1 00:00:02,519 --> 00:00:04,869 We unreadiness . Welcome to order . 2 00:00:05,099 --> 00:00:08,399 Welcome everyone . So good afternoon or 3 00:00:08,409 --> 00:00:10,687 as we say in Hawaii , Aloha , everyone . 4 00:00:11,170 --> 00:00:13,340 The subcommittee meets today to 5 00:00:13,350 --> 00:00:15,159 consider testimony on the small 6 00:00:15,170 --> 00:00:17,700 business programs of the Department of 7 00:00:17,709 --> 00:00:20,040 Defense and the military departments . 8 00:00:20,340 --> 00:00:22,799 Our witnesses today include Mr Faro . 9 00:00:25,100 --> 00:00:27,267 Am I pronouncing your name correctly ? 10 00:00:27,819 --> 00:00:31,260 Oh , sorry , you're over there , Mr 11 00:00:31,319 --> 00:00:33,375 Mitha , the Director Office of Small 12 00:00:33,375 --> 00:00:35,930 Business Programs and the Dod M 13 00:00:35,939 --> 00:00:39,279 Kimberly Bueller . Yes , 14 00:00:40,099 --> 00:00:42,266 Director Army Office of Small Business 15 00:00:42,266 --> 00:00:45,150 Programs , Mr Jimmy Smith , 16 00:00:45,619 --> 00:00:47,639 Director Navy Office Small Business 17 00:00:47,650 --> 00:00:51,150 Programs and Mr Scott Kaiser , Director 18 00:00:51,159 --> 00:00:54,659 Air Force Small Business Programs . As 19 00:00:54,669 --> 00:00:56,502 chair of the subcommittee , I am 20 00:00:56,502 --> 00:00:58,558 focused on ensuring that our service 21 00:00:58,558 --> 00:01:00,389 members and the large military 22 00:01:00,400 --> 00:01:03,430 community have the support they need to 23 00:01:03,439 --> 00:01:05,680 defend our nation . And that means 24 00:01:05,690 --> 00:01:07,912 modernizing our military infrastructure 25 00:01:07,912 --> 00:01:10,730 to meet the needs of the 21st century 26 00:01:10,739 --> 00:01:13,099 and preparing the services to meet the 27 00:01:13,110 --> 00:01:16,349 challenges posed by climate change . It 28 00:01:16,360 --> 00:01:18,919 also means ensuring our defense 29 00:01:18,930 --> 00:01:21,989 industrial base is ready and able to 30 00:01:22,000 --> 00:01:23,944 meet future demands , which is why 31 00:01:23,944 --> 00:01:26,809 today's hearing is so important . I 32 00:01:26,819 --> 00:01:28,430 thank the witnesses for your 33 00:01:28,430 --> 00:01:30,652 willingness to share your insights with 34 00:01:30,652 --> 00:01:32,800 the subcommittee and for your work to 35 00:01:33,169 --> 00:01:35,339 support and strengthen our military . 36 00:01:36,199 --> 00:01:38,910 Collectively , you all bring many 37 00:01:38,919 --> 00:01:41,830 decades of experience supporting small 38 00:01:41,839 --> 00:01:44,010 businesses and that expertise is 39 00:01:44,019 --> 00:01:46,400 critical as we consider ways our 40 00:01:46,410 --> 00:01:49,959 committee can help you as well as our 41 00:01:49,970 --> 00:01:52,319 service members in carrying out our 42 00:01:52,330 --> 00:01:54,552 shared mission of ensuring our national 43 00:01:54,552 --> 00:01:56,910 security . I hope you will also be able 44 00:01:56,919 --> 00:01:58,919 to highlight the vital work , small 45 00:01:58,919 --> 00:02:01,040 businesses as well as approaches your 46 00:02:01,050 --> 00:02:03,569 organizations have taken to help 47 00:02:03,580 --> 00:02:06,949 successfully transition product into 48 00:02:06,959 --> 00:02:10,000 the hands of our service members . We 49 00:02:10,009 --> 00:02:12,120 also welcome your insight into how we 50 00:02:12,120 --> 00:02:15,050 can best help transition Companies 51 00:02:15,059 --> 00:02:18,669 beyond their small business status . We 52 00:02:18,679 --> 00:02:20,735 all recognize the critical role that 53 00:02:20,735 --> 00:02:22,790 small businesses play in our economy 54 00:02:22,880 --> 00:02:24,830 and especially in our defense 55 00:02:24,839 --> 00:02:27,830 industrial based ecosystem , small 56 00:02:27,839 --> 00:02:29,759 businesses play a vital role in 57 00:02:29,770 --> 00:02:31,548 spurring the kind of innovation 58 00:02:31,548 --> 00:02:33,710 necessary for our military to remain 59 00:02:33,720 --> 00:02:35,899 competitive and meet the challenges of 60 00:02:35,910 --> 00:02:38,660 the 21st century . As noted by the 61 00:02:38,669 --> 00:02:40,725 recently released dod small business 62 00:02:40,725 --> 00:02:44,190 strategy in fiscal year 2021 small 63 00:02:44,199 --> 00:02:47,669 businesses numerically made up 73% of 64 00:02:47,679 --> 00:02:50,100 all companies that did business with 65 00:02:50,110 --> 00:02:52,270 the dod . Additionally , small 66 00:02:52,279 --> 00:02:55,830 businesses comprise 77% of the research 67 00:02:55,839 --> 00:02:58,149 and development companies that did 68 00:02:58,160 --> 00:03:00,429 businesses with the dod . And as I 69 00:03:00,440 --> 00:03:02,607 mentioned , especially in a time where 70 00:03:02,607 --> 00:03:05,160 when um being creative is and 71 00:03:05,169 --> 00:03:07,169 innovative is important . This is a 72 00:03:07,169 --> 00:03:09,447 really , really important number , 77% . 73 00:03:09,447 --> 00:03:11,391 However , in the past decade , the 74 00:03:11,391 --> 00:03:12,891 number of small businesses 75 00:03:12,891 --> 00:03:15,113 participating in the defense industrial 76 00:03:15,113 --> 00:03:18,199 base declined by over 40% . That is a 77 00:03:18,210 --> 00:03:20,432 significant drop in the number of small 78 00:03:20,432 --> 00:03:23,380 businesses doing work with the dod that 79 00:03:23,389 --> 00:03:26,100 is a puzzling and uh just uh concerting 80 00:03:26,110 --> 00:03:28,221 trend . And I hope that our witnesses 81 00:03:28,221 --> 00:03:30,277 will be able to shed some light . uh 82 00:03:30,277 --> 00:03:33,139 what you see as the dynamics causing 83 00:03:33,149 --> 00:03:35,038 this trend as well as some of the 84 00:03:35,038 --> 00:03:36,982 actions the department can take to 85 00:03:36,982 --> 00:03:39,539 improve the situation . And this trend 86 00:03:39,550 --> 00:03:41,661 begs a number of questions related to 87 00:03:41,661 --> 00:03:43,606 our approach to small businesses , 88 00:03:43,606 --> 00:03:45,699 including how good are our data and 89 00:03:45,710 --> 00:03:48,410 matrix in tracking the success or 90 00:03:48,419 --> 00:03:50,475 failure of these small businesses in 91 00:03:50,475 --> 00:03:52,141 the defense industrial base , 92 00:03:52,141 --> 00:03:54,419 especially as they try to contribute to 93 00:03:54,429 --> 00:03:57,690 larger competitiveness goals of the 94 00:03:57,699 --> 00:04:00,350 departments . Do we have the means to 95 00:04:00,360 --> 00:04:02,582 support these businesses while they are 96 00:04:02,582 --> 00:04:05,080 small and also to help them transition 97 00:04:05,089 --> 00:04:07,240 to grow into medium and large 98 00:04:07,250 --> 00:04:10,429 businesses . How could we improve the 99 00:04:10,440 --> 00:04:12,699 strategic approach to using and 100 00:04:12,710 --> 00:04:14,800 fostering our small businesses to 101 00:04:14,809 --> 00:04:16,587 contribute to national security 102 00:04:16,589 --> 00:04:19,359 emissions in Hawaii ? We know firsthand 103 00:04:19,369 --> 00:04:21,480 the importance of small businesses to 104 00:04:21,480 --> 00:04:23,670 the success of our armed forces and 105 00:04:23,679 --> 00:04:27,019 vice versa . Businesses like Rico , a 106 00:04:27,059 --> 00:04:30,070 software company based in Honolulu and 107 00:04:30,079 --> 00:04:32,301 they demonstrate the importance of this 108 00:04:32,301 --> 00:04:34,279 relationship between Dod and small 109 00:04:34,290 --> 00:04:37,239 businesses . Since 2019 , this company 110 00:04:37,429 --> 00:04:39,769 has doubled its revenue , created 100 111 00:04:39,779 --> 00:04:42,609 and 20 jobs and expanded its presence 112 00:04:42,619 --> 00:04:45,290 to more than 25 states . 113 00:04:46,459 --> 00:04:48,237 Its success would not have been 114 00:04:48,237 --> 00:04:50,292 possible without support from the DD 115 00:04:50,292 --> 00:04:54,019 which included 55 , million in grants 116 00:04:54,049 --> 00:04:57,459 from the Air Force Thank you again to 117 00:04:57,470 --> 00:04:59,581 our witnesses . I look forward to our 118 00:04:59,581 --> 00:05:01,359 testimonies and now I'd like to 119 00:05:01,369 --> 00:05:03,679 recognize my friend , ranking member , 120 00:05:03,700 --> 00:05:05,811 senator . Thank you madam chair . And 121 00:05:05,811 --> 00:05:08,149 I'm honored to be uh the ranking member 122 00:05:08,160 --> 00:05:10,619 on the readiness subcommittee . This is 123 00:05:10,630 --> 00:05:12,297 the first among equals of the 124 00:05:12,297 --> 00:05:14,408 subcommittees . Don't tell any of the 125 00:05:14,408 --> 00:05:16,463 other subcommittees about that , but 126 00:05:16,463 --> 00:05:19,140 it's true . And um I look forward to a 127 00:05:19,149 --> 00:05:23,109 robust set of hearings . I'm gonna just 128 00:05:23,119 --> 00:05:25,540 make a statement here more broadly . 129 00:05:25,700 --> 00:05:28,019 Last Congress , we held one hearing in 130 00:05:28,029 --> 00:05:30,239 this subcommittee in two years and it 131 00:05:30,329 --> 00:05:34,220 was one hearing . Ok , no offense . 132 00:05:34,230 --> 00:05:36,980 But that is 133 00:05:36,989 --> 00:05:39,149 ridiculous . We should be holding at 134 00:05:39,160 --> 00:05:41,493 least two hearings a month on readiness . 135 00:05:41,493 --> 00:05:43,716 There's nothing more important than the 136 00:05:43,716 --> 00:05:45,771 readiness of the US military in this 137 00:05:45,771 --> 00:05:48,760 time of great power competition , the 138 00:05:48,769 --> 00:05:50,936 new air of authoritarian aggression to 139 00:05:50,936 --> 00:05:54,079 have the most lethal military that can 140 00:05:54,089 --> 00:05:56,959 be ready to win wars and fight tonight 141 00:05:58,010 --> 00:06:00,170 right now . So I sure hope . And you 142 00:06:00,179 --> 00:06:02,235 have my commitment . Uh , we will do 143 00:06:02,235 --> 00:06:04,290 three hearings a month if you want , 144 00:06:04,290 --> 00:06:06,679 but one hearing in two years was uh 145 00:06:06,690 --> 00:06:09,459 abdication of responsibility and we 146 00:06:09,470 --> 00:06:11,359 should never do that again on the 147 00:06:11,359 --> 00:06:13,581 readiness subcommittee . That's just my 148 00:06:13,581 --> 00:06:15,679 opening statement on that 2 to 3 149 00:06:15,690 --> 00:06:17,801 hearings a month . I'm ready to ready 150 00:06:17,801 --> 00:06:19,968 to do it . Nothing more important than 151 00:06:19,968 --> 00:06:22,299 readiness of our military and it's not 152 00:06:22,309 --> 00:06:25,140 really ready right now in my view . So , 153 00:06:25,149 --> 00:06:27,260 uh , I want to thank the witnesses as 154 00:06:27,260 --> 00:06:29,371 well in January of this year . As the 155 00:06:29,371 --> 00:06:32,709 chair mentioned , D U D updated their 156 00:06:32,720 --> 00:06:35,369 small business strategy . We actually 157 00:06:35,380 --> 00:06:37,679 legislated on this issue in fiscal year 158 00:06:37,690 --> 00:06:41,549 2019 and the 2019 N D A A and the 159 00:06:41,559 --> 00:06:45,190 whole purpose was to have Congress 160 00:06:45,200 --> 00:06:48,029 direct opportunities for our small 161 00:06:48,119 --> 00:06:50,750 businesses to support mission execution 162 00:06:50,760 --> 00:06:54,390 and the readiness of our forces . And 163 00:06:54,399 --> 00:06:56,790 uh we had hoped that a unified small 164 00:06:56,799 --> 00:06:59,021 business strategy across the department 165 00:06:59,130 --> 00:07:02,279 would expand small business engagement 166 00:07:02,290 --> 00:07:06,279 and opportunities um across our 167 00:07:06,299 --> 00:07:08,920 economy . Unfortunately , as the chair 168 00:07:08,929 --> 00:07:12,179 mentioned , um there has actually been 169 00:07:12,190 --> 00:07:14,589 a very significant decline of small 170 00:07:14,600 --> 00:07:18,010 business vendors contracting with the 171 00:07:18,019 --> 00:07:20,859 department . So the trends are going 172 00:07:22,010 --> 00:07:24,890 the wrong way . Uh I believe that when 173 00:07:24,899 --> 00:07:26,899 small business opportunities are in 174 00:07:26,899 --> 00:07:29,640 decline , it stifles opportunity 175 00:07:29,649 --> 00:07:32,850 innovation and can lead to increased 176 00:07:32,859 --> 00:07:36,570 acquis acquisition costs . Um One area 177 00:07:36,579 --> 00:07:38,746 in particular that I'd like to explore 178 00:07:38,746 --> 00:07:41,769 that I think matters to many of our 179 00:07:41,779 --> 00:07:43,850 communities . Certainly my State of 180 00:07:43,859 --> 00:07:46,980 Alaska , I think uh the chair's state , 181 00:07:46,989 --> 00:07:49,200 great state of Hawaii as well is the 182 00:07:49,209 --> 00:07:51,839 opportunities with native contractors . 183 00:07:52,170 --> 00:07:55,579 Um I've been a strong advocate of the 184 00:07:55,760 --> 00:07:57,880 native , a , a government contracting 185 00:07:57,890 --> 00:08:01,160 program and one of the reasons is it's 186 00:08:01,179 --> 00:08:03,290 a , it's a really good match . I like 187 00:08:03,290 --> 00:08:05,980 to say the Alaska native community like 188 00:08:05,989 --> 00:08:09,070 lower 48 Indian communities and Native 189 00:08:09,079 --> 00:08:11,299 Hawaiians have what I like to refer to 190 00:08:11,309 --> 00:08:14,329 as special patriotism , special 191 00:08:14,339 --> 00:08:16,929 patriotism . They serve at higher rates 192 00:08:16,940 --> 00:08:18,829 in the US military than any other 193 00:08:18,829 --> 00:08:21,029 ethnic group in the country , year 194 00:08:21,040 --> 00:08:22,707 after year , generation after 195 00:08:22,707 --> 00:08:24,762 generation , even when their country 196 00:08:24,762 --> 00:08:26,984 hasn't always treated them so well . So 197 00:08:26,984 --> 00:08:29,489 that kind of special patriotism lends 198 00:08:29,500 --> 00:08:33,250 itself to strong support with regard to 199 00:08:33,260 --> 00:08:36,010 a day opportunities . And I think it's 200 00:08:36,020 --> 00:08:38,353 another area that can be critical , win , 201 00:08:38,353 --> 00:08:41,289 win for those communities , our states , 202 00:08:41,299 --> 00:08:43,590 our small businesses and the Department 203 00:08:43,599 --> 00:08:46,919 of Defense . But I hear from many of 204 00:08:46,929 --> 00:08:50,539 our small businesses in Alaska about 205 00:08:50,549 --> 00:08:54,460 the difficult time , they experience 206 00:08:54,469 --> 00:08:56,640 just being able to get their foot in 207 00:08:56,650 --> 00:09:00,380 the door of dod because it's such a big 208 00:09:00,450 --> 00:09:03,590 bureaucracy , complicated place to do 209 00:09:03,599 --> 00:09:05,859 business . And once they get their foot 210 00:09:05,869 --> 00:09:08,036 in the door , sometimes it's difficult 211 00:09:08,036 --> 00:09:10,679 to maintain the connection . As we all 212 00:09:10,690 --> 00:09:12,634 know , small businesses oftentimes 213 00:09:12,634 --> 00:09:16,059 don't have the resources to do 214 00:09:16,070 --> 00:09:19,349 department wide requirements on issues 215 00:09:19,359 --> 00:09:22,520 like uh cyber security and 216 00:09:22,530 --> 00:09:24,929 acquisition reform . And they 217 00:09:24,940 --> 00:09:26,718 oftentimes don't have the extra 218 00:09:26,718 --> 00:09:29,760 bandwidth to become experts in certain 219 00:09:29,770 --> 00:09:32,200 areas that are required in their 220 00:09:32,210 --> 00:09:34,599 relationship with the department . So 221 00:09:34,859 --> 00:09:37,026 what we wanna be able to get from this 222 00:09:37,026 --> 00:09:39,409 hearing and what I do certainly is how 223 00:09:39,419 --> 00:09:42,099 we can improve that process , expanding 224 00:09:42,109 --> 00:09:44,599 readiness , expanding the ability of 225 00:09:44,609 --> 00:09:47,260 American innovators who might not be 226 00:09:47,270 --> 00:09:50,630 the giant military contractors but can 227 00:09:50,760 --> 00:09:53,530 disrupt and create 228 00:09:53,539 --> 00:09:56,080 opportunities for our military , for 229 00:09:56,090 --> 00:09:59,640 advancing technology and for the 230 00:09:59,650 --> 00:10:01,650 workers of America . We all want to 231 00:10:01,650 --> 00:10:03,706 participate in that . We all support 232 00:10:03,706 --> 00:10:05,372 our military and having small 233 00:10:05,380 --> 00:10:07,830 businesses be a part of that I think is 234 00:10:07,840 --> 00:10:10,062 a critical function of the department . 235 00:10:10,062 --> 00:10:12,118 So thank you again , madam chair . I 236 00:10:12,118 --> 00:10:14,118 look forward to working with you on 237 00:10:14,118 --> 00:10:16,340 numerous numerous hearings on readiness 238 00:10:16,340 --> 00:10:18,562 in the next two years and uh appreciate 239 00:10:18,562 --> 00:10:20,673 your leadership on this issue . Thank 240 00:10:20,673 --> 00:10:22,562 you very much . I look forward to 241 00:10:22,562 --> 00:10:24,673 working with you . Also , we'll start 242 00:10:24,673 --> 00:10:27,729 with uh Mr chairperson Hirono , ranking 243 00:10:27,739 --> 00:10:29,739 member , Sullivan and distinguished 244 00:10:29,739 --> 00:10:31,683 members of the subcommittee . Good 245 00:10:31,683 --> 00:10:33,350 afternoon . Thank you for the 246 00:10:33,350 --> 00:10:35,461 opportunity to testify today on small 247 00:10:35,461 --> 00:10:37,683 business tools within the Department of 248 00:10:37,683 --> 00:10:39,961 Defense to enhance the industrial base . 249 00:10:39,961 --> 00:10:41,850 My name is Faruq Mita and I'm the 250 00:10:41,850 --> 00:10:43,961 director of the Department of Defense 251 00:10:43,961 --> 00:10:46,072 Office of Small Business Programs . I 252 00:10:46,072 --> 00:10:45,880 report to the Assistant Secretary of 253 00:10:45,890 --> 00:10:48,289 Defense for Industrial Base Policy 254 00:10:48,299 --> 00:10:50,559 within the undersecretary's Office for 255 00:10:50,570 --> 00:10:52,792 Acquisition and sustainment . Today , I 256 00:10:52,792 --> 00:10:54,792 will discuss tools used to increase 257 00:10:54,792 --> 00:10:56,959 small business participation , address 258 00:10:56,959 --> 00:10:58,737 small business barriers and the 259 00:10:58,737 --> 00:11:00,792 department's recently released small 260 00:11:00,792 --> 00:11:02,848 business strategy . Small businesses 261 00:11:02,848 --> 00:11:04,903 make up 99% of all businesses in the 262 00:11:04,903 --> 00:11:06,737 United States and are a critical 263 00:11:06,737 --> 00:11:08,903 contributor to our national security . 264 00:11:08,903 --> 00:11:11,126 Last fiscal year , the department spent 265 00:11:11,126 --> 00:11:12,219 $85.2 billion 266 00:11:12,229 --> 00:11:16,739 25% 267 00:11:16,750 --> 00:11:18,917 of the department's prime contracts go 268 00:11:18,917 --> 00:11:20,972 to small businesses . Additionally , 269 00:11:20,972 --> 00:11:23,083 the department exceeded its goals for 270 00:11:23,083 --> 00:11:25,028 small disadvantaged businesses and 271 00:11:25,028 --> 00:11:27,083 service disabled veteran owned small 272 00:11:27,083 --> 00:11:29,028 businesses . Despite their immense 273 00:11:29,028 --> 00:11:31,194 value , the number of small businesses 274 00:11:31,194 --> 00:11:33,139 in the defense industrial base has 275 00:11:33,139 --> 00:11:35,361 declined over the last decade . This is 276 00:11:35,361 --> 00:11:37,528 an economic and national security risk 277 00:11:37,528 --> 00:11:39,750 for our nation . We risk losing mission 278 00:11:39,750 --> 00:11:41,583 critical domestic capabilities , 279 00:11:41,583 --> 00:11:43,694 innovation , and strong supply chains 280 00:11:43,694 --> 00:11:45,861 to respond to this . The department is 281 00:11:45,861 --> 00:11:45,760 working to strengthen our small 282 00:11:45,770 --> 00:11:47,659 business supply chains , increase 283 00:11:47,659 --> 00:11:50,030 competition and attract new entrants . 284 00:11:50,340 --> 00:11:52,507 I want to specifically highlight a few 285 00:11:52,507 --> 00:11:54,729 programs at the department that support 286 00:11:54,729 --> 00:11:57,007 enhancing small business participation . 287 00:11:57,007 --> 00:11:58,896 These programs include the Mentor 288 00:11:58,896 --> 00:12:01,229 protege program , the Apex Accelerators , 289 00:12:01,229 --> 00:12:03,118 the Rapid Innovation Fund and the 290 00:12:03,118 --> 00:12:05,419 Indian Incentive Program . The mentor 291 00:12:05,440 --> 00:12:07,440 protege program enables experienced 292 00:12:07,440 --> 00:12:09,107 companies to provide business 293 00:12:09,107 --> 00:12:11,107 developmental assistance to protege 294 00:12:11,107 --> 00:12:13,020 firms . The proteges are small 295 00:12:13,030 --> 00:12:14,697 businesses from socioeconomic 296 00:12:14,697 --> 00:12:17,059 categories or new entrants . And the 297 00:12:17,070 --> 00:12:19,181 mentorship enables proteges to become 298 00:12:19,181 --> 00:12:21,570 suppliers as prime and subcontractors 299 00:12:21,580 --> 00:12:23,619 to the department and other federal 300 00:12:23,630 --> 00:12:25,950 agencies . Today . Current and previous 301 00:12:25,960 --> 00:12:27,793 proteges contribute more than $5 302 00:12:27,793 --> 00:12:30,289 billion dollars of work on contracts 303 00:12:30,299 --> 00:12:32,739 each year . On average . Another key 304 00:12:32,750 --> 00:12:34,750 enabler for small businesses is our 305 00:12:34,750 --> 00:12:36,694 apex accelerators . The department 306 00:12:36,694 --> 00:12:39,260 funds 96 apex accelerators across the 307 00:12:39,270 --> 00:12:41,690 country that assist small businesses by 308 00:12:41,700 --> 00:12:43,811 helping them learn how to do business 309 00:12:43,811 --> 00:12:45,367 with the government . These 310 00:12:45,367 --> 00:12:47,367 accelerators were previously called 311 00:12:47,367 --> 00:12:49,200 procurement technical assistance 312 00:12:49,200 --> 00:12:51,422 centers or P tax . After the P moved to 313 00:12:51,422 --> 00:12:53,640 my office . Late last year , we we 314 00:12:53,650 --> 00:12:55,940 rebranded them as our Apex Accelerators 315 00:12:56,030 --> 00:12:58,030 and the department is expanding the 316 00:12:58,030 --> 00:13:00,197 services they give to small businesses 317 00:13:00,197 --> 00:13:02,419 such as training them on cyber security 318 00:13:02,419 --> 00:13:04,474 requirements and leveraging them for 319 00:13:04,474 --> 00:13:06,586 better market research . I would also 320 00:13:06,586 --> 00:13:08,641 like to mention the Rapid Innovation 321 00:13:08,641 --> 00:13:10,863 Fund and the Indian Incentive Program . 322 00:13:10,863 --> 00:13:12,974 The Rapid Innovation Fund is designed 323 00:13:12,974 --> 00:13:15,141 to support small businesses and moving 324 00:13:15,141 --> 00:13:14,929 technologies from prototype to 325 00:13:14,940 --> 00:13:17,162 production . While the Indian incentive 326 00:13:17,162 --> 00:13:19,960 program provides a 5% rebate to a prime 327 00:13:19,969 --> 00:13:21,691 contractor on the total amount 328 00:13:21,691 --> 00:13:23,858 subcontracted to native American owned 329 00:13:23,858 --> 00:13:25,691 businesses . As you mentioned in 330 00:13:25,691 --> 00:13:27,802 January , the department released our 331 00:13:27,802 --> 00:13:29,913 new small business strategy . And the 332 00:13:29,913 --> 00:13:32,136 goal of the strategy is to ensure small 333 00:13:32,136 --> 00:13:33,913 businesses entering the defense 334 00:13:33,913 --> 00:13:35,525 marketplace , understand the 335 00:13:35,525 --> 00:13:37,636 contracting opportunities , resources 336 00:13:37,636 --> 00:13:39,580 available to them and where to get 337 00:13:39,580 --> 00:13:41,636 support . The strategy calls for the 338 00:13:41,636 --> 00:13:43,525 establishment of a small business 339 00:13:43,525 --> 00:13:45,858 integration group across the department , 340 00:13:45,858 --> 00:13:45,619 implementing a common training 341 00:13:45,630 --> 00:13:47,519 curriculum for our small business 342 00:13:47,519 --> 00:13:49,352 professionals in the acquisition 343 00:13:49,352 --> 00:13:51,408 workforce and streamlining points of 344 00:13:51,408 --> 00:13:53,630 entry into the defense marketplace . As 345 00:13:53,630 --> 00:13:55,574 part of the strategy , we are also 346 00:13:55,574 --> 00:13:57,352 ensuring long term planning and 347 00:13:57,352 --> 00:13:59,463 organizational alignment for programs 348 00:13:59,463 --> 00:14:01,686 that drive the small business ecosystem 349 00:14:01,686 --> 00:14:03,852 and providing tools to the acquisition 350 00:14:03,852 --> 00:14:06,019 workforce such as robust set of market 351 00:14:06,019 --> 00:14:08,074 intelligence tools that can help the 352 00:14:08,074 --> 00:14:10,297 efficiency of market research and close 353 00:14:10,297 --> 00:14:12,241 equity gaps in the nation's supply 354 00:14:12,241 --> 00:14:14,408 chains . Lastly , as a part of our new 355 00:14:14,408 --> 00:14:16,574 strategy , the department will provide 356 00:14:16,574 --> 00:14:18,797 more tools to ease their entry into the 357 00:14:18,797 --> 00:14:20,797 defense marketplace . An example is 358 00:14:20,797 --> 00:14:22,686 helping small businesses navigate 359 00:14:22,686 --> 00:14:24,797 issues that threaten their security , 360 00:14:24,797 --> 00:14:26,852 maintaining cyber security readiness 361 00:14:26,852 --> 00:14:28,741 and mitigating the risks posed by 362 00:14:28,741 --> 00:14:30,963 foreign ownership control and influence 363 00:14:30,963 --> 00:14:33,130 or folk are arguably the most pressing 364 00:14:33,130 --> 00:14:35,297 issues faced by small businesses . Our 365 00:14:35,297 --> 00:14:37,241 adversaries routinely target small 366 00:14:37,241 --> 00:14:39,186 businesses thus building effective 367 00:14:39,186 --> 00:14:41,130 cyber security resilience into the 368 00:14:41,130 --> 00:14:43,019 defense industrial base for small 369 00:14:43,019 --> 00:14:44,908 businesses is a critical national 370 00:14:44,908 --> 00:14:46,852 security priority to bolster those 371 00:14:46,852 --> 00:14:48,741 efforts . The department provides 372 00:14:48,741 --> 00:14:50,797 resources to small businesses on the 373 00:14:50,797 --> 00:14:52,797 project spectrum platform . Project 374 00:14:52,797 --> 00:14:54,852 spectrum provides companies with the 375 00:14:54,852 --> 00:14:54,830 knowledge and tools necessary to 376 00:14:54,840 --> 00:14:56,784 protect our nation's most critical 377 00:14:56,784 --> 00:14:58,896 assets in cyberspace . The goal is to 378 00:14:58,896 --> 00:15:00,896 provide supply chain visibility and 379 00:15:00,896 --> 00:15:03,118 assurance of standards compliance while 380 00:15:03,118 --> 00:15:04,896 delivering the industrial cyber 381 00:15:04,896 --> 00:15:06,840 security tools and techniques that 382 00:15:06,840 --> 00:15:09,007 small businesses need . The department 383 00:15:09,007 --> 00:15:11,118 is going to expand this risk platform 384 00:15:11,118 --> 00:15:13,229 to also include training and tools on 385 00:15:13,229 --> 00:15:15,284 due diligence and folk eye that will 386 00:15:15,284 --> 00:15:17,340 help small businesses understand and 387 00:15:17,340 --> 00:15:17,030 mitigate their risks on those matters 388 00:15:17,039 --> 00:15:19,261 as well . I'm grateful to the panel for 389 00:15:19,261 --> 00:15:21,206 giving me the opportunity to speak 390 00:15:21,206 --> 00:15:23,428 today . The department looks forward to 391 00:15:23,428 --> 00:15:23,349 implementing the small business 392 00:15:23,359 --> 00:15:25,510 strategy to continue this important 393 00:15:25,520 --> 00:15:27,409 work that's vital to our national 394 00:15:27,409 --> 00:15:29,576 security . I look forward to answering 395 00:15:29,576 --> 00:15:32,039 any questions that you may have . You 396 00:15:32,049 --> 00:15:34,160 see , I'm so motivated on the writing 397 00:15:34,160 --> 00:15:36,271 in the subcommittee . I've taken over 398 00:15:36,271 --> 00:15:38,382 the chairmanship here . So , no , I'm 399 00:15:38,382 --> 00:15:40,605 just kidding . Uh The chair had to step 400 00:15:40,605 --> 00:15:43,190 out . So um m uh Bueller , can you uh 401 00:15:43,200 --> 00:15:46,340 your testimony , please ? Uh Yes . Uh 402 00:15:46,349 --> 00:15:48,460 Chairperson Hirono , ranking member , 403 00:15:48,460 --> 00:15:50,571 Sullivan and distinguished members of 404 00:15:50,571 --> 00:15:52,738 the subcommittee on behalf of the army 405 00:15:52,738 --> 00:15:54,682 senior leaders . Thank you for the 406 00:15:54,682 --> 00:15:56,849 opportunity to appear before you today 407 00:15:56,849 --> 00:15:58,849 and discuss the Army Small Business 408 00:15:58,849 --> 00:16:00,793 Program as the daughter of a small 409 00:16:00,793 --> 00:16:02,738 business owner . I understand that 410 00:16:02,738 --> 00:16:04,849 small businesses must be passionate , 411 00:16:04,849 --> 00:16:07,071 committed resilient and willing to work 412 00:16:07,071 --> 00:16:09,182 more hours than it seems or even in a 413 00:16:09,182 --> 00:16:11,293 day . In order to be successful , the 414 00:16:11,293 --> 00:16:13,293 small business entrepreneurs I meet 415 00:16:13,293 --> 00:16:15,516 while executing my duties as the army's 416 00:16:15,516 --> 00:16:17,627 small business director , demonstrate 417 00:16:17,627 --> 00:16:19,738 all of these qualities and are fueled 418 00:16:19,738 --> 00:16:21,905 by the um the passion to help the army 419 00:16:21,905 --> 00:16:24,016 fulfill its mission to deploy , fight 420 00:16:24,016 --> 00:16:26,182 and win our nation's wars . As part of 421 00:16:26,182 --> 00:16:27,849 the joint force , these small 422 00:16:27,849 --> 00:16:29,849 businesses are key to executing the 423 00:16:29,849 --> 00:16:32,016 national defense strategy and building 424 00:16:32,016 --> 00:16:34,182 the army of 2030 . They are engines of 425 00:16:34,182 --> 00:16:36,127 innovation that fill knowledge and 426 00:16:36,127 --> 00:16:38,071 capability gaps , help us maintain 427 00:16:38,071 --> 00:16:40,238 readiness and maintain modernization . 428 00:16:40,238 --> 00:16:42,349 I'm sorry , enable modernization . In 429 00:16:42,349 --> 00:16:44,516 fiscal year 2022 the army awarded over 430 00:16:44,516 --> 00:16:47,489 $24.5 billion to small businesses owned 431 00:16:47,500 --> 00:16:49,333 by disadvantaged entrepreneurs , 432 00:16:49,333 --> 00:16:51,278 including women veterans and those 433 00:16:51,278 --> 00:16:53,222 living and working in historically 434 00:16:53,222 --> 00:16:55,222 underutilized business zones . This 435 00:16:55,222 --> 00:16:57,419 equated to over 25% of all prime 436 00:16:57,429 --> 00:17:00,109 contracts . We exceeded the enhanced 437 00:17:00,119 --> 00:17:02,175 small disadvantaged business goal by 438 00:17:02,175 --> 00:17:06,079 14.75% which includes award of the 439 00:17:06,089 --> 00:17:09,479 $1.7 billion contract to ihealth labs . 440 00:17:09,619 --> 00:17:11,563 A small disadvantaged business who 441 00:17:11,563 --> 00:17:13,675 delivered the rapid antigen test kits 442 00:17:13,675 --> 00:17:15,730 for COVID-19 distributed through the 443 00:17:15,730 --> 00:17:17,786 United States postal service . These 444 00:17:17,786 --> 00:17:19,841 achievements are consistent with the 445 00:17:19,841 --> 00:17:21,952 army's long history as being a leader 446 00:17:21,952 --> 00:17:24,119 for small business achievements in the 447 00:17:24,119 --> 00:17:26,175 Department of Defense and across the 448 00:17:26,175 --> 00:17:28,008 federal government . The army is 449 00:17:28,008 --> 00:17:30,175 committed to ensuring small businesses 450 00:17:30,175 --> 00:17:32,341 have maximum opportunity to perform on 451 00:17:32,341 --> 00:17:34,119 contracts at both the prime and 452 00:17:34,119 --> 00:17:36,397 subcontract levels . In fiscal year 22 , 453 00:17:36,397 --> 00:17:38,341 we deployed innovations and issued 454 00:17:38,341 --> 00:17:40,119 policy and guidance to increase 455 00:17:40,119 --> 00:17:42,286 opportunity , reduce barriers to entry 456 00:17:42,286 --> 00:17:44,452 and improve the professionalism of the 457 00:17:44,452 --> 00:17:46,730 small business workforce . For example , 458 00:17:46,730 --> 00:17:48,952 in April 22 , the Secretary of the Army 459 00:17:48,952 --> 00:17:51,175 issued army wide guidance for the small 460 00:17:51,175 --> 00:17:53,397 business programs , which was the first 461 00:17:53,397 --> 00:17:55,508 in over a decade . The undersecretary 462 00:17:55,508 --> 00:17:57,619 of the army launched a series of five 463 00:17:57,619 --> 00:17:59,675 initiatives to help small businesses 464 00:17:59,675 --> 00:17:59,510 better collaborate with defense , 465 00:17:59,520 --> 00:18:02,209 defense prime integrators . These pilot 466 00:18:02,219 --> 00:18:04,386 programs will encourage partnerships , 467 00:18:04,386 --> 00:18:06,050 open supply chains and drive 468 00:18:06,060 --> 00:18:08,380 accelerated adoption of technology 469 00:18:08,479 --> 00:18:10,270 cultivated through army and dod 470 00:18:10,280 --> 00:18:12,619 investments . The small business 471 00:18:12,630 --> 00:18:15,390 innovation research program or S B I R 472 00:18:15,400 --> 00:18:17,511 continues to be a critical enabler of 473 00:18:17,511 --> 00:18:19,650 army modernization and we appreciate 474 00:18:19,660 --> 00:18:21,493 congress' reauthorization of the 475 00:18:21,493 --> 00:18:23,910 program . In F Y 22 the army 476 00:18:23,920 --> 00:18:25,920 established a contracting center of 477 00:18:25,920 --> 00:18:28,142 excellence to innovate how we award S B 478 00:18:28,150 --> 00:18:30,489 I R phase one and phase two contracts . 479 00:18:30,739 --> 00:18:33,770 Average time to award is now up to 75% 480 00:18:33,780 --> 00:18:36,410 faster based on stakeholder feedback . 481 00:18:36,420 --> 00:18:38,531 And the reauthorization , the program 482 00:18:38,531 --> 00:18:40,420 continues to refine its strategic 483 00:18:40,420 --> 00:18:42,729 approach to integrating non traditional 484 00:18:42,739 --> 00:18:44,920 innovators into the army ecosystem and 485 00:18:44,930 --> 00:18:47,479 increasing phase three awards . In F Y 486 00:18:47,489 --> 00:18:51,395 22 the army executed a total of 100 153 487 00:18:51,405 --> 00:18:53,572 Phase three Awards totalling more than 488 00:18:53,572 --> 00:18:57,324 $318 million 100 unique firms across 489 00:18:57,334 --> 00:19:00,314 26 states . Other notable actions in 490 00:19:00,324 --> 00:19:02,425 fiscal year 22 that target small 491 00:19:02,435 --> 00:19:04,268 business opportunity include the 492 00:19:04,268 --> 00:19:06,670 refresh of the mythbusters campaign Uh 493 00:19:06,680 --> 00:19:08,589 to provide strategies that help 494 00:19:08,599 --> 00:19:10,488 acquisition professionals improve 495 00:19:10,488 --> 00:19:12,060 industry communication . We 496 00:19:12,069 --> 00:19:14,349 reinstituted goals for procurements 497 00:19:14,359 --> 00:19:16,137 valued less than the simplified 498 00:19:16,137 --> 00:19:18,869 acquisition threshold of $250,000 499 00:19:19,109 --> 00:19:21,469 conduct regular reporting to the heads 500 00:19:21,479 --> 00:19:23,646 of the contracting activity to improve 501 00:19:23,646 --> 00:19:26,180 subcontract reporting uh published by 502 00:19:26,189 --> 00:19:28,160 annual forecasts of small business 503 00:19:28,170 --> 00:19:31,119 opportunities . And um we published the 504 00:19:31,130 --> 00:19:33,019 first small business professional 505 00:19:33,019 --> 00:19:35,186 talent management guide um in the army 506 00:19:35,186 --> 00:19:37,186 history . Finally , the army stands 507 00:19:37,186 --> 00:19:39,241 ready to work with the Department of 508 00:19:39,241 --> 00:19:41,130 Defense to implement the recently 509 00:19:41,130 --> 00:19:43,241 updated small business strategy . And 510 00:19:43,241 --> 00:19:45,186 we will publish the army's updated 511 00:19:45,186 --> 00:19:47,186 strategy this fiscal year . I would 512 00:19:47,186 --> 00:19:49,297 like to thank Congress for supporting 513 00:19:49,297 --> 00:19:51,352 our soldiers , our civilians and the 514 00:19:51,352 --> 00:19:53,130 small business programs working 515 00:19:53,130 --> 00:19:55,352 together . We can continue to ensure we 516 00:19:55,352 --> 00:19:57,574 provide maximum contracting opportunity 517 00:19:57,574 --> 00:19:59,630 for the small business entrepreneurs 518 00:19:59,630 --> 00:20:01,574 that drive our economy and deliver 519 00:20:01,574 --> 00:20:03,574 capability to our soldiers . I look 520 00:20:03,574 --> 00:20:05,630 forward to addressing your questions 521 00:20:05,630 --> 00:20:05,530 this afternoon . Great . Thank you , 522 00:20:05,540 --> 00:20:08,560 Miss uh Bueller and uh Mr Smith . The 523 00:20:08,569 --> 00:20:11,329 floor is yours . Thank you , Chair 524 00:20:11,339 --> 00:20:13,283 Hirono , ranking member , Sullivan 525 00:20:13,283 --> 00:20:15,395 members of the subcommittee . It's an 526 00:20:15,395 --> 00:20:17,506 honor to appear before you here today 527 00:20:17,719 --> 00:20:19,997 on behalf of the Secretary of the Navy , 528 00:20:19,997 --> 00:20:22,219 the Department of the Navy leadership . 529 00:20:22,219 --> 00:20:24,441 Thank you for your continued support to 530 00:20:24,441 --> 00:20:26,275 our sailors , marines , civilian 531 00:20:26,275 --> 00:20:28,680 workforce , industry partners , in 532 00:20:28,689 --> 00:20:30,467 particular , the small business 533 00:20:30,467 --> 00:20:32,739 community , a healthy small business 534 00:20:32,750 --> 00:20:34,770 industrial base will continue to be 535 00:20:34,780 --> 00:20:37,489 vital to the long term success and 536 00:20:37,500 --> 00:20:39,667 affordability of the Department of the 537 00:20:39,667 --> 00:20:42,000 Navy , as well as our national security . 538 00:20:42,430 --> 00:20:44,374 Increasing opportunities for small 539 00:20:44,374 --> 00:20:47,099 businesses is a high priority and focus 540 00:20:47,109 --> 00:20:49,310 for the Department of the Navy . The 541 00:20:49,319 --> 00:20:51,541 Department of the Navy , senior leaders 542 00:20:51,541 --> 00:20:53,486 must ensure that Navy Marine Corps 543 00:20:53,486 --> 00:20:55,597 acquisition activities are aligned to 544 00:20:55,597 --> 00:20:57,800 the Secretary of Defense . Three small 545 00:20:57,810 --> 00:21:00,020 business priorities which are 546 00:21:00,310 --> 00:21:02,489 increasing the share of small business 547 00:21:02,500 --> 00:21:06,270 dollars , lowering barriers to entry 548 00:21:06,640 --> 00:21:08,696 and increasing competition for small 549 00:21:08,696 --> 00:21:10,839 businesses and traditionally 550 00:21:10,849 --> 00:21:14,150 underserved entrepreneurs . In Fiscal 551 00:21:14,160 --> 00:21:16,216 Year 22 , the Department of the Navy 552 00:21:16,216 --> 00:21:20,060 awarded $94 billion Prime Contract 553 00:21:20,069 --> 00:21:23,349 Awards . Nearly 20% of that went to 554 00:21:23,359 --> 00:21:25,470 small businesses that served as prime 555 00:21:25,470 --> 00:21:28,300 contractors . This 20% equates to 556 00:21:28,310 --> 00:21:31,579 $18.4 billion dollars awarded to small 557 00:21:31,589 --> 00:21:34,180 businesses . It also represents an 558 00:21:34,189 --> 00:21:38,089 increase over the FY 21 numbers 559 00:21:38,130 --> 00:21:41,380 which was $17.3 billion dollars awarded 560 00:21:41,390 --> 00:21:45,040 to small businesses . In fiscal year 22 , 561 00:21:45,050 --> 00:21:47,050 Department of the Navy exceeded its 562 00:21:47,050 --> 00:21:49,189 goals for women owned service , 563 00:21:49,199 --> 00:21:51,532 disabled , veteran owned , historically , 564 00:21:51,532 --> 00:21:53,880 underutilized business , owned small 565 00:21:53,890 --> 00:21:57,170 businesses . The Department of the Navy 566 00:21:57,180 --> 00:21:59,540 increased its small disadvantaged 567 00:21:59,550 --> 00:22:02,810 business target significantly in F Y 22 . 568 00:22:02,819 --> 00:22:04,652 In response to President Biden's 569 00:22:04,652 --> 00:22:08,250 executive order 13985 , our proactive 570 00:22:08,260 --> 00:22:10,482 posturing resulted in the Department of 571 00:22:10,482 --> 00:22:13,170 the Navy's four year run of exceeding 572 00:22:13,180 --> 00:22:15,510 its goals in all four socioeconomic 573 00:22:15,520 --> 00:22:19,329 categories to be broken By aggressively 574 00:22:19,339 --> 00:22:23,229 targeting the 1% short for 575 00:22:23,239 --> 00:22:25,072 small disadvantaged businesses . 576 00:22:27,349 --> 00:22:29,571 The Department of the Navy continues to 577 00:22:29,571 --> 00:22:31,627 blaze new trails as the Secretary of 578 00:22:31,627 --> 00:22:33,627 the Navy continues to lead from the 579 00:22:33,627 --> 00:22:35,571 front . In addition to his regular 580 00:22:35,571 --> 00:22:37,627 meetings with industry partners . He 581 00:22:37,627 --> 00:22:39,682 conducts small business round tables 582 00:22:39,682 --> 00:22:42,489 and he also established and led two 583 00:22:42,500 --> 00:22:44,510 small business executive off sites 584 00:22:44,520 --> 00:22:46,520 within the Department of the Navy . 585 00:22:46,660 --> 00:22:48,930 These off sites required that the 10 586 00:22:48,939 --> 00:22:50,828 commanders that oversee our major 587 00:22:50,828 --> 00:22:53,250 buying commands . And the 18 program 588 00:22:53,260 --> 00:22:55,849 executive officers reflect back on 589 00:22:55,859 --> 00:22:58,026 their small business opportunities and 590 00:22:58,026 --> 00:23:00,290 performance against their F Y 22 small 591 00:23:00,300 --> 00:23:03,069 business goals . And then we spent time 592 00:23:03,079 --> 00:23:06,030 discussing the F Y 23 small business 593 00:23:06,040 --> 00:23:09,699 execution plans . Furthermore , S A 594 00:23:10,000 --> 00:23:12,260 F challenged these senior leaders to 595 00:23:12,270 --> 00:23:15,550 disaggregate previously held large and 596 00:23:15,560 --> 00:23:18,239 omnibus contracts to afford small 597 00:23:18,250 --> 00:23:20,361 businesses the opportunity to compete 598 00:23:20,361 --> 00:23:22,489 for prime contracting opportunities 599 00:23:23,270 --> 00:23:25,048 supporting in this stance . The 600 00:23:25,048 --> 00:23:27,359 Secretary of the Navy then tasked my 601 00:23:27,369 --> 00:23:30,890 office , my team with creating a policy 602 00:23:30,900 --> 00:23:33,650 to leverage O M B's memo entitled 603 00:23:33,660 --> 00:23:36,839 advancing equity in small business to 604 00:23:36,849 --> 00:23:38,682 strengthen accountability of the 605 00:23:38,682 --> 00:23:40,969 Department of the Navy . Senior leaders 606 00:23:40,979 --> 00:23:42,812 in meeting the goals established 607 00:23:50,680 --> 00:23:52,589 in each socioeconomic category , 608 00:23:52,599 --> 00:23:54,655 thereby strengthening and increasing 609 00:23:54,655 --> 00:23:56,710 small business industrial capacity . 610 00:23:56,900 --> 00:23:58,844 This direct communication with the 611 00:23:58,844 --> 00:24:01,067 Department of the Navy , senior leaders 612 00:24:01,067 --> 00:24:02,844 and the accountability measures 613 00:24:02,844 --> 00:24:04,789 affected through their performance 614 00:24:04,789 --> 00:24:06,511 plans has yielded unparalleled 615 00:24:06,511 --> 00:24:08,250 increases in outreach efforts 616 00:24:08,260 --> 00:24:10,482 throughout the Department of the Navy . 617 00:24:10,482 --> 00:24:13,670 My team and I contribute , attribute 618 00:24:13,680 --> 00:24:15,829 the majority of the increase of the 619 00:24:15,839 --> 00:24:18,239 small business performance to a hands 620 00:24:18,250 --> 00:24:20,510 on approach to increasing small 621 00:24:20,520 --> 00:24:22,150 business and giving them the 622 00:24:22,160 --> 00:24:24,430 opportunity to provide war fighting 623 00:24:24,439 --> 00:24:27,680 capability to the Navy's mission . In 624 00:24:27,689 --> 00:24:30,319 conclusion , the small businesses that 625 00:24:30,329 --> 00:24:32,459 are essential to the healthy defense 626 00:24:32,469 --> 00:24:34,699 base . We need you working on our 627 00:24:34,709 --> 00:24:36,849 hardest problems , you bring about 628 00:24:36,859 --> 00:24:39,260 innovation , you bring about capability 629 00:24:39,270 --> 00:24:41,369 and technology and we afford 630 00:24:41,380 --> 00:24:43,869 opportunities to work with you . The 631 00:24:43,880 --> 00:24:46,800 department recognizes that there are 632 00:24:46,810 --> 00:24:50,689 incredible and resources available for 633 00:24:50,699 --> 00:24:53,010 this adaptability . The Department of 634 00:24:53,020 --> 00:24:55,270 the Navy is committed to these 635 00:24:55,280 --> 00:24:57,447 opportunities and removing barriers to 636 00:24:57,447 --> 00:24:59,391 doing business with us . Thank you 637 00:24:59,400 --> 00:25:01,329 again for your leadership of this 638 00:25:01,339 --> 00:25:03,849 committee and the oversight of interest 639 00:25:03,859 --> 00:25:06,599 in the Department of the Navy to my 640 00:25:06,609 --> 00:25:08,680 Navy small business team . Thank you 641 00:25:08,689 --> 00:25:10,633 for the outstanding work you do in 642 00:25:10,633 --> 00:25:12,689 support of the Navy mission . I look 643 00:25:12,689 --> 00:25:14,800 forward to your questions . Thank you 644 00:25:14,800 --> 00:25:18,189 very much , Mr Kaiser . Good afternoon 645 00:25:18,199 --> 00:25:19,977 chair Hirono , ranking member , 646 00:25:19,977 --> 00:25:21,532 Sullivan and members of the 647 00:25:21,532 --> 00:25:23,699 subcommittee . My name is Scott Kaiser 648 00:25:23,699 --> 00:25:25,810 and I currently serve as the Director 649 00:25:25,810 --> 00:25:25,569 of Small Business Programs for the 650 00:25:25,579 --> 00:25:27,689 Department of the Air Force covering 651 00:25:27,699 --> 00:25:29,755 both the United States Air Force and 652 00:25:29,755 --> 00:25:31,866 the United States Space Force . Thank 653 00:25:31,866 --> 00:25:34,088 you for the privilege to be sharing our 654 00:25:34,088 --> 00:25:36,310 perspective on small business tools and 655 00:25:36,310 --> 00:25:38,366 for enhancing the defense industrial 656 00:25:38,366 --> 00:25:40,532 base . It's good to see that you madam 657 00:25:40,532 --> 00:25:42,755 chair and Senator Shaheen and Duckworth 658 00:25:42,755 --> 00:25:44,866 also serve on the Senate Committee on 659 00:25:44,866 --> 00:25:46,977 small business and entrepreneurship . 660 00:25:46,977 --> 00:25:48,977 We value your continued support for 661 00:25:48,977 --> 00:25:50,755 small business for our civilian 662 00:25:50,755 --> 00:25:52,810 employees and our uniformed military 663 00:25:52,810 --> 00:25:54,810 members who serve as small business 664 00:25:54,810 --> 00:25:57,099 professionals . Our F Y 22 small 665 00:25:57,109 --> 00:25:59,331 business participation record is strong 666 00:25:59,589 --> 00:26:01,478 for the third year in a row . The 667 00:26:01,478 --> 00:26:03,533 Department of the Air force exceeded 668 00:26:03,533 --> 00:26:05,533 all small business goals as well as 669 00:26:05,533 --> 00:26:07,756 each of the sub categories , awarding a 670 00:26:07,756 --> 00:26:11,439 record 29 point or 22.9% of all 671 00:26:11,449 --> 00:26:13,869 eligible daft contracts representing 672 00:26:13,880 --> 00:26:17,260 $15.6 billion direct to small business , 673 00:26:17,500 --> 00:26:20,099 small disadvantaged businesses . STV S 674 00:26:20,119 --> 00:26:22,550 owned by disadvantaged individuals , 675 00:26:22,709 --> 00:26:24,699 native American tribes , native 676 00:26:24,709 --> 00:26:26,598 Hawaiian organizations and Alaska 677 00:26:26,598 --> 00:26:29,739 native corporations received 10.12% 678 00:26:30,180 --> 00:26:32,236 goals for service , disabled veteran 679 00:26:32,236 --> 00:26:34,180 owned small business , women owned 680 00:26:34,180 --> 00:26:36,069 small businesses and historically 681 00:26:36,069 --> 00:26:38,347 underutilized business zone , hub zone , 682 00:26:38,347 --> 00:26:40,729 small businesses were also all exceeded . 683 00:26:41,160 --> 00:26:43,520 This industrial base is broad from R 684 00:26:43,530 --> 00:26:45,697 and D to construction , to information 685 00:26:45,697 --> 00:26:47,729 technology to manufacturing . For 686 00:26:47,739 --> 00:26:49,550 example , an A N C owned small 687 00:26:49,560 --> 00:26:51,782 disadvantage business was chosen as the 688 00:26:51,782 --> 00:26:53,979 best value for aircraft logistics at 689 00:26:53,989 --> 00:26:55,989 the United States Air Force Academy 690 00:26:55,989 --> 00:26:59,989 contract worth over $1.109 million . 691 00:27:00,199 --> 00:27:02,088 Small businesses are known as the 692 00:27:02,088 --> 00:27:04,920 engines of innovation . We agree last 693 00:27:04,930 --> 00:27:07,229 year , we obligated 19.7% of all 694 00:27:07,239 --> 00:27:10,569 eligible R and D contracts over $2.7 695 00:27:10,579 --> 00:27:13,010 billion to small firms spend under 696 00:27:13,020 --> 00:27:15,187 small business innovation , research , 697 00:27:15,187 --> 00:27:17,209 Siber and small business technology 698 00:27:17,219 --> 00:27:19,489 transfers for techno 699 00:27:19,859 --> 00:27:22,540 technological visibility , further 700 00:27:22,550 --> 00:27:24,880 research and prototyping reach just 701 00:27:24,890 --> 00:27:27,459 over $1 billion . Our technology 702 00:27:27,469 --> 00:27:29,949 transition is strong . In F Y 22 we 703 00:27:29,959 --> 00:27:32,449 awarded Sitter phase three contracts 704 00:27:32,560 --> 00:27:34,609 with a ceiling value of almost $2 705 00:27:34,619 --> 00:27:37,319 billion with nearly 1.8 billion awarded 706 00:27:37,329 --> 00:27:40,859 to small firms . Our F Y 22 eligible 707 00:27:40,869 --> 00:27:43,010 phase three contract obligations 708 00:27:43,020 --> 00:27:46,660 reached 772 million from under 709 00:27:46,670 --> 00:27:49,760 300 million . In F Y 18 of those 710 00:27:49,770 --> 00:27:52,380 772 million small firms got 711 00:27:52,390 --> 00:27:55,819 627 million . We made almost half of 712 00:27:55,829 --> 00:27:58,630 dod wide phase three obligations . The 713 00:27:58,640 --> 00:28:00,584 most important tool in which these 714 00:28:00,584 --> 00:28:02,696 successes Hinge is our small business 715 00:28:02,696 --> 00:28:04,751 professional workforce which assists 716 00:28:04,751 --> 00:28:06,640 small firms and advocates for the 717 00:28:06,640 --> 00:28:08,696 participation and innovations in the 718 00:28:08,696 --> 00:28:10,640 acquisition process . I lead small 719 00:28:10,640 --> 00:28:12,839 business community of 162 small 720 00:28:12,849 --> 00:28:15,829 business subject matter experts , about 721 00:28:15,839 --> 00:28:18,006 half of which are dual headed in their 722 00:28:18,006 --> 00:28:20,719 responsibility and rules . Uh small 723 00:28:20,729 --> 00:28:22,951 business professionals work hard . Last 724 00:28:22,951 --> 00:28:24,619 year's average was about 642 725 00:28:24,630 --> 00:28:28,020 contracting action per S B P under 726 00:28:28,030 --> 00:28:30,430 purview , an increase from 6 25 the 727 00:28:30,439 --> 00:28:32,540 year prior to drive strategic 728 00:28:32,550 --> 00:28:34,439 improvements . We organized small 729 00:28:34,439 --> 00:28:36,439 business professionals into what we 730 00:28:36,439 --> 00:28:38,439 call a daft small business board of 731 00:28:38,439 --> 00:28:40,839 directors and employed the objectives 732 00:28:40,849 --> 00:28:43,209 and key results management model from 733 00:28:43,219 --> 00:28:45,500 leading private sector organizations . 734 00:28:45,599 --> 00:28:48,469 We use the O K R MO model to pursue 735 00:28:48,479 --> 00:28:51,089 broad lines of lines of effort . Under 736 00:28:51,099 --> 00:28:53,266 our bod structure . The small business 737 00:28:53,266 --> 00:28:55,349 professionals on each L O E team 738 00:28:55,359 --> 00:28:57,660 developed the O R s to support that 739 00:28:57,670 --> 00:29:00,099 team's objectives . OK . R S address 740 00:29:00,109 --> 00:29:02,300 training and fill the workforce 741 00:29:02,310 --> 00:29:04,366 deployment of effective guidance for 742 00:29:04,366 --> 00:29:06,421 small business contracting methods . 743 00:29:06,421 --> 00:29:09,329 Data goal , metrics , improved outreach 744 00:29:09,339 --> 00:29:11,550 and reduction of entry barriers and 745 00:29:11,560 --> 00:29:13,589 mainstreaming the use of Ver Sitter 746 00:29:13,599 --> 00:29:15,766 phase three and acquisition planning . 747 00:29:15,766 --> 00:29:17,821 Thanks to the ORS our small business 748 00:29:17,821 --> 00:29:19,766 professionals carried out a record 749 00:29:19,766 --> 00:29:21,821 number of outreach activities . Last 750 00:29:21,821 --> 00:29:25,390 year , increasing 45.7% of audience 751 00:29:25,400 --> 00:29:29,150 over FY 21 , both virtual and in person 752 00:29:29,160 --> 00:29:32,099 audience members . We even sent our 753 00:29:32,109 --> 00:29:34,579 Siber sitter expert to speak in Hawaii 754 00:29:34,589 --> 00:29:36,478 at the Governor's invitation last 755 00:29:36,478 --> 00:29:39,290 October , the OR methodology based 756 00:29:39,300 --> 00:29:41,260 policy changes have helped small 757 00:29:41,270 --> 00:29:44,739 business firms receive 78.2% of daft 758 00:29:44,750 --> 00:29:47,189 simplified acquisition threshold level 759 00:29:47,199 --> 00:29:49,739 spend . Despite all our successes , we 760 00:29:49,750 --> 00:29:51,861 know small business firms continue to 761 00:29:51,861 --> 00:29:53,972 face challenges , doing business with 762 00:29:53,972 --> 00:29:56,430 the and the dod in general , we take 763 00:29:56,439 --> 00:29:58,661 this seriously implementing the new dod 764 00:29:58,670 --> 00:30:00,579 small business strategy . We've 765 00:30:00,589 --> 00:30:03,859 assigned the strategies 23 action items 766 00:30:03,869 --> 00:30:06,859 into our boss , L O E teams and they've 767 00:30:06,869 --> 00:30:09,091 worked it into that so we can track our 768 00:30:09,091 --> 00:30:10,979 progress on a monthly basis . We 769 00:30:10,989 --> 00:30:12,869 provided the dod office of Small 770 00:30:12,880 --> 00:30:15,920 Business profession uh programs for 771 00:30:15,930 --> 00:30:18,099 appropriate action . The daft strategy 772 00:30:18,109 --> 00:30:20,579 resourcing estimate matching action 773 00:30:20,589 --> 00:30:22,760 items to the existing or additional 774 00:30:22,770 --> 00:30:24,550 personnel as approved by our 775 00:30:24,560 --> 00:30:26,959 undersecretary with the concurrence of 776 00:30:26,969 --> 00:30:29,025 the chief and vice chief of both Air 777 00:30:29,025 --> 00:30:31,390 Force and Space Force . Thank you again 778 00:30:31,400 --> 00:30:33,400 for this opportunity to testify and 779 00:30:33,400 --> 00:30:35,619 share the small business perspective . 780 00:30:35,630 --> 00:30:37,519 We look forward to answering your 781 00:30:37,519 --> 00:30:40,459 questions . Thank you very much . I'll 782 00:30:40,469 --> 00:30:42,802 start with the questions . First of all , 783 00:30:42,802 --> 00:30:44,630 let's get a definition of small 784 00:30:44,640 --> 00:30:46,119 business from you and Mr 785 00:30:48,670 --> 00:30:50,892 Yeah , uh Thank you for that question . 786 00:30:50,892 --> 00:30:53,119 Uh So the small business uh depends on 787 00:30:53,130 --> 00:30:56,319 the the codes that are established by 788 00:30:56,829 --> 00:30:59,051 uh the Department of Commerce and North 789 00:30:59,051 --> 00:31:01,218 American industry classification codes 790 00:31:01,218 --> 00:31:03,329 for each industry have size standards 791 00:31:03,329 --> 00:31:05,319 that are issued by the S B A . And 792 00:31:05,329 --> 00:31:07,380 those size standards vary based on 793 00:31:07,390 --> 00:31:10,939 either average revenues or by 794 00:31:10,949 --> 00:31:14,500 individuals . For services type work . 795 00:31:14,510 --> 00:31:16,630 It's generally in an average of about 796 00:31:16,640 --> 00:31:17,640 $16 million 797 00:31:17,640 --> 00:31:21,599 500 798 00:31:21,609 --> 00:31:23,720 employees . It depends on the class . 799 00:31:23,720 --> 00:31:25,220 It depends on the industry 800 00:31:25,220 --> 00:31:27,442 classification . When we talk about the 801 00:31:27,442 --> 00:31:29,387 thousands of small businesses that 802 00:31:29,387 --> 00:31:31,498 contract with the dod though we are , 803 00:31:31,498 --> 00:31:33,720 are we talking about uh businesses that 804 00:31:33,720 --> 00:31:35,939 have 500 plus employees ? Some , but 805 00:31:35,949 --> 00:31:38,060 what is the average ? And because I'd 806 00:31:38,060 --> 00:31:40,171 like to get a picture of , you know , 807 00:31:40,171 --> 00:31:42,171 the , the , the kinds of businesses 808 00:31:42,171 --> 00:31:44,393 that you all are contracting with and I 809 00:31:44,393 --> 00:31:46,116 take it , you all use the same 810 00:31:46,116 --> 00:31:48,282 definition even if they're different , 811 00:31:48,282 --> 00:31:50,505 depending on , well , what uh the , the 812 00:31:50,505 --> 00:31:52,060 in industry or whatever the 813 00:31:52,060 --> 00:31:54,229 definitional basis is . So you all use 814 00:31:54,239 --> 00:31:57,060 the same . So what are we talking about ? 815 00:31:57,069 --> 00:31:59,969 Really small businesses like uh 100 ? 816 00:31:59,979 --> 00:32:02,869 Is that an average kind of a , a small 817 00:32:02,880 --> 00:32:05,079 business or are we talking about 500 ? 818 00:32:06,619 --> 00:32:08,619 I would say it depends , uh I don't 819 00:32:08,619 --> 00:32:11,650 have a uh an exact answer on , on the 820 00:32:11,660 --> 00:32:13,770 average . But I would say that for 821 00:32:13,780 --> 00:32:16,002 professional service type work where we 822 00:32:16,002 --> 00:32:18,469 look at revenues , it's in that revenue 823 00:32:18,479 --> 00:32:20,479 range of probably $10 million . And 824 00:32:20,479 --> 00:32:22,819 less in revenues is those types of 825 00:32:22,829 --> 00:32:24,829 companies . And for manufacturers , 826 00:32:24,829 --> 00:32:27,410 it's harder to tell , uh , from my view . 827 00:32:27,420 --> 00:32:29,459 But , uh , it could be in that 500 828 00:32:29,469 --> 00:32:32,430 range . Yes I'd like to continue with 829 00:32:32,439 --> 00:32:34,661 you . That , that , that , uh , is that 830 00:32:34,661 --> 00:32:36,828 there is a drop in the number of small 831 00:32:36,828 --> 00:32:39,069 businesses now participating in dod 832 00:32:39,079 --> 00:32:41,412 contracts . And this is for each of you . 833 00:32:41,412 --> 00:32:43,412 What do you think is accounting for 834 00:32:43,412 --> 00:32:45,468 this job ? And what specifically are 835 00:32:45,468 --> 00:32:47,635 you doing ? You know , you , you cited 836 00:32:47,635 --> 00:32:49,801 a number of outreach kinds of programs 837 00:32:49,801 --> 00:32:51,968 that you're doing . But what , what uh 838 00:32:51,968 --> 00:32:54,510 which of these programs I is going to 839 00:32:54,520 --> 00:32:56,576 enable you to increase ? I take it , 840 00:32:56,579 --> 00:32:58,949 that's a goal , increase the number of 841 00:32:58,959 --> 00:33:01,369 small businesses that are uh working 842 00:33:01,380 --> 00:33:04,719 with each of you . So I can tell , tell 843 00:33:04,729 --> 00:33:06,800 you a couple of things from the OS D 844 00:33:06,810 --> 00:33:08,939 level that we're doing . Uh I think 845 00:33:08,959 --> 00:33:11,070 some of the policy changes that we've 846 00:33:11,070 --> 00:33:13,070 enacted , we hope will reverse that 847 00:33:13,070 --> 00:33:15,560 decline . Uh We've , we sent out some 848 00:33:15,569 --> 00:33:17,959 guidance to our workforce based off of 849 00:33:17,969 --> 00:33:21,130 an omb memo that will enable us to uh 850 00:33:21,140 --> 00:33:24,430 have more set aside competitions for 851 00:33:24,439 --> 00:33:26,550 small businesses in our socioeconomic 852 00:33:26,550 --> 00:33:28,630 groups . Uh in terms of category 853 00:33:28,640 --> 00:33:30,949 management type policies , we've de 854 00:33:30,959 --> 00:33:33,900 emphasized the use of best in class 855 00:33:33,910 --> 00:33:37,000 vehicles uh where we can , where we 856 00:33:37,010 --> 00:33:39,232 want to encourage our work for . We are 857 00:33:39,232 --> 00:33:41,066 encouraging our workforce to use 858 00:33:41,066 --> 00:33:42,732 vehicles that have more small 859 00:33:42,732 --> 00:33:44,732 businesses on them and to have more 860 00:33:44,732 --> 00:33:46,788 small business set asides . Uh We're 861 00:33:46,788 --> 00:33:48,954 also , we've also sent out guidance to 862 00:33:48,954 --> 00:33:51,099 our workforce on uh decreasing the 863 00:33:51,109 --> 00:33:53,331 bundling and consolidation of contracts 864 00:33:53,331 --> 00:33:54,942 and breaking out contracting 865 00:33:54,942 --> 00:33:56,942 opportunities where we have bundled 866 00:33:56,942 --> 00:33:59,165 contracts for small businesses . And on 867 00:33:59,165 --> 00:34:01,220 the outreach fronts , we now have at 868 00:34:01,220 --> 00:34:03,387 the office of the Secretary of Defense 869 00:34:03,387 --> 00:34:05,750 level , these 96 apex Accelerators that 870 00:34:05,760 --> 00:34:07,482 I mentioned . And we're really 871 00:34:07,482 --> 00:34:09,704 leveraging them to be our front door to 872 00:34:09,704 --> 00:34:11,899 industry . And by them moving , they 873 00:34:11,909 --> 00:34:13,742 were previously at D L A Defense 874 00:34:13,742 --> 00:34:16,030 Logistics Agency . Uh Now they're in my 875 00:34:16,040 --> 00:34:18,207 organization where they can , they can 876 00:34:18,207 --> 00:34:20,207 be more integrated into our broader 877 00:34:20,207 --> 00:34:22,207 industrial based activities so that 878 00:34:22,207 --> 00:34:24,373 outreach and training and support that 879 00:34:24,373 --> 00:34:26,318 we're gonna provide hopefully will 880 00:34:26,318 --> 00:34:28,207 increase . I wanna give the other 881 00:34:28,207 --> 00:34:30,262 panelists uh a chance . So I take it 882 00:34:30,262 --> 00:34:32,429 all of you do have the goal of wanting 883 00:34:32,429 --> 00:34:31,708 to increase the number of small 884 00:34:31,718 --> 00:34:34,428 businesses that receive contracts from 885 00:34:34,438 --> 00:34:36,188 you . So would you like to add 886 00:34:36,198 --> 00:34:40,118 something this viewer ? So in 887 00:34:40,128 --> 00:34:41,795 the army , it really is about 888 00:34:41,795 --> 00:34:44,679 opportunity . It is definitely about 889 00:34:44,689 --> 00:34:47,879 opportunity . So we are working to make 890 00:34:47,889 --> 00:34:50,111 sure that small businesses are aware of 891 00:34:50,111 --> 00:34:52,278 what opportunities are out there early 892 00:34:52,278 --> 00:34:54,222 enough . So we publish acquisition 893 00:34:54,222 --> 00:34:57,219 forecasts in both January and June of 894 00:34:57,229 --> 00:34:59,820 each fiscal year that gives them the 895 00:34:59,830 --> 00:35:01,886 the small businesses the opportunity 896 00:35:01,886 --> 00:35:04,108 opportunity to directly engage with the 897 00:35:04,108 --> 00:35:05,830 contracting and small business 898 00:35:05,830 --> 00:35:08,840 professionals to influence the um 899 00:35:08,850 --> 00:35:10,639 acquisition strategy for those 900 00:35:10,649 --> 00:35:13,830 procurements . We are um establish 901 00:35:13,840 --> 00:35:16,620 reestablished , simplified acquisition 902 00:35:16,629 --> 00:35:19,239 threshold goals So , in accordance with 903 00:35:19,250 --> 00:35:22,169 the federal acquisition regulations , 904 00:35:22,310 --> 00:35:24,860 all small business , all procurements 905 00:35:24,870 --> 00:35:27,770 valued um under 250,000 are supposed to 906 00:35:27,780 --> 00:35:29,502 be reserved for small business 907 00:35:29,502 --> 00:35:31,558 performance . So of course , there's 908 00:35:31,558 --> 00:35:33,836 reasons why that's not always possible , 909 00:35:33,836 --> 00:35:35,780 but we are pushing our contracting 910 00:35:35,780 --> 00:35:37,885 officers and requiring activities to 911 00:35:37,895 --> 00:35:40,004 expand those opportunities and make 912 00:35:40,014 --> 00:35:42,695 sure that a higher percentage share uh 913 00:35:42,715 --> 00:35:46,054 does go to those companies . So , um so 914 00:35:46,064 --> 00:35:49,145 that's AAA big push . Um And we are , 915 00:35:49,155 --> 00:35:51,524 we revised our category management 916 00:35:51,534 --> 00:35:54,675 policy from uh back in 2021 to make it 917 00:35:54,685 --> 00:35:57,419 more small business friendly and uh the 918 00:35:57,429 --> 00:35:59,540 Secretary of the Army when she issued 919 00:35:59,540 --> 00:36:02,719 her memo um to all army . Um not only 920 00:36:02,729 --> 00:36:04,729 hold senior leaders accountable for 921 00:36:04,729 --> 00:36:06,896 providing small business opportunity , 922 00:36:06,896 --> 00:36:09,860 but also reinforces the importance of 923 00:36:09,870 --> 00:36:11,981 our small business workforce being at 924 00:36:11,981 --> 00:36:14,830 the table early during market research 925 00:36:14,840 --> 00:36:16,951 and acquisition planning to influence 926 00:36:16,959 --> 00:36:19,126 positive outcomes for small business . 927 00:36:20,699 --> 00:36:23,729 Mr Smith in , in keeping with my 928 00:36:23,739 --> 00:36:25,739 sister's service here in the army , 929 00:36:25,739 --> 00:36:27,906 we're doing the exact same thing . One 930 00:36:27,906 --> 00:36:30,128 of the things that I would highlight in 931 00:36:30,128 --> 00:36:32,183 addition to to what Navy is doing of 932 00:36:32,183 --> 00:36:34,629 virtual engagements because of COVID 933 00:36:34,639 --> 00:36:36,806 things neck down dramatically from our 934 00:36:36,806 --> 00:36:39,540 ability to breach people in person . We 935 00:36:39,550 --> 00:36:41,449 have expanded our social media 936 00:36:41,459 --> 00:36:43,681 footprint to areas that I never thought 937 00:36:43,683 --> 00:36:45,962 we would go in order to use that 938 00:36:45,972 --> 00:36:48,252 mechanism to let the public know , let 939 00:36:48,262 --> 00:36:50,429 industry partners know that we're open 940 00:36:50,429 --> 00:36:52,540 for business . And if you look at our 941 00:36:52,540 --> 00:36:54,651 long range acquisition forecast . You 942 00:36:54,651 --> 00:36:56,818 can see every single solicitation that 943 00:36:56,818 --> 00:36:58,540 we plan on awarding across the 944 00:36:58,542 --> 00:37:01,302 Department of the Navy between now and 945 00:37:01,312 --> 00:37:03,479 five and even six , six years off into 946 00:37:03,479 --> 00:37:05,812 the future . So you can plan tactically , 947 00:37:05,812 --> 00:37:07,479 you can plan strategically on 948 00:37:07,479 --> 00:37:09,201 opportunities that you want to 949 00:37:09,201 --> 00:37:11,423 investigate and potentially bid on from 950 00:37:11,423 --> 00:37:13,479 a Department of Navy standpoint . So 951 00:37:13,479 --> 00:37:15,423 providing transparency , providing 952 00:37:15,423 --> 00:37:17,875 outreach , going to where people are in 953 00:37:17,885 --> 00:37:20,107 order for them to know that you're open 954 00:37:20,107 --> 00:37:22,329 for business . That's where we're doing 955 00:37:22,329 --> 00:37:24,052 it in a magnificent way . Just 956 00:37:24,052 --> 00:37:26,218 aggregating contracts . That's another 957 00:37:26,218 --> 00:37:28,329 great opportunity where you take what 958 00:37:28,329 --> 00:37:30,385 used to be a very large contract and 959 00:37:30,385 --> 00:37:32,552 you're breaking into individual pieces 960 00:37:32,552 --> 00:37:34,163 so that small businesses can 961 00:37:34,163 --> 00:37:36,274 participate . That's what we're doing 962 00:37:36,274 --> 00:37:38,274 and it's , it's reaping significant 963 00:37:38,274 --> 00:37:40,385 results that we have never across all 964 00:37:40,385 --> 00:37:42,663 of us have seen in the last , you know , 965 00:37:42,663 --> 00:37:44,829 678 years . And just because you break 966 00:37:44,829 --> 00:37:46,969 the large contracts into smaller 967 00:37:46,979 --> 00:37:48,879 contracts doesn't affect the 968 00:37:48,889 --> 00:37:51,090 effectiveness or the , the what what 969 00:37:51,100 --> 00:37:53,709 you're getting out of breaking the 970 00:37:53,729 --> 00:37:55,840 contract . So the first thing we have 971 00:37:55,840 --> 00:37:58,062 to do first is meet the mission . We're 972 00:37:58,062 --> 00:38:00,285 not just here in the business of giving 973 00:38:00,285 --> 00:38:02,451 contracts to people just to pass money 974 00:38:02,451 --> 00:38:04,507 down the line , you have to meet and 975 00:38:04,507 --> 00:38:06,729 support the mission in every single one 976 00:38:06,729 --> 00:38:08,729 of our cases . First and foremost . 977 00:38:08,729 --> 00:38:10,729 Thank you for that reassurance , Mr 978 00:38:10,729 --> 00:38:12,896 Kaiser . Thank you madam chair for the 979 00:38:12,896 --> 00:38:15,389 question um similar to the other , 980 00:38:15,399 --> 00:38:17,455 other services , but we also work in 981 00:38:17,455 --> 00:38:19,399 tandem . For example , in terms of 982 00:38:19,399 --> 00:38:21,621 those outreach , we will also go to the 983 00:38:21,621 --> 00:38:23,843 Navy go Department of the Air Force who 984 00:38:23,843 --> 00:38:25,621 represented the Navy Gold Coast 985 00:38:25,621 --> 00:38:27,929 Outreach events , the A USA outreach 986 00:38:27,939 --> 00:38:29,883 events because some of those small 987 00:38:29,883 --> 00:38:32,106 businesses may have been focused on one 988 00:38:32,106 --> 00:38:34,161 military service . So we do a lot of 989 00:38:34,161 --> 00:38:36,272 cross service opportunities for those 990 00:38:36,272 --> 00:38:39,209 small businesses . Secondly , uh in 991 00:38:39,219 --> 00:38:41,108 terms of increasing some of those 992 00:38:41,108 --> 00:38:43,441 opportunities , even on large contracts , 993 00:38:43,441 --> 00:38:45,850 we had a recent um effort where a 994 00:38:45,860 --> 00:38:49,209 enterprise wide uh contract on I uh 995 00:38:49,219 --> 00:38:52,689 we use the authorities within the G A 996 00:38:52,699 --> 00:38:54,629 which allows a contractor teaming 997 00:38:54,639 --> 00:38:56,583 arrangement where you might have a 998 00:38:56,583 --> 00:38:58,528 large , but it then brings in many 999 00:38:58,528 --> 00:39:01,780 small I T companies to get the , the 1000 00:39:01,790 --> 00:39:04,540 service gets the credit in terms of 1001 00:39:04,550 --> 00:39:06,550 percentages and dollars . However , 1002 00:39:06,550 --> 00:39:08,550 what this gives them a lot of small 1003 00:39:08,550 --> 00:39:10,717 businesses an opportunity to work on a 1004 00:39:10,717 --> 00:39:12,772 much bigger contract than they might 1005 00:39:12,772 --> 00:39:14,883 otherwise to continue their steps one 1006 00:39:14,883 --> 00:39:17,479 by one further up the ladder . Thank 1007 00:39:17,489 --> 00:39:19,969 you , I've gone over . So thank you , 1008 00:39:20,060 --> 00:39:22,060 Mr Sullivan . Feel free to go three 1009 00:39:22,060 --> 00:39:25,040 minutes over . Mr uh 1010 00:39:26,870 --> 00:39:29,092 uh I wanna press , I , I read your Hill 1011 00:39:29,092 --> 00:39:32,610 op Ed and I do want to 1012 00:39:32,620 --> 00:39:35,669 press a little bit more on the 1013 00:39:35,679 --> 00:39:39,260 statement that you made there about you 1014 00:39:39,270 --> 00:39:42,939 kind of talked a lot about the 1015 00:39:42,949 --> 00:39:45,669 statistics , but then you said , sounds 1016 00:39:45,679 --> 00:39:47,899 like a great success story . However , 1017 00:39:47,909 --> 00:39:49,798 despite their immense value , the 1018 00:39:49,798 --> 00:39:51,939 number of small businesses in the US 1019 00:39:51,949 --> 00:39:55,610 industrial base has declined by 40% in 1020 00:39:55,620 --> 00:39:58,600 the last decade . The Senator Hirono 1021 00:39:58,610 --> 00:40:00,666 kind of asked you , why do you think 1022 00:40:00,666 --> 00:40:02,888 that happened ? You , you didn't really 1023 00:40:02,888 --> 00:40:04,943 get into it ? Do you have details of 1024 00:40:04,943 --> 00:40:04,659 why do you think that happened ? 1025 00:40:04,669 --> 00:40:07,239 Because I think we , you know , a lot 1026 00:40:07,250 --> 00:40:09,194 of the testimony here is how great 1027 00:40:09,194 --> 00:40:11,306 things are going , but 40% decline is 1028 00:40:11,306 --> 00:40:14,429 not great . So what , what specifically 1029 00:40:14,439 --> 00:40:16,606 do you think that is ? And then how do 1030 00:40:16,606 --> 00:40:19,699 we work to address it ? I think there's 1031 00:40:19,709 --> 00:40:22,179 several reasons . Uh One reason I think 1032 00:40:22,189 --> 00:40:24,189 is the complexity of doing business 1033 00:40:24,189 --> 00:40:26,411 with the department of Defense . It's a 1034 00:40:26,411 --> 00:40:28,633 huge issue , right ? And I think we all 1035 00:40:28,633 --> 00:40:28,310 got to get our arms around it . We all 1036 00:40:28,320 --> 00:40:30,542 got to recognize that the Pentagon is a 1037 00:40:30,542 --> 00:40:32,598 giant bureaucracy and it can just be 1038 00:40:32,598 --> 00:40:35,189 exhausting for small businesses to 1039 00:40:35,199 --> 00:40:37,979 break through . And I think that's kind 1040 00:40:37,989 --> 00:40:39,878 of the key mission of each of the 1041 00:40:39,878 --> 00:40:41,989 witnesses here , isn't it not ? Yes . 1042 00:40:42,129 --> 00:40:46,050 OK . Good . What else ? I think 1043 00:40:46,060 --> 00:40:48,629 another reason is we've had , we've 1044 00:40:48,639 --> 00:40:50,770 seen some of our practices of how we 1045 00:40:50,780 --> 00:40:53,899 manage our contracting policies like 1046 00:40:53,909 --> 00:40:55,899 category management a lot . When I 1047 00:40:55,909 --> 00:40:58,131 first started this job , a lot of small 1048 00:40:58,131 --> 00:41:00,409 business industry groups came and said , 1049 00:41:00,409 --> 00:41:02,409 hey , with category management , we 1050 00:41:02,409 --> 00:41:02,149 feel like we've been left out because 1051 00:41:02,159 --> 00:41:03,992 if we're not on the vehicle , we 1052 00:41:03,992 --> 00:41:06,215 wouldn't see the opportunity , wouldn't 1053 00:41:06,215 --> 00:41:08,381 be able to compete for it , right ? Uh 1054 00:41:08,381 --> 00:41:10,548 That's why we sent the memo out that I 1055 00:41:10,548 --> 00:41:09,669 referenced earlier where we're now 1056 00:41:09,679 --> 00:41:12,300 giving tier or two credit to , to small 1057 00:41:12,310 --> 00:41:14,477 business set asides or any , any small 1058 00:41:14,477 --> 00:41:16,310 business awards to companies and 1059 00:41:16,310 --> 00:41:18,366 socioeconomic categories , we can go 1060 00:41:18,366 --> 00:41:20,477 outside of those vehicles and do more 1061 00:41:20,477 --> 00:41:22,699 set aside competitions as well . Let me 1062 00:41:22,699 --> 00:41:24,532 ask , uh , back to the eight day 1063 00:41:24,532 --> 00:41:28,500 contractors and the partnership that 1064 00:41:28,510 --> 00:41:30,820 each of the services have with them . 1065 00:41:31,169 --> 00:41:34,439 What specifically is your , uh , 1066 00:41:34,449 --> 00:41:37,870 service working on to 1067 00:41:37,879 --> 00:41:40,780 deepen that partnership ? I think it's 1068 00:41:40,790 --> 00:41:42,734 a great opportunity to bring these 1069 00:41:42,734 --> 00:41:44,959 numbers up . This goes for 1070 00:41:44,969 --> 00:41:46,858 disadvantaged communities , rural 1071 00:41:46,858 --> 00:41:49,191 communities , like I said , in my state , 1072 00:41:49,191 --> 00:41:51,191 it's uh primarily the Alaska native 1073 00:41:51,191 --> 00:41:54,969 corporations and tribes and A N CS 1074 00:41:55,340 --> 00:41:58,719 that really can bring benefits to very 1075 00:41:58,729 --> 00:42:01,260 rural parts of Alaska , very rural 1076 00:42:01,270 --> 00:42:04,129 parts of America and indigenous 1077 00:42:04,419 --> 00:42:07,760 communities . So , uh can I ask each of 1078 00:42:07,770 --> 00:42:09,800 the services what you are doing 1079 00:42:09,810 --> 00:42:13,100 specifically that relates to both near 1080 00:42:13,110 --> 00:42:16,550 and long term uh opportunities with a 1081 00:42:16,560 --> 00:42:18,919 day contractors ? Why don't we start 1082 00:42:18,929 --> 00:42:20,373 with you , Miss Bueller ? 1083 00:42:26,260 --> 00:42:29,540 I'm sorry . Um Yes . So we absolutely 1084 00:42:29,550 --> 00:42:31,661 recognize the importance of the a , a 1085 00:42:31,661 --> 00:42:33,439 business development program in 1086 00:42:33,439 --> 00:42:36,350 advancing opportunity for small 1087 00:42:36,360 --> 00:42:38,582 business , particularly , um you know , 1088 00:42:38,582 --> 00:42:41,209 disadvantaged populations . We have the 1089 00:42:41,219 --> 00:42:44,239 most aggressive goal for small 1090 00:42:44,250 --> 00:42:46,472 disadvantaged business , which includes 1091 00:42:46,472 --> 00:42:48,583 the A , a portfolio in the Department 1092 00:42:48,583 --> 00:42:51,844 of Army . Um Our goal for F Y 23 is 15% . 1093 00:42:51,854 --> 00:42:54,187 Ok . But what are you doing ? Yes , sir . 1094 00:42:54,415 --> 00:42:57,465 Yes , Senator . So we are developing 1095 00:42:57,475 --> 00:43:00,425 strategic partnerships with our , um 1096 00:43:00,435 --> 00:43:02,885 with our a , a companies particularly 1097 00:43:02,895 --> 00:43:05,006 you , you mentioned the Alaska native 1098 00:43:05,006 --> 00:43:07,173 corporations . I recently went out and 1099 00:43:07,173 --> 00:43:10,024 visited with uh the AAA uh group and 1100 00:43:10,034 --> 00:43:12,415 met with their uh their shareholders as 1101 00:43:12,425 --> 00:43:14,425 well as the leads from all of their 1102 00:43:14,425 --> 00:43:16,592 business lines of effort . That was uh 1103 00:43:16,592 --> 00:43:18,536 a , a key engagement . I intend to 1104 00:43:18,536 --> 00:43:21,530 replicate that with other organizations 1105 00:43:21,540 --> 00:43:23,484 um and , and expand that kind of a 1106 00:43:23,484 --> 00:43:26,879 partnership . We are um again making 1107 00:43:26,889 --> 00:43:29,111 sure that we're going after and setting 1108 00:43:29,111 --> 00:43:31,222 aside those business opportunities at 1109 00:43:31,222 --> 00:43:33,389 that very tactical level , making sure 1110 00:43:33,389 --> 00:43:35,500 that our small business professionals 1111 00:43:35,500 --> 00:43:38,169 are empowered to actually make things 1112 00:43:38,179 --> 00:43:41,750 happen and create opportunity . And um 1113 00:43:41,760 --> 00:43:43,860 and , and we're , we are using our 1114 00:43:43,870 --> 00:43:46,129 virtual vendor engagements to conduct 1115 00:43:46,139 --> 00:43:48,429 enhanced outreach , just like um you 1116 00:43:48,439 --> 00:43:50,606 know , my partner over here , Mr Smith 1117 00:43:50,606 --> 00:43:53,639 mentioned , we have had uh one focus 1118 00:43:53,649 --> 00:43:56,129 singularly on the small disadvantaged 1119 00:43:56,139 --> 00:43:58,361 business and a , a population trying to 1120 00:43:58,361 --> 00:44:00,528 make sure that they know that the door 1121 00:44:00,528 --> 00:44:02,695 is open for the , from the army and we 1122 00:44:02,695 --> 00:44:05,139 want to create opportunity with them . 1123 00:44:05,199 --> 00:44:07,310 Great , good uh Mr Smith . What about 1124 00:44:07,310 --> 00:44:10,500 you ? Yes , same , same question . So 1125 00:44:10,510 --> 00:44:14,030 last fiscal year , we reached a 1126 00:44:14,239 --> 00:44:16,461 pretty unique engagement with the small 1127 00:44:16,461 --> 00:44:18,628 business administration on the eight A 1128 00:44:18,628 --> 00:44:20,739 program . So it does it take a lot of 1129 00:44:20,739 --> 00:44:22,850 coordination with S P A . It does the 1130 00:44:22,850 --> 00:44:25,017 work you're doing . So that's gotta be 1131 00:44:25,017 --> 00:44:27,239 a key element of it . Absolutely does . 1132 00:44:27,239 --> 00:44:29,406 And I think that's going well with S P 1133 00:44:29,406 --> 00:44:31,572 A , it's going absolutely Well , so at 1134 00:44:31,572 --> 00:44:33,795 the end of last fiscal year , I reached 1135 00:44:33,795 --> 00:44:36,017 out to my counterpart over in the eight 1136 00:44:36,017 --> 00:44:35,469 a program at the Small Business 1137 00:44:35,479 --> 00:44:37,646 Administration . And I said one of the 1138 00:44:37,646 --> 00:44:39,646 barriers to doing business with the 1139 00:44:39,646 --> 00:44:41,368 Department of the Navy is past 1140 00:44:41,368 --> 00:44:43,535 performance . If our industry partners 1141 00:44:43,535 --> 00:44:45,423 don't have past performance , you 1142 00:44:45,423 --> 00:44:47,590 typically don't get work from us . And 1143 00:44:47,590 --> 00:44:49,757 how do you ever get out of that loop ? 1144 00:44:49,757 --> 00:44:51,923 So I , I , I can't , if you don't have 1145 00:44:51,923 --> 00:44:51,770 past performance , you can't start . We 1146 00:44:51,780 --> 00:44:54,058 actually worked out a pretty good deal . 1147 00:44:54,058 --> 00:44:56,379 OK . What is it ? So I contacted my , 1148 00:44:56,389 --> 00:44:58,611 my counterpart and he said , uh what if 1149 00:44:58,611 --> 00:45:01,360 we came to an arrangement where my PC R 1150 00:45:01,370 --> 00:45:03,639 S his folks that are in the field that 1151 00:45:03,649 --> 00:45:05,929 know what these local companies can do 1152 00:45:05,939 --> 00:45:08,310 vouch for them to be able to do work 1153 00:45:08,320 --> 00:45:10,729 for us . Can we take a government 1154 00:45:10,739 --> 00:45:13,389 persons vouching for a company even 1155 00:45:13,399 --> 00:45:15,343 though they haven't done deal even 1156 00:45:15,343 --> 00:45:17,566 though they haven't do it , done it for 1157 00:45:17,566 --> 00:45:19,677 dod . And in many cases , we ask that 1158 00:45:19,677 --> 00:45:21,732 let's take in the case of building a 1159 00:45:21,732 --> 00:45:23,899 firehouse , a firehouse is a firehouse 1160 00:45:23,899 --> 00:45:23,899 is a firehouse . But if you never built 1161 00:45:23,909 --> 00:45:26,580 one for us , we hope pull that back 1162 00:45:26,590 --> 00:45:29,040 from you . But if that local PC R can 1163 00:45:29,050 --> 00:45:30,939 tell us that we , we've seen this 1164 00:45:30,939 --> 00:45:33,106 company build a firehouse in our local 1165 00:45:33,106 --> 00:45:34,994 community for state and municipal 1166 00:45:34,994 --> 00:45:37,106 reasons , they can do it for us . And 1167 00:45:37,106 --> 00:45:39,328 we actually pulled out of their list of 1168 00:45:39,328 --> 00:45:41,280 over 1400 companies in the eight A 1169 00:45:41,290 --> 00:45:43,729 program that have never won a contract . 1170 00:45:43,889 --> 00:45:46,111 We pulled 40 companies off of that list 1171 00:45:46,111 --> 00:45:49,290 last quarter just because we had an 1172 00:45:49,300 --> 00:45:51,300 engagement with one another on this 1173 00:45:51,300 --> 00:45:53,719 company is good . Take them forward and 1174 00:45:53,729 --> 00:45:55,896 we're watching those companies now for 1175 00:45:55,896 --> 00:45:58,007 the execution of those contracts . As 1176 00:45:58,007 --> 00:46:00,062 we mentioned , it's not about giving 1177 00:46:00,062 --> 00:46:01,785 money away . This is all about 1178 00:46:01,785 --> 00:46:04,290 readiness lethality winning wars . So 1179 00:46:04,300 --> 00:46:07,020 engaging the Business Administration on 1180 00:46:07,030 --> 00:46:09,360 the eight A program from a one on one 1181 00:46:09,889 --> 00:46:12,209 standpoint for , for opportunities to 1182 00:46:12,219 --> 00:46:14,560 expand and grow work . That's a good 1183 00:46:14,570 --> 00:46:16,737 example . What about you , Mr Kaiser ? 1184 00:46:17,350 --> 00:46:19,294 Good afternoon . Uh Thanks for the 1185 00:46:19,294 --> 00:46:21,239 question of following on and , and 1186 00:46:21,239 --> 00:46:23,406 perhaps some additional information as 1187 00:46:23,406 --> 00:46:25,572 uh we're negotiating with the S P A on 1188 00:46:25,572 --> 00:46:27,739 those uh S A A uh partnerships . We're 1189 00:46:27,739 --> 00:46:29,683 getting the S P A to share with us 1190 00:46:29,683 --> 00:46:31,739 their a , their information on their 1191 00:46:31,739 --> 00:46:34,909 most recent new A , a firms . Secondly , 1192 00:46:34,919 --> 00:46:37,060 from our staff , last June , we sent 1193 00:46:37,070 --> 00:46:39,181 our director of staff , Mr mcwilliams 1194 00:46:39,181 --> 00:46:41,564 who's here with us today to Alaska to 1195 00:46:41,574 --> 00:46:43,574 the A , a conference that's held in 1196 00:46:43,574 --> 00:46:45,741 June each year and we'll be sending it 1197 00:46:45,741 --> 00:46:47,963 as we traditionally do in terms of that 1198 00:46:47,963 --> 00:46:50,135 outreach . Similarly , in , in April , 1199 00:46:50,145 --> 00:46:53,034 we'll be going to the uh N H O A 1200 00:46:53,044 --> 00:46:55,854 conference in uh Hawaii once again , 1201 00:46:55,864 --> 00:46:57,420 for the outreach to as many 1202 00:46:57,420 --> 00:46:59,753 organizations as we can possibly get to . 1203 00:46:59,753 --> 00:47:01,642 And we look to uh in terms of the 1204 00:47:01,642 --> 00:47:03,770 mentor protege program , we target 1205 00:47:03,780 --> 00:47:07,000 those in , in the tribal uh uh 1206 00:47:07,229 --> 00:47:09,173 organizations . I asked about that 1207 00:47:09,173 --> 00:47:11,173 because that was actually one of my 1208 00:47:11,173 --> 00:47:13,340 questions . The mentor protege program 1209 00:47:13,340 --> 00:47:15,340 is a really good idea , but I worry 1210 00:47:15,340 --> 00:47:18,610 that it's hard to get that kind of 1211 00:47:18,620 --> 00:47:21,709 program out into the rural 1212 00:47:22,159 --> 00:47:25,459 communities . Right . So are you , when 1213 00:47:25,469 --> 00:47:27,525 you're talking about , you mentioned 1214 00:47:27,525 --> 00:47:29,747 you're targeting native communities and 1215 00:47:29,747 --> 00:47:31,858 rural communities with that program ? 1216 00:47:31,858 --> 00:47:33,969 You are , are all of you doing that ? 1217 00:47:33,969 --> 00:47:35,969 Because sounds like a great program 1218 00:47:35,969 --> 00:47:35,919 looks like it's working . But I worry 1219 00:47:35,929 --> 00:47:37,818 that it's tough to get to a small 1220 00:47:37,818 --> 00:47:39,873 Alaska native village with a program 1221 00:47:39,873 --> 00:47:41,818 like that . So are you considering 1222 00:47:42,100 --> 00:47:45,739 those kind of entities to make sure 1223 00:47:45,750 --> 00:47:47,806 they can benefit from a program like 1224 00:47:47,806 --> 00:47:50,850 that as well ? Absolutely . And , and 1225 00:47:50,860 --> 00:47:52,971 I'm trying to find the list . I think 1226 00:47:52,971 --> 00:47:55,250 we have one in place already in Alaska . 1227 00:47:55,399 --> 00:47:57,399 I'm just talking , but once again , 1228 00:47:57,399 --> 00:47:59,677 it's trying to make people aware first , 1229 00:47:59,677 --> 00:48:01,899 increase the awareness of those kind of 1230 00:48:01,899 --> 00:48:04,121 opportunities through the manufacturing 1231 00:48:04,121 --> 00:48:06,121 overall base may not be the same in 1232 00:48:06,121 --> 00:48:08,177 every location , but we're trying to 1233 00:48:08,177 --> 00:48:10,121 start that conversation and get it 1234 00:48:10,121 --> 00:48:12,010 going right ? I think we have one 1235 00:48:12,010 --> 00:48:11,840 already in place . I'm looking for the 1236 00:48:11,850 --> 00:48:13,850 list . Ok . Well , we'll stand by . 1237 00:48:13,850 --> 00:48:16,080 Thank you madam chair . I'd like to 1238 00:48:16,090 --> 00:48:18,949 start round two of questioning . So yes , 1239 00:48:18,959 --> 00:48:20,903 I have a question about the mentor 1240 00:48:20,903 --> 00:48:23,015 Proto J program . I take it that that 1241 00:48:23,015 --> 00:48:26,219 is a very uh successful way of enabling 1242 00:48:26,229 --> 00:48:28,659 more small businesses to engage or have 1243 00:48:28,669 --> 00:48:30,729 contracts with the duty . So what do 1244 00:48:30,739 --> 00:48:32,860 you do ? Do you put out a call for 1245 00:48:32,870 --> 00:48:35,679 volunteers to be mentors and then you 1246 00:48:35,689 --> 00:48:38,629 match them up with proteges ? Is that 1247 00:48:38,639 --> 00:48:40,979 how each of you is doing this program ? 1248 00:48:42,159 --> 00:48:44,326 I can , I can start so the mentor . So 1249 00:48:44,326 --> 00:48:46,270 each component uh services and dod 1250 00:48:46,270 --> 00:48:48,215 components are participants in the 1251 00:48:48,215 --> 00:48:50,103 program . The funding comes to my 1252 00:48:50,103 --> 00:48:51,659 office , they put out their 1253 00:48:51,659 --> 00:48:53,770 requirements of different topics from 1254 00:48:53,770 --> 00:48:55,548 the services and components for 1255 00:48:55,548 --> 00:48:57,881 agreements that they would like to fund . 1256 00:48:57,881 --> 00:48:59,992 And the mentors apply to be mentors . 1257 00:48:59,992 --> 00:49:01,770 And there are certain statutory 1258 00:49:01,770 --> 00:49:03,881 requirements to be a mentor . Uh Once 1259 00:49:03,881 --> 00:49:05,992 those mentors are approved , they can 1260 00:49:05,992 --> 00:49:08,215 team up with the protege firm . Ideally 1261 00:49:08,215 --> 00:49:10,381 a small disadvantaged or socioeconomic 1262 00:49:10,381 --> 00:49:12,548 firm they have a relationship with and 1263 00:49:12,548 --> 00:49:14,715 they , they give us a proposal that we 1264 00:49:14,715 --> 00:49:16,937 then fund through an agreement where we 1265 00:49:16,937 --> 00:49:19,229 reimburse the costs to the mentor for 1266 00:49:19,239 --> 00:49:21,239 the business development assistance 1267 00:49:21,239 --> 00:49:23,406 they provide to the protege or we give 1268 00:49:23,406 --> 00:49:25,350 them subcontracting credit towards 1269 00:49:25,350 --> 00:49:27,406 their goals . So do all the services 1270 00:49:27,406 --> 00:49:30,429 have this mentor pro pro program Army ? 1271 00:49:33,790 --> 00:49:37,550 Ok . And is it working out well , is it 1272 00:49:37,560 --> 00:49:41,530 growing in the , in the case of the 1273 00:49:41,540 --> 00:49:44,399 Navy , we have four current prodigy 1274 00:49:44,409 --> 00:49:46,929 agreements . We have three already in 1275 00:49:46,939 --> 00:49:49,260 the works for this year . And I believe 1276 00:49:49,270 --> 00:49:51,548 we'll have three more added on to that . 1277 00:49:51,548 --> 00:49:53,603 Once the industry partners make that 1278 00:49:53,603 --> 00:49:55,659 teaming agreement with one another , 1279 00:49:55,659 --> 00:49:57,992 then they present it to the Navy . So I , 1280 00:49:57,992 --> 00:50:00,570 I will have 10 here relatively this 1281 00:50:00,580 --> 00:50:02,691 year . That's what I , so do you have 1282 00:50:02,691 --> 00:50:04,747 some kind of numerical goals each of 1283 00:50:04,747 --> 00:50:07,179 you for um the mentor protege program ? 1284 00:50:07,189 --> 00:50:09,300 So I will tell you the Navy is trying 1285 00:50:09,300 --> 00:50:11,078 to catch up in this regard . My 1286 00:50:11,078 --> 00:50:13,245 colleagues on my left and my right are 1287 00:50:13,245 --> 00:50:15,522 leading the Navy right now . I'm sorry . 1288 00:50:15,522 --> 00:50:17,745 Did you say you have a numerical goal ? 1289 00:50:17,745 --> 00:50:19,967 It's I think we think it's a fair share 1290 00:50:19,967 --> 00:50:22,022 kind of opportunity and money is the 1291 00:50:22,022 --> 00:50:24,245 driver at the end of the day , how much 1292 00:50:24,245 --> 00:50:27,659 money is in the pit ? Uh 1293 00:50:27,669 --> 00:50:30,429 Yes . Uh uh Senator , so the army has 1294 00:50:30,439 --> 00:50:33,399 six active agreements . We recently um 1295 00:50:33,409 --> 00:50:35,631 changed our processes so that we have a 1296 00:50:35,631 --> 00:50:38,199 year long open solicitation so that 1297 00:50:38,209 --> 00:50:41,270 mentor protege um proposals can come in 1298 00:50:41,280 --> 00:50:43,719 at any point during that year . So that 1299 00:50:43,729 --> 00:50:45,840 gives industry the ability to come to 1300 00:50:45,840 --> 00:50:47,507 us on their timetable and not 1301 00:50:47,507 --> 00:50:49,507 necessarily on ours , right ? So it 1302 00:50:49,507 --> 00:50:51,507 gives them much more flexibility to 1303 00:50:51,507 --> 00:50:53,451 work those relationships and those 1304 00:50:53,451 --> 00:50:56,040 agreements . And uh we are very excited 1305 00:50:56,050 --> 00:50:58,439 to uh you know , on board new uh new 1306 00:50:58,449 --> 00:51:01,429 agreements this fiscal year . So uh 1307 00:51:01,439 --> 00:51:03,790 like uh Senator Sullivan , I , I have a 1308 00:51:03,800 --> 00:51:07,590 commitment to the a a entities and 1309 00:51:07,600 --> 00:51:09,711 for a number of them , I think one of 1310 00:51:09,711 --> 00:51:11,767 the biggest barriers in dealing with 1311 00:51:11,767 --> 00:51:13,822 the dod is just the complexity of uh 1312 00:51:13,822 --> 00:51:15,933 dealing with them , as you say , Mr . 1313 00:51:15,979 --> 00:51:19,449 So name one thing that each of you did 1314 00:51:19,459 --> 00:51:22,340 to make , make the whole uh contracting 1315 00:51:22,350 --> 00:51:26,149 process less complicated for small 1316 00:51:26,159 --> 00:51:29,929 businesses . One thing that we are 1317 00:51:29,939 --> 00:51:32,040 doing right now is creating a single 1318 00:51:32,050 --> 00:51:34,161 entry point for small businesses into 1319 00:51:34,161 --> 00:51:35,939 the defense marketplace . So my 1320 00:51:35,939 --> 00:51:37,772 office's website is business dot 1321 00:51:37,772 --> 00:51:39,828 defense dot gov . And we're creating 1322 00:51:39,828 --> 00:51:42,050 that into a one stop shop . We have all 1323 00:51:42,050 --> 00:51:44,050 the forecasting , all the different 1324 00:51:44,050 --> 00:51:45,939 small business programs , all the 1325 00:51:45,939 --> 00:51:47,939 resources that are available . So a 1326 00:51:47,939 --> 00:51:49,661 company won't have to go to 20 1327 00:51:49,661 --> 00:51:51,883 different websites to figure out how to 1328 00:51:51,883 --> 00:51:51,040 do business with us . That's one thing 1329 00:51:51,050 --> 00:51:53,330 that we're working on right now . Would 1330 00:51:53,340 --> 00:51:57,000 you like to add that ? Yes . So with um 1331 00:51:57,010 --> 00:52:00,909 in the army , we um we're using O T 1332 00:52:00,919 --> 00:52:03,100 A S as another mechanism , other 1333 00:52:03,110 --> 00:52:05,770 transaction authority as a mechanism to 1334 00:52:05,780 --> 00:52:08,770 expand our nontraditional vendor base 1335 00:52:08,780 --> 00:52:10,836 that's participating on our critical 1336 00:52:10,836 --> 00:52:13,100 technology area is and that is a low 1337 00:52:13,110 --> 00:52:16,899 barrier um entry program where we can 1338 00:52:16,909 --> 00:52:19,479 reach those uh companies that have no 1339 00:52:19,489 --> 00:52:21,322 experience or limited experience 1340 00:52:21,322 --> 00:52:23,545 working with the government . So that's 1341 00:52:23,545 --> 00:52:25,767 been an effective tool for us in trying 1342 00:52:25,767 --> 00:52:29,110 to reach uh new vendor populations . Mr 1343 00:52:29,120 --> 00:52:31,689 Smith reintroducing people to a tool 1344 00:52:31,699 --> 00:52:33,977 that's been in the toolbox for a while . 1345 00:52:33,977 --> 00:52:35,866 You can actually award up to $100 1346 00:52:35,866 --> 00:52:38,149 million contract to an eight A company 1347 00:52:38,159 --> 00:52:40,689 on a letter contract . So pulling that 1348 00:52:40,699 --> 00:52:42,699 tool about back , letting our , our 1349 00:52:42,699 --> 00:52:45,050 contracting officers know that they can 1350 00:52:45,060 --> 00:52:47,171 use that instead of having to compete 1351 00:52:47,171 --> 00:52:49,338 everything and run down the the formal 1352 00:52:49,338 --> 00:52:51,338 process we've brought that back and 1353 00:52:51,338 --> 00:52:53,338 resurrected it in a magnificent way 1354 00:52:53,419 --> 00:52:57,149 over Mr Kaiser . Uh Yes , once again , 1355 00:52:57,159 --> 00:52:59,850 similar activities , we also use uh 1356 00:52:59,860 --> 00:53:03,179 phase three to go make a direct awards 1357 00:53:03,189 --> 00:53:05,540 to speed the process . And also going 1358 00:53:05,550 --> 00:53:07,717 back to add on to the previous comment 1359 00:53:07,717 --> 00:53:09,828 on the MP P S and the native American 1360 00:53:09,828 --> 00:53:12,520 organizations . MP P . We've had two 1361 00:53:12,530 --> 00:53:14,586 agreements , one is already done and 1362 00:53:14,586 --> 00:53:17,000 complete and that was in Montana . The 1363 00:53:17,010 --> 00:53:19,232 second is current and active and in the 1364 00:53:19,232 --> 00:53:21,919 State of North Dakota . Thank you , 1365 00:53:21,929 --> 00:53:25,340 Senator Kaine . Thank you to our chair 1366 00:53:25,350 --> 00:53:27,461 and ranking and thanks for doing this 1367 00:53:27,461 --> 00:53:30,020 hearing today . Um There's been a 1368 00:53:30,030 --> 00:53:32,159 report by the National Academies of 1369 00:53:32,169 --> 00:53:34,419 Sciences , Engineering and Medicine , 1370 00:53:34,669 --> 00:53:37,479 uh identified that the goals of the S B 1371 00:53:37,489 --> 00:53:40,620 I R program and the Small Business 1372 00:53:40,629 --> 00:53:42,979 Technology Transfer Program might be in 1373 00:53:42,989 --> 00:53:46,610 conflict particularly um that in , in 1374 00:53:46,620 --> 00:53:49,320 the effect that commercialization can 1375 00:53:49,330 --> 00:53:51,379 be overemphasized as a metric for 1376 00:53:51,389 --> 00:53:54,399 success . Does the recent re recently 1377 00:53:54,409 --> 00:53:56,631 released strategy that you all have put 1378 00:53:56,631 --> 00:53:58,465 together address the priority of 1379 00:53:58,465 --> 00:54:00,465 commercialization relative to other 1380 00:54:00,465 --> 00:54:02,830 priorities , stimulating innovation , 1381 00:54:02,840 --> 00:54:05,300 meeting Federal R and D needs fostering 1382 00:54:05,310 --> 00:54:07,421 diversity . How do you deal with that 1383 00:54:07,421 --> 00:54:09,532 potential conflict in the report that 1384 00:54:09,532 --> 00:54:12,659 you've done , Mr Sure . Um 1385 00:54:12,939 --> 00:54:15,820 Yes , we do emphasize the importance of 1386 00:54:15,830 --> 00:54:17,949 both commercialization and helping 1387 00:54:17,959 --> 00:54:20,015 small companies go from prototype to 1388 00:54:20,015 --> 00:54:22,070 production . I hope this answers the 1389 00:54:22,070 --> 00:54:24,181 question but I kind of view it as a , 1390 00:54:24,181 --> 00:54:26,181 as a pipeline where we have dollars 1391 00:54:26,181 --> 00:54:28,237 that we spend on prototyping through 1392 00:54:28,237 --> 00:54:30,080 our labs and using our other 1393 00:54:30,090 --> 00:54:32,146 transaction authorities and programs 1394 00:54:32,146 --> 00:54:33,979 like S B I R . But we want those 1395 00:54:33,979 --> 00:54:36,639 companies ideally to mature and develop 1396 00:54:36,649 --> 00:54:38,816 those technologies to meet our mission 1397 00:54:38,816 --> 00:54:40,593 needs . So we talk in the small 1398 00:54:40,593 --> 00:54:42,816 business strategy about how our various 1399 00:54:42,816 --> 00:54:45,038 small business programs can work better 1400 00:54:45,038 --> 00:54:47,093 together in a more integrated way to 1401 00:54:47,093 --> 00:54:49,205 help mature the technologies along so 1402 00:54:49,205 --> 00:54:51,260 they can actually get fielded into a 1403 00:54:51,260 --> 00:54:53,260 system and commercialized . Thank . 1404 00:54:53,260 --> 00:54:55,427 Thank you for that , Mr Smith . I want 1405 00:54:55,427 --> 00:54:57,205 to ask you this in your written 1406 00:54:57,205 --> 00:54:59,149 testimony . You indicated that the 1407 00:54:59,149 --> 00:55:00,982 Secretary of the Navy , Del Toro 1408 00:55:00,982 --> 00:55:02,982 directed your office to ensure that 1409 00:55:02,982 --> 00:55:04,871 small business considerations are 1410 00:55:04,871 --> 00:55:07,093 included very early in the acquisitions 1411 00:55:07,093 --> 00:55:09,149 process . That's good , but that you 1412 00:55:09,149 --> 00:55:11,260 don't have specific metrics to assess 1413 00:55:11,260 --> 00:55:14,159 the impact of those efforts . So I I am 1414 00:55:14,169 --> 00:55:16,002 a big believer that if you don't 1415 00:55:16,002 --> 00:55:18,225 measure it , you you never get to where 1416 00:55:18,225 --> 00:55:20,225 you wanna go , data and metrics are 1417 00:55:20,225 --> 00:55:22,280 really necessary for making informed 1418 00:55:22,280 --> 00:55:24,502 decisions about the effectiveness of an 1419 00:55:24,502 --> 00:55:26,502 effort such as the one we would all 1420 00:55:26,502 --> 00:55:28,669 want to undertake . So are you working 1421 00:55:28,669 --> 00:55:28,560 on , you know how you could develop 1422 00:55:28,570 --> 00:55:30,520 metrics that would determine the 1423 00:55:30,530 --> 00:55:33,439 success of uh the efforts that uh to , 1424 00:55:33,449 --> 00:55:35,060 to expand our small business 1425 00:55:35,060 --> 00:55:36,919 partnerships ? Thank you for the 1426 00:55:36,929 --> 00:55:39,340 question . Um Developing the metrics is 1427 00:55:39,350 --> 00:55:41,939 very important , holding people pool 1428 00:55:41,949 --> 00:55:43,616 accountable . We feel at this 1429 00:55:43,616 --> 00:55:45,671 particular stage of the game is even 1430 00:55:45,671 --> 00:55:47,838 more important . It's not just a small 1431 00:55:47,838 --> 00:55:50,060 business professionals . Responsibility 1432 00:55:50,060 --> 00:55:52,393 to be the advocate for small businesses . 1433 00:55:52,393 --> 00:55:54,449 All acquisition professionals across 1434 00:55:54,449 --> 00:55:56,616 the entire Department of the Navy have 1435 00:55:56,616 --> 00:55:58,782 the responsibility to live up to these 1436 00:55:58,782 --> 00:56:00,782 goals and responsibilities . And we 1437 00:56:00,790 --> 00:56:02,846 want to make sure that you're in the 1438 00:56:02,846 --> 00:56:05,068 conversation early instead of after you 1439 00:56:05,068 --> 00:56:07,179 sealed up an acquisition solicitation 1440 00:56:07,179 --> 00:56:09,123 opportunity and you're ready to go 1441 00:56:09,123 --> 00:56:11,234 award the , the small business person 1442 00:56:11,234 --> 00:56:13,290 doesn't come flying in at the end of 1443 00:56:13,290 --> 00:56:15,234 the day . Those considerations are 1444 00:56:15,234 --> 00:56:17,346 baked in up front , um measuring it I 1445 00:56:17,346 --> 00:56:19,568 think is important . But holding people 1446 00:56:19,568 --> 00:56:21,679 accountable through their performance 1447 00:56:21,679 --> 00:56:23,901 on their jobs to do their jobs is where 1448 00:56:23,901 --> 00:56:25,901 we hold people accountable . Well , 1449 00:56:25,901 --> 00:56:28,012 given that the secretary Del Toro not 1450 00:56:28,012 --> 00:56:30,068 only had a distinguished career as a 1451 00:56:30,068 --> 00:56:32,068 navy surface ship officer , he also 1452 00:56:32,068 --> 00:56:34,179 started a small business that doesn't 1453 00:56:34,179 --> 00:56:36,346 work in this space . I'm assuming he's 1454 00:56:36,346 --> 00:56:38,290 pretty focused on this and holding 1455 00:56:38,290 --> 00:56:40,346 people accountable for it , sir . Uh 1456 00:56:40,346 --> 00:56:42,457 Secretary to has helped me just about 1457 00:56:42,457 --> 00:56:44,790 every single day . He's been on the job . 1458 00:56:44,790 --> 00:56:46,734 He's a small business owner for 17 1459 00:56:46,734 --> 00:56:48,901 years and he came in with that passion 1460 00:56:48,901 --> 00:56:51,068 and enthusiasm to make sure that small 1461 00:56:51,068 --> 00:56:53,123 businesses didn't go through some of 1462 00:56:53,123 --> 00:56:55,346 the challenges that he experienced as a 1463 00:56:55,346 --> 00:56:55,074 small business owner . And we have 1464 00:56:55,084 --> 00:56:57,504 changed culture because of that 1465 00:56:57,514 --> 00:56:59,635 influence and added focus . I'm gonna 1466 00:56:59,645 --> 00:57:01,756 ask an open ended question if I can , 1467 00:57:01,756 --> 00:57:03,701 madam chair and just hope that all 1468 00:57:03,701 --> 00:57:05,812 might just address it a little bit in 1469 00:57:05,812 --> 00:57:07,645 the work that you're doing . I'm 1470 00:57:07,645 --> 00:57:07,004 assuming you're hearing what I'm 1471 00:57:07,014 --> 00:57:08,903 hearing as I'm talking to small , 1472 00:57:08,903 --> 00:57:11,574 medium and large businesses . Um , I'm 1473 00:57:11,584 --> 00:57:13,751 sea power chair , so I do a lot in the 1474 00:57:13,751 --> 00:57:15,973 shipbuilding , ship repair space . It's 1475 00:57:15,973 --> 00:57:18,195 hard to hire people so you can have the 1476 00:57:18,195 --> 00:57:20,140 best programs you want in terms of 1477 00:57:20,140 --> 00:57:22,195 small business partnerships . But if 1478 00:57:22,195 --> 00:57:24,084 they're struggling with workforce 1479 00:57:24,084 --> 00:57:26,084 issues , uh , it's gonna be hard to 1480 00:57:26,084 --> 00:57:27,973 have programs that will really be 1481 00:57:27,973 --> 00:57:30,140 successful and I don't view this issue 1482 00:57:30,140 --> 00:57:32,306 as one that's getting easier . We just 1483 00:57:32,306 --> 00:57:33,973 made it , you know , historic 1484 00:57:33,973 --> 00:57:36,028 commitment to infrastructure , who's 1485 00:57:36,028 --> 00:57:37,973 gonna build it . We've just made a 1486 00:57:37,973 --> 00:57:40,028 historic commitment in the chips and 1487 00:57:40,028 --> 00:57:39,929 manufacturing builds and manufacturing , 1488 00:57:39,939 --> 00:57:42,217 who's gonna fill those jobs . So we're , 1489 00:57:42,217 --> 00:57:43,828 we're ready to make a lot of 1490 00:57:43,828 --> 00:57:45,828 investments . I think this is gonna 1491 00:57:45,828 --> 00:57:48,050 make the , the challenge even tougher . 1492 00:57:48,050 --> 00:57:50,272 So in , in each of your spaces , if you 1493 00:57:50,272 --> 00:57:52,328 could , uh my time is about up , but 1494 00:57:52,328 --> 00:57:54,272 I'd love to hear , you know , what 1495 00:57:54,272 --> 00:57:56,495 you're hearing from your small business 1496 00:57:56,495 --> 00:57:58,661 partners and are you engaged with them 1497 00:57:58,661 --> 00:58:00,828 in , in creative strategies around the 1498 00:58:00,828 --> 00:58:00,649 workforce question that the committee 1499 00:58:00,659 --> 00:58:02,881 should know about ? So maybe we can try 1500 00:58:02,881 --> 00:58:06,219 to amplify or expand them ? Yes , I am 1501 00:58:06,229 --> 00:58:08,229 hearing that from small companies , 1502 00:58:08,229 --> 00:58:10,173 especially in manufacturing and in 1503 00:58:10,173 --> 00:58:12,396 certain sectors that are very important 1504 00:58:12,396 --> 00:58:14,507 to us . Uh one of the things that I'm 1505 00:58:14,507 --> 00:58:16,673 hoping that we can do from my office's 1506 00:58:16,673 --> 00:58:18,229 per view is use our 96 apex 1507 00:58:18,229 --> 00:58:20,396 accelerators that are out in the field 1508 00:58:20,396 --> 00:58:22,507 across the country to do a better job 1509 00:58:22,507 --> 00:58:24,340 of talent matching for . So if a 1510 00:58:24,340 --> 00:58:26,451 company wins a contract , they can go 1511 00:58:26,451 --> 00:58:28,507 to them . And those folks have , are 1512 00:58:28,507 --> 00:58:28,500 tapped into the workforce development 1513 00:58:28,510 --> 00:58:30,459 training programs and can actually 1514 00:58:30,469 --> 00:58:32,747 build , be a connector between the two . 1515 00:58:34,679 --> 00:58:36,679 Uh Yes , I'm hearing the same thing 1516 00:58:36,679 --> 00:58:38,901 from small businesses . It's one of the 1517 00:58:38,901 --> 00:58:41,012 challenges that they have in addition 1518 00:58:41,012 --> 00:58:43,068 to the , the regular challenges that 1519 00:58:43,068 --> 00:58:45,290 you have running a small business . And 1520 00:58:45,290 --> 00:58:47,512 uh you know , it's very important to us 1521 00:58:47,512 --> 00:58:49,623 when we are making contract awards to 1522 00:58:49,623 --> 00:58:49,219 these companies that they're going to 1523 00:58:49,229 --> 00:58:51,459 be able to perform . So we need to 1524 00:58:51,469 --> 00:58:54,199 understand the industry dynamics and 1525 00:58:54,209 --> 00:58:56,409 what conditions they're facing . And 1526 00:58:56,419 --> 00:58:58,475 we're trying to incorporate that and 1527 00:58:58,475 --> 00:59:00,419 include that as part of our market 1528 00:59:00,419 --> 00:59:02,252 research um to make sure that we 1529 00:59:02,252 --> 00:59:04,419 understand because it also impacts the 1530 00:59:04,419 --> 00:59:06,530 price that we're gonna pay at the end 1531 00:59:06,530 --> 00:59:09,159 of the day . So it's helps us to also 1532 00:59:09,169 --> 00:59:11,336 prioritize what we're gonna be able to 1533 00:59:11,336 --> 00:59:14,149 actually buy . Thanks MS Mr . So I've 1534 00:59:14,159 --> 00:59:16,048 seen the exact same result . I've 1535 00:59:16,048 --> 00:59:17,826 actually watched small business 1536 00:59:17,826 --> 00:59:19,992 Industry partners team in a way that I 1537 00:59:19,992 --> 00:59:21,770 haven't seen some of the larger 1538 00:59:21,770 --> 00:59:23,937 businesses do . Uh reaching out to the 1539 00:59:23,937 --> 00:59:26,159 local community colleges , reaching out 1540 00:59:26,159 --> 00:59:28,159 to the colleges and universities to 1541 00:59:28,159 --> 00:59:30,159 build a pipeline of talent that you 1542 00:59:30,159 --> 00:59:31,992 need upon graduation to join the 1543 00:59:31,992 --> 00:59:34,159 workforce . If you don't start early , 1544 00:59:34,159 --> 00:59:36,326 hoping to get them at the end and when 1545 00:59:36,326 --> 00:59:38,760 they're ready to go is , is a wish . Uh 1546 00:59:38,770 --> 00:59:41,310 building dedication , loyalty , and 1547 00:59:41,320 --> 00:59:43,469 commitment early on , I think that 1548 00:59:43,479 --> 00:59:45,701 transfers volumes and I think more need 1549 00:59:45,701 --> 00:59:47,923 to do that , but we're all starving for 1550 00:59:47,923 --> 00:59:50,360 talent . Right ? And Mr Kaiser , uh 1551 00:59:50,370 --> 00:59:52,919 once again , you're spot on and that I 1552 00:59:52,929 --> 00:59:55,459 think is probably more systemic across 1553 00:59:55,469 --> 00:59:57,413 the entire nation of every kind of 1554 00:59:57,413 --> 00:59:59,469 hands on skill . Watch the financial 1555 00:59:59,469 --> 01:00:02,239 news network activity about a week ago . 1556 01:00:02,250 --> 01:00:04,770 And the CEO was ex exemplifying , 1557 01:00:04,780 --> 01:00:07,002 verbalizing exactly what you said . And 1558 01:00:07,002 --> 01:00:08,836 as they talk with this CEO , she 1559 01:00:08,909 --> 01:00:11,379 indicated cannot get the skills I could 1560 01:00:11,389 --> 01:00:13,500 be making millions more dollars . And 1561 01:00:13,500 --> 01:00:15,840 this is a total non dod company that 1562 01:00:15,850 --> 01:00:18,072 was having facing the same challenges . 1563 01:00:18,072 --> 01:00:20,183 Now , Senator Mullen was here from my 1564 01:00:20,183 --> 01:00:22,072 time at Tinker Air Force Base . I 1565 01:00:22,072 --> 01:00:24,072 remember they had several technical 1566 01:00:24,072 --> 01:00:26,199 schools focused on aviation in the 1567 01:00:26,209 --> 01:00:28,620 state of Oklahoma that he might be able 1568 01:00:28,629 --> 01:00:30,907 to lend , you know , how do they do it ? 1569 01:00:30,907 --> 01:00:32,851 And part of that was to build , to 1570 01:00:32,851 --> 01:00:34,629 bring some aircraft maintenance 1571 01:00:34,629 --> 01:00:36,830 capabilities and skills to Tinker Air 1572 01:00:36,840 --> 01:00:38,896 Force Base . But at the same time at 1573 01:00:38,896 --> 01:00:41,669 Tulsa uh Tulsa Oklahoma , you had the 1574 01:00:41,679 --> 01:00:43,760 American Airlines has their huge 1575 01:00:43,770 --> 01:00:45,770 manufacture uh maintenance facility 1576 01:00:45,770 --> 01:00:47,937 there . So it's how do we get these uh 1577 01:00:47,937 --> 01:00:50,020 technical schools with the technical 1578 01:00:50,030 --> 01:00:52,439 degrees , bring the young people in who 1579 01:00:52,449 --> 01:00:54,560 are going to put the hands on because 1580 01:00:54,699 --> 01:00:56,810 that not everybody wants to do this . 1581 01:00:56,810 --> 01:00:58,866 So how do we incentivize that ? That 1582 01:00:58,866 --> 01:01:01,032 will be a bigger issue beyond just the 1583 01:01:01,032 --> 01:01:03,255 dod small business and for our nation . 1584 01:01:03,255 --> 01:01:05,366 Thank you . Well , I yield back madam 1585 01:01:05,366 --> 01:01:07,421 chair . I know many of us are really 1586 01:01:07,421 --> 01:01:09,532 coming to this realization that we're 1587 01:01:09,532 --> 01:01:11,699 not gonna completely train our way out 1588 01:01:11,699 --> 01:01:13,810 of this , um , without an immigration 1589 01:01:13,810 --> 01:01:16,032 reform bill and , and it , and it , and 1590 01:01:16,032 --> 01:01:18,088 it can be very workforce focused . I 1591 01:01:18,088 --> 01:01:20,199 mean , and it probably should be with 1592 01:01:20,199 --> 01:01:19,989 unemployment rates lowest . It's been 1593 01:01:20,000 --> 01:01:23,189 since 1969 . So just Virginia doing a 1594 01:01:23,199 --> 01:01:25,199 better job of maybe convincing some 1595 01:01:25,199 --> 01:01:27,366 Marylanders to come to Hampton Roads . 1596 01:01:27,366 --> 01:01:29,477 That's not going to solve our problem 1597 01:01:29,477 --> 01:01:31,643 because we'll cannibalize each other's 1598 01:01:31,643 --> 01:01:31,520 workforces . We have to figure out a 1599 01:01:31,530 --> 01:01:34,290 way to provide skills , more skills , 1600 01:01:34,300 --> 01:01:36,078 uh value , career and technical 1601 01:01:36,078 --> 01:01:38,022 education allow people to use Pell 1602 01:01:38,022 --> 01:01:40,244 Grants for it for the first time in our 1603 01:01:40,244 --> 01:01:42,467 history . But I do think there's a need 1604 01:01:42,467 --> 01:01:44,689 that is becoming more obvious every day 1605 01:01:44,689 --> 01:01:44,300 that a that a work based immigration 1606 01:01:44,310 --> 01:01:46,366 reform bill is also gonna be part of 1607 01:01:46,366 --> 01:01:48,421 the solution here . I yield back and 1608 01:01:48,421 --> 01:01:50,643 thank you guys agree with you , Senator 1609 01:01:50,643 --> 01:01:53,100 Kaine because every single industry , 1610 01:01:53,810 --> 01:01:55,643 we're not just talking about the 1611 01:01:55,643 --> 01:01:57,699 military and its contracting . These 1612 01:01:57,699 --> 01:01:59,921 but every single industry has workforce 1613 01:01:59,921 --> 01:02:02,143 needs . Uh , something is going to have 1614 01:02:02,143 --> 01:02:03,921 to give and I , I do think that 1615 01:02:03,921 --> 01:02:06,169 something is we need to take a serious 1616 01:02:06,179 --> 01:02:09,360 look and commitment to changing our 1617 01:02:09,370 --> 01:02:11,537 immigration system because we have the 1618 01:02:11,537 --> 01:02:13,537 lowest , as you said , uh number of 1619 01:02:13,537 --> 01:02:16,330 visas , uh work visas are given out of 1620 01:02:16,340 --> 01:02:18,507 any . I I don't even know . So that is 1621 01:02:18,507 --> 01:02:21,510 having a major impact on our ability to 1622 01:02:21,649 --> 01:02:23,879 uh be competitive . Senator Sullivan . 1623 01:02:24,969 --> 01:02:26,913 Thanks madam chair and , and I , I 1624 01:02:26,913 --> 01:02:28,747 don't disagree with any of those 1625 01:02:28,747 --> 01:02:30,747 comments on immigration . We got to 1626 01:02:30,747 --> 01:02:32,858 secure the border first before we get 1627 01:02:32,858 --> 01:02:35,025 into discussions of immigration . That 1628 01:02:35,025 --> 01:02:37,247 should , that's a national security per 1629 01:02:37,247 --> 01:02:39,689 uh prerogative . That shouldn't be that 1630 01:02:39,699 --> 01:02:41,866 hard . And right now , we don't have a 1631 01:02:41,866 --> 01:02:43,977 secure border . So that's a different 1632 01:02:43,977 --> 01:02:46,032 topic , but an important one . Uh Mr 1633 01:02:46,032 --> 01:02:48,199 Smith , I wanna dig down with not only 1634 01:02:48,199 --> 01:02:50,629 you but the rest of the panelists on 1635 01:02:50,639 --> 01:02:54,479 your statement about the , um , 1636 01:02:54,949 --> 01:02:58,280 uh , recent , relatively recent , uh , 1637 01:02:58,290 --> 01:03:00,610 two years ago , eight , a contractor , 1638 01:03:00,870 --> 01:03:04,129 um , opportunities for sole source 1639 01:03:04,139 --> 01:03:07,260 contracts up to 100 million . Um , that 1640 01:03:07,270 --> 01:03:09,879 is relatively recent . Uh , that was my 1641 01:03:09,889 --> 01:03:12,580 provision in the N D A A in 2020 . So 1642 01:03:12,590 --> 01:03:14,830 I'm really appreciative that you 1643 01:03:14,840 --> 01:03:17,560 highlighted that as another opportunity 1644 01:03:17,909 --> 01:03:21,159 that can really help provide long term 1645 01:03:21,169 --> 01:03:25,040 success for the A a and small business 1646 01:03:25,050 --> 01:03:27,469 contractors . The , what I'm hearing 1647 01:03:27,479 --> 01:03:30,280 from my , um , a , a contractors in 1648 01:03:30,290 --> 01:03:33,060 Alaska though , is that a lot of the 1649 01:03:33,070 --> 01:03:35,850 contracting officers haven't really 1650 01:03:35,860 --> 01:03:38,520 gotten the word yet or kind of like ? 1651 01:03:38,530 --> 01:03:40,949 Yeah , I don't wanna do that or no , 1652 01:03:40,959 --> 01:03:43,620 I'm not interested . Well , we , the 1653 01:03:43,629 --> 01:03:45,407 congress told you you should be 1654 01:03:45,407 --> 01:03:47,573 interested , right ? It's in the law . 1655 01:03:47,573 --> 01:03:49,740 So can you expand upon that ? And what 1656 01:03:49,740 --> 01:03:51,796 I'd really like to do since you guys 1657 01:03:51,796 --> 01:03:53,962 are the ones in charge ? And I've been 1658 01:03:53,962 --> 01:03:56,250 hearing this a lot from my a a 1659 01:03:56,260 --> 01:04:00,260 contractors . Again , they do great 1660 01:04:00,270 --> 01:04:02,437 work . They contribute to the national 1661 01:04:02,437 --> 01:04:05,189 security , as I mentioned , at least in 1662 01:04:05,199 --> 01:04:07,255 Alaska . So many of them are already 1663 01:04:07,255 --> 01:04:10,540 veterans themselves . Um The vast 1664 01:04:10,550 --> 01:04:12,850 majority from indigenous populations , 1665 01:04:12,870 --> 01:04:15,629 very patriotic . What I'd like to do is 1666 01:04:15,639 --> 01:04:18,209 also get a commitment from each of you 1667 01:04:18,879 --> 01:04:21,300 to send a memo to your contracting 1668 01:04:21,310 --> 01:04:23,421 officers , just as you mentioned , Mr 1669 01:04:23,421 --> 01:04:25,588 Smith reminding them that , hey , this 1670 01:04:25,588 --> 01:04:29,169 is a tool and if a , if an eight day uh 1671 01:04:29,179 --> 01:04:31,860 contractor comes in , you know , you 1672 01:04:31,870 --> 01:04:33,926 got to consider this and I know it's 1673 01:04:33,926 --> 01:04:36,148 relatively new , so it probably takes a 1674 01:04:36,148 --> 01:04:38,092 little bit of time to work its way 1675 01:04:38,092 --> 01:04:40,148 through the bureaucracy , but that's 1676 01:04:40,148 --> 01:04:42,314 the new law . And I , again , I'm glad 1677 01:04:42,314 --> 01:04:44,537 you , you mentioned that is kind of out 1678 01:04:44,537 --> 01:04:46,939 that tool as helpful . But can I get 1679 01:04:46,949 --> 01:04:49,060 your thoughts on that from all of you 1680 01:04:49,060 --> 01:04:51,060 and get each of your commitments to 1681 01:04:51,060 --> 01:04:53,060 send out a memo to your contracting 1682 01:04:53,060 --> 01:04:54,949 officers just saying , hey , as a 1683 01:04:54,949 --> 01:04:56,782 reminder , year and a half ago , 1684 01:04:56,782 --> 01:04:59,629 Congress changed this rule . It's now 1685 01:04:59,639 --> 01:05:02,850 um you know , up to $100 million and I 1686 01:05:02,860 --> 01:05:05,709 think that'll spur a lot of interest 1687 01:05:05,719 --> 01:05:08,020 and hopefully opportunity and activity 1688 01:05:08,389 --> 01:05:10,389 on the common goal that we all have 1689 01:05:10,389 --> 01:05:12,500 here . Do you want to comment further 1690 01:05:12,500 --> 01:05:14,611 on that ? And then each of you and if 1691 01:05:14,611 --> 01:05:16,667 you make that commitment to me to be 1692 01:05:16,667 --> 01:05:18,889 doing a memo on that ? Sure . Um like , 1693 01:05:18,889 --> 01:05:21,111 like you mentioned , it's a tool in the 1694 01:05:21,111 --> 01:05:23,111 toolbox and folks need to know that 1695 01:05:23,111 --> 01:05:25,167 they have it at their disposal for a 1696 01:05:25,167 --> 01:05:27,939 long time . Competition was king . If 1697 01:05:27,949 --> 01:05:30,005 you had plenty of opportunities with 1698 01:05:30,005 --> 01:05:32,171 industry partners competing to get the 1699 01:05:32,171 --> 01:05:34,005 best price , that's what we were 1700 01:05:34,005 --> 01:05:36,540 driving for . Now , we got less people 1701 01:05:36,550 --> 01:05:38,830 playing in the swimming pool . I got 1702 01:05:38,840 --> 01:05:40,729 less opportunities with a certain 1703 01:05:40,729 --> 01:05:42,951 industry partners . Now it's time to go 1704 01:05:42,951 --> 01:05:45,118 pull some of these other tools out and 1705 01:05:45,118 --> 01:05:47,284 get the ease of contracting . I mean , 1706 01:05:47,284 --> 01:05:49,507 folks have been trained a certain way . 1707 01:05:49,507 --> 01:05:51,562 The flow down to all of the echelons 1708 01:05:51,562 --> 01:05:53,562 across the entire department of the 1709 01:05:53,562 --> 01:05:55,618 Navy has to take place just like you 1710 01:05:55,618 --> 01:05:57,562 mentioned . Um it's an education , 1711 01:05:57,562 --> 01:05:59,729 there's small business professionals , 1712 01:05:59,729 --> 01:06:01,784 some of your contract . Absolutely . 1713 01:06:01,784 --> 01:06:04,260 Absolutely . And some people , you know , 1714 01:06:04,270 --> 01:06:06,214 making the doughnuts is making the 1715 01:06:06,214 --> 01:06:08,270 donuts , is making the doughnuts and 1716 01:06:08,270 --> 01:06:10,326 they need to be told and taught that 1717 01:06:10,326 --> 01:06:12,270 there's a way to do it differently 1718 01:06:12,270 --> 01:06:14,560 faster to go about another path . So 1719 01:06:14,570 --> 01:06:16,681 can I get a commitment from you ? And 1720 01:06:16,681 --> 01:06:18,514 we already , we already have the 1721 01:06:18,514 --> 01:06:20,681 commitment across the department ? But 1722 01:06:20,681 --> 01:06:20,129 I mean , to send a memo to your 1723 01:06:20,139 --> 01:06:22,139 contracting officers , reminding of 1724 01:06:22,139 --> 01:06:24,361 this done and send it to this committee 1725 01:06:24,361 --> 01:06:26,695 is absolutely done . Not a problem . Ok , 1726 01:06:26,695 --> 01:06:28,750 Mr uh Kaiser , do you have a view on 1727 01:06:28,750 --> 01:06:31,030 this or thoughts on it just to expand 1728 01:06:31,040 --> 01:06:33,207 it ? It probably might even be helpful 1729 01:06:33,207 --> 01:06:35,429 if we have a joint signature coming out 1730 01:06:35,429 --> 01:06:37,651 at least from the Department of the Air 1731 01:06:37,651 --> 01:06:39,596 Force from our head of contracting 1732 01:06:39,596 --> 01:06:41,707 activity . Uh in order to have a dual 1733 01:06:41,707 --> 01:06:43,484 signature , it's small business 1734 01:06:43,484 --> 01:06:45,651 contracting side by side . Thank you . 1735 01:06:45,651 --> 01:06:47,873 That's a great suggestion . Thank you , 1736 01:06:47,873 --> 01:06:50,040 Mr Mueller . Uh Yes , I was gonna make 1737 01:06:50,040 --> 01:06:52,096 the same suggestion actually that we 1738 01:06:52,096 --> 01:06:54,262 have to make sure that our contracting 1739 01:06:54,262 --> 01:06:56,429 uh partners are also pushing , pushing 1740 01:06:56,429 --> 01:06:58,207 the same message that we have a 1741 01:06:58,207 --> 01:07:00,429 consolidated front um in the Department 1742 01:07:00,429 --> 01:07:02,540 of the Army . We're also conducting a 1743 01:07:02,540 --> 01:07:04,540 uh small business roadshow training 1744 01:07:04,540 --> 01:07:06,540 with our contracting workforce that 1745 01:07:06,540 --> 01:07:08,707 actually started today , um , and will 1746 01:07:08,707 --> 01:07:11,100 continue um in second and into third 1747 01:07:11,110 --> 01:07:13,166 quarter . And one of the areas we're 1748 01:07:13,166 --> 01:07:15,332 training on is the eight A program and 1749 01:07:15,332 --> 01:07:17,443 we're partnering up with the S B A at 1750 01:07:17,443 --> 01:07:19,499 certain locations to uh to make that 1751 01:07:19,499 --> 01:07:21,666 the most effective it can be perfect . 1752 01:07:21,666 --> 01:07:23,554 Do I have time to ask a couple of 1753 01:07:23,554 --> 01:07:24,721 others ? All right . 1754 01:07:27,169 --> 01:07:29,679 Um Let me , uh , Mr Kaiser , I want to 1755 01:07:29,689 --> 01:07:33,219 compliment you , uh , in the Air Force . 1756 01:07:33,229 --> 01:07:35,340 You know , we've had a very big build 1757 01:07:35,340 --> 01:07:38,139 up of uh , The air force in Alaska with 1758 01:07:38,149 --> 01:07:41,699 the f-35s , two squadrons f-35s and a 1759 01:07:41,979 --> 01:07:45,239 whole host of uh new um , 1760 01:07:46,209 --> 01:07:48,399 air Force personnel at Olson Air Force 1761 01:07:48,409 --> 01:07:50,742 Base and other places throughout Alaska . 1762 01:07:50,742 --> 01:07:53,110 And it was a lot of um , military 1763 01:07:53,120 --> 01:07:55,520 construction authorized by this 1764 01:07:55,530 --> 01:07:58,879 committee . And um , we now have , by 1765 01:07:58,889 --> 01:08:01,340 the way on time on budget that the Air 1766 01:08:01,350 --> 01:08:04,840 Force got two squadrons of F-35s batted 1767 01:08:04,850 --> 01:08:06,906 down at is Air Force base during the 1768 01:08:06,906 --> 01:08:10,419 pandemic . So great job , great job . 1769 01:08:10,500 --> 01:08:13,479 Um , you also did a really good job of 1770 01:08:13,489 --> 01:08:16,600 working with the core , uh , the core 1771 01:08:16,609 --> 01:08:19,810 of engineers That was letting these 1772 01:08:19,819 --> 01:08:22,950 contracts to build the hangars and 1773 01:08:22,959 --> 01:08:25,430 everything for the f-35 and a lot of 1774 01:08:25,439 --> 01:08:28,279 small businesses , uh , did , uh , 1775 01:08:28,290 --> 01:08:30,729 quite well in Alaska because the cop 1776 01:08:31,410 --> 01:08:33,549 and the air force were committed to 1777 01:08:33,560 --> 01:08:36,560 getting those contracts prima primarily 1778 01:08:36,569 --> 01:08:38,291 to Alaska-based businesses and 1779 01:08:38,291 --> 01:08:40,938 contractors and unions . And so it 1780 01:08:40,949 --> 01:08:43,258 worked . Do you have any lessons on , 1781 01:08:44,009 --> 01:08:46,700 on an example of that ? Working well , 1782 01:08:46,709 --> 01:08:48,876 which I thought it worked quite well . 1783 01:08:48,876 --> 01:08:51,419 I was very involved in the oversight of 1784 01:08:51,430 --> 01:08:53,597 it , but you guys nailed it on time on 1785 01:08:53,597 --> 01:08:56,140 budget . I think the number was 95% of 1786 01:08:56,149 --> 01:08:58,038 the mil con went to Alaskan based 1787 01:08:58,038 --> 01:09:01,700 companies uh , to expand beyond and , 1788 01:09:01,709 --> 01:09:03,820 and , and what they did . I , I , I , 1789 01:09:03,820 --> 01:09:06,640 I'm not as familiar with those specific , 1790 01:09:06,649 --> 01:09:08,538 but that is not uncommon with the 1791 01:09:08,538 --> 01:09:10,538 contracting Air Force contracting , 1792 01:09:10,540 --> 01:09:12,484 working hand in hand with the Army 1793 01:09:12,484 --> 01:09:14,596 Corps of Engineers on these major mil 1794 01:09:14,720 --> 01:09:17,859 projects and with re reconstruction or 1795 01:09:17,870 --> 01:09:20,729 new construction . Uh , once again , I 1796 01:09:20,740 --> 01:09:22,879 will pass your congratulations on it 1797 01:09:22,890 --> 01:09:25,700 with your permission to the Army and 1798 01:09:26,060 --> 01:09:29,000 the Army Corps . Absolutely . But this 1799 01:09:29,009 --> 01:09:32,069 is not absolutely , uh , experience I 1800 01:09:32,080 --> 01:09:34,089 have is with Langley Air Force Base 1801 01:09:34,100 --> 01:09:36,479 following hurricane Isabel in the oh 1802 01:09:36,490 --> 01:09:38,712 three oh five time frame . Once again , 1803 01:09:38,712 --> 01:09:40,712 contracting a lot of coordination . 1804 01:09:40,712 --> 01:09:42,823 With the Corps of Engineers . At that 1805 01:09:42,823 --> 01:09:45,046 time , we were betting down the F-22 at 1806 01:09:45,046 --> 01:09:46,990 Langley . So once again , a lot of 1807 01:09:46,990 --> 01:09:49,113 teamwork across the board , everybody 1808 01:09:49,124 --> 01:09:51,124 focused on the mission because they 1809 01:09:51,124 --> 01:09:53,180 understand the importance of it . So 1810 01:09:53,180 --> 01:09:55,235 not uncommon to us and I suspect the 1811 01:09:55,235 --> 01:09:57,457 other service as well . But thank you , 1812 01:09:57,457 --> 01:10:00,304 sir for that . Uh , that , um , 1813 01:10:01,390 --> 01:10:03,720 the next question is for Mr Smith and 1814 01:10:03,729 --> 01:10:05,840 I'm sure Senator Kaine will have some 1815 01:10:05,840 --> 01:10:07,673 interest in it . I had breakfast 1816 01:10:07,709 --> 01:10:10,669 actually with the C N O this morning 1817 01:10:11,000 --> 01:10:13,549 and we talked a lot about shipyards . 1818 01:10:13,560 --> 01:10:16,370 We talked a lot about the defense 1819 01:10:16,379 --> 01:10:19,919 industrial base as it relates to um 1820 01:10:19,930 --> 01:10:22,549 building ships which , you know , 1821 01:10:22,700 --> 01:10:24,922 that's not necessarily a small business 1822 01:10:24,922 --> 01:10:27,144 activity , but small businesses can get 1823 01:10:27,144 --> 01:10:29,256 a lot of the action on that . But the 1824 01:10:29,256 --> 01:10:31,367 one area that is a small business , a 1825 01:10:31,367 --> 01:10:33,720 relatively small business activity is 1826 01:10:33,879 --> 01:10:37,629 the maintenance and repair of 1827 01:10:37,750 --> 01:10:40,200 big navy ships or coast guard ships . 1828 01:10:40,529 --> 01:10:44,399 And um there's a lot of opportunity 1829 01:10:44,410 --> 01:10:48,049 there in the small business sector 1830 01:10:48,330 --> 01:10:50,839 for smaller shipyards , not the giant 1831 01:10:50,850 --> 01:10:52,794 ones that are like in Virginia and 1832 01:10:52,794 --> 01:10:54,628 stuff , but we have some smaller 1833 01:10:54,628 --> 01:10:56,517 shipyards . We have a shipyard in 1834 01:10:56,517 --> 01:10:58,683 Seward Alaska called Jag that just got 1835 01:10:58,683 --> 01:11:01,470 a navy contract really , really big 1836 01:11:01,479 --> 01:11:03,646 deal for these guys . Uh They're gonna 1837 01:11:03,646 --> 01:11:05,535 do repair work . We have a bigger 1838 01:11:05,535 --> 01:11:07,620 shipyard in Ketchikan that does big 1839 01:11:07,629 --> 01:11:11,339 Coast Guard overhauls . And um 1840 01:11:11,500 --> 01:11:13,910 can you talk about particularly in this 1841 01:11:13,919 --> 01:11:17,209 need to get our navy bigger and 1842 01:11:17,220 --> 01:11:20,689 better and stronger the ability to use 1843 01:11:20,700 --> 01:11:23,430 smaller shipyards . Probably not for 1844 01:11:23,439 --> 01:11:26,029 the building but for the repair and 1845 01:11:26,040 --> 01:11:29,390 maintenance . In that way , the big 1846 01:11:29,399 --> 01:11:32,169 shipyards can build the subs and the L 1847 01:11:32,180 --> 01:11:34,819 H A s and things like that . Well , 1848 01:11:34,830 --> 01:11:36,997 Senator , having grown up on the , the 1849 01:11:36,997 --> 01:11:39,219 ship building side of the house , I was 1850 01:11:39,219 --> 01:11:41,330 Virginia classes construction manager 1851 01:11:41,330 --> 01:11:43,386 when we delivered the first one . Um 1852 01:11:43,386 --> 01:11:45,386 capacity is gonna be your challenge 1853 01:11:45,386 --> 01:11:47,441 here having a dry dock to bring in a 1854 01:11:47,441 --> 01:11:49,552 guided missile destroyer or a large a 1855 01:11:49,552 --> 01:11:51,663 fib or an aircraft carrier . You have 1856 01:11:51,663 --> 01:11:53,886 to have the facilities to be able to do 1857 01:11:53,886 --> 01:11:55,663 that . Now my understanding the 1858 01:11:55,663 --> 01:11:57,970 carriers and the nukes are public yard 1859 01:11:57,979 --> 01:12:01,370 is that is . But even the C N I was 1860 01:12:01,379 --> 01:12:03,601 talking about dishing out some of the , 1861 01:12:03,601 --> 01:12:05,939 even though it's public public yard , 1862 01:12:05,950 --> 01:12:08,649 you know , with the nuke navy that you 1863 01:12:08,660 --> 01:12:11,379 can still dish out some of the non nuke 1864 01:12:11,950 --> 01:12:14,520 work to small businesses is that , 1865 01:12:14,720 --> 01:12:17,479 that's absolutely true . In the past , 1866 01:12:17,490 --> 01:12:19,323 we would have probably put up an 1867 01:12:19,323 --> 01:12:21,323 omnibus kind of contract for a very 1868 01:12:21,323 --> 01:12:23,379 large industry partner to get it all 1869 01:12:23,379 --> 01:12:25,601 done and they would subcontract to work 1870 01:12:25,601 --> 01:12:27,434 out the smalls and they're gonna 1871 01:12:27,434 --> 01:12:29,601 continue to do that to break that work 1872 01:12:29,601 --> 01:12:31,823 out separately and move the platform to 1873 01:12:31,823 --> 01:12:33,934 a smaller yard . I think there's some 1874 01:12:33,934 --> 01:12:36,157 coordination there that we have to look 1875 01:12:36,157 --> 01:12:36,060 at , not saying that we can't do it , 1876 01:12:36,069 --> 01:12:38,359 but today we can park the platform in 1877 01:12:38,370 --> 01:12:40,537 one place and everybody show up to the 1878 01:12:40,537 --> 01:12:42,589 ship . If you're gonna take it away 1879 01:12:42,600 --> 01:12:44,859 from the bigs and move it to a small , 1880 01:12:44,870 --> 01:12:46,703 well , then that work's gonna be 1881 01:12:46,703 --> 01:12:48,814 segmented and probably not integrated 1882 01:12:48,814 --> 01:12:50,926 in a fashion that we're accustomed to 1883 01:12:50,926 --> 01:12:53,259 today . So it's not that we can't do it . 1884 01:12:53,259 --> 01:12:55,314 I think it'll be different . I think 1885 01:12:55,314 --> 01:12:57,481 small businesses can benefit from that 1886 01:12:57,481 --> 01:12:57,279 opportunity . They're currently 1887 01:12:57,290 --> 01:13:00,000 benefiting today as subcontractors . 1888 01:13:00,009 --> 01:13:01,731 And you're talking about prime 1889 01:13:01,731 --> 01:13:03,953 contracting opportunities in the future 1890 01:13:03,953 --> 01:13:05,953 with your construct . I don't see a 1891 01:13:05,953 --> 01:13:08,065 reason we can't do it . It's gonna be 1892 01:13:08,065 --> 01:13:10,231 more of a coordination . And when does 1893 01:13:10,231 --> 01:13:12,342 the fleet need that platform back the 1894 01:13:12,342 --> 01:13:14,509 service ? Because if you can do it all 1895 01:13:14,509 --> 01:13:16,731 in parallel , that's one thing . But if 1896 01:13:16,731 --> 01:13:18,787 you're gonna make series maintenance 1897 01:13:18,787 --> 01:13:20,787 activities , that's time that we're 1898 01:13:20,787 --> 01:13:22,842 talking about marching along at that 1899 01:13:22,842 --> 01:13:24,842 point . Ok . So I had that , that's 1900 01:13:24,842 --> 01:13:27,009 very helpful . I had one more question 1901 01:13:27,009 --> 01:13:29,176 that's back to Mr Smith , but maybe it 1902 01:13:29,176 --> 01:13:31,419 can be more broadly . We had a small 1903 01:13:31,430 --> 01:13:33,652 business in Alaska called Trivaris that 1904 01:13:33,660 --> 01:13:36,729 wanna contract with the Navy to build 1905 01:13:36,740 --> 01:13:39,890 your uh mobile cleaning recovery and 1906 01:13:39,899 --> 01:13:43,089 recycling systems . This is what I was 1907 01:13:43,100 --> 01:13:45,500 referring to as like a Zamboni for an 1908 01:13:45,509 --> 01:13:47,398 aircraft carrier . If you get the 1909 01:13:47,398 --> 01:13:49,565 hockey analogy and an aircraft carrier 1910 01:13:49,565 --> 01:13:52,770 or a L H A with a flat deck and this 1911 01:13:52,779 --> 01:13:54,779 company developed it on its own and 1912 01:13:54,779 --> 01:13:56,779 built them 43 for the Navy . It was 1913 01:13:56,790 --> 01:13:59,430 really , really , really impressive . 1914 01:13:59,439 --> 01:14:01,910 We were so proud of them because , you 1915 01:14:01,919 --> 01:14:03,863 know , we , we don't have that big 1916 01:14:03,863 --> 01:14:05,919 industrial base up in Alaska and the 1917 01:14:05,919 --> 01:14:07,808 Navy . You know , there were some 1918 01:14:07,808 --> 01:14:09,919 hiccups , right . There was some back 1919 01:14:09,919 --> 01:14:12,197 and forth with the contracting officer . 1920 01:14:12,299 --> 01:14:14,577 We heard at one point suggesting , hey , 1921 01:14:14,577 --> 01:14:16,855 if you really want to stay in the game , 1922 01:14:16,855 --> 01:14:19,077 you , you need to move your business to 1923 01:14:19,077 --> 01:14:21,077 the lower 48 . Right . Trust me . I 1924 01:14:21,077 --> 01:14:23,077 called the Secretary of the Navy on 1925 01:14:23,077 --> 01:14:22,939 that one saying you gotta be kidding me . 1926 01:14:22,950 --> 01:14:25,061 And we wanna keep this stuff in our , 1927 01:14:25,061 --> 01:14:27,228 our state , not encourage them to go . 1928 01:14:27,228 --> 01:14:29,450 But you know , so companies like this , 1929 01:14:29,450 --> 01:14:31,617 they get a big contract . It's great . 1930 01:14:31,617 --> 01:14:33,783 They kind of base their whole business 1931 01:14:33,783 --> 01:14:36,006 model on it , but once that contract is 1932 01:14:36,006 --> 01:14:37,894 over and if it doesn't continue , 1933 01:14:37,894 --> 01:14:39,894 that's , you know , challenging for 1934 01:14:39,894 --> 01:14:42,006 them . Do you guys look at those kind 1935 01:14:42,006 --> 01:14:45,049 of contracts where they build this , uh 1936 01:14:46,589 --> 01:14:48,950 as I think they're called or zones for 1937 01:14:48,959 --> 01:14:51,080 aircraft carriers ? But then also can 1938 01:14:51,089 --> 01:14:53,256 do the maintenance work because that's 1939 01:14:53,256 --> 01:14:56,779 something that to me gives the company 1940 01:14:56,790 --> 01:14:58,568 with expertise , the ability to 1941 01:14:58,568 --> 01:15:00,568 continue doing that . They probably 1942 01:15:00,568 --> 01:15:02,734 know more about this system since they 1943 01:15:02,734 --> 01:15:05,012 built it from scratch than anyone else . 1944 01:15:05,012 --> 01:15:07,179 And I don't think they're ever able to 1945 01:15:07,179 --> 01:15:09,234 get the maintenance work to be doing 1946 01:15:09,234 --> 01:15:11,012 that and it's a little bit more 1947 01:15:11,012 --> 01:15:13,549 challenging . So I'm not familiar with 1948 01:15:13,560 --> 01:15:15,671 that particular case . I will go find 1949 01:15:15,671 --> 01:15:18,180 out and uh yeah , we can , we can and 1950 01:15:18,189 --> 01:15:20,250 I'll go respond for the record for , 1951 01:15:20,259 --> 01:15:22,979 for that . Ok . That inquiry , um , I'm 1952 01:15:22,990 --> 01:15:25,779 curious , Zimbo for an aircraft carrier 1953 01:15:25,790 --> 01:15:27,790 that picked my attention . Well , I 1954 01:15:27,790 --> 01:15:29,957 mean , they zip up , they , they bring 1955 01:15:29,957 --> 01:15:32,549 up all the , any kind of material on 1956 01:15:32,560 --> 01:15:34,870 the flight deck that can hurt the love 1957 01:15:34,879 --> 01:15:36,935 with the fifth gen aircraft and hurt 1958 01:15:36,935 --> 01:15:38,540 the system . So it's really 1959 01:15:38,549 --> 01:15:41,290 sophisticated stuff . And , uh , one of 1960 01:15:41,299 --> 01:15:43,243 the things that we encourage small 1961 01:15:43,243 --> 01:15:46,129 businesses to be able to do is do you 1962 01:15:46,140 --> 01:15:48,080 have a commercial outlet for your 1963 01:15:48,089 --> 01:15:50,033 opportunity as well along with the 1964 01:15:50,033 --> 01:15:52,200 maintenance ? Because I'm sure there's 1965 01:15:52,200 --> 01:15:54,200 airports , I'm sure there's runways 1966 01:15:54,200 --> 01:15:56,200 nearby where that capability can be 1967 01:15:56,200 --> 01:15:58,919 provided elsewhere . Counting on dod to 1968 01:15:58,930 --> 01:16:01,529 be your sole customer . That's an 1969 01:16:01,540 --> 01:16:03,790 interesting market . But I think if you 1970 01:16:03,799 --> 01:16:05,966 had many more people buying from you , 1971 01:16:06,229 --> 01:16:08,890 that's a more lucrative market . So , 1972 01:16:08,899 --> 01:16:11,121 but I will uh definitely go endeavor to 1973 01:16:11,121 --> 01:16:13,177 investigate that one further . Thank 1974 01:16:13,177 --> 01:16:12,959 you . 1975 01:16:23,720 --> 01:16:25,831 We have to make sure that we continue 1976 01:16:25,831 --> 01:16:28,060 to stay the course of modernizing uh 1977 01:16:28,069 --> 01:16:30,229 these facilities because there is no 1978 01:16:30,240 --> 01:16:32,509 question that we need to enable them to 1979 01:16:32,520 --> 01:16:34,799 be , become a lot more efficient . Uh 1980 01:16:34,810 --> 01:16:36,870 because the most recent report says 1981 01:16:36,879 --> 01:16:39,359 that that is taking far longer to 1982 01:16:39,370 --> 01:16:41,390 repair our naval ships and get them 1983 01:16:41,399 --> 01:16:44,839 ready for um uh deployment so that uh 1984 01:16:44,850 --> 01:16:46,906 needs to happen . And then at a time 1985 01:16:46,906 --> 01:16:48,990 when we need to really shore up our 1986 01:16:49,000 --> 01:16:52,299 ability to be innovative uh and um 1987 01:16:52,310 --> 01:16:54,620 competitive with a near near peer 1988 01:16:54,629 --> 01:16:57,859 competitor , I E , China , I would like 1989 01:16:57,870 --> 01:17:00,709 to uh know if each of you uh fully 1990 01:17:00,720 --> 01:17:03,950 utilize the S B I R and S D T R 1991 01:17:04,069 --> 01:17:07,850 programs to really push innovation to 1992 01:17:07,859 --> 01:17:11,600 small businesses . Do you do that ? 1993 01:17:13,939 --> 01:17:16,669 Uh Yes , Senator , the Army absolutely 1994 01:17:16,680 --> 01:17:19,430 uses the S B I R and the S TT R 1995 01:17:19,439 --> 01:17:22,799 programs to uh develop innovation . 1996 01:17:23,029 --> 01:17:25,810 Um not only do we use the programs 1997 01:17:25,819 --> 01:17:27,930 properly , we've developed transition 1998 01:17:27,930 --> 01:17:29,875 broker teams along eight different 1999 01:17:29,875 --> 01:17:32,041 lines of effort , you know , linked to 2000 01:17:32,041 --> 01:17:34,097 specific technologies and capability 2001 01:17:34,097 --> 01:17:36,263 gaps that we're trying to uh to fill . 2002 01:17:36,263 --> 01:17:38,263 So we're trying to make the program 2003 01:17:38,263 --> 01:17:40,430 more effective for us to really target 2004 01:17:40,430 --> 01:17:42,763 um you know , those high critical areas . 2005 01:17:42,884 --> 01:17:44,940 We're also using it as part of our , 2006 01:17:44,940 --> 01:17:47,375 what we call the X tech search . This 2007 01:17:47,384 --> 01:17:50,444 is a shark tank like competition where 2008 01:17:50,455 --> 01:17:53,774 companies will um propose uh a certain 2009 01:17:53,785 --> 01:17:56,495 technological solution . We will uh 2010 01:17:56,504 --> 01:17:59,314 give them small contracts and take them 2011 01:17:59,325 --> 01:18:01,325 through a successively , you know , 2012 01:18:01,325 --> 01:18:03,600 down select competition . Um you know , 2013 01:18:03,609 --> 01:18:06,330 over a period of time um until we get 2014 01:18:06,339 --> 01:18:08,560 to a winner . So we're utilizing the S 2015 01:18:08,569 --> 01:18:10,930 B I R authorities to also facilitate 2016 01:18:10,939 --> 01:18:13,050 that . So absolutely part of our tool 2017 01:18:13,050 --> 01:18:16,270 kit , Mr Smith , uh no different from 2018 01:18:16,279 --> 01:18:18,501 the army and probably no different from 2019 01:18:18,501 --> 01:18:20,612 the Air Force in that regard . That's 2020 01:18:20,612 --> 01:18:22,839 our fertile feeding ground for future 2021 01:18:22,850 --> 01:18:25,209 opportunities , future technology comes 2022 01:18:25,220 --> 01:18:27,790 from that area , uh having the right 2023 01:18:27,970 --> 01:18:29,890 mission set for what you need to 2024 01:18:29,899 --> 01:18:32,066 counter in the future is what it's all 2025 01:18:32,066 --> 01:18:34,121 about and having interest , industry 2026 01:18:34,121 --> 01:18:36,399 partners working in that vein . That's , 2027 01:18:36,399 --> 01:18:38,566 that's where we are and we're spending 2028 01:18:38,566 --> 01:18:40,288 transition dollars to get that 2029 01:18:40,288 --> 01:18:42,343 capability into the fleet , not just 2030 01:18:42,343 --> 01:18:44,510 doing research and development for the 2031 01:18:44,510 --> 01:18:46,788 sake of doing research and development . 2032 01:18:46,788 --> 01:18:48,955 Definitely , we need to make sure that 2033 01:18:48,955 --> 01:18:51,066 it's uh of some utility . Mr Kaiser . 2034 01:18:51,066 --> 01:18:53,177 Do you do the same thing ? You really 2035 01:18:53,177 --> 01:18:55,010 push for this kind of innovation 2036 01:18:55,010 --> 01:18:57,121 support ? Absolutely . Uh Senator Ron 2037 01:18:57,121 --> 01:18:59,299 and uh once again , just adding on 2038 01:18:59,310 --> 01:19:01,470 similar activities , but also uh in 2039 01:19:01,479 --> 01:19:03,500 fact , earlier this week , uh we 2040 01:19:03,509 --> 01:19:05,398 execute a lot of our super Sitter 2041 01:19:05,398 --> 01:19:07,565 dollars through an organization called 2042 01:19:07,565 --> 01:19:10,200 A Works and Space Works . Met earlier 2043 01:19:10,209 --> 01:19:12,376 Monday afternoon of this week with the 2044 01:19:12,376 --> 01:19:14,265 new leader of that organization , 2045 01:19:14,265 --> 01:19:16,376 Colonel Lee to talk about how they're 2046 01:19:16,376 --> 01:19:18,542 restructuring program . A lot of their 2047 01:19:18,542 --> 01:19:20,709 activity Over the last couple of years 2048 01:19:20,709 --> 01:19:22,598 has been toward just kind of open 2049 01:19:22,598 --> 01:19:22,245 topics . Well , they're now 2050 01:19:22,254 --> 01:19:24,087 streamlining that and focusing , 2051 01:19:24,087 --> 01:19:26,214 they'll have at least 40% of their 2052 01:19:26,225 --> 01:19:28,334 research ideas and small business 2053 01:19:28,345 --> 01:19:31,495 awards focused on operational 2054 01:19:31,504 --> 01:19:33,671 imperatives that you've probably heard 2055 01:19:33,671 --> 01:19:35,893 secretary Kendall talk about the things 2056 01:19:35,893 --> 01:19:37,893 that we really need to get after in 2057 01:19:37,893 --> 01:19:40,765 order to be very competitive , shall we 2058 01:19:40,774 --> 01:19:43,029 say ? And so that they're so we're 2059 01:19:43,040 --> 01:19:45,040 meeting with them to make sure that 2060 01:19:45,040 --> 01:19:47,151 what they're doing research on is not 2061 01:19:47,151 --> 01:19:50,169 just necessarily open or basic research 2062 01:19:50,180 --> 01:19:52,529 but rather focused research on the 2063 01:19:52,540 --> 01:19:54,651 things that we need for our program , 2064 01:19:54,651 --> 01:19:56,596 executive officers for our weapons 2065 01:19:56,596 --> 01:19:58,596 systems , so to make sure that it's 2066 01:19:58,596 --> 01:20:00,762 really making a difference . Uh And so 2067 01:20:00,762 --> 01:20:02,596 the pe o the program , executive 2068 01:20:02,596 --> 01:20:04,818 officers , pe OS are becoming much more 2069 01:20:04,818 --> 01:20:07,040 involved in the cyber process as well . 2070 01:20:07,040 --> 01:20:09,151 And so uh we've been awarding quite a 2071 01:20:09,151 --> 01:20:11,151 bit and our , our dollars have gone 2072 01:20:11,151 --> 01:20:14,120 from about 300 million in F Y 18 to , 2073 01:20:14,129 --> 01:20:16,509 we're about $1 billion this year . So 2074 01:20:16,520 --> 01:20:18,687 thank you for that continued support . 2075 01:20:20,040 --> 01:20:22,207 I , I just wanted to make sure that we 2076 01:20:22,207 --> 01:20:24,262 get it on the record . How important 2077 01:20:24,262 --> 01:20:26,318 these two um uh programs are because 2078 01:20:26,318 --> 01:20:28,429 there are some people who don't think 2079 01:20:28,429 --> 01:20:30,651 that it's important to reauthorize uh S 2080 01:20:30,651 --> 01:20:33,089 P I R or S C R . Thank you . Thank you 2081 01:20:33,100 --> 01:20:35,870 very much to all of you for coming and 2082 01:20:35,879 --> 01:20:38,149 talking with us and with that , this 2083 01:20:38,160 --> 01:20:39,169 hearing is adjourned .