Committee on Small Business Holds Hearing to Highlight the Role Small Businesses Play in National Security

WASHINGTON, D.C. - Today, Congressman Roger Williams (R-TX), Chairman of the House Committee on Small Business, held a hearing titled "Restoring America's Industrial Base: The Role of Small Businesses in National Security" to examine the critical role small businesses play in restoring and strengthening the American DIB through their contributions in innovation, critical technology development, and support for national security.

"Consolidation, overregulation, and excessive bureaucratic barriers have undermined the ability of small contractors to provide our warfighters with the cutting-edge solutions they need to deter and defeat emerging threats," said Chairman Williams. "This Committee is committed to ensuring that American small businesses are empowered to compete on a level playing field to deliver innovative and agile solutions that strengthen the economy and safeguard the United States."

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Watch the full hearing here.

Below are some key excerpts from today's hearing:

Chairman Williams: "Mr. Schwartz, the number of contractors supporting the defense industrial base has shrunk by roughly 40 percent since 2010. Rising regulatory costs are cited as a major reason small businesses are leaving these federal contracting programs. For small firms, every dollar spent on compliance is a dollar not spent on innovation, production, workforce, or even cybersecurity. So, the question would be, how has the Trump Administration's Revolutionary FAR Overhaul addressed that challenge?" Mr. Schwartz: "Thank you. On a bumper sticker, one way to improve acquisition, generally, and for small businesses as well, is fewer regulations, more consistently enforced by an empowered workforce. And there's an effort to rewrite the FAR and then the DFAR, the Defense Federal Acquisition Regulation, which strikes at two of those. By deregulating, as we've all talked about, it gives small businesses more opportunity to focus on the business of what they're delivering instead of non-value-added regulations and compliance. That's one. But the second thing, which might be the even more important impact that people don't necessarily think about, is the message we're sending to the workforce. The message we're sending is less about compliance and more about doing the right thing and empowering them. I'm hopeful that this rewrite is really going to send that message, because unless we deal with the workforce, almost everything else is playing around the margins."

Rep. Wied: "Thank you for serving in the Air Force, and thank you for all your efforts in helping those who are disabled veterans. I know that's very important and near and dear to our hearts. I want to talk a little bit about - the acronyms in the government are great-SDVOSB. A program that, of course, was designed to ensure that service-disabled veteran-owned small businesses have a meaningful opportunity to compete for federal contracts. In your experience, how has that certification changed your ability to compete in the defense marketplace?" Mr. Closson: "It's been amazing. Number one, it's a very proud designation that I've been honored to have and that the SBA has blessed us with creating, but now holding the certification. But being able to set things aside has not only helped Colossal but also our entire environment. I'm going to the DAV to speak to entrepreneurs, and they want to start businesses because of this program. To see a room of 50 disabled veterans, now motivated to do it because there's proven success, like a Colossal, is one of the biggest gifts I think I can give the veteran community. So, for Colossal, it's been amazing. Now, hopefully, getting the Rule of Two to dive in a little more and now open up the J&As for more sole sources. I hope we attract more people in, but it's been a blessing."

Rep. Jack: "As a small business that does not have an SBA certification and must compete in the broader small business category, how challenging is it for those types of businesses to win awards, and do you believe you're at a disadvantage in terms of the contracts offered to you because of it?" Mr. Jaworowski: "We're definitely at a disadvantage because the contract space, an opportunity space, for a company that's our size, doesn't apply for a set-aside. That's set aside on a socioeconomic basis and forces us to compete at a higher level. In my testimony, I talked about how there is a pool of companies that really punch above their weight. They're large businesses masquerading as small businesses that get to operate under 8(a) criteria in similar spaces to ours. It's really a three hundred person company going up against a behemoth that can be several thousand employees at times. It's very, very challenging to find the right opportunity space. Frequently, when large companies pursue a small business set-aside that we can compete in, we often see contracting officers elect to make a direct award to an 8(a) rather than hold a full-blown competition. The Rule of Two should apply there, but they're still subjectivity that can be applied to the Rule of Two, which can limit competition."

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