[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] CONTINUING TO SERVE: FROM MILITARY TO ENTREPRENEUR ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS FIRST SESSION __________ HEARING HELD JULY 10, 2019 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 116-032 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 36-965 WASHINGTON : 2019 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman ABBY FINKENAUER, Iowa JARED GOLDEN, Maine ANDY KIM, New Jersey JASON CROW, Colorado SHARICE DAVIDS, Kansas JUDY CHU, California MARC VEASEY, Texas DWIGHT EVANS, Pennsylvania BRAD SCHNEIDER, Illinois ADRIANO ESPAILLAT, New York ANTONIO DELGADO, New York CHRISSY HOULAHAN, Pennsylvania ANGIE CRAIG, Minnesota STEVE CHABOT, Ohio, Ranking Member AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member TRENT KELLY, Mississippi TROY BALDERSON, Ohio KEVIN HERN, Oklahoma JIM HAGEDORN, Minnesota PETE STAUBER, Minnesota TIM BURCHETT, Tennessee ROSS SPANO, Florida JOHN JOYCE, Pennsylvania Adam Minehardt, Majority Staff Director Melissa Jung, Majority Deputy Staff Director and Chief Counsel Kevin Fitzpatrick, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Nydia Velazquez............................................. 1 Hon. Steve Chabot................................................ 2 WITNESSES Mr. Davy Leghorn, Assistant Director, The American Legion, Washington, DC................................................. 5 Mr. Scott M. Davidson CPT, USA, Retired, Managing Principal & CEO, The GCO Consulting Group, McLean, VA...................... 6 Ms. Torrance Harrington Hart, Owner, Teak & Twine, Springfield, VA............................................................. 8 Ms. Laurie Sayles, President and CEO, Civility Management Solutions, Greenbelt, MD....................................... 9 APPENDIX Prepared Statements: Mr. Davy Leghorn, Assistant Director, The American Legion, Washington, DC............................................. 35 Mr. Scott M. Davidson CPT, USA, Retired, Managing Principal & CEO, The GCO Consulting Group, McLean, VA.................. 40 Ms. Torrance Harrington Hart, Owner, Teak & Twine, Springfield, VA............................................ 45 Ms. Laurie Sayles, President and CEO, Civility Management Solutions, Greenbelt, MD................................... 47 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: Statement from Hon. Ross Spano - Speech on Veterans Entrepreneurship Act of 2019............................... 57 IFA - International Franchise Association.................... 58 CONTINUING TO SERVE: FROM MILITARY TO ENTREPRENEUR ---------- WEDNESDAY, JULY 10, 2019 House of Representatives, Committee on Small Business, Washington, DC. The committee met, pursuant to call, at 11:32 a.m., in Room 2360, Rayburn House Office Building, Hon. Nydia M. Velazquez [chairwoman of the Committee] presiding. Present: Representatives Velazquez, Finkenauer, Golden, Kim, Crow, Davids, Veasey, Schneider, Delgado, Houlahan, Craig, Chabot, Radewagen, Kelly, Balderson, Hern, Hagedorn, Stauber, Burchett, Spano, and Joyce. Chairwoman VELAZQUEZ. Good morning. The committee will come to order. I am pleased to be chairing this hearing today to discuss ways the Small Business Administration can help our nation's veterans transition from the military to civilian life by launching and growing a successful small business. Every year, more than 200,000 of our nation's heroes make the transition out of our military. Some pursue employment opportunities, others go back to school or learn a new trade. Some decide to pursue the American dream and launch a small, innovative business. For these returning servicemembers, the Small Business Administration can play a key role in helping to turn their small business dreams into a reality. Through their commitment to serving our country, veterans develop an unwavering mindset that often makes them uniquely suited to take on the challenges of starting a new business. They are leaders, doers, and remarkably driven. Today's veterans are the most educated and technologically trained servicemembers ever, and often, they have firsthand exposure to the government procurement process. This means we have a sector of the population that is primed to be the innovators and business owners of tomorrow. They have the potential to strengthen our nation's economy, create jobs, and drive economic growth. Yet, despite the rich tradition of owning a small business, starting and running a business can be challenging. Veterans, like other entrepreneurs, face many obstacles. Finding affordable access to capital, getting products to market, developing a network, and finding new customers can prove to be steep undertakings. Even more troubling, we have witnessed the share of new veteran entrepreneurs decline steadily from 12.49 percent in 1996, to 4.16 percent in 2016. Clearly, more needs to be done to help our nation's veterans launch, grow, and succeed in entrepreneurship. For that reason, I am committed to improving the Small Business Administration's programs to ensure they are effectively serving our nation's heroes. I am pleased to support a number of these measures--from lending to contracting to training and counseling--that will make it easier, not harder, for our veterans to get their businesses up and running. With approximately 2.5 million veteran-owned businesses generating over $1 trillion, it is clear for many men and women leaving the service that entrepreneurship provides a promising path to continue serving their country, creating jobs in their local communities while supporting their families. I am pleased that we will have an opportunity at today's hearing to hear from several veteran entrepreneurs about their firsthand experiences with these programs. I commend each and every one of you for your service to our country. It is my hope that they can highlight for us what they found beneficial, where improvements can be made, and identify gaps in how these services reach veterans. I thank all the witnesses for being here today. Your testimony will help inform the committee as we work toward the goal of supporting veteran small business ownership. With that, I thank each of the witnesses for joining us today, and I look forward to your testimony. I would now like to yield to the Ranking Member, Mr. Chabot, for his opening statement. Mr. CHABOT. I thank the Gentlelady for yielding, and for holding this hearing today, and we want to thank the witnesses for being with us. Today we are asking for input on what I believe is a strong bipartisan package of bills that we hope to mark up later this month. Again, I thank the Chairwoman for conducting this process with bipartisanship. Each of these bills has a member of both parties as an original sponsor and co-sponsor. One of this Committee's main goals when considering Federal contracting matters is to streamline and reduce the red tape small businesses must endure. So I would like to thank Mr. Kelly and Mr. Crow for sponsoring H.R. 1615, the VA-SBA Act, which will help accomplish that goal for veteran-owned and service-disabled veteran owned small businesses. I would also like to take this time to thank our colleagues at the House Veterans Affairs Committee for their close collaboration with this Committee on that matter. H.R. 1615 eliminates duplication in contracting programs between the SBA and the Department of Veterans Affairs. Both operate separate, yet conflicting, verification programs with different eligibility rules and regulations. These two disparate programs create inconsistent outcomes and confusion among veteran entrepreneurs. Last year, the House Small Business Committee and House Veterans Affairs Committee held a joint hearing exploring whether government-wide verification by a single entity would be a viable solution. This legislation is the culmination of those efforts. I would also like to hear our witnesses' thoughts on my bill, H.R. 499, which is designed to align how the VA and the rest of the Federal Government treat surviving spouses of service-disabled veteran small business owners. This bill ensures that the surviving spouses of service-disabled veteran small business owners can retain the company's special status for a certain period of time after the death of the veteran spouse. This policy is already codified in Title 38 of the United States Code. However, there is a lack of parity between Title 38 and the Small Business Act. I have heard from several small businesses, including one in my district, that this discrepancy creates legal uncertainty and confusion in the application of this important policy. The bill aims to rectify that. Additionally, we will examine how the SBA administers disaster loans to businesses that experience hardships and economic losses because their employees enter military service. Led by Representative Andy Kim of New Jersey, and Representative Tim Burchett of Tennessee, the National Guard and Reserve Entrepreneurship Support Act expands the businesses eligible for a military reservist economic injury disaster loan for those that have employees called to Active Duty to those called for active service. Finally, our Committee hopes to advance H.R. 3537, the Veterans Entrepreneurship Training Act of 2019. This bill, offered by Committee Members Schneider of Illinois and Spano of Florida, amends the Small Business Act to authorize for 5 years the Boots to Business program which helps transitioning servicemembers launch and grow small businesses. This is another example of how we can come together to advance bipartisan legislation to serve those who served our nation so proudly. I want to thank Mr. Spano and Mr. Schneider for their work on that bill. And I am looking forward to the discussion today, and I yield back, Madam Chairwoman. Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. The gentleman yields back. And if committee members have an opening statement prepared, we will ask that they be submitted for the record. I would like to take a minute to explain the timing rules. Each witness gets 5 minutes to testify, and the Members get 5 minutes for questioning. There is a lighting system to assist you. The green light will be on when you begin, and the yellow light comes on when you have 1 minute remaining. The red light comes on when you are out of time, and we ask that you stay within that timeframe to the best of your ability. I would now like to introduce our witnesses. Our first witness is Mr. Davy Leghorn. Davy Leghorn is the Assistant Director of the Veteran Employment and Education Division of the American Legion, the largest veteran service organization in the United States. Mr. Leghorn oversees employment and small business portfolios and administers the American Legion's national veteran hiring initiative. He previously worked as a National Appeals Representative for the American Legion at the Department of Veterans Affairs' Board of Veterans' Appeals, where he provided representation to veterans, their spouses, and dependents in appellate hearings before the veterans law judges. Mr. Leghorn also served as a mortar infantryman in the Army. Thank you for your service and thank you for being here today. Our second witness is Mr. Scott Davidson. Mr. Davidson is the Managing Principal and CEO of the GCO Consulting Group, a growing service-disabled veteran owned small business. Mr. Davidson provides specialized consulting expertise in GSA schedule contracting compliance. Mr. Davidson served honorably in the United States Army as an enlisted soldier, non- commissioned officer, and a commissioned officer, and served multiple combat tours throughout southwest Asia to include Iraq and Afghanistan. He was medically retired from the United States Army as a captain for injuries sustained during his tour in Iraq in July 2007 while he was working as a counter-IED and convoy security officer. Mr. Davidson continues to serve the veterans community as the co-founder of the Bourbiz, a professional and personal resource networking event for veterans, military spouses, and caregivers in which the events connect attendees with a wide range of resources to grow. Thank you for your service and all that you are doing to support veterans in our country. Our third witness today is Ms. Torrance Hart. Ms. Hart is the founder of Teak and Twine, a small business that designs beautifully made and thoughtfully packaged gifts. After serving 8 years in the Air Force, Ms. Hart connected with a Veterans Business Outreach Center to help launch her small business. She attended Boots to Business, where she learned valuable information about entrepreneurship and was connected to local entrepreneurial resources. Thank you for your service. I am really looking forward to hearing your experience in the Boots to Business program. I would now like to yield to the Ranking Member, Mr. Chabot, to introduce our final witness. Mr. CHABOT. Thank you, Madam Chair. Our next witness is Laurie Sayles, President and CEO of the Greenbelt, Maryland company, Civility Management Systems, or Civility MS, for short. Ms. Sayles started her career by enlisting in the Marine Corps, serving there for 10 years, and achieving the rank of Staff Sergeant. A woman minority, service-disabled veteran owned small business, Civility MS provides project, program, financial, and grants management, training, conference logistics, acquisition, and administrative support through contractual work for several Federal agencies. Sergeant Sayles obtained her bachelor's degree in social science from the University of Maryland University College. She also received a business project management certificate from UMUC, and is a member of the Project Management Institute, Women Impacting Public Policy, Women Marines Association, National Veterans Owned Business Association, and the National Marine Corps Business Network. Sergeant Sayles, thank you for your service to our country, and thank you for being with us today. We look forward to hearing your testimony as we do all the testimony from all the witnesses, and I yield back. Chairwoman VELAZQUEZ. Thank you. Mr. Leghorn, welcome back to the committee. You are recognized for 5 minutes. STATEMENTS OF DAVY LEGHORN, ASSISTANT DIRECTOR, THE AMERICAN LEGION; SCOTT M. DAVIDSON CPT. USA, RETIRED, MANAGING PRINCIPAL & CEO, THE GCO CONSULTING GROUP; TORRANCE HARRINGTON HART, OWNER, TEAK & TWINE; AND LAURIE SAYLES, PRESIDENT AND CEO, CIVILITY MANAGEMENT SOLUTIONS STATEMENT OF DAVY LEGHORN Mr. LEGHORN. Chairwoman Velazquez, Ranking Member Chabot, and distinguished members of the Committee, on behalf of our national commander, Brett Reistad, and the 2 million members of the American Legion, we thank you for the opportunity to testify this morning. We are privileged to present our position on several pieces of legislation up for consideration. Our written testimony is a matter of record, so we will briefly summarize our discussion on just two bills. The American Legion supports expanding eligibility for SBA programs that permit loan assistance to businesses when deployments are not part of a military conflict, and allow loan recipients to defer repayments of principal and interest on disaster loans when they are ordered to active service for more than 30 consecutive days. Currently, these programs are underutilized because their eligibility restrictions do not fully reflect current deployment practices. Both the Guard and Reserve have transitioned from a strategic Reserve into an operational force to meet the need of an all-volunteer force in an era of persistent conflict in which Active Duty and Reserve component alike are expected to deploy regularly. The American Legion Resolution No. 17 positioned on the operational Reserve urges Congress to reform laws and policies governing the Reserve components to provide them programmatic sustainability as an operational force. The proposed Patriot Employer Protection Act is in line with our resolution. Members of the Guard and Reserve are an integral part of our national defense, and the Nation should do everything we can to support their service. Next, we will discuss the VA-SBA Act. Last year, the Federal Government aligned the regulations governing SDVOSB definitions, but even with the deconflicted regulations, the maintenance of two Federal certification programs for veteran small businesses still continues to be a source of confusion. The American Legion Resolution No. 155, Support Verification Improvements for Veteran Businesses, concurs with H.R. 1615's proposal to have SBA absorb the responsibility of VA's CVE. Currently, VA requires businesses applying for SDVOSB status to address size, ownership, and control issues prior to certification. In contrast, SBA allows businesses to self- certify that they meet the regulatory threshold. Self- certification permits businesses to qualify for all Federal contract awards with the exception of the Veterans First contracting program at VA. The problem with two SDVOSB identification processes is simple: It creates confusion for contracting officers seeking to award contracts, and for veterans seeking certification. To compound the confusion, many State and Federal agencies now inquire whether veteran-owned businesses are VA certified, resulting in many veteran firms acquiring VA certification when it isn't necessary. The American Legion believes we should finish the work that began when we moved toward the single set of SDVOSB definitions by consolidating the accrediting process to a singular certifying agency. SBA has a proven workflow platform that can potentially handle SDVOSB certifications. VA will likely continue validating veteran and service-connected disability status, but SBA is aptly poised to verify size, ownership, and control standards. Moving the verification program is not a punitive measure. The Vets First program under VA's stewardship has successfully demonstrated SDVOSBs as a credible workforce. VA can be proud of the work they did in overcoming many programmatic hurdles. Their efforts and investments prove to State and Federal agencies the value of veteran businesses as a preferred contracting group. However, for the veteran small business industrial base to grow beyond just the Vets First program, verification must leave the confines of the VA. So with a move towards a singular standard for SDVOSB definition, the shifting of appellate cases to SBA's Office of Hearing and Appeals and SBA's successful integration of certified.SBA.gov, this is the right time to move verification to the SBA and sunset the system of self certification. Chairwoman Velazquez, Ranking Member Chabot, and distinguished members of the Committee, we thank you for the opportunity to explain the position of the 2 million members of the American Legion, and we look forward to any questions you may have. Chairwoman VELAZQUEZ. Thank you, Mr. Leghorn. Mr. Davidson, you are now recognized for 5 minutes. STATEMENT OF SCOTT M. DAVIDSON Mr. DAVIDSON. Thank you. Chairwoman Velazquez, Ranking Member Chabot, and distinguished members of the Committee, on behalf of GCO Consulting, a service-disabled veteran owned business, and my fellow servicemembers, I thank you for inviting me here today testify to this morning. I had the honor and privilege of serving my country in the United States Army as an enlisted soldier, a non-commissioned officer, and a commissioned officer in both peace and wartimes. I was not afforded the opportunity during my military separation to participate in the transition assistance program, or the Boots to Business program, due to my medical retirement. Starting a business was not on my mind as my military career abruptly ended, due to injuries sustained during a combat tour in Iraq. I had no time to plan my exit and prepare for transition back into the civilian world, because a medical evaluation board was convened to decide my future in early 2007. I was abruptly notified of the results of the proceedings while recovering at Eisenhower Medical Center. My career in the Armed Services officially ended, and less than 6 weeks later, I was back at home. I had never attended any military transition assistance programs in that short period of time before I was released from the hospital care and the warrior transition unit. Although I fumbled through this time in my life, I learned a lot regarding the stress and rigors of transitioning, and then ultimately starting a business. Eventually, I was able to attend the Boots to Business program years after I started my own business, thanks to some great veteran mentors in my network like Jack Manderville (ph) and Pat Baker. I immediately recognized the value of this course. While my company is more than a decade old, the company continues to grow, because of programs like Boots to Business and Entrepreneurship Boot Camp for Veterans at Syracuse University. The road to entrepreneurship has shaped a unique transition experience for me from my military experience to becoming a veteran entrepreneur. I am proud that I can share my experience and insight today as they directly relate to the matters discussed regarding veterans business ownership. It is important for me to note, though, at this time, that throughout my entire time in that transition process, and even today, that I have never changed my steadfast affinity for the United States Army, and the pride and privilege that I have and I feel every day that I was given the opportunity and I was able to serve. The first point I would summarize is Boots to Business. First, I would like to focus on the importance of codifying Boots to Business as an integral part of transition assistance program for servicemembers who may be deciding to choose entrepreneurship as a path after leaving the service. Boots to Business may be the first exposure to entrepreneurship for the servicemen who are receiving actual baseline of what the requirements are to start and run a business. Boots to Business provides real insight and an opportunity for servicemembers to understand what it takes to start a business in the civilian world, and how to make it successful. This program would have assisted me in several areas as I stumbled through early on in my transition, processing, and starting my business. Transitioning from the military is always going to be stressful. Any insight the Armed Services can provide to a transitioning servicemember will alleviate the stressors and allow for a business plan to be laid. Recently, it is my understanding that in the NDAA 2019, a portion of Boots to Business curriculum has been made mandatory for transitioning servicemembers. This is a great change that will expose servicemembers to resources and knowledge that may encourage them to take the step in the direction of entrepreneurship and channel the Warrior Ethos that has had them succeed in the military, and also focus on boots and success in the boardroom. The Army builds soldiers. Boots to Business educates these patriots so they can successfully establish and grow veteran businesses from now and in the future. The next item I will talk about is moving the responsibility of the VACB functions to the SBA. Over the last 11 years, my firm has been on the operational front lines of assisting veteran business owners with the CVE process. From the VIP system to the dysfunctional VEMS system, I have heard countless stories of frustration and near defeat from veteran business owners in working with the VA over the years to become CVE certified. In the end, after all the day-to-day system and customer service issues my clients and consultants face, at CVE, we are often asked the following question: Why do we have the VA, which is a separate agency certifying veteran business size and control determination, when the SBA is responsible for the size control determination for all businesses to even include the self-certifying veteran-owned and disabled service veterans systems through the SAM system? The answer is simple. It is not necessary. And the solution to the issue of size and control determination certification already exists inside the Small Business Administration. The SBA possesses a certification system that mirrors other programs like the SBA is already administering successfully, like the 8A business development program. The SBA also has a certification program that is available through certified.SBA.gov. It would only make logical sense to adopt the SBA's existing system and adapt it to the certification process for veteran businesses instead of risking significant amounts of taxpayer dollars on trying to fix a system that is broken, or attempting to build one from scratch. Veteran businesses should not have to take on any additional burden or separate certification requirements that may stifle growth and strain resources. A single certifying agency and system determining the size standard for all businesses should fall under the responsibility of the very agency it is tasked for to build and grow the Nation's economy, and that is the Small Business Administration. I thank you for your time today, Chairwoman Velazquez, Ranking Member Chabot, and distinguished members of the Committee. I look forward to answering any of your questions. Chairwoman VELAZQUEZ. Thank you, Mr. Davidson. Ms. Hart, you are recognized. STATEMENT OF TORRANCE HARRINGTON HART Ms. HART. Chairwoman Velazquez, Ranking Member Chabot, and distinguished members of the Committee, thank you for giving me the opportunity to speak today. I am an Air Force veteran, former military spouse, and also the founder of Teak and Twine, and I am here to talk about my involvement in Boots to Business, and to lend support for this valuable program, its role in empowering military veterans, and especially for military spouses to try entrepreneurship. Like Mr. Davidson, starting a business after I left the Air Force was definitely not my first choice. The whole time I was in the military, I had wanted to go to business school, but once my time in the Air Force was winding down, I was also a military spouse. And the thought of taking 2 years to move away to another city and go to business school, and after that, how was I supposed to get a job? Would we be separated for even longer? And so, ultimately, after a lot of soul searching, I decided I am just going to skip business school and dive straight into entrepreneurship, and just try to figure it out myself. I attended Boots to Business a few months before separating from the Air Force, because a lot of my friends in the military had recommended the program to me. While I was already well on my way in my entrepreneurial journey, the course validated many of my early decisions, and would have been especially valuable if I had wanted to raise capital as the course does a great job of laying out options for how to raise money from angel investors, as well as getting loans. Even better for me is that it put me in touch with my local Veterans Business Outreach Center, or VBOC, which continued to be a resource after Boots to Business was over. For the next coming months and even years, I continued to reach out to my VBOC representative whenever I had an issue in my business, or a big question that I was struggling to tackle. In the 4 years since I left Active Duty, I have moved my business two times across the country due to the military, and my customers have never even known. To be honest, I have grown Teak and Twine bigger than I ever thought I would, and have done so in the most remote and isolated duty locations imaginable. We may not have had a target, but I always had a local VBOC representative that I knew I could reach out to. My business allowed me, even as a military spouse, to build a career that I absolutely love, and I am so grateful that I wasn't able to pursue my first choice. Even better, everywhere I have been, I have gotten to hire from a group of the most hungry and talented and incredible people, the military spouses that are stationed at the same duty location as me. For many of the military spouses I have talked to, being a military spouse means giving up completely on their career ambitions. Frequent moves to remote locations make it hard to establish what many of us think of as a real career. I see entrepreneurship as the secret weapon for military spouses. It is a way to create something that can support your family, give you flexibility you need during deployments, give you the freedom to do something that you love, and it moves with you when needed, and even allows you to give back to other military spouses. It is an incredible career that is open to anyone, no matter where you are. The Boots to Business program is vital to giving military spouses the resources, information, and the foundation they need to unleash the amazing possibilities of entrepreneurship. Thank you so much for the opportunity to speak today. Chairwoman VELAZQUEZ. Thank you, Ms. Hart. Ms. Sayles, you are recognized. STATEMENT OF LAURIE SAYLES Ms. SAYLES. Good morning, Chairwoman Velazquez, Ranking Member Chabot, and members of the Committee. My name is Laurie Sayles. I am a veteran who served 10 years in the United States Marine Corps and the owner of Civility Management Solutions, a professional consulting company supporting government as well as commercial. Civility provides various professional services, training, and support for Department of Homeland Security, HHS, Air Force, Army, NASA, GAO, as well as the Department of Veterans Affairs, also on both prime and subcontracts. Civility has clients, thanks to the contracting programs through both the SBA and the VA. I am a verified service-disabled veteran owned small business, SBA certified economically disadvantaged, and woman-owned small business, and certified 8A. I, like many, have my share of experiences with both SBA and the VA to acquire the proper certifications. Thus, my testimony today will address the requirements of the veterans programs with the hope of providing recommendations to the Committee that will assist and enable the SBA to obtain the desirable outcomes for veteran business owners. I have always been an entrepreneur, and I have tried many ventures from an early age. Thanks to the Marine Corps, I increased in leadership, integrity, teamwork and being steadfast, which is essential in entrepreneurship. I also earned respect as an African American woman in a man's world and now am an outspoken advocate, actively involved in Vet Force and WIPP. As an officer on Vet Force, I have heard the frustrations of many veteran small business owners regarding certification and contracting opportunities within the VA. For many veterans, returning to civilian life can be difficult. It is a process, and it takes time to adjust. We depend upon the VA for all of our benefits, and we need them to operate in excellence as we were trained to do. However, the confusion of acquiring a verification from the VA, while being able to self-certify with the SBA is baffling. The issue is that the two agencies have different definitions and standards of control. For example, we have seen the VA require that a veteran exercise with absolute control over the business. Meanwhile, the SBA recognizes non-veteran owners as having a say over some matters of the business. Recently, the SBA spearheaded efforts to address this, and several other issues, by publishing rules on September 28, 2018 which require service-disabled veterans work at their company during normal business hours, and this leads to a rebuttal presumption that veterans are not actually in control. The SBA would also prefer veterans work closer to their headquarters, or job sites as published rules mention that if a veteran is not located within a reasonable commute to the company, there is a rebuttal presumption that he or she does not control the firm. For most veterans who may have hoped that using the SBA regulations would eliminate some of the more cumbersome VA requirements, the SBA's adoption of those requirements may be disappointing. Since the SBA has both the specialty and expertise in developing, certifying, and maintaining their programs, it was never clear to me why the VA manages small business verifications for veterans. While attending my third Vet Force meeting, I inquired about why would I focus on being verified by the VA if the Vets First program was not applicable at all Federal Government agencies, especially since most of the attendees were complaining about its difficulty. To keep it simple, the VA should do what they do for veterans, and that is care for our benefits, and the SBA should do what they do for small business owners, and that is provide us with certifications, training, and resources. The newly appointed VA Office of Small Business Development Utilization Leadership announced an effort to create a pilot program for women veterans as they have realized a shortage of women veterans participation in VA contracting awards, because since the institution of the Vets First program, the VA's women-owned small business goals have not been met. While H.R. 190 was a great step in its passage in the House, it is my recommendation that Congress put also economic and earned status veterans contracting programs on equal footing. One group should not have a variance over another. The work should be on the business owner to market their companies, offerings just like 8A companies, and deliver the offerings timely, and at the best cost. The VA continuously meets the goals of service-disabled veterans, basically due to the Vets First program, but as we see the growth of more veteran small business owners, the value of all Federal agencies, at least meeting the 3 percent goal, may be possible once the SBA has the oversight of the VA verification. I urge the Committee to ensure that we make the contracting program a priority, and strengthen the veterans small business program so that we have the ability to grow. That concludes my testimony, and I am happy to answer any questions. Chairwoman VELAZQUEZ. Thank you to all the witnesses. I recognize myself for 5 minutes. After listening to you, I believe that the committee is on the right path to harmonize programs that have been put into law to help veterans, especially those returning or transitioning from military service to civilian life, and our role here is to help you realize your dreams and aspirations. I would like to hear from you in your own words why it is so important that we codify the Boots to Business program? Mr. Leghorn. Mr. LEGHORN. Thank you for your question, ma'am. The American Legion supports Boots to Business, and because we support robust transition programs in general, I mean, it takes the military years to train someone to become a servicemember, but they expect a week of transition courses to suffice when it is time for reintegration in the private sector. You know, Mr. Davidson's story of his transition is a prime example of everything that the Army could have gotten wrong. The American Legion is committed to any additional resources we can give to servicemembers as they transition to put them on better footing and to prevent another instance where a servicemember has to endure something like Mr. Davidson has gone through. Chairwoman VELAZQUEZ. Mr. Davidson. Thank you. Mr. DAVIDSON. Thank you, Ms. Chairwoman. Boots to Business is important because having seen it after the fact and not having the ability to go through it the first time and then, you know, having been afforded that opportunity, it levels the playing field in a sense. It gives the servicemember the ability to understand what they are in for, if they are going to go down the path of transition with regards to entrepreneurship. It is very important. It may not be the full toolbox that they need, but what it will do is give them pause and establish a baseline for them to understand this is what is required if I am going to go down this path of entrepreneurship. I can start my plan now. If it is 24 months prior to when they are leaving the service, it is very important, because they get to see exactly what is required with regards to just the lift of it, right, to build the business plan, to go ahead and look at what the assets are that they have to acquire, to understand what access to capital is. To go through that curriculum, they understand that part, and I think that is a very important piece. So with Boots to Business, absolutely. That is why it needs to be codified, because if you give them that opportunity, and they are able to see it and have that type of lead time, it will absolutely make a difference in their life with regards to the path they choose with transition. And transition is hard enough as it is, but at least let's have them be able to lay a plan with educated, you know, responses that they can, you know, have access to. Chairwoman VELAZQUEZ. Thank you. Ms. Hart. Ms. HART. I think the Boots to Business program is so valuable because you have so many questions when you are starting a business. You just really don't know anything, and it is also this time in your life that you could really go into a huge amount of debt without moving in the right direction. So the last thing that I would want to see is military members trying to transition out, acquiring a ton of debt for a business that hasn't been thought about correctly, where they have issues with product market fit that they haven't thought of. So it is this way where you can kind of--if you already have an idea, you can solidify your idea and get the resources you need to be heading in the right direction without wasting time or money. And if you are not sure if entrepreneurship is right for you, then it has a great portion at the beginning of the course where you can kind of have this gut check to see if it might be a good fit for you. Chairwoman VELAZQUEZ. Thank you. Ms. Sayles. Ms. SAYLES. Ma'am, when I got out, it was not offered. No training was being provided. It would have been wonderful to have the opportunity, to have that opening. When I joined the Marine Corps, I was 21. I had already done several entrepreneurial journeys before I even joined the Marine Corps. College was not an option for me in my mindset, off the top; I was accustomed to making my own money as an independent woman. However, the Boots to Business program has allowed veterans now to get out, military personnel to get out and get opened up to what is available to them. I went from being a receptionist after leaving Active Duty in the Marine Corps, being a Staff Sergeant leading people in order to enter into the corporate America world. Secretary, admin assistant, operations manager, program manager, before I became President and CEO of Civility Management Solutions. That was a very long journey, and it would have been nicer to have some support along the way prior without wasting 20 years of my time at that time. Thank you so much, ma'am. Chairwoman VELAZQUEZ. Thank you. Maybe any of you could answer this question, or comment on it. We know how many veterans are coming back from Iraq and Afghanistan, and yet, what we have seen recently is a decline in entrepreneurship among veterans. Do you have any insight--is there is any underlying reason? What more can we do when we have programs like this, and we are going to take action to codify the program and to make it easier for veterans to access those type of entrepreneurial programs? Do you have, or do you know of any facts that are related to the issue of the declining of entrepreneurship among veterans? Mr. LEGHORN. Thank you for the question. I will try to answer it. I believe the reason we saw a dip in veteran startup is because we are still kind of climbing out of the recession. And as the economy gets better within the coming years, I think we are going to see an uptick in veteran entrepreneurship in general. Mr. DAVIDSON. I agree with Mr. Leghorn with regards to the recession, but the other thing I do see, and it is somewhat anecdotal. In working with a lot of young veterans as they transition out now and what we have been doing, a lot of times I hear things like, and it might also be related to the recession, is they have trouble with access to capital. They have trouble with actually understanding most of the process. They say Boots to Business is a great start for them, but they also feel like there is still a convoluted process on the after part of that. So once they transition out, for some reason, they are not connecting to the programs that are available to them to help them continue on in all those difference types of programs. Chairwoman VELAZQUEZ. Thank you. My time has expired. I recognize the Ranking Member, Mr. Chabot. Mr. CHABOT. Thank you, Madam Chair. Before asking questions, I just want to, again, thank all the panelists for their service. We really do appreciate that, and thank you so much for that. This Committee is always evaluating whether the SBA's programs are effectively and efficiently meeting the needs of the small business owners that they are intended to help. Mr. Leghorn, in your testimony, you stated the Guard and the Reserve have transitioned from a strategic Reserve into an operational force. With this in mind, does the SBA military disaster loan draft legislation that we are working on better align with today's military forces as they currently exist? Is that your understanding? Mr. LEGHORN. Congressman Chabot, thank you for your question. We absolutely think that this is a step in the right direction. Over the years, we have been using Guard and Reserve components like we never have before in terms of the tempo of their deployments, and you know, they have become an integral part of our Armed Services and national defense at this point, and just across the board, we need all the programs to catch up to that. And so, we appreciate everything you folks are doing to improve that for the servicemembers. Mr. CHABOT. Great. Thank you very much. Mr. Davidson, could you talk a little bit about how important it is for programs, and we have discussed it to some degree already, the Boots to Business, to be exposed to separating servicemembers early in the process? Mr. DAVIDSON. Yes, Congressman. So I would say that it is kind of like a wide range of the importance of programs. I think Boots to Business is very important, but I also believe that we need to also push the curriculum with regards to how they network and mentorship pieces with regards to how they are developing those networks with entrepreneurship. So there is incredible programs out there that are free, non-profits, you know, whether it is--I mean, we could run the gamut, American Corporate Partners. That is probably the best known one out there, and that is staged for people who are on Active Duty? But I think that is one of the things that I believe that is one of the items that if not missing, it needs to be pushed, is that they need to be able to understand the social part of the network. They need to be able to have that mentorship with regards to how they actually reach and interact with individuals and work that part, and that is something that especially, again, interacting today with most people, those types of programs have to be integrated. Boots to Business, great baseline, absolutely, but then you have all the other, I would say, aspects that need to be kind of combined, because I think Boots to Business is a great program, but everything we know can always be improved. So, I always think there is a 2.0 and a 2.1 and a 3.0 that is going to be out there, that you have to take these other programs that are very important parts of that entire process. Even if it is not entrepreneurship, it is something else, they still have to understand how to network. They still have to understand the importance of mentorship and things of that nature, so I think those programs are---- Mr. CHABOT. Thank you very much. I have got 2 minutes left and two questions to go through. Ms. Hart, in your testimony you mentioned, again, the Boots to Business program, that it does a nice job outlining the loan process and how to raise capital. When you were going through this process, did you find that accessing capital was challenging and any specifics about that? Ms. HART. I bootstrapped my business off of sales from the beginning, so I thought the information was really helpful, but I didn't take advantage of it myself. Mr. CHABOT. Okay. Thank you. And finally, Ms. Sayles, regarding the VA-SBA Act, do you think housing the certification function at the SBA and eliminating the VA's separate program will help decrease any confusion and encourage more small business owners, women, and veterans to pursue their certifications and enter the Federal marketplace? Ms. SAYLES. Yes, sir. Without a doubt, it will make a difference because currently, the certified.SBA.gov website has done an outstanding job in general for us. I am a woman-owned small business as well, and just because I am also certified as an 8A, a lot of the questions that were requested previously from self-certifying myself as a woman-owned was no longer necessary, because they already had the information. So in the end, it was a good possibility that it will eliminate many of the questions that the VA is asking us within the SBA because they will have all the required documents previously from other certifications. The only thing they will really need is a DD-214. Mr. CHABOT. Thank you very much. And I have got 13 seconds left, so in that time, I just want to, again, thank you for your service. We really do appreciate it, and yield back. Chairwoman VELAZQUEZ. The gentleman yields back, and now we recognize the gentlelady from Iowa, Chairwoman of the Subcommittee on Rural Development, Agriculture, Trade, and Entrepreneurship, Ms. Finkenauer. Ms. FINKENAUER. Thank you, Chairwoman Velazquez. And I just want to, again, say thank you all for being here today, thank you for your service, and thank you for your advocacy as well. This is just an incredibly important hearing to be having, and I am very supportive of the Boots to Business program, and to hear your perspective is invaluable, so thank you. And one of the things--I am going to take it in a little bit different direction, you know. I know we are working to create an environment that helps veteran entrepreneurs succeed, but weeding out fraud also should be part of the conversation. We hear about predatory lenders and dishonest vendors, but our veteran entrepreneurs also face other sources of fraud we need to be paying attention to as well which was very much brought to my attention, you know, since my time in Congress, but before this as well. And even, you know, this Monday, I was with a veteran in my home district at a press conference about something that he went through himself, you know. Jeff was, again, a veteran in my district, who was actually defrauded by a dishonest university. He attended a for-profit university, ITT Technical Institute, in pursuit of a bachelor's degree that he hoped would further his career and give him the skills that he needed, and he worked hard, and he did everything right. His story is absolutely heartbreaking. He did everything he was supposed to do, and then the school actually closed right before he was completing his last course that he needed to graduate. Now, you know, he is stuck with thousands in debt. He is struggling to get the relief that he deserves, and actually is spending time and resources he could have used to further his business aspirations. And today, actually, I am working with some of my colleagues to introduce the Relief for Defrauded Students Act of 2019. This bill would help folks like Jeff who are lied to about the training they would receive, and how much they would pay and whether their credits would be recognized. The Department of Education actually has rules on the books already to cancel the Federal loans of students who were defrauded by a university but is actually not enforcing those rules, unfortunately. So this bill would actually require the Department to follow through on the obligations and codify that. We know right now there is 158,000 veterans and student borrowers in the exact same situation as Jeff who are waiting for the Department to act. In fact, I mean, some of the stories we have heard, we have had predatory for-profit universities going and talking to our Marines who have had brain damage or traumatic brain injuries, knowing that they wouldn't even be able to complete the courses but getting them to sign up. I mean, these are the types of stories we have heard. They are heartbreaking. It is not how our country should be working, and we need to get that relief to the folks who deserve it and need it. And what I am wondering, you know, what would that relief actually do? I mean, Jeff himself is sitting--I think he said $15,000 in Federal student loans that could be canceled, and should be canceled, because of the rules we already should have, we do have on the books that are not codified yet and are not being enforced. What would that mean for somebody who is wanting to start their own business to have that relief? Mr. Leghorn, would you be able to touch on that? Mr. LEGHORN. Sure. Thank you for your question. Having $15,000 in the pocket when you are looking at starting a business is a windfall, and one of the good things that Boots to Business does is it helps you identify whether there is--it makes you do market research and helps you identify if your product is actually needed, so it guides you in how you spend that money. So going back to your question, yeah, that would be wonderful. Ms. FINKENAUER. Anybody else want to touch on it all? I know I am about out of time. Mr. DAVIDSON. Thank you for the question. Again, I echo his sentiment. I mean, if we have--and I am sure everybody knows, especially if you bootstrapped your business from your own generated sales. If you can avoid having $15,000 in debt, that is a significant issue with access to capital, as we know, and that actually leads to additional predator lending practices, because what will happen is you have to go to high-risk lenders that will take absolute advantage of you at APR rates, you know, loan rates that are beyond belief which we see all over the place. They claim they are veteran-friendly, but we all know where they are actually--what their rates are and how they are getting that claw back from individuals. So it does put you in a significantly, you know, unfortunate position, because in order to get the business off the ground, if you don't have the ability to kind of bootstrap and then build your sales, you are going to wind up with those predatory lenders, unfortunately. So, yeah, I think that that is a great way to be able to alleviate that type of stress- related access to capital and debt. Ms. FINKENAUER. Thank you, Mr. Davidson. I know we have a few more seconds. Ms. Sayles or Ms. Hart, do you have any comment? Ms. SAYLES. I actually don't have much of a comment regarding fraud on that matter, but I do want to talk about subcontracting, which is also in the way of fraud, to the point that what needs to actually happen is that the Federal Government should become a little bit more responsible to helping the new small businesses on any subcontract work that you have so that if you are removed from the contract and receiving zero dollars of revenue from helping a prime get a contract, then there should be some action within the Federal Government, specifically the Office of Small Business. They should be able to be able to support you during that time. Ms. FINKENAUER. Got it. Thank you all so much and thank you all for being here again, and thank you for your service. This is a great hearing to have. I yield back. Chairwoman VELAZQUEZ. The gentlelady's time has expired. Now we recognize the gentlelady from American Samoa, who is the Vice Ranking Member of the committee, Mrs. Radewagen, for 5 minutes. Mrs. RADEWAGEN. Hello, friend. Good morning. I want to thank Chairwoman Velazquez and Ranking Member Chabot for holding this important hearing today, and I particularly want to thank you all for joining us today with your important information. I am proud to represent American Samoa, which has the highest enlistment rate out of any State or territory in the United States, and also proud and humbled to be Vice Ranking Member. Ensuring that veterans have the opportunity for economic advancement after serving our country is one of my top priorities, and we have some very successful veteran-owned small businesses in American Samoa. So my time is short, but my first question is for the entire panel. Can you describe if the current two-system structure at SBA and VA causes problems among contracting officers in choosing to award contracts with veteran-owned small businesses? In other words, are contracting officers declining to award contracts to veteran-owned small businesses because of the confusion arising between the two existing programs? Mr. Leghorn. Mr. LEGHORN. Thank you for your question. So with regards to contracting officers and how they award contracts, currently, there is only one front end certifying system, and that is at the VA, and only for a limited scope, and it is only used at VA for one program. And, so, if you are a contracting officer at another agency, usually your job requires you to verify that an SDVOSB or a VOSB is who they say they are yourself. But it is a shortcut for you to just straight up ask them are you certified by VA CVE. And this causes a lot of problems and confusion with veterans because veterans don't realize that to do business with the Federal Government, they only need to be self-certified. But for the purposes of Vets First, they need to be CVE certified. I hope that answers your question. Mrs. RADEWAGEN. Mr. Davidson. Mr. DAVIDSON. Thank you for the question. I also echo Mr. Leghorn's sentiment. The confusion is just that. The reality is that there are two sets of rules, and they are often asked that question: Are you CVE certified? And I know people who absolutely do not do business with the VA but they do business with 15 other agencies, and they don't require the CVE, and they say no. In some cases, after they have done market research, they are passed over for those types of opportunities. I have actually had those unfortunate conversations with vendors. So yes, it does cause confusion because they don't answer it the right way, and they say well, I am not because I don't do business with the VA. I do business with the Department of Defense. I do business with the Department of Homeland Security and everybody else, so I never felt the need to be CVE certified. So that does cause that type of confusion and unfortunately can cause issues with business. Thank you. Mrs. RADEWAGEN. Ms. Hart. Ms. HART. I am not the best person for this one. Thank you. Mrs. RADEWAGEN. Ms. Sayles. Ms. SAYLES. Yes, ma'am. I was biting at the edges here to have a comment about this. I love your country, by the way, your part of our world. Now, I can say that contracting officers have an issue with providing contracts to veterans outside of the VA specifically because of some of the way the rules are set up where you have to have two or more in order to be able to provide them for the SDVOSB set aside where that doesn't apply so much to the 8A opportunity. And as a woman that has worked with about 128 employees, $11.5 million in revenue for another woman-owned small business before I started mine, and people knew me, my reputation was there, my work performance was there, but they were not able to access Civility Management Solutions through me being a service-disabled veteran owned small business. And I was a little disheartened with the fact that that program really doesn't have strength to it as 8A does. Mrs. RADEWAGEN. Thank you, Madam Chairwoman. I yield back. Chairwoman VELAZQUEZ. The gentlelady yields back, and the gentleman from Maine, Chairman of the Subcommittee on Contracting and Infrastructure, Mr. Golden, is recognized for 5 minutes. Mr. GOLDEN. Thank you, Madam Chair. The first thing, Mr. Leghorn, I wanted to welcome you here, and thanks to all of you for your service. But Mr. Leghorn, I want to let you know I am a member of the Corey Edwin Garver American Legion. We call it the Mighty Post 202. It is where the new State commander for Maine comes out of, so you should look him up. A great guy and pretty active, I think, on the national level. So I just wanted to ask you to make sure I understand your testimony that you think that the VA's certification process where they are making sure that businesses are what they say they are, you know, before awards are contracted, the VA's process is preferable, but that you do want to see that process adopted by SBA, and then have SBA take the lead on CVE as an example. Mr. LEGHORN. Yes. That is exactly what we are saying. We absolutely want that process to move over to the SBA and sunset self-certification, because, again, just having two certifying processes is not only confusing to contracting officers, but veterans seeking certification as well. Mr. GOLDEN. So go with the SBA as the lead but have them adopt the VA process? Mr. LEGHORN. Correct. Mr. GOLDEN. All right. Thank you. I just wanted to make sure. I appreciate that. Ms. Hart, I wanted to ask you. You, I think, talked about how you were connected with a Veterans Business Outreach Center. How close were you to that business outreach center? Was it close to where you were living? Was it far away? Could you talk a little bit about that experience? Ms. HART. Sure. So when I started Teak and Twine, I was in Destin, and they were an hour away in Panama City. So I did go and visit a couple times, but most of the answers they provided were over the phone. When I moved to New Mexico, they were hours away, and they were still able to be helpful, just over the phone. Mr. GOLDEN. All right. That is reassuring to hear. The closest one we have is in Rhode Island, which is a ways away from Maine, so I have always been a bit concerned by that, but it sounds like you feel like a lot of what they do can be done over the phone, and by email, and social media. Ms. HART. I do think that the VBOC would be--their services would be improved by going to bases on a regular basis, and establishing a program where there is kind of a community element to it, and a mentorship element to it. You can reach out to the VBOC, but we all know that sometimes you just need people to come to you, and so I do think that it should be more localized. If they are not traveling, then there needs to be someone closer. Mr. GOLDEN. And whenever possible, the presence near bases is what you are saying. Ms. HART. Right, or even a non-VBOC person on that base who is kind of a rep, like a business owner who is further down the line, just happens to be stationed there. They could foster a community there, not necessarily being part of the VBOC. Mr. GOLDEN. Yeah. That is helpful. Mr. Davidson, this is kind of off topic, but I wanted to ask you. You went through a MEB. Did you get some kind of separation payment as part of your medical separation? Mr. DAVIDSON. Thank you for the question. I was medically retired, so I did. So, I mean, I eventually--in a perfect world, DFAS works at the speed of business, but it didn't. Mr. GOLDEN. It didn't. Mr. DAVIDSON. And I eventually did start to get my pay. Mr. GOLDEN. I am actually curious if you came across any issues later down the road with VA and the disability rating and a lump sum payment there being offset in some kind of clawback? Mr. DAVIDSON. So there wasn't--so the interesting thing, I was rated, you know, by the Physical Disability Evaluation Board first so I have a rating from them, you know. The MEB does its process, and you go to the disability evaluation board. I have the rating from them, and they retired me, so I didn't go to the VA until a very long time after, because I was already retired, and I didn't look at it. And when I did that, yes, there was a part of an offset, but as you know, because if it is related to a combat injury, if you are retired, you are exempt even from the military retirement, not the VA. We know the VA is tax-free, but my regular Army military retirement, I do not pay taxes on that. So that has kind of helped, I think, with the alleviation of things, and they kind of got that, but no. There was hiccups up and down that lane, and I did have to work with DFAS for a very long time to correct a lot of those issues. Mr. GOLDEN. Yeah. I have just come across some veterans that have found themselves in some pretty tough places and didn't understand what was going to happen to them, and so they weren't prepared for it when it came. Mr. DAVIDSON. I wasn't, but I will say that I did find people, especially with the Wounded Warrior transition type group that did help tremendously, and they did work very hard in order to help me, but again, it did take a long time. Mr. GOLDEN. All right. Thank you very much. I yield. Mr. DAVIDSON. Thank you. Chairwoman VELAZQUEZ. The gentleman yields back, and we recognize the gentleman from Mississippi, Mr. Kelly, for 5 minutes. Mr. KELLY. Thank you, Chairlady, and thank you, Ranking Member, for holding this very important. I want to thank each of you witnesses, first of all, for your service in uniform to this great Nation; and second, I want to thank you for coming here and taking time to give your testimony; and I also want to thank you for supporting my bill, the VA-SBA Act. As we have heard today, the VA proactively verifies service-disabled veteran owned small businesses, while the SBA allows business owners to self-certify. This process creates inconsistent outcomes, such as businesses qualifying as a service-disabled veteran business for VA contracts, but not other Federal agency contracts or vice versa. While the SBA certified business awards are subject to scrutiny, the lack of front-end verification also leaves the door open for fraud and abuse. We have already made significant strides in the right direction. The National Defense Authorization Act for fiscal year 2017 has struck at SBA and VA to unify the definitions for service-disabled veteran owned small businesses, and begin moving regulatory responsibilities from the VA to the SBA. President Trump's reform plan for the Federal Government released last year cited the need for a one-stop shop for small business Federal procurement programs. The SBA has already made headway through the launch of their website certified.SBA.gov, and we are committed to working with them to see it through. The VA-SBA Act marks the next significant step towards unification of the two programs under one umbrella. At the SBA, and as Ranking Member Chabot mentioned earlier, will reduce red tape and confusion for veteran small business owners. I also serve as the Ranking Member on the Military Personnel Subcommittee of the Armed Services Committee. We work very hard on many of these issues on that Subcommittee, and passed down a nonpartisan through the mark. I am on that Subcommittee with Chairwoman Speier. We focused on soldiers and sailors and airmen and Marines transitioning to business when they leave the service, assistance to spouses who have to move quite frequently and to do things that help them to perform a career as opposed to just a job at a base moving to another job, things that would do that. Some of those things are, like, certificates, so they cross State lines and that they are able. We also focused on day care and many of those things that are issues for our soldiers. We will continue to focus on that. This Committee, Small Business, is very bipartisan in nature, and I thank the Chairwoman and the Ranking Member for making that both last term and this term in Congress. We will continue to look for solutions for our veterans because it is very, very important. I also am very focused on surviving family members, especially those Gold Star family members, and there are several issues that cross those lines when a veteran dies. I have a veteran small owned business, how we transition, and make sure that we don't take it away from those spouse and children because they are not a veteran. Because you guys all know, especially you, Ms. Hart, that the family members serve also. My wife has served all 33 years with me, and it is probably been harder on her than it has me, and so we have a responsibility to those spouses and those children, especially the Gold Star members who we lost in combat, but for all veterans who pass on. So with that, Mr. Leghorn, just very briefly, are you familiar with H.R. 499, and do you have any thoughts on the bill, whether you think that treatment of surviving spouses of service-disabled veterans small business owners with the SBA in extending the program to take them when they pass on? Do you have any experience with that, Mr. Leghorn? Mr. LEGHORN. Congressman Kelly, thank you for your question. You know, it is funny you mention that, because the American Legion actually has a resolution that supports allowing Gold Star spouses to take on the certification, the SDVOSB certification of their deceased spouse, so we would absolutely support something like that. Mr. KELLY. You know, and that is just an area--I think sometimes we lose sight of the spouses, and their opportunities and professional careers are set on the sideline so that our soldiers and sailors and Marines can go forward and do their jobs. And so, I think we need to look at some SBA things that help those surviving spouses and also actual spouses to do that. And with that, Ms. Chairman, I yield back. Chairwoman VELAZQUEZ. The gentleman yields back, and now we recognize the gentleman from Colorado, Mr. Crow, who is the Chairman of the Subcommittee on Innovation and Workforce Development. Mr. CROW. Thank you, Chairwoman, and thank you to all of you for your testimony and your leadership. I really appreciate it. This is helpful hearing from all of you. One of the most common things that I hear about from veterans in my community is this chicken-or-egg problem about having to have a track record before being able to access capital and secure loans. And, of course, they say, Well, how do I get the track record if I don't have the money to start my business? So, I would love to hear from you on any additional things. I know there was some discussion earlier. Several of you mentioned this in your opening statements. I would love to have any additional thoughts or ideas on this. And Ms. Sayles, I would love to start with you. Ms. SAYLES. Thank you so much, sir. As far as having past performance, which is what determiners in the Federal Government space, hence, the whole thing about subcontracting, the Federal Government advisors, PTAC advisers, VBOC, anyone that you are actually going through with your training, VIP, Veterans Institute for Procurement, by the way, they also would advise us to start with subcontract opportunities in order to get past performance. If you don't have past performance, then you are not going to have opportunities within the Federal Government. And here is why some of the rules and regulations need to be stricter when it comes to being a subcontractor within the Federal Government holding the prime responsible. As far as capital, without a doubt, and as a woman as well, there is a lot of difficulty when obtaining capital. I was fortunate to be attached to WIPP, Women Impacting Public Policy, and they advised me of someone that has actually done a lot of advocacy work to help us as women as well as veterans and as minorities being able to obtain capital. I was just fortunate to have that connection, but many people are struggling with that. Ms. HART. I thought this was one of the places where Boots to Business really excelled. They went through many different resources available between loans and getting investors. I mean, as high level as, like, venture capital firms they even talk about. I ended up renting out a guest room in my house on Airbnb, and starting that way and then bootstrapping the rest of the way, so kind of being creative. But I think that there is definitely kind of a romancing of, like, starting on credit cards, and then, you know, your business is just going to do really well and come in and save the day. You hear that story over and over from really big companies now, that that is how they started. They maxed out a couple credit cards, and so that is what they hear. And so having someone tell you that that definitely isn't the way to go is also helpful. Mr. DAVIDSON. I think it sets the stage, unfortunately, for what we talked about earlier, predatory lending practices, and a lot of people we have seen, especially in the space in working with veteran entrepreneurs, I have seen people, specifically organizations focus on veterans and claim veteran friendly because they know they are actually somewhat of a vulnerable population because they are in a very stressed situation when you are transitioning. And when someone entices you with Hey, I am going to give you $25,000. It is going to be a high-risk loan. I am going to put you at 22 points, potentially, at APR. You are going to take it. But that is where I think it is important that the education process is there for these veterans and these servicemembers, so they understand that. So I think it is a significant problem. I hear horror stories, and I am considerably worried about that because the practice continues. And just like Ms. Hart had said, you hear these stories about credit cards and things of that nature. I see on the other side where there are a lot of these predatory lenders out there that are under the guise of being veteran-friendly, and they are targeting that population. And we have seen it time and time again with incredible rates that put them at significant disadvantages with regards to being able to advance their business as they start to even grow it. Mr. CROW. Thank you. Mr. DAVIDSON. Thank you for the question. Mr. LEGHORN. Congressman Crow, I think what you said in the beginning was absolutely true. You have got to have money to make money, but you also need money to just even borrow money, because what we have seen with either private equity banks or anything else, if you are looking for money to scale, you need collateral, and that is something that transitioning servicemembers do not have, because the military lifestyle, the nomadic nature and the unpredictability, it is not conducive to amassing collateral for when you need money later. So one of the things I was thinking that we can do is to administer Boots to Business earlier in a servicemember's career, to get them thinking about entrepreneurship, letting them know early on that if this is a path that you want to go down, that you need to start amassing collateral early in your career. Mr. CROW. That is helpful. Thank you. Chairwoman, I yield back. Chairwoman VELAZQUEZ. The gentleman yields back. And now we recognize Dr. Joyce from Pennsylvania. He is the Ranking Member of the Subcommittee on Rural Development, Agriculture, Entrepreneurship, and Trade. Mr. JOYCE. Thank you, Madam Chairwoman, and thank you, Ranking Member Chabot, for sponsoring this today. This is important for us. What you bring to the table, the information you bring to us, we all attentively listen to. I am the spouse. My wife is former United States Navy. She is a small business owner. She also is a member of the American Legion. I look out, thank you, and have walked this walk with you. This is so important, what information you bring to us here today. My first question is for you, Mr. Leghorn. You mentioned in your testimony that sometimes the Boots to Business training leads to transitioning of servicemember to understand, or realize, that it is not the right time or course for them to start their business. Do you feel that offering alternative vocational and trade training programs for our veterans that make that determination could be similarly beneficial for transitioning our servicemen and servicewomen? Mr. LEGHORN. Dr. Joyce, thanks for your question. I absolutely do think that is crucial, and one of the things that happened with the TAP revamp that happened with the VOW Act in 2011 is that they created the transition GPS, which has three Capstone courses. One of them is entrepreneurship, known as Boots to Business, but there is a vocational training portion, and there is also an educational training portion for folks that are college bound. So you know, the American Legion believes that all three of those Capstone courses should be made mandatory during a servicemember's transition. Mr. JOYCE. Mr. Davidson, do you feel that vocational training also has an importance as we transition, what Mr. Leghorn just alluded to? Mr. DAVIDSON. Thank you, Doctor. I do, because entrepreneurship, of course, it may not be for everybody, but that vocational training, I think as we have seen a decline in the United States over the years, and I think it is missing. It is a very important component to how we grow the economy. I think if you do offer those alternatives, because not everybody is going to want to own a business, and not everybody is going to want to go and be, you know, a program manager or be stuck to something that they are not there for. And let's say they had some type of vocational skill inside the military, I do think it is an important skill that they have the ability to explore that type of career and type of additional training. I would say not voc rehab, but vocational training. Mr. JOYCE. Mr. Leghorn, currently we see workforce development as an important need as our economy is booming, and we realize that many people who go into heating and air conditioning, welding, plumbing can go on and develop their own businesses. In your experience, have you seen this occur? Mr. LEGHORN. Yes. Absolutely. The American Legion works with a lot of feeder programs that gets people scholarships to go into the skilled trades, and we hear phenomenal stories about people earning a lot of money in the trades because you are dealing with jobs that can't be outsourced, you know. You can't send jobs of, you know, people coming into your home and fixing your dishwasher or air conditioner to another country. It has to be done in America, and it has to be done by someone you trust, and there is nobody more suited for that job than veterans. Mr. JOYCE. I think you raise a very important point that has not fallen on deaf ears here at this Committee. Your service to the United States has been incredible, but your insights, what you bring us to the table today, your own personal experiences, your development of business as being the entrepreneurs, as understanding that what we need is to be able to transition from military to the workforce, that has been incredible. I thank you all. I thank you for your service. Madam Chair, I yield my time. Chairwoman VELAZQUEZ. The gentleman yields back, and the gentlelady from Kansas, Ms. Davids, is recognized for 5 minutes. Ms. DAVIDS. Thank you, Madam Chairwoman. Well, first, I want to thank the witnesses for being here today and coming to testify before the Committee and for your years of military service. My mom served in the Army for 20 years, so you know, I appreciate the commentary from multiple people about the impact on family members. I mean, I certainly was proud to be raised by a strong, single mom who was a Drill Sergeant. I have got the pushups to prove it. But you know, growing up with a parent in the military, I know how hard it can be frequently moving. It can be hard on building those personal networks that sometimes people, when they go into entrepreneurship, depend on, and also that has second- and third-order effects, especially on accessing capital and, you know, networks and accessing capital are some of the major barriers that veterans face. And even veterans who are successful at starting their own businesses can continue to struggle. A constituent of mine, Mr. Walter Justice, is an Air Force Special Forces veteran who was in Vietnam, and owns Tendou Martial Arts Academy in Kansas City, Kansas. I am also a martial artist, so a special place in my heart for all of that. Mr. Justice has been in business for 20 years, and one of his main concerns is addressing some of the changing atmosphere around marketing, around the technologies that are coming up. And I know that hearing some of the comments that you all have made, Mr. Leghorn, I thought it was, you know, the idea that it takes years to get trained up and then the expectation that a week of transition time is enough. Can you speak a little bit to maybe the ways that--and maybe it is already happening, so I would love to hear more about it, but the ways that Boots to Business or some of the other SBA programs are helpful in getting veterans up to speed or at least knowledgeable about some of the changing landscape that we are seeing because certainly I imagine that is impacting the businesses that you all are seeing and participating in. We will start with Mr. Leghorn. Mr. LEGHORN. Thank you for your question, ma'am. One of the things that is good about TAP is that I think by law, it has to be updated every 2 years. I believe Boots to Business may not be on that same cycle, but I think with the current bill, it reauthorizes every 5 years, so that would give you folks time to make them relook at their curriculum to encompass all the advancement that has happened because I mean, I am pretty sure everyone here as seen marketing change rapidly within the last couple of years from email to digital and content marketing, and it is just that that learning curve is huge. I personally hear a lot of demand for learning that. Ms. DAVIDS. So you are looking at a couple of the other programs. There might be some updates that we could do to, like a Boots to Business program. Mr. LEGHORN. Uh-huh. Ms. DAVIDS. Okay. Thank you. And then if anyone else has-- please. Mr. DAVIDSON. Yeah. I would just echo that sentiment. It is going to be probably solely focused on the social media and marketing aspect. We see that a lot of times, and I know Mr. Leghorn and I have worked on several different projects. That experience needs to be integrated and updated on a constant basis, because it can make or break significant businesses. And when done well, it is done well. Again, it is not an overnight thing, but we have seen significant successes in those types of strategies, which I think should be updated and taught and improved inside of those TAP programs. Thank you. Ms. SAYLES. Yes. I also attended Veterans Institute of Procurement in Beltsville, Maryland, which a program that is overseen by Barbara Ash in Montgomery County that is specifically focused on veterans interested in doing work within the Federal Government space, and we are brought in, free of charge, as far as our stay and our food. We have to just pay for our transportation to arrive. So I think that is a great, great program that should continue and be expanded. Ms. HART. When I moved to a very rural location, I wanted to help other military spouses at that location, and social media has been a huge part of growing my business. And I thought it would be so cool if I could come into a Boots to Business class as, like, a one-hour guest speaker and talk about what has worked for me. I went in, and it basically didn't work, and so, I think that having something like that where you bring in local knowledge would be awesome. Ms. DAVIDS. Thank you very much. I appreciate your service and your testimony here today. And with that, I yield back. Chairwoman VELAZQUEZ. The gentlelady yields back, and now we recognize the gentleman from Tennessee, Mr. Burchett, for 5 minutes. Mr. BURCHETT. Thank you, Chairlady, and I appreciate the leadership you and the Ranking Member have shown in promoting a very good bipartisan working environment for our Nation's small business, and I want to thank you for that, ma'am. And I want to thank our distinguished panelists today, both for your service to our country as members of our military. My dad fought in the Corps in the Second World War, and ma'am, his colonel was a man named Chesty Puller on an island called Peliliu. I am sure you have heard of that. He was the First Marine Division and then went on to Okinawa and then went to China for a short while to fight the communists. My mama actually did not serve technically, but she flew an airplane during the war. She had lost a brother fighting the Nazis, so my family has a very good history, rich history in our military service, and they are both buried at Veterans Cemetery, and I am honored to be their little boy. But I want to thank you all for what you what you did, and I want to apologize to you for some of treatment you have received. You took an oath to uphold our Constitution, and we made some promises to you all, and frankly, we haven't kept them. And dadgumit, it kind of ticks me off, and that is not in my notes, but that is just from the heart, so I will get back to my notes before I create an international incident and get visited by some four star general somewhere. But Mr. Leghorn, you state in your testimony that the SBA's current disaster loan program has strict eligibility requirements for those in our military. How will expanding the definition from Active Duty to active service better assist those small business owners that have an essential employee called up to serve their country? Mr. LEGHORN. Congressman, thank you for your question. So currently, Guard and Reservists are only eligible for what we call MREIDL, the loan program, when they deploy under Title X. And the change from Active Duty to active service in statutory text will allow, let's say, a National Guardsman that is called up by the governor under Title 32 for disaster relief to receive that loan, take advantage of that loan. It will allow a business who maybe employed several National Guardsmen that deployed for that disaster relief to also receive that loan. So that is the main gist of what would happen when we change that statutory text. Mr. BURCHETT. Okay. I am very optimistic that the Patriotic Employer Protection Act, which I was happy to work with my colleague, Mr. Kim, on will help protect our employees who are National Guard and Reservists when they are called upon to serve their country. I want to thank you all again for your service, and I will not ask any more boring questions for you all, so you all can get on some more important things. Chairlady, thank you again, ma'am, for your consideration and your bipartisanship. Chairwoman VELAZQUEZ. Thank you. The gentleman yields back, and we recognize Mr. Hern, Ranking Member of the Subcommittee on Economic Growth, Tax and Capital Access from Oklahoma. Mr. HERN. Thank you, Madam Chairwoman. It is great to be here. I thank our witnesses for being here as well. Thank you for your service to our country. Like many on this panel, I am the son of a 22-year Air Force veteran, 1955 to 1977, so my dad turned 84 on the 4th of July, so I can never forget his birthday. I thank you for being here today and testifying to the challenges of transitioning from military careers to a new career in a civilian life. As a small business owner for over 34 years, I certainly know firsthand of how difficult it is to become a successful entrepreneur. I also know that veteran entrepreneurship is declining, and it can be extremely difficult for our veterans to transition from the military into a career entrepreneurship. Because of this, myself and several of my colleagues support the programs, organizations, and people who help provide our veterans with the resources they need to start their careers and become successful. We actually have 115,000 veterans in northeast Oklahoma where I serve. In my district, this includes organizations and people like Pete Lewiler, who was my veteran of the month in March, and Rachel Runfola from Oklahoma Veterans Connection, a referral network which assists them in finding various benefits; Mark Lownsberry from Volunteers of America, an employment service organization which helps veterans to find gainful employment; and Jonathan and Jessica Shepherd and Stacey Hester from Eagle Ops, an active outreach to veterans which provides relational and resource connections to veterans, and there are many, many, many more. I could spend the rest of my time talking about the wonderful organizations that are veteran-led to help veterans. My first question as the Ranking Member of the Subcommittee as the Chairwoman spoke about, it is my goal to help provide access to capital to the transitioning servicemembers who need that resource. Ms. Hart, in your testimony, you discuss the Boots to Business program, and you said it does a good job outlining the loan process and how to raise capital. I know you just touched on it with Congresswoman Davids, but could you elaborate more and describe the challenges you experienced? You started to touch on it on accessing capital and how this program helps to overcome these challenges? Ms. HART. Well, I bootstrapped, so I didn't use any of the programs that the business talked about, but I think one of the most important things that it does is tells you also bad ways to raise money, one of which would be running up credit card debt or predatory loans, as folks have talked about. So in that way, that was certainly helpful to, you know, steer me towards staying very lean and not relying on credit cards. Mr. HERN. Sometimes we make the access too easy and create bad behaviors that are not conducive to being successful, and not only does that not--that happens in the veterans world in transition, it happens in the civilian world, and so it is great to have organizations that work to help prevent that. So it is great to have folks that are sitting on either side of you that have experienced things as we go across the veterans community. Anybody else want to talk about the Boots to Business program, because we have talked about it a lot over the past 7 months in here as it relates to our veterans. Any positives or negatives? Mr. DAVIDSON. I will just reiterate positives, sir. It is just--I think it gives tools and it educates the individuals to create a baseline for them to understand what they are getting into, and just like with access to capital, making good judgment. It will help them foster that good environment to hopefully make decisions that will avoid catastrophic mistakes with predatory lenders and things of that nature, but also give them what the reality of is that it is not an easy thing to start a business as yourself knows as a small business owner, and that it will help them at least to start to focus on structure because going from a structured environment to what would be the civilian world of unstructure and building it yourself, I think those types of things bring that--Boots to Business kind of shows a little bit of a life of reality with its curriculum, and it educates the servicemember enough to say is this for me, or is it not for me? Or at least it plants a seed for them to start to think am I going to be a veteran entrepreneur? Mr. HERN. Ms. Sayles, that kind of leads me into my last question here. What advice would you give this Committee to help future veteran entrepreneurs themselves as we aim to tackle the issue of accessing capital to finance small businesses? Ms. SAYLES. I think that there needs to be some information in the literature that is shared within the banking industry, specifically on finding better means to work with small businesses as a whole when they are new. A lot of them are not interested in working with you if you don't have $10 million revenue, or $5 million revenue, and so that puts us in a position where we have to go to alternatives. There are definitely alternatives including some non- profits to get some lending, but most importantly, they need to enforce something that will open the doors a little bit more, force small businesses to be able to get capital, so they don't have to use credit cards. And in my case, it was not so much credit cards, but it is called factoring in the Federal Government space, and some of them can be very much predatory as well. However, I had an advocate at the table with me that fought on my behalf which made a difference which I know is an exception. Mr. HERN. I thank each of you. I am also in the banking world, so I know kind of the transition in government regulations that have occurred over the last decade, and it does make it very difficult for banks to meet some of the capital requirements they have in order to work with small businesses that don't have a lot of history. So duly noted that things we need to work on. Madam Chairwoman, I yield back. Chairwoman VELAZQUEZ. The gentleman yields back. Now we recognize the gentleman from Minnesota, Mr. Stauber, Ranking Member of the Subcommittee on Contracting and Infrastructure. Mr. STAUBER. Thank you very much, Madam Chair. To the witnesses, thank you for your time and attention, and I want to thank each and every one of you for your service. That is not a cliche that comes, you know, lightly. You have given us the opportunity to live in a free country. My wife is also a veteran, and she attempted to get a VA loan, and there were some difficulties in 2010. So you are speaking to a member that has been involved in potentially going into small business and having that roadblock because as a female veteran, we want our veterans, and in particular, our female veterans to have that opportunity, the entrepreneurial spirit that you all have, and be successful in America. I am just--I want to say that I am a co-sponsor of the VA- SBA Act. I know that you have the--it is going to work. I know that we need--there is some tweaks right now, but the testimony that I have heard is incredible. And it is so interesting for us to hear because many of us on this panel have experienced, or been told firsthand there is not a better example than to hear it firsthand, and your witnesses have told us some of the concerns you have had. We are going to make this better. It is our job to make sure that our veterans are taken care of during their service, and make sure that upon or prior to separation, you have the ability to continue living the American dream if you want to be an entrepreneur. Now, Ms. Sayles, you talked about your leaving and going into a position that you did. Was it the desirable one at that point? I want to tell you that to have the VA-SBA Act go through, it is going to give you all the opportunity and future veterans the opportunity to succeed. I am proud to be a member of the Small Business Committee on Subcontracting and Procurement. It is an extremely important that as Member Hern said, that the financial part of it is available. You shouldn't have to climb over mountains to be given that opportunity to get lending your way. I am excited to be able to move this forward. And I don't really have any questions, per se, because many of them have been asked. As a member, one of the last to speak, I mean, I think that it is important that we thank you for your service. Thank you for being witnesses today and know that the Small Business Committee is here to represent you. And I am looking forward to this Act going through, and thank you once again. Thank you, Madam Chair, and I yield back. Chairwoman VELAZQUEZ. Thank you. And the gentleman yields back. We are going to go into a second round of questions, and I will recognize the gentleman from Maine, Mr. Golden, for 5 minutes. Mr. GOLDEN. Maine, Colorado. They are both cold. Not this time of year. But you know, real quick, while I know that my Ranking Member, Congressman Stauber is here, I wanted to ask Ms. Sayles. You talked a little bit about--actually, my friend here from Colorado that was sitting next to me, Congressman Crow, called this--I am going to borrow the term, rent a vet problem. And you talked about it, and Representative Stauber and I are on the--you know, we Chair and are a Ranking Member of the Subcommittee on this. I would like to hear how prevalent is this issue of, you know, subcontractors who are vets being used to get the contract and then kind of hung out to dry? Ms. SAYLES. Well, actually, sir, it is two different issues. A rent a vet is when we are referring to a veteran that has actually accepted a nice six-figure income to sit in the position as a President and CEO of a company, and yet, someone else is actually running the company. But as far as subcontracting, it is a big issue because it is, you know, the means of getting into the Federal Government space. I have an example of offering up an opportunity through my relationships within the Federal Government. They trusted me. They knew that I could bring the work. They knew that I could perform. However, I did not have the certification at that time which was 8A, in order for a sole source opportunity to land, so I utilized another company that had it. Unfortunately, that company, as far as being equitable in the share, was not completed. I was able to stay on the contract until the end, but upon a 6-month extension, for an example, they removed me from the contract. They took 40 percent of my revenue. I had to lay off three people, and I had to reduce salaries across the board in my corporate office. Mr. GOLDEN. Do you have any ideas about how we can improve the oversight of that? Ms. SAYLES. The idea I would have would be Office of Small Business Development Utilization Office, which is the overseer of any small businesses working within the Federal Government. Let them be involved. Instead of telling us if you are a subcontractor, we can't do anything about it, they should be able to intervene in some way and be able to support the contracting officer in getting some type of filing of a report that they are doing what they said they were going to do with supporting a subcontractor to come on to the contract, instead of removing them. Mr. GOLDEN. Thank you. I would be interested in continuing to talk. Maybe we can connect, and I will have my staff ask to get you. Ms. SAYLES. Yes, sir. Thank you. Mr. GOLDEN. Thank you. I also just wanted to ask quickly for anyone out there. Do any of these offices or opportunities help veterans, including those looking to start a business with dealing with, you all know this problem, State licensing and certification, you know. When you get out, and you have got the skill sets, maybe even a skill set you learned in the military that you could use to launch a business, but we have got these 50 States with different licensing requirements, certification processes. Like, do any of these programs help veterans navigate that and figure out how to cut through some of that red tape? Mr. LEGHORN. Thank you for your question, sir. I think the VBOCs, because they are regionally located, they provide that specific service in counseling veterans as they go back to where they came from, or where they lived prior to joining the service. When they connect with the VBOCs, the VBOCs are going to be able to tell them what licenses and certifications you need to start a business in the industry that you desire to be in. Mr. GOLDEN. Thank you. I mean, this is a problem I think among spouses, too, who have to sometimes relocate, but it is just one that, you know, I have tried to work on at a State level, but tough to do at a national level. So it is just a huge problem that holds people back, so I don't know. If you all have any ideas, share them with us. And lastly, I would just ask. The great programs that you are all talking about, I have never heard of them, you know. TAPS is wonderful, but when I was getting out, I was infantry, I just wanted to get out. And so, it is nice to hear that there is, like, a reboot program out there, but still, I never heard of it. And I am just one veteran, but I am sure I am not unique. So real quick, we have got, like, 30 seconds. Does anyone have anything to say about what is the best way, in your experience, to get word about these programs out to veterans on the street? Mr. DAVIDSON. Thank you, sir. It is going to be social media, right. You are going to have to--especially you talked about going to rural areas. I think that is one of the biggest complaints that I hear is that people feel like they are left out, especially when they relocate to Butte, Montana, or somewhere along those lines. They feel like they are outside of, let's say, a large city, and they don't have those resources. There is ways that we can connect, and I think that is where we are failing them is through those programs. They need to be able to socially connect them. Mr. GOLDEN. We always hear about veterans being lost in a sea of goodwill. If we can't get the word out to them about the programs, they can't take advantage of them. So thanks for that feedback. Chairwoman VELAZQUEZ. The gentleman yields back, and now we recognize the gentleman from Ohio, Mr. Balderson, for 5 minutes. Mr. BALDERSON. Thank you, Madam Chair, and thank you all for your service, and thank you all for being here today. My question is for Mr. Davidson. The SBA has the 8A program to provide business training, counseling, marketing, and technical assistance to small businesses that have been certified. The certification is intended for organizations that are owned and controlled by socially and economically disadvantaged citizens. Do you believe disabled veterans, small business owners, are socially or economically disadvantaged after having given so much for this Nation? Mr. DAVIDSON. Sir, thank you for that question. I want to start by saying that it is an interesting question with regards to veterans being socially and economically disadvantaged, because the one thing I would say about veteran-owned businesses and disabled service veteran-owned businesses, it is the only status you have to earn, if you think about it. So there is nothing else out there. Everything else is done either by birthright or affinity in a sense, but for veteran- owned businesses, let's say--take the service disabled part out of it, it is an earned benefit. So with that in mind, I would say unfortunately, in some cases, let's say a service disabled, there would be an economic or social disadvantage to them. And I know individuals, even in the 8A program, that have actually gotten in on the 8A program from experiences that have occurred from their military service, especially with regards to if you are, you know, isolated in an area for a certain period of time would qualify you for those types of things. And, of course, if you are looking at, and I will tell you from experience that you get a stigma attached to you with regards to if you are a service-disabled veteran or veteran. So I do think there are disadvantages, unfortunately, with regard to being certified that way and how we are viewed in a certain manner. So I do believe that there is a very--there is absolutely a parallel, and I also know, like I said, veterans that have become 8A certified with their experiences that they have had from being a service-disabled veteran. Mr. BALDERSON. Let me follow up with you on that great response. What would be the benefits of allowing all service- disabled veterans and small businesses to receive equal 8A treatment? Mr. DAVIDSON. I think it is--we see it now. I see how the 8A program grows, right? You have your build-up phase, phase one, years 1 through 4, and then you graduate to phase 5 through 9. I think it is the same thing. I think they would receive the same benefit. But I do caution, and I believe, you know, Ms. Sayles, same thing. She would be a part of the 8A membership program. One of the failures that I see all the time in 8A programs is that there is a--you have a set-aside program, right, that works very well with the 8A, but it is only for 9 years. A lot of programs I see, you see that revenue drop because they no longer have that advantage once they graduate from the 8A program, and they are no longer sitting there and having that one lane. So I think if we are going to apply it to the veterans, I think the same thing has to be improved with the 8A program, is that you need to properly prepare them for that graduation phase. And I know that the SBA does a good job of it now, but I think they also have to recognize that one day, essentially, it shuts off, right. I mean, you lose that advantage, and I think that is an important part of how we would probably want to develop that program a little bit, so they understand that after the 9 years, you may no longer have this benefit, and you should be absolutely ready to be able to market and compete in a certain market. It is going to be a free market, essentially, that you are not going to have this benefit anymore. Mr. BALDERSON. Okay. Thank you very much. Madam Chair, I yield back my remaining time. Chairwoman VELAZQUEZ. The gentleman yields back, and Mr. Stauber is recognized. Mr. STAUBER. Thank you, Madam Chair. Just another question for those, obviously, you are separated. Could this government have done better by giving you some education, either at the end, or just before you separated from service? And I will ask this for everyone. Just give us a 20-, 30-second answer. Mr. Leghorn. Mr. LEGHORN. Thank you for your question, sir. I think it is crucial that we not only give classes regarding transition assistance at the end of a servicemember's career in the military, but we should do it in the middle and towards the beginning as well. The more you allow somebody to plan for their separation, the better footing they are going to be. Mr. STAUBER. Mr. Davidson. Mr. DAVIDSON. Thank you, sir. In my personal experience, unfortunately, I was in a very unique place where I was abruptly, you know, retired because of a medical injury. I didn't have time to transition or plan at all, so I was within a 6-week period, and I believed that I was going to be a career military person. So, I believe just even from a little bit of education, there was a great benefit. And just again, having the ability to go back and see it now, and I was able to observe Boots to Business, thanks to some friends of mine, and even the Boots to Business reboot. Absolutely it is an invaluable tool that they need. Mr. STAUBER. Ms. Hart. Ms. HART. I knew 2 years before I was going to get out that I thought I would start a business when I did get out, and I actually started my business a year before I separated and was doing the two concurrently, and that runway was invaluable. It made it so that by the time I got out and lost my income, I had another income. If I had started my business the day after, it would have been a huge gap financially. And so, I wish I had taken Boots to Business earlier. Taking it when I did solidified some of the things that I had done, but it definitely could have helped taking it before. Mr. STAUBER. I would say you are probably the exception. You were preparing for your exit, and that is why you were successful. Ms. Sayles. Ms. SAYLES. Thank you, sir, for the question. My thoughts on it actually is that yes, it is definitely something that is required, something that was not offered at all during the time in the 10 years that I served in the military. Also, I was a Marine, you know. We were operating under different rules and regulations than every other branch of the military, as far as I am concerned. They are strictly focused on you being a Marine while you serve, so you are not trying to do a lot of outside activities. However, her story is a great story because there was time to prepare having a year in and getting some training and some insight. It is hugely valuable for her, and it would be for anyone that is interested in entrepreneurship. And also, sir, I must add. When you think about someone who has put in 20-plus years, getting out of the military and then deciding to go off and get a 4-year college degree is not something you would think that they would be interested in doing. So entrepreneurship is a great option for them. Mr. STAUBER. I expected those answers. Ms. Hart, yours was a little bit different, but I think you were forward-thinking enough to do that. My wife was 24 years, and it was the end, the end date. With that transition, it is hard. So, I think, we, as elected members, need to ensure that that is put in place. We owe that to you, and as Mr. Davidson just said, you have earned that. We owe and honor your service. Thank you, Madam Chair. I yield back. Chairwoman VELAZQUEZ. Thank you. I have one further question for either Mr. Davidson or Ms. Sayles. In the Federal contracting space, so the government, the Federal Government is the largest purchaser of goods and services around the world. The most effective way we can empower veteran-owned businesses is facilitating for them to do business with the Federal Government. What is the number one challenge that you can share with us that you are facing when you are doing business with the Federal Government? Mr. DAVIDSON. So thank you for the question, Madam Chairwoman. I think the biggest issue is education. Not just for me, I am just saying for in general. I think if we look at a hole in the contracting population, commercially speaking, Main Street businesses, you are looking at 95 percent of that is the type of businesses that veterans run. We are stuck in a Beltway where about 5 percent makes up the majority of what government contracting opportunities are. They are all sitting here in the hub. So when we leave this area of the Beltway, the rest the businesses for veterans are Main Street. They are not even thinking about that they have these opportunities. So it is a matter of us educating them and letting them know of the government procurement opportunities. I will give you a perfect example. We have very large veteran-owned businesses that I know that are commodity brokers, right. Black Rifle Coffee Company is a perfect example of it. They want to work in the Federal space. They have no idea. They are doing an incredible job, but they don't know how to get into the space, and they even tried to come in. I am just saying as an example, I am not saying they are the end all, be all, but the success they have had on a Main Street type business selling coffee, right, how does that translate to contracting? Well, we know there is a lot of different ways with regards to how, you know, people buy coffee, especially for the military, but they don't know how to get in. And I always use that example is that they have tried and they have tried to learn, but it is the education process. But I think that is where we are missing our gap. We are stuck in a bubble in a 5 percent that represents the most of the buying power for the Federal Government through veterans here, and maybe San Diego and a couple other spaces, but it is mostly generated here. We are forgetting about Main Street or the 95 percent. Chairwoman VELAZQUEZ. Thank you very much. Let me take this opportunity to thank all of you for taking time to be here today. I know you all have busy schedules, but what you have shared with this committee today is so important. Veteran-owned small businesses and entrepreneurs play a key role in strengthening our economy and creating jobs. With 200,000 servicemembers transitioning from the military to civilian life each year, the need for additional counseling resources, access to capital, and contracting opportunities will increase. The testimony we heard today provides invaluable insight into the challenges and benefits of being a veteran entrepreneur in this country, and will help guide the committee as it moves forward with legislation to prepare veterans for entrepreneurship. I want to thank all of you for being here and for your tireless and undying service to our country. I would ask unanimous consent that members have 5 legislative days to submit statements and supporting materials for the record. Without objection, so ordered. And if there is no further business to come before the committee, we are adjourned. Thank you. [Whereupon, at 1:18 p.m., the Committee was adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]