[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
MARKUP OF: H.R. 5078, PRISON TO PROPRIETORSHIP ACT; H.R. 5065, PRISON
TO PROPRIETORSHIP FOR FORMERLY INCARCERATED ACT; H.R. 5130, CAPTURING
ALL SMALL BUSINESSES ACT OF 2019, H.R. 5146, UNLOCKING OPPORTUNITIES
FOR SMALL BUSINESSES ACT OF 2019
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
NOVEMBER 20, 2019
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 116-062
Available via the GPO Website: www.govinfo.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
38-351 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
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina
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
APPENDIX
Additional Material for the Record:
H.R. 5078, Prison to Proprietorship Act...................... 14
H.R. 5065, Prison to Proprietorship for Formerly Incarcerated
Act........................................................ 21
H.R. 5130, Capturing All Small Businesses Act of 2019........ 25
H.R. 5146, Unlocking Opportunities for Small Businesses Act
of 2019.................................................... 27
Statement of Congressman Hakeem Jeffries..................... 31
MARKUP OF: H.R. 5078, PRISON TO PROPRIETORSHIP ACT; H.R. 5065, PRISON
TO PROPRIETORSHIP FOR FORMERLY INCARCERATED ACT; H.R. 5130, CAPTURING
ALL SMALL BUSINESSES ACT OF 2019; H.R. 5146, UNLOCKING OPPORTUNITIES
FOR SMALL BUSINESSES ACT OF 2019
----------
WEDNESDAY, NOVEMBER 20, 2019
House of Representatives,
Committee on Small Business,
Washington, DC.
The committee met, pursuant to call, at 11:34 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, Chu, Veasey, Evans, Schneider, Espaillat,
Houlahan, Craig, Chabot, Hern, Hagedorn, Burchett, Spano,
Joyce, and Bishop.
Chairwoman VELAZQUEZ. Good morning. The Committee will
please come to order. A quorum being present, I am pleased to
call this morning's meeting of the Committee on Small Business
to order.
Without objection, the Chair is authorized to declare a
recess at any point.
In today's markup, we will be considering four bipartisan
bills. Two of the bills will require SBA's resource partners to
provide counseling and training to individuals in prison and
post-release. The other two bills will make meaningful
improvements to contracting programs that support small
businesses.
I would like to take a moment to thank the Ranking Member
and all of the Members of the Committee for their
bipartisanship and commitment to small business owners and
entrepreneurs. It is not a small feat that together we have
worked to pass 23 bipartisan bills that will make it easier for
Americans to launch and grow their small businesses, and all of
those bills have sailed through the House of Representatives
with broad bipartisan support. That is a good track record, and
I want to thank all of you.
That is part of the reason why I am so pleased to lead this
Committee, but the other part is that I have an opportunity to
work on issues that can really make a difference in people's
lives.
Today, we have an opportunity to do just that with the two
prison to proprietorship bills.
We can also make it easier for small businesses to compete
in the federal marketplace by leveling the playing field for
small contractors on the verge of transitioning out of the
small business definition and those hoping to build a history
of past performance.
With that, let's turn to the bills under consideration. As
a result of hearings and outreach, the Committee today is
considering four bills, which are:
H.R. 5078, the ``Prison to Proprietorship Act,'' introduced
by myself and co-sponsored by Ranking Member Chabot;
H.R. 5065, the ``Prison to Proprietorship for the Formerly
Incarcerated Act,'' introduced by Mr. Jeffries and co-sponsored
by Mr. Burchett;
H.R. 5130, the ``Capturing All Small Businesses Act of
2019,'' introduced by Mr. Veasey and co-sponsored by Mr. Hern;
and
H.R. 5146, the ``Unlocking Opportunities for Small Business
Act,'' introduced by Mr. Hagedorn and co-sponsored by Mr.
Evans.
I support each of the bills to be marked up today.
In the interest of time, I would now like to recognize our
Ranking Member, Mr. Chabot, for his opening statement.
Mr. CHABOT. Thank you, Madam Chair. Thank you for holding
this morning's markup. Again, I appreciate your and your
staff's willingness to work with me and our staff in such a
bipartisan manner.
All four of these bills are led by Members of both parties,
which has become standard practice in our Committee, whichever
party is in the majority. We thank you for that.
I will be brief in my opening as we will discuss each bill
as they come up. We have two sets of bills today.
Two of them focus on fostering entrepreneurship among the
soon-to-be and formerly incarcerated. Last month, we held a
hearing that featured compelling testimony about the power of
entrepreneurship and how that power can help people who are
looking to get their lives back on track after having been
incarcerated. These individuals typically face higher rates of
unemployment than any other segment of our population.
Providing worthy candidates with an outlet for their
entrepreneurial spirit not only helps them re-acclimate to
society but also boosts our economy and local communities.
The other two bills focus on a longstanding bill of our
Committee, increasing small business access to the federal
marketplace. Our government, the United States government, is
the largest purchaser of goods and services anywhere in the
world. Our job is to ensure that small businesses have ample
opportunity to compete for those federal contracts. A vibrant
small business presence here increases competition, increases
quality, and lowers prices for the American taxpayer. All of
these things are good, obviously. Both bills will make it
easier for small firms to compete against the big guys.
Again, thank you, Madam Chair, for holding this hearing,
and marking up these four important bills today. I yield back.
Chairwoman VELAZQUEZ. Thank you very much. The gentleman
yields back.
Before we get into the individual bills, are there any
Members present who seek recognition for the purpose of making
an opening statement?
H.R. 5078
Seeing none, we will move to consideration of H.R. 5078,
the ``Prison to Proprietorship Act,'' introduced by myself and
Ranking Member Chabot.
I sincerely want to thank Ranking Member Chabot for joining
me as the lead co-sponsor on the bill. Leading this bill with
you sends a strong message to SBA, our resource partners, and
the formerly incarcerated that helping guide these individuals
onto the path of entrepreneurship is a priority. After paying
their debt to society, former inmates return to their
communities with hope and the goal of starting fresh.
Unfortunately, many are locked out of the labor market. As we
heard in our hearing last month, employers do not want to hire
them because of the stigma associated with incarceration and
many lack the skills needed to work in the 21st Century.
Entrepreneurship training can help individuals overcome the
barriers to re-entering the workforce, and for the formerly
incarcerated, it can be the difference between successfully
reintegrating back into the community or returning to prison.
With approximately 180,000 individuals locked up in federal
prisons across the country, which costs nearly $100 per day per
inmate, it makes fiscal sense to give these folks the tools
they need to build a meaningful life.
H.R. 5078 requires SBA's resource partners to provide
counseling and training to individuals in prison. Federal
prisoners would be eligible for in-depth classroom instruction,
combined with one-on-one mentoring and priority given for
inmates within 18 months of release.
SBA's resource partners, with more than 1,000 centers
located across the country, are perfectly suited and very well
positioned to carry out these services in federal prisons.
Unlocking opportunities for the formerly incarcerated will
empower and enable them to rebuild their lives, build wealth,
and promote lasting economic growth.
I now recognize the Ranking Member to speak on H.R. 5078.
Mr. CHABOT. Thank you, Madam Chair.
The Bureau of Justice Statistics discovered that almost
half of all U.S. prisoners were without access to vocational
training programs. There is an opportunity here that leaves
room for the emerging field of prison to proprietorship.
Private sector programs saw 57 percent of the businesses remain
open, a percentage that is higher than the average rate of
business survival. Graduates of these programs also maintain a
7.5 percent 3-year recidivism rate, exponentially smaller than
the national average of 50 percent.
Our bill, H.R. 5078, the ``Prison and Proprietorship Act''
directs the Association of Women's Business Centers and the
Association of Small Business Development Centers to coordinate
reentry entrepreneurship services by providing counseling and
training services that focus on individuals who have been
incarcerated in a federal prison. This bill will create a
pathway for qualified ex-offenders to be successful,
contributing members of society.
I want to thank you, Madam Chair, for your dedication and
partnership on this very important piece of legislation. I am
glad that we are able to work on this and it is bipartisan. I
yield back.
Chairwoman VELAZQUEZ. Thank you, Mr. Chabot.
Are there any other Members who wish to be recognized for a
statement on H.R. 5078?
I am seeing none.
I urge my colleagues to support this important legislation
that will give federal prisoners a second chance to lead
meaningful and productive lives after release.
If there is no further discussion, the Committee will move
to consideration of H.R. 5078.
The clerk will report the title of the bill.
The CLERK. H.R. 5078, the ``Prison to Proprietorship Act.''
Chairwoman VELAZQUEZ. Without objection, H.R. 5078 is
considered as read and open for amendment at any point.
Are there any Members who wish to offer an amendment?
Seeing none, the question is now on H.R. 5078.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it.
H.R. 5078 is agreed to.
The question now occurs on reporting H.R. 5078 to the
House.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it.
H.R. 5078 is reported favorably to the House.
Without objection, Committee staff is authorized to correct
punctuation, make other necessary technical corrections, and
conforming changes.
Without objection, Members shall also be entitled to 2 days
to file additional supplemental, dissenting, and minority
views.
H.R. 5065
Our second bill today is H.R. 5065, the ``Prison to
Proprietorship Act for the Formerly Incarcerated,'' introduced
by Mr. Jeffries and co-sponsored by Mr. Burchett. This bill
complements the Prison to Proprietorship bill by requiring the
Service Corps of Retired Executives to provide mentoring,
workshops, and training videos for formerly incarcerated
individuals on how to launch and grow small businesses.
I would now like to recognize the gentleman from Illinois,
Mr. Schneider, for an opening statement on H.R. 5065.
Mr. SCHNEIDER. Thank you, Madam Chair.
I want to thank you for holding the hearing earlier this
fall that examined entrepreneurship as an opportunity for
formerly incarcerated individuals. We heard compelling
testimony that spoke to how we can empower the formerly
incarcerated with the skills to start their own small
businesses. What a powerful force that can be, both for those
individuals, as well as their communities.
I want to thank my colleagues, Hakeem Jefferies and Tim
Burchett for introducing the ``Prison to Proprietorship for
Formerly Incarcerated Act.'' I am proud to be a cosponsor of
this bill.
This legislation, and the legislation that we just voted
on, the ``Prison to Proprietorship Act,'' will empower those
leaving the federal prison system with not only the skills, but
also the support to start their own small business.
I have long been a fan of the SCORE program and how it
helps burgeoning small businesses expand and grow. Mentorship
can play a vital role in the success of entrepreneurs and
citizens returning to society after serving time, facing unique
challenges when trying to start their own small business.
I know this legislation would have a positive impact in my
own district. Our own Small Business Development Center based
out of the College of Lake County is in the process, in
conjunction with the local county jail, of offering
entrepreneurship courses to a cohort of inmates.
I am proud of the initiative our SBDC, particularly its
director, Mitch Bienvenue, has undertaken by designing and
offering this program. I look forward to hearing about the
success stories of these inmates once they are returned to
their own communities. I am excited to push this bill forward
because I know that SCORE would provide these individuals with
the mentorship that could be instrumental for their success.
No one starts a successful small business on their own, and
SCORE can be an invaluable pipeline for the help necessary to
making the dream of running one's own small business a reality.
Thank you again to my colleagues, Mr. Burchett and Mr.
Jeffries for their work on this important bill.
I would also like to ask unanimous consent to include Mr.
Jeffries' written testimony in support of H.R. 5065 into the
record.
Chairwoman VELAZQUEZ. Without objection, the statement is
entered into the record.
Mr. SCHNEIDER. Thank you, and I yield back.
Chairwoman VELAZQUEZ. Thank you.
I now would like to recognize the other sponsor of the
bill, Mr. Burchett, from Tennessee, for 5 minutes.
Mr. BURCHETT. Thank you, Chairlady Velazquez and Ranking
Member Chabot, for helping us work on these important bills.
I do want to educate my friends across the aisle. It is
Burchett, birch, like the tree, and et, like I just et
breakfast. Can everybody say that together? Burchett? Burchett.
Thank you. If I can get, dadgummit, if I can get Velazquez, you
all can get Burchett. Okay?
I want to thank you. I love saying that name, by the way,
Chairlady. That is really cool. You have been very kind to me.
Thank you all.
Can we please have order? Order, please?
I mean, I really am fired up about this bill, and I want to
thank you all for allowing me to----
Chairwoman VELAZQUEZ. You better hurry up. Otherwise, I am
going to make it a partisan bill.
Mr. BURCHETT. I got it. I got it. Are you cutting in on my
time, Chairlady? No, I got it. Do not worry.
Thank you, Mr. Schneider, for those kind words.
Of course, the goal of correctional facilities should be to
rehabilitate or to remove individuals that are dangerous to us
from society. Learning is vital to everyone regardless of where
they are or who they are, and for our formerly incarcerated, a
successful reentry into society can start with continued
learning.
To me, providing folks an opportunity to learn how to work
in a small business and work towards a good job is essential.
Ultimately, I want to make sure individuals who are
incarcerated but ready for a fresh start, a new beginning, have
a real shot at success, not just some empty promises.
I thank Mr. Jeffries for his leadership on this bill, on
H.R. 5065, and I appreciate the constructive approach this
Committee has taken to solve serious issues such as this. Thank
you, Chairlady Velazquez, and I yield the rest of my----
Chairwoman VELAZQUEZ. By the way, it is Velazquez.
Mr. BURCHETT. Velazquez. Well, I had it right the first
time but Ranking Member Chabot told me otherwise.
Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
Are there any other Members who wish to be recognized for a
statement on H.R. 5065?
The gentleman from Ohio, Mr. Chabot is now recognized.
Mr. CHABOT. Thank you very much, Madam Chair.
As our Committee heard in our hearing on this topic last
month, up to 60 percent of people released from prison remain
unemployed after a year, oftentimes seeking employment.
Therefore, it is not surprising that about half of former
inmates recidivate within 3 years of being released from
prison. In other words, they have committed a crime and they
are back behind bars. Small business ownership can provide
steady employment, which can drastically lower the risk of
recidivism with nonviolent offenders.
This bill, H.R. 5065, the ``Prison to Proprietorship for
Formerly Incarcerated Act'' directs SCORE programming and
mentorship services to the formerly incarcerated.
I want to thank the gentleman from Tennessee, Mr. Burchett,
and the gentleman from New York, Mr. Jeffries, for their
bipartisan work on this bill and I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Are there any other Members who wish to be recognized for a
statement on H.R. 5065?
Mr. Spano?
Mr. SPANO. Thank you, Chairwoman. I appreciate it. Just to
echo what everybody else has said, it has always struck me as--
in many respects--that we have individuals who are trying to
turn the page of their lives and start over but they have got
that mark against them of having that criminal history. It
makes it very, very, very difficult for them assimilate back
into society by finding work and moving on. The ability to give
these folks the tools that they need to make their own way when
that relates to starting your own small business is incredibly
exciting to me. Thank you to the Chair, and thank you to the
Committee for this effort. I think it is a great idea.
Chairwoman VELAZQUEZ. Thank you.
Mr. SPANO. Thank you.
Chairwoman VELAZQUEZ. Thank you for yielding back.
I now recognize myself briefly.
Nearly 95 percent of the people currently in prison will be
released, and one of the biggest obstacles they face is
unemployment. Entrepreneurship is the best option for many.
While the ``Prison to Proprietorship Act'' would provide the
in-prison training on how to launch a business, we must ensure
that the skills learned in the program are fully utilized upon
release. Under this bill, SCORE would be required to provide
the formerly incarcerated individuals with mentoring tailored
to their unique needs. The mentorship will be invaluable to
those reentering our communities, and so I want to commend Mr.
Jeffries and Mr. Burchett for their collaboration.
I urge my colleagues to support the bill, which will go a
long way in reducing recidivism, creating new jobs, and
promoting economic growth in communities.
If there is no further discussion, the Committee will move
on to consideration of H.R. 5065.
The clerk will report the title of the bill.
The CLERK. H.R. 5065, the ``Prison to Proprietorship for
Formerly Incarcerated Act.''
Chairwoman VELAZQUEZ. Without objection, H.R. 5065 is
considered as read and open for amendment at any point.
Does anyone wish to offer an amendment?
Seeing none, the question is now on H.R. 5065.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it.
H.R. 5065 is agreed to.
The question now occurs on reporting H.R. 5065 to the
House.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it.
H.R. 5065 is reported favorably to the House.
Without objection, Committee staff is authorized to correct
punctuation, make other necessary technical corrections and
conforming changes.
Without objection, Members shall also be entitled to 2 days
to file additional supplemental, dissenting, and minority
views.
H.R. 5130
The next bill is H.R. 5130, the ``Capturing All Small
Businesses Act of 2019,'' introduced by Mr. Veasey and co-
sponsored by Mr. Hern, which modifies the method for
calculating the employee-based size standard.
I would now like to recognize the gentleman from Oklahoma,
Mr. Hern, the cosponsor of the bill, for an opening statement.
Mr. HERN. Thank you, Madam Chairwoman. I would like to
thank my colleague, Representative Veasey, for his leadership
on this important legislation, which will help provide small
business manufacturers with greater competitive edge in the
open marketplace.
This bill provides parity with another important small
business bill that this Committee passed which was signed into
law nearly a year ago. The previous bill extended the runway
for revenue-based small businesses, allowing them to stay
smaller for a longer period of time. While revenue-based and
employee-based firms differ in many respects, one thing remains
constant--that competing in the open marketplace when a firm is
not ready to leave the small business arena can have disastrous
effects on a small business's growth trajectory.
There is a reason why so many small businesses liken this
transition to jumping off a cliff. Oftentimes, small firms
cannot compete against the giants in their particular
industries and eventually fail, stay small, or become acquired
by a large company supply chain. None of these outcomes promote
growth for small businesses, and none of these options are good
for competition.
Therefore, it is critical that we ensure our small
manufacturers are capable of successfully and smoothly
transitioning out of the small business space into the open
marketplace without falling off of this cliff. That is exactly
what this bill does for small manufacturers.
By extending the measurement of a small manufacturer's
concern size from a rolling 12-month average to a 24-month
average, we provide these small businesses with more time to
build their competitive edge and infrastructure so they are
better equipped to handle a more robust competition once they
graduate out of the small business space.
In short, the bill is good, common sense policy aimed at
encouraging small business growth and competition at the
highest levels. I urge my colleagues to support H.R. 5130, and
I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
I would like to recognize the gentleman from Texas, Mr.
Veasey, the sponsor of the bill for an opening statement.
Mr. VEASEY. Thank you, Madam Chair, Committee Members. I am
excited to be leading H.R. 5130, the ``Capturing All Small
Businesses Act of 2019,'' with Representative Hern, to protect
small businesses against being prematurely forced out of the
small business category due to sudden growth. This bipartisan
legislation lengthens the calculation period used by SBA to
determine average employee count, one of the size standards SBA
uses to determine if businesses are small from 12 months to 24
months. By extending SBA's calculation period for the employee-
based size standards, we promote the sound and stable growth of
small businesses, support job creation, and strengthen our
industrial base.
In my home state of Texas, small businesses make up about
99 percent of all business and employs 4.7 million Texans. As
we have seen in this Committee, these small businesses are
critical for a healthy, competitive, and innovative
marketplace. However, under SBA's size standards, a small
business experiencing sudden growth could face being
prematurely placed out of their small business size standard.
If this occurs, businesses may face challenges including no
longer being able to qualify for SBA loans, contracts, and
other assistance, and having to compete in the open market
against much larger businesses.
H.R. 5130 would grant small businesses additional time to
mature and become better equipped for success in the open
marketplace. The change in this bill also provides a period
between small businesses subject to employee-based size
standards and those subject to receipts-based size standards
which were modified last year through the ``Small Business
Runway Extension Act'' by this Committee. By amending the
existing SBA employee-based size standards, we can provide
protections that ensure our nation's small businesses can
succeed in our economy.
I am proud to offer this effort, and hope this Committee is
able to advance this important legislation to provide much-
needed relief to small businesses all across our great country.
Madam Chair, I yield back.
Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
I now recognize the Ranking Member.
Mr. CHABOT. Thank you, Madam Chairwoman.
I would also like to express my support for this
legislation, which will encourage our small businesses to grow
successfully and competitively into the mid-size marketplace.
We have heard too many stories of small businesses successfully
providing significant value to the federal government and
growing at a steady pace only to hit a wall once they grow out
of their small-sized threshold. We need to ensure that there is
a pathway for sustained development for our nation's small
businesses and small manufacturers, and this bill takes a step
in the right direction.
I want to thank the gentleman from Texas, Mr. Veasey, and
the gentleman from Oklahoma, Mr. Hern, for their leadership on
this issue. It is nice to see a Texan and an Oklahoman working
together. We do not always see that, so thank you, gentleman. I
yield back.
Chairwoman VELAZQUEZ. The gentleman yields back. Thank you,
Mr. Chabot.
I will now recognize myself briefly.
The SBA size standards represent the largest size that a
business may be to remain classified as a small business
concern. Size standards are important because they are used to
determine eligibility for SBA's financial assistance and other
federal programs, including government procurement programs
designed to assist small contractors. The actual determination
of what a small business is and what the small business size
standards should be has also been a point of contention.
Last year, we passed the ``Small Business Runway Extension
Act,'' which modified the calculation period for the receipts-
based size standard using the average of the preceding 5 years
instead of the preceding 3 years. The act was in response to
the concerns of small firms that outgrew their size standard
and lost their eligibility for small business set-asides and
SBA programs. By modifying the receipts-based formula, we
granted small businesses additional time to transition into the
open marketplace.
While this legislation was certainly a step in the right
direction, it did not provide an equivalent change for those
businesses subject to the employee-based size standard.
Unfortunately, this standard was left intact even though small
businesses experienced the same challenges and concerns that
the ``Runway Extension Act'' tried to alleviate.
H.R. 5130 provides a reasonable solution to this issue, and
I want to congratulate both gentlemen for their efforts.
If there is no further discussion, the Committee will move
on to consideration of H.R. 5130.
The clerk will report the title of the bill.
The CLERK. H.R. 5130, ``Capturing All Small Businesses Act
of 2019.''
Chairwoman VELAZQUEZ. Without objection, H.R. 5130 is
considered as read and open for amendment at any point.
Does anyone wish to offer an amendment?
Seeing none, the question is now on H.R. 5130.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it.
H.R. 5130 is agreed to.
The question now occurs on reporting H.R. 5130 to the
House.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it.
H.R. 5130 is reported favorably to the House.
Without objection, the committee staff is authorized to
correct punctuation, make other necessary technical corrections
and conforming changes.
Without objection, Members shall also be entitled to 2 days
to file additional supplemental, dissenting, and minority
views.
H.R. 5146
The final bill before us today is H.R. 5146, the
``Unlocking Opportunities for Small Business Act of 2019,''
introduced by Mr. Hagedorn, and co-sponsored by Mr. Evans,
which removes the barriers to entry for small businesses across
the country.
I would now like to recognize the bill's sponsor, the
gentleman from Minnesota, Mr. Hagedorn, for an opening
statement.
Mr. HAGEDORN. Thank you, Chairwoman Velazquez. I appreciate
that. Ranking Member Chabot. One of the wonderful things about
this Committee is the bipartisan nature and the way that
Members get together and try to improve small businesses and do
what we can with our jurisdiction. Thank you for that.
I would also like to thank my colleague, the gentleman from
Pennsylvania, Mr. Evans, for his hard work and collaboration
with me on this legislation which will, as the bill says,
unlock opportunities for small contractors seeking to gain
access to prime contracting opportunities with the federal
government.
Unfortunately, small contractors are stuck in a catch-22.
In order to receive a prime contract, federal agencies require
evidence showing that the contractor is capable of doing the
work, but they will generally only accept past proof of
experience, also known as past performance work, which is work
done as a prime contractor with the government. You cannot get
prime contracts if you do not have a record of past
performance, but you cannot get past performance experience
without winning the contracts. Winning prime contracts for many
small businesses is the key to sustained growth and making the
leap from subcontracting or teaming with other companies to
prime contracting can be exceedingly challenging due to this
dilemma.
I have a little bit of experience with this as a
congressional relations officer in the Treasury Department in
my past work, and I saw how some of these contracts work.
Basically you would go in, they would score it and determine
who would get the contracts. I recently spoke with a friend of
mine, Adam Roosevelt, who does a lot of subcontracting with
DHS, just recently, and he was at one of our hearings about a
week ago and he said it is really tough for them. They do the
work, they are capable of it, but there is no way for the
agencies even to score it. I think in the future, when we look
at this, maybe we need a category in scoring that would say if
you have done a lot of work as a subcontractor on these
contracts that would count for something and would give them an
opportunity to move past that so that is maybe something we can
look at in the future.
The assessment of a contractor's capabilities based only on
their experience as a prime contractor does a great disservice
to many qualified and capable small contractors, as we said,
that have performed vital and critical work as members of joint
ventures. The work small contractors have performed in these
roles may have great relevance to a contracting bid. However,
they are unable to showcase their capabilities due to the
agency's focus on prime contracting experiences.
I would like to submit the rest of my statement for the
record, and I appreciate the consideration of the Members to
vote for our bill, H.R. 5146.
With that I yield back. Thank you.
Chairwoman VELAZQUEZ. Without objection, so ordered.
I would now like to recognize the bill's cosponsor, the
gentleman from Pennsylvania and Vice Chair of the Committee,
Mr. Evans, for an opening statement.
Mr. EVANS. Thank you, Madam Chairwoman Velazquez and
Ranking Member Chabot, for having this markup. Thank you,
Congressman Hagedorn for your leadership on this bill.
In addition to the congressman's comments, I would like to
emphasize that this bill is especially important to minority-
owned small businesses. Minority-owned small businesses in my
home city of Philadelphia are frequently working joint ventures
to pool their resources to work as subcontractors to prime
contractors who are usually majority white-owned. Consequently,
the majority of the work Philadelphia-based small businesses
are performing cannot be counted as past performance when
submitting bids to federal contracts. This hurts the small
businesses, especially their ability to bid and compete when
contractors are prime, which also impacts the businesses'
ability to grow, create jobs, and contribute economically to
the community. This is especially impactful in Philadelphia
where the poverty rate is nearly 25 percent. This bill will
permit those small businesses to use their work in joint
ventures or as subcontractors to count as past performance,
which will allow the businesses to build track records that are
necessary to bid as primes for federal contracts. Consequently,
minority-owned small businesses will field hurdles in their
goal to prosper and flourish.
I invite the Members of the Committee to support the
passage of this important bill. Thank you, and I yield back,
Madam Chair.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the Ranking Member.
Mr. CHABOT. Thank you, Madam Chair. I would like to thank
the gentleman from Minnesota, Mr. Hagedorn, and the gentleman
from Pennsylvania, Mr. Evans, for their leadership on this
legislation, which I believe will reduce significant barriers
to small contractors in the federal marketplace.
As we have heard from our colleagues, obtaining relevant
past performance is critical for a small business to be
competitive for a contract award. Unfortunately, federal
agencies take a narrow view on what they might consider as
relevant past performance for a prime contract opportunity.
This limits a small business's ability to compete for contracts
that they would otherwise be a perfect fit for which is
detrimental both to the small business and to the government.
In short, the important thing for a federal agency to know is
whether a business is capable of successfully completing the
specific task being requested. If the small business can show
that it has successfully performed that type of work in the
past, it should be able to use that as evidence that it can
complete the task in the future. It is that simple.
This bill will not only unlock prime contracting
opportunities for small businesses but will also have the
additional positive impact of eventually growing the industrial
base, increasing competition, and lowering costs for the
taxpayer.
I urge my colleagues to support this important legislation
and yield back.
Chairwoman VELAZQUEZ. The gentleman yields back. Thank you.
I will now recognize myself briefly.
First, I would like to commend both Mr. Hagedorn and Mr.
Evans for their collaboration on this bill and working to make
it easier for small businesses seeking to perform as prime
contractors. Past performance is an important factor in
evaluating many solicitations. Knowing how a small business
performed a contract in the past is an important indicator of a
small business's ability to successfully perform in the future.
H.R. 5146 addresses this issue by allowing small businesses to
leverage past performance experience obtained as part of joint
ventures and subcontracts, which otherwise would not be an
option. With this legislation, we reaffirm our commitment to
offering small businesses the tools they need to thrive. Thus,
I urge my colleagues to support the bill.
If there is no further discussion, the Committee----
Mr. Spano is recognized.
Mr. SPANO. Thank you, Madam Chair. Thank you, Ranking
Member. My congratulations to Mr. Hagedorn and Mr. Evans. Great
job.
This is a bill that I think is an important piece of
legislation that down the road we will look back to and say,
wow, that really transformed small business owners' ability to
be able to break into government contracting. I think it could
be really transformative. So I fully support it. It is
important that we make sure our tax dollars do more to build up
main street, and I think this bill does that. I encourage my
colleagues' support. Thank you.
Chairwoman VELAZQUEZ. The gentleman yields back.
Is there any other Member who wishes to speak on this bill?
If there is no further discussion, the Committee will move
on to consideration of H.R. 5146.
The clerk will report the title of the bill.
The CLERK. H.R. 5146----
Chairwoman VELAZQUEZ. Without objection, H.R. 5146 is
considered as read and open for amendment at any point.
Does anyone wish to offer an amendment?
Seeing none, the question is now on H.R. 5146.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it.
H.R. 5146 is agreed to.
The question now occurs on reporting H.R. 5146 to the
House.
All those in favor, say aye.
All those opposed, say no.
In the opinion of the Chair, the ayes have it.
H.R. 5146 is reported favorably to the House.
Without objection, Committee staff is authorized to correct
punctuation, make other necessary technical corrections and
conforming changes.
Without objection, Members shall also be entitled to 2 days
to file additional supplemental, dissenting, and minority
views.
I thank all the Members for their participation today. If
there is no further business to come before the Committee, we
are adjourned. Thank you.
[Whereupon, at 12:12 p.m., the committee was adjourned.]
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