 you're in your testimony and I yield back. Welcome. Thank you, uh, Miss Salazar, Ms. Olman, you are now recognized for five minutes. Please proceed. Good morning, chairman. I'm and serve on the category whether the many like to pay 11, numerous sounds. Okay, you it's still something. Okay. Okay. Is to share my first hand. Category managers for the role of 30% of my own business in the last two years. It has widened the gap between small and large contractors to the direction of the large company and has reduced the availability of innovative prospective solutions in the economy. Recent executive orders introduced a concept called tiered spending, under which for federal procurement departments are forced to use a small handful of government-wide contract vehicles, best-in-class contract vehicles. These BICs, like Alliance 2, VETS 2 and OASIS, account for hundreds of billions of dollars of spend amongst very small groups of pre-qualified contractors. And of these vehicles, only VETS 2 and OASIS provide a swim lane for a handful of small, minority-owned and or woman-owned businesses. Category management and tiered spending rules create significant problems for small businesses, whereas large contractors have the experience of making credentials to qualify for nearly every single BIC. Small businesses are hard-pressed to qualify for even one. Competing for these BIC contracts requires a small business who have already spent hundreds of thousands of dollars on certifications, have tens of millions of dollars in prior contracts, and meet dozens of other requirements that only the largest businesses would ever have. Here's a sobering statistic. Only .0001% of small businesses, that is one in 100,000, have access to 100% of the BIC spending. And these quote-unquote small businesses are not small by most industry standards. They sometimes have a hundred million dollars in revenue, have been around for decades, and have thousands of employees. Of the tens of thousands of small businesses who might want to pursue a BIC contract, only a few dozen will ever receive an award. The small businesses who don't earn a seat at the table on a BIC contract are effectively barred from competing during the 10-year life of that contract. At the end of the day, the steering of government spending to large businesses results from a loss of millions of small business jobs. Large businesses are offshoring many of the jobs won on government contracts, including BICs. With a concentration of contracting in the hands of fewer larger businesses, the government loses the benefit of competition to lower prices. Furthermore, when large businesses subcontract to small companies, they mark up our services by 25% to 40% without additional value to the government. Innovation is stifled, and let's face it, most of the innovation in today's economy comes from small businesses and entrepreneurs. And the hollowing out of small businesses in our defense industrial supplier base creates national security risks in countless industry sectors. As an immigrant, I'm not deterred by hard work or challenging times. I view it as my honor and responsibility to shoulder and protect the future of vibrant small business ecosystem in the US. And I'm encouraged by the protections of the small business included in the National Defense Authorization Act, including exemptions from category management for small business in all socioeconomic categories. Provisions like these are absolutely essential to protecting the viability of our small business contractors who have already been pressed to their limits. I am immensely grateful for the opportunity to address this subcommittee and for the work that you do to preserve diversity and inclusion in our federal government supplier base. I will gladly answer any questions. Thank you so very much. I cede the floor. Thank you very, very much, Ms. Holliman. We appreciate your testimony. Ms. Casey, you are now recognized for five minutes. Chairman Imfume, ranking member Salazar and members of the committee, thank you for the invitation. My name is Lanane Casey and I am the founder and CEO of Arcus Bisio, a woman-owned small businesses that has provided innovative professional services to the federal government since 2008. I'm also a member of the board of directors of the Professional Services Council and work often with other small businesses who serve the federal government. And this topic is of particularly importance to me. Category management is an urgent issue for my company and other small businesses since it's contributing to the trend of decreasing the small business supplier base and running counter to the purpose of the Small Business Act. In my testimony, I plan to offer some ideas and potential solutions to help grow the supplier base. All of my remarks refer to professional services rather than any items or products. While category management does help increase procurement efficiencies, our company has seen it reduce the number of small businesses and the number of opportunities that are available for companies like mine to compete on. This in turn reduces innovation that small businesses bring. In terms of the challenges of category management, we have been competing as a subcontractor and a prime contractor with the federal government for 13 years who are very experienced. We've been on several category management best in class vehicles. And despite our extensive experience and exceptional performance, we've only won one of those. And that's after spending hundreds of thousands of dollars. We are also a mentor to another small business in the Small Business Administration mental protege program under an A to A program. So both Arcus Biccio and our protege, which are very different with stages of maturity in our company have seen a significant reduction in the number and size, as well as the scope of opportunities for us available to compete and pursue competitively. We love hard work and we love to compete. We just want the opportunity to compete. Many new and re-compete contract opportunities for Arcus Biccio have moved to best in class contract vehicles where we were not a prime contractor and therefore could not pursue the work. Agencies have raised significant concerns about not being able to allow their incumbent small businesses to bid for their re-competes competitively, allowing small businesses to re-compete on follow-on contracts after successfully delivering to the government should be a regular practice in small businesses. And yet category management does not allow this competition and it prohibits innovation, competition, and it doesn't allow for continuous improvement. In addition to fewer opportunities to pursue, it's very difficult for small businesses to compete and win tier three big contracts. You have to have hundreds of thousands of dollars worth of certifications and these big contracts often disproportionately favor small businesses who have extensive experience and certifications with the Department of Defense. And yet many other departments outside of DOD use these vehicles but they can't get access to their current small business contractors. As a result, there are fewer small businesses, there's less competition. And while the revenue to small businesses may be increasing, it's to a much smaller base of small businesses. So ultimately, very small businesses are getting acquired or are just dropping out of the market and we're dramatically reducing the small business supplier base. She's correct. There are four potential ideas that I suggest and provide additional information in my written testimony. I'd encourage the committee to explore looking at category management for spend under management and exempting small business goals from the spend under management to expand the opportunities for set aside contracts. Legislation to increase simplified acquisition thresholds from 250,000 to a million or more is another idea. Considering legislation or policy to allow the GSA multiple award schedules for professional services contracts to be a big is another solution. Thank you so much for the opportunity to testify today and I work on further questions on my testimony. Thank you to the committee. Thank you very much, Ms. Casey. We appreciate your testimony. Mr. Holt, you are now recognized for five minutes. Thank you. Chair Fullmay, ranking member Salazar, and members of the subcommittee. Thank you for the invitation to testify today. I'm Victor P. Holt, President and CEO of BTEC Solutions Incorporated. As a minority veteran of HUBZone firm, we provide health, technology, and professional services. We most recently celebrated our 21st anniversary. Today, I testify as the Vice Chair of the HUBZone Contractors National Council. The council is a nonprofit trade association that provides information and support for companies and individuals interested in the HUBZone program. The HUBZone program provides economic assistance to historically unutilized business zones by awarding federal contracts to HUBZone companies that operate and employ workers who live in designated HUBZone tracks. We would like to thank the committee for its commitment and support of small government contracting businesses. We also thank you for highlighting the topic of category management. This is a topic that the council continues to be concerned about. The council chair, Shirley Bailey, testified in 2018 before the committee on this topic. Today, we are here again facing the same bleak outlook as 2018. The cause for concern remains simple. Small business access to government contracts. Small businesses are the engine that fuels the American economy. We bring growth, innovation, and employment opportunities. We embody the promised hope and future of our country. However, substantial challenges and barriers still exist. The council continues to believe that best in class contracts create enormous barriers for small businesses. As the government moves away from direct award contracts, business opportunities decrease for the small business community. The large buying contract used in category management requires substantial resources to bid and win task orders. These contract requirements are various deterrents that keep small businesses from competing. This includes stringent past performance or other requirements that are impossible for a small business to bid. Subcontracting comes with its own challenges as well. This includes small margins and often alignment with a large or mid-sized prime based solely on cost. Big vehicles also have a crippling effect on small business competitive opportunities. Approximately 25,000 small businesses provide IT services to the government. But for the Oasis Small Business Pool 1, only 30 slots are available. Additionally, some best in class vehicles do not have on ramps. This restricts the opportunities for future on ramping for small businesses, hence shutting us out from high dollar contract opportunities. According to Bloomberg government, IT spending represented more than half of the best in class market in FY20 with the best in class spending of FY21 at approximately 48.4 billion dollars. With a large portion of IT spending going through these best in class contracts, winning a recompete or direct award may be even more challenging than before. Category management when applied to broad acquisitions does not consider that innovation provides incredible value. Best in class should not resemble lowest price technically acceptable. We hope the government does not mistake lowest costs for best value. As the popularity of utilizing best in class contracts increases, hub zones and other small businesses have fewer opportunities to compete. In fact, the government has never met its goal to obligate 3% of the eligible prime contract dollars to the hub zone community. This represents 23 years of missed opportunities and unawarded dollars to hub zone companies that can train, employ and mentor constituents within your hub zone tracks. Very true. No one would disagree with the goals of the efficient government buying and saving a taxpayer money. However, we believe category management comes at a cost. It can restrict the ability of small businesses to grow through federal contract. The council urges the committee to exercise its authority to ensure the government's procurement policies, specifically category management, utilize the small businesses rather than limited. I thank you for the opportunity to speak today and look forward to engaging a continued dialogue. Thank you very much, Mr. Hope. We appreciate your testimony. We will be back to you, obviously. Ms. Tong, you are now recognized for five minutes. Please proceed. We encourage management best in class. If you don't know those things. Chairman and former ranking members and members of subcommittee, I thank you for the opportunity to testify before you today. My name is Xavier Tong. I'm founder and CEO of TNT Consulting Services in TNT. We located in Falls Church, Virginia. TNT is a woman on small business. We specialize in providing strategic IT solutions to the federal government that allow them to successful achieve their mission objectives on time and within budget. I'm testifying today on behalf of the Montgomery Chamber of Commerce, MCCC, in Montgomery County, Maryland. Today's topic is very important for the small business contracting community. The impact of category management is increasingly evident in my industry and affecting our company. Agencies are bundling contracts. They were previously performed successfully by small business, ruining them into large contracts and awarding them to large businesses. The outcome of this action is killing small spires like ours. They are countless example of this in the IT field. For example, August this year, the Defense Health Agency, BHA awarded a large business single award 10 year, two billion, blame purchase agreement, BPA, to support our military health systems enterprise IT service integrator requirement. By taking this work and bundling into a massive single award contract, a monopoly is created. Allow the large business to control and raise prices on the work performed for the government. Large business always claim there's no harm to the small business supplier. As contract consolidation happened, because they will hire us small business as a subcontractors. However, the fact is large firms often take substantial cuts. Small business are usually given our realistically low rates to subs and they make it difficult to meet requirements, recoup and return resource for us. The margins are too thin. Additionally, small business lose the close relationship we had with the government kind when we were prime. And then now we become subcontractors. Another example, large business also use the high rates they receive from government to steal the workforce from small business. There are numerous instance where members of my team have been hired by large business that were awarded my previous contract all due to the consolidation efforts. Unfortunately, my experience is that government clients are able to help in resolving this disputes. And then third one, times has also fully small business leveraging their existing network and relationship with government clients to try to steal contracts from successful performing smalls. For example, we receive a sole source contract to create a minimum viable project MVP for an organization under DHA. The contract is still ongoing and the customer are very satisfied with our performance. But because the contract is very important and could potentially become a very large contract, we were contacted by many large business wanting it to be part of this effort. And one of them is Google. When Google found out we were not able to bring them on the team, Google wrote a letter of concern to DHA, complained that DHA awarded this contract to a small business. Google. This type of behavior is common and increasingly concerning. Google. Although we have grown to large small business, newer and smaller and entrance are particularly hard hit with category management. Even for a mature world established small business with a diverse portfolio like us, contract bundling and consolidation is hurting this business. The cost of getting in a best in cost contract is substantial and requires significant investments just to get a slot. Category management continues to shift an increasing number of dollars to large contract vehicles. Additionally, category management has accelerated the decline in diversity of vendors with large dollar amount held only by a few companies. The chamber opposed inclusion of provision in a FY 2022 NDAA by the committee to combat the effects of category management and any future bundling strategies. MCCC also understands additional factors are contributing to the supplier based decline in addition to category management, increasing transparency and accountability in subcontracting, as well as increasing R&D investment to maintain and growing the small business supplier base. In conclusion, small business are asking for equity, a fair chance to compete for contracts. We are asking for actions from this committee to change the trajectory of contract consolidation, which in our view creates opportunities for large businesses, but results in fewer opportunity for small business like us. We need your help and appreciate the opportunity to bring those issues before you today. Thank you. Thank you very much, Ms. Tong. We're gonna begin our questioning and just a minute, I wanna again, thank all of the witnesses. I know you have much more to say and hopefully you'll get that opportunity as we go around the table, so to speak, and have members join in with questions. How many people feel like David Beedle is sending threatening letters to small businesses? Ms. Almond, I'd like to really just start with you. We all know that the ultimate goal of category management is to increase efficiencies and to decrease duplication and things that harm the process and yet what we see as we've all heard today and which many of you have given in your testimonies has been an adverse effect on small businesses. Now I know some of you, and I wanna come to you in just a moment, had some specific suggestions, but Ms. Almond, what do you think we can do to strike the right balance as the Congress with oversight between the goals of category management and ensuring that we still have a robust small business space? Thank you. I think that the actions already taken in the House version of the National Defense Authorization Act already address some of the important topics that we've been testifying on. For example, an amendment to the small business action included in the NDA states that all contracts awarded under the relevant sections of the Small Business Act will be classified as tier zero. In essence, they will not be aligned to category management principles and not being required to be enforced under category management rules. And it further stipulates that these tier zero contracts shall not be included in metrics related to category management goals and that federal agencies shall not classify tier zero contracts to tier one, two, or three without approval from the SBA administrator. This is a really important step to preventing future small business awards from being rolled up into massive procurements for large businesses, as is currently being done with several of our own task orders at the IRS. And as a metrics person, as a person who lives for numbers, I can tell you that people will do what they're measured against. If you measure them against what percentages they do in each of these tiers and tier zero is not an option for them, guess what, they're not gonna use tier zero. Okay. Ms. Casey, you were specific in your written testimony. You have four recommendations. Is it fair to assume that all of these recommendations that you listed are still very much needed and necessary? And if you would, could you kind of prioritize them and let the committee know what is the most important or the second most important as you see it? Yes, of course. As Ms. Alamon just said, the number one item would be to consider the language that allows small businesses and small business to be considered in category management such that they wouldn't get counted against the metrics. And so that would allow more small businesses to compete. So I agree with that recommendation. I also think considering, and if that can't be done, considering that for professional services contracts, considering the GSA schedules, which are very successful for both new entrants and current small businesses to win prime contracts should be considered because they are competitively awarded under GSA. And so they should be considered under category management. I would also strongly consider that you look at not only current SBA increases in small business size standards, but future increases that keep the small business player base very healthy are very important. Okay, I'm gonna quickly go to you, Mr. Holt. You talked specifically about loss of competition, smaller margins. I think I also heard you say that someone from your firm or that you were associated with came before a similar hearing back in 2018 and that nothing has changed in many respects. Any specific ideas you've heard, both Ms. Olliman and Ms. Casey, what are your thoughts on what we can do and should do immediately to turn this around? I'll go with what they say as far as more language as it relates to the NDAA or inclusion. One of the biggest challenges that we face as small businesses, especially as it relates to category management, that's the class type contracts as a subcontractor is playing with very, very razor thin margins. And we're asked to do a lot with a little and it's sort of like sometimes just going down the line to whatever company will sign up for that. So what we're looking at is how do we hold these primes that we work with more accountable, understanding their pricing structure that you see on the procurement side and being able to say this is fair and justified what they're doing with their small businesses that small businesses will be able to perform. There will not be any false starts in onboarding a small business or subcontractor and getting underway and ensuring good service delivery to the federal government. Thank you very much, Mr. Holt. Ms. Tong, I don't have any time left. So I will try to hold off my comments and questions for our next round, but thank you very much for your patience. As I said, my time has expired. So the ranking member of Ms. Salazar, Florida is now recognized for five minutes. Thank you, Mr. Chairman. And thank you to all the witnesses. I wanted to start with Mrs. Tong. You mentioned that, you mentioned, you said two key words, that you were being bullied and that Google had written a letter to an agency, which I'm sorry that I didn't, maybe I didn't write the name correctly. And I wanted you to expand on the bullying situation who has been bullying you. Listen to this. And number two, if you could expand on that initiative taken by Google and to what agency and what did the letter contain? Thank you, Mrs. Tong. Thank you for the opportunity to talk about this issue. So it was Google, it's the right name Google, the giant. So this is a very important initiative taken by DHA for an organization called Joint Pathology Center. So DHA had conducted sources of before and then identified the solutions they want for this effort. And we were picked to be the integrator for this work. So Google called us and say, we have talked to the executive in DHA and they like our solution. So I told them, say the solution was picked by DHA, all we have to do is to follow the instruction they want, put together the team to perform this work. So I told them, say I would try to help them look for the future, but I just cannot take them to the team. So Google turned around and then send a letter of concern to DHA complaining that why DHA awarded this contract to an AA company? I don't know the detail of the letter because it was directly from the lawyer of DHA. It's a source of thought. But all I know is the customer asked us what we have disclosed to Google, which I didn't because we signed the NDA. This is a very... So you signed an NDA, but nonetheless Google had the information that it should have not had. It was, they got the information from the sources. And also I think they know something from their connection and their network. They know something. In a DHA. They know. So they come to me, I just tell them, I cannot tell you anything. So the DHA is working for Google then? She didn't say that. They didn't pick Google, but this effort. They didn't pick that for the effort. So the sources of thought is a way that DHA find out what could be possible solutions out there for them. And then based on their response, they will decide what are the solutions they would like to use for this effort. So Google participate in the sources of thought but wasn't selected. Right. All right. And when you tell me booming besides what you just described. That's insane. Google's way of conducting itself against your interests. What other bullying incidents have you felt or have you experienced in the last while conducting your business as a small business owner? So I have another counter as example. We create a software that was very successful at the regional level. I was able to convince the CIO to bring it to enterprise wide and they are very happy about it and would support this idea. But unfortunately they were told by the contracting and one of the organization that managed the money told them say, no, we cannot create more contracts. And I cannot say it's a bullying but I think they have connection with the large business. So the work actually got pushed to a large business vehicle and it's not even an IT counter vehicle. And so our customer tell them say, tell them say we are the one creator software and they're hoping that they could leverage us for this effort. But in large business just turn around, use the money to hire our people. All right. Very, very insightful information that I'm sure a chairman is understanding we definitely need to do something about this and continue protecting people like you all over the country that are being stolen, not only their intellectual property, but their employees, people that you have invested time and effort and energy into training for now to be then just stolen away by the bigger guy. Thank you. I think that my time is it's coming to an end. I will get back to you in the second round. Thank you very much for sharing that with us. I'm sure that is not an experience that you've only felt. I'm sure there are thousands of other business, small business owners all over the country that are experiencing the same thing. Thank you, Mrs. Tong. Thank you. Thank you. The general woman's time is as far as the chair recognizes the 30 people watching 17 lights. Thank you guys. Hit like button. Thank you, Mr. Chair. I really appreciate it. Mr. Hold, I wanted to start with you in your testimony. You noted that, quote, with larger contracts being utilized by the federal government, subcontracting is more important than ever. You identify better oversight of prime contractor's compliance with subcontracting plans as one solution. I have an effort, a legislation I'm trying to put forward called the Put Our Dabers to Work Act, which was also included in the House Pass NDAA, which would require upcoming DOD subcontracting opportunities to be posted publicly. So local small businesses have a better chance to compete. One thing that we've come across that has been, that we feel like has been helpful, for instance, are the procurement technical assistance centers, PTACs, like one of the New Jersey Institute of Technology, which provides one-on-one counseling to help small businesses become subcontractors. I want to ask your thoughts. What other strategies should we be using to get more small businesses started in contracting? Trying to figure out how to demystify the process and help them understand what might be feasible. So I wanted to see if you had other thoughts about the PTACs or about other opportunities. PTAC, come on, Ray. They can help you. We happen to work with the PTAC, specifically DCPTAC, and they're a great resource for what we've been able to do and they've been very instrumental. Good political answer. With our growth as it relates to having entry points into federal government introductions, as well as understanding certain programs that are out there. So I would definitely push the PTAC as one of those resources for you. In addition, the putting our neighbors to work, when you said that, I smiled because I always think our neighbors is many different neighborhoods, but me as a HUBZone company, that's something that I really embraced and the HUBZone council embraces that. We're always looking at how do we get subcontracting and prime opportunities put into the HUBZone arena. HUBZone companies, and I say this probably more than anyone, knows how to find these individuals, these neighbors that you speak of, that we can identify, train, employ, coach, and mentor along their career journey and get them into gainful employment. Currently, I have about 120 employees in Alabama with the majority of them, 80% plus of them, are in HUBZone communities. And so when I think about that, working with various local agencies, the Department of Employment Services, working with PTACs, working with veteran organizations who they're always looking at how do we find our returning heroes and our war fighters employment. So those are some of the things that come to mind. I appreciate that, Mr. Hold. And I wanted to just open this up for anyone who might want to respond. But another issue that I'm hearing over and over again is about how small businesses, often have fewer resources than larger businesses in terms of navigating red tape and bureaucracy that comes with contracting with federal government. That often creates these barriers to entry for many qualified small businesses from the very start. So I wanted to ask if any one of you had any thoughts about whether or not there were targeted reforms that could be made to administrative burdens that would allow accessibility for small businesses to enter the market and whether or not you had any thoughts or concrete, some concrete thoughts here about what it is that we can do. So I'll just kind of open that up if anybody has any thoughts. Administrative burdens, Google. I'll speak up real quickly. The HUBZone program has never met its 3% goal requirements since inception, 23 years. Right. There's a lot that can be done there. So why is it P-Technology fixing that? I would offer to work with you on that. The HUBZone Council would offer to work with you on that. Michelle Burnett, I just dropped it in the chat. Any last thoughts here, Ms. Tong? Yeah, I would like to suggest can we remove the JNA requirement for HUBZone woman-owned and SDVOSB sole source because right now every time we try to do sole source for these three categories, the contracting officer, it refused to do so because they have to write JNA and it has to go through the lawyer legal to review and it takes long time. So even though we have the regulatory part saying that we are allowed to get a sole source but no one is doing that or very few of them. Great, thank you. Mr. Chair, I'll yield back. Thank you very much. The gentleman yields back. The chair recognizes Mr. Stauber, the gentleman from Minnesota for five minutes. Thank you very much, Mr. Chair. And thanks to all the witnesses. This is for anyone on the panel. What hurdles must small businesses, particularly new small businesses, that are just starting out in the federal marketplace have to overcome to successfully participate in government contracts under category management? This is for anybody on the panel. I'm happy to take that, Mr. Stauber. New entrance to, gosh, to be a small business entering the market and selling the federal government today is almost impossible. So to actually even learn about all of the contract vehicles and the experience that you need to start applying for those contracts starts as a subcontractor. So you need to find out opportunities to subcontract. But then you need opportunities to prime contract and there are fewer and fewer opportunities to prime contract on GSA schedules than there used to be. The GSA schedules used to provide a great opportunity to subcontract to get you ready to bid on things like a GWAC or a best in class vehicle. And so more opportunities to have allowing more opportunities on the schedules so that small businesses can get the prime contract experience they need to then be a credible prime for the best in class vehicles. It's a critical pathway and very important. Thank you very much. Is there anybody else on the panel that would like to tackle that question or have comments on the question? Oh, I have. Yeah, I got it. So from my experience, I found mental poliger is very helpful for the new entrance. So they can form a joint venture with a larger company and then through the large company they can get a sole source contract or they can get a subcontract opportunity. Just post it on there about mental poliger. To help them to get started. That's how I help my voting GSAs. Thank you very much. And Ms. Taylor, would you want to respond? Aleman. So the thing that I'm looking for today is the opportunity to create opportunities for small emerging companies. So one of those is through mentorships over historically and we benefited from large businesses under the Department of Defense's mentor protege program. And SAIC at that time was our mentor. We learned so much. They helped us with our certifications. But the DoD mentor protege program funds those large businesses, provides dollars for them to have staff to help us. So they're incented to that doesn't exist in the civilians phase. So for those that are working civilian, there is no funding for that. So and quite frankly, as a mentor to other small businesses in the women's chamber of commerce, I find that our smalls, our larger smalls, like the ones represented here today, make better mentors to the small smalls than the big companies because we get them. We're there every Saturday and Sunday writing that proposal. We can hit each other up on teams. We're talking 24 seven. We understand the world they're living in and we're still facing some of those challenges. So we're closer to the fire and we have a better shot at really helping them. So providing funding for mentors would be ideal. Give me the funding. I'm not sure how much time to have perfect. We are I'm mentoring small businesses every day. Looks like you've got a minute and one second. We need to get the funding to people like myself. You know, I think that others were actually doing this work savings for taxpayers. It's absolutely laudable. But it's clear that category management is it has a punishing effect on some of our small businesses. And so I would ask any of the panelists real quick, what suggestions do you have to make our federal marketplace more accessible for small business participation? And just give me one or two quick examples. Go to YouTube. Go to Facebook. People are go to social media. Go to Facebook. I would like to read it. New start companies. I would suggest mandating that all of the agencies use a forecast system to project out what their requirements are. Forecast. So small businesses can pursue both subcontracting and prime opportunities. Yep. And that is not consistent across agencies. They are using old formats to get advertised to small businesses. They're using old vehicles, old means. They're still putting out press releases when we've got. So I would suggest to stop counting the quota of the sole source and then set aside for small businesses toward the tier zero for the category management. And then increase more sole source, more small business set aside. How are the people going to learn how to do sole source? Miss Ellerman, real quick. Yes. So for bigs like Alliant 2 that got canceled for the small businesses, they only offered 80 seats at the table for the 400 small business bidders percentage wise. The 50 larges that got it out of the 80 that bid doesn't make any sense. And YGSA stuck to their ground on 80 when they had the opportunity through the federal procurement process and the protest process to increase the ceiling to 120. And they refused. They just canceled it. And they essentially locked out small businesses from that big vehicle forever because they've canceled the procurement. It's only open for the larges. Well, thank you very much. Back to you, Mr. Chair. Thank you. Thank you. The gentleman from Minnesota yields back. The chair recognizes the gentleman from Pennsylvania, Mr. Muser, for five minutes. Thank you, Mr. Chairman. Thank you to our witnesses very much. This is a quite an important hearing. I have many small businesses in my district throughout Pennsylvania going through much of what you're all discussing. Small businesses in our district. And it's appreciated. And it matters because hopefully we can take this information and do something with it. That's what our role should be, oversight, but also effectuate some improvements. And Mr. Stabber's last question on what we could do to afford you to make contracting more accessible, efficient, transparent is a key question here. So I noted that well. I would ask, Lynn Ann Casey, in your original testimony or your testimony here, losing contracts, you've lost contracts. I'm sure all of you have difficulty retaining contracts due to changes in class requirements. And sometimes that happens sort of late in the game or during the contracting process. Can you illustrate that a little more and tell us? That just sounds like a very, very challenging situation should contract requirement change late in the game. Oh, it's terrible. Yes. What happened to me? Often we find out, we would like to re-compete on a contract. We want to do that fairly. We're not asking to be re-awarded a contract without a competition. But we are finding out later and later that our agencies are at the very end moving our recompete to these best in class vehicles without even clearly communicating that to us. So we don't know where those opportunities are going sometimes. And we have to scramble at the last minute to become a subcontractor to someone who's on those vehicles. And that has happened to us multiple times, mostly because of the department and agency level procurement policies that require mandatory use for vehicles and for category management vehicles. And so often we see those switching vehicles all the time so we can't even track them. We've had multiple contracts go to large business instead of small on category management or to just go on to a category management where we're not a prime contractor and it doesn't happen all the time. Is it explained to you why that occurs? Like the agent that you're working with, they explain to you anything? No, actually at the department level they won't even publish what their policy is. So we only find out about it by talking to a contracting officer who says very little. They say they can't share a copy of the policy with us and they would like to get an exception for the policy but they actually are afraid to put their neck out and go talk to a fair exception process in their agencies. And they really don't have the information to explain it. They just have to blindly follow the policy from their agency. Mr. Holt, does this seem like a fair process to you? No, it's not. This is a process that I've been affected by. We had a best-in-class vehicle being stars too where we were doing cybersecurity work with the Navy. And there was a contract that we enjoyed for almost eight years. When the option period was coming up, they took it down to the wire. They didn't put it on the street. There was no recompete. And that week, we were informed that the small business work was no longer needed. And I saw 75% of my team absorbed in a prime who was already doing work with that program office. And they just took them on. So this is something that has affected us personally. And what that did, that hit us. That was worth about $2.8 million a year and revenue that walked out the door. Okay, glad you didn't hear this. Sorry it occurred, but glad to hear it. I want to change subjects a little bit and ask about vaccine guidance for federal contractors, both from those who provide product and service. In your view, received guidance, it's to go into effect by December 8th, clear, understandable, comprehensible guidance on what type of vaccines your or level of vaccination and all that your employees must have in order to keep your contracts. I don't know. So we've already published a policy for our employees regarding that and we've provided them with timelines, options, the path for obtaining legitimate exemptions. We've engaged once the executive order was signed, within two weeks we engaged legal counsel to develop how we would roll that out into our organization. We've been on all hands calls with our employees, everyone that is vaccinated has uploaded their vaccine cards to a private HR portal. And there are folks that will not get vaccinated that are not exempt and they know that their last day with us will be December 8th. Okay, and I yield back, Mr. Chairman. I will say though that I do hear from many small businesses that have federal contracts that they do not understand clearly the vaccine requirements which they have to abide by. But they don't have their precise requirements. I yield back, thank you. Thank you very much. The gentleman from Pennsylvania yields back. Chair recognizes the gentleman from Wisconsin, Mr. Fitzgerald for five minutes. Thank you, Mr. Chairman. And as somebody that was a former small business owner and a veteran, a lot of the questions today kind of nibble on the edges of what is the big frustration. And it's the same today as I think it's been for many years and that is having the technical assistance available to navigate the federal system. And I know personally, and I think if you talk to specifically a couple of industries, for the most part the sector like manufacturing or certainly I was very familiar with the printing industry. And if you want a federal contract, you either need to hire out professional services that can navigate the federal system and the technical aspects of all the specs that need to be met. Or you need to hire somebody that's full-time on staff that can work and navigate, like I said, the entire system. So that's a frustration that's existed for many years. I would just say there's a couple of different angles I think that could be helpful. And I would like maybe Ms. Tong could comment this and Mr. Holt for sure. If there were larger contractors that were granted kind of a larger scope of what they could enter into or what they could actually bid on. And then the ancillary smaller businesses, whether it's a tool and dye shop down the street or certainly transportation services. If there was some way of enhancing the synergy between those two entities, do you think that would be helpful? Because that seems to be still missing out there in this whole discussion. It's called all smaller technology program. They're already doing that. That's what someone said earlier. Thank you. So I think the challenge for us to working with large businesses is actually the path that they take when they give it to us makes it difficult for us. They don't want to work with us. Yes. They constantly engage small business, but they just didn't give us the good rate or like for us to be able to have. Make money, be successful, be profitable. To work efficient. Right. Be a business owner. And like us TNT, we actually have like 15 contract vehicles. We are able to bid and we see all the opportunities. Right. The challenge is more like some of the opportunities got consolidated, become a super huge contract. And it's just not something small business or even mid-sized company can bid. Absolutely. That's the main issue. So that's not an answer. Mr. Holt, do you have any comment on that? Yes, sir. We've actually had played on both sides of the field. Right now, we are working with a large, come up on a year has been a very enjoyable, enjoyable opportunity. I got a big momentum. They have given us custodial responsibility for the services that we deliver and what the appropriate rates. And that's an anomaly. That's usually not the norm. And what the norm is, is that depending on the health and the needs of the prime, a lot of times when the task order comes up for renewal or recompete, they're going to ask you to lower your rate. They're going to ask you, how do you lower your rate? And we've had it happen admit contract before where I call it the bullying effect. They buy this down. They buy it on the contract. The prime will come and say, hey, is it any role we need you to go down by X percent? They buy down the contract. We've held our ground on some and we've had opportunities for it. We just had to walk away because we couldn't do the business. So if there was a way to have more compliance as it relates to the prime and how the government looked into how they treated their subcontractors, I think it would go a long way as it relates to compliance and oversight and it's showing proper revenue share as far as the pricing that is being pushed down to us. Very good. Thank you. Thank you. And in the, in the limited amount of time that I just wanted to touch on something that Congressman Muser brought up earlier. And that is Mr. Chairman, I think, I think there's kind of a storm brewing out there on the vaccination. No, there are so many different tentacles that are kind of reaching into the smaller businesses that do work or are associated with specific type of types of sectors, whether they utilize a U.S. mail or they may have obviously DOD ties. And you know, what was presented, I think, by the Biden administration as something that was only going to affect corporations with 100 employees or more, we're starting to hear, I am back in the district, that this is reaching down much further than that. And I would hope that this committee would use its voice to make sure we reach out to the administration and make them aware of that because like I said, I think it's a storm that's brewing that could become a big problem. They have not ever met the Hubs on goals since the program has started. They've never met the goals. Vaccination has nothing to do with it. And I will share that with the larger committee on small business that might want to pursue that going forward. We are going to pursue a second round of questioning and I will recognize myself for five minutes. Can any of you or all of you talk to the fact about whether or not you were not allowed to recompete at some point in time on a contract? And what was that like and how did you make out? Anyone? I can speak to that, Mr. Influeme. Over the past three years, we have not been allowed to... Three years. No vaccinations. Three years ago. At least seven different contracts. Nothing to do with vaccinations. Probably well over $15 million of work, where we were getting exceptional ratings from the government on our performance. So it's really significantly affecting us. It's been many, many contracts. What ultimately ends up happening? We're going to have to jump off now. So... Okay, so you're going to second round? Happening is we have to give up the work and then our people who are doing work at that agency then get hired by either the large contractor or the company on category management that won the work. So it's hurting our long-term workforce and it's hurting our long-term revenue and it's in places where we were doing excellent. And then you want me to train these people for free on my own dime. Similar things. And was there any effort to move you into a best-in-class situation? Yes, most of those were because they were moving it from say a GSA schedule to a best-in-class vehicle or they were moving it from a department-wide vehicle into a best-in-class vehicle. So yes, it was because of category management and best-in-class. Now I've heard the term bullying a couple times today and it's interesting because I think what I'm really hearing is something that Mr. Holt referenced earlier and that's the way crimes treat subs and that there is apparently a lack of... There's no accountability. Yes, practices or a lack of guidelines. I mean we put in place a number of guidelines. If you are a prime in order to get a sub, you must do this, you must do that. There are a number of things that have to be complied with. Mr. Holt, am I talking out of school? Are you suggesting here that there are to be some sort of standards that we can put in place even if we do it through report language that would give prime some sense that they're being watched in terms of how they are treating subs to make sure this quote bullying phenomenon doesn't continue? Yes, sir. That's exactly what I'm saying. And do you have any suggestions of what those standards or guidelines should encompass? I think it should be part of their service level deliveries being transparent with the government as well as being transparent with the subs that are supporting the primes understanding what the expected revenue share is up front where a lot of times primes they'll say, hey, we want you on this particular opportunity, give us your pricing, give us this, give us that. And when you go to talk about work share, they don't want to have that conversation. That's taboo. And what usually can come out of that is that they start using us as staff augmentation as opposed to solution is where we can really come in and provide something that is of value, if you will, that we can create more effectiveness, more efficiency. And on the other side of the coin is for the primes to partner with us as opposed to just push work down to us that they may not want to do and that the margin may not be big enough for them to put their own employees in. Okay, my time is short. Mr. Tong, you mentioned also your not so pleasant experience with Google when you heard Mr. Old. Any suggestions you may have also to kind of prevent that from curing in the future? Yes. So I think right now, government only look at the percentage they sub out to the sub or small business, but they never look at like what's the financial numbers in terms of like how much path do they take from the rate and then pass down to small business? Or do they even offer to pass down their escalation to the subs? Because we are asking, we cannot escalate our rate over the year. But you know that people's salary is going to increase over the year. So things like that, if government can look at more mattress numbers like or even use cost plus, look at like what's the actual cost, they hire the sub and they just give them incentive on the part or the profit on the part. I think it will help. So they don't have to cut our rate in order to meet their goal. Okay. Thank you very much. My time has expired. Chair recognizes the ranking member Ms. Salazar. Hey, everybody watching hit the like button please. We've got 38 likes. Hit the like button. Thank you, Mr. Chairman. And this goes for any of the witnesses and any of the speakers. I would like to hear your experiences. I have heard from some of you this term of buying your staff an intellectual property for pennies on the dollar. I know that Mrs. Tong spoke about it, but I would like to hear Mrs. Alleman or Mrs. Casey, if there are any examples that you want to share with us, specifically when another bigger contractor stole from you precious employees after you had trained them and invested money, time and energy in keeping them. Mrs. Alleman or Mrs. Casey or Mrs. Tong? Let's start with you, Mrs. Alleman. I'm not sure if you want to share with us or if you have examples where we can illustrate this practice that's happening right now. Please do so. Yeah. This is a very recent example at the IRS. We have developed an award-winning solution for DevSecOps, CICD, pipeline onboarding, saving the IRS 27 to 30,000 hours a year. For the automation we've done and we've accelerated that with a patent-pending unique solution that we've actually patented, won a national and international award for. They gave us, they were so critical to their filing season that they gave us, they issued us under the women owned, under the women owned procurement preference. They issued us a sole-source contract last year to continue our work because our large agency-wide vehicle got shut down by a BIC. And so, and that was full and open and it got shut down by the BICs. So they issued us this wonderful two-year contract, sole-source base and option. Come September at the end of our base year, we still had an option here that didn't need to re-procure. Instead of exercising our option here, which they need the support we provide, they bundled a series of large contracts into something like 120, $200 million contract. So they bundled it. And they said, no, no, everything goes under that now. So you got to go talk to them. So we did. We went to the prime, Maximus, who said, oh, no, we don't have space for you on our team. This is after-award. Knowing that our work would be shut down, then they sent us, they batted us over. This is the bullying part, but it's almost like collusion. They batted us over to their key subcontractor, which we all know Deloitte is not a small. So Maximus and Deloitte, both of them telling each other in the background, no, no, no, don't hire them. Meanwhile, calling every single one of our employees on that contract. And now the government is calling our employees, our employees, the government, the federal employees are calling our employees saying, go, please go. We can't shut down your work. We need it. We've been off the contract for three weeks and the pipeline has been shut down. So I'm looking forward to January when filing season kicks off. And they are not able to launch this because my employees refused to go. I love your employees. They're sitting on my bench now, which is totally fine because that's on me. That's the kind of decisions we small business owners make. I love it. We choose where our money goes. We choose to invest our profits in our... I wish I could put like a, like a gexer hat on her. ...shut down during COVID, during contract transitions. They don't go because of that. So that's not always... She needs that turnover chain from the University of Miami football team. Give her that turnover chain on her neck. Absolutely. This can happen. And I thank you very much for sharing this testimony. Chairman, you've been listening to this. We got to stop this somehow. That's what we're here for. The government cannot be stealing away from the private sector. So thank you, Mrs. Alamon. I think I have a couple of more minutes. In Mrs. Casey, would you like to share some of your experiences with us? I too have had similar experiences where large businesses have signed subcontracts with us and have given us a work share. Say 30% of the work is supposed to be performed by Archis Bissio. And if we're lucky, we'll get 5 to 10% of that revenue and nobody holds the prime accountable. And there's no way, you know, they have a lot of lawyers and there's no way we can kind of argue with them about standing forward with their teaming agreements. But they use our teaming agreements to actually win the contracts in the first place. So they say, we're going to team with Archis Bissio. They're going to do all this work. And then afterwards, they don't do that. And I too have had similar experiences where a large prime contractor has literally taken one of my employees, given that employee to one of the other small businesses on the contract, and on Friday they leave us and they say that person won't work there. And on Monday, they're there working on the same contract for another small business. Incredible. Unbelievable. Unbelievable. Thank you very much for sharing both of you. And I'm sure that we will, we're going to take action into this. And I think once again, I have to yield back. I don't have any more time. The gentleman woman yields back. The chair recognizes again, the gentleman from Pennsylvania, Mr. Muser for five minutes. Thank you again, Mr. Chairman. Thanks to everyone again for all this important information. And I agree with Ms. Salazar. We certainly need to help and act upon it. So in a couple of testimonies, and in the discussion that just took place, this, you know, Ms. Alamon referred to as predatory joint ventures between large and small firms. And that's been discussed. But I want to delve into that a little bit further. Here, where these larger firms will set up subsidiaries or just new companies and set up joint ventures. And therefore are able to capture contracts that they wouldn't normally be able to capture. And so large companies can do that. And then perhaps undercut along the way. I mean, that's, you know, that's capitalism to an extent, right? I mean, if you can do something better, you're going to be able to sell it for less. But when you're engaged in a deliberate, truly manipulative manner that is not outlined in a contract, it doesn't state, hey, if you want to get a small business contract or minority owned contract or veteran owned contract, you can't just set up a company with those people as owners. And therefore now you're eligible. I mean, that's just clearly against the grain and inappropriate and shouldn't be done. And perhaps should be illegal. Is that something that you've now, you've all been mentioning it, but I'll go to Lynanne Casey. Ms. Casey, is that something that small business experiences related to federal contracts? Say that there are certain situations where large business primes enter into joint ventures. And I would call them serial joint ventures where they do it over and over and over. I think joint ventures are a good thing for small businesses, especially under the mentoring programs. But I would look to maybe limit how often a large business could enter into those joint ventures and whether they're serial joint ventures and therefore preventing other small businesses from benefiting. Yeah, it has to be a legitimate joint venture, not just a spin-off. Someone else like to comment on that? Yeah, can I? So my situation as my mentor, they actually have so many potages. So which makes our joint venture wasn't as fruitful as I wish it would be, because just within us is a food fight, is a food fight within us. And so I want to echo what Ms. Casey said, limit the number of potages they can have, because we can only have two mentors. Right, a limit, right. They can have at a minimum three at the same time. Small business can only have two mentors. We didn't have to mention on other pages. But the big guys can have a limit of potages, like EOD or like Treasury. Great point. I like that later on there. Ms. Alamon or anyone else care to comment? So I'm a big fan of capitalism. I'm a Cuban American immigrant. This is what my parents brought me here to this country to do. I believe in America, freedom, the opportunities that it provides. I will live and die by that. And I can tell you that I hear the pain in Lynanne and Victor and Sophia's voice, because we've all been there. And any small business owner that you put in front of a room and you say, oh, has this ever happened to you? The intent of joint ventures is a good one, just like category management. It's a good one. It's to relieve the pressure of procurement offices. But the reason smalls, ultra smalls, are gravitating towards them, knowing that they're still vulnerable is because they don't have a choice. So I think it's our responsibility, mutual responsibility, you as our elected representatives and us with a voice in our communities and in the organizations we belong, to create that opportunity for them. Let's give them the choice. Let's give them the choice to get work so that they can put other human beings to work, which is what we spend our money on is other human beings. So I just say create more opportunity. Don't shut down capitalism. That's not what this is about. I promise you all the small business owners I deal with, and these on this call, we're not looking for handouts. We're looking for a fair competition. That's all. Perfectly well said. Mr. Holt, last word. You have about 25 seconds. I agree with everything that's been said. A fake joint ventures is a good thing when done correctly. A lot of times we see that it can become predator where companies come together to capitalize and create an unfair marketplace. So long as it's done correctly, 100% support. I agree. All right. Thank you, Mr. Chairman. I yield back. And thanks again to all our witnesses. Gentlemen yields back. Dillman's time has expired. All time has expired. And on behalf of the ranking member, I want to thank all of our witnesses for being here today. Your testimony showcased the obstacles and many of the frustrations that category management has created for small businesses like yours across the country. And the longer we allow these issues to persist for small firms, they will be pushed out of the federal supplier base. This would be bad news obviously for businesses, but it would also be bad news for our government. So I look forward to working with committee members to find ways to improve our federal procurement systems while ensuring abundant opportunities for all small businesses. I would ask unanimous consent that members have five legislative days to submit statements and supporting materials for the record. And without objection, it is so ordered. And if there is no further business before the committee, we stand adjourned. Thank you all very much. All right. So that was interesting to say the least. That was interesting. Thank you all for joining. Thank you for watching. I just want to kind of give people some insight as to what's happening. We actually stand by the HUBZone Council. I put that in the chat. If you visit the HUBZone Council's page, they support us as well equally. And actually on their blog, on their newsletter updates, if you have not subscribed to the HUBZone Council's email list, and I'll tell you why, because on the HUBZone Council's email list, they let you know about all of these things that are happening. And when there's new legislation being pushed or passed, they actually, you can sign an affidavit and support that legislation that helps small businesses. Michelle Burnett, who's been on our show here on our podcast, Gulf Conjines podcast, is one of the biggest advocates of small businesses that I've ever met in my entire life. And so her organization, the HUBZone Council, you don't have to join them, but you can sign up on their email list. And that way you get the information when it's time to actually submit and sign. Like for example, this one that went out last week, I signed and I put in some of my live sessions for people to share. So definitely look into the HUBZone Council. In fact, I'm going to pull it up on the screen. Give me a second here. Let me pull it up. I just got to change over windows. All right. And so here you'll see the HUBZone Council and what they do. Let me just take this off real quick. This is the HUBZone Council, but let me make them smaller so you can see the full page. That's Michelle on the left hand side with those red shoes on. But their organization, I can tell you that the gentleman that spoke today, he was one of the gentlemen was from the HUBZone Council. As you can see here on their blog news updates, they support us. You see some of the content in there from GovCon Giant. So we work with them. I would definitely encourage you to subscribe to their email list. And then that way you can get notified when there's upcoming hearings and summits and things like that. So just I thought I would share that with folks because we got to do something. We have to do something. We can't sit back and let this happen. And we got to bond together, like Kevin Williams said, we have to work together. You got to work on your business, not inside your business, so that that way you can focus on these issues that are affecting all of us. And then you can also be an asset to other small businesses out there. And as quickly as you can actually scale up your business and level up to the point where you could start working with other people, like we had the other day where Sheena and Stephanie were working together on contracts during janitorial work. Demetrius and Chris Facy, two of our students were working together on transportation contracts. The moment that you can start scaling up and leveling up and become an asset to other small businesses, then we can do what Kevin talked about in the chat today, which is collectively working together to stop some of this from happening. Because unless we get together, this is going to continue and perpetuate. And it's only thing you have to do is sit back to the side and watch. Because if you're expecting these politicians to help change these things, I'm not saying that they can't. They may try their best efforts, but we know what the landscape looks like over at the, up in the White House and the Senate and Congress. We already know what that landscape looks like. So I don't want to entrust them, solely entrust them on my future. I'm going to do my part in advocating and pushing so that they raise, like for example, I'm going to see if I have it on the screen. But one of the things that we talked about that Michelle brought up was, I'm just, and I'm reading off the screen here, was increasing the sole source contracts for small businesses from up to $8 and $10 million, increasing the small business contracting goals, adding cybersecurity counseling capabilities to small business development centers, requiring companies to update their SAM status. And why is that important? Because the SAM status, if you go from a small to a large business, is not renewed annually. And so a lot of these organizations are getting away with claiming or taking credit as a small business because they didn't update their SAM status. Very simple things. Clarifying that the HUBZone price preference applies to task orders. Little changes that they can make that can help support small businesses. But I'm going to come on. This came up today, so I popped in. But we do have a live session tonight where we're going to look at the SBA and some of their, hold on, let me pull up on my screen. All right. We're going to look at some of the grants that the SBA awarded to organizations and agencies. We're going to take a look at that today. Hold on, let me see if I can pull this up. We're going to look at that tonight because these companies, these entities, have been awarded SBA grant funds and they're supposed to be supporting small businesses. So if none of us show up and none of us apply, how do we expect to make these people accountable? So tonight at 7 p.m., we're going to show you that so that we can start making some of these folks accountable here. Hold on. So that's what we're talking about tonight. The people on this list, the persons, entities, that were awarded these grants that are supposed to be helping emerging Michael entrepreneurs gain access to capital. We're going to talk about, we're going to take a look at who they are. I'm going to reveal them later on this evening so that we can- Good morning, Ms. Craig. Can we do an audio check really quick? Oh, let me turn this people on. You bet. Testing one, two, three. All right. I got to turn off the hubs on people. Thank you. All right. So we're going to be taking a look at this group tonight and we're going to be revealing who they are so that you can actually show up and say that, you know, that you're here so that you can get yourself, make yourself available and let them know because a lot of times what happens is when organizations get funding and money from the government. All right. Good morning, everybody. I call this meeting to order and without objection, the tier is authorized to clear a recess at any time. Hold on. And so what happened, sorry, there was some background noise. And what happens is if we don't show up and we don't make them accountable, then they can take the money and do whatever they want and say no small businesses participated. So, yep, we're going live on YouTube, Maurice, that'll be 7 p.m. Eastern time. So just in about five hours from now, we'll be back on live talking about this particular SBA awarding 5.2 million contracts and who they are. So, all right, guys, listen. Hey, my man, KW, I appreciate you. I didn't even know you was Eric's brother. Are you his big brother or his little brother? But you're doing good work, Kevin. I really appreciate you. Thanks for all the comments and the feedback. Thanks for everybody who participated and we'll see you in a couple hours.