U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001

96–380PDF 2004

H.R. 1460, THE VETERANS ENTREPRENEURSHIP

ACT OF 2003; H.R. 1712, THE VETERANS FEDERAL PROCUREMENT OPPORTUNITY ACT OF

2003; AND H.R. 1716, THE VETERANS EARN

AND LEARN ACT

HEARING

BEFORE THE

SUBCOMMITTEE ON BENEFITS

OF THE

COMMITTEE ON VETERANS’ AFFAIRS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

APRIL 30, 2003

Printed for the use of the Committee on Veterans’ Affairs

Serial No. 108–10

(
COMMITTEE ON VETERANS’ AFFAIRS 

CHRISTOPHER H. SMITH, New Jersey, Chairman 

MICHAEL BILIRAKIS, Florida 

TERRY EVERETT, Alabama 

STEVE BUYER, Indiana 

JACK QUINN, New York 

CLIFF STEARNS, Florida 

JERRY MORAN, Kansas 

RICHARD H. BAKER, Louisiana 

ROB SIMMONS, Connecticut 

HENRY E. BROWN, JR., South Carolina 

JEFF MILLER, Florida 

JOHN BOOZMAN, Arkansas 

JEB BRADLEY, New Hampshire 

BOB BEAUPREZ, Colorado 

GINNY BROWN-WAITE, Florida 

RICK RENZI, Arizona 

TIM MURPHY, Pennsylvania 

LANE EVANS, Illinois 

BOB FILNER, California 

LUIS V. GUTIERREZ, Illinois 

CORRINE BROWN, Florida 

VIC SNYDER, Arkansas 

CIRO D. RODRIGUEZ, Texas 

MICHAEL H. MICHAUD, Maine 

DARLENE HOOLEY, Oregon 

SILVESTRE REYES, Texas 

TED STRICKLAND, Ohio 

SHELLEY BERKLEY, Nevada 

TOM UDALL, New Mexico 

SUSAN A. DAVIS, California 

TIM RYAN, Ohio

PATRICK E. RYAN, Chief Counsel and Staff Director 

SUBCOMMITTEE ON BENEFITS 

HENRY E. BROWN, JR., South Carolina, Chairman 

JACK QUINN, New York 

JEFF MILLER, Florida 

JEB BRADLEY, New Hampshire 

GINNY BROWN-WAITE, Florida 

MICHAEL H. MICHAUD, Maine 

SUSAN A. DAVIS, California 

SILVESTRE REYES, Texas 

CORRINE BROWN, Florida

(II) 
(III)

C O N T E N T S 

April 30, 2003

Page

H.R. 1460, the Veterans Entrepreneurship Act of 2003; H.R. 1712, the Veterans Federal Procurement Opportunity Act of 2003; and H.R. 1716, the 

Veterans Earn and Learn Act ............................................................................. 1

OPENING STATEMENTS 

Chairman Brown ..................................................................................................... 1

Hon. Michael H. Michaud ....................................................................................... 2

Prepared statement of Congressman Michaud .............................................. 103

Hon. Lane Evans, Ranking Democratic Member, Committee on Veterans’

Affairs .................................................................................................................... 2

Prepared statement of Congressman Evans .................................................. 104

Hon. Susan A. Davis ................................................................................................ 3

Hon. Ginny Brown-Waite ........................................................................................ 3

WITNESSES 

Bliss, III, George H., The Building and Construction Trades Department 

Apprenticeship and Training Committee ........................................................... 17

Prepared statement of Mr. Bliss ..................................................................... 116

Gaytan, Peter S., Principal Deputy Director, National Veterans Affairs and 

Rehabilitation Commission, The American Legion ........................................... 38

Prepared statement of Mr. Gaytan ................................................................. 182

Henry, Charles, President and CEO, National Veterans Business Development Corporation ................................................................................................. 31

Prepared statement of Mr. Henry ................................................................... 156

Hesser, Robert G., President and CEO, Hi Tech Services, Inc. ........................... 29

Prepared statement of Mr. Hesser, with attachments .................................. 148

Jones, Richard, National Legislative Director, AMVETS .................................... 40

Prepared statement of Mr. Jones .................................................................... 189

Krempasky, James R., President and CEO, Western Fire, Inc. .......................... 28

Prepared statement of Mr. Krempasky .......................................................... 138

Lawrence, Brian E., Assistant National Legislative Director, Disabled American Veterans ........................................................................................................ 38

Prepared statement of Mr. Lawrence ............................................................. 176

Lopez, John K., Chairman, Association of Service-Disabled Veterans ................ 25

Prepared statement of Mr. Lopez, with attachment ...................................... 128

Mackay, Jr., Leo S., Deputy Secretary, Department of Veterans Affairs; accompanied by Tim McClain, General Counsel; William Campbell, Assistant 

Secretary for Management; Robert Epley, Associate Deputy Under Secretary for Policy and Program Management, Veterans Benefits Administration; and Scott Denniston, Director, Office of Small and Disadvantaged 

Business Utilization ............................................................................................. 7

Prepared statement of Dr. Mackay ................................................................. 108

Ortner, Blake, Associate Legislative Director, Paralyzed Veterans of America . 36

Prepared statement of Mr. Ortner .................................................................. 169

Renzi, Hon. Rick, a Representative in Congress from the State of Arizona ....... 4

Prepared statement of Congressman Renzi ................................................... 106

Schatz, Chad, Secretary, National Association of State Approving Agencies ..... 20

Prepared statement of National Association of State Approving Agencies . 121

Stephens, William D., Co-Chair, Apprenticeship and On-Job Training Committee, National Association of State Approving Agencies ............................... 19
Page

IV

Stephens, William D., Co-Chair, Apprenticeship and On-Job Training Committee, National Association of State Approving Agencies—Continued

Prepared statement of National Association of State Approving Agencies . 121

Styles, Angela B., Administrator, Office of Federal Procurement Policy, Office 

of Management and Budget; accompanied by William D. Elmore, Associate 

Administrator, Office of Veterans Business Development, U.S. Small Business Administration; and Fred C. Armendariz, Associate Deputy Administrator, Government Contracting and Business Development, U.S. Small 

Business Administration ..................................................................................... 33

Prepared statement of Ms. Styles, with attachment ..................................... 160

Sullivan, Ann, Federal Legislative Consultant, Women Impacting Public Policy, Inc. .................................................................................................................. 22

Prepared statement of Ms. Sullivan ............................................................... 125

Wilson, Donald, President and CEO, Association of Small Business Development Centers ........................................................................................................ 26

Prepared statement of Mr. Wilson .................................................................. 135

MATERIAL SUBMITTED FOR THE RECORD 

Bills: 

H.R. 1460, a bill to amend title 38, United States Code, to permit the 

use of education benefits under such title for certain entrepreneurship 

courses, to permit veterans enrolled in a vocational rehabilitation program under chapter 31 of such title to have self-employment as a 

vocational goal, and for other purposes ...................................................... 45

H.R. 1712, a bill to amend the Small Business Act to establish a development program for small business concerns owned and controlled by 

qualified service-disabled veterans, to reauthorize the programs of the 

National Veterans Business Development Corporation, to establish a 

Government-wide procurement goal for small business concerns owned 

and controlled by veterans, and for other purposes ................................... 52

H.R. 1716, a bill to amend title 38, United States Code, to improve 

educational assistance programs of the Department of Veterans Affairs 

for apprenticeship or other on-job training, and for other purposes ........ 81

Statements: 

Lt. Gen. Emmett Paige .................................................................................... 194

Frederico Juarbe, Jr., Assistant Secretary for Veterans’ Employment and 

Training, Department of Labor .................................................................... 198

John J. Flynn, International Union of Bricklayers and Allied 

Craftworkers .................................................................................................. 200

Beth B. Buehlmann, Executive Director, Center for Workforce Preparation, U.S. Chamber of Commerce ................................................................ 202

James N. Magill, Director, National Employment Policy, Veterans of Foreign Wars ....................................................................................................... 207

National Association for Uniformed Services ................................................. 209

Associated Builders and Contractors .............................................................. 214

Written committee questions and their responses: 

Congressman Evans to Department of Veterans Affairs .............................. 219

Congressman Evans to Office of Management and Budget .......................... 224
(1)

H.R. 1460, THE VETERANS ENTREPRENEURSHIP ACT OF 2003; H.R. 1712, THE VETERANS 

FEDERAL PROCUREMENT OPPORTUNITY 

ACT OF 2003; AND H.R. 1716, THE VETERANS 

EARN AND LEARN ACT 

WEDNESDAY, APRIL 30, 2003

U.S. HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON BENEFITS, 

COMMITTEE ON VETERANS’ AFFAIRS, 

Washington, DC 

The subcommittee met, pursuant to notice, at 10 a.m., in room 

334, Cannon House Office Building, Hon. Henry Brown (chairman 

of the subcommittee) presiding. 

Present: Representatives Brown, Brown-Waite, Michaud, and 

Davis. 

Ex-officio present: Representative Evans. 

OPENING STATEMENT OF CHAIRMAN BROWN 

Mr. BROWN. Good morning, ladies and gentlemen. Welcome to 

this morning’s hearing on House Resolution 1460, the Veterans Entrepreneurship Act of 2003; House Resolution 1712, the Veterans 

Federal Procurement Opportunity Act of 2003; and House Resolution 1716, the Veterans Earn and Learn Act. 

As I see it, America’s sons and daughters who have served—and 

are serving—in our military are the most engaging and resourceful 

persons to be found anywhere. I am so proud of them. I am especially proud of our servicemembers who recently have freed 

Afghani and Iraqi citizens from oppressive and murderous regimes. 

In so doing, they have protected our everyday freedom as well. 

These bills are for them, for those who preceded them, and those 

who will follow them. 

The Parliamentarian has split jurisdiction of House Resolution 

1460 to the Small Business Committee and parts to the Veterans’ Affairs Committee. The Parliamentarian refers House Resolution 

1712 to the Small Business Committee. The Small Business Committee retains jurisdiction. Staff continue to informally discuss with 

the Parliamentarian the possibility of a sequential referral to this 

committee for certain parts of House Resolution 1712. 

I am pleased to have the opportunity to work with Mr. Michaud. 

With that, I will turn to him, the Ranking Member, for opening 

remarks. 
2

OPENING STATEMENT OF HON. MICHAEL H. MICHAUD 

Mr. MICHAUD. Thank you very much, Mr. Chairman. Thank you 

also for having this hearing to discuss these very important pieces 

of legislation. The three bills before us today represent efforts to 

enforce and enhance veterans’ small business opportunities, provide quality job training and education programs, and assist service-disabled veterans re-entering into the workforce. 

The first hearing I attended as a Member of this Congress examined in part the issues of veteran small business owners and their 

participation, or lack thereof, in the federal procurement and contracting process. Consequently, I am pleased to be here today to receive testimony and to discuss these measures, which attempt to 

respond to many of the problems raised in the first hearing. And 

I am also fortunate enough to sit on the House Small Business 

Committee as well as this committee. 

I have great interest in these measures and look forward to 

working with my colleagues from both sides of the aisle on both 

committees to improve small business opportunities for veterans 

and service-disabled veterans as well. 

Before we begin, I would like to extend a warm welcome to a fellow freshman lawmaker of the 108th Congress, Congressman Rick 

Renzi. I wish you a warm welcome, and I welcome the testimony 

of those that provide testimony to this committee today. 

Thank you very much, Mr. Chairman. 

[The prepared statement of Congressman Michaud appears on p. 

103.] 

Mr. BROWN. Thank you, Mr. Michaud. I am also pleased to welcome the ranking member of the full committee here this morning, 

Congressman Lane Evans. Mr. Evans is a Marine Corps veteran 

who is a tireless and a highly respected member of this committee, 

where he has served with distinction for some 22 years. Any opening remarks you would like to make, Mr. Evans? I know this is a 

great issue for you, and thank you for being here this morning. 

OPENING STATEMENT OF HON. LANE EVANS, RANKING 

DEMOCRATIC MEMBER, COMMITTEE ON VETERANS’ AFFAIRS 

Mr. EVANS. Well, thank you, Mr. Chairman. It took me about 10 

years before I became a ranking member. So these two members 

are excelling, have done what I was able to do quicker than myself. 

Four years ago, Congressman Bob Stump, former chairman of 

this committee, and Jim Talent, and I had a specific intent when 

we sponsored the bill that became Public Law 106–50. We wanted 

to achieve real results for service-connected disabled small business 

owners contracting with the Federal Government. We also wanted 

to enhance the opportunities of all categories of small business 

owners by setting achievement goals. I will now introduce H.R. 

1712 to achieve the outcomes intended by that public law. 

The executive branch performance to date is very poor regarding 

the achievement of small business owners, their goals, and with 

respect to all service-disabled veterans with small businesses. The 

administration claims that it is about results. Mr. Chairman, H.R. 

1712 will get results. It will get results for small business owners. 

It will get results for veterans. It will get results for women. It will 

get results from the disadvantaged. And it will get results for exec-
3

utive agencies. It is tough, but we need to enact tough and fair legislation to stop this backsliding. But Congress must not ignore 

what we set out to achieve. The bill is balanced. Agencies and vendors alike have had incentives to seek out small business concerns. 

It also has teeth and will soundly snap at any willful non-compliance. 

Public Law 106–50 is being ignored. Let it be heard that the results we intended have not been achieved. I urge my colleagues to 

support H.R. 1712. 

Thank you, Mr. Chairman, for the opportunity to speak, and I 

yield back the balance of my time. 

[The prepared statement of Congressman Evans appears on p. 

104.] 

Mr. BROWN. Thank you, Mr. Evans. 

Ms. Davis, do you have opening remarks? 

OPENING STATEMENT OF HON. SUSAN A. DAVIS 

Mrs. DAVIS. Thank you, Mr. Chairman and ranking member. I 

appreciate being here today. I am certainly looking forward to the 

testimony. And also I just wanted to thank those of you in the audience who are here because your presence is very important. We 

need to hear from you. We need to hear how the bills that we are 

talking about today can benefit you, what the problems might be, 

how we can make them better, what some of the pitfalls may be. 

That will be very, very important. 

I recall, very briefly, when I had an opportunity actually to travel 

to Afghanistan. And we went on the JFK in the Arabian Coast, and 

I met a gentleman there, a sailor, one of our members who had 

been serving for almost 20 years, who was about ready to retire 

from the Navy, very nervous about his future. And yet quite obviously had some wonderful skills and expressed to me more than 

anything else he wanted to start his own business. 

So I think that those are important issues. I appreciate the fact 

that we are dealing with them today, and I look forward to the 

hearing. 

Thank you. 

Mr. BROWN. Thank you, Ms. Davis. Ms. Brown-Waite. 

OPENING STATEMENT OF HON. GINNY BROWN-WAITE 

Ms. BROWN-WAITE. Thank you very much, Mr. Chairman. Obviously, coming from Florida, I have a large number of veterans. And 

one of the things that I always do when I am back in the district 

is I tell people that if they come to the hearings and there are not 

a large number of Members here, it is only because simultaneously 

other hearings are going on. Believe me, every Member who is not 

here on both sides of the aisle, it is only because there probably is 

a mark-up in the other committee that they are on. 

With the large number of veterans in Florida, obviously, encouraging the veterans to start their own business, particularly in today’s economy. It is a great opportunity for people to take advantage of programs out there and to start their own businesses. We 

all know that small businesses are the major employers in our 

country. And anything that we can do to encourage that, I support. 
4

Anything that we can do to enforce the law and put more teeth into 

it is what I believe we should be all about. 

And thank you, Mr. Chairman, for this opportunity. 

Mr. BROWN. Thank you, Ms. Brown-Waite. 

Before I recognize our freshman Congressman from Arizona, I 

would like just to address the audience. We were in a meeting earlier this morning with Speaker Hastert. During the Easter break, 

he went to Germany and met some of the service personnel in the 

hospitals there. And went to the USS Truman, an aircraft carrier, 

and met some 5,000 I guess young sailors and Air Force personnel. 

It looked like a UPS operation where all the merchandise came in 

and was disseminated back. But the impression that was really on 

his heart was that most of those personnel were 19- and 20-year 

old Americans. He said that down the line every person that he 

talked to were patriots. They all were anxious to be there to do 

their job and support this great country. 

And I was relating to Secretary Mackay earlier this morning 

about the responsibility that we have for those young men and 

women who came and served, and came and served voluntarily, 

which is a great attribute for this nation. But we can’t forget them, 

when they come and they serve and protect the freedom of this 

country. We have a moral obligation to continue to support them 

and their families. 

So I am pleased to be a part of this committee, to be chairman 

of this subcommittee. And certainly look forward to the testimony 

this morning. And, like Ms. Davis, I also welcome all of you this 

morning to this hearing. I know it is going to be a long hearing. 

We have got some six panels that are coming, but it is for the right 

reason. 

And, Mr. Renzi, we are certainly glad to have you, a member of 

this committee, to be part of this proceeding this morning. I know 

this is your first year, but you bring a lot of history. Your daddy 

was a general in the Army, and so you have a certain compassion 

for the military. We are pleased to have you come and testify this 

morning. 

STATEMENT OF HON. RICK RENZI, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF ARIZONA 

Mr. RENZI. Thank you, Mr. Chairman. I am honored to be with 

you and Ranking Member Michaud, Ranking Member Evans, and 

my colleagues. Thank you so much for giving me the honor to appear before you today and testify on this legislation that we worked 

on together. It does have a long history. And I am privileged to be 

the one having the ability to sponsor this to help improve veterans’ employment. 

Before I begin, I would like to recognize a personal friend and 

mentor, a man who helped my father become a general, who helped 

raise me down in Fort Huachuca, Arizona, I would like to recognize 

Lt. Gen. Emmett Paige. Lt. Gen. Paige was promoted to lieutenant 

general in 1984 when he assumed command of the Information 

Systems Command, which had over 42,000 soldiers and civilians 

headquartered at Fort Huachuca, Arizona, where I grew up and 

went to high school. Upon his retirement in 1988, President Clinton nominated Gen. Paige for the position of Assistant Secretary of 
5

Defense for Command and Control Communications and Intelligence, C3–I. And he was confirmed by Congress in 1993. After 

which he served as president of OAO Corporation, which is a small 

disadvantaged corporation and which was one of the first to graduate from that program. 

So his expertise and immense understanding of how we can grow 

small businesses and then get them to the point where they can 

graduate is integral today to our testimony. 

Gen. Paige’s testimony will be submitted for the record. 

[The prepared statement of Lt. Gen. Emmett Paige appears on 

p. 194.] 

Mr. RENZI. In addition today, I have with me Mr. James 

Krempasky and his brother. Mr. James Krempasky is a Purple 

Heart recipient from Grenada. He was Businessman of the Year in 

Arizona in 2003. He is uniquely qualified in the field of fire technology and terrorism defense. He has launched a small business in 

Arizona, which has the ability to help protect military bases, federal facilities, and even our capitol with a new fire foam that is a 

non-toxic, biodegradable, and very unique product that he is going 

to be discussing today. 

He will be able to grow his company because of this proposed bill. 

And in also growing his company, the government will be able to 

achieve their objectives of meeting that 3 percent statutory goal 

that all of us together know the government has fallen way short 

of. 

With that, I would like to submit my written testimony for the 

record and briefly discuss the reasons why I have introduced H.R. 

1460. 

The nation asked that young men and women volunteer their 

service to defend the freedoms we enjoy. Sometimes these brave individuals come home with an injury related to their service in the 

armed forces. I believe that we are morally bound to provide certain benefits and services to those who have made personal sacrifices on behalf of this nation. 

Earlier this year, we heard testimony that service-disabled veteran-owned small businesses are not fully participating in federal 

contracting opportunities. While there is a government-wide 3 percent statutory goal for participating by service-disabled veterans’

small businesses, the federal contracts to these business owners 

have not come anywhere near that goal. In fact, according to Administration figures, the numbers are going down. We need to improve veteran business owners and the federal contracting officers 

and provide them with the tools to achieve that goal. As servicedisabled veterans return home from Operation Iraqi Freedom, we 

should give them the Purple Heart and the nation’s gratitude, 

which they earned. And, in addition, we should help them in their 

transition into private life. They don’t need a hand-out, they need 

a hand-up. And they simply need access to the resources and the 

opportunities to cultivate their businesses that are accorded to 

other select groups. 

For those veterans who want to use the skills and training they 

have gained during their service to create a business, this legislation allows them to use their VA education benefits to learn how 

to grow and manage a business. This legislation gives government 
6

contracting officers the discretionary authority to set aside contracts up to $5 million for service-disabled veteran-owned small 

businesses, the same authority accorded small and disadvantaged 

business, women-owned businesses, Hub Zone 8A owned 

businesses. 

Service-disabled veterans reflect the fabric of our America. And 

this legislation provides the ability of veterans of every race, creed, 

gender, and economic condition to participate in contracting business with the Federal Government. 

H.R. 1460 provides equity in federal contracting. Today, veterans 

who want to compete for federal contracts may not disclose that 

they are even a veteran-owned business because they don’t benefit 

from this disclosure. Under this legislation, they will have the 

same advantages as other small businesses. Veterans should not be 

ashamed of their service. They should be proud of it and be able 

to benefit from it. H.R. 1460 will restore this pride that many of 

our men and women feel in serving our nation. They have earned 

our respect and they deserve to be treated fairly. They help preserve our economic environment, our economic security, and they 

allow this nation to prosper. It only seems right that they should 

participate in the market they have fought to sustain. 

Mr. Chairman, Mr. Ranking Members, my colleagues, thank you 

for support on this legislation and for allowing me to appear before 

you today. 

[The prepared statement of Congressman Renzi appears on p. 

106.] 

Mr. BROWN. Rick, thank you very much for bringing this testimony and your interest in this bill. I don’t have any questions, but 

Mr. Michaud, do you have a question? Any other members of the 

panel? 

Mr. EVANS. Excuse me, we forgot to applaud your excellent general and your Purple Heart winner. 

Mr. RENZI. Yes, sir. 

Mr. EVANS. And I would like to make sure they get a round of 

applause. 

Mr. BROWN. Would you all stand, please, and be recognized. 

(Applause.) 

Mr. RENZI. Thank you, Mr. Evans. 

Mr. BROWN. Ms. Davis, do you have a question? Ms. BrownWaite? 

Thank you, Rick. Thank you very much for being a part of this 

committee. 

Mr. RENZI. Thank you. 

Mr. BROWN. Mr. Secretary? I am especially pleased to welcome 

the Honorable Leo Mackay, Deputy Secretary of the Department of 

Veterans Affairs. Deputy Secretary Mackay is accompanied by Mr. 

Tim McClain, general counsel; Mr. William Campbell, Assistant 

Secretary for Management; Mr. Robert Epley, Associate Deputy 

Under Secretary for Policy and Program Management, Veterans 

Benefits Administration; and Mr. Scott Denniston, Director, Office 

of Small and Disadvantaged Business Utilization. 

Dr. Mackay is a Naval Academy graduate and a former Naval 

aviator with 235 carrier landings and 1,000 hours in the F–14. He 

earned his master’s degree in public policy and a Ph.D. in political 
7

economic analysis, both at Harvard. He was a Harvard McArthur 

Scholar, a graduate prize fellow, and research fellow at the Center 

for Science and International Affairs. Dr. Mackay has taught at the 

Naval Academy and was a special guest fellow at the Brookings 

Institution. 

Following his distinguished naval career, Dr. Mackay was an executive at Lockheed Martin, where he was director of market development prior to his nomination. Dr. Mackay had general management responsibilities as vice president of the Aircraft Service Business Unit at Bell Helicopter Teltron, Inc., of Fort Worth, TX. Dr. 

Mackay is now the chief operating officer of the Federal government’s second largest department, with a budget of more than $59 

billion. 

Dr. Mackay, a very special welcome to you on your first appearance before the Benefits Subcommittee. We are delighted to have 

you. You can start whenever you are ready. Thank you for being 

here. 

STATEMENT OF LEO S. MACKAY, JR., DEPUTY SECRETARY, DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY TIM 

MCCLAIN, GENERAL COUNSEL; WILLIAM CAMPBELL, ASSISTANT SECRETARY FOR MANAGEMENT; ROBERT EPLEY, ASSOCIATE DEPUTY UNDER SECRETARY FOR POLICY AND PROGRAM MANAGEMENT, VETERANS BENEFITS ADMINISTRATION; AND SCOTT DENNISTON, DIRECTOR, OFFICE OF 

SMALL AND DISADVANTAGED BUSINESS UTILIZATION 

Dr. MACKAY. Thank you, Mr. Chairman. It is indeed a pleasure 

to be here. Ranking Member Michaud, it is good to be here. Ranking Member Evans and other Members of Congress, I certainly appreciate your holding this hearing. And thank you for inviting me 

to testify on the three bills being considered today, H.R. 1460, the 

Veterans Entrepreneurship Act of 2003; H.R. 1716, the Veterans 

Earn and Learn Act; and H.R. 1712, the Veterans Federal Procurement Opportunity Act of 2003. 

This legislation would significantly affect VA’s education and vocational rehabilitation programs, as well as many small business 

opportunities for veterans. The matters we are covering today are 

all about opportunity and incentive. Opportunity and incentive for 

our nation’s veterans to learn, train, become successful entrepreneurs, and overcome disability and employment handicap to engage in self-employment enterprise that forms the very fabric of 

our economy. 

I applaud the interest and the support apparent in the initiatives 

embodied in this legislation. Mr. Chairman, I am constrained to 

note, however, that many provisions of these bills carry with them 

costs. And although the Budget Enforcement Act’s pay-as-you-go 

requirements and discretionary spending caps expired last year, 

the administration supports extension of these budget enforcement 

mechanisms in a manner that ensures fiscal discipline and is consistent with the President’s budget. Thus, the support we express 

today for many provisions of this legislation must be contingent on 

accommodating its estimated cost within the overall budget submitted by the President. Still, I believe that working with the Sub-
8

committee we can find ways of achieving the goals of provisions 

that we mutually support. 

Mr. Chairman, turning to the bills themselves, H.R. 1460 will 

give veterans the all-important opportunity to use their GI Bill 

education benefits to pursue certain entrepreneur courses. We 

wholly support the goals of this proposal and would hope that a 

franchiser, an authorized franchiser offering an entrepreneurship 

course likewise could be considered a qualified provider for this 

purpose. An offset of course would have to be found for the cost of 

the proposal, which is estimated at $1.5 million in fiscal year 2004 

and a 10 year total of $32 million. However, we would be pleased 

to work with the Subcommittee on this. 

H.R. 1460 would also expand the services and assistance available for self-employment goals under the VA Vocational Rehabilitation Program. We agree that it may be time to re-examine the current limitation in this area and are asking that the Secretary’s recently established Vocational Rehabilitation Task Force do that examination. We will be happy to submit our official views once we 

receive the Task Force’s guidance. 

The last provision of H.R. 1460 would authorize certain sole 

source awards to small business concerns owned and controlled by 

service-disabled veterans and restrict competition to such concerns 

under specified conditions. We support this provision. Although we 

recognize that the provision of a set aside is an unusually strong 

measure that inhibits open market functioning, we believe it is 

only appropriate in this instance due to the singular worthiness of 

service-disabled veterans for preferential treatment. Its use here 

would not be meant however to establish a general precedent. 

Mr. Chairman, H.R. 1716, the Veterans Earn and Learn Act, recognizes the importance of apprenticeship and on-the-job-training to 

veterans and to the economy and would make several changes affecting pursuit of that training under VA’s education benefit 

programs. 

Mr. Chairman, we certainly recognize the need to bring VA’s 

benefits law relating to apprenticeships into the 21st Century. This 

bill contains some very worthwhile proposals. Nevertheless, unless 

an offset can be found for the estimated $47.7 million cost of H.R. 

1716 in fiscal year 2004 and $548 million 10 year cost, VA cannot 

support this bill. 

Finally, turning to H.R. 1712, VA supports the provisions of Section 4 that would establish a government-wide goal of 3 percent for 

award of contracts to veteran-owned small businesses. However, I 

am concerned with the provisions for raising the small business 

goal, prohibiting double counting of acquisitions, restricting appropriations, and mandating certain evaluation factors in negotiated 

acquisitions. The government already is struggling to meet its current goals. These provisions in our opinion would only exacerbate 

the problem, as well as remove the flexibility agency’s need to successfully carry out their missions. 

Mr. Chairman, that concludes my oral statement, and I would 

ask that my full written testimony also be included in the record. 

I will be pleased, as well as those with me, to answer any questions 

that you or the subcommittee may have. 

[The prepared statement of Dr. Mackay appears on p. 108.] 
9

Mr. BROWN. Mr. Secretary, would the VA support an expansion 

of section 2 of H.R. 1460, the Veterans Entrepreneurship Act of 

2003, to cover classroom instruction as part of obtaining a 

franchise? 

Dr. MACKAY. Yes, sir, Mr. Chairman. I would invite Scott 

Denniston to follow up with any comments after me. He runs our 

Center for Veterans’ Enterprise and is our Office of Small and Disadvantaged Business Utilization Director. 

This is a very important Act and a very important provision of 

the legislation under consideration today. The flexibility to use 

Montgomery GI Bill benefits, benefits which are paid into and contributed for by the veteran, in order to pursue entrepreneurial activities we think is a critical enhancement of the Montgomery GI 

Bill. 

We have started a program with the International Franchise Association called VetFran, or actually resuscitated it. It was in an 

earlier incarnation during the Desert Storm period. And it is very 

successful. We have had 10 graduates of the program that are off 

running their businesses today. Twenty-five people are engaged in 

various stages of the VetFran initiative. And we have 93 members 

of the International Franchise Association (IFA) that are participating with us, and making entrepreneurial opportunities available 

to veterans. The ability to use their Montgomery GI Bill for education and training and other entrepreneurial activities and course 

work would be a substantial enhancement to this program and the 

overall opportunity for veterans to move from service into entrepreneurship. 

Scott? 

Mr. BROWN. One other question. Does the VA have an internal 

contracting goal for veteran-owned small businesses in addition to 

the government-wide 3 percent goal for service-disabled veterans 

owning small businesses? 

Dr. MACKAY. Yes, sir, Mr. Chairman, we do. I am happy to report 

in fiscal year 2002 that VA was able to meet for veteran-owned 

businesses, the 3 percentage point goal. Now the 3 percent goal 

from Public Law 106–50 applies to service-disabled veteran-owned 

business and, frankly, our present condition I would admit is not 

where it needs to be. We are at 6⁄10 of 1 percent in fiscal year 2002 

performance in terms of the percentage of our contracts that were 

delivered to service-disabled veteran-owned businesses. I would 

say, however, that that 0.6 percent is triple the figure in fiscal year 

2001, which was 0.2 percent, which in turn was double the 0.1 percent that we achieved in fiscal year 2000. So there is a track record 

of some achievement. 

We have challenged ourselves at VA. We have an overall goal for 

business with veteran-owned small business of 7 percent in addition to the 3 percent for service-disabled veteran-owned businesses. 

We are not there. That is one of the reasons that we favor the proposal in H.R. 1460, it would give us flexibility with respect to solesource contracting, and a tool, an important tool to help make this 

goal. That is one of the reasons that we have the Center for Veterans’ Enterprise. It is one of the reasons for our MOU with the 

IFA. 
10

One of the reasons that the Secretary chartered our own internal 

study to seek improvement to our relationship with service-disabled veteran-owned last summer, was to add other measures in 

education, in outreach, in other types of flexibility that would help 

us meet those goals. 

Scott or our chief financial officer, Bill Campbell, I would invite 

them to comment about that at this time, if they have anything. 

Mr. CAMPBELL. The VA goal of 7 percent that we have internally, 

and we do an awful lot of work to try to make that, shows just how 

very difficult it is to meet the goals. And it is my opinion, I don’t 

have any data for it, but having been involved in federal procurement now for the last two decades, it appears that what and how 

the Federal Government is buying things have a profound effect on 

all small business, including that of veterans. 

Mr. DENNISTON. I would just like to add to that some comments 

from the task force report that Dr. Mackay spoke of. The task force 

was established in July of 2002 and the report was delivered to the 

Secretary in January. And some of the areas that we looked at, 

that we think we can do a better job at, number one is acquisition 

planning. Number two is identifying capabilities of service-disabled 

veteran-owned small business and developing a match for what we 

need versus the capabilities. We also think we need to do a better 

job internally of communicating the Secretary’s desires, Dr. 

Mackay’s desires in the goals. We also are going to establish performance standards for the appropriate people in the acquisition 

process to ensure that the veteran goals are part of the performance plan. And the last thing that we are doing is we have made 

recommendations, and we are continuing to make recommendations, on specific procurement mechanisms that would allow us to 

do a better job of meeting the goals. 

Mr. BROWN. Thank you very much. Mr. Michaud? 

Mr. MICHAUD. Thank you very much, Mr. Chairman. The procurement process has recently been granted additional flexibility, 

yet the executive branch performance for veterans actually has decreased. If you look at it, it went from bad to worse. So how does 

flexibility without accountability help? 

That is my first question. And my second question is should service-disabled veterans be required to compete against workers in foreign countries who may be able to provide lower costs for goods and 

services because those countries do not have to pay minimum wage 

or any safety standards comparable to those in the United States? 

Dr. MACKAY. Sir, we don’t seek to evade accountability. I mentioned our performance in order to highlight where we are. We are 

not satisfied with where we are at the Department of Veterans Affairs with regard to dealing with service-disabled veterans and veteran-owned businesses. That is why we seek the very flexibility. So 

we seek both flexibility and accountability. 

I think as well the provision that we support, which would give 

us authority to structure sole-source contracting opportunities or 

places where two service-disabled veteran-owned businesses would 

compete against each other but the winner, of course, would be a 

service-disabled, veteran-owned business provides just the kind of 

insulation from competition that you seek. It is an important tool 

that would give us a lot of the flexibility that you talked about. 
11

And we would be happy to be held accountable. We want to partner 

with this committee. We want to partner with you and the chairman. We need to get this done. 

Two of the most honored titles that an American citizen can hope 

to accede to are veteran and entrepreneur. We are committed to 

that. And I think that some of the steps that we talked about, Center for Veterans’ Enterprise, our task force study, our MOU with 

the International Franchise Association, we are seeking as many 

outlets as we can think of in order to push this because this is important for veterans, for their future and for ours. 

Mr. MICHAUD. What do you seek for accountability measures? 

Dr. MACKAY. Accountability measures are the ones embodied in 

Public Law 106–50, the ones embodied in our own internal measures. We have a 7 percent goal for veteran-owned small business 

and, of course, the 3 percent goal for service-disabled-veteranowned small businesses. 

Mr. MICHAUD. And I don’t think you have ever reached that, but 

I will forward some additional questions. Before my time runs out, 

there is one issue that you had mentioned I would like to comment 

on. And it is not meant to you directly because I know you work 

ultimately for the President. But when you mentioned in your 

speech about fiscal discipline, I question this budget’s fiscal discipline. For your information, I served 22 years in the Maine legislature, served on the appropriations committee. We went from 

number 48th in the country as far as how our budget was put together to number six during my 4 years as chair. So I am quite 

familiar with fiscal discipline, and this budget is not a fiscally responsible budget. 

My concern is everyone is talking about supporting our troops because of the war in Iraq, which I agree with. My biggest concern, 

in your testimony, it is not included in the budget of the President’s, the funding is not included in the budget of the President’s. 

And that is my big concern, because it is a matter of priorities. I 

think we definitely have to support our troops during the time of 

war, but, more importantly, we have to support them after the war 

is over, because a lot of veterans will come back with a limb missing or what have you. Those families have to deal with that long 

term. It is not the short term like the war. Likewise, if a member 

lost their life in war. So it is a matter of priorities. 

And I don’t think that this administration is putting veterans as 

a top priority when you look at the budget proposal, when you look 

at some of the cuts that is proposed in the budget. But when you 

look at your comments here that you will do it if we can find the 

money. I agree we have to do it. If this is a priority for the VA, 

I would suggest that the VA strongly talk to the President and 

those who are advising the President that we want to make sure 

that veterans are taken care of and they are not being taken care 

of. Would you comment on that? 

Dr. MACKAY. I would certainly be very happy to. With all due respect, I must disagree. The budget that the President sent to Congress calls for a 7.7 percent increase—increase, not a cut—in the 

budget. It is a fact that from fiscal year 2001 to fiscal year 2004 

resources for the Department have risen from $48 billion to $64 bil-
12

lion, as the President’s budget accounts for. If you do your math, 

that is a 32 percent increase. 

If you look at the increases year over year, from fiscal year 2001 

to 2002 to 2003 to 2004, they average about 7.5 percent. And that 

7.7 percent in this budget, this President’s budget that was sent to 

Congress, represents the second largest—second largest percentage 

increase of all the cabinet agencies in the Federal Government. I 

think that that is a message that says that this President cares 

about veterans. It is a high priority for this President to support 

our nation’s veterans. 

And on fiscal discipline, it is the plain fact that as the pay-go 

provisions are an exercise of fiscal discipline because they say that 

new spending must be offset by a reduction in other identified 

spending. That, sir, is an exercise in fiscal discipline. And it is a 

recognition of both this Congress and this administration’s respect 

for that fiscal discipline that led me to mention that in the opening 

part of my statement. 

Mr. MICHAUD. Thank you very much. But when I stop hearing 

from veterans in the State of Maine that they have to wait a year 

or so just to get an exam, then I will say we are taking care of our 

veterans. We are not taking care of our veterans. And whatever 

statistics that you throw out there, you can manipulate statistics. 

I have been around long enough to realize that. And once veterans 

stop complaining about the lack of service that they are receiving, 

then I will say that we are taking care of our veterans. Until that 

point in time, I feel confident saying we are not taking care of our 

veterans. We have got to do a much better job than what we currently are doing right now. 

Thank you. 

Mr. BROWN. Mr. Evans, do you have any questions for the panel? 

Mr. EVANS. Yes. Actually, I should yield to the Congresswoman 

from California. 

Mrs. DAVIS. I would be happy to yield to the ranking member. 

Mr. EVANS. I do have a hypothetical question; at least the way 

I am going to pose it, it is somewhat hypothetical. The gentleman 

from Maine has raised an important issue about how contracts of 

the VA may be going to overseas markets. We found out that, for 

example, janitor uniforms, which had to be disposed of just a few 

days after they had been worn, actually had been made in Honduras at a time in which Protectsol, an Illinois plant, tried to bid 

for these contracts without any real ability to go after them the 

way that large private contractors do. So what are we doing to 

proactively recruit small businesses to get veterans contracts? I 

suppose most of my colleagues would have a situation I do where 

the veterans involved really don’t have much say in these matters, 

but they would like the uniforms that they work in to be made in 

America. Any comments you might be able to make about how we 

do that? 

Dr. MACKAY. Yes, sir, Congressman. I am not familiar with the 

instance that you raise, and I would be happy to find out about it 

and communicate with you further. I would ask the real expert— I am aware of many, many things, but Scott is our expert—in 

terms of outreach. And I would ask him to comment in detail about 

the outreach efforts that we are undertaking across the board with 
13

respect to getting veteran and service-disabled veteran-owned businesses knowledgeable, involved, and, as I mentioned, contracting 

with the Department. 

Scott? 

Mr. DENNISTON. Thank you. We have been active since the passage of Public Law 106–50 of getting the word out within the veterans community. We have entered into some partnerships with 

the Association of Small Business Development Centers, the Procurement Technical Assistance Centers that are funded by the Department of Defense. We put those together. We have got about 

1,200 partners around the country that we have been working with 

to get the word out. The beauty of those two organizations is they 

work directly with small businesses in the local community. We 

have worked very closely with the National Veterans Business Development Corporation to get the word out. We have a fairly robust 

website that we use for getting the word out. 

We have participated in somewhere around 85 conferences this 

past year doing workshops. We average about 1,000 calls a month 

to our Center for Veterans Enterprise for veterans who are interested in starting small businesses, not necessarily in the world of 

federal procurement. But, as we know, we can’t have successful 

federal procurement if we don’t grow those small businesses to be 

able to compete. So we have been very, very active in doing that 

with the partners that are in the local communities because we 

think that is the best approach. 

Mr. EVANS. But it is part of the larger issue as well. So I will 

meet with you after the meeting and discuss it then, I guess. 

Thank you, Mr. Chairman. 

Mr. BROWN. Thank you, Mr. Evans. Ms. Davis, do you have a 

question? 

Mrs. DAVIS. Thank you, Mr. Chairman. I wanted to just go back 

to the H.R. 1712 accountability provisions. And you had raised the 

equal protection concerns as well in your statement. And could you 

also talk more specifically about what kind of enforcement mechanisms really are applicable, what work, what do we really have at 

our disposal that is used? 

Dr. MACKAY. Well, let me let our general counsel talk about the 

specific legal issue that you raised, and I would be happy to discuss 

the second issue you raised. 

Mr. MCCLAIN. Congresswoman Davis, you were talking about a 

equal protection issue in the written statement? And if you could 

just point me to it, it might make it easier. 

Mrs. DAVIS. They really are dealing with the equal protection of 

gender and race, ‘‘In implementing the various provisions of the 

legislation that make classifications based on race and gender, the 

government would afford equal protection of the laws as required 

by the due process clause of the Fifth Amendment to the Constitution,’’ on page 10. 

Mr. MCCLAIN. I see where you are pointing. And rather than trying to address it off the cuff, I would be glad to provide you with 

our analysis of it for the record and directly to you. 

Mrs. DAVIS. Okay, that would be acceptable. Obviously, raising 

concerns about whether or not you can—to deal with the VA issues 
14

and how that might conflict with existing provisions, and I would 

be interested in having you talk more about that. 

But I also wondered, could you address then the issue of enforcement, the mechanisms that we have? 

Dr. MACKAY. One of the important points about differences between goals and quotas. And we have goals. And so we need to 

have flexible tools. Certainly we need to be held accountable. We 

need performance metrics. We need to deliver what we promise. We 

need to use every mechanism possible to reach those goals. But 

they need to remain goals. And some of the enforcement mechanisms that are contemplated in H.R. 1712, in our opinion, would 

be tantamount to constructing quotas. If money is not expended 

such that you reach 28 percent, which is the recommendation of 

the bill, then the provision of that money in subsequent appropriations bills would be spent with those particular categories of suppliers is tantamount to making a goal a quota. 

While we support wholeheartedly these goals, we commit to work 

hard to realize these goals, and we are making progress, as I pointed out earlier, we cannot change a goal to a quota. And I think that 

is the effect—perhaps not the intent but the effect—of some of the 

provisions in H.R. 1712. 

There is a significant curtailment of the flexibility that a departmental manager would need and would seek in order to try to 

reach these goals. I think the measure that I supported earlier in 

testimony, the sole-source contracting flexibility that we would 

have at the Department, is a good example of a tool that would be 

a positive good in allowing us to reach this goal. It does not create 

a quota but it does recognize the very special character of the people that we are dealing with. And it does give us a very special tool 

in order to help us continue to track and to make improvements. 

I would remind you we have gone from a doubling to a tripling. 

We are still under 1 percent, that is still not good enough. I am 

not satisfied. I know that the members of this committee are not 

satisfied. But we want to keep that track record of success going. 

We also want to make sure that we do not turn goals into quotas. 

Mrs. DAVIS. I would agree with you that we should always use 

incentives, carrots, as opposed to sticks. But I also know that when 

we don’t get there, or we don’t even come close, that sometimes we 

do have to think of some other remedies that we might have at our 

disposal. And that is why I was interested in knowing, are there 

any? 

Dr. MACKAY. Well, I think that the measures that we have 

talked about, that Scott has talked about in terms of education, 

learning, outreach, as well as the very special tool that we support 

in this legislation, would be good, constructive measures. We commit to you to continue to make progress and we expect to be held 

accountable. I expect to come back on other occasions in other 

venues to talk about these. And we welcome—we ask for the flexibility and we welcome the accountability. 

Mr. BROWN. Thank you, Ms. Davis. 

Ms. Brown-Waite, do you have a question? 

Ms. BROWN-WAITE. Yes, sir, I do. 

Dr. Mackay, first of all, I want to thank you for setting the 

record straight on the veterans funding in this current budget. I, 
15

too, have veterans who are waiting, and one of the reasons why I 

supported the budget was because there was increased funding in 

there for veterans’ health care, so we can make sure that we whittle away at the wait times. I am not happy with the wait times. 

You know, we have had this conversation. And making sure that 

the funding is in the budget to eliminate as many of the long periods that veterans are currently waiting for health care is important 

I believe to every member on both sides of the aisle. 

When you look at the veterans contracting program, obviously, 

with 6⁄10 of 1 percent, something is in the way of bringing more veterans in to take advantage of it. In order to solve this problem, I 

think you need to look at what the obstacles are. Have you done 

an assessment of what your agency believes the obstacles currently 

are? 

Dr. MACKAY. Congresswoman, yes, we have. We have just completed, and I would be happy to supply your office with a copy or 

copies, of a task force report focused on veteran-owned small business and service-disabled veteran-owned small business. We, too, 

are not satisfied with 0.6 percent in fiscal year 2002 and that is 

why we constructed this task force. It talks about the things that 

we can do to actively in solicit and identify veteran-owned businesses internally. That is, again at risk of belaboring the point, 

that is why we support so vigorously the sole-source contracting 

tool that will allow us to have flexibility with the restrictions that 

are there for fair and reasonable pricing and for the very modest 

top-dollar amounts, to be able to go out and construct sole-source 

opportunities for veteran-owned small business. 

I would also like to point out just a couple of figures, not so much 

in defense of our Department but to give the whole picture. In fiscal year 2001, among federal agencies, of the 88,000 actions with 

veteran-owned small business, VA was responsible for 94 percent 

of them, or 83,000, with a total contract value of $122 million, 

which was almost 22 percent of the total contracted dollar amount 

that was contracted with veteran-owned small businesses. 

With respect to service-disabled veteran-owned small businesses, 

we accounted for almost 64 percent, 63.97 percent, of the actions 

with service-disabled-veteran-owned small business in all the 

Federal Government for that year. However, the dollar totals were 

much more modest, only $13 million. But we are making some 

progress. I mentioned the progress from 0.1 percent in fiscal year 

2000, a doubling to 0.23 percent in 2001, and then a tripling to 0.6 

percent here in fiscal year 2002. I expect that to continue. We are 

committed to continuing that progress. We are already at the 3 

percent level for veteran-owned small businesses, and we have a 

target of 7 percent for veteran-owned small businesses. We need to 

get that 3 percent for service-disabled-veteran-owned small 

businesses. 

Ms. BROWN-WAITE. Just one more question. Do you encourage 

veterans who are applying to also work with SCORE, the Service 

Corps of Retired Executives? Because I can just tell you, as somebody who started a small business in the 1980s when interest rates 

were high, we didn’t, although my husband was eligible, we didn’t 

apply for any sort of veterans contracting or anything. It is pretty 

darn intimidating to start a small business. So if you can partner 
16

with SCORE and have the availability of sometimes decades of 

managerial and executive experience in business, that way you can 

ensure that when a veteran starts a business, that he or she is 

very successful. And I think that is another important thing too, 

that we not only start the businesses but that we mentor them to 

make sure that they are successes. 

Dr. MACKAY. I could not agree more with your statement, and I 

certainly appreciate your advocacy for veterans in Florida and your 

support of our Department. Scott was nodding his head. Perhaps 

you know more specifically about our partnership with SCORE? 

Mr. DENNISTON. Sure, be happy to. SCORE is one of those partners that I failed to mention, along with SBA, as part of Public 

Law 106–50 that we work closely with. SCORE has responsibilities 

under Public Law 106–50 to do special outreach to veterans, as the 

rest of us do. 

Congresswoman Davis, if I could just go back to your question 

of the impediments. It is very difficult as a contracting officer to 

have a lot of different goals but no mechanisms to reach the goal. 

And, unfortunately, that is the dilemma that we are in with the 

service-disabled-veteran-owned businesses. That is why, as Dr. 

Mackay said, we support the legislation. That is why we think that 

the performance standards, and making this a performance standard for everybody in the acquisition process, is going to be very 

important. 

As an anecdotal story, after we got our statistics halfway through 

the year, I was frustrated with what I would consider non-performance of some of our facilities. Went to Dr. Mackay, he picked up 

the phone, and he called those directors and said to them point 

blank, ‘‘You need to do better.’’ That kind of attention, when it 

comes from the top of an agency, I think, makes all the difference 

in the world, and why we are confident that the trends that Dr. 

Mackay talked about will continue to go up. 

Mr. BROWN. Well, thank you very, very much for coming. Dr. 

Mackay, I wonder if you could submit a copy of that report to the 

committee, and we will get it out to the other members. 

Dr. MACKAY. Mr. Chairman, we would be delighted. 

Mr. BROWN. Thank you all for coming and thank you for all you 

do for our veterans in this great nation. 

Dr. MACKAY. Thank you, sir. 

Mr. BROWN. Ladies and gentlemen, the next panel will speak to 

House Resolution 1716, the Veterans Earn and Learn Act. This 

measure updates the on-the-job training and apprenticeship programs administered by the Department of Veterans Affairs to reflect today’s workplace. 

Joining us today is Mr. George Bliss of the United Association 

of Plumbing and Pipefitters. Mr. Bliss also chairs the Building and 

Construction Trades Department Apprenticeship and Training 

Committee. We also welcome Mr. William Stephens and Mr. Chad 

Schatz. With a name like Henry Brown I get mixed up all the time. 

Welcome. And Ms. Ann Sullivan for Women Impacting Public 

Policy. 

I would ask members to hold their questions until all witnesses 

have completed their testimony. Without objection, the witness’ full 

statement will be included in the printed record of the hearing. I 
17

would appreciate witnesses limiting remarks to no more than 5 

minutes. And if the red light appears, please conclude your testimony. 

Mr. Bliss, we begin with you. Thank you very much for coming. 

STATEMENTS OF GEORGE H. BLISS, III, THE BUILDING AND 

CONSTRUCTION TRADES DEPARTMENT APPRENTICESHIP 

AND TRAINING COMMITTEE; WILLIAM D. STEPHENS, COCHAIR, APPRENTICESHIP AND ON-JOB TRAINING COMMITTEE, NATIONAL ASSOCIATION OF STATE APPROVING 

AGENCIES; CHAD SCHATZ, SECRETARY, NATIONAL ASSOCIATION OF STATE APPROVING AGENCIES; AND ANN SULLIVAN, 

FEDERAL LEGISLATIVE CONSULTANT, WOMEN IMPACTING 

PUBLIC POLICY, INC. 

STATEMENT OF GEORGE H. BLISS, III 

Mr. BLISS. Thank you. Good morning. As you mentioned, my 

name is George Bliss. I am the director of training for the United 

Association as well as the chair of the Building and Construction 

Trades Department Apprenticeship and Training Committee. And 

I would like to thank you for the opportunity to present this information. 

The United Association of Plumbers, Pipefitters, and Sprinkler 

Fitters and the Building and Construction Trades Department are 

proud to support the fine men and women of our Armed Forces. As 

evidence of our gratitude for their service to our nation, it is our 

intention to do all we can to assist those leaving the military and 

returning to civilian life. To that end, the United Association, the 

other building trade union, has recently developed a program designed to provide training and career opportunities to qualified veterans. This program is know the Helmets to Hard Hats Initiative. 

And we believe it is a strong adjunct to our nation’s existing veterans programs, such as Transitional Assistance Program, TAP, 

and the GI Jobs Bill. 

While we support the proposed changes to the GI Bill, we want 

to take this time to raise just a few concerns. Today, the apprenticeship program in the United States, and especially that found in 

the unionized building trades, offers the finest skill training in the 

world. This excellent training leads to employment that provides 

high wages and generous benefits. This training is now available 

in hundreds of occupations for veterans making the transition into 

the private sector, not only TAP, GIs to Jobs Programs, but also 

through Helmets to Hard Hats. This is accomplished through the 

U.S. Military Apprenticeship Program, known as U.S. MAP. The 

program is part of an ongoing effort to develop a bridge between 

the military occupations and the private sector occupations. 

The benefits of this effort are twofold. One, it allows departing 

veterans, who have participated in or completed an apprenticeship 

program under U.S. MAP to have direct entry into registered apprenticeship programs, such as those found in the building trades. 

Secondly, the program offers private industry employers sponsors, 

such as our signatory contractors, access to some of our nation’s 

most highly-motivated and dedicated workers. Unfortunately, today 

only the Navy, Marines, and Coast Guard are participating in U.S. 
18

MAP. It is our belief that both veterans and the private sector 

would benefit if the Army and the Air Force would participate in 

this program as well. 

The United Association’s National Apprenticeship Program recognizes the great value that military personnel can bring to our industry. These local and hard-working veterans bring experience, 

leadership, and skills that all of our employers want and need in 

the workforce. Because we recognize that our veterans have a proven track record of commitment and excellence on the job, we have 

included in our own apprenticeship standards a provision for direct 

entry into our programs by military personnel covered under U.S. 

MAP. In addition, we give credit for those skills that are directly 

related to our industry that these veterans acquired while serving 

our country. Thus, they have the opportunity, depending on experience, to move quickly through our traditional five year program 

since they may be able to start as either second, third, or fourth 

year apprentices. 

While our UA programs are certain to continue to benefit both 

industry and workers, we recognize that apprenticeship training is 

a long-term strategy and represents a commitment on both the 

parts of employers and workers. Many industries, and most especially the construction industries are cyclical in nature with periods 

of high employment and then low employment. We believe that the 

veterans’ apprenticeship benefits should not be withheld or suspended due to downturns in the economy that create interruptions 

in apprenticeship training. 

The current requirement for veterans to receive apprenticeship 

benefits is 120 hours per month of classroom and on-the-job training. While in many parts of the country, this is not a difficult obligation to fulfill, there are areas where the up and down nature of 

the construction industry could make that requirement difficult to 

meet at times. It is our position that that requirement should be 

lowered to 100 hours per month so that no veteran is left behind. 

We also believe that we have to look to the future and give special consideration to those young people who are entering the 

Armed Forces today or are contemplating entering. They are asked 

to elect certain veterans’ benefits at the time that they are inducted into the service. But are they really prepared to make those 

important long-term decisions? These are usually young people, 

perhaps just out of high school, who have very little workplace experience. Many of them are hoping to acquire skills and training 

while in the military but they might not know how to do that. For 

example, they may be going through training and they discover an 

aptitude for a certain mechanical skill that they didn’t know they 

had. So they should not be precluded from expanding these skills 

later on after discharge simply because of their youth and inexperience in years. 

One of the great benefits of the all-volunteer armed forces is the 

opportunity it provides generations of young people to develop not 

only certain technical skills but also the discipline, maturity, and 

a sense of responsibility that sets them apart from those who have 

not shared the extraordinary experience of military service. Many 

young people today struggle to develop the same work ethic that 

is integral to parts of life in our nation. It is also this very quality 
19

that makes veterans so appealing to employers in the private sector. The men and women leaving the Forces today are remarkable 

individuals who have demonstrated a commitment and courage 

that deserves to be rewarded. It is my belief that we have a fundamental obligation to ensure that all these service people find ample 

opportunities for success in the private sector. 

Thank you. 

[The prepared statement of Mr. Bliss appears on p. 116.] 

Mr. BROWN. Thank you very much, Mr. Bliss. Mr. Stephens. 

STATEMENT OF WILLIAM D. STEPHENS 

Mr. STEPHENS. Mr. Chairman and members of the subcommittee, 

we are pleased to appear before you today on behalf of the National 

Association of State Approving Agencies to provide support for H.R. 

1716, the Veterans Learn and Earn Act. 

State approving agencies are an integral part of the administration of the GI Bill. We are very pleased with all sections of this bill. 

The standardization of the method which entitlement is used for all 

chapters of the GI Bill is definitely needed. Competency-based apprenticeship programs are viable training methods, and the lump 

sum payment for individuals who complete competency-based apprenticeships early ensures that no one will be placed at a disadvantage. The equalization of the benefit payment for individuals 

enrolled in a training program, which includes classroom training, 

will remedy the current problem of having two eligible individuals 

with the same entitlement in the same classroom receiving different benefit amounts. Police academies are a prime example of 

where this is occurring now. 

In addition to increasing the use of registered apprenticeship programs, working closer with Department of Labor staff will also increase GI Bill utilization. Some states currently have outstanding 

working relationships between the state approving agency and the 

apprenticeship registering agency. There are a couple of states 

which have not been able to develop effective working relationships 

with their registering agency. There is no question that the sharing 

of information will be beneficial to all concerned. 

State approving agencies have been actively involved in outreach 

for several years. A major focus of the outreach program has been 

to ensure all eligible veterans, reservists, and dependents are 

aware that they can use their benefits for apprenticeship or on-thejob training programs. In short, the GI Bill is not just for college. 

We will now discuss several examples of what SAAs have been 

doing. In Pennsylvania, we do the following for outreach. We have 

a welcome home packet which provides information to each returning veteran. This includes a letter from the governor, a directory 

of agencies that assists veterans, information on apprenticeship onthe-job training, information concerning the Transition Assistance 

Program and a pre-paid postcard to request additional information. 

This project began in 1990 and has provided information to over 

103,000 returning veterans. 

We also utilize three information pamphlets, one for education, 

two for apprenticeship on-the-job training. I have an example of 

one of the OJT booklets designed for the individuals. It is an excellent tool. It is easy to mail. 
20

We also sponsor a booth at the annual Pennsylvania Farm Show 

dedicated exclusively to veterans’ issues. This booth includes information concerning GI Bill benefits, apprenticeship on-the-job training programs, health care, disability benefits, home loan benefits 

and more. It is operational for the entire Farm Show week. Many 

different organizations assist us in this. We get assistance from the 

VA, Vocational Rehabilitation Counselors, VA work study students, 

and many other organizations. 

We also sponsor a Veterans’ Day ceremony in the Department of 

Education. We get approximately 150 individuals who attend each 

year. In 2002, we were able to provide special recognition to the 

three Department of Education employees who were on Active duty 

at the time. We work closely with the Bureau of Apprenticeship 

and Training personnel who support the Pennsylvania State Apprenticeship Counsel. The most successful component of this close 

working relationship is the two year registered apprenticeship program for corrections officer at all of the 26 state prisons. This is 

both the largest registered and the largest approved-for-veterans 

training program in Pennsylvania. 

We also work closely with the veterans employment representatives of the Department of Labor. We participate in job fairs, training sessions, and other outreach activities. As a side note, we also 

have the Veterans Employment Representative Programs, which 

are sometimes titled the Disabled Veterans Outreach Program, and 

the Local Veterans Employee Representative Programs, approved 

as 2-year on-the-job training programs. And we have had over 20 

individuals complete these. 

We conduct presentations at the Transition Assistance Programs 

at the four locations in Pennsylvania. We conduct mailings to county veterans’ affairs directors, service organization, National Guard 

members, and we are continually looking for more things to do. 

I would like to thank you for this opportunity. Chad will now finish our testimony. 

STATEMENT OF CHAD SCHATZ 

Mr. SCHATZ. Thank you, Mr. Chairman and members of the subcommittee. My name is Chad Schatz, executive secretary for the 

National Association of State Approving Agencies and state approving agency director in Missouri. 

In Missouri, outreach is specifically designed to increase participation in on-the-job training and apprenticeship opportunities for 

VA-eligible trainees. The state approving agency has aggressively 

pursued outreach to increase usage. The outreach effort includes 

identification of eligible trainees and orientation for prospective 

training establishments in public and private sectors. 

Since September 1, 1996, this effort has yielded 622 new and additional programs yielding dramatic economic impact benefitting 

over 820 eligible veterans. The economic impact of one veteran receiving an average annual benefit of $5,608 annually will impact 

the economy by approximately $16,824 according to the Missouri 

Economic Development Office. 

Computing approximate benefits and economic impact from approvals written since September 1, 1996 and participant numbers, 

a figure of $10,873,000 is developed. Beyond the impressive impact 
21

this program has on economic development through the course of 

on-the-job training, benefits of well-trained workers and greater 

stability and enhanced performance within crafts and trades are 

achieved. The Missouri Army National Guard, the Missouri Air 

Force National Guard and the Missouri State Approving Agency 

have teamed to engage in broader outreach activities. Guard recruiters receive orientation training, on-the-job training, apprenticeship benefits, and approval criteria through the state approving 

agency to provide accurate program information. 

The state approving agency and the Missouri Army National 

Guard have teamed to produce compact discs, videos, audio tapes 

on on-the-job training apprenticeships and other media-related 

pieces. Copies are routinely distributed to strategic points of 

contact, including public service announcements for radio and 

television. 

The state approving agency networks with the U.S. Department 

of Labor Veterans’ Employment and Training Services, presentations to various organizations are made, including area Chambers of Commerce, recruiting stations, and law enforcement training centers. The state approving agency also has used the Add-AStop Program. As time permits, staff that are en route to or from 

a scheduled visit to an approved institution or establishment stop 

at a non-approved location to discuss apprenticeship or on-the-job 

training program opportunities. This does not increase travel costs 

and has provided excellent results. 

The Missouri State Approving Agency has recently approved 

school teachers as an on-the-job training program. The Missouri 

State Approving Agency also is actively involved in the Troops to 

Teachers Program. 

Other outreach efforts include press releases, various pamphlets, 

posters, participation at job fairs, et cetera. In Texas, the state approving agency also has active outreach efforts that include a recently designed and distributed pamphlet entitled, ‘‘Earn While 

You Learn’’ at job fairs, local workforce centers, TAP briefings, and 

other venues. The state approving agency works with local workforce boards and the Texas Commission in distribution of material. 

The state approving agency also conducts presentations with various organizations. Other SAAs have active outreach efforts. 

There are many opportunities for veterans, reservists, and dependents to use their earned benefits while enrolled in training 

programs. State approving agencies are continually seeking new 

and innovative outreach projects to ensure that everyone is aware 

of their opportunities. 

Recommendations of the National Association of State Approving 

Agencies: 

It is with these beliefs and insights that we support the provisions of H.R. 1716. In addition, we would also request that when 

the time is appropriate, consideration be given to modifying the 

current payment formula provided for eligible individuals enrolled 

in training programs. Currently, the percentages are 75 percent of 

the amount they would receive if attending an educational institution for the first 6 months, 55 percent for the next 6 months, and 

35 percent for the remainder of the program. The National Association of State Approving Agencies recommends these percentages in-
22

crease to 100 percent for the first 6 months, 75 percent for the next 

6 months, and 50 percent for the remainder of the program. 

In closing, we encourage the leadership and the members of this 

committee to take a firm and aggressive stand in promoting the enactment of the provisions of H.R. 1716. 

Thank you, Mr. Chairman and members of the subcommittee for 

the opportunity to address you today. We would be pleased to respond to any questions that you have. 

[The prepared statement of National Association of State Approving Agencies appears on p. 121.] 

Mr. BROWN. Thank you, Mr. Schatz. Ms. Sullivan. 

STATEMENT OF ANN SULLIVAN 

Ms. SULLIVAN. Mr. Chairman, members of the subcommittee, my 

name is Ann Sullivan. I am pleased to appear today on behalf of 

Women Impacting Public Policy. Women Impacting Public Policy is 

a bipartisan organization of 430,000 women and minority business 

members nationwide. Thank you for inviting us to comment on 

H.R. 1460 and H.R. 1712. 

First let me say WIPP applauds any legislation that establishes 

programs for small businesses to compete in the federal contracting 

arena, as is the case with the legislation the subcommittee is considering today. We believe that the barriers to federal contracting 

for small businesses are great and those companies that face economic and social barriers deserve special consideration when trying 

to enter that arena. 

But on behalf of the women business owners that WIPP represents, we say, ‘‘Be careful what you wish for.’’ We are referring, 

of course, to the statute, Public Law 106–554, which established a 

program which would allow federal contracting officers to restrict 

competition for any contract to women-owned companies if the following conditions are met: 

One, 51 percent ownership by women are economically disadvantaged; 

Two, the contracting officer has to have a reasonable expectation 

that two or more small women-owned companies will bid on the 

contract; 

Three, a contract is for procurement of goods or services that is 

shown to be under-represented by the SBA administrator; Four, the anticipated award does not exceed $5 million for an in- dustrial code or $3 million for any other contract; 

Five, the contract award can be made at a fair and reasonable 

price. 

The statute requires that a federal, state, or national certifying 

entity approved by the administrator must certify that the business 

is woman-owned. In order to identify industries in which small 

women-owned businesses are under-represented in federal procurement contracting, the statute requires that the SBA administrator 

conduct a study to determine those industries. 

That law was passed in the year 2000. It has yet to be implemented. Over one year ago, the SBA declared the study completed 

to identify the industries under-represented as unsatisfactory. Just 

last month, the SBA told the Small Business Committee that it intended to complete a study to study the study in the next 7 months 
23

at the cost of $150,000. So we are really talking about implementation of a law 4 years later, if in fact the study is ever accepted. 

Mr. Chairman, the bills you are considering today would establish a much stronger program for service-disabled veterans with regard to federal contracting, including sole-source contracts and penalties for federal agencies failing to meet their goals. They are 

much stronger than the women-owned program. If the administration has been unwilling to implement the women-owned program, 

we believe that it will indeed be an uphill battle, not only for passage for implementation of the laws and the legislation that you 

are considering. Our recommendation is by all means don’t include 

a study in your legislation. 

The government-wide women-owned goal established in 1994 is 

5 percent. When Public Law 106–554 was passed, women owned 

one-third of all businesses, and 40 percent were deemed able to do 

business with the Federal Government. Now 40 percent of all new 

businesses are owned by women and their capabilities have vastly 

expanded. Yet the Federal Government has yet to meet their 5 percent target. The woman-owned percentage government-wide is 2.49 

percent. Just recently, Women Impacting Public Policy conducted a 

survey of our membership that indicated that 95 percent of the 

businesses are willing and qualified to bid on federal contracts. 

In closing, WIPP believes it is important that all small businesses be treated equally with regard to federal procurement programs. We urge the subcommittee to work with all small business 

groups who are seeking to increase federal procurement opportunities, whether it be HUB-owned, women-owned, STB or veteran. We 

believe that all of these groups should work together to increase 

the federal procurement dollars going to small business. 

Thank you. 

[The prepared statement of Ms. Sullivan appears on p. 125.] 

Mr. BROWN. Thank you very much for that timely testimony. 

Mr. Michaud, do you have a question? 

Mr. MICHAUD. Yes, Ms. Sullivan, with respect to small business 

concerns, what are the key hurdles to the Federal Government improving its procurement process, in your opinion? 

Ms. SULLIVAN. I think our previous speakers have identified 

some, and certainly some that are following us, like Ms. Styles and 

Mr. Armendariz, can comment on that as well. One is a culture 

that pervades in the federal agencies. Basically, it is very tough to 

get contracting officers to want to work with small business. It is 

much easier to bundle contracts, make them big and work with the 

big businesses that have 77 percent of the federal pie at this time. 

Another one is the extensive paperwork that is required to participate in federal procurement. It is not certainly for the weak or 

businesses that cannot devote a large amount of time at the front 

end to complete things like the 8A certification, GSA’s schedule, 

which is around 100 pages. So it is very tough to even get through 

those hurdles when you are a small business. 

The other thing that we find is that many agencies encourage 

our members to be subcontractors instead of primes. But with that 

comes another whole set of issues. Many women-owned businesses 

are listed in the contracts that the large federal contractors have 

and may never see a dollar of that business. 
24

So there are a lot of barriers. 

Mr. BROWN. Ms. Davis, do you have a question? 

Mrs. DAVIS. Just a comment. Thank you very much, all of you, 

for being here. I really wanted to pursue the same question, because I know in San Diego it is a very big concern for womenowned businesses; we have a lot of contracts that go out in our 

community, and yet our numbers are low. 

Do you see within the paperwork that needs to be done, have you 

all identified some ways that there could be more of a general office 

that that might go through that would be assisting so that it would 

still obviously be fair for everybody? How do you—when you all sit 

around and talk about this, what would be the——

Ms. SULLIVAN. I wish I had a wonderful answer for you. We 

struggle with that, because the committees and the small business 

committees in both the House and Senate have asked us that question. SBA has asked us that question. One of the things that our 

women find is that they might complete federal paperwork process, 

like the GSA schedule. But then they also have state certifications. 

They have got local certifications. It just goes on and on and on. 

So we would love to see something where if you are certified by 

the feds via GSA schedule or 8(a), that somehow that applies 

across government and across state and local so that you don’t keep 

on doing these things over and over. 

Mrs. DAVIS. So that there is some way, standard—I guess it is 

not necessarily standardizing it, taking a look at what qualifications are singular for state or federal and how you would make 

them so that they are not duplicative? 

Ms. SULLIVAN. Exactly. The goal is that more people accept one 

certification so that once you have completed one it is widely accepted. That doesn’t go to the heart of your question, which is there 

a way to simplify it? There probably is, but we don’t claim to be 

experts on how to simplify a GSA process. 

Mrs. DAVIS. Are there communities that have almost an incubator-type system so they have people who help and assist with 

that, almost like a grant writer but who obviously are not employed by the small business to do that, particularly? Have you 

seen successes in that way? 

Ms. SULLIVAN. It really depends on the GSA folks or the SBA 

folks who are just kind of willing to do that. We haven’t seen a concerted effort to help our people with their certifications. It is just 

a matter of who the personnel is in the regional offices. So the degrees of help vary just depending on how strong the staff is. But 

we could sure use more help on that. 

Mrs. DAVIS. Thank you. 

Ms. SULLIVAN. You are welcome. 

Mr. BROWN. Thank you all very much for coming. Mr. Evans, did 

you have a question? I am sorry. Okay, thank you very much for 

coming. 

The next panel scheduled is Panel 4, but I understand Ms. Styles 

is not here yet, and so if we could have Panel 5 come forward. 

Thank you for your indulgence. We had to go vote, and we appreciate you all waiting around. And thank you for filling in for Panel 

4. I guess everybody will be here on that panel pretty soon. 
25

This panel is here to testify on House Resolution 1460 and House 

Resolution 1712, the two bills dealing with veterans’ small business 

issues. Testifying today is Mr. John Lopez, Chairman of the Association for Service-Disabled Veterans; Mr. Donald Wilson, president 

and CEO of the Association of Small Business Development Centers; Mr. James Krempasky, president and CEO of Western Fire, 

Incorporated, Mr. Robert Hesser, president and CEO of HI Tech 

Services, Incorporated; and we have got a new member of this 

panel, Maj. Gen. Charles Henry, U.S. Army, retired, president and 

CEO of the National Veterans Business Development Corporation. 

Gentlemen, thank you very much for coming. We look forward to 

your testimony. Mr. Lopez. 

STATEMENTS OF JOHN K. LOPEZ, CHAIRMAN, ASSOCIATION 

OF SERVICE-DISABLED VETERANS; DONALD WILSON, PRESIDENT AND CEO, ASSOCIATION OF SMALL BUSINESS DEVELOPMENT CENTERS; JAMES R. KREMPASKY, PRESIDENT AND 

CEO, WESTERN FIRE, INC.; ROBERT G. HESSER, PRESIDENT 

AND CEO, HI TECH SERVICES, INC.; AND CHARLES HENRY, 

PRESIDENT AND CEO, NATIONAL VETERANS BUSINESS DEVELOPMENT CORPORATION 

STATEMENT OF JOHN K. LOPEZ 

Mr. LOPEZ. Mr. Chairman and distinguished members of the 

committee, it is a pleasure for me to appear today to provide the 

Association for Service Disabled Veterans’ views concerning H.R. 

1460, the Veterans Entrepreneurship Act of 2003 and H.R. 1712, 

the Veterans Federal Procurement Act of 2003. I applaud the wisdom of the sponsors and co-sponsors of these important legislative 

initiatives and the committee for holding today’s hearing. For matters of convenience, I will summarize my testimony. I respectfully 

respect that our written statement in its entirety be entered into 

the record. 

Mr. BROWN. So noted. 

Mr. LOPEZ. For far too long our nation’s veterans, particularly 

service-disabled veterans, have been excluded from federal programs that facilitate small business development and federal contracting. Presently, mandated programs have not assisted all businesses equally. ASDV is dedicated to the development of self-employment and managed employment opportunities for those men 

and women who incurred disabling injuries while serving our nation. We view H.R. 1460 and H.R. 1712 as being mutually supporting and both have great merit. 

The H.R. 1460 establishment of self-employment as a goal and 

entrepreneurship training as a benefit via the Department of Veterans Affairs Rehabilitation Service will provide all disabled veterans an opportunity to receive the support, the procurement services, and the professional training to assist them to achieve success. We are pleased to see that the administration in the Department’s fiscal year 2004 budget submission will submit legislation 

to modify the Montgomery GI Bill to enable veterans to be reimbursed for certain self-employment training programs. 

We are also pleased that the sponsors of H.R. 1460 took into consideration recommendations to utilize restricted competition pro-
26

curement programs for service-disabled veteran-owned small business. I think they are referred to as sole-source, I call them restricted competition. I respectfully suggest that for H.R. 1460 to be 

most effective, the language addressing procurement programs 

could be modified. Attached to this testimony is suggested language 

for consideration by the committee. I submit that this proposed language will also strengthen and enhance the language in H.R. 1712 

that establishes an enhanced veterans’ business development program within the Small Business Administration. 

We also firmly believe that the committee should carefully consider establishing a national veterans service-disabled veteran 

business certification program, administered by the Department of 

Veterans Affairs in coordination with the Department of Defense 

Central Contract Registry. 

However, Mr. Chairman, we also feel very strongly that America’s veterans and service-disabled veterans, men and women who 

have earned their benefits in service to this great nation, should 

not be subjected to proving that their misery and injuries create 

economic disadvantage as proposed in H.R. 1712. Although I have 

been assured by the staff that that provision is being modified. 

Veterans placed at risk for death, disability, and torture should 

not be subjected to artificial barriers to participation in the economic system they sacrifice to preserve. They answered your call 

and made a personal sacrifice. A grateful nation should eagerly 

provide them with opportunity, not subject them to demeaning bureaucratic processes. 

We are pleased that the committee is concerned with federal 

agency non-compliance with the goals that Congress specified in 

Public Law 106–50, goals intended to provide service-disabled veterans increased government contracting opportunities. 

I compliment the Chairman and Ranking Member Evans, for 

their foresight in including consequences for non-compliance in 

H.R. 1712. And Chairman Smith, Congressman Renzi, and Chairman Manzullo for their insight in recognizing that self-employment 

assistance is an important rehabilitation benefit, just as is education and training, medical care, and home ownership assistance. 

Mr. Chairman, members of the committee, I extend my admiration and my compliments to you for your understanding of the difficulties confronting our service-disabled veterans in establishing 

small businesses and actively participating in Federal Government 

procurement programs. We encourage and request your support 

and that of the 108th Congress for passage of H.R. 1460 and H.R. 

1712. These two bills are mutually supporting and will serve to 

open doors that have restricted veteran-owned business opportunities for the past 50 years. 

I will be pleased to answer any questions from the members. 

Thank you. 

[The prepared statement of Mr. Lopez, with attachment, appears 

on p. 128.] 

Mr. BROWN. Thank you, Mr. Lopez. Mr. Wilson. 

STATEMENT OF DONALD WILSON 

Mr. WILSON. Mr. Chairman, thank you very much for having the 

Association of Small Business Development Centers testify today. 
27

I will direct my comments essentially to H.R. 1460, Congressman 

Renzi’s legislation. We would like to commend Congressman Renzi, 

all of those on the staff, and the co-sponsors who helped bring this 

legislation before the Congress and commend you and Ranking 

Member Michaud for holding a hearing on this important legislation today. 

The Small Business Development Center Program was created in 

1980, signed into law by President Carter. It is the nation’s largest 

management assistance training program. We have served over 

10,000—excuse me, 10 million small business owners and aspiring 

small business owners in the last 23 years. 

Four years ago, when I came to the Association, one of the things 

that I wanted to focus on was better serving the veterans’ community. And within the first few months after I was there, former 

Congressman Solomon put together a breakfast meeting with the 

Association of Small Business Development Centers to meet with 

veterans service organizations in this town. To my knowledge, we 

were one of the first, if not the first, non-veteran service organization to support Public Law 106–50 and still support it. And commend all of those who put that legislation together. 

Roughly 8 percent of our clients, Mr. Chairman, are self-declared 

veterans. We know the numbers are far greater than that. It is not 

surprising, entrepreneurship requires a great deal of discipline. It 

requires risk taking. It requires leadership. These and other characteristics that are inherent in our veterans make them outstanding entrepreneurs. The Kauffman Foundation estimates that 

one in 10 adult Americans is seeking to become an entrepreneur. 

And in fact the numbers may be up. The Department of Labor indicates that when unemployment rises, self-employment or the desire 

for self-employment rises. We have certainly seen the numbers of 

those approaching our centers for assistance increase. 

Last year, we served 650,000 Americans with counseling of an 

hour or more or training of 2 hours or more. And we are finding 

waiting lists at many of our centers because we have been level 

funded essentially for a number of years. 

Opening up the training programs that are available in entrepreneurship by SBDCs and other groups, Gen. Henry’s group, for example, women business centers and others, is a tremendous opportunity for veterans, disabled veterans in particular. We believe the 

opportunities in technology that have now come along, with which 

we are extremely familiar and do a great deal of training in, open 

up the opportunities for self-employment to disabled veterans at 

home, which were not available say 6 or 8 years ago. 

So we believe that this legislation has a tremendous potential. 

We have worked very closely with Mr. Denniston and others at the 

Department of Veterans Affairs and, as I said, work very closely 

with Mr. Elmore and Gen. Henry. We believe the opportunities 

that this legislation will afford to our nation’s veterans to use 

Montgomery GI benefits will enable them to learn the skills required to be outstanding entrepreneurs. The studies that we have 

done, for example, probably 20 percent of small businesses are successful on average over 5 years. However, those at SBDC centers 

who have had long-term counseling and training, their success rate 

over that five year period is roughly 80 percent. 
28

So we know the programs that we offer outstanding long-term 

curriculum, such as the Next Level Program and the Fast Track 

Program, which I know Gen. Henry and others are familiar with. 

We offer those regularly through nearly a 1,000 service centers nationwide. So this makes them readily accessible to our nation’s veterans. We have roughly 6,000 employees. We are affiliated with 

some of the finest business schools and universities in the country. 

And so we believe it is a resource that is the ideal resource to 

deliver this training to our nation’s veterans and commend all of 

those associated with 1462 for making the changes in the statutes 

that would enable veterans to get this type of training. 

Thank you, Mr. Chairman. 

[The prepared statement of Mr. Wilson appears on p. 135.] 

Mr. BROWN. Thank you, Mr. Wilson. Mr. Krempasky. 

STATEMENT OF JAMES R. KREMPASKY 

Mr. KREMPASKY. Thank you, Mr. Chairman. I am very pleased 

to have been asked to appear this morning before the Subcommittee on Benefits for disabled veterans. My name is James 

Krempasky, and I am a service-connected, disabled veteran. I got 

this way not by choice, but I proudly wear the shoe that’s been 

placed on me. It is a known fact and reality for disabled veterans 

that we are treated differently. But disabled veterans realize that 

they are limited only by the limitations placed in their own minds. 

My status as a disabled veteran has put me at a disadvantage 

in the business world. I have found already, that owning my small 

business, that the federal procurement contracting world favors big 

businesses, and the small business owner doesn’t have a level playing field. I feel that, if enacted, the bills before the subcommittee 

would help disabled veteran, small business owners have access to 

the same contracting opportunities as their larger counterparts. 

The bills are important for disabled veterans, why? 

I feel, number one, they provide, as I stated before, an equal 

playing field for procurement contracting opportunities by sharing 

in the opportunities of government. Number two, they educate by 

providing the tools and skills necessary to be successful. Number 

three, the sole-source contracting under $5 million is very important as we, now, no longer have to compete on a level with big 

business. This may be good for services that are provided, but for 

someone in my particular business who provides products, I feel 

that there needs to be more done. 

For example, I bring the latest technology in fire prevention and 

terrorism defense by virtue of my fire suppression foam. I can put 

my product in the fixed sprinkler system that currently exists in 

your building, thereby improving the capability 200 percent more 

than what it currently is right now. 

But how do I get there? I have found a long process of empty 

roads and obstacles placed before me in trying to bring a product 

forward, with regards to a new technology, as a small business 

owner. We currently don’t have deep pockets and the ability to pay 

for the enormous requirements of paying for testing and certification, in my instance, for the fire industry that is required. There 

is no way to get around that at this time. If you don’t have deep 

pockets, you don’t bring your technology forward; therefore, I can’t 
29

participate in the federal procurement contracting opportunities 

that are available. 

I would ask that there be a way to make this happen, that funding be somehow put together to allow small business owners to 

bring new technology forward into the market that benefits mankind. 

Lastly, and most important, what I have not heard this morning, 

it provides me with self-respect. It provides me with self-esteem 

and a self-reliance that I, otherwise, would not have. It would be 

very easy for me to sit at home and collect my pension check and 

not be a productive member of society. Disabled veterans don’t 

want that. They want to be productive members of society. They 

don’t want to surrender to their disabilities and sit at home and 

collect a paycheck. They do not want sympathy. They don’t want 

a free handout. They only want fair opportunities to participate in 

the procurement process. 

I read in the paper the other day about the 137 members of our 

armed forces, men and one woman, that were killed in Iraq. Yet 

most people don’t realize that over twice as many of those service 

people were wounded. And out of those people that were wounded, 

two-thirds of them will no longer be able to go back to Active duty. 

They have become disabled veterans, and they will face the same 

pains and struggles that I faced when I came back from Active 

duty of what to do next. 

I fully support Mr. Michaud and what you stated earlier sir that 

after the war is over, we are forgotten. We are out of sight and out 

of mind. I wish that that would change because I think, as was 

stated before, we have earned our right by sacrificing for our country to have an equal opportunity to share in the benefits that our 

government offers. 

We still see this with the lack of equivalency for federal retirees. 

I don’t get paid the same retirement that a regular federal retiree 

gets. That is not part of this hearing, but it still shows that disabled veterans are not getting their fair share. 

Lastly, sir, I would like to add and ask respectfully for my written statement to be added to the record for this hearing. 

Mr. BROWN. Without objection. 

Mr. KREMPASKY. Thank you. 

[The prepared statement of Mr. Krempasky appears on p. 138.] 

Mr. BROWN. Thank you, Mr. Krempasky, lieutenant, I believe, 

and thank you for your service and thanks for being with us today. 

Mr. Hesser. 

STATEMENT OF ROBERT G. HESSER 

Mr. HESSER. Good morning, I would like to echo Mr. 

Krempasky’s problems in trying to get a service-disabled veteran 

company going. 

Good morning, Chairman Brown, Ranking Democrat Michaud, 

and your distinguished colleagues on this panel. My name is Bob 

Hesser. I currently serve as president of HI Tech Services, Incorporated, commonly known as HITS, a Virginia C corporation. I 

thank you for this opportunity to appear here today to present my 

views regarding the vital veterans’ issue of providing veteran-
30

owned and service-disabled-veteran-owned business an equal opportunity to compete for Federal Government procurement. 

My testimony concerns H.R. 1460 and H.R. 1712, as they will impact veteran-owned and service-disabled-veteran-owned small businesses. An attachment to my testimony addresses each section in 

more detail. Section 4 of H.R. 1460 will not be necessary if H.R. 

1712 was passed. I believe the thoroughness of H.R. 1712 will provide guidance to federal contracting officers, other federal employees, and prime contractors so necessary since passage of Public 

Law 106–50. 

Since passage of Public Law 106–50, I have attended over 60 

small business conferences, met with over 100 government officials, 

met with most of the top 15 Federal Government prime contractors, and worked with several veteran-owned and service-disabledveteran-owned small businesses. I am an active member of the 

Task Force of Veteran Entrepreneurship, as well as a member of 

veteran service organizations. I make this point because I want it 

to be clear that my knowledge and experience is beyond personal 

experience in just establishing HITS. My perspective is assuredly 

different than those without the same experience. Many people tell 

me that. 

This testimony is my personal viewpoint and does not represent 

any organization or person. I want to make five points in my verbal 

testimony. Thus far, Public Law 106–50, as far as procurement opportunity is concerned, has provided nothing but a Guinea stamp. 

Two, as a retired U.S. master chief, with 8 subsequent years as 

a government employee replacing two major IT systems through 

the federal procurement system in the Department of Agriculture 

and NAVC, with 7 years working with 8(a) firms, and 3 years establishing HITS, I firmly believe that the proposed legislation is 

sorely needed. Contracting officers and federal managers must 

have all the tools they need or Public Law 106–50’s purpose will 

never be realized. Large businesses rarely achieve subcontracting 

goals. H.R. 1712 will result in approved achievement of prime and 

subcontracting goals for all groups. I believe H.R. 1712 addresses 

the provisions of section 4 of H.R. 1460. 

Four, any legislative change made to the Small Business Act, 

and thus Federal Acquisition Regulations Part 19, will provide little improvement upon federal procurement from small business as 

long as the GSA has the ability to exempt FAR Part 19 from GSA 

schedule contracts. 

During fiscal year 2002, GSA schedule sales equaled more than 

$22 billion. That is all GSA schedule sales. GSA schedule spending 

rose from 7 percent to 31 percent of total IT procurement dollars 

from 1997 through 2002. While full and open IT competition spending decreased from 57 to 41 percent. GSA can no longer be allowed 

to dance around the Small Business Act. 

Five, I do not know how many procurement dollars went to small 

business. I don’t think anybody does. Statistics from the Federal 

Procurement Data Center are the best available. I highly suspect 

their accuracy because many of the same procurement dollars are 

counted as 8(a), veteran, service-disabled veteran, et cetera. 

From personal experience, I know that the few contract actions 

my company had during 2002 are only 50 percent accurate. If these 
31

few transactions are inaccurate, how can I trust the others? Contracting officers do typically report more than one category per 

transaction. 

In conclusion, Mr. Chairman, we need congressional support 

now. I have shared my opinions with you today because I, as well 

as many of my fellow veteran and service-disabled-veteran-owned 

business associates, believe we have a right to a fair and equitable 

playing field. I support the combining of H.R. 1712 and H.R. 1460, 

as stated. We desperately need this legislation. Without this legislation, we actually have nothing. I want to point out again I believe 

Public Law 106–50, insofar as procurement opportunity is concerned, has provided nothing but a Guinea stamp to service-disabled-veteran-owned companies. 

Thank you for this opportunity to appear here today to share my 

views on these issues so vital to the well-being of America’s veterans. And I would be happy to answer any questions. I request 

that my written testimony be made part of the record. 

[The prepared statement of Mr. Hesser, with attachments, appears on p. 148.] 

Mr. BROWN. So moved. Thank you, Mr. Hesser. 

Gen. Henry, thank you for your patience in waiting. We will hear 

from you now. 

STATEMENT OF CHARLES HENRY 

Mr. HENRY. Mr. Chairman, thank you for the opportunity that 

put me on this panel. And let me say to Ranking Member Michaud 

and other distinguished members of this committee, I am just 

proud to be here and to give testimony in support of the legislation 

that is before it. 

Mr. Chairman, before I do, we have two or three important people in the audience. May I take a moment and introduce them to 

the committee? The chairman of the National Veterans Business 

Development Corporation, a presidential appointee, Mr. Arthur 

Lopez, from the great State of California. He is our chairman. 

Along with him is Mr. Rich Oshner from the Commonwealth of Virginia, a presidential appointee on our board, the Veterans Corporation. And we have Dr. Sam Metters. He is a member of the newly 

appointed SBA Advisory Committee on Veterans Business Affairs. 

This is embodied in Public Law 106–50. And this organization just 

came into being last week. We are very delighted to have Dr. Sam 

and my two directors here with us today. 

With your permission, Mr. Chairman, I would like to submit my 

testimony for the record and summarize my remarks. I would also 

like to say that I commend the committee for holding these hearings. The House Resolutions 1460, 1712, and 1716 are very important to the veterans’ community. The Veterans’ Corporation supports the majority of the provisions in these bills, and I would like 

to just detail some of the thoughts that we would have concerning 

each. 

On H.R. 1460, we strongly support this provision. We think that 

the skills obtained in service to the nation makes service-disabled 

veterans well-suited for self-employment. And we heard the testimony here of an individual that talks about the benefit of that. We 

feel that the funding that this bill authorizes certainly would assist 
32

in the effort. And we would strongly ask that the committee look 

at the procurement process and support a 3 percent set-aside—and 

I would call it a set aside goal for the enforcement of Public Law 

106–50 in achieving the procurement goal in federal establishment. 

By way of explanation, I have got a history of being a senior acquisition executive back in the Department of Defense. Contracting officers do not have discretionary authority as you would think. I 

think it has to be mandated and put into the legislation. 

We certainly support these vehicles to provide processes for service-disabled veterans but we would also ask that you consider including other veterans into that. And the way that we could make 

equity is that you give the service-disabled veterans more of a percentage than you would the others but certainly all veterans coming into the process. We would see that that would certainly help 

us. Accomplishing this provides solid, tangible proof I think that 

this nation truly values the great service that military members 

perform for our nation. 

With respect to H.R. 1716, the Veterans Earn and Learn Act, we 

certainly support this Act and the potential to improve job opportunities for servicemembers as they leave the military. I can say that 

I as one individual using the GI Bill when I was on Active duty 

as a young officer, went to law school, and used the GI Bill to help 

me do that. And I can see the benefit of that and would certainly 

say that type of vehicles absolutely proof positive that it provides 

servicemembers with tremendous opportunities to learn and to be 

productive after they leave the service. 

With respect to H.R. 1712, I say, Mr. Chairman and Ranking 

Member, we have had a great relationship with both the staff directors on both sides of the aisle. I personally want to commend 

Len Sistek and his staff for their efforts in drafting H.R. 1712. My 

written testimony will indicate that we are in support of its principles. While we are not reguesting additional administrative funding, we are in support of additional funding for specific Veteran 

service programs, for example, The Veterans Entrepreneurial 

Training (VET) Program and the Community Based Organizations 

initiative, but do appreciate the Minority staff’s efforts on behalf of 

The Veterans Corporation. We have a great program to provide veteran education training that was given to us by the Kauffman 

Foundation. Mr. Wilson mentioned that. We have put together a 

program and that program is working to produce 617 veterans this 

year, by 30 September, our plan wraps to 1,500 veterans next year 

and 3,000 veterans the following year. 

This program documents a 77 percent chance of being in business 5 years later. It is a tremendously successful program. The 

total bill for 3,000 veterans will be $6 million per year. We are asking the committee to look at this for program cost. That is money 

that we can input into a direct program that will benefit veterans 

starting now. 

Sir, this concludes my testimony. I thank you for the opportunity 

to be here and to be a part of the distinguished members of this 

panel. 

[The prepared statement of Mr. Henry appears on p. 156.] 

Mr. BROWN. Ranking Member Evans, do you have a question? 

Okay, do any other members of the panel have a question? 
33

Mr. Hesser, we are going to try our best to get some input from 

the GSA on your problem, and we hope we can get some support 

from that direction. But thank you all for coming and being a part 

of this deliberation this morning. I appreciate your patience in 

waiting us out and getting the votes out of the way. We will now 

go back to Panel 4. I understand Ms. Styles is here. 

Mr. LOPEZ. Thank you. 

Mr. BROWN. Welcome. We are glad to have you all appear before 

us this morning. I know that you are doing overtime today, Ms. 

Styles. We certainly appreciate your willingness to fit this in your 

schedule. 

Accompanying Ms. Styles this morning is Mr. William Elmore, 

associate administrator for the Office of Veterans Business Development, and Mr. Fred Armendariz, associate deputy administrator 

for Government Contracting and Business Development. We have 

already heard from Gen. Henry. He was part of your panel but he 

elected to come earlier. We are glad that you are here, and we will 

hear from you now, Ms. Styles. 

STATEMENT OF ANGELA B. STYLES, ADMINISTRATOR, OFFICE 

OF FEDERAL PROCUREMENT POLICY, OFFICE OF MANAGEMENT AND BUDGET; ACCOMPANIED BY WILLIAM D. 

ELMORE, ASSOCIATE ADMINISTRATOR, OFFICE OF VETERANS BUSINESS DEVELOPMENT, U.S. SMALL BUSINESS ADMINISTRATION; AND FRED C. ARMENDARIZ, ASSOCIATE 

DEPUTY ADMINISTRATOR, GOVERNMENT CONTRACTING 

AND BUSINESS DEVELOPMENT, U.S. SMALL BUSINESS ADMINISTRATION 

Ms. STYLES. Thank you. I apologize for being late. I was testifying before the House Government Reform Committee and it ran 

a little bit over. 

I am very pleased to be here today to discuss H.R. 1460 and H.R. 

1712. I welcome the opportunity to collaborate with you on these 

issues. Both bills would establish mechanisms for creating opportunities for participation by veterans in federal contracting. 

H.R. 1460 would authorize sole-source awards to service-disabled-veteran-owned small business, up to $5 million for manufacturing contracts, and $3 million for non-manufacturing contracts. 

The legislation would also establish a set aside for competition limited to these businesses. 

H.R. 1460 focuses on setting aside contracts for small businesses 

owned and controlled by service-disabled veterans, whereas H.R. 

1712 would be broad-reaching in its effect on all federal small business procurement programs. We support the procurement provisions of H.R. 1460 but we oppose H.R. 1712. 

As I testified before this committee in February, the Federal 

Government has done an abysmal job of providing federal contracting opportunities for our veterans. And I have to tell you when 

my testimony went through clearance, I got several comments from 

agencies about using the word ‘‘abysmal,’’ and I held firm on that. 

I don’t think we have done a good job, and I think there are a lot 

of ways that we need to try and improve. 

As you know, Section 502 of Public Law 106–50 sets a 3 percent 

government-wide goal for participation by small businesses owned 
34

and controlled by service-disabled veterans in federal contracting 

and sub-contracting. The statistics from FPDS, our Federal Procurement Data System, reflect that the agencies really aren’t doing 

a very good job of meeting veterans’ procurement goals. As an initial step to rectify this situation, I issued a memorandum to all 

agencies reminding them of their goals and asking them to focus 

their attention on this segment of the commercial market. 

To assist agencies in locating veteran-owned small business, 

these agencies were informed in my memorandum that the Department of Veterans Affairs is creating the Vet Biz vendor information 

pages, which will identify about 5,000 veteran-owned businesses. 

Attached to my testimony is a copy of that memo. 

We hope that this will be an effective first step but I would like 

to emphasize it is just a first step. Friday of last week, I talked to 

Frank Ramos, the director of the Small Disadvantaged Business 

Utilization Office in the Department of Defense. We agreed to establish an inter-agency working group to address several issues 

that may be directly impacting veteran-owned small business participation in the federal procurement system. Although we have not 

yet identified members, we plan on addressing a wide range of 

issues, including proper identification of veteran-owned small businesses already participating in the federal procurement system. 

There are a host of other issues this group can identify and address. This inter-agency group will work under the leadership of 

my office and a newly-established Federal Acquisition Council. In 

the near-term, we will be establishing objective, short-term and 

long-term plans for the veteran-owned small business community 

and the small business community generally. 

On Monday of this week, I also addressed these issues with the 

newly-established Small Business Procurement Advisory Council at 

the Small Business Administration. I believe we have the recognition and understanding from small business offices within our 

agencies that these numbers must improve. 

Over the past 2 years, I have encouraged restructuring of the 

current procurement system to allow for greater participation from 

small and first-time contractors to the federal marketplace. In this 

context, the administration strongly supports open competition 

among qualified firms in the awarding of government contracts. 

Unfortunately, the statute, judicial interpretations, and regulations 

have in the small business arena become so confusing and difficult 

for our procurement people to understand that I am concerned 

about the ramifications of creating new statutory preference programs. I sense an increasingly negative culture toward small business that could be exacerbated by additional statutory requirements. 

I am also concerned that procurement preferences that would be 

created by H.R. 1460 might not have the long-term increase in contract awards to firms owned by service-disabled veterans that both 

the committee and this administration would like to see. Statutory 

changes could provide a short-term fix without consideration of 

long-term ramifications. However, recognizing the need to provide 

agencies with additional tools for contracting with service-disabledveteran-owned small businesses, we support section 4 of H.R. 1460. 
35

I would also like to point out the extraordinary nature of this 

proposed preference program for service-disabled-veteran-owned 

small businesses. It is only with extreme caution and reservation 

that this administration would support the creation of a new procurement preference program. However, in recognition of the sacrifice that service-disabled veterans have made for their country, 

we support the creation of this preference program. In every other 

conceivable instance, the administration would err towards open 

competition among qualified firms. Only through open competition, 

using our free market system, can we ensure that we are receiving 

the highest quality goods and services at the lowest price. 

There is no question that this administration is committed to ensuring that veterans are provided every opportunity to fully integrate themselves in their communities upon return from service, 

and I am personally committed to ensuring that we continue to 

focus agency performance on improving contracting opportunities 

for veterans. We must demonstrate to our service personnel that 

we support them in all that they do and appreciate the sacrifices 

that they have made on our behalf. I look forward to continued collaboration on these issues. 

This concludes my prepared remarks but I am very happy to answer any questions you may have. 

[The prepared statement of Ms. Styles, with attachment, appears 

on p. 160.] 

Mr. BROWN. Thank you, Ms. Styles. 

Any questions from the panel? Mr. Michaud? 

Mr. MICHAUD. Yes, thank you very much, Mr. Chair. Excuse me, 

Ms. Styles. Actually, Mr. Chairman, I would like to submit questions in writing for Ms. Styles to respond. Just a comment. You 

talked about—it is abysmal as far as what has happened out there. 

And I guess my only concern is I think veterans have heard a lot 

of promises and how we praise veterans and it is a good sound bite. 

But they haven’t seen results. And that is what they want to do 

is see results. They are tired of promises and they have heard the 

same promises when it comes to the veterans’ benefits. It has just 

been promises. And there are a lot of problems out there. And I 

think we got to make sure, this Congress and this administration 

has to make sure that we get results. And that is not happening. 

So I do have several questions which I will submit in writing. And 

hopefully OMB and SBA will take this very seriously because there 

are a lot of problems out there. 

I want to thank the panel for their time today. 

Ms. STYLES. Well, I agree with you. And I would also like to say 

that that is the reason that we support this set-aside and this solesource authority, so we can give the agencies additional tools to be 

able to award contracts to service-disabled veterans. 

Mr. BROWN. Ms. Davis, do you have a question? Okay, Ms. 

Styles, thank you very much for coming. I know this is double duty 

today, and I certainly appreciate the personal commitment, leadership and energy you bring to this issue on behalf of our President. 

And I thank you for all you and the rest of your team do there. 

Thanks for being a part of this, and we look forward to further 

input as we move these bills through the process. 

Ms. STYLES. Thank you very much. 
36

Mr. BROWN. Thank you. Welcome, gentlemen. Our final panel is 

made up of representatives of veterans service organizations. Mr. 

Blake Ortner? 

STATEMENTS OF BLAKE ORTNER, ASSOCIATE LEGISLATIVE 

DIRECTOR, PARALYZED VETERANS OF AMERICA; BRIAN E. 

LAWRENCE, ASSISTANT NATIONAL LEGISLATIVE DIRECTOR, 

DISABLED AMERICAN VETERANS; PETER S. GAYTAN, PRINCIPAL DEPUTY DIRECTOR, NATIONAL VETERANS AFFAIRS 

AND REHABILITATION COMMISSION, THE AMERICAN LEGION; AND RICHARD JONES, NATIONAL LEGISLATIVE DIRECTOR, AMVETS 

STATEMENT OF BLAKE ORTNER 

Mr. ORTNER. Thank you, Mr. Chairman. Mr. Chairman, members 

of the subcommittee, Paralyzed Veterans of America is pleased to 

present our views on the legislation before you today. PVA is the 

only national veterans’ service organization chartered by Congress 

to represent and advocate on behalf of our members and all Americans with spinal cord injury or disease. All of PVA’s members in 

each of the 50 states and Puerto Rico are veterans with spinal cord 

injury or dysfunction. These veterans suffer from catastrophic injury and disease and face challenges everyday in their quest to survive and function fully in society. 

Due to time, I will only address some of the issues with each 

piece of legislation but have included more detailed remarks in my 

written testimony, and I ask that be made part of the record. 

PVA thanks Mr. Renzi for introducing H.R. 1460, the Veterans 

Entrepreneurship Act of 2003. Entrepreneurship training is a valuable process for veterans, especially disabled veterans as they reenter civilian society. This is especially true for those with catastrophic disabilities who often have difficulty and face multiple 

challenges in the normal workplace. The opportunity to gain training to make our disabled veterans self-employable will truly bring 

benefits to themselves and to America. It is a win for everyone. 

PVA is also glad to see the legislation pursue non-traditional 

sources of training programs, such as the National Veterans Business Development Corporation, while maintaining sufficient definitions to preclude entities not able to deliver on their program promises. The legislation also provides for procurement improvements, 

allowing sole-source contracts to service-disabled businesses will 

give them the jumpstart needed to develop. But this will only be 

successful if contracting officers are encouraged to provide contracts to service-disabled-veteran-owned businesses as required by 

Public Law 106–50. 

To date, the performance of federal agencies has been dismal. We 

would like to offer our special thanks to Mr. Evans for introducing 

H.R. 1712, the Veterans Federal Procurement Opportunity Act. 

The introduction of legislation to support our disabled veteran business owners is welcomed. But if there is no requirement to provide 

contracts to these businesses, then it is simply an empty gesture. 

And I would like to applaud Ms. Styles. She is perhaps the first 

administration official to actually do something for veterans’ businesses. She has met with some of our organizations. And I would 
37

like to applaud her efforts on that. However, H.R. 1712 actually 

puts some teeth behind the rhetoric. PVA fully supports this legislation and particularly welcomes the modification of the Small 

Business Act to exclude amounts received for a veterans’ serviceconnected disability when determining a veteran is economically 

disadvantaged. 

PVA also welcomes the reauthorization of programs of the National Veterans Business Development Corporation. We are encouraged by the continuing support for the Corporation by the subcommittee. However, in appropriating funds for the Corporation, 

we would ask you to consider earmarking the appropriations for 

fiscal year 2005 and 2006 to programs developed by the Corporation. Possibly, for the community-based outreach programs and the 

educational training programs. Earmarking would directly benefit 

the programs provided by the Corporation and encourage the Corporation’s own self-sufficiency. PVA fully supports the Veterans 

Corporation but also looks forward to it becoming the self-sustaining private corporation envisioned in Public Law 106–50. 

PVA particularly welcomes the prohibition against double-counting. Double-counting is deceptive and does not give a clear picture 

of procurement for an agency. PVA also applauds language requiring a restriction on the use of funds for agencies that do not meet 

their goal. The only way to force agencies to meet their obligation 

to veterans is with an enforcement mechanism. 

PVA thanks House Veterans’ Affairs Committee Chairman Smith 

for his forward-thinking legislation, H.R. 1716, the Veterans Earn 

and Learn Act. A lump sum payment of benefits for those who complete training programs early only makes good sense. The ability 

to encourage veterans to move on to gainful employment benefits 

both the veteran and society. It will increase the veterans’ self-esteem and confidence and may provide funds to become established 

if the veteran needs to re-locate to find higher paying jobs in a new 

discipline. 

PVA also welcomes the recommendation for the Secretary to increase the use of apprenticeships which can more quickly return 

veterans to the workforce, often at jobs providing a higher initial 

income and living wage. This is particularly important with today’s 

veterans who are often older and have families. 

PVA welcomes provisions to share information among departments with respect to on-the-job training. PVA understands the 

needs for states and private organizations to regulate professional 

activities in their jurisdictions. But it simply doesn’t make sense 

that veterans trained as professionals must be re-trained to meet 

bureaucratic requirements. We hope the departments will work 

with the Professional Certification Advisory Board to ensure our 

veterans face as few impediments to employment as possible. PVA 

would also like to see Congress earmark funding to support the 

Board’s efforts. 

Mr. Chairman, I thank you and the subcommittee for its efforts 

to provide for our veterans, and I would be pleased to answer any 

questions. 

[The prepared statement of Mr. Ortner appears on p. 169.] 

Mr. BROWN. Thank you, Mr. Ortner. 
38

We also have with us Mr. Brian Lawrence, Disabled American 

Veterans. 

STATEMENT OF BRIAN E. LAWRENCE 

Mr. LAWRENCE. Thank you, sir. Good afternoon, Chairman 

Brown and Ranking Member Michaud. On behalf of the Disabled 

American Veterans, we appreciate the opportunity to testify on the 

bills under consideration today. The DAV was founded on the principal that our nation’s first duty to veterans is rehabilitation of its 

war-time disabled. Along with quality health care and adequate 

compensation, this principal envisions training and assistance to 

help disabled veterans become self-sufficient. 

H.R. 1460, H.R. 1712, and H.R. 1716 provide both disabled and 

non-disabled veterans an excellent opportunity to provide for themselves by running their own businesses. For some disabled veterans, entrepreneurship is the only viable option for maintaining 

self-sufficiency. The need for frequent medical treatments and 

other obstacles sometimes prohibit them from maintaining regular 

working hours. Such veterans often choose to operate their own 

businesses where they need not conform to the demands of a set 

schedule. Those who cannot are forced to rely on VA individual 

unemployability compensation. 

From an economic standpoint, it is better when disabled veterans 

operate their own firms. As business owners, they are able to contribute to federal revenue, rather than being an added increase to 

spending for VA programs. 

Small businesses also create millions of new jobs and generate 

billions of dollars annually. So we are stimulating the gross domestic product at the same time we are helping disabled veterans. 

Mr. Chairman, the DAV has nothing except praise for these 

three bills. Preceding witnesses have well-outlined each of them so 

for the sake of brevity, I will not reiterate what has already been 

stated. I will close by saying on behalf of our 1.2 million members 

we appreciate the subcommittee’s efforts to improve VA benefits. 

These bills illustrate to our nation’s disabled veterans that their 

dedicated service and sacrifices are not forgotten. Clearly, the 

DAV’s mission to improve the lives of disabled veterans is shared 

by this subcommittee, and we appreciate your efforts and look forward to working together on future issues. 

Thank you. 

[The prepared statement of Mr. Lawrence appears on p. 176.] 

Mr. BROWN. Thank you, Mr. Lawrence. 

Next will be Mr. Peter Gaytan of The American Legion. 

STATEMENT OF PETER S. GAYTAN 

Mr. GAYTAN. Mr. Chairman, thank you for the opportunity to 

present the American Legion’s views on H.R. 1460, H.R. 1712, and 

H.R. 1716. We commend the subcommittee for holding a hearing to 

discuss these important issues. The American Legion recognizes 

the benefits of American entrepreneurship, not only for the overall 

American economy but also for the transitioning servicemember 

seeking to develop their own business. 

The bills being considered today will indeed improve employment 

and entrepreneurship opportunities for America’s veterans. H.R. 
39

1460, the Veterans Entrepreneurship Act of 2003, allows veterans 

to use VA educational benefits to enroll in a non-degree, non-credit 

business course offered by a Small Business Development Center 

and the National Veterans Small Business Development Corporation. In addition, it clarifies that disabled veterans enrolled in 

school under a VA vocational rehabilitation program may establish 

self-employment and a small business enterprise as a vocational 

goal and would give federal agency contracting officers the discretionary authority to create sole-source contracts for disabled veteran-owned businesses up to $5 million for manufacturing awards 

and $3 million for non-manufacturing awards. 

The American Legion fully supports the provisions of this bill. 

More than any other group, those veterans who have sacrificed 

their health and well-being in service to the nation deserve the opportunity to successfully transition to the civilian workforce. 

H.R. 1712, the Veterans Federal Procurement Opportunity Act of 

2003, seeks to establish a development program for small business 

concerns owned and controlled by qualified service-connected disabled veterans, to reauthorize the programs of the National Veterans Business Development Corporation, and to establish a government-wide procurement goal for small business concerns owned 

and controlled by veterans. The American Legion is pleased to see 

this proposed legislation adding veterans, especially service-connected disabled to the list of specified small business categories receiving a 3 percent set-aside. And the American Legion fully supports all provisions of H.R. 1712. 

H.R. 1716, the Veterans Earn and Learn Act, seeks to approve 

VA educational assistance programs for apprenticeship or other onthe-job training. While the American Legion supports this important piece of legislation, we do not however have an official position 

on Section 6. We are reviewing the implications of this provision 

in detail and are willing to provide that opinion to the subcommittee when it is developed. And I will forward that to the committee as soon as it is ready. 

I would like to focus specifically on Section 7, which requires certain coordination of information among VA, DOD, and DOL with 

respect to on-the-job training. At the time of a servicemember’s separation from Active duty, the Secretary of Defense would be required to furnish VA with information concerning each registered 

apprenticeship pursued by servicemembers during Active duty 

service. Additionally, it would require VA, in conjunction with the 

DOL, to encourage and assist states and private organizations to 

grant credit to servicemembers and civilian occupations for skills 

and training earned during military service. 

The American Legion has consistently advocated proper recognition of military training and experience by civilian licensor and certification agencies. Section 7 of this bill is a step in the right direction. Ignoring the skills and training of America’s servicemembers 

when they transition into the civilian workforce, is not only a disservice to the transitioning veteran but is a disservice to the future 

employers. The training and education of military personnel is in 

many cases parallel, if not better, than their civilian counterparts. 

Parity recognition of their skills and qualifications enables civilian 

employers to recruit from the highly-trained and experienced work-
40

force of transitioning servicemembers. The American Legion applauds Chairman Smith for introducing this important piece of 

legislation. 

Mr. Chairman, that concludes my testimony, and I welcome any 

questions you may have. 

[The prepared statement of Mr. Gaytan appears on p. 182.] 

Mr. BROWN. Thank you, Mr. Gaytan. 

Mr. Richard Jones with AMVETS, welcome. 

STATEMENT OF RICHARD JONES 

Mr. JONES. Thank you. Chairman Brown, Ranking Member 

Michaud, thank you for the opportunity to present our views on the 

three bills subject to this hearing. Before I begin, I would like to 

publicly thank you both and members of this subcommittee and 

members of the full committee for your strong support for the Veterans’ budget this year. Your work was outstanding. And I would 

also like to publicly thank the sponsor of H.R. 1460, Mr. Rick 

Renzi, for his principled stand in support of a strong VA budget. 

Through his work and your work, you have helped design a blueprint for VA to fulfill its mission to serve veterans, all veterans. 

Regarding H.R. 1460, introduced by Representative Rick Renzi, 

the bill would seek to provide our nation’s veterans economic opportunities that would allow them to create their own enterprises. By 

funding enrollment in new credit and non-degree business courses 

offered at Small Business Administration Centers, this legislation 

would help veterans learn the self-employment skills necessary to 

run a successful business enterprise. Additionally, H.R. 1460 would 

liberalize certain VA practices that require disabled veterans to 

state an inability to work for others before becoming eligible for 

certain entrepreneurial services provided by VA rehabilitation programs. This change would help make entrepreneurship a more integral part of rehabilitation for disabled veterans and bolster the 

opportunity for disabled veterans to foster home-based businesses. 

The bill would also grant discretionary authority for procurement 

purchases and award contracts up to $5 million for manufacturing 

awards and $3 million for non-manufacturing awards to disabled 

veterans. This provision would help allow disabled veterans’ businesses to catch up to more contract advance providers with longstanding ties to federal agencies. AMVETS supports H.R. 1460 and 

urges its passage by the full House. 

Regarding the next bill under consideration, H.R. 1712, the Veterans Federal Procurement Opportunity Act of 2003, would advance the goals of Public Law 106–50, the Veterans Entrepreneurship and Small Business Development Act of 1990. H.R. 1712 

would establish a new development program for low-income and 

service-connected veterans. It would provide assistance, both financial and non-financial, to qualified veterans for their business creation and it would provide set-aside authority for federal agencies 

to better reach the goal of at least 3 percent of their contracts being 

awarded to service-connected disabled veterans. 

The bill would also eliminate double-counting. A contract to a 

service-connected disabled veteran would be counted as having 

been awarded to that single sub-category for tally in the Federal 

Procurement Data System. Under this system, much more realistic 
41

statistics of an agency’s performance under both 8(a) and new designations created by this bill for service-connected disabled veterans would be established. 

Finally, H.R. 1712 would establish a lock box that ensures an 

agency meets the 3 percent goal. In short, should an agency not 

meet its goal of providing at least 3 percent of prime contracts to 

service-connected disabled veterans, the 3 percent of its funding 

would be withheld. Those funds could only be used to contract with 

eligible service-connected disabled veterans until the goals are met. 

AMVETS fully supports H.R. 1712 and urges its passage in the full 

House. 

H.R. 1716, introduced by House Veterans’ Affairs Committee 

Chairman Chris Smith, seeks to ensure that veterans have the best 

opportunity to receive valuable training through on-the-job training 

and apprenticeship programs. The changes sought by this bill 

would modernize VA’s on-the-job training and apprenticeship programs to reflect the needs of American business in the 21st Century. Current VA on-the-job training and apprenticeship programs 

see limited use for fiscal year 2001, only 4.2 percent of veterans 

were enrolled in an on-the-job training or apprenticeship program. 

Several states, including Missouri and Pennsylvania, have mounted 

aggressive programs to place veterans in employment opportunities 

that offer on-the-job training. 

These programs have shown encouraging results. Enactment of 

H.R. 1716 would provide veterans with greater opportunity for employment by helping them obtain the professional licenses and accreditation they require to get the job track they have chosen. 

AMVETS fully supports H.R. 1716 and urges its passage by the full 

House. 

Again, we thank you for this opportunity to present our views 

and appreciate your time and efforts to make veterans’ lives better 

and to give them improved and enhanced benefits for themselves 

and their families. 

Thank you. 

[The prepared statement of Mr. Jones appears on p. 189.] 

Mr. BROWN. Thank you, Mr. Jones. 

Mr. Michaud, do you have a question? 

Mr. MICHAUD. Yes, two questions. My first question is have your 

organizations looked at the contract process for the application? I 

heard earlier that it is cumbersome. Is there a way to make that 

process, procurement process more streamline so small businesses 

of vets would be able to deal with it? 

Mr. ORTNER. Sir, I am not sure that anything done in the government cannot be complicated. I say that sort of tongue and cheek 

but I am serious. When we are looking at spending the taxpayers’

money, I think almost by definition, we want to have—you want 

it to be a little more complicated or at least a little more involved. 

I think some of the organizations or some of the agencies are looking at not necessarily streamlining the effects but providing assistance, providing outreach to help veterans get through the paperwork. I know there is some agency, NASA, I believe does it, I know 

the Treasury does it, where they actually do outreach to veterans’ businesses where they do business fairs and the initial day of their 

business fair will be exclusively for veterans and service-disabled 
42

veteran business owners. And when those owners come in, they get 

some assistance on getting through the process. And that seems to 

be more beneficial. 

Mr. MICHAUD. Thank you. Actually, I think I remember during 

the campaign, Congressman Ron Emmanuel actually was talking 

to me about the student loan program where students had to fill 

out over 100 some odd questions for a couple of thousand dollars 

whereas when you are exporting businesses and when you deal 

with some other programs of the Federal Government that includes 

millions of dollars, there is only 12 questions the Federal Government had asked. So I think there probably is a way that we can 

streamline the process to still have accountability but also to make 

it more accessible. 

My second question is, and I am not sure how long the 3 percent 

goal has been into statute, but a lot of times, having served for 22 

years in the Maine Legislature, there is a resentment between the 

Executive and Legislative Branch, and bureaucrats sometimes tend 

to resent what the legislature might put into statute, in this case 

a 3 percent goal. So even though they say they might want to implement it, there is no real initiative for them to do that. And that 

is why I support that part of this provision. 

But my question to the organizations, if in fact we can’t achieve 

that 3 percent goal, do you have members in your organization, if 

we change the structure, so that the final approval rather than 

being made by existing bureaucrats that is set up by a committee 

maybe a three or a two from service organizations to make that 

final decision to ensure that contracts, procurement contracts, they 

are meeting their obligation under statute? Do you feel you have 

members in your organization that will be able to take on that 

task? 

Mr. GAYTAN. The American Legion would be willing to get involved in ensuring that that 3 percent requirement is met, yes, sir. 

Mr. LAWRENCE. The Disabled American Veterans would be happy 

to participate in that, as well. So please let us know if we can be 

of any assistance. 

Mr. ORTNER. PVA may be able to, in a limited sense, do that; because of the catastrophic nature of our membership, there are limited numbers of business owners. But if the opportunity presented 

itself, it is certainly something we would like to look at. 

Mr. JONES. Bureaucratic inertia is part of the law of government, 

so we would expect there would be resistance to change and slowness to do so. But what Ms. Styles presented in the testimony a 

month or so ago was just startling with regard to the 3 percent effort. The effort was better in the first year than it was in the second year. There was a depreciation of the value of what you had 

suggested in the 106th legislation. AMVETS would of course be 

pleased to participate in any sort of effort to ensure that the 3 percent goal was met. We are hopeful that the American taxpayers 

would see that what we were doing would be valuable. And we 

would be pleased to participate if such an opportunity presented 

itself. 

Mr. MICHAUD. Thank you very much. 

Mr. BROWN. Gentlemen, you are the last panel we will take input 

from. And thank you all for what you do for the veterans. We have 
43

a goodly number of veterans down in South Carolina in my first 

congressional district. And I am absolutely so pleased to be the 

chairman of this Benefits Subcommittee and so glad to have testimony from you all today. 

Unless there are any more comments, we will stand adjourned. 

[Whereupon, at 12:45 p.m., the subcommittee was adjourned.] 

(45)

A P P E N D I X 
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219

WRITEN COMMITTEE QUESTIONS AND THIER RESPONSES 

CONGRESSMAN EVANS TO DEPARTMENT OF VETERANS AFFAIRS
220
221
222
223
224

CONGRESSMAN EVANS TO OFFICE OF MANAGEMENT AND BUDGET
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
274
275
276
277
278
279
280
281
282
283
284
285
286
287
288
289
290
291
292
293
294
295
296
297
298
299
300
301
302
303
304
305
306
307
308
309
310
311
312
313
314

Æ