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Opening Statements

LaLota: “Leveling the Playing Field: Challenges Facing Small Business Contracting”

WASHINGTON, D.C. – Today, the House Committee on Small Business Subcommittee on Contracting and Infrastructure is holding a hearing titled “Leveling the Playing Field: Challenges Facing Small Business Contracting.”

Subcommittee Chairman LaLota’s opening statement as prepared for delivery:

Good morning, and welcome to today’s Small Business Subcommittee hearing on Leveling the Playing Field and Challenges Facing Small Business Contracting.

First, I want to thank our witnesses for joining us today – a few of whom have traveled here from the best place in the country, Long Island. Your time here is very much appreciated, and I look forward to your testimonies.

Today, our Subcommittee will focus on several critical issues facing Main Street America. First, the number of small businesses receiving federal contracts has decreased by 50 percent over the past ten years. Further, nearly 60 percent fewer small businesses are entering the federal contracting system. Second, the regulatory burden placed on small businesses that seek to enter federal contracting is too high. Finally, we intend to address the systemic failures in the federal acquisition process which undermine small business participation in contracting.

It’s not enough that we point out problems.  The focus here should be on how we solve these three and other issues, knowing the crucial role Main Street plays in increasing competition, innovation and stimulating our economy.

It’s embarrassing and even shameful that our small businesses have been systematically squeezed out of federal contracting for decades. This decline comes as no surprise as the Biden Administration actively steers our economy and national security in the wrong direction.

At a time when the country needs a robust defense industrial base, small businesses are getting pushed out of government contracts in this space.

Specifically in my district – we have the nation’s second largest industrial park after Silicon Valley in Hauppauge. More broadly, Long Island is home to over 167 defense and aerospace companies, comprising over 3 million square feet of industrial/commercial space, with 10,000 full time employees (FTE), and $3 billion of economic activity.

With the decline of domestic industrial small and medium sized defense contractors, it is important to recognize and promote the vital work of our existing industry, like Long Island’s industrial defense industry, whose contributions keep our military prepared at a moment's notice.

As we look at contracting at the Department of Defense, we must not only consider the primes but also the tiers of suppliers providing parts for submarines, ships, and planes or businesses providing vital services.

The bureaucratic red tape small businesses are forced to navigate is also extremely harmful and burdensome.

Needless to say, the complexity of these barriers makes it even harder for small businesses to enter the federal marketplace.

For example, involvement in federal contracting requires a sufficient understanding of the long and cumbersome regulations related to Federal Acquisition, Defense Federal Acquisition, and within the Federal Register.

Together these burdensome and bureaucratic documents are over 94,000 pages long and require thousands of manhours to read. I’m sure we can all agree no small business has the manpower to accomplish this successfully.

Finally, we must examine the systematic failures currently in the federal acquisition process which consistently undermine Main Street.

Practices like self-certification and joint ventures are ripe for exploitation by large companies to the detriment of small firms when large firms partner with a small business to gain access to small business contracts.

Fraud is rampant in self-certification and yet, the Biden Administration seeks to expand rather than correct these actions.

I recently joined my colleague from the other side of the aisle and fellow New Yorker, Ranking Member Velazquez in introducing a bill that would phase out self-certified women-owned small businesses from the government-wide procurement goals and protect the integrity of the program.

Just like with any small business program across the federal government, we must ensure structure and guidance is in place to ensure firms are accurately represented.

Our goal on this Committee is to create a pathway for small businesses to succeed. We must ensure each small business is given the opportunity to thrive without drowning in bureaucratic red tape.

Thank you all again for joining us today.

Our witness’ real-world experiences, which we will hear shortly, will help the Committee work to make meaningful improvements to ensure small businesses are fully utilized in the federal procurement marketplace.

We must work together to stop the decline of small business contracting and fight to keep Main Street open for business.

With that, I yield to my distinguished colleague, the Ranking Member from Michigan, Ms. Scholten.