Restoring America’s Industrial Base: The Role of Small Businesses in National Security (June 3, 2026)
Summary
The printed record of a hearing of the House Committee on Small Business titled Restoring America’s Industrial Base: The Role of Small Businesses in National Security, on June 3, 2026, Small Business Committee Document Number 119–038. Chairman Roger Williams presided, and the contents list opening statements by Hon. Roger Williams and Hon. Gil Cisneros. The witnesses were Moshe Schwartz of the National Defense Industrial Association, Daniel Jaworowski of Infinity Systems Engineering LLC, Anthony Closson of Colossal Contracting, LLC and Angela Dingle of Women Impacting Public Policy. Representative Clay Fuller opened with a prayer before the Pledge of Allegiance. The appendix carries the prepared statements and a Women Impacting Public Policy (WIPP) Letter.
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“Restoring America’s Industrial Base: The Role of Small Businesses in National Security (June 3, 2026).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/chrg-119hhrg63917-f400925007/
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RESTORING AMERICA’S INDUSTRIAL BASE: THE
ROLE OF SMALL BUSINESSES IN NATIONAL
SECURITY
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
HEARING HELD
JUNE 3, 2026
Small Business Committee Document Number 119–038
Available via the GPO Website: www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
63–917 WASHINGTON : 2026
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HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
JAKE ELLZEY, Texas
MARK ALFORD, Missouri
BRAD FINSTAD, Minnesota
TONY WIED, Wisconsin
ROB BRESNAHAN, Pennsylvania
BRIAN JACK, Georgia
KIMBERLYN KING-HINDS, Northern Marina Islands
DEREK SCHMIDT, Kansas
JIMMY PATRONIS, Florida
CLAY FULLER, Georgia
NYDIA VELÁZQUEZ, New York, Ranking Member
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
LAMONICA MCIVER, New Jersey
GIL CISNEROS, California
KELLY MORRISON, Minnesota
GEORGE LATIMER, New York
DEREK TRAN, California
LATEEFAH SIMON, California
JOHNNY OLSZEWSKI, Maryland
MAGGIE GOODLANDER, New Hampshire
SEAN DILLON, Majority Staff Director
MELISSA JUNG, Minority Staff Director
(II)
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CONTENTS
OPENING STATEMENTS
Page
Hon. Roger Williams ................................................................................................ 1
Hon. Gil Cisneros ..................................................................................................... 3
WITNESSES
Mr. Moshe Schwartz, Senior Fellow for Acquisition Policy, National Defense
Industrial Association, Potomac, MD ................................................................. 6
Mr. Daniel Jaworowski, Chief Operating Officer and President, Infinity Sys-
tems Engineering LLC, Colorado Springs, CO .................................................. 8
Mr. Anthony Closson, Chief Executive Officer and Founder, Colossal Con-
tracting, LLC, Annapolis, MD ............................................................................. 9
Ms. Angela Dingle, President and Chief Executive Officer, Women Impacting
Public Policy, Washington, DC ........................................................................... 11
APPENDIX
Prepared Statements:
Mr. Moshe Schwartz, Senior Fellow for Acquisition Policy, National De-
fense Industrial Association, Potomac, MD ................................................ 38
Mr. Daniel Jaworowski, Chief Operating Officer and President, Infinity
Systems Engineering LLC, Colorado Springs, CO ..................................... 45
Mr. Anthony Closson, Chief Executive Officer and Founder, Colossal Con-
tracting, LLC, Annapolis, MD ...................................................................... 47
Ms. Angela Dingle, President and Chief Executive Officer, Women Im-
pacting Public Policy, Washington, DC ....................................................... 56
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Women Impacting Public Policy (WIPP) Letter ............................................. 61
(III)
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RESTORING AMERICA’S INDUSTRIAL BASE:
THE ROLE OF SMALL BUSINESSES IN
NATIONAL SECURITY
WEDNESDAY, JUNE 3, 2026
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The Committee met, pursuant to call, at 10:05 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams [chair-
man of the Committee] presiding.
Present: Representatives Williams, Van Duyne, Alford, Wied,
Bresnahan, Jack, Patronis, Scholten, Cisneros, Morrison, Tran,
Olszewski, and Goodlander.
Chairman WILLIAMS. Before we get started, I would like to rec-
ognize Representative Clay Fuller from the great state of Georgia
to lead us in the Pledge of Allegiance and a prayer. Please stand.
Mr. FULLER. Dear Heavenly Father, today we give thanks for
the small business owners who are the backbone of our country.
We are grateful for the men and women who work long hours,
make sacrifices, and take risks to provide for their families and
serve their communities. Lord, bless these business owners and
their families; strengthen them during the late nights, early morn-
ings, and challenging seasons; reward their hard work; guide their
decisions; and help their businesses to continue to grow and pros-
per.
We also ask your blessing on the work of this Committee. Grant
us wisdom, good judgment, and a sprit of service as we carry out
our responsibilities. May we work together with integrity, purpose,
and gratitude for the freedoms and opportunities we all enjoy in
this great nation. May God continue to bless our community, our
country, the United States of America. In your name we pray.
Amen.
ALL. I pledge allegiance to the Flag of the United States of
America, and to the Republic for which it stands, one nation, under
God, indivisible, with liberty and justice for all.
Chairman WILLIAMS. Good morning, everybody. And it is great
to have everybody here today. I now call the Committee on Small
Business to order. Without objection, the Chair is authorized to de-
clare a recess of the Committee at any time.
Before we get to the main business of today, I ask unanimous
consent to waive Representative Fuller onto the Subcommittee on
Oversight, Investigations, and Regulations and the Subcommittee
(1)
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on Innovation, Entrepreneurship, and Work Force Development.
Without objection, so moved. Congratulations.
I now recognize myself for my opening statement.
Welcome to today’s hearing titled ‘‘ Restoring America’s Indus-
trial Base: The Role of Small Business in National Security.’’ I
want to thank our witnesses for joining us today and for bringing
us expertise and experience to the important discussion.
Our national security relies on more than weapons stockpiles.
For generations, America’s strength has been defined by both the
power of our military and the tenacity of the American people. It
is an honored—it is anchored on the determination of American en-
trepreneurs and the belief that in this country, if you are willing
to build something, create something, and contribute something
greater than yourself, there ought to be a place for you in the
American story. And nowhere is that more evident than in the
small businesses that help shape our defense industrial base.
Sustaining strong and competitive small businesses’ participation
in the defense industrial base is not a choice, but it is imperative
to the long-term national security interests of the United States.
What our history teaches us is what our adversaries already under-
stand, that the country’s defense and industrial base is increasingly
concentrated in a small handful of large companies, which means
it is inherently fragile.
Resilience, by definition, requires depth. It requires a network
capable of adapting when disruption occurs and when carrying the
load when part of the system is compromised. A resilient defense
industrial base cannot hinge on a single point of failure. That is
where the Committee’s onus lies.
For small businesses, participation in the defense industrial base
has not always been easy. So too often complex compliance require-
ments, limited access to capital, and lawyers of bureaucracy make
it harder for more—for new and emerging small businesses to com-
pete and contribute. These are the ongoing challenges we need to
continue to address.
Now more than ever, it is for small—it is time for small busi-
nesses to activate. We are living through a moment of historic in-
vestment in America defense and manufacturing. The priorities of
this Committee, the direction of this Congress, and the guidance
under this administration will point to the capabilities small busi-
nesses are uniquely able to provide. The door is open for small
business.
None of this happens by accident. The work of this Committee
is foundational. As a Committee, we must ensure that we are doing
everything in our power to make good on our promises. We are re-
sponsible for ensuring American innovation is neither stifled by un-
necessary complexity nor concentrated solely at the top of the sup-
ply chain.
At the same time, capable firms remain on the outside looking
in. We must ensure that the opportunity is real, competition is fair,
and American small businesses have a genuine chance to con-
tribute to our economy and national security. That is the work be-
fore us today.
I want to thank all of you for joining us again today. I look for-
ward to the conversation ahead.
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I now yield to our Ranking Member from the great state of Cali-
fornia, Mr. Cisneros, for his opening remarks.
Mr. CISNEROS. Thank you, Mr. Chairman, and thank you to
our witnesses for being here today.
The Department of Defense obligated $755 billion in contracts in
fiscal year 2024. Just over $97 billion of that, or 26.3 percent of eli-
gible contract dollars, went to small defense contractors. These dol-
lars point to the critical role small businesses play in supporting
the DOD mission and the warfighter. So I was encouraged at first
by an official estimate showing an increase to $98.9 billion going
to small business firms in fiscal year 2025, an increase at DOD of
almost $2 billion. However, the dollar figure alone does not provide
a complete picture of the health of the defense industrial base.
We will discuss today two worrying trends behind these num-
bers. The first is that the percentage of dollars awarded to small
firms saw a year-over-year decrease to 25.7 percent. Small business
contracts are not growing at the same rate as overall DOD con-
tracts. The second is an issue I have raised here and through my
work on the House Armed Services Committee that must continue
to be a top priority: the shrinking industrial base. While small
business dollars have gone up, small business participation has
gone down. In fact, the number of small businesses in the govern-
ment’s ecosystem has almost halved.
Over a year ago, Ranking Member Velázquez and I wrote about
the decline of the industrial base in The Hill op-ed. We highlighted
the importance of the SBA’s program and contracting authorities
that level the playing field for all small businesses to enter, com-
pete, and have success in the federal market.
Since then, unfortunately, but typical, the administration’s ac-
tions have made things worse. As one recent study summarized,
the decline of small business participation is an existing trend ex-
acerbated by the disproportionate impact of DOGE contract termi-
nations. It is yet to be seen if the overhaul of the government’s pro-
curement regulations will be more than a word-cutting exercise and
reduce nonvalue-added requirements for small firms. To date, the
results appear to be uneven.
While the Rule of Two was retained, it is not secured as its fu-
ture depends on a sunset provision. Some processes were stream-
lined, but particularly harmful buying practices known to drive
small firms from the market have been bolstered. Further, contract
consolidation and required use of contract vehicles will put more
opportunities out of reach for small businesses, who we know leave
the industrial base as a result.
Rather than advocate for or assist small business government
contractors, SBA is AWOL. They have gutted the workforce and di-
verted limited resources to a phishing expedition based on unsub-
stantiated and increasingly unrealized accusations in one small
business program. DOD has also unfairly targeted all small busi-
nesses with a slickly produced, but factually inaccurate social
media video designed to intimidate small firms, even those who
previously competed and won defense contracts.
If we are serious about strengthening America’s industrial base
and securing our economic future, we should be expanding opportu-
nities for all small businesses, not undermining them. This is al-
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most—there is almost universal agreement that the government’s
acquisition process has become too cumbersome, too burdensome,
and needs to be simplified. I saw this firsthand during my time at
the Department of Defense.
CMMC has further upended the degree of difficulty, layering on
new requirements small firms must meet without any guarantee of
a return on their costly investments. Starting and growing a busi-
ness is already incredibly difficult. Meeting the unique require-
ments to complete—to compete for defense contracts adds another
layer of complexity, especially for small firms without the resources
of corporate giants or the ear of this President.
I look forward to hearing from our witnesses on what we can do
to revitalize the defense industrial base and to ensure that as de-
fense budgets continue to climb, the government is incentivized to
leverage the capabilities, solutions, innovation, and competition
that small businesses bring to the table.
Thank you very much.
Chairman WILLIAMS. The gentleman yields back. We will now
move to witness introductions.
Our first witness today is Mr. Moshe Schwartz. Mr. Schwartz is
a senior fellow for acquisition policy for the National Defense In-
dustrial Association. And has spent over 15 years advising Con-
gress on acquisition industrial base issues, including roles at the
Congressional Research Service and GAO. Mr. Schwartz has testi-
fied before Congress and written extensively on defense acquisi-
tions reform, contract policy, the Defense Production Act, wartime
contracting, and other related issues. He holds an MBA and M.S.
in public policy from Carnegie Mellon University and a J.D. from
Yeshiva University’s Cardozo School of Law. And he also is a base-
ball guy. There you go. And we thank you for being here today.
Our next witness is Mr. Daniel Jaworowski. Mr. Jaworowski is
president and chief operating officer at Infinity Systems Engineer-
ing, a Colorado-based systems engineering and mission operations
company specializing in payload integration, space operations, and
systems sustainment. He is responsible for the establishing of poli-
cies and strategies in fulfilling Infinity’s mission. Mr. Jaworowski
has extensive experience in aerospace and defense with a strong
track record in portfolio management, space system development,
and major ground systems sustainment programs. He holds a B.A.
in geography and an M.S. in management information systems
from the University of Mary Washington, as well as MBA from
Pennsylvania State University, known as Penn State University to
many, right? I look forward to your testimony.
Our next witness today is Mr. Anthony Closson. Mr. Closson is
the founder and CEO of Colossal Contracting, a Maryland-based IT
and professional services company that provides technology, com-
munications, and mission support solutions to government and
commercial clients. He is a military veteran and a former commu-
nications specialist deployed in Iraq. During his final assignment
at Joint Base Andrews as an IT project manager, he laid the foun-
dation for Colossal Contracting. Thirty percent of Colossal Con-
tracting employees are veterans. He earned a degree from the Uni-
versity of Georgia and Terry College of Business. Thank you for
your service, and we appreciate you all being here today.
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I now recognize the Ranking Member, Mr. Cisneros, to briefly in-
troduce our last witness appearing before us.
Mr. CISNEROS. Thank you, Mr. Chairman. It is my pleasure to
introduce Ms. Angela Dingle, president and chief executive officer
of Women Impacting Public Policy. W-I-P-P, or WIPP, is a national
nonpartisan organization that advocates on behalf of women entre-
preneurs and serves as the voice for the over 14 million women-
owned companies in the U.S. Women Impacting Public Policy has
a proven track record of working directly with our Committee and
others in Congress to shape policies that create economic opportu-
nities for women-owned small businesses and ensure procurement
inclusion and access to the federal marketplace.
Prior to serving as the CEO of WIPP, Angela founded Ex Nihilo
Management, an award-winning technology and management
consultancy that provides governance, risk management, and cy-
bersecurity. She holds a master’s degree in management informa-
tion systems and a bachelor’s in computer science.
WIPP has championed key small business government con-
tracting initiatives, including the Women-Owned Small Business
Program, and has built, led, or joined coalitions to advocate for
small—smart solutions to issues that range from access to capital
and access to technology to family leave and health and childcare.
I just read with interest your piece from 2 weeks ago, ‘‘ The Future
of Innovation Depends on Whether Small Businesses Are at the
Table.’’ I hope my colleagues will as well, and ask unanimous con-
sent to insert this for the record.
Chairman WILLIAMS. So moved.
Mr. CISNEROS. Thank you, Angela, and to all our witnesses for
being here today.
Chairman WILLIAMS. The gentleman yields back, and I also
want to thank everybody for being here today.
And before recognizing the witnesses, I would like to remind
them we got some rules here, rules in Congress, and remind all of
you that your oral testimony is restricted to 5 minutes in length.
If you see the light turn red in front of you, it means your 5 min-
utes has concluded and you should wrap up your testimony. And
if you keep talking after 5 minutes, you are going to hear this.
That will mean you are done. Okay? And so forth.
And also, you may see people coming in and out. There are other
hearings going on today and so you may see other Members going
in and out. It is nothing you said, nothing you did. It is just trying
to cover all the bases.
So with that, I want to recognize Mr. Schwartz for his 5-minute
opening remarks.
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STATEMENTS OF MR. MOSHE SCHWARTZ, SENIOR FELLOW
FOR ACQUISITION POLICY, NATIONAL DEFENSE INDUS-
TRIAL ASSOCIATION; MR. DANIEL JAWOROWSKI, CHIEF OP-
ERATING OFFICER AND PRESIDENT, INFINITY SYSTEMS EN-
GINEERING LLC; MR. ANTHONY CLOSSON, CHIEF EXECU-
TIVE OFFICER AND FOUNDER, COLOSSAL CONTRACTING,
LLC; AND MS. ANGELA DINGLE, PRESIDENT AND CHIEF EX-
ECUTIVE OFFICER, WOMEN IMPACTING PUBLIC POLICY
STATEMENT OF MOSHE SCHWARTZ, SENIOR FELLOW FOR AC-
QUISITION POLICY, NATIONAL DEFENSE INDUSTRIAL ASSO-
CIATION
Mr. SCHWARTZ. Thank you. Chairman Williams, Ranking
Member Cisneros, Members of the Committee, thank you for invit-
ing me today to testify. The views expressed are my own and not
necessarily those of NDIA.
The topic for this hearing, the role of small business in national
security, is an important one. Today I would like to make four
points.
First, small businesses play a critical role in the defense indus-
trial base. In 1953, President Eisenhower signed the Small Busi-
ness Act because he understood the importance of having a level
playing field to give small businesses equal opportunity to compete
for government contracts. General Eisenhower knew the impor-
tance of small business to national security. Small businesses rep-
resent 70 percent of the defense industrial base. Companies like
Onebrief, which supports military operations by providing AI-pow-
ered software to enhance force deployment, and Aurora Engineer-
ing, which provides AI machine learning and simulation to support
NASA missions, are contributing to mission success. But what is
less well known is that small businesses also play a significant role
in subcontracting. Small businesses make up approximately 50 to
55 percent of the subcontractor base for defense prime contractors.
This brings me to my second point. The defense industrial base
is shrinking. The defense industrial base has been shrinking be-
cause fewer companies are willing to work with the Department of
Defense. As a result, the government has less access to advanced
technologies and capabilities that commercial markets have to
offer, less competition, which often results in increased costs, and
a less resilient supply chain.
Here are some numbers. From fiscal year 2011 to 2020, the num-
ber of small businesses receiving DOD contracts decreased by 43
percent, even as obligations to small businesses increased by ap-
proximately 15 percent. According to a Bloomberg analysis, in fis-
cal years 2021 and 2022, the number of small businesses con-
tracting with DOD decreased an additional 5 percent.
This decline is occurring precisely when the federal government
increasingly relies on commercial technologies. The reason for this
decline was explained by Secretary of Defense Hegseth when he
said we have been impossible to deal with, a bad customer who
year after year changes our mind on what we want and what we
don’t want. We have to fix our own house first, provide clarity, sim-
plify the system, allow more people to access it, give that steady
demand signal.
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This brings me to my third point. We need to streamline the ac-
quisition rules and help small businesses find the front door. There
are too many acquisition rules and they are overly complicated. In
a recent poll by NDIA, companies were asked what do you find
most difficult about government processes? Fifty-six percent cited
the burden of the acquisition process and paperwork, 33 percent
cited regulations. Some may argue that streamlining is code for re-
pealing necessary oversight. On the contrary, done right, stream-
lining will increase accountability by clarifying lines of authority,
shortening timelines, and improving outcomes without under-
mining oversight.
Let me give an example. The Office of the National Cyber Direc-
tor reported that current regulations are harming cybersecurity
outcomes and increasing costs through administrative burdens.
Many companies have reported that complying with the regulations
is actually drawing resources away from actual cybersecurity pro-
grams and efforts.
Finally, my last point, we can be smarter in helping small busi-
nesses. Even though the Department has consistently met its over-
all small businesses target, the number of small businesses, as has
been mentioned, working with DOD has declined. There are other
methods that could be just as impactful or more in helping small
businesses. Here are three proposals.
One, promote the use of shared classified workspaces. Small
businesses generally do not have the resources to build or maintain
secure compartment information facilities, or SCIFs, creating a
barrier to entry. We could encourage more use of companies like
Nooks, which offers secure, high-end SCIF spaces for lease. And by
the way, Nooks is a small business. Agencies could also provide ac-
cess to underutilized government-owned SCIF space. Such access
could help small and other businesses compete and provide new ca-
pabilities to the Department.
Two, streamline subcontracting regulations. When regulations
placed on prime contractors must be included in subcontracts, we
are actually placing regulations on small businesses. Congress and
the Department could view regulations to see when the benefits of
flowing down requirements are outweighed by the costs imposed on
subcontractors.
And third, help small businesses submit better SBIR applica-
tions. Companies often do not get meaningful feedback on SBIR
proposals that were not accepted. Better communication with los-
ing bidders explaining the weaknesses of the offer will help them
do better next time and help small businesses learn how to improve
their bids and help DOD by increasing the quality of their offers.
Thank you for the opportunity to share these thoughts. I look for-
ward to your questions.
Chairman WILLIAMS. The gentleman yields back. Thank you
very much.
I now recognize Mr. Jaworowski for his 5-minute opening re-
marks.
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STATEMENT OF DANIEL JAWOROWSKI, PRESIDENT & CHIEF
OPERATING OFFICER, INFINITY SYSTEMS ENGINEERING LLC
Mr. JAWOROWSKI. Chairman Williams, Ranking Member
Cisneros, distinguished Members of the Committee, thank you for
the opportunity to testify before you today. My name is Dan
Jaworowski. I am the president and chief operations officer of In-
finity Systems Engineering in Colorado Springs. We support the
Air Force, the Space Force, intelligence community, and a variety
of major industry primes.
I have got a 30-year career myself in this business. Coinciden-
tally, Infinity celebrates our 30th anniversary today. And I would
like to use my most recent experience working in small business
to appeal for you to look out for the independent small businesses
like us that face what can only really be described as a second Val-
ley of Death.
Infinity has successfully scaled, yet we find ourselves trapped in
a regulatory blind spot, and we are not alone. As a small business
with fewer than 300 employees and no socioeconomic designations,
we are too large to benefit from entry-level small business set-aside
programs. Therefore, we are considered a large and forced to com-
pete for full and open contracts directly against multibillion-dollar
defense primes who possess exponentially more proposal, legal, and
overhead resources. Forcing a growing mid-sized business to jump
straight into the ring with defense giants is the antithesis of
healthy competition. There are countless commercial entities with
valuable capability to bring to the fight who stay away from the
sector for this reason.
Small private businesses like ours are really left with three
choices when we get to this stage. We can stay in the fight and try
to grow organically, which is what we are continuing to do. We can
make our own investments in M&A and try to scale inorganically,
but that takes capital investment that we can’t handle. And if we
take on outside investment, we start to lose control of our business.
And finally, exit the market via an acquisition.
In the past 6 years, nearly a dozen privately held defense firms
in Colorado Springs have sold to larger firms and/or private equity.
All are now a part of significantly larger entities, thereby shrinking
the base as we so see.
I am often asked by my peers and counterparts how I feel about
the recent eight audits taking place in government services, includ-
ing defense. In short, I believe that they are necessary, but, in my
experience, most of these firms seemingly operate within the
bounds of the law and with integrity. I do work with a lot of these
firms that operate under the protections offered by legislation that
is geared towards helping small, disadvantaged firms compete.
However, many of these firms are very far from small, and they
certainly are not disadvantaged.
While intended to assist developing firms, the 8(a) program fre-
quently grants immense advantages to massive multi-entity hold-
ing structures and conglomerations. These firms masquerade as
small businesses, yet have shared corporate services and capital
pools that far exceed the reach of an independent and truly small
business. It is firms like ours that become disadvantaged when ac-
commodation is made where accommodation is not needed.
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The frequent use of sole source noncompetitive direct awards al-
lows these firms to essentially name their price to the government.
That has an impact on the labor force in that local market, and it
severely undercuts the small businesses that have to compete
based on price alone.
The FAR overhaul designed to bring flexibility and speed is both
necessary and overdue. However, these changes are only as good as
the acquisition professionals executing them. Today, contracting
shops are paralyzed by a weaponized protest culture throughout
the industry. The fear of frivolous protest traps contracting offices
in endless acquisition strategy design and source selection morass.
The result is delayed acquisition schedules, sometimes for months
or even years. For a small business that has already sunk hun-
dreds of thousands of dollars into a pursuit, these delays drain
vital capital that we need to fund independent R&D and to sustain
our talent for future pursuits. In the end, the government feels this
in increased rate structures.
From a legislative perspective, this Committee can do a lot to ad-
dress these concerns, and I am hopeful to see some of these things
materialize. Number one, legislate directly to direct an expansion
of NAICS categories and size standards to include the middle tier
of companies, set-asides for larger than X, but smaller than Y com-
panies. Legislate to limit the accommodations of the 8(a) program
to truly disadvantaged firms and prohibit holding companies of any
kind from participation.
Legislate accountability metrics that hold government acquisition
timelines to the same standard as contractor schedules. It should
be no more acceptable for the government to miss deadlines than
it is for the contractor to miss them.
And finally, introduce clear statutory thresholds and financial
penalties to curb frivolous bid protests designed purely for revenue
extension or to force a failed competition. This will liberate con-
tracting officers from a culture of fear.
With that, I thank you, and I look forward to answering your
questions.
Chairman WILLIAMS. The gentleman yields back. Thank you.
And I now recognize Mr. Closson for his 5-minute opening re-
marks.
STATEMENT OF ANTHONY CLOSSON, FOUNDER & CHIEF
EXECUTIVE OFFICER, COLOSSAL CONTRACTING LLC
Mr. CLOSSON. Chairman Williams, Congressman Cisneros, and
Members of the Committee, thank you for the opportunity to testify
today. My name is Anthony Closson, and I am the founder and
CEO of Colossal Contracting, a service-disabled veteran-owned
small business IT value-added reseller and integrator. As a VAR,
we deliver comprehensive IT solutions combining industry-leading
products, engineering expertise, integration services, and lifecycle
support to maintain mission-critical technology environments.
Thank you for holding this hearing on the important role small
businesses play in strengthening America’s industrial base and
supporting national security.
My journey to entrepreneurship began in the United States Air
Force as a communications specialist, affectionately known as a
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wire dog. At my duty stations in Japan, Joint Base Andrews, de-
ployments to Kuwait and Iraq, I saw firsthand how government
agencies depend on both public servants and private sector part-
ners to accomplish mission-critical missions. In 2009, I founded Co-
lossal Contracting and believe service to this country does not end
when we take off the uniform. We build our company on the values
defined our military service: integrity, accountability, teamwork,
mission focus. Today, as Colossal, we support mission-critical pro-
grams across the federal government while creating opportunities
for veterans, military spouses, and other highly skilled profes-
sionals who want to serve their nation.
My testimony today focuses on the role of the IT VAR in the in-
dustrial base. Companies like ours serve as the bridge between
technology manufacturers and government agencies, helping evalu-
ate, integrate, secure, and deploy mission-critical technology solu-
tions. As the federal government pursues modernization initiatives
like the GSA OneGov Strategy, we support these efforts, leverage
buying power, and deliver better value to taxpayers.
However, those efforts must continue to preserve meaningful op-
portunities for small businesses. A strong supplier base depends on
both innovation from the manufacturer and execution from small
business like Colossal. There are three issues I would like to high-
light today.
First, the federal government’s industry classification system has
not kept pace with modern technology marketplace. Today’s tech-
nology procurements often combine hardware, software, cloud, AI,
cybersecurity, technical support into one single requirement, yet
there is no dedicated classification for these buys. Establishing a
separate IT VAR NAICS code would provide greater clarity on how
technology solutions are delivered to government customers.
Second, the current 150-employee SBA size standard no longer
reflects the realities of today’s technology sectors. Reaching 151
employees does not mean a company is a large business, yet it
forces those companies to compete against multinational corpora-
tions that employ tens of thousands of people. Increasing the
threshold to at least 300 would allow successful small businesses
to continue to grow and compete while strengthening the federal
supplier base.
Third, I strongly support robust cybersecurity requirements, in-
cluding the Cybersecurity Maturity Model Certification program.
At Colossal, achieving CMMC certification required substantial in-
vestments in technology, compliance, and personnel. As implemen-
tation continues, cybersecurity requirements should remain risk-
based and scalable so that small businesses can continue to con-
tribute to the industrial base while meeting the government’s secu-
rity objectives.
Before I close, I would like to thank the Committee for its leader-
ship in passing H.R. 2804 to codify the Rule of Two. This legisla-
tion helps preserve small businesses to compete for federal work
and strengthen the industrial base by ensuring continuing to con-
sider qualified small businesses as your first solution. Small busi-
nesses are innovators. We are job creators. We are veteran advo-
cates, problem solvers, and mission partners. When small busi-
nesses succeed, our government gains competition, resilience, and
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access to the expertise needed to meet the ever-evolving national
security challenges.
Thank you for this opportunity to testify today and for your con-
tinued support on America’s small businesses and the veteran com-
munity, and I look forward to any and all questions. Thank you.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Dingle for her 5-minute opening remarks.
STATEMENT OF ANGELA DINGLE, PRESIDENT & CHIEF
EXECUTIVE OFFICER, WOMEN IMPACTING PUBLIC POLICY
Ms. DINGLE. Good morning, Chairman Williams, Ranking Mem-
ber Cisneros, and Members of the Committee. My name is Angela
Dingle. I am president and CEO of Women Impacting Public Pol-
icy, a national nonpartisan organization advocating on behalf of
women-owned businesses. I am also a small business owner with
more than 20 years of experience in the federal marketplace, help-
ing companies navigate it successfully. Thank you for the oppor-
tunity to testify.
This hearing asks the right questions. Small businesses are not
bystanders to America’s industrial base. They are its foundation. A
procurement system built on a broad base of small firms is more
competitive, more resilient, and harder for our adversaries to dis-
rupt. A narrow one built up around a smaller pool of larger con-
tractors is a national security risk. And yet that base is shrinking.
In fiscal year 2024, agencies awarded a record $183 billion in prime
contracts to small businesses, the highest total ever. But the num-
ber of firms doing that work has been cut nearly in half from
roughly 121,000 in 2009 to about 63,000 in 2022. Record dollars are
flowing to fewer and fewer companies. As firms leave, agencies
grow more dependent on a smaller group of large incumbents, re-
ducing competition, raising costs, and weakening the government’s
own leverage. It is the opposite of a strong industrial base.
What is driving small businesses out? In a word, unpredict-
ability. As a business owner, I factor risk into every decision: how
I spend my time, how I price, whether to pursue an opportunity at
all. I need real confidence that I have a chance at winning to jus-
tify the investment. When contracts are awarded and then abruptly
canceled, when policy shifts without warning, that confidence
erodes and small firms simply walk away. Stability and predict-
ability are not luxuries. They are conditions that keep us in the
market and investing in the capacity this country needs.
This is why the Rule of Two matters so much. It has long been
a bedrock protection for small businesses, and any threat to it,
even a potential one, raises risk and accelerates consolidation. Con-
gress should retain and codify the Rule of Two as a true shall re-
quirement applied consistently across contract vehicles. WIPP is
proud to support the Protecting Small Business Competition Act of
2025, which does just that. We commend the Committee for its
unanimous approval of this bill and hope that the full House will
follow your lead.
I now want to talk about a program that is near to our mission
at WIPP, the Women-Owned Small Business, or WOSB, Program.
The WOSB Program and similar programs are not handouts, nor
are they charity. They exist to level a field that is not yet level and
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to give the government the widest possible pool of qualified com-
petitors, and they work. In fiscal year 2024, women-owned small
businesses won $31.7 billion in federal contracts, and the certified
WOSB Program grew to more than 13,400 firms. Women-owned
firms are winning contracts and delivering, but only when they get
a fair shot to compete. That is good business and good government.
A few practical points. Subcontracting and the chance to grow
into a prime is how small firms become the durable suppliers the
industrial base relies on. Both deserve protection. And the offices
meant to champion us inside agencies, the OSDBUs, are under-
staffed or vacant.
As the administration reexamines federal programs, the wide
reach of those reviews has inadvertently captured offices and re-
sources that are vital to small firms. Even though supporting small
business is squarely a competition and capacity issue, not a periph-
eral one, a program is only as strong as the people charged with
making it work. Small businesses are not just beneficiaries of fed-
eral contracts. We are essential partners in this nation’s security
and prosperity. We bring the innovation, agility, and cost savings
that lead the government to meet its mission quickly and effec-
tively.
Protect and expand our role, and you strengthen the industrial
base. But if we keep facing instability and a shrinking chance to
compete, you should not be surprised when fewer of us remain.
Thank you, and I look forward to answering any of your ques-
tions.
Chairman WILLIAMS. The gentlelady yields back. Thank you.
We will now move to the Member questions under the 5-minute
rule. I recognize myself for 5 minutes.
Mr. Schwartz, the number of contractors supporting the defense
industrial base has shrunk by roughly 40 percent since 2010. Ris-
ing regulatory costs were cited as a major reason small businesses
are leaving these federal contracting programs. For small firms,
every dollar spent on compliance is a dollar not spent on innovation
or production or workforce or even cybersecurity. So the question
will be, how has the Trump administration’s revolutionary FAR
overhaul addressed that challenge?
Mr. SCHWARTZ. Thank you. So, in a bumper sticker, I would
say one of the ways to improve acquisition generally, and for small
businesses as well, is fewer regulations, more consistently enforced
by an empowered workforce. And this effort to rewrite the FAR and
then the DFAR, the Defense Federal Acquisition Regulation,
strikes at two of those. By deregulating, like we have talked about,
like we have all talked about, it gives small businesses more oppor-
tunity to focus on the business of what they are delivering instead
of non-added valuate, non-added regulation and compliance. That
is one.
But the second thing, which might be the even more important
impact that people don’t necessarily think about, is the message we
are sending to the workforce. The message we are sending is less
about compliance and more about doing the right thing and em-
powering them. And I am hopeful that this rewrite is really going
to send that message because unless we deal with the workforce,
almost everything else is playing around the margins.
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Chairman WILLIAMS. All right. Thank you.
Mr. Jaworowski, as the national security landscape becomes in-
creasingly shaped by cutting-edge software and artificial intel-
ligence, the defense industrial base is under pressure to modernize
faster than traditional acquisition process was designed to support.
So the question is, from your position leading Infinity Systems En-
gineering, how do you see the role of a small business evolving over
the next decade, and what structural changes are most necessary
for the defense industrial base to fully leverage main street’s capa-
bilities?
Mr. JAWOROWSKI. Thank you for the question, Mr. Chairman.
I think that the recent extension of the Small Business Innovative
Research Program is going to go a long way to help satisfy some
of that gap that exists, particularly when it comes to AI. AI is
something—that is an area that we operate. We are active in the
SBIR Program. I would love to see it become permanent, not just
a 5-year extension so that we don’t have another lapse like we did
recently. But that program is very, very encouraging for new en-
trants to this market to come in and participate. There are a lot
of companies out there that don’t participate in the defense indus-
trial base that can absolutely bring capability that is well needed,
and that program is really the way to do it.
Chairman WILLIAMS. Okay. Thank you.
In the limited time I got, Mr. Closson, Colossal Contracting’s
identity as a veteran-owned business speaks to something larger
happening across the federal landscape, and it represents the grow-
ing recognition that smaller companies can often move faster and
more effectively, stay closer to the mission needs of government
customers. So my question is, in an environment where agencies
are looking for partners who are even—who can rapidly integrate
emerging technologies and adapt to changing requirements, how
does Colossal Contracting leverage its veteran-led mindset and
small business agility as a competitive advantage?
Mr. CLOSSON. Thank you, sir. Being agile, right? Being aggres-
sive. I mean, that is part of who we are and what we are trained
to be as veterans. That is why I think it is great to see so many
veterans going into the entrepreneurial, you know, mindset and to
becoming service-disabled veteran-owned small businesses. That
value that we are trained with and the ethics that we have and the
drive from being military have delivered absolute value.
And especially in supporting the defense industrial bases, you
know, a lot of us veterans are dealing with the missions that we
dealt with when we served. So we are able to see what the issues
are, understand their mission, and do what we can to elevate it.
And because we are not massive, we don’t have these huge layers,
right, we are dealing directly with the program, with people that
understand the mission. And what we are doing is we are taking
all the different types of technologies as an IT VAR and as a mas-
ter aggregator and bringing those together to answer the mail and
to elevate their solution, so—and to elevate their mission.
So, you know, to answer, sir, is who we were trained to be is de-
livering absolute max value. And I believe it will continue to do
that.
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Chairman WILLIAMS. All right, thank you. The gentleman
yields back.
I now recognize the Ranking Member for 5 minutes of questions.
Mr. CISNEROS. Thank you, Mr. Chairman.
Ms. Dingle, with the administration’s ongoing attack on the 8(a)
and legislation to eliminate the women-owned small business pro-
grams pending, can you reiterate for the Committee the value of
the SBA’s programs not only for small businesses, but for the gov-
ernment and the industrial base?
Ms. DINGLE. Thank you, Ranking Member. The Women-Owned
Small Business Program and the SBA programs like the 8(a) Pro-
gram—the 8(a) in particular is a business development program,
and the Women-Owned Small Business Program—they create a
level playing field. They are not handouts.
For every contract that I have ever won, I had to compete for
those contracts, and so do the other businesses. When, as my col-
league here mentioned in his comments, when we have to compete
against multibillion-dollar firms who have existed for hundreds of
years, it is more costly. It creates an unpredictable environment
that we are not able to determine whether or not we should invest
the dollars that are necessary. And it makes it really hard for busi-
ness owners to be able to grow.
One contract award in one of those programs can be a game-
changer. It can completely change the trajectory of the company be-
cause we simply need a foot in the door, and these programs create
those opportunities for you to get a foot in the door.
Mr. CISNEROS. Yeah. You know, a company like General Dy-
namics, right, did not start out as a big corporation. It started out
with kind of doing a small company doing a contract for NASA,
and, and we need to have those game-changers out there.
But halfway through this fiscal year, Ms. Dingle, documents cir-
culated online showing SBA changed their scorecard criteria and
lowered each agency’s spending targets. What will be the impact of
SBA telling agencies they should spend less, potentially $12 billion
less on small business?
Ms. DINGLE. I think it just flies in the face of what this Com-
mittee and this conversation that we are having. If we continue to
say that small businesses are the engine of the U.S. economy, then
we have to create an opportunity for those small businesses to com-
pete.
One of my other colleagues mentioned the burden that is on the
contracting officers. Some of these programs assist them in getting
their work done. And sometimes they just need an easy button.
They will take the least path of resistance. And so if you say to an
agency, you only have to spend $12 billion less than you did, they
will simply do that and small businesses will be cut out. Ulti-
mately, for the government, that means less innovation. It means
less competition, and it means additional cost because we believe,
and I am certain my colleagues would agree with me, that small
businesses can do it cheaper and faster and with more flexibility.
Mr. CISNEROS. Thank you very much for that answer.
Mr. Closson, the FAR rewrite removes the justification and ap-
proval requirements for direct awards when agencies utilize the
Service-Disabled Veteran-Owned Small Businesses or other small
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business programs. Will these changes make it easier to provide
contracting opportunities to serve disabled veteran-owned busi-
nesses?
Mr. CLOSSON. Thank you, sir. I believe so. I believe removing
the J&A requirements and getting contracting officers also com-
fortable with doing sole sources. The sole source has been around
for a while for the SDVOSBs, but not many people use it. Con-
tracting officers see it as difficult. They don’t want to have to jus-
tify things. So we are hoping that that mixed with the Rule of Two
is really going to open up some things and be able to showcase the
service-disabled veteran-owned small businesses out there and be
able to provide that max value.
So to answer, sir, absolutely, I think that it will, hopefully, open
up some more solid SDVOSBs to doing sole source work, and that
mixed with the Rule of Two, it should open things up.
Mr. CISNEROS. Since you mentioned the Rule of Two, let me
ask you this. Can you quickly address what a sunset of the Rule
of Two would mean for small business participation in the indus-
trial base?
Mr. CLOSSON. It would hurt. If that went away and contracting
officers and program people were not evaluating the value of small
business, I think it would impact us greatly. I mean, we need the
Rule of Two. We need there to be that first look, especially, hey,
there is the place for the systems integrator where they are work-
ing on massive programs that protect this nation, and I am good
with that. And we work with a lot of them. But there is a lot of
amazing opportunities for the agility and the expertise that small
businesses bring, and we need that Rule of Two.
Mr. CISNEROS. All right. Ms. Dingle, since you mentioned the
Rule of Two, in our last 30 seconds here, can you answer that same
question. What would it mean if this sunsetted?
Ms. DINGLE. I agree. I mean, it would just be disastrous for
small businesses. That Rule of Two helps me in my decision-mak-
ing as a business owner when I am evaluating whether or not I am
going to compete on an opportunity. The Rule of Two makes it
something that is viable for me to consider for competition. And the
predictability of knowing what is going to happen in this environ-
ment is what makes me decide whether or not I am going to con-
tinue to do business in the federal marketplace.
Mr. CISNEROS. All right. Well, thank you for your testimony,
and I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Alford from the great state of Missouri for
5 minutes.
Mr. ALFORD. Well, thank you, Mr. Chair.
I am also on the Appropriations Committee, and we have two
markups across the hall, so I am kind of back and forth. But I did
not get to listen to your testimony, but I did read it, and I am high
on the end there. I am excited that you are here today so thanks
for coming here.
When most people think about our national defense, they think
about large defense contractors, but behind every major weapon
system, aircraft, and military platform is a network of small busi-
nesses providing innovative technology, specialized manufacturing,
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and critical supply chain support. Small businesses are essential to
maintaining America’s technological edge, and they are often the
first to deploy emerging capabilities in areas like artificial intel-
ligence, cybersecurity, advanced manufacturing, and electronic war-
fare, and they also provide the competition and innovation nec-
essary to make sure that our military has access to the best capa-
bilities available.
However, despite their importance, the number of small busi-
nesses participating in federal contracting has declined signifi-
cantly, raising concerns about consolidation within the defense in-
dustrial base and long-term resilience. And as we face increasing
competition from adversaries such as China, it is critical that we
expand opportunities for innovative American companies to enter
and succeed in the defense marketplace.
Today’s hearing provides an opportunity to better understand
those challenges and identify ways Congress can strengthen small
business participation in our defense industrial base. I represent a
great base in the DOD family, Fort Leonard Wood. We also have
Whiteman Air Force Base, but we have exciting things going on.
We have a technology park, 10 square miles on the base in Fort
Leonard Wood in the southeastern part of our district, where we
are trying to attract more small defense capabilities there.
So Mr. Jaworowski, did I pronounce that correct?
Mr. JAWOROWSKI. Very close.
Mr. ALFORD. All right, very close. Jaworowski, better? All right.
Mr. JAWOROWSKI. Better.
Mr. ALFORD. Your business started out contracting with DOD
and then won an SBIR award. What led you and your company to
pursue that award after receiving multiple defense contracts?
Mr. JAWOROWSKI. Thank you for your question, sir. We—you
know, you hit the nail on the head at the beginning of your state-
ment and question there. You know, Infinity has been around for
30 years, but we were founded on subcontracts with the large
primes. So some of those large primes today are still some of our
biggest customers. We are primarily a services company providing
engineering services to those primes and to DOW on the satellite
operations front.
About 5 years ago, we made the decision that we were seeking
out some higher margin work. We didn’t really want to leave DOD
and go into the commercial space, and we saw SBIR as an oppor-
tunity to bring some ideas and innovations to the table that we saw
we saw as gaps with some of the large primes that were probably
not meaty enough for them to go after themselves, but they were
difference-making enough for us that we were able to innovate and
capitalize on that program, and it has been a game-changer for us.
Mr. ALFORD. Mr. Schwartz, as you know, Secretary Hegseth
proposed a $1.5 trillion defense budget for fiscal year. We are going
to be taking up the defense appropriations in the coming weeks
right across the hall. How can Congress make sure that small busi-
nesses are positioned to compete for these dollars?
Mr. SCHWARTZ. That is a great question. I think there are a
lot of examples. There are a lot of things that Congress can do to
help small businesses have a level playing field, and I will just reit-
erate two of them.
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One is when a company loses an SBIR, right, they don’t nec-
essarily get the feedback that would help them do a better bid next
time, right? Now, this actually, because GAO bid protests had been
mentioned, this was a problem with bid protests where companies
didn’t know why they were losing bid protests. So Congress actu-
ally legislated and said, DOD, you will do enhanced debriefings,
and they did. And companies thought that was very helpful. And
in fact, my understanding is the data said that bid protests de-
creased because companies understood. That is one thing that Con-
gress could do. They could say you shall give better debriefings for
SBIRs, you know, so companies know how to compete better.
And another one very quickly is shared SCIF space. Companies
don’t always have the investment if they are small businesses to
invest in that, which means they can’t compete for the bid——
Mr. ALFORD. Right.
Mr. SCHWARTZ.—and then they can’t perform. Excess SCIF
space in GSA, for example, is a great way, like, for a pay-for-fee
like a WeWorks——
Mr. ALFORD. Right.
Mr. SCHWARTZ.—is another opportunity.
Mr. ALFORD. Well, two very innovative ideas. I think we had
similar legislation with other government contracts that passed
through this Committee and the full House, I believe, that required
the government to give explanations to small businesses of why
they did not secure a contract. And I think maybe this would be
good to look at this in this case and also the shared SCIF space.
Great ideas. We will get to work on that. I yield back. Thank
you.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Goodlander from the great state of New
Hampshire for 5 minutes.
Ms. GOODLANDER. Thank you, Mr. Chairman, and thank you
to our witnesses for being here today for this really important hear-
ing.
I want to start with two numbers that have come up in this
hearing: 51 to 5. Fifty-one to five. That is how many prime defense
contractors we had in this country in 1993, 51. Just 7 years later,
we were down to 5. And this was driven by consolidation that the
Pentagon itself blessed. You know, fast forward to today, we are
seeing this same movie once again, even more consolidation.
And Mr. Jaworowski, I want to be sure to emphasize this very
powerful portion of your written testimony where you described the
second Valley of Death, this frozen middle where small businesses
like yours are trapped with three really challenging options. The
first, and I applaud you for pursuing it, to continue to try to oper-
ate in this environment where the deck is stacked against you, the
rules are not written for you. And I want to work with you and
each one of our witnesses who are here today to help us write bet-
ter rules of the road.
When I think of President Eisenhower, General Eisenhower, Mr.
Schwartz, you invoked him, I think he would be very disappointed
in the progress that we have made since 1953. We have reversed
course from where we should be. And I came to Congress having
worked in the Antitrust Division at the Justice Department ,where
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we worked really hard to dust off the federal code to give and em-
power people across our administration, including in the Pentagon,
the confidence that they can enforce the rules that we have on the
books. And I am here now and I want to write better rules of the
road that are going to help businesses trapped in the second Valley
of Death.
The three options you have in front of you, can you just say a
bit more about the two other bad options that are available to a
small business like yours, sir, in the second Valley of Death?
Mr. JAWOROWSKI. Sure, I am happy to. You know, really sell-
ing out is what we are seeing most prevalent. Most companies are
getting to our size and they find that this competitive landscape
has changed and it gets frustrating and it is the easy answer is to
just take the exit.
Ms. GOODLANDER. Sell to a prime.
Mr. JAWOROWSKI. Sell to a prime or sell to private equity. Pri-
vate equity is what we see more commonly and they are consoli-
dating small businesses like ours, ultimately for a sale of that enti-
ty to probably to a prime in a more strategic transaction.
The second road is really to say, we are going to go try to acquire
another company ourselves. And that is capital intensive.
Ms. GOODLANDER. Yeah.
Mr. JAWOROWSKI. And that is a really, really challenging deci-
sion to make for an independent, privately held company. And if—
the capital is just not there to do something like that. So we would
have to take on an outside investment, and when we do that, you
are probably going to lose some control over your company, and we
are not interested in doing that either.
Ms. GOODLANDER. Well, I appreciate that.
Mr. Closson, can you speak to—I gather you are also riding
through the second Valley of Death.
Mr. CLOSSON. Yes, I am. You know, we are on that, in our
world as an IT VAR, as soon as you go over 150, you are now com-
peting against systems integrators and very large companies. If
you walk into Colossal’s headquarters today, you will hear music
playing, people, you know, enjoying life, but it has a small business
feel, right? It is a culture that we created that we will lose, right?
If we can’t compete, because as soon as we go over 151, without
things like the gentleman was saying here, losing who you are,
selling out to private equity, you know, making a massive invest-
ment that you don’t have, right, you are going to lose who you are.
I said the other day to our group that I wish and I hope and I
will work as hard as I can that Colossal becomes a legacy company
and that we can stay around for a long time. But like I mentioned,
I—my fear is I am constantly battling this under 150. And because
we are an IT VAR, people will see that we are selling a lot of
equipment with our services and look at us and say, hey, well, you
are a large business, right?
Ms. GOODLANDER. Right.
Mr. CLOSSON. Even though we are 105 people. So we are con-
stantly in that battle and it is something that we have to fight for.
Ms. GOODLANDER. Well, I really look forward to, you know, as
you point out, determining whether a business qualifies as small
sounds like an easy exercise. We clearly have not gotten it right
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under federal law, so I really look forward to working with you on
this important legislative measure that we should correct as soon
as we possibly can.
What you just described as footnote 18, as soon as we are talking
about footnotes and manuals that aren’t in the U.S. Code, I think
we haven’t given you the clarity that you need. So I appreciate
that.
I—well, I guess I have run out of time, but I really appreciate
our witnesses being here today. And with that, I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Wied from the great state of Wisconsin for
5 minutes.
Mr. WIED. Thank you, Mr. Chairman. Thank you to all of our
witnesses for being here today.
Main Street America is not only the backbone of the United
States economy, but also of our defense industrial base as contrac-
tors and subcontractors. As the new Chairman of the Sub-
committee on Contracting and Infrastructure, I am committed to
ensuring that small businesses are given fair opportunities to com-
pete for government contracts. Bills like Protecting Small Business
Competition Act, which passed out of this Committee 2 weeks ago,
go a long way to ensuring our nation’s small businesses are af-
forded those opportunities. I look forward to discussing the state of
government contracting for small businesses, including the Depart-
ment of War’s newly implemented Cybersecurity Maturity Model
Certification.
Mr. Jaworowski, the CMMC, which is the Cybersecurity Matu-
rity Model Certification, is a tiered certification process that is
based off of sensitive data that contractors have access to. I have
heard from some of the small business owners in our area that the
cost to comply with the Department of War’s new cybersecurity re-
quirements can be upwards of $100,000. What did this process look
like for you?
Mr. JAWOROWSKI. Thank you for your question. I would, I
would say upwards of several hundred thousand dollars is probably
the more likely answer. That is the—that is what we have seen.
For us, we were pretty fortunate. We had made some decisions
early on about 5 years ago that once the first drafts of CMMC com-
pliance were coming out, that we were going to lean in and start
to do that work. So we started to do that work with existing IT in-
frastructure and existing IT personnel. We had to make invest-
ments along the way in order to be compliant, but we were able
to limit the overall cost of that, but it took 5 years to be ready.
So if we were to fast forward to today, if I were starting that
process all over again, I would have to hire a staff of several indi-
viduals to come in and help us be compliant, and if I was trying
to do it inside of a year, it would definitely cost us several hundred
thousand dollars.
Mr. WIED. Do you think that there are issues with overclassi-
fication?
Mr. JAWOROWSKI. Absolutely. Absolutely. There are issues
with overclassification. And to the degree that CMMC is geared to-
wards managing controlled unclassified information, what we are
seeing now is anything that is unclassified is now being called CUI
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for the sake of CMMC. So it is really when it comes to outside enti-
ties trying to add to the defense industrial base, all we have really
done is create another barrier to entry.
Mr. WIED. Thank you.
Mr. Closson, while large contractors have an easier time absorb-
ing the costs associated with CMMC compliance, small contractors
required to meet the same standards, right, with, I mean, a frac-
tion of the resources. So what has achieving CMMC compliance
looked like for you in your business?
Mr. CLOSSON. It was extremely difficult. But we understand
the value. We clearly understand the value of it. But we have, you
know, we have had things like ISO certifications and CMMI, be-
cause we do have a lot of work in the defense space. That helped
us prepare for it. But we had dedicated resources. We had, you
know, auditors that you have to pay for, we have pre-auditors that
you have to pay for. We understand the value of it and I truly do.
My concern isn’t for just Colossal, it is for the when Colossal was
10 people. Like, I don’t know how that would be done. Again, I un-
derstand the importance and I stomp that completely. But the re-
ality is, is when I was going through this, it made me feel, man,
when I was 10 people, I would have been able to do this. So we
would luckily have a great team and great partners. So we were
able to get it done, but it definitely was a big lift.
Mr. WIED. Well, thank you for serving in the Air Force. And
thank you for all your efforts in helping those that are disabled,
disabled veterans. I know that is very important and near and dear
to your hearts.
I want to talk a little bit about the—what is—the acronyms in
the government are great, SDVOSB Program that, of course, was
designed to ensure that service-disabled veteran-owned small busi-
nesses have a meaningful opportunity to compete for federal con-
tractors. In your experience, how has that certification changed
your ability to compete in the defense marketplace as a small busi-
ness?
Mr. CLOSSON. It has been amazing. Number one, it is a very
proud designation that I have been honored to have and that the
SBA is blessed with creating, but now holding the certification. But
being able to set things aside has not only helped Colossal, but our
entire environment.
I am going to the DAV and speaking to entrepreneurs, and they
are wanting to start businesses because of this program. To see a
room of 50 disabled veterans now with the motivation to do it be-
cause there is proven success, like a Colossal, is one of the biggest
gifts that I think that I can give the veteran community. So for Co-
lossal, it has been an amazing thing. Now hopefully getting the
Rule of Two to dive in a little more and now open up the J&As for
more sole sources. I hope we attract more people in, but it has been
a blessing.
Mr. WIED. All right, thank you. I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Dr. Morrison from the great state of Minnesota
for 5 minutes.
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Ms. MORRISON. Thank you very much, Chairman Williams, for
holding this hearing, and thank you to our witnesses for being here
today.
In an era of rapid technological disruption, the agility and speed
of small businesses are exactly what we need to maintain our mili-
tary advantage. However, we face an urgent reality. Small business
participation in the defense industrial base has steadily stagnated,
presenting a serious risk to our national security. To reverse this
trend, we have to look closely at where the barriers are highest and
where regional solutions are succeeding.
I am proud to say that my home state of Minnesota is combating
this challenge head-on, and there are small number of—there are
a number of small businesses doing phenomenal work in the de-
fense ecosystem. One small business based in my district, Opera-
tive X, is working on the cutting edge of combat medicine. And is
developing a sophisticated deployment system to help triage med-
ical decisions on the battlefield. Using advanced AI-based
diagnostics, this technology aims to extend the capabilities of mili-
tary hospitals into the field, providing combat medics with the in-
formation they need to make quick, informed decisions that get
wounded warfighters the care they need as quickly as possible. As
a physician myself and the wife of an Army combat veteran, I am
proud that this great work is happening in my backyard.
Competition is essential for innovation, and it is critical that
small businesses know how to effectively compete and know what
resources are available to them across the federal government.
Aligning these resources is essential to reducing barriers for small
businesses with the potential to transition dual-use capabilities for
our urgent national security needs.
Ms. Dingle, how can federal workforce and education programs
better align with the needs of small businesses supporting the de-
fense industrial base?
Ms. DINGLE. Thank you for the question. I really think it is im-
portant to have resources that are available to assist small busi-
nesses with technical assistance and access to training and edu-
cation that will allow them to take advantage of new technologies
such as AI. We have worked with our partners and we understand
how important AI is to the growth of small businesses, but deci-
sions about the affordability of those technologies, the availability
of those technologies, and how they might be available, access to
them, those conversations are happening without those small busi-
nesses. And it is the small businesses that bring that innovation
to the defense industrial base.
So ensuring that small businesses are involved in those conversa-
tions, that the pricing and access to those technologies are avail-
able to small businesses because we simply can’t afford to buy into
those technologies and create new products and services at the
price point that exists right now.
Ms. MORRISON. Thank you for that answer. Another one for
you. In fiscal year 2024, fewer small businesses received govern-
ment contracts than the year before, and the women-owned small
businesses receiving contracts decreased by an even larger percent-
age. An SBA report found that women-owned small businesses ac-
counted for a quarter of the total small business decline in 1 year
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alone. What factors contribute to more women-owned firms leaving
the industrial base?
Ms. DINGLE. There are a number of factors that contribute. My
colleague mentioned the difficulty in getting contracting officers to
understand the program and how to use the program, so more edu-
cation being available to them. And with a lot of the changes that
have happened with the federal workforce, then we are starting
over, having conversations about how you might be able to leverage
that program.
There are misunderstandings about the program that, you know,
it might be some form of handout as opposed to a way to increase
competition. And then the complexity of complying and competing
in the federal marketplace just continues to get more and more dif-
ficult. And so if I have to evaluate the ability to compete on a pro-
gram against a large company, that may cause me not to want to
compete.
Some of the DOGE changes that we have seen have just com-
pletely wiped out business owners. I received a phone call very
early on last year, as soon as one of the executive orders were
passed, and one of the business owners—I have received many, but
this one very early on in January essentially said, I will be out of
business by May if these things move forward. So I think that Con-
gress can really help us by not just saying we want to, you know,
modernize this process or we want to revitalize something, but
hearing the voices of small business to understand what that looks
like.
WIPP has always—we always come to the Hill and offer we are
here to help, right? We don’t want to—you know, we are not here
to bash you over the heads, but we really want to be able to help
you to find solutions around that. And keeping that woman-owned
small business program and other small business programs avail-
able and open and usable creates access and opportunity for small
businesses.
Ms. MORRISON. Thank you so much.
One for you, Mr. Closson. A recent study found that contract ter-
minations and declining market participation for small businesses
are creating defense supply chain innovation and competition con-
cerns. So what do you think are the short-term actions we can take
to help offset DOGE’s negative impact on the industrial base?
Mr. CLOSSON. So the reality is, you know, we have to get out
there and compete, and this is the landscape that we are in right
now. I believe there is competition to be had, but we need to con-
tinue to be agile, and we need contracting officers and the govern-
ment to be able to have enough opportunities out there for us in
the prime. We will see that number go up as opportunities are
there. There are still plenty of good small businesses out there. We
just need to see as many opportunities as we can.
Ms. MORRISON. Thank you for getting an answer.
And I have exceeded my time, Mr. Chair. I yield back. Thank
you.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Fuller from the great state of Georgia for 5
minutes.
Mr. FULLER. Thank you, Mr. Chairman.
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Mr. Closson, great to see another Airman in the room. I was
going over your bio, had an admonishment for you real quick. I
didn’t see the University of Georgia in the bio that I have. So just
a quick question, you would agree with me that is a far superior
school than the TCU or something?
Mr. CLOSSON. Don’t bring me into this.
Mr. FULLER. And I wanted to ask you real quick, specifically re-
lated to you were talking about giving speeches to veterans at a
DAV. One of the things that I think with suicide rates in the vet-
eran community being so high, it is just losing that sense of pur-
pose, losing that sense of service. What is your number one piece
of advice that you give to veterans in that speech specifically to go
through this process of making sure you can get the certification
for the Service Disabled Veteran-Owned Small Business Program?
Mr. CLOSSON. Right. I am very truthful with them. When I
speak at the DAV, I don’t talk about the clouds and the unicorns
and all the great stuff that come, you know, 7 years, 17 years, for
me almost 18 years. It is hard and no one is going to do it for you,
you know. And there has been a lot of programs like the DAV now
that are available.
When I sit through these things, you know, we are giving them
the roadmap, right, but we are just honest with them on what it
takes, but also to be there for each other. The support programs
talk a lot about small businesses and SDVOSBs and how to be suc-
cessful in GovCon. But we talk equally about being there for each
other and removing the stigma of being the tough guy and saying,
hey, man, are you okay? Right? Because it is challenging. I mean,
all of us have opened small businesses. This is a challenge to get
into GovCon. It is not easy.
So what we focus on is being there for them through their—the
programs like the DAV has that lays out the structure of how to
get there, and then having a community with you that has your
back, because it does put a lot of stress on you. And a lot of these
gentlemen and ladies have PTSD. And—but I have seen some
amazing success stories come from those programs, and we are
going to keep seeing it.
Mr. FULLER. Yeah. Well said. Airpower and I appreciate you
being here.
Mr. CLOSSON. Yes, sir.
Mr. FULLER. Mr. Schwartz, I wanted to turn to you in my re-
maining time here. I don’t know if you would agree with me, so cor-
rect me if you feel like I am wrong. I feel like the American defense
industrial base is broken. But if you had to put it on a scale of 1
to—it is 1 is doing fine to 10 it is completely broken. Where would
you put the American defense industrial base?
Mr. SCHWARTZ. So first, I disagree with you on the ranking of
colleges. Put that out there.
Mr. FULLER. Way to stall for time.
Mr. SCHWARTZ. Yeah. No, no, second of all, I wouldn’t say it
is broken. I would say it is a system designed for something else.
Like if you are going into the Rockies in Colorado, you probably
don’t want a Corvette. You probably want a Ford 150, right? So we
were designed—the acquisition system was designed for a different
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era, for a different concern. And we have not shifted to the right
system or the right car. It is substantially problematic.
I will just give one example and I think it highlights the whole
concern. The attack drones that we used most recently in Iran were
reverse engineered from the Iranian Shaheds. That shouldn’t have
to happen. So if that——
Mr. FULLER. Yeah, absolutely. And obviously, you have high-
lighted here in your testimony that small businesses can help fix
those problems. You refer to it as small businesses finding the
front door, and back home I would call it the front porch.
One of my concerns is that the defense industrial small business
base that may get into this may be on the coast, East and West
Coast. I represent Appalachian communities. What would be your
one piece of advice for me as a legislator or leader to make sure
small businesses and entrepreneurs in Appalachia are getting in-
volved in the defense industrial base? What can I do to help them?
Mr. SCHWARTZ. I am going to say two. I apologize. One is work
really hard to get rid of all those ancillary regulations that are not
priorities, right? Cybersecurity is important, but you can’t focus on
your job and cybersecurity when you are also given 20, 25 other
regulations that really aren’t as important anymore.
And the second is help them figure out where to open the door,
right? And sometimes that might be helping them, giving them the
contact. Sometimes it might be legislating in ways to ensure that
DOD is reaching out because what we need from our acquisition
workforce, and this is, I think, the key here, is for them to have
the time and the support to slow down and say, I don’t want to
push the easy button. I want to find the best solution. And some-
times the best solution is a small business. But if you don’t have
the time to sit back and say let me do my market research and
really scout out where to go and who is out there, we are not going
to get them.
Mr. FULLER. Yes, sir.
Mr. Chairman, I yield back my time. Thank you for your testi-
mony.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Tran from the great state of California for
5 minutes.
Mr. TRAN. Thank you, Mr. Chairman and the Ranking Member,
for today’s hearing. Thank you for our witnesses for being here
today.
Los Angeles and Orange Counties are home to one of the nation’s
most dynamic aerospace and defense manufacturing and research
ecosystems. I am especially proud to represent Auriga Space, lo-
cated in Garden Grove. I have had the chance to tour their facility
with their CEO, Winnie Lai, and see firsthand the amazing work
that they are doing to develop the first electromagnetic launch sys-
tem for rockets. From advanced manufacturing and satellite tech-
nology to defense software and precision engineering, small busi-
nesses throughout southern California are helping build the sys-
tems that keep America secure.
Small businesses are often the source of breakthrough tech-
nologies and specialized capabilities that our national security de-
pends on, but there is a troubling disconnect. The federal govern-
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ment is spending more on our national security than ever before,
but the share of contract dollars going to small businesses declined.
In fiscal year 2025, the Department of Defense awarded nearly
$500 billion in contracts, but only a quarter of those went to small
businesses. That is less than the year before.
Far too often, federal procurement remains too complicated, too
slow, and too expensive to navigate for small businesses. They face
burdensome compliance requirements, lengthy contracting
timelines, slow funding disbursements from other transaction au-
thority managers, and a maze of regulations that often favor com-
panies with dedicated administrative staff and teams of consult-
ants. Meanwhile, the Small Business Administration has signifi-
cantly cut staff meant to help with government contracting.
Instead of cutting resources, we should be smartly investing in
America’s industrial base. That means reducing red tape, stream-
lining, streamlining contracting pathways, improving outreach, ap-
propriately funding the Offices of Small and Disadvantaged Busi-
ness Utilization, and ensuring agencies are held accountable for
meeting their small business contracting goals because America’s
national security is stronger, more innovative, and more resilient
when small businesses have a fair shot at contracting opportunities
and a level playing field to compete.
Ms. Dingle, despite significant increases in DOD contracting
spending in fiscal year 2025, the National Defense Industrial Asso-
ciation’s Vital Signs ’26 report found that overall small businesses
are reporting fewer contracting opportunities than last year, with
a significant percentage seeing a decrease. What do you think we
can do to ensure that the Department is structuring contracts in
a way that small businesses can compete and perform?
Ms. DINGLE. Thank you for that question. I think there are a
number of things that you can work on. As my colleague men-
tioned, the process of getting into the front door can be extremely
difficult. So if you are not already in that defense industrial base,
it is nearly impossible to get in. Less and less agencies are permit-
ting new entrants because you need to have a clearance in order
to get a contract, and you need a contract to get a clearance. So
that is one of the issues.
The other is if there is anything that can be done to lessen the
burden of all of the compliance requirements. I grew up in cyberse-
curity. I have worked in defense for many years. I understand the
importance. So it is a necessary—it is necessary to have cybersecu-
rity provisions in place, but the amount of money that it costs for
a company to comply is nearly impossible, and some companies are
getting out.
Sometimes the procurements come out, and, you know, it is 180-
some-odd pages of things that you have to be able to read and re-
spond to. And for small businesses, we just don’t have the staff
that are necessary to be able to navigate those things and to re-
spond to those types of requirements. So streamlining the require-
ments in a way that doesn’t necessarily burden small businesses
would be great.
Mr. TRAN. Thank you for that.
Ms. Dingle and Mr. Closson, while small businesses may receive
contracts, the actual funding is frequently delayed. Government in-
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efficiencies and other acquisition bottlenecks are the cause. As you
know, these challenges create severe cash flow problems for small
businesses. How would you expand multiyear procurement authori-
ties that the DOD help create more stable business opportunities
for both prime contractors and subcontractors? And secondary to
that is, would this help reduce the barrier to entry for small busi-
nesses?
Ladies first.
Ms. DINGLE. Thank you. You mentioned stability and predict-
ability. I think those are just the key, right? When I started my
business, the sales cycle was about 6 months. That sales cycle now
is nearly 3 years. It is nearly impossible for a small business to
hold on to the staff and the resources that are necessary to com-
pete. So that is something that is important.
And I apologize, a little bit of noise. I forgot what the second half
of your question was.
Mr. TRAN. No problem. I will just go to Mr. Closson. You have
anything to add, 5 seconds.
Mr. CLOSSON. Yeah. Okay, 5 seconds. The reality is it is tough,
right? And we have to find ways to be able to get it done. I am hop-
ing that the Rule of Two, using more sole sources, I mean, you
think about that, the sole source alone would be something huge.
The Rule of Two and actually executing sole sources would expedite
everything.
Mr. TRAN. Thank you. Chairman, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Van Duyne from the great state of Texas for
5 minutes.
Ms. VAN DUYNE. And I agree with Mr. Schwartz’ assessment
on the ranking of colleges. TCU rules.
Thank you, Mr. Chairman. This hearing is important because re-
building America’s defense industrial base cannot just mean rely-
ing on the same large prime contractors. Small businesses are a
critical part of getting new ideas, faster production, and better ca-
pabilities to the warfighter.
Too often Washington makes it harder than it needs to be for
small businesses to be able to compete. And for a small business
every dollar that is spent on unnecessary compliance is a dollar
that cannot be spent hiring workers, developing new products, or
supporting the mission. And that is why I introduced the Small
Business Regulatory Reduction Act, which passed the House in De-
cember and is waiting Senate action. It is killing me. I have intro-
duced this for three sessions now. We finally got it out of Com-
mittee. We got it on the floor. And now it is dying a very slow
death in the Senate.
And my bill requires the Small Business Administration to en-
sure that the cost of its rulemaking on small businesses is not
greater than zero each fiscal year. It requires SBA to report on reg-
ulations that impact small businesses. And the principle is simple:
before Washington adds another burden, it has to start removing
them. And today’s hearing shows why that matters. If we want a
stronger defense industrial base, we need more small businesses
willing and able to work with the federal government and not
fewer.
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Mr. Schwartz, in your testimony, you discussed the critical role
of small businesses in keeping our defense industry competitive
and innovative. My concern is that even while higher contracting
dollar amounts are flowing from the Department of War to small
businesses, we are ignoring that the overall number of small busi-
nesses that win contracts is actually shrinking. So what does the
shrinking number of contractors say exactly about the health of the
defense industrial base, and what makes it less attractive now for
small businesses to work with the government than it was 5 years
ago?
Mr. SCHWARTZ. So the first one is shrinking, what does it say?
So you may have noticed I eat kosher and I am Jewish, right? I
lived in a city—there is a point, really, I promise. I lived in a city
that had one kosher pizza store. The food wasn’t great, their serv-
ice was not great, and it could be cleaned up a little bit. One day,
another kosher pizza store opened up two blocks away. You would
be, I guess, not surprised how quickly that first pizza store, the
pizza got really good, and the service was excellent. It is the same
thing here. When you have that decline in the industrial base, you
are losing that competition. When you are losing that competition,
you are losing that hunger to improve and get better to win that
contract. At the end of the day, that is, I think, the example.
Okay. Now, I was thinking of food, so I totally forgot the second
question. I apologize.
Ms. VAN DUYNE. The last 5 years, do you think that it is—that
government has made it harder or easier for small businesses to
be able to work with?
Mr. SCHWARTZ. Oh, I think they have definitely made it hard-
er. And I will give one example. As was mentioned, every dollar
matters for small businesses. And what they need is that predict-
ability of business. And yet we saw this year the SBIR authority
lapse and then get renewed, right? That interruption of SBIRs that
some companies knew they were going to win and got disrupted
and lost that cash flow is a huge problem for planning on business.
So that is just one example of including some of the ones that we
talked about in cyber.
So one option to really help small businesses, I think, is make
some of those authorities permanent so companies know they can
count on it and don’t worry every single year that it is going to dis-
rupt their business.
Ms. VAN DUYNE. I appreciate that. I remember we had a wit-
ness here in front of the Small Business Committee several years
ago from the defense industry, and he held up a three-ring binder
that is about four inches thick. And he said, this is the regulation
we are sitting here talking about today. If you pass this, I close my
doors. Because while some of the major defense companies can af-
ford to have regulatory agencies, I cannot. This is going to cost me
about $100,000. My margins are this thin. So if you pass this, you
are literally taking my business away from me, just by a regula-
tion.
Tell me how important—and I understand we have to have regu-
lations. That is important. But the layering upon layering upon
layering, how much have you seen your time being spent on that
as opposed to what you should actually be focused on?
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Mr. SCHWARTZ. So I can’t say my time because I don’t run a
small business for defense. I am here for the NDIA, the National
Defense Industry Association. But it is one of the biggest com-
plaints that companies have. All the small businesses in the polls,
it is consistently at the top. It is the regulations, the paperwork.
And it—not only does it take up their time. I would argue what is
even worse than taking up their time is distracting them from
what we really want them to be doing, which is delivering capa-
bility, not working on compliance that doesn’t really add anything.
Ms. VAN DUYNE. I appreciate that, and I yield back. Thank
you.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Olszewski from the great state of Maryland
for 5 minutes.
Mr. OLSZEWSKI. Thank you very much, Mr. Chairman. Thank
you to our Ranking Member and all of our witnesses for being here
today.
I believe that we can all agree that driving American innovation
for small business is a top priority for Members of this Committee
and on all sides of the aisle. Maryland, we are proud to be home
of the Army’s oldest active proving ground, Aberdeen Proving
Ground, where I know the National Defense Industrial Association,
Mr. Schwartz, has a chapter. Thank you for fostering collaboration
among government, industry, and academia to advance Army mod-
ernization efforts. APG features expansive test ranges and road
courses designed to stress military hardware. So if a piece of equip-
ment has—is meant to shoot, move, or communicate, it likely has
gone through testing at APG.
APG uses Small Business Administration guidelines to award re-
search, technology, and service contracts to smaller-scale compa-
nies. Unfortunately, the Trump administration has gutted the
SBA’s capacity to advocate for small contractors at federal agencies
like APG. The Office of Government Contracting and Business De-
velopment has been reduced by 60 percent, meaning fewer nego-
tiators to help identify small business opportunities and fewer
phone calls from small business owners being answered, which
makes no sense to me, especially as Trump’s own DOD has said,
quote, ‘‘ A weakened American industrial base and supply chain
threatens both the economic security of millions of Americans and
our country’s national security.’’ I agree wholeheartedly.
Kneecapping small businesses who want to enter, compete, and
innovate in the federal market does, in fact, weaken our industrial
base and supply chain. So I do hope we can work together in spite
of these challenges to produce positive outcomes for the industrial
base and for the government cluster.
Ms. Dingle, I will start with you. Since 2015, SBA has made mul-
tiple unsuccessful attempts to deliver a single IT platform to bring
all of its small business certifications into place. I think this is a
great idea, especially if it cuts down on time for small businesses
to apply and the time SBA to process applications. The Unified
Certification Platform was deployed in 2024, even as the GAO and
others raised concerns. The Committee no longer receives annual
certification data, and it is unclear if those outstanding concerns
have been addressed.
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I just wanted to wonder, from your perspective, is the portal
functioning well for small business businesses currently seeking
certifications with the SBA?
Ms. DINGLE. Thank you for that question. So I am not certain
whether the portal is currently functioning well. It was. The chal-
lenge for our business owners is they don’t have a person they can
contact at the SBA to figure out what is going on. The workforce
has just been moved around. I won’t say decimated, but it is—small
businesses need a point of contact in an agency or in the SBA, for
instance, to be able to get the answers that they need. Just like we
were talking about debriefs on a contract, you need a debrief on
what is happening with your application, and that is not possible
right now.
Mr. OLSZEWSKI. Sure. Hopefully, it is something we can ad-
dress together. I want to thank the Committee for recently passing
legislation I sponsored requiring the SBA to provide Congress more
comprehensive information on the certification portal and related
programs.
Can you speak a little bit to how having that more complete pic-
ture of application volumes, processing times, and outcomes might
help SBA improve the portal and better serve those small business
applicants?
Ms. DINGLE. Yeah, I think the small business community, the
women-owned business community, is all for transparency and ac-
countability. It is just how does that come about, right? And what
we are seeing—I was just having a conversation recently and some-
one says have you spoken to this person at the SBA or have you
spoken to this? Like, we have little to no contact with the resources
that used to be able to assist business owners. So I think as tax-
payers, as business owners, we all want transparency and account-
ability, but we also need the resources that are necessary to sup-
port that transparency and accountability.
Mr. OLSZEWSKI. Thank you.
And then, Mr. Closson, I will close with you with my last minute.
We know that small business-only competitions are critical for
small firms to participate in the defense industrial base, but are a
small percentage of those defense dollars, making up just over 17
percent. How can we expand efforts to protect this small but crit-
ical investment rather than allow them to exit the industrial base
and taking their innovation capacity with them?
Mr. CLOSSON. The Rule of Two, like we mentioned earlier,
being able to get more small business—prime opportunities for
small businesses, that is going to be critical. And educating on the
J&A for the sole sources. I mean, these are two quick paths to be
able to get more—the companies that are there operating and then
also bringing in new. But we need more prime contracts.
Right now I would say the majority of our work growing, you
know, was subcontracting, right? So being able to give us the op-
portunity to compete at the prime level as many times as possible
is not only going to strengthen who is there, but it is going to bring
more in.
Mr. OLSZEWSKI. Thank you very much. I appreciate the wit-
nesses’ time.
And Mr. Chairman, I yield back.
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Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Bresnahan from the great state of Pennsyl-
vania for 5 minutes.
Mr. BRESNAHAN. Thank you, Chairman, Ranking Member, and
thank you to all of our witnesses for being here today.
The defense industrial base has long been one of the United
States’ most important economic and national security assets, cre-
ating jobs, strengthening communities, and helping keep the Amer-
ican people safe. While many hear defense contracting and think
of large corporations and mega contractors, small businesses lo-
cated all over the country play a critical role in supporting our na-
tional defense and military readiness.
In northeastern Pennsylvania, we see this firsthand. Small busi-
nesses throughout northeastern Pennsylvania provide specialized
services and equipment that help ensure our service members have
the tools they need to complete their missions safely and effec-
tively. During the Committee’s annual Small Business Showcase
last month, I was proud to welcome Inert Products, a small busi-
ness representative from Pennsylvania’s Eighth Congressional Dis-
trict. Inert Products is a veteran-owned small business developing
advanced training aids and life-saving equipment that help secu-
rity forces detect, respond to, and defeat explosive threats. Anyone
who saw their state-of-the-art tactical robot at the showcase saw
firsthand how Inert Products equips our troops and allies with the
best possible equipment to protect them while they protect us.
Another standout example is Noble Biomaterials, who produce
thermal, radar, and electromagnetic interference shielding tech-
nology that protect our warfighters and critical military assets.
Based in Scranton, Noble manufactures lightweight, flexible, low-
observable materials that help our servicemembers operate more
effectively and avoid detection in high-risk environments.
Small businesses like these protect our troops and save American
lives, but we must continue to ensure they and companies like
them are given fair opportunities to thrive in the space, which will
in turn create local jobs, benefit our communities, and provide for
their families.
So my first question is for Mr. Schwartz. In your testimony, you
cited the overburdensome paperwork and regulatory process that
often push away potential defense contracting small businesses.
Obviously, that barrier to enter the marketplace shouldn’t be im-
peded by unnecessary paperwork. Is there anything tangible that
we can be doing in Congress to simplify the process?
Mr. SCHWARTZ. Yes, there are a couple of things, but one is
there are a lot of regulations that stem from statute. So if you look
at the Federal Acquisition Regulation overhaul that is being done
right now, the revolutionary overhaul, what they are trying—what
they are doing is taking everything that is not required by statute
and taking it out, right? But there are things that are required by
statute that have been required by statute because of things that
are 20, 30 years old that perhaps we have not reviewed of late that
are still in there that is not being reviewed because of this over-
haul, because the administration has no authority to take that out,
or any of the agencies.
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So one thing that could be done is a systematic review of the
statutory requirements and regulation with a very simple question:
is this doing more good than harm? Right? Because some of those—
there used to be a regulation that said you had to use dollar coins
in every vending machine on a base. That was ultimately appealed
because of something that Congress did, or there was a require-
ment you had to use double-sided paper. Right? Those might be re-
quirements that are examples that we may want to start reviewing
those and getting rid of those so we can focus on the important
things. So that would be at the top of my list.
Mr. BRESNAHAN. Well, the 11 words you never want to hear:
we are from the government and we are here to help. So, honestly.
My second question for Mr. Closson. First of all, thank you for
your service. As the founder of the Service Disabled Veteran-
Owned Small Business, what advice would you have or to give to
a veteran in the early stages of starting a small business? And this
is something that I frequently encounter when I am meeting with
my constituents. They served our country, and sometimes it is in-
credibly frustrating to get that inertia moving to be able to get the
business off of the ground. So if you can maybe identify perhaps
one or two key suggestions that I can take back to them.
Mr. CLOSSON. First is find a good program. Like the DAV has
programs where they have mentorship programs for starting small
businesses. It is one of the best ones I have ever seen. I have been
honored enough to teach a couple of those sessions. Extremely val-
uable for me. I actually sit through some of the others to get value.
Extremely valuable. So the DAV puts on an awesome SDVOSB En-
trepreneurial Veteran clinic for people starting business.
Two is understanding how to monetize who you are and the
value that you have. Being able to take that step, to dig into your
Rolodex of people you have worked with in government or not and
be able to monetize your relationships and bring value to their mis-
sion. Understand your value and how you can impact theirs.
Mr. BRESNAHAN. Thank you for your service as well.
And Mr. Chairman, I yield.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Scholten from the great state of Michigan
for 5 minutes.
Ms. SCHOLTEN. Thank you so much, Mr. Chairman and Mr.
Ranking Member, and thank you for our witnesses for being here
today. This is a really, really important conversation.
You know, there is a through line here, right, that we agree
small businesses are the backbone of our economy and they are
foundational to the strength of our defense industrial base. On
that, we agree. However, according to a 2022 study, the number of
small businesses competing for awards through the Department of
Defense dropped by 23 percent. Over that same time period, the
number of firms that were awarded small-dollar contracts, less
than $1 million, shrank by even more, by 32 percent.
Ms. Dingle, what steps can we take to ensure that there are suf-
ficient opportunities for small businesses who compete for these
lower awards?
Ms. DINGLE. Thank you for the question. I think we have heard
from a number of my colleagues here about the Rule of Two cre-
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ating opportunities, right, because that sets aside some of the busi-
ness. But the other thing is consolidations right now are causing
problems for us, some of the consolidations. And again, when you
look at it from a taxpayer standpoint, it makes sense, but when
you look at it from a business standpoint, that just takes some
small businesses out of competition completely. You have got to be
at a certain dollar figure to even be able to compete. So making
small business set-asides available, using tools like the Rule of
Two, making sure that contracts are not necessarily consolidated.
I will try to be sensitive to time, but as a small business owner
who has worked in defense, we had existing incumbent work that
was then moved to a consolidated contract vehicle that we weren’t
eligible to compete on. So even though we had gotten our foot in
the door, now the door was—we were put on the outside of the door
and the door was closed so we couldn’t get back in.
Ms. SCHOLTEN. Yeah.
Ms. DINGLE. And so being mindful of those kind of things is
something that is going to be important.
Ms. SCHOLTEN. Yeah. Another factor that you have emphasized
in your testimony is the ever-changing economic landscape and the
instability. I mean, I know defense contracting or not, that is the
number one issue that I hear about from our small businesses back
home.
A recent op-ed from WIPP emphasizes that the use of AI in small
business operations presents both a critical opportunity and a bar-
rier to entry for certain entrepreneurs. My bill, the AI-WISE Act,
would address this challenge by requiring the SBA to create learn-
ing modules to help small business owners adopt AI into their oper-
ations. We know they want it, but often they don’t know how to
use it. They might be afraid that a changing regulatory landscape,
for example, could negatively impact them down the road. They are
afraid of giving up proprietary information.
Can you talk more about the challenges small businesses are fac-
ing with this new technology, specifically if you are able to speak
to it, and how it could potentially help them to compete for federal
contracts?
Ms. DINGLE. So we know that AI is being used in the evalua-
tion process for federal contracts. So first of all, as a business
owner, I need to understand how my proposals are being evaluated.
So even having someone at the SBA or in one of the agencies be
able to provide an informational session to tell us that or to have
some educational programs.
And I will use cybersecurity as an example. As the defense in-
dustrial base was—cybersecurity was rolled out, there were
roadshows around the country to say, hey, this is what this is going
to look like——
Ms. SCHOLTEN. Yeah.
Ms. DINGLE.—and here is how you need to be prepared. We
need to be doing that now with AI. Right? So having some edu-
cation for that might be really helpful.
Making sure that the tools are accessible in terms of the cost as-
sociated with those tools. There has been some push to make sure
that there are some cybersecurity tools that are available. Doing
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that same thing from an artificial intelligence standpoint would be
really helpful.
Ms. SCHOLTEN. Yeah.
Ms. DINGLE. Business owners, they want to use the technology,
but we are concerned, right? There is no real regulatory guidance
on whether we can use AI as a part of our solution. There is no
real guidance on what our exposure is with respect to privacy and
loss of data for our clients. And so some assistance in that area
would be great.
Ms. SCHOLTEN. That is very, very helpful feedback. We teach
our students, the first thing you learn in an English class is write
for your audience, right? It is almost dystopian to think that that
audience might be AI. But the reality is, we know that this is eval-
uating our proposals. And so making sure folks understand how to
prepare that is critically important. We are teaching students now
how to write smart AI prompts to get it to do what they want. You
know, getting our small business owners prepared for drafting
their proposals is a really good idea.
We will follow up with your team. We would love to, you know,
chat out some specifics there.
Ms. DINGLE. Thank you.
Ms. SCHOLTEN. My time is almost up, so I will yield back. That
was very helpful. Thank you, Ms. Dingle.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Patronis from the great state of Florida for
5 minutes.
Mr. PATRONIS. Thank you, Mr. Chairman.
My district, northwest Florida, I have got over 100,000 veterans.
I got 25,000 Active Duty, and it is definitely a stable part of the
country because of their understanding, commitment to service,
mission. But I think I am going to leave this kind of open for any-
body that wants to chime in. What are we doing right and doing
wrong?
I know there are so many different organizations and groups that
assemble to help those warfighters transition into careers, small
business. But again, I am—I would rather you just, you know,
throw darts at us where we are dropping the ball and creating
problems to help those transitions, because there is—otherwise
there wouldn’t be so many different organizations trying to be the
nonprofit solution, whether it be Operation New Uniform or what
have you, that tries to help that. So I am, Mr. Chairman, I am
open to any that wants to chime in.
Mr. CLOSSON. Sure. So as somebody who transitioned you
know, a while ago now, it has been 17 years, but being—having
friends that are transitioning now and also working with Mission
22 and DAV and all of these agencies, these nonprofits trying to
transition, is having these programs available within the military.
Right? Because right now they are having to go out outside of that.
There are—the military has done an amazing job from over the
last couple of years of doing better transitioning. I was talking—
we have a former colonel that works with Colossal now, and I was
asking him because I was curious. He said it is getting better,
right? And that there is a lot more care into that transition.
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But I think specifically around wanting to start an SDVOSB, a
veteran-owned small business, a small business in general, are
there classes available during that transition that they can point
them in that direction and say—because a lot of it they train us
to go get a job, right? Hey, this is what you need to do to go work
for Lockheed or Raytheon or whoever else, and we are figuring that
out. For me, when I made the decision just—there wasn’t anything
available. Right?
Now, today, there are a lot of these programs like the DAV has
of the SDVOSB veteran boot camp that they have, and there are
these other agencies doing it. But my question is, is what is the
government doing to foster that within the military? There may be
some programs I am not sure about, so I don’t want to say that
that is not happening, but in the transitioning that I am hearing
happening is we got to be there for them and be able to foster that.
Mr. PATRONIS. Well, you have been there, done that. Okay. So
in your career of service, when did you make up your mind that
you were going to transition out? And ideally, what is the perfect
timing to try to catch somebody with those transition procedures?
Mr. CLOSSON. Absolutely. With me, it was, you know, when I
got to Joint Base Andrews, I really got a better view of how the
contractor can support the mission. And I was like, man, I think
I could do this. Like, I really believe that I could bring value to this
mission as a contractor and I can still serve the nation, right? Be-
cause I didn’t want to take the uniform off, but I wanted to find
a way to continue to serve.
So in that transfer time is what I started doing is asking these
companies I was working with as a military member, hey, how does
this work? You know, I was just interviewing everyone. They prob-
ably thought I was crazy, but I knew that this is the path that I
wanted to take, but there was nothing there for me.
So the answer to your question is it is probably different with
every member, right? But the reality is, is once that transition hap-
pens and you decide 6 months into it or a year into it, or you are
hitting your 18 years and you are getting the itch and you got 2
left, is what programs are there to train them and to educate them
on how to start an SDVOSB or veteran-owned small business?
Mr. PATRONIS. Sure, sure.
Mr. JAWOROWSKI. Yeah, I would add to that, I think that the
programs that are there to support transitioning servicemembers
into industry are great. We utilize them all the time. We hire from
them frequently. When it comes to Active Duty internships, they
frequently take place at the very tail end of the career, and if you
have got somebody that, like Mr. Closson said, that has maybe got
a few years left, that is a really good time to expose them to some
of what industry has to offer, the challenges that industry faces, so
they can make an informed decision about where they are going to
take their future.
I think that they can—the more—you know, rotation programs,
maybe, you know, work with this company for a month and then
a different company for a month, and they can see what the dif-
ferent size companies are really dealing with. I think that there is
a lot of opportunity to improve there.
Mr. PATRONIS. Sure.
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Ma’am?
Ms. DINGLE. Thank you for your question. And might I add that
doing those rotations would be really helpful for small businesses
because we want that expertise. And I think that exposure for the
folks that are still in will give them a sense of what the two envi-
ronments look like because it can be pretty shocking to come out
of the military or come out of federal service, like myself, and then
transition into business.
Mr. PATRONIS. Gotcha. Thank you.
Mr. SCHWARTZ. Do I have time to answer? Oh, thank you. I
will be very quick.
Chairman WILLIAMS. You got 15 seconds.
Mr. SCHWARTZ. Fifteen seconds. One of the things I think is
very often overlooked is many veterans who leave the Department
leave and they are like, I saw this problem, I know how to fix it
in a way that other people don’t. And that is something that I
think we should really leverage when people leave. Like the com-
pany Onebrief that I mentioned earlier in the testimony, that per-
son left the military and said, I saw this problem, I can fix it, and
started a company to fix it. If we can capture that, we would really
benefit.
Mr. PATRONIS. Sure. Great answers.
Chairman WILLIAMS. The gentleman’s time is up.
Mr. PATRONIS. Thank you.
Chairman WILLIAMS. I now recognize Mr. Jack from the great
state of Georgia for 5 minutes.
Mr. JACK. Thank you very much, Mr. Chairman.
If I could start with Mr. Schwartz, I appreciate your testimony
today, and I want to talk a little bit about, you know, you had a
great graph that you included in your testimony that shows the de-
clining number of companies contracting with the federal govern-
ment, and would welcome your thoughts as to why you believe it
is harder for small businesses to contract with the federal govern-
ment, particularly within the defense industrial space.
Mr. SCHWARTZ. So first, thank you for reading the written tes-
timony. Appreciate it.
I think there are a lot of challenges. Let me start with the work-
force. Right? Is if you are a contracting officer and you have a lot
of pressures and there is a perception of compliance that you have
to do and you have to move fast, it is very difficult to sit back and
say, okay, I can do this really fast or I can go slow, do more market
research, figure out what the right companies are, who is offering
the best thing, and find them. That go find them is hard because
who knows about a small business?
We had to find a plumber recently and we had no idea where to
start except Roto-Rooter because they were right there. Right?
They are easy. It is a lot harder to find some of these small busi-
nesses. I think that is one of the biggest challenges is the visibility
or people knowing this is what they have to offer.
Mr. JACK. You also included in your testimony the crushing bur-
den of overregulation. Would welcome thoughts to this Committee
as to how we as a Small Business Committee and a Republican
majority can help reduce regulatory costs and burdens to small
businesses trying to get involved.
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Mr. SCHWARTZ. Right. I will just review two.
The first one is, as we were talking before, there are a number
of small businesses that are subcontractors. And it is not infre-
quent that a requirement on a prime contractor is required to be
flowed down through the contract to every lower tier, which means
we are also putting those regulations on small businesses that are
the subcontractors. Well, perhaps let’s review those requirements
of what has to go flow down and say, do we really need to flow that
down? Is it really important?
And related to that is systematically go through all of the regula-
tions and say this was—this is a regulation because something that
was passed in 1992. Do we really need it anymore or can we amend
it to alleviate the burden?
Mr. JACK. That is how I feel, too.
Mr. Jaworowski, appreciate your testimony as well, and I would
welcome for this Committee an answer to this question, because as
a small business that does not have an SBA certification and must
compete in the broader small business category, how challenging is
it for those types of businesses to win awards? And do you believe
you are at a disadvantage in terms of the contracts offered to you
because of it?
Mr. JAWOROWSKI. We are definitely at a disadvantage because
the contract space and opportunity space for a company that is our
size that doesn’t apply for a set-aside that is set aside for socio-
economic basis forces us to compete at a higher level. And in my
testimony, I talked about how there is this pool of companies that
really punch above their weight. They are large businesses
masquerading as small businesses that get to operate based on 8(a)
criteria in similar spaces to us. So it is really a 300-person com-
pany going up against a behemoth that can be several thousand
employees at times.
So it is very, very challenging to find the right opportunity space.
And frequently, if those companies that are large are pursuing a
small business set-aside where we can compete, we often see con-
tracting officers electing to do a direct award to an 8(a) rather than
have a full-blown competition. The Rule of Two should apply there,
but there is still subjectivity that can be applied to the Rule of
Two, which can limit competition.
Mr. JACK. Thank you.
Next question, Mr. Closson, since we are talking about certifi-
cates, would welcome your opinion and perspective as to how the
SDVOSB Certification has changed your ability to compete in the
defense marketplace?
Mr. CLOSSON. It has been extremely valuable. It has helped
shape the company in every way. We started off just fighting any
way that we could, but I think we hit it on two values that helped
our grow. As they started setting aside for SDVOSB, we started
working with the VA more and started getting some work there,
and then started working with the Air Force, got a couple prime
contracts, were awarded some GWACs that we are able to set
aside, like SOOP and ITES, that have set aside requirements for
SDVOSB. And, you know, also the large, you know, partners that
we work with also have set aside standards within their large con-
tracts.
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You just got to get to be out there and work as hard as you can
and find the avenues. They don’t run and punch you in the face.
You got to go look for them and hunt them down through your rela-
tionships. But they are out there and we really hope to see more.
Mr. JACK. Well, I appreciate you all’s testimony today.
With that, Mr. Chairman, I yield back.
Chairman WILLIAMS. The gentleman yields back.
And I would like to thank our witnesses today for your testimony
and for appearing before us. It has been a great hearing. I hope
when you go back home you can tell your friends that there are
hearings that people don’t yell and scream at. And there is a lot
of—much of what we talked about, the Ranking Member and I
were just talking about how much we agree from party to party on
small businesses today. So I want to thank you for being here.
Without objection, Members have 5 legislative days to submit ad-
ditional materials and written questions for the witnesses to the
Chair, which will be forwarded to the witnesses. I ask the wit-
nesses to please respond promptly if that happens.
If there is no further business, without objection, the Committee
is adjourned. Thank you.
[Whereupon, at 11:51 a.m., the committee was adjourned.]
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APPENDIX
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Æ
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File and source
- File
- CHRG-119hhrg63917.pdf
- Size
- 8,968,551 bytes
- SHA-256
- 93087ae09d884a3e59eaa90ef293cbd9dcbe44cd8c02f7e42802cc4daf0027f0
- Our copy
- CHRG-119hhrg63917.pdf
- Original
- www.govinfo.gov