Second, the SBIR program’s success depends on the ability to 

match NASA’s needs with the capabilities of small businesses 

across the country. Unfortunately, it can be challenging for small 

businesses to understand the details of a technology request that 

NASA issues based solely on the written solicitation. NASA currently institutes a communication ban between companies and the 

Contracting Officer’s Technical Representative once it issues the 

solicitation of SBIR and STTR topics. Our understanding is that 

the intent is to prevent one organization from gaining an unfair advantage with information not available to the larger community. 

On the other hand, organizations such as the Department of Defense have found a way to share information with a pre-release of 

SBIR topics. During the pre-release, small businesses have one 

month to ask questions about the technology and how it fits into 

larger programs before the communication blackout takes effect. 

This enables the small business to better match its technology with 

the goals of the organization and present higher-quality development plans. We recommend NASA follow suit by opening communications on SBIR topics for a reasonable period before instituting 

a ban on contact outside the formal proposal response channels. 

In light of my suggestions above, I want to emphasize that for 

small businesses, NASA remains one of the Federal government’s 

most supportive organizations. I believe NASA understands the 

ways in which the small business community can help it succeed 

with its mission, and it takes seriously its mandate to provide opportunities for small businesses such as Honeybee Robotics to 

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thrive. We are excited for what the future holds and, along with 

our small business colleagues, look forward to the exciting and important missions ahead. 

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