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Hon. Bill Johnson, Chairman, Subcommittee on Oversight and Investigations

Good morning.  This hearing will come to order.

I want to welcome everyone to today’s follow-up hearing on the VA’s Service-Disabled Veteran-Owned Small Business Certification Process.  I thank the members of the Subcommittee on Economic Opportunity for their participation today and their efforts in improving the process for veteran-owned and service-disabled veteran-owned small businesses to do business with the VA. 

A first item I would like to mention is the several outstanding deliverables due to the Committee, some of which are now nearly two months overdue.  If the VA is sincere about working with this Committee to better the lives of our Veterans, I would expect action that reflects that desire.  Failing to identify the leadership structures of your own VISNs for over two months, or not being able to identify efficiency measures in patient visits for over a month is alarming, and makes me wonder whether the VA is fully aware of events happening under its watch. 

In July, we held a hearing on this certification process.  At that time, Mr. Tom Leney (“Linn-ee”) was relatively new to his position as the Executive Director of Small and Veteran Business Programs at VA’s Office of Small and Disadvantaged Business Utilization, commonly referred to as the “OSDBU” (“Ausd-booh”).  At that hearing, we promised a follow-up discussion with Mr. Leney to see how his planned improvements for the process in certifying veteran-owned small businesses had been implemented after several months.  Today is that follow-up.  I look forward to hearing of the progress made toward achieving those goals and how much longer it will be until the goals are realized. 

I also have concerns regarding recent actions taken by the VA’s Senior Procurement Executive in response to the recent GAO Aldevra decision, which states that the VA should make efforts to contract with veteran-owned small businesses when feasible, and in accordance with the Veterans First contracting program.  GAO recently upheld a bid protest filed by the Aldevra business on a VA contract, and recommended that the VA re-bid that contract.  Despite clear legislative and committee report language outlining the intent of the Veterans First contracting program, the VA decided that GAO’s decision would not apply to its contracting operations and that it would continue as it pleased, doing away with preference for VOSBs and SDVOSBs in much of its contracting.

The VA has made it clear in correspondence and meetings following the Aldevra decision that it has no intention of attempting to clear up its own questions about Veterans First.  Despite acknowledging a problem, the VA is not trying to solve the problem, nor did it even ask Congress or this Committee those questions that needed to be answered years ago. 

Even after the Aldevra decision and the VA’s response, efforts by these two subcommittees to help explain parts of the law that the VA had trouble understanding- several years after its passage- were met with a lack of cooperation on the VA’s part. 

Instead, the VA is determined to run this through the court system, eliminating key opportunities for VOSBs to contract with the federal government. 

When the VA cannot, or chooses not to, implement clearly written legislation, we have a problem. 

This is not rocket science.  The Veterans First contracting program exists to help the VA set the standard in federal government contracting with VOSBs and SDVOSBs.  With Congress and the Administration sharing a goal of increasing contracting with VOSBs and SDVOSBs, the Veterans First language facilitated the achievement of that goal.  The law contains clear wording on how the VA can achieve that goal, while simultaneously helping our veterans do business and not hindering the VA in its contracting efforts.   With straightforward language such as “the Secretary shall give priority to a small business concern owned and controlled by veterans,” it is difficult to understand the VA’s failure to correctly interpret this law, which also provides reasonable accommodations when a VOSB or SDVOSB cannot fill the need. 

We need to get this right.  The certification process must ensure that VOSBs and SDVOSBs are efficiently processed and certified.  We then must ensure that those same businesses are able to compete for the appropriate contracts.  Otherwise, there is no point in having these businesses in the system if the VA is going to ignore them. 

I look forward to today’s testimony on improvements made in the certification process since our last hearing and the further improvements we can look forward to in the near future.  I also look forward to discussion on how we can make the actual contracting system with VOSBs and SDVOSBs work as it is intended.  I am, however, disappointed that VA’s testimony barely touches on the Aldevra topic despite knowing for 30 days that it would be a part of this hearing.  This is no surprise to anyone, and since VA’s October meeting with Committee staff we see no great effort on VA’s part to improve this situation. 

Closing remarks

Improvements in the SDVOSB verification process are obviously a good thing, but I believe we all know the work is far from over.  I look forward to VA’s continued reporting to the Committee on progress made in this effort, not only in approving those eligible companies but also in taking prompt action against those that seek to defraud the government and take business away from our deserving Veterans. 

Our concerns regarding the Aldevra decision are fairly clear as well.  Knowing for the last 30 days that it would come up at this hearing, the testimony provided was disappointing at best.  There is a prime opportunity for VA to solve this issue without the added time and expense of forcing it into the court system.  Our Veterans served this country with pride, and we should be proud to do business with them when they return to the workforce.  The VA can maintain leadership in this arena, but instead is choosing to only do so when convenient.  That is not the treatment our veteran small business owners deserve.