Chairwoman Herseth Sandlin, Ranking Member Boozman, members of the Subcommittee, Paralyzed Veterans of America (PVA) would like to thank you for the opportunity to express our views on the issue of veteran-owned small businesses that contract with the Federal Government.  PVA appreciates the hard work and sincere effort that this Subcommittee applies to their oversight efforts of business and educational programs that help veterans.

Small businesses are the backbone of our economy.  They drive employment and are responsible for the majority of new jobs in this country.  Small businesses generate untold billions of dollars to the Gross Domestic Product (GDP) each year.  In 2009, over half of GDP was generated by small businesses with 500 or fewer employees.  This can be expected to continue in the future.  Simply put, small businesses are the essence of the American Dream, the ability to succeed as an individual through hard work and dedication to a goal.

The issue of small business ownership is important to PVA.  PVA’s members are veterans disabled by catastrophic injury or diseases.  The many challenges still facing these individuals with disabilities as well as other service disabled veterans as they seek employment have resulted in an unemployment rate higher than any other category of citizens in the United States.   With the employment options for veterans limited, many have chosen to use the skills and knowledge acquired in the military to create a small business with the hopes of being able to support themselves and their families.  Small business ownership and self-employment is a bridge for many of these individuals.  Conducting business with the federal government and specifically with the Department of Veterans Affairs (VA) is the goal for many of the veteran-owned and service disabled veteran-owned businesses. 

Since the passage of the “Veterans Entrepreneurship and Small Business Development Act of 1999,” the VA has had a responsibility to support the veteran who is exploring or expanding his or her business to include contracting with the federal government through the Department of Veterans’ Affairs.   In 2001 the VA created the Center for Veterans Enterprise (CVE) within the Office of Small and Disadvantaged Business Utilization program to promote business ownership and expansion for veterans and service-connected disabled veterans.  CVE has worked closely with VA contracting personnel to inform them of their responsibilities to veterans and service-disabled veteran-owned small businesses.  

The VA created a verification process for veterans and service-disabled veteran business owners who plan to conduct business with the VA.  The verification process is the responsibility of the CVE.   Although this was intended to ensure proof of military service or military service that resulted in a service connected disability of the veteran business owner seeking VA contracts, other agencies have often requested this verification to insure the business is owned by a veteran.   This makes verification a required document for the veteran owned business pursuing federal contracts.

Obtaining this required verification has been a problem.  Some veteran business owners have submitted the required documents and have been told they may wait twelve months to receive verification.  This is not acceptable for the veteran-owned small business.  When the veteran decides to contact the office of CVE to check on the status of their application, no one answers the phone.  I am told by veteran business owners that they can not get a response by e-mail or by direct mail.  It is frustrating for the veteran business owner to not know if they have one more month to wait, or six more months.

In a recent meeting of the Veterans Entrepreneurship Task Force, (VET-Force) the current acting Deputy Director for CVE, Gail Wegner, told the organization that it would take a year to process the applications they currently have.  We cannot understand why it should take a year to process these applications.  Meanwhile, the veteran faces a decision of applying for this year and submitting an application for next year at the same time.

The other issue that has veteran business owners frustrated is the policy of the CVE that the veteran business owner can only own one business.  Nowhere else in the federal government contracting marketplace or small business incentive programs do such restrictions exist. Often a veteran-owned small business will have a second similar type business that compliments their primary business.  For example, in the requirements of contracting business with the Department of Defense, one business may require a security clearance for its personnel, while the business directed to the general public would not require such a select workforce.  This policy of owning only one business should be removed.

Lastly, we remain concerned about resources for the CVE.  Congress must provide the Department of Veterans’ Affairs with dedicated funding to ensure the success of the Center for Veterans Enterprise so that it may fully staff its organization to adequately meet the increasing demand for timely certification of veterans’ status, as legitimate entrepreneurial entities.

Chairwoman Herseth Sandlin, Ranking Member Boozman, thank you for this opportunity to testify on this issue.  I would be happy to answer any questions you have.