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68–061 2011

PROMOTING ENTREPRENEURSHIP AND JOB 

CREATION BY DECREASING DUPLICATION AT 

THE SBA 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MAY 25, 2011 

Small Business Committee Document Number 112-016 

Available via the GPO Website: www.fdsys.gov 


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(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

Page 

Opening Statements: 

Graves, Hon. Sam ............................................................................................. 1 

Vela ́zquez, Hon. Nydia M. ............................................................................... 2 

WITNESSES 

Mr. William B. Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office, Washington, DC ..................... 4 

Mr. Arnold Baker, Founder/CEO, Baker Ready Mix & Building Materials, 

New Orleans, LA .................................................................................................. 5 

Ms. Jody Keenan, Director, Virginia SDBC Network Mason Enterprise Center, Fairfax, VA .................................................................................................... 7 

Ms. Denise Pickett, Executive Vice President, American Express OPEN, New 

York, NY ............................................................................................................... 9 

APPENDIX 

Prepared Statements: 

Mr. William B. Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office, Washington, DC ....... 24 

Mr. Arnold Baker, Founder/CEO, Baker Ready Mix & Building Materials, 

New Orleans, LA ........................................................................................... 37 

Ms. Jody Keenan, Director, Virginia SDBC Network Mason Enterprise 

Center, Fairfax, VA ....................................................................................... 40 

Ms. Denise Pickett, Executive Vice President, American Express OPEN, 

New York, NY ............................................................................................... 44 

Questions for the Record: 

Graves, Hon. Sam ............................................................................................. 55 

Owens, Hon. Bill ............................................................................................... 56 

Answers for the Record: 

Mr. William B. Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office, Washington, DC ....... 59 

Ms. Jody Keenan, Director, Virginia SDBC Network Mason Enterprise 

Center, Fairfax, VA ....................................................................................... 61 

Ms. Denise Pickett, Executive Vice President, American Express OPEN, 

New York, NY ............................................................................................... 75 

Additional Materials for the Record: 

Association of Small Business Development Centers Accreditation Standards 2010 ....................................................................................................... 77 

Association of Small Business Development Centers Accreditation Standards Study Guide 2010 ................................................................................. 88 


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(1) 

HEARING: PROMOTING ENTREPRENEURSHIP 

AND JOB CREATION BY DECREASING DUPLICATION AT SBA 

WEDNESDAY, MAY 25, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 1:00 p.m., in room 2360, 

Rayburn House Office Building. Hon. Sam Graves (chairman of the 

Committee) presiding. 

Present: Representatives Graves, Bartlett, Hanna, Coffman, 

Mulvaney, Fleischmann, Landry, West, Vela ́zquez, Chu, Cicilline, 

Richmond, Owens. 

Chairman GRAVES. We call this hearing to order. I want to say 

good afternoon and I appreciate all our witnesses being here. We 

are going to have a vote called somewhere between 1:20 and 1:30 

and it is going to be somewhat lengthy. It may be an hour or an 

hour and a half, unfortunately, we do not get the opportunity to 

schedule those. So it may mess up the hearing for just a little bit. 

I hope you will bear with us and we will try to get through as 

much of the opening statements as we can. 

Our nation is at a critical point and our national debt and annual deficits have reached historic proportions. It is Congress’s obligation to look for ways to reduce federal spending to get our fiscal 

house in order. The first step is to cut out waste and duplication 

in government programs. This Committee is responsible for determining how the U.S. Small Business Administration can operate 

more efficiently while providing quality services to our nation’s aspiring entrepreneurs and business owners so that they can grow 

our economy and create more jobs. 

Turning an idea into a small business can be very overwhelming. 

To aid small business owners, the SBA offers online training and 

counseling, both through its district offices and through its network 

of resource partners. However, as government continues to grow, so 

have the number of entrepreneurial development programs, not 

only at the SBA but at a number of different federal agencies as 

well. It is our job now to take a thorough look at what each of these 

programs does and how best to serve the American people, both 

those who use the programs and the taxpayers who obviously finance them. 

Today we have a very distinguished group of panelists, who will 

provide guidance to this Committee so we can look to streamline 

the government to make delivery of services more efficient and 


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more effective. First, we are going to hear about the scope of the 

problem. According to the Government Accountability office, there 

are 80 programs in four different federal agencies charged with 

helping entrepreneurs. And for fiscal year 2010, these programs 

cost the government $6.2 billion. 

Next, we want to look at the needs of entrepreneurs through the 

eyes of the people on the ground providing the counseling. We will 

hear from someone who is providing services through the SBA 

Small Business Development Center Program. And then finally we 

are going to hear about some of the programs available to business 

owners that are not funded by the taxpayers but by industry peers 

who want to help their communities prosper. 

I am very much looking forward to the testimony today to help 

guide our efforts to streamline the government and provide more 

efficient delivery of services to entrepreneurs and the taxpayers 

who are funding them. And again, I want to thank all of our witnesses for their participation and for being here. We appreciate it 

very much. 

And now I will turn to Ranking Member Vela ́zquez. 

[The information follows:] 

Ms. VELA ́ ZQUEZ. Thank you, Chairman Graves. And good afternoon to all the witnesses. 

The SBA is charged with a broad mandate and fulfils it through 

various programs and initiatives. In doing so, it undertakes a wide 

range of activities running the gamut from providing seed capital 

for start-ups, to helping mature companies gain access to foreign 

markets. This initiative has become essential to our nation’s small 

businesses, which are responsible for creating two-thirds of all new 

jobs. In administering these programs, it is critical that the SBA 

do so in a manner that maximizes efficiency and minimizes waste. 

In practice, this means ensuring that rules and regulations are 

clearly articulated, that a framework for evaluation is in place, and 

that the initiatives are not duplicative of other agency efforts. It is 

imperative that programs are continually evaluated and it should 

not take a fiscal crisis to do so. 

Democrats on this Committee have repeatedly pinpointed programs at SBA that are wasteful and duplicative, irrespective of 

budgetary politics. We have annually identified tens of millions of 

wasteful spending that could be reinvested in other valuable programs, but as we do so we have to be mindful that the Bush administration slashed the Agency’s budget by nearly 50 percent, taking it from nearly a billion dollar agency under President Bill Clinton and leaving it largely unable to meet the needs of entrepreneurs. 

The Committee has also done significant work with third party 

evaluators such as GAO. As a result, fraud in the HUBZone initiative has been exposed. There were 108,000 HUBZone contract actions in 2010 and in 70 percent of these cases, the small business 

actually qualified for another SBA contracting program. We have 

also asked GAO to review the Agency’s disaster program, as well 

as how its loan program can be better coordinated with the USDA. 

Eliminating waste and improving efficiency could enhance services 

for entrepreneurs. 


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Oversight is not only a responsibility on Congress, however, but 

also for the SBA. Unfortunately, in this regard, the Agency has not 

met expectations. According to GAO, it has not yet developed outcome measures for the HUBZone program that are linked to its 

mission. Without them the Agency is unable to measure the program’s effectiveness. In addition, the Agency has established unauthorized pilot programs without any performance measure that provide the basis for such oversight. 

While these initiatives cost taxpayers millions of dollars, the 

Agency has repeatedly failed to use objective metrics to quantify 

their success or failure. It recently requested funds to operate 

seven pilots, including the Small Loan Advantage and Community 

Advantage programs, among others. The last three of these programs alone cost $50 million. That is more than we spend on the 

Women’s Business Centers, an initiative that is authorized and 

regularly overseen by Congress. 

While the regional intent may be admirable, once launched, 

these pilot programs often take on a life of their own, drawing 

funds away from proven initiatives. Even among programs that we 

know work, there is a need for better harmonization. In its recent 

report, GAO found that SBA does not help its resource partners coordinate their services. If it did, the SBA could lower administrative costs and leverage each program’s unique strength. Such steps 

must also be taken between agencies that operate similar programs 

so that taxpayers are getting the biggest bang for their buck, and 

equally important, that small businesses’ needs are met. 

Today, reducing the duplication and improving program performance are not just nebulous bureaucratic catch phrases. When applied, they mean better services for entrepreneurs and greater job 

creation for the economy. Everyone here recognizes the importance 

of entrepreneurship to our recovery. As we seek ways to make economic development programs more efficient, we cannot afford to 

shortchange small businesses. Instead, our goal should be ensuring 

these programs work in concert together delivering small businesses the help they need. And that is why I look forward to today’s testimony on this important topic. And I thank the witnesses 

in advance for your presence here. 

Thank you, Mr. Chairman. I yield back. 

[The information follows:] 

STATEMENTS OF WILLIAM B. SHEAR, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; ARNOLD BAKER, CHAIRMAN, NATIONAL BLACK CHAMBER OF COMMERCE; JODY KEENAN, 

STATE DIRECTOR, VIRGINIA SMALL BUSINESS DEVELOPMENT CENTER NETWORK; DENISE PICKETT, EVP, AMERICAN 

EXPRESS OPEN 

Chairman GRAVES. Thank you very much. 

Our first witness is going to be Bill Shear, who is the director 

of Financial Markets and Community Investment Team at the U.S. 

Government Accountability Office. The Financial Markets Team 

works to improve the effectiveness of regulatory oversight in financial and housing markets. It also oversees the management of community development programs. Mr. Shear, you are no stranger to 

this Committee and we appreciate you being here today. 


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STATEMENT OF WILLIAM B. SHEAR 

Mr. SHEAR. Thank you very much. It is really an honor to be 

here. 

Chairman Graves, Ranking Member Vela ́zquez, and members of 

the Committee, I am pleased to be here this afternoon to discuss 

the potential for duplication and fragmentation in economic development programs. 

In March, and more recently last week, we reported on potential 

duplication among federal economic development programs. This 

statement is based on this work. 

Absent a common definition for economic development, we had 

previously developed a list of nine activities most often associated 

with economic development. Our recent work includes information 

on 80 economic development programs at four agencies—SBA, Agriculture, Commerce, and HUD. 

The SBA administers 19 of the 80 programs. According to the 

agencies, funding provided for these 80 programs in fiscal year 

2010 amounted to $6.2 billion of which about $2.9 billion was for 

economic development efforts. Here I want to stress that our focus 

to date has been on the design of these programs. In other words, 

we have evaluated the permitted uses of funds and have not as of 

yet drilled down to see how each program’s funds are actually distributed among various uses. 

In summary, based on our work to date, we have found that first, 

the design of each of these economic development programs appears to overlap with that of at least one other program in terms 

of the economic development activities that they are authorized to 

fund. Second, Commerce, HUD, SBA, and USDA appear to have 

taken actions to implement some collaborative practices, but they 

have offered little evidence so far that they have taken steps to develop compatible policies or procedures with other federal agencies 

or to search for opportunities to leverage physical and administrative resources with their federal partners. And third, the agencies 

appear to collect only limited information on program outcomes, information that is necessary to determine whether this potential for 

overlap and fragmentation is resulting in ineffective or inefficient 

programs. 

Building on our past work, we are in the planning phase of a 

new, more in-depth review that will focus on a subset of these 80 

programs, including a number of SBA programs. In fact, our current thinking is that we may focus on the 54 programs that fund 

entrepreneurial efforts. And this would include all 19 SBA economic development programs. In this body of work we will further 

differentiate the programs. In addition, we will build upon previous 

work, such as those listed as related GAO products in our written 

statement, including our work on Women’s Business Centers and 

programs to assist service-disabled veteran-owned small businesses. We plan to evaluate how funds are used, identify additional 

opportunities for collaboration, determine and apply criteria for 

program consolidation, and assess, how program performance is 

measured. 

Chairman Graves and Ranking Member Vela ́zquez, this concludes my prepared statement. I would be happy to answer any 

questions. 


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[The statement of Mr. Shear follows:] 

Chairman GRAVES. Thank you, Mr. Shear. And I will now yield 

to Mr. Richmond. I think you are going to introduce our next witness. 

Mr. RICHMOND. Thank you, Mr. Chairman and Ranking Member. 

I have the great pleasure of introducing not only a constituent 

and a business owner in my district but a true friend. And that is 

Mr. Arnold Baker with Baker Ready Mix, who is the chairman of 

the National Black Chamber of Commerce and the CEO of Baker 

Ready Mix and Building Materials in New Orleans, Louisiana. Mr. 

Baker’s successful small business has recently gone from only 10 

employees to nearly 60. Mr. Baker is testifying on behalf of the National Black Chamber of Commerce, which has 140 affiliated chapters throughout the nation and reaches over 100,000 black-owned 

businesses and also Mr. Baker, on behalf of Congressman Landry 

and I—and I understand that you have recently expanded to his 

district—so on behalf of both of us, welcome. And we look forward 

to hearing your testimony. 

Chairman GRAVES. Mr. Baker. 

STATEMENT OF ARNOLD BAKER 

Mr. BAKER. Thank you, Congressman Richmond. 

Chairman Graves, Minority Leader Vasquez, and Congressman 

Richmond, distinguished members of this Committee, thank you for 

inviting the National Black Chamber of Commerce to participate in 

this most important hearing. 

The NBCC proudly represents the fastest growing segment of the 

American economy, black-owned businesses. We were incorporated 

in May 1993. When we were incorporated, the U.S. Census Bureau 

stated that there were 300,000 black-owned businesses doing 30 

billion in sales annually. Today, the U.S. Census Bureau states 

that there are over 1.9 million black-owned businesses doing over 

$137 billion annually. This fantastic growth has swelled our membership and made us the largest black business organization in the 

world. We have over 160 chapters, with 70 percent located throughout the United States. Our database of black-owned firms exceeds 

60,000 businesses. 

The NBCC Business Development Committee is rapidly making 

new inroads and increasing the sales of our members. Several of 

our chapters are working closely with the SBA and have members 

benefitting from SBA-sponsored and/or supported programs. Despite this fantastic growth, we found that the federal government 

to be—I guess we found the actions of the federal government seem 

to be counter to this activity. With the exception of DOD contracts, 

of which we do not have the numbers for, in fiscal year 2010, black 

firms were awarded 3,994 contracts, all federal agencies except for 

DOD as I shared earlier, which was a 16 percent decrease from fiscal year 2009 and a paltry .3 percent of the total contract volume. 

We suspect DOD numbers to be no better. 

SBA lending is somewhat better but that is a variable decided 

upon by participating banks. For the past 20 years, small business 

entrepreneurs of this great nation generate 70 percent of all new 

jobs in America. If you want more jobs, then support the development and expansion of more small businesses. We just met with 


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two ambassadors from other countries who are replicating the efforts that we are doing here to create small businesses in their 

countries. The world is watching our small business development 

support system. Watching it and replicating it. 

Cutting support for small businesses programming at this time 

when the country needs jobs as the world is watching us to replicate us seems counterintuitive. A better funded and better stafffilled infrastructure for the SBA is critical to continue improvement 

of this nation’s economy. We see no indication that cutting SBA 

funding is the right solution at this time as outreach and inclusion 

to the business community is so rudimentary and critical for our 

continued development. 

If we just look to the black business community, the latest census reports show that while the black business community was 

fast-growing, the majority of black businesses around the country 

employ one employee and generate less than $60,000 in gross revenues. That is according to our census. 

Other segments of the business community were not significantly 

more stable. This nation’s small business community is still extremely fragile and they deserve a federal government that assists 

in their development. 

Since the 1990s, the manpower of the field offices for the SBA 

has greatly declined. At one time the New Orleans District Office 

had over 70 employees. When Katrina hit, there were fewer than 

20 and it could not possibly service the needs of the local business 

population. The National Black Chamber of Commerce stepped up 

its activity. We made over 75 visits within the first three years and 

for the first three years also had our annual conventions there to 

bring attention to the issues and help bring resolutions to the 

table. 

The SBA and Women’s Business Development Centers that they 

funded all collaborated and helped bring this to fruition through a 

host of outreach activities, information sharing, sharing of databases. I am proud to say that our newly opened Gulf Coast chapters claim to have affected over $3 billion in rebuilding contracts 

to the extent we are now opening a regional office of the National 

Black Chamber in New Orleans to help with further collaboration. 

I feel the need to specifically address the potential of private entrepreneurial development programs replacing current services provided by the SBA. There is a fear spreading that this may create 

a temporary duplication in some markets. We must not forget that 

a private company can and only will provide services that they can 

generate profits from. It is the nature of business. As soon as that 

service or as soon as that market or as soon as that target population becomes unprofitable, they have a fiduciary responsibility to 

cease those activities. It is the nature of business. In this case, it 

would be to eliminate a segment of the population that needs it the 

most. 

It would be disingenuous of me to also not state that our members have expressed great frustration with the SBA and some of 

their programs. That happened. Even my wife has frustration with 

me. I mean, she admits that. Our members, especially those in the 

Gulf South, bore the greatest impact of their loan program deficiencies and diminished inclusion efforts. 


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I personally—when Katrina hit, I had five employees. I had one 

plant. I had five trucks. I produce concrete. And I had no idea what 

a PTAC was. I had never had a federal contract before. I had no 

clue. But it was through the assistance of—fortunately, the Women’s Business Development Center was one of the first centers that 

opened and I was actually able to garner information from there 

which led me to other pathways to where today I have four plants. 

I have 43 trucks. I have 58 employees and, you know, we are still 

growing. You know. I now have two congressmen. 

This Committee would do the country and the economy well by 

fighting for increased funding and bringing manpower back to the 

mid-1990s. So the subject of reducing duplication, it is a tough 

question. I mean, it is tough. However, cutting support at this time 

is simply not worth the risk to the small business community. 

I thank you for allowing us this time and I will be happy to answer any questions. 

[The statement of Mr. Baker follows:] 

Chairman GRAVES. Thank you, Mr. Baker. 

Next, I would like to introduce our witness, Jody Keenan. Ms. 

Keenan is the state director of the Virginia Small Business Development Center Network. Ms. Keenan is also a past chairman of the 

board of the Association of Small Business Development Centers, 

which is who she is representing today. Thank you for being here. 

I appreciate it. 

STATEMENT OF JODY KEENAN 

Ms. KEENAN. Chairman Graves, Ranking Member Vela ́zquez, 

members of the Committee, thank you for inviting me to testify. 

Again, I am Jody Keenan and I am the director of the Virginia 

SBDC Network and past chairman of the ASBDC. 

For 30 years, SBDCs have been providing services to small business owners while developing an infrastructure dedicated to assist 

all small firms and providing them free consulting on how to improve their businesses. The result is a national network of over 900 

locations with over 4,000 professional advisors who advise hundreds of thousands of small businesses in every state and territory. 

Roughly, half of our clients are new businesses and half are existing businesses. Last year, two percent of all new business starts 

were SBDC clients. SBDCs work with women entrepreneurs. More 

than 40 percent of our clients are women and six of the state Small 

Business of the Year winners were women-owned SBDC clients. 

SBDCs prioritize assistance to veterans. Approximately 10 percent 

of our clients are veterans and in Virginia we have a specialized 

program to assist them. This year we are honoring Colonel Perry 

Casto, who founded his firm a few years ago and now has 60 employees. Through our program we aggressively market to the veterans’ community and guide them to our resources and services 

and other resources. Many SBDCs have similar programs. 

The SBDC outreach to minority and underserved communities is 

also significant. Our minority clientele is over 33 percent of our client base and our members support outreach programs all across 

the country. In New York, the SBDC hosts the organization for 

Latino entrepreneurs, and in Maryland, the SBDC supports the 

Branch Avenue Project, an inner city business restoration program. 


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Virginia’s network is an example of the broad reach SBDCs have. 

In addition to our veterans’ outreach, we are co-located with the 

Women’s Business Center of Northern Virginia, and we run the 

Small Town and Merchant Program in rural communities. We also 

train small businesses in procurement, international trade, and a 

host of other subjects. 

We always try to expand our services to adapt to a changing 

business environment. Through our association, SBDCs partner 

with firms like Intuit, Google, and Boefly, to bring innovative and 

efficient tools to small businesses for improving their operations 

that lead to growth and job creation. 

In order to give this Committee and Congress a better picture of 

what we offer, ASBDC is compiling a catalogue of our services. It 

is not complete yet, but as you can see, we are much more than 

business planning. In many states, we are a key provider of services, like in Missouri where the SBTDC is the Delta Regional 

Authority’s business development provider. 

There are a few things that ASBDC believes need to be developed. First, there need to be reasonable, uniform standards for effectiveness of programs. Growth in sales, investment, and hiring 

are key indicators. Obtaining capital is usually the key measure. 

ASBDC believes that access to capital is vital, but if that financing 

is not leading to an improved bottom-line, it is just an output, not 

an outcome. We judge our success by helping our clients increase 

their sales, their job creation, and their financing. These metrics 

should be the building blocks for assessing the effectiveness of any 

small business assistance program. It is futile to compare programs 

and yet hold them to different standards. 

This goes with the need to share information. There is nothing 

more unproductive than collecting different data for different agencies in different formats. It does not matter who the information is 

for. Incompatible databases and inconsistent information are fundamentally inefficient. Federal agencies are required to gauge their 

performance by using and tracking outcome measures. If an agency 

operates entrepreneurial development programs they must focus on 

small business success. 

SBA does a good job of tracking SBDC performance. Every SBDC 

is subject to a full SBA financial review every other year on top of 

the audits from our hosts and the program offices. SBA reviews our 

client impact in addition to our own client impact surveys and our 

association’s national impact survey. And we believe the best way 

to gauge our effectiveness is to ask our clients whether SBDC counseling is effective or not. 

On top of that we have our accreditation process that monitors 

the skills of our counselors and the strength of our management. 

The SBDC program was recognized in 2008 by OMB for its accountability and the quality of its performance data. 

Our final theme is cooperation. My network incorporates the 

Women’s Business Center. Many SBDCs host SCORE, PTACs or 

VBOCs, yet programs arise that seem to duplicate the efforts of existing programs and ignore capabilities that are already in place. 

This is because people do not realize what is out there. We need 

to know the resources we have and how to leverage them to the 

best effect. 


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In closing, thank you for letting me share our thoughts, and I 

look forward to your questions. 

[The statement of Ms. Keenan follows:] 

Chairman GRAVES. Thank you, Ms. Keenan. 

Our final witness is Denise Pickett. Ms. Pickett is the Executive 

Vice President at American Express OPEN. OPEN is American 

Express’s business unit dedicated exclusively to supporting small 

business owners and is the leading card issuer in this segment. We 

appreciate you being here. We did get a vote called but I think we 

can hear your testimony. 

STATEMENT OF DENISE PICKETT 

Ms. PICKETT. Okay. Chairman Graves, Ranking Member 

Vela ́zquez, and members of the Committee, thank you for allowing 

me to share a few thoughts with you today. 

Despite the enormous pressure the economy has put on small 

business, our research shows that small business owners are beginning to show optimism for the future. Nonetheless, they still face 

great challenges. I would like to discuss three of those—gaining 

and maintaining customers, acquiring knowledge and ideas to improve their business, and meeting financial needs. American Express has responded to each of these through programs, partnerships, and resources. 

To help address the first challenge, the need for more customers, 

OPEN has created several programs, two of which I would like to 

discuss today. 

First, we launched the Victory in Procurement program, or VIP 

in 2008, which was designed to help small businesses capitalize on 

the enormous opportunities in government contracting. VIP live 

events and websites give small businesses access to training and 

educational resources to assist throughout the contracting process. 

This includes providing access to coaching and mentoring and critical information about working with procurement officials and 

forming teaming relationships. 

Last year, OPEN engaged more than 150,000 small businesses 

through our VIP events and our VIP site. And in partnership with 

SCORE and other organizations, VIP gave these businesses tools to 

grow. Our Give Me Five program has focused on contracting for 

women. We provided a Train the Trainer session for over 100 representatives of the Women’s Business Centers. 

The second program we created to generate more customers is 

Small Business Saturday. This national grassroots movement encourages consumers to shop at small businesses on the Saturday 

after Thanksgiving, which falls between Black Friday and Cyber 

Monday, two of the country’s biggest annual shopping days. We relied heavily on Facebook to promote Small Business Saturday, 

since small businesses are increasingly turning to social media for 

business promotion. 

One point two million people joined the movement by liking 

Small Business Saturday, and small retailers experienced a 28 percent increase in sales on American Express cards that Saturday, 

compared to the same day in 2009. This year we will be growing 

that movement further and we look forward to the continued supVerDate Mar 15 2010 05:22 Sep 21, 2011 Jkt 068061 PO 00000 Frm 00013 Fmt 6633 Sfmt 6602 E:\HR\OC\A061.XXX A061

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port of this Committee as we build what we believe will become a 

holiday shopping institution to benefit small businesses in America. 

To address the second major challenge, which is the need for 

knowledge and information to grow, we created OPEN Forum, a 

website designed to empower all small businesses, not just our customers. It has become the number one online destination site for 

small businesses. OPEN Forum’s mission is to provide three resources—information from experts and peers, education, and a true 

community of small business owners. While OPEN Forum delivers 

the most current and relevant information through articles and 

interviews, we are most proud of the community we have helped 

create. OPEN Forum’s interactive nature has allowed us—has allowed small businesses to draw on the power of collective knowledge. It has even provided a platform through which government 

can interact with them, including an online event that allowed 

hundreds of thousands of small business owners to submit questions and interact directly with SBA Deputy Commissioner Marie 

Johns. 

Our core business addresses the third challenge, meeting financial needs. We give small businesses access to working capital, primarily through our small business pay-in-full charge cards and our 

credit cards. They provide purchasing power, flexibility, rewards, 

and savings on business services. In the first quarter of this year 

alone, small businesses spent almost $2 billion every week on their 

cards to buy goods and services they need to operate their businesses. 

We also made nearly $27 billion in credit available to our business customers through our lending products. 

In closing, we believe if the economy is to prosper, there is a 

great need to cultivate thriving small businesses and support their 

growth. And while we strongly believe in the results we have 

achieved, we feel when the public and private sector work together, 

small businesses of all sizes are going to benefit. 

We look forward to working with members of this committee and 

others in Congress to continue to help small business and the economy grow. I appreciate the opportunity to speak with you today. 

And I look forward to taking questions. 

[The statement of Ms. Pickett follows:] 

Chairman GRAVES. Thank you, Ms. Pickett. 

We are going to adjourn until his series of votes is over, which 

is approximately—I think there are five votes with a Motion to Recommit in there. So we will adjourn and be back just as soon as 

we can. Thank you. 

[Recess] 

Chairman BARTLETT. Thank you very much for your patience. 

Our Subcommittee will reconvene. 

As is my practice, I will ask my questions last, hoping that someone else will have asked them so I do not have to ask them. I will 

now recognize Mrs. Vela ́zquez for her questions. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Bartlett. 

Mr. Shear, the GAO recommended to the SBA to increase collaborative practices to develop compatible policies with other federal agencies. And this was recommended in 2007, again 2008, and 

yet there is little evidence that this recommendation has been 


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taken anywhere by SBA. Why is this not occurring in your judgment based on—— 

Mr. SHEAR. There does not seem to be—— 

Ms. VELA ́ ZQUEZ [continuing]. Is it on? 

Mr. SHEAR [continuing]. It is on. Yeah. Okay, sorry. Now can you 

hear me? 

Ms. VELA ́ ZQUEZ. Yes. 

Mr. SHEAR. Okay, I am sorry. 

With respect to SBA and USDA, every once in a while when we 

follow up with them they say they did develop an MOU so they 

have something in place, but then when we follow up further and 

ask are you taking that step further and actually developing compatible policies or ways to share responsibilities—— 

Ms. VELA ́ ZQUEZ. Or to leverage resources. 

Mr. SHEAR. Leverage resources. We do not see evidence of that 

occurring. In this most recent work, and again we just took a little 

bit of time to touch on some economic development programs. We 

asked more broadly about collaborative practices and it seemed like 

there were some initiatives put on the table but there just does not 

seem to be the leadership to really take it further. So we see that 

in the veterans’ area. We see it with USDA. We see it in a number 

of areas. So we do not really get a good explanation except to say 

we are working on it. 

Ms. VELA ́ ZQUEZ. There were 108,000 HUBZone contract actions 

in 2010, and in 70 percent of these cases the small business qualified for another SBA contracting program. With all the problems 

GAO has identified with the HUBZone program and that the majority of its participants qualify for another program, I would like 

to ask you what will happen. What will be the impact on contracting opportunities for small businesses if Congress eliminated 

the HUBZone program? 

Mr. SHEAR. I think you make a very important point here and 

one of the reasons—over the years when we have written about the 

various contracting programs and business development programs 

we always include a pie chart just to show that type of illustration—how much overlap there is in terms of those who qualify for 

one or more of the preferences. And if it was eliminated, it is hard 

to say because it has never really been an evaluation of what the 

HUBZone program provides, either in terms of a one-time study except for one study by the Office of Advocacy. There is some anecdotal evidence but it is hard to say what you would give up. 

The HUBZone program is more—it is based on location rather 

than the characteristics of the business. And in that sense, in that 

there is overlap among businesses, you know, businesses that qualify for more, it becomes more problematic in that there are not 

good performance measures out there. It is hard for this Committee 

and it is hard from a management standpoint for SBA to say where 

they should be using their resources. So if you eliminated the program, there would be some businesses that would no longer participate in Federal contracting. 

Ms. VELA ́ ZQUEZ. So what impact does the lack of this measure 

have on the HUBZone and other contracting programs? The lack 

of those measures implemented by the SBA. 


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Mr. SHEAR. At some point I cannot answer the question as far 

as picking winners and losers among various programs. But in 

looking at our body of work on economic development programs, 

and in those that are confined to SBA, at some point I would think 

it would be a question that this Committee should be asking and 

that SBA would address as a management practice. 

It costs money and resources to run various programs. And so if 

you required resources to run programs and you are strained for 

resources, at some point you at least have to ask the question, do 

we want to keep all these separate programs operating? So that is 

a more general observation. 

Ms. VELA ́ ZQUEZ. I guess that you have been able to detect my 

frustration in previous hearings with SBA. And GAO’s investigation showed fraud and abuse and waste on the HUBZone program. 

So for the Agency not to have any outcome measures in place, 

any metrics, it is just unbelievable. So my question to you is do you 

believe that the SBA is not implementing these measures because 

they are afraid that it will show that the program is not achieving 

its goal? 

Mr. SHEAR. You raise a very good observation and I cannot read 

into the minds of people at SBA. But at some point after being repeatedly told, and when we reached out in terms of what we call 

constructive engagement, we would actually help SBA develop performance measures. And after having interactions and having all 

these what I will call false starts, the question becomes what is the 

motivation to do this? The one observation I will make is one evaluation that was completed around the time that we—just after we 

completed our first audit at your request was by SBA’s Office of 

Advocacy. It did not demonstrate that the program was really serving its purpose well. So there was one report since the time we finished our audit work that would suggest that the benefits from the 

program seem to be small but yet I cannot read the minds of people 

at SBA. 

Ms. VELA ́ ZQUEZ. Thank you. 

Ms. Pickett, there are many private entities that provide small 

business services which supplement federal and state efforts. Some 

believe that government funding is unnecessary and the market 

will create assistance if there is demand. My question is do you believe that private efforts alone can meet the need for entrepreneurial assistance? 

Ms. PICKETT. So thank you, Congresswoman Vela ́zquez. 

I would say that in our case we have many small business owners who have very different needs. They come in different industries, they come in different sizes, and they are at different stages. 

And those different needs suggest that both private and public programs need to work together and they cannot work alone to meet 

all of those needs. So in our experience I would say no, you need 

both programs working together, and the best hope we have for 

small businesses is if private, public and not-for-profit institutions 

work together to help meet the needs of small businesses. 

Ms. VELA ́ ZQUEZ. Okay. I have more questions but I will do it in 

the second round. 

Chairman BARTLETT. Thank you. Before recognizing Mr. Richmond I would like to make a comment about HUBZones. It is not 


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surprising that most of the HUBZone contractors would have qualified for a contract in some other category because the HUBZone 

contracts are open to any small business. The unique thing about 

HUBZone contracts is not who they are but where they are because 

the HUBZone contracts have to be in an area—I have a whole 

county that qualifies—that has high unemployment or low income 

levels. I have personally seen the benefits of moving a HUBZone 

contract to one of these areas. I have in my western-most county 

in Appalachia—a HUBZone company that moved there and they 

pay their people three times the average salary in that county. 

This clearly creates other jobs and lifts the whole county. So it is 

not surprising that HUBZone contractors would qualify to get the 

contract under some other category because it is open to anybody 

and everybody. It is not who they are; it is where they are that is 

important about the HUBZone contract. I think it is probably 

unique in that category. It is the only contracting we do with small 

business that is determined by where they contract rather than 

who they are. 

Let me now recognize Mr. Richmond. 

Mr. RICHMOND. Thank you, Mr. Bartlett. 

My first question will go to you, Mr. Baker. Part of what I am 

trying to assess is just the common sense and the day-to-day struggles of small businesses when dealing with the SBA. For example, 

I had someone in my office yesterday who, while trying to navigate 

the 8A application process, asked why will they not just put the 

status online where they can go into your pass code and find the 

update as opposed to staying online all day? So in your experience, 

especially after Katrina as businesses try to stand back up, how 

was your interaction with the SBA and how do you find the programs as you try to grow and hire more people? 

Mr. BAKER. Thank you. In the immediate aftermath of Katrina, 

we found interaction to be, at best, difficult. You know, their resources were stretched. They were underfunded. They had an enormous task with new contracts being led and also administering 

various loan programs. And so it created a potentially detrimental 

situation for access for small businesses in the region. It was actually through—and that is why the Black Chamber stepped up and 

actually created throughout the Gulf South to help coordinate and 

work with not just the SBA but their business development centers, partnering with Southern University and the University of 

New Orleans Business Development Centers, we actually hosted 

events together. 

But it short of that, you know, I think we were able to as a region be able to do something that was a unique and generational 

opportunity to actually come together in a collaborative fashion to 

use a grassroots—truly grassroots communication and inclusionary 

effort to bring more people to the table of information. This included setting up computers in our offices so that businesses that 

did not even have homes, much less computers, had access to web 

information. 

But there are certainly many shortcomings in the delivery mechanisms but, you know, they are improving and I think as Ms. Pickett shared earlier, it is going to take a complete collaborative effort 

of the private sector and public sector to actually make a dent in 


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this. I mean, the challenge is that large, that tremendous, and we 

are still trying to play catch-up as a nation. 

Mr. RICHMOND. Next, for Ms. Pickett. Ms. Pickett, I know that 

you and American Express, that you both work with SCORE chapters and WBCs. If the SBA’s Business Assistance Center budgets 

were to be cut at the federal level, do you think it would make it 

more difficult for SCORE and WBCs to attract the private sector 

or such private sector funding? 

Ms. PICKETT. So I am certainly not an expert on the role that private sector funding plays in those organizations, but what I can tell 

you is that those organizations are very important to the programs 

that I described earlier and our ability to put them on. And they 

bring content to those programs and they bring one-on-one technical mentoring and coaching that we simply could not deliver 

without that partnership. 

Mr. RICHMOND. So it would hamper at least that collaborative 

and the deliverables? 

Ms. PICKETT. It would certainly put our ability to partner in 

question if they did not have the funding they needed from their 

perspective. 

Mr. RICHMOND. And I guess my next question, and I have, I 

guess, a minute left, is for Ms. Keenan. Collaboration among the 

SBA’s Business Assistance Centers has been sporadic. What efforts 

has your center made to improve such collaboration and what barriers still exist to further cooperation and collaboration? 

Ms. KEENAN. Well, I can speak for Virginia. We, as I mentioned 

earlier, we have a Women’s Business Center that is co-located with 

one of our SBDC offices in Northern Virginia and we do quite a lot 

of work referring clients and companies back and forth to their program as they refer programs back to ours. We also on some occasions have had SCORE counselors who have come out into the 

Northern Virginia area and set up office areas in our SBDCs as a 

way to help them reach into the suburban communities. And we 

have done this throughout Virginia as well, and in many other 

states the same partnerships happen. 

Some of the obstacles—was that your question then? What some 

of the obstacles are? Candidly, I think we have made an effort to 

overcome the obstacles but sometimes the obstacles are data tracking and just accountability. You know, SCORE, for instance, they 

have their metrics and goals to meet with a certain number of clients. We have our goals and metrics to meet with a certain number 

of clients. Our philosophy—my philosophy in Virginia has been 

there are more than enough businesses for all of us to serve. We 

are not serving 100 percent of the businesses. So we do our best 

to make sure that when we start these engagements that everyone 

understands what type of business we are going to work with, what 

kinds of services each of us is going to provide so we are not tripping over one another, so we are not confusing the client. So I can 

speak to that in Virginia. That has happened and that has been 

our mantra. 

Mr. RICHMOND. Thank you. I yield back. 

Chairman BARTLETT. Ms. Chu. 

Ms. CHU. Thank you. 


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Well, I would like to ask Ms. Pickett from American Express, you 

have a program called Victory in Procurement for Small Business 

and that is for the general small businesses, but then you decided 

to do something above that for women entrepreneurs called Give 

Me Five. Now, there are some here who are saying SBDC and 

WBC would be duplicative but you apparently have not found your 

women’s program to be duplicative. Why did you have a women’s 

program above your regular small business procurement program? 

Ms. PICKETT. So despite the fact that women-owned businesses 

are actually growing at a faster rate, they are actually not getting 

to the same size as male-owned businesses. And so we decided to 

have a program specifically designed. They have very unique 

needs, women-owned businesses. They generally have needs for negotiating skills. They have different needs as it pertains to financing. And I think that they also have different work-life balance 

needs in terms of running their own businesses. So we know that 

women-owned businesses have unique needs and we designed a 

program for them called Give Me Five. 

Give Me Five is not a substitute for the programs that are offered by some of these agencies. In fact, it provides an introductory 

level of how to get into federal government contracting, but I think 

for them to be really successful they need the ongoing support that 

are provided by the agencies that we have discussed here today. 

Ms. CHU. And then, Ms. Keenan, let me ask the SBDCs, of 

course, and the WBCs both coexist and some are saying that it is 

duplicative. However, it seems that WBCs focus on poorer clients 

with less education than SBDCs and that the Center for Women’s 

Leadership found that 67 percent of the Women’s Business Center 

clients came from households with income less than $50,000 and 

that 55 percent of the WBC clients had only a high school education or less. So if the WBC is removed and incorporated into 

SBDC, what would happen with this demographic? What would 

happen with minority entrepreneurs such as this? 

Ms. KEENAN. Forty percent of our client base are women entrepreneurs. Thirty-three percent of our client base are minority entrepreneurs. So we would continue to serve that growing population within the SBDC program. In Northern Virginia, where our 

SBDC is co-located with the Women’s Business Center, I think they 

would very easily be able to continue to deliver the audience that 

the Women’s Business Center has been targeting. 

Ms. CHU. But how can you explain the difference in the demographics between the two populations? 

Ms. KEENAN. I agree. I think that the Women’s Business Centers 

do tend to focus—particularly in our Northern Virginia office, that 

is the one I am most intimately familiar with—they do have some 

specialized services for new Americans who are women entrepreneurs. They also work with male entrepreneurs as well. And 

that partnership in Northern Virginia is the result of a collaboration with the Fairfax County Office of Economic Development and 

the Fairfax County Family Services, I think is the program. So in 

Northern Virginia, we would continue those relationships and work 

with that population without much of a hiccup in all honesty. 

Ms. CHU. Let me ask another question in another arena where 

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porting assistance. In your testimony you mentioned that Small 

Business Development Centers are a key in the state’s export assistance program. Now, in my opinion there is a lot of help that is 

needed in exporting. In California, the exports have risen 19.3 percent in 2010 to 143 billion, but California’s exporters are small and 

do not venture far. Mexico and Canada are the top two countries 

where the state exports and yet there is so much potential. 

Now, the Committee has recommended rescinding $30 million in 

grant programs to states to help trade and export promotion. Is 

such funding duplicative of the work that you are already doing at 

SBDC? 

Ms. KEENAN. In a couple of states, for example, Massachusetts 

and Illinois, the SBDC programs in those states are the premier 

export assistance provider on behalf of the states. So there is a lot 

of collaboration there. In Virginia, how we are working with the 

state in their response to the STEP funding is the state is really 

working with new-to-market companies, so firms that are already 

exporting to Mexico and Canada and helping them expand into 

their second or third country, and the SBDCs are working with— 

and we are developing a new initiative this summer—to work with 

new-to-export companies to identify and prepare firms who are not 

currently exporting to get into that pipeline to take advantage of 

the state services. So we are being very careful not to step on the 

products that are already out there in Virginia and helping kind 

of feed that pipeline which the state program just is not funded or 

resourced to do right now. So that is how we are really trying to 

make sure that the services are complimentary and expansive and 

not redoing what is already out there. 

Ms. CHU. So you are saying that they are actually not duplicative? 

Ms. KEENAN. In Virginia they will not be duplicative. In Massachusetts and Illinois as two examples, the SBDC is the program 

that the state turns to to prepare companies for exporting, as well 

as to take them on exporting initiatives. 

Ms. CHU. Thank you. 

Chairman BARTLETT. Ms. Vela ́zquez, you had additional questions? 

Ms. VELA ́ ZQUEZ. Yes, I do. 

Ms. Keenan, in your testimony you indicated that there are programs and initiatives that seem to be—to duplicate the efforts of 

existing programs and basically some of those questions were asked 

by Ms. Chu. In recent years SBA has created two new programs, 

Emerging Leaders and Regional Innovative Clusters. Is this a good 

example of expenditure of tax funds or do SBDCs already provide 

these services? 

Ms. KEENAN. I think some of the confusion in those new programs was what were they intending to achieve. So I think that 

the SBDCs are engaged in activities that support those initiatives, 

but it was very difficult for us to identify exactly what the goal was 

for those programs. 

Ms. VELA ́ ZQUEZ. Well, Emerging Leaders, for example, they select entrepreneurs for training. Do you do that? 

Ms. KEENAN. Yes. Yes, ma’am. 


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Ms. VELA ́ ZQUEZ. Mr. Baker, after Hurricane Katrina, you went to 

a local Women’s Business Development Center to seek help. Right? 

Why did you choose that center and not an SBDC? 

Mr. BAKER. In the immediate aftermath of Katrina there were 

only a few resources available. Fortunately, the Women’s Business 

Center and the SBA office were located in areas that were not impacted by water and so they were functional early on, just as the 

Black Chamber was. 

Ms. VELA ́ ZQUEZ. Okay. Thank you. 

Ms. Keenan, according to SBA’s data, the Women’s Business Development Center assists over 160,000 small businesses at a cost 

of only 139 per business. Also, SBDCs help create over 14,000 

small businesses at a cost of over $9,000 per business. In your testimony you state that the foundation of the SBDC network is designed for and can accommodate expanded services. I understand 

that SBDCs have a broader scope for services for a variety of clientele, but why should we expand SBDCs’ services when the cost for 

business is already much higher than other programs like WBDCs? 

Would it not make sense to encourage the expansion of WBDCs 

since they assist more businesses at a lower cost? 

Ms. KEENAN. We have a larger footprint, so we have 900 offices 

around the country that have been—those are invested costs already. That infrastructure is in place. We see a number of existing 

businesses as well. I do not know what the breakdown is for Women’s Business Centers with existing versus start-up. 

Ms. VELA ́ ZQUEZ. This is data provided by SBA. 

Ms. KEENAN. By SBA, right. Right. Okay. But I do not know the 

breakdown. I do know that our base of existing businesses that we 

have been serving, particularly in the past three or four years has 

really expanded. So I think that although we are working with 

start-up companies and helping businesses get started, we are 

spending a lot more time as well attending to existing companies 

and so that could have an impact on why those numbers look the 

way they do. 

Ms. VELA ́ ZQUEZ. My question is because some members would 

like to take the Women’s Business Development Centers allocation 

and give it to SBDCs so that you have the infrastructure to provide 

the services and the clientele that is being served, as Ms. Chu 

pointed out, is more low income women and low income communities. But when we are considering programs in a cost efficient 

manner, we need to look at costs. 

Ms. KEENAN. Right. 

Ms. VELA ́ ZQUEZ. And it seems to me that the Women’s Business 

Development Centers are providing the services that you are providing. And this is not—I am not criticizing the Small Business Development Centers. What I am saying is that we just cannot pick 

winners and losers here when we know that you have a target clientele and the Women’s Business Development Centers have another target clientele. And it is being served in quite a costly-efficient manner. 

Mr. Baker, do you believe that socially and economically disadvantaged business owners currently have adequate access to federal contracting opportunities? If not, what can be done to improve 

the situation? 


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Mr. BAKER. No, I do not believe that socially and economically 

disadvantaged businesses have adequate access to federal procurement opportunities. There are some—while it has certainly improved over the past few years, there is certainly a tremendous 

amount of work to be done in that arena. One shining example of 

where there has been a focused effort and federal procurement inclusion is in Mississippi where Congressman Thompson and the 

governor’s office there—they actually made a commitment to formal inclusion that, just as an example, Mississippi has six PTAC 

offices whereas Louisiana has two. And just the results of that 

combined with bonding assistance programs and local collaboration 

with various chambers has actually increased the amount of black 

business contracting in the state by 40 percent. I mean, that is a 

tremendous impact but it shows that, you know, there is still a lot 

of work to be done but yet if there is a focused, funded, concentrated effort, you know, the results will definitely come to fruition. 

Ms. VELA ́ ZQUEZ. Okay. Thank you. Mr. Shear, I have my last 

question to you. And given the most recent natural disasters that 

we have been witness on television, I am concerned about the fact 

that in 2009, in the GAO report you found that the SBA had only 

met 13 of 26 requirements of the Small Business Disaster Response 

and Loan Improvements Act which was passed to make improvements in the aftermath of Katrina. Where does the agency stand 

on implementing these requirements? Do you know? 

Mr. SHEAR. At the time it was reported to you two years ago it 

was 13 out of 26. We are not as diligent at looking at legislative 

provisions as we are our own recommendations, but the last time 

we really got an assessment was one year ago. So this would have 

been one year after we reported to you, and at that time it had increased to 15 out of 26. Five of the provisions we did not think 

were relevant at the time because there has to be a triggering 

event for those five provisions to become effective. So the remaining 

six provisions we saw some movement by SBA but they were not 

implemented yet. And the ones that they seem to be most challenged with were the ones that involved using private sector lenders and private sector entities in reaching out when disasters 

strike. 

Ms. VELA ́ ZQUEZ. Thank you. 

Chairman BARTLETT. Thank you very much. Let me recognize 

Mr. Hanna. 

Mr. HANNA. Thank you very much. 

Ms. Keenan, thank you for being here. Do you believe that business owners in general around, well, your area in particular, are 

overwhelmed by the number of programs that we have? 

Ms. KEENAN. Yes. 

Mr. HANNA. What would you do about it? 

Ms. KEENAN. Well, certainly not create any new ones. I mean, we 

spend a lot of time in our centers just educating our clients about 

who does what and why to come here instead of going there. And 

we also work on the other side to make sure we understand who 

the other programs are and collaborating and trying to define the 

piece of the spectrum that everyone is trying to serve. So, you 


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know, short of not creating new ones and if possible encouraging 

better collaboration and coordination, that is the approach. 

Mr. HANNA. Do you find that people are leaving the building simply because they cannot cope with the complexity of it all? I mean, 

basically—— 

Ms. KEENAN. We hope that we do not send them out of the building—— 

Mr. HANNA [continuing]. Right. 

Ms. KEENAN [continuing]. More confused than when they came 

in. That is for sure. But, you know, certainly, if they come to us 

it is very often after they have been to a number of other places, 

whether—and I do not know if it is individuals or organizations or 

entities—and they are hearing a lot of you need to talk to Jody. 

You need to talk to Barbara. You need to talk to John. You need— 

so when they come in we try not to just shoot them down the pike 

somewhere else but really work to help them understand who does 

what and why they need to be with us or why they need to be at 

the Women’s Business Center or why they need to be at PTAC. 

And we tend to pride ourselves on not just pushing someone on 

down the pike. 

Mr. HANNA. Thank you very much. 

Ms. Pickett, I had a couple of corporations and for many, many 

years and duplication was something, you would not even begin to 

tolerate. It becomes clear and obvious waste and the first target. 

Do you think there is a lot of that in your organization? 

Ms. PICKETT. So in our organization we obviously spend a great 

deal of time making sure that we are efficient and effective in what 

we do and that is our obligation to do it and that is what we do 

in our organization. 

Mr. HANNA. So you are pretty well clean of that in your opinion? 

Ms. PICKETT. We are as efficient and effective as we can be. 

Mr. HANNA. Thank you. 

Chairman BARTLETT. Thank you. 

My understanding is that a major reason we have a number of 

programs is because we have identified a number of groups that we 

would like to help. It is not quite clear to me what we mean by 

duplication. Obviously, a wounded veteran comes in and they are 

a small business person, and they are a male, they could qualify 

under several different programs. But it is my understanding in 

watching this development now for nearly 20 years, that every time 

we find a new group that is not being adequately served we create 

another program for that group. What do we mean by duplication? 

Do you have duplicative programs that serve wounded warriors or 

is your duplication the fact that you are serving both a black person, a small business person, and a wounded veteran.—It can be 

all three at one time, can they not? What kind of duplication are 

we talking about? And, if our goal is to service more small businesses and if we are not confusing them and piling on with this duplication, why is duplication a problem? If we want to cut our costs 

but then they also cut what we get done, why is duplication a problem for simply looking out to contact and serve more small business people? 

Mr. SHEAR. You have asked some very good questions and that 

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erally and also with respect to what I am speaking about today as 

far as economic development programs. We see that there is overlap which could lead to potential duplication of services. 

Chairman BARTLETT. But sir, if the duplication simply serves another small business, is not that what we want to do? 

Mr. SHEAR. If we have a situation where separate infrastructures 

are being created, and this is part of when we look forward when 

we try to determine principles that we could apply for when consolidation might be appropriate. We are looking at questions such 

as, are there separate infrastructures in place and are there so 

many different programs that are not harmonized? To bring up 

what Representative Hanna just brought up, the idea is how do 

you figure out all these different programs? And if it leads to confusion or if it leads to difficulty in rural areas of figuring out what 

do we turn to USDA for and what do we turn to SBA for, all those 

things we are looking for areas where there could be inefficiencies 

associated with multiple programs at multiple agencies serving 

similar interests. 

But let me make something really clear. When we look at questions such as—let us just take the three counseling and training 

programs at SBA. We do not view it that somehow there is an efficiency created ifi youi eliminate a program and stop serving there 

recipient. If you eliminate one program and just say, well, this is 

how much was appropriated for that program this year, efficiency 

is not evaluated. The types of things we will look into is that is 

there something about delivering the services that can be done 

more effectively either through increased collaboration among the 

three programs and the resource partners or possibly through certain reductions in the number of programs. We are looking for efficiencies in government and how services are being delivered. So we 

are looking at those types of questions. 

And so you are very right. We are reaching out. We are not passing judgment as far as how many resources are allocated toward 

reaching out to small businesses and different components of small 

businesses, but the question is the efficiency of that service delivery. That is what we are focusing on. 

Chairman BARTLETT. So you are really focusing on efficiency 

rather than duplication. If you have duplicative programs, they are 

simply serving more small businesses, and if both of those programs are efficient, who should care? 

Mr. SHEAR. And the question becomes, for this Committee and 

for the Congress and for all of us, is to try to look at what demonstration is there that these programs are all efficiently providing 

services. And to do some comparison what, if anything, could be 

gained by combining programs or by expanding collaborative practices in how these programs are carried out in states and localities 

and in urban and rural areas. So that is really a major part of our 

focus. But ultimately it is a question of efficiency of service delivery 

and reaching out and serving the needs of small businesses and the 

needs of what Congress assesses as the priorities in reaching out 

to serve economic development activity. 

Chairman BARTLETT. One of the other elements of our charter for 

this hearing was how private efforts can help meet the needs of 

businesses. As an example of this kind of question, our kids go out 


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at Halloween and they do not Trick or Treat, they leave a basket, 

a bag in the home and they say if you will please put some nonperishable food in this we will come back and collect it and then 

we are going to make up food baskets for poor people. So we did 

that. And then the women who were involved in organizing this 

program called up the Welfare Society and they said we would like 

to know of some poor families because we have these food baskets. 

The welfare people were indignant. What do you mean poor families, needy families? What do you think we are here for? How private efforts can help? Are we crowding out private efforts by our 

multiple programs? 

Mr. SHEAR. I do not have an answer to that question but when 

we look at these various programs we do look for what resources 

are available. So I will just take this one example. The work that 

we have done in the past, looking at programs to help service disabled veterans start their own businesses. We know that there are 

state programs. We know there are local programs. We know that 

there are nonprofits all involved in that activity. And what we are 

looking for and what I think the Congress has been looking for, 

and it has been expressed in legislation, is the idea of how can we 

allow all those activities to really provide services where veterans 

know what is available to them to help to start or to grow their 

small businesses. So what information is out there? How are things 

being coordinated among various nonprofits, private entities, and 

government entities? And that is what I think that many of us are 

looking for. 

Chairman BARTLETT. Yeah. In our desire to be helpful we may 

have limited the helpfulness of others, have we not? 

Ms. Vela ́zquez, do you have other questions or comments before 

we close? 

Ms. VELA ́ ZQUEZ. No. 

Chairman BARTLETT. Mr. Hanna, other questions or comments? 

Mr. HANNA. You do run a remarkable company. 

Ms. PICKETT. Thank you. 

Mr. HANNA. I only know that because it was the first credit card 

I ever had in the ’70s. So thank you for that. And I do not owe you 

anything, incidentally. My wife might. 

There is this kind of implicit assumption about government that 

it does everything more or less badly. And I wonder if sometimes 

we ask the wrong question, we assume that because we are the 

government and there are layers within that, and bureaucracy 

being what it is, that we could always do better. And that is probably true. But it does seem as though the opportunities on the 

street away from government are great but people—you said people 

come to you last—come to small business, Ms. Keenan, last. 

Ms. KEENAN. Not always last but they do come to us. 

Mr. HANNA. What drives—I am curious—what drives them to 

your door that they cannot find someplace else? 

Ms. KEENAN. Well, we get a lot of referrals from lending institutions and accounting professionals, for example. So a business will 

go into a lending institution looking for financing and they have 

not fully prepared their business plan or their financial projections. 

Or maybe they are just not really fundable at this point. So the 

lender will refer them to the SBDC because the lender himself or 


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herself is not tasked or missioned or incentivized to help that business figure itself out. But the Small Business Development Center 

can help them do that. 

Mr. HANNA. So there is a big difference between being loan worthy and being potentially successful? I mean, there are a lot of people with good ideas that simply cannot get off the ground. 

Ms. KEENAN. Right. Absolutely. Or good ideas and they are not 

quite sure how to get it off the ground. I mean, particularly in financing we are all familiar with getting a credit card or a car loan 

or a mortgage, but getting a commercial loan is a different animal. 

And if you have not done that before and are not sure how to go 

about it and you go into the lender, much like you would go into 

a mortgage broker or a banker looking for a mortgage, you are just 

not—you just do not have it all together right then. So that is 

where the SBDC in that case would help put everything together. 

Mr. HANNA. Indulge me for one moment if you would. What is 

your best success story? 

Ms. KEENAN. Oh, we had a company that was a software developer that was acquired by Microsoft four years ago. 

Mr. HANNA. Good. Second best. 

Ms. KEENAN. We have been working seriously with some spinoff 

companies out of the George Mason University Computer and 

Technology—Information Technology and Engineering. So a number of those companies have spun off out of the university and created 40 and 50 jobs in Northern Virginia and they are also positioned for acquisition. So those are some of our top success stories. 

Mr. HANNA. Thank you very much. I am good, sir. 

Ms. VELA ́ ZQUEZ. I just would like to ask a question to Ms. Keenan. 

Ms. KEENAN. Yes, ma’am. 

Ms. VELA ́ ZQUEZ. You do workshops, right? 

Ms. KEENAN. Yes, ma’am. 

Ms. VELA ́ ZQUEZ. I do workshops in my district and I work with 

the Women’s Business Development Center, the Small Business 

Development Centers. Is it not true that because you work with the 

lending community, the financial institutions in a cluster and geographic area, you come to know which of those financial institutions serve best the needs of a potential business person, right, who 

comes to you? And then based on their business plan, based on 

their idea, if they want to start up a business you are better 

equipped to maybe match that borrower with a lender. 

Ms. KEENAN. Absolutely. I mean, just like we work with the 

other organizations to know what they are doing, we certainly do 

that in the lending community as well. 

Ms. VELA ́ ZQUEZ. And because you are better equipped in that 

sense, capacity building and technical assistance is so key in the 

success of these potential businesses. 

Ms. KEENAN. Absolutely. And that is what we hang our hat on. 

Ms. VELA ́ ZQUEZ. Mr. Shear, I think that one of the frustrations 

that we have when we talk about duplicative programs is the fact 

that there is this attitude of agencies not to establish clear measurements, right, and metrics, so that it will enable them to measure outcomes and decide which of the programs is better and some 

of the metrics that they have in place to determine what is working 


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and what is not and what type of program we should get rid of, 

which one of those programs we should eliminate. Do you see 

that—lack of will from agencies to clearly establish those clear 

measurements and clear metrics that will enable them to decide 

which programs are delivering the service that they were supposed 

to deliver in a more cost efficient way? 

Mr. SHEAR. You have raised a tremendous question. There have 

certainly been attempts over the years, whether it is through Results Act or through different actions of Congress. Certainly 

through our audits we are trying to address that issue. Evaluation 

of how programs are working should be integral to the management of those programs. There has been progress in some places 

and not in others. And this stands out as being a major area. And 

a lot of times the reaction is the cost to make evaluations. But the 

response should not be to not do any evaluation at all. It might be 

hard to measure certain statistics on an annual basis but it might 

be important to do, such as coming out of the part reviews from 

a number of years ago where SBA actually did have some evaluation of SCORE, SBDC, and Women’s Business Centers. So we are 

looking for that more evaluative framework to try to inform those 

decisions and we see that in this area. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chair. 

Chairman BARTLETT. Thank you all very much for your testimony. Thank you for your patience during a long series of votes. 

When the Committee has had a chance to review the hearing and 

the question and answer period, there may indeed be additional 

questions that we will need to ask for the record. We would appreciate it if you could be available to answer those questions. 

I ask unanimous consent that members have five legislative days 

to submit statements and supporting materials for the record. 

Without objection, so ordered. 

Thank you all again very much. And the hearing is now adjourned. 

[Whereupon, at 3:55 p.m., the Committee was adjourned.] 


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