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Witness Testimony of Mr. Scott F. Denniston, Office of Small and Disadvantaged Business Utilization, Director, and the Center for Veterans Enterprise, U.S. Department of Veterans Affairs

Madame Chairwoman and Committee Members, thank you for convening this hearing to examine the current state of the Federal Veterans’ Entrepreneurship Program.  I am honored to represent Secretary Nicholson, Deputy Secretary Mansfield and the dedicated employees throughout the Department of Veterans Affairs who serve our veterans daily. 

Much progress has been made since the May 17, 2007, hearing on this program.  On June 14, VA and the Veterans Entrepreneurship Task Force conducted the First Veterans’ Business Program Accountability Conference to measure agency progress in implementing Executive Order (EO) 13360.  In this conference, key officials from six large Federal agencies addressed business owners and advocates about their progress and future plans for improving opportunities for service-disabled veterans.  In a plenary session, the Chief of Staff for the U.S. Small Business Administration (SBA) announced details of SBA’s new Patriot Express Loan program.  Representatives from Northrop Grumman, IBM and SAIC addressed corporate buying practices and offered owners marketing advice.  Afternoon action groups focused on Federal prime contracting procedures; subcontracting barriers; status of EO 13360 strategic plans; and education needs for Federal officials and business owners.  To demonstrate their commitment, the program listed email addresses and full contact information for the speakers to encourage follow-up discussion.  We hope this will become an annual event.  A copy of the program is attached to my statement.

We’ve recognized program leaders through our Annual Champions of Veterans Enterprise Awards’ Program.  This year we had a record number of honorees.  Our ceremonies were conducted on June 14 and 27.  In total, 12 Federal agencies were recognized: VA, Agriculture, Air Force, Army, the Defense Logistics Agency, Energy, the Environmental Protection Agency, the General Services Administration, Labor, NASA, State and Transportation.  Five contractors were honored: BAE, Booz Allen Hamilton, EDS, SAIC and TetraTech. 

On June 20, 2007, VA implemented our “Veterans First!” buying program, as authorized by Public Law 109-461.  This law gives VA unique authority to purchase from service-disabled veteran-owned small businesses (SDVOSBs).  It also provides opportunities for veteran-owned small businesses (VOSBs).  For example, VA contracting officers now have the ability to conduct veteran-owned small business set-asides.

We just returned from the 3rd National Veterans’ Business Conference held from June 25-28, 2007.  This program set an attendance record with more than 1,300 participants.  These events provided the community with multiple forums to come together to tackle issues.  These issues are solvable, as we will address today.  More importantly, the advocates, agency officials and business owners are united in support of our Global War on Terror heroes. 

In 1999, Congress legislated the Veterans Entrepreneurship and Small Business Development Act.  For the first time, SDVOSBs had a place in the Federal marketplace.  The law established a 3 percent prime contract procurement goal.  Since then, service-disabled veterans have demonstrated superior performance in some of our Nation's most demanding situations.  A two-year old business, Valador, won NASA’s Columbia Space Shuttle Investigation contract, perhaps NASA’s most visible contract in recent history.  Excalibur Associates organized the largest civilian airlift in our Nation’s history to assist citizens harmed by Hurricane Katrina.  A two-month old business, Horizontal Oilfield Supplies and Services, re-tooled its equipment to remove the water from
New Orleans
after Hurricane Katrina.  They accomplished this in just 12 days even though some government estimates said it would take 12 months.  The Department of State awarded a contract to process visa applications from foreign nationals to an SDVOSB, Quality Support.  In this era of heightened security, veterans deliver.

The 3 percent goal for service-disabled veteran-owned small businesses needs to be achieved across government.  A few initiatives that would contribute immeasurably include: more early acquisition planning tools such as sources sought notices and more pre-solicitation notices in the FedBizOpps electronic posting system; improved acquisition planning; better definition of requirements; and improved evaluation procedures.  Together, these actions would shorten award cycle time.  These actions will help all business owners.

In addition, more coordination by Federal agencies and prime contractors in their outreach to veteran entrepreneurs would benefit everyone.  The Procurement Technical Assistance Centers (PTACs) funded by the Defense Logistics Agency are an outstanding resource for owner training.  PTAC staffs have contact with local Federal offices and prime contractors.  Many centers organize at least one procurement conference yearly.  In our experience, every dollar invested in the PTAC program provides an outstanding return to the taxpayer through businesses that are better prepared to be successful in the Federal marketplace.

As you know, VA exceeded the 3 percent SDVOSB goal last year.  Our procurement budget was $10.3 billion.  We spent $346 million with SDVOSBs, or 3.38 percent.  We spent 6.35 percent of our total procurement dollars with VOSBs, or approximately $651 million. 

Our success is based on leadership focus.  With this direction, our executives and acquisition personnel are using the tools available to help them to locate new suppliers: sources sought notices, pre-solicitation notices, industry days and set-asides.  FedBizOpps is the electronic posting system used by Federal agencies to announce procurement opportunities.  A query of this system for the period July 1, 2006 through June 30, 2007 shows that VA contracting personnel were very active in placing sources sought, pre-solicitation and SDVOSB set-aside notices.  We absolutely believe that advance planning is critical to success. 

Quite simply, VA met the goal because we have the collective will to do so.  Throughout our department of over 230,000 employees, we do not want to simply achieve the goal, we expect to exceed it.  VA’s Deputy Secretary Gordon H. Mansfield personally supported our Champions of Veterans Enterprise Programs and the National Veterans Business Conference.  His presence at these events solidified VA senior leadership’s commitment to veterans in business. 

Deputy Secretary Mansfield is the Department’s Senior Oversight Official for EO 13360.  In this capacity, he directed that performance plans for key VA executives be modified to ensure that our leadership is meeting the 3 percent SDVOSB goal.  In addition, he requires that the senior leaders personally report progress in supporting all small business programs during monthly senior managers’ meetings.

On June 20, 2007, VA implemented our new buying authority, the Veterans First Program.  On that day, Deputy Secretary Mansfield distributed a letter to all employees that clearly establishes his expectation that every VA employee will personally embrace this new program.  One short and simple letter can deliver a powerful message which directly translates to dollars in the pockets of ’s veterans in business.  A copy of this letter is attached to the testimony.

Progress in the service-disabled veterans’ business program is underway.  Last month's Accountability Conference provided an opportunity for diverse groups to discuss their challenges.  “Hats off” to Mr. Ron Poussard and his team at the Air Force Small Business Office.  They stayed the entire day.  They collaborated on problem-solving with the business owners and advocates. Believe me, there were no holds barred.  This was a tough and challenging dialogue.  They promised to continue the conversation at the National Conference in
Las Vegas
, just 2 weeks ago.  They were true to their word.

Also at the conference, Ms. Tracy Pinson, Director of the Army’s Office of Small Business Programs, announced that Army is forecasting $1.8 billion to be spent with SDVOSBs over the next 12 months.  Ms. Pinson has asked VA’s Center for Veterans Enterprise (CVE), to partner with her to ensure business owners are aware of these opportunities.  The CVE supports Federal agencies and business owners.  These services include free market research, collaborative conference sponsorship, communications with industry through our VetBiz.gov Vendor Information Pages database and other support as desired.  VA co-sponsors many business conferences with other organizations.  VA, Army and other agencies organized the National Veterans Business Conference.  On July 25, VA, the Army and the Navy will jointly support a BRAC conference here in the Nation’s capital to provide owners with advance information about procurement opportunities associated with base realignment action from 2008 to 2012.  In addition, CVE maintains a help desk for business owners and others who have questions about the Veterans Entrepreneurship and Small Business Development Act.  We also provide information about VA’s unique procurement authority and other programs supporting entrepreneurship, such as our partnership with the International Franchise Association.  CVE utilizes volunteers in Federal agencies and corporations as our local resources.

The strongest sentiment expressed since we last met in May is a memory from the Accountability Conference.  After participating in several hours of Action Group dialogue, a very young owner said to the founders of this program, generation veterans, "I appreciate everything you have done to clear the way for my business."  This is the current state of the Federal Veterans Entrepreneurship Program.  We have reached a moment in which we have some very robust businesses with good revenues and good experience.  It is time to step forward and support our Global War on Terror heroes as they create their futures, as employees or business owners.  

Madame Chairwoman, let me say that I appreciate what each of you on this Subcommittee is doing to improve economic opportunities for all veterans.  On behalf of so many who would have liked to address you today, "Thank you." Thank you again for convening today’s hearing and for your judicious oversight of this important program.  I welcome your interest and I am prepared to answer any questions that you or the Members may have. 

Memo to VA Undersecretaries from Dep. Sec. Gordon Mansfield regarding Veterans First Contracting Program