Summary of U.S. Senate Small Business Committee Field Hearing
The U.S. Senate Small Business Committee, led by Chairman Risch, with participation by Senators Sullivan and Murkowski, occurred in Anchorage, Alaska on June 29, 2018. The hearing lasted for over two hours and testimony was given by: Robb Wong, SBA Associate Administrator for the Government Contracting/Business Development (GC/BD) Programs; an Economically Disadvantaged Woman Owned Small Business and current 8(a) Participant; a Service Disabled Veteran Owned Small Business and former 8(a) Participant; a tribe whose subsidiaries participate in various SBA programs in addition to the full and open work; an Alaska Native Corporation-a village-whose subsidiaries participate in SBA programs-primarily 8(a), in addition to the full and open work competitive work; and an Alaska Native Corporation-a regional- whose subsidiaries participate in SBA programs-primarily 8(a), in addition to the full and open work competitive work.
The full transcripts will be available on the Senate website and this rough summary is made from notes taken by the author. The witnesses and questions were strong and led to insight into government contracting, in general, as well as those participating in SBA Programs. Mr. Wong, from the SBA, was also able to give specific examples of the SBA streamlining processes and tangible targets for the future. The other witnesses gave candid and compelling statements of things that worked in the programs and items that could be improved upon in the future.
Opening by Chairman Risch, compliments to the Alaska’s strong delegation, Alaska. The committee was present in its oversight capacity. Chairman Risch focuses on success and the continuous work it takes to ensure to keep the programs working and successful. What is working and what is not working. Administrator McMahon commended for her Ignite tour of visiting offices.
- Bringing people up here to see the uniqueness
- Bring back strong economic growth to Alaska and the Nation
- Rolling back unnecessary burdensome regulations
- Key to real sustained growth is through our small businesses in Alaska, and the United States
- Submitted two expert reports-admitted to court by the DOJ, evidencing on-going disparity and the need for the continuation of SBA programs
- Small businesses are the backbone of the economy/SBA and this Committee provides many resources
- 8(a) Program
- Mentor Protege
- Submit statements for the record
Mr. Wong is welcomed and begins his statement
- One of SBA’s top priorities is to be more efficient and better at enabling small businesses to make money.
- Wong has over 35 years in and around 8(a) program, from both sides-inside SBA and outside as a Participant and consultant.
- SBA wants to hear directly hear from our customers.
- As such, Administrator McMahon’s trip to Alaska included business owners, and went to Bethel and Kwethluk.
- Feedback-Mr. Wong focused on the delivery of results.
- Qualified companies certified and how to do better for those companies in certification and once in the programs.
- District office and DC staff trained and focusing on delivering results.
- Value the input received on regulations from tribal consultations and written comments.
- Goal to reduce burdens.
- 8(a) and HUBZone programs are undergoing reform and regulatory change.
- Here, Albuquerque, Oklahoma City, listening at tribal consultations and making reform as well as eliminating regulations.
- Focus on small business success.
- One step is for contracting officers to think small business first.
- Certifications-trying to get better and make more efficient process with computerized systems.
- SBA understands more the greater responsibility of Alaska Native Corporations, tribes, and Native Hawaiian Organizations to the past, present, as well as future generations.
- Alaska commitments to each other and Alaska is palpable.
Chairman Risch thanks Mr. Wong for serving and his passion for the program/delivering results
Thanks Mr. Wong for coming and your team for coming to the hearing
Open and accessible
Senator Sullivan inquires as the role of the Business Opportunity Specialists (BOS) and how many are here and needed?
Mr. Wong testifies as the role of BOSes, how many are in offices and more coming
8(a) is the best product
Increase the supply of contracts to SBA
23% or more is supposed to go to small business
Senator Sullivan queries as to the challenge or problem with too many regulations
Create a bureaucracy of regulations
Policies, then implementing regulation/rules and red tape
Mr. Wong gives specific examples of reducing regulatory burdens and program reform. Tangible goals with deliverable results for HUBZone
Senator Sullivan inquires as to the SBA’s education function-Education mission
Education on opportunities
Mr. Wong gives examples of ease of use of existing resources reform as well as reform in publications/offices/website. Also speaks to leverages existing points of contacts, such as those with SDVOB depots.
Senator Sullivan inquiries into what type of metrics are used to measure results
Have more time with certification holders-BOS
Senator Sullivan inquires as to the education of federal government officials, contracting officers. Education regarding Section 811 of the NDAA of 2010 and the subsequent chilling effects . Is SBA aware of letters from the various DOD Secretaries? Broader responsibilities of Alaska Native Corporations (ANCs)?
Mr. Wong responds:
ANCs seem to have a more difficult and broader responsibility.
ANCs and Native tribes and Native companies are often misunderstood
Working with Alaskans, larger contracts are not to buy mansions on the Potomac, responsibility for economic development of the large shareholder base, preserve the land
(Shareholders from the most impoverished places in the country)
ANCs are misunderstood, the noble mission and responsibility to take care of everybody.
Trying to make sure people know that.
Look at marketing and sales packages/contracting officers viewpoint.
Sales people that you share-let the government contracting officers-goes and supports a community.
Tell them the that 40% of the people (work force) have nothing to do with Alaska-but serve a greater purpose, which they like.
Carrie Jokiel Economically Disadvantaged Woman Owned Small Business (EDWOSB) and former 8(a) Participant
3 Main Challenges and the Top Challenge varies with what time of year it is/the procurement cycle.
Advocacy and education
Wants to do more than survive, wants to thrive
WOSB under represents on Multiple Award Contracts
3/4 have no orders set aside for WOSB
21% less likely to win or be in place for contract awards with all variable being controlled.
Why legwork required that is time and resource consuming when it is a known national issue.
2nd concern-Education of using the WOSB Program/Agencies unfamiliar and very difficult to educate/time/effort/resources by a small business often greatly impacts small business
3rd Concern-Financing and the difficulty of receiving it. Houses are in play, 401k funds are in play, everything in sunk into a business. Had to go to an 8(a) conference and learn funding was available until the mobilization costs could be recouped from remote Alaska work. That is a challenge facing small business.
SBA should be commended for successes as well
Mentor Protégé Programs being open to all.
Ability to use similarly situated entities for performance goals.
Ability to use each joint venturers past performance on a contract is really helpful.
Gabe Kompkoff-Chugach Alaska Corporation-ANC Regional Corporation CEO
Next 7 generations ahead of us to serve and preserve is the goal.
Timber and fishing devastated by the Exxon Valdez Oil Spill.
Under ANCSA, historically disadvantaged people linked 8(a) Program.
Missing link to ANCSA, allowed to rebuild and grow after bankruptcy
ANCs did not have MBAs or higher education when ANCSA was passed, bootstrap it.
Learn the business skills, sales team, working capital.
8(a) serves its purpose to promote growth.
Tribes of people that it benefits.
He himself earned a scholarship from the heritage foundation, went to school.
Family’s livelihood was devasted with oil spill, could not afford school.
Every single one of shareholders who apply for a scholarship now will receive a scholarship.
Proud of heritage and commend the efforts of the delegation.
Protecting small business set-aside programs-thank you.
Carl Marrs-Old Harbor Native Corporation-ANC village corporation CEO
Thank you for the opportunity to testify.
Proud to be an Alaska Native.
40 plus years served Native community.
CEO of Old Harbor Native Corporation.
ANCSA and ties to the corporate form that did not address the social needs of Natives.
Congress recognized critical role of SBA.
Through amendments encouraged to participate in SBA programs.
Economically and socially disadvantaged.
Not only regulating federal procurement but regulate commerce with Indian tribes.
Federal procurement programs/regulate commerce under Constitution.
Write regulations to carry out intent/to have Congress re-affirm its commitment.
Not just congressional commitments but from agencies/congressional intent.
Stressful and expensive for ANCs to deal with agencies with layers of bureaucrats that do not understand the intent of Congress and the Constitution as it relates to Native peoples, Alaska Native, Tribes and Native Hawaiian Organizations.
16 pages of written testimony submitted with very specific examples of paths of improvement and suggestions on fixes.
Mr. Peterson/President Tlingit Haida Tribal Council
THTBC-17(c) holding company that has under it subsidiaries participating in various SBA programs as well as full and open competitions.
List Types of companies.
Saving Government money on contracts-low rates, good performance.
Directly benefits the tribes, that’s its mission.
Many military bases performance, very hard to stay in compliance with HUBZone requirements.
Suggestions from tribal consultations on efficiency on different processes within SBA and follow up suggestions regarding different programs.
Rolando Miranda-Miranda Electric-Service Disabled Veteran Owned Small Business (SDVOSB) and former 8(a) Program Participant
When entering the SBA 8(a) Program, thought contracts would come to him. Did not. Got subcontracts. Suggests more readiness education before entry into 8(a) Program.
As a SDVOSB, he tries to do work at Eielson Air Force base. Tries to get meetings. Out of all his efforts he maybe gets one single phone call back. Even as a veteran, he cannot get work from a military base or even a meeting. Not one.
When he submits bid as subcontractor, prime may use his eligibility to check the box for the small business subcontracting plan, then uses someone else.
When he calls the contracting officer to discuss, contracting officers will not get involved in “contract disputes.”
Time and resources expended in putting his bid/subcontract scope of work together lost and no recourse.
Miranda Electric has become successful and he is thankful for his opportunities afforded by SBA programs.
Senator Sullivan asks open question to panelists
Mr. Kompkoff describes the mission of organization/passion/tenor of the panel of doing the work they do and being able to continue to do good work.
Employees are excited to be in organization and the retention rate is high.
Core values everywhere/on card/ onsite. These core values echo through the organization and are embraced by the employees.
Stand up a little taller, put in the extra mile because of that passion and commitment.
Mr. Peterson -echoes Mr. Kompkoff’s sentiments and adds.
The companies perform at the highest standards/resents welfare comparison.
Did not get higher value contracts through 8(a) but full and open.
Visit sites/proud to work for the tribe/social piece there/fulfillment.
Tribal values reflected in work.
Alaska Natives highest serving ratio in the military/same commitment/same good work carries through in service of working for the government.
Because of SBA programs, can compete on a more level playing field.
We do a lot of work for government at great price.
So many rules within the regulations within agencies.
Difficult for us to compete because we operate as small businesses.
For every bid we invest $20-50k.
A year if not longer in the process.
Detrimental regulations/ that interfere with securing contracts in efficient manner.
No-where near a handout and that is such a misconception.
Could argue it because of the fiduciary/trust relationship but the work stands alone.
Poorest in the entire nation/why is that.
Leg up on a fair basis to even compete.
Intent of Congress very clear/agencies make it difficult.
SBA does a good job, but that is just one agency of many and the regulations pile up.
Chairman: Office of Advocacy/Independent agency should help. Make commitment to do so.
But a lot of work is on-site government.
35% have to live in HUBZone.
Changes 3-year certification to make it easier to meet compliance.
In Alaska, most of its HUBZone, but very difficult to meet that ratio (low population) and work is performed elsewhere-often at military installation.
Started business in HUBZone-meet 35%, recruit and retain employees.
Ms. Jokiel answers financing questions
Needed to figure out how to figure out financing.
Mobilization loan/financing-took Gov Con as asset-gap financing tool/more conversations for WOSB b/c this awareness came about from being 8(a).
MP-with big/neighbor/maybe more opportunities to match make facilitated by SBA.
No mansions on the Potomac, rather his tribal members still struggle to have running water and flush toilets. Also dealing with opioid crisis.
There is always going to be abuse somewhere/misconceptions as the truth. Those misconceptions being accepted as truth is detrimental to us.
Misconception something for nothing/hand-out from the Government.
Because it is a Gov/loads of rules and bureaucracy we have to work with to get contract and perform it.
Try to streamline the program.
8(a) can always negotiate a good deal. No requirements for sole source contract. A lot of misconceptions out there about how this works.
No advantage over other contractors/Bechtel/Boeing. They receive sole source awards without the scrutiny. The awards here are so much smaller/piece of that.
Why is it so limiting and restrictive/there are times that someone will go awry/do not throw out baby with bathwater.
We do it for our shareholders.
Very small amount actually in margin on contracts. Out of that low margin, is the need for shareholder benefits and some profit needed to continue operations. Very tough with a lot of shareholders.
Chairman Risch thanks staff, colleagues and State. Closes the hearing.