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HELPING SMALL BUSINESSES COMPETE: 

CHALLENGES WITHIN PROGRAMS DESIGNED 

TO ASSIST SMALL CONTRACTORS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CONTRACTING AND 

WORKFORCE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD 

SEPTEMBER 15, 2011 

Small Business Committee Document Number 112–034 

Available via the GPO Website: www.fdsys.gov/house 


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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 

ROBERT SCHILLING, Illinois 

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 

JANICE HAHN, California 

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 

OPENING STATEMENTS 

Page 

Hon. Mick Mulvaney ............................................................................................... 1 

Hon. Judy Chu ......................................................................................................... 3 

WITNESSES 

Mr. Joseph G. Jordan, Associate Administrator of Government Contracting 

and Business Development, U.S. Small Business Administration, Washington, DC ............................................................................................................. 8 

Ms. Jiyoung Park, Associate Administrator, Office of Small Business Utilization, U.S. General Services Administration, Washington, DC ......................... 6 

Mr. William B. Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office, Washington, DC ..................... 5 

APPENDIX 

Prepared Statements: 

Mr. Joseph G. Jordan, Associate Administrator of Government Contracting and Business Development, U.S. Small Business Administration, Washington, DC ................................................................................... 25 

Ms. Jiyoung Park, Associate Administrator, Office of Small Business 

Utilization, U.S. General Services Administration, Washington, DC ...... 31 

Mr. William B. Shear, Director, Financial Markets and Community Investment, U.S. Government Accountability Office, Washington, DC ....... 36 

Questions for the Record: 

None 

Answers for the Record: 

None 

Additional Materials for the Record: 

Letter from Mr. Joseph G. Jordan .................................................................. 57 


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(1) 

HELPING SMALL BUSINESSES COMPETE: 

CHALLENGES WITHIN PROGRAMS DESIGNED TO ASSIST SMALL CONTRACTORS 

THURSDAY, SEPTEMBER 15, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON CONTRACTING AND WORKFORCE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10 a.m., in room 

2360, Rayburn House Office Building. Hon. Mick Mulvaney (chairman of the subcommittee) presiding. 

Present: Representatives Mulvaney, West, Chu, and Critz. 

Chairman MULVANEY. We call this meeting of the Small Business Committee to order. We are here today to talk about three important programs that were created to help small business compete 

for federal contracts. We will look at the Offices of Small and Disadvantaged Business Utilization. There is an acronym for that and 

I cannot pronounce it so I will be calling it OSDBU. We will also 

look at the Procurement Center and Commercial Market Center 

Representatives Programs and we will look into the MentorProte ́ge ́ Program. 

The primary focus of the OSDBU is advocating for small business contracts and fighting unjustified bundling. To underscore the 

importance of this effort, when Congress created these provisions 

in 1978 they required that each OSDBU, with the exception of the 

Department of Defense, would answer only to and directly to the 

agency head or deputy agency head. So it was answering very high 

up the chain. 

The Procurement Center Representatives program and the Commercial Market Representatives program are made up of Small 

Business Administration employees and their focus is to ensure 

that small businesses have the opportunity to compete for prime 

contracts and that there are small business opportunities at the 

subcontract level. In fact, PCR is one of the most important defenses small businesses have against contract bundling because 

they have the ability to protest procurements up to the head of the 

contracting agency when a contract fails to provide for small business participation. 

The third program, which is really a conglomeration of 13 individual programs, is the Mentor-Prote ́ge ́ Program. This could also be 

an important tool to help small business become more competitive. 

Generally speaking, the program allows small, less experienced 

firms to be mentored by larger, more experienced firms with a goal 


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of increasing the participation of small businesses in government 

contracting. 

Small business contractors are good for the government and good 

for the economy. They increase competition, innovation, create jobs, 

and they save taxpayers money, which is why there is a statutory 

goal of awarding 23 percent of prime contractors—excuse me, 

prime contract dollars—to small businesses. However, recent reports reveal that these programs could and should do a little better. For example, last year when the federal government spent over 

half a trillion dollars through government contracts, the administration fell short of that 23 percent goal and only about 20 percent 

of those prime contract dollars actually made it to small businesses. Given the achievement gap, we are going to continue to 

look at ways to help small businesses compete. 

But, we also must address the several agencies that are refusing 

to comply with the Small Business Act, and thus making the problem worse. For example, when we were looking at the OSDBU 

practices, the GAO found seven agencies that were not complying 

with the law regarding the reporting requirements. To find out 

why, my office actually sent letters to the heads of each of those 

agencies on August 5th. That was almost six weeks ago. Thus far, 

only three agencies have bothered to respond. Their responses 

range from the Social Security Administration saying that it would 

change its practices to bring it into compliance with the law, to the 

Treasury saying that it was going to keep its policy even though 

it violated the law. I can assure you that we will have future hearings on those agencies, as well as the agencies that had decided not 

to respond to the Congressional inquiry. 

In addition to addressing those challenges on OSDBUs, we are 

going to examine the PCR and CMR programs today. I hope our 

witnesses will also be able to address ways in which we can 

strengthen both of these programs, whether it is looking at measures of effectiveness, addressing the challenges that the programs 

have identified, prioritizing workloads, or looking at ways in which 

technology can help us do the job. 

Finally, and then I will close, within the 13 different MentorProte ́ge ́ Programs, the eligibility requirements vary widely as do 

the types of assistance provided to the prote ́ge ́s and the incentives 

provided and encouraged to the mentors. Now, GAO studied the 

controls for each of those programs and looked at how each tracked 

success. I look forward to hearing more about the GAO findings. 

Issues like affiliation play out in these programs and whether having so many independent programs puts an unnecessary burden on 

the participants. As the Small Business Jobs Acts allows the SBA 

to create additional, specialized mentor programs, I look forward to 

learning more about their plans for the future. 

As this Committee considers the PCRs, CMRs, OSDBUs, and 

whatever other acronyms we can throw into that mix, we want to 

learn how to help strengthen and improve all of these programs. 

If we succeed, we will be able to help small business, which is the 

goal of everybody who is on this Committee. 

So with that I yield to Ms. Chu for opening comments and then 

we will talk to the witnesses. 

Ms. CHU. Thank you, Mr. Chair. 


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Since the financial crisis of 2008, small businesses have faced a 

challenging economic environment, and for this reason the federal 

marketplace has become an increasingly attractive option. In fact, 

the reality is that doing business with government is vital for many 

firms’ success. 

Historically, however, it has been difficult for small businesses to 

gain a toehold in the federal procurement system. The passage of 

procurement reforms in the 1990s has led to bigger and more consolidated contracts. At the same time, the federal acquisition workforce has declined, failing to keep up with the explosive growth and 

procurement activity. When combined with the sheer complexity of 

the system, this has left many entrepreneurs on the outside looking 

in. 

To help small businesses overcome these barriers, several initiatives were established. While the most well-known resources were 

set aside and restricted competition programs of the SBA, there are 

several other tools that have great promise. These include the Mentor-Prote ́ge ́ Programs, the Office of Small and Disadvantaged Business Utilization, which I shall call OSDBU, and Procurement Center representatives, the PCRs. Through different mechanisms these 

initiatives enable small firms to gain great access to federal contracts that they would not otherwise be able to serve. 

This is accomplished in two ways. First, the OSDBUs and PCRs 

provide oversight of contracts, looking for opportunities in which 

small businesses can serve not only as a prime contractor but also 

as a subcontractor on much broader projects. 

Second, through the Mentor-Prote ́ge ́ Program, smaller firms are 

given the opportunities to work directly with large vendors. This 

can provide them with vital experience and lead to future opportunities. Together these creative efforts are an important means to 

getting more federal contracts in the hands of small businesses. 

While they do show great promise, recent GAO reports suggest 

there is a long way to go until their full potential is realized. GAO 

found that while Mentor-Prote ́ge ́ Programs have policies in place to 

make sure that participants benefit, agencies generally do not 

know what impacts such participation has on a business’ ability to 

win contracts without the mentor. Similarly, the GAO reported 

that SBA’s government contracting area report data may not be accurate. In both cases, accurate data is so critical because without 

it the agencies cannot determine how well their staff has performed 

or if the program’s goals are being achieved. 

Perhaps more troubling was GAO’s finding with regard to the 

OSDBUs. Although it is statutorily required that they have direct 

access to the highest levels of the agency, that is far from the case. 

Seven of the 16 federal agencies were not in compliance with this 

requirement and this only shortchanges small businesses that end 

up suffering the consequences of OSDBU’s diminished agency 

standing. Together, GAO’s reports paint a troubling picture of the 

agency’s implementation and oversight of these important small 

business assistance initiatives. 

With a sluggish economy, it is absolutely critical that programs 

like these succeed and are successful in bringing more entrepreneurs into the federal procurement marketplace with small 

businesses making up more than 99 percent of all American compaVerDate Mar 15 2010 15:46 Nov 30, 2011 Jkt 071281 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 E:\HR\OC\A281.XXX A281

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nies, but receiving fewer than one-quarter federal contracts, these 

efforts could broaden the economic benefits of federal contracts and 

create jobs in communities across the nation. For each one percent 

increase in share of contracts going to small businesses, 100,000 

new jobs are created. And with unemployment above nine percent, 

we should be finding ways to make this happen and make sure 

that small businesses have the tools they need to succeed. 

Thank you and I yield back. 

Chairman MULVANEY. Thank you, Ms. Chu. At this time I would 

ask you, please, to begin the introduction of our witnesses. 

Ms. CHU. Well, thank you. And I am so pleased to introduce William Shear, who is the director of financial markets and community investment at the U.S. Government Accountability Office. Bill 

has directed substantial bodies of work addressing the Small Business Administration, Housing Finance, including the role of the 

housing GSEs, the Rural Housing Service, and community and economic development programs. Mr. Shear will also be directing a report that the Congressional Asian-Pacific American Caucus requested last year on outreach development programs and resources 

designed to connect minority-owned businesses to contracting opportunities. 

I look forward to that report and I look forward to hearing your 

testimony today and working with you on future reports. 

Chairman MULVANEY. Thank you. And welcome, Mr. Shear. 

The next witness is Jiyoung Park, the associate administrator of 

the U.S. General Services Administration’s Office of Small Business Utilization. Ms. Park manages and oversees GSA’s Small 

Business Policy and Programs, which strives to expand opportunities in federal government procurement for small, disadvantaged, 

woman-owned and historically underutilized business zones, and 

service disabled veteran-owned small businesses. During her tenure, Ms. Park also started the GSA’s Mentor-Prote ́ge ́ Program, I 

believe. So thank you and welcome. 

Sitting next to her is Joseph Jordan. Mr. Jordan has served as 

the associate administrator of Government Contracting and Business Development at the U.S. SBA since March of 2009. The Office 

of Government Contracting and Business Development works to 

create an environment for maximum participation by small, disadvantaged, and woman-owned businesses and federal government 

contract awards and large prime subcontract awards. It also plays 

a major role in the formulation of federal procurement policies that 

affect small businesses. I just read some of that yesterday. That 

was scintillating reading. There is no question about it. So, about 

24 pages single spaced. 

So, anyway, Mr. Jordan, thank you. And thank you all. 


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STATEMENTS OF WILLIAM B. SHEAR, DIRECTOR, FINANCIAL 

MARKETS AND COMMUNITY INVESTMENT, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; JIYOUNG PARK, ASSOCIATE ADMINISTRATOR, OFFICE OF SMALL BUSINESS UTILIZATION, U.S. GENERAL SERVICES ADMINISTRATION; JOSEPH 

G. JORDAN, ASSOCIATE ADMINISTRATOR OF GOVERNMENT 

CONTRACTING AND BUSINESS DEVELOPMENT, U.S. SMALL 

BUSINESS ADMINISTRATION 

Chairman MULVANEY. We will begin, I believe, with Mr. Shear. 

STATEMENT OF WILLIAM B. SHEAR 

Mr. SHEAR. Chairman Mulvaney, Ranking Member Chu, and 

members of the Subcommittee. I am pleased to be here to discuss 

our recent work on the federal government’s efforts to increase contracting opportunities for small businesses. My testimony today 

discusses three reports we issued in June 2011. Specifically, I will 

discuss our work on first, the reporting structure at and the functions performed by Offices of Small and Disadvantaged Business 

Utilization, often called OSDBUs, in agencies with major contracting activity. Second, the Mentor-Prote ́ge ́ Programs at 13 federal agencies. And third, SBA’s Procurement Center representatives and commercial market representatives. 

In summary, we found the following and made recommendations 

for improvements. First, we found that nine of the 16 agencies we 

reviewed were in compliance with the Small Business Act’s requirements that OSDBU directors be responsible only to and report directly to the agency or deputy agency head. However, seven were 

not. We recommended that the seven agencies act to comply with 

the requirement. The Social Security Administration agreed with 

the recommendation and the Department of the Interior agreed to 

reevaluate its reporting structure. The Departments of Commerce, 

Justice, State, and the Treasury disagreed, stating they were in 

compliance. We maintained our position on these agencies’ compliance status. Since issuance of our report, Interior has indicated 

that it will work closely with Congress in seeking a statutory exemption. 

Second, while controls existed at all 13 federal agencies with 

Mentor-Prote ́ge ́ Programs to help ensure that participants met eligibility criteria and benefitted from the program, the agencies generally did not track prote ́ge ́ achievements after program completion. We recommended that 10 agencies consider doing so. Six of 

the 10 agencies—Homeland Security, Energy, GSA, HHS, Treasury, and VA—generally agreed with our recommendation. State 

partially agreed with our recommendation citing concerns about 

the impact that post-completion reporting could have on the Department, mentor firms, and prote ́ge ́ firms. Since issuance of our 

report, VA indicated that it will collect data from the prote ́ge ́ for 

one year after enactment, and EPA indicated it would evaluate 

whether its programs should continue, and if so, what improvements should be made. 

Third, although SBA had some measures to assess the effectiveness of PCRs and CMRs, select data these staff reported were not 

reliable and report controls and reviews had weaknesses. We recommended that SBA take measures to improve data reliability and 


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internal controls. SBA agreed with our recommendations and has 

been updating guidance for the PCR and CMR programs to provide 

clear instructions for reporting. SBA also said it would implement 

a method to verify and review PCR and CMR documentation. For 

the purpose of this statement, I will just state here that we do address resource challenges with the PCR and CMR community. It is 

in my written statement. 

Chairman Mulvaney, Ranking Member Chu, this concludes my 

statement. I would be happy to answer any questions you or other 

members of the Subcommittee may have. 

[The statement of Mr. Shear follows on page 36.] 

Chairman MULVANEY. Thank you, Mr. Shear. 

And just a word to the witnesses. We are not under some of the 

same time constraints that we have been in previous meetings so 

you will see the lights go off in front of you. Green means you are 

well within your five minutes, yellow means you have moved within a minute, and red means you are over your five minutes. But 

I will assure you that given the fact that we are not under the gun 

here today, if you need to go a minute or two over we would much 

rather get more information rather than less. So do not feel constrained completely by the five minutes. 

And with that, Ms. Park. 

STATEMENT OF JIYOUNG PARK 

Ms. PARK. Good morning, Chairman Mulvaney, Ranking Member 

Chu, and members of the Subcommittee. 

I appreciate being invited here this morning to discuss the U.S. 

General Services Administration’s Mentor-Prote ́ge ́ Program. And I 

would like to submit my written testimony for the record. 

The purpose of GSA’s Mentor-Prote ́ge ́ Program is to leverage private sector expertise to assist small businesses and enhance their 

ability to compete for federal government contracts. Navigating federal contracting can be complex and daunting, and GSA’s MentorProte ́ge ́ Program is an easy to navigate program that helps reduce 

barriers to bringing small business private sector partners to the 

government. 

GSA established its Mentor-Prote ́ge ́ Program in September 2009, 

and over the past two years we have developed a robust program 

that is already yielding tangible results in the form of contracts 

awarded and jobs created. 

Now, our program’s success is a testament to the commitment 

and hard work of the GSA team, and in particular, of our program 

manager, Tony Eiland, who is also here today. And I should point 

out and clarify that I unfortunately cannot accept credit for standing up the program as it was in motion before I arrived at GSA, 

so I just wanted to make that clear. But we have been working on 

it together as a team and very proud of the accomplishments. 

And more importantly, our success is due to the program participants themselves. Prote ́ge ́s have reported 41 new contracts, one as 

a result of assistance received from their mentors, with a total 

value at up to $260 million, including in some cases indefinite delivery, indefinite quantity contracts with high dollar ceilings spanning multiple years. We have also seen significant subcontract 

awards from mentors to their prote ́ge ́s. The prote ́ge ́s have reported 


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54 new subcontracts from their mentors. Last, but not least, participants have reported creating 132 new jobs as a result of participating in the program. Some jobs were the result of new contract 

awards and others were the result of mentors’ assistance to expand 

existing contracts. Given today’s economic climate, these new jobs 

certainly are a particularly important statistic. 

There are many specific examples of success I could share but I 

will share just two examples we have seen. One service-disabled 

veteran mentor helped its prote ́ge ́, another service-disabled veteran-owned small business, to bid on an opportunity by sharing 

tips on how to form a winning proposal team and by providing 

technical writing assistance on the proposal. As a result, the 

prote ́ge ́ won an IDIQ valued at $50 million over the life of the contract. The mentor was not part of the contract team, which demonstrates the mentor’s investment in the prote ́ge ́’s business growth 

as a long-term strategic partner. 

Another prote ́ge ́ firm struggled with proposal and bid decisions. 

The company was bidding on many opportunities without a clear 

focus. The mentor taught that the prote ́ge ́ had to develop a clear 

bid-no bid review process and a targeted bidding strategy. After implementing this new process, the prote ́ge ́ bid on 44 opportunities 

in a six-month period, winning 11. The mentor’s help made all the 

difference between the prote ́ge ́ wasting valuable bid and proposal 

dollars and growing their bottom-line. 

In total we have 81 prote ́ge ́s directly benefitting from guidance 

and assistance from their mentors. Our prote ́ge ́s are all small businesses representing all socioeconomic categories, including 8(a) or 

small disadvantaged business, woman-owned small business, veteran and service-disabled, veteran-owned small business, and those 

businesses located in historically underutilized business or 

HUBZones. Forty-five, or more than half of the prote ́ge ́s, are small 

businesses owned by veterans. 

In closing, GSA has high expectations for the continued success 

of our Mentor-Prote ́ge ́ Program. In this tightened fiscal climate, 

our goal is for GSA’s mentor-prote ́ge ́ relationships to spur innovation in areas of information technology, open government, and 

high-performing and efficient green buildings consistent with 

GSA’s mission. The program can help drive government transformation, reduce government waste, and create high-paying American jobs. 

The 41 new contracts, 54 new subcontracts, and 132 new jobs the 

program has created are just the beginning. 

We look forward to continuing to improve GSA’s Mentor-Prote ́ge ́

Program through collaboration with the program participants, 

SBA, other agencies, and following GAO’s recommendations as 

well. For example, pursuant to GAO’s recommendation, we have 

made steps to implement a post-completion assessment that will 

allow us to track prote ́ge ́ firms’ success after they exit the program. 

Now, our first graduation is anticipated to happen early 2012. 

I welcome the Subcommittee’s questions. Thank you. 

[The statement of Ms. Park follows on page 31.] 

Chairman MULVANEY. Thank you, Ms. Park. And again, we are 

going to save our questions till the end. So we will move down to 

Mr. Jordan. 


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STATEMENT OF JOSEPH G. JORDAN 

Mr. JORDAN. Thank you. Chairman Mulvaney, Ranking Member 

Chu, and members of the Subcommittee, thank you for inviting the 

U.S. Small Business Administration to testify today. 

Our top priority at SBA is to maximize opportunities for small 

businesses and ensure that the benefits of our programs flow to the 

intended recipients. My office works each day to provide increased 

opportunities for eligible small businesses to compete for and win 

federal contracts. We are always looking for ways to increase small 

business contracting opportunities, and I am proud to say that in 

the two and a half years I have been in my position, we have made 

significant and quantifiable improvements. The federal government spends about $500 billion every year 

through federal contracts, and it is with SBA’s support and assistance small businesses receive nearly $100 billion of that spend. In 

fiscal year 2010, small businesses won 22.7 percent of federal contracting dollars. This marks the second consecutive year of increase 

and the largest two-year increase in over a decade. SBA is committed to meeting and exceeding the 23 percent statutory goal and 

getting more contracts into the hands of small businesses. At the 

same time, we are working to implement the provisions of the 

Small Business Jobs Act and eliminating fraud, waste, and abuse 

from all of our programs. 

With these priorities in mind, please allow me to discuss the 

three Government Accountability Office reports that are the subject 

of today’s hearing. The first report concerned SBA’s Procurement 

Center Representatives (PCRs) and Commercial Marketing Representatives (CMRs). These members of my team play a critical 

role in ensuring small businesses receive their fair share of government contracts. They are located at the largest federal agency buying activities across the country and work closely with acquisition 

teams at these agencies to ensure small business utilization is 

maximized. 

We recently conducted an analysis of our PCR and CMR functions and their role and responsibilities. This analysis helped us 

determine how we can more effectively utilize these resources to increase opportunities for small business contracting. Our analysis 

also looked into whether we have appropriately allocated our PCRs 

and CMRs in the most effective and efficient way. Furthermore, in 

the fiscal year 2012 budget request, the president asked for additional full-time employees, including PCRs, to provide oversight for 

small business contracting programs and work towards eliminating 

fraud, waste and abuse. 

The second GAO report is in regards to the Offices of Small and 

Disadvantaged Business Utilization that work in each federal agency. SBA works very closely with the directors and staff of these offices. We chair monthly meetings with the OSDBU directors to 

share program updates, discuss policy and regulatory changes, and 

discuss best practices. We also work with the OSDBU directors to 

set small business goals for their agency and help them develop 

plans to meet those goals. 

The report discusses Section 15(k)3 of the Small Business Act, 

which says the OSDBU directors should report to agency heads or 

deputy agency heads. SBA strongly supports the underlying policy 


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set forth in this statute and is asking all agencies to ensure they 

are in compliance with the requirements. In fact, SBA administrator Karen Mills recently sent a memorandum to all agency 

heads and deputy heads reinforcing the importance of this requirement and asking each agency to ensure they are in compliance. 

SBA strongly believes in the importance of the OSDBU role and 

works closely with the White House and Office of Federal Procurement Policy to engage senior officials at each agency on the importance of small business contracting and also keep those agencies 

accountable to their goals. 

The third and final report concerned Mentor-Prote ́ge ́ Programs. 

Mentor-Prote ́ge ́ Programs are arrangements in which mentors, 

typically experienced prime contractors, provide business development assistance to small business prote ́ge ́s. In return, the program 

provides incentives for mentor participation, such as credit towards 

subcontracting goals and additional evaluation points towards the 

awarding of contracts. Mentors may also enter into joint venture 

agreements with prote ́ge ́s to compete for government contracts. 

SBA currently runs an Overseas One Mentor-Prote ́ge ́ Program, 

which is for participants in the 8(a) Business Development Program. However, the Small Business Jobs Act gave the agency authority to implement additional programs for HUBZone, womanowned, and service-disabled veteran-owned small businesses. We 

are in the process of implementing these new programs. Other federal agencies also have their own Mentor-Prote ́ge ́ Programs. SBA 

does not oversee the other agencies’ Mentor-Prote ́ge ́ Programs but 

we are supportive of efforts made to increase opportunities for 

small businesses to compete for and win federal contracts. 

In addition to sharing our views on the three GAO reports, I 

would also like to take this opportunity to share with you two important initiatives our Office of Government Contracting and Business Development is currently focused on. The first is our effort to 

combat fraud, waste, and abuse in all small business contracting 

programs. We have no tolerance for fraud, waste, or abuse, and 

have implemented a comprehensive three-prong strategy to identify, prevent, and pursue non-compliance or fraud across all of our 

government contracting programs. The three prongs of our fraud, 

waste, and abuse strategy are as follows: (1) effective certification 

processes; (2) continued surveillance and monitoring; and (3) robust 

and timely enforcement. 

The other issue I would like to discuss is in regards to our 

HUBZone or historically underutilized business zone program. 

With the public release of the 2010 census data, a number of existing areas will no longer be designated HUBZones due to the statutory mandate to remove these past redesignated areas. This mandate will have an impact on thousands of existing HUBZone firms 

who will no longer qualify for the program. Extending these firms 

eligibility can only be done by Congress. SBA is happy and willing 

to work with Congress on any proposals related to this issue to promote economic development and employment growth in distressed 

areas. 

As demonstrated by the initiatives and efforts described in this 

testimony, SBA has taken great strides to strengthen our Small 

Business Contracting Programs and strategies for combating fraud, 


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waste, and abuse. These efforts are critical in ensuring small businesses gain access to federal contracting opportunities so that they 

can grow their businesses and create jobs. 

Thank you for allowing me to share SBA’s views and initiatives 

with you today, and I will be happy to answer any questions. 

[The statement of Mr. Jordan follows on page 25.] 

Chairman MULVANEY. Thank you, Mr. Jordan. And here is what 

has happened in the meantime. We have an unexpected vote as you 

can see up on the board, so what we are going to try and do is, 

I think Mr. Critz has just a few minutes of questions. I am going 

to let him ask his questions and then welcome you back if you 

want to come back. But Ms. Chu and I will be back at probably 

a quarter to 11. So what we will do is go to your questions now, 

Mr. Critz, and then Ms. Chu and I will come back after we adjourn 

for a few minutes. 

Mr. CRITZ. Thank you, Mr. Chairman. And I just have actually 

two or three quick questions. 

Mr. Shear, you had mentioned at one point that Commerce, Justice, Treasury, and there was a fourth that were not complaint. 

And I think Interior and someone else—— 

Mr. SHEAR. It was State. 

Mr. CRITZ. And State were not compliant. So you say they are 

not complaint; they disagree. Is the final outcome that you just 

agree to disagree or what comes next? 

Mr. SHEAR. It is a complex question even though it started out 

as a simple question. 

With Justice and State, we just looked at the reality of what the 

interaction is between the OSDBU directors and senior officials— 

or the interaction with the heads of the agency or the absence 

thereof. It was strictly based on the facts that we collected from our 

audit. And we think the facts on that are quite clear. So we are 

at a disagreement there and we state it, and continue to maintain 

what we found. 

With Treasury and State, the disagreement is over—what they 

have done is that they named somebody an OSDBU director who 

reports to the head or deputy head of the agency but then they delegate the authority. And then they cite a legal argument dealing 

with delegated authority and whether it can be withheld or not. We 

think the delegated authority is withheld by implication in the 

Small Business Act in the relevant section. So with Treasury and 

State it is a legal disagreement. 

What we do about all of this, the chairman raised a very good 

point. He has sent letters to these agencies. There is going to be 

oversight of these agencies. When we were writing our report, our 

report reviewer said—what happens to an agency that is not in 

compliance? We said there really are not any sanctions so maybe 

there will be congressional oversight. That is one reason we put in 

our recommendation that if they are not going to comply they 

should state in reporting to Congress why they do not comply to 

create some burden of proof on these agencies. So we are trying to 

move the ball forward but there is a disagreement here. 

Mr. CRITZ. You also mentioned that at some point that you mentioned resource challenges that I guess some offices are—and I am 

assuming what you are saying is that they do not have the funding 


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to put in place some of the things that they need to do. This is not 

the same issue though. 

Mr. SHEAR. No. It is a different issue. And it is an important one. 

So I thank you for asking that. 

With the PCRs and CMRs, starting a few years ago we recommended to SBA that they do a resource assessment of the adequacy of the PCRs to basically fulfill their responsibilities. In response to that they have had an evaluation done and Mr. Jordan 

referred to that evaluation. That evaluation was not completed so 

therefore, it was not shared with us during our work that I am testifying on today. But we think there are some real resource issues 

here in terms of the ability of PCRs and CMRs to carry out their 

functions. And we think SBA should be close enough to the situation and be able to do an evaluation of its own needs and share 

with the Congress and with us and other parties how they plan to 

address what seem to be shortcomings in the ability of PCRs to 

carry out their functions. 

Mr. CRITZ. Good. Good. Thank you. 

Ms. Park, the Mentor-Prote ́ge ́ Program from the reading that I 

had, the reporting that comes post, is it not dictated that the reporting is from the mentor and the prote ́ge ́? I guess sometimes it 

is just the mentor that people go to and sometimes it is just—it is 

a joint. And I am curious. This is not clearly defined? 

Ms. PARK. So in GSA’s Mentor-Prote ́ge ́ Program we currently 

conduct an assessment on a semi-annual basis of the prote ́ge ́s and 

the mentors jointly. They submit from both perspectives how the 

agreement is progressing while the expectations set forth are being 

met, what contracts have been won by the prote ́ge ́, what jobs have 

been created by the prote ́ge ́, and you know, to what extent the 

mentors have fulfilled their commitment and vice versa in terms of 

commitments and expectations being met. 

Now, what the GAO report guides GSA to do is to implement a 

post-completion evaluation so that if a mentor and prote ́ge ́ have set 

up a one-year agreement, after that one year has been completed, 

to then continue to track the progress to see to what extent 

prote ́ge ́s can compete successfully for contracts without the assistance of their mentor. So that is something we have already taken 

steps to implement. 

Mr. CRITZ. Thank you. Thank you, Mr. Chairman. 

Chairman MULVANEY. Thank you. And I would hope to have Mr. 

West get some time. Mr. West, do you want to try and proceed or 

do you want to come back? 

Mr. WEST. Thank you, Mr. Chairman and ranking member. 

First question, the PCRs and CMRs, full-time or part-time positions? 

Mr. JORDAN. These are full-time positions. 

Mr. WEST. Okay. Very well. 

We talked about meeting the 23 percent contracting stipulation 

and we are at 22.7. What are we as far as vet-owned, womanowned, minority-owned right now? 

Mr. JORDAN. I can get you that. In 2010, so the small businesses 

overall were 22.7 percent as you said. Woman-owned small businesses were just over four percent. Small disadvantaged businesses 

were just under eight percent. Service-disabled veteran-owned 


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small businesses were two and a half percent. And HUBZone businesses were 2.8 percent. 

Mr. WEST. Now, how does that relate to the statutory requirements? 

Mr. JORDAN. To the goals? I’m sorry. So the woman-owned businesses are four percent towards a five percent. So about a little less 

than a percent short. SBDs were at eight percent towards a five 

percent goal, so significantly exceeding. Service-disabled vets, two 

and a half percent of a three percent goal, so half a percent short. 

And HUBZones, 2.8 percent of a three percent. 

Mr. WEST. Very well. 

Last question. What do we see as the average amount of time 

that we have this mentor-prote ́ge ́ relationship going on? Is it a long 

umbilical cord? Short umbilical cord? 

Ms. PARK. I would be happy to answer that about GSA’s program. We ask of the mentors at least a one-year commitment as 

a requirement and up to three years. 

Mr. WEST. Do we see any instances of, you know, some bundling 

from the mentors to the prote ́ge ́s as far as, you know, getting them 

to come on as subcontractors or are they truly operating independently to help people on contracts that are, I guess, separate from 

what their field of expertise is? 

Ms. PARK. We have seen good contracts awarded both on the 

prime and the subcontract level to prote ́ge ́ firms. Certainly, subcontracts are a great way for small businesses to enter the federal 

marketplace either as a starting point or as continued ways to win 

federal contract work. 

Mr. WEST. Okay. 

Mr. JORDAN. And Congressman, I will just expand. For the 8(a) 

Business Development’s Mentor-Prote ́ge ́ Program we did see some 

issues with the way that the joint ventures between those mentors 

and prote ́ge ́s were happening. And in March we released the first 

comprehensive revision of the 8(a) regulations in more than a decade which addressed a lot of the issues around that. 

Mr. WEST. Very well. That was a concern that I had. 

Mr. JORDAN. Absolutely. 

Mr. WEST. Thank you very much. Mr. Chairman, I yield back. 

Let’s go vote. 

Chairman MULVANEY. Exactly. So we will adjourn. We will adjourn now until 11 o’clock, although I will tell you Ms. Chu and I 

will come back as quickly as we can to try and move through. So 

if you can stay in the area that will be great. We will adjourn until 

11 o’clock. 

[Recess.] 

Chairman MULVANEY. Thanks again to everybody for sticking 

around. I apologize for the inconvenience. Unfortunately, it is 

something that neither Ms. Chu nor I have any control over. But 

it was nice to welcome the two new members of Congress. 

We will pick up on questions. And as is my practice I will defer 

to my ranking member and let her ask to her heart’s delight and 

then I will go last. So, Ms. Chu. 

Ms. CHU. Okay, thank you. Thank you, Mr. Chair. 

Ms. Park, you described some great progress that was made with 

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lion worth of contracts. What I was wondering was are there certain departments where this relationship works well more so than 

others? And the reason I ask is because we see with the OSDBU 

compliance that there is variation, a great deal of variation with 

the departments. And I am wondering if there are certain departments, like say for instance with the Department of Defense where 

there is more compliance than with others because it lends itself 

more to that because there is a lot of subcontracting that goes on 

there? And if there is variation, how do we better enhance the 

other departments in this area? 

Ms. PARK. Well, GSA’s Mentor-Prote ́ge ́ Program focuses on, you 

know, developing suppliers, subcontractors, and primes in industries where we do business. That is really in support of our mission. So right now we have, you know, primarily in professional 

services, construction services-related participants in the program. 

Facilities maintenance as well. I do not know if there are, you 

know, particular compliance hurdles that may be, you know limiting in other agencies’ programs. I can speak about GSA’s program. It is really open to any and all industries that GSA does 

business with. We have, you know, seen interest primarily from 

those industries I mentioned that we do, you know, a preponderance of our business with, but certainly it is open to any and all 

businesses, including those on the schedules in the schedules program. 

Ms. CHU. So do you see certain industries where it is easier to 

set up that kind of Mentor-Prote ́ge ́ Program? 

Ms. PARK. Well, for, you know, for us I do not think it is really 

industry specific. Certainly, with our Public Building Service we, 

you know, primarily that is construction-related services, facilities 

maintenance. So we do have a good number of participants from 

those industries. We also have participants from professional services, IT, you know, management consulting and strategy services 

that are in the Schedules Program for GSA. So, you know, I really 

do not know that there are specific industry or industry-specific 

challenges to participating but certainly we see interest from particular firms in certain industries in support of where, you know, 

GSA spends money and where our contract dollars are. 

Ms. CHU. Mr. Shear, did you find any differences there? 

Mr. SHEAR. I am going to make a general statement about what 

we were mandated to do to set up the answer if I could. We 

thought it was great to receive a mandate from Congress to look 

at Mentor-Prote ́ge ́ Programs, partly that it seems like there has 

been very little evaluation of these programs even though the number has grown to 13. And even when we started it seemed like everybody was shocked to hear that there were 13 programs. And it 

was in a way very good that we had a short time fuse. You know, 

it was a mandate with a specific date. So it was good because we 

scoured the universe and we were able to describe the programs, 

at least the controls that are on paper, to operate these programs. 

And we could at least describe in our report how they vary. 

But the question you raise is an extremely important one. And 

as auditors, here we looked at controls on paper but we said we did 

not test the controls of these various programs. And one of the first 

things that would go off in my mind if we did have the time or in 


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the future did look at the controls around these programs is how 

about the agencies where it seems the OSDBUs do not play as 

prominent a role, do not have the right reporting structure, might 

have budget problems. We see it on the surface from just going into 

each agency. But you raise a great question that we hope that 

sometime in the future we will be able to go in and get a better 

handle on particularly on the agencies that seem to have OSDBUs 

that have limited staff resources and those that are not reporting 

to the senior-most levels to see how well those programs are being 

carried out. 

Ms. CHU. Thank you for that. 

Mr. Shear, I also wanted to ask about the Procurement Center 

Representatives, the PCRs, and your report recommends several 

options for increasing PCR effectiveness. Certain ones seem to be 

ones that could be implemented by the administration without any 

legislative action. For instance, increasing the face-to-face interactions, increasing service capacity, and improving the training. 

And has SBR responded to or implemented any of these actions? 

Mr. SHEAR. In our report we discuss these various options and 

we discuss them with the PCR community. So we explored these 

options. It is in the context that in the past we have recommended 

that SBA has to assess its PCR workload and its resources for this 

activity. So what we found from that was consistent with the idea 

that most of these options do involve greater use of resources so it 

is one of the reasons we have always been very anxious to hear 

about the evaluation that SBA had of their PCR resources and 

what results from that. And Mr. Jordan, you know, alluded to that 

in terms of the president’s 2012 budget request. So a lot of these 

have to do with greater resource availability, whether it is through 

IT or just basically having more people or increasing interaction by 

increasing the travel budget. All these are options that could improve PCR effectiveness. 

Ms. CHU. And, of course, I must ask Mr. Jordan. 

Mr. JORDAN. Sure. Yes, as Mr. Shear says, we agreed with most, 

if not all of the recommendations in the GAO report. We had already begun a proactive analysis of our Procurement Center Representative and Commercial Marketing Representative workload 

with an eye towards maximizing both the effectiveness of these 

folks in getting contracts awarded, both the prime and sublevel to 

small businesses, but also the efficiency. And that is where, you 

know, we have got to figure out what which level is cross functional 

performance important. So these folks also handle size protests, 

service-disabled veteran-owned small business status protests. 

They do surveillance reviews and some of these other functions 

that the GAO commented on, at which point is it very helpful to 

have them cross-train and cross-functional versus that become a 

workload balancing challenge and you really want specialization. 

And we did conduct this robust analysis both where they are located and what they are doing and have started implementing 

some of those changes already and have implemented some of those 

changes already. But in addition, as the GAO noted, some of those 

workload and resource challenges really need to be addressed by 

increasing the workforce of the PCRs and to keep from robbing 

Peter to Paul and taking them from somewhere else and then causVerDate Mar 15 2010 15:46 Nov 30, 2011 Jkt 071281 PO 00000 Frm 00018 Fmt 6633 Sfmt 6602 E:\HR\OC\A281.XXX A281

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ing another problem, the president did ask for an increase in this 

workforce. 

Ms. CHU. One of your recommendations, Mr. Shear, was to allow 

PCRs to dispute procurement if their recommendations were not 

implemented. And I was not sure whether that one required legislation. Does it? 

Mr. SHEAR. I would have to defer to Mr. Jordan. I think it might 

require legislation to provide that but I am really not sure on that 

particular option. And I don’t know, Joe, if you—— 

Mr. JORDAN. Which one is it again? 

Ms. CHU. That is the one allowing the PCRs to dispute the procurement if their recommendation is not implemented. And also I 

would like to know why would their recommendations not be taken 

if they have gone to all this trouble to put such one together. 

Mr. JORDAN. Sure. So we have an important tool right now in the 

PCR toolkit to address that issue, which is called the Form 70. And 

this is one of the things that make PCRs as a cadre so effective 

and important is that if they file a Form 70, that procurement that 

they are in disagreement with has to stop until there is a resolution. And as we all know, we have an overall contracting officer 

workload. They want to get things through quickly and done well. 

And so they do not want the procurement to stop. And it can be 

very helpful as a specter, you know, not having to use it but knowing that you could. And then we do use it sometimes and there is 

a series of escalations if we continue to disagree between the buying activity that is issuing the contract and the PCR. So that actually is something that we do do quite a bit. 

Now, the best situations are where Procurement Center Representatives and the contracting officer workforce and the buying 

activities they cover are working together at the acquisition planning stage, at the program level, etcetera, so that you do not get 

to the end. But if a PCR disagrees that, you know, a contracting 

officer is trying to issue a contract to full and open competition and 

the PCR believes, no, there are two more small businesses that 

could do this, you must set it aside, the PCR can stop that procurement until that is resolved. And there is a series of protests that 

rise up all the way to the secretary level. 

Ms. CHU. And do you know whether they are successful or not? 

Mr. JORDAN. We find, one, again, the overwhelming majority of 

the time it does not need to get to the actual issuance of a Form 

70, just saying we disagree to this level we are going to precipitates 

a conversation in which the disputes are resolved. And I do not 

know of really any cases in my two and a half years here whereas 

it has gone up a chain of protests. We have not agreed by the end. 

Mr. SHEAR. And I will apologize for bouncing back but one of the 

options we looked at had to do with the role of PCRs if they disagree with the subcontracting plan. And that for them to take an 

action specific to a subcontracting plan would require statutory 

change for them to do that. So the Form 70 process I really thank 

Joe Jordan for pointing out how the Form 70 process works but 

there is not the authority—the PCR does not have the authority to 

go through that type of Form 70 action when the objection is to the 

subcontracting plan. 


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Ms. CHU. Okay. Mr. Shear, your report mentions that many of 

the OSDBU directors felt they had a lack of influence on the procurement process and that hinders their responsibility, their ability 

to carry out the responsibility. And that the OSDBU directors 

seemed to have a conflict with the authority of the contracting officers in the process. So is the tension between these offices intended 

or does this need to be corrected? 

Mr. SHEAR. There are two types of tensions here and it is a great 

question. So first I will start with the tension that I think is intended to be there and that is OSDBU directors are in a position 

to be advocates for small businesses. And so they are there to create some tension so that when contracting officials are making 

awards, they are doing the right market analysis, and they are taking the appropriate actions for set asides. So it is to create a tension for—to carry out the Small Business Act provisions. So that 

we would refer to as a pretty healthy tension. 

There is some tension, and this especially seems to be present in 

those agencies that do not comply with the reporting structure. 

And those tend to be those where we hear from OSDBU directors 

that while that function is taken care of by the contracting officials, 

well, in a sense that there can be in a reporting relationship, if it 

does create a situation where a healthy conflict is not there, if 

there is a different conflict which plays out where the OSDBU does 

not have enough influence, then it can lead to a result where they 

are not able to really fulfill their purpose. 

Ms. CHU. And do you think there should be an increase in the 

authority of the OSDBU? And is there a way to do that without 

adding to the complexity or length of the contracting process? 

Mr. SHEAR. There seems to be two issues that are most associated with what I will call the prominence of the OSDBU in carrying out their mission. One tends to be reporting structure and 

the other one tends to be budget and resources. And those are the 

two that stand out to us. It is very hard for us to evaluate certain 

cases where the OSDBU might say the contracting officials take 

care of that function because in some agencies it might be that the 

OSDBU has created a sense of culture where the contracting officials are very close to serving the needs of small businesses, that 

is including small businesses. So it is hard for us to make that distinction. So we find ourselves coming back to why did Congress set 

things up in this way? And it makes sense to us. 

Ms. CHU. Okay. And finally let me ask this. I know that SBA, 

Mr. Jordan, asked for 24 full-time employees. Are you devoting 

these—any of these employees to the PCRs and the CMRs? 

Mr. JORDAN. Yes, absolutely. So the exact split is something that 

we would be working through based on the implementation of the 

analysis we discussed but it would be to handle those oversight and 

fraud, waste, and abuse prevention functions. So yes, you would 

have more PCRs. Yes, you would have more CMRs out of that, in 

addition to looking at how can we best handle the size protests, 

status protests, and surveillance reviews which are also ongoing 

continuous improvement projects that we do in discussion with the 

OSDBU community, GAO, and Congress. 

Ms. CHU. Okay, thank you. I yield back. 

Chairman MULVANEY. Thank you, Ms. Chu. 


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My questions are going to be all over the board. And while I 

think I have a feel for who they should be directed to, please, I encourage you, if you feel like you can contribute something, please 

feel free to chime in. 

In no particular order, I think my first question is to Mr. Shear 

and Ms. Park regarding the mentor programs. In fact, I think 

maybe it is to everybody. How much uniformity is there across the 

differing mentor programs of the different agencies? And is there 

any system that is set up to help deal with somebody who might 

want to participate in the program at the DoD and then go over 

and participate in the GSA? And if so, is that system working? 

Mr. Shear, we will begin with you and then Ms. Park. 

Mr. SHEAR. Your direct question we did not address—the ability 

of small businesses to participate as prote ́ge ́s, let’s say in multiple 

programs. We did not look at that. We know that when you have 

13 programs and there has not been a lot of evaluation looking 

across the programs, and I would say ours is again kind of like a 

first effort of just trying to describe them—— 

Chairman MULVANEY. Can you cross—is there any value to 

crossing? If I run a small business that does three or four different 

things and I want to do a job for the DoD and I want to participate 

in that mentor program, is there any demand for—do I learn what 

I need to learn about all government contracting if I am a prote ́ge ́

in the DoD program? Does it carryover to GSA or do I have to— 

is there a benefit then for me to go to GSA separately? 

Mr. SHEAR. I will answer that by saying that there is a benefit 

of going to each agency separately and where that—so it is not 

strictly a one-sided answer but the issue becomes what is the small 

business that I am providing and what agencies have supply chains 

that I could fit into best? So I won’t say that there should not be 

just one Mentor-Prote ́ge ́ Program across the government. I know 

there is some interest in that. So I cannot opine on that one way 

or the other. But the challenge with that would be to ensure that 

businesses that can be successfully applied to one supply chain but 

not others are really incorporated by the Mentor-Prote ́ge ́ Program. 

So the role of the individual OSDBU in running the MentorProte ́ge ́ Program becomes important. 

At the same token, one of the things that we certainly discussed 

a lot looking at our three reports together and it kind of points to 

the Interagency Taskforce that the president created and the role 

of SBA with the various OSDBUs—is that is there a way to identify best practices or a certain structure where you can figure out 

what is the appropriate role for the OSDBU and what is the appropriate role for PCRs and the various entities because they bring a 

different tool mix to the table. How do you reconcile all of these? 

And these really come to a head when you start talking about the 

roles of these various entities in running Mentor-Prote ́ge ́ Programs. 

So it is a two-sided answer but it is one that there are benefits to 

some businesses. If you have a business that can be part of the 

supply chain of multiple agencies, there could be a benefit of having one program. There certainly would be a benefit if the programs were a little more transparent and there was some standardization to those programs. But having one program could leave 


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out certain prote ́ge ́s that might fit in best with basically the supply 

chain and one agency. 

Chairman MULVANEY. Ms. Park, go ahead with that. 

Ms. PARK. We do collaborate with other federal agency program 

managers of the other Mentor-Prote ́ge ́ Programs. You know, our 

program manager, Tony Eiland, does meet and talk with the other 

agencies’ programs. To what extent there is uniformity across programs, you know, I do not believe there is 100 percent uniformity 

either in the application process or who can participate depending 

on what kind of small business category you are in. So, you know, 

there is probably opportunity for that to be streamlined. I can 

imagine that, you know, the business community, you know, fewer 

forms or fewer applications, fewer agreements would, you know, 

would be a good thing. 

But we do see that there are participants in our program that 

are also participants in other agencies’ programs. You know, each 

agency has our specific mission and, you know, our specific supply 

chains and looking to develop a supplier base that supports our 

mission. So there surely is a specific mission that each MentorProte ́ge ́ Program is supporting. Certainly with GSA’s wide contracting vehicles, you know, we do serve a broad range of industries that also support other agencies’ missions. 

Chairman MULVANEY. If we were to—and I recognize the fact 

that one of the complaints—complaint is too strong a word, but one 

of the concerns that you raised, Mr. Shear, is the sort of lack of 

evaluation, the lack of input, the lack of transparency. But if we 

had a chance to talk to the firms who had been prote ́ge ́s, what 

would they say is the best part about the program? What does the 

Mentor-Prote ́ge ́ Program help them with the most? What is the 

hardest part about being a government contractor and how does 

that problem get solved through the Mentor-Prote ́ge ́ Program? 

Start with you, Mr. Jordan. 

Mr. JORDAN. So when Congress passed the Small Business Jobs 

Act, which asked SBA to expand our 8(a) Mentor-Prote ́ge ́ Program 

to include HUBZone-eligible firms, women-owned small businesses 

and service-disabled vets, we wanted to figure out that very question, how best to do that. And so as part of a 13 city listening tour 

we asked small businesses, both who had participated in our program or perhaps had participated in another Mentor-Prote ́ge ́ Program or had not yet participated, what was the benefit they were 

looking for or had experienced. What we overwhelmingly heard is 

that it is a great opportunity to learn from somebody who has done 

this how to do it. You know, there are various kind of shades of 

that answer but it was essentially we do not yet have the capability or capacity to do this. It is really hard to just learn by reading the FAR. 

Chairman MULVANEY. So is that paperwork? Is that development 

technology standards? What is it? 

Mr. JORDAN. So that, with our 8(a) Program, we specifically say 

that that mentor and prote ́ge ́ who want to come together, the mentor needs to prove it has a defined skill that meets the prote ́ge ́’s 

defined need. So sometimes that is marketing. How do you get in 

front of federal agencies? How do I sell the government? For other 

people it is the back office systems. I do not know how to set up, 


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you know, defense or, you know, DSEC-compliant system accounting systems and all these types of things. It depends on what that 

prote ́ge ́ needs but it works best when it is not just a mentor and 

a prote ́ge ́ saying, hey, we both are in a similar industry; let’s figure 

out how we can best go get contracts. But rather, the prote ́ge ́ has 

a defined need. The mentor has a skill there that they can help 

build the capability and capacity of the prote ́ge ́. They come together and then the key question is how do you provide a mentortrue incentive to want to do that? You know, they are businesses. 

It is not always altruistic. So there has got to be some incentive, 

either DoD funds theirs, we waive affiliations so they can form 

joint ventures. There is a series of those, but make it a good 

enough incentive that they do come in but good enough controls 

that there is not the fraud, waste, and abuse that you could see. 

Chairman MULVANEY. Gotcha. I guess we will leave for another 

day the problem of how it got so complicated in the first place that 

we have to have this program. 

Let us talk about goals and accomplishments. Ms. Park, you had 

mentioned some numbers and in all candor I probably lost my 

notes on them. But regarding the number of jobs that you folks 

have helped create and the success of the program, could you give 

me those again? Do you have those readily? 

Ms. PARK. Sure. We have 123 new jobs, 54 new subcontracts. 

And then on prime contracts, let me flip to that page as well. 

Chairman MULVANEY. And there was a huge amount of money, 

several hundred million dollars. 

Ms. PARK. Two hundred sixty million dollars. 

Chairman MULVANEY. That is what it was. So here is my question because it sounds great and I congratulate you. This is not a 

small on the program at all but I guess my question is what did 

it cost us to get that? 

Ms. PARK. We have one program manager, full-time employee, 

who actually splits his time between this program as well as really 

being our service-disabled veteran-owned small business champion 

in the agency. And they really are overlapping and, you know, very 

complementary duties if you think about it. We have, you know, 

certainly a commitment to increase opportunities for veteranowned businesses in federal contracting and more than half of the 

prote ́ge ́s that are in the firm are veteran-owned companies. And so 

it really is a streamlined and efficient program. I think we have 

our program manager, Tony Eiland, who is really committed to 

meeting face-to-face with the businesses to help walk them through 

the process. I think the paperwork we have in place is streamlined. 

It is just a couple pages. We assume that folks coming to the table 

can, you know, have their business plan in place and their financials are in place. 

Chairman MULVANEY. Is it generally less than one full-time employee? Is that what you are telling me? 

Ms. PARK. Yes. Yes, sir. 

Chairman MULVANEY. Okay. That is helpful. 

By the way, Mr. Jordan, to the extent we were to put something 

on our websites for our constituents who want to do this, is there 

an overall website on how to do this? Is it part of the SBA? Or, 


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if I wanted to get in the Mentor-Prote ́ge ́ Program, where would be 

the one best place to go? 

Mr. JORDAN. SBA.gov, for sure. And we will get everybody exactly where they need to go. 

Chairman MULVANEY. Mr. Shear, let us talk a little bit about accountability. It sounds like you are getting a lot of the same treatment that the Committee got in terms of folks who are not responding or responding essentially saying that we do not think we 

are breaking the law. Is that a common occurrence when you try 

and look into these programs? Or is it a new development? What 

do you think is causing it? Is it just bureaucratic red tape? 

Mr. SHEAR. Well, I will just give a broad reaction because you 

are saying compared with other experience. Most of the time when, 

whether it is agencies or individuals who have a statutory responsibility to do something, there is normally some type of implications 

of not complying—there is some sense of punishment involved. And 

you are just seeing—it seems here that, we did this evaluation almost a decade ago. It is getting pretty close. And you had agencies 

not in compliance and you still have those agencies not in compliance today that were not complying at that time. And it does not 

seem like there has been any harm from that. So—— 

Chairman MULVANEY. What would be an appropriate sanction 

for that, seriously? 

Mr. SHEAR. All I can say is that you would think, at some 

point—we can point out but there are certain value judgments on 

what the severity of what you could say the deficiency is and what 

the reaction is. What we took the prerogative of doing, which in a 

way was creating work for you, was saying these agencies that are 

not in compliance, maybe we can push them a little bit if we say 

at least you have to come up with a, in that our recommendations 

do not carry legal sanctions either but the idea is if you have a reporting responsibility to Congress where you have to justify this it 

creates some burden of proof. From your standpoint you send letters. That is a great—that is more than I think what has happened 

in the past. If you have oversight hearings I think that can help. 

There are a lot of things that can help but as far as what is an 

appropriate legal sanction, that is where I just say that I do not 

have a basis to say what the right legal sanction should be. But 

it is quite clear there are a number of agencies that have not taken 

these requirements seriously. 

Chairman MULVANEY. Well, and we will be—we will be asking 

those folks to come in. To the extent sitting here is a sanction, I 

guess we will get them to do that. 

Jumping around a little bit to close up, Mr. Jordan, you mentioned Form 70. Did one of your PCRs issue that to the Coast 

Guard this year on insourcing? 

Mr. JORDAN. Yes, sir. 

Chairman MULVANEY. What was the outcome of that? And the 

only reason I ask is we have had separate hearings on insourcing. 

I just read your rules yesterday that you promulgated I guess on 

Monday—I assume that was you folks—on insourcing. So what was 

the outcome of that one? 

Mr. JORDAN. So it is not yet resolved. And I am happy to follow 

up as that progresses. There is still a lack of clarity as to whether 


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or not the Form 70 authority applies to insourcing since it is not— 

it is almost the reverse of a contract. We are not stopping a contract from going out; there is no contract anymore. So that is what 

we are trying to work out. Again, if there is one thing I have 

learned over the last couple years is that when we always rely on 

adversarial-type tools, we do not get the same progress as if we 

work collaboratively. So we are working closely with our counterparts at Homeland Security and at Coast Guard to try to figure out 

what is going on with that situation. Is there something thematic 

that we can do more? And like you said, Dan Gordon, the Office 

of Federal Procurement Policy, just re-released very clear guidelines on what is inherently governmental and closely associated, 

and we are working with him. 

Chairman MULVANEY. And again, I do not want to get off topic 

too much but since it is something we spent some time on, do you 

think that the rules that were issued on Monday will help bring 

some clarity to that specific situation? 

Mr. JORDAN. We have not gotten yet the information as to their 

precise rationale and impetus for insourcing the particular contract 

or function that you are talking about. So I am not sure if it was 

due to a cost savings which is one of the previous issues that drove 

insourcing, or whether it was because there was inherently governmental or closely associated function being insourced. So I do not 

yet know. 

Chairman MULVANEY. And staff tells me they have some information that they might be able to share with you, so thank you. 

We will continue to follow insourcing, by the way, throughout the 

course of this year. 

Let me see. Ms. Park, staff has a couple of questions and this is 

a good one. Under the Act, the SBA, you are supposed to have supervisory authority over personnel carrying out the functions of the 

SBA of the Act itself. Are you able to do that? Is that the case? Is 

that working well? 

Ms. PARK. I do have supervisory authority over the staff that I 

have in Central Office that do report directly to me. There are 

about 11 staff members. And we have a network of regional representatives across the country, another two dozen, and so together 

we carry out the functions of the Small Business Act. And in the 

different regions they report to the head of Contracting Activity for 

the Federal Acquisition Service currently with a dotted line reporting in to Central Office. And so we do work closely together to 

carry out the responsibilities of the Small Business Act. 

I would mention going back to your previous question about the 

half full-time employee that manages the Mentor-Prote ́ge ́ Program, 

the whole network of employees on the OSDBU staff do support the 

program as well as part of overall duties, so I would be a little bit 

misleading in saying just one full-time—half a full-time employee 

to clarify that. 

Chairman MULVANEY. Just a second. Clearly, we would consider 

that a success. Are there goals for your Mentor-Prote ́ge ́ Program? 

Are there specific goals in terms of the number of jobs, the number 

of contracts awarded? Are there any specific goals? We start the 

new year, I guess, next week or two weeks from now. October 1st 


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will be the beginning of our fiscal year. Do each of these programs 

have specific goals they are setting out to accomplish for FY2012? 

Mr. JORDAN. For SBA’s Mentor-Prote ́ge ́ Program, which is part 

of the 8(a), it does not have a programmatic specific goal, i.e., contracts awarded, dollars, those types of things. What it has is for 

each individual Mentor-Prote ́ge ́ agreement, those are good for a 

year and each year there is an annual review where SBA business 

development specialists talks with the prote ́ge ́ and the small business in our program and says you laid out a plan for what your 

specific needs were, how this mentor was going to help you. Did 

that happen? Can you show it to us? Because each one, like I said, 

has a slightly different metric for success but we want to make 

sure we are looking at that every year. 

Chairman MULVANEY. But at the—you are GAO, you are GSA, 

I lose track of all the letters. At the GSA, do you all have a goal 

for next year? 

Ms. PARK. Well, similar to SBA’s approach, we do not necessarily 

have specific targets for contracts awarded or dollars won. We do 

have, you know, an internal goal to have 100 agreements in place 

by I think the end of the calendar year is what we are looking at. 

But we really are taking the data and what we have seen the past 

two years to see if they make sense given kind of that baseline to 

see if it makes sense to establish specific goals. What we do not 

want to do is box in the program to be just about the contract dollars and the jobs won. We want to make sure that there is room 

to define success by the different business capabilities that are developed. Certainly, what are the specific needs of each business 

coming to the table? 

I will give you one example that is not necessarily about contract 

dollars or new jobs. Where the large business scale and training resources can be helpful if there is an ISO or CMMI IT-related certification that is fairly expensive that costs thousands of dollars to 

obtain, the smaller business could and has been in a couple of examples, been invited to participate in the training that the large 

business is already paying for their own employees. And so that is 

a clear benefit that is not necessarily defined in terms of contract 

dollars and jobs. 

Chairman MULVANEY. It is. But going back to Mr. Shear’s original point when he started and what you have just mentioned are 

very admirable qualitative goals. That makes it very hard to measure though, does it not, Mr. Shear, if that is what we are chasing 

if we have to look at everyone on a case-by-case basis, every single 

Mentor-Prote ́ge ́ Program to say was that individual program a success? Or should we have quantitative goals of some fashion to 

make your job a little bit easier? And they will still be friends either way. 

Mr. SHEAR. Both. Because when we look across the programs 

there is a lot of attention paid to the actual agreement and the 

needs of the prote ́ge ́. And I think both witnesses characterize that 

well. But there are certain things that are looked at, such as how 

well the prote ́ge ́s are doing while they are in the program. And we 

at least wanted the agencies to consider to look at how well they 

have done, even after they leave the program a year or two, such 

as the way DoD does. So there are advantages of trying to create 


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both. The concern sometimes if you try to create too many quantitative metrics is what becomes your baseline. And we recognize 

that many times you say, well, there has been job growth among 

the prote ́ge ́s this year, how about if we saw a decline, which at 

DoD you did see, when the recession hit. Well, you have to put it 

into a context and you have to have some sense of putting it into 

perspective. But quantitative goals, in looking at how well prote ́ge ́s 

do, can be very useful. 

Mr. JORDAN. And if I can just add, Mr. Chairman, the difference 

between quantifiably tracking these things which we are really trying to push on and setting goals in advance as Mr. Shear said is 

where some of the challenges—so we have 7,000 8(a) firms, approximately 500 mentor-prote ́ge ́ agreements. That is more of a 

process programmatic data point. Then you look at output. So how 

many contracts do they get? How many contract dollars? And we 

do track those metrics. But really what we are driving towards are 

outcomes in quantifying what those desired—or defining what 

those desired outcomes are and then quantifying them is where we 

are really spending a lot of time trying to push our thinking so that 

we can track whether these programs are actually successful in the 

goal of the program, which is to develop these businesses for longterm growth and sustainability. 

Chairman MULVANEY. Last question, I promise. You have mentioned a number, one of the quantifiable goals here is the overall 

SBA goal of the 23 percent participation. I mentioned in my opening statement 20 percent from last year. You mentioned 22.7 percent, which it does not sound like a lot, but when you are talking 

about half a trillion dollars worth of contracts it actually is a lot. 

What is the difference between those two numbers, Mr. Jordan? 

Mr. JORDAN. Without seeing the exact quantitative inputs you 

are using, what I would surmise is that we are using the same numerator of $98 billion in prime contracts to small businesses. 

Chairman MULVANEY. I have got 109,171. 

Mr. JORDAN. Let us use your number. I like that better. 

So we are pretty close in that the question is what constitutes 

the denominator, which for purposes of goaling we use small business-eligible dollars, which is a subset of all federal procurement 

dollars. So in 2010, the all federal procurement dollars spent was 

roughly $530 billion. The small business-eligible dollars that we 

use as the denominator was $435 billion. And so that is how we 

get to the 22.7. What drives that delta is a set of spend categories 

that have long been excluded, things that do not have to play by 

the rules of the Federal Acquisition Regulation. So either specific 

agencies, like FAA, or specific types of work, work done OCONUS 

(outside the continental United States), foreign military sales, 

those types of things are removed from the base. 

Now, I know it is a constant source of discussion and one that 

we have had and will continue to have with your staff, but the important thing from my perspective is when I joined we had just had 

three successive years of declining performance year after year. So 

instead of worrying about adding to or moving from that list of exclusions we said we want an apples to apples comparison as we fix 

this process and these programs to see if we can move performance 

in the right direction. And as I said, we, over the last two years, 


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have had the largest increase in over a decade having not added 

anything to nor removed anything from that list. So that is where 

we were and now, you know, we are happy to continue the dialogue 

of what comprised the delta. 

Chairman MULVANEY. We may do that. We may follow up with 

you in writing because that is one of the things that I know everybody on this Committee tracks, because that 23 percent number is 

burnt into our brain from the very first day that we are here that 

that is the goal. And you know where I am coming from which is 

that we just do not want you folks to say, well, 22.7 percent, that 

is close enough. We want to continue to have folks push and I 

know that you are doing that. 

Listen, thanks to everybody who stuck around. Thank you for 

waiting during the break. As always, it is an honor to see someone 

sworn in on the floor of the House. So thank you for accommodating us in that. We look forward to having you back sometime 

soon. Please do send to the extent you have friends at the Interior 

or at the Treasury or any of the other folks who have not responded to us, that this was a really good experience I hope today, 

notwithstanding the fact it took two hours. It is not going to be as 

much fun for them. So if you could let them know that we are serious about getting the information that we have requested. 

So thanks very much. With that we are adjourned. 

[Whereupon, at 11:58 a.m., the Subcommittee hearing was adjourned.] 


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