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Honorable Marlin Stutzman

Honorable Marlin Stutzman

Good morning.  Everyone here knows about the problems VA has had implementing the small business provisions of a series of public laws beginning with P.L. 109-461.  And we will hear more about it today.

While addressing those continuing issues is important, especially those which may include criminal activity, the past is not my focus.  I want to know how and equally important, when VA will put in place the systems and policies that will shorten the time to be approved, decrease the level of effort needed to pass muster and lower the cost, and finally, create a community of veteran-owned businesses that is reasonably free from unqualified companies.

This is not just a VA task.  There are issues we in Congress need to deal with.  For example, current law effectively eliminates any company funded through investors because of the 100% control requirement.  That means should we adopt a less stringent definition of control which then begs the question of how to prevent rent-a-vet operations from flourishing at the expense of fully qualified companies.

Another issue is what VA describes as negative control where a veteran majority owner can potentially be thwarted by a non-veteran minority owner.  Another is how to best judge the level of control when there is a disparity in the résumés of a veteran majority owner and a minority owner.

Finally, there is the issue of recertification.  I believe the current approach of recertifying every business, whether every year, or every two years, or three years or four years, etc. may overwhelm CVE resources.  Let me explain using an assumed increase of 2,000 approved businesses annually.  As you can see on the monitors, using the current two year recertification process, at the end of the 10th year, CVE will be recertifying 18,000 businesses.  Even using what Mr. Leney will describe as the “simplified recertification process,” I do not see how that magnitude of workload can be managed without a significant increase in resources beyond the current $30 million per year.  We need another approach, perhaps a risk-based one that recertifies companies only when they are identified as a potential contract winner.

So, Mr. Leney, you have your work cut out for you and I truly want you to succeed because that will be good for the veteran business community.  I yield back.