“Leveling the Playing Field: Fostering Opportunities for Small Business Contractors”

1[House Hearing, 119 Congress]2[From the U.S. Government Publishing Office]34                 LEVELING THE PLAYING FIELD: FOSTERING5                   OPPORTUNITIES FOR SMALL BUSINESS6                              CONTRACTORS7=======================================================================89                                HEARING1011                               BEFORE THE1213             SUBCOMMITTEE ON CONTRACTING AND INFRASTRUCTURE1415                                 OF THE1617                      COMMITTEE ON SMALL BUSINESS18                             UNITED STATES19                        HOUSE OF REPRESENTATIVES2021                    ONE HUNDRED NINETEENTH CONGRESS2223                             FIRST SESSION2425                               __________2627                              HEARING HELD28                           SEPTEMBER 10, 20252930                               __________3132[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3334            Small Business Committee Document Number 119-01935             Available via the GPO Website: www.govinfo.gov3637                                __________3839                   U.S. GOVERNMENT PUBLISHING OFFICE4061-897 PDF                  WASHINGTON : 20264142-----------------------------------------------------------------------------------4344                   HOUSE COMMITTEE ON SMALL BUSINESS4546                    ROGER WILLIAMS, Texas, Chairman47                        PETE STAUBER, Minnesota48                        DAN MEUSER, Pennsylvania49                         BETH VAN DUYNE, Texas50                           JAKE ELLZEY, Texas51                         MARK ALFORD, Missouri52                         NICK LALOTA, New York53                        BRAD FINSTAD, Minnesota54                          TONY WIED, Wisconsin55                      ROB BRESNAHAN, Pennsylvania56                          BRIAN JACK, Georgia57                         TROY DOWNING, Montana58             KIMBERLYN KING-HINDS, Northern Marina Islands59                         DEREK SCHMIDT, Kansas60                        JIMMY PATRONIS, Florida61               NYDIA VELAZQUEZ, New York, Ranking Member62                       MORGAN MCGARVEY, Kentucky63                       HILLARY SCHOLTEN, Michigan64                      LAMONICA MCIVER, New Jersey65                        GIL CISNEROS, California66                       KELLY MORRISON, Minnesota67                        GEORGE LATIMER, New York68                         DEREK TRAN, California69                       LATEEFAH SIMON, California70                       JOHNNY OLSZEWSKI, Maryland71                        HERB CONAWAY, New Jersey72                    MAGGIE GOODLANDER, New Hampshire7374                 Lauren Holmes, Majority Staff Director75                 Melissa Jung, Minority Staff Director7677                           C O N T E N T S7879                           OPENING STATEMENTS8081                                                                   Page82Hon. Nick LaLota.................................................     183Hon. Gil Cisneros................................................     28485                               WITNESSES8687Mr. Rao Anumolu, President & Chief Executive Officer, ASR88  International Corp., Hauppauge, NY.............................     689Mr. Michael Ramos, President, Raymond Global, Conyers, GA........     890Ms. Sue Tellier, President and Owner, JetCo Federal, Grand91  Rapids, MI.....................................................    109293                                APPENDIX9495Prepared Statements:96    Mr. Rao Anumolu, President & Chief Executive Officer, ASR97      International Corp., Hauppauge, NY.........................    2998    Mr. Michael Ramos, President, Raymond Global, Conyers, GA....    3399    Ms. Sue Tellier, President and Owner, JetCo Federal, Grand100      Rapids, MI.................................................    41101Questions for the Record:102    None.103Answers for the Record:104    None.105Additional Material for the Record:106    Associated Builders and Contractors (ABC)....................    46107    Aleto, Inc...................................................    48108    Karrington Clinical Laboratory...............................    49109    CMGT.........................................................    51110    Consulting Corporation.......................................    53111    DEFUTEK......................................................    54112    Engineering/Remediation Resources Group, Inc. (ERRG).........    56113    Government Acquistions, Inc. (GAI)...........................    57114    Metis Technology Solutions, Inc..............................    60115    Kilda Group, LLC.............................................    62116    CarINTech, LLC...............................................    65117    AdNet........................................................    66118    First Principles & Concepts (FP&C)...........................    67119    Millennium Health & Fitness..................................    69120    Bridges System Integration...................................    71121    Patricio Systems, LLC........................................    74122    Sygnetics Inc................................................    76123    Coalition Letter.............................................    78124    Mid-Tier Advocacy (MTA)......................................    86125    The American Small Business Chamber of Commerce (ASBCC)......    88126    National Veteran Small Business Coalition (NVSBC)............    89127    U.S. Women's Chamber of Commerce (USWCC).....................    90128    National Congress of American Indians (NCAI).................    91129    Professional Services Council (PSC)..........................    94130    Workplace Solutions Association (WSA)........................    98131    Women Construction Owners & Executives, USA (WCOE)...........   102132    Greater Los Angeles African American Chamber of Commerce133      (GLAAACC)..................................................   105134    UpState New York Black Chamber of Commerce...................   108135    Center for Entrepreneurial Opportunity.......................   112136    Purple Jay, LLC..............................................   114137    Coleman-Anderson, LLC........................................   116138    The Regional Affiliate Councils of NMSDC.....................   118139    San Francisco African American Chamber of Commerce (SFAACC)..   122140    Small Business Majority Letter...............................   126141    Minority Business RoundTable (MBRT)..........................   131142    Native American Contractors Association (NACA)...............   132143    National Ramp Letter.........................................   148144    EA Engineering, Science, and Technology Inc., PBC Letter.....   150145    Southeast Cherokee Construction, Inc.........................   152146    SJS Executives, LLC..........................................   155147    B&T Construction Logistics, Inc..............................   157148    IMPRES Technology Solutions, Inc.............................   159149    X&T Enterprise Company.......................................   161150    Information Systems Solutions (ISS)..........................   163151    Venatore, LLC................................................   164152    Airport Minority Advisory Council (AMAC).....................   166153    AvantGarde, LLC..............................................   170154    GovEvolve Letter.............................................   172155    HUBZone Contractors National Council.........................   177156    ITVAR Modernization Coalition................................   182157    The Montgomery County Chamber of Commerce (MCCC).............   185158    Planate Management Group (PMG)...............................   189159    The Women's Procurement Circle (WPC).........................   194160161LEVELING THE PLAYING FIELD: FOSTERING OPPORTUNITIES FOR SMALL BUSINESS162                              CONTRACTORS163164                              ----------165166                     WEDNESDAY, SEPTEMBER 10, 2025167168              House of Representatives,169               Committee on Small Business,170                        Subcommittee on Contracting171                                        and Infrastructure,172                                                    Washington, DC.173    The Subcommittee met, pursuant to call, at 9:33 a.m., in174Room 2360, Rayburn House Office Building, Hon. Nicholas LaLota175[chairman of the Subcommittee] presiding.176    Present: Representatives LaLota, Meuser, King-Hinds,177Williams, Cisneros, Scholten, Morrison, Latimer, and Tran.178    Chairman LALOTA. Good morning, everyone. I now call the179Committee on Small Business to order.180    Without objection, the Chair is authorized to declare a181recess of the committee at any time.182    I now recognize myself for an opening statement.183    Small businesses are the economic engine of America. They184make up 99 percent in this country and provide over half of all185jobs. Yet, when it comes to contracting with the federal186government, small businesses are too often shut out. The facts187speak for themselves. Less than 30 percent of federal188contractors are small businesses, and while the total dollar189value of federal contracts going to small business firms has190gone up, the number of small businesses winning those contracts191has gone down, meaning fewer local employers, fewer innovative192solutions, and less competition for taxpayer dollars.193    The reasons are not hard for us to see. The federal194procurement system is riddled with barriers, including onerous195compliance costs, agency rules that favor the biggest firms,196and solicitations written in dense, legal, and technical jargon197that all discourage small businesses from even applying.198Compliance alone is crushing.199    Over the past 4 years, Washington piled on nearly $2200trillion in new regulatory costs and 359 million new hours in201paperwork. For small businesses, that translates to about202$15,000 per employee per year, over 20 percent more than what203the larger firms pay. For small businesses working with the204government, the burden has doubled. Not only do they have to205comply with 100,000 pages of federal regulations, they also206have to navigate more than 2,000 pages of the federal207acquisition regulations and the defense supplement.208    These rules and requirements add up, and some of the small209firms decide it is simply not worth their time or money to bid210on federal contracts. This means America continues to lose out211on the innovative, cost-effective solutions small businesses212are known for, and taxpayers pay the price. On top of that,213practices like contract bundling, that combine multiple smaller214contracts into one larger solicitation, effectively sidelines215small businesses that could have delivered those services216directly. Instead of competing as prime contractors, they are217pushed into subcontractor roles. That is not leveling the218playing field.219    One of the most common complaints I hear from small220business owners is about the language itself. federal contracts221are written in a way that is nearly impossible to understand222without a lawyer or consultant. In fact, a Naval Postgraduate223School study reviewed more than 1 million Department of Defense224solicitations and found that fewer than 3 percent were written225in plain English. Most required at least a college education to226understand. Even seasoned small business contractors told227researchers they couldn't tell what the government was really228asking for. I think that is totally unacceptable.229    If a business owner can't even figure out what product or230service the government wants to buy, how can they fairly231compete to provide it? That is why I introduced the bipartisan232Plain Language Contracting Act. This bill requires federal233agencies to write solicitations clearly and concisely. The best234part is it doesn't cost taxpayers a single dime but lowers the235barriers to entry and increases competition.236    When contracts are written in plain language, small237businesses can make faster and more informed decisions. They238don't need to hire expensive lawyers just to submit a bid, and239more competition means better value for the government and for240the taxpayer. The House has already passed this bill with241strong bipartisan support, and now I call my colleagues in the242Senate to take up this commonsense legislation.243    Together with the Trump administration's deregulatory244agenda of cutting red tape, reducing paperwork, and simplifying245the federal acquisition regulations, this legislation will make246federal contracting accessible again to America's small247businesses.248    The bottom line is simple: government contracts should be249written so that everyone can understand them. If we remove250unnecessary barriers and insist on fairness and transparency,251we can unleash the full potential of America's small252businesses, strengthen our industrial base, and deliver better253results for taxpayers.254    I look forward to hearing from our witnesses today about255their experiences and their ideas on how we can keep leveling256the playing field for small business contractors.257    I now recognize my good friend, Ranking Member Cisneros,258for his opening remarks.259    Mr. CISNEROS. Thank you, Mr. Chairman.260    And I want to thank our witnesses for being here with us261today.262    The federal government obligated $755 billion in contracts263in fiscal year 2024, $183 billion of which was awarded to small264business government contractors. These dollars highlight the265critical role small businesses play in supporting federal266agency missions, but they do not paint a complete picture or267reflect the health of the industrial base.268    Over the past decade, as the dollars have gone up, the269number of small vendors in the government's ecosystem has been270cut in half. The government has a recruiting and retention271problem when it comes to small business. We must address both272issues. Too few are signing up and too many getting out.273Today's hearing is especially timely as the government is274rewriting its procurement rules. We can almost all agree that275the government acquisition process has become too cumbersome,276too burdensome, and needs to be simplified.277    During my time at DOD, I saw a system that does not produce278the best outcomes with many projects not being delivered on279time or on budget. Well-thought-out reforms that will make the280process quicker, smarter, and deliver the best results would be281welcomed. Unfortunately, I do not believe we are seeing that282now, and we have reasons to be concerned. Previous efforts have283shown what happens when reforms are imposed without small284business involvement. For example, category management285practices have saved taxpayer dollars, a goal we all share.286Yet, many believe they directly contributed to the shrinking of287the industrial base.288    The administration recently mandated required use of289certain contracting vehicles, but requiring the use of certain290contracting vehicles may create barriers to entry and barriers291to competition for small businesses. We need the administration292to provide clarity on how this will be implemented and how it293will impact small federal contractors. I am worried that the294lack of transparency from this administration and the lack of295involvement from the SBA means we may end up in a situation a296decade from now needing to hold an urgent hearing on how to297reverse the decline of the industrial base.298    This committee cannot allow small businesses to become an299afterthought. We need to ensure that they are heard and their300concerns are addressed. Small businesses are the ones driving301innovation and bringing in talent and solutions that deliver302real value to the government customer. Their success is a win-303win for them and for the government.304    In the past 7 months, SBA has testified once before our305committee. I expressed my frustration at the time that we do306not have the opportunity to hear from the decisionmakers and307discuss these issues directly. I hope we will again soon. When308I asked the Administrator about the FAR changes, and309specifically the Rule of Two in the hearing, it was unclear if310the SBA had been involved.311    This is a troubling pattern. Rather than advocate for small312business government contractors, the SBA has been AWOL. The SBA313did not take any action as service-disabled veterans saw their314VA contracts canceled, and many small businesses took hits from315DOGE. There was no action from the SBA to support women-owned316small businesses as they got kicked off contracts due to the317administration's misguided DEI claims.318    The SBA did, however, lower the goals for contracts awarded319to some small businesses, like those on our panel, and has320targeted the 8(a) program in an attempt to decrease use of321these critical business development tools. The SBA is also322gutting the office whose job it is to maximize small business323prime and sub contracts across the government.324    I will close by adding that I hope today we can counter325some of the attacks we hear on small business programs. They326are not handouts--that small firms could not otherwise compete327if we did not have these in place. Nothing could be further328from the truth. Small businesses don't need handouts, nor do329they want them. They want a level playing field with a fair330shot to compete.331    I look forward to hearing from each of our witnesses about332how we can help them do that. Thank you very much. I yield333back.334    Chairman LALOTA. The gentleman yields.335    I now recognize the full committee Chairman Roger Williams336for his opening remarks.337    Mr. WILLIAMS. Thank you, Mr. Chair.338    And I can barely see all of you, my chair is sitting so339low. I am really not 5-foot 6, I promise. Anyway, thank you,340Mr. Chairman, and, everybody, for being here today, for holding341this hearing on the issues small businesses face when competing342for valuable federal contracts. I look forward to hearing about343our witnesses' experience navigating a cumbersome federal344procurement process.345    It can be difficult for small businesses to compete when346agencies make it unnecessarily difficult to even understand347what a product and service is being asked for. This discussion348comes at a critical time in this country as our nation349continues to prioritize economic growth under President Trump,350and we must ensure that small businesses have a fair and351meaningful opportunity to compete for and win federal352contracts.353    One of the simplest ways to empower small business in the354government contracting is to ensure contract solicitations are355written in plain language. When the government clearly and356concisely communicates its needs, small businesses can prepare357proposals that meet the agency's demands. This not only358improves competition by removing the unnecessary barrier but359also reduces the cost of hiring compliance attorneys.360    And, moreover, we must streamline the procurement process361to produce administrative overhead. Small businesses often find362themselves overwhelmed by redundant forms, under submission363procedures, and rapidly shifting deadlines. By simplifying and364standardizing these procedures, we will ultimately deliver365greater value to taxpayers and more innovative solutions for366government agencies. Small businesses shouldn't be at the367disadvantage just because they don't have the same resources368that large firms have to hire massive teams of lawyers. In a369truly competitive market, very qualified businesses, every370qualified business, big or small, should have a fair and371transparent shot at competing for success.372    I look forward to working with my colleagues and hearing373from today's witnesses on how plain language and streamlining374the procurement process can ensure the best products and375services are selected.376    With that, Mr. Chairman, I yield back.377    Chairman LALOTA. Thank you, Mr. Chairman. To summarize, the378Chairman endorses the Plain Language Act, is what I think I379heard. Thank you, Mr. Chairman.380    Mr. WILLIAMS. [Inaudible.]381    Chairman LALOTA. Yes, sir, I will. And this big seat is382pretty nice over here, Mr. Chairman. Thank you very much.383    I will now introduce our witnesses. Our first witness here384today is my constituent, Mr. Rao Anumolu. Mr. Anumolu is the385president and chief executive officer of ASR International386Corporation on Long Island in New York. Mr. Anumolu founded ASR387International in 1986 and has over 40 years of experience in388aviation manufacturing, engineering, and program management for389major aircraft programs like the A-10, F-14, and the F-18.390    Mr. Anumolu was awarded the 2010 Ellis Island Medal of391Honor, which recognizes recipients for outstanding392contributions to their communities, the nation, and the world.393Mr. Anumolu earned a master's in industrial engineering and a394master's in business administration from Illinois Institute of395Technology. He is also a graduate of the Owner/President396Management Program at Harvard Business School.397    Thank you for joining us today, sir.398    Mr. ANUMOLU. Thank you.399    Chairman LALOTA. Our next witness here today is Mr. Michael400Ramos. Mr. Ramos is the president of Raymond Global in Conyers,401Georgia. Prior to becoming president at Raymond, he was the402executive vice president and federal lead. In these roles he403led Raymond's engagement and presence in the federal market.404    Additionally, Mr. Ramos serves as a Board Member for405Raymond Global and oversees their continuous improvement406initiatives. Mr. Ramos formerly served as a director of407analysis for DBNA and as a senior associate of Booz Allen408Hamilton. Mr. Ramos received a bachelor of science in chemical409engineering from the Massachusetts Institute of Technology and410a master of science in chemistry from Tufts University.411    We appreciate you being here today.412    Mr. RAMOS. Thank you.413    Chairman LALOTA. I now recognize my friend, Ms. Scholten,414to briefly introduce her constituent, who is the last witness415appearing here today.416    Ms. SCHOLTEN. Thank you so much, Mr. Chair. I am so pleased417that we were able to get this really important hearing418rescheduled.419    And I am so proud to introduce Sue Tellier, owner of JetCo420Federal and a constituent of mine in Michigan's Third421Congressional District. JetCo is a packaging storage and422distribution company headquartered in Grand Rapids, Michigan.423It began in 2007 and won its first federal contract in 2009. It424is an SBA WBENC-certified woman-owned small business. Woo.425Prior to founding JetCo, Sue ran supplier diversity and426business outreach for the Michigan Department of Management and427Budget. In this role, she trained more than 4,300 small and428underrepresented companies teaching them how to bid on and win429State government contracts.430    Sue volunteers time to support the defense industrial base431and is an advocate for small and woman-owned small businesses.432She serves as the first Vice Chair of the Board for Women433Impacting Public Policy, WIPP. She is also the immediate past434Chair of the Women in Defense National Council and the435immediate past president of the Michigan Chapter of Women in436Defense. She is a longtime Member of the National Defense437Industrial Association and participates in their logistics,438small business, and manufacturing divisions.439    Sue is heavily involved in the small business community in440Michigan, and we are all the better for it. She was recently441appointed by Governor Whitmer to begin her third term on the442Michigan Strategic Fund Board, which has broad authority to443promote economic development and create jobs. Sue has also444served as Board Chair for the Small Business Association of445Michigan, the largest statewide small business advocacy446organization in the country. She is a graduate of Michigan447State University and Wayne State University.448    Welcome, Sue.449    Chairman LALOTA. Thank you.450    Before recognizing the witnesses, I would like to remind451them that their oral testimony is limited to 5 minutes. If you452see the red light turn on, that means your 5 minutes is up. We453won't necessarily play the music like they do in the Emmys and454the Grammys, but that means wrap it up and we will get into455more detail afterwards.456    Ms. SCHOLTEN. Nobody wants Nick to sing.457    Chairman LALOTA. Definitely don't want that. Not good for458America.459    I now recognize Mr. Anumolu for his 5-minute opening460remarks. The floor is yours, sir.461462STATEMENTS OF RAO S. ANUMOLU, PRESIDENT &CEO, ASR INTERNATIONAL463    CORP; MICHAEL RAMOS, PRESIDENT, RAYMOND GLOBAL; AND SUE464          TELLIER, PRESIDENT AND OWNER, JETCO FEDERAL.465466                  STATEMENT OF RAO S. ANUMOLU467468    Mr. ANUMOLU. Am I at the right place here, too?469    Good morning to you, ladies and gentlemen. Thank you for470this illustrious committee for giving me this opportunity.471    After 38 years of grueling work in the small business472arena, our Chairman, Congressman LaLota, gave me the473opportunity to speak in front of you our experiences, good and474bad. Some are very good; some are to be improved. I won't call475them as negative, but I almost echo what you both Chairmen476spoke. They are realities of life we face. We don't have 55477lawyers to fight with the government or others to get up there.478We want to do the right work for you is and want to be a very479productive company to serve the nation. We have been doing like480this. We have got the exemplary [inaudible] person effort all481the federal contracts we have run in the last 38 years.482    Sir, Congresswoman McCarthy has recognized us in 2003 for483the 9/11 area services that this company has supported, honored484us in the same building. Only one small business was recognized485by Congress. I am terribly, you know, humbled by that486experience. So we doubled up our work. We invested more487ourself, and we work night and day from Long Island and488throughout the nation supporting the country's efforts both in489Navy--38 years we work for Navy.490    We worked for Air Force, Scott Air Force Base during the491Iraq War, and we worked for the Army, Eagle Program, the big492programs. And we have been pioneering many areas. And the493creativity and the innovative tactics we have engaged or494employed have been copied by the Chinese. I don't want to tell495this loud, but we got patents. We help process patents. I see496also somewhere else those processed patents. They were first497generated in U.S.A.498    So I just want you to know the level of effort that was put499in and the kind of contribution we were able to make as a high-500technology, knowledge-based company in this country. Now, to501this advantage, I want to suggest the contracting officers502still gravitate towards Big Business, which Congressman LaLota503has already mentioned. They go and give massive contracts to504big businesses, very small contracts to small businesses, with505LCTA rating, that is lowest cost technically acceptable. You506must recognize that should be abolished from our scene.507    Lowest cost, yeah, we will be lowest cost, true. But508technically they say it is acceptable. It is in their509perception they are not getting the quality of the product.510This must be understood by this committee and the contracting511officers. Very important. Similar things we could have done in512a big way as the Big Business has been awarded, and those513contracts go to--gravitate to big businesses.514    A request our Chairman also brought up is you need team of51530 lawyers and 20 CPAs to fight the battle. We don't have to516fight the battle. We fight intellectually. We still win. Don't517think we don't win. We still win some contracts. We win against518the Big Business. We won against Rockwell International at Hill519Air Force Base on the Minuteman missile. First contract. We won520against certain big companies--I don't want to mention it--on521our own without any [inaudible] and we got exceptional rating522on those things.523    Sixty percent of our contracts are exceptional ratings. To524that we propel forward. On the contractual side, there are many525improvements they can do from contracting side. One of the526preliminary things I would like to suggest is the SCA527justification. They just randomly throw on the contractors, you528know, ``Hey, this is a service contract act. Do it your way.''529    Many people very unaware of, you know, exemptions of the530SCA contract. I think government should fix the norms, give the531correct SCA accord, and then we all will be on the level532playing field. [Inaudible] the way that contracting officer533wants. When will we learn the contracting officer will do the534right thing? Most of them do--please don't mistake me--but many535have to be trained. That is my request on the contracting side.536    The other thing I would like to bring up is banking side.537We all need funding, no question. As you are doing more work538and more work, the funding needs are there. However, they only539tie you in as long as you can provide your house as the540collateral or your building as the collateral or the other541things. I want them also to think with us, join the people that542are serving the nation, understand the business, develop543themselves, train themselves into it. Yeah.544    Chairman LALOTA. Thank you for your testimony, sir. We are545going to get into a lot of these back and forth. This committee546is going to be----547    Mr. ANUMOLU. Yes.548    Chairman LALOTA.--very interested to hear some of those549details.550    Mr. ANUMOLU. Just, I will be only one second, sir. They551should be trained with the small business people. We are552willing to train at no cost to the bankers. They are called553relationship managers. And they are never trained. They are554just released on us like birds, and they come and land on us. I555request you to do that.556    Finally, there are other attributes that are involved. We557will discuss when you are asking us the questions.558    Chairman LALOTA. Thank you very much, sir.559    Mr. ANUMOLU. Thank you. Thank you.560    Chairman LALOTA. The gentleman's time has expired.561    Mr. ANUMOLU. Thank you.562    Chairman LALOTA. I now recognize Mr. Ramos for his 5-minute563opening remarks.564    Mr. ANUMOLU. Thank you, sir.565566                   STATEMENT OF MICHAEL RAMOS567568    Mr. RAMOS. Chairman LaLota, Ranking Member Cisneros,569Members of the subcommittee, thank you for the opportunity to570testify today. My name is Michael Ramos, and I am the president571of Raymond Global. What began in 1992 as a small roof572consulting practice in Greater Atlanta started by my father has573steadily grown into a family owned, full-service architecture574and engineering firm. Beyond my role at Raymond, I also serve575as the Chair of the GovCon Small Business Coalition, a group of576small and midsized contractors that advocate for policies that577support business growth and strengthen the defense industrial578base.579    For its first decade, our company focused largely on K-12580schools and municipal projects. In 2005, we expanded beyond a581one-person consultancy and have since averaged nearly 20582percent year-over-year growth. By the end of this year, 2025,583we expect to employ 120 professionals with expertise in584architecture, interior design, structural engineering,585mechanical, electrical, plumbing services, civil engineering,586and building envelope services.587    The SBA's 8(a) program and our certification as a service-588disabled, veteran-owned small business provided crucial589development support and opportunities that helped us build up590performance and diversify into broader markets, including the591federal market. Although we have since graduated from these592programs, Raymond continues to work extensively with the DOD593and actively participates in the SBA's Mentor-Protege Program.594    This hearing comes at an especially pivotal moment. With595significant changes underway in the federal acquisition596landscape, it is imperative for small businesses to remain at597the center of innovation and competitiveness. I would like to598highlight several pressing issues that are impacting firms like599mine and the broader small business community.600    First, cybersecurity is critical to national security, but601the rollout of DOD CMMC 2.0 has been costly and uncertain, and602those burdens fall hardest on the smallest firms with limited603resources. At my company, compliance with a Level 2604certification will cost approximately $0.5 million, which is605not a one-time cost.606    The acquisition process: Federal solicitations are often607too unclear, inconsistent, and overly complex. This frequently608leads to protests that small businesses can least afford.609Recently, we pursued a federal procurement; this contract was610awarded three times, protested twice, and ultimately canceled611for all firms. That means months and sometimes years of lost612opportunity and valuable resources.613    The Mentor-Protege Program: This program has been614transformative for my company and our growth. However, the615rapid expansion of joint ventures has tilted the competitive616landscape. Increasingly, contract scoring criteria favors617mentor-protege joint ventures, leaving independent small618businesses with fewer opportunities to prime.619    New SBA rules: Published at the end of last year, a recent620SBA rule requires small businesses sold after January 2026 to621recertify their size status within 30 days. What this means is622they are now ineligible for future task orders under their623existing contracts. This will result in reduced company624valuations and shareholder equity, discourage investments, and625will have a chilling effect on the mergers and acquisitions626market. Left as--the impact on a small business' ability to627sell will be severe.628    The contracting cliff: Right now, firms are classified as629either small or large. There is no middle ground. This binary630system forces companies that grow just beyond the small631business threshold to compete directly with billion-dollar632primes. A structured transition program for midsized firms is633urgently needed.634    The FAR rewrite: As GSA and OMB undertake the monumental635and necessary task of rewriting the FAR, it is critical that636reforms do not strip away small business protections,637streamlining regulations that should not be synonymous with638eliminating safeguards, which is why the Rule of Two should be639codified into law. Protecting this foundation will preserve640small business competitions and enable small contractors to641inter-compete and remain vital participants in the defense642industrial base.643    And, finally, inflation and size standards: Rising644construction costs have inflated revenues without reflecting645true growth. SBA size standards based on outdated 2017 data646don't reflect current market conditions. That misalignment647threatens competitiveness for many small businesses.648    These challenges add up. Rise in compliance costs,649inefficient acquisition processes, structural imbalances in650programs, and poorly calibrated regulations all weaken651competition. And when competition suffers, so does innovation,652and so does our defense industrial base. Small businesses bring653agility, economic strength, and the ability to respond quickly654to evolving needs. But, to keep playing that role, we need a655contracting environment that works for us, not against us.656    Thank you again for the chance to share my perspective, and657I am happy to answer any questions.658    Chairman LALOTA. Thank you, Mr. Ramos.659    I now recognize Ms. Tellier for her 5-minute opening660remarks.661662                    STATEMENT OF SUE TELLIER663664    Ms. TELLIER. Good morning Chairman LaLota, Ranking Member665Cisneros, and Members of the subcommittee. As mentioned by my666fantastic Congresswoman, my name is Sue Schweim Tellier. I am667the president of JetCo Federal, an SBA-certified women-owned668small business. I also serve as Vice Chair of the Board for669Women Impacting Public Policy, a national nonpartisan670organization advocating on behalf of women-owned small671businesses. Thank you for the invitation today. It is a672tremendous honor.673    JetCo Federal is a prime contractor. We are freakishly674obsessed with efficient warehouses. Our government and industry675partners rely on my team to design, produce, and deliver676complex packaging solutions, perform storage and distribution677services, and transport into secure facilities. JetCo Federal678won our first DOD contract in 2009, and we have continuously679increased our role in supporting the missions of the Defense680Logistics Agency, the Army, and the Navy.681    Eighty percent of our work right now supports the defense682industrial base in some capacity, usually very much behind the683scenes. We joke that we are the least interesting, maybe boring684part of the manufacturing cycle, yet we play a critical role in685protecting DOD parts for storage and distribution. My employees686are incredibly proud to support the warfighter, and I am687clearly comfortable putting my Midwestern humility aside to say688that we have really earned a strong reputation as a reliable689partner for our DOD agencies.690    The committee's focus today is timely and important. The691number of small business federal contractors is shrinking.692Since 2010, the number of small businesses winning federal693contracts has decreased by 50 percent even as contract spending694has increased. This results in a more stratified federal695contractor pool.696    Our conversation today, as all of you have mentioned in697your opening remarks, really should focus on strong small698business strength and the importance of opportunities for us.699We are job providers in all of your districts, significant job700providers. It is equally important, though, that we talk about701good government. And expansive market research, the Rule of702Two, and small and socioeconomic set-aside programs are not703acts of charity. Instead, they ensure that government benefits704from the innovation, competition, flexibility, and values small705businesses bring.706    Shrinking the pool of qualified contractors will leave707agencies increasingly reliant on a narrower group of large708incumbents, directly reducing the government's leverage. It is709not good business or good government to have a stratified710contractor pool. There is no benefit to pushing small companies711out of federal contracting.712    As a small business leader, I factor risk into my business713decisions. This includes how I use my time, how I manage714unpredictability in my customer base, and how I price my715solutions. I must have some degree of confidence that I have a716chance at winning an opportunity to justify pursuing it.717Otherwise, I am wasting precious time and resources from my718small but mighty team.719    Any threat or even a potential threat to the Rule of Two720increases risk for small businesses and federal contracting.721The Rule of Two has historically been a bedrock protection for722us. Its erosion results in a less welcoming environment,723reducing opportunities for small, innovative firms, and instead724accelerating consolidation.725    The FAR rewrite presents a pivotal opportunity to address726these challenges. Retaining and codifying the Rule of Two--727making it a true ``shall'' requirement applied consistently728across vehicles--is essential to keeping small firms engaged in729the federal marketplace.730    The transformation of FAR Part 10 and the new direction for731market research is also concerning. The drastic streamline732proposed effectively trims market research down to three very733limited situations. More prescriptive triggers, such as those734related to bundling consolidation and small business outreach,735have been removed. References to small business consultation736and set-aside considerations have been stripped.737    For experienced contractors like JetCo, this increases738risk. There is no longer a mandated pause to engage small739business advocates, notify incumbents, or explore set-aside740potential. Instead, agencies may proceed quickly, potentially741overlooking small business opportunities. Under pressure to742move fast, agencies may default to expedience.743    If there is one thing I hope you take away from my words744today, it is that small businesses are not just beneficiaries745of federal contracts, they are essential partners to agencies.746We bring innovation, agility, and cost savings while providing747the government and taxpayers with options to meet mission needs748quickly and effectively. The innovation we deliver strengthens749America's competitive edge in the global marketplace.750    Protecting and expanding our role in federal procurement is751both sound policy and strategic imperative, and if we continue752to face unpredictability and competition challenges, you should753not be surprised when fewer of us remain engaged in federal754contracting.755    Again, I appreciate the opportunity to testify today, and I756look forward to answering any questions. Thank you.757    Chairman LALOTA. Thank you.758    Thank you to each of you for your awesome 5-minute opening759statements.760    Now here comes the fun part. We are going to move to the761Member questions under the 5-minute rule, and I recognize762myself for 5 minutes.763    Mr. Anumolu, it is great to see you here in D.C. The more764Long Islanders in D.C. the better, I say. I think the last time765we saw each other was at your workplace when you allowed me to766visit about a year ago.767    Mr. ANUMOLU. Yes.768    Chairman LALOTA. Your testimony, sir, reads like the769American Dream and what you have done in this great country.770    Mr. ANUMOLU. Yes.771    Chairman LALOTA. You came here, you studied at top772universities, went on to build a company that has delivered773critical services to our military, enhanced our national774security, kept our troops safe, all right from Long Island. I775was hoping that you can share with the committee what you776think, sir, has made that dream possible.777    Mr. ANUMOLU. Two inspiring things. I found when I came here778first a good study, intellectual penetration into the American779arena will allow you to grow properly, bring our families780together nicely, and also I have an interest to settle in our781community. I achieved all those dreams on my own in a modest782way, not in a big way but modest way. I brought my family well.783My children went to top schools, and I am able to settle in the784community by doing real, hard, intellectual work. And that is785what elevated us.786    To add to that, Congress also somewhat recognized me right787when we did the best things for the Hill Air Force Base and the788Iraq War. And, since then, we propelled farther. That789[inaudible] is serving in Navy, and also winning their790contracts against Big Business with all the odds is what we are791fighting. If you can level the playing field slightly, I can792tell you, the intellectual stamina we are offering will be793exponentially greater.794    The AI contribution we are doing as a company will be795enormous. The cost reduction to the U.S. Government will be796tremendous. We want to achieve those things. We want to feel797satisfied when we go home in the night that I achieved798something for my nation, for my people, for my house.799    Chairman LALOTA. We love it. Here in the committee, we want800to harness dedication, innovation, perseverance. That is what801we believe to be the American Dream, and I think that is a802Democrat and Republican principle here. We want to help unleash803that everywhere in every corner of America.804    Mr. ANUMOLU. Yes. Yes.805    Chairman LALOTA. We are here today--and you alluded to this806in your opening testimony, you are going to tell us some of the807tough things you have been through and how sometimes government808has made things a little more difficult for you. Can you tell809us, sir, a little bit about the application process for some of810these contracts and some of the roadblocks you have suffered811through throughout your many decades experience----trying to812earn those contracts, sir.813    Mr. ANUMOLU. Yes.814    Mr. ANUMOLU. In 38 years, when we see a contract coming815with 2,000 pages, even before we read, we--this is the earmark816for somebody. That is a bad word we use in our lingo in the817company. Hey, that is set for somebody else. Somebody is there,818you know. So we don't even try to beat it. That should not be819our feeling when we are willing to spend our valuable time820night and day.821    And there are many contracts that come. All the service--822intellectual contracts--I request the contracting officers to823try and level field with the simple language as [inaudible]824coming from both the Chairmen. If you do it, 50 percent of the825more [inaudible] will be there, more competition, and we can826beat Big Business.827    Chairman LALOTA. To my left here is the federal acquisition828regulation, 2,000 pages here.829    Mr. ANUMOLU. Yes, sir.830    Chairman LALOTA. Sorry, we hurt some trees to do this, but831I think the point is well worth it to demonstrate to the832audience here, folks watching from home, that these833regulations, in our view, are onerous, that when--a834hardworking, dedicated, principal business like you has to835apply for a contract--you have to consult these pages.836    Mr. ANUMOLU. Yes, sir.837    Chairman LALOTA. My question--and I only have about 30838seconds remaining.839    Mr. ANUMOLU. Yes, sir.840    Chairman LALOTA. My final question is, what would the Plain841Language in Contracting Act do for you, an effort to simplify842the language in these contract applications? What would a843simpler application process mean for your company, sir?844    Mr. ANUMOLU. All that they have to do is define what type845of people they want us to use, SCA, very important. Then tell846us, ``Hey, this is what we are expecting as an ultimate847objective from your productivity or from our schedules,'' you848know, what we do to the government, and that is all we need.849    Chairman LALOTA. Thank you.850    My time has expired. I hope that we can get a second round851and maybe some more questions in. I want to talk to some of you852folks in a second round. But I am going to yield and recognize853Mr. Cisneros for 5 minutes.854    Mr. CISNEROS. Thank you, Mr. Chairman.855    And thank you again, all, for being here today.856    And I am going to start with Ms. Tellier. As I said in my857opening remarks, we should welcome reforms that simplify the858government's procurement process, but there are concerns that859this administration is making changes that will drive small860businesses out of the industrial base. This is highlighted by861the potential elimination of the Rule of Two, that both you862mentioned, as well as Mr. Ramos mentioned.863    What happens to small businesses and the industrial base if864the Rule of Two goes away?865    Ms. TELLIER. So we have to have some degree of confidence866as small business owners or leaders or business developers that867we have a shot at winning. The Rule of Two gives us confidence868in that. Changes to the Rule of Two that would only apply to869certain sizes of solicitations doesn't help with that. My870contract portfolio is not conducive to me only going after871$249,000 opportunities because they are under the SAT. I need872to have confidence that I can compete well on solicitations873well over that.874    Market research really allows contracting professionals to875understand whether two or more small companies can compete876effectively. It decimates us. There are small businesses that877will leave federal contracting if they don't have that878confidence.879    Mr. CISNEROS. Mr. Ramos, I would love to hear your comments880on that.881    Mr. RAMOS. I do think that, if we remove the Rule of Two,882that will be damaging to the defense industrial base. I think883that is pretty critical to understand. If you remove that rule884and you do not codify it, you have this scenario where not only885will small businesses leave, but you will just create massive886entrenchment of the existing large or small businesses. Also,887to a certain degree, it is a land grab by the larger companies888that are in the market. And it is an opportunity right now to889codify it and make sure that small businesses are protected for890larger contracts and when they are qualified. A lot of Sources891Sought are to make sure that is happening, and there are892opportunities for Rule of Two to be applied today.893    Mr. CISNEROS. Mr. Chairman, I request unanimous consent to894insert for the record these letters and statements of support895for the Rule of Two.896    Chairman LALOTA. Without objection.897    Mr. CISNEROS. Thank you very much.898    Ms. Tellier, some claim that small business-only899competitions or SBA programs like 8(a) or the Women-Owned Small900Business Program are not based on merit and award contracts to901businesses that otherwise could not compete on price or902quality. Can you lay out why these comments are misguided, and903tell us, you know--or why they are a misguided view of federal904contracting and how these programs actually level the playing905field.906    Ms. TELLIER. Yes, Congressman. I think I can even do that907without swearing, although it takes a little bit of restraint908on my part, candidly. I have never won a contract because I am909a WOSB. I have won the opportunity to compete on a contract910because I am a WOSB, but every contract I have won it is911because I have strong CPARS; I can do the work well; and I have912proven that with my write-up in my pricing.913    My small business owner peers are the same way. And,914candidly, Mike has made some comments so far about how this915affects the defense industrial base. When we look at whether or916not government benefits from small businesses fleeing or from917the socioeconomic set-asides not being deployed, if we don't918bid, the agility leaves, the innovation leaves.919    I have a contract with NSWC Corona, and the crate that I am920producing for munitions has a one-eighth-inch tolerance. I921guarantee you, none of my large competitors would bother with922that, but I care deeply about it. You lose the passion in that,923too.924    Mr. CISNEROS. Thank you.925    And, Mr. Ramos, in your testimony you mentioned that926Raymond is an 8(a) program graduate?927    Mr. RAMOS. Yes, sir.928    Mr. CISNEROS. What are some of the positive outcomes for929your firm resulting from your participation in the 8(a)930program?931    Mr. RAMOS. We entered the federal marketplace, and932specifically Department of Defense, because we were an 8(a)933firm. We were able to get certified. That is how we entered934into federal contracting. We saw an opportunity where we knew935we could perform the work, but we needed a way, as Sue Tellier936was saying, to have an avenue where we could be competitive937with entrenched players. The way procurements are done today,938it is all about past performance. It is not what I can do, it939is what I have done for that specific agency. 8(a) has been940incredibly helpful, as well as service-disabled veteran-owned941small business, in order to allow us that opportunity to have a942shot at competing. Highly qualified firm, but, you have got to943have someone open the door for you, so to speak.944    Mr. CISNEROS. I think we have heard from these witnesses945today the importance of the 8(a) program as well as the Rule of946Two. I just hope the SBA administration is listening today and947will follow up and support these programs into the future.948Thank you very much. I yield back.949    Chairman LALOTA. The gentleman yields.950    I now recognize the gentleman from Pennsylvania, my good951friend and small business owner, Mr. Meuser, for 5 minutes.952    Mr. MEUSER. Thank you very much, Mr. Chairman.953    And it is very nice having you all here. Thanks for your954testimony. It is quite important. It is important to us. It is955extremely important to you. So we appreciate your detail and956your specifics.957    I was in business for well over 20 years and engaged in958some federal contracting. So I know what it is like. That was a959few years back. Sometimes things get a little bit more960regulatory over time, but it is always difficult, right. And we961grew as a small business into a somewhat larger business, but962it was difficult, right. It was a lot of gambits, a lot of963traps, a lot of paperwork, a lot of visits to the different964agency that you needed to win the contract from and all that.965But I would like to focus on what was unfair, particularly for966small business, because we are all small business advocates.967What was unfair--and I will start with you, Mr. Anumolu. What968was unfair, and, specifically, what would you like to see us969correct?970    Mr. ANUMOLU. I will give you two, three examples for971verification purposes.972    Mr. MEUSER. And, Mr. Ramos, I am going to come to you with973the same question.974    Mr. ANUMOLU. Yeah. Two, three examples. If there is a job975for, say, eight people, they still give it to the Big Business976because the Big Business has done that before, and they have977performed well.978    Mr. MEUSER. So it is a little bit lazy. They are not979looking to--when you say you have----980    Mr. ANUMOLU. Well, I don't want to use--that is your981terminology----982    Mr. MEUSER. Yeah, well, but----983    Mr. ANUMOLU.--which I will endorse it. I will accept you.984Because just giving it to a Big Business--I don't want to name985names. I can give you five names. They just give it to Big986Business because----987    Mr. MEUSER. Does the contracting officer visit your sight?988    Mr. ANUMOLU. They don't, sir.989    Mr. MEUSER. Okay.990    Mr. ANUMOLU. Very rarely. And so are banks, by the way.991Don't leave them out. They don't care as long as you are paying992their bills.993    Mr. MEUSER. That is very important access to capital, and994that is largely our other committee, and believe me we are, in995this Congress, working on that.996    Mr. ANUMOLU. They should be--they have to be trained, sir.997They are good people, but they are not trained.998    Mr. MEUSER. As a former businessperson, I want to try to999make a difference from this. So anything that you can provide1000us, we will get in the hands of those whom need to see it and1001where the corrections could be made. That is our role,1002oversight, not, unfortunately, implementation, although we can1003help force that.1004    Mr. Ramos, same question.1005    Mr. RAMOS. I would say the entrance into the industry is a1006huge historical challenge. Getting into federal contracting can1007be the biggest win. If you win your first contract, that gives1008you a shot to maybe prolonging it long-term, and that is what I1009would say historically. But I would say, right now, the biggest1010issue might be CMMC. This will be an incredible barrier, an1011incredibly costly barrier for small businesses to enter even--1012we are not talking about five-person companies. We could be1013talking about a 100-person company. That is a huge cost to bear1014just for the opportunity to compete on a contract.1015    Mr. MEUSER. Okay. And you did mention in your testimony how1016service-disabled veteran-owned small business was crucial if1017your company's early growth. Just expand on that a little bit.1018    Mr. RAMOS. Yes. So it is basically a socioeconomic1019category; certain contracts are set aside for SDVOSB firms--to1020actually compete. And so if you look at the Department of1021Veterans Affairs, as a veteran-owned company, we were allowed1022access to a number of different projects that we could bid on1023individually or umbrella contracts. And, because the1024competition pool is a little more limited, there is a better1025opportunity to actually win some of those contracts--and that1026is not to say that is an unfair advantage. I do think it is1027important to prioritize our veterans, and, most importantly,1028all of the firms that are going after those contracts are1029highly qualified and it is still very competitive.1030    Mr. MEUSER. Sure. If you are sitting in my seat, what are1031you working on later today, tomorrow to improve the situation1032within contractors, federal--particularly defense for small1033business?1034    Mr. RAMOS. I do think there is an opportunity to simplify1035procurements. And, potentially on the flip side, on the1036backside, if we are going to do a government efficiency model1037and we are going to reduce workforce, there is absolutely a1038need to change the process so that we are efficient enough to1039still carry out the mission.1040    Mr. MEUSER. Okay. Great.1041    Ms. Tellier, same question.1042    Ms. TELLIER. I lost track of the question. I am so sorry,1043sir.1044    Mr. MEUSER. The question was, you are sitting in our seat,1045and you are focused on this, and you want to make some1046differences, what are the top one or two or three things you1047are focused on?1048    Ms. TELLIER. Codify the Rule of Two. Make it a shell.1049    Mr. MEUSER. All right. Very good.1050    I am about to run out of time, so I am afraid if I hand it1051over to you, Mr. Anumolu, we may go over time. But I am going1052to risk that. Go ahead.1053    Mr. ANUMOLU. It is an interesting thing you are asking me1054to do. A few things.1055    Mr. MEUSER. We may have to hold off. My apologies, sir.1056    Mr. ANUMOLU. Yeah.1057    Mr. MEUSER. I yield back, Mr. Chairman.1058    Chairman LALOTA. We will give some deference to the1059gentleman if in 30 seconds you can answer Mr. Meuser's1060question. What would you do if you were a Member of Congress to1061help small businesses, in 30 seconds?1062    Mr. ANUMOLU. If I am there, you know, I would certainly1063take notes of who are the players and where to correct them. I1064can give you two, three examples so that that can be made as a1065universal thing. Plus, I would add one small thing, sir, a team1066of bankers, contracting officers, and a small business person1067should be put and trained for, say, 3 days.1068    Chairman LALOTA. Thank you.1069    Mr. MEUSER. I am going to join the Chairman on the next1070visit to your place out in Long Island.1071    Mr. ANUMOLU. You must, sir.1072    Mr. MEUSER. Thank you, Mr. Chairman. I yield.1073    Mr. ANUMOLU. I am at Long Island University, just to add. I1074didn't take their permission. I am trusted there. I can talk to1075the president and the Chairman. Sir, it is open. I can teach1076them. I am willing to teach that.1077    Mr. MEUSER. Thank you. Our time has expired.1078    Mr. ANUMOLU. After 38 years, you should allow me to do1079that.1080    Chairman LALOTA. The gentleman's time has expired. Thank1081you.1082    I now recognize the gentleman from California, former small1083business owner, Mr. Tran, for 5 minutes. But, if he needs 6, we1084will give him that instead.1085    Mr. TRAN. Thank you, Chairman and Ranking Member, for1086convening today's very important hearing.1087    And, to the witnesses, I appreciate you traveling to be1088with us and sharing your testimony.1089    Ms. Tellier, in April of this year, the Department of1090Health and Human Services fired almost their entire Office of1091Small and Disadvantaged Business Utilization, also known as1092OSDBU, staff, leaving only the executive director, despite1093requirements in the Small Business Act that the office have a1094minimum of 13 personnel. We have heard that the State1095Department has fired almost all of their staff as well, and1096there are draft proposals for reductions at other agencies or1097changes that would weaken OSDBU's authorities or independence.1098Can you discuss the role of OSDBUs and how your firm has worked1099with them?1100    Ms. TELLIER. Absolutely. The acronyms are fun sometimes,1101aren't they?1102    Mr. TRAN. Leave it to the government to come up with them.1103    Ms. TELLIER. Well, I haven't worked with HHS directly1104because so much of my work is within the defense industrial1105base. I can speak heavily about the level of professionalism1106and the level of helpfulness that I have gotten from especially1107DLA and Army OSDBU offices. The help that they give in guiding1108in the pre-solicitation or during the solicitation process,1109like the opportunity process, is very helpful. But I think a1110lot of people forget how much help they provide post award.1111    Last week--oh, my gosh. I am blanking on her name, which I1112am mortified by--the head of the OSDBU office for DLA1113distribution helped me get paid. DLA was behind about 60 days1114on a contract that was valued at $187,000. So I had already1115obviously incurred all of those costs. They helped pull the1116trigger to get the contracting personnel to make sure that the1117items were received. On a post-award basis, they are helpful;1118on a pre-award basis, they are helpful. They make sure they are1119guiding us. I actually think they need more money, not less.1120    Mr. TRAN. Thank you.1121    And, if the other two witnesses has any dealings with it, I1122would love to hear your testimony.1123    Okay. Ms. Tellier, in your testimony, you state that you1124must have a level of confidence that you can win an award to1125invest the time and resources to develop a proposal and bid. If1126a small business did not know their competitors were also small1127businesses and understood that they might be competing with a1128much larger corporation, how does that change the calculus1129around whether a small business bids on that contract?1130    Ms. TELLIER. The bid decision is heavily influenced by1131whether or not we perceive that we have a probability for a1132win, not a guarantee of a win. These aren't guarantees in any1133capacity. It is just the level playing field. If I don't--if I1134feel like an opportunity is wired for someone else, including a1135large business, I am not going to waste the time bidding. It is1136somewhere between 8 and 40 hours of my time, and that doesn't1137include the time of my employees to put together a complex1138proposal response. And I am good at it. I am quick at it. So1139there is companies that are newer to this space that would have1140a lot more of a time investment to do it well. It is not worth1141the time.1142    Mr. TRAN. Thank you.1143    Mr. Ramos, anything to add?1144    Mr. RAMOS. I wholeheartedly agree with those comments. It1145is critical that the government does understand there is a true1146business cost to putting together a procurement response. We do1147have to play a little bit of a numbers game, but at the end of1148the day, if I am going up against large or unrestricted size1149companies, it is a huge deterrent for me to pursue those1150opportunities.1151    Mr. TRAN. And, as Members of this committee, we are very1152concerned about small businesses, entrepreneurs, and the1153communities where your firm pays taxes and create jobs, but1154small business policies are a win-win for small businesses and1155the government. Can you, any one of you, talk about the1156benefits of your government customers when we have a robust1157small business industrial base?1158    Mr. ANUMOLU. Can I?1159    Mr. TRAN. Yes, please.1160    Mr. ANUMOLU. So we helped create several hundreds of jobs1161throughout the communities. Our business model is create jobs1162in the community that has awarded us the contract. For example,1163if I got in San Diego, people in San Diego are hired by us,1164positioned by them, and we pay them the wages that we derive1165from that contract. In other words, we are building the local1166communities. That has been our business model for 38 years.1167Very successful.1168    The same thing we did everywhere in the nation, not in one1169place. We are a nationwide company with nationwide contracts1170trying to help the local community with big wages. Whatever we1171bid, if I bid with three-person, two-person margins, the rest1172of it is going to my employees. And this is not done by Big1173Business--overheads are 80 percent. They pay, I mean, less. I1174mean, I don't want to comment that way, but their overheads are1175bigger than us.1176    Mr. TRAN. And I thank you all for your testimony. I think I1177am running out of time here, but congratulations on the success1178of your business, and you can count on this committee to help1179support you.1180    Thank you, Mr. Chairman. I yield back.1181    Chairman LALOTA. The gentleman yields.1182    Next up in the batting order is the gentleman from Texas,1183the small business owner, the full committee Chairman, Chairman1184Williams, for 5 minutes.1185    Ms. WILLIAMS. Thank you, Mr. Chairman.1186    And thank all of you for your testimony. It is a good1187hearing, and we appreciate you being here.1188    On this committee, we have repeatedly heard that government1189contracts and solicitations are often overly complex making1190them difficult for many businesses to respond to successfully,1191and we have seen the pile there at the Chairman's desk. As1192Chairman LaLota has stated, less than 3 percent of the1193contracts the Department of Defense were written in plain1194language.1195    So, Mr. Ramos, to you, what steps has your firm taken to1196understand and respond to overly complex solicitations, and if1197contract solicitations were written in plain language, would1198this encourage small businesses like yours to compete more for1199government contracts?1200    Mr. RAMOS. Yes, sir. We almost have a full in-house lawyer1201at this point. That is required. We engage with our general1202counsel, who is a third party today, on a very regular basis on1203a number of issues related to federal contracting. That has1204been critical. That has also included training for our1205personnel so that we can become better experts.1206    But this is an art at figuring out federal contracts. And I1207will say that, if you figure out that art, you have an1208entrenched competitive advantage in order to continue going1209after contracts. So, if we can simplify the language, then more1210small businesses will have an opportunity to compete.1211    Ms. WILLIAMS. Lawyers and accountants can get expensive,1212can't they?1213    Mr. RAMOS. Just a little.1214    Ms. WILLIAMS. Yeah.1215    Regulations and red tape in government contracting can be a1216major strain on small businesses--that we have heard all day1217this morning--forcing them to redirect their limited resources1218towards the cost of compliance rather than growing and1219expanding their businesses.1220    So, Mr. Anumolu, how do these burdensome regulations and1221complicated solicitations impact your business and your bottom1222line?1223    Mr. ANUMOLU. Substantially, sir. So we try to avoid them to1224the extent we can and improvise ourself to see if we can bid1225in. We did some bids like that. We did partial success.1226However, the strain we had to go through is horrendous. But we1227did it, sir. We have won against big businesses. But that is1228not the solution. That is what is survival we are doing,1229survival techniques, you know, which I learned at Harvard. But1230we have to prepare ourselves to be trained fully, to work with1231plain language contracting like you mentioned in your opening1232speech----1233    Ms. WILLIAMS. Okay.1234    Mr. ANUMOLU.--and----1235    Ms. WILLIAMS. Thank you.1236    Mr. ANUMOLU.--Congressman LaLota also mentioned. They1237should be simplified. They can be--it is very easy to simplify,1238sir. I don't know why they don't do it.1239    Ms. WILLIAMS. Because it is the government. They don't1240understand simple, but we do, and I appreciate your testimony.1241    Mr. ANUMOLU. Thank you, sir.1242    Ms. WILLIAMS. The Biden-Harris administration shackled1243businesses an additional $1.8 trillion in regulations and $3501244million additional paid man hours, we will call them, for1245compliance. That is just unbelievable. And, thankfully, the1246Trump administration has already been able to eliminate over1247$75 billion in costly regulations.1248    So, Mr. Ramos, to you, how do regulatory costs impact your1249business and staffing decisions as you move--as you go to work1250everyday?1251    Mr. RAMOS. Actually, just yesterday, we were having our Q31252management team meeting, and hiring is something we talk about1253at all of these, and hiring is based on profitability,1254strategic growth, and direction of the company. I will tell1255you, regulations like CMMC have absolutely impacted how we are1256handling our business and not for the better. This is a1257tremendous constraint. It is one example of the regulations1258that you are citing. And, if we can work towards actually1259simplifying some of these regulations, like the administration1260is aiming to do, then we are all for it. We project fewer1261regulations equals better growth.1262    Mr. WILLIAMS. It is more fun to be on offense than defense.1263    Mr. RAMOS. Yes, sir.1264    Ms. WILLIAMS. When you are on offense, it translates to1265productibility and profits and more jobs.1266    Mr. RAMOS. Yes, sir.1267    Ms. WILLIAMS. We appreciate your testimony.1268    Mr. Chairman, and I yield my time back.1269    Chairman LALOTA. The gentleman yields.1270    I now recognize Ms. Scholten, my good friend from Michigan,1271and the former Ranking Member of this committee, for 5 minutes.1272    Ms. SCHOLTEN. Wonderful. Though I have moved onto a1273different ranking position, I am still honored to be a part of1274this fine committee.1275    When the government contracts directly with small1276businesses, there are some things they can do only when the1277small business is a subcontractor. One of the ways Congress has1278encouraged fair treatment and proper utilization of small1279businesses that some contract with larger primes is to include1280certain criteria in the prime contractor's past performance1281ratings. The most important of these criteria, I bet everyone1282would agree, is did the contractor make timely payments and1283whether they met their subcontracting goals.1284    Ms. Tellier, my first question is for you. How important1285are those accountability mechanisms for small business1286subcontractors?1287    Ms. TELLIER. It is critical. The example that I used with1288Congressman Tran: We have to get paid. I can't wait 90 days to1289receive almost a quarter-million dollars from the government. I1290also can't do that with the prime contractors. The example that1291I used, by the way, is a little atypical. My government1292agencies usually pay me in a more timely manner than the prime1293contractors do. It would also be helpful if we had an1294understanding of how those ratings affected our customers who1295were prime contractors. So, if I am a sub under somebody and I1296have the option of subbing under two different companies, I am1297probably going to take the one that on a dashboard would1298reflect they cared about me enough to pay me.1299    Ms. SCHOLTEN. Yeah.1300    Ms. TELLIER. Yep.1301    Ms. SCHOLTEN. Thank you. Very helpful.1302    Question two: Currently federal law requires that contracts1303under a certain amount be automatically set aside for a small-1304business-only competition, and yet a surprising amount of1305spending under that threshold is not awarded to small firms,1306the reason for which is still unclear. It is something we are1307trying to get to the bottom of. Some have pointed to things1308like software licenses and other products or services that1309can't be purchased via a small business. I have submitted an1310amendment to the NDAA that can get to the bottom of this issue1311and ensure that this spending is making its way to the small1312business, as intended by federal law. Very pleased that it made1313it into the final round.1314    Ms. Tellier, again, coming to you, can you talk a little1315bit about how small businesses utilize contracts under the SAT,1316and why it is important to ensure that those opportunities are1317going to small businesses as intended?1318    Ms. TELLIER. Absolutely.1319    The simplified acquisition threshold allows me to kind of1320fill my pipeline that is outside of my larger contracts. So the1321BPA or IDIQs that I have that are larger are wonderful for1322predictability and stability.1323    But the stuff under the simplified acquisition threshold1324allows me to grow, too. So, if it is a $240,000 opportunity, I1325would like that to go to small businesses.1326    I have been at this a while, right. So, as a company who is132718 years old now, I can still remember what the early days of1328trying to win my first contracts were like, and those were all1329under the SAT.1330    And so, for companies that are just emerging into the1331federal marketplace--and we want them to stay, and we want them1332to grow, and we want their innovations, and we want their1333engagement--we have to make sure that they feel welcomed, and1334those under SAT contracts really allow them to do that.1335    Ms. SCHOLTEN. Thank you.1336    This is not about giving a disadvantageous priority to the1337underdog. It is about making sure that our more nimble small1338businesses can actually compete in this space, which is what we1339want. The competition ensures we are getting the best quality1340product and the lowest potential price. It is good for1341business. It is good for national security.1342    I see that you maybe wanted to weigh in or had some1343additional thoughts. I would love to hear. I was going to toss1344it down that way.1345    Mr. RAMOS. Well, I appreciate that. I am just very engaged.1346    Using the $240K example, I would challenge any large1347business in how they are going to manage their overhead so that1348it is actually cost-effective and best cost for the government.1349    Ms. SCHOLTEN. Thank you. Thank you.1350    My last question in my last minute, and we will stick with1351you, Ms. Tellier. In your testimony, you mentioned that a small1352fraction of the dollars counted toward the women-owned small1353business goal are through WOSB contracts. Instead, the majority1354of those contracts are open competitions with WOSB competing1355against other small businesses or sometimes large businesses1356and winning that work. I thought that was a really important1357point that was worth revisiting.1358    What can we do to ensure agencies are using these tools as1359intended and bringing in more women-owned small businesses to1360compete for contracts, not necessarily automatically be granted1361them?1362    Ms. TELLIER. That is a great question.1363    I think there is an educational component both on the side1364of industry and the side of government. Contracting1365professionals have a huge administrative burden, and each of1366the socioeconomic programs are different.1367    The WOSB program is the only one that is NAICS limited.1368They each have their quirks. Making sure that contracting1369professionals understand that they can and when they can set1370contracts aside keeps us competing. It keeps us in the pool.1371    And then, you know, making sure that industry is educated1372well so that they can beat their large counterparts, which I1373like to do.1374    Ms. SCHOLTEN. Thank you. We appreciate it so much.1375    And thank you for your comments, too, sir.1376    I yield back.1377    Chairman LALOTA. The gentlelady yields.1378    I now recognize my new friend, Dr. Morrison from Minnesota,1379for 5 minutes.1380    Ms. MORRISON. Thank you, Chairman LaLota and Ranking Member1381Cisneros, for holding this hearing.1382    And thanks to our witnesses for being here to take the time1383to testify. It has been a really interesting and illuminating1384conversation. I am grateful for your testimony.1385    Contracting with federal agencies is an important avenue to1386help small businesses grow. Unfortunately, as we have heard,1387the number of small businesses participating in government1388contracting has decreased over the past decade, and I worry1389about how this administration's random termination of contracts1390and abrupt firing of federal employees will impact small1391businesses' decision to enter into government contracts.1392    These once secure sources of revenue may now seem too risky1393for some small businesses. The Trump administration has1394proposed cutting the Small Business Administration's1395Contracting Office budget by almost a third. This includes1396reducing the number of SBA Procurement Center representatives1397who are critical to ensuring the contracts are written in ways1398that enable small businesses to compete for them.1399    Without SBA performing this critical role, agencies are1400likely to make contracts that are too large for small1401businesses or have more requirements than small businesses can1402meet, essentially making them inaccessible to small businesses.1403    Ms. Tellier, could you describe how SBA employees have1404assisted your small business over the years and how cutting1405members of SBA's Contracting Office, such as Procurement Center1406representatives, could impact small businesses?1407    Ms. TELLIER. Yes. It is a great question. Thank you for1408asking it.1409    The Procurement Center representatives often are behind-1410the-scene, unknown advocates to those of us who are small1411business contractors. They are ensuring that subcontracting1412plans are adhered to, and they are ensuring competition is1413maximized practicably within agencies.1414    The SBA Office of Government Contracting has done a lot1415with a little for quite a few years. Any further cuts, it1416affects certification programs. It affects the ability to1417retain the PCR staff that directly affects small businesses1418even if many small businesses don't know they are being1419protected and advocated for by those PCRs.1420    Ms. MORRISON. Thank you. I share those concerns.1421    I am also worried about other ways that federal agencies1422are making it harder for small businesses to compete for1423contracts. For example, when federal agencies consolidate1424multiple contracts into a single, larger contract, that puts1425the contract out of reach for a small business.1426    So this one is again for Ms. Tellier and Mr. Ramos, too.1427Both of your testimonies highlight recent changes to how the1428government conducts market research before a contract can be1429consolidated. Can you elaborate on the impact on small1430businesses when billions in contracts are consolidated every1431year?1432    Mr. Ramos, we can begin with you.1433    Mr. RAMOS. That is a fantastic question.1434    Bundling probably has some place in driving better1435efficiency in government contracting, but if you are bundling1436that volume of contracts, that puts it completely out of reach1437for a small business.1438    I would say the opportunity, if you want to consolidate1439contracts, there are a lot of zombie contracts in existence,1440and the market research should be a little bit more thorough so1441that those don't come into existence. They cost us money in1442order to actually secure. No awards actually happen under those1443contracts.1444    And so that would be more preferred, in my opinion, if we1445are taking a consolidation approach.1446    Ms. MORRISON. Thank you.1447    Ms. Tellier?1448    Ms. TELLIER. I would agree with his comments. Category1449management or bundling just generally goes to the perception.1450If, as a small business, I don't think I can compete to win, I1451am not going to spend 75 grand trying to get on a Best-in-Class1452vehicle that I am not going to get spent on.1453    I haven't heard it called a zombie before, but I love that1454word now, and I am going to keep using it. So thank you.1455    Mr. RAMOS. You are welcome.1456    Ms. MORRISON. It is apt.1457    Ms. TELLIER. Yes.1458    I do think the market research goes a little bit further on1459that, too. Being able to have that market research involved,1460engaging with small businesses would allow that input to come1461into it to avoid the consolidation in the first place.1462    Ms. MORRISON. Yes.1463    If a small business' contract is consolidated, what1464resources or assistance are available for that business from1465the SBA or the contracting agency?1466    Ms. TELLIER. I mean, I would start with the OSDBU office1467within the agency, and then I would rely heavily on the PCR for1468that region as well. And, if that didn't work, I would call1469Congresswoman Scholten.1470    Ms. MORRISON. Good idea.1471    Thank you so much for your testimony.1472    And I yield back.1473    Chairman LALOTA. The gentlelady yields.1474    After consulting with the Ranking Member, we will now move1475to our second round of questions under the 5-minute rule.1476    I now recognize myself for 5 minutes.1477    Mr. Ramos, I was quite impressed by your resume, including1478a couple of degrees you have.1479    Mr. RAMOS. Thank you.1480    Chairman LALOTA. Chemical engineering degree from MIT.1481    Mr. RAMOS. Yes, sir.1482    Chairman LALOTA. And a master of science in chemistry from1483Tufts. Pretty impressive.1484    Mr. RAMOS. Thank you.1485    Chairman LALOTA. When one googles that, one reads that1486earning a chemical engineering degree at MIT is widely1487considered as one of the toughest academic paths in higher1488education.1489    Yet, even with that strong academic background, you said in1490a previous round of questioning you had to hire a lawyer in1491order to go through these massive government applications. You1492have to consult with 2,000 pages in the FAR.1493    Even a guy who graduated from MIT in a degree that I don't1494even understand at all has to do those things. So the point is,1495how can a regular American go through these processes if the1496MIT chemical engineering grad has to outsource and bring on an1497attorney to go through that?1498    So can you share with me some of the frustrations,1499experiences, or whatnot you have been through as an MIT grad1500whose has got a chemical engineering degree and going through1501some of these onerous government contracts? What burden has it1502placed upon you personally?1503    Mr. RAMOS. Well, the first thing is, if an average person1504wants to do that, they can do it, but they quit their day job.1505This has to be the only thing that they do. They are not1506running a company. They are not performing on contracts. They1507have to spend all of their time doing something like this. A1508lawyer is necessary.1509    And some of the frustrations: We see a tremendous amount of1510variability as well. It is not just that you have a 1,000-page1511contract or something like that. The next procurement that may1512come from the next office over may be completely different for1513the same level of services or the same types of services being1514provided.1515    This is a problem because now you may have brought in your1516lawyer. You may have brought in some friends or colleagues that1517are former contracting officers in order to try and get through1518it. You now have the same problem the next day. It continually1519repeats itself.1520    Chairman LALOTA. And I want to be very transparent in this.1521Yes, this Committee wants to make life easier on small1522businesses. That is, you know, part of our--it is in our1523wheelhouse. It is not just out of charity and benevolence; we1524are just being good guys, that we want to make things easier on1525you. It is out of wanting to have more applications. When we1526have more applications, the government gets a better price,1527arguably a better product that can be more on time and a higher1528quality.1529    Selfishly, government should want to make it easier on1530applicants to be a part of the process. We shouldn't want to1531drown you in paperwork. We shouldn't want you to have to give1532up your specialty to now become a government applicant1533specialist.1534    So tell me a little more about how you have had to1535outsource that and it affects your ability to focus on what is1536most important for your business.1537    Mr. RAMOS. Well, one of the first things you have to1538remember is, if we have less that we have to do in a1539procurement, that means we can respond to more, which means we1540can actually take shots on goal at innovating. We can't do that1541today. We have to focus solely on the evaluation criteria,1542which is incredibly rigid.1543    And so, having to outsource this, we hire a general1544counsel. There is a tremendous amount of cost that comes with1545just having lawyers. We have to actually go to our partners1546that are typically bigger businesses or maybe teaming partners1547on those. Those are things that we might be able to get just1548because we are a good firm, and we have got good connections in1549order to rely on those resources.1550    Or we might have to hire a complete third-party consultant1551not only to write that proposal but also have a consultant to1552help us actually navigate the federal landscape and actually1553doing business development outside of the procurement process1554so that we can be positioned just to have a shot at those1555procurements.1556    Chairman LALOTA. Ms. Tellier, do you have a similar1557experience that--the bipartisan Plain Language in Contracting1558Act is meant to address these issues for all small businesses,1559either anecdotally or whatnot. Do you have a similar experience1560as Mr. Ramos?1561    Ms. TELLIER. I think we all do, candidly. I think we all1562have an understanding that when we are comparing a commercial1563opportunity that is 4 pages with a 158-page solicitation, that1564the risk/reward ratio comes into play there. If we can1565simplify, that certainly helps.1566    I would offer that it might not be the most important1567barrier to entry for small companies, but it is certainly one.1568    Chairman LALOTA. Thank you.1569    I am going to yield the rest of my time back and recognize1570my friend from California, Mr. Cisneros, for 5 minutes.1571    Mr. CISNEROS. Thank you very much.1572    Ms. Tellier, I just kind of want to follow up on a previous1573question that you got, right. Previous efforts have sought to1574consolidate contracts through initiatives such as category1575management, consolidating efforts that put contracts out of1576reach for many small businesses, including some that have1577previously performed the work.1578    Can you elaborate more on the cost and requirements for1579small businesses to get on certain contracting vehicles before1580you can compete?1581    Ms. TELLIER. Absolutely.1582    Any of the multiple award vehicles have a pretty intensive1583either application process or proposal process. If you do that1584in-house, that can take somewhere between 20 and 100 hours of1585time. In a small business, that is, unfortunately, sometimes1586the owner of the company.1587    And, to Mr. Ramos' point, that is innovation leaving, and1588there is a focus on just submitting the process. There is an1589opportunity cost to my time.1590    Once I get on that vehicle--now that I know the word1591``zombie contract,'' which I am smitten with, clearly--once I1592get on that vehicle, I might never get spent. There might not1593be opportunities that come out through it, but I am still1594responding to task orders on that. If I get on that vehicle, I1595am still responding to task orders on it.1596    It is an intense outlay of time and money at the beginning1597and then it just continues.1598    Mr. CISNEROS. Mr. Ramos?1599    Mr. RAMOS. I would maybe amplify the comment. When we have1600our umbrella contracts, we go after task orders. I have had1601years where we have hit over a hundred task orders we have had1602to respond to on contracts that we already own and that we have1603already won, in addition to trying to secure new work on other1604federal procurements or even in a non-federal realm.1605    And so, there is a huge cost outlay in order to do this.1606    Mr. CISNEROS. All right.1607    Ms. Tellier, DOGE cuts led to prime contracts, terminating1608subcontracts with smaller firms, including those by women-owned1609small businesses, veteran-owned businesses, minority-owned1610businesses. What was the impact of these terminations for small1611businesses? What have you heard from your other small business1612owners?1613    Ms. TELLIER. It has been quite devastating. Thank you so1614much for that question. It really hasn't come up.1615    Having contracts canceled mid-cycle means that there are1616people that lost their jobs. Those contracts had employees1617associated with them. The performance of the work statement1618required bodies. It required input. Some of those inputs had1619fixed costs that were already sunk into them.1620    So small business contractors, some of them closed. Some of1621those contracts were substantial, and they couldn't survive.1622But what it did for the rest of the contracting community is1623inject unpredictability, and unpredictability for a small1624business is just inherent risk.1625    So I didn't get DOGE'd. You know the verb DOGE'd? I didn't1626get it. But it is still injected on predictability and to my1627decisions as a federal contractor.1628    Mr. CISNEROS. No, I think that is what we heard from many1629small businesses, right, is that they didn't know what was1630going to come next. They didn't know. And it doesn't matter1631whether it was the small businesses. I would say the school1632districts, everybody, the local governments. We just want to1633know what is going to happen, right. Just tell us what is going1634to happen. This unpredictability does not help us at all.1635    And, if I could just throw one last question in there, and1636I open this up to the panel. What advice would you give to a1637small business either just starting out or an existing1638commercial firm that is interested in contracting with the1639federal government for the first time? What advice would you1640give them?1641    Mr. RAMOS. This is a very expensive endeavor. So, make sure1642you have your cash flow lined up. The entry-level regulations1643that you are going to have to meet in order to enter into the1644federal marketplace is almost insurmountable. For small1645companies, even established commercial companies, this is a1646very big challenge.1647    Mr. CISNEROS. Ms. Tellier?1648    Mr. ANUMOLU. I would like to give an answer.1649    Mr. CISNEROS. No, I will get you, sir. I will get you, sir.1650    Ms. TELLIER. I would weigh in very quickly that there are1651some fabulous resources that you fund for small businesses who1652are entering the APEX Accelerators, and the Small Business1653Development Centers are a great starting point as well, but it1654is expensive.1655    Mr. CISNEROS. Thank you.1656    And, sir, please.1657    Mr. ANUMOLU. My only request is if they want to start off,1658be prepared to spend 24 by 7 on this project in a committed1659way. Otherwise, there will be two losers. One is the person who1660started the business and also the government.1661    Mr. CISNEROS. All right.1662    All right. With that, I yield back my time.1663    Chairman LALOTA. The gentleman yields.1664    And we are going to adjourn in a minute, but I want to1665thank our witnesses for traveling to Washington, for being a1666part--Mr. Latimer, do you----1667    Mr. LATIMER. No, thank you.1668    Chairman LALOTA. Okay.1669    I do want to thank our witnesses for traveling to1670Washington. This is insightful. We spent about 1 hour and 201671minutes together having a good dialogue. We read your bios. We1672read your testimony, but the dialogue that we will be able to1673have afterwards is productive for this Committee. It does a lot1674of decent, bipartisan work. We have some differences about some1675of the things on the fringes, but, for the most part, we agree1676on a lot, and your testimony helps illuminate some of the1677things that we are most focused on. So I definitely want to1678thank you for being a part of that.1679    Without objection, Members have 5 legislative days to1680submit additional materials and written questions for the1681witnesses to the Chair, which will be forwarded then to the1682witnesses. And I would ask the witnesses, if you get that1683correspondence, to please reply promptly.1684    If there is no further business, without objection, the1685Committee stands adjourned.1686    [Whereupon, at 10:51 a.m., the Subcommittee was adjourned.]16871688                            A P P E N D I X16891690[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]16911692                                 [all]