TESTIMONY OF JOHN K. LOPEZ, CHAIRMANASSOCIATION FOR SERVICE DISABLED VETERANS TOJOINT HEARING, U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON VETERANS AFFAIRS COMMITTEE ON SMALL BUSINESS MAY 20, 1998 CANNON 311 U.S. HOUSE OF REPRESENTATIVES OFFICE BUILDING WASHINGTON, D.C. "SERVICE DISABLED VETERANS IN BUSINESS"
BACKGROUND Over 635,000 men and women have died in the wars of the United States of America, including 17,034 who died in prison camps and an estimated 89,414 persons that remain classified as Missing in Action. An additional 327,000 veterans have subsequently died from their service disabilities. THE SURVIVING 28 MILLION VETERANS OF OUR NATION INCLUDES OVER 100,000 WHO WERE PRISONERS OF THE WARS AND 2,100,000 WHO WERE DISABLED IN SERVICE (SDV). As the products of direct and deliberate actions of our government, these 2.2 million service disabled veterans are entitled to unique INDEMNIFICATION. "Veterans have been obligated to drop their own affairs and take up the burdens of the nation, subjecting themselves to the mental and physical hazards as well as the economic and family detriments which are peculiar to military service and which do not exist in normal civil life." Our country has a long-standing policy of compensating veterans for their past contributions by providing them with numerous advantages. This policy has always been deemed to be legitimate." (Supreme Court Justice William H. Rehnquist in a decision reaffirming the special rights of veterans, May 23, 1983) In one area of opportunity, access to participation in the nation’s economic system through small business ownership, the service disabled and prisoner of war veterans of the United States have been the victims of discrimination
ISSUE "Disabled workers were almost twice as likely to be self-employed as were members of the non-disabled population. Finding it difficult to secure gainful employment from others, persons with disabilities may elect to become self-employed. Disabled women were self-employed twice as often as were non-disabled women; 10.8% versus 5.3% among men, 16.8% of disabled persons as against 10.1% of non-disabled individuals were self-employed." (U.S. Bureau of the Census — President’s Committee for the Employment of the Disabled) New medical advances in prosthetics, medications and care techniques have not made it possible for service disabled and prisoner of war veterans (SDV) to pursue their rehabilitation by being owners and manager of small businesses. The U.S. Congress has theoretically affected legislation to assist veterans in small business. That legislation has not assisted service disabled veterans. The State of California has established service disabled veteran small business goals in state contracts and procurements that are available to "certified" small businesses in Article 6 Chapter 6 Division 4 of the Military and Veterans Code and Section 10108.5 of the Public Contracts Code effective January 1, 1990. Additionally, the legislation requires that businesses bidding for State of California contracts demonstrate that they are "responsive" to service disabled veteran business "participationN" in their contract bids. Bidders that fail to show a good faith effort will be bypassed for contract awards to be made to the next lowest "responsive" and responsible bidder.
FINDINGS The U.S. Defense Department, the federal agency that "created" the service disabled and prisoner of war veteran has absolved itself of responsibility for the rehabilitation aspirations of these SDV. It has diverted action on their behalf to the U.S. Department of Veterans Affairs (DVA). The DVA has declined to support and implement legislation assisting SDV to pursue self-employment in a small business (Veterans Benefits Act 38 USC 1517). The DVA has instead further referred that responsibility to the U.S. Small Business Administration (SBA). That agency has totally neglected the SDV. Although the Americans with Disabilities Act (ADA) codifies that the disabled, as a group, are to be considered socially, economically and vocationally disadvantaged, federal agencies chose to ignore that intent of Congress. For example, at the federal level, of the 111,000 small business loans in the nationwide portfolio of the U.S. Small Business Administration (SBA) only 67 were to service disabled veterans, (1988). Also, SBA does not offer 8(a) contract procurement assistance and "exceptional" loan benefits to SDV as a group, although it does so for select ethnic and religious groups. Of 2,900 participants in the 8(a) program six (6) are service disabled veterans and are also members sof "eligible" ethnic groups. Sadly, a 1996 survey of eight (8) federal agencies reveals that these organizations do not even record the inquiry incidence, or share of procurement awards to service disabled and prisoner of war veteran owned businesses (SDVB) thereby precluding specific tabulated evidence of the lack of assistance to SDVB. A sample inquiry of 300 SDV who are starting or expanding a small business in California reports that over 250 had "negative" and "discouraging" experiences when attempting to solicit federal and local governments for equal consideration in bidding for procurements. In program administration, the SBA has ignored advocacy for disabled veterans’ programs while increasing other SBA programs and has requested that the U.S. Congress discontinue direct loans to the "handicapped" and "veterans." Given the established and legal right of private lenders to refuse loans to obvious and extraordinary risks, such as service disabled veterans, that discontinuance would remove the last source of reasonable financial assistance to the SDV. ACTION NEEDED It is imperative that the U.S. Congress and state and local governments establish that Service Disabled Veteran owned small businesses as a group, be included as equal beneficiaries in the definition "socially and economically disadvantaged population," when such definition is used to determine eligibility for benefits of federal, state and local government programs. In a draft bill, November 10, 1993, Congresswoman Jan Meyers called for legislated direction to the U.S. Department of Veterans Affairs to establish and actively implement a small business development and assistance program for disabled in service and prisoner of war veterans. Those SDV that chose business ownership as a means of rehabilitation were to receive financial, procurement and technical assistance resources sufficient to initiate their subsequent success. These resources were to be obtained from existing programs for the socially and economically disadvantaged and therefore were "Revenue and Appropriations neutral." Attempts by several legislators, such as Chairman James Talent of the Small Business Committee, Congressman McDade (HR 1404), Filner (HR 168), Ramstad (HR 794), Solomon (HR 800 and 8002) and Congresswoman Meyer (HR Draft 111093 and HR 4263 Report) to protest and redress this discrimination have not been successful. The Service Disabled and Prisoner of War Veteran Business persons (SDVB) of our nation are hopeful that the 105th U.S. Congress will legislate to ENSURE EQUAL PARTICIPATION in our nation’s economy to those persons who sacrificed so much for a free world. An often mentioned resolution to this controversy is the suggestion that the Congress add language to the Small Business Act that simply states: "FOR PURPOSES OF THIS ACT, THE DEFINITION OF SOCIALLY AND ECONOMICALLY DISADVANTAGED PERSONS SHALL INCLUDE MILITARY VETERANS WITH SERVICE CONNECTED DISABILITIES OR DISCHARGED FOR SERVICE CONNECTED DISEASE OR INJURIES." However, there are other resolutions such as: "SERVICE DISABLED AND PRISONER OF WAR VETERAN BUSINESS OWNERS (SDV) ASSISTANCE." A legislated measure to provide a bidding differential of 10% to bids for federal procurements, when such bids are submitted by certified SDV. A legislated requirement that all federal agencies and their non-small business vendors implement programs that target and increase SDV participation in their actual contract awards. A legislated requirement that the SBA establish an Office of SDV Affairs that conducts a comprehensive program of procurement, financial and technical assistance directed specifically at SDV and that program report its actions to the U.S. Congress and the Committees on Veteran Affairs and Small Business in the U.S. Senate and the U.S. House of Representatives. SUMMARY It is obvious that the governments of this nation cannot restore the maimed bodies of these service disabled veterans but it can assist them in their struggle to maintain their rehabilitation and to participate in that economic system for which they have so greatly sacrificed and in which the people of the United States consistently benefit. If the government and the profiting institutions of the nation are unwilling to support participation in its economic system for those citizens that were maimed and tortured for its perpetuation, it is unlikely that the system will have the support of future citizens. |