[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
FIELD HEARING: MOORESTOWN, NJ: EXPANDING OPPORTUNITIES FOR SMALL
BUSINESSES AT MILITARY BASES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ECONOMIC GROWTH, TAX, AND CAPITAL ACCESS
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
AUGUST 1, 2019
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-040
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
37-179 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 STATEMENT
Page
Hon. Andy Kim.................................................... 1
WITNESSES
Mr. John Whittington, Business Representative, Sheet Metal
Workers Local Union 27, Farmingdale, NJ........................ 4
Mr. Paul Costello, President of Del Ran Business Association,
Vice President of Sciacca's Upholstery, Delran, NJ............. 6
Mr. Raul Mercado, Director, New Jersey Institute of Technology
Procurement Technical Assistance Center, Newark, NJ............ 7
Mr. Jeff Cantor, Colonel, US Army (Retired), Founder & CEO, NJ
State Veterans Chamber of Commerce, Marlboro, NJ............... 10
APPENDIX
Prepared Statements:
Mr. John Whittington, Business Representative, Sheet Metal
Workers Local Union 27, Farmingdale, NJ.................... 25
Mr. Paul Costello, President of Del Ran Business Association,
Vice President of Sciacca's Upholstery, Delran, NJ......... 26
Mr. Raul Mercado, Director, New Jersey Institute of
Technology Procurement Technical Assistance Center, Newark,
NJ......................................................... 28
Mr. Jeff Cantor, Colonel, US Army (Retired), Founder & CEO,
NJ State Veterans Chamber of Commerce, Marlboro, NJ........ 30
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
EXPANDING OPPORTUNITIES FOR SMALL BUSINESSES AT MILITARY BASES
----------
THURSDAY, AUGUST 1, 2019
House of Representatives,
Committee on Small Business,
Subcommittee on Economic Growth, Tax, and Capital
Access,
Washington, DC.
The Subcommittee met, pursuant to call, at 11:10 a.m., at
Town Hall, 111 West Second Street, Moorestown, New Jersey, Hon.
Andy Kim, presiding.
Present: Representative Kim.
Chairman KIM. Good morning, everyone. Thank you so much for
coming on out here today and thank you in particular to the
panel here, the witness panel for taking time out.
I will be very mindful of your time, so I will try to make
this as effective and efficient as humanly possible. But it
means a lot that you joined us here. I really want to thank
Moorestown as well for hosting us. It is really wonderful to be
able to do this right here in our own district.
We are so focused on these field hearings. We just did one
in Oklahoma not too long ago, just making sure that we are
going out outside of Washington, D.C., and going directly to
the communities, directly to the small business owners, to the
business communities and associations, and understanding and
learning what it is that we can be doing better. I wanted to
make sure that we are trying to find some issues and some
challenges that are out there and try to come up with some
really tangible solutions to those.
For those in attendance, I would like to just share some
background on the proceedings. This is a formal field hearing
of the House Committee on Small Business. Due to the format,
there is not an opportunity for questions or public comment
from the audience this time, but I thank you for your
attendance and your interest in this issue.
As I mentioned, these field hearings play a critically
important role in the work that we are doing, and it is really
just trying to bring the work of our Committee closer to our
districts and to our communities and have an opportunity to
share that view on the issues that matter.
Right now, we are at a time when America's small businesses
are an economic engine that drives growth in our economy.
Nearly 30 million small firms in the United States represent
99.7 percent of all employers and generate two-thirds of all
net new jobs. Because of these firms' crucial work and role in
our economy, it is imperative that Congress enact policies that
promote small business, entrepreneurship, job creation, and
also provide opportunities for growth.
My priorities in Congress have been to increase access to
capital so that entrepreneurs can start and grow businesses, as
well as ensuring that small firms can adequately participate in
the nearly $500 billion a year Federal marketplace.
Small contractors offer unique opportunity for government
because they are often nimbler than their larger counterparts
by responding to market shifts and driving innovation more
rapidly. The result in that is that governments receive high-
quality supplies and services at competitive prices.
Congress has recognized the positive impact and, therefore,
has established a minimum for the Federal contract set-aside of
23 percent. Last year alone, small businesses were awarded over
$120 billion in Government contracts. Yet the percentage of
dollars awarded to small firms is just one measure of the
success and not the only measure. And the size of the average
award and the vendor count are some other examples of how we
can gauge success.
Despite contract spending rising over recent years, the
number of Federal contractors working as Federal prime vendors
is at a 10-year low. In other words, fewer contractors are
receiving more contracting dollars.
Another disappointing trend is that the recent data shows
that there is a 32-percent drop in the number of small
businesses that are contracting with the Government, from about
131,000 to 88,000 during the last decade.
In contrast, large vendors declined only 4 percent during
that period, and this shows two things. One is that the small
business supplier base is shrinking at a much higher rate
compared to that of large vendors; and two, there are fewer
small firms that are benefitting from incentives created in the
Small Business Act to ensure their participation, and this is
simply unacceptable.
Right here in New Jersey's Third District, we have a number
of small contractors ready and willing to provide goods and
services. We also have the Joint Base McGuire-Dix-Lakehurst,
the only tri-service U.S. DOD base, which also includes units
from all five branches.
The joint base, with its 44,000 service members and
families that live and work here and the $9 billion in
infrastructure supporting the base's operations provide an
amazing customer base for small businesses in our area that
work in different industries, from construction to
manufacturing to technology. And that is why I am excited to
hear about innovative steps the joint base is taking to bring
new small businesses into the Government procurement process.
I know the Air Force's Pitch Day, which awarded 242 SBIR
contracts in 2 weeks and $3.5 million to 51 innovative
companies in 1 day, those are going to be game-changers that
can expand the industrial base and dramatically cut down the
time it takes to award a small business contract. But I also
want to hear about how we can improve the efforts at the joint
base and others around the country to better serve our Nation's
small contractors and ensure a strong defense industrial base.
This is something that is very personal to me with the work
I am trying to do as someone who sits on the Small Business
Committee and as the Chairperson for this Subcommittee on
Capital Access, Tax, and Economic Growth, but also I am on the
Armed Services Committee. Especially being on the Readiness
Subcommittee and other places, there are ways in which we can
try to use these to understand the different perspectives and
help you all to branch out.
And during today's hearing, I look forward to being able to
discuss these challenges that small businesses face in
competing for contracting opportunities within the Department
of Defense and how we can ensure that the joint base is able to
take advantage of all that small businesses have to offer.
Again, I want to thank the witnesses for being here. And I
will just take a moment to explain how this works. I will
introduce our witnesses before recognizing each one. We will
give 5 minutes to make an opening statement that summarizes
their written testimony.
We didn't bring our gizmos and our gadgets from D.C. with
the lighting system to let you know where things are at, but
just try to keep around that time. But as we are here to be
able to listen to you and as you have taken time out, we will
certainly make sure that we listen to each and every word that
you say. And again, just appreciative of your time.
I would like to now introduce our witnesses. We have our
first witness, Mr. John Whittington, the business
representative for the Sheet Metal Workers Local Union 27. I
met with Mr. Whittington earlier this year to discuss obstacles
that sheet metal workers face when seeking contracting
opportunities at the joint base.
Welcome. Thank you for coming here.
Mr. WHITTINGTON. Thank you very much.
Chairman KIM. Our next witness is Mr. Paul Costello,
president of the Del Ran Business Association and vice
president of Sciacca's Upholstery in Delran, New Jersey, a 75-
year-old small business with a third-generation owner.
Welcome, Mr. Costello.
Our third witness is Mr. Raul Mercado, the director at the
New Jersey Institute of Technology Procurement Technical
Assistance Center. The Procurement Technical Assistance Center
is a DOD program that is funded by the Defense Logistics Agency
through a cooperative agreement with NJIT. This program
provides free counseling in addition to training and technical
resources to New Jersey-based businesses.
Welcome, Mr. Mercado.
And our final witness is Mr. Jeff Cantor, who is the
founder and chief executive officer of the New Jersey State
Veterans Chamber of Commerce, which launched in November 2018.
His goal is to improve the economic environment for veterans in
the State and to build the infrastructure to create greater
competitiveness and success for veteran business entities. He
also recently retired in 2017 as a colonel in the Army Reserve.
Welcome, Mr. Cantor, and thank you for your service and
what you are doing to be able to help support veterans in our
community.
Well, we are going to just start off, and then we will go
down the panel. So, Mr. Whittington, I am going to turn it over
to you. You are recognized for 5 minutes.
STATEMENTS OF JOHN WHITTINGTON, BUSINESS REPRESENTATIVE, SHEET
METAL WORKERS LOCAL UNION 27, FARMINGDALE, NEW JERSEY; PAUL
COSTELLO, PRESIDENT OF DEL RAN BUSINESS ASSOCIATION, VICE
PRESIDENT OF SCIACCA'S UPHOLSTERY, DELRAN, NEW JERSEY; RAUL
MERCADO, DIRECTOR, NEW JERSEY INSTITUTE OF TECHNOLOGY
PROCUREMENT TECHNICAL ASSISTANCE CENTER, NEWARK, NEW JERSEY;
AND JEFF CANTOR, COLONEL, U.S. ARMY (RETIRED), FOUNDER AND
CHIEF EXECUTIVE OFFICER, NEW JERSEY STATE VETERANS CHAMBER OF
COMMERCE, MARLBORO, NEW JERSEY
STATEMENT OF JOHN WHITTINGTON
Mr. WHITTINGTON. Good afternoon. Thank you, Congressman,
staff, community, for this opportunity here to speak today on
an important subject close to the hearts of many of the members
I represent in the building trades.
The joint base provides thousands of jobs for local
residents. That being said, the base also supports our local
and State economies.
The members I represent work in the construction field. The
base provides a lot of construction opportunities, offering
renovations, additions, maintenance, so forth. The work on the
joint base also provides paychecks, which, in turn, spurs the
local economy. The many jobs I see bid out are to out-of-State
contractors with minor realized economic advantage to the local
economy.
I get a bit choppy here because I threw it together, so
excuse it if it sounds a bit choppy here.
Our local contractors have an advantage that the base can
save, in my opinion, an enormous expenditure of resources. Cost
savings could include efficient production capabilities of the
small contractors, production facilities that are located in
close proximity to the base projects.
Now these bullet points I have, I would like to elaborate
here and there. I will make it brief.
The close proximity point. If the product is damaged, let
us say, for example, a facility in close proximity, usually
within an hour's drive, could have that product sent back,
refinished, you know, redone and sent back within an hour's
time, you know?
Production facilities utilize high technology standards.
The contractors of the members I represent acquire and utilize
the latest and up-to-date equipment, software, and practices to
remain competitive.
A highly skilled local area workforce. New Jersey is
located in a highly competitive metropolitan area. To offer the
highest-quality labor available on a project, we must make sure
our area workforce has steady training throughout the year.
We offer high-quality local apprenticeship standards. That
goes along with the previous example. To offer the most
competitive and affordable bids, our members are constantly
trained on the latest equipment and programs the industry has
to offer.
I would also like to add that we take advantage of a very
successful program called ``Helmets to Hard Hats.'' Veterans
can start a career right out of the service with direct entry
into our apprenticeship program. It is a program we are proud
of and we have had tremendous success with.
The workforce lives in the immediate area. The wages the
workforce earns on these projects is spent and invested into
the local area communities, infrastructure, government, and
residences, for example. If you are an out-of-State contractor,
you bring in your own workforce. That spending there is short-
lived in this State. The rest of the earnings are taken back
and invested elsewhere, with practically no reinvestment
benefit to the local area and the community.
The base can work directly with the necessary trade for
projects as a cost-saving measure in relation to our direct
hire, which we are having progress within this State, and you
know, maintenance, so forth.
Some of the concerns I have with the projects on the base
are as follows:
The information on future projects on the base. I
personally do not know if there is a website, a phone number to
call, a location that I can visit where I can obtain possible
future projects on the base.
The lead time on information. The construction lead
services I use usually have information a day or two too late.
I constantly miss the opportunity to register by a certain date
to attend a walkthrough of a project or a pre-bid meeting.
Fair competition for local area companies and security
issues that hinder access to projects. I am proud of the fact
that the bases require an extensive background check on all
persons wanting to access the bases. My job requires me to
monitor projects and ensure that contractors, in State or out
of State, are following local area standards for workforce
safety practices, product quality, project timeliness in a
drug-free environment.
I would also like to check that the contractor is not
taking advantage of a worker that may be unwittingly working
for an improper local area wage. The last time I tried
accessing a job, I was sent to two security offices and told to
fill out forms for access to the base so that I might be
granted access in 30 to 60 days.
And my final point here, access to project personnel. The
project lead services I employ have contact information, but
the information sometimes is inaccurate, or I do reach someone,
just not the right someone who I would like to speak to about
projects on the base--for example, maintenance managers,
project managers, even possibly a base commander. If there is a
website, a publication, a phone number, or an office I need to
visit to access this kind of information, I would greatly
appreciate that kind of assistance.
These points I have relayed are only a few. I feel a
cohesive relationship with the bases and local area residents
as well as the small businesses will yield immense cost-saving
measures each week for everyone.
That is all. Thank you.
Chairman KIM. Thank you for your testimony.
We are going to turn it over to you, Mr. Costello. You are
now recognized for 5 minutes.
STATEMENT OF PAUL COSTELLO
Mr. COSTELLO. Good morning. Thank you for inviting me to be
able to testify on this subject here this morning.
My name is Paul Costello. I am the vice president of
Sciacca's Upholstering and Design Center and C&S Marine.
Sciacca's Upholstering and Design Center is a 75-year-old
establishment with third-generation ownership. We service
residential, commercial, professional clients for all aspects
of upholstery, custom-built furniture, window coverings, and
on-site cleaning services.
C&S Marine was a recent acquisition for us in November of
2017. We hold the sole international license to produce
upholstery for Correct Craft and Ski Nautique boats. We have
eight dealers internationally and private clients worldwide. I
am also the president of the Del Ran Business Association and
an officer in the Riverside Business Association.
I feel that our local small businesses can provide
ancillary services that the Government is not prepared, nor set
up to provide, such as specialty services, customized items,
and large-scale refurbishing and manufacturing. There are
hundreds of businesses in the Burlington County area that can
provide these services to the military bases. The key is that
they need to know how to connect and become properly
registered.
The action of cultivating a relationship between a small
business owner and a military base is tremendous growth for
that private business owner. The necessary documents,
certifications, and credentials must be completed to be
considered for available projects.
My suggestion here for expansion is, one, keep the costs
within reach so that a greater number of small business owners
can join the program; and encourage the people that award these
bids to seek out the small vendors for specialty items; and
lastly, if it would be possible for the base to hold
registration events for small business owners to attend to
learn about the opportunities that are available at the base.
My personal thoughts and experience in attaining a SAM
registration, CAGE number, and having produced a Government-
friendly website for our business has been a large financial
commitment. In the past year, we have seen only a handful of
bidding opportunities related to our services. Most have been
outside of our immediate service area.
As a company, we have devoted our time cultivating military
relationships by attending quarterly commander luncheons hosted
by the Burlington County Regional Chamber of Commerce, and we
have also been ambassadors for ranking officers at events such
as the Annual Installation Dinner for the Burlington County
Regional Chamber of Commerce.
In closing, I truly thank you for your time and attention
today and would be happy to respond to any additional questions
you may have.
Thank you.
Chairman KIM. And thank you for your testimony.
We are going to move on. Mr. Mercado, you are recognized
for 5 minutes.
STATEMENT BY RAUL MERCADO
Mr. MERCADO. Thank you, Congressman, for having us here to
give our testimony.
I am the director for the statewide PTAC here in New
Jersey, where the NJIT Procurement Technical Assistance Center
is one of 94 PTACs throughout the U.S. So as I was
contemplating what I was going to testify here, a lot of what I
am speaking on now is probably relevant to some other PTACs
throughout the Nation because a lot of us kind of share the
same pains and challenges and successes also.
We have been hosted by NJIT for--this is our 36th year.
Today is the first day of our fiscal year. And over the course
of those 36 years, we have been successful in assisting small
businesses acquire over $20 billion in contract awards. Just
this past year, as I looked at the numbers this morning, $680
million in contract awards for the past fiscal year. That is a
significant chunk of opportunities that have been made
available through our resources and our assistance with these
small businesses.
We are not just tasked to work with small businesses. We
also assist large concerns, large Government primes in
identifying and connecting with qualified small business
vendors, so--in order to help them achieve their small business
subcontracting plan goals. So that is a connection that we have
made in the last several years in making sure that large
businesses are also part of our portfolio so that the
opportunities will continue to expand for the businesses here
in New Jersey.
And the way that we have been doing this is through
strategic relationships with like-minded organizations. We work
hand-in-hand with the Veterans Chamber, Mr. Cantor here, and
other chambers, other organizations that have a small--that
work with small businesses, and that has helped us reach in a
little deeper to the New Jersey-based business community. We
identify a match based on needs, goals of the organizations, as
well as the small businesses and the large businesses. We look
at the capacities and capabilities of other organizations that
we work with.
So there are certain things--because we are funded by the
Defense Logistics Agency, there are things that we can't do,
but some other organizations can do. So we complement one
another. We work together for a common goal or to increase
opportunities for businesses here in Jersey. In doing that, we
start building trust, and it is through finding mutually
beneficial and often complementary service offerings that I
just mentioned.
There is a lot of communication. Communication is very
critical. We also have to take calculated risks many times. And
without risks, there are no--we can't continue to do things the
way we have done in the past. And oftentimes what we do is
there is a unified message when we are working with these
collaborators throughout the region and the State so that we
can all reach our common goals.
One of the things that happened earlier this--well, earlier
this year, in May, I got contacted by the joint base, and they
wanted to do a Pitch Day. So within a matter of 24 hours, we
were able to set up some training for small businesses that was
focused on them being able to do pitches to--effective pitches
to buyers.
We also do SAM registration workshops. So we focus more on
SAM registration workshops because there were a lot of startups
that were probably going to be participating in this. And you
read the numbers on that Pitch Day. They were pretty
significant for a 1-day pitch and a 1-day buy.
Since then, we have--MacDill Air Force Base is having a
Pitch Day today. We assisted them with that as well, although
they are outside of our region. There is at least one of our
small businesses that is based here in New Jersey that is
pitching today in Florida at MacDill Air Force Base.
So there are a lot of opportunities. This whole Pitch Day
thing is--it is a huge change and new initiative because it is
something that was set up by the Department of Defense that is
out of the Federal Acquisition Regulations to kind of fast-
track these innovative solutions, and how do we do that in a
way where we can have it done expeditiously and capture those
innovations in a constructive way and in a fast manner?
Some of the barriers that we found is that although there
are 94 PTACs and there are millions of dollars allocated
through the DLA, the Department of Defense for the PTACs, there
is a huge lack of awareness of the resources that PTACs have
available.
And there is also the fact that there is inequitable
funding of the PTACs. Let us say a statewide PTAC maximum for
statewide is $750,000 that the DLA helps match. Now that is
going up to a million. But a regional--and we have one regional
county here--receives right now 450. That is going up to 650.
And then, Congressman Kim, you mentioned being in this
region, how expensive it is. It is totally--the money that we
receive and what we can do with that money here in the New York
metro area doesn't--can't compete with what the expenditures
are out West or the Midwest.
Let us see. So I think that some of the things that are
barriers are access to knowing about future purchases, which is
mentioned by one of the speakers, one of the testimonies here,
burdensome documentation for small businesses. The legislation
regulations are not keeping up with the times.
I think the DOD did a great job with the CSO. I forget what
the CSO is, but you have that in my documentation. The CSO is a
new way for them to do business and that allows them to do the
Pitch Days, so getting more creative with the legislation and
the regulations.
And then oftentimes what happens, Government kind of
dictates what should be done for small businesses, and this is
a refreshing--I have been doing this for over 20 years, and
this is the first time in 10 or 15 years that someone or a
Committee in Congress has--I have been involved with you asking
us what are the needs, and often it is top-down. This is what
we are going to do. This is the legislation. It sounds really
good on paper, but it doesn't work because we don't have the
small businesses involved, we don't have these organizations
involved, and that has been an issue in the past. And I am
looking forward to some big changes with our testimony and as
you go across the country.
Another big thing is when you talk about Government
contracting, what is missing oftentimes, and for a lot of us we
don't think about the large Government primes that will always
get the bulk of business. Cars will continue to be manufactured
by the large car manufacturers. The planes and helicopters will
continue to be manufactured by those corporations. Now those
corporations have small business subcontracting planned goals.
The issue is that often they can't meet those goals, and that
becomes an issue for us because they should be taken up to
task. They need to be part of this equation.
If we are looking to expand opportunities at the bases
across the U.S., then we need to tell these large corporations
you need to be at the door because we need people to retrofit
seating, to build the bolts, to provide raw materials. And
until that happens, we are losing a lot of opportunities
because there is a lot of money there, and these large
corporations cannot do it by themselves. They don't do it by
themselves. So we need a fast track to those dollars that are
available to the large manufacturers and Government
contractors.
Possible moves for success with this initiative to expand
opportunities for small businesses at the bases. Maybe we
should--or you should consider or somebody should consider one
national point person to act as a czar or to build
relationships at these communities.
As the director of an NJIT PTAC, I am actively connecting
the dots between manufacturers, organizations, chambers of
commerce, whatever it may be. But in a national scale, if we
are looking to increase opportunities for small businesses at
the bases, we need someone who is a go-to person.
Unfortunately, at the bases what we have are very dedicated
staff members, but they change every several years. So they
have a job today. Three years from now, they are gone. So what
happens to those contacts?
I am, right now, an honorary commander working with the
87th Contracting Squadron, but I don't know how long that
command--the lieutenant colonel is going to be there. So what
happens when there is a switch?
Okay, so we need to build those relationships nationally,
to build relationships, to identify resources, make long-
lasting continuity connections and increase the commitment to
funding and supporting PTACs. PTACs, you know, require
legislation, equitable funding. And when a constituent comes to
see you, refer them to the local PTAC because that is a way for
them to get that assistance.
And please don't forget the ``Dear Colleague'' letters that
go out to support the PTACs. We are a service here. We are here
to serve, and we are proud of serving and making a difference,
but we need your help.
Chairman KIM. Thank you. Thank you for that testimony.
Mr. Cantor, we are going to turn it over to you for 5
minutes. You are recognized.
STATEMENT OF JEFF CANTOR
Colonel CANTOR. Thank you, Congressman. And I offer this
testimony in the lens of a veteran, a veteran small business
owner, a certified SDVOB, SBE, and hopefully soon, a certified
HUBZone. Prior to that, I was Governor Murphy's veterans
adviser during the campaign, and last year, I was the lead for
economic development in the State of New Jersey.
So thank you, Congressman Kim and Honorable Members, for
allowing me to offer testimony on the issues affecting small
and diverse businesses here in New Jersey and beyond. My name
is Colonel Jeff Cantor, and I represent the 668 members of the
New Jersey State Veterans Chamber of Commerce.
In the 32 years I spent in the military, I was always
taught to deliver the bottom line up front. So here it is.
Small and diverse businesses in the State are not getting their
fair share of procurement opportunities and experience
unfriendly conditions to operating their businesses in our
State. There are seven key areas that Federal intervention
could have a profound effect on small and diverse businesses,
which I will share with you in my testimony.
To provide context, I will share with you that New Jersey
has two set-aside laws currently on the books. One is for small
businesses, and the other one is for service-connected,
disabled veteran-owned businesses, or SDVOBs. The SDVOB set-
aside law, which is Public Law 2015, Chapter 116, has been
public law since it was passed unanimously in 2015. Since that
timeframe, roughly 3 1/2 years, not one contract has been set
aside, and no money has been awarded to SDVOBs under the
program.
There are seven key areas where Federal intervention would
have a profound effect on supporting small and diverse
businesses.
First, it would be advisable to add veteran-owned and
service-disabled veteran-owned businesses to the Federal
definition, according to the U.S. Department of Transportation,
as a disadvantaged business entity, or a DBE. The current
definition only includes African Americans, Hispanics, Native
Americans, Asian-Pacific, subcontinent Asian Americans, and
women who are presumed to be socially and economically
disadvantaged. Other individuals can also qualify as socially
and economically disadvantaged on a case-by-case basis.
Veterans have a tougher time gaining access to capital, and
since their service was usually away from their home State,
they do not have the networks that other businesses have
developed. Veterans and service-disabled veterans are truly
disadvantaged business entities and need to be included in the
Federal definition according to the U.S. Department of
Transportation.
Second, there are not very many service-disabled veteran
businesses in this State and in many others. It would be
advisable to introduce an SDVOB price preference law at the
Federal level of 15 percent to accommodate for this shortfall.
Many States have implemented a price preference law for
SDVOBs because of the lower number of businesses. A 15-percent
price preference law is needed in New Jersey and for the
Federal Government. This would allow SDVOBs to compete in the
open bid process. States like Michigan and Connecticut have
already implemented these laws and have seen success.
If the lowest bidder on a project is $100,000 and an SDVOB
comes in at $112,000, under a 15-percent price preference law,
it would mean that the SDVOB was the lowest technical bidder.
Since we are not talking about a lot of businesses--there is
actually 65 currently registered in the State of New Jersey--it
would have a profound and positive impact on the SDVOB
community with minimal risk and negative impact on the business
community at large.
Third, the Small Business Association has been a good
partner to small and diverse businesses. It would be great if
the SBA could expand their program to veteran business entities
to provide greater access to capital, insurance, and bonding.
These programs are needed as there are a dearth of programs
available to support VBEs, veteran business entities, and allow
them to take their businesses to the next level.
Bonding and insurance costs are extremely high and can eat
up the cash flow of a small business. Additionally, it is very
difficult to obtain an appropriate amount of surety bonding
without having to sign your life away and risk losing all you
have worked for.
Having the SBA roll out a program that is accepted at all
Federal and State entities would relieve an enormous amount of
stress on veteran entrepreneurs and allow them to compete for
larger jobs, which would also allow them to hire more people.
Fourth, the system for doing business in the New Jersey is
very complicated to navigate. Right now, an SDVOB has to
register with the VA to get the CVE certification. Then they
have to register with the New Jersey State Department of
Treasury, then with the Division of Purchase and Property, then
with the Division of Property Management and Construction, then
with New Jersey Transit, then with the Turnpike Authority, then
with the utilities, then with the Port Authority, and so on and
so on. This takes time, money, and effort away from the
business owner. Instead, there should be one universal
registration portal in the State. Once a diverse business is
registered, they would be pre-qualified with all State
entities.
Unfortunately, there is no money in the State budget to
allow for a universal portal system. Getting a grant from the
Federal Government to roll this out would be advisable and
welcome at State government levels. The cost of a total
universal portal system would likely be $1 million to $2
million.
Fifth, there needs to be transparency of small and diverse
spending at every Federal entity. Transparency in government is
an extremely important tenet. There should be a mandatory
listing on every Federal entity website that operates in New
Jersey as to their small and diverse spends. It should be easy
to find out how much the FAA or DOD or DLA or the U.S. Army
Corps of Engineers, and so on, spend on African-American
businesses, Hispanic businesses, women businesses, veteran
businesses, and service-disabled veteran-owned businesses.
There should be a percentage of overall annual spends, as
well as the actual dollar spends, by diverse group so we can
see they are primarily spending--how they are spending taxpayer
dollars. Those dollars should represent the diverse background
of our State.
Sixth, there should be greater opportunities on Joint Base
McGuire-Dix-Lakehurst and Picatinny Arsenal for veteran and
service-disabled veteran-owned businesses. I know the folks at
the small business office on the joint base, and they do a
tremendous job. They do a great job of communicating and
working with the Veterans Chamber and with the veterans
community. When we have them speak, they do discuss their
diverse spends. They have initiated a small business
roundtable, but I have not seen any action to date which would
support small and diverse businesses.
Having procurement opportunity fairs on the bases would
help bring small and diverse businesses to the procurement
specialists on base. There should be some type of training
program that can be rolled out. If an SDVOB did not get a
specific contract on the base, then they could sit with the
small business office and go through their bid and compare it
to the winning bid to understand the differences and can show
improvement in the future. That would be very valuable for
SBEs.
And seventh and finally, there needs to be more joint
venture and mentorship opportunities with Federal contracting.
By creating joint ventures and mentors, you create seasoned
companies who help newer companies and startups break into the
Federal field. It is extremely difficult to do it on your own,
so having more joint ventures would create additional
opportunities for newer businesses.
I have recently written a white paper that I shared with
the Governor on steps that the State can take to improve its
support on small and diverse businesses. I think I already sent
it to your staff. I provided my contact information for you
should you need any further information.
But I do appreciate the opportunity to come in today to
speak, and thank you for your interest in helping out small
businesses here in New Jersey.
Chairman KIM. Thank you. I really appreciate that. And
thank you, again, to the four of you for giving me and the
Committee your perspective on this.
It is interesting. I mean, I hear similarities. I hear
different nuances between the four of you. And as I mentioned,
when we are in Tulsa, Oklahoma, or Washington, D.C., for these,
it is interesting because some aspects of this are unique to
certain communities, certain States, but other aspects are
broader and national in those perspectives. I mean, that is
something where I am trying to get a better sense of this going
forward.
I certainly hear on a regular basis what it is that we can
try to do, you know, here in New Jersey to be able to support
and work with the joint base, work with Picatinny, work with
other installations, other Government offices to be able to
improve. And we are trying to figure out, you know, are there
lessons learned from other States that we can implement here?
Are there certain things that we can do nationally to be able
to get at it?
There are three aspects of this that I feel like are some
commonalities that I would like to just get--to dig into a
little bit more, but let me lay it out first.
One is that what seems like a constant thread amongst the
four of you, along with many others, is what can we do to
remove barriers for small businesses when they are engaged in
this type of work or trying to proceed down those roads?
Two is that there is an ongoing difficulty in terms of just
the opaque nature of this and just the difficulties of
navigating, you know, some of the--what Mr. Whittington was
talking about earlier, about just what is the transparency side
of things or future projects, just so you are aware of what is
on the table or going to be on the table so you can better
prepare.
And three, I think that hits at an issue of just what is a
sense of fairness in the system as a whole to make sure that it
is not just those that have the most connections and the
biggest presence down in D.C. or the deepest history with
working at a particular installation or with the Government,
but that, you know, others have opportunities to be able to
have that.
And I think that a lot of what you have said kind of fits
into some of those buckets. Of course, if there are other big
aspects of this, please let me know. But I would like to just
kind of go through them kind of one by one and just kind of get
some of your deeper takes on this.
So, you know, for instance, this question will be for all
four of you, but I would like to start with Mr. Mercado. You
know, one thing that you mentioned was about the burdensome
documentation. That seems like an area in which there are, you
know, barriers there, too. And I would like to just kind of
learn a little bit more from you, you know, what specifically
you are talking about, you know, any examples you might have or
any thoughts you might have on how we can try to make that less
burdensome for small firms.
Mr. MERCADO. Well, first of all, understanding the process
or responding to RFPs is a big issue. The Federal Acquisition
Regulations, they are what they are. They are pretty difficult
to understand, and that is something that we assist clients,
navigating through that. But it is still quite a bit to handle
for a small business who may be doing $10,000, $20,000 in
business and needing to understand how they process an order,
how they deliver an order.
And I can understand why the regulations are there and
things are supposed to be uniform in a lot of ways, but
sometimes it is not a one-size-fits-all. There could possibly
be some exceptions to those rules when it is something that is
not a bolt that is going on a helicopter or something that is
not as crucial as something that could be lifesaving or
something that the warfighters need out in the field.
It is cumbersome. It is difficult to understand. It is
often--even for those of us who have been doing this for many
years, to kind of grasp what is happening. There are a lot of
new changes in certifications and regulations that are
constantly coming down the pike.
Now we have this issue of cybersecurity, which is not going
away. And so there are some guidelines, but there are no
stipulations or real solutions as to how to handle that as a
small business. I mean, the list goes on and on. It is just--it
is very difficult.
It is good that the PTACs are here. I know I keep on
referring to the PTACs because I--although we are here in New
Jersey, but it is a common issue throughout all the PTACs, and
we do try and assist wherever possible. But it is daunting for
a small business to start playing in this field.
The gentleman here on the left, Mr. Whittington, was
talking about going out and doing wage rate interviews. Okay,
that is what you were referring to.
Mr. WHITTINGTON. Yes, sir.
Mr. MERCADO. If you can't do the wage rate interviews, then
you are not in compliance with your contract, and that can--
that is very detrimental.
So things like that have to be addressed because it is part
of his responsibility. If he can't do that----
Chairman KIM. Yes.
Mr. MERCADO. Then it is a problem. So it is all these
little things. And I don't think we can address that here, but
we should be having more roundtables as to how can we handle
this in these different areas.
Chairman KIM. Yes, and I think it gets to what you were
saying earlier just about, you know, too often the Government
trying to tell small businesses how to be able to operate,
rather than understanding what--you know, what the experience
from your end is.
And Mr. Costello, something you raised, you know, along
this idea of barriers that are there, you know, you mentioned
and alluded to financial burdens, you know, as another
impediment to doing business with the Government. So I would
like to hear just a little bit more from you about that in
terms of what are some of the costs that small businesses such
as yours incur in order to try to offer its products to--and
services to the Government, and why is it so expensive.
Mr. COSTELLO. Yes. The cost of it was for us to actually
set up and register as a--get a SAM registration and a CAGE
number, and then we were informed that we needed to have a
Government-friendly website because of the people that do the
bidding and stuff. They have to have a certain area on the
Internet that they can go to and not be on the Worldwide Web,
but a certain area that they are allowed into. So that was a
cost involved to us to have all of this set up.
And we went through a third-party company that did this for
us that was on the Government website when we went to register.
It said you have to contact these people here. So we contacted
them. Of course, then we found out there was fees and costs
involved in doing it, which we figured would be, you know,
offset by eventually starting to do business with the
Government. And then nothing came of it, nothing in our local
area that we could service.
And now hearing all of the other stuff that we may have to
do once we get that bid, it would be pretty daunting for a
small company like ours.
Chairman KIM. And that is helpful.
And I think, Mr. Whittington, I mean, I think one thing you
mentioned kind of fits into this in a different direction. I
mean, sure, some of the other points that were just mentioned
are ones that you struggle with as well. But one that kind of
stuck out to me that you talked about was just about the
security side of things as well, in terms of getting people and
workers actually on the base or on a different installation.
So I would like to hear from you just a little bit more
about that in terms of the security clearance process on your
end, elements that you saw that might be able to be expedited.
But things that--you know, that sounds like it is another
barrier in addition to the financial burdens or in addition to
paperwork. But I would just like to hear about that a little
bit more from you.
Mr. WHITTINGTON. Thank you.
I am one of the largest advocates, I would say, on
security, especially at the bases, with the past decade-worth
of incidents we have had on the bases. You know, it has been a
bit scary. But that being said, I also have the obligation to
my members, to the building trades to help form a more cohesive
relationship with the bases.
And in respect to what you are asking, it would seem that
there might be an easier process to vet, you know, my members,
vet myself to be able to go on, instead of a 30- to 60-day, you
know, background check, which I more than advocate for. But it
seems--doesn't seem to be a good way of doing business on the
base.
I hate to sound so--you know, lay on it, but it doesn't
work. It just doesn't work.
Chairman KIM. Let us say you go through that process. In
the 30 to 60 days, you get a clearance. How long does that stay
with you?
Mr. WHITTINGTON. I was told I would have clearance, you
know, during the term of the job, you know?
Chairman KIM. And then if there were to be a subsequent
job, you may have to----
Mr. WHITTINGTON. Again, yes.
Mr. KIM.--go through it again?
Mr. WHITTINGTON. Yes. And thank you for elaborating on
that. I appreciate that. Man----
Chairman KIM. Because I think for----
Mr. WHITTINGTON.--I mean, you have said it. You have said
it best, to be honest with you. That would--that is my major
concern right there, access and the ability to access these
jobs on the base once you are cleared.
If my members can go through in a gate, show a card, sign
in and go in, you know, they have been vetted through the
contractor. You know, they submit their information. They do a
background check--could be 15 days, 30 days--why is it that,
you know, another person who, in relation to that job, has to
take 30 to 60 days to--you know, for the same background check
on multiple----
Chairman KIM. Yes, this is something that we will make sure
we dig into a little bit more here. We don't have a
representative from the base here.
Mr. WHITTINGTON. Right, I understand.
Chairman KIM. And there may be a process there that--but it
kind of goes added to what you were saying earlier, just the
process being a bit opaque, at least from your perspective
there.
Mr. WHITTINGTON. Right, right.
Chairman KIM. And what is it that we can do or others can
do to just try to clarify. I have often found that--you know, I
have often found, certainly at the joint base and Picatinny,
and a lot of the places here in New Jersey, that a lot of the
folks there, they want to make sure that they are connecting in
with the communities. They want to make those opportunities
available to people. And I found them very accommodating to try
to make certain things happen.
And I find that sometimes there is a disconnect between
what it is that they are putting into processes and then how it
is being implemented or how it is being perceived or received.
But I think your point was really spot-on. I mean, look,
all of us want to make sure that we are continuing to have
security on these bases. You know, I was a career prior to this
in national security. I lived on military bases before. I
understand how important that is.
But we also want to make sure that we are able to really
draw on the community in the same way that we here in New
Jersey want to absolutely embrace the joint base and embrace
all of the other installations that are so important because we
are proud of it.
Mr. WHITTINGTON. Yes, absolutely.
Chairman KIM. And they are great for our economy, for our
communities. But we also want to make sure that there is a good
relationship, and it is not isolated and closed off from the
communities because that--I mean, you know, I remember growing
up here. We used to just be able to drive through the base, and
obviously, after September 11th, that is no longer doable. And
I have seen a change just over time, and I am sure that is the
same with communities across this country. So in this era where
we have heightened concerns about security, of course, how can
we try to find that element? So I absolutely want to work with
you on that.
And I think, Mr. Cantor, you know, you raised a point as
well. That just sounds so frustrating about how, you know, a
business--a veteran-owned business, how they have to get
certifications, you said, from the VA and then from elsewhere.
I mean just having to constantly go in that kind of process.
I mean, I am sure you have looked into this and others, but
you know, what are the barriers to try to streamline that
because then, you know, you also have the Federal side of
things, but then also the State level.
So I guess my question to you is that I am sure that we are
not going to be the first to try to streamline this process and
see what we can do. Others have tried before.
You know, what have been some of the barriers there to try
to get a system that is more respectful of the time of small
business owners that, frankly, don't have the time to just
constantly jump through these hoops? You know, it is usually
just them or just a handful of employees. This isn't some big
corporation where they have an entire division, you know,
dedicated to handling Government work or legal work, right?
So I guess I just kind of want to get a steer from you of,
you know, where do you think we can be putting our energy or,
you know, what are some of the other areas that we should be
looking into here?
Colonel CANTOR. Thank you for the question, Congressman.
So a couple things. With regards to the certification
process, I will tell you that it eats up 80 percent of your
time. As a young entrepreneur, it eats up 80 percent of your
time.
You should be focused on business development. You should
be focused on, you know, trying to find work to sustain your
business. But you can't play in that game unless you have the
certification, so it is sort of like a catch 22.
So for me, for my example, I own a construction company
here in New Jersey. I applied to the VA with the help of the
PTAC, I might say, so they have been very, very helpful in
helping me get my certification. And even with their help, it
took me 6 months to get that certification.
Chairman KIM. Six months.
Colonel CANTOR. Six months. And that is on the fast side.
That is on the fast side. The time I did this before, it took
over 9 months.
And what I tell people in the Chamber when they are going
for the certification is plan on a year, plan on not having
your CVE certification in a year's time.
Now what we were able to do, as part of the advocacy from
the Veterans Chamber, is we were able to get the State to
change the verbiage in the rules and regulations on certifying
as a service-disabled veteran-owned business in the State of
New Jersey. So now you have to supply a DD-214, which is your
proof of service, and if you have a letter from the VA stating
that you do have, in fact, a service-connected disability, then
you are eligible to become a service-disabled veteran-owned
business in the State of New Jersey.
Unfortunately, with the 3-percent set-aside law the way it
is, it doesn't really help because there is not business to be
had right now in the State of New Jersey. So you have to go
elsewhere, like New York and Pennsylvania.
So for me as a business owner, I spent an inordinate amount
of time getting certified with the VA, getting certified in the
State of New Jersey, getting certified with Pennsylvania,
getting certified with New York, so that there is business
opportunities. So I can play in a lot of these games, and I can
apply for work. And that is just the ticket for entry.
Now I have to work on building on my business, right? Now I
have to work on, okay, for FedBizOpps, all these jobs come out.
I have to look closely. And you know, these RFPs are not easy
to work through and translate. Some are hundreds of pages long.
And you go through these RFPs and you could literally hire like
four other people just to go through the RFP process to put a
bid in for this--for any specific job. So it is a painful
process. It is a process that is at hand. So that is the
environment we are playing in.
But I would tell you that the thing that I think if you
were able to focus your efforts on, the two most important
things, number one is we understand that we have to wait this
amount of time for the CVE process through the VA, to get
vetted and certified as a disabled veteran-owned business. In
that interim, what we can do or what Congress could do is to
get the Department of Transportation to recognize veteran
entities--veteran business entities as a disadvantaged business
entity. That will shorten the amount of time it takes for
veterans to compete in a lot of these jobs that are currently
available as a DBE, as opposed to waiting for their SDVOB.
So that would be job number one, would be get the veteran
business entities recognized, U.S. DOT, as a DBE. Second, to
support our disabled-veteran business community, is to have
that price preference, have a national price preference, 15
percent, to support these disabled-veteran businesses.
That is the only way that disabled veteran-owned
businesses--because they don't necessarily have the ability to
scale up for any specific jobs, so the only way they can
compete, truly compete, is to have a 15-percent price
preference.
Chairman KIM. Thank you for that.
Just going back, I mean, you know, Mr. Costello, I thought
a point you just kind of made in your last response was
interesting. I mean, you were talking about the barriers that
you had to go through just to get off the ground and then you
were remarking of what you are hearing about the road forward
here.
I guess my question to you is just what are you thinking
about as a business owner about the return on your investment
then? You know, when you are thinking about these financial
burdens, when you are--you know, the paperwork and you are
hearing now about some of these other things, like, you know,
if you were to kind of start over again knowing what you know
now, how would you feel about the return on your investment and
what it has to undertake to offer your products and services to
the Government?
Mr. COSTELLO. I would definitely reconsider, especially out
here, the paces we have to go through once we do, you know,
submit a bid. But we thought, you know, going forward with this
would be a great opportunity to have the service. We are a very
mixed business, and there is--anywhere we go, anybody is a
potential customer for us. If there is like something at home,
it has got a window. With the Government, at the base, every
aircraft carrier or every airplane has a seat in it, at least
one. The base has multiple seating areas where, you know, money
could be made.
So that is what we initially looked at was the volume of
work that was available to us at the base. And then once we got
started with it, we figured, okay, this is just a start-up
cost. We will, you know, start to see some return on it, and
then we haven't seen anything yet.
But now another example, just to keep going--but what is
going to come down the road next, I don't really know if it is
a fit for a business that is as small as we are.
Chairman KIM. Yes.
Mr. COSTELLO. Again, I don't have, you know, an entire
staff dedicated to going through the process doing all that
other stuff.
Chairman KIM. Well, I think that is very reflective of, I
am sure, what a lot of other business owners think across the
board here, right, and--absolutely.
And Mr. Mercado, I was going to turn to you anyway. You
successfully made PTAC the official acronym of this hearing.
That is definitely sticking in all of our minds here.
So, you know, I love your perspective on just that
question. But I guess I also just want to ask you just a little
more detail about workshops that you guys are doing or other
information you provide, and like what are some of the things
that you are doing that you have seen to be most effective or
most supportive or providing that kind of assistance to small
businesses?
You know, when you hear what Mr. Costello was just saying,
what goes through your mind in terms of what it is you might be
able to provide or other things that we might be able to do?
Mr. MERCADO. Well, let me go back a little bit and just say
that I have been on the small business end, and that is kind of
why I ended up here because of the frustration I had as a small
business owner and seeing developments coming up and thinking
that--I had a liquor license, and I thought it was going to be
worth millions. And it turns out that the city gave licenses to
these big conglomerates for a song and dance, and all the
licenses along the waterfront were basically worthless.
After that, I got into small business development, and then
I am here today as an advocate to small businesses and to take
that frustration, rather than being frustrated, let us see what
I can do to effect some change.
And years later, now I am at the helm of a PTAC here in New
Jersey statewide and, again, changing everything the way it
used to be done, and now we are focusing more on value-added
training with webinars, live sessions with subject matter
experts helping people.
Colonel CANTOR. Do you have an expo?
Mr. MERCADO. Huh?
Colonel CANTOR. Do you have an expo?
Mr. MERCADO. We have a matchmaking conference. Okay, you
mentioned Procurement Expo, but everybody has Procurement Expo.
Our expo was a little more difficult to put together and
more costly, and it is a big headache for us. But guess what?
At the end of the day, what we want is to connect the dots
between a small business, Government buyers, and large primes.
So, yes, we may not make--we may not be doing 500 or 1,000
people coming into the event, but we can have several hundred
people connecting with potential buyers. So we have doing that
for the last 3 years, and we are looking to gain more success
doing that.
We do one-on-one counseling. So as you come in--when Jeff
came--Mr. Cantor came in to us, he was just getting started,
and there is a lot of unknowns. Yes, somebody wants you to get
certified here. They want you get certified there. So we assist
through that process.
Now, mind you, we are short-staffed and we don't have that
much funding, but we try and do as much as we can. And you
know, we would like to help everybody with their
certifications, and we try and do that. So now we are going
from individual classes and individual one-on-one counseling.
We are trying to do group counseling--I mean group sessions so
that we can get everybody in a room and do the SAM
registrations, rather than doing them individually. We have bid
match services that kind of connect you to bid opportunities
that are coming your way.
The issues with the bids, whether they are Federal or they
are private sector, is that you usually don't get much lead
time. You are lucky if it is a 4-week lead time. And by the
time you find out and look at it, you may have 1 week to
respond. I don't see that changing anytime soon, but we try and
assist--we assist through that process, also.
As you are putting the proposal together, we are reviewing
the proposal. Before you submit the proposal, we will review it
and make sure that your I's are dotted and your T's are
crossed, but it is a big endeavor.
And we--and the certifications, oh my, God, it is just
unbearable. New Jersey has a certification. New York has a
certification. There is the small business certifications with
the Federal Government. Then there is the VA. And then if you
want to do a DBE type--DOT work, then you have to get DBE
certifications as well if you want to do work at the airport.
Right now--recently, a lot of those DOT certifications have
been unified now so that now you don't have to certified here
in New Jersey and also in California, you know, so that is kind
of a win. But the certifications can be daunting, and you have
to keep them up. It is either once a year or once every 3
years, and there are charges for them.
But you know, we are in New Jersey. And I am almost a
lifelong resident of New Jersey. I was raised here. Born in
Brooklyn, raised in Jersey City. But when I look at what New
York State has done, and they have--what is the percentage they
have----
Colonel CANTOR. They have--well, they----
Mr. MERCADO.--for veterans?
Colonel CANTOR. Six percent.
Mr. MERCADO. Six percent.
Colonel CANTOR. Set aside.
Mr. MERCADO. Set aside. And they got--they are actually
doing business with veterans, and they are certifying New
Jersey State veterans as well. I think we have lessons to learn
from New York State.
And I remember when Governor Cuomo came up at the Small
Business Forum a number of years ago, and he upped the
percentage up to 25 percent.
Colonel CANTOR. Now it is 30 percent.
Mr. MERCADO. Now it is 30 percent. And we all thought--I
thought he was losing it. But guess what? New York is doing it.
And why can't we do that here in New Jersey?
Chairman KIM. Yes, I think you are right. I mean, look,
there is no single layer of government that is going to have
all of the solutions to this.
And I am trying to be--thinking through, you know, what are
the different strategies that we can be having, you know, at a
local level, at a State level, at a Federal level, from a small
business angle, from an armed services angle, and trying to get
at this.
And I think it goes back to what I was saying earlier of
just, you know, what is our sense of fairness, you know? And I
think a lot of these issues are structural and systemic
problems that deal with just the rigidity of the regulations
and the systems that are there.
But some of it is also just--I think the right word would
be, you know, maybe more personal in this way in terms of, you
know, how we try to navigate within our own communities.
And, Mr. Whittington, I just want to go back to you on this
one. I mean, you know, you have laid out your frustrations on
the transparency side and the lead time, a lot of the things
that we have talked about here. I know this is an issue that
has been, you know, frustrating for you and others for years,
and so I don't want to make it seem like we are just
discovering that this is a problem, right?
Mr. WHITTINGTON. I understand.
Chairman KIM. Like we absolutely want to make sure that we
have local workers having a fair shot at the type of projects
that are going on, whether for joint base or for any Government
operation. And when I see construction projects happening at
the base, I am just thinking are they bringing in local
workers? Sometimes they are not, and I am trying to get a
handle on that.
So, you know, I guess I would just like to get a sense from
you just, you know, personally, as you have been trying to get
a sense of what is fair for local workers, what have you tried
before, and what have been some of the barriers that you have
connected in? I know you have tried to engage with different
people working at the base and other things like that. What
have you seen to be maybe successful? What have you seen to be
some of the problems?
And then on top of that, I am sure one of the things you
probably mentioned is the fact that there is just such
turnover, too, you know once you start building a relationship.
You know, we have a new commander--base commander now who just
came in, and we will have to start building these relationships
again and then in many ways just feel like we are kind of
pushing back up those same hills. Each time, hopefully, we
learn, but I would just be interested in hearing your
perspective of it.
Mr. WHITTINGTON. Thank you, Congressman.
I guess you brought up an important point about the
turnover that--not to be redundant, but that is an important
point. You know, these gentlemen here have expressed their
concerns about the fact that--you know, the turnover. You form
a relationship, they leave 2 years later, a year and a half
later. You know, you are doing great there, next thing you
know, the new commander--I will just use one, for example--
comes in, a new agenda, new opportunities, new ideas. It may
not be conducive to the way you were doing business prior.
Sure, we have to adapt and work with the new--you know, the new
commander.
But in any case, some of the other frustrations there, as
you mentioned, I guess, would be--you know, I have to admit
that I am relatively new in this position, okay, so it is been
great learning, you know, the new ways and the new ideas, who
to approach, who to talk to. There is a lot of community.
Burlington Chamber Regional Commerce, you know, they have a
great packet you can start with. You know, it is a good
starting point. But where do we go from there? You know, where
do we go? Who do we talk to?
These gentlemen here provide excellent opportunities, you
know, but how do we get that information out to the small
businesses? How do they even understand who to talk to, where
to go to, unless I stumble upon them, unless Mr. Mercado or Mr.
Cantor or Mr. Costello has an opportunity to talk to them?
Chairman KIM. Who is the point person?
Mr. WHITTINGTON. Right, exactly. Excellent point. Maybe one
national point person or point office, you know, as it was
suggested. Excellent, you know?
And personally, it is--I can only say, personally, it is
been a great learning opportunity, as well as frustrating, to
learn how cumbersome it is to, you know, grasp as I start to
grow. It is almost like an endless the more I know, the less I
know.
Chairman KIM. Well, look, we are all going to be working
together to try to figure out, you know, a way in which we
could try to address some of these issues. And you know, each
of you brings a great perspective here, and certainly, we will
be laser-focused on trying to figure out some of these steps
forward.
Before we start to bring this to a close, Mr. Cantor, I
just wanted to turn back to you. I would be interested in
hearing, you know, your reactions to what Mr. Whittington was
saying about some of these struggles, just getting the
transparency, focused on that, but a little bit more of just
what your understanding is. You know, what, in your mind, is
that fairness level? You know, what is it that we are trying to
be pushing for?
And I thought also, you know, a part that you mentioned
earlier, which was about being the subcontractor side of things
there, too, you know, so--you know, that you and Mr. Mercado
were talking about.
So I would love to just kind of hear any sort of final
thoughts in your mind, as you provided us a lot of really
concrete, you know, potential steps that we can be taking.
Colonel CANTOR. Yes, Congressman, and thank you again for
the opportunity.
The one thing that I would address is that in 2021, it is
likely that we will face another BRAC hearing. And to dispel
the presence of the joint base going away in a BRAC--because, I
mean, we had this happen in New Jersey with Fort Monmouth--the
most effective way to counter a BRAC is to show the economic
vitality that the local community has with the joint base,
right? So, and it takes time to do that. It takes time to build
that infrastructure.
So to avoid BRAC, and especially joint base because it
provides a lot of employment opportunities and a lot of
opportunities in general, we need to be able to start now to
showcase how the joint base works with the local community and
how businesses like Mr. Costello's or like mine has an impact,
has interest in the joint base, and vice-versa, right? So
unless we do that, we are going to face what happened to Fort
Monmouth several years ago when that was BRAC'd.
So, as a newly formed entity last year for my business, my
only way forward right now in the--on the Federal side is to
come in as a subcontractor. So I have to build my base of
business to show people I can do the work, but I can't do it as
a prime because I don't have the experience because when you
apply for work in the Federal Government as a prime, you have
to show past experience. So I don't have that as my business.
I have hired people that have past experience with other
companies, but that doesn't count because it is my entity,
right? So now, I am starting from scratch. So the only way I
can break in is at a subcontractor level.
So the issue is, you know, how do you create more
opportunities for businesses like mine, for businesses like Mr.
Costello's as a subcontractor that can be sort of like handheld
with a joint venture or a mentorship program to say, all right,
here we go. I am going to do--the prime vendor is going to do
this. We want the subcontractor to do this part of this job to
test the waters to see, A, how you do and, B, to establish a
base of business so then you can eventually come up and become
a prime contractor.
So I think more subcontracting opportunities is the way
forward, and the way to do that is with more joint venture and
more mentorship opportunities with the joint base. But unless
we are showing a total involvement with as many businesses in
our communities that surround the joint base, BRAC is going to
be ever-present.
Chairman KIM. Well, I appreciate all of your comments today
and the insights that you have been able to provide. As I
promised, I would be mindful and respectful of your time as
well, so we will start to bring this to a close here.
But I certainly feel like I have a clearer idea of some of
the challenges that are out here and what it is that you or
other business owners that you work with are experiencing here.
And it is frustrating. It is frustrating, and I think that
this is exactly the type of work that the Small Business
Committee is trying to stay on top of. And I see it every day
down in Washington that so often on the issues that we talk
about, whether it is about healthcare or the economy or jobs,
oftentimes, we know that, you know, the biggest corporations
and those, you know, they are there. They have their voices
heard, and they are talking about it.
But it is even just difficult for us to get small business
owners down to D.C. to testify because they have got their
business to run. And if they are not there that day or the next
day because they are down in D.C., that means somebody has got
to cover and what kind of trouble. So, you know, this is the
role that the Small Business Committee is trying to play to
make sure that we can be a voice for small businesses.
And I will tell you that it has been truly a great honor to
be able to work on this Committee. And I know you watch the
news and you see the divisions that happen and the disputes
that happen down in D.C., but this Committee is one where I can
assure you I have talked to every single Member on both sides
of the aisle, and they feel very committed to this.
You know, if ever there was an issue that we can rally
around and put aside any differences, it is, you know, looking
out for our small businesses, especially small businesses that
are trying to work to better secure our country and work with
our--support our armed service men and women and our
Government. You know, these are the types of commitments that
we are trying to make sure we lift up and be able to support.
I often say, you know, on the Small Business Committee and
the other Committee I am on, the Armed Services Committee,
these are Committees that really have shown a lot of
bipartisanship in this time. And you know, oftentimes, you
could probably just print out a transcript of these Committee
hearings, especially the Small Business, and just block out the
names, and you won't know who is a Democrat or Republican. You
know, they are just trying to, you know, hone in on this.
So in that vein, as well as the vein of what we said of
just meeting people where they are at, being able to come to
you, talk to you, I just want to again say sincerely on behalf
of myself as the Chairman of this Subcommittee, as well as the
entire Committee who I have talked to extensively prior to this
to make sure I can reflect the questions and the concerns and
the issues that all of the different members are asking, I just
want to again say thank you.
We certainly have our work cut out for us, and I feel like
coming out of this, there are a lot of things that we need to
follow up on. I am sure we will be staying in touch with you,
as well as others here participating today and other small
business owners and others that weren't able to make it. And we
will just, you know, keep at this and do what we can to be able
to support.
At this point, we will start to bring this to a close. So I
am asking for unanimous consent that members have 5 legislative
days to submit statements and supporting material for the
record. And without any objection, so ordered.
And if there is no further business to come before this
Committee, we are adjourned.
Thank you so much.
[Whereupon, at 12:31 p.m., the Subcommittee was adjourned.]
A P P E N D I X
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[all]