[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                    MOVING UPWARDS AND ONWARDS: THE 
                WORKFORCE AND INNOVATION NEEDS OF THE 
                AVIATION AND AEROSPACE INDUSTRY

=======================================================================

                                HEARING

                               BEFORE THE

                      SUBCOMMITTEE ON INNOVATION,
              ENTREPRENEURSHIP, AND WORKFORCE DEVELOPMENT

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                              MAY 12, 2022

                               __________


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 117-055
             Available via the GPO Website: www.govinfo.gov
             
                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
47-536 PDF                 WASHINGTON : 2022                     
          
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                          JARED GOLDEN, Maine
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                         KWEISI MFUME, Maryland
                        DEAN PHILLIPS, Minnesota
                         MARIE NEWMAN, Illinois
                       CAROLYN BOURDEAUX, Georgia
                         TROY CARTER, Louisiana
                          JUDY CHU, California
                       DWIGHT EVANS, Pennsylvania
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                          ANDY KIM, New Jersey
                         ANGIE CRAIG, Minnesota
              BLAINE LUETKEMEYER, Missouri, Ranking Member
                         ROGER WILLIAMS, Texas
                        PETE STAUBER, Minnesota
                        DAN MEUSER, Pennsylvania
                        CLAUDIA TENNEY, New York
                       ANDREW GARBARINO, New York
                         YOUNG KIM, California
                         BETH VAN DUYNE, Texas
                         BYRON DONALDS, Florida
                         MARIA SALAZAR, Florida
                      SCOTT FITZGERALD, Wisconsin

                 Melissa Jung, Majority Staff Director
            Ellen Harrington, Majority Deputy Staff Director
                     David Planning, Staff Director
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Jason Crow..................................................     1
Hon. Young Kim...................................................     2

                               WITNESSES

Hon. Eric Fanning, President & Chief Executive Officer, Aerospace 
  Industries Association, Arlington, VA..........................     5
Ms. ML Mackey, Chief Executive Officer, Beacon Interactive 
  Systems, Waltham, MA, testifying on behalf of the National 
  Defense Industrial Association (NDIA)..........................     6
Mr. Blake Scholl, Founder & Chief Executive Officer, Boom 
  Technology, Inc., Centennial, CO...............................     8
Ms. Judy Burns, President, Patriot Machine, St. Charles, MO......    10

                                APPENDIX

Prepared Statements:
    Hon. Eric Fanning, President & Chief Executive Officer, 
      Aerospace Industries Association, Arlington, VA............    23
    Ms. ML Mackey, Chief Executive Officer, Beacon Interactive 
      Systems, Waltham, MA, testifying on behalf of the National 
      Defense Industrial Association (NDIA)......................    28
    Mr. Blake Scholl, Founder & Chief Executive Officer, Boom 
      Technology, Inc., Centennial, CO...........................    31
    Ms. Judy Burns, President, Patriot Machine, St. Charles, MO..    39
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    NBAA - National Business Aviation Association................    43
    Pilot Supply by the Numbers..................................    47
    Pilot Retirement Age Facts...................................    48

 
 MOVING UPWARDS AND ONWARDS: THE WORKFORCE AND INNOVATION NEEDS OF THE 
                    AVIATION AND AEROSPACE INDUSTRY

                              ----------                              


                         THURSDAY, MAY 12, 2022

              House of Representatives,    
               Committee on Small Business,
      Subcommittee on Innovation, Entrepreneurship,
                                 and Workforce Development,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2360, Rayburn House Office Building, Hon. Jason Crow 
[chairman of the Subcommittee] presiding.
    Present: Representatives Crow, Houlahan, Young Kim, 
Luetkemeyer, Williams, Tenney, and Garbarino.
    Chairman CROW. Good morning. I call this hearing to order.
    Without objection, the Chair is authorized to declare a 
recess at any time.
    I would like to begin by noting some important 
requirements. Standing House and Committee rules and practice 
will continue to during hybrid proceedings. All Members are 
reminded that they are expected to adhere to these rules, 
including decorum.
    House regulations require Members to be visible through a 
video connection throughout the proceeding, so please keep your 
cameras on. Also, please remember to remain muted until you are 
recognized to minimize background noise.
    In the event a Member encounters technical issues that 
prevent them from being recognized for their questioning, I 
will move to the next available Member of the same party and I 
will recognize that Member at the next appropriate timeslot 
provided they have returned to the proceeding.
    The U.S. aviation and aerospace industry is crucial to our 
national security and national defense capabilities. From 
commercial airliners to telecommunication satellites, the 
aerospace industry touches the lives of countless Americans 
every day.
    The industry also provides meaningful employment to over 2 
million workers. These are great paying jobs that allow workers 
to further their careers and support their families. In 2020, 
aerospace workers averaged roughly $104,000 in wages and 
benefits.
    The impact of this industry extends beyond U.S. borders. 
Domestic aerospace companies are global leaders that export 
civil and military products to countries worldwide. In 2020 
alone, the industry generated $874 billion in total industry 
sales revenue.
    The impact of this industry is big, but small businesses 
make up a substantial portion of the sector. For example, small 
entities comprise more than 90 percent of businesses in airline 
transportation, air transport support, and aviation 
manufacturing.
    Despite the successes of the aerospace industry, COVID has 
presented unprecedented challenges. Travel restrictions around 
global air traffic to a near halt in the early days of the 
pandemic. Since then, new variants and intermittent rising case 
counts have continued to depress commercial aviation's 
recovery. In January of this year, flights operated stood at 
85.3 percent of pre-pandemic levels.
    But even with this decreased demand, companies are 
struggling to hire the right workers to keep up with the 
supply. This problem is not confined to the aerospace industry. 
Small businesses across the country are feeling the effect of 
an overall labor shortage. This worker shortfall is complex and 
connected to pandemic-related issues, like decreased legal 
immigration, early retirements, and a lack of childcare options 
for working parents.
    But even before the pandemic, the aerospace industry faced 
labor issues, including an aging workforce and the need to 
constantly upskill workers due to innovation.
    These problems have led to shortfalls in vital positions, 
including pilots and mechanics, and staffing shortages have led 
to record flight cancelations throughout early 2022, creating 
significant disruptions for travelers.
    The implications of this labor shortage also extend to our 
military. Studies predict significant shortfalls for Air Force 
and Navy pilots very soon. This is simply unacceptable.
    If the aerospace industry cannot find an adequate number of 
trained workers, our economy and national security will suffer. 
That is why we must use the tools at our disposal to ensure 
that workers have the necessary skills to fill these positions.
    The FAA Reauthorization Act of 2018 and the National 
Defense Authorization Act for Fiscal Year 2020 added training 
grants for the pilot workforce alongside aviation maintenance 
technical workers. The aerospace industry has also embraced 
apprenticeships as a model for attracting young workers and 
equipping them with the necessary skills to succeed.
    So today, we will deepen our understanding of this 
industry, examining these workforce initiatives and other 
policy solutions that can support workers in the aerospace 
sector as we work toward recovery.
    I would now like to yield to the Ranking Member, Mrs. Kim, 
for her opening statement.
    Ms. YOUNG KIM. Thank you, Chairman Crow. I want to thank 
you for holding this hearing, and I want to thank all of our 
witnesses for testifying today.
    Over the past few years, small businesses within the 
aviation and aerospace industries have been met with 
unparalleled economic headwinds, including labor shortages, 
supply chain disruptions, and soaring costs. These industries 
are vital to our economy as they produce both military and 
civil aircrafts, facilitate trade and tourism, and connect 
Americans worldwide.
    Small businesses play a key role in aviation and aerospace. 
According to the Census, statistics of the U.S. business, 94.3 
percent of all firms that provide air transportation are 
considered small businesses and almost 88 percent of aerospace 
firms are small businesses.
    One of the biggest challenges these firms are facing is the 
unprecedented labor shortage. The most recent Job Openings and 
Labor Turnover Summary reported 11.5 million job vacancies. To 
make matters worse, employers continue to face record numbers 
of workers leaving their jobs. And in March, 4.5 million 
workers quit their jobs.
    These trends persist, even as nearly half of small business 
owners have reported job openings they could not fill. Worker 
shortages are not a new issue to the aviation and aerospace 
industries. In fact, this Committee held a hearing back in 2018 
on this exact issue.
    Unfortunately, COVID-19 exacerbated the shortages by 
encouraging early retirements among airline and aerospace 
workers uncertain about their career prospects in a sector that 
was almost entirely shut down for months.
    According to the Regional Airline Association, the United 
States will lose about half of its pilots to retirement in the 
next 15 years. Further, a recent study found a lack of 
technical staff as the top disruptor for the aviation 
maintenance and repair sector over the next 5 years. A pilot 
and technician shortage affects not only the airlines but also 
the millions of Americans who fly each year.
    Another issue that is contributing to the worker shortage 
is the growing skills gap. These sectors rely on highly skilled 
workers to build aircrafts, satellites, missiles, and conduct 
maintenance and safety tests.
    According to a recent study by Deloitte, the manufacturing 
skills gap in the United States could result in 2.1 million 
unfilled jobs by 2030. The cost of these missing jobs could 
total $1 trillion in 2030 alone. The lack of skill labor is a 
major concern, and if not addressed, could have serious impacts 
on our economy.
    From finding and retraining skilled labor to supply chain 
issues and skyrocketing costs and disruptive inflation and 
energy prices, our small businesses are facing a multitude of 
economic hurdles that threaten to close their doors.
    I look forward to hearing from our witnesses today on how 
we can better support you, and I hope to work with my 
colleagues to find real solutions to elevate the increasing 
economic challenges that our small businesses are facing every 
day.
    Thank you, and I yield back.
    Chairman CROW. Thank you, Mrs. Kim. The gentlelady yields 
back.
    I would like to take a moment to explain how this hearing 
will proceed. Each witness will have 5 minutes to provide a 
statement and each Committee Member will have 5 minutes for 
questions. Please ensure that your microphone is on when you 
begin speaking and that you return it to mute when finished. We 
run a tight ship here, Mrs. Kim and I, so please stick with 
your 5 minutes so I do not have to gavel you out.
    So with that I would like to introduce our witnesses.
    Our first witness is Mr. Eric Fanning, President and CEO of 
the Aerospace Industries Association, the leading advocacy 
organization for the aerospace and defense industry. He has 
more than 25 years of distinguished government service. He 
previously served as Chief of Staff to the Secretary of 
Defense, Acting Secretary of the Air Force, and Deputy 
Undersecretary of the Navy. In 2016 and 2017, he served as the 
22nd United States Secretary of the Army. He is the only person 
to have held senior appointments in all three military 
departments and the Office of the Secretary of Defense, which 
actually raises the question for me is when you tell military 
jokes, which service do you make fun of? So thank you, Mr. 
Fanning for joining us. I look forward to your testimony.
    Our next witness is ML Mackey, co-founder and CEO of Beacon 
Interactive Systems and Division Chair of the National Defense 
Industry Association Small Business Division. Ms. Mackey is an 
innovator and entrepreneur. Her company, Beacon, is a valued 
and rapidly-growing provider of mission-critical systems to the 
Department of Defense that helps drive efficiency, improves 
sustainability, and unleashes productivity. She is an advocate 
for small businesses, women's leadership, and STEM innovation. 
Ms. Mackey is an active Member of the NDIA's Workforce Project, 
and in 2021, served as the Board Chair of the National Small 
Business Association. Welcome, Ms. Mackey. It is a pleasure to 
have you on the panel.
    Our third witness is Mr. Blake Scholl, the CEO of Boom 
Supersonic, an end product supersonic aircraft company based in 
my district. Mr. Blake started Boom in his basement in 
September 2014 with the goal of making high-speed travel 
mainstream and enabling a new world of human connection. Prior 
to founding Boom, he held a leadership role at Amazon and 
cofounded the mobile tech startup, Kima Labs, which was later 
acquired by Groupon. Thank you, Mr. Scholl. I look forward to 
hearing about your experience.
    I will now yield to the Ranking Member to introduce our 
final witness.
    Mr. LUETKEMEYER. Thank you, Mr. Chairman and Ranking 
Member. I would like to welcome our final witness who is from 
my district, Ms. Judy Burns. Ms. Burns is the president and 
cofounder of Patriot Machine, Inc. Her company is headquartered 
in St. Charles, Missouri, which is in the eastern part of 
Missouri's 3rd Congressional District. Ms. Burns and her 
husband started this small business more than 30 years ago and 
the company has since expanded to 160 employees. Patriot 
Machine is a globally competitive aerospace manufacturer 
supplying highly complex structural parts and assemblies to 
America's largest aircraft manufacturers. The company prides 
itself on its cutting edge technology, skilled workforce, and 
advanced planning techniques. Patriot Machine continues to 
exhibit growth by recently adding a new advanced manufacturing 
facility with ample space for further expansion. Under Ms. 
Burns' expert leadership, Patriot Machine has received the 
Supplier of the Year Award on three separate occasions from the 
Boeing Company. Ms. Burns' other recognitions include 
Missouri's First Lady Award for success in the field of 
business innovation and the 2015 University if Missouri St. 
Louis Distinguished Alumni Award. I know Ms. Burns' experience 
as a small business owner and vast knowledge on innovation and 
workforce issues will be extremely beneficial to our hearing. 
Welcome, Ms. Burns, and thank you for taking time to testify 
before us today.
    And with that, Mr. Chairman, I yield back.
    Chairman CROW. Thank you. The Ranking Member yields back.
    Thank you all for joining us today. Mr. Fanning, you are 
recognized for 5 minutes.

STATEMENTS OF ERIC FANNING, PRESIDENT AND CEO OF THE AEROSPACE 
 INDUSTRIES ASSOCIATION; M.L. MACKEY, CEO AND A CO-FOUNDER OF 
 BEACON INTERACTIVE SYSTEMS; BLAKE SCHOLL, FOUNDER & CEO, BOOM 
       SUPERSONIC; JUDY BURNS, PRESIDENT, PATRIOT MACHINE

                 STATEMENT OF HON. ERIC FANNING

    Mr. FANNING. Thank you, Chairman Crow, Ranking Member Kim, 
and Members of the Committee. Thank you for inviting me to be 
part of today's hearing. My name is Eric Fanning and I serve as 
the President and CEO of the Aerospace Industries Association 
(AIA). For over 100 years, AIA has advocated for America's 
aerospace and defense companies and the more than 2 million men 
and women who are the backbone of our industry.
    AIA thanks this committee for its ongoing leadership in 
listening and learning from A&D industry leaders to support and 
strengthen our industry. A crucial part of this effort is 
rightfully focused on our world-class workforce, which remains 
the bedrock of our industry's success. These men and women 
bring unparalleled experience and expertise, as well as 
tremendous heart to their work on behalf of America's military 
and our aviation transportation system.
    The A&D manufacturing base is a strategic asset for our 
nation, and the workforce is its cornerstone. The pandemic 
underscored how essential these employees are and reminded us 
of the unique capabilities they bring to bear in support of our 
security and safety each day. Without question, addressing our 
21st century workforce needs is vital to our missions, our 
customers, and to America's national and economic security.
    Addressing the workforce needs of the A&D industrial base 
requires a strong partnership between government and industry. 
There are several ways AIA would like to work with government 
leaders and Congress to address these needs. This includes 
investing in STEM education, reskilling current employees for 
new technologies, expanding our country's training efforts to 
broaden talent pools, and increasing workforce diversity and 
inclusion efforts within the A&D industry.
    The workforce is strong but challenges persist. Economic 
conditions like record inflation and the length and severity of 
the pandemic are adding pressures to the budget, affecting the 
cost of personnel, goods, and services. This has a direct 
impact on employment, and ultimately, our customers. These 
concerns were top of mind when our Supplier Management Council 
assembled in New Hampshire a few weeks ago. Like so many in the 
U.S., the pandemic created unprecedented challenges for our 
workforce. In 2020 alone, decreasing demand for products due 
largely to the reduction in air travel cost our industry 87,000 
jobs. Approximately 64 percent of these losses came from the 
shared A&D supply chain, comprising of thousands of small and 
medium-sized businesses. Inflation is exacerbating the 
continued pressure on employment.
    Another challenge the A&D industry faces is the aging of 
our workforce. An estimated 26 percent of our industry 
employees are over the age of 55, slightly higher than the U.S. 
total workforce. Given this disparity and a projected increase 
in retirements, it will be imperative to retain and develop the 
mid-career workforce, while also continuing to attract top 
talent.
    AIA and our Members are committed to strengthening the 
diversity, equity, and inclusion throughout our industry. I say 
more about this in my written testimony, but our companies are 
investing significant resources into the attraction and 
recruitment of diverse candidates to ensure we are accessing 
the full breadth of what the country has to offer and to build 
stronger teams.
    How can industry partner with government to support and 
strengthen the A&D workforce? Congress can expand federal 
support for apprenticeships and career technical education, 
while also removing barriers that are preventing companies from 
effectively competing for highly-skilled talent. This includes 
addressing the lengthy security clearance process which is 
historically slow and bureaucratic, leading to staffing delays 
and slowdowns for important national security projects.
    Additionally, Congress must address the harmful research 
and development tax change that went into effect in January 
2022 that reduces cash flow and in turn will affect employment. 
Nearly 70 percent of R&D spending is for wages and salaries. 
This means that R&D spending is an investment in America's 
workforce, as well as innovation.
    At a time when we need to stay ahead of the growing 
competitive threat from China, we must continue to build and 
strengthen our world-class workforce. It is our employees that 
are incubators of innovation. Their skill will usher in the 
next generation of advancements that transform and empower our 
country in the world. We urge Members to delay this tax change 
during the bipartisan Innovation Act negotiations.
    Thank you for having me today for this important and timely 
hearing. I look forward to your questions.
    Chairman CROW. Thank you, Mr. Fanning.
    Ms. Mackey, you are recognized for 5 minutes.

                    STATEMENT OF M.L. MACKEY

    Ms. MACKEY. Chairman Crow, Ranking Member Kim, and Members 
of the Committee, thank you for inviting me to appear before 
the Innovation, Entrepreneurship, and Workforce Subcommittee 
today. And thank you for your consistent efforts in supporting 
America's small business community.
    My name is ML Mackey, and I am the CEO of Beacon 
Interactive systems. Beacon delivers innovative, efficiency 
improving, digital capabilities to the U.S. Air Force. I am 
also here today in my role as the Chair of the Small Business 
Division of the National Defense Industrial Association (NDIA), 
the nation's oldest and largest defense industry association, 
comprised of nearly 1,800 corporate and over 63,000 individual 
members.
    So the challenge facing the aviation and aerospace industry 
today is a workforce challenge. How do we increasingly grow the 
innovation workforce to address both current and future needs? 
Whether it is a focus on the scientists and engineers 
developing and delivering innovative technology or the 
maintenance technicians, the airmen on the flight line, 
maintaining and sustaining aircraft, there is a workforce 
shortage across the board. To be successful we can either 
increase the workforce so that we have more people available, 
or we can increase the capacity of the resources in place. The 
most successful outcome will be an artful combination of the 
two.
    Using Beacon as an example, participating in federal R&D 
programs not only enabled us to further develop technology 
innovation for the maintainers on the flight line, it also 
enabled us to further develop our own innovative workforce. 
This developmental impact in terms of becoming an ever more 
innovative team is the multiplier effect of federal R&D 
funding.
    It is important to call out that the innovation workforce 
is not only comprised of the technical resources typically 
thought of in STEM discussions, but also the wider team of 
innovation thinkers necessary to bring a successful product 
forward. It includes the program managers, the analysts, and 
the extended teammates of our Air Force colleagues on the 
flight line. This is the diversity of thought and creativity 
that fuels successful innovation. This is the team federal R&D 
funds let us explore, find, and push the envelope to develop.
    Without this well-developed intentional diversity of 
thought, innovation happens in one-off moments not as the 
continuous engine critical to U.S. national security needs and 
the country's economic prosperity.
    At this point I would like to broaden the discussion to 
bring in input and recommendations from my fellow NDIA 
colleagues.
    At NDIA, we talk a lot about workforce training. The 
success and growth of the aerospace and defense industry is 
reliant on a robust and talented workforce. Technicians are a 
critical component to the overall operational safety of the 
industry and are playing a vital role in supporting the 
pandemic recovery efforts.
    Boeing's recently released Pilot and Technician Outlook 
2021-2040 forecasted that 626,000 new maintenance technicians 
will be needed to meet operator and MRO demand to maintain the 
global commercial aviation fleet over the next 20 years. 
Maintenance technicians will play a critical role in restoring, 
inspecting, and preparing aircraft that have sat idle during 
the pandemic to meet airworthiness standards. As importantly 
the industry will need an influx of technicians familiar with 
electrical and hybrid motors and components to keep pace with 
the emerging advanced air mobility sector.
    The recommendation here is to both continue and accelerate 
investment in federal workforce training programs for 
upskilling of the existing workforce, as well as outreach 
efforts for future workforce development.
    Another topic we frequently discuss at NDIA is procurement 
visibility. The need for a clear demand signal from the federal 
government, while important across all industry participants, 
is especially true for small business. This is not limited to 
just to procurement or research and development; it is also 
needed for businesses providing aerospace services, spare 
parts, and support.
    A critical step the federal government, and particularly 
DoD, could take to send a clearer demand signal to industry 
regarding its priorities for aerospace systems' sustainment 
would be to provide additional detail in the operations and 
maintenance budget request regarding the materiel availability 
objective for each major weapon system and the resources 
required across the FYDP to achieve that objective.
    That kind of accountability and transparency on the part of 
the federal government would enable greater investment in 
innovation and workforce development.
    In closing, I will give voice to a third recommendation, 
which is more about how to think about federal R&D than actual 
steps to take. I am going to suggest we collectively adjust our 
thinking on R&D funding from a singular engagement to more of a 
continuum; that it should be viewed as more than just the 
specific outcome of the specific R&D funding. It should be 
understood as a continuous investment in developing the 
innovation workforce critical to the aviation and aerospace 
industry.
    With that, I will close my remarks. Again, I would like to 
thank you Chairman Crow, Ranking Member Kim, and Members of the 
Committee. Thank you for the opportunity to appear before you 
this morning and thank you for your continued efforts in 
helping the small business community.
    I would be pleased to respond to any of your questions.
    Chairman CROW. Thank you, Ms. Mackey.
    Mr. Scholl, you are recognized for 5 minutes.

                   STATEMENT OF BLAKE SCHOLL

    Mr. SCHOLL. Well, good morning, Chair Crow, Ranking Member 
Kim, Members of the Committee. Thank you for having me here 
this morning.
    I am Blake Scholl, founder and CEO of Boom Supersonic, and 
I am pleased to talk about the importance of entrepreneurship, 
innovation in U.S. aerospace, and our efforts to safely and 
sustainably return supersonic passenger flight.
    At Boom, we have already built and tested XB1, which is 
history's first independently developed supersonic jet. In our 
hangar just outside of Denver, we have the world's only 
operational nonmilitary supersonic jet, and we are well on our 
way to launching a Supersonic Renaissance with manufacturing 
starting in 2 years where we will create thousands of jobs in 
our super factory in North Carolina.
    But big things start small. Not that long ago, Boom was a 
tiny band of innovators in my basement in Denver building a 
supersonic airliner markup out of cardboard, plywood, and 
chairs from Office Depot.
    At Boom, we believe in a world in which more people can go 
more places more often, and we are redefining long distance 
travel with Overture, our supersonic commercial airliner. And 
we are proud especially to be part of an American manufacturing 
renaissance that is so desperately needed in our country.
    We are developing our Overture airline to satisfy three 
objectives: speed, safety, and sustainability. Aboard Overture, 
London is just 3.5 hours from New York, and Sydney, Australia, 
will become as accessible as Honolulu is today. Ultimately, we 
envision a future in which all can benefit from high-speed 
flight and making the planet more accessible.
    Increasing travel speeds fosters greater human connection, 
but here in 2022, we actually fly no faster than we did 65 
years at the dawn of the jet age, and I think that statis in 
innovation in aerospace is a big reason why we have workforce 
challenges. We have not inspired young people to enter careers 
in aerospace.
    But small startups are changing the face of innovation and 
aviation. They are innovative, nimble, and able to take risks. 
And this mindset is what propels startups to bring 
revolutionary products, like a supersonic airliner to the 
market. Businesses that do great things all start small. And 
thanks to fundamental advancements in the aviation industry and 
at Boom, safe supersonic flight will now be comfortable, 
affordable, and sustainable.
    And this acceleration in flight is possible thanks to a 
revolution in clean energy. Historically, revolutions in energy 
have powered improvements in the speed of travel. In the 19th 
century, coal powered the transition from sail to steam and 
from horses to railroads. In the first half of the 20th 
century, oil powered the transition into airplanes. In this 
decade, a revolution in alternative sustainable fuels will 
power the transition to supersonic flight.
    It takes new entrants like Boom to change the fundamental 
paradigm of travel, both in terms of speed and sustainability. 
And it is important to note that the United States is not the 
only country developing supersonic aircraft. China and Russia 
are very visible investing in speed.
    The U.S. has long been a global leader in aerospace, and at 
Boom, we are determined to see the country remain at the 
forefront of innovation. And we are grateful for the early 
support we have received from both commercial and military 
sectors. United Airlines has purchased 15 of our aircraft with 
an option for another 35, a deal that brings our order book to 
70 aircraft. And by comparison, only 14 Concords ever entered 
service.
    The supersonic technology we are developing will also give 
new strategic options to the U.S. military. The outbreak of war 
in Ukraine has shown us how important it is to get critical 
people and critical things where they need to be quickly, and 
in the future, supersonic capability will enhance the 
effectiveness of American leaders, diplomats, and 
servicemembers.
    Through the Small Business Innovation Research program, we 
are also proud to have two contracts with the Air Force. Our 
most recent is a 3-year strategic cost-share STRATFI, strategic 
funding increase partnership which is a dollar for dollar match 
between the Air Force and Boom to accelerate R&D on Overture. 
But in reality, taxpayers are getting an even better deal. The 
Air Force is leveraging our private capital and there are 10 
investor dollars for every 1 dollar the Air Force has 
committed.
    By teaming with Boom, the Air Force gets in on the ground 
floor of a transportation revolution that can continue to build 
U.S. air superiority. The Air Force's interest in our work 
sends a powerful signal to our investors, customers, and 
partners, validating the viability of our aircraft, and the 
SBIR program allows the Air Force to mature technologies down 
the road. When we are ready for procurement, the technology is 
ready and the option is there.
    To ensure that U.S. leadership in aerospace endures, 
government must continue to partner with innovative small 
business to nurture innovation and to facilitate the next 
generation of aerospace technology and inspire people to go 
into the field.
    So thank you very much for having me here today, and I look 
forward to answering your questions.
    Chairman CROW. Thank you, Mr. Scholl.
    Ms. Burns, you are now recognized for 5 minutes.

                    STATEMENT OF JUDY BURNS

    Ms. BURNS. Chairman Jason Crow, Ranking Member Young Kim, 
Congressman Luetkemeyer, and other distinguished Members of the 
Subcommittee, thank you for the opportunity to testify in this 
hearing, and thanks much for the opportunities that allow small 
businesses to participate in the aerospace and defense 
industry.
    I am the president and cofounder of Patriot Machine. Over 
the past 31 years, my company has grown from my home's garage 
into a globally competitive aerospace manufacturer with 160 
employees. Headquartered in St. Charles, Missouri, we supply a 
variety of highly complex structural parts and assemblies to 
America's largest aircraft manufacturers. From the beginning, 
innovation has been the key to thriving in a highly competitive 
environment. The long-term health of our company depends on 
regularly integrating new technologies and continually finding 
new and better ways to improve operations. While we pride 
ourselves on our culture of continuous improvement and problem 
solving, there are some challenges we cannot take on alone.
    The labor shortage in America affects all businesses. At 
Patriot Machine, we have seen a marked decline in the number of 
skilled applicants since early 2020. Increasingly, we are 
training new hires on the job because they come to us without 
the necessary manufacturing skills. We are developing internal 
programs that emphasize structured, on-the-job training, and 
mentorship, and also provide financial support for education 
that applies to our industry. The costs of recruiting, 
onboarding and training new hires are significant, particularly 
if those employees leave the company after a short period of 
employment, which sometimes happens with new hires who are not 
yet sure what career path they want to follow. We know 
employees are looking for opportunities to learn and grow and 
we are committed to helping them. This is why we would like to 
see an increase in federal funding for technical education and 
community college programs with a technical focus to help 
prepare the incoming workforce for careers in aerospace 
manufacturing.
    Meanwhile, the aerospace industry's supply chain 
disruptions and rising prices in our sector have only worsened 
in the perfect storm of recent events. The price and lead-time 
of raw materials has doubled. Labor force issues, rising costs 
and other factors have caused our suppliers to increase their 
pricing significantly. Yet even under these volatile 
conditions, Patriot is bound by long-term fixed price contracts 
with our customers.
    I encourage you to keep these challenges in mind when 
making decisions on the 2023 defense budget. The increase 
currently outlined, while helpful, does not provide significant 
growth due to inflation. Aerospace companies like ours depend 
on strong support for advanced development programs, which is 
R&D basically, and for our existing production programs. A 
combination of both helps us to stay ahead with technology, but 
also adds support for long-term stability.
    Lastly, we are a capital-intensive business with a need to 
make serious financial investments in assets that often do not 
pay off for years. This is especially true of the acquisition 
of our high-tech machinery and equipment, which can take 
several years between the initial purchase, manufacture and 
installation. Hiring, training and retaining individuals 
capable of programming and operating this equipment takes 
significant investment as well. Rising interest rates will make 
these acquisitions harder, too. One item which helped manage 
these high-cost hurdles was the Tax Cuts and Jobs Act of 2017, 
which temporarily increased the allowance of bonus depreciation 
to qualified property to 100 percent of the value of assets 
acquired that year. However, that percentage will be phased out 
by 2027. An extension of these benefits, and perhaps even a way 
of making these benefits known in advance and permanent, would 
help Patriot Machine and other small businesses plan for the 
future.
    Thank you again for letting me share my perspective as a 
small business owner in the aerospace manufacturing industry. 
Your investments in aerospace projects allow us to continually 
improve technologies and develop the next generation of the 
workforce and industry leaders
    Chairman CROW. Thank you, Ms. Burns.
    I will begin by recognizing myself for 5 minutes.
    Mr. Fanning, starting with you, there has been a lot of 
discussion about reinvigorating the U.S. manufacturing base, 
onshoring things that we lost in the 1980s and the 1990s to 
create the ecosystem again, particularly in advanced 
manufacturing, yet it remains a very sticky challenge of how we 
find that workforce again that we lost over the last couple of 
decades, those skills. I would love your thoughts on what is 
the best way for us to redevelop that pipeline of skilled 
workers, particularly with respect to advanced manufacturing?
    Mr. FANNING. Thank you for that question. That is something 
we spend a lot of time thinking about. Obviously, we are in 
strong favor of American manufacturing, but we are a big 
exporting industry as well, and so we recognize the importance 
of the global markets in that way.
    There are a number of things that we saw from COVID that 
point to what we would like to bring back to the United States, 
chips being one of them. I think we have cut in half the 
production of chips in the United States as we look for cheaper 
labor elsewhere. But as you pointed out, there is a labor 
problem already, which is slowing the recovery. A number of our 
businesses think they could recover faster and do more quicker 
if they just had access to the workforce.
    I think one of the big things is what programs are out 
there to train for what. I remember Secretary Acosta saying 
when he was labor secretary in the previous administration that 
he was down in Florida talking about needing to train for 
machinists, and a university said, we will create an associate 
degree program for that because that is the only money they 
could get access to from the federal government. So these are 
good, high-paying jobs that require high skills, so leaning 
into and investing more on the government side in 
apprenticeships, work study programs, and really targeting 
where we can go after underrepresented communities. That is a 
whole category, a whole group of people that we are not 
accessing and should be accessing and helping them get on paths 
for these jobs.
    Chairman CROW. And will that require us reaching into K 
through 12 and really starting that pipeline earlier and, you 
know, are there any programs that you think would help, you 
know, really invigorate people's interest frankly in middle 
school and high school in this area?
    Mr. FANNING. Even elementary school. I think you are 
absolutely right. We want to get the big end of the funnel as 
big as possible. I mean, our experience with STEM education is 
it is a series of offramps. You lose kids when they lose from 
elementary school to junior high, junior high to high, high to 
college. You are not finding people that are coming in later in 
life because they do not have the skills that they need that 
they learn in math and basic science. And so there are 
programs, NASA, FAA, Department of Education that try to 
inspire kids into STEM as early as elementary which is 
important because then you need to get them all the way through 
high school to get them into these other types of programs that 
we are talking about, the apprenticeship programs.
    Chairman CROW. Thank you.
    Mr. Scholl, we had a chance to talk earlier about the SBIR 
program and obviously, one of the things we talk about a lot 
within this industry and context is the issue of the so-called 
``Valley of Death,'' you know, where you have a lot of great 
ideas and companies that fall off before they can really bring 
things to scale and bring things to market. So I would love to 
get your views on that and the importance of programs like the 
SBIR program for companies like yours.
    Mr. SCHOLL. Yeah, I think the SBIR program is super 
important as a bridge from zero to one for new technologies. 
Without that, for example, with the Air Force, we would have to 
go from nothing to having a product that is ready for a program 
of record procurement process. And the hurdle for that is very 
high. And what SBIR does is allow the DoD, the Air Force, to 
signal interest in a future product to encourage private sector 
development of that product before it is ready to be purchased. 
So it helps bridge that ``Valley of Death.'' It helps bring 
things along and ensures that the U.S. has an option to procure 
an innovative product when it is ready.
    Chairman CROW. Thank you.
    Ms. Mackey, comments on either of those questions, or both 
of them?
    Ms. MACKEY. Diversity in innovation is really about 
diversity. So I am intrigued by the experience that you have 
about bringing a product forward. I also find in the SBIR 
pipeline that there is an idea and a thought more than a 
product. So there are these different paths that I think are 
all valuable and really important to the process.
    I will share our experience with the SBIR program was about 
bringing a capability forward that manifested into a product 
idea during the SBIR initial investment, and then beyond that 
transitioned to the Navy and now it is transitioning to the Air 
Force. So I think the SBIR program is a really important piece 
of our economy. I think it is also important to the workforce 
in that it lets us try innovative new things that otherwise as 
a small business we might be more conservative on. It lets us 
attract the workers that you were talking about into doing 
interesting work.
    Chairman CROW. Great. Thank you. My time has expired.
    The Ranking Member, Mrs. Kim, is now recognized for 5 
minutes.
    Ms. YOUNG KIM. Thank you.
    I would like to ask my first question to Ms. Burns joining 
us virtually. Thank you.
    In your testimony, you reference the many challenges of 
being a small business owner, including labor shortages, 
inflation, and supply chain disruptions. So these are the 
hurdles that we heard from other businesses as well. And they 
do impact businesses in this similar industry. So how is your 
business managing with all these economic headwinds?
    Ms. BURNS. Thank you. Thank you, Congressman Kim.
    We are taking it all in as much as possible. One of the 
things during COVID that was very helpful was the PPP funding 
and then also----
    Ms. YOUNG KIM. We have technical difficulty.
    Ms. BURNS. Sorry. Sorry.
    We were critical infrastructure during COVID, which was 
very good because it allowed our workforce to continue to work 
through all of the COVID difficulties. We were in the middle of 
building a new building, which we were able to continue doing 
and we are ready for new work opportunities now. And we have 
our new equipment installed. Fortunately, before, the interest 
rates were low but now going forward interest rates are rising. 
That will be more difficult. We are doing the best we can of 
bringing in whoever we can to train and work on jobs but we are 
very, very, let's see, highly technical. So it does take a lot 
of training.
    Ms. YOUNG KIM. So you mentioned that your company provides 
internal workforce development programs to train and mentor 
your employees. So can you tell us a bit more about the types 
of programs you offer? And what is the biggest challenge your 
small business faces in training your workforce?
    Ms. BURNS. Well, we, let's see. We do a lot of different 
things for training. When we onboard people, we have a lot of 
different things we have to train on--safety, different 
processes, equipment. We have a lot of very tight tolerances on 
our parts, less than like a hair's thickness. Then we have to 
measure them and make sure they are all made to order 
correctly. And we just are, let's see, putting in processes to 
make sure that everybody gets the training they need. So, we 
just do the best we can.
    Ms. YOUNG KIM. Thank you very much. Thank you.
    I want to move on to Mr. Fanning. In your testimony, you 
discussed the AIA Members launching a successful apprentice 
program at Valley Community College in San Bernadino. My 
district has parts of San Bernardino. How has this program 
helped meet the company's labor demands and bring new employees 
to the sector?
    Mr. FANNING. The company is CAS, Certified Aviation 
Services I think in your district. It is a great example of a 
public-private partnership. So they join forces with the local 
community college and provide on-the-job training actually on 
the aircraft that they are servicing, and 70 hours of that 
program, of that worktime, counts towards the degree. And it 
provides a pipeline since those students, while they are 
getting their certificates, are already working at CAS. They 
are more inclined and CAS wants to capture them if they can.
    Ms. YOUNG KIM. And those are the things we want to 
highlight. So what can we do in Congress and as Members who 
represent those, like your community college, to highlight and 
raise awareness for apprenticeship programs like that?
    Mr. FANNING. Well, I think the demand exceeds what is 
available for some of those programs. So if we could increase 
the funding for those apprenticeships to provide for the 
schools, that type of training that the companies can tap into 
and partner with, I think you will see the demand will grow 
with whatever the funding is available for those partnerships.
    Ms. YOUNG KIM. What I am hearing is a lot of funding. 
Continue funding that is working.
    Mr. Scholl, how has your business recruited the next 
generation of skilled labor in the past? I know you talked 
about bringing the new generation and want to make sure that 
this industry has more next generation that is interested in 
continuing the work?
    Mr. SCHOLL. Thank you.
    I think the most important thing is inspiration. People at 
very early ages decide what is going to be exciting to go into 
and what they can see themselves going into. And so reaching 
our young people, yes, I think going all the way back to 
kindergarten, if not sooner, and help ensure people from all 
walks of life that exciting things are happening, innovation is 
happening in aerospace, and supporting them all the way through 
their career so they can go do something amazing, not just go 
and work on a new app for a cellphone.
    Ms. YOUNG KIM. Thank you. I think my time is up so I will 
yield back. Thank you.
    Chairman CROW. The gentlelady yields back.
    I will now recognize the gentleman from Texas, Mr. 
Williams, Vice Ranking Member of the Committee, for 5 minutes.
    Mr. WILLIAMS. Thank you, Mr. Chairman, and Ranking Member 
Kim. We talk about garages a lot today. It speaks pretty well 
for garages. So I want to congratulate you all. And I want to 
thank the witnesses for being here today. I appreciate that.
    As a small business owner for over 50 years--I am a car 
dealer so we can talk about supply chain and some stuff--but 51 
years. I still own my business, employ hundreds of people back 
in Texas. I know firsthand that we are always looking for more 
mechanics, technicians, and other technical workers as we 
talked.
    Our country is facing a growing skills gap as younger 
generations are not joining the vocational workforce--we have 
talked about that--at a high enough rate that we need. And I 
was pleased to see that my bill, the Supporting Small Business 
in Career and Technical Education Act passed this Committee in 
our markup yesterday which provides CTE graduates with 
additional support as they enter the skilled workforce. While 
this bill is a great first step in connecting CTE professionals 
and as a lot of kids are dropping out of school they need this 
so they can realize they can do other things and not go back to 
school. Congress and the Biden administration need to do more 
to address the technical worker shortage that is hurting 
industries across the country. And of the business owners 
trying to currently hire workers, we talked about this this 
morning, an astounding 93 percent reported having only a few or 
no qualified applicants for the position they were trying to 
fill and that is because this administration is paying people 
not to work rather than to work and we have got to fix that.
    So, Ms. Burns. I have a question for you. As an aerospace 
manufacturer, I know this technical worker shortage is not news 
to you. Would you elaborate quickly on the biggest challenges 
your small business is facing when recruiting and training 
skilled workers, and how is your woman-owned business adapting 
to this skilled labor shortage?
    Ms. BURNS. Well, it is a challenge. And we are trying to 
get people however we can, basically. We are bringing in people 
that are in other career or maybe, you know, like other types 
of work that have not had more advanced training that can come 
in and grow their skills and their career in aerospace 
manufacturing. And sometimes they do not have, you know, 
schooling past high school and they are more mechanical and 
they like these types of jobs. And----
    Mr. WILLIAMS. If I might interrupt you, it just shows that 
training is important and that sometimes you have to go get 
people from another company rather than training them; correct?
    Ms. BURNS. Yes. Actually, we try not to do that too much 
but there are a lot of people who are switching between 
aerospace jobs who are getting recruited to other aerospace 
companies as well.
    Mr. WILLIAMS. Well, thank you. I will have another question 
for you here in a minute.
    So, Biden is skyrocketing inflation. We talked about that. 
Everybody is affected with this inflation and we have got no 
fix to it right now according to this administration. Continues 
to create uncertainty and has replaced the labor shortage as 
the top concern for small business owners. And on top of that, 
the Bureau of Labor Statistics released its April Consumer 
Price Index reporting that consumer prices, and all of you saw 
this, increased by 8.3 percent, which is worse than experts 
expected. Plus, we have a negative GDP. Another month of raging 
inflation from this administration means more bad news for 
business owners like all of us. And so, as a business owner 
when you get this, you have got to decide whether to reduce 
capital investment, lay off, or cut pay for employees, or pass 
the costs along to consumers in order to offset these increased 
costs, and that is not that easy to pass it on.
    So these are difficult decisions business owners should not 
be forced to make, and so many people in Congress, my 
colleagues, never have to make it because they have never owned 
a business. That is a big problem.
    So let me ask you this quickly, Ms. Burns. Can you expand 
on how the rising costs of goods and gas and labor has impaired 
your business and your customers? I am sure you cannot pass it 
on to consumers. You just in many cases have to expense it; 
right?
    Ms. BURNS. Right. We are going to have to expense those 
costs. I am not quite sure how we are going to cover it yet but 
while we are increasing business, I would say there is one good 
thing in the business environment now. Since we are coming out 
of COVID there seem to be a lot of new opportunities, which I 
think, will help grow our business if we can make sure that we 
get enough qualified people to help expand.
    Mr. WILLIAMS. And I think you touched on that, too. And 
everybody did here. The tax cuts that we passed in 2016, we 
need to make them permanent. Everybody is taking advantage of 
those. That is the debate we had back and forth between the two 
parties, but the tax cuts did as much to help this economy as 
anything, and I am glad to hear our witnesses say that.
    So with that in mind, Mr. Chairman, I will yield back.
    Chairman CROW. Thank you. The gentleman yields back.
    I will now recognize the gentlelady from New York, Ms. 
Tenney, for 5 minutes.
    Ms. TENNEY. Thank you, Mr. Crow, Chairman Crow, and Ranking 
Member Young Kim for holding this meeting. And thank you to the 
witnesses for your time, your insight, and being business 
owners in a tough economy right now.
    I am honored to represent New York's 22nd Congressional 
District which stretches from the shores of Lake Ontario in the 
north, all the way to the Pennsylvania border and everything in 
between. This region has a strong innovation heritage and 
centuries of pioneers in the Industrial Revolution, starting 
back with the digging of the Erie Canal in my district. And it 
is also the birthplace of IBM, the headquarters for the Air 
Force Research Lab Directorate, otherwise known as Rome Lab, 
which is a greater center for innovation in our communities. 
The area around Rome Lab especially hosts a vibrant ecosystem 
of aerospace companies developing the future of drones and 
their potential to improve our lives and our national security. 
This is aided by the New York Unmanned Aerial Systems Test 
Site, which includes a state-of-the-art, 50-mile long testing 
corridor that stretches from Rome, New York, to Syracuse, New 
York. However, one of our biggest constraints holding back 
progress has been the bureaucratic uncertainty from the FAA and 
the federal government, as well as the inability to secure 
needed components. We need a federal rulemaking process that 
actively incorporates the needs of small businesses and not 
just the entrenched interests that tend to be larger. We also 
must ensure that regulators are fully transparent about their 
plans and intentions so small companies can plan and adapt. The 
shortage of components is tied to the country's decades-long 
failure to curate a strong domestic supply chain and a line of 
important products and parts. As our aerospace industry 
increasingly pushes the boundaries of technology, it becomes 
more and more evident and important to ensure that our 
companies can access the semiconductors and the specialized 
components they need. This is a crisis for national security 
and our manufacturing capacity.
    I want to first address my questions to Ms. Burns, and I 
want to say thank you for bringing up the 2017 Tax Cuts and 
Jobs Act and the need to make them permanent. That has been one 
of the greatest things that has happened to our small business 
community in upstate New York. We have finally gotten a 
breather from the oppressive tax and spend type of policies 
coming out of New York State from the federal side thanks to 
that Tax Cuts and Jobs Act. Not only has it give us more growth 
in terms of our small business community; it has given them a 
little bit of an edge against some of their bigger competitors. 
So thank you for that, and I appreciate my colleague mentioning 
it.
    I wanted to first ask you though, in your testimony you 
wrote how the aerospace industry supply chain disruptions and 
rising prices have only worsened and that these constraints 
make it harder to carry out your long-term contracts with your 
customers. Would you be able to give an example of some 
important products that you are unable to purchase domestically 
and have to import from foreign sources and where you have to 
import them from?
    Ms. BURNS. Okay. Thank you for the question.
    We actually only use U.S. made products for our 
manufacturing. We do not outsource or have any foreign sources 
for our product. It is all U.S. made. But some of the prices in 
materials, such as aluminum, titanium, stainless steel, those 
types of things have, you know, some of them have gone up like 
double. Aluminum, for instance, is much more expensive than it 
was previously.
    Ms. TENNEY. Is your aluminum and your titanium, are they 
domestically sourced through the companies or are they--
obviosuly, they are coming from somewhere else.
    Ms. BURNS. They are domestically sourced. Yes. So they are 
made in the U.S. and I do not know why but there seems to be a 
shortage of some things right now. A shortage of supply. I am 
not really totally sure why.
    Ms. TENNEY. Thank you. I think it has to do with our 
policies.
    I quickly want to ask Mr. Fanning a question, and thank you 
for your question, Ms. Burns.
    You wrote that a January 2022 tax change has significant 
impacted America's innovators and their ability to recuperate 
some of their research and development expenses. Can you talk 
more about how this tax change is harmful and how it is hurting 
small businesses?
    Mr. FANNING. The change that occurred this year was to 
amortize R&D investments over 5 years rather than getting the 
credit in the year the expense was made. Seventy percent of R&D 
comes out of the private sector, and 70 percent of R&D expenses 
go to wages and salaries. So it is good for the economy. It is 
good to attract new workforce, and it is good for small 
business because a lot of small businesses are pulled into the 
research and development programs.
    Simultaneous to that, China is doubling down and giving a 
200 percent deduction for R&D expenses. And so we look at it 
both from an innovation standpoint but also from a national 
security standpoint that we are making a change that could 
disincentivize private investment in R&D.
    Ms. TENNEY. Thank you for that. I appreciate it. And I 
think my time has run out so I yield back. Thanks, Mr. Chairman 
and Ranking Member.
    Chairman CROW. Thank you. The gentlelady's time has 
expired.
    I will now recognize the gentlelady from Pennsylvania, Ms. 
Houlahan, for 5 minutes.
    Ms. HOULAHAN. Thank you. Thank you, Mr. Chair, and thank 
you to all of you all for being here today.
    As an engineer and a former Air Force officer, I understand 
the very critical role that this industry and your industry 
plays in supporting our nation's defenses and to promote 
innovation across our economy. In my community in Pennsylvania, 
Boeing employs approximately 462 of my constituents 
contributing to an estimate $492 million of annual economic 
impact throughout Pennsylvania. The industry's impact 
reverberates across all of our local economies and supports 
small businesses in manufacturing and innovation. A common 
theme that I have heard in your testimonies is the need for 
greater federal investments in STEM and STEAM workforce 
development. To address this need, I have introduced a 
bipartisan STEM Restart Act to provide funding to small and 
middle-sized businesses, STEM businesses in particular, to 
offer robust, paid, mid-career internships, known as 
returnships, for mid-career workers. This would particularly 
benefit women who are seeking to return or transition into the 
STEM workforce.
    For Mr. Fanning, could you please talk a little bit about 
how providing funding for flexible workforce development 
opportunities, such as the returnships that are created by the 
STEM Restart Act, would help address the workforce development 
and diversity challenges that are faced by the aerospace and 
defense industry?
    Mr. FANNING. I think one of the things we have learned from 
COVID is the value of flexibility when you can afford it. And 
oftentimes, people leave the workforce because they cannot 
balance the competing needs they have outside of their job. And 
so providing that flexibility, recognizing it, implementing 
what we have learned during COVID we think will entice more 
people back into the workforce, and in particular, as you 
pointed out, women, which will help diversify our workforce.
    Ms. HOULAHAN. I appreciate that. It has definitely been my 
personal experience that it was very hard to kind of balance 
everything when my family was young.
    To Ms. Mackey, in your testimony you spoke about the 
importance of federal investments in Research and Development. 
On this Committee, I have introduced other bipartisan 
legislation that would enhance SBA's SBIR and STTR programs 
which have been shown to provide significant returns on R&D 
investments at the Department of Defense. Could you speak to 
the importance of reauthorizing these programs and share your 
views on how the program can be enhanced?
    Ms. MACKEY. Yeah. So it is incredulous to many of my 
colleagues in industry, at trade associations, and the 
government that the SBIR is at risk of being reauthorized. What 
is it, $1.2 billion a year of innovation. And as you talked 
about, that first step to engage with the Department of Defense 
and bring mission critical technology forward.
    So to your first point, it is almost ludicrous that we are 
even considering whether we should reauthorize it. But of 
course, we should reauthorize it and focus more on it. One of 
the things, I was at a Harvard Business School event 2 weeks 
ago with a lot of leadership from DoD and there were a lot of 
students look about how can we get into national security and 
how can we bring our emerging technologies and entrepreneurial 
interests forward? And one of the conversations was, and it is 
a lot like what you said, that SBIR is a gateway. I hesitate to 
call it a gateway but a gateway into the community that is an 
easy path into what is a different place than traditional 
commercial contracting. So we are a nontraditional defense 
contractor. The SBIR program let us first explore things that 
our more risk averse customers would not have explored. And 
then it exposed us to a whole new marketplace that is quite 
compelling in terms of personal satisfaction in what you 
deliver.
    So I do not know if that answers your question or if there 
is anything else.
    Ms. HOULAHAN. No, I appreciate that. Thank you. And with 
the limited the that I have left, I am really happy to hear 
that there is increased attention back to our conversation 
about diversity and inclusion in the aerospace industry, 
particularly with regard to female representation. According to 
AIA's 2021 Aerospace and Defense Work Study, only 25 percent of 
the workers in the industry are women. Additional data has 
shown that nearly 90 percent of professional airline pilots are 
white men.
    So to Mr. Fanning, how is the industry making strides in 
training, recruiting, and retaining women as part of its 
commitment to increase diversity and inclusion? And what can we 
do to be helpful?
    Mr. FANNING. Well, first of all, it is a priority because 
as we need to grow our workforce and are in a hunt for talent, 
we need to make sure that we are accessing everything that is 
out there. And so if we are leaving some parts of the country 
off the table, it is not going to be very effective for our 
recruiting efforts. Aerospace and defense companies are 
doubling down on efforts to provide mentoring, to provide paths 
for development and career growth and promotion, to recruit 
from different areas than they have in the past to try and find 
that talent. And we are, back to the other conversation, doing 
a number of things to attract people into STEM earlier. For 
example, we run the world's largest student rocketry challenge, 
and we just partnered with the Girl Scouts this year to get 
more girls into the program, get them excited about STEM, and 
then find paths for them through middle school and high school 
and into the industry.
    Ms. HOULAHAN. Thank you. I know my time has run out. I will 
foot stomp again on the importance of returnships. I think we 
are doing our very best to bring young girls along but we have 
to keep them once we get them.
    So I appreciate it, and I yield back.
    Chairman CROW. The gentlelady yields back.
    I will now recognize the gentleman from New York, Mr. 
Garbarino, for 5 minutes.
    Mr. GARBARINO. Thank you, Mr. Chairman. And thank you to 
the Ranking Member for holding this hearing. And thank you to 
the witnesses for being here.
    A question for Mr. Fanning, and maybe Ms. Mackey can add on 
to what she thinks after he answers, but Mr. Fanning, the week 
before last, the Senate Armed Services Committee held a hearing 
regarding the health of the defense industry industrial base 
featuring the president/CEO of the Professional Services 
Council, David Berteau, and former Undersecretary of Defense 
for Acquisition and Sustainment, Ellen Lord. Our hearing focus 
today is a little bit broader than that but both witnesses 
spoke repeatedly about the need for industry to have a clear 
demand and signal from DoD. For example, Secretary Lord stated, 
``If you do not have a clear demand cycle and you do not know 
what is being purchased over the next 5 years, you cannot 
invest your resources, whether that be you plant, your 
equipment, your tooling, your people, in something where you do 
not know where the return is. And because there has been such 
an erratic demand cycle and purchasing cycle, companies start 
to go out of business or they put themselves up for sale. So 
the most critical thing that the government could do is be very 
clear about how much of what is going to be procured over 
multiple years and then have long-term multiyear contracts.'' 
And then Mr. Berteau reinforced this key message by saying, 
``In order to be successful, the company has to predict what 
DoD is going to need. They have to invest in that years in 
advance, and then they have to maintain that investment until 
such time as the contract is awarded. This is very lengthy.''
    I am from Long Island. Northrup Grumman used to have a big 
footprint. They left Long Island but a lot of their 
subcontractors are still on Long Island and I have met with a 
bunch of them. They run through an organization called the 
DAPS. It is an aerospace and defense trade association. And all 
of them have said the same thing as what these two witnesses 
said, they need more clarity in what kind of money is being 
spent and what is going to happen.
    And it is not just limited to procurement though, either. 
It is also, as you heard from, you know, research and 
development. What could the federal government, in particular 
DoD, do to send a clear demand signal to industry regarding its 
priorities for aviation systems sustainment to enable greater 
involvement in innovation and workforce development?
    Mr. FANNING. Thank you for that question. And I agree 
completely with what David Berteau and Ellen Lord said. Having 
spent most of my life on the government side in the Pentagon, 
now working with industry, I see how industry has to guess 
oftentimes. Not only is the clarity not there all the time but 
the consistency is not there. And so the 5-year defense program 
provides some clarity but is not always consistent over those 5 
years. And one key element that is missing from that is 
sustainment costs. Seventy percent of the lifecycle costs of 
what the Pentagon guys are actually in the sustainment of it. 
That is not included in the 5-year defense plan and that would 
be another element that would be very helpful for industry in 
its planning to take some of the guesswork out which would 
actually serve the Department of Defense better in the long run 
as well.
    Mr. GARBARINO. I appreciate that.
    Ms. Mackey, do you have anything to add about what the 
federal government and DoD can do?
    Ms. MACKEY. So I would just add that the reality, the 
picture from a small business owner and from my colleagues at 
NDIA, and that is in plain speak, our bottoms are closer to the 
bottom line. We do not need it be easier but we need it to be 
consistent. So all of the strategic advice that you just gave, 
as well as once you release a procurement, make sure that you 
stay consistent to how you said you wanted to acquire. We have 
businesses inside NDIA right now that are working issues of 
having invested in order to do some of these larger 
procurements that really take them to the next level and then 
the playing field changes at the last minute and the ability to 
absorb those fits and starts and changes is really hard for 
small business. So I think consistency is the piece that I 
would like to recommend from the small business perspective.
    Mr. GARBARINO. Yeah, the bigger businesses might be able to 
manage it better than the small businesses. I have heard that 
as well from the member companies in my district.
    And just quickly, I know I am running out of time soon, a 
couple of you all spoke about what your company or your member 
companies are doing for recruitment because workforce has been 
very tough to fill. And I know what community colleges are 
doing. There has been a big push to get community colleges 
involved. Are we seeing any resistance from high schools, or 
really specifically high schools from pushing people into these 
trade jobs instead of pushing them to colleges or have you seen 
high schools being willing to send people to be part of these 
programs, students? And that is for anybody who has experience.
    Mr. FANNING. I do not know that we are seeing resistance 
but I do know we need to do a better job of explaining to 
schools, and to parents, why these are good paths. These are 
high-paying jobs that can support families and are doing 
interesting things. And so I think that is one thing we have 
identified we need to do better at which is explain why these 
paths are good paths.
    Mr. GARBARINO. All right. Thank you so much. I have run out 
of time so I yield back. Thank you, Mr. Chairman.
    Chairman CROW. Thank you. The gentleman yields back.
    One of the things that this Committee does a lot is talk 
about the supply of pilots, which is essential to making a lot 
of this work. And as additional background and context on that 
issue I want to submit a paper into the record with 
substantially more background by the Airline Pilots Association 
to make sure that we are getting the pilots' perspective on 
training and supply pilots as well.
    So thank you again to our witnesses for testifying today. 
This hearing has showcased the importance of the aerospace 
industry to our nation. The pandemic created unprecedented 
challenges but today the sector is on its way to recovery. 
However, these labor shortages will continue to hold back this 
industry and the entire economy if they persist. So I am 
hopeful we can work together to advance workforce development 
solutions that help upskill workers and ensure that small 
businesses of all types can find the right employees.
    Without objection, Members have 5 legislative days to 
submit statements and supporting materials for the record.
    And I want to just thank again all of the witnesses for 
your perspective, and this is the type of stuff that is 
actually called legislating and getting things done. And this 
is one of the more bipartisan committees in Congress, and I 
look forward to working with all Members to actually get these 
things done.
    So if there is no further business to come before the 
Committee, without objection, we are adjourned. Thank you.
    [Whereupon, at 11:09 a.m., the subcommittee was adjourned.]
                            
                            
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