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Week of 16 March 2009

Is Stimulus harmful to SDVOSB’s?
Vets object to billing private insurance for service injuries
Agencies to direct stimulus funds to veteran-owned small businesses

(Editor’s Note: The following is a prepared statement presented by Scott Denniston to the U.S. Senate Small Business and Entrepreneurship Committee March 12. Denniston, who recently retired as director of the VA’s Center for Veterans Enterprise, testified before the committee regarding the impact of the stimulus bill on SDVOSBs. Denniston is now director of programs for the National Veteran-Owned Business Association (NAVOBA). He continue to be a supporter of VetBizCentral and its programs.)

Is Stimulus harmful

To SDVOSB’s?

This administration appears to have several conflicting goals: spending stimulus money quickly, prohibiting the use of sole source and limited competition contracting methods and bringing transparency to the contracting process. Taken together these goals could mean the end of the government’s small business contracting programs as we know them, and could be particularly hurtful to service-disabled, veteran-owned small businesses (SDVOSBs). The SDVOSB program is the government’s newest and least supported small business program based on the Small Business Administration’s report of federal contracting dollars awarded to all categories of small business.

The administration has directed federal agencies to spend billions of dollars as quickly as possible to help heal the ailing U.S. economy. Unfortunately, little or no guidance has been provided as to how to spend the money. Contracting officers are currently overwhelmed trying to keep up with mission requirements within the agencies. No new contracting officers or program officials are being added by the administration to spend the stimulus money. Human nature dictates in difficult times folks take the path of least resistance. In this case, it means spend the money as quickly as one can, with known companies in bundled contracts. This will result in “large business set-asides.” Some agencies are considering sending monies to other agencies to spend as they don’t believe they have the necessary resources to do it themselves. This further dilutes accountability for supporting the small business programs.

On March 4, the White House announced “that executive agencies shall not engage in noncompetitive contracts.” The press release makes no distinction between the thousands of sole source awards to productive and efficient small businesses under the SDVOSB, HUBZone or 8(a) programs and the billions of dollars awarded sole source to large businesses such as KBR and Halliburton. No guidance has been provided to contracting officers as to whether the administration is restricting the use of legitimate contracting mechanisms to support the nation’s small businesses.

The pressures being exerted on the contracting officer community will probably result in greater use of the General Services Administration’s Federal Supply Program. Under Part 8 of the Federal Acquisition

Regulations, FSS holds a higher contracting preference compared to the small business programs. Unfortunately, GSA does not allow set-asides for any small business group under the FSS program, which will further diminish opportunities for small businesses.

The administration’s actions are particularly onerous for service-disabled, veteran-owned small businesses. As the newest small business program, the government’s resistance to change has hurt SDVOSBs the most. Public Law 106-50 mandates 3% of all federal prime and subcontracts be awarded to SDVOSBs. To date the government’s accomplishments have been abysmal, averaging less than 1% to this most deserving group of Americans. If the administration restricts the use of the sole source authority to award contracts to SDVOSBs as is allowed under Public Law 108-183 and in particular for the Department of Veterans Affairs under Public Law 109-461 – Veterans First Program – SDVOSBs will further suffer. Part 19 of the Federal Acquisition Regulations already puts SDVOSBs at a disadvantage compared to 8a and HUBZone small businesses. The recent General Accountability Office decision which places HUBZone firms in front of SDVOSBs in the contracting hierarchy further hurts the ability of SDVOSBs to be awarded contracts at fair and reasonable prices.

Congress must step up and reiterate the government’s long-standing position of supporting small businesses in federal contracting. Congress must also address the issue of “parity” of the small business programs with each other. Contracting officers and program officials in the rush to support their mission will bypass the small business programs for other less burdensome and confusing contract mechanisms if these issues are not addressed.

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Vets object to billing private insurance for service injuries

From CNN Supervising Producer Adam Levine

WASHINGTON (CNN) — Veterans groups are warning President Barack Obama against going ahead with a possible administration move to charge veterans' private health care for service-related injuries.

In a letter sent by 11 of the most prominent veterans organizations, the groups warned that the idea "is wholly unacceptable and a total abrogation of our government's moral and legal responsibility to the men and women who have sacrificed so much."

CNN obtained a copy of the letter sent to the White House by groups including The American Legion, Disabled American Veterans, Military Order of the Purple Heart, Veterans of Foreign Wars of the United States, and Iraq and Afghanistan Veterans of America.

Read the letter below

A White House spokesman would neither confirm nor deny the option is being considered.

"The details of specific proposals will be transmitted with the full submission in April. The president has made it clear that meeting the needs of veterans is one of his priorities, and as a result has requested an 11 percent increase in discretionary funding for 2010, and the administration is actively working with the veterans community to ensure we get the details of this budget right," said White House spokesman Nick Shapiro.

In the letter, the groups said they have been told by sources on Capitol Hill and at the VA that the idea under consideration would allow the Department of Veterans Affairs to bill health insurance for a treatment of a disability or injury that was a result of military service.

Here's the letter:
The Honorable Barack Obama
President of the United States
The White House
Washington, DC

Dear President Obama:

On behalf of the millions of veterans represented by the veterans and military service organizations that have joined our effort, we write to express our serious concerns about a policy proposal that has been discussed this week in conjunction with the release of your first budget. We have been told that your Administration may be considering a proposal that would allow the Department of Veterans Affairs (VA) health care system to bill a veteran’s insurance for the care and treatment of a disability or injury that was determined to have been incurred in or the result of the veteran’s honorable military service to our country. Such a consideration is wholly unacceptable and a total abrogation of our government’s moral and legal responsibility to the men and women who have sacrificed so much for our freedoms.

As you know, the mission of the VA is “To care for him who shall have borne the battle, and for his widow, and his orphan.” Similarly, the VA emphasizes that it will “provide veterans the world-class benefits and services they have earned—and to do so by adhering to the highest standards of compassion, commitment, excellence, professionalism, integrity, accountability, and stewardship.” Unfortunately, the proposal to bill veterans for the care of their service-connected disabilities ignores the most important aspect of this vision—that their care has been earned.

This proposal ignores the solemn obligation that this country has to care for those men and women who have served this country with distinction and were left with the wounds and scars of that service. The blood spilled in service for this nation is the premium that service-connected veterans have paid for their earned care.

We understand and accept that the VA bills third-party insurers of veterans who are treated for non-service connected conditions. However, we cannot and would not agree to any proposal that would expand this concept any further. There is simply no logical explanation for billing a veteran’s personal insurance for care that the VA has a responsibility to provide. While we understand the fiscal difficulties this country faces right now, placing the burden of those fiscal problems on the men and women who have already sacrificed a great deal for this country is unconscionable. If in fact your Administration is considering this proposal, we would like to meet with you, as well as VA Secretary Eric Shinseki and Office of Management and Budget (OMB) Director Peter Orzag, to discuss this further.

We strongly urge your Administration to drop consideration of any proposal to bill third-party insurers for veterans’ service-connected conditions. We appreciate your continued emphasis on caring for the men and women who have served in defense of this country, as evidenced by the significant increase provided for VA programs in your FY 2010 budget submission. You can reaffirm this commitment by not allowing such a proposal to be carried forward. We stand ready to work with you, Secretary Shinseki, OMB Director Orzag, and others in your Administration to ensure that appropriate care and benefits are provided to those who have earned and deserve it.

Sincerely,

David K. Rehbein
National Commander
The American Legion

John C. Hapner
National Commander
AMVETS

Thomas Miller
Executive Director
Blinded Veterans Association

Raymond E. Dempsey
National Commander
Disabled American Veterans

Paul Reickhoff
Executive Director
Iraq and Afghanistan Veterans of America

Ira Novoselsky
National Commander
Jewish War Veterans of the USA

VADM Norb Ryan, USN (Ret.)
President
Military Officers Association of America

John P. Leonard
National Adjutant
Military Order of the Purple Heart of the USA, Inc.

Randy L. Pleva, Sr
National President
Paralyzed Veterans of America

Glen M. Gardner, Jr.
Commander-in-Chief
Veterans of Foreign Wars of the United States

John Rowan
National President
Vietnam Veterans of America

Cc:

Eric Shinseki, Secretary, Department of Veterans Affairs

Peter Orzag, Director, Office of Management and Budget

Honorable Harry Reid, Senate Majority Leader

Honorable Mitch McConnell, Senate Minority Leader

Honorable Nancy Pelosi, Speaker of the House

Honorable Steny Hoyer, House Majority Leader

Honorable John Boehner, House Minority Leader

Honorable Daniel Akaka, Chairman, Senate Committee on Veterans’ Affairs

Honorable Richard Burr, Ranking Member, Senate Committee on Veterans’ Affairs

Honorable Bob Filner, Chairman, House Committee on Veterans’ Affairs

Honorable Steve Buyer, Ranking Member, House Committee on Veterans’ Affairs

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Agencies to direct stimulus funds to veteran-owned small businesses

By Robert Brodsky E-Mail March 12, 2009

Federal officials pledged Thursday that stimulus funds will reach veteran-owned small businesses, which have been hard hit by the economic downturn.

Representatives from five agencies testified before the House Small Business Subcommittee on Contracting and Technology that they have strategies for making sure 2009 American Recovery and Reinvestment Act money flows to veteran-owned small businesses.

The Defense Department, which received $7.4 billion in stimulus funds, is setting aside millions in contracts through its Small Business Technology Transfer and Small Business Innovation Research programs.

"As DoD expends the funds provided by the Recovery Act, we will continue to pursue strategies that will give the maximum practicable opportunities to all small business, and give vigorous attention to providing opportunities for [service disabled, veteran-owned small businesses]," said Linda Oliver, acting director of Defense's Office of Small Business Programs.

Small businesses can expect to receive nearly $3 billion in contracting and subcontracting opportunities through the Transportation Department's Disadvantaged Business Enterprises program and millions more through grants and bonding assistance, said Joel Szabat, the deputy assistant secretary for transportation policy. Transportation received $48 billion in Recovery Act funds, most of which will be used for state-level infrastructure improvements.

"There's no magic bullet or formula," said Szabat, Transportation's point person on stimulus spending. "It's just going to take hard work and elbow grease."

Other witnesses noted that many small business opportunities could come in the form of subcontracting.

The Energy Department, which will get nearly $39 billion in stimulus funding, recently directed prime contractors "to give preference to small businesses in the award of subcontracts for projects funded by Recovery Act dollars," said Brenda DeGraffenreid, supervisory acquisition manager in Energy's Office of Small and Disadvantaged Business Utilization.

Lawmakers and advocates for veteran-owned small businesses expressed concern that contracts would be bundled together, making it harder for small companies to bid on them.

The government has not met its statutory mandate of awarding 3 percent of all contracts to service-disabled veteran-owned small businesses, said Rep. Glenn Nye, D-Va., chairman of the subcommittee.

Nye noted that a high percentage of the $111 billion in Recovery Act public works contracts is expected to go to industries where veteran entrepreneurs traditionally have had a strong presence, including engineering, telecommunications, project management and construction.

"Today we are putting government agencies on notice: We will not accept the tired excuse that the need to move hastily and the sheer volume of contracts resulted in an 'inadvertent oversight' of veteran-owned businesses," Nye said.

The Office of Management Budget last month instructed agencies to maximize opportunities for small businesses to compete for stimulus contracts. But, much of the Recovery Act funding will be dispersed in the form of state grants, which bypass federal contracting regulations.

The Recovery Act also did not set aside money for contracts to particular small business groups and OMB's February guidance directed agencies to spend the funds as quickly as possible, a mandate that historically has led to contracts with familiar large contractors.

In fact, the guidance, along with President Barack Obama's recent contracting reform memorandum, encouraged agencies to use competition as often as possible in awarding stimulus-related deals.

"Specific guidance needs to be provided to contracting officers as to whether the administration is restricting the use of legitimate contracting mechanisms to support the nation's small businesses, or [limiting] multibillion-dollar noncompetitive awards to large prime contractors," said Joseph Sharpe Jr., the deputy director of the American Legion's Economic Commission.

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Is Stimulus harmful To SDVOSB’s?

Vets object to billing private insurance for service injuries

Agencies to direct stimulus funds to veteran-owned small businesses

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