EXECUTIVE SUMMARY

Congress passed Public Law (PL) 109-461, the Veterans Benefits, Health Care, and Information Technology Act of 2006. While this legislation provided a number of benefits for veterans; what’s of particular importance for the purposes of this hearing today, is that Title V, Sections 502 and 503 of this legislation, authorized a unique "Veterans First" approach to VA contracting. This approach would change the priorities for contracting preferences within the Department of Veterans Affairs (VA), by placing Service-Disabled Veteran Owned Small Businesses (SDVOSB’s) and Veteran Owned Small Businesses (VOSB’s) first and second, respectively, in satisfying VA's acquisition requirements.

In so doing, it required that certain conditions be met.  All SDVOSB’s and VOSB’s, must register in the VA’s Vendor Information Pages (VIP), aka Veterans Small Business Database, available at www.VetBiz.gov.  To be eligible for award of a contract exclusively within the Department of Veterans Affairs and be ‘VERIFIED’ by the VA’s Center for Veterans Enterprise (CVE).  Once registered in the database, the veterans’ status, ownership, and control would be verified and penalties would be assessed for misrepresentation.

Unfortunately, after more than 2 years, VA’s acquisition officials, their General Counsel, and/or the Office of Management and Budget still have not come to an agreement to publish the regulations to fully implement the portion of the law that pertains to VA contracting for veteran business owners.  Last week, December 8, 2009, the VA issued the Request for Comments on section 819.307 of the Final Rule 48 CFR 819.  Comments are due January 7, 2010. The result is that veteran and service-disabled veteran business owners are continuing to be deprived of millions of dollars in contracting opportunities that could benefit them, their families, and their communities.   

There are thousands of capable and qualified veteran and service disabled veteran owned businesses registered in the VA’s Veteran Small Business Database.  Yet, we often hear from contracting officers and Large Primes that they cannot be found.  Veteran business owners represent America.  They are all races, Black, White, Hispanic, Asian, Jewish, they are Male, Female, Old, and Young. 

VA must fully implement The Veterans Benefits, Health Care, and Information Technology Act of 2006 now and implement it correctly. 

INTRODUCTION (Verbal Testimony):

Good Morning Chairman Mitchell, Ranking Member Roe, other members of this Subcommittee, fellow veterans, and guests.

Let me first thank you for the opportunity to come before you today to share views on the Department of Veterans Affairs’ (VA) “Acquisition Deficiencies” and how this Subcommittee can help to increase contracting opportunities for Veteran and Service-Disabled Veteran-Owned Businesses.  I am the 1st Co-Chairman of the Veterans Entrepreneurship Task Force known as the VET-Force.  My testimony today is mine; not the VET-Force. 

My Navy active duty was many years ago.  With 22 ½ years, I was unexpectedly transferred to the Disability Retirement List as a Master Chief (E9).  I was given a check and sent home.  At that time, I could not work a full workday.  This has happened to thousands of veterans.  The VET-Force and its members want this practice stopped.  PL 106-50 and subsequent legislation/Rule making has significantly improved the Veteran’s Procurement Program. 

This testimony concerns five points:

1. Center for Veterans Enterprise (CVE)

1. CVE personnel are responsible for tasks that require 10-fold the assets they now have.

2. Many of their tasks cannot be completed in a timely fashion because they do not have the authority to complete them.  In other words, they are frequently micro-managed.

3. 12,000 Veteran owned companies desiring “verification” are waiting their turn.  CVEwas verifying 200 each month.  I do not know the recent figure. 

2. Contracting Officers

1. Not all contracting officers are required to follow regulations and rules.

2. They are not always given authority commensurate to responsibility

3. Appropriations and Budgets

1. CVE is a non appropriated organization and it exists only by the grace of the VA Supply Fund

2. CVE needs its own Line Item and a significant increase of available funds

4. VA General Counsel

1. The VA has not complied with the PL 109-461.  The date of enactment was to be 180 days after Dec 22, 2006 - the date of the Act.   Today, six days short of three years, the Act has yet to be completely implemented.

2. All requirements might not ever be implemented because there is a requirement that VA and SBA execute an interagency agreement pursuant to the Economy Act.  Negotiations of this interagency agreement have not yet been finalized.

3. It is General Counsel’s responsibility to ensure regulations are followed in a timely and accurate manner.  The result of their ignoring PL 108-183, 109-461, and Executive Order 13-360 is apathy and confusion throughout the VA acquisition community. 

4. General Counsel’s inaction has caused, in some areas within the VA Acquisition Community, derogatory feelings toward the VOSB/SDVOSB procurement program.  Lack of firm direction has been and is still today creating roadblocks.

5. Vocational Rehabilitation & Employment (VR&E) program and CVE

1.  A significant funds increase is needed for VR&E because CVE cannot assist service-connected disabled-veterans without the VR&E Counseling occurring before the Veteran goes to CVE

Passage of the original concept of PL 109-461 was highly supported by the VET-Force and most Veteran supporters.   It is still supported by the VET-Force.  The law is written for the VA.  One requirement is that the VETBIZ VIP data base be expanded using both VA and DOD data.  It also requires the VA to make VETBIZ VIP available to the entire Federal Government to view the registrants within the data base.  It also states that the VA will verify all VOSB’s and SDVOSB’s prior to awarding a Veteran Affairs contract.  PL 109-461 does not say that the VA’s application of their 38 CFR 74 regulations was to be Federal Government wide.  Both, PL 106-50 or 108-183 direct non-VA contracting officers to accept self-certification.  The Federal Acquisition Regulations also require all contracting officers to practice due diligence prior to award.  Only those desiring VA contracts are to be verified by CVE.  VA’s present procedure is to verify a company and issue them a Verification Pin.  The VA then enters in that company’s profile that they are VERIFIED.  When a VA contracting officer wants to award a contract to a SDVOSB who is in the VETBIZ que for VA verification the contracting officer contacts the CVE and the verification is rushed.  However, when a SDVOSB in the VETBIZ que submits a response to a “NON-VA” SDVOSB set-aside Request for Proposal by a contracting officer who uses VETBIZ, the company not verified will unjustly be considered as not qualified to bid.  The VET-Force has recommended to the VA CVE that all VA CVE verifications remain accessible to only VA acquisition personnel.  The VA CVE has not accepted this recommendation.  Not doing so is sabotaging the Service-Disabled Veteran-Owned Small Business procurement program.  The first step was the VA only.  The second step should be all the Federal Government.