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) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

74–842 2012

THE MINORITY BUSINESS DEVELOPMENT AGENCY: 

ENHANCING THE PROSPECTS FOR SUCCESS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COMMERCE, TRADE, 

AND CONSUMER PROTECTION 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

OCTOBER 15, 2009 

Serial No. 111–71 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 


jbell on DSK7SPTVN1PROD with HEARING
COMMITTEE ON ENERGY AND COMMERCE 

HENRY A. WAXMAN, California, Chairman 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

EDWARD J. MARKEY, Massachusetts 

RICK BOUCHER, Virginia 

FRANK PALLONE, JR., New Jersey 

BART GORDON, Tennessee 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

BART STUPAK, Michigan 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

Vice Chairman 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANE HARMAN, California 

TOM ALLEN, Maine 

JANICE D. SCHAKOWSKY, Illinois 

CHARLES A. GONZALEZ, Texas 

JAY INSLEE, Washington 

TAMMY BALDWIN, Wisconsin 

MIKE ROSS, Arkansas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

CHARLIE MELANCON, Louisiana 

JOHN BARROW, Georgia 

BARON P. HILL, Indiana 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

CHRISTOPHER S. MURPHY, Connecticut 

ZACHARY T. SPACE, Ohio 

JERRY MCNERNEY, California 

BETTY SUTTON, Ohio 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOE BARTON, Texas 

Ranking Member 

RALPH M. HALL, Texas 

FRED UPTON, Michigan 

CLIFF STEARNS, Florida 

NATHAN DEAL, Georgia 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOHN B. SHADEGG, Arizona 

ROY BLUNT, Missouri 

STEVE BUYER, Indiana 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

JOHN SULLIVAN, Oklahoma 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

(II) 


jbell on DSK7SPTVN1PROD with HEARING
(III) 

SUBCOMMITTEE ON COMMERCE, TRADE, AND CONSUMER PROTECTION

BOBBY L. RUSH, Illinois 

Chairman 

JAN SCHAKOWSKY, Illinois 

Vice Chair 

JOHN SARBANES, Maryland 

BETTY SUTTON, Ohio 

FRANK PALLONE, New Jersey 

BART GORDON, Tennessee 

BART STUPAK, Michigan 

GENE GREEN, Texas 

CHARLES A. GONZALEZ, Texas 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

ZACHARY T. SPACE, Ohio 

BRUCE L. BRALEY, Iowa 

DIANA DEGETTE, Colorado 

JOHN D. DINGELL, Michigan (ex officio) 

CLIFF STEARNS, Florida 

Ranking Member 

RALPH M. HALL, Texas 

ED WHITFIELD, Kentucky 

GEORGE RADANOVICH, California 

JOSEPH R. PITTS, Pennsylvania 

MARY BONO MACK, California 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

SUE WILKINS MYRICK, North Carolina 

MICHAEL C. BURGESS, Texas 


jbell on DSK7SPTVN1PROD with HEARING

jbell on DSK7SPTVN1PROD with HEARING
(V) 

C O N T E N T S 

Page 

Hon. Bobby L. Rush, a Representative in Congress from the State of Illinois, 

opening statement ................................................................................................ 1 

Hon. Phil Gingrey, a Representative in Congress from the State of Georgia, 

opening statement ................................................................................................ 3 

Hon. Kathy Castor, a Representative in Congress from the State of Florida, 

opening statement ................................................................................................ 4 

Hon. G.K. Butterfield, a Representative in Congress from the State of North 

Carolina, opening statement ............................................................................... 5 

Hon. Bruce L. Braley, a Representative in Congress from the State of Iowa, 

opening statement ................................................................................................ 6 

WITNESSES

David Hinson, National Director, Minority Business Development Agency, 

United States Department of Commerce ........................................................... 8 

Prepared statement .......................................................................................... 11 

Answers to submitted questions ...................................................................... 142 

Cindy Ramos Davidson, President and CEO, El Paso Hispanic Chamber of 

Commerce ............................................................................................................. 30 

Prepared statement .......................................................................................... 33 

Shelia Hill, President, Chicago Minority Business Development Council .......... 43 

Prepared statement .......................................................................................... 45 

Susan Au Allen, President and CEO, U.S. Pan Asian American Chamber 

of Commerce ......................................................................................................... 50 

Prepared statement .......................................................................................... 52 

SUBMITTED MATERIAL

Report entitled, ‘‘The State of Minority Business Enterprises,’’ dated August, 

2006 ....................................................................................................................... 89 


jbell on DSK7SPTVN1PROD with HEARING

jbell on DSK7SPTVN1PROD with HEARING
(1) 

THE MINORITY BUSINESS DEVELOPMENT 

AGENCY: ENHANCING THE PROSPECTS FOR 

SUCCESS 

THURSDAY, OCTOBER 15, 2009 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COMMERCE, TRADE, 

AND CONSUMER PROTECTION, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 1:42 p.m., in Room 

2322, Rayburn House Office Building, Hon. Bobby L. Rush [chairman of the subcommittee] presiding. 

Present: Representatives Rush, Sarbanes, Gonzalez, Butterfield, 

Castor, Space, Braley, and Gingrey. 

Staff Present: Michelle Ash, Chief Counsel; Angelle Kweme, 

Counsel; Timothy Robinson, Counsel; Will Cusey, Special Assistant; 

Aaron Ampaw, Fellow; Brian McCullough, Minority Senior Professional Staff; Shannon Weinberg, Minority Counsel; and Chad 

Grant, Minority Legislative Assistant. 

OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Mr. RUSH. The hearing will be called to order. This is a hearing 

of the Subcommittee on Commerce, Trade, and Consumer Protection. The hearing is entitled, ‘‘The Minority Business Development 

Agency: Enhancing the Prospects for Success.’’ 

The Chair yields himself 5 minutes for the purposes of an opening statement. 

The 111th Congress took extraordinary steps to turn around our 

moribund economy when it passed the American Recovery and Reinvestment Act of 2009. Back in October 2008, I told Senators in 

my district and also across the Nation that I had just begun to ensure that the concerns of people living on Main Street would not 

be ‘‘eclipsed by the excesses on Wall Street.’’ Today’s hearing is a 

continuation of my pledge. 

This hearing is more than just about the Minority Business Development Agency. It really is about the larger matter of what we 

as Members of Congress can do to assist the executive branch in 

coming up with a prescription to help cure our fiscal and economic 

ails. As part of that prescription building, we will have a frank discussion today regarding the MBDA’s reformulated vision from its 

new National Director, Mr. David A. Hinson, and whether it makes 

sense to endow MBDA with more resources to pursue that vision. 


jbell on DSK7SPTVN1PROD with HEARING
2 

In listening to the testimony and ideas of our distinguished panel 

of guests, we witnessed some of what MBDA could do, in conjunction with the Department of Commerce, to help reverse the devastation that has touched down on many of our formerly hardworking 

and historically blue collar and minority communities. These communities have suffered disproportionately under the yoke of this recession. 

I am of the belief that the MBDA can be an engine for positive 

change not just on Wall Street, but on Raleigh Road in Wilson, 

North Carolina; or on South Cresler Street in San Antonio, Texas; 

and West 74th Street in my hometown of Chicago, Illinois. 

To make sure of that change, the Federal Government and the 

States must authorize more spending of stimulus dollars and Recovery Act contracting with minority businesses—businesses that, 

I might add, are proving time and time again that they can complete projects on time and within budget. There can be no other 

fairer outcome. 

Minority firms have a greater tendency than nonminority firms 

to train future minority entrepreneurs, recruit and hire minority 

workers, and set up operations in minority communities. African 

Americans have a greater tendency to hire African Americans, 

women tend to hire women, Hispanic Americans tend to hire Hispanic Americans, and so on and so on and so on it goes. This is 

how the real world operates. Really, to understand this aforementioned dynamic one need not look any further than the halls of 

Congress. 

Since the start of the recession in December 2007, unemployment 

rates for all the major working groups are much higher. The unemployment rates for minority workers are even higher than those for 

white workers, by as much as 15 percent. 

According to the most recent Department of Labor employment 

statistics, the unemployment across race, sex, and age for African 

Americans is 15.3 percent; in 2007, it was 8.6 percent. For Hispanic Americans, it is 12.2 percent; in December 2007, it was 6.3 

percent. For Asian Americans, it is 7.4 percent; in 2007, it was 3.7 

percent. For Indian Americans and Alaskan Natives, it is 15 percent; in 2007, it was 7.8 percent. And for Native Hawaiians, it is 

14.4 percent; in 2007, it was 2.8 percent. 

These are horrifying statistics. They paint a picture of the underutilization of minority workers, which is a harbinger of worse 

things to come. 

In closing, I want to thank the witnesses for coming here to offer 

us your perspectives. You are serving more than minority businesses through your appearances. You are also helping to uplift the 

U.S. from the severely economically distressed position it now finds 

itself in. 

I want to thank you, and I yield back. 

Now it is my pleasure and honor to recognize the Ranking Member, Dr. Gingrey, for 5 minutes for the purposes of an opening 

statement. 


jbell on DSK7SPTVN1PROD with HEARING
3 

OPENING STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA 

Mr. GINGREY. Chairman Rush, thank you. Thank you so much. 

I appreciate you calling today’s oversight hearing regarding the 

Commerce Department’s Minority Business Development Agency. 

Most businesses in this country, as we all know, are small businesses, and the value of small companies is significant. They provide the lifeblood of our economy. They employ more than half of 

all workers in this country. In fact, they have provided more than 

14 million net new jobs created over the past 15 years. 

Small firms are the bedrock of American capitalism and they 

should be encouraged. Some of our most creative and valuable enterprises have started in someone’s garage, with nothing more than 

an idea. While we can’t guarantee successful outcomes, we can and 

we should work to ensure the path to small business contains as 

few hurdles as possible. And for small businesses, regulatory compliance is an enormous hurdle. 

For small businesses, regulatory compliance is a much greater 

burden than it is for a larger firm that has economies of scale and 

they can absorb these costs much more easily. As expected, the effect for small businesses—let’s say one with fewer than 20 employees—is even greater. The cost of compliance with Federal regulations for firms with fewer than 20 employees averages 45 percent 

more per employee than it does for large firms. These small businesses spend approximately $7,647 per employee to meet Federal environmental, economic, workplace, and 

tax compliance requirements. These costs are real and they can be 

disastrous to many small businesses that are, in some cases, homebased businesses. We have heard from many who close their doors 

because they were affected by the unforeseen regulatory cost of the 

Consumer Product Safety Improvement Act which made it too expensive to conduct business. 

As we look at the Minority Business Development Agency and its 

priorities, I would suggest that we focus on facilitating small business entry into the market by limiting unnecessary regulatory cost 

and roadblocks. Creating an environment conducive to job creation 

is always good policy, and I will always support it. 

Our country is a world leader in providing the opportunity to 

succeed, and the result has been a pipeline of small businesses and 

entrepreneurs that are invaluable to this dynamic United States’ 

economy. Given the state of the world economy, addressing obstacles that hold back many of our small businesses is a good idea; 

indeed, an excellent idea. 

The Commerce Department’s Minority Business Development 

Agency is one Federal initiative that seeks to promote minority 

business opportunities and the continued growth of their businesses. 

Currently there are over 4 million minority-owned businesses in 

the United States. They range in background from Native-born 

Americans to recent immigrants from many different ethnicities. 

Their common thread is they came to America to pursue a better 

life in a land of limitless opportunities. I am proud to say that 

many of the residents have used this opportunity to start successful businesses. 


jbell on DSK7SPTVN1PROD with HEARING
4 

So I am very interested in how the Minority Business Development Agency seeks to promote small businesses and to ensure opportunities exist for everyone who has the will and the determination to pursue the American dream. 

As I said at the subcommittee’s first trade hearing back in 

March, often the difference that turns a struggling business into a 

successful one is the connection between buyers and sellers. Those 

networking opportunities and connections can be aided by our government’s promotional efforts. Expanding the market of potential 

buyers often leads to new export and trade opportunities that are 

beneficial to our entire economy. 

It is not our role to ensure—we can’t, really—whether a particular business is successful. That is up to the business and its 

ability to execute its own level of entrepreneurship. But we can 

seek to ensure that our existing resources that enhance small business growth are available to all Americans. 

Mr. Chairman, I look forward to the testimony of the witnesses, 

and I yield back at this time. 

Mr. RUSH. The Chair thanks the gentleman. 

The Chair now recognizes the gentlelady from Florida, Ms. Castor, for 2 minutes for an opening statement. 

OPENING STATEMENT OF HON. KATHY CASTOR, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA 

Ms. CASTOR. Thank you, Chairman Rush, very much and welcome to our witnesses here today. 

We find ourselves in the worst economic downturn in a generation and the challenge now with the recovery plan and all of our 

efforts is to ensure that we save jobs and we create jobs. 

It is most important throughout our neighborhoods and communities that these are the hardworking folks that keep the economy 

going, our small businesses and folks that may be particularly vulnerable in these type of downturns. 

So we need your help and we need your advice on what we do 

make sure the Recovery Act is implemented as effectively as possible. I would like to hear how we use the new tools of modern 

technology to communicate, because you all understand better than 

anyone how difficult it is to get the word out. That is the challenge 

for many of these businesses and business owners. They want to 

compete, and they can compete very well, but they have to know 

about the opportunities. 

I found myself back home in Florida being a conduit, explaining 

what some of the opportunities are under the Recovery Act. But it 

is difficult. It is so vast and expansive. 

Next weekend we are going to have a big seminar and invite all 

of our small businesses, disadvantaged businesses, women-owned, 

veteran-owned, service-disabled, to come hear from the U.S. GSA 

and small business folks and bring in other representatives from 

local government in our neighborhoods to spread the word. But we 

need to do more. And I want to hear from you all, with all of your 

expertise, how we can do a better job to keep people working and 

make sure our businesses have every opportunity to compete. 

Thank you. 


jbell on DSK7SPTVN1PROD with HEARING
5 

Mr. RUSH. The Chair now recognizes the gentleman from Ohio, 

Mr. Space, for 5 minutes. 

Mr. SPACE. I just would like to thank you, Mr. Chairman, for 

your leadership on this issue and thank the witnesses for taking 

the time to prepare and offer your testimony today. 

It seems one of the unfortunate ironies of difficult economic times 

is that those who oftentimes need the most help are the first ones 

to get cut. I think the SBA’s cuts have been a reflection of that 

maxim. That certainly applies to other areas as well. 

My district happens to be a very rural one, a very poor one, and 

the services that normally would be applied to areas like ours to 

help stimulate economic development, the areas like ours that need 

the help, are the services that have diminished or disappeared in 

the wake of difficult economic times. It oftentimes can become a vicious, cyclical pattern. 

So I’m again grateful for your taking the time to prepare and 

offer your testimony today, and look forward to hearing it. 

Thank you. I yield back. 

Mr. RUSH. The Chair now recognizes the gentleman from Texas, 

Mr. Gonzalez, for 2 minutes. 

Mr. GONZALEZ. I will waive opening, Mr. Chairman. Thank you. 

Mr. RUSH. The Chair now moves to the gentleman from North 

Carolina, Mr. Butterfield, for 2 minutes. 

OPENING STATEMENT OF HON. G.K. BUTTERFIELD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH 

CAROLINA 

Mr. BUTTERFIELD. Thank you very much, Mr. Chairman, for convening this very important hearing today. When I first came on 

this subcommittee a few months ago, you told me that this was 

your passion and this was something we could expect. I want to 

thank you very much for living up to your promise. 

I, too, have a very profound interest in minority business development. I have had that passion for a very long time. And so I 

want to thank all of you four witnesses for coming and thank you 

for what you do to make this a reality. 

I must say at the outset that I have a bias, Mr. Hinson, toward 

the Department of Commerce. My daughter started this week as an 

appointee in the Trade Administration, so we now have something 

in common. And I look forward and welcome you as you take on 

this responsibility. 

Mr. Chairman, as I mentioned a minute ago, I represent a very 

poor, low-income, rural district in eastern North Carolina. My district is the fourth poorest district in the United States of America. 

My district is about 50 percent minority, and most of those minorities are African Americans. I can tell you that we have literally 

hundreds if not thousands of businesses in my district who are positioned to thrive if they could just get the financial resources and 

the technical expertise to make this happen. And so I want to encourage you to do more with the resources that you have at your 

disposal to try to make this happen. 

There is a parallel agency in my State, and I think most of you 

may be familiar with it, it is the North Carolina Institute of Economic Development, led by a friend of mine, Andrea Harris. I have 


jbell on DSK7SPTVN1PROD with HEARING
6 

known Andrea for at least 40 years. She wouldn’t want me to say 

that. But she’s a dynamic individual. That institution is helping 

minority businesses in my district do things that they need to do. 

And so I welcome you. I pledge to work with you. I am going to 

work with the Chairman and the Ranking Member and anyone in 

this Congress who wants to promote minority business development. 

The Congressional Black Caucus is totally committed to this effort. It has been for many years. Now that we have new leadership 

in the White House and in this Congress, hopefully we can make 

it a reality. 

Thank you very much. Thank you for coming. 

I yield back. 

Mr. RUSH. Mr. Sarbanes from Maryland is recognized for 2 minutes. 

Mr. SARBANES. Thank you, Mr. Chairman. I look forward to the 

hearing. In particular, as has been mentioned by a number of folks, 

the role that is played in terms of reaching out and providing service and support to minority-owned businesses and small businesses, that role is ever more important in these difficult times 

that we are facing right now. 

What tends to happen, of course, is in a tough economy, particularly when you have a stimulus effort like we have and you are trying to move quickly to get the stimulus distributed through the 

economy, you can tend then to overlook small businesses and go to 

kind of the big players. At the same time, the mid-size and larger 

contractors, from what I have heard, because they are relatively 

desperate to get work, are kind of muscling in on some of the space 

traditionally occupied by the smaller businesses. 

And so I look forward to hearing the testimony today and maybe 

having some of those issues addressed. 

I yield back my time. 

Mr. RUSH. The Chair thanks the gentleman. 

The Chair now recognizes the gentleman from Iowa, Mr. Braley, 

for 2 minutes. 

OPENING STATEMENT OF HON. BRUCE L. BRALEY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF IOWA 

Mr. BRALEY. Mr. Chairman, thank you for holding this important 

hearing. In the 110th Congress I was Chair of the Subcommittee 

on Contracting and Technology on the Small Business Committee 

and we talked a lot in our hearings about how to improve the effectiveness of programs like the HUB zone and 8A business development programs and level the playing field for minority-owned small 

businesses. 

One of the things that stood out during those hearings with the 

SBA was that the Federal Government was not keeping its promise 

to make sure that a certain percentage of contracts were going to 

minority-owned businesses. At that time, I pushed, and I will continue to push, to make sure the government is providing the tools 

and resources to help small businesses flourish and making sure 

that government contracts are going to a diverse group of businesses. 


jbell on DSK7SPTVN1PROD with HEARING
7 

One of the other things I learned during those hearings was that 

growing businesses have a difficult transition period once they exceed SBA size standards and are no longer eligible for programs offered by the SBA. That is why the Minority Business Development 

Agency is so important. 

For the past 40 years it has been providing technical assistance, 

education, and training to help these minority-owned businesses as 

they move into this next stage of development. It is especially important as a resource as this Nation continues its economic recovery. 

While I’m certainly appreciative of all the great work that the 

MBDA is doing, I also believe that one of the greatest challenges 

this agency faces is that it is grossly underfunded. In fact, it is the 

smallest funded government agency, having received just $29 million last year. 

We need to make business development a greater priority and to 

make sure agencies like MBDA have the resources they need to 

create more procurement opportunities for minority business owners and jobs for minority workers. This is an investment that pays 

for itself through job creation and an increased tax base. 

I also think greater effort should be made to coordinate with the 

SBA so there is a smoother transition for these 8A graduates and 

these entrepreneurs to continue to have access to tools and expertise they need so their businesses can grow and compete globally. 

Minority-owned businesses make up 20 percent of all U.S. businesses but continue to be overlooked by many prime contractors in 

landing contracts with the Federal Government. Great strides have 

been made in the private sector to expand opportunities for minorities. It is time for the Federal Government to do its share. 

Thanks again, Mr. Chairman, and thank you to all the witnesses 

for joining us today. I yield back. 

Mr. RUSH. The Chair thanks the gentleman. Now it is my distinct honor and privilege to recognize the visitors and also those 

who are in the audience—I want to acknowledge you—but I want 

to give special recognition to those who are witnesses before this 

subcommittee. I will begin on my left. 

On my left is Mr. David Hinson. He is the National Director of 

the Minority Business Development Agency for the Department of 

Commerce. 

Next to Mr. Hinson is Ms. Cindy Ramos Davidson. She is the 

President and CEO of the El Paso Hispanic Chamber of Commerce. 

Next to her I am very, very delighted to have with us someone 

from my hometown, Ms. Shelia Hill. She is the President of the 

Chicago Minority Supplier Development Council. 

Next to Ms. Hill is Ms. Susan Allen. She is the President and 

CEO of the U.S. Pan Asian American Chamber of Commerce. 

Before I proceed any further, it is the common practice of this 

committee that I swear in the witnesses. So would you please stand 

and raise your right hand. 

[Witnesses sworn.] 

Mr. RUSH. Please let the record reflect that the witnesses have 

all answered in the affirmative. 


jbell on DSK7SPTVN1PROD with HEARING
8 

TESTIMONY OF DAVID HINSON, NATIONAL DIRECTOR, MINORITY BUSINESS DEVELOPMENT AGENCY, UNITED STATES DEPARTMENT OF COMMERCE; CINDY RAMOS DAVIDSON, 

PRESIDENT AND CEO, EL PASO HISPANIC CHAMBER OF 

COMMERCE; SHELIA HILL, PRESIDENT, CHICAGO MINORITY 

BUSINESS DEVELOPMENT COUNCIL; AND SUSAN AU ALLEN, 

PRESIDENT AND CEO, U.S. PAN ASIAN AMERICAN CHAMBER 

OF COMMERCE 

Mr. RUSH. Now the Chair is delighted and pleased to recognize 

the Director of the MBDA, Mr. Hinson. Before Mr. Hinson begins, 

let me just state something for the record as the Chair. Mr. 

Hinson, you are certainly welcome here at any point in time. I met 

you in my office, and you are a delight. But I am woefully disappointed that we did not have an assistant secretary or someone 

that will really have the authority to speak across the board. 

I know you have the authority to speak for the Department, but 

I am just astounded that at this hearing, which is the first hearing 

that this subcommittee has had on this matter in a while—and it 

has been almost 40 years of the inception of MBDA—I’m really astounded that there is not enough interest, or what I perceive is interest, in the Department of Commerce. 

Will you please send the message back that I am absolutely determined that the next hearing that we have, that we have an assistant secretary or higher, because this MBDA is getting ready to 

grow in significance as far as I’m concerned and as far as the U.S. 

commerce is concerned. So it won’t be the smallest agency in the 

U.S. Government if I have anything to do with it and other members of this committee. 

So please get back and tell them to get their act together now 

and increase their own responsibility and sensitivity toward the 

issue that your agency is concerned about and your agency has as 

its mission. 

We will have another hearing soon and we expect to have not 

only you present, but someone who is an assistant secretary 

present also, or, if not, the Secretary of Commerce. 

OK. Thank you so much. 

Mr. RUSH. Now, it is my pleasure to recognize the National Director of the MBDA, Mr. Hinson, for 5 minutes for opening statements. 

TESTIMONY OF DAVID HINSON 

Mr. HINSON. Good afternoon, Chairman Rush and Ranking Member Gingrey and members of the subcommittee. Thank you for inviting the Minority Business Development Agency here today to 

discuss how MBDA and the Department of Commerce is helping 

create wealth and jobs in the minority business community and the 

global economy. 

My name is David Hinson. I was appointed as National Director 

of the Minority Business Development Agency by Commerce Secretary Gary Locke on July 15, 2009. 

MBDA has been in existence for over 40 years. The agency was 

originally established through executive order by President Richard 

Nixon on March 5, 1969. The agency is currently authorized by ExVerDate Mar 15 2010 00:21 Aug 25, 2012 Jkt 074842 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 E:\HR\OC\A842.XXX A842

jbell on DSK7SPTVN1PROD with HEARING
9 

ecutive Order 11625, as amended, and receives annual appropriations from Congress. 

MBDA’s vision is economic prosperity for all American business 

enterprises. The agency’s mission is to foster the growth and global 

competitiveness of U.S. businesses that are minority-owned. It is 

my mission that each Member of Congress comes to understand the 

economic contributions that MBDA makes both in their local communities and to the entire Nation. 

MBDA works with minority firms of all sizes during all stages 

of their business lifecycle. MBDA aims to create a new generation 

of businesses with $100 million in annual revenue, which in turn 

generates higher economic activity and job creation. 

Based upon the needs of the client, MBDA provides the following 

business services through our nationwide network: business consulting; procurement matching; private equity and venture capital 

sourcing; bonding assistance and loan packaging; strategic 

partnering; and market promotion. 

MBDA funds a nationwide network of 46 centers, which are operated as public-private partnerships. The centers are staffed by professional consultants who have the knowledge and practical experience necessary to operate profitable businesses. 

Clients of the centers include businesses owned and operated by 

Native Americans, Hasidic Jewish Americans, Native Hawaiians, 

Alaska Natives, Asian Americans, Pacific Islanders, Hispanic 

Americans, and African Americans. 

MBDA’s performance is evaluated annually on the number of 

new jobs created, the total dollar value of contract awards, and the 

total dollar value of financing transactions generated by the agency. 

In fiscal year 2008, MBDA generated over $1 billion in contracts, 

more than $1 billion in financial transactions, and generated 5,316 

new jobs. Preliminary results for fiscal year 2009 look to be equally 

as positive. 

So, as you can see, MBDA’s programs increase the economic activity at the local, regional, and national level. This economic activity translates into reduced unemployment, stronger businesses, expanded tax bases, the creation of wealth and community investment. 

Congress has conducted numerous hearings and received numerous reports that demonstrate the persistence of discriminatory barriers that continue to limit contracting opportunities for minority 

businesses. As part of my written testimony I am submitting Appendix A, a list of hearings and materials that have already been 

presented to Congress; and Appendix B, a list of State and local 

government disparity studies. 

MBDA is an important catalyst in building stronger minority 

business communities. More than 18 percent of all U.S. nonpublicly 

traded firms are minority-owned. Yet, these firms represent only 

7.5 percent of the total gross receipts generated by all U.S. businesses. This disparity underscores the opportunity gap that still exists in the U.S. economy. 

If the minority business community were performing at economic 

parity, the U.S. economy would benefit from an additional $1.8 trilVerDate Mar 15 2010 00:21 Aug 25, 2012 Jkt 074842 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 E:\HR\OC\A842.XXX A842

jbell on DSK7SPTVN1PROD with HEARING
10 

lion in annual gross receipts, 11.4 million new jobs, and an additional tax base exceeding $100 billion per year. 

A more comprehensive discussion regarding economic parity for 

MBEs and on the business characteristics of MBEs is available in 

two MBDA publications which have been provided to the subcommittee staff. 

In conclusion, MBDA has identified the following three strategic 

priorities and continues to implement programs to achieve these 

goals: Improve marketplace access and opportunity; improve access 

to traditional and nontraditional sources of capital; serve as a 

knowledge center and valuable resource for minority business 

stakeholders. 

I would like to thank Chairman Rush and Ranking Member 

Gingrey and the entire subcommittee for allowing me to testify before you today. I respectfully request the Chairman to enter my full 

written testimony, along with the two MBDA reports mentioned, as 

well as appendix A and appendix B, in the official hearing record. 

Mr. RUSH. There has been unanimous consent request. Hearing 

no objection, the aforementioned articles and reports will be included in the record. So ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. HINSON. On a final note, Mr. Chairman and distinguished 

members of the subcommittee, the Department of Commerce and 

MBDA are encouraged by this opportunity to testify. We look forward to working with you to create an environment where minority 

firms have an equal opportunity to participate in the marketplace. 

Thank you very much. 

Mr. RUSH. The Chair thanks the gentleman. 

[The prepared statement of Mr. Hinson follows:] 


jbell on DSK7SPTVN1PROD with HEARING
11 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 17 74842A.001
12 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 18 74842A.002
13 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 19 74842A.003
14 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 20 74842A.004
15 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 21 74842A.005
16 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 22 74842A.006
17 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 23 74842A.007
18 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 24 74842A.008
19 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 25 74842A.009
20 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 26 74842A.010
21 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 27 74842A.011
22 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 28 74842A.012
23 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 29 74842A.013
24 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 30 74842A.014
25 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 31 74842A.015
26 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 32 74842A.016
27 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 33 74842A.017
28 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 34 74842A.018
29 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 35 74842A.019
30 

Mr. RUSH. I recognize for 5 minutes for the purposes of opening 

statement Ms. Ramos Davidson. 

Mr. BUTTERFIELD. Mr. Chairman, would you allow me to ask a 

question of the Chair, please? 

Are any of the Minority members of the committee going to join 

us today; have you received any word? 

Mr. RUSH. It was the Ranking Member, Mr. Gingrey. They keep 

changing Ranking Members on us. He was here. I can’t speak for 

the Minority. 

Mr. BUTTERFIELD. How many Republican members are on this 

subcommittee? 

Mr. RUSH. There are 12. 

Mr. BUTTERFIELD. Are any of them represented by staff today? 

Mr. RUSH. Yes, sir. 

Mr. BUTTERFIELD. Thank you, Mr. Chairman. 

Mr. RUSH. Ms. Ramos Davidson. 

TESTIMONY OF CINDY RAMOS DAVIDSON 

Ms. RAMOS DAVIDSON. Good afternoon, Mr. Chairman and members of the subcommittee. Thank you for the opportunity to testify 

today on recommendations to enhance the prospects of success 

through the Minority Business Development Agency. 

I am Cindy Ramos Davidson, President and CEO of the El Paso 

Hispanic Chamber, a nationally and statewide recognized Chamber 

that not only serves our market but small, minority- and womenowned businesses in our borderplex in our region. 

I am here today to testify on behalf of the United States Hispanic 

Chamber of Commerce, the world’s largest business federation representing more than 3 million Hispanic-owned businesses and organizations of every size, sector, and region, as well as the El Paso 

Hispanic Chamber of Commerce, which is an affiliate of the U.S. 

Hispanic Chamber. 

I’m in a unique position to be able to provide you some testimony, because you’re looking at the real face on the street every 

day who utilizes these programs to move opportunity forward. 

The El Paso Chamber of Commerce has successfully operated an 

SBA-funded Women’s Business Center for the past 8 years. More 

recently—and I’m proud to say—as an operator of a Minority Business Enterprise Center in partnership with MBDA and the U.S. 

Department of Commerce for the last 18 months. 

I think it’s important to note that I tried five different times to 

be able to be awarded the Center, because I understood and recognized the need for the services the Center offered in our market. 

And each time we applied and we didn’t get selected, we kept going 

back and going back. So a lot of that tenacity and sweat equity that 

we do every day is what we teach in our Centers. 

It’s of interest to note that the El Paso Hispanic Chamber and 

the Arizona Hispanic Chamber are the only two minority Chambers in the country currently operating Minority Business Enterprise Centers in partnership with MBDA. 

In addition, we operate a satellite PTAC in partnership with our 

community college, which is partnered with the Department of Defense, Defense Logistics Agency; a HUB Development Center of Excellence for State and Federal HUB certification; an Empowerment 


jbell on DSK7SPTVN1PROD with HEARING
31 

Zone Technical Assistance in partnership with the city of El Paso 

and HUD; and our newest one that we are going to open on the 

28th, which is our Texas Department of Transportation Business 

Opportunity Center in partnership with TXDOT and the Federal 

Highway Administration. 

We are honored to be associated with each of these agencies and 

confident that we can provide testimony as an effectiveness of 

these Centers for minority business populations we serve. 

Our efforts are grassroots, provided bilingually, with technical 

assistance and development, for every phase of startup and growth 

industry businesses would not be possible without the support of 

all these agencies. 

From January 1, 2003, to July 31, 2009, we have served through 

our counseling and training centers 28,101 individuals; assisted in 

financing projects totaling $51 million; provided successful procurement and bid matches totaling $61 million; helped assist in the 

startup of 316 businesses; most notably, assisted 3,668 expanding 

businesses which helped to create and retain over 11,000 jobs. 

As a veteran community, with our military base, Fort Bliss, we 

have serviced 747 veteran and service-disabled clients; 722 homebased businesses; and 14,152 female clients—all of these Centers 

providing an estimated impact to our community of $362 million. 

Being on the street and in the trenches every day, we understand firsthand the needs of minority business and feel that these 

agencies work in tandem with MBDA to complement each other’s 

services. 

The SBA has been a primary agency for startup businesses, providing much-needed support in the area of accessing hard-to-find 

capital through guarantee loan programs, business plan development, and marketing strategies. But MBDA is the core of opportunity for the market we serve. That is where the strength of economic viability is going to come, is through those growth industries, those businesses that we help through the MBDA. 

MBDA’s Minority Business Enterprise Centers, their Native 

American Business Enterprise Centers, and their Minority Opportunity Centers provide a much deeper level of assistance to small 

businesses to grow through larger, more complex traditional lending avenues, such as bonding assistance; guidance on procurement 

strategies, such as joint ventures and teaming agreements; and 

providing networking and contracting opportunities through its 

wide network of resources. 

The diversity of services and clients enables all minority entrepreneurs who need assistance to receive it with our support, to be 

able to champion their own destiny and catch a part of the American dream through free enterprise. 

To date, the El Paso MBEC has received and worked through 

companies in our area $528,398,207 from the American Recovery 

and Reinvestment Act. I do have a copy here of all of those jobs 

through AAR that we have done if anybody needs a copy of those. 

With the support of our MBEC and the U.S. Department of Commerce, we have been able to ensure that minority-owned businesses 

in our community are able to successfully bid and perform on these 

jobs. The report has also shown there’s a significant support aveVerDate Mar 15 2010 00:21 Aug 25, 2012 Jkt 074842 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 E:\HR\OC\A842.XXX A842

jbell on DSK7SPTVN1PROD with HEARING
32 

nue in terms of helping these companies not just to stay small, but 

be able to grow. 

We have seven Centers within our organization and each one of 

those Centers works hand in hand with the MBEC to be able to 

provide what is necessary to grow these businesses. 

We feel that consideration should be given to making MBDA 

have a much greater influence in this country because you’re looking at the face who works day and day with the company who 

wants to start a business, has a wonderful idea, and doesn’t know 

where to get started. 

The resources we have are great, but we could do so much more 

if we had more resources. And I am with you, Mr. Chairman; 

MBDA is the smallest but yet it does the best work. It’s got the 

biggest heart, more compassion than anybody I’ve seen, but we can 

certainly triple that if we had more dollars and more resources. 

I thank you, because I see my time is up, for the opportunity to 

testify. 

[The prepared statement of Ms. Ramos Davidson follows:] 


jbell on DSK7SPTVN1PROD with HEARING
33 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 39 74842A.020
34 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 40 74842A.021
35 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 41 74842A.022
36 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 42 74842A.023
37 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 43 74842A.024
38 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 44 74842A.025
39 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 45 74842A.026
40 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 46 74842A.027
41 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 47 74842A.028
42 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 48 74842A.029
43 

Mr. RUSH. The Chair will entertain a unanimous consent request 

that the aforementioned reports that Ms. Ramos Davidson mentioned in her testimony, that they be entered into the record. Hearing no objections, so ordered. 

Mr. RUSH. Now it is my pleasure, again, to recognize the 

Chicagoan among the group, Ms. Hill. Ms. Hill, you’re recognized 

for 5 minutes. Welcome. 

TESTIMONY OF SHELIA HILL 

Ms. HILL. Thank you so much, Congressman. Good afternoon. I’d 

like to thank the Honorable Bobby L. Rush, Chairman of the Subcommittee on Commerce, Trade, and Consumer Protection and the 

distinguished committee members for giving me the this opportunity to speak. 

I am Shelia Hill. I’m President and CEO of the Chicago Minority 

Supplier Development Council, a 42-year old not-for-profit organization founded on the basic principle that all should have equal access to participate in the commerce of this country. 

I have been in this industry for more than 20 years and I have 

been an entrepreneur, a Fortune 500 corporate professional, and 

now the leader of the Minority Supplier Development Council. 

The Chicago Minority Supplier Development Council is the 

founding member council of the National Minority Supplier Development Council, and it represents over 37 affiliate councils, 16,000 

certified minority businesses, and more than 3,500 major buying 

organizations. The mission of the Council is to create an environment that maximizes business opportunities between buying organizations and certified MBEs and to provide development services 

to foster the creation of mutually beneficial business relationships. 

Therefore, our relationship with MBDA is a perfect marriage. 

CMSDC has maintained a 40-plus year relationship with the Minority Business Development Agency, MBDA, U.S. Department of 

Commerce, and has been the operator of the Chicago Minority 

Business Opportunity Center for 6 years. We also operate the Gary 

Minority Business Opportunity Center and co-operate the Chicago 

MBOC. 

Our relationship with MBDA is unique, and it in conjunction 

with this relationship the minority business community has benefited and business opportunities have prospered. Through this relationship, the operation of the MBOC has created jobs; access to 

contracts, both public and private sector; increased financial transactions, including but not limited to mergers and acquisitions. In 

fact, the MBOC has generated approximately $1 billion in contracts 

and financial transactions over the past 3 years. 

The Chicago model is an excellent model. It is a good working 

model and it is one that I hope will be replicated across the country. 

MBDA provides vital resources to the business community, and 

although the name says minority, its policies far outreach, far exceed the minority business community. And for the record, committee members, public policy dictates private behavior and policy. 

MBDA’s initiatives impact all Americans, not just minority Americans. It is an American agency, not just a minority business agency. 


jbell on DSK7SPTVN1PROD with HEARING
44 

Parity for people of color in business does not exist. Discrimination is still extremely widespread. Access to contracts, financing, 

and bonding, which lead to growth, prosperity and employment, 

continue to be limited. Minority businesses need access and business development. It is through the support of MBDA that these 

things happen. At approximately $29 million, the Minority Business Development Agency is the smallest federally funded agency within the 

government. Nevertheless, for the last 5 years the citizens of America have realized a minimum return of 54 times and a maximum 

return of 74 times. I think that is pretty substantial. 

As a business professional committed to the growth and development of minority businesses, the growth and development of this 

country, it is mission critical for MBDA to be better funded. 

Had the MBDA budget remained flat over the past 40 years, it would be, minimally, a $300 million agency. 

As operator of the Chicago MBOC, this would allow me to serve 

more MBEs. Larger, more successful MBEs would hire more employees; more employees would positively contribute to the economy, pay more taxes, and build our country. 

MBDA is the only Federal agency specifically devoted to growth 

and development of minority businesses. It was created back in 

1969, as you all know, by executive order. It needs to have statutory authority. 

Transparency and accountability to ensure a level playing field 

is still needed. A perusal of FedBizOps would confirm that minority 

businesses are not widely being included in the stimulus, TARP, or 

ARRA. MBDA is critical to enhancing the prospects for success. 

Thank you so much for this opportunity. 

[The prepared statement of Ms. Hill follows:] 


jbell on DSK7SPTVN1PROD with HEARING
45 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 52 74842A.030
46 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 53 74842A.031
47 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 54 74842A.032
48 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 55 74842A.033
49 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 56 74842A.034
50 

Mr. RUSH. The Chair thanks the witness. And now the Chair recognizes Mrs. Allen for 5 minutes for the purposes of opening statement. 

TESTIMONY OF SUSAN AU ALLEN 

Ms. ALLEN. Thank you, Mr. Chairman and distinguished subcommittee members. The U.S. Pan Asian American Chamber Education Foundation welcomes this invitation and opportunity to 

speak before this subcommittee on the subject of enhancing the 

prospects for success for the Minority Business Development Agency and the Minority-owned Business Enterprise Community in the 

United States. 

I would like to ask, Mr. Chairman, that my more lengthy written 

statement be incorporated in the official record. 

Mr. RUSH. So ordered. 

Ms. ALLEN. To start, we did apply for the opportunity to run a 

center, and we didn’t get it either. 

In 1984, 11 Asian Pacific Americans from Maryland, Virginia, 

and Washington, D.C., had an idea. We wanted to bring together 

the very diverse Asian Pacific business owners for the common purpose of developing a national business and professional network. 

That was also the year I received my law degree. As the only lawyer in the group, I was asked to form the U.S. Pan Asian American 

Chamber of Commerce Foundation. 

My goal then was to create for the Asian American business community a strong voice in our Nation’s capital and in the rest of the 

country that would speak to their talents, capabilities, aspirations, 

concerns, challenges, and the contributions that they have made to 

this country since the year 79 A.D. 

Since our founding, we have been working to help Asian American businesses to succeed and thrive, including providing certification to qualified Asian American businesses that want to do business in the minority business community and in the mainstream 

marketplace. This is a very important program for Asian Americans to get involved in. In order for them to get into this area, they 

have to be certified as a minority business. And I will talk about 

that further. 

Today, USPAACC has expanded its nationwide reach with national headquarters in Washington, D.C., and six regional chapters 

in California, Texas, Georgia, Illinois, and the D.C.-Maryland-Virginia area. We have the largest database that contains information 

about the most important, innovative, and cost-effective Asian 

American suppliers across industries. 

Our small business transportation resource center in the southwest region, based in San Francisco, helps to prepare small businesses, that include Hispanic, African American, Asian, Native 

American, women, veterans, and disabled veterans-owned businesses located in Arizona, California, Hawaii, Nevada, and Utah, 

so they could have an equal opportunity to participate in U.S. Department of Commerce and related contracts at the local, State, 

and Federal levels. 

Through our unique one-on-one prescheduled business matchmaking meetings, we were the first to introduce the platform that 

allows suppliers to build business connections and strengthen relaVerDate Mar 15 2010 00:21 Aug 25, 2012 Jkt 074842 PO 00000 Frm 00056 Fmt 6633 Sfmt 6633 E:\HR\OC\A842.XXX A842

jbell on DSK7SPTVN1PROD with HEARING
51 

tionships with potential customers, and, along with our summits, 

seminars and workshops, we continue to educate and nurture our 

members. 

Asian Americans now account for approximately 15.2 million of 

the U.S. population, with the majority born overseas. As an ethnic 

group we are diverse and complex, with origins from countries in 

East Asia, Southeast Asia, the Indian subcontinent, and the Pacific 

Islands, speaking over 100 languages and dialects. 

By the year 2050, Mr. Chairman and members of the committee, 

the Asian American population is projected to climb to over 40 million people, or 10 percent of the U.S. population. 

We have now enjoyed the highest median household income in the United States, with a buying power of $526 billion a year. 

Today, Asian Americans are relatively young, well educated, and 

the most wired, Internet savvy, bilingual ethnic group with deep 

pockets—and technologically savvy, too, Ms. Castor. 

Among U.S. small businesses, MBEs are the fastest growing sector, and Asian American businesses are the fastest growing in this 

group. Over 1.1 million Asian American businesses generated more 

than $393 billion in revenue in 2002 and hired 2.5 million employees, the largest among all ethnic groups. 

Most Asian American businesses, however, do not fit the 

stereotypical high-tech garage setups or mom and pop operations. 

The biggest share of businesses fall into the service category, such 

as technical services, health care, transportation, construction, and 

so on. 

What are the issues and challenges that Asian American businesses face? Despite the large positive numbers registered by 

American business in the past several years, many continue to 

struggle in today’s competitive global economy. In the area of diversity, a program that encourages the utilization of businesses owned 

by minorities and women, Asian American-owned businesses continue to be underrepresented in all sectors except for information 

technology and telecommunications. 

Contract bundling is a major hurdle for small businesses and all 

minority businesses. Getting certification accepted is a major hurdle for Asian American-owned businesses. 

What do I suggest that we could do with MBDA? I suggest that 

MBDA work with organizations such as us, USPAACC, such as 

MBDC, such as the U.S. Hispanic Chamber of Commerce and its 

many, many affiliates to reach out to the nooks and crannies of the 

country, because we are the people in the grassroots. We have our 

ear on the ground. We know where the footsteps are coming. With 

us, we can help MBDA reach down to all corners of the country and 

perform the services that are so much needed and send information 

out about opportunities that will truly benefit and bring prosperity 

to the country. 

[The prepared statement of Ms. Allen follows:] 


jbell on DSK7SPTVN1PROD with HEARING
52 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 60 74842A.035
53 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 61 74842A.036
54 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 62 74842A.037
55 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 63 74842A.038
56 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 64 74842A.039
57 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 65 74842A.040
58 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 66 74842A.041
59 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 67 74842A.042
60 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 68 74842A.043
61 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 69 74842A.044
62 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 70 74842A.045
63 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 71 74842A.046
64 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 72 74842A.047
65 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 73 74842A.048
66 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 74 74842A.049
67 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 75 74842A.050
68 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 76 74842A.051
69 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 77 74842A.052
70 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 78 74842A.053
71 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 79 74842A.054
72 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 80 74842A.055
73 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 81 74842A.056
74 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 82 74842A.057
75 

Mr. RUSH. The Chair thanks you. The Chair has been generous 

in the time allocated to you, but we do have to move on. Did you 

bring your statement to a conclusion? 

Ms. ALLEN. Yes. I shall be happy to answer any questions. 

Mr. RUSH. Thank you so very much. There is a vote that is occurring on the floor as we speak, but we are going to try to move as 

fast as we can. 

The Chair recognizes himself for 2 minutes for questions. 

Director Hinson, it is unfortunate that MBDA is a largely unknown agency. Can you outline some steps that you plan to take 

to raise the profile of the only agency designed to assist and promote minority businesses? 

Mr. HINSON. Thank you for that question, Mr. Chairman. The 

Minority Business Development Agency, as is the Commerce Department, is moving aggressively to expose the activities of MBDA 

to our constituents nationwide. We are doing quite a number of 

things to increase our visibility in conjunction with the Department 

of Commerce. 

We are going around and meeting with many of the stakeholders 

that are across the Nation. They have expressed an interest in 

meeting with me personally. I have taken on that task to meet 

with them and to listen to all of their concerns. We are actively 

pursuing technology. 

We actually are one of the first agencies in the Commerce Department to begin to use social networking to expand our messaging around the Nation. We are engaging with many of the other 

Federal agencies. This is in partnership with the Small Business 

Administration under the economic stimulus activity to ensure that 

they are aware of what we are doing and what our agency is doing. 

So we are taking quite a number of steps. 

Mr. RUSH. Let me ask you this. There’s a new Office of Innovation and Entrepreneurship in the Department of Commerce. What 

kind of relationship do you intend to have with that office? 

Mr. HINSON. Thank you again, Mr. Chairman, for that question. 

We expect to have a very close relationship with that new area. 

Mr. RUSH. That office is not going to supplant you and your mission? 

Mr. HINSON. No, sir. It is a separate group that has a separate 

mission, and it is a vital mission. What it is doing is bringing the 

best—and this is under the leadership of Secretary Locke—is 

bringing the best of what the Department of Commerce has to offer 

to early stage and startup businesses and providing a variety of 

technical services and support for those businesses. So it is a complementary effort. 

Mr. RUSH. The chairman’s time has expired. 

The Chair now recognizes Ms. Castor for 2 minutes. 

Ms. CASTOR. Thank you, Mr. Chairman. Director Hinson, what 

is the extent of MBDA’s cooperation with the Small Business Administration in assisting small minority-owned businesses that 

grow too large for SBA programs? Does SBA communicate with 

MBDA and identify enterprises that they might not be able to help 

any more but could benefit from the assistance of your agency? 

Mr. HINSON. Thank you for that question. Many of those firms— 

you’re talking about, I think, specifically about firms that graduate 


jbell on DSK7SPTVN1PROD with HEARING
76 

from the 8A program. We actually interact with quite a number of 

those firms through our 46 centers nationwide, and we actively engage them to help them prepare to actually compete in the open 

market. 

We have a great relationship with SBA. Our missions are different. We serve, in some respects, a different constituency, in that 

MBDA works with minority-owned firms of all sizes at all levels in 

their growth cycle. SBA tends to work with more early stage companies. And so what happens is many of the companies that we 

work with actually exceed the size standards of the SBA. 

But, with that in mind, we have worked closely with them, 

again, particularly on a point you made earlier, on promoting economic stimulus contracting for small and minority business. We 

are engaged, under the leadership of Secretary Locke and Administrator Karen Mills, to make sure that small and minority businesses gain their fair share of economic stimulus contracts. We 

have been engaged in quite a number of activities in that regard. 

If I might take a moment to share some of them with you. There 

have been—under their leadership there have been near 200 different information and outreach sessions nationwide on economic 

stimulus. We have engaged in pulling together actual lists of shovel-ready companies that we can present—and this is us on the 

State level—that we can present to State procurement people and 

to the State government to make them aware that companies are 

ready to participate in these contracts. 

We, in conjunction, again with the leadership, have developed a 

tracking system to help begin to track the results of contracts. We 

have now begun to see some of the results of those efforts in terms 

of contracts that come from the Federal agencies. 

We have been engaging all of the Federal agencies to make them 

aware of the importance of working with minority and small businesses relative to economic stimulus contracts. We have done quite 

a number of B-to-Bs, business-to-business programs, to engage, 

particularly in the construction industry, prime contractors with 

subcontractors and build those relationships—and relationships are 

critical to making sure that subcontractors are added to the prime 

contractor structure under economic stimulus. 

So we’ve done quite a lot with SBA in that respect. 

Mr. RUSH. The Chair now—we have votes occurring on the floor 

and I think there are less than 5 minutes for the vote. So I’m going 

to ask the witnesses, if you can, would you be willing to remain 

until after we conclude? I think there are two or three votes. And 

then we will reconvene this committee hearing after the votes. 

Mr. HINSON. We’d be delighted to, Mr. Chairman. 

Mr. RUSH. This committee stands—did you have something? 

Ms. RAMOS DAVIDSON. I’ve got a very special opportunity to meet 

Judge Sotomayor this evening and I have to be at the building by 

six o’clock. 

Mr. RUSH. We intend for you to be there a long time before six 

o’clock. So the Chair will reconvene the hearing within 5 minutes 

after the last vote. Thank you. 

[Recess.] 

Mr. RUSH. The subcommittee will come to order. 


jbell on DSK7SPTVN1PROD with HEARING
77 

The Chair now recognizes the gentleman from Texas, Mr. Gonzalez, for 5 minutes for questioning. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman, for the 

generous amount of time you have provided me. 

Welcome one and all. And your testimony has so much in it for 

later use by us. What we do with the statements of course and staff 

is we refer to them as resource materials in the future. I just ran 

over here. I am not what I used to be. I will tell you that. 

But I do have a couple of observations. There is a statement in 

here, and it is Ms. Hill’s statement, that basically tells us why we 

are here today and why we have within departments and agencies 

certain sections that are devoted to the proposition that the world 

just may not be all that fair and that government has a responsibility to right a wrong and to pursue justice. And your statement 

is: ‘‘Parity for people of color in business does not exist. Discrimination is still widespread. Access to contracts, financing, and bonding, 

which lead to growth, prosperity, and employment, continues to be 

limited. Minority businesses need access and business development.’’ 

And this is not one of these ‘‘woe is me.’’ I think we are just recognizing a fact of life and what we need to do and what we are all 

seeking is that opportunity, and I just wanted to pay special emphasis to those couple of—three sentences that you have that really 

gives us the guidance. 

I don’t know if there is a member on this subcommittee, Mr. 

Chairman, that hasn’t at one time or another served on the Small 

Business Committee. So we have had a lot of experience with the 

Small Business Administration, and I will tell Mr. Hinson that you 

are quite lucky because in every hearing that I ever attended when 

I was on Small Business when we either had the Administrator or 

someone in one of the sections from the Small Business Administration and we had other witnesses from the small business community, they were never greeted with words of praise and looking 

at a promising future to be working with you. So I just think you 

are doing something right and just to continue on that path. 

It appears to me that every one of the witnesses here had great 

emphasis on the Minority Business Enterprise Centers. So, of 

course, the first thing is do we have something like that in San Antonio? We are blessed. It is not necessarily for the auspices of our 

Chambers of Commerce but rather our University of Texas at San 

Antonio. And I guess that is going to be Mr. Hinson. You have how 

many—was it 46? I can’t remember. 

Mr. HINSON. Forty-six centers, sir. 

Mr. GONZALEZ. Forty-six. And they seem to be a highly valued 

service that you provide with partnering up with individuals in 

these communities. And you may have touched on it, but what do 

you view as your biggest asset, your most effective tool, because 

you seem to have identified that as one of them, and what do you 

propose to do to expand on that which has already been identified 

as quite valuable? 

Mr. HINSON. I thank you for the question. I frankly think our 

biggest asset is the leadership at the senior levels in the Commerce 

Department who have demonstrated a commitment to the Minority 

Business Development Agency. I think a very solid asset is the supVerDate Mar 15 2010 00:21 Aug 25, 2012 Jkt 074842 PO 00000 Frm 00083 Fmt 6633 Sfmt 6633 E:\HR\OC\A842.XXX A842

jbell on DSK7SPTVN1PROD with HEARING
78 

port we get from the White House, and quite candidly, another 

solid asset is this committee right here because you are illuminating in a very great way both the issues that minority businesses face and the opportunities to the Nation if we can eradicate 

the obstacles that prevent minority firms from competing successfully and effectively in all industries. 

What we will do at MBDA is to continue to do what we are 

doing, with one caveat, and that is we will certainly continue to integrate ourselves more into the Department of Commerce, taking 

advantage of agencies like the International Trade Administration, 

taking advantage of NIST and NOAA and building strong relationships there. In addition to that—and what that means is—for our 

clients is really a greater focus on globalizing the minority business 

community, and there are tremendous opportunities around the 

world that we haven’t—we typically don’t even discuss in a normal 

course of discussion on minority businesses. We are going to continue to focus with the resources that we have on attempting to 

build a generation of substantial minority businesses. 

I mentioned in my oral comments the importance of building mi- nority businesses that are $100 million or larger. That is typically 

the size that you need for these firms to compete as primes. The 

other unique component of that is that these firms create the vehicle from a relationship standpoint and from an access standpoint 

to help smaller firms actually grow and prosper. 

We will continue to focus on the President’s initiative to move 

minority firms into frontier industries, which is very important, 

technology, alternative energy, health care IT. And so we will focus 

on that as a part of our relationship both with our centers and as 

a part of the activities that are going on inside the Department of 

Commerce. 

So that just gives you a thumbnail of the things that we are 

thinking about and focusing on. 

Mr. GONZALEZ. Again, I just appreciate your testimony here 

today. 

And I think, Mr. Chairman, I have about 40 seconds, but I will 

yield back to you. 

Mr. RUSH. Thank you very much. 

Let me ask Mr. Hinson, and then I am going to ask the other 

witnesses also. The Chair recognizes himself for as much time as 

he may consume and the Chair will for the second round extend 

that to the gentleman and any other member of the subcommittee. 

Mr. Hinson, in the Secretary’s announcement of this new Office 

of Innovation and Entrepreneurship and also his comments there 

were mirrored in a statement that you made in the Minority Enterprise Development news conference where you alluded to the idea 

that minority businesses must move away from service-oriented 

businesses and embrace huge innovative opportunities such as 

clean energy, smart grid technology, and health care IT. 

How involved are you at MBDA and how involved will you be in 

terms of making those types of transitions, and are you suggesting 

then that small businesses need to abandon their service-related 

industries? 

Mr. HINSON. Thank you for that question, Mr. Chairman. I will 

answer the second part. 


jbell on DSK7SPTVN1PROD with HEARING
79 

No, I am not suggesting that minority firms exit service industries. I am suggesting that minority firms have traditionally been 

concentrated in several industries. Those industries don’t fully embrace the frontier industries that will be really the next generation 

for job growth. I mean 20 years, 30 years from now we will be talking about, you know, alternative energy not as something that is 

new and innovative but something that is part and parcel to our 

day-to-day vocabulary. 

So, no, I am not suggesting that at all. But it is important as, 

frankly, the Commerce Secretary has outlined, as President Obama 

has touched upon, that minority firms do move more into the frontier industries, and it is a commitment certainly on our part, and 

certainly it is of a great interest to the Department of Commerce, 

that these companies be helped to move into these industries in 

larger numbers. So it is important that this occur and we are here 

to make that happen. 

Mr. RUSH. Now, let me ask the other three witnesses. Given 

what the Director has said, first of all, are you prepared, each one 

of you, are you prepared, or your businesses, are they prepared to 

move into the, quote, frontier industries, as he has indicated, and 

what are the obstacles and what do you think we can as members 

of this committee, as the Congress, can do in order to help you to 

overcome the obstacles? 

Ms. RAMOS DAVIDSON. I will start if you don’t mind, Mr. Chairman. I would say most definitely, yes, our businesses are ready to 

move into frontier with services and opportunities that MBEC in 

our market provided that allows us to do that. We have been teaching our market for the longest time how to diversify their people, 

their product, and their service. And that means looking for a different type of customer than they normally do. 

The challenge for the small minority women—minority market in 

our avenue is that there is so much opportunity that they are so 

busy working in their business as opposed to on it that it is challenging for them sometimes to be able to utilize the resources that 

the MBEC has. And that is what our challenge is on the grassroots 

floor is getting all the wonderful resources from our MBEC and 

getting the business to use it and get them out of working in their 

business and on it, and working on it is finding ways to get into 

that new frontier. 

What I hear from a lot of our businesses is when they get into 

there, what is the Federal Government going to do to help to give 

them additional resources to do that, whether it be in tax incentives or lessening the burden of rules and regulations they have to 

go through and all the hurdles they jump through every day just 

to be able to find a widget and identify a new market and, oh, by 

the way, find a new growth industry and a new frontier. 

So it isn’t that they don’t have the capability and the imagination 

to do it. It is about the resources available to help them to do that. 

And you can see with MBDA being one of the smaller agencies in 

terms of funding and all that they have been able to do with what 

they have, they are truly entrepreneurs because they are constantly doing more and more with less and less. But you can certainly see what they could do if more resources and influence was 

given to the agencies. 


jbell on DSK7SPTVN1PROD with HEARING
80 

Mr. RUSH. Ms. Hill. 

Ms. HILL. Absolutely we have businesses that are poised right 

now and are looking for new opportunities. One of the businesses 

in your district, in fact, Congressman, is Funk Linko. They are out 

in the south suburbs and they are poised for energy and new technology. One of their challenges, quite frankly, oftentimes, though, 

is money. You know, access to capital still continues to be a problem for minority businesses. Whether they are small, mid-size, or 

large, you know, money is an issue and especially as you are 

transitioning into a new business. 

I would like to see this group, this committee, focus on getting 

us more access to money. And also because MBDA is not focused 

on a business that is of any particular size, it may be small and 

may be very large, I am a firm believer that the larger the businesses—and I am not ignoring is small business because we certainly have to do that, but the larger businesses can help the 

smaller businesses. So if they don’t have access to capital, then it 

affects us all down the pipeline. 

So when you ask what are the challenges, the challenges, quite 

frankly, are access, access to opportunity and access to money. 

Mr. RUSH. Ms. Allen. 

Ms. ALLEN. Yes, chairman. First of all, sure, there are lots of 

Asian-American-owned companies who already have the innovation. They need help to put that into a full prototype. One of our 

companies is called Rabbit Air in southern California. He has created—from a very simple device, he created a bigger device that 

will help to clean the air within buildings, and he is now selling 

to the veterans hospital, but he wants to expand that market and 

he needs some extra money to take him there or some new business. 

Another company in Virginia and in New York has come up with 

an innovation that will help to retrofit some of the government 

buildings, and he has lined up some potential contracts with many 

Federal agencies, but he needs somebody who will have the confidence to ‘‘try my building first.’’ 

So what I think I suggest is that MBDA consider having a program such as the SBIC, Small Business Innovation Investment 

Corporation, type, so that MBDA will be able to have access to that 

type of working capital or innovative capital for minority businesses to take whatever they have already created to the market. 

I also want to take this opportunity, Mr. Chairman, to say that 

my testimony beginning was intended to give all the good news 

first before I come to the bad news or the sobbing story. And I want 

to say despite all the good numbers about Asian-American businesses, there are still a major portion of them who are underrepresented in the minority business community. 

And I was beginning to talk about contract bundling. I think this 

is an issue—and I myself personally have fought for 10 years, 10 

years, and I remember my husband used to tell me, Don’t do it, 

Susan. It is a fact of life. Don’t cry over spilled milk. And I said, 

We could change it. And I think hopefully with this administration 

and your leadership we could actually take a look at contract bundling because this consolidation practice, although sometimes it 

makes sense, unless it has reasonable grounds for bundling all the 


jbell on DSK7SPTVN1PROD with HEARING
81 

contracts, it is going to bundle all the minority businesses out of 

the market. 

What I suggest also is that we do work with MBDA. MBDA 

works with us. And there is lots of programs that the MMSCC, the 

Hispanic Chamber of Commerce, and we, the only national organization that represents this umbrella group of minority businesses, 

come to our events and be our partner. When we have our conference, be there with us so that we can further promote the 

MBDA’s programs and practices. 

One thing you could do is to work with the agency, not just the 

SBA or IT but all agencies, and work through the top. Go to the 

procurement offices and ask them to account for their spin, their 

contract opportunities, because the buyers are not going to listen 

to you unless the decision comes from the top. 

Similarly, I also suggest that MBDA also work with the major 

corporations and go all the way to the top and ask the CEO of all 

these companies, who many of them are dressing in small business 

costumes and going to the Federal sector and get small business 

contracts—ask them to make sure that their procurement offices 

will absolutely take supply diversity or doing business with minorities seriously and give the CEO report. 

I think with the new interest in minority businesses and, Mr. 

Chairman, your interest and the current administration’s interest, 

I think there is a lot we could do to influence corporate America 

to spend more money in minority businesses because we are good. 

We are very flexible. We can turn overnight and make things happen when major corporations have a hard time turning. Just like 

a barracuda turning around in the Pacific Ocean, it would take 

about 3 days, but we would take about 30 seconds. 

Thank you. 

Mr. RUSH. All right. 

Director Hinson, the MBDA was really created under the administration of President Nixon, was created to be, as Ms. Allen characterized it, as being one barracuda. But now today in today’s climate, one barracuda in terms of the Federal Government, or the 

main barracuda, the big tuna, a big barracuda in the Federal Government, but now it is swallowed a lot of little mini barracudas. As 

a matter of fact, every agency, every department, has its own 

version of MBDA, its own office of minority procurement and its 

own operations. So that means that minority interests, business interests in terms of creation and expansion, growth and opportunities, that there is such a divergence of focus among the different 

departments, and different departments have uneven application 

levels and achievement levels. Some are doing great, some are 

doing not so great, and some are doing actually poor. 

Do you see that as being a problem, or do you think that there 

should be more of a centralization of the resources and the mission 

approach to MBDA, that it should return back to its original mission and with that should it be—I mean the whole—I think MBDA 

is still operating under the original directive in 1969 and it hasn’t 

been updated at all. 

Mr. HINSON. There was amendment, but generally, yes. 

Mr. RUSH. Generally, yes. Even to the point where ‘‘Negro’’ is 

still being used to describe African Americans in its directive. 


jbell on DSK7SPTVN1PROD with HEARING
82 

So let me just ask you should it be renewed, should it be reinvigorated, reformed, and should it have more of a centralized responsibility as it relates to minority businesses? 

Mr. HINSON. Let me just say—thank you for that question, Mr. 

Chairman. And let me just say that, you know, we welcome all of 

your views and all your wisdom and all of your advice on these 

types of issues and your leadership in that respect. The fact that 

there are multiple government agencies that provide exposure, if 

you will, and have offices for minority businesses could be looked 

at as a source of dispersion, which would then be deemed negative 

or to be looked at as an opportunity. I look at it as an opportunity. 

I think that anywhere there is an opportunity for minority businesses to engage the Federal Government through any office is a 

good thing. What we need to do better and what we have initiated 

at MBDA is an effort to try to coordinate these efforts. 

Keep in mind that Commerce Secretary Locke has been very 

much interested and forceful in trying to create better coordination, 

and it is that leadership that we have taken to heart and that is 

the direction that we move in. And as a part of that, we want to 

better coordinate our activities with all governmental agencies that 

focus on the issues that minority businesses face. 

So I look at that as an opportunity, and we are taking the steps 

to coordinate ourselves with the other Federal agencies in that respect. 

Mr. RUSH. Mr. Gonzalez. 

Mr. GONZALEZ. Thank you very much, Mr. Chairman. And I will 

be brief because I know Ms. Ramos Davidson does not want to miss 

meeting with Sonia Sotomayor. I don’t blame you. She is incredible, 

by the way. 

But Ms. Allen brought something up, and, Mr. Chairman, you 

have heard it, as you have been here longer than I have, the dreaded word ‘‘bundling’’ and the disadvantage it plays in small business. But even if we graduate from, let’s say, small business category and we are where Mr. Hinson is more relative to that size 

business, you still have that issue because I don’t think that minority-owned businesses, even after they graduate from the small business category, are free of some of the same problems that you have 

referenced already. And this could have been a Small Business 

hearing in part because I just think it is a cousin of the same problem. It just kind of follows. 

So it leads me back to the Director. Staff will always prepare 

memos and they are so good and I want to go over the last sentence of the memo because—and I do not want to discourage you 

from thinking big because you are thinking big and maybe it is a 

new way of looking at things, but MBDA National Director David 

Hinson has laid out three strategic goals for fiscal year 2010: One, 

increase the number of businesses that are minority owned at the 

$1 billion level; establish MBDA as the agency of choice for businesses that are minority-owned, policymakers and the private sector; and, three, implement operational efficiencies. In addition he 

has explained that minority businesses, quote, ‘‘must move away 

from service,’’ and we went over this but I want to hit on the three, 

‘‘and embrace the innovative opportunities of clean energy, smart 

grid technology, and health care IT.’’ 


jbell on DSK7SPTVN1PROD with HEARING
83 

But those areas are hugely capital intensive, even in San Antonio, and it is not a really small firm but it is an IT firm, and they 

are incredible. And it is minority owned, a woman, and you may 

know Ms. Mendosa, Elaine, a Ph.D., and she has a difficult time 

competing. And I hate to tell you, just the big enterprises out there 

in the IT world and heaven knows when we get into the clean energy and smart grid, how will a minority-owned business that just 

doesn’t have that kind of leverage, doesn’t have that size, doesn’t 

have the access to capital and such, how do you envision bringing 

them in? Because, like I said, I don’t want to discourage. You are 

ambitious, you are young, you are thinking differently than many 

other people, and we need that. And what can we do to assist you 

to accomplish what is a very ambitious goal but one that we would 

love to be successful in? 

And I am going to leave that question with you, Mr. Hinson, and 

then for the three witnesses if they have any suggestions. 

Mr. HINSON. Thank you for that question. When you start talking about—and I appreciate your point, and you make an excellent 

point. When you start talking about the growth of capital-intensive 

businesses within companies that are smaller, it does raise the 

specter of extreme difficulty. But what it does is—what it also does 

is it necessitates a reevaluation of the growth model of the company, and it necessitates a reevaluation of the growth model away 

from organic growth strategies, which are typically part and parcel 

to companies that are more service oriented and, therefore, less 

capital intensive. And it forces the entrepreneur, the business 

owner, to consider growth strategies that perhaps they would not 

consider before. 

Those strategies include growth through merger and growth 

through acquisition, as Ms. Hill alluded to in her opening statement, growth through strategic partnership and growth through 

joint venture. Those growth models allow for smaller businesses to 

acquire the scale to then obtain the capital to then go into these 

industries in a bigger way. 

And so size of firm is not really the limiting factor if the business 

owner or the management team is willing to consider alternative 

growth models. 

Mr. GONZALEZ. Thank you. I can start with Ms. Allen, since I referenced your bundling issue. 

Ms. ALLEN. Yes, sir. Most of the innovation in the United States 

did not come out of major corporations. They came out of small and 

minority businesses. They are the laboratory of innovation. If you 

look at the patents that are filed with the U.S. Patent Office, many 

of them were filed by small business and therefore the minority 

business community. I have a—one of our members, and he doesn’t 

want me to talk about him; so I would leave his name alone. He 

has a product that can put out fire very quickly. But he is afraid— 

he wants to expand into the national market but he does not want 

to have any major company coming to his business because he is 

afraid that once his formula is utilized, is exposed, he will lose that 

secret. 

So maybe we could put our heads together and find out how to 

protect these small and minority businesses who came up with inVerDate Mar 15 2010 00:21 Aug 25, 2012 Jkt 074842 PO 00000 Frm 00089 Fmt 6633 Sfmt 6633 E:\HR\OC\A842.XXX A842

jbell on DSK7SPTVN1PROD with HEARING
84 

novation and ideas so they do not have to be absorbed and taken 

over by major companies. 

So going through partnership, joint ventures, and at the same 

time making sure that whatever they have spent their hard-earned 

savings, their mortgaged house to create that innovation, will stay 

with them for some time just like with the patent, 12 years, let me 

have it, and then you can take it somewhere else. That will probably give the minority businesses the ability to go into more capital-intensive markets where they can bring the idea in and become 

a partner with major corporations. 

I also want to say that in a way America has become a place 

where making widgets is no longer our strength. There will be 

these competing economies in China and India who are together— 

the world population such that China has the highest population. 

The second is India and third is the United States. And in the next 

10 years, these three countries will dominate the population of the 

world, and China and India are rapidly growing in the global marketplace. They are our trading partners, but they are also our fiercest competitors. So we need to look at that as well and find out 

how we can partner with them. But that is where the market is. 

As they have more business in the country, there will be consumers 

who love the ‘‘made in USA’’ label, and it is up to us to go across 

the Pacific Ocean and sell to them. 

So we ought to be thinking about what Americans are best at, 

what is in our head, brain, our brain power, and that comes with 

service, and our technology, the latest innovation. 

Mr. GONZALEZ. Thank you. 

Ms. Hill. 

Ms. HILL. I have to agree with Director Hinson. There is a way 

for us to grow larger businesses but it is not the traditional model. 

You know, we have to start thinking differently than we have always thought. But before that I want to say there is a place in the 

marketplace for everybody. Some businesses might want to be lifestyle businesses. They might be small and that might be the best 

place for them to be, and they contribute to the economy, and that 

is a good thing. You know, some might be mom and pop and small 

businesses, and that is really oK. 

On the other hand, businesses that want to grow and compete 

and be in a larger space ought to be able to do that as well. But 

in order to do that, you can’t do that organically. You can’t just get 

a contract and a contract and a contract and expect that you will 

grow to be a billion dollar business or even a hundred million dollars or even a $10 or $20 million business. You have to do something differently. 

The reason I am so strongly and so adamant and so much in support of MBDA is because those strategies exist. There is a natural 

marriage between my organization and MBDA because we have 

businesses of all sizes that want to serve the entire community. 

What happens, however, when we start talking about small and we 

just talk about small businesses, then it doesn’t allow the businesses to grow and to contribute to their best ability. 

I mentioned Funk Linko, for example. Funk Linko is already in 

the space that we are talking about, in that new energy space. 

They are, in fact, trying to build—trying to engage in opportunities 


jbell on DSK7SPTVN1PROD with HEARING
85 

in the Chicagoland area now, but in fact they tried to get a loan. 

They were denied a loan to fund and develop a wind farm in Chicago, you know. So, again, there are businesses that are there that 

are poised and ready to grow. We just need to help support them 

and to help find a way that they can continue to grow. Strategic 

alliances, buying businesses, mergers, acquisitions, joint ventures, 

that is the way to grow if you are not going to grow just organically. 

Thank you. 

Mr. GONZALEZ. Thank you. 

Ms. Ramos Davidson. 

Ms. RAMOS DAVIDSON. Well, I would agree with everyone on the 

panel, but I am going to add a few more things. Mentor-protege 

programs are a great opportunity, especially in the IT arena. We 

have a company in El Paso that attended a conference last year, 

and this company now has major, major contracts with companies 

here in the D.C. Area because of what this individual learned at 

one of the conferences about the benefits of mentor-protege. It also 

taught the mentor what it takes to be a mentor, and it taught the 

protege how to create this relationship of trust because that is 

what it is all about. Had it not been for the MBDA conference and 

their affiliation with our chamber and them coming in to us, this 

individual would never have understood the dynamics of what it 

takes to get to that component. 

I think elevating the awareness of the critical components of 

MBDA across the board from every agency is very important because there is a disconnect in terms of understanding what SBA offers, what MBDA offers, and what other agencies offer. 

I have been doing small business minority development for over 

30 years, and the biggest challenge is always how to better communicate, inform, and educate the market we are trying to serve to 

access and capitalize on these programs. The Federal Government 

makes it a little challenging because there is so much bureaucracy, 

there are so many rules and regulations and some unclear communications about what agency does what. 

SBA is a great start place for someone who has an idea. MBDA 

is critical to taking that idea once they have gone to the year 5 and 

growing it larger than anything. But I think because people still 

don’t understand what the two agencies do and how they can help, 

that that tends to be a stopgap. 

I would agree with both these ladies that the most critical mass 

for minority business is capital access. I am very fortunate to sit 

on the board of the Federal Reserve Bank in El Paso, Texas, which 

is our local branch, and I create a true face in terms of reality on 

that board with the more conservative bankers on that board. The 

challenge we face all the time is they will not lend unless there is 

a relationship with that individual. And it is teaching our market, 

specifically our minority market, how to build that relationship. 

And from a Hispanic perspective, my grandmother used to keep 

her money under the mattress because she didn’t trust the bankers, but yet she had a hair business. So it is how to teach them, 

you know, to do these things and be able to create that trust. Had 

she had centers like the MBEC, God knows where she would have 

been back then in terms of her business. 


jbell on DSK7SPTVN1PROD with HEARING
86 

So the critical mass here is looking at how to create more resources through MBDA to allow us what we need on the ground 

floor to grow these minority businesses because the heart and soul 

is definitely there, but the resources sometimes are lacking. 

Mr. GONZALEZ. Thank you very much. 

I yield back, Mr. Chairman. 

Mr. RUSH. Yes. The Chair is really just bursting to ask one final 

question. I think I will if you don’t mind. 

The American Recovery and Reinvestment Act, what kind of impact is that? You mentioned bundling sources. 

Ms. RAMOS DAVIDSON. To date we have helped a quite a few 

businesses to the total of $528,398,207, and I have a list of all the 

projects. These are projects from a construction perspective, from 

building roads to schools to revamping industries to all kinds of different things. The challenge with helping these businesses, and get 

this, which is a lot of money in our market, was helping them work 

through the maze of where it starts and where it ends because it 

started up here but it is filtered through the States and then the 

States filter it to the cities but then the cities filter it through 

agencies but then some cities don’t and some States just do it 

through the agencies. So you can see, I got to make a widget. I 

have to find a customer. I have to get it out the door. I have got 

employee rules and regulations. I have taxes I have to pay. And 

you want me to go through a maze of information to have shovelready projects? 

You can see how challenging it is. Without the resources of what 

we do through our MBEC and all the other six centers, the businesses in our market would have never been able to capitalize on 

this because the maze of trying to find this has been absolutely 

grueling. 

Mr. RUSH. Anybody else want to comment on that? 

Ms. HILL. I hate to be the naysayer among the group again. 

ARRA has been wonderful and many have benefited from it, but 

I wanted to make a particular point today to talk about some of 

the people that are in our space that are particularly being served 

by the MBECs and the MBOCs but that didn’t have opportunity, 

that were stymied for one reason or another. Escendant IT Staffing, it is an African American firm. Clerysys, a $21 million IT 

Asian Indian firm. Weld Tech, a Hispanic-owned firm. VCT, an 

Asian firm that is about $40 million. 

All these people—and I have others here. I won’t list all of them. 

But all of them were looking for opportunities and particularly, 

again, access to capital. The banks aren’t lending. You know, the 

money’s supposed to be there. And in Illinois you know how it 

works, is come into Illinois and then it goes to the cities, and then 

sometimes the money is held up at the State level. So the people 

from—as much as we can determine—that are getting the opportunities and the contracts are the same old people that have always 

gotten the contracts and the opportunities. The shovel-ready 

projects for us were shovel ready, and even though they may have 

had DBE goals in them or some minority goal, actually the minorities didn’t get benefit of those projects. At least so far they are really not getting benefit. 


jbell on DSK7SPTVN1PROD with HEARING
87 

There is a lot of opportunity and all the money in Chicago or in 

the Illinois area hasn’t actually been let as of yet, but that that has 

been let we have not substantially benefited from. 

Thank you. 

Ms. ALLEN. We just held two regional conferences on ARRA, particularly on transportation related, in San Francisco and in San 

Gabriel, which is right outside of Los Angeles, 2 weeks ago. We had 

folks coming from different parts of a Federal agency. Here is what 

we found out: First of all, recovery.gov, that Web site was created. 

It was so confusing they have to redo it again. So people tried to 

navigate, and they all gave up, and now we are spending I think 

another $10 million to redo the Web site. But once that is done, 

hopefully the American people will be able to get a better grasp of 

how to drill down that Web site and go to the local, State and city. 

One-third, Mr. Chairman, as you know, of the Recovery—of the 

ARRA is only for stimulus. The rest are tax cuts and also State tax 

relief. So one-third. And that for this year, most of the money was 

spent on health IT. Construction had not—is just beginning to get 

out this quarter. So I think the jury is still out whether they are 

reaching America. I have talked to somebody from OPM—OMB 

when they came to our conference in Los Angeles to speak, and she 

said that—and I understand it because the President wants this 

program to be abuse proof, waste proof, and fraud proof, and therefore the government folks are very, very careful for, and we endorse that. What we are looking to us now is for the current quarter of next year how the recovery money will be coming through. 

It would be good if we could have more transparency in how things 

are done. 

It is still an old boys network. And here is the truth, ok? They 

need to spend the money within the next 18 months. They are in 

a hurry or the money will be gone. So what are they going to do? 

They are going to look at a minority business and say I don’t know 

who you are. I can’t trust you. I am going to go to my same old 

supplier and use them. Good-bye. That is what we are hearing 

right now. 

Now, what we are—go to our suppliers, minority businesses, is 

go to find the prime contractor, find out who has been awarded 

those contracts, who has been doing business with the Federal Government or the major companies who are going to be doing business with the government through ARRA or continue with ARRA, 

and knock on their door. And here is where MBDA could come in 

because MBDA has been given the responsibility to monitor contracts. Maybe we could give some more teeth to that role and as— 

like what the SBA does. They have small business specialists in 

every agency and say how much are you doing business with small 

businesses, and if you don’t do well the Inspector General from— 

I think from SBA will write a letter to the corporation—the president, and the president will send a letter to the general counsel. 

Everything will move around. I think that you have that capability. 

You may be able to move some—move the chess a bit over. 

Mr. HINSON. Under the leadership of the Commerce Secretary, as 

you know, Vice President Biden tasked the Department of Commerce and SBA to work with minority and small businesses to ensure they get their fair and equitable share of economic stimulus 


jbell on DSK7SPTVN1PROD with HEARING
88 

contracts. I will tell you we are already there. We have in our 46 

centers people who are focusing almost exclusively on creating opportunities, creating contract relationships for minority businesses. 

We have, as I indicated in my prior comments, been engaging in 

B-to-B relationships, particularly in the construction industry. We 

are actually doing the work to find out who—what primes are getting contracts and we are engaging with minority subcontractors to 

ensure that that relationship is there that will lend itself to them 

getting a subcontract from a prime contract. 

So we are actually already doing what you suggested, and I 

thank you for your suggestion. We have been tasked with also 

doing tracking, and so we are completing the final stages of computer software capability that will allow us to track on the State 

and local level. We actually already have our first run, if you will, 

which once we complete an evaluation I would be delighted to give 

you, of what minority firms have achieved from economic stimulus 

on the Federal level. And so we are right now scrubbing these 

numbers to make sure that there is a high level of accuracy and 

therefore a high level of confidence. But we think these numbers 

are extremely encouraging. 

So all of the things that have been outlined that MBDA, the Department of Commerce should do, we are doing as it pertains to 

making sure that, again, minority firms achieve their fair and equitable share of economic stimulus contracts. 

Mr. RUSH. I will be looking forward to that report as soon as you 

complete it, and we will make it available to all the members of 

the subcommittee. 

That concludes this hearing. Again I want to thank all the witnesses for the generous use of your time. You have been extraordinary and you really have helped this committee move this ball 

along. 

So it has been pretty exciting and informative to hear your testimony, and I will just ask you to keep up the good work. You are 

doing a magnificent job, and we will do all that we can to make 

sure that you are able to accomplish your goals and your mission 

as your organizations deem fit. So thank you so very much. 

And Director Hinson, thank you so much for your time, and 

please pass my dissatisfaction somewhat to the Secretary. You 

have done—maybe the next time you will be promoted to Assistant 

Secretary and we won’t have any beef. No comment on that, ok? 

Mr. HINSON. I appreciate that. 

Mr. RUSH. Thank you very much. God bless you, and this committee now stands adjourned. 

[Whereupon, at 3:53 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 


jbell on DSK7SPTVN1PROD with HEARING
89 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 98 74842A.058
90 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 99 74842A.059
91 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 100 74842A.060
92 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 101 74842A.061
93 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 102 74842A.062
94 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 103 74842A.063
95 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 104 74842A.064
96 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 105 74842A.065
97 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 106 74842A.066
98 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 107 74842A.067
99 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 108 74842A.068
100 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 109 74842A.069
101 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 110 74842A.070
102 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 111 74842A.071
103 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 112 74842A.072
104 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 113 74842A.073
105 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 114 74842A.074
106 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 115 74842A.075
107 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio116 74842A.076
108 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 117 74842A.077
109 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 118 74842A.078
110 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 119 74842A.079
111 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 120 74842A.080
112 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 121 74842A.081
113 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 122 74842A.082
114 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 123 74842A.083
115 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 124 74842A.084
116 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 125 74842A.085
117 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 126 74842A.086
118 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 127 74842A.087
119 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 128 74842A.088
120 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 129 74842A.089
121 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 130 74842A.090
122 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 131 74842A.091
123 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 132 74842A.092
124 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 133 74842A.093
125 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 134 74842A.094
126 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 135 74842A.095
127 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 136 74842A.096
128 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 137 74842A.097
129 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 138 74842A.098
130 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 139 74842A.099
131 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 140 74842A.100
132 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 141 74842A.101
133 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 142 74842A.102
134 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 143 74842A.103
135 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 144 74842A.104
136 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 145 74842A.105
137 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 146 74842A.106
138 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 147 74842A.107
139 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 148 74842A.108
140 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 149 74842A.109
141 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 150 74842A.110
142 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 151 74842A.111
143 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 152 74842A.112
144 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 153 74842A.113
145 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 154 74842A.114
146 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 155 74842A.115
147 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 156 74842A.116
148 


jbell on DSK7SPTVN1PROD with HEARINGInsert graphic folio 157 74842A.117