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77–845 2013

MARKUP OF COMMITTEE VIEWS AND ESTIMATES 

ON THE SMALL BUSINESS ADMINISTRATION 

FY2013 BUDGET, H.R. 3850, H.R. 3851, H.R. 

4121, H.R. 3893, H.R. 3980, AND H.R. 4118 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

HEARING HELD 

MARCH 7, 2012 

Small Business Committee Document Number 112–056 

Available via the GPO Website: www.fdsys.gov 


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HOUSE COMMITTEE ON SMALL BUSINESS 

112th Roster 

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 

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 


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C O N T E N T S 

OPENING STATEMENTS 

Page 

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

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESSES 

None. 

APPENDIX 

Additional Materials for the Record: 

Amendments ..................................................................................................... 32 

Cicciline Statement for the Record ................................................................. 36 


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MARKUP OF COMMITTEE VIEWS AND ESTIMATES ON THE SMALL BUSINESS ADMINISTRATION FY 2013 BUDGET; H.R. 3850; H.R. 

3851; H.R. 4121; H.R. 3893; H.R. 3980; AND H.R. 

4118 

WEDNESDAY, MARCH 7, 2012 

HOUSE OF REPRESENTATIVES

COMMITTEE ON SMALL BUSINESS, Washington, DC. 

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

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

Committee) presiding. 

Present: Representatives Graves, West, Herrera Beutler, 

Ellmers, Barlett, Hanna, Schilling, Keating, Owens, Peters, 

Bartletta, Vela ́zquez, Schrader, Critz, Clarke, Chu, Cicilline, Richmond, Hahn, Mulvaney, Tipton, Coffman, Walsh, King. 

Chairman GRAVES. Good afternoon, everyone. I call this Small 

Business Committee meeting to order. 

Today our first order of business is to consider our views on the 

Small Business Administration’s budget for fiscal year 2013. After 

considering the views and estimates, we will move into marking up 

legislation on improving the environment for small businesses interested in federal contracting. 

The president has often talked about the importance of small 

business to the American economy. Despite this, the administration 

could provide no one to defend the budget in a timely fashion so 

views and estimates could be submitted to the Committee on the 

budget by March 9, 2012. 

The president held a press conference in which he touted the 

need to restructure services offered by the government to help 

small businesses. Of course, this presumes that the best way to 

help small businesses is for the government to offer services. Instead, the best way, I think, to help small businesses is to revise 

the tax code, reduce unnecessary regulations, provide certainty 

with respect to health care costs, and lower the deficit. The budget 

certainly does none of these things. 

Given the significant debt owed by the federal government, the 

budget fails to take the opportunity to provide a roadmap for making the hard choices needed to reduce spending on small business 

programs without undercutting the capacity to provide the most 

necessary services to assist the growth of small businesses. For example, the budget requests an additional $10 million for entrepreneurial outreach and education on programs not authorized by 


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Congress or even examined by Congress. Even if the goals of such 

programs are worthy, it is irresponsible for the SBA to make such 

requests given the existing budget situation. 

Nor does the budget provide a roadmap on efforts needed to reduce spending by the SBA. The largest increase in the SBA’s budget is for subsidies needed to operate the guaranteed loan programs 

so small businesses can obtain scarce capital. A key component in 

determining the amount needed is how much the government can 

expect to recover if the loan defaults. The SBA provides no path to 

improve such recoveries or plans for revamping the computer systems that manage these loans. 

Even though the president did not offer a budget which made 

hard choices and no one from the SBA was available to provide insight into the budget, the views and estimates before us today do 

make hard choices and provide a roadmap for a leaner but still robust agency that can provide necessary services to small businesses. 

The views and estimates letter recommends eliminating a variety 

of duplicative programs at the SBA. Even with these cuts, the SBA 

will necessarily face an increase in their budget. 

The budgetary increases stem entirely from the costs of operating 

the SBA’s conventional and disaster lending programs. Yet, the 

president’s budget made no recommendations on processes that 

might reduce such costs. The views and estimates letter before us 

provides such a path through ways to increase recoveries after defaults and requiring that programs which are supposed to operate 

without any appropriation actually do so. Additionally, the letter 

before us requests that no appropriations be allocated for pilot or 

other initiatives until the SBA has a modern, fully functional loan 

management accounting system. 

Despite these cuts, the core functions of the SBA to make capital 

available, provide advice, and increase utilization of small businesses as federal government contractors are preserved. The sensible approach outlined in the views and estimates letter will represent this Committee’s effort at reducing the federal spending. 

And now I am very happy to recognize the ranking member for 

her opening remarks. 

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

Today’s consideration of the Committee’s views and estimate on 

the SBA budget is occurring as the economy is showing increasingly promising signs of a recovery. GDP, growth, surplus, expectations last quarter rose 3 percent, the fastest pace since early 2010. 

And other positive signs are everywhere. American factory output 

grew at the fastest rate in five years, while consumer confidence 

hit a one-year high. All of this good news is finally translating into 

job gains as employers added one million workers to payrolls since 

July, leading to the biggest decline in the unemployment rate since 

1984. At 8.3 percent, unemployment is the lowest in almost three 

years. 

But the truth of the matter is that much more needs to be done 

on the job creation front and this is where SBA plays a crucial role. 

The agency’s near-term blueprint for accomplishing this goal is its 

fiscal year 2013 budget request of $1.1 billion. The most notable aspect of the summation is the rising credit subsidy costs for the 7A 


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and 504 programs. With the Federal Reserve reporting that lending 

standards have still not recovered to pre-recession levels, it remains difficult for many businesses to access capital. As a result, 

SBA lending programs are as important as ever and these costs, 

while rising are absolutely necessary and appropriate to preserve 

this source of capital. 

Unfortunately, to help defray these additional expenses, the 

agency imposes a 10 percent across-the-board cut on proven programs that actually generate taxable revenue and pay for themselves, all the while continuing to seek funding for unauthorized 

initiatives. Programs like the Small Business Development Centers 

are successful and not only creating new businesses but also the 

jobs that come with them. While we understand the need to cut 

programs, it makes little sense to reduce the very programs that 

work, while increasing spending on programs that are untested. 

For instance, the SBA chooses to spend on countless, unauthorized 

initiatives, including 6 million on the Business USA website; 3 million on clusters; and another 7 million for a new veteran effort. 

There are at least six other such unauthorized programs included 

in the SBA’s fiscal year 2013 budget. In times of tight budgets, the 

agency should not be cutting results-oriented programs like SBDCs 

and then proposing to spend millions on ideas that have not been 

vetted by Congress, nor objectively reviewed. 

With regard to the majority of these views and estimates letter, 

I support several of its provisions. It recommends the elimination 

of many of the aforementioned unauthorized programs. It is right 

to terminate them as other established programs show long-term 

benefits to the taxpayer. However, there are some areas of concern. 

By proposing to eliminate funding for the Veterans Business Outreach Center program, it is limiting the ability of the 190,000 veterans of the wars in Iraq and Afghanistan to start their own businesses. These men and women have unique skills and needs which 

justify the veterans’ program approach. Many of these centers are 

run by veterans themselves which made them an appropriate 

means to provide training to would-be veteran entrepreneurs. 

In addition, while the majority talks about its concerns that the 

SBA is too concentrated in Washington, D.C., it fails to provide 

concrete steps for distributing personnel. It simply proposes to reduce both field staff and headquarters staff alike which does not 

necessarily lead to a more diffused SBA. Instead, the agency’s personnel structure should be evaluated and steps taken to ensure 

that all areas of the country have access to the SBA resources they 

need. 

As we all know, this agreement and priorities in the agency’s annual budget is not unusual. Although Chairman Graves and I do 

not fully agree on our views, it is rather obvious that we both believe more work needs to be done at the SBA in setting its priorities. Put simply, continually spending taxpayer money on priorities not approved by Congress is not a good use of resources. 

While the recent downturn required many business owners to reimagine their company to stay competitive, the SBA should be taking similar steps. This means recommitting itself to existing programs that work while reducing waste and fraud and other key initiatives. Doing so will bring tangible benefits to small businesses 


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while also making sure that taxpayers are given a positive return 

on their investment. 

And with that I yield back. 

Chairman GRAVES. Are there any other members who wish to be 

recognized for a statement on views and estimates? 

The Committee now moves to consideration of the views and estimates letter. The clerk will read the title of the document. 

The CLERK. Views and estimate of the Committee on Small Business on matters to be set forth in the concurrent resolution of the 

budget for fiscal year 2013. 

Chairman GRAVES. Without objection, the views and estimates 

letter is considered as read and open for amendment in its entirety. 

Does any member seek recognition for the purpose of offering an 

amendment on views and estimates? 

Seeing none, the question on adopting the views and estimates 

letter, all those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All opposed say no. 

In the opinion of the chair the ayes have it. The views and estimates are agreed to. 

Ms. VELA ́ ZQUEZ. Mr. Chairman. 

Chairman GRAVES. I recognize ranking member. 

Ms. VELA ́ ZQUEZ. I would like to give notice pursuant to House 

Rule 11, clause 21, that the Committee’s democrats will be finding 

additional views with the Committee on Budget on the SBA’s fiscal 

year 2013 budget submission. 

Chairman GRAVES. Absolutely. Without objection that is so ordered. Without objection the Committee is authorized to correct 

punctuation and to make other necessary technical adjustments on 

the document considered today. 

All right. We now move to the markup of contracting legislation. 

Given that the federal government spends over half a trillion dollars each year through contracts, this is an incredibly important 

market for small businesses. Improving small business opportunities for federal contracts is a triple play. Small businesses win 

more contracts, workers win as the small businesses create jobs 

and taxpayers win because small businesses bring competition, innovation, and lower prices to save the government money. Recognizing that this is a crucial area for small businesses over the past 

year, the Committee has held 10 hearings or subcommittee hearings on federal procurement issues. these have resulted in eight 

bills introduced by the majority, and this package has been supported by over 20 trade associations, such as the Association of 

General Contractors, Minority Business Roundtable, the Chamber 

of Commerce, the Financial Services Roundtable, National Association of Home Builders, Mason Contractors Association, the Sheet 

Metal and Air Conditioning Contractors, National Association of 

Surety Bond Producers, National Association of Small Disadvantaged Businesses, the U.S. Black Chamber, the National Women 

Business Owners’ Corporation, Women Impacting Public Policy, 

and American Institutes of Architects. And many, many others. 

Additionally, our minority just introduced three contracting bills 

bringing us to a total of 11 contracting bills which we are committed to marking up. Now, that is a testament to the bipartisan 


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nature I believe of this Small Business Committee and to the 

issues that are obviously before us. 

Today we are going to mark up the first six of these bills. And 

while we discuss each bill briefly before we mark it up, I want to 

emphasize how crucial it is that we have bipartisan contracting reform that is going to improve opportunities for small businesses. 

I look forward to working with all of you today to move these 

bills one step closer to law, and I now recognize Ranking Member 

Vela ́zquez for her opening statement. 

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

With the federal marketplace accounting for half a billion dollars 

annually, procurement policy can be a powerful instrument for job 

creation. One of the most effective things we can do in this area 

is ensure small businesses win their fair share of contracts and 

that more small businesses can get involved in the process. When 

large corporations win contracts, their existing workforce can take 

on the new work. However, when entrepreneurs are hired by the 

federal government, they bring on new employees, creating opportunities for working families. Reforming the procurement process 

can therefore help us create badly needed jobs without having to 

spend additional taxpayer dollars. After all, these expenditures will 

already be made. The question is whether small firms can compete 

for them fairly or not. 

The fact is the federal government’s record omitting small business contracting goals has been disappointing at best. The government as a whole consistently fails to ensure 23 percent of its contracting dollars go to small businesses and agencies regularly fail 

to meet their individual goals, not only for small businesses but 

other disadvantaged entrepreneurs like veterans, women, and minorities. Improving this process and empowering more small firms 

to grow with the government as a customer can be vital to not only 

the small business sector but our economy as a whole. 

I thank the Chairman for working with us on this legislation and 

I yield back the balance of my time. 

Chairman GRAVES. Thank you very much. Are there any other 

members who wish to be recognized for the purpose of an opening 

statement? 

Seeing none we will move forward with H.R. 3850. We will now 

consider—in fact, we will go through all six of these contracting 

bills in the order listed in the notice. And copies of each of the bills 

have been provided. 

The first item is 3850, Government Efficiency through Small 

Business Contracting Act of 2012. I introduced this bill with Congressman Owens and Congressman Schilling to increase contracting opportunities for small businesses. This bill does this by 

increasing the businesses’ prime contracting goal from 23 percent 

to 25 percent, which will result in approximately 11 billion more 

in prime contracts for small businesses each year. The bill 

strengthens subcontracting opportunities by instituting a statutory 

40 percent goal when there was previously only Administrative 

Goal 35.9. The bill also clarifies how contracts should be counted 

for the purposes of the goal and does something small businesses 

have been clamoring for—holds agencies accountable for meeting 

the goal. Specifically it says that no senior executive at any agency 


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is eligible for a bonus if the agency does not meet its small business goals. 

The changes made by this legislation will motivate agencies to 

meet their obligations to small businesses and improve contracting 

to the benefit of taxpayers and small businesses alike. I would urge 

the Committee to pass this important piece of legislation. I now 

recognize Ranking Member Vela ́zquez for her opening comments on 

3850. 

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

The legislation before us makes significant changes to the federal 

small business governing program. This effort originally established in the Business Opportunity Development Reform Act of 

1988 requires the government to attempt to annually achieve a certain goal for contracts awarded to small businesses. Unfortunately, 

since the goal was raised to 23 percent in the Small Business Reauthorization of 1997, it has not been achieved. The reasons for 

this are many. Agencies lack the tools and resources to effectively 

channel many contracts to small firms. For instance, only last year 

did we finally see a women-owned procurement program implemented even though women received less than 4 percent of contracting dollars. 

Compounding this is an understaffed acquisition workforce including a lack of PCRs and CMRs who traditionally focus on increasing opportunity for small businesses but are clearly undermanned. The result is that contract consolidations continue to 

occur, leaving smaller companies locked out of some of the most lucrative opportunities. In addition, it appears that what was once a 

goal may have effectively become a cap on small business procurement participation. Fourteen years is a long time to not achieve a 

reasonable goal and even the staunchest small business advocates 

have to wonder if a goal is leading to agency underperformance in 

this area. 

Other problems plague the program, including that the performance data and reporting mechanisms are so error filled that some 

years the golden grapes have been essentially meaningless. As a result of all these concerns, one has to question whether goals are 

helping or hurting our own goal of increasing small business participation in the federal procurement marketplace. 

While the legislation certainly attempts to get more contracts in 

the hands of small businesses, raising goals without providing 

agencies with the tools and resources necessary to achieve them 

may well fall short. Without such assistance as well as comprehensive procurement reforms, I am afraid that we will simply be back 

in this very room contemplating why agencies are still unable to 

achieve their goals. The truth is that small businesses need more 

than just goals to succeed in the federal marketplace and I look forward to working toward that goal in the future. 

Thank you, Mr. Chairman. I yield back. 

Chairman GRAVES. Are there any other members that wish to be 

recognized for a statement on 3850? 

Seeing none, the Committee now moves to consideration of H.R. 

3850. The clerk will report the title of the bill. 


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The CLERK. H.R. 3850. To Amend the Small Business Act with 

Respect to Goals for Procurement Contracts Awarded to Small 

Business Contractors and For Other Purposes. 

Chairman GRAVES. Without objection, H.R. 3850 is considered as 

read and open for amendment at this point. Does anyone seek to 

be recognized? I think we are going to start with Congresswoman 

Hahn. 

Ms. HAHN. Thank you, Chairman Graves, for working with me 

on this important amendment. 

My amendment to H.R. 3850, the Government Efficiency through 

Small Business Contracting Act of 2012 is a simple step towards 

ensuring transparency in government. It requires the congressionally mandated SBA report to Congress and the president also be 

made available to the public by publishing the report online. This 

simple sentence will make a world of difference in creating transparency and accountability and the SBA’s mandate to give a bite 

at federal contracting dollars to the true backbone of the American 

economy, the real job creators, American small businesses. The 

American people deserve to see how we are empowering small businesses, and they should not have to go any further than their computer to see whether or not we are living up to these goals. Thank 

you. 

Chairman GRAVES. We are kind of going a little backwards but 

will the clerk please read the amendment? 

The CLERK. Amendment 1 to H.R. 3850 offered by Ms. Hahn of 

California. 

Chairman GRAVES. Without objection the amendment is considered as read and Ms. Hahn has adequately explained her amendment. Does anyone else wish to be heard on the amendment? 

And with that the gentlelady’s amendment makes sense to me. 

The report on Small Business Contracting should be made available online so all small businesses and taxpayers can see it. So I 

support the amendment. 

Ms. HAHN. Thank you. 

Chairman GRAVES. If there is no other further discussion on the 

lady’s amendment being offered, all those—we will just open it up. 

That is amendment No. 1 sponsored by Ms. Hahn. All those in 

favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

In the opinion of the chair, the ayes have it. The amendment is 

agreed to. 

The next amendment would be Representative Chu. 

Ms. CHU. Mr. Chairman. Thank you. I have Amendment No. 2. 

And I want to thank you for including a robust reporting section 

on contracts awarded to small businesses. 

Chairman GRAVES. Just bring it up and we will let the amendment be reported and then you will have five minutes. 

The CLERK. Amendment 2 to H.R. 3850 offered by Ms. Chu of 

California. 

Chairman GRAVES. Without objection the amendment is considered as read. The member is recognized for five minutes. Thank 

you. 


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Ms. CHU. Well, Mr. Chairman, again, thank you for the robust 

reporting section on contracts awarded to small business. 

Until we have a good idea of how agencies are conducting their 

contract activities and an accurate report on who is getting the contracts, we cannot make the right changes to ensure that small 

businesses participate in federal contracting. I have a small and 

straightforward transparency amendment to offer under the reporting section. My amendment seeks to gain further transparency in 

the reporting process by requiring data on why the firms are considered socially and economically disadvantaged. The current data 

does not give enough detail about what firms are actually securing 

the contracts. By collecting this data we can learn more about the 

firms that are currently receiving federal contracts. This amendment simply says that the reports by the administrator will also include the reason that the certification of the small business is considered socially and economically disadvantaged. Thus, we will get 

a better picture of the small and disadvantaged business category. 

Again, this amendment is simple and straightforward and I ask 

for the Committee’s support. 

Chairman GRAVES. Does anyone else wish to be heard on the 

amendment? 

With that, when H.R. 3850 was drafted it sought to increase 

transparency into who is receiving contracts and how they were receiving those contracts. The gentlelady’s amendment furthers that 

goal giving us additional insight into which companies are winning 

government contracts, and I do support the amendment. 

Ms. VELA ́ ZQUEZ. Mr. Chairman? 

Chairman GRAVES. Yes. 

Ms. VELA ́ ZQUEZ. If I may. 

Chairman GRAVES. Absolutely. 

Ms. VELA ́ ZQUEZ. I will encourage my colleagues to support this 

straightforward common sense amendment. As we have seen with 

prior reports from GAO, many businesses that are not qualified as 

small businesses are getting contracts and this is a way to add another layer of transparency. 

Chairman GRAVES. So with that the question is on the amendment offered by Ms. Chu. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

The ayes appear to have it. The ayes do have it. It is the opinion 

of the chair that the amendment is agreed to. 

Let us see here. The next amendment would be Representative 

Peters. Clerk, would you please read the amendment? 

The CLERK. Amendment 3 to H.R. 3850 offered by Mr. Peters of 

Michigan. 

Chairman GRAVES. Without objection the amendment is considered as read. The member is recognized for five minutes. 

Mr. PETERS. Thank you, Mr. Chairman. 

I am certainly pleased that H.R. 3850, the Small Business Contracting Act, raises the small businesses contracting goal from 23 

to 25 percent. This is certainly going to mean a substantial amount 

of new business for small businesses. In fact, probably around $11 

billion worth, which is an incredible accomplishment. However, my 

amendment would simply increase the government-wide goal for 


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participation by small businesses that are owned and controlled by 

socially and economically disadvantaged individuals. Currently set 

at 5 percent, it would move it up to 71⁄2 percent. While I recognize 

this appears to be a significant increase, it is one that is certainly 

very achievable. In fact, the SBA has reported that prime contracting achievement of almost 8 percent in 2010 and it was above 

71⁄2 percent in 2009. So this amendment will simply ensure that 

the government continues its recent successes in contracting with 

small businesses that are owned by socially or economically disadvantaged folks. Meeting this goal for the socially and economically disadvantages small businesses will certainly help us reach 

the overall goal of 25 percent. Certainly, the bar of 5 percent has 

been met. It has been achieved and actually exceeded. This amendment will make sure that we do not backslide from our current levels which are over 71⁄2 percent and I would urge my colleagues to 

put this benchmark in place having already achieved the other one. 

Thank you, Mr. Chairman. 

Chairman GRAVES. Does any other member wish to be recognized 

on the amendment? 

Ms. HAHN. Excellent. Excellent amendment. 

Mr. COFFMAN. Mr. Chairman, how do you define socially disadvantaged? I think there would probably be people that would 

place me in that category. How do you define that? Mr. Peters? 

Chairman GRAVES. The gentleman is recognized. 

Mr. PETERS. It is already determined in the legislation. We are 

not adding a new definition that does not already exist in the statute. Basically, economic disadvantaged is determined by personal 

net worth, which is outlined in the legislation already. Social disadvantage includes a broad array of groups. African Americans, 

Hispanic Americans, Native Americans, Alaska Natives, Native 

Hawaiians, or enrolled members of federally or state recognized Indian tribes, Asian-Pacific Americans, and members of other groups 

that have been designated by the SBA. So this amendment does 

not change any of those designations. It simply puts the goal, 

which has already been achieved, just sets that floor what we are 

already achieving so we do not backslide from where we are. 

Chairman GRAVES. Ms. Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Yes. I would like to say, Mr. Chairman, that I 

commend the gentleman’s amendment. There are over 323,000 active profiles of businesses who have registered to contract with the 

federal government. Of this, more than 53 percent are self-certified 

or SBA certified small business disadvantaged businesses whose 

contracts are eligible to be counted towards this category. The current 5 percent goal really does not represent this business participation in the federal marketplace. This amendment will ensure 

that the goals more closely meter the market participation of this 

class of small businesses. 

Additionally, the federal government has met and exceeded the 

goal for contracts to this category of small businesses. By raising 

this goal we are ensuring that we do not remain stagnant in 

awarding contracts to small businesses. And I will ask my colleagues to support this amendment. 

Chairman GRAVES. Does any other member wish to be heard? 

Mr. CICILLINE. Mr. Chairman. 


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Chairman GRAVES. Yes. Mr. Cicilline. 

Mr. CICILLINE. Thank you, Mr. Chairman. I, too, want to compliment the sponsor of this amendment, and at a time when I think 

there is enormous empirical evidence that the divide between many 

communities in this country is growing wider and wider and becoming more and more challenging for new start up small businesses and having just raised the goal to 25 percent I think it is 

really important that we ensure that we at the same time raise 

this goal. And I want to compliment the gentlemen for this excellent amendment and urge everyone to support it. 

Chairman GRAVES. Does any other member wish to be heard? 

Seeing none, as Chairman of the Small Business Committee I 

have tried not to favor one group of small businesses over another 

and I do not want to pick winners and losers, and I want to help 

all small businesses compete. And right now we have one small 

business goal and four subcategory goals—women, service-disabled 

veterans, HUBZone firms, and small disadvantaged businesses. 

Each of these subcategories of small businesses can compete for 

small business contracts, so they all win when we increase the 

small business goal. However, when we increase the small disadvantaged business goal, only about 9,200 firms benefit instead of 

the 350,000 small firms currently seeking to do business with the 

federal government. Indeed, this amendment will completely subsume a 2 percent increased proposal by H.R. 3850 and then take 

another half percent, reducing opportunities for firms that are not 

small disadvantaged businesses. Therefore, I am afraid I cannot 

support the amendment. 

With that the question is on the amendment by Mr. Peters. All 

those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

[Chorus of noes.] 

Chairman GRAVES. It is the opinion of the chair that the nos 

have it. The nos do have it. 

Ms. VELA ́ ZQUEZ. Mr. Chairman. 

Chairman GRAVES. Yes. 

Ms. VELA ́ ZQUEZ. Call for a vote. 

Chairman GRAVES. Okay. 

Mr. PETERS. May I request a record roll call? 

Chairman GRAVES. Absolutely. A recorded vote is requested. Pursuant to Rule 10 of the Committee’s Rules of Proceedings on the 

Bill Amendment will be postponed. What we are going to do is 

stack so that we do not get members hung up because we have got 

a vote coming up here pretty quick and then we will try to get everybody back over and we will pick that up so we have one recorded vote now on Mr. Peters. 

Next recognize—will the clerk—we have got Ms. Ellmers’ amendment up on 3850. Will the clerk please read the title? 

The CLERK. Amendment 4 to H.R. 3850 offered by Ms. Ellmers 

from North Carolina. 

Chairman GRAVES. Without objection the amendment is considered as read. 

Ms. Ellmers, you are recognized for five minutes. 

Ms. ELLMERS. Thank you, Mr. Chairman. 


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My amendment directs agencies, including the GSA, to abide by 

small business contracting goals of the Small Business Act when 

using commercial leasing services. Small business brokers such as 

Carpenter/Robbins, ICI, and Public Properties have had several 

projects in my home state of North Carolina. Recently, Public Properties provided support for the completion of a VA outpatient clinic 

in Wilmington, North Carolina and a VA health care clinic in Charlotte, North Carolina. My amendment would allow these small 

business brokers to compete for these leases. That completion will 

in turn provide lower prices for the federal government and taxpayers. Further, these small brokers offer specialized services, such 

as finding a hospital for the VA or a port for the NOAA. 

Under current law, GSA is not legally bound to follow small business goals to procure leases with nonappropriated funds. This 

amendment protects small business government procurement contracting opportunities by (1) ensuring that the GSA must abide by 

the small business contracting goals outlined in the Small Business 

Act, as well as the amendments here in H.R. 3850, makes the SBA; 

and (2) ensures small business concerns are protected in commercial leasing. And I ask my colleagues of the Committee to approve 

and support this amendment. Thank you. 

Chairman GRAVES. Does any other member wish to be heard on 

the amendment? 

Ms. VELA ́ ZQUEZ. Yes, Mr. Chairman. 

Chairman GRAVES. Ms. Vela ́zquez. 

Ms. VELA ́ ZQUEZ. I strike the last word. In the broadest context, 

commercial leasing services can include the renting of equipment, 

automobiles, and trucks. It is also understood to include real estate 

advisory services. Given the breadth of this definition, it is curious 

that this Committee will go on record to endorse the application of 

the Small Business Act contracting provisions to such commercial 

leasing services. At the very least, commercial leasing services 

should be defined not just so members know what it means but so 

this legally vague jargon is not applied in an unintended manner. 

In addition, the small business contracting provisions include 

several programs, including those for minorities, women, and veterans. Applying such certifieds, as well as the goal for these demographics to private sector commercial leasing services, could lead to 

unintended consequences. This could mean that we are calling for 

the establishment of private sector contracting goals, as well as requiring private sector transactions to be subject to federal setasides for minority women and veterans. 

Given these concerns, I would like to yield to the gentlelady for 

the purpose of providing some clarification on her amendment. And 

I would like to ask the gentlelady if the intent to apply the small 

business contracting provision to contracts among private entities. 

Ms. ELLMERS. Well, the goal of this amendment is to allow some 

of the smaller entities, some of the small business entities, brokers, 

to be able to compete for some of these leasing projects that some 

of the larger entities basically are able to obtain. 

Ms. VELA ́ ZQUEZ. Your amendment reads, ‘‘It is the sense of Congress that the contracting provision of the Small Business Act shall 

apply to commercial leasing services.’’ So it means private buildings in the private sector? 


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Reclaiming my time, in your amendment it states what I read. 

And this is not specific to contracts entered into by a federal agency with a commercial leasing agent. Therefore, this amendment 

could be interpreted that you are applying the Small Business Act 

contracting provision from goals to set-asides to contracts negotiated between two private parties. 

So just to be clear, it is your intent to apply the minority and 

women set-aside programs and the accompanying goals for these 

demographic groups to commercial leasing services contracts? 

Ms. ELLMERS. What we can do is offer a clarifying amendment 

if that will allow your concerns. 

Ms. VELA ́ ZQUEZ. Well, I would like to ask the gentlelady to withdraw your amendment and to work with the minority and then 

when we go to the floor we can work on the language. 

Ms. ELLMERS. Well, what I would like to do is vote on it and see 

where we are. And if we need to put forward a clarifying amendment we can do so. 

Chairman GRAVES. Could the counsel clarify the amendment? 

COUNSEL. Yes. I believe the intent of the amendment was to 

focus solely on awarding contracts to commercial leasing services 

that obtained office space for buildings for the federal government. 

Ms. VELA ́ ZQUEZ. But we are not here to discuss intent; we are 

here to discuss the language of the amendment. It is not about the 

intent. It is about what the language reads. It says, ‘‘Should apply 

to commercial leasing services.’’ 

COUNSEL. And I would argue that in the context of federal government contracting the commercial leasing services that we are 

talking about relates to public buildings and the obtaining of leases 

on public buildings. 

Ms. VELA ́ ZQUEZ. So could I ask the counsel to show me in the 

language of this amendment where it says public buildings? 

COUNSEL. It does not. But the definition of commercial leasing 

services is those services in which if I was the federal government 

and I needed office space or I needed some other type of office 

space, it is not a—it is a term of art essentially, making the argument that it is a commercial lease in the same way that if I was 

in the private sector seeking office space, I was an attorney seeking 

office space, that is what I—— 

Ms. VELA ́ ZQUEZ. Is that defining the small business statute? 

COUNSEL. Excuse me. I am sorry. I did not—— 

Ms. VELA ́ ZQUEZ. The explanation, the definition of commercial 

leasing, is that defined in the small business statute? In the Small 

Business Act? 

COUNSEL. No, it is not. 

Ms. VELA ́ ZQUEZ. Okay. 

Chairman GRAVES. Would it be possible—could we—while we 

take a break for votes—to perfect this? Is that possible? 

Ms. ELLMERS. From my end that is agreeable. 

Chairman GRAVES. And we will just skip over. We will try to get 

another one. We will just stop at the moment if you guys think you 

can work it out. 

Ms. VELA ́ ZQUEZ. Would the gentlelady ask unanimous consent to 

withdraw the amendment? 


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Chairman GRAVES. If you want to, Ms. Ellmers, if you want to 

withdraw it and then we will come back to it if you guys can perfect it over this vote series, whatever it is. 

Ms. ELLMERS. Okay. I would ask unanimous consent to withdraw 

at this time with that intent. 

Chairman GRAVES. Try to work that out and then we will come 

right back to it. So we will postpone what we are doing on 3850. 

We will move directly to 3851, which is the next order of business, the Small Business Advocate Act of 2012. The purpose of this 

bill is to ensure that the Offices of Small and Disadvantaged Business utilization within each federal agency have the clout to be effective advocates for small business concerns and that they focus 

their resources in a way that helps small businesses compete for 

contracts. 

As the Committee uncovered this year, some agencies have been 

selling small businesses shot by making the director of the Office 

of Small and Disadvantaged Business Utilization also serve as the 

chief acquisition officer, chief financial officer, and one of a half 

dozen other titles. In each case the responsibility for small businesses got passed down to a lower level individual so small businesses lack the senior advocate envisioned by the statute. This bill 

addresses the problem by promoting the directors to enroll where 

they are the peer of the senior acquisition personnel and requiring 

that small businesses be the director’s primary responsibility. It 

also clarifies the types of assistance the office should provide and 

reinforces the role of the office when it comes to government-wide 

procurement policy. 

Again, I believe that this bill deserves bipartisan support. I urge 

the Committee to pass it, and I now recognize Ranking Member 

Vela ́zquez for her remarks. 

Ms. VELA ́ ZQUEZ. I do not have a statement to make at this point, 

Mr. Chairman. 

Chairman GRAVES. Okay, now, the Committee now moves consideration of 3851. Clerk, please report the bill. 

The CLERK. H.R. 3851, To Amend the Small Business Act with 

Respect to Offices of Small and Disadvantaged Business Utilization 

and for Other Purposes. 

Chairman GRAVES. Without objection, H.R. 3851 is considered 

read and open for amendment at any point. And I do have an 

amendment. Will the clerk please report the amendment. 

The CLERK. Amendment 1 to H.R. 3851 offered by Mr. Graves of 

Missouri. 

Chairman GRAVES. Without objection the amendment is considered as read. 

What this amendment does is develop through cooperation with 

the ranking member and improves 3851 by adding minimum requirements for the position of director of the Office of Small and 

Disadvantaged Business Utilization. Specifically, it requires that 

the director have at least 10 years of experience in government 

contracting and enumerates how this experience can be gained. 

Small businesses need strong advocates to require that they have 

a base level of knowledge makes sense, and I urge the Committee 

to accept the amendment. 


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Are there any other members wishing to be heard on the amendment? 

Seeing none the question is on the amendment by myself, the 

chairman. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

The opinion of the chair is that the ayes have it. The ayes do 

have it. 

Now we have an amendment from Representative Hahn. Will the 

clerk please read the amendment. 

The CLERK. Amendment 2 to H.R. 3851 offered by Ms. Hahn of 

California. 

Chairman GRAVES. Without objection the amendment is considered as read. 

Congresswoman Hahn, you are recognized for five minutes. 

Ms. HAHN. Thank you, Mr. Chairman and Ranking Member 

Vela ́zquez. 

I am offering this amendment because my hometown of Los Angeles is facing a severe unemployment crisis and although it has 

improved over the past year the unemployment rate is still 10.9 

percent in Los Angeles, well above the national average of 8.3 percent. We know small businesses are the engines of our economic 

growth and the heartbeat of the American economy. It is these entrepreneurs who put Americans to work and fuel the innovation 

and development that has made this economy the best in the 

world. 

My amendment requires small business specialists to give priority to small businesses located in areas like Los Angeles where 

the unemployment rate is higher than the national average. This 

will ensure that assistance will be focused where it is needed most 

and fastest. Not only is this a win for small businesses struggling 

to succeed in ailing local economies but it is a win for workers who 

have been unable to find work in the worst job markets in this 

country. Thank you. 

Chairman GRAVES. Does anyone else wish to be heard on the 

amendment? We have 12 minutes. Oh, it has been called. 

Seeing none, I think this amendment is going to encourage small 

business advocates to provide technical assistance in areas with 

high unemployment rates. And since the Office of Small and Disadvantaged Business Utilization currently provides assistance to 

all small businesses, I do not anticipate this will take assistance 

away from any small business; instead, it will help focus them on 

the fact that small businesses are job creators and it is going to 

help the overall economy. I do support the amendment. 

With that the question is on the amendment by the gentlelady 

Ms. Hahn. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

The ayes appear to have it. The ayes do have it. 

Does anyone else wish to have an amendment? I do not think 

they do. 

Seeing none then the question is going to be on agreeing to H.R. 

3851 as amended. All those in favor say aye. 

Mr. KEATING. Mr. Chairman. 


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Chairman GRAVES. Yes. Who is calling? Yes. Mr. Keating. 

Mr. KEATING. Point of order. 

Chairman GRAVES. Absolutely. 

Mr. KEATING. We do not have the redrafted amendment before 

us. We were going to do that afterwards. 

Chairman GRAVES. That is the bill before this. 

Mr. KEATING. Okay. 

Chairman GRAVES. We postponed that. This is the second bill we 

are going to try to run through. This is 3851. The one that was 

postponed with the amendment was 3850. 

Mr. KEATING. Thank you. 

Chairman GRAVES. Absolutely. No problem. 

It is the opinion of the chair that the ayes do have it and H.R. 

3851 —— 

Mr. KEATING. Mr. Chairman. 

Chairman GRAVES. Yes. 

Mr. KEATING. I request a recorded vote. 

Chairman GRAVES. All right. A recorded vote has been requested. 

Let us go ahead and dispense with this one. Clerk, please call the 

roll, 3851. 

The CLERK. Chairman Graves. 

Chairman GRAVES. Aye. 

The CLERK. Chairman Graves votes aye. 

Mr. Barletta. 

Mr. BARLETTA. Aye. 

The CLERK. I am sorry. Mr. Bartlett. 

Mr. Chabot. 

The CLERK. Mr. King. 

Mr. Coffman. 

Mr. COFFMAN. Aye. 

The CLERK. Mr. Coffman votes aye. 

Mr. Mulvaney. 

Mr. MULVANEY. Aye. 

The CLERK. Mr. Mulvaney votes aye. 

Mr. Tipton. 

The CLERK. Mr. Landry. 

Ms. Herrera Beutler. 

Mr. West. 

Mr. WEST. Aye. 

The CLERK. Mr. West votes aye. 

Ms. Ellmers. 

Ms. ELLMERS. Aye. 

The CLERK. Ms. Ellmers votes aye. 

Mr. Walsh. 

Mr. Barletta. 

Mr. BARLETTA. Aye. 

The CLERK. Mr. Barletta votes aye. 

Mr. Hanna. 

Mr. Schilling. 

Mr. SCHILLING. Aye. 

The CLERK. Mr. Schilling votes aye. 

Ranking Member Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Aye. 

The CLERK. Ranking Member Vela ́zquez votes aye. 


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The CLERK. Mr. Schrader. 

Mr. SCHRADER. Aye. 

The CLERK. Mr. Schrader votes aye. 

Mr. Critz. 

Mr. CRITZ. Aye. 

The CLERK. Mr. Critz votes aye. 

Ms. Clarke. 

Ms. CLARKE. Aye. 

The CLERK. Ms. Clarke votes aye. 

Ms. Chu. 

Ms. CHU. No. 

The CLERK. Ms. Chu votes no. 

Mr. Cicilline. 

Mr. CICILLINE. No. 

The CLERK. Mr. Cicilline votes no. 

Mr. Richmond. 

Mr. RICHMOND. No. 

The CLERK. Mr. Richmond votes no. 

Ms. Hahn. 

Ms. HAHN. I like my amendment but I am going to vote no on 

the bill. 

The CLERK. Ms. Hahn votes no. 

Mr. Peters. 

Mr. PETERS. No. 

The CLERK. Mr. Peters votes no. 

Mr. Owens. 

Mr. OWENS. No. 

The CLERK. Mr. Owens votes no. 

Mr. Keating. 

Mr. KEATING. No. 

The CLERK. Mr. Keating votes no. 

Chairman GRAVES. Are there any other members wishing to 

vote? Seeing none, report—— 

The CLERK. 11 ayes, 7 nos. 

Chairman GRAVES. The vote is 11 ayes, 7 nos. The bill is favorably reported to the House. And without objection the Committee 

is authorized to correct punctuation and make other necessary 

technical corrections on the document concerned today. So ordered. 

When we come back we are going to move onto, if we can dispense with 3850. We will try if you all get it worked out. If not, 

we will move on to 3891. And with that we have 7 minutes 52 seconds. Well, you have got it up there. So we are recessed until as 

soon as we get back. So please hurry back. 

[Recess.] 

Chairman GRAVES. The Committee will come back to order. 

Let us see. We are going to go out of order real quick while we 

get the rest of our members here. And we are going to now pick 

up H.R. 4121, the Early Stage Small Business Contracting Act. Let 

us see. 

Can the clerk report the file? 

The CLERK. H.R. 4121, To Provide for a Program to Provide Federal Contracts to Early Stage Small Businesses and for Other Purposes. 


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Chairman GRAVES. All right. Without objection—we will assume 

that it has been read. The bill has been read, 4121. 

H.R. 4121 helps the early stage small businesses by removing the 

barriers to entry in the federal procurement, making sure that the 

smallest businesses have the opportunity to compete and make 

sense and this bill does have my support. And with that I recognize 

Ranking Member Vela ́zquez for any remarks on 4121. 

MS. VELA ́ ZQUEZ. With the economy facing challenging times over 

the last few years much has been stated about the power of small 

businesses to lead us forward. However, what is clear is that 

among small firms, those that generate the greatest number of jobs 

also happen to be in the early stages. In fact, recent research 

shows that these early stage small businesses are responsible for 

the majority of job creations over the last 30 years. This means 

that it is imperative to not simply think about small businesses 

when we are designing policies but more specifically those firms 

that show a greater likelihood to grow and create employment 

gains. 

With this in mind, channeling a small portion of the half trillion 

dollar federal marketplace to these very small firms is sensible policy. For this reason I am strongly supporting H.R. 4121. It builds 

on past efforts to accomplish this goal, enabling agencies to award 

contracts based on the existing mechanism used in other government-wide programs, including the general small business 

HUBZone, service disabled veterans, and the 8A. Such a move is 

appropriate and it will help educate and train these firms in government procurement practice which is critical as they grow larger. 

I want to thank Mr. Schrader for his work on this issue and also 

again recognize the chairman for his openness in working with us 

on this legislation. Early stage businesses are an important engine 

for job creation and I look forward to advancing this legislation 

that will help these companies expand and grow stronger. 

Thank you and I yield back. 

Chairman GRAVES. Thank you, Ms. Vela ́zquez. 

H.R. 4121 is now under consideration and will now consider 

amendments to it. 

Ms. VELA ́ ZQUEZ. Are you going to recognize him? 

Chairman GRAVES. Oh, I did not realize—absolutely. Absolutely. 

I did not realize—— 

Mr. SCHRADER. Just a comment, if I may. I appreciate that, Mr. 

Chairman. 

I appreciate consumer confidence is increasing and it looks like 

the jobless claims are finally at a three year low but more needs 

to be done I think for our truly small businesses. These early stage 

small firms are critical to both our national economy and also to 

my home state of Oregon. We have 108,000 businesses and more 

than one-quarter of those are very small firms with less than 25 

employees. So helping these firms to mature and grow will be a key 

ingredient to getting our unemployment back and our economy 

back on track. 

For manufacturing, technology, and R&D, many new young businesses I think would be very well positioned to do business with 

the federal government. Unfortunately, they face significant hurdles tapping into the marketplace. They do not have an in-house 


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contracting team. They lack the experience navigating complexities 

of this whole process. So hopefully this legislation will make a huge 

difference in making it easier for these guys to start up. In fact, 

I think in Oregon alone it is estimated that this could be 500 or 

more contracts for struggling small businesses for hard-working 

Oregonians and ultimately Americans. 

So if we do not want to foster early stage businesses I would urge 

an aye vote. And thank you very much for hearing the bill, sir. 

Chairman GRAVES. Absolutely. Does any other member wish to 

be recognized on 4121? 

Seeing none it is now open for amendment, which I have an 

amendment to offer. Will the clerk please report the amendment. 

The CLERK. Amendment 1 to H.R. 4121, Chairman Graves of 

Missouri. 

Chairman GRAVES. Without objection the amendment is considered as read. What this amendment does is it simply strikes a note 

to the current statute that is going to be obsolete and confusing if 

Mr. Schrader’s bill becomes law. And I urge the Committee to accept the amendment. Does anyone wish to be heard on the amendment? 

With that, seeing none, the question is on the amendment by myself, Mr. Graves, to 4121. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All opposed, no. 

The ayes appear to have it. The ayes do have it. The amendment 

is adopted. Does anyone else have any other amendments? 

All right. Seeing none the question is on agreeing to H.R. 4121 

as amended. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

The opinion of the chair is the ayes have it. The ayes do have 

it. H.R. 4121 is agreed to. And without objection and a quorum 

being present, the bill is favorably reported to the House. 

Okay. Are we ready to go back? Just go back in line. Okay, now 

we will get back in order. 

The next order would be 3893, the Subcontracting Transparency 

and Reliability Act of 2012 introduced by Mr. Mulvaney, which I 

strongly support the bill and I yield to Mr. Mulvaney to speak on 

3893. 

Mr. MULVANEY. Thank you, Mr. Chairman. The Subcontracting 

Transparency and Reliability Act, H.R. 3893, addresses a number 

of small business contracting issues that we identified during our 

subcommittee hearings first. It changes the limitations on subcontracting provisions from cost to price to make it easier for legitimate small businesses to determine if they are complying with limitations. The bill adds a penalty for small businesses that do not 

comply with limitations and cracks down on those small businesses 

that front for larger businesses. Also, the bill allows small businesses to team with other similar small businesses in order to complete the contract, giving more businesses the opportunity to learn 

and participate in the federal contracting process. 

Secondly, the bill strengthens the prime contractor reporting requirements. This makes it easier for contracting officer to determine if there are real subcontracting opportunities for small busiVerDate Mar 15 2010 01:27 Jan 19, 2013 Jkt 077585 PO 00000 Frm 00022 Fmt 6633 Sfmt 6602 E:\HR\OC\A845.XXX A845

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ness and to catch and punish large businesses who are bad actors. 

These provisions bring additional transparency and reliability to 

the contracting process. 

Finally, the bill addresses the problem of in-sourcing, the subject 

of several hearings that we had. It is the process by which the government takes work currently awarded through private sector competition and converts it into work performed by federal employees. 

The act requires or the bill requires federal agencies to publish 

their insourcing processes and give small businesses standing to 

challenge agency insourcing decisions. 

Thank you, Mr. Chairman. 

Chairman GRAVES. I now recognize Ranking Member Vela ́zquez 

for her remarks on 3893. 

Ms. VELA ́ ZQUEZ. I do not have any remarks on the bill. I have 

remarks on the amendment. 

Chairman GRAVES. All right. Any other members wish to seek 

recognition on 3893? Seeing none, I support H.R. 3893 because it 

will make it easier for small businesses to comply with rules about 

how much of the work they must perform on a set-aside contract 

and make it easier for the government to catch businesses fronting 

for dishonest large firms, a practice commonly known as passthroughs. It also improves opportunities for small businesses as 

subcontractors. And finally, it adds transparency to insourcing 

practices by requiring that agencies publish the process by which 

they make insourcing decisions. 

Again, I believe that this bill deserves bipartisan support and I 

urge the Committee to pass it. 

The Committee now moves consideration of H.R. 3893. The clerk 

please report the title. 

The CLERK. H.R. 3893, To Amend the Small Business Act with 

Respect to Subcontracting and Insourcing and for Other Purposes. 

Chairman GRAVES. Without objection, H.R. 3893 is considered as 

read and open for amendment at this point. Does anyone have an 

amendment? I think Mr. Mulvaney has the first one. 

Mr. MULVANEY. I do. We have a manager’s amendment, Mr. 

Chairman. Two small things. The act, as originally drafted, codified 

limitations on subcontracting for construction contracts. In speaking with the administration, however, we learned that this was traditionally done through public rulemaking and not through statutes. So the manager’s amendment resolves that. It removes the 

limitation on subcontracting for construction and statute and allows the administrator to continue the established practice of setting the limitations through rulemaking. It also provides some 

flexibility at the agency level to address small business needs in 

construction contracts. Finally, there is a technical change to further clarify that small businesses are the entities which have 

standing to challenge in-sourcing decisions. 

Chairman GRAVES. We will go ahead—I forgot to report the 

amendment. Will the clerk please read the title? 

The Clerk. Amendment 1, the H.R. 3893 offered by Mr. 

Mulvaney of South Carolina. 

Chairman GRAVES. Okay. The amendment is considered read. 

Does any other member wish to be heard on the amendment? 

Ms. VELA ́ ZQUEZ. Yes. 


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Chairman GRAVES. Ranking Member Vela ́zquez, please. 

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

This amendment offered by Congressman Mulvaney will simplify 

the limitations on subcontracting for small businesses as it moves 

the calculations from cost spend to total price of the contract. Additionally, it significantly scales back the in-sourcing provisions of 

the original text. Without this amendment, any business will be 

able to challenge the decision of agencies to convert the performance of a function to federal employees. A DoD-alone action for 

more than $900 million worth of contracts will have been eligible 

for protest; 846 million being performed by large businesses. This 

will have been detrimental to the contracting process as agencies 

will have to spend their time litigating cases rather than ensuring 

that functions essential to running their departments were being 

performed. However, under this new language only small businesses will be able to challenge when functions that they are performing are converted to performance by federal employees. At 

DoD, this will mean that only 6 percent of their insourcing decisions will have been eligible for protest. Small businesses can use 

this as a tool to ensure the functions being performed by small 

businesses are not being converted before those functions are performed by large businesses. 

And with that I support the amendment. 

Chairman GRAVES. Thank you, Ranking Member Vela ́zquez. 

Does anyone else wish to be heard on the amendment? 

Seeing none this amendment was developed in a bipartisan manner with the ranking member. It does clarify the intention of the 

bill and I think it is going to improve the process for small businesses and it has my support. 

The question is on the adoption of the amendment. All those in 

favor say aye. 

Chairman GRAVES. All those opposed, no. 

The opinion of the chair is the ayes have it. The amendment is 

agreed to. 

The next amendment is Representative Clarke. And will the 

clerk please report. 

The CLERK. Amendment 2 to H.R. 3893 offered by Ms. Clarke of 

New York. 

Chairman GRAVES. Without objection the amendment is considered as read. 

Ms. Clarke, five minutes. 

Ms. CLARKE. Thank you, Mr. Chairman. 

Chairman GRAVES. Yes, ma’am. 

Ms. CLARKE. Everyone here supports federal contracting, and I 

consider myself to be an ardent, outspoken, forceful, and 

unapologetic advocate for minority women and veteran-owned federal contractors. However, the provisions of this bill that my 

amendment strikes does nothing more than make it nearly impossible for federal agencies to even have the option to insource without a prolonged delay regardless of the reason for the insourcing. 

While there are parts of this bill that I find agreeable, I unfortunately cannot support it in its current form. I urge my colleagues 

to support this amendment, and I yield to my colleague and friend, 

Ms. Chu. 


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Ms. CHU. Thank you, Representative Clarke, for yielding some 

time. 

First of all, I would like to say that I appreciate Representative 

Mulvaney’s efforts to improve subcontracting opportunities for 

small business. The hearing that we held together on subcontracting exposed a number of areas where small businesses were 

taken advantage of by the prime contractor. We were both dismayed at this since subcontracting is an important entry point for 

small firms to get experience in federal contracting. With this bill, 

the federal subcontracting reporting system can track compliance 

with subcontracting plans so that contracting officers, SBA, and the 

Office of Small and Disadvantaged Business Utilization can be notified of any potential violations. This is a positive step forward for 

small businesses. 

However, I do support Representative Clarke’s amendment to 

strike the language in the bill regarding insourcing. The insourcing 

provision will expand legal standing to any small business contractor to challenge any agency’s decision to insource any function 

when contractors already have legal standing sufficient to challenge agencies’ decisions in the Court of Federal Claims as well as 

in the Government Accountability Office. This provision can delay 

decisions made by agencies until they are wholly made public for 

comment. Some functions of agencies are not appropriate for public 

consumption nor made for contract lawyers and procurement 

judges. Besides that, the National Defense Authorization Act has 

twice codified the use of insourcing as an effective tool to rebalance 

the workforce, to realign inherently governmental work and to generate resource efficiencies. I agree that we have to do all that we 

can to support small businesses receiving federal contracts but I do 

not think that restricting insourcing is the right answer. 

Thank you, and I yield back. 

Chairman GRAVES. Does any other member wish to be heard on 

the amendment? Do you want to go? 

Ms. VELA ́ ZQUEZ. He should go. 

Chairman GRAVES. Mr. Mulvaney. 

Mr. MULVANEY. Very briefly, and I appreciate the comments. 

Keep in mind, the language that we are talking about here is fairly 

simple and straightforward. The language that they are seeking to 

strike in this amendment reads—it takes 15 seconds—’’a federal 

agency may only convert a function.’’ That is the formal word for 

insource. ‘‘May only convert a function that is being performed by 

small business to performance by a federal employee if (1) the 

agency has made publicly available after providing notice and an 

opportunity for public comment the procedures of the agency with 

respect to decisions to convert.’’ All we are asking is that these 

agencies will publish and give folks the terms and conditions under 

which they want to consider insourcing. 

We had regular testimony here—I think we did two separate 

hearings on this—about folks simply—small businesses not knowing what rules an agency was going to play by; that they did not 

know what targets they were trying to hit. They did not know the 

conditions under which their contract might be insourced and you 

could easily make the case that if we would simply publish these 

rules and let the small businesses know the terms and conditions 


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under which they are up for possible insourcing, that small business could adjust their contract, adjust their services in order to 

keep the service being performed by small business. So I think in 

the long run and the short-term this will continue to encourage the 

use of small business when it comes to government contracts. 

Regarding the standing, I think the criticisms are fair but I think 

they are more applicable to the original version of the bill. I think 

we solved many, if not all of the standing—the potential abuses of 

the standing issue and the manager’s amendment which we have 

already adopted. So while I think it is a valid criticism, I think we 

have already solved that problem and the standing issue is now 

limited only to bona fide small businesses who are actually impacted by the decision. So with that I would encourage a yea vote 

on the amendment. 

Thank you, Mr. Chairman. 

Chairman GRAVES. Ranking Member Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Mr. Chairman, I strike the last word. 

I have been clear today. Insourcing has supporters on both sides 

of the issue. Proponents believe that private businesses can perform tasks more efficiently than federal employees. Contrarily, opponents believe that certain functions are inherently governmental 

and should be only undertaken by employees. For work being performed by small businesses, this issue only becomes more important because small firms themselves create jobs at a rate that far 

exceeds other sectors of the economy. In this regard, I recognize the 

efforts of the chairman to put forward a manager’s amendment to 

clarify that the insourcing provisions only pertain to small firms. 

In fact, prior to that change 100 percent of agencies’ insourcing decisions would have been subject to the bill’s provision. Now, the 

scope has been dramatically reduced so that, for example, only 6 

percent of the Department of Defense contracts are subject to that 

restriction. 

While reducing the impact of the bill by 94 percent is a good 

start, we need to continue to work towards ensuring that there is 

no impact at all. There is still work to be done to ensure that this 

process does not simply create a web of costly litigation for agencies 

without the intended increase in new jobs, except possibly for the 

attorneys contesting the protest. It is crucial that this new protest 

procedure does not simply waste scarce government resources, clog 

the GAO, and delay legitimate protests and provide no proven benefit to the taxpayers. 

With this concern in mind, I am supporting the gentlelady’s 

amendment and urging a yes vote. However, it is important to 

again recognize that we have come a long way, and again, I want 

to thank the chairman for truly minimizing the effect of this provision. With that I yield back. 

Chairman GRAVES. Does any other member wish to be heard on 

the amendment? 

Do you want to clarify your position? 

Mr. MULVANEY. Yes, other than to change my encouragement for 

an aye vote to a no vote. Yes, I got the word wrong. But other than 

that the sentiment remains the same. Thank you, Mr. Chairman. 

Chairman GRAVES. Any other member wish to be recognized? 


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This amendment would strip all the insourcing protections I 

think for the small businesses from H.R. 3893 and there seems to 

be three arguments against insourcing provisions. First, there is a 

question of whether the Offices of Small and Disadvantaged Businesses and the Procurement Center representatives should even be 

involved in the process. Frankly, I do not understand why this is 

an issue because the administration’s own Office of Federal Procurement Policy, SBA, Administrator Mills, and the Director of the 

Minority Business Development Agency sent out a guidance last 

year directing the agencies to involve the small business representatives when insourcing small business work. And that is exactly 

what we are trying to do with this bill. 

Second, there is a question as to whether insourcing guidance 

should be published. Right now I know of a business that may have 

its contract insource this month for cost purposes and they requested information on the contracting agency’s insourcing processes under the Freedom of Information Act, only to have their 

FOIA request denied. A small business should not be losing a contract under secret process. Transparent, repeated processes must 

be required. Repeatable processes must be required. 

And finally, there is the question of GAO protests. The process 

that governs outsourcing allows the government employees to protest to GAO and this provision would simply give small businesses 

the same rights. Since I know of small businesses that have lost 

their companies after insourcing decisions, they should have some 

due process right. And for these reasons I cannot support the 

gentlelady’s amendment, and I urge my colleagues to oppose it. 

With that the question is on Ms. Clarke’s amendment to 3893. 

All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

[Chorus of noes.] 

Chairman GRAVES. The nos appear to have it. The nos do have 

it. 

With that—thank you very much—with that we will move on to 

the next order of business. 

Are there any other amendments, I guess, before we close? Any 

other amendments? 

Seeing none, the question now is agreeing to H.R. 3893 as 

amended. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

[Chorus of noes.] 

Chairman GRAVES. It is the opinion of the chair that the ayes 

have it. The ayes do have it. 

H.R. 3893 is agreed to. Without objection, a quorum being 

present, the bill is favorably reported to the House. 

Without objection, the Committee is authorized to correct punctuation and make any other necessary technical corrections of the 

document considered today. Without any objection that is so ordered. 

The next order of business. The next order of business is H.R. 

3980, the Small Business Opportunity Act of 2012 introduced by 


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Ms. Herrera Beutler and Mr. Schrader. I yield to Ms. Herrera 

Beutler to speak on 3980. 

Ms. HERRERA BEUTLER. Thank you, Mr. Chairman. And I would 

like to say publicly thank you, Chairman Graves and to your staff 

for helping make this important bill—help us bring it before this 

Committee today. I would also like to thank Ranking Member 

Vela ́zquez. And further, my partner in this effort, Mr. Schrader, for 

joining me in introducing this bipartisan piece of legislation. And 

all my colleagues who have co-sponsored the bill. 

You know, I am pleased, Mr. Chairman, to introduce the Small 

Business Opportunity Act. This bill improves the acquisition planning process and empowers procurement center representatives— 

PCRs is what I am going to refer to them as—to be better advocates for small businesses. This is going to mean more jobs and 

more economic opportunities in Southwest Washington where I 

represent and across the country. 

Procurement center representatives are Small Business Administration employees inside federal agencies. So they are advocates inside these agencies directly responsible for ensuring small businesses get the opportunity to compete for federal contracts. They 

review federal contracts with the single goal of providing small 

businesses a level playing field on which to compete. Unfortunately, Mr. Chairman, PCRs are not given the opportunity to perform their jobs to the best of their abilities. 

Why, you might ask. At times agencies fail to send those procurement documents for their review. When they do receive those documents, at times the review is the last step in the procurement process, meaning they get it once the package is only complete. Everything has been all but finalized but when the PCR actually receives 

it. So this limits the PCR’s ability to meaningful alter or improve 

the contracts that will benefit small businesses. So basically it is 

keeping them off the table or not at the table. So instead of reviewing contracts, procurement center representatives often spend a 

great deal of time contracting personnel, training contracting personnel in various small business contracting programs. This task 

does not appear in their job description. So with only 58 PCRs 

across the country, Mr. Chairman, they certainly do not need to be 

spending their time doing other people’s jobs. 

So perhaps the biggest obstacles that small businesses face when 

they are competing for contracts is the fact that PCRs are directed 

to specifically not review contracts on commercially available items 

or services. A commercially available item is anything an everyday 

person would be able to purchase from a store. Anything from a 

box of pencils to a laundry service. There is absolutely no reason 

that small businesses should not be given the opportunity to compete for these contracts. Without proper input from the PCRs, 

many times they are excluded. 

So how do we fix this? Well, this bill, the Small Business Opportunity Act, changes this playing field; it levels it. The legislation 

clarifies that PCRs shall have access to all documents in the acquisition planning process. Further, they will now be consulted at the 

beginning of the planning process rather than at the end when everything is put together and given an opportunity to weigh in on 

behalf of small businesses throughout the development of each conVerDate Mar 15 2010 01:27 Jan 19, 2013 Jkt 077585 PO 00000 Frm 00028 Fmt 6633 Sfmt 6602 E:\HR\OC\A845.XXX A845

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tract. The Federal acquisition Institute and the Defense Acquisition 

University, which are already funded to educate federal acquisition 

workforce, will be responsible for all the training, which means we 

are taking it off the PCRs’ plate, and it allows them to focus on 

their main goal, which is advocating for small businesses. 

Mr. Chairman, small businesses across the country are eager to 

compete for these contracts—for these federal contracts. There are 

over 900 of them in Southwest Washington alone, in my district, 

and when we have double digit unemployment and we know that 

small businesses—they are the engines of our economy, they should 

be given the opportunity to compete. Not only will allowing them 

to better compete benefit the small businesses in jobs that they are 

going to create, it is going to increase competition, which is going 

to bring down bidding prices and the dollars saved on those lower 

bids are taxpayer dollars. So it is an efficient, effective use of this 

system, and the Small Business Opportunity Act reforms it in a 

very commonsense way. 

So I urge my colleagues to adopt, and again, I thank the ranking 

member and the chairman and my partner in this effort, Mr. 

Schrader. I yield back. 

Chairman GRAVES. Ms. Vela ́zquez. 

Ms. VELA ́ ZQUEZ. I do not have a statement. 

Chairman GRAVES. I am sure Mr. Schrader does. Mr. Schrader. 

Mr. SCHRADER. Thank you, Mr. Chairman. 

I just briefly want to express my support for Congresswoman 

Herrera Beutler’s bill. It simply clarifies the procurement process 

for small businesses through enabling the PCRs to do their job and 

it is a good bipartisan bill and I hope everyone will vote for it. 

Thank you. 

Chairman GRAVES. Are there any other members that wish to be 

recognized for a statement on 3980? 

With that I support H.R. 3980. It does modernize the role of the 

procurement center representatives. Doing so will ensure that we 

have qualified individuals supporting small businesses in a manner 

consistent with current procurement practices. It is also going to 

ensure that small businesses are considered throughout the acquisition process, not just at the end, which will increase small business opportunities. I believe that this bill deserves bipartisan support and I urge the Committee to pass it. 

The Committee now moves to consideration of H.R. 3980. The 

clerk will report the title. 

The CLERK. H.R. 3980, To Amend the Small Business Act with 

Respect to Procurement Center Representatives and Acquisition 

Planning and for Other Purposes. 

Chairman GRAVES. Without objection 3980 is considered read 

and open for amendment at any point. Does anyone have an 

amendment? And I believe the first one is Mr. Schilling. 

Mr. SCHILLING. Thank you, Chairman Graves and Ranking Member Vela ́zquez. 

Chairman GRAVES. Hang on just a second. Let the clerk report. 

The CLERK. Amendment 1 to H.R. 380 offered by Mr. Schilling 

of Illinois. 

Chairman GRAVES. Without objection the amendment is considered read. Mr. Schilling, you have five minutes. 


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Mr. SCHILLING. Thank you again. Also, I want to thank Representative Herrera Beutler and Mr. Schrader for their bipartisan 

legislation on this issue. 

As we all know, PCRs are an important part of making certain 

that small businesses have the opportunity to compete for government contracts. They provide invaluable service advice and assistance to small firms during the sometimes lengthy and complicated 

procurement process. That being said, it is important that these 

advocates have the necessary training to advise small businesses. 

My amendment adds an important clarification for PCRs who have 

not achieved the certification requirements in this legislation. 

As currently written, I believe H.R. 3980 may result in the SBA 

having to let go of PCRs that do not meet the certification requirements in the bill. I fear this would harm small businesses by 

abruptly interrupting the process but also these PCRs could lose 

their jobs which we do not need any more unemployment, of 

course. But my amendment would provide current PCRs with an 

additional time, five years, to receive the necessary certification 

and training to comply with the improvements offered by H.R. 3980 

and help them properly assist our job creators. It is a good bill. I 

think it is a short, sweet amendment and I would hope to have 

your support on it. I yield back. 

Chairman GRAVES. Does anyone else wish to be heard on the 

Amendment No. 1 by Mr. Schilling? 

With that, this member provides a phase-in period for requiring 

procurement center representatives to obtain federal contracting 

certification. I think this amendment makes sense. I do support the 

gentleman’s amendment. 

The question is on the amendment offered by Mr. Schilling. All 

those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All opposed, no. 

The ayes appear to have it. The ayes do have it. The amendment 

is adopted. 

The next amendment would be Ms. Chu. Would the clerk please 

report the title. 

The CLERK. Amendment 2 to H.R. 3980 offered by Ms. Chu of 

California. 

Chairman GRAVES. Without objection the amendment is considered read. You have five minutes. 

Ms. CHU. Mr. Chair, I am supportive of the improvements that 

this bill is making to procurement center representatives and acquisition planning. Many of these comments and changes are long 

overdue. With the same thought in mind, my amendment would require training in small business prime contracting programs for 

PCRs, OSDBU directors, contracting officers, and business opportunity specialists. Basically, personnel involved in contracting and 

procurement for small business. The prime contracting programs 

include the 8A program, the HUBZone program, the service-disabled veteran-owned small business program, and the womenowned small business program. It is surprising, but not all contracting officers and PCRs understand the requirements of the 

unique characteristics each business owner faces. By giving them 


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this training on these businesses, these personnel can only be more 

successful in their work on behalf of small businesses. 

Chairman GRAVES. Any other member wish to be heard on the 

amendment? 

Ms. VELA ́ ZQUEZ. Well, I would encourage all the members to support this amendment. It is straightforward common sense. It will 

add to the federal acquisition process and will enable those PCRs 

to really understand when to help small businesses. And I encourage support for this amendment. 

Chairman GRAVES. Any other member wish to be heard? 

Seeing none, this amendment does clarify that training on the 

Small Business Act’s contract and provisions means that all the 

small business contracting programs—it requires that other small 

business contracting advocates, not just PCRs have a federal contracting certification. Educating contractors and small business advocates is going to increase the quality of government contracting 

and the number of awards to small businesses. I do support the 

amendment. 

And with that, the question is on the amendment offered by Ms. 

Chu. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All opposed, no. 

The ayes appear to have it. The ayes do have it. The amendment 

is adopted. 

The next amendment is with Mr. Richmond. Will the clerk please 

report the title. 

The CLERK. Amendment 3 to H.R. 3980 offered by Mr. Richmond 

of Louisiana. 

Chairman GRAVES. Without objection, the amendment is considered as read. Mr. Richmond, you have five minutes. 

Mr. RICHMOND. Thank you, Mr. Chairman. And I want to thank 

both sides and the authors for bringing this bill. 

My amendment simply acknowledges the fact that we are losing 

a large number of our acquisition workforce and this would request 

that the GAO look at that and see—and report back to us on the 

impact that it is having on small businesses so that we can make 

sure that staffing levels in the future will not impact the sustainability of small businesses. And that is simply what it does. And 

I would ask everyone to support it. 

Chairman GRAVES. Anyone else wish to be heard on the amendment? 

Seeing none, this amendment, it does require, just as Mr. Richmond pointed out, it requires GAO to report on potential retirements in the acquisition workforce and how they are going to relate 

to small businesses. When the workforce is inadequate, they tend 

to bundle contracts and that is a real problem as we have seen in 

this Committee. I do think this topic is worth further study and I 

support the amendment. 

With that, the question is on the amendment by Mr. Richmond. 

All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All opposed, no. 

The ayes appear to have it. The ayes do have it. The amendment 

is adopted. 


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Are there any other amendments? 

Seeing none, the question is on agreeing to H.R. 3980 as amended. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed no. 

In the opinion of the chair the ayes have it and H.R. 3980 is 

agreed to. Without objection, a quorum being present, the bill is favorably reported to the House. And without objection, the Committee is authorized to correct punctuation and make other necessary technical corrections to the document considered today 

which is so ordered. 

So this brings us back to 3850. Is that correct? 

[Recess.] 

Chairman GRAVES. All right. I missed 4118. The next order of 

business is 4118. Then we will come back to 3850. 

The next order of business is 4118, Small Business Procurement 

Improvement Act of 2012 offered by Mr. Critz. 4118 addresses the 

problem of how the procurement program of the Small Business 

Act apply to multiple award contracts and the role of the Small 

Business Administration in making those procurement policies. 

The Small Business Act never exempted multiple award contracts, 

but agencies have routinely acted as it did despite the Government 

Accountability Office holding otherwise. This bill corrects that 

problem and puts the SBA on the Federal Acquisition Regulation 

Council, which is going to ensure that small businesses have a 

larger voice in federal procurement. This bill does have my support. 

I recognize Ranking Member Vela ́zquez. Or do you want to go to 

Mr. Critz? 

Ms. VELA ́ ZQUEZ. Over the last decade, historically significant 

trends have overtaken the federal procurement marketplace. While 

the government has nearly doubled its spending to half a trillion 

dollars, the acquisition workforce that oversees these contracts has 

only grown by 10 percent. The result is not surprising. The use of 

multiple award contracts is growing rapidly, allowing agencies to 

award more dollars with less time and staffing resources. This is 

the future of federal contracting. These type of contracts now represent nearly 30 percent of the federal procurement marketplace 

and more than $40 billion are now awarded annually. When counting other types of multiple award contracts, the total dollar amount 

approaches $200 billion. 

Given these astonishing trends, it is absolutely critical that businesses are not left behind as these newer procurement vehicles expand and grow. Doing so not only gives smaller firms an opportunity to compete for awards but also gives the government more 

suppliers to choose from. This improves quality and price competition and is the number one reason this Committee continues to 

fight to open up more federal contracts to small businesses. It is 

against this backdrop that I offer my strong support for H.R. 4118. 

At its core, the legislation recognizes that procurement practices 

are evolving and this Committee needs to act to ensure small firms 

are at the forefront of these changes rather than an afterthought. 

Importantly, it also places an emphasis on small business as the 

highest level of federal procurement policy, a change that is long 

overdue. 


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I want to commend Mr. Critz and also thank Chairman Graves 

and his staff for their work on this important piece of legislation. 

And with that I yield back. 

Chairman GRAVES. Does any other member wish to be recognized 

for a statement on H.R. 4118? 

Mr. Critz. 

Mr. CRITZ. Thank you, Mr. Chairman. And thank you, Ranking 

Member Vela ́zquez—— 

Chairman GRAVES. Is it St. Patrick’s Day already? 

Mr. CRITZ. There was a party today. [Laughter.] 

We will not be here for St. Patrick’s Day so we celebrate early. 

I appreciate you noticing. And often. Thank you. 

Thank you, Mr. Chairman and Ranking Member Vela ́zquez for 

all your work and for allowing me to present this bill. The federal 

marketplace, as you know, continues growing and is now approaching over half a trillion dollars annually. Unfortunately, there is 

also a pattern of federal agencies regularly missing their small 

business procurement goals of 23 percent. The total value of federal 

procurement marketplace last year was $535 billion with small 

businesses winning $92 billion or a mere 17 percent, only threequarters of their goal. About 171⁄2 billion in federal awards went 

to our Pennsylvania companies, which I represent, but less than 16 

percent of that went to small firms, much lower than the national 

average. 

In short, we are letting our small businesses down, depriving 

them of opportunities that could create badly needed jobs. In Pennsylvania we have about 485,000 citizens who are seeking work but 

cannot find it. By channeling more work to local entrepreneurs, we 

can help reduce those numbers, offering more Americans the opportunity they need to secure a strong, stable job. 

The Small Business Procurement Improvement Act takes several 

steps that will broaden small firms’ participation in the federal 

marketplace. Currently, projects no larger than $150,000 are reserved for small businesses. However, given the inability of the 

government to achieve its 23 percent goal, more needs to be done 

to get contracts in the hands of small businesses. By raising this 

limit to $200,000, we can expand the number of contracts that are 

reserved specifically for small businesses. This means more opportunity for small growing firms which translates into more jobs. 

Just as the size of contracts have changed, so, too, has the specifics of how they are structured. Today federal agencies use a variety of complex vehicles to meet their acquisition needs. Agencies 

have the flexibility to purchase goods and services through multiple 

award contracts like those on the GSA schedule or effectively enter 

into a contract with other federal agencies. As these types of arrangements grow more common, it is important that small businesses be able to win their fair share. This legislation would require that agencies begin setting small business contracting goals 

that apply to these new procurement techniques. The legislation 

also enhances the SBA’s ability to advocate for small firms in the 

federal marketplace. By ensuring entrepreneurs have a voice at the 

table, we can enhance SBA’s ability to advocate for our nation’s 

27.5 million small businesses, including Pennsylvania’s one million 

small firms. Taken together these reforms will mean that more 


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contracts flow to small companies, creating jobs locally and helping 

drive our economic recovery forward. 

I urge my colleagues to support this legislation. I thank the 

chairman and the ranking member once again and yield back the 

balance of my time. 

Chairman GRAVES. Thank you, Mr. Critz. Anybody else wish to 

be heard on the bill? 

The Committee now moves to consideration of H.R. 4118. The 

clerk, please report the title. 

The CLERK. H.R. 4118, to Amend the Small Business Act to Provide for Increased Small Business Participation in Multiple Award 

Contracts and for Other Purposes. 

Chairman GRAVES. Without objection, 4118 is considered as read 

and open for amendment at any point. Does anyone wish to offer 

an amendment? I do not think there are any. 

Seeing none, the question is on agreeing to—where are we at? 

Seeing none, the question is on agreeing to 4118. All those in favor 

say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

The opinion of the chair is the ayes have it. 4118 is agreed, and 

without objection and a quorum being present, the bill is favorably 

reported to the House. And without objection the Committee is authorized to correct punctuation and make other necessary technical 

documents or corrections on the documents considered today. 

Okay. With that we are going to go back to 3850 and clean it up 

which we have an amendment by Ms. Ellmers which was to be 

worked out over the vote break. The Committee will now resume 

consideration of H.R. 3850 in which further proceedings had been 

postponed to allow the gentlewoman from North Carolina to fix her 

amendment for what purpose is the gentlewoman recognized. 

Ms. ELLMERS. Yes, Mr. Chairman, I do have a clarification to the 

amendment to be added on the end of the bill. 

Chairman GRAVES. Will the clerk please report the amendment. 

The CLERK. Amendment 5 to H.R. 3850 offered by Ms. Ellmers 

of North Carolina. 

Chairman GRAVES. The gentlelady is recognized. 

Ms. ELLMERS. And I am to read the—— 

Chairman GRAVES. Yes. 

Ms. ELLMERS. Yes. Okay. And I believe this is agreeable to the 

ranking member and I thank all of the staff for working on this 

on the break. 

It is the sense of Congress that the contracting provisions of the 

Small Business Act shall apply to the leasing of buildings and office space by the United States and shall not apply to any leasing 

transactions between private parties. 

Chairman GRAVES. Does anyone else wish to be heard on the 

amendment? I think the amendment has been distributed. 

Ms. Vela ́zquez. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. I want to take this 

opportunity to thank the gentlelady for her flexibility in revising 

this amendment. I still feel like the amendment is still a solution 

in search of a problem but at least now we know what the solution 

is. 


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With that I thank the chairman. 

Chairman GRAVES. Does anyone else wish to be heard on the 

amendment? 

Seeing none, the question before us is on the amendment offered 

by Ms. Ellmers to, let us see, what was it, 3850. All those in favor 

say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All those opposed, no. 

The ayes appear to have it. The ayes do have it. The amendment 

is adopted. 

We have one recorded vote that is pending which appears No. 3 

to H.R. 3850. Does the gentleman wish to be recognized? 

Mr. PETERS. Yes, thank you, Mr. Chairman. 

During the vote series we had a chance to discuss this amendment with the chairman and the ranking member. It is my understanding there is some willingness to work on this issue further before this bill comes to the floor. And with that in mind and in the 

spirit of goodwill of working on this issue I would move to withdraw the amendment at this time. 

Chairman GRAVES. Mr. Peters, you have my word. We will work 

on it. I am more than willing to work with folks to try to figure 

something out and try to get things done and I will be happy to 

work with you on it. 

Mr. PETERS. I appreciate that, Mr. Chairman. 

Chairman GRAVES. Are there any other amendments? 3850. Are 

there any other amendments to 3850? 

Seeing none, the question is on agreeing to—oh, yes, ma’am. 

Ms. VELA ́ ZQUEZ. Mr. Chairman, before you proceed. 

Chairman GRAVES. Absolutely. 

Ms. VELA ́ ZQUEZ. Just to clarify, we are going to be working both 

sides to include some type of language in the manager’s amendment regarding Mr. Peters. 

Chairman GRAVES. Yes, we are. 

Ms. VELA ́ ZQUEZ. Okay. 

Chairman GRAVES. Anybody else wish to be heard? 

Seeing none, the question is on agreeing to H.R. 3850 as amended. All those in favor say aye. 

[Chorus of ayes.] 

Chairman GRAVES. All opposed, no. 

The ayes appear to have it. The ayes do have it. 

Without objection and a quorum being present, the bill is favorably reported to the House. Without objection, the Committee is 

authorized to correct punctuation and make other necessary technical corrections on the document considered today. Without objection that is so ordered. 

I think that is everything. Have I forgotten anything? 

Why all the long faces? This was a good day. 

With that, I appreciate everybody being here. It has been a long 

afternoon but we got a lot of good stuff. We have got more to come 

on this contracting stuff. We will have another hearing in a few 

weeks, two weeks, to finish this stuff up. But with that, thank you 

very much. I appreciate it. This hearing is adjourned. 

[Whereupon, at 3:50 p.m., the Committee was adjourned.] 


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AMENDMENT TO H.R. 3850 

OFFERED BY MS. HAHN OF CALIFORNIA

Page 8, line 5, strike ‘‘paragraph (2)’’ and insert ‘‘subsection 

(h)(2)’’. 

Page 8, beginning on line 23, strike ‘‘competition in the Contract 

Act’’ and insert ‘‘the Competition in Contracting Act of 1984’’. 

Page 10, line 11, insert after ‘‘President and Congress’’ the following: ‘‘, and to make available on a public website,’’. 

AMENDMENT TO H.R. 3850 

OFFERED BY MS. CHU OF CALIFORNIA

Page 13, line 9, strike ‘‘and’’. 

Page 13, line 11, insert ‘‘and’’ at the end. 

Page 13, insert after line 11 the following (and redesignate provisions accordingly): 

(VI) by reason of that concern’s certification as 

a small business owned and controlled by socially 

and economically disadvantaged individuals; 

AMENDMENT TO H.R. 3850 

OFFERED BY MR. PETERS OF MICHIGAN

Page 3, line 18, strike ‘‘5 percent’’ and insert ‘‘7.5 percent’’. 

Page 3, line 19, strike ‘‘5 percent’’ and insert ‘‘7.5 percent’’. 

AMENDMENT TO H.R. 3850 

OFFERED BY MRS. ELLMERS OF NORTH CAROLINA

Add, at the end of the bill, the following: 

SEC. 5. SENSE OF CONGRESS. 

It is the sense of Congress that the contracting provisions of the 

Small Business Act shall apply to commercial leasing services. 

AMENDMENT TO H.R. 3851 

OFFERED BY MR. GRAVES OF MISSOURI

Page 4, insert after line 19 the following (and redesignate provisions accordingly): 

(e) REQUIREMENT OF CONTRACTING EXPERIENCE FOR OSDBU DIRECTOR.—Section 15(k) of the Small Business Act (15 U.S.C. 

644(k)), as amended by this Act, is further amended, in the matter 

preceding paragraph (1), by striking ‘‘who shall’’ and insert the following: ‘‘, with at least 10 years of experience serving in any combination of the following roles: federal contracting officer, small 

business technical advisor, contracts administrator for federal govVerDate Mar 15 2010 01:27 Jan 19, 2013 Jkt 077585 PO 00000 Frm 00036 Fmt 6633 Sfmt 6602 E:\HR\OC\A845.XXX A845

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ernment contracts, attorney specializing in federal procurement 

law, small business liaison officer, officer or employee who managed federal government contracts for a small business, or individual whose primary responsibilities were for the functions and 

duties of sections 8, 15 or 44 of this Act. Such officer or employee 

shall’’. 

AMENDMENT TO H.R. 3851 

OFFERED BY MS. HAHN OF CALIFORNIA

Page 3, beginning on line 4, strike ‘‘Section (15)(k)(8)(B)’’ and insert the following: 

(1) EXPANSION OF ROLE.—Section (15)(k)(8)(B) 

Page 3, line 6, strike ‘‘by striking’’ and insert the following: 

‘‘— 

(1) by striking’’ 

Page 3, insert after line 7 the following: 

(2) by inserting after ‘‘of this Act’’ the following: ‘‘(giving priority in assigning to small business that are in metropolitan 

statistical areas for which the unemployment rate is higher 

than the national average unemployment rate for the United 

States)’’. 

AMENDMENT TO H.R. 3893 

OFFERED BY MR. MULVANEY OF SOUTH CAROLINA

Page 2, beginning on line 13, strike ‘‘(except construction)’’. 

Strike page 2, line 17, and all that follows through page 3, line 

7, and redesignate provisions accordingly. 

Page 4, strike line 5 and all that follows through line 12, and redesignate provisions accordingly. 

Page 6, insert after line 3 the following: 

(3) CONSTRUCTION PROJECTS.—The Administrator shall establish, through public rulemaking, requirements similar to 

those specified in paragraph (1) to be applicable to contracts 

for general and specialty construction and to contracts for any 

other industry category not otherwise subject to the requirements of such paragraph. The percentage applicable to any 

such requirement shall be determined in accordance with paragraph (2). 

Page 18, line 2, strike ‘‘private sector entity’’ and insert ‘‘small 

business concern’’. 

Page 18, line 12, strike ‘‘includes any’’ and insert ‘‘means a’’. 


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34 

AMENDMENT TO H.R. 3893 

OFFERED BY MS. CLARKE OF NEW YORK

Beginning on page 17, line 18, strike all that follows through the 

end of the bill, and redesignate provisions accordingly. 

AMENDMENT TO H.R. 3980 

OFFERED BY MR. SCHILLING OF ILLINOIS

Page 6, line 14, insert after ‘‘certification’’ the following: ‘‘, except 

that any person serving in such a position on the date of enactment 

of this clause may continue to serve in that position for a period 

of 5 years without the required certification’’. 

AMENDMENT TO H.R. 3980 

OFFERED BY MS. CHU OF CALIFORNIA

Page 8, line 24, insert ‘‘, including the requirements for small 

business concerns owned and controlled by service-disabled veterans, qualified HUBZone small business concerns, small business 

concerns owned and controlled by socially and economically disadvantaged individuals, small business concerns owned and controlled by women,’’ before the period at the end. 

Page 9, insert after line 5 the following: 

(c) REQUIREMENT THAT BUSINESS OPPORTUNITY SPECIALISTS BE

CERTIFIED.—Section 7(j)(10)(D)(i) of the Small Business Act (15 

U.S.C. 636(j)(10)(D)(i)) is amended by inserting after ‘‘to assist such 

Program Participant.’’ the following: ‘‘The Business Opportunity 

Specialist shall have a Level I Federal Acquisition Certification in 

Contracting (or any successor certification) or the equivalent Department of Defense certification, except that a Business Opportunity Specialist serving at the time of the date of enactment of the 

Small Business Opportunity Act of 2012 may continue to serve as 

a Business Opportunity Specialist for a period of 5 years beginning 

on that date of enactment without such a certification.’’. 

AMENDMENT TO H.R. 3980 

OFFERED BY MR. RICHMOND OF LOUISIANA

Page 9, insert after line 5 the following: 

(c) GAO REPORT.—Not later than 365 days after the date of enactment of this Act, the Comptroller General of the United States 

shall conduct a study and submit a report to the Committee on 

Small Business of the House of Representatives and the Committee 

on Small Business and Entrepreneurship of the Senate on the relationship between the size and quality of the acquisition workforce 

and the Federal government’s ability to maximize the utilization of 

small businesses in Federal procurement. The report shall specifically address the following: 


tjames on DSK6SPTVN1PROD with 
35 

(1) The extent to which training on small business contracting laws affects a contracting officer’s determination to 

use one of the contracting authorities provided in the Small 

Business Act. 

(2) The relationship between a robust Federal acquisition 

workforce and small business success in obtaining Federal contracting opportunities. 

(3) The effect on economic growth if small businesses experienced a significant reduction in small business procurement activities. 

(4) The effect of the anticipated acceleration of retirements 

by the acquisition workforce on small business procurement opportunities. 

AMENDMENT TO H.R. 4121 

OFFERED BY MR. GRAVES OF MISSOURI

Page 5, insert after line 14 the following: 

SEC. 3. REPEAL OF SIMILAR PROGRAM. 

Section 304 of the Small Business Administration Reauthorization and Amendments Act of 1994 (15 U.S.C. 644 note) is repealed. 


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DAVID N. CICILLINE 

1ST DISTRICT. RHODE ISLAND 

128 CANNON BUILDING 

WASHINGTON, D.C. 20515 

1202!225-4911 

(202!225-3290{FAX) 

t070 MAIN STREET, SUITE 300 

PAwruCKET. RI02860 

(401) 72g.·5600 

(401) 72g.·5608 (FAXI 

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1!;lllUl.e .of 1K.epr.ea.ettfatiu.ea 

1Iu!i~ttt9t.ott. llar20515 

Representative David N. Cldlllne (RI-Ot) 

COMMITTEE ON SMALL BUSINESS 

suaCOVMIITEE ON ECONOMIC 

GROWTH, TAX ANr)CAI'ITAl.. ... CCES5 

5UUCOMMIITt;J! ON AGRICULTURE, 

CQMM1TTES ON FOREIGN AFFAIRS 

SUBCOMMITTEe ON TERROfUSM. 

NONPROLIFERATION, AN!) TRAOE 

SUaCOMMlrTEE ON OVERSIGHT AND 

COMMITTEE ON STEERING AND POLICY 

Testimony Regarding The House Small Business Commlttee's Views and Estimates Small 

Business Administration's Fiscal Year 2013 Budget Request 

Thank you Chairman Graves, Ranking Member Velazquez, and my colleagues on the House 

Committee on Small Business. 

As of January, the unemployment rate In Rhode Island stood at 10.9 percent. That means more than 

61,000 men and women in my state are without work. As all of you know so well, the federal budget 

is not just a series of estimates, revenues, and expenditures. The budget is a powerful Indication of 

our priorities as a nation. The work that we will undertake in the coming months is a rellection of 

our desire and ability to chart a course to prosperity in our states and nation - both now and into 

the future. 

Small businesses are a key component of Rhode Island's and the nation's economic recovery. 

Charting a course to prosperity requires that we create an environment where hardworking 

entrepreneurs can access the tools they need to generate and expand Ilrms, create jobs, and 

strengthen our economy. 

Small bUSinesses, firms with fewer than 500 employees, totaled 93,333 In Rhode Island in 2009. Of 

this total, 23,837 were employers, accounting for 55.2% of the state's private-sector jobs. 

Furthermore, in 2010, small businesses with less than 20 employees accounted for approximately 

90 percent of all private sector employers, providing jobs for Just over 25% of Rhode Island's 

workforce. 

Small businesses are vitally Important for job growth in my state and throughout the nation. 

Depending on the data source one uses, nation-wide over the past 15 years, small businesses have 

accounted for 65% to 90% of net new jobs. However, small businesses have also borne the brunt of 

the worst economic downturn in generations and shed a Significant number of jobs during the 

receSSion. This distinguishes the most recent recession from the 2001 downturn, in which larger 

businesses experienced greater net Job declines and very small businesses were quicker to recover. 

It is clear that cultivating robust and thriving small bUSinesses Is a critically important element in 

improving the health of Rhode Island's and our nation's economy. The Small Business 

Administration (SBA), through capital access programs, technical assistance, entrepreneurial 

development initiatives, and government contracting activity fullllls a vital role in supporting this 

segment of our economy. As the House Committee on Small Business transmits Its views and 

estimates report on the SBA Fiscal Year 2013 budget request. I would like to take this opportunity 

to provide my Input. 

PRINTED ON RECYCLED PAPER 
37 


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Representative David N. Cicilline (RI - 01) 

Testimony to House Small Business Committee 

March 7, 2012 

Page20f3 

First, SBA's Rhode Island District Office was credited with $126,542,000 in loan dollar volume 

during Fiscal Year 2011. This volume represents more than a 20% increase above Fiscal Year 2010. 

Of the 447 loans in Fiscal Year 2011 by program, the vast majority were acquired through SBA's 

most commonly used lending program - the 7(a) Loan Program. The SBA's guarantees help 

entrepreneurs secure loans to establish new businesses or to assist in the acquisition, operation, or 

expansion of an existing business. For small businesses in Rhode Island, and throughout the nation, 

the SBA's lending programs provide critically needed capital and credit to our job creators and 

entrepreneurs. In January of this year, I visited Dr. Carmen D. Sanchez, owner of Comfort Dental in 

Central Falls, Rhode Island. Dr. Sanchez, a native of the Dominican Republic, first opened a Comfort 

Dental office in Providence in 1999, and later started a second office in Central Falls after she was 

able to secure loans from the SBA. For Fiscal Year 2013, I support the much-needed funding for 

SBA's lending programs, including 7(a), the Certified Development Company Loan Program, and 

Microloans, so that entrepreneurs like Dr. Sanchez can continue to open and grow small businesses 

and create jobs. 

Second, our nation's network of Small Business Development Centers (SBOCs) is an essential 

element of the SBA's outreach and technical assistance efforts. As I stated last year, I once again 

strongly disagree with the proposal to reduce SBDC funding. In 2011 alone, the Rhode Island Small 

Business Development Center (RISBOC) helped businesses acquire more than $26 million in muchneeded capital, and helped to create or retain more than 1,800 jobs. For a state with one of the 

highest unemployment rates in the country, the RlSBDC is an invaluable resource for our small 

businesses and entrepreneurs. Nationally, SBDCs help form the backbone of essential economic 

development services for our smaller enterprises. A 10 percent reduction to the SBOC will not only 

stifle their ability to generate finanCing. which amounted to more than $3.8 billion in 2011, but will 

also negatively impact other outcomes that are more difficult to quantify in monetary terms. 

Locally, these outcomes include partnering with the Rhode Island Department of Labor and 

Training and local businesses to assess skills gaps, assisting Spanish speaking small business 

owners through bi-lingual training programs, providing human resource aSSistance to help retain 

workers, and aiding entrepreneurs with sales and marketing strategies. 

While the Administration and Congress contemplate the many possible ways to reduce spending, 

we must support programs, like the Small Business Development Centers, that have proven their 

return on investment time and again - delivering high quality and effective services to small 

business owners and entrepreneurs. 

Third, as was the Majority's recommendation in the IT 2012 Views and Estimates of the House 

Committee on Small Business, the IT 2013 Views and Estimates again include reductions and, in 

some instances, elimination of funding for programs that provide targeted and essential assistance 

to communities in critical need of access to the SBA's expert counsel. As I argued last year, the 

position promoted within the Views and Estimates regarding duplication of services and programs, 

within and outside of the SBA, requires urgent and comprehensive review by an independent third 

party. Efforts to eliminate funds for programs that serve women, veterans, low-income individuals, 
38 


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Representative David N. Cicilline (RI - 0 I) 

Testimony to House Small Business Committee 

March 7, 2012 

Page 3 of3 

and Native Americans should not be enacted without first conducting a thorough, third party 

review of these programs and their relationship with existing initiatives in the SBA and other 

government agencies and departments. This Committee must ensure that essential services will 

continue to be provided in a timely and effective fashion to clients who face unique obstacles in 

opening and expanding a small business. 

Finally, the Small Business Administration must be given the flexibility to adapt their programs in a 

timely fashion to the changing needs of small businesses and fluctuations in the economy. As I 

stated in FY 2012, I again reiterate that while flexibility should not exceed statutory authorization, 

it must also not be interpreted so narrowly as to constrain the SBA's ability to innovate and 

adequately serve the needs of small businesses and entrepreneurs. 

As I noted during a hearing of the Small Business Committee in October 2011, I commend the SBA 

for taking the initiative to propel more capital into the hands of start-ups and entrepreneurs 

through two new variations in the Small Business Investment Company (SBIC) program - the Early 

Stage Innovation Fund and Impact Investment Fund. As Ranking Member Velazquez noted during 

that hearing. SBA studies indicate that the unmet need for early-stage equity financing for small 

businesses is about $60 billion annually. Initiatives like the Early Stage Innovation Fund will help 

Start-ups like Axena Technologies in Providence, Rhode Island by targeting the market gap in earlystage financing that all too often prevents start-up small businesses from transforming their 

entrepreneurial visions into reality. The SBA has $3 billion in authorized leverage annually through 

the SBIC program, and is seeking an increase to $4 billion for FY 2013. Both the Early Stage 

Innovation Fund and Impact Investment Fund are intended to leverage a portion of existing. 

untapped authority - propelling much needed capital into the hands of start-ups and 

entrepreneurs. 

At the same time, as part of their continuing commitment to expanding access to capital for small 

businesses in underserved communities, the SBA launched two new initiatives within the 7(a) 

lending program - the Small Loan Advantage and the Community Advantage. These programs will 

reach maturation in FY 2013, and I look forward to the SBA's review of the performance of these 

initiatives and their ability to get more capital into the hands of small business owners and 

entrepreneurs in underserved areas. 

While the SBA should be given the flexibility to implement these proposals within the SBIC and 7(a) 

programs, they must also be held accountable for developing and operating the programs in a 

manner that protects the financial soundness of the SBIC and 7(a) portfolio. Furthermore, as stated 

last year, I strongly believe the SBA should be required to provide regular reviews to this 

Committee on the performance of these initiatives. 

Thank you for the opportunity to submit my opinions on this Committee's views and estimates of 

the SBA Fiscal Year 2012 budget request.