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52–278 PDF 2009

DOING BUSINESS WITH THE 

GOVERNMENT: THE RECORDS 

AND GOALS FOR SMALL, MINORITY 

AND DISADVANTAGED BUSINESSES 

(111–59) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 17, 2009 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

PARKER GRIFFITH, Alabama 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

(II) 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chair 

BETSY MARKEY, Colorado 

MICHAEL H. MICHAUD, Maine 

HEATH SHULER, North Carolina 

PARKER GRIFFITH, Alabama 

RUSS CARNAHAN, Missouri 

TIMOTHY J. WALZ, Minnesota 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania, 

Vice Chair 

DONNA F. EDWARDS, Maryland 

THOMAS S. P. PERRIELLO, Virginia 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

MARIO DIAZ-BALART, Florida 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

MARY FALLIN, Oklahoma 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

PETE OLSON, Texas 

(III) 

(V) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... vii 

TESTIMONY 

Amirian, Ray, Nastos Construction Company, District of Columbia Small 

Business Winner, 2009 ........................................................................................ 34 

Ayers, Stephen T. AIA, Acting Architect of the Capitol ....................................... 4 

Giordano, Catherine President/CEO, Knowledge Information Solutions, Inc. ... 34 

Hansen, Jacob, Director, Acquisition Management Division, Federal Emergency Management Agency ................................................................................. 4 

Mosier, Roger, Vice President of Facilities, The John F. Kennedy Center 

for the Performing Arts ....................................................................................... 4 

Riggs, Tamela, Deputy Assistant Commissioner for Vendor Alliance and Acquisition, General Services Administration, Public Building Service .............. 4 

Rouse, Terrie S., Chief Executive Officer for Visitor Services, Capital Visitor 

Center .................................................................................................................... 4 

Stephenwoof, Rosalind Styles, President and CEO, Capitol City Associates, 

Inc. ......................................................................................................................... 34 

Watley, Rudy, Supplier Diversity Program Manager, Office of Equal Employment and Minority Affairs, The Smithsonian Institution ................................ 4 

Zingeser, Joel, Associated General Contractors of America ................................. 34 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Carnahan, Hon. Russ, of Missouri ......................................................................... 54 

Norton, Hon. Eleanor Holmes, of the District of Columbia ................................. 55 

Oberstar, Hon. James L., of Minnesota ................................................................. 59 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Amirian, Ray ............................................................................................................ 60 

Ayers, Stephen T. .................................................................................................... 62 

Giordano, Catherine ................................................................................................ 74 

Mosier, Roger ........................................................................................................... 91 

Riggs, Tamela ........................................................................................................... 94 

Rouse, Terrie ............................................................................................................ 104 

Stephenwoof, Rosalind Styles ................................................................................. 108 

Watley, Rudy ............................................................................................................ 113 

Zingeser, Joel ........................................................................................................... 116 

SUBMISSIONS FOR THE RECORD 

Ayers, Stephen T. AIA, Acting Architect of the Capitol: ......................................

Chart entitled, ′′Smithsonian Institution Contract Awards to Small and 

Small Disadvantaged Business Fiscal Years 2004- 2008′′ ..................... 66 

Chart entitled, ′′Status of SI Supplier Diversity FY 2009 Goal Accomplishments .................................................................................................. 67 

Memorandum of Understanding between the Small Business Administration and the Architect of the Capitol .................................................. 68 

Hansen, Jacob, Director, Acquisition Management Division, Federal Emergency Management Agency, responses to questions from the Subcommittee . 79 

Riggs, Tamela, Deputy Assistant Commissioner for Vendor Alliance and Acquisition, General Services Administration, Public Building Service: .............

Chart entitled, ′′FY 2009 PBS National Capital Region Preliminary 

Small Business Goaling Achievement′′ .................................................... 98 

Responses to questions from the Subcommittee ......................................... 99 

Rouse, Terrie S., Chief Executive Officer for Visitor Services, Capital Visitor 

Center, responses to questions from the Subcommittee ................................... 106 

Page

VI 

Watley, Rudy, Supplier Diversity Program Manager, Office of Equal Employment and Minority Affairs, The Smithsonian Institution, responses to questions from the Subcommittee .............................................................................. 115 

ADDITION TO THE RECORD 

The Associated General Contractors of America, Ken Simonson, Chief Economist, fact sheet ..................................................................................................... 122 

Thor Construction, Richard Copeland, Chairman, written testimony ................ 123 

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(1) 

DOING BUSINESS WITH THE GOVERNMENT: 

THE RECORD AND GOALS FOR SMALL, MINORITY AND DISADVANTAGED BUSINESSES 

Thursday, September 17, 2009 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 1:55 p.m., in Room 

2167, Rayburn House Office Building, Hon. Eleanor Holmes Norton 

[Chair of the Subcommittee] presiding. 

Ms. NORTON. I apologize for the delay. Votes delay and continue 

to delay. Since I vote on some matters on the House floor, I finished those matters on which I vote. The Ranking Member is still 

allowed to vote on some matters that I am not allowed to vote, although his people don’t pay as many Federal income taxes as mine 

do per capita, as I shall remind him, but these are the last votes 

of the day. So I only hope with all the arrangements Members 

make to leave that he will be able to come. 

This Subcommittee is pleased to welcome our witnesses today. 

We look forward to hearing the testimony of our small business 

witnesses concerning their experiences in contracting with the Federal Government. And we are also pleased to receive the testimony 

of agencies within the jurisdiction of this Subcommittee about their 

goals and accomplishments for small businesses and for minorityowned, minority-women-owned and our disadvantaged businesses. 

The subject of today’s hearing could not be more timely or important because of the government’s critical interest in ensuring that 

small minority and women-owned businesses are given an equal 

opportunity for Federal contracts. 

According to information supplied us by the Department of Justice, there is strong evidence that these small businesses continue 

to face barriers in numerous areas of business that unlawfully limit 

their opportunities. For example, minority and women-owned businesses experience discrimination from business lenders, are 

charged higher prices for essential materials, are intentionally subjected to unnecessarily high bonding requirements, and are excluded from subcontracting opportunities by prime contractors. Robust implementation of the Federal programs enacted to support 

these businesses is necessary to ensure that the government does 

not unlawfully and unconstitutionally participate in or perpetuate 

these barriers. 

2 

Today’s hearing is a follow-up of our March 6, 2008, hearing on 

the subject when we alerted our agencies that we would be holding 

annual oversight hearings on issues and progress in small business 

contracting. Among the issues we addressed last year were bundling of contracts by Federal agencies that makes it difficult for 

small businesses to compete, the benefits of competing on the GSA 

schedule, small business outreach by Federal agencies, and how 

agencies account for small business participation in procurement. 

We look forward to examining agency efforts to address these as 

well as new issues that may have arisen. 

This Subcommittee places a strong emphasis on business, small 

businesses, because they are central to the U.S. economy, particularly during what is now being called the Great Recession. The 

Federal Government as the largest small business contractor has 

a special obligation to this indispensable sector, especially in today’s economic turndown. The roughly 25 million small businesses 

in the United States account for 50 percent of the Nation’s private 

nonfarm gross national product; however, they receive only 20 percent of Federal contracts. Women make up 30 percent of the small 

business owners nationally in 2008, but received only 3.4 percent 

of contracts. Minorities own 18 percent of small businesses nationally, but receive only 6.8 percent of Federal contracts in 2008. 

Because most of the jobs created by small businesses remain in 

this country, their formidable job creation power has premium 

value for our economy and for the American people. Small businesses with fewer than 500 employees accounted for 64 percent of 

the 22.5 million net new jobs between 1993 and the third quarter 

of 2008, according to the Small Business Administration. Of course, 

many Federal contracts necessarily go to large contractors, so Federal agencies are in the best position themselves to analyze their 

contracts in order to make a fair and practical allocation of contracts that should go to small businesses under the law. 

We are particularly interested in how agencies make these allocations, considering that small businesses are responsible for the 

lion’s share of new jobs. Unfortunately, however, the difficulty of 

establishing and maintaining small businesses, even in the best of 

economic times, means that many of these businesses and the jobs 

they generate do not survive; however, they are quickly replaced by 

new risk takers, characteristic of successful entrepreneurship in 

this country. 

The Small Businesses Administration said in a recently released 

report to the President that the recession’s credit freeze in the 

short-term funding market had a particularly harmful effect on the 

ability of small businesses to operate. 

The American Recovery and Reinvestment Act provided an important opportunity for the Federal Government to offer a lifeline 

to small businesses in this tough economy. As of August 14, 2009, 

the SBA reports that 23.7 percent of the 8.37 billion in Recovery 

Act contract dollars have gone to small businesses, and those Federal agencies have been meeting disadvantaged business category 

goals with stimulus spending as well. 

SBA reports that 10.6 percent of contracts are awarded to small 

disadvantaged businesses, 87 percent to aid a firm, 6.4 percent to 

3 

HUBZone firms, 4.3 percent to women-owned firms, and 3.1 percent to service-disabled-veteran-owned firms. 

How have the businesses under our jurisdiction, this Subcommittee’s jurisdiction, used stimulus funds or other funds available to 

them to help fill the gap for small businesses in today’s economic 

climate? In stimulus funding alone the General Services Administration is receiving approximately $5.5 billion, the Federal Emergency Management Agency, or FEMA, is receiving $210 million, 

and the Smithsonian is receiving $25 million. We will be interested 

to know the number and type of opportunities for small business 

contracting that have been generated by agencies under the jurisdiction of this committee. 

For almost 50 years it has been the policy of the Federal Government to encourage the participation of small business in Federal 

procurement and contracting. The Small Business Act requires an 

affirmative Federal policy of doing business with small businesses—and here I am quoting—′′in order to preserve free competitive enterprise, ensure that a fair portion of the total purchases 

and contracts for supplies and services for the Federal Government 

is placed with small businesses, and maintain and strengthen the 

overall economy of the Nation,′′ end quote. 

For minority and women-owned businesses, there is an additional 14th Amendment constitutional obligation carried out in 

Federal law by Title 6 of the 1964 Civil Rights Act and by other 

Federal legislation to assure that Federal dollars do not fund discriminatory activities. In Fullilov v. Klutz, the Supreme Court 

found that Congress had the authority to remediate historic discrimination by contracting through, quote, —′′prospective elimination of barriers to public contracting opportunities,′′ end quote. 

Tough competitive standards must be enforced for small businesses and small disadvantaged businesses as for large contractors; 

however, targeting Federal procurement contracts and subcontracts 

for small businesses and for management and technical grants, 

educational and training support, as well as security bond assistance are obligations under the law. 

Although the Small Business Administration has oversight for 

encouraging small business participation by Federal-sector agencies, only continuing and regular oversight by the authorizing and 

appropriation committees with whom we will be working on these 

issues in concert can hold individual agencies accountable to implement the small business policies of the Federal Government. We 

believe that this Subcommittee has the obligation to increase the 

momentum established with our first hearing, considering the socalled Great Recession that has seized the country and most of the 

world. 

The agencies before us today have submitted information to our 

Subcommittee on their progress in meeting the requirements of 

Federal law. Three of these agencies, the Architect of the Capitol 

as a legislative agency, the Smithsonian Institution, and John F. 

Kennedy Performing Arts Center, technically are not covered by 

the Small Business Act, but to their credit voluntarily abide by the 

law. 

We will be happy to hear from all the Federal agencies for which 

we perform oversight, General Services Administration, the FedVerDate Aug 31 2005 10:00 Nov 30, 2009 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 P:\DOCS\52278 JASON
4 

eral Emergency Management Agency, the Architect of the Capitol, 

the Capitol Visitors Center, the Smithsonian and the John F. Kennedy Performing Arts Center. We offer our thanks in advance as 

well to our small business witnesses. 

Our first panel consists of the Federal witnesses, and we can proceed left to right. Thank you. Our first witness, Tamela Riggs, Deputy Assistant Commissioner for Vendor Alliance and Acquisition, 

General Services Administration, Public Building Service. 

TESTIMONY OF TAMELA RIGGS, DEPUTY ASSISTANT COMMISSIONER FOR VENDOR ALLIANCE AND ACQUISITION, GENERAL SERVICES ADMINISTRATION, PUBLIC BUILDING SERVICE; JACOB HANSEN, DIRECTOR, ACQUISITION MANAGEMENT DIVISION, FEDERAL EMERGENCY MANAGEMENT 

AGENCY; RUDY WATLEY, SUPPLIER DIVERSITY PROGRAM 

MANAGER, OFFICE OF EQUAL EMPLOYMENT AND MINORITY 

AFFAIRS, THE SMITHSONIAN INSTITUTION; ROGER MOSIER, 

VICE PRESIDENT OF FACILITIES, THE JOHN F. KENNEDY 

CENTER FOR THE PERFORMING ARTS; STEPHEN T. AYERS, 

AIA, ACTING ARCHITECT OF THE CAPITOL; AND TERRIE 

ROUSE, CHIEF EXECUTIVE OFFICER FOR VISITOR SERVICES, 

CAPITOL VISITOR CENTER 

Ms. RIGGS. Thank you. Good afternoon, Madam Chair. 

Ms. NORTON. Could you turn your mike on or put it closer to 

you? 

Ms. RIGGS. Better? 

Ms. NORTON. A little bit. 

Ms. RIGGS. Now—— 

Ms. NORTON. Say something, and we will know. 

Ms. RIGGS. Okay. Testing. 

Ms. NORTON. Okay. That is good. 

Ms. RIGGS. Thank you. Good afternoon, Madam Chair and Members of the Subcommittee. Thank you for the opportunity to appear 

before you today to discuss the General Services Administration’s 

record and goals for small minority and disadvantaged businesses. 

I am Tamela Riggs, Deputy Assistant Commissioner for the Public 

Building Service’s Office of Acquisition Management at GSA, and 

it is my pleasure to be here today. 

As the premier acquisition agency of Federal Government, GSA’s 

mission is to help Federal agencies better serve the public by offering, at best value, superior workplaces, expert solutions, acquisition 

services and management policies. 

GSA’s focus on small business starts with their agency leaders, 

who recognize the importance of small businesses in our Nation’s 

economy and in helping the Federal Government to accomplish its 

work. We know that small businesses bring new and innovative solutions to government challenges, and that a successful and strong 

small business community is integral to job creation, community 

empowerment and economic revitalization. 

Our agency works hard to improve small business access to our 

procurement programs. GSA has continually increased its efforts to 

purchase products and services from small business, which has led 

to not only meeting our small business goals, but exceeding them. 

5 

The Small Business Act establishes for Federal executive agencies an annual goal of awarding 23 percent of prime contract dollars to small businesses. At GSA in fiscal year 2008, over $1.8 billion, or 38 percent of all prime contract dollars, went to small businesses. We are proud that in 2008 we surpassed the small business 

statutory goal and all of the socioeconomic goals that were set for 

our agency. 

GSA’s Public Building Service procures services related to real 

estate. PBS’s largest contracting areas are repair and alteration of 

buildings, construction of buildings and operations and maintenance. In fiscal year 2008, of the more than $2.4 billion eligible in 

those areas, 1.2 billion, or 50 percent of the dollars, was awarded 

to small businesses. 

GSA’s Federal Acquisition Service creates procurement vehicles 

that cover more than 4 million commercial products and services 

and has a strong record of helping other Federal agencies achieve 

small business contracting. The FAS Multiple Awards Schedules 

Program offers small businesses a tremendous opportunity for potential work with Federal, State and local governments. I am 

happy to report that 80 percent of all scheduled contracts are with 

small businesses. In fiscal year 2008, using these scheduled contracts, Federal agencies awarded over $13 billion in awards to 

small businesses, which is approximately 36 percent of the total 

dollars spent in that program. 

Within GSA there are many resources available to help small 

businesses and to provide them with useful information. In addition to the support provided through FAS and PBS, our Office of 

Small Business Utilization provides direct support to the small 

business community. They have resources, small business technical 

advisors in each of our 11 regional offices as well as our headquarters. And our GSA Web site, GSA.gov, provides valuable information and links to a variety of resources and small business information. 

GSA has consistently demonstrated its commitment to small 

businesses, and we are proud that we were able to exceed our goals 

in 2008. Additionally, we are very excited to be part of the efforts 

under the American Recovery and Reinvestment Act. We recognize, 

however, that the large influx of funding for recovery projects, 

while increasing the overall amount that GSA is able to award to 

small businesses, may negatively impact our percentage goals. For 

example, many of our construction projects funded by the Recovery 

Act by nature of their size and complexity are unlikely to be won 

by large businesses. Therefore, GSA has significantly increased its 

small business outreach and education efforts to heighten the small 

business community’s awareness of Recovery Act contracting opportunities. 

GSA also remains committed to negotiating aggressive small 

business subcontracting plans with prime contractors. We are now 

publicizing prime contractors’ contact information on line at 

GSA.gov and hosting partnering events that provide opportunities 

for small businesses to present qualifications and form relationships with prime contractors. 

Madam Chairwoman, our agency is strong, innovative and determined to find new and promising ways to ensure that the small 

6 

business communities continue to partner and excel when working 

with us. 

I thank you for the opportunity to appear before you today, and 

I will be happy to answer any questions which you may have. 

Ms. NORTON. Thank you very much, Ms. Riggs. 

The next witness is Jacob Hansen, Director, Acquisition Management Division of FEMA. 

Mr. HANSEN. Chairwoman Norton and Members of the Subcommittee, thank you for the opportunity to appear before you 

today. I will submit a written statement for the record in the near 

future. In addition to my oral statement, I will be pleased to respond to any questions you may have today. 

FEMA’s mission is to support our citizens and first responders to 

ensure that as a Nation we work together to build, sustain and improve our capability to prepare for, protect against, respond to, recover from and mitigate all hazards. FEMA’s procurement goal is 

to use competitive strategies while also providing local and socioeconomic business contracting opportunities whenever and wherever possible. 

I am proud to report that FEMA has competed 85.5 percent of 

its procurement dollars to date in fiscal year 2009. This is up from 

78.1 percent competition statistics in fiscal year 2008. This is a 

major accomplishment, and FEMA leads all DHS components in 

the percentage of procurement dollars awarded through competition thus far in fiscal year 2009. 

Form should follow function in addressing diversity on emergency management contracting. Accordingly, FEMA is working to 

develop an organization that more closely reflects the diversity of 

our stakeholders. Further, the businesses with which we choose to 

work and invest taxpayer money to build our capabilities must also 

reflect this mission. As a measure of our commitment, FEMA has 

dedicated a full-time small business specialist whose primary responsibility is to increase contracting opportunities for small, minority and disadvantaged business. The position is currently being 

filled by a senior member of my staff as we look for an experienced 

permanent replacement. It is anticipated the position will be filled 

during the first quarter of fiscal year 2010. 

Having a dedicated small business specialist helps to institutionalize and focus attention on the small and minority contracting 

efforts, as well as helps to maintain a level playing field. 

FEMA continues to work to meet and exceed our socioeconomic 

contracting goals. In fiscal year 2007, for example, FEMA awarded 

$485 million to small businesses. This amount represented approximately 33 percent of the Agency’s total procurement dollars awarded in that fiscal year, thus exceeding the then small business goal 

of 30 percent set by DHS. However, in fiscal year 2008, while 

FEMA increased awards to small businesses to $495.3 million, that 

figure represented only 26.8 percent of the Agency’s total procurement dollars, which was less than the 31.9 percent goal for fiscal 

year 2008. 

As of September 15th, 2009, in fiscal year 2009, FEMA has 

awarded $405.5 million to small businesses, which represents 29.5 

percent of the Agency’s total expanded procurement dollars, just 

under the 31.9 percent target for this year. Hopefully the next 2 

7 

weeks we will continue to see an increase in the percentage of contract dollars awarded to small businesses as the end of the Federal 

fiscal year typically tends to be very busy. 

The reason why FEMA did not meet its goal in fiscal year 2008 

is largely attributable to Hurricanes Ike and Gustav, as FEMA 

thought it necessary to activate a significant number of preposition 

contracts, all of which were awarded competitively to large businesses. 

With respect to the areas in which FEMA has exceeded its goals, 

slightly more than 6 percent of the procurement dollars have been 

awarded to women-owned businesses, and approximately 5.6 percent of procurement dollars have been awarded to small disadvantaged businesses. 

FEMA will continue to work to meet the Agency’s service-disabled-veteran-owned small business, SDVOSB, and historically underutilized business empowerment zones, the HUBZones, small 

business goals of 3 percent respectively. To date in 2009, FEMA 

has awarded 2.9 percent to SDVOSBs, and has awarded 1.03 percent to HUBZone small businesses. 

It is worth noting that the small minority and disadvantaged 

business investments made in fiscal year 2009, approximately 22 

percent were for professional services, 20 percent were for management support services, 14 percent were for ADP and IT services, 

and 5.1 percent were for housekeeping services. 

As the Subcommittee considers how well FEMA is working with 

small minority and disadvantaged businesses across the procurement continuum, we urge you also to take note of how we are engaging the private sector, whether large or small, across the Homeland Security landscape. FEMA continues to aggressively pursue 

initiatives with the private sector and business community on various fronts to build a stronger emergency management system. 

These initiatives include, one, the FEMA Private Sector Division of 

External Affairs established a dialogue with the private sector year 

round. Working with acquisitions and other FEMA programs, the 

division increased awareness among private-sector audiences of all 

sizes of key resources on how to do business with FEMA, disaster 

preparedness and recovery information, training, and other resources. 

The division also maintains an on-line portal with resources and 

training for businesses of all sizes—that address is www.fema.gov/ 

private sector—as well as a growing distribution list of almost 

18,000 subscribers nationwide who received private-sector preparedness tips and other updates. The division also developed and 

piloted a basic training course for disaster reservists who work 

with the local businesses in declared disasters. 

Two, FEMA is building new and enhancing existing preparedness partnerships. 

Three, FEMA is soliciting private-sector participation in a development and refinement of the National Response Framework and 

the National Preparedness System. 

Four, FEMA is creating stronger and more vibrant public/private 

partnerships through programs and initiatives, namely, the Citizens Corps, Ready Business, and the FEMA Donation Management 

System and other national, regional, State and local planning exerVerDate Aug 31 2005 10:00 Nov 30, 2009 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 P:\DOCS\52278 JASON
8 

cise and training efforts. These efforts foster open lines of communication with our Homeland Security partners and the business 

and nonprofit communities. 

We are leveraging the resources and expertise of our partners in 

the private and nonprofit sectors even above and beyond the important role they have always played in the past. It is important, however, to give some contextual perspective on the opportunity and 

challenge involved in effectively engaging the private sector in 

emergency management. 

The magnitude and complexity of the business community, with 

its varying needs, capabilities and capacity, makes coordination a 

daunting challenge and will require a sustained and long-term effort. Through its Private Sector Division of External Affairs, FEMA 

continues to build a network with nongovernmental organizations; 

business and trade associations; and local, regional and national 

Chambers of Commerce, and anticipates making continued significant progress in integrating the private sector as a full partner in 

incident management. We know that the worst time to build private-sector relationships is during a disaster. Thus, we are building 

them today in a sustainable and ongoing manner. 

Thank you for the opportunity to speak about FEMA’s record and 

goals in working with small, minority and disadvantaged businesses. 

Ms. NORTON. And thank you, Mr. Hansen. 

Now, my good friend and the Ranking Member has been good 

enough to stop by after the last vote and people clear out of Dodge. 

And he has got to clear out for a plane, so I am interrupting the 

testimony, if you will forgive me at this time, to hear the Ranking 

Member’s statement, with appreciation that he did stop by before 

running off. 

Mr. DIAZ-BALART. Thank you, Madam Chairwoman, and I thank 

all the witnesses. I apologize for the interruption. I also want to 

thank the Chairwoman for always being so kind and understanding. Thanking you also for holding this very important hearing. 

Small business obviously—the Small Business Act directs the 

Federal Government to protect the interests of small businesses in 

order to preserve the competitive enterprise and free market, and 

a fair share of Federal Government contracts are awarded to small 

businesses. And obviously nobody can deny the importance of small 

businesses to our economy and to strengthening our economy. 

Also, we all know, unfortunately, that the national unemployment rate has risen to 9.7, the highest since 1983. Florida’s unemployment rate is even above the national average at 10.7 percent. 

And the Chairwoman knows Florida very well, has been there a 

number of times. So job creation has to be a priority. 

Obviously, when you look at job creation, it is small businesses. 

That is who creates jobs. So obviously small businesses have also 

developed more patents per employee than larger businesses, for 

example, which much greater number coming from the smallest 

firms, smallest companies and smallest firms, with fewer than 25 

employees. Not only do they create jobs, but they are also 

innovators. 

9 

In Florida, small businesses account for more than 99 percent of 

the State’s employers, and they provide 44 percent of private-sector 

jobs. Those are astonishing numbers. When you want to incentivize 

the economy, and you want the job creation, you have to look at 

small businesses. And those numbers are very plain. 

Now, despite the importance of protecting the interests of small 

businesses, unfortunately many government agencies are continuing to really fall short of their goals for contracting with small 

businesses. Last year only 1 of 24 agencies scored by the Small 

Business Administration met all of its small business contracting 

goals. I am very pleased, however, that GSA met its 2008 goals. 

That is a step in the right direction, and we are very proud of that. 

But despite this progress, we need to continue to pressure agencies 

to continue to work with small businesses to achieve those goals. 

Obviously, in addition, agencies must ensure that contracting 

practices are fair, they are accessible, and they are transparent, obviously to maximize small business participation. And as I stated 

a little while ago, supporting small businesses is crucial, always is 

crucial, but particularly now with the unemployment rate as high 

as it is. And again, as I said a little while ago, if you want to create 

jobs, you have to look no farther than small businesses. 

I want to thank you all for being here today. I apologize that I 

do have to step out. And again, thank you, as always, for being so 

courteous with me. 

Ms. NORTON. Thank you very much, Mr. Diaz-Balart. 

Now we go on to Mr. Watley. 

Mr. WATLEY. Good afternoon, Chairwoman Norton. My name is 

Rudy Watley, and I am the Supplier Diversity Program Manager 

in the Office of Equal Employment and Minority Affairs at the 

Smithsonian Institution. On behalf of the Institution, let me express my appreciation to you for holding this hearing on the use 

of small, disadvantaged, minority and women-owned small businesses in Federal contract operations. And let me thank you for inviting the Smithsonian Institution to participate in this discussion 

and share with you a few of our Supplier Diversity Program 

achievements and ongoing initiatives. 

The Smithsonian is the world’s largest museum and research 

complex. With 19 museums, 9 research centers, 137 million artifacts, 18 libraries and the National Zoo, the Smithsonian stands 

out as a unique entity and a leader in science, research, history, 

art and culture. 

The Smithsonian Institution is a trust instrumentality of the 

Federal Government that has been a public-private partnership 

since its establishment 163 years ago. Its mission is the increase 

and diffusion of knowledge, and the support of the administration 

and Congress is essential to the achievement of this mission. The 

Institution’s leadership believes that diversity and inclusion are integral components of the mission, and it is expressly committed to 

diversity in all aspects of its workforce and business operations. 

Diversity and inclusion have long been a part of the Institution’s 

strategic plan and performance plan, our policy statements and directives. Doing business with small, minority and women-owned 

business is a reflection of that commitment. Over the past 3 years, 

the institution has spent roughly 40 to 50 percent of its contract 

10 

and procurement dollars with small businesses, and, as indicated 

in the materials attached to my written statement, you can see 

that the Institution has consistently achieved and exceeded all of 

its procurement preference goals except one, service to disabled-veteran-owned small businesses. Our SDVOSB goals, like SBA’s governmentwide goal, is 3 percent, and over the past year we increased our use of these firms from 1 percent in fiscal year 2007 

to 2.8 in fiscal year 2008. We have made progress, and we are actively pursuing and zeroing in on projects that can be performed 

by these firms. 

As shown in the chart provided for fiscal year 2009, we have exceeded and more than doubled our accomplishments. These accomplishments speak for themselves. Specifically we have spent 49 percent of our Federal contracting dollars with small businesses, a 

whopping 20 percent with small disadvantaged businesses, 12 percent with 8(a) small disadvantaged businesses, 10 percent with 

women-owned small businesses, and we found a way to exceed our 

HUBZone goal with 5 percent of contracting dollars to help 

HUBZone firms. 

While achieving our procurement goals for service-disabled-veteran-owned small business remains a challenge, we are actively 

pursuing opportunities to do business with these firms. 

The success of the Smithsonian Supplier Diversity Program is 

the result of unwavering commitment from the top, starting with 

the Secretary. Dedication and collaboration from all managers and 

perseverance on the part of all procurement officials are the ingredients that makes the program work as well as it does. I am 

pleased to say that the collaborative relationship among the Supplier Diversity Program, our Office of Contracting, Procurement 

and Property Management, as well as the major buying units at 

the Smithsonian is exemplary. 

Let me share with you some of our supplier diversity accomplishments this year. Thirty-eight percent of our American Recovery 

and Reinvestment Act funds allocated to the Smithsonian were 

spent in contracts with minority small businesses. Specifically, 9.5 

million of the 25 million the Smithsonian received in Recovery Act 

funds were obligated to 8(a) small businesses. Using our Supplier 

Diversity Program infrastructure, we were able to move swiftly to 

galvanize and employ these firms to participate in this great opportunity. This is a testimony to the effectiveness of our program and 

the Institution’s commitment to supplier diversity. 

Let me share one more example of the success of the 

Smithsonian’s commitment to supplier diversity that I believe will 

have historic significance. As the result of aggressive outreach initiatives, minority-owned firms were identified and competed in the 

design competition for the new National Museum of African American History and Culture, and the winning firm is minority owned. 

We are currently in negotiation with a minority firm to perform the 

architecture and engineering design services for the new museum. 

We are particularly proud of this accomplishment. 

In closing, let me reiterate, as evidenced by our accomplishments, the Smithsonian Institution’s commitment to diversity 

throughout its operations remain strong, and we will continue to 

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11 

owned firms, as well as service-disabled-veteran-owned firms in our 

business relationships. 

Thank you again for this opportunity to share our story, and I 

am happy to answer questions. 

Ms. NORTON. And thank you, Mr. Watley. 

The next witness is Roger Mosier, Vice President of Facilities, 

John F. Kennedy Center for the Performing Arts. 

Mr. Mosier. 

Mr. MOSIER. Good afternoon, Madam Chairwoman. My name is 

Roger Mosier, and I serve as Vice President of Facilities for the 

John F. Kennedy Center for the Performing Arts. 

The Kennedy Center is unique in that it serves the dual purpose 

of being the national cultural center and the memorial to President 

John F. Kennedy. Each year the Kennedy Center reaches over 2 

million people with more than 2,000 performances in all performing 

arts disciplines. Every season our focus is on developing programming that achieves national and international acclaim as is befitting our role as the national cultural center. We appreciate the 

committee’s interest in the promotion of small businesses. I will 

provide an overview of the Kennedy Center’s efforts in this regard. 

In fiscal year 2009, the Center received direct Federal funding of $36.4 million for operations and maintenance and capital repair. 

While our contracting activities are small in comparison to the 

agencies appearing with me, we are committed to awarding a fair 

portion of our Federal purchases to small minority and disadvantaged business enterprises. The Kennedy Center continually looks 

for opportunities to offer contracts to small businesses. Given our 

relatively small budget, the opportunities for such awards are limited; however, each contracting action is evaluated as to its suitability for small, minority or disadvantaged business opportunity. 

In general, the Center’s Chief of Contracting serves as our small 

business advocate. In addition, project managers and other contracting officers representatives are also advocates for this program 

due to our track record of successful work with small businesses. 

Regarding operations and maintenance funding, many basic services and minor repair contracts are awarded to small businesses, 

including minority businesses, disadvantaged businesses. These 

contracts range in size from $3,000 for sign language interpretation 

for Federal employees to approximately $2 million for housekeeping 

service. On an ongoing basis the Center utilizes small businesses 

for services such as elevator maintenance and inspection, asbestos 

abatement, indoor air quality monitoring, artwork and textile 

maintenance, pipe organ maintenance, emergency generator maintenance, fire pump maintenance, and various mechanical and electrical equipment inspection, repair and maintenance services. Additionally, supplies such as carpet, air filters, paint, light bulbs and 

many more are regularly purchased from small businesses. 

For construction projects, from capital projects to major maintenance, we utilize small businesses for both consulting and contracted services. For professional services we have contracted with 

small businesses for architectural and engineering services, cost estimating, and contraction scheduling review. 

For general construction work we have awarded a number of contracts to small businesses ranging in size from $20,000 to nearly 

12 

5 million. These have included recently completed work to upgrade 

life safety systems on the Center’s Roof Terrace level and a project 

to paint the exterior columns of the facility. Both of these projects 

were completed within budget and on schedule. 

This summer we awarded a construction contract of $4.9 million 

to a small business for the renovation of the concert hall support 

spaces, including practice rooms, rehearsal rooms, lockers and offices. This project is one the largest capital projects we currently 

have in progress. 

Most recently we awarded approximately $1.8 million in miscellaneous life safety work to a small business for construction 

work, and that is just getting under way. 

The Center has also established open contracts with small disadvantaged general contracting businesses participating in the 8(a) 

program. These contracts are utilized for minor repair and significant maintenance projects that typically cost less than a quarter 

million. 

The Center has worked with 8(a) firms for many years and currently has four 8(a) firms under indefinite delivery and indefinite 

quantity contracts. This summer 8(a) firms refurbished the Center’s coat check room, renovated the African Room, and repainted 

a significant portion of the concert hall ceiling. 

The Center has achieved success in working within the 8(a) program by actively pursuing opportunities to promote the use of 

small minority and disadvantaged businesses, including meetings 

with a marketing firm representing 8(a) firms. This allows us to remain current on the breadth of companies participating in the program as well as their capabilities. 

Based on the size and scope of the contract to be awarded, the 

contracting office will avail itself of the option to go directly to the 

Small Business Administration for a set-aside, or it may limit competition to only small minority and disadvantaged businesses. This 

method proved successful in the award of our housekeeping contract, which is in the final year of a multiyear contract. A new 

small business procurement for the next housekeeping contract is 

currently ongoing. 

While not every contract can be awarded utilizing these small 

business vehicles, many of the capital projects outlined in our 5- 

year comprehensive building plan are of a size and complexity that 

fit within the services we obtain through our small business relationships. The Kennedy Center’s capital plan includes a number of 

relatively smaller infrastructure projects that we have been able to 

award to small businesses. 

In summary, our experiences with small minority and disadvantaged businesses have proven to deliver a successful outcome in a 

variety of areas, including services, supplies, consulting and construction. As a result we are proactive in seeking out opportunities 

for the appropriate award of small business contracts. We appreciate the Subcommittee’s interest in this program and for including 

the Kennedy Center in this discussion this afternoon. Thank you. 

Ms. NORTON. Thank you, Mr. Mosier. 

The next witness is Stephen Ayers, the Acting Architect of the 

Capitol. 

13 

Mr. AYERS. Thank You, Madam Chairwoman, for inviting me 

here today to discuss the AOC’s efforts to increase procurement opportunities for small businesses. We have made tremendous 

progress in our efforts to implement programs that enable and encourage small businesses to effectively compete for AOC contracts. 

Specifically I have directed our staff to implement two programs 

to actively award contracts to companies that reflect the diversity 

of our country, above and beyond the standard requirements of 

Federal regulations. These include a small business set-aside program for small purchases between $5,000 and $100,000, and a 

small business subcontracting program for construction contracts 

exceeding $1 million. Additionally, we have recently partnered with 

the Small Business Administration to further utilize small business 

programs. 

On August 10th, SBA Administrator Karen Mills and I signed a 

Memorandum of Understanding to establish the roles and responsibilities of each of our agencies in the implementation of the use 

of small business programs at the AOC. The Memorandum of Understanding, while preserving the separation of powers between the 

legislative and executive branches, establishes the support activities, roles, and responsibilities necessary for the AOC to fully utilize small businesses identified under the SBA Act and SBA’s regulations. 

Our Small Business Subcontracting Program, which was 

launched in August of 2007, requires large businesses that are 

awarded construction contracts exceeding $1 million to submit and 

adhere to a small business subcontracting plan. This plan includes 

goals for prime contractors recruiting small businesses as subs, and 

they must meet or exceed the Small Business Administration’s 

statutory goals for Federal executive agencies. 

When contracts are awarded to large businesses under this program, we require each one to submit a semiannual progress report 

detailing how well they are achieving the prescribed goals. On October 1st of this year, our Small Business Set-Aside Program will 

be fully in effect for small purchases between $5,000 and $100,000. 

Under this program our contracting officers make every effort to 

identify and use small disadvantaged, women-owned, veteranowned, and service-disabled-veteran-owned small businesses. 

Along with these programs, we continue to reach out to identify 

small businesses that are currently working with the AOC or are 

interested in competing for work with us in the future. We also 

continue to reach out to new vendors, and the data received is used 

to identify small businesses that can compete for our requirements. 

Vendors not previously used by the AOC can also submit literature 

to our Small Business Office, and they can find information on that 

on our Web site. 

As we continue to expand our current vendor database to include 

small business information, our procurement staff continues to 

communicate business opportunities with diverse audiences 

through workshops, small business fairs and small business conferences. 

Madam Chair, the AOC is leading the way in the legislative 

branch in encouraging small disadvantaged and women-owned 

businesses to effectively compete for contracts. We are working to 

14 

meet or exceed our goals through the three major initiatives I mentioned, the Small Business Set-Aside Program, the Small Business 

Subcontracting Program, and our partnership with the Small Business Administration. We obviously have a vested interest in supporting small businesses in order to help facilitate competition and 

to support local communities in a sustainable way. We look forward 

to our continued work with this Subcommittee and the Congress to 

ensure that our efforts result in strong small business participation 

in future AOC solicitations. 

That concludes my statement, and I would be happy to answer 

any questions you may have. 

Ms. NORTON. Thank you very much, Mr. Ayers. 

The next and final witness is Terrie Rouse, the Chief Executive 

Officer for the Capitol Visitor Center. Ms. Rouse. 

Ms. ROUSE. Thank you, Madam Chair, for inviting me to participate. 

Ms. NORTON. Please put your microphone closer or turn it on. 

Ms. ROUSE. Is that better? 

Ms. NORTON. That is. 

Ms. ROUSE. Thank you, Madam Chair, for inviting me to participate in today’s hearing. 

As the Capitol Visitor Center prepares to welcome its 2 millionth 

visitor, we are on track to double the number of visitors to the Capitol as compared with previous years. We are pleased at this outcome, and even more pleased to report that the average time a visitor waits before entering the facility is 6 minutes. This compares 

with a wait that could have stretched to several hours in recent 

years. 

The Capitol Visitor Center is also providing the public with opportunities to experience Congress’ rich history in the Exhibition 

Hall, which will feature approximately 50 new historic documents 

beginning October 12th. From today through September 23rd, we 

will host a series of public programs to celebrate Constitution Week 

at the Capitol. 

The Visitor Center’s goal to work with and develop new opportunities for small and minority businesses is in line with the goals 

of the Architect of the Capitol. My staff and I have worked aggressively to hire personnel and award contracts to individuals and 

small companies that reflect the diversity of our country. I believe 

that such an effort enhances our ability to serve Congress and all 

who visit the U.S. Capitol. 

Specifically regarding our procurements, the Capitol Visitor Center team follows the policies of the Office of the Architect of the 

Capitol. As we move forward, we are incorporating the aims of the 

Small Business Program, which Mr. Ayers discussed in his testimony. 

At the present time, based on our continued and internal assessment of products in our gift shops, more than 70 percent of the 

merchandise is produced by small business vendors. Approximately 

25 percent of our vendors are women-owned businesses. As we are 

still in the ramp-up phase of operation, we are constantly reviewing our merchandise and our vendors in order to make sure that 

we are offering our visitors high-quality merchandise from a variety of vendors. 

15 

We will be working with officials in the Small Business Administration and the Government Printing Office to explore opportunities for increasing the percentage of minority, disadvantaged and 

small business vendors who are contributing to our gift shop inventory. One of the goals is to hold a small business fair and invite 

vendors to speak with gift shop representatives regarding their 

products and their potential for sales at the Visitor Center gift 

shop. 

The gift shops are also developing a purchasing strategy to enable the Capitol Visitor Center to showcase merchandise representative of the States and territories of the United States. We expect 

that the results of the strategy will be apparent in the gift shops 

by spring 2010 during our busiest visitor season. Attracting small 

minority and disadvantaged businesses will play a major role in 

the development and success of the strategy. 

We have also reached out to merchandise and trade organizations, including the Museum Store Association and the producers 

of the New York International Gift Fair, for information on minority-owned businesses in order to further expand our reach and support of these businesses. 

Madam Chair, you have my commitment that I will continue to 

work to ensure that we do business as much as possible with small 

minority and disadvantaged businesses. Thank you, and I am 

happy to answer any questions. 

Ms. NORTON. Well, I am very pleased first to welcome my good 

friend and neighbor in the region, who, unlike the Ranking Member and others on the committee, didn’t have a plane to catch and 

cared enough about this matter to spend at least a little time with 

us today. And I want to welcome Representative Edwards, who 

tells me she doesn’t have an opening statement at this time. So I 

will proceed with questions. 

I appreciate that your testimony shows that agencies are making 

an effort, and as I indicated, we could not have anticipated that the 

effort would have been ever so much more necessary. Nobody has 

a dime to spend except the Federal Government these days. I know 

you know that; we are the only game in town. And the only reason 

we have money to spend is because we can write checks with 

money not in the bank. Therefore, people are really looking to us 

to make sure that it all gets done. 

I want to ask the same question for those of you who have stimulus all the way down. Some of you, I have to say there is nobody 

who cares about your general jurisdiction except me, and that is 

because I represent the District of Columbia and in many ways the 

region. It is an extremely rich region for minority businesses, 

women-owned businesses and small businesses generally. So it is 

doing better because the Federal Government is expanding; therefore, we are probably going to put an extra burden on you and ask 

you to try even harder than you already have. 

So in stimulus funds, let us just get it on the record, given 

when—and I know that we have had an issue in our larger Committee about outlays versus obligations. I think I would be satisfied 

with obligations at this point. I want to know for those who have 

stimulus funds what the percentage is. You can give me small businesses, because this hearing is about small businesses generally. It 

16 

is about small women-owned businesses, it is about small minorityowned business, and it is about small disabled-veteran-owned businesses. So if you want to break those down, be my guest, but I 

want to know what percentage of stimulus funding, the stuff that 

is being pumped into the economy as I speak, has gone to any of 

those categories. 

I will begin with Ms. Riggs. 

Ms. RIGGS. Thank you, Chairwoman. 

Ms. NORTON. A little louder. 

Ms. RIGGS. A little louder. Yes, thank you. 

Of our recovery, you know, GSA received the 5.55 billion. We 

have awarded to date approximately 1.3 billion. Of those contracts, 

of the 1.3-, we see about 48 percent of our contracts going to small 

business. Numberwise in terms of contracts, they are competing 

very well. 

Ms. NORTON. Say that again. 

Ms. RIGGS. I say in terms of the number of contracts that we are 

awarding for recovery, the small businesses are competing very 

well. Just barely under 50 percent are going to small. Dollarwise, 

however, we see far more dollars going to the large with recovery 

because so many of our dollars are going to the large construction 

projects. So we will see. 

Ms. NORTON. And I appreciate that, and I also appreciate because you are doing the biggest construction project in the history 

of the United States and happen to be doing it right here in the 

District of Columbia, DHS, and it will be going on for years. But 

as I go down the line, first, when you indicate what your dollars 

are, I appreciate, for example, that you are abiding by the notion 

of setting aside. You set aside, I think, $5 million for small businesses, or is it small disadvantaged businesses? Which is it? Five 

million dollars has been set aside for small or small disadvantaged 

businesses. Which is it? 

Ms. RIGGS. I apologize. I do not have that exact number. 

Ms. NORTON. It may be small businesses. I have no argument 

with that. 

But let me tell you a complaint I have already received. This 

complaint is applicable to each and every Federal agency. A $50 

million contract to do the electrical work has already been awarded. We received a complaint from an electrical contractor that, well, 

you awarded it to—first of all, the business is Clark Construction. 

See, I call names out in this place; that is how you track people. 

Fine. This is an excellent company. They competed for it, and they 

received it. They competed for—then we competed the contract, the 

electrical contract, very lucrative contract today, $50 million in one 

region. 

The complaint came from a small electrical contractor. When he 

called to try to compete as a subcontractor—I picked GSA because 

I received a complaint, but I assure you this is the kind of complaint we hear from small contractors all along. This is how they 

evade the small disadvantaged business and small business contract. This guy who has the electrical contract, Dynalectric—called 

his name out. Glad you got it, got it fair and square. But the subcontractor said when he then went to say, now we are ready to be 

a subcontractor, he was told, well, we already have our subconVerDate Aug 31 2005 10:00 Nov 30, 2009 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\DOCS\52278 JASON
17 

tractor, and therefore there is nothing for the rest of you. Out of 

$50 million, this is the message I get. Now they are going to have 

to come in and see me to correct the record, but this is the message 

I get. I know I have got a requirement. I am going to meet it in 

the most amenable fashion I can. I got me a either a disadvantaged 

business or small business; maybe even in good faith says, 

Dynalectric, we worked with them in the past, and so we know 

they are good. Later for all the rest of you out there, no matter 

what your record is, no matter how you would compete. 

That may not be what is happening, but, Ms. Riggs, should $50 

million in electrical contract—by the way, Dynalectric gets to keep 

what isn’t given to the subcontractor. And one of the abuses that 

we believe we see is, shall we say, preconceived small businesses 

who kind of—help us out here. Even some of the complaints, go pay 

off small businesses, don’t even get to do it as long as the goal is 

reached. Don’t think that with a billion dollars—and I can tell you 

there is one Member and only one Member who struggled for that 

money for GSA. I don’t intend to use that $1 billion to defeat this 

practice, to the extent it exists, to call out people who are doing it, 

so that in the other agencies across the government, not necessarily those who are here, we send the message we are going to 

break that abuse. Technically within the law; outrageous violation 

of the intent of Congress. 

So it suggests to me, since he thought he was getting away with 

this, that GSA just looked at the bottom line and didn’t raise the 

issue until this electrical contractor got in touch with this Member 

of Congress. 

What can you tell me, Ms. Riggs? 

Ms. RIGGS. I can tell you that, generally speaking, we are being 

very attentive and growing aggressively moreso each day with our 

subcontracting plans, and not only monitoring the submission of 

the subcontracting plan, but also the adherence to that plan. With 

St. E’s, I do not have—St. Elizabeth’s development—I do not have 

the specific information that you have about that company. 

Ms. NORTON. You don’t even know about this. In the biggest contract you have, you have no—do you know of this complaint? 

Ms. RIGGS. I am not personally aware of that. 

Ms. NORTON. Well, when do they get up to your level, Ms. Riggs? 

Ms. RIGGS. The folks in our project areas may very well, and in 

fact the contracting officer is here with me. 

Ms. NORTON. Where is the contracting officer? Step to the table, 

contracting officer. We are really here to try to find out some information. We are tired of hearing the complaints. Agencies have not 

been held accountable. The best way to hold them accountable is 

to take the DHS mammoth—and $1 billion, that is only the first, 

it is going to be $5 billion before it is all over, DHS. Do you know 

of the Dynalectric contract and of the complaint that came from 

their electrical contractor? 

Ms. ECHOLS. Yes, ma’am, the subcontractor—the contractor that 

you are talking about did give me a phone call. 

Ms. NORTON. What has been done, if anything, to make sure that 

there is not a pass-through to a favored minority or small business 

given this complaint? 

18 

Ms. ECHOLS. The project executive and I, we actually had the 

general contractor, Clark Design/Build come in. We actually had a 

roundtable discussion to let them know that we weren’t going to 

tolerate this kind of action. 

Ms. NORTON. Let me thank you. Say your name again, please. 

Ms. ECHOLS. Bonnie Echols of the General Services Administration, St. Elizabeth’s project. 

Ms. NORTON. Ms. Echols, you do have some credibility with me, 

because you have worked with us to try to make sure that minority 

businesses do have access to this larger-than-ever Federal contract. 

But it does suggest to me that, unless one monitors these people 

as these contracts are given, it is not are worth a darn, shall we 

say. They have gotten into these habits because committees like us, 

and certainly the Appropriation Committee, have only monitored— 

only monitoring is by SBA, and they don’t have any jurisdiction. 

So we are going to have to ask you, and then I think it should 

have been reported to Ms. Riggs. She needs to know, because she 

is in charge of the whole kit and kaboodle, so that she can be on 

the lookout for this happening elsewhere. 

I suspect that this happens throughout the government. Everybody says I know what my goal is. I got at least one. I am not even 

looking for any others. And then Members of Congress get these 

complaints, and nothing happens. They don’t do anything. And all 

of y’all are violating the law. And then we are left to try to find 

and make phone calls. We are not going to do it anymore, not on 

something as big as this. 

So I am going to ask you to develop a procedure—you are doing 

very well in developing a procedure for hiring, and I thank you for 

it. I want you to develop a procedure for tracking the subcontracts 

to see where they go and to inform all the contractors, inform 

Clark that Clark is going to be held accountable for it. Clark does 

excellent work. It is going to do excellent work abiding by the law 

with respect to small business and small minority businesses. And 

I want to see Clark contracting staff. Because I am going to give 

them the message myself. I am not going to be sitting in the District of Columbia with people coming to me from Maryland, Virginia, and D.C., and by the way, these contracts are open to people 

all over the United States, knowing that I am the Chair of the 

Committeewith complaints. We are going to correct the complaints 

before they occur. We are not going to be a complaint-tracking service. 

Let me go to Mr. Hansen. Stimulus funds, who got stimulus 

funds in the categories I am speaking of? 

Mr. HANSEN. Chairwoman Norton, the $210 million in stimulus 

funds for FEMA went to firefighter assistance grants. 

Ms. NORTON. This is more difficult because here, Mr. Hansen, 

unlike Ms. Riggs, has to work through the States. And one of the 

reasons we are holding this hearing is that we know we are, Ms. 

Edwards and I and this Subcommittee and Mr. Oberstar, are personally accountable, because unlike Mr. Hansen, these people report directly to us. There is no State between us and GSA contracting. 

All right, Mr. Hansen, I will be interested to hear how you do 

it therefore. 

19 

Mr. HANSEN. Well, the $210 million were grants to modify, upgrade, or construct non-Federal fire stations. So really none of the 

stimulus funds came to my acquisition management division. 

Ms. NORTON. That doesn’t mean you have no responsibility, Mr. 

Hansen. 

Mr. HANSEN. The grants division, we can get that information for 

you, ma’am, but I would have to go to a different department within FEMA. 

Ms. NORTON. These fire grants, and in the other part of our jurisdiction, this is very important to us, what do the States know about 

their obligation with respect to minority—and what kind of contracts are these, Mr. Hansen? 

Mr. HANSEN. Again, ma’am, these are grants handled through 

our grants department. And I am going to have to go to them to 

get you more details. 

Ms. NORTON. What is funded by these grants, Mr. Hansen? 

Mr. HANSEN. In this particular case, it was construction of nonFederal fire stations. 

Ms. NORTON. That is what I thought, Mr. Hansen. You can see 

that it is not a lot of money. And you can see how people under 

some great compulsion to spend it, because we are putting them 

under that compulsion, could easily go to the fastest, best in their 

judgment, quickest way to spend it. So I am going to have to ask 

you, within 30 days—and you know, the contracting officer should 

remain at the table, please. We may have other questions for you. 

I am going to ask you and Ms. Riggs to get to us, Ms. Echols and 

Ms. Riggs, through Ms. Riggs, to get to us within 30 days what the 

record has been thus far in small business contract awarding under 

the fire grants, the more than $200 million you now have. 

Mr. HANSEN. Yes, ma’am. 

Ms. NORTON. Thank you, sir. 

Mr. Watley. 

Mr. WATLEY. Chairwoman Norton, the Smithsonian Institution 

received $25 million in Recovery Act funds. Of that $25 million 

that we received, we awarded $9.5 million to 8(a) disadvantaged 

businesses. There were 11 contracts awarded to these small businesses. And that constituted 38 percent of our Recovery Act dollars. 

The type of work that was done was construction, general construction, facilities engineering, maintenance contracts. And that is how 

we spent that money. 

Ms. NORTON. That is thus far? 

Mr. WATLEY. Thus far. 

Ms. NORTON. How have you been able to award—in terms of your 

overall goals, how does that compare with your overall goals? 

Mr. WATLEY. Compared to our overall goals? We included—early 

on when we got the Recovery Act funds, we included that money 

in there to make sure that we did. Let me just take a look at the 

figures we have. 

Ms. NORTON. And this is disadvantaged businesses you are talking about, the $9 million. 

Mr. WATLEY. To 8(a) small, disadvantaged businesses, that is 

correct. 

20 

Ms. NORTON. While you are looking for that, I understand that 

Ms. Edwards also has an appointment and may need to leave before I get to her. 

So, Mr. Watley, I will come back to you. 

Meanwhile, Ms. Edwards may have questions for any of them, 

any of you, and as long as for as much time she shall consume she 

may proceed now. 

Ms. EDWARDS. Thank you, Madam Chairwoman. 

And of course, I won’t consume that much time. And I appreciate 

it. I have another Committee assignment in just a few minutes. 

And I do thank you for holding this hearing, because you have been 

incredibly vigilant about our pursuit and our oversight responsibility to ensure that all of our businesses get the fullest benefit of 

participation, particularly with these stimulus funds. 

My question actually goes to sort of a process. I think when 

small businesses come to me, one of the biggest obstacles that they 

say they encounter is this procedure that is supposed to result in 

an efficiency of bundling contracts. And so then that leaves it to 

the decision-making of a prime contractor about what or whether 

to subcontract. And then there becomes this sort of ongoing process 

of, you know, knowing who you know in order to get the contract. 

And the next thing you know, you look down a list, and it is the 

same, old folks even though they may be small, minority, and disadvantaged businesses or women-owned businesses, that are getting the same contracts over again. 

And so I want to talk about, you know, just the process and get 

some thoughts, particularly from GSA, about what might be done 

to loosen that up, to expand the availability of opportunities. And 

I know it may be an administrative or bureaucratic pain, but I am 

just tired of looking at the same list of contractors and subcontractors. And you know, you got contractor prospectives out there who 

have the potential to do really great work for us and increase our 

level of competition and our knowledge about what some other 

businesses are doing, but they can’t even get a bid in edgewise. 

And so help me understand what you are trying to do to open 

the process and also to do it with a degree of transparency. Too 

often the complaint, and I think the Chairwoman has spoken to 

this, the complaint that we hear is that we just don’t know and 

that prospective solicitors don’t know and don’t understand, and as 

a result, they may be assuming that they have been left out or cut 

out or not made an award for reasons that may be perfectly justified, but the level of transparency or the lack of transparency 

makes it very difficult to understand the process through which 

these contracts have been awarded. So help me understand that. 

Ms. RIGGS. Absolutely. I think we have done a lot to improve the 

transparency, to use that word. We have significantly increased our 

outreach to small businesses. And in particular, not only—but in 

particular new small businesses who are interested in working 

with the government either as a prime or as a subcontractor. And 

we have certainly increased our number of personal involvement, 

our presence at industry outreach events. We have strengthened 

our Web site materials enormously so those folks who are comfortable using that as a tool have a lot more available to them. 

21 

But we have also begun to use different tools. We are now using 

Twitter, social media to get information out to those communities 

about business opportunities. So it is still going on FedBizOpps for 

those who are used to doing that. But we are also putting it out 

there through Twitter. And we are getting quite a lot of response 

from that. We actually established a vendor-specific support line 

that vendors can call into and speak to a human and ask them for 

help and ask them questions about the procurement process. And 

through that we are reaching a lot of folks, teaching them how to 

find out more about who our primes are. We have published that 

list, and we will continue to, of our prime contractors on the Web 

site, but we are also teaching small businesses how to go into the 

Federal Procurement Data System, FPDS, and look for our primes 

to see what we are buying and in turn what they may be able to 

provide. 

Ms. EDWARDS. But what really compels the primes to open the 

doors? You know, if there is one significant contract, what really 

compels that prime contractor to open their doors? And I am not 

talking about meeting a goal that GSA might set forward, but expanding business opportunity and their knowledge of other businesses there. And it just doesn’t seem to me that we—I am not 

quite sure whether the rules are in place, and certainly the law is 

not in place that compels our prime contractors, particularly on 

these huge contracts, to really open their doors to other vendors. 

And then please don’t leave out the question of bundling of contracts. 

Ms. RIGGS. Oh, absolutely. 

In bundling, in fact, that question was asked at a previous hearing, and so I know we looked, we had, GSA had no bundled contracts last year. We do have one this year that is underway. The 

procurement is actually underway as we speak in the IT environment. So we have very few, in fact one, but relatively no bundled 

contracts. What entices the prime—— 

Ms. NORTON. Would the gentlelady yield? I wonder if any of the 

rest have any bundled contracts while you are getting an answer 

to that question. 

Ms. EDWARDS. Any of the other agencies? 

Mr. AYERS. No, ma’am. 

Ms. EDWARDS. And so, well, then how would one become a subcontractor then? Because you have subcontractors. Mr. Hansen? 

Mr. HANSEN. Well, first on the topic of bundling, that is counter 

to my leadership philosophy. To really, truly have a small business 

program, it has got to be a cultural event within an organization. 

And I can give you a practical example. I recently hired a new 

chief of contract operations in charge of my contract operations who 

served in the past as the director of small business programs for 

the Department of Defense. And he served as the associate administrator for government contracting and business development of 

the Small Business Administration. This is my top layer of leadership. It takes that type of leaders in your organization to build that 

culture within the organization to let your workers know what is 

expected. Small Business and FEMA is exactly where we want to 

go. I don’t want to bundle contracts; I want to unbundle them. 

Ms. EDWARDS. Any of our other witnesses? 

22 

And then I think, lastly, and Madam Chairwoman, I am going 

to have to slip out, on the question of transparency, I heard GSA’s 

response. I want to hear from our other agencies about the methods that you have put in place to ensure not just that we here in 

the committee have a sense of what you are doing, but that the 

business community, the small business community, really has a 

sense that they are getting a fair shake. 

Mr. WATLEY. Well, Congresswoman, for Smithsonian, one of the 

things we do is take our referrals from small businesses directly to 

the large businesses and pass that information on to them. What 

I do in the supplier diversity program is I negotiate with our Office 

of Contracting, and more often for construction projects our facilities unit, the subcontract plan prior to the contract award. And we 

include the percentages in. And after those percentages are included in the contracts, then we refer those small businesses that 

are interested, the electricians, the trades folks to our contractors. 

Ms. EDWARDS. Thank you. 

And Ms. Riggs, before I leave, can you tell me that, once you do 

these kind of outreach efforts to small businesses, how do you track 

the ones that actually come back and eventually awards are made 

to them? Do you track that? 

Ms. RIGGS. We do not currently. And that is something that we 

are putting into place. 

Ms. EDWARDS. Because, I mean, the question is, how do you 

know that all of this outreach business is really effective? 

Ms. RIGGS. Absolutely. And particularly now that we are using 

so many different tools, we really want to know which ones are 

most effective in reaching them. So we have began to capture the 

feedback that we are getting from the vendors, and certainly on return calls telling us the results of the conversation. But we are 

looking to put something more formal into place. 

Ms. EDWARDS. That would be great, because I have to share with 

you, when I talk to our small businesses, they say, oh, yeah we go 

to those seminars and outreach things all the time, never gotten 

a contract. And so it would be helpful I think on an ongoing basis 

for the Chairwoman and this Subcommittee to really hear from 

you, and that is each of you, what is the real result of your outreach efforts? Because otherwise, I would say, why bother to spend 

the money on outreach if no one is ever going to get a contract? 

Thank you. 

Thank you, Madam Chairwoman. 

Ms. NORTON. Thank you very much, Ms. Edwards, for those important questions. 

Remember, Ms. Edwards and I are saying that a contractor has 

to make sure that he meets the standards of the Federal Government, very high when it comes to building or doing any service for 

the Federal Government. But to meet that. If the lesson we get 

back is, to meet it, I am going to use the same subcontractor in 

perpetuity, you are doing nothing to carry out the congressional intent to increase and for that matter help train small businesses, 

because they do get contracts. And if a small business gets a contract and begins not to perform up to your expectation, you are 

supposed to yank that contract. You are supposed to have things 

in the subcontract that makes that possible. 

23 

But the failsafe notion, which we believe has been abused even 

further, that people have gotten a subcontract to meet the requirement and then didn’t even do the work, nobody better try doing 

that on a billion dollar project at the DHS. We understand that 

having familiarity with a subcontractor who has performed well 

means you want to go back to that subcontractor. But how in the 

world do you know that there is no other subcontract electrician in 

this region or in this country except the one you have used, Dial 

Electric? How in the world can you say, especially since so many 

are out of work, that you got the one and only who can live up to 

the standards of the Federal Government? That is where our patience runs out and where we do not believe outreach is occurring. 

I want to just say that Ms. Echols has already shown that there 

are ways to increase the numbers because of the GSA workshops 

which went on, as I recall it, for 2 days for several sessions. And 

at the end, is this not true, Ms. Echols, small businesses qualified 

at the end for 8(a) contracting? Am I correct on that? Or how did 

that work? 

Ms. ECHOLS. You are correct, yes. 

Ms. NORTON. So what she did was to essentially sit them there, 

and by the end of it, if you had met all that it took to indicate that 

you had, you were an 8(a) contractor, having sat through. Now of 

course that is going to increase the number of contractors. Some 

may have come back or already were just to refresh. But we are 

either going to be hearing—and the gentlewoman said that we hear 

complaints that people didn’t get contracts. We are going to continue to do that. 

If my answer is simply, I know, but the contractor, the electrical 

contractor did award X number of electrical contractors, I am going 

to tell them, look, you can’t expect every electrician in the region 

to have received a contract. And if there are goals to be met, then 

the goals have to go to where the small businesses are. They are 

at the subcontracting stage. 

Mr. Watley, would you continue so we can more quickly go 

through this? 

Mr. WATLEY. In fiscal year 2009, we awarded $158 million; $18 

million was awarded to D.C. contractors, and $6 million was 

awarded to small businesses in the District. 

Ms. NORTON. You have presaged a question I am going to ask not 

for rendition here because you weren’t asked to bring region-specific information to this hearing, but I will ask you within 30 days, 

each of you, to supply me with the percentages awarded in this region. And the reason I pick out this region is it is the National 

Capital Region, and it is where you would expect more people to 

come forward. I want it by region, by State, by District of Columbia, Maryland, and Virginia, and by category, percentage and dollar amount. Names of contractors would give me a sense of whether or not the same contractors are simply getting the same business over and over again. 

Again, I do not mean to say that that shouldn’t happen. I mean 

to say, though, when you have a mammoth contract like the electrical contract, and you can find only one person is a red flag that 

is going to go up. 

24 

Mr. Mosier, your answer on stimulus broken down by those categories. 

Mr. MOSIER. Madam Chairman—— 

Ms. NORTON. And would each of you, by the way—you can’t perhaps do this right now, but I want last year versus end of fiscal 

year now or up to this point. You won’t be able to give me the end 

of the fiscal year. You will only be able to give me if it is up to 

the quarter or give me up to the quarter of last year, so that we 

will have some sense of whether or not agencies are doing their 

best to make up for the losses—you can’t make up for them all— 

that small businesses are encountering in mammoth amounts in 

contracting. 

Mr. Mosier. 

Mr. MOSIER. We have not received any stimulus funds. 

Ms. NORTON. Mr. Ayers? 

Mr. AYERS. The Architect of the Capitol has not received any 

stimulus funds either. 

And to answer your second question, last year, in fiscal year 

2008, we awarded 19.5 percent of our contracts to small businesses. 

And this year through September 2nd, we have awarded 35.7 percent of our contracts to small businesses. 

Ms. NORTON. Now, how about disadvantaged small businesses? 

Mr. AYERS. That went from 3.2 percent last year to 4.9 percent 

this year. 

Ms. NORTON. Thank you. 

Ms. Rouse? 

Ms. ROUSE. As a jurisdiction of the AOC, we don’t—— 

Ms. NORTON. Oh, you are included within the AOC. Of course. 

Ms. ROUSE. Yes, ma’am. 

Ms. NORTON. Now, one way to get at this subcontracting abuse 

is to make greater use of the GSA schedule, a multiple award 

schedule. How many of you make use of that schedule, that GSA 

schedule where the small businesses are? Not all of them; some of 

them are with contractors. But the GSA schedule is full of contractors, harder to get on because you have got to do a whole lot of 

show who you are and how good you are in advance. But for that 

reason, you would think that a Federal agency would particularly 

be interested in the GSA schedule. 

So why don’t we just start with Ms. Riggs on that one. 

Ms. RIGGS. Yes, ma’am. We use schedules quite heavily. And we 

have used schedules for recovery work as well. 

Ms. NORTON. Of course, you use it as a GSA schedule. I am trying to find out about small business, disadvantaged small businesses, how often you go to—let me be clearer then—you go to the 

GSA schedule as opposed to going to the subcontractor or contractor who is able, looks, it seems to us, to camouflage a lot of the 

outreach that you otherwise would require. You go straight to that 

schedule; don’t you get yourself a small business more quickly? And 

does it work for you with the kinds of contracts you do? 

Ms. RIGGS. We do use schedules quite a lot. Most heavily we use 

them probably in our facility area for facility operations. And they 

do work for us. 

Ms. NORTON. Facility area, you mean for things like—— 

25 

Ms. RIGGS. Maintenance and repair—I am sorry, thank you— 

maintenance and repair, alterations, operations. And we do see a 

mix there of large and small, and it does work very well for us. We 

also use schedules heavily in the IT area, again with a mix. We 

have quite a lot of small in our IT area. And our third largest area 

is for professional services that we purchase. 

Ms. NORTON. In 30 days, could you get us that breakdown from 

the schedule? What is the schedule showing us in small businesses 

over a period of let’s take a year, so we can compare, in small disadvantaged businesses, in small businesses and in small businesses themselves, the use of the schedule and in what kind of 

services? I am aware, of course, that certain kinds of services lend 

themselves to the schedule more than others. 

For example, Clark Construction is responsible, because he is a 

general contractor, and therefore Ms. Edwards’ questions, for example, there, are more relevant. Although it is not that he couldn’t 

go to the schedule. He might benefit from going to the schedule as 

well. But the responsibility lies with him. 

For you, the responsibility could lie with whether you decide to 

go straight to the schedule on some matters or to go through a contractor. So I am interested in the use of the schedule. And I am 

not complaining, although I hear complaints, so that you don’t 

think I simply bring you the complaints we hear from contractors, 

who call all the time, the subcontractors. I am not complaining, although I would like you to look at what it takes to get on the 

schedule. 

I happen to like government. Therefore I am particularly sensitive when people complain about government, because the people 

who don’t like government, whose names shall go unmentioned, 

often use the fact that government paperwork and all that goes 

with it can be so burdensome to try to get rid of a whole lot of what 

we do. So I am a huge streamline type and am better known in 

chairing the EEOC for getting rid of the backlog than for things I 

would rather have on my tombstone. 

So I really do—I am interested, particularly in the use of the 

schedule, and I am interested, and this I don’t require in 30 days, 

but I am going to require it in 60 days, I need you and your staff 

to look at whether the schedule can be streamlined, how much it 

can be streamlined and yet meet the high standards of the Federal 

Government. 

Who else is going to speak to the stimulus? I am sorry, was 

that—schedules, I am sorry. 

Mr. Watley, you use schedules? 

Mr. WATLEY. The Smithsonian uses GSA schedules. We primarily use them for IT supplies, for office products, janitorial supplies, but not for construction-related requirements. 

Ms. NORTON. Mr. Hansen, you know, with FEMA, if you are into 

quick purchasing, you ought to be going to the schedules like it was 

yesterday. 

Mr. HANSEN. We love the GSA schedules; 19 percent of our acquisitions are off schedule. But keep in mind that doesn’t relinquish us of our responsibilities for competition. We actually do competitions on the schedule. 

26 

Ms. NORTON. You know everybody on the schedule has already 

competed. 

Mr. HANSEN. You can still do competitions with the members on 

the schedule to get the best price. 

Ms. NORTON. Of course. But that doesn’t take a lot of time. 

Mr. HANSEN. That does not take a lot of time. They have done 

a lot of the work up front for us. 

Ms. NORTON. So, in Katrina, how often—what percentage of the 

contracts came off the schedule? 

Mr. HANSEN. Can I have my 60 days to respond to that, ma’am? 

Ms. NORTON. You will probably need for that. 

Mr. HANSEN. Yes, ma’am. 

Ms. NORTON. Also for what was the one in Houston? 

Mr. HANSEN. Ike and Gustav? 

Ms. NORTON. I need to know the use of the schedules. Get me 

those two hurricanes. But if you simply want to do it by year, and 

I understand the Katrina problem, I think I would rather have it 

by year, just like I am asking people to give me, go back to the 

quarter in 1 year, go to the quarter in this year. 

Mr. HANSEN. Yes, ma’am. 

Ms. NORTON. Schedules and who else? 

Mr. Mosier, you have a high percentage. I cannot believe you 

don’t use the schedules. 

Mr. MOSIER. We do. We don’t have a huge volume of schedule 

buys. Our funding of course is solely for the maintenance. 

Ms. NORTON. Is what? 

Mr. MOSIER. Is solely for the maintenance and upkeep of the facility. So all of our purchases are related to that. 

Ms. NORTON. But you talked about some renovation you were 

doing. 

Mr. MOSIER. In very, very rare cases, we might do contracted 

services through the GSA schedule. But we primarily use it for 

supplies. 

Ms. NORTON. What is an open contract? 

Mr. MOSIER. An open contract is I suppose just my way of saying 

an active contract. It is sort of a blanket purchase agreement or vehicle with a small business that I can continue to tap into. 

Ms. NORTON. Schedules, Mr. Ayers? 

Mr. AYERS. We make extensive use of the GSA schedules. We 

find them to be excellent vendors, as well as it is a streamlined acquisition method that saves us time and effort. 

Ms. NORTON. So you do make use of the schedules? 

Mr. AYERS. Absolutely. 

Ms. NORTON. As opposed to going through the contract route? 

Mr. AYERS. Yes. 

Ms. NORTON. How much? Get me that information over a quarter, please. 

Mr. AYERS. Yes, ma’am. 

Ms. NORTON. Ms. Rouse, how about you? 

Ms. ROUSE. Madam Chair, we do use GSA schedules for some of 

our—we are talking about the gift shop items. But I will have to 

get back to you with what percentage that is. 

Ms. NORTON. Thank you. Quarter to quarter over a year. I am 

just trying to get a sense. 

27 

Now, I want to ask you something that I have just seen happen, 

and I was pleased to see it happen, and I want to know how you 

go about deciding the amount. GSA is to be commended for setting 

a very important example when it did the preliminary work clearing the land and the like, and I want to know whether it happened 

off the schedule or how you did it. It was able—I should preface 

this by saying the more complicated the work in a society that has 

denied opportunities for minorities and women, the more likely it 

is that you will see fewer at the very top like contractor. And you 

will see more in lower reaches of the work. And GSA must understand that, because when it contracted over the past year, according to our figures, for the work, 100 percent of it went to—this is 

without any hearing or any demand by this Member or any other 

Member—went to minority—sorry, disadvantaged businesses, and 

40 percent to businesses in the District of Columbia. More recently, GSA, for the next stage, I think a $450 million 

contract, set aside 5 percent for I don’t know if it is small businesses or small disadvantaged businesses. So I want you to break 

it down for me, how did you decide—and I want everybody to listen—how did you decide so that you were able to get those numbers in small disadvantaged businesses in the beginning, and what 

are you doing with this $5 million? And how did you even get to 

$5 million? Because certainly the Committee didn’t tell you that 

that was the number. We wouldn’t have known how to tell you 

what the number was. 

Yes. 

Ms. ECHOLS. If I am not mistaken, I believe you are talking 

about Nastos Construction, who did some work out there at the—— 

Ms. NORTON. We know that they got the disadvantaged business 

in the District of Columbia. 

Ms. ECHOLS. Right. 

Ms. NORTON. That was reported to us. Go ahead. 

Ms. ECHOLS. Some of the projects that we did solicit, we did use 

some of the schedules, some of the IDIQs. 

Ms. NORTON. Were they on the schedule? 

Ms. ECHOLS. Nastos, no. That is a construction firm. Nastos was 

not on the GSA schedule. That was an 8(a) procurement. 

Ms. NORTON. I see. 

Ms. ECHOLS. Yes. 

Ms. NORTON. So how did you go about finding, and the 40 percent in the district and others went to other places, that—did you 

advertised this for small businesses or for small disadvantaged 

businesses? How does it work? Did they have to compete among 

themselves? How does it work? 

Ms. ECHOLS. Pulling firms off of the FAS schedule and then inviting them to submit a proposal to GSA depending upon what 

project we are working on. 

Ms. NORTON. I hope everyone heard that. Inviting them to participate. Others will come forward on their own. 

Ms. ECHOLS. And if they hear about it, they are, too, invited to 

participate. 

Ms. NORTON. So you don’t exclude others. 

Ms. ECHOLS. Yes. 

Ms. NORTON. What was the last thing you said? 

28 

Ms. ECHOLS. As long as they are scheduled. If it is a scheduled 

requirement, then they must be a schedule holder under that particular—— 

Ms. NORTON. How did you get to the $5 million? Tell me about $5 million. You or Ms. Riggs. We read that $5 million of the $450 

million I think for this first tranche was set aside for you tell me 

what, for small business competition? Would you elaborate? 

Ms. ECHOLS. I believe you may be talking about the demolition 

contract that is out there now? 

Ms. NORTON. I think that is probably—— 

Ms. ECHOLS. Right. That was a competitive 8(a) requirement. 

And what we did, that was at FedBizOpps, and the requirement 

was that you must be certified through SBA as an 8(a) firm to participate. 

Ms. NORTON. All right. Now, this is legal and constitutional. 

They are making 8(a) contracts compete within the 8(a) category 

for small business where they have determined that there is an 

available pool. This is one way, particularly where you know there 

is an available pool, where those pools historically have not been 

used; it is a way. 

How many of you use 8(a) contracting in that way? Because that 

is where we get some of the biggest complaints is from 8(a) contractors. How many of you use 8(a) contractors? Would you describe, 

beginning with Ms. Riggs, your use of 8(a) contractors? I now 

know—and how did you get to $5 million? Was that based on what 

you know about the available pool, for example, of people who can 

do that work within the 8(a) contract pool of contractors? 

Ms. RIGGS. I am looking at examples of things that we have purchased from 8(a) contractors last year. Our largest category of work 

was in maintenance and repair of office buildings. Behind that was 

construction. And behind that custodial. There is quite a list here, 

but those are probably our largest categories where we saw dollars 

going to 8(a) companies. 

Ms. NORTON. Now, could I know from the rest of you, do you take 

some of your stimulus money or other money and say, this money 

is for 8(a) contractors? And if so, what percentage? 

Mr. Hansen, Mr. Watley, et cetera. Mr. Hansen? You of course, 

you would have to be dealing, not with your grants, but with your 

other funds that you use. Go ahead. 

Mr. HANSEN. Yes, there are a couple of different techniques that 

you can use to identify 8(a) contractors. One of the easiest ways is 

to put a request for information out on FedBizOpps, giving it 30 

days. If you find out that you have 8(a)s out there that can compete, they will inform you through that process. So that is one technique. We also have a program where, if a contract is already 8(a), 

we are going to keep it 8(a) because they have already demonstrated they can do the work. We have a policy where we award 

sole source contracts to 8(a)s up to $3.5 million. But when we have 

a procurement in excess of $3.5 million, we compete them amongst 

the 8(a)s. 

Ms. NORTON. Would you get us the information over the quarters 

from 1 year to another how much of that has taken place using 

your funds? I am interested in the 8(a) so that when somebody 

calls me I can look down, and I can say, well, FEMA last year 

29 

awarded—which means they set aside for 8(a) competition—awarded X percent of 8(a)s. So while you may have had difficulty, contractor X, it may or may not be a problem with the agency they 

then are calling me to complain about. 

Mr. Watley, 8(a) contracts. 

Mr. WATLEY. For our Recovery Act dollars, we looked at the opportunities available, but we did not assign a dollar amount that 

said X amount of the $25 million—— 

Ms. NORTON. Were those 8(a) contracts? 

Mr. WATLEY. Pardon? 

Ms. NORTON. Are we talking about 8(a) contracts now? 

Mr. WATLEY. The 8(a) contracts that we awarded; we did award 

that $9.5 million. 

Ms. NORTON. If you are saying to the 8(a) contractors, here is $9 

million—— 

Mr. WATLEY. Correct. 

Ms. NORTON. —you surely don’t pull that out of the air. 

Mr. WATLEY. Correct. 

Ms. NORTON. How did you get to that number? 

Mr. WATLEY. That number came out of the amount that we obligated. We did obligate $9.5 million. 

Ms. NORTON. What I am trying to find out, is that just catch as 

catch can? So you were able to get those impressive numbers without having a specific goal? 

Mr. WATLEY. Correct. And so what we did do, though, was we 

looked at the amount that we had, and we do have IDIQ contracts 

that were previously awarded to 8(a) vendors. And we said, of the 

money that we would receive, what dollars and what projects can 

we award to these 8(a) vendors? And so that was the approach we 

did rather than identifying a specific amount of money. We looked 

at the projects, and we looked at the vendors available, and we 

made the award of those projects. 

Ms. NORTON. So based on your past history, you know where to 

go. Yeah, you know, you are not going to find 8(a) contractors in 

a number of different categories. You are going to find them in 

other categories. So you are going to have to knowledgeably do outreach. 

Mr. Mosier? 

Mr. MOSIER. We are fairly active with 8(a) contracts. 

Ms. NORTON. Just get me those figures then. I know you may not 

have—and Mr. Ayers? Those figures are very important, because 

you see, I would be particularly embarrassed, you are a legislative 

branch agency, to hear from constituents in the region that our 

own legislative branch had difficulty. 

Mr. AYERS. The 8(a) program is really a Small Business Administration program. So, to date, we have not made efforts to particularly work or direct work to 8(a) programs. But I think, with our 

new relationship and agreement that we signed last month with 

the Small Business Administration, maybe that is a goal we can 

develop and push for in the future. 

Ms. NORTON. You ought to be commended on understanding that 

though technically, and of course technically we could take steps, 

technically because there are three branches of government, you 

are the legislative branch of government; the Federal agencies canVerDate Aug 31 2005 10:00 Nov 30, 2009 Jkt 000000 PO 00000 Frm 00043 Fmt 6633 Sfmt 6633 P:\DOCS\52278 JASON
30 

not oversee you in the sense that we can. That law does not automatically apply to you. But to your credit, you have, to the best of 

your ability, complied, and you now have a MOU. 

Mr. Ayers, I had great problems, you were not the Architect 

then, when we did this massive buildout. It was just horrific, where 

we spent all that money. I don’t even want to know, because you 

had so many complaints. We were in the minority. And it was very 

difficult to deal with that. We are not going to have that again. 

And if you are not using the 8(a) program the way these agencies 

are, you are not going to have a lot of success. We want the use 

of multiple ways. I am after my minority businesses to get on the 

GSA schedule. The minority contractor—or sorry, he was a small 

business; he was not a minority contractor, came to me on the electrical. He did the right thing. I am after them to go after the contractors. Contractors sometimes come with some small businesses. 

They are supposed to get points, Ms. Riggs, but of course if nobody looks afterwards, why should they care as long as they get 

their funds? You see me going into such great detail because we 

will never be spending this kind of money again, I just can’t imagine, for decades of the kind we are spending with your agency. Others have smaller amounts. So it is going to be important to know. 

Mr. Ayers, would you kindly submit within 30 days a copy of the 

MOU you have recently signed with the Small Business Administration? 

Mr. AYERS. Yes, ma’am, happy to. 

Ms. NORTON. And I compliment you for doing that. 

Mr. AYERS. Thank you. 

Ms. NORTON. You indicated that you did use small business setasides—or you are going to begin, that is part of it—between 

$5,000 and $100,000. Is that right? 

Mr. AYERS. That is correct. 

Ms. NORTON. That is the first time you have done that. 

Mr. AYERS. That is correct. 

Ms. NORTON. Well, I compliment you for that. I think it is scandalous that the agencies have been doing that and that our own 

legislative branch—that is why we are going to be doing the oversight. There is not really any way for you to know unless the authorizing or the Appropriations Committee does it. 

I will be looking, Mr. Ayers, to see how your subcontracting goals 

coincide with those of the SBA. What about the vendor database 

that you and perhaps Ms. Rouse use? 

Mr. AYERS. We have an extensive database. When we began focusing on this program, the first thing we did was to send a letter 

out to all of our known vendors asking them to self-identify whether they were a small business, large business, disadvantaged. We 

have got that information now, and we loaded it into our vendor 

database and our financial management system. And certainly several times a week we meet with new vendors. 

Obviously, as you know, we have been to your fair both in 2008 

and 2009. We have been to three fairs this year. And we get information from small business vendors and load that into our vendor 

database. 

Ms. NORTON. It looks like, Mr. Ayers, that you are in more of a 

start-up phase, and I don’t mean to say you have not been doing 

31 

anything, than the other agencies. And therefore, we will be particularly interested in the MOU and how you are going to carry 

them out. And of course, the GSA experience is so extensive that 

I would invite you to collaborate with them to save some—to get 

to some short cuts. And I would like to ask Ms. Rouse, and I understand much of her work comes under the Architect of the Capitol, 

but I wonder if you set internal goals for small business programs 

of your own? For example, the Government Printing Office, does 

that come under your purview? 

Ms. ROUSE. What we are trying to do, thanks to the new relationship with the SBA, is use the SBA and GPO as our sort of avenue to find new vendors. Our real interest is trying to work with 

our procurement staff and SBA to do our first vendor fair at some 

point between now and the springtime, which will allow us to actually hopefully attract more vendors who want to create or already 

have products that would be of interest to people in our gift shops. 

So we think we have some new opportunities. And I think the more 

people know that we are doing it the more vendors we will get. 

Ms. NORTON. Well, you are very visible. And of course and again, 

I speak to Mr. Ayers and Ms. Rouse particularly since the embarrassment would be to Members of Congress if complaints were to 

come in your area. It would mean we weren’t tending to our own 

store. 

We are going to let you go. 

I am going to say to Mr. Hansen that I am particularly interested in how you spend during a disaster. Let me tell you the complaint I get as—I have the primary jurisdiction over FEMA. I am 

also on Homeland Security. They actually have a much smaller 

part of the jurisdiction. This is what we hear. Here we have some 

of the only things left standing in this area are us small businesses, but, they complain, without any way for me to respond, but 

small businesses here, there, and particularly the bigger contractors are getting all the business. So they really—here I am giving 

you their complaint. I am not verifying it, but the complaint goes 

that if they really wanted to help us, they would give the business 

to the small business person who is up and running and can do it. 

That is the complaint about FEMA. 

Mr. HANSEN. Madam Chairwoman, you will be happy to hear 

that FEMA has adopted a program called the Local Business Transition Team that we actually deployed this last year to Gustav and 

Ike. And it is the job of that team to help transition work from the 

larger corporations to the smaller corporations. It is also the job of 

that team—— 

Ms. NORTON. This question went to the smaller corporations in 

the disaster area who happen to be up and running but see contracts going here, there, and yonder, but not to the area where the 

money would flow back into the jurisdiction that has been hit. 

Mr. HANSEN. That is exactly the intent of this team is then to 

reach out to the community, to reach out to those small local disadvantaged businesses to teach them how to work in the government, to get them enrolled in the central contractor registry, to 

help them get DUNS numbers, to show them how they can go on 

FedBizOpps to see where the opportunities might exist. And in 

areas that are really devastated, we actually have bid boards, and 

32 

we teach the local contractors how to go to the bid boards to compete for those contracts. So this Local Business Transition Team is 

really a good initiative that I think really gets to the crux of what 

you are talking about. 

Ms. NORTON. You are setting that up now? 

Mr. HANSEN. We did in Gustav and Ike, and it has been a promising practice we are going to do in the future. 

Ms. NORTON. This is excellent. This is excellent. 

Mr. Hansen, could you get to us how that is now working by 

numbers? 

Mr. HANSEN. Yes, ma’am. 

Ms. NORTON. We don’t know how to translate anything but numbers here. But I very much appreciate it. That is precisely what 

would be necessary. 

First of all, many of the folks will be down just like the residents 

are down. So this is difficult. To set up something special for it is 

very important. 

I am going to have one question for Ms. Riggs before I give all 

of you a very important charge. 

The question for Ms. Riggs is, since the DHS development, which 

is only now, it can’t even be a third of the money you are going 

to be spending, but it is currently underway, where we would expect small business opportunities to be unusually plentiful, have 

you goals or how will you do goals for this development? You are 

going to be going on—I would be surprised if you are not going on 

for almost a decade when all is said and done before the first people land there and say, we now, we, 14,000 Federal employees, are 

there. How are you going to manage small business opportunities 

for so large a project in terms of goals for the development? 

Ms. RIGGS. Well, first, let me voice appreciation for our CO. We 

are quite fortunate to have a CO who is very aggressive on that 

project towards small business. And as you can see from her past 

performance, she has looked for those projects that can be severed 

from the larger—— 

Ms. NORTON. Now, I have nothing but praise for Ms. Echols. But 

what I am afraid of is a—what is the best way to put this?—a step 

by step notion as opposed to you know exactly what you are going 

to do there. You are going to be doing building from the ground up. 

In fact, there is no kind of construction work you are not going to 

be doing, including reuse, where small contracts will be abundant 

in the extreme. You are reusing maybe 60 percent of the buildings 

there. Somebody, if you want to be successful, long before that 

work begins, is going to have to begin to map out this. 

Ms. Echols is an implementer, because I have seen her do her 

work. Somebody, before you get anywhere close to the next contract, has got to be looking at reuse. I am going to insist that GSA 

do reuse and construction at the same time. What are you waiting 

for? We shouldn’t be going step by step. We used to not have anything to do with building from the ground up. So I am going to be 

seeing whether or not GSA can walk and chew gum at the same 

time. Therefore, I ask about your overall planning for the small 

business contracting for this project. 

33 

Ms. RIGGS. We will see quite a lot of work go to small businesses 

through subcontracting. But we will also continue to see work go 

to small businesses as primes—— 

Ms. NORTON. Ms. Riggs, I know that. See, in testimony terms, 

that is known as a truism. Is there a plan? Is anybody working on 

planning for the opportunities that will be available so that contractors and, for that matter, subcontractors will be briefed well in 

advance of what is going to be required as they tool up to compete 

for the next one of the many contracts that are going to come out 

of GSA? 

Ms. RIGGS. Yes, ma’am. That team is—— 

Ms. NORTON. Let me ask you before Congress goes out of session 

to get me a sense of how you would plan to do small business contracting, considering the opportunities that are going to be available for reuse and for construction. And bearing in mind that, since 

this is a mammoth contract, the big boys are who are going to benefit most. And, well, they should. They have the necessary expertise. They are putting out much in order to be able to accomplish 

within the time frames we give them. 

But we are as intent on meeting the small business and small 

disadvantaged business goals as we are on the rest. And they are 

all tied into this. You are not going to go to the GSA table for all 

of these people. And I don’t ever want to see another Clark 

Dynalectric complaint in the years that this thing is going to be 

built. Never want to see it. Indeed, I know of nothing you can do 

after it has occurred. This presages my next question. Is there anything you can do? Is there any sanction that you know of or have 

used if you gave a subcontract or small business contract and you 

found that in fact they were not using disadvantaged contractors, 

they were not fulfilling, or they were simply not fulfilling what you 

asked them to do? What do you do then? 

Well, you know what? I want to make it unnecessary to answer 

that question. Because my answer to it is, it is all over then, and 

we all lose. And I know that there are some counting on it being 

all over then. Therefore, the most important mission I could leave 

you with is tracking. Catch the abuse or the failure before it comes 

home. You are holding the money, friends. Is there any way to 

withhold money if a contractor fails to meet his goals in subcontracting that you know of? What is it, Ms. Echols? 

Ms. ECHOLS. We actually do a hold-back procedure. 

Ms. NORTON. Say that again. 

Ms. ECHOLS. We actually do a hold-back procedure. 

Ms. NORTON. Everybody spell those words, hold-back procedure. 

Because we don’t want to have to call out names the way we did 

here, call in contractors. Contractors are doing whatever they are 

doing because the Federal Government has not been tracking, has 

not been helping. Somebody has a great big contract; he is going 

to do what we say to. I am not worried about the contractor. So 

the failure lies with us. And I am trying not to be responsible. And 

I think you have to inform your small business contractors that you 

are going to be held accountable before the Subcommittee. You certainly will be held accountable on an annual basis. 

And GSA, who is the largest amount, will be held accountable 

more often than that because we have hearings often with GSA. 

34 

And I am prepared to have hearings if we find lapses of which we 

have not found today. We found much more than good-faith efforts 

today. We knew that from the SBA figures and how well we were 

doing. And the administration takes this very seriously. 

I have had discussions with the Justice Department, which 

means to proceed, not in this area, where we are talking about affirmative work, but in areas where we find people in violation of 

the law, where you may need the Justice Department to back us 

up. I want to thank all of you for your testimony today. It is very, 

very helpful. 

Please remember the time frames we have set. And please be in 

touch with staff, because we are here not simply to do oversight 

but to be helpful to all of you. 

And I would like to call the final panel, panel two. This is a very 

important panel, because agencies come forward simply to tell us 

what they mean to do and what they believe they have done. And 

they testify truthfully and in good faith. But we need to put that 

together with how that experience works on the ground, and therefore, we are welcoming the next witnesses, asking them to quickly 

be seated, and we will hear their testimony. We are going to go 

left-right here. 

TESTIMONY OF ROSALIND STYLES STEPHENWOOF, PRESIDENT AND CEO, CAPITOL CITY ASSOCIATES, INC.; JOEL 

ZINGESER, ASSOCIATED GENERAL CONTRACTORS OF AMERICA; CATHERINE GIORDANO, PRESIDENT/CEO, KNOWLEDGE 

INFORMATION SOLUTIONS, INC.; AND RAY AMIRIAN, NASTOS 

CONSTRUCTION COMPANY, DISTRICT OF COLUMBIA SMALL 

BUSINESS WINNER, 2009 

Ms. NORTON. And we are going to proceed quickly, beginning 

with Rosalind Stephenwoof, President and CEO, Capitol City Associates. 

Ms. STEPHENWOOF. Good afternoon, Congresswoman Norton. I 

am excited, to say the least, to be here to be able to testify again 

before your Committee to talk about the small disadvantaged businesses and your goals for meeting, for assisting us in competing in 

the Federal marketplace. 

Again, I am Rosalind Styles Stephenwoof, and I am President 

and CEO of Capitol City Associates, Incorporated, an AfricanAmerican, woman-owned small and disadvantaged business that is 

located in the esteemed Anacostia neighborhood of Washington, 

DC. 

Capitol City was established solely for the purpose of assisting 

Federal and local entities, major corporations and private developers to maximize the participation of local developers and businesses within communities to participate in the revitalization of 

their neighborhoods. 

Capitol City has worked with communities in Washington, DC, 

and now has extended its work in Maryland and northern Virginia, 

working to negotiate relationships with owners of development 

projects and establishing partnerships with resident organizations 

so that the inclusion of local businesses is inherent in the design 

and construction of projects. 

35 

Capitol City also works to develop capacity-building skill-training 

programs, such as the pre-apprenticeship, apprenticeship, administrative office, property management, communications systems operations training that help people to not only effectively compete for 

employment during the construction of projects, but also as employees during the operation of the facilities post-construction. 

Most of the partnerships implemented written agreements which 

included a process for monitoring and enforcement. Capitol City is 

a public-private expert, having successfully assisted the government of the District of Columbia to change the laws governing the 

participation of local, small, and disadvantaged business enterprises on city-funded projects from a goal to a requirement. And we 

continue to monitor compliance on Federal, local, and private development initiatives to ensure the full participation of the small, disadvantaged business community in construction-related projects. 

Ms. STEPHENWOOF. I offer my congratulations and support to 

you, Congresswoman Norton, for spearheading this initiative on 

the Federal level and working to ensure that local residents and 

businesses are able to participate in the construction marketplace 

on projects under your purview. I have witnessed firsthand the instrumental role you have played to include the United States Recovery Act dollars in GSA’s redevelopment of the St. Elizabeth’s 

West Campus in Southeast Washington. An unprecedented requirement has been included in the solicitation for construction management and the general contractor teams to establish and maintain 

a plan for preapprenticeship and apprenticeship training programs 

to be incorporated in their construction plan. 

This brings me to my review of the General Services Administration and its support of small business and entrepreneur participation in this historic development initiative. St. Elizabeth’s West 

Campus, as you know, sits in one of the most highly distressed 

neighborhoods in the country. The state of the economy recently reported that the current recession has lasted longer than any recession since the Great Depression, that the unemployment rate is the 

highest it has been in 26 years, and that unemployment in the construction industry is at the highest unemployment rate of any industrial section. 

In comparison, the residents of the Ward 8 community surrounding this development project have lived with these distressed 

economic standards for generations. It would be a great disservice 

for our community if the first recipients of the economic recovery 

possible from this project provided by the United States does not 

benefit the residents and local businesses impacted by this multibillion-dollar development initiative. 

Over the past 5 years, GSA has facilitated dialogue with the 

Ward 8 community to gain input and garner support in development of the St. Elizabeth West Campus, but I think GSA can do 

more to expand its public engagement efforts. In engaging in deeper outreach, they can create smaller work groups, advisory committees and community engagement venues designed to advise residents and local businesses of employment training and business opportunities. They can initiate alternative marketing tools for distribution in communities that are more sensitive to the neighborhood and its constituents. 

36 

Providing technical support in partnership with the Small Business Administration, they can provide one-on-one technical to assist small local businesses to achieve Federal certification; conduct 

assessments of current businesses and provide a roadmap to become competitive in the construction marketplace; and provide financial counseling for businesses and avenues for assistance with 

bonding, start-up costs, personnel and other business expenses. 

The third area is to provide employment and training opportunities: Create partnerships with established local support service programs and training providers to recruit residents for employment. 

Utilize specialized resident advocacy agencies and organization, 

such as ex-offender, public housing and human service programs, 

who are currently subsidized by Federal programs to refer local 

residents and assist with ongoing counseling services throughout 

their employment. 

The next step to successfully implement these programs and 

services is accountability. GSA should include a strong monitoring 

and compliance component. Developers, general contractors and 

prime contractors have historically maintained as their bottom line 

having a project come in ′′on time and under budget.′′ The inclusion 

of alternative recruitment, training and employment programs and 

services in their opinion has a negative impact on their bottom 

line. 

GSA and all Federal small and disadvantaged business participation should be a strong requirement, not a goal. All contracts utilizing Federal funds should include strong enforcement language 

that does not only state possible penalties for noncompliance, but 

should outline the process for the enforcement of penalties by the 

withholding of funds and payment of fines. Goals and requirements 

can only be stated by financial retribution to ensure compliance. 

Lastly, I wish to add that since 2005, I have served as the president of the National Association of Minority Contractors, Washington, D.C., Metropolitan Area Chapter. Wearing that hat, I would 

like to address our organization’s concerns regarding the possible 

implementation of a project labor agreement on any Federal construction project, and especially I am referring to the project at the 

West Campus. 

Over the past 40 years, NAMC has served as an advocate for minority contractors throughout this country. Designed to address the 

needs and concerns of minority contractors and create parity in the 

construction industry, NAMC has aggressively pursued equity in 

contracting for small minority and disadvantaged businesses. Our 

local chapter also includes women-owned, HUBZone and veteranowned businesses. 

In the Washington metropolitan area, which includes the Federal 

enclave, we have several significant construction projects planned 

or under way. Because of the state of the national economy, construction firms and their employees are saturating our area to compete in the construction marketplace. Due to the paucity of minority contractors in the construction industry, our members cannot 

compete with the established unionized labor force through project 

labor agreements. If any of these highly competitive fellow contract 

projects fall under PLAs, an alarming number of minorities and female workers and minority contractors who are living and working 

37 

in Washington, D.C., and the surrounding area will be denied access to a vital opportunity for work. 

NAMC Washington would like to continue our dialogue with your 

Committee regarding the implementation of a PLA. We can provide 

you with statistical data from the U.S. Department of Labor, which 

outlines the status of journeyman employees by race and gender 

within each construction trade, which will validate the significant 

disparity in the construction trade by race and gender. 

We are committed to work with this Committee to craft a process 

for the local minority and women-owned businesses are at the forefront of the redevelopment of our cities and our neighborhoods. 

Capitol City Associates and the National Association of Minority 

Contractors, Washington, D.C., Metropolitan Area Chapter, stands 

ready to assist your Committee to increase the participation of 

small and minority businesses doing business with their Federal 

Government. 

I thank you for your time. 

Ms. NORTON. Thank you very much, Ms. Stephenwoof. 

Next, Joel Zingeser, Associated General Contractors of America. 

Mr. Zingeser. 

Mr. ZINGESER. Thank you, Ms. Norton, and it is a pleasure to be 

here and an honor. My name is Joel Zingeser, of Grunley Construction, where I lead the firm’s strategic planning, business development and sustainable design and construction efforts. 

For over 50 years our firm has specialized in renovations, restorations and modernization of large-scale government and commercial buildings, including office, laboratory and educational facilities. In addition, we construct new facilities and additions to existing buildings for both public- and private-sector clients. 

On behalf of the Associated General Contractors of America, we 

strongly support full and open competition for the many contracts 

necessary to construct improvements to real property. This includes 

competition among general contractors, specialty contractors, suppliers and service providers. Over the years it has been established 

that such competition energizes and improves the construction industry to the benefit of the industry and the Nation as a whole. 

As the Committee considers the changing Federal procurement 

landscape, AGC offers the following points for consideration. Regarding contracting reform issues, AGC supports procurement reform to improve delivery of Federal construction services. Reform 

of the Federal procurement process should recognize construction’s 

unique melding of industry sectors, while ensuring the government 

is using the most cost-effective method of procurement. 

AGC is working to foster a business climate that enhances opportunities for all businesses. Construction is an intensely competitive 

industry, and we believe that competition penalizes any firm that 

resorts to discrimination. To succeed, construction firms have to 

focus on price, quality and reliability. 

Our members recognize the benefits that the 8(a) program and 

the Disadvantaged Business Enterprise programs have to contractors who qualify for these programs. We also have growing concerns about the need for Federal decisionmakers to address the 

challenges small businesses that do not qualify for special preferences are also facing in today’s harsh economic conditions. We beVerDate Aug 31 2005 10:00 Nov 30, 2009 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 P:\DOCS\52278 JASON
38 

lieve that current Federal rules need to be updated to generate 

more collaboration, mentoring and assistance no matter who is the 

business owner. 

AGC would like to discuss issues surrounding a wide range of 

concerns and recommendations we have for improving the Federal 

market. 

At this point I would like to refer the Subcommittee to my submitted testimony. Topics include AGC’s positions on contract bundling, the HUBZone Program, and Alaskan Native contracting. 

I would also like to highlight a few other points. Subcontracting 

goal achievement. Current SBA rules require small business setasides and establish small business goals to be met by large businesses to assure that significant portions of Federal procurement 

dollars flow to small business firms, but the rules for keeping track 

and measuring the actual flow of dollars to small businesses do not 

take into account the actual amounts that flow down below the 

first-tier level of subcontracting. Within the construction industry, 

the bulk of work is performed by subcontractors who in turn hire 

second-tier and third-tier firms to perform elements of the project. 

Under the current system, if an other than small business is included as a first-tier subcontractor, the prime contractor is not 

asked to report further dollars that are going to small businesses 

below the first-tier subcontractor. This is because the contracting 

agency is not allowed to take credit for those dollars towards its 

goals. Allowing prime contractors to report small business subcontracting at all tiers would demonstrate true small business participation on a Federal contract and would show more accurately how 

the construction industry supports and is dependent upon small 

businesses. 

The shift to Electronic Subcontracting Reporting System, the 

ESRS, by the Federal Government provides the opportunity to correct this problem. The system has the capability or can be made 

to have the capability to track and report small business subcontractors on multiple tiers. Yet current rules do not encourage 

the prime contractors and their subcontractors to account for total 

small business participation at all tiers. AGC recommends Congress direct a change to the system through legislation to potentially help all parties track the dollars flowing to all small businesses. 

The Federal Acquisition Workforce. Recruitment, retention and 

training of the government workforce should be a high priority for 

both government and industry. As you can already see from the 

concerns about contracting bundling, which I submitted in the testimony, an understaffed Federal Acquisition Workforce is suffering 

from the pressures of an already challenging procurement environment. The shrinking acquisition workforce is an ongoing problem 

and will exacerbate as the number of procurements continues to 

grow. 

About one Federal acquisition professional in eight already is eligible to retire, and that will rise to more than half the workforce 

by 2016. The average retirement eligibility for contracting professionals will increase from 29 percent in fiscal year 2011 to 50 percent in fiscal year 2016. 

39 

We fear that the Federal Government workforce challenges may 

only get worse in the coming years. In order for the government to 

meet its many missions, it will have to do a better job of recruiting, 

hiring and training new employees. Given that the government’s 

purchase of good and services is at an all-time high, it is essential 

that the government acquisition positions be fully staffed. This 

problem needs to be addressed in the near term to avoid the negative ripple effects that a strained workforce can have on all facets 

of contracting. 

Agency consistency. As a matter of policy, AGC recommends that 

agencies with large regional offices continue to work to promote the 

implementation of uniform agency policies that will provide greater 

consistency in the construction process. Many of our members have 

repeatedly found wide variances in regional operations, contract 

administration and administrative practices. Such can produce serious administrative and communication problems, and can discourage contractors from continuing to work in the Federal market. 

We are pleased that the General Services Administration has 

worked very hard to ensure consistent communication and consistency between regional offices over the past several years, and hope 

that trend continues into the future. 

Project labor agreements. At the outset AGC wishes to explain 

its overall position on PLAs. AGC neither supports nor opposes 

PLAs per se. What AGC strongly opposes is government-mandated 

PLAs on any publicly funded construction project. AGC is committed to free and open competition in all public construction markets and believes that publicly financed contracts should be awarded without regard to the labor relations policy of the government 

contractor. AGC believes that neither a public owner nor its representative should mandate the use of a project labor agreement 

that would compel any firm to change its labor policy or practice 

in order to compete for or to perform work on a publicly financed 

project. AGC further believes that the proper parties to determine 

whether to enter into a PLA and to negotiate the terms of a PLA 

are the employers that employ workers covered by the agreement 

and the labor organization representing the employer/employee relationship—I am sorry, and the workers covered by the agreement 

since those are the parties that form the basis for the employer/employee relationship, have a vested interest in forging a fair and stable employment relationship, and are authorized to enter into such 

an agreement under the National Labor Relations Act. 

AGC has submitted comments on the July 14th, 2009, proposed 

rule that would implement Executive Order 13502 to determine the 

effect this proposed rule will have on Federal procurement policy 

and the cost of doing business with the Federal Government. We 

would be pleased to share a copy of our comments with the Committee. 

That really concludes my formal comments. I am pleased to answer any questions to the Chair. 

Ms. NORTON. Thank you, Mr. Zingeser. 

Next is Catherine Giordano, who is president of and CEO of 

Knowledge Information Solutions, Inc. Ms. Giordano. 

Ms. GIORDANO. Good afternoon, Chair Holmes Norton. I am the 

CEO of Knowledge Information Solutions, Inc., located in Virginia 

40 

Beach, Virginia. We are an information technology value-added 

network integrator with a full range of products and services to 

create, manage and secure networks. We are an 8(a) women-owned 

firm. 

I am appearing here today on behalf of Women Impacting Public 

Policy, a national bipartisan public policy organization representing 

well over a half million women and minorities in business, including 49 associations that partner with us. Thank you for holding 

this hearing and for inviting me to testify. 

Let me first mention I had the opportunity to testify on the very 

same topic last year, March of 2008, and I am pleased to give you 

an update on these small business contracting issues that are so 

important to women-owned businesses and WIPP members. 

The most pressing issue for women-owned businesses in the procurement arena is the failure of the SBA to implement a women’s 

procurement program. As this Subcommittee knows, Public Law 

106554, which was passed in 2000, established a Women’s Procurement Program because Federal agencies were not meeting their 5 

percent women-owned contractual goals. In fact, the government 

has never met the 5 percent goal for women. The highest number 

that it has ever achieved is 3.4 percent. For 7 long years the Women’s Procurement Program suffered from inaction, and in 2007 and 

2008, the SBA proposed a program that was unacceptable to the 

women’s business community and, frankly, was considered an insult by women business owners. 

There were two major flaws in the proposed program. One, the 

SBA chose the narrowest method of data analysis by the Rand Corporation and identified only four NAICS codes that would be subject to restricted competition. 

Two, an agency was required to perform an internal audit of its 

past contracting actions to show it is rectifying past discriminatory 

contracting practices before any contract could have qualified for a 

set-aside. We believe this would have set forth a new legal standard which would have been damaging not only to this program, but 

potentially every women business enterprise program in the country. 

Thankfully with the influence of many Members of the House 

and Senate, including the Chair of this Subcommittee, the SBAproposed program was not implemented. But we have reason to be 

more optimistic this year. The new SBA Administrator Karen Mills 

is now working to propose a new program and a simultaneous 

withdrawal of the previous program. The SBA hopes to have a program in place by the end of the year, which would give womenowned businesses a real chance to compete for stimulus dollars. 

We have urged the SBA to take another look at the Rand Corporation disparity study and expand the eligible industries to more 

than the narrow definition proposed in the past. In fact, the Rand 

Corporation study suggests that up to 87 percent of the industry 

categories could be eligible for the program if the SBA chose to use 

that interpretation. WIPP is working closely with the SBA to ensure that the Women’s Procurement Program will serve to assist 

the Federal Government in finally meeting its women-owned goals. 

The Federal Government’s ability to meet small business goals is 

making progress; however, it is far from impressive. The 2008 

41 

numbers show that the percentage of contracting to small businesses has dropped to 21.5 percent. The women-owned goal number 

has remained at 3.4. However, the number of agencies that met the 

women-owned contractual goal increased from 10 to 14 agencies 

from 2006 to 2008. 

I wish I had good news with respect to subcontracting and bundling, but the challenges in these two areas continue to plague the 

small business community. WIPP continues to believe that if you 

list us, use us. Small businesses spend thousands of dollars in staff 

resources to be part of the subcontracting plan on a prime contractors bid. We believe prime contractors should utilize small businesses unless they no longer meet the requirements. There should 

be penalties assessed for violating the subcontracting plans. With 

respect to the contract bundling, to our knowledge there had been 

no new studies since OMB’s 2002 report, which states for every 

$100 awarded on a bundled contract, there is a $33 decrease to 

small business. 

A new concern for small business is insourcing. While we certainly understand the policy as it relates to the practice of awarding large sole-source contracts to major corporations, the unintended consequence for small business contractors is they are losing opportunities in the subcontracting front and losing their employees to the government. 

We believe the Federal Government should make a deeper commitment to contracting directly with the small businesses. We certainly do not believe the administration intended government agencies to poach small business employees who are working at their 

sites, but we worry about the consequences of this policy. WIPP 

urges the Committee to take a closer look at this issue. 

In conclusion, it is not impossible for small women-owned business to be successful in Federal contracting. I am an example of 

that success. But our success does not rest solely on the quality of 

our products and services. Federal acquisition policy largely dictates if and when we will be successful. The Congress and the Federal agencies must work together to ensure that the policies they 

enact and the paperwork they create do not shut out the ability of 

the women-owned businesses to succeed in the Federal marketplace. 

I thank you for your time. 

Ms. NORTON. Thank you very much, Ms. Giordano. 

Ray Amirian, Nastos Construction Company. And congratulations, Mr. Amirian, on being the District of Columbia Small Business of the Year 2009. You may proceed. 

Mr. AMIRIAN. Thank you. Thank you, Madam Chair, for inviting 

me to participate in today’s hearing. My name is Ray Amirian, I 

am vice president for operations at Nastos Construction, Incorporated. We are a registered disadvantaged small minority business located in the District of Columbia. This year marks our 16 

years in business. We have made steady growth as a company from 

the very beginning in 1993. Much of that progress has been due to 

the large number of construction projects that have been made 

available by the government to such companies as ours, and the 

considerable help for small business that has been available from 

42 

the Small Business Administration and numerous other Federal 

and State agencies. 

The District government has been especially helpful. The government set-aside program for small minority and disadvantaged business, specifically the 8(a) program, has been especially helpful, and 

we have made every effort to work within those guidelines to the 

best of our ability. 

The Federal Government has been an especially rich source of 

funding as many of its buildings are aging and in need of remodeling, or in some cases more dramatic reconstruction. 

In the process of working on many of these projects over the 

years, Nastos has become specialized in the repair and remodeling 

of historic structures. These have included numerous buildings on 

the St. Elizabeth campus, including the 140-year old brick wall surrounding it; and most recently the 70-year old D.C. National Guard 

Armory on which we are currently replacing all mortar that has accumulated over the years and replacing it with mortar that exactly 

matches the original mortar with which it was built. 

Due to the recent downturn in the economy, whereas we earlier 

bid against four to five local companies for government jobs, we 

now sometimes find ourselves bidding against as many as 20 companies from as far away as Ohio Valley when local projects become 

available. Nonetheless, Nastos remains strong and competitive during the present downturn, and we attribute most of it to the 

thoughtfulness and special programs made available by the Federal 

and the State government. 

On behalf of Nastos Construction, I wish to thank you and Members of the Committee for having me here today. 

Ms. NORTON. Thank you very much, Mr. Amirian. 

Let me go to my first question, which is for you. You talk about 

and expressed an appreciation for the quantity of contracts that 

have been available through GSA. What type of work have you 

done for GSA? 

Mr. AMIRIAN. In the last 8 years, under the 8(a) program, we 

have done numerous projects that include the design and build of 

the plaza at Health and Human Services, Department of Labor, 

and National Nuclear Regulatory Commission headquartered in 

Bethesda. We have done office renovations for GSA headquarter 

buildings, and roof replacement at Department of Labor, and on average every year we have done between 2- to $4 million worth of 

renovation projects under 8(a) program. 

Ms. NORTON. So all of this has been 8(a) work? 

Mr. AMIRIAN. Yes, ma’am. 

Ms. NORTON. That $4 million was what percentage of your work, 

for example, annually? 

Mr. AMIRIAN. That is $4 million annually, but GSA represents almost 40 percent of our volume. 

Ms. NORTON. And you are located right here, so you are alert to 

the opportunities available, and you clearly have taken advantage 

of them. 

Mr. AMIRIAN. Yes, ma’am. 

Ms. NORTON. Are you—and indeed this is for all of you. Are you, 

Mr. Amirian, and do any of you know of firms that are benefiting 

43 

from the stimulus funding, small business firms or small minority 

business firms? Mr. Amirian, have you? 

Mr. AMIRIAN. No, I don’t. 

Ms. NORTON. Not yet. 

Mr. AMIRIAN. Not yet. 

Ms. NORTON. Mr. Zingeser, surely somebody. Mr. Singer has already received some of the stimulus funding. Do you know of any 

through the association? 

Mr. ZINGESER. Well, I can speak for Grunley Construction. We 

have been the recipient of three projects that were funded with 

ARRA money. These projects were the continuation of phases or options for continuation of work that was awarded under prior competitive bids. The three projects are the Mary Switzer Building, 

which phase 2 is funded with ARRA funds, at $43 million approximately; the Hoover joint venture Department of Commerce building, that is a joint venture with Gilbane Construction, the total is 

about 158 million; and the Department of the Interior’s headquarters building, phase 5, approximately $34 million. So there is 

a total in terms of Grunley’s portion of the joint venture of about 

$156 million worth of work that is again being funded under ARRA 

funds. 

All of those contracts have small business plans and programs, 

subcontracts and goals to be met. And as I say, they are in the 

process of proceeding. Those awards were made at the end of June, 

the ARRA funds, roughly. 

Ms. NORTON. Mr. Zingeser, we are going to give you time to do 

this, but I would like you within 6 months of today to report how 

those funds in turn have been distributed to subcontractors, contractors beneath yourselves, and to disadvantaged business contractors. 

Mr. ZINGESER. Will you let me report second and third tier? 

Ms. NORTON. Yes. 

Mr. ZINGESER. Okay. 

Ms. NORTON. In fact I am going to ask you—I was befuddled by 

that part of your testimony. I am interested, this whole hearing is 

about so-called second and third tier in one sense. 

Could you give me your sense of why the second and third tier 

contractors are not—′′not allowed,′′ according to your testimony on 

page 3, for subcontracting goal reporting? So it would be like only 

you? 

Mr. ZINGESER. The way the—I don’t work for an agency. 

Ms. NORTON. No, I understand. Surely they must have said 

something to you, like you said to me, can I report. You must have 

said that to them, and what did they give you as the reason? 

Mr. ZINGESER. Here is the general understanding that I have, 

which I would suggest is probably the understanding that the industry has. An agency has small business goals within the contracts that they award. You are required when you compete for this 

work to submit either with your submission or immediately after 

a small business plan. That plan outlines what percentage of the 

subcontracts are going to be awarded to small business, and then, 

within that, what percentages will flow down to the other special 

categories. 

Ms. NORTON. Tier 2 and 3? 

44 

Mr. ZINGESER. No, no, to the subcontractors. I am talking strictly 

now the subcontracts. 

Ms. NORTON. Only subs. 

Mr. ZINGESER. The subcontractors, okay. 

Then the process begins, the work begins, and reports are due. 

The reports that are due come from us to the agency. They used 

to be forms 294 and 295, I believe were the names, and now there 

is the ESRS system for doing it, electronic. Very, very high potential to get good information an get it quickly. 

What we are asked to report is at the subcontractor level only 

whether those are small businesses or not or other special categories. We are not asked to report about what happens below that. 

And I will talk about that in a minute. When we report—the reason we are only asked to report, and this is my supposition, is because the agency does not get credit with the Small Business Administration towards the goals—— 

Ms. NORTON. Because? 

Mr. ZINGESER. —at any level except the first tier. 

Ms. NORTON. Because? 

Mr. ZINGESER. Because either the law says it, the rules say it, 

there is policy. I don’t know. I will leave that up to other—— 

Ms. NORTON. Is it a paperwork problem? Do they think there will 

be too much paperwork going down the line? But you say a lot of 

this would be captured easily. 

Mr. ZINGESER. If that was the case, it would not be hard to get 

that information. 

Ms. NORTON. We could capture this pretty easily now? 

Mr. ZINGESER. I think so. 

Ms. NORTON. We are certainly going to find out. 

Mr. ZINGESER. Okay. The reason this is so important is because 

the goals of the small business program and all the subsets are to 

get money flowing to small businesses. This is what we want to do. 

These are the social-economic-political goals. 

Ms. NORTON. And many of these subcontractors are not small 

businesses, right? 

Mr. ZINGESER. Well, here is the point on that. Let us take one of these $100 million renovation projects. The buildings exist, so 

where is the money going? What kinds of things are happening in 

those buildings? An awful lot is happening in the mechanical, in 

the electrical areas of upgrading and modernizing the building, 

building the performance levels up in term of energy reduction and 

so forth. Those companies that can do the 30 million or 40 million 

out of that 100- are not small businesses. They don’t have the 

bonding capacity or the means to do it. So there is a large business 

that will often have that contract. But if you look, it won’t take you 

long to see that they in turn are subcontracting to a second-tier 

and a third-tier level, and so that 30- or $40 million is absolutely 

flowing to small businesses, but no one is getting the credit for it 

politically or otherwise. 

Ms. NORTON. Yeah, that is what my Dynalectric example, I 

think, was all about. They said, you know, 50 million, zap; that all 

goes to me and one other. Now, that might be efficient in one 

sense, and the last thing we are going to do is reduce the efficiency, 

but, hey, licensed contractors? I bet there are a lot of very efficient 

45 

licensed, sub sub subs, however you want to characterize them out 

there, who can do it. 

So I get your point, and we are going to find out why they are 

given no credit, because it seems to me that runs counter to what 

the law is asking them to do. This is to get to small businesses. 

If you can’t get down to them and get credit for them, then you are 

going to do what Dynalectric did, stop at the first tier. 

Mr. ZINGESER. I would like to just make sure that my words are 

clear that this is not an agency problem, this is a systemic problem. 

Ms. NORTON. No, it is a problem that flows from the way SBA 

asks the reporting to take place. 

Mr. ZINGESER. Correct. 

Ms. NORTON. We are not blaming the agencies, we are not even 

blaming SBA, because guess what? I think the Congress is the ultimate culprit in all of this. We are just trying to get a report on how 

it occurs, and unless we get it and then hear their explanation, and 

they may have a good one that we haven’t heard, then we won’t 

be able to do anything about it or to at least try. 

Now, I wanted—I think this may be gone, but Ms. Giordano, we 

love having panels with broad representation. If one reads closely, 

part of your testimony would appear to contrast with Mr. 

Zingeser’s testimony, because he expressed concerns about SBA’s 

requirement that agencies show past discriminatory practices before any contractor could qualify under the program set-aside for 

minorities and women. 

Now, of course, 8(a) contracts would be such contracts, and we 

know that they are legal and constitutional. And I don’t—I want 

to know if that is your view that is still the case, because I do want 

to note that I recall—I recall very distinctly the part of your testimony that described—I agree with you it was an insult, particularly to women-owned and small businesses. I don’t even think minorities were required to do this. Women were picked out for this. 

I can only call it discrimination. And women across the board here 

in the Congress were mortified and as insulted as you were where 

they implored a contract chapter to somehow, if anything, reduce 

your eligibility. And we thought it was a joke when we read that 

they had identified for competition only—now, this is women-owned 

businesses, everybody—cabinet making, engraving, other motor vehicle dealers, and national security and international affairs. It almost looks like they say, well, where have women most been discriminated against, and therefore we will have the fewest number 

able to compete. 

Ms. Giordano, with the new administration I believe that that 

has been withdrawn; has it not? 

Ms. GIORDANO. To my knowledge, it is being looked at. I believe 

they are not utilizing those four categories. I believe it has been 

withdrawn. What they could be looking at, however, is the value 

of the Rand study showing that 87 percent of the qualifying categories of NAICS’ codes could indeed be considered qualified. 

Ms. NORTON. Among those that one would choose, then, you 

could go to as many as 87 percent? 

Ms. GIORDANO. You could—well, they left it up to the SBA to 

make the decision how narrowly or broadly they chose—— 

Ms. NORTON. That is still under consideration. 

46 

Ms. GIORDANO. My understanding, that it is still under consideration; however, it is not actually being implemented as previously 

stated based on testimony. 

Ms. NORTON. The categories—it seems to me that if you propose 

a rule, you are not supposed to do more harm than good. It seems 

to me that that is what the last administration did. It was laughable, except it made you want to cry. Why bother if you are going 

to make it worse? And we will be tracking this with this large 

amount of funds flowing at least through the GSA and some of the 

other agencies you have seen. 

I hope—whose testimony—Ms. Giordano, did you have any problem with this notion about past discrimination; that is the reason 

you have an 8(a) program? 

Ms. GIORDANO. Well, the way it was designed by the previous administration was first you had to prove before you could even consider placing it in a set-aside environment, which does happen with 

8(a)s to some degree because they go out for sources sought, and 

if they come up with more than three, they know they have the capabilities in the marketplace to perform. 

Ms. NORTON. What has to adjust that program, the women’s part 

of that program? You have suggested that you have to set up— 

have SBA set up a women’s procurement program. Do you believe 

that is the only way to straighten this out, or are there other ways 

to do so? Because this was operating before the administration put 

up this barrier, wasn’t it? 

Ms. GIORDANO. The category of set-aside is not capable of being 

accomplished under the current program. I look in the mirror, I 

designate myself a women-owned business, a women-owned small 

business, but I am not entitled to any of the categories of—— 

Ms. NORTON. And what is the reason for that, Ms. Giordano? 

Ms. GIORDANO. I am not sure I understand the reason the SBA 

chose to eliminate women-owned small businesses. 

Ms. NORTON. Did they ever have women-owned small businesses 

as a category? 

Ms. GIORDANO. Self-professed. There is no procurement program 

currently in place for women-owned. 

Ms. NORTON. The reason you have an 8(a) program is because we 

have had centuries of discrimination against people of color, and 

that pushing and pushing and pushing. 

Ms. GIORDANO. Yes, ma’am, I am Hispanic, and I am 8(a)-certified woman-owned business. 

Ms. NORTON. So you understand that. 

Ms. GIORDANO. I understand the 8(a) process. 

Ms. NORTON. I know there were horrific abuses at one time found 

in women-owned contracting with—for that matter minority-owned. 

If there are abuses, you deal with the abuses, you don’t deal with 

the whole program. 

Ms. GIORDANO. Yes, ma’am—I am sorry. 

Ms. NORTON. We will be very, very vigilant. If they don’t want— 

have a similar program, then they are going to have to have some 

way to make sure women-owned businesses are not put in this category or continuing not to meet those very small goals that have 

been set for women-owned businesses. Women are half the population. Many are not disadvantaged in the sense minorities are. 

47 

Their, quote, disadvantage has been particularly horrific because 

they have been well educated and yet not been able to get the same 

jobs, and yet not been able to get the same businesses. 

That is curable. In fact, it should be more curable since they 

come out of the same pool of people that White businesses generally do. It should have been more easily curable. And yet minority businesses, because of the historic discrimination, because they 

pushed and pushed, it looks like they do better in small business 

contracting. That is amazing, you know. Blacks are 12 percent of 

the population; women are 50 percent. 

I would bet, given the advantages and education and station in 

life women have, you might expect more women across the board 

in various ethnic groups than minorities. In fact, it is the other 

way around. I am not trying to use any group to make sure any 

other group equals them. That won’t happen. That is a very false 

way to go about it. But this is shameful for women, and I keep getting the statistics not getting any better, and so I am going to be 

especially vigilant on that. 

Ms. Stephenwoof, you say on page 5—no, I am sorry. You say— 

your mention of St. E’s got my attention. You want to expand public engagement. Well, I have looked very closely at what GSA had 

been doing because it has been right under my very nose, and I 

have to tell you, they have got people who do nothing, nothing but 

engage the public, nothing. 

They had a small business education forum it must have been 5 

years ago. It was way before I got the money out. They are in the 

community every other day. You have got right at the table an 8(a) 

business. They have set aside 5 million for the next tranche. You 

mentioned things like alternative market tools. 

So I need—given the fact that given GSA has been doing better 

than most, I need specifics, because we are in a position to make 

sure that GSA experiments, tries new things. We are not going to 

suffer 1 ounce of inefficiency on these projects. No, sir, not with Eleanor the only one up there able to go to the appropriators and say, 

give me some money. I have to make sure that it all happens. If 

you say there are some alternative market tools to be used, I need 

to know what those are. And I don’t—and you say—here it is, page 

3—specialized resident advocate agency and organization. Well, 

they have set aside employees who perform this function. 

So I need—I am not one to let people spend money to be spending it. I want to spend it on contracts, so I need to know what it 

is more in specific terms that you think that GSA ought to be 

doing. 

Ms. STEPHENWOOF. Thank you for those questions. 

Let me say in very layman’s terms GSA has done a phenomenal 

job. As I said in my testimony, that has been unprecedented for 

any Federal agency within a community. And you are right. As I 

participate in this, in public engagement for the past—it has been 

5 years exactly that they have had these community forums. What 

we are trying to do, what I am referring to, is how to get the businesses to the table. The difference between—and also—— 

Ms. NORTON. Are they brain dead? I mean, here is a billion dollars out there. 

48 

Ms. STEPHENWOOF. No, that is true. Everybody is asking. What 

I was talking about is having the small work groups, because most 

of the businesses in the community say, I don’t know how to compete against the big boys. 

Ms. NORTON. Well, just a moment. We—Mr. Amirian wants to 

comment on this, too. We brought Ms. Echols to the table, who described how after 2 days of intensive work, you become 8(a). 

Mr. Amirian is an 8(a) contractor. Well, how do you want to 

speak to that, Mr. Amirian, before we go back to Ms. Stephenwoof? 

Mr. AMIRIAN. What we would like to see, Madam Chair, is GSA 

not to bundle. For example, St. Elizabeth, there are 45 buildings 

that—— 

Ms. NORTON. What did they bundle? Because they testified—— 

Mr. AMIRIAN. Grouping them together. There are 45 buildings 

that needs to be renovated. And we see the trend that may be advertised together. 

Ms. NORTON. You mean 450 million? 

Mr. AMIRIAN. No, 45 buildings on campus at St. Elizabeth that 

have to be renovated. They are historical buildings. They cannot be 

demo’d. We would like to see it broken into packages so a small 

contractor—— 

Ms. STEPHENWOOF. Exactly. 

Ms. NORTON. Wait a minute. You have a sense that all the buildings will be bundled? 

Mr. AMIRIAN. Everything I have seen, it is all a billion dollars, 

$3-1/2 billion projects, nothing has been—I haven’t see any jobs advertised as small—— 

Ms. NORTON. They have not advertised yet for the reuse part, so 

you are talking about the reuse of the buildings, all that work, that 

is where your ripest opportunity—— 

Mr. AMIRIAN. Yes. 

Ms. NORTON. As far as I can tell it, I can’t—also my recollection, 

please correct me if I am wrong, is that they said that they would 

not and do not engage in bundling. Do you say that they do? 

Mr. AMIRIAN. No, I haven’t seen any specific projects coming out 

or advertisements. So we just want to make sure before packages 

are put together, they are bidding for them, that breaking into a 

smaller size. 

Ms. NORTON. I certainly can’t imagine that they would be in 

their right minds to bundle all of those buildings up when those— 

that is the most remarkable set of small business opportunities on 

the face of the USA, Earth today, I think. So thank you for that. 

That will help us to be proactive. 

Ms. Stephenwoof, will you resume your—— 

Ms. STEPHENWOOF. Again, what I would like to be able to reiterate is that the GSA has done a good job of putting the product 

on the market, but it will be up to the general contractor to work 

with the prime contractor and, as he said, to be able to solicit and 

to break those packages up into small pieces so that the smaller 

businesses can participate. 

I was also at the certification program that they had at the Martin Luther King Library, where they were helping to certify the 

small businesses. What I am talking about is to do a lot more of 

49 

that within the communities also, because a lot of businesses 

that—— 

Ms. NORTON. Well, they are continuing to do that throughout 

this project that is going to last for 10 years or so, besides which 

they have now such a rich number of 8(a) contractors, they won’t 

want for contractors. 

Ms. STEPHENWOOF. Every business is not going to be able to have 

the capacity of 8(a), and all the jobs are not 8(a) requirement. 

There is also the disadvantaged business certification. There is 

small business certification. So those kinds of programs which can 

be done in conjunction with the Small Business Administration can 

be done within communities. 

Ms. NORTON. There are two more programs you would like to see 

workshops on; is that right? 

Ms. STEPHENWOOF. Exactly. 

Ms. NORTON. And one is—let me hear that, please. 

Ms. STEPHENWOOF. The Disadvantaged Business Certification 

Program. 

Ms. NORTON. And the second one is? 

Ms. STEPHENWOOF. The whole certification as a small business or 

a HUBZone business, because Anacostia is—well, I understand the 

District as a whole, but Anacostia is a HUBZone area. The business owners within the community have not been educated about 

how to become certified as HUBZone, so they can’t compete. 

Ms. NORTON. Those are very good suggestions. We were so 

pleased with their 8(a) workshops. We will approach them. In fact, 

those—if you want to continue to work and to work on other and 

perhaps even larger contracts than your first contracts, you certainly have got to graduate. 

Ms. STEPHENWOOF. You have to graduate to the 8(a) program. 

And so a lot of businesses that are within the communities, that 

is the level that they have to start with. They are not ready for the 

8(a) level in order to compete. 

Ms. NORTON. What is it that they are ready for? 

Ms. STEPHENWOOF. They can compete in the disadvantaged business community and the HUBZone community. Of course, self-certification as a small business enterprise. 

Ms. NORTON. We also will ask GSA about contracts, and, remember, this is a huge Federal contract. 

Ms. STEPHENWOOF. Exactly. 

Ms. NORTON. Only so much learning is going to be done on this 

project. 

Ms. STEPHENWOOF. But it gives us enough time. 

Ms. NORTON. But I am going to ask them about HUBZone and 

disadvantaged projects. 

While I am on HUBZone, I am going to ask Mr. Zingeser, would 

you summarize your recommendation on HUBZone? We have had 

a lot of HUBZone problems in this region, so much so that my good 

friend, the Chair of the Subcommittee, was about to abolish the 

whole thing. And then we got a new administration, which I believe is working and has done all kinds of reform of HUBZone. 

Could you speak to your concerns? 

Mr. ZINGESER. The AGC has looked at HUBZone and has made 

recommendations on the program. The problem that—— 

50 

Ms. NORTON. Now, let me just say, we were horrified that—let 

us go to my region. People within my region were using HUBZone, 

coming in, and there wasn’t a minority in sight once they got certified. So when you mess up that way, then the roof falls in on the 

program. 

Of course, a lot of us went to the administration and went to the 

SBA and went to the Small Business Committee Chair and said, 

don’t throw the baby out with the bath water. 

And, Mr. Zingeser, I am aware, I was embarrassed by what the 

IGs were finding. I could not in good faith say, keep this program 

up, unless it was like turned on its head, virtually started all over 

again. But I would like to hear your experience and your suggestions. 

Mr. ZINGESER. Well, again, the issues—the objectives of the program make sense; the increased employment opportunities, investment and economic development, and low-income or high-unemployment areas that meet the Federal definition of an historically 

underutilized business zone. Without getting into it a whole lot 

more, there are some things that jump out. 

Number one, the way the program works, and this speaks to the 

point that was just made, if you are in a HUBZone in East Sheboygan, you are in a HUBZone, and you can come and compete 

against the same people that are in the HUBZone where the 

project is. You don’t have to be in the HUBZone where the project 

is. You can be in a HUBZone anyplace and compete. So—— 

Ms. NORTON. Wait a minute. Wasn’t that because they wanted 

to bring—yeah, you have people already competing in these areas 

where there is not a lot of work. This brings employment, and if 

you were employing people, wasn’t the point that if you bring somebody who may not be in the area and may have business, and that 

person begins to hire people who would otherwise not be employed, 

that is a win-win, because you can’t expect people who are already 

doing business in a HUBZone, because these zones are per se, by 

definition, zones where there is not lots of contracting and not lots 

of employment as well. 

So, I mean, if you are not going to have somebody else come in 

and say, we will do business, and in return for doing business here, 

we will hire this many employees, how do you break through if the 

only people you are depending upon are the people already in the 

HUBZone which are themselves in the same barrel as the residents 

in the HUBZone? 

Mr. ZINGESER. It starts with the notion that, first of all, you 

must be a certified HUBZone business. And then, once you are, you 

are free as a HUBZone business to go do business and get all of 

the benefits of that no matter where the project is. So if there 

is—— 

Ms. NORTON. Within the HUBZone you mean? 

Mr. ZINGESER. No. No. To go the other way, let’s assume there 

is a HUBZone certified here in the District of Columbia, and the 

project is New York State, and it is set aside as a HUBZone preference. The company here can go do the project in New York State. 

Well, the same is true here. If there is a project in Anacostia, 

and a HUBZone wants to compete and get the HUBZone preference 

and they are in Ohio, they can come and be treated the same as 

51 

the local firm. Now, that, in my mind, I am a very simple person, 

doesn’t make sense. So that is the definition of how the program 

works. It seems to me—— 

Ms. NORTON. So you are saying it is the illusion of reciprocity 

there? 

Mr. ZINGESER. Yeah, I guess the idea that you want to nationally 

improve HUBZone, the economics in HUBZones, so it doesn’t matter where the project is. But in construction, it is a local thing. It 

really ought to be held for people—— 

Ms. NORTON. I see what you are saying. 

Mr. ZINGESER. So that is a simple idea that—— 

Ms. NORTON. Not only that, I am very interested in, and again, 

I will be working with the Subcommittee, I wanted to elaborate 

your concern. I am not prepared to answer it, because I can see the 

concern. 

Mr. ZINGESER. That is one. The other thing that sort of jumps 

out is the 10 percent preference. Now, in the construction industry, 

10 percent is a lot of money. That is an extraordinary preference. 

And that essentially means that everybody else is out of the competition, because if you are not—— 

Ms. NORTON. Let me tell you why it is meant that. Why it is 

meant that, I believe, based on the, abuse is not the word for it, 

the fraud I have seen is because they were taking the preference 

without doing anything within the communities. This wasn’t abuse. 

This was straight out fraud. It was in this region. It was so bad 

that they were having these all over the United States. I am sure 

the work is still going on since the new administration then was 

charged with straightening this out or it goes. 

So by the time we have probably our next GSA hearing, I will 

want to know more, and I ask the staff to bear this in mind, about 

the progress the administration is doing, that means the SBA, who 

really was at fault on this, just as they were at fault on the women’s program, how far they have gotten in straightening out a program that collapsed of its own weight. 

When the Committee Chair of the Small Business Committee— 

this is a Puerto Rican woman—was so outraged, the Chair of the 

Committee, that she wanted to abolish the program, I know there 

is a problem in that program. She comes from a part of Brooklyn 

which is rich in small businesses, so she has a vested interest in 

small businesses. 

So I am not prepared—because I don’t know what is at work— 

but I certainly appreciate your alerting me, your testimony, both 

of you—— 

Mr. ZINGESER. Let me be clear, because from AGC’s point of 

view, 91 percent of the construction companies are small businesses. I mean, 91 percent, according to the AGC’s statistics, so—— 

Ms. NORTON. Look, your point, let me make sure I understand 

it, your point that this reciprocity when it comes to construction, 

at least with small businesses, is laughable. You are not like a national construction company. 

Mr. ZINGESER. My point would be for the construction industry, 

if there is such a thing as a HUBZone program, which by the way, 

if it were abolished in its present form would be a good thing to 

start over and do it different than it is—— 

52 

Ms. NORTON. They may be doing that. 

Mr. ZINGESER. Okay. But in its present form related to construction, the jobs and the dollars don’t go to the local HUBZone companies necessarily. 

Number two, the 10 percent preference is out of—it is extraordinary. It is too high in a competitive world. That is a simple statement. Then there are some other points which we can submit if you 

want. 

Ms. NORTON. 10 percent is—those numbers, you will never see 

those numbers—you remember when people were getting 10 percent of the market? Everybody should scrub 10 percent from their 

category. We are going to be in a much different economy. That is 

why I don’t even want people to be waiting for the economy to come 

back. It is going to be very different. It is not going to have anything to do with whether we stimulated it or not. It is just that 

there has been a sea change. And so those numbers, even in that 

economy, and I know enough about construction to know what that 

does. I don’t know what the effect was, whether the effect was that 

they got all the contracts. And it looks like you were doing pretty 

well; your company was doing pretty well. 

Mr. ZINGESER. Again, not all government contracts have 

HUBZone preferences. But where they do have a preference—— 

Ms. NORTON. I see. 

Mr. ZINGESER. —you have to think very seriously about whether 

you have a chance at all if you are not a HUBZone. Now, that 

doesn’t mean there shouldn’t be a HUBZone program with some 

set-asides, just like we have 8(a) and other things. 

Ms. NORTON. Exactly. 

Mr. ZINGESER. These things do have a place. 

Ms. NORTON. And in fact, if she looked at, the Small Business 

Chair looked at 8(a) and said, you know, they found a way to do 

it. And so one of the things she wanted to do was to say, wipe out 

HUBZones; go to 8(a) entirely. Because of the reluctance to simply 

wipe out a program based on fraud, they are now rethinking the 

program. And staff will report to me on how far they have gotten. 

The notion of any disadvantage to our companies doing business 

within the region right now, and all these funds unprecedented are 

flowing, would be potentially unacceptable. We have all worked together, and minority- and women-owned companies in particular 

have worked together. 

Ms. Giordano, I recall, for example, the problems I had when we 

were in the minority when we weren’t sure that disadvantaged programs, particularly in areas like the authorization, where there is 

perhaps the largest amount of money in transportation infrastructure, how closely women and minorities worked together. We have 

been very pleased with how contractors have worked with GSA, 

even given the strictures that Congress for small, women-owned 

and minority-owned business had placed on them. 

I am former chair of the Equal Employment Opportunity Commission. I did some of my best work with business, because these 

programs don’t work if in fact business feels it is at a disadvantage 

for doing what the government thinks is the right thing to do to 

equal the playing field and not to put people ahead of it. That is 

probably one of the first things I did when I came to the EEOC was 

53 

to initiate a negotiation so that not every complaint was there for 

2 years. Most of them, by the end of 2 years, weren’t any good anyway. They had all fallen away. 

And so we took complaints when you first got them, see if we 

could work out something. Sometimes, as a cost of doing business, 

an employer would say, it is not worth my time and would do so. 

Some employers would decide to remain in. We realized that the 

employer might indeed believe there was no discrimination. At the 

same time, we would go aside with the minority or the women and 

indicate what in fact would have to be shown, that the burden lies 

on the plaintiff. 

And so some of the best experiences, this may seem very strange 

to say, that I had as Chair of the Equal Employment Opportunity 

Commission was working with the business community so that we 

worked together and so that we weren’t bringing suits left and 

right. We brought suits, for example, on the basis of worst first so 

that somebody who—government can’t sue everybody—so somebody 

trying his level best didn’t find because he was in sight of some investigator, he got a suit, where his competitor, who wasn’t doing 

as well, hadn’t yet been gotten to. We are trying to make sure that 

these programs reflect that kind of rationality as well when it 

comes to business. At the same time that we do all we do, we can, 

especially in the climate of the Great Recession, to bring equality 

so far as firms are able to show in their work to small business and 

small disadvantaged business contracting. 

I can’t thank each of you enough for remaining so long with us. 

And I assure you that your testimony has been of immense value 

to us. This hearing is adjourned. 

[Whereupon, at 5:02 p.m., the Subcommittee was adjourned.] 

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