Moving Upwards and Onwards: The Workforce and Innovation Needs of the Aviation and Aerospace Industry (House Small Business subcommittee hearing, May 12, 2022)

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Transcript of the May 12, 2022 hearing Moving Upwards and Onwards: The Workforce and Innovation Needs of the Aviation and Aerospace Industry, before the House Small Business Subcommittee on Innovation, Entrepreneurship, and Workforce Development, Small Business Committee Document Number 117–055. Jason Crow presided, and he and Young Kim gave opening statements. Witnesses were Eric Fanning of the Aerospace Industries Association, ML Mackey of Beacon Interactive Systems for the National Defense Industrial Association, Blake Scholl of Boom Technology, Inc. and Judy Burns of Patriot Machine. Additional material includes NBAA - National Business Aviation Association items titled Pilot Supply by the Numbers and Pilot Retirement Age Facts. The subcommittee adjourned at 11:09 a.m.

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MOVING UPWARDS AND ONWARDS: THE
WORKFORCE AND INNOVATION NEEDS OF THE
AVIATION AND AEROSPACE INDUSTRY

HEARING
BEFORE THE

SUBCOMMITTEE ON INNOVATION,
ENTREPRENEURSHIP, AND WORKFORCE
DEVELOPMENT
OF THE

COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION

HEARING HELD
MAY 12, 2022

Small Business Committee Document Number 117–055
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
47–536 WASHINGTON : 2022
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin

MELISSA JUNG, Majority Staff Director
ELLEN HARRINGTON, Majority Deputy Staff Director
DAVID PLANNING, Staff Director

(II)
CONTENTS
OPENING STATEMENTS
Page
Hon. Jason Crow ...................................................................................................... 1
Hon. Young Kim ...................................................................................................... 2

WITNESSES
Hon. Eric Fanning, President & Chief Executive Officer, Aerospace Industries
Association, Arlington, VA .................................................................................. 5
Ms. ML Mackey, Chief Executive Officer, Beacon Interactive Systems, Wal-
tham, MA, testifying on behalf of the National Defense Industrial Associa-
tion (NDIA) ........................................................................................................... 6
Mr. Blake Scholl, Founder & Chief Executive Officer, Boom Technology, Inc.,
Centennial, CO ..................................................................................................... 8
Ms. Judy Burns, President, Patriot Machine, St. Charles, MO ........................... 10

APPENDIX
Prepared Statements:
Hon. Eric Fanning, President & Chief Executive Officer, Aerospace Indus-
tries Association, Arlington, VA .................................................................. 23
Ms. ML Mackey, Chief Executive Officer, Beacon Interactive Systems,
Waltham, MA, testifying on behalf of the National Defense Industrial
Association (NDIA) ....................................................................................... 28
Mr. Blake Scholl, Founder & Chief Executive Officer, Boom Technology,
Inc., Centennial, CO ..................................................................................... 31
Ms. Judy Burns, President, Patriot Machine, St. Charles, MO ................... 39
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
NBAA - National Business Aviation Association ........................................... 43
Pilot Supply by the Numbers .......................................................................... 47
Pilot Retirement Age Facts .............................................................................. 48

(III)
MOVING UPWARDS AND ONWARDS: THE
WORKFORCE AND INNOVATION NEEDS OF
THE AVIATION AND AEROSPACE INDUSTRY

THURSDAY, MAY 12, 2022

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
SUBCOMMITTEE ON INNOVATION, ENTREPRENEURSHIP,
AND WORKFORCE DEVELOPMENT,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building, Hon. Jason Crow [chairman
of the Subcommittee] presiding.
Present: Representatives Crow, Houlahan, Young Kim, Luetke-
meyer, Williams, Tenney, and Garbarino.
Chairman CROW. Good morning. I call this hearing to order.
Without objection, the Chair is authorized to declare a recess at
any time.
I would like to begin by noting some important requirements.
Standing House and Committee rules and practice will continue to
during hybrid proceedings. All Members are reminded that they
are expected to adhere to these rules, including decorum.
House regulations require Members to be visible through a video
connection throughout the proceeding, so please keep your cameras
on. Also, please remember to remain muted until you are recog-
nized to minimize background noise.
In the event a Member encounters technical issues that prevent
them from being recognized for their questioning, I will move to the
next available Member of the same party and I will recognize that
Member at the next appropriate timeslot provided they have re-
turned to the proceeding.
The U.S. aviation and aerospace industry is crucial to our na-
tional security and national defense capabilities. From commercial
airliners to telecommunication satellites, the aerospace industry
touches the lives of countless Americans every day.
The industry also provides meaningful employment to over 2 mil-
lion workers. These are great paying jobs that allow workers to fur-
ther their careers and support their families. In 2020, aerospace
workers averaged roughly $104,000 in wages and benefits.
The impact of this industry extends beyond U.S. borders. Domes-
tic aerospace companies are global leaders that export civil and
military products to countries worldwide. In 2020 alone, the indus-
try generated $874 billion in total industry sales revenue.
(1)
2

The impact of this industry is big, but small businesses make up
a substantial portion of the sector. For example, small entities com-
prise more than 90 percent of businesses in airline transportation,
air transport support, and aviation manufacturing.
Despite the successes of the aerospace industry, COVID has pre-
sented unprecedented challenges. Travel restrictions around global
air traffic to a near halt in the early days of the pandemic. Since
then, new variants and intermittent rising case counts have contin-
ued to depress commercial aviation’s recovery. In January of this
year, flights operated stood at 85.3 percent of pre-pandemic levels.
But even with this decreased demand, companies are struggling
to hire the right workers to keep up with the supply. This problem
is not confined to the aerospace industry. Small businesses across
the country are feeling the effect of an overall labor shortage. This
worker shortfall is complex and connected to pandemic-related
issues, like decreased legal immigration, early retirements, and a
lack of childcare options for working parents.
But even before the pandemic, the aerospace industry faced labor
issues, including an aging workforce and the need to constantly
upskill workers due to innovation.
These problems have led to shortfalls in vital positions, including
pilots and mechanics, and staffing shortages have led to record
flight cancelations throughout early 2022, creating significant dis-
ruptions for travelers.
The implications of this labor shortage also extend to our mili-
tary. Studies predict significant shortfalls for Air Force and Navy
pilots very soon. This is simply unacceptable.
If the aerospace industry cannot find an adequate number of
trained workers, our economy and national security will suffer.
That is why we must use the tools at our disposal to ensure that
workers have the necessary skills to fill these positions.
The FAA Reauthorization Act of 2018 and the National Defense
Authorization Act for Fiscal Year 2020 added training grants for
the pilot workforce alongside aviation maintenance technical work-
ers. The aerospace industry has also embraced apprenticeships as
a model for attracting young workers and equipping them with the
necessary skills to succeed.
So today, we will deepen our understanding of this industry, ex-
amining these workforce initiatives and other policy solutions that
can support workers in the aerospace sector as we work toward re-
covery.
I would now like to yield to the Ranking Member, Mrs. Kim, for
her opening statement.
Ms. YOUNG KIM. Thank you, Chairman Crow. I want to thank
you for holding this hearing, and I want to thank all of our wit-
nesses for testifying today.
Over the past few years, small businesses within the aviation
and aerospace industries have been met with unparalleled eco-
nomic headwinds, including labor shortages, supply chain disrup-
tions, and soaring costs. These industries are vital to our economy
as they produce both military and civil aircrafts, facilitate trade
and tourism, and connect Americans worldwide.
Small businesses play a key role in aviation and aerospace. Ac-
cording to the Census, statistics of the U.S. business, 94.3 percent
3

of all firms that provide air transportation are considered small
businesses and almost 88 percent of aerospace firms are small busi-
nesses.
One of the biggest challenges these firms are facing is the un-
precedented labor shortage. The most recent Job Openings and
Labor Turnover Summary reported 11.5 million job vacancies. To
make matters worse, employers continue to face record numbers of
workers leaving their jobs. And in March, 4.5 million workers quit
their jobs.
These trends persist, even as nearly half of small business own-
ers have reported job openings they could not fill. Worker shortages
are not a new issue to the aviation and aerospace industries. In
fact, this Committee held a hearing back in 2018 on this exact
issue.
Unfortunately, COVID-19 exacerbated the shortages by encour-
aging early retirements among airline and aerospace workers un-
certain about their career prospects in a sector that was almost en-
tirely shut down for months.
According to the Regional Airline Association, the United States
will lose about half of its pilots to retirement in the next 15 years.
Further, a recent study found a lack of technical staff as the top
disruptor for the aviation maintenance and repair sector over the
next 5 years. A pilot and technician shortage affects not only the
airlines but also the millions of Americans who fly each year.
Another issue that is contributing to the worker shortage is the
growing skills gap. These sectors rely on highly skilled workers to
build aircrafts, satellites, missiles, and conduct maintenance and
safety tests.
According to a recent study by Deloitte, the manufacturing skills
gap in the United States could result in 2.1 million unfilled jobs by
2030. The cost of these missing jobs could total $1 trillion in 2030
alone. The lack of skill labor is a major concern, and if not ad-
dressed, could have serious impacts on our economy.
From finding and retraining skilled labor to supply chain issues
and skyrocketing costs and disruptive inflation and energy prices,
our small businesses are facing a multitude of economic hurdles
that threaten to close their doors.
I look forward to hearing from our witnesses today on how we
can better support you, and I hope to work with my colleagues to
find real solutions to elevate the increasing economic challenges
that our small businesses are facing every day.
Thank you, and I yield back.
Chairman CROW. Thank you, Mrs. Kim. The gentlelady yields
back.
I would like to take a moment to explain how this hearing will
proceed. Each witness will have 5 minutes to provide a statement
and each Committee Member will have 5 minutes for questions.
Please ensure that your microphone is on when you begin speaking
and that you return it to mute when finished. We run a tight ship
here, Mrs. Kim and I, so please stick with your 5 minutes so I do
not have to gavel you out.
So with that I would like to introduce our witnesses.
Our first witness is Mr. Eric Fanning, President and CEO of the
Aerospace Industries Association, the leading advocacy organiza-
4

tion for the aerospace and defense industry. He has more than 25
years of distinguished government service. He previously served as
Chief of Staff to the Secretary of Defense, Acting Secretary of the
Air Force, and Deputy Undersecretary of the Navy. In 2016 and
2017, he served as the 22nd United States Secretary of the Army.
He is the only person to have held senior appointments in all three
military departments and the Office of the Secretary of Defense,
which actually raises the question for me is when you tell military
jokes, which service do you make fun of? So thank you, Mr. Fan-
ning for joining us. I look forward to your testimony.
Our next witness is ML Mackey, co-founder and CEO of Beacon
Interactive Systems and Division Chair of the National Defense In-
dustry Association Small Business Division. Ms. Mackey is an inno-
vator and entrepreneur. Her company, Beacon, is a valued and rap-
idly-growing provider of mission-critical systems to the Department
of Defense that helps drive efficiency, improves sustainability, and
unleashes productivity. She is an advocate for small businesses,
women’s leadership, and STEM innovation. Ms. Mackey is an ac-
tive Member of the NDIA’s Workforce Project, and in 2021, served
as the Board Chair of the National Small Business Association.
Welcome, Ms. Mackey. It is a pleasure to have you on the panel.
Our third witness is Mr. Blake Scholl, the CEO of Boom Super-
sonic, an end product supersonic aircraft company based in my dis-
trict. Mr. Blake started Boom in his basement in September 2014
with the goal of making high-speed travel mainstream and ena-
bling a new world of human connection. Prior to founding Boom,
he held a leadership role at Amazon and cofounded the mobile tech
startup, Kima Labs, which was later acquired by Groupon. Thank
you, Mr. Scholl. I look forward to hearing about your experience.
I will now yield to the Ranking Member to introduce our final
witness.
Mr. LUETKEMEYER. Thank you, Mr. Chairman and Ranking
Member. I would like to welcome our final witness who is from my
district, Ms. Judy Burns. Ms. Burns is the president and cofounder
of Patriot Machine, Inc. Her company is headquartered in St.
Charles, Missouri, which is in the eastern part of Missouri’s 3rd
Congressional District. Ms. Burns and her husband started this
small business more than 30 years ago and the company has since
expanded to 160 employees. Patriot Machine is a globally competi-
tive aerospace manufacturer supplying highly complex structural
parts and assemblies to America’s largest aircraft manufacturers.
The company prides itself on its cutting edge technology, skilled
workforce, and advanced planning techniques. Patriot Machine con-
tinues to exhibit growth by recently adding a new advanced manu-
facturing facility with ample space for further expansion. Under
Ms. Burns’ expert leadership, Patriot Machine has received the
Supplier of the Year Award on three separate occasions from the
Boeing Company. Ms. Burns’ other recognitions include Missouri’s
First Lady Award for success in the field of business innovation
and the 2015 University if Missouri St. Louis Distinguished Alum-
ni Award. I know Ms. Burns’ experience as a small business owner
and vast knowledge on innovation and workforce issues will be ex-
tremely beneficial to our hearing. Welcome, Ms. Burns, and thank
you for taking time to testify before us today.
5

And with that, Mr. Chairman, I yield back.
Chairman CROW. Thank you. The Ranking Member yields back.
Thank you all for joining us today. Mr. Fanning, you are recog-
nized for 5 minutes.
STATEMENTS OF ERIC FANNING, PRESIDENT AND CEO OF
THE AEROSPACE INDUSTRIES ASSOCIATION; M.L. MACKEY,
CEO AND A CO-FOUNDER OF BEACON INTERACTIVE SYS-
TEMS; BLAKE SCHOLL, FOUNDER & CEO, BOOM SUPER-
SONIC; JUDY BURNS, PRESIDENT, PATRIOT MACHINE

STATEMENT OF HON. ERIC FANNING
Mr. FANNING. Thank you, Chairman Crow, Ranking Member
Kim, and Members of the Committee. Thank you for inviting me
to be part of today’s hearing. My name is Eric Fanning and I serve
as the President and CEO of the Aerospace Industries Association
(AIA). For over 100 years, AIA has advocated for America’s aero-
space and defense companies and the more than 2 million men and
women who are the backbone of our industry.
AIA thanks this committee for its ongoing leadership in listening
and learning from A&D industry leaders to support and strengthen
our industry. A crucial part of this effort is rightfully focused on
our world-class workforce, which remains the bedrock of our indus-
try’s success. These men and women bring unparalleled experience
and expertise, as well as tremendous heart to their work on behalf
of America’s military and our aviation transportation system.
The A&D manufacturing base is a strategic asset for our nation,
and the workforce is its cornerstone. The pandemic underscored
how essential these employees are and reminded us of the unique
capabilities they bring to bear in support of our security and safety
each day. Without question, addressing our 21st century workforce
needs is vital to our missions, our customers, and to America’s na-
tional and economic security.
Addressing the workforce needs of the A&D industrial base re-
quires a strong partnership between government and industry.
There are several ways AIA would like to work with government
leaders and Congress to address these needs. This includes invest-
ing in STEM education, reskilling current employees for new tech-
nologies, expanding our country’s training efforts to broaden talent
pools, and increasing workforce diversity and inclusion efforts with-
in the A&D industry.
The workforce is strong but challenges persist. Economic condi-
tions like record inflation and the length and severity of the pan-
demic are adding pressures to the budget, affecting the cost of per-
sonnel, goods, and services. This has a direct impact on employ-
ment, and ultimately, our customers. These concerns were top of
mind when our Supplier Management Council assembled in New
Hampshire a few weeks ago. Like so many in the U.S., the pan-
demic created unprecedented challenges for our workforce. In 2020
alone, decreasing demand for products due largely to the reduction
in air travel cost our industry 87,000 jobs. Approximately 64 per-
cent of these losses came from the shared A&D supply chain, com-
prising of thousands of small and medium-sized businesses. Infla-
tion is exacerbating the continued pressure on employment.
6

Another challenge the A&D industry faces is the aging of our
workforce. An estimated 26 percent of our industry employees are
over the age of 55, slightly higher than the U.S. total workforce.
Given this disparity and a projected increase in retirements, it will
be imperative to retain and develop the mid-career workforce,
while also continuing to attract top talent.
AIA and our Members are committed to strengthening the diver-
sity, equity, and inclusion throughout our industry. I say more
about this in my written testimony, but our companies are invest-
ing significant resources into the attraction and recruitment of di-
verse candidates to ensure we are accessing the full breadth of
what the country has to offer and to build stronger teams.
How can industry partner with government to support and
strengthen the A&D workforce? Congress can expand federal sup-
port for apprenticeships and career technical education, while also
removing barriers that are preventing companies from effectively
competing for highly-skilled talent. This includes addressing the
lengthy security clearance process which is historically slow and
bureaucratic, leading to staffing delays and slowdowns for impor-
tant national security projects.
Additionally, Congress must address the harmful research and
development tax change that went into effect in January 2022 that
reduces cash flow and in turn will affect employment. Nearly 70
percent of R&D spending is for wages and salaries. This means
that R&D spending is an investment in America’s workforce, as
well as innovation.
At a time when we need to stay ahead of the growing competitive
threat from China, we must continue to build and strengthen our
world-class workforce. It is our employees that are incubators of in-
novation. Their skill will usher in the next generation of advance-
ments that transform and empower our country in the world. We
urge Members to delay this tax change during the bipartisan Inno-
vation Act negotiations.
Thank you for having me today for this important and timely
hearing. I look forward to your questions.
Chairman CROW. Thank you, Mr. Fanning.
Ms. Mackey, you are recognized for 5 minutes.
STATEMENT OF M.L. MACKEY
Ms. MACKEY. Chairman Crow, Ranking Member Kim, and
Members of the Committee, thank you for inviting me to appear
before the Innovation, Entrepreneurship, and Workforce Sub-
committee today. And thank you for your consistent efforts in sup-
porting America’s small business community.
My name is ML Mackey, and I am the CEO of Beacon Inter-
active systems. Beacon delivers innovative, efficiency improving,
digital capabilities to the U.S. Air Force. I am also here today in
my role as the Chair of the Small Business Division of the National
Defense Industrial Association (NDIA), the nation’s oldest and larg-
est defense industry association, comprised of nearly 1,800 cor-
porate and over 63,000 individual members.
So the challenge facing the aviation and aerospace industry
today is a workforce challenge. How do we increasingly grow the
innovation workforce to address both current and future needs?
7

Whether it is a focus on the scientists and engineers developing
and delivering innovative technology or the maintenance techni-
cians, the airmen on the flight line, maintaining and sustaining
aircraft, there is a workforce shortage across the board. To be suc-
cessful we can either increase the workforce so that we have more
people available, or we can increase the capacity of the resources
in place. The most successful outcome will be an artful combination
of the two.
Using Beacon as an example, participating in federal R&D pro-
grams not only enabled us to further develop technology innovation
for the maintainers on the flight line, it also enabled us to further
develop our own innovative workforce. This developmental impact
in terms of becoming an ever more innovative team is the multi-
plier effect of federal R&D funding.
It is important to call out that the innovation workforce is not
only comprised of the technical resources typically thought of in
STEM discussions, but also the wider team of innovation thinkers
necessary to bring a successful product forward. It includes the pro-
gram managers, the analysts, and the extended teammates of our
Air Force colleagues on the flight line. This is the diversity of
thought and creativity that fuels successful innovation. This is the
team federal R&D funds let us explore, find, and push the envelope
to develop.
Without this well-developed intentional diversity of thought, in-
novation happens in one-off moments not as the continuous engine
critical to U.S. national security needs and the country’s economic
prosperity.
At this point I would like to broaden the discussion to bring in
input and recommendations from my fellow NDIA colleagues.
At NDIA, we talk a lot about workforce training. The success and
growth of the aerospace and defense industry is reliant on a robust
and talented workforce. Technicians are a critical component to the
overall operational safety of the industry and are playing a vital
role in supporting the pandemic recovery efforts.
Boeing’s recently released Pilot and Technician Outlook 2021-
2040 forecasted that 626,000 new maintenance technicians will be
needed to meet operator and MRO demand to maintain the global
commercial aviation fleet over the next 20 years. Maintenance tech-
nicians will play a critical role in restoring, inspecting, and pre-
paring aircraft that have sat idle during the pandemic to meet air-
worthiness standards. As importantly the industry will need an in-
flux of technicians familiar with electrical and hybrid motors and
components to keep pace with the emerging advanced air mobility
sector.
The recommendation here is to both continue and accelerate in-
vestment in federal workforce training programs for upskilling of
the existing workforce, as well as outreach efforts for future work-
force development.
Another topic we frequently discuss at NDIA is procurement visi-
bility. The need for a clear demand signal from the federal govern-
ment, while important across all industry participants, is especially
true for small business. This is not limited to just to procurement
or research and development; it is also needed for businesses pro-
viding aerospace services, spare parts, and support.
8

A critical step the federal government, and particularly DoD,
could take to send a clearer demand signal to industry regarding
its priorities for aerospace systems’ sustainment would be to pro-
vide additional detail in the operations and maintenance budget re-
quest regarding the materiel availability objective for each major
weapon system and the resources required across the FYDP to
achieve that objective.
That kind of accountability and transparency on the part of the
federal government would enable greater investment in innovation
and workforce development.
In closing, I will give voice to a third recommendation, which is
more about how to think about federal R&D than actual steps to
take. I am going to suggest we collectively adjust our thinking on
R&D funding from a singular engagement to more of a continuum;
that it should be viewed as more than just the specific outcome of
the specific R&D funding. It should be understood as a continuous
investment in developing the innovation workforce critical to the
aviation and aerospace industry.
With that, I will close my remarks. Again, I would like to thank
you Chairman Crow, Ranking Member Kim, and Members of the
Committee. Thank you for the opportunity to appear before you
this morning and thank you for your continued efforts in helping
the small business community.
I would be pleased to respond to any of your questions.
Chairman CROW. Thank you, Ms. Mackey.
Mr. Scholl, you are recognized for 5 minutes.
STATEMENT OF BLAKE SCHOLL
Mr. SCHOLL. Well, good morning, Chair Crow, Ranking Member
Kim, Members of the Committee. Thank you for having me here
this morning.
I am Blake Scholl, founder and CEO of Boom Supersonic, and I
am pleased to talk about the importance of entrepreneurship, inno-
vation in U.S. aerospace, and our efforts to safely and sustainably
return supersonic passenger flight.
At Boom, we have already built and tested XB1, which is his-
tory’s first independently developed supersonic jet. In our hangar
just outside of Denver, we have the world’s only operational non-
military supersonic jet, and we are well on our way to launching
a Supersonic Renaissance with manufacturing starting in 2 years
where we will create thousands of jobs in our super factory in
North Carolina.
But big things start small. Not that long ago, Boom was a tiny
band of innovators in my basement in Denver building a supersonic
airliner markup out of cardboard, plywood, and chairs from Office
Depot.
At Boom, we believe in a world in which more people can go
more places more often, and we are redefining long distance travel
with Overture, our supersonic commercial airliner. And we are
proud especially to be part of an American manufacturing renais-
sance that is so desperately needed in our country.
We are developing our Overture airline to satisfy three objec-
tives: speed, safety, and sustainability. Aboard Overture, London is
just 3.5 hours from New York, and Sydney, Australia, will become
9

as accessible as Honolulu is today. Ultimately, we envision a future
in which all can benefit from high-speed flight and making the
planet more accessible.
Increasing travel speeds fosters greater human connection, but
here in 2022, we actually fly no faster than we did 65 years at the
dawn of the jet age, and I think that statis in innovation in aero-
space is a big reason why we have workforce challenges. We have
not inspired young people to enter careers in aerospace.
But small startups are changing the face of innovation and avia-
tion. They are innovative, nimble, and able to take risks. And this
mindset is what propels startups to bring revolutionary products,
like a supersonic airliner to the market. Businesses that do great
things all start small. And thanks to fundamental advancements in
the aviation industry and at Boom, safe supersonic flight will now
be comfortable, affordable, and sustainable.
And this acceleration in flight is possible thanks to a revolution
in clean energy. Historically, revolutions in energy have powered
improvements in the speed of travel. In the 19th century, coal pow-
ered the transition from sail to steam and from horses to railroads.
In the first half of the 20th century, oil powered the transition into
airplanes. In this decade, a revolution in alternative sustainable
fuels will power the transition to supersonic flight.
It takes new entrants like Boom to change the fundamental par-
adigm of travel, both in terms of speed and sustainability. And it
is important to note that the United States is not the only country
developing supersonic aircraft. China and Russia are very visible
investing in speed.
The U.S. has long been a global leader in aerospace, and at
Boom, we are determined to see the country remain at the forefront
of innovation. And we are grateful for the early support we have
received from both commercial and military sectors. United Air-
lines has purchased 15 of our aircraft with an option for another
35, a deal that brings our order book to 70 aircraft. And by com-
parison, only 14 Concords ever entered service.
The supersonic technology we are developing will also give new
strategic options to the U.S. military. The outbreak of war in
Ukraine has shown us how important it is to get critical people and
critical things where they need to be quickly, and in the future, su-
personic capability will enhance the effectiveness of American lead-
ers, diplomats, and servicemembers.
Through the Small Business Innovation Research program, we
are also proud to have two contracts with the Air Force. Our most
recent is a 3-year strategic cost-share STRATFI, strategic funding
increase partnership which is a dollar for dollar match between the
Air Force and Boom to accelerate R&D on Overture. But in reality,
taxpayers are getting an even better deal. The Air Force is
leveraging our private capital and there are 10 investor dollars for
every 1 dollar the Air Force has committed.
By teaming with Boom, the Air Force gets in on the ground floor
of a transportation revolution that can continue to build U.S. air
superiority. The Air Force’s interest in our work sends a powerful
signal to our investors, customers, and partners, validating the via-
bility of our aircraft, and the SBIR program allows the Air Force
10

to mature technologies down the road. When we are ready for pro-
curement, the technology is ready and the option is there.
To ensure that U.S. leadership in aerospace endures, government
must continue to partner with innovative small business to nurture
innovation and to facilitate the next generation of aerospace tech-
nology and inspire people to go into the field.
So thank you very much for having me here today, and I look
forward to answering your questions.
Chairman CROW. Thank you, Mr. Scholl.
Ms. Burns, you are now recognized for 5 minutes.

STATEMENT OF JUDY BURNS
Ms. BURNS. Chairman Jason Crow, Ranking Member Young
Kim, Congressman Luetkemeyer, and other distinguished Members
of the Subcommittee, thank you for the opportunity to testify in
this hearing, and thanks much for the opportunities that allow
small businesses to participate in the aerospace and defense indus-
try.
I am the president and cofounder of Patriot Machine. Over the
past 31 years, my company has grown from my home’s garage into
a globally competitive aerospace manufacturer with 160 employees.
Headquartered in St. Charles, Missouri, we supply a variety of
highly complex structural parts and assemblies to America’s larg-
est aircraft manufacturers. From the beginning, innovation has
been the key to thriving in a highly competitive environment. The
long-term health of our company depends on regularly integrating
new technologies and continually finding new and better ways to
improve operations. While we pride ourselves on our culture of con-
tinuous improvement and problem solving, there are some chal-
lenges we cannot take on alone.
The labor shortage in America affects all businesses. At Patriot
Machine, we have seen a marked decline in the number of skilled
applicants since early 2020. Increasingly, we are training new hires
on the job because they come to us without the necessary manufac-
turing skills. We are developing internal programs that emphasize
structured, on-the-job training, and mentorship, and also provide fi-
nancial support for education that applies to our industry. The
costs of recruiting, onboarding and training new hires are signifi-
cant, particularly if those employees leave the company after a
short period of employment, which sometimes happens with new
hires who are not yet sure what career path they want to follow.
We know employees are looking for opportunities to learn and grow
and we are committed to helping them. This is why we would like
to see an increase in federal funding for technical education and
community college programs with a technical focus to help prepare
the incoming workforce for careers in aerospace manufacturing.
Meanwhile, the aerospace industry’s supply chain disruptions
and rising prices in our sector have only worsened in the perfect
storm of recent events. The price and lead-time of raw materials
has doubled. Labor force issues, rising costs and other factors have
caused our suppliers to increase their pricing significantly. Yet
even under these volatile conditions, Patriot is bound by long-term
fixed price contracts with our customers.
11

I encourage you to keep these challenges in mind when making
decisions on the 2023 defense budget. The increase currently out-
lined, while helpful, does not provide significant growth due to in-
flation. Aerospace companies like ours depend on strong support for
advanced development programs, which is R&D basically, and for
our existing production programs. A combination of both helps us
to stay ahead with technology, but also adds support for long-term
stability.
Lastly, we are a capital-intensive business with a need to make
serious financial investments in assets that often do not pay off for
years. This is especially true of the acquisition of our high-tech ma-
chinery and equipment, which can take several years between the
initial purchase, manufacture and installation. Hiring, training and
retaining individuals capable of programming and operating this
equipment takes significant investment as well. Rising interest
rates will make these acquisitions harder, too. One item which
helped manage these high-cost hurdles was the Tax Cuts and Jobs
Act of 2017, which temporarily increased the allowance of bonus
depreciation to qualified property to 100 percent of the value of as-
sets acquired that year. However, that percentage will be phased
out by 2027. An extension of these benefits, and perhaps even a
way of making these benefits known in advance and permanent,
would help Patriot Machine and other small businesses plan for
the future.
Thank you again for letting me share my perspective as a small
business owner in the aerospace manufacturing industry. Your in-
vestments in aerospace projects allow us to continually improve
technologies and develop the next generation of the workforce and
industry leaders
Chairman CROW. Thank you, Ms. Burns.
I will begin by recognizing myself for 5 minutes.
Mr. Fanning, starting with you, there has been a lot of discussion
about reinvigorating the U.S. manufacturing base, onshoring
things that we lost in the 1980s and the 1990s to create the eco-
system again, particularly in advanced manufacturing, yet it re-
mains a very sticky challenge of how we find that workforce again
that we lost over the last couple of decades, those skills. I would
love your thoughts on what is the best way for us to redevelop that
pipeline of skilled workers, particularly with respect to advanced
manufacturing?
Mr. FANNING. Thank you for that question. That is something
we spend a lot of time thinking about. Obviously, we are in strong
favor of American manufacturing, but we are a big exporting indus-
try as well, and so we recognize the importance of the global mar-
kets in that way.
There are a number of things that we saw from COVID that
point to what we would like to bring back to the United States,
chips being one of them. I think we have cut in half the production
of chips in the United States as we look for cheaper labor else-
where. But as you pointed out, there is a labor problem already,
which is slowing the recovery. A number of our businesses think
they could recover faster and do more quicker if they just had ac-
cess to the workforce.
12

I think one of the big things is what programs are out there to
train for what. I remember Secretary Acosta saying when he was
labor secretary in the previous administration that he was down in
Florida talking about needing to train for machinists, and a univer-
sity said, we will create an associate degree program for that be-
cause that is the only money they could get access to from the fed-
eral government. So these are good, high-paying jobs that require
high skills, so leaning into and investing more on the government
side in apprenticeships, work study programs, and really targeting
where we can go after underrepresented communities. That is a
whole category, a whole group of people that we are not accessing
and should be accessing and helping them get on paths for these
jobs.
Chairman CROW. And will that require us reaching into K
through 12 and really starting that pipeline earlier and, you know,
are there any programs that you think would help, you know, real-
ly invigorate people’s interest frankly in middle school and high
school in this area?
Mr. FANNING. Even elementary school. I think you are abso-
lutely right. We want to get the big end of the funnel as big as pos-
sible. I mean, our experience with STEM education is it is a series
of offramps. You lose kids when they lose from elementary school
to junior high, junior high to high, high to college. You are not find-
ing people that are coming in later in life because they do not have
the skills that they need that they learn in math and basic science.
And so there are programs, NASA, FAA, Department of Education
that try to inspire kids into STEM as early as elementary which
is important because then you need to get them all the way
through high school to get them into these other types of programs
that we are talking about, the apprenticeship programs.
Chairman CROW. Thank you.
Mr. Scholl, we had a chance to talk earlier about the SBIR pro-
gram and obviously, one of the things we talk about a lot within
this industry and context is the issue of the so-called ‘‘Valley of
Death,’’ you know, where you have a lot of great ideas and compa-
nies that fall off before they can really bring things to scale and
bring things to market. So I would love to get your views on that
and the importance of programs like the SBIR program for compa-
nies like yours.
Mr. SCHOLL. Yeah, I think the SBIR program is super impor-
tant as a bridge from zero to one for new technologies. Without
that, for example, with the Air Force, we would have to go from
nothing to having a product that is ready for a program of record
procurement process. And the hurdle for that is very high. And
what SBIR does is allow the DoD, the Air Force, to signal interest
in a future product to encourage private sector development of that
product before it is ready to be purchased. So it helps bridge that
‘‘Valley of Death.’’ It helps bring things along and ensures that the
U.S. has an option to procure an innovative product when it is
ready.
Chairman CROW. Thank you.
Ms. Mackey, comments on either of those questions, or both of
them?
13

Ms. MACKEY. Diversity in innovation is really about diversity.
So I am intrigued by the experience that you have about bringing
a product forward. I also find in the SBIR pipeline that there is an
idea and a thought more than a product. So there are these dif-
ferent paths that I think are all valuable and really important to
the process.
I will share our experience with the SBIR program was about
bringing a capability forward that manifested into a product idea
during the SBIR initial investment, and then beyond that
transitioned to the Navy and now it is transitioning to the Air
Force. So I think the SBIR program is a really important piece of
our economy. I think it is also important to the workforce in that
it lets us try innovative new things that otherwise as a small busi-
ness we might be more conservative on. It lets us attract the work-
ers that you were talking about into doing interesting work.
Chairman CROW. Great. Thank you. My time has expired.
The Ranking Member, Mrs. Kim, is now recognized for 5 min-
utes.
Ms. YOUNG KIM. Thank you.
I would like to ask my first question to Ms. Burns joining us vir-
tually. Thank you.
In your testimony, you reference the many challenges of being a
small business owner, including labor shortages, inflation, and sup-
ply chain disruptions. So these are the hurdles that we heard from
other businesses as well. And they do impact businesses in this
similar industry. So how is your business managing with all these
economic headwinds?
Ms. BURNS. Thank you. Thank you, Congressman Kim.
We are taking it all in as much as possible. One of the things
during COVID that was very helpful was the PPP funding and
then also——
Ms. YOUNG KIM. We have technical difficulty.
Ms. BURNS. Sorry. Sorry.
We were critical infrastructure during COVID, which was very
good because it allowed our workforce to continue to work through
all of the COVID difficulties. We were in the middle of building a
new building, which we were able to continue doing and we are
ready for new work opportunities now. And we have our new equip-
ment installed. Fortunately, before, the interest rates were low but
now going forward interest rates are rising. That will be more dif-
ficult. We are doing the best we can of bringing in whoever we can
to train and work on jobs but we are very, very, let’s see, highly
technical. So it does take a lot of training.
Ms. YOUNG KIM. So you mentioned that your company provides
internal workforce development programs to train and mentor your
employees. So can you tell us a bit more about the types of pro-
grams you offer? And what is the biggest challenge your small
business faces in training your workforce?
Ms. BURNS. Well, we, let’s see. We do a lot of different things
for training. When we onboard people, we have a lot of different
things we have to train on—safety, different processes, equipment.
We have a lot of very tight tolerances on our parts, less than like
a hair’s thickness. Then we have to measure them and make sure
they are all made to order correctly. And we just are, let’s see, put-
14

ting in processes to make sure that everybody gets the training
they need. So, we just do the best we can.
Ms. YOUNG KIM. Thank you very much. Thank you.
I want to move on to Mr. Fanning. In your testimony, you dis-
cussed the AIA Members launching a successful apprentice pro-
gram at Valley Community College in San Bernadino. My district
has parts of San Bernardino. How has this program helped meet
the company’s labor demands and bring new employees to the sec-
tor?
Mr. FANNING. The company is CAS, Certified Aviation Services
I think in your district. It is a great example of a public-private
partnership. So they join forces with the local community college
and provide on-the-job training actually on the aircraft that they
are servicing, and 70 hours of that program, of that worktime,
counts towards the degree. And it provides a pipeline since those
students, while they are getting their certificates, are already
working at CAS. They are more inclined and CAS wants to capture
them if they can.
Ms. YOUNG KIM. And those are the things we want to high-
light. So what can we do in Congress and as Members who rep-
resent those, like your community college, to highlight and raise
awareness for apprenticeship programs like that?
Mr. FANNING. Well, I think the demand exceeds what is avail-
able for some of those programs. So if we could increase the fund-
ing for those apprenticeships to provide for the schools, that type
of training that the companies can tap into and partner with, I
think you will see the demand will grow with whatever the funding
is available for those partnerships.
Ms. YOUNG KIM. What I am hearing is a lot of funding. Con-
tinue funding that is working.
Mr. Scholl, how has your business recruited the next generation
of skilled labor in the past? I know you talked about bringing the
new generation and want to make sure that this industry has more
next generation that is interested in continuing the work?
Mr. SCHOLL. Thank you.
I think the most important thing is inspiration. People at very
early ages decide what is going to be exciting to go into and what
they can see themselves going into. And so reaching our young peo-
ple, yes, I think going all the way back to kindergarten, if not soon-
er, and help ensure people from all walks of life that exciting
things are happening, innovation is happening in aerospace, and
supporting them all the way through their career so they can go
do something amazing, not just go and work on a new app for a
cellphone.
Ms. YOUNG KIM. Thank you. I think my time is up so I will
yield back. Thank you.
Chairman CROW. The gentlelady yields back.
I will now recognize the gentleman from Texas, Mr. Williams,
Vice Ranking Member of the Committee, for 5 minutes.
Mr. WILLIAMS. Thank you, Mr. Chairman, and Ranking Mem-
ber Kim. We talk about garages a lot today. It speaks pretty well
for garages. So I want to congratulate you all. And I want to thank
the witnesses for being here today. I appreciate that.
15

As a small business owner for over 50 years—I am a car dealer
so we can talk about supply chain and some stuff—but 51 years.
I still own my business, employ hundreds of people back in Texas.
I know firsthand that we are always looking for more mechanics,
technicians, and other technical workers as we talked.
Our country is facing a growing skills gap as younger genera-
tions are not joining the vocational workforce—we have talked
about that—at a high enough rate that we need. And I was pleased
to see that my bill, the Supporting Small Business in Career and
Technical Education Act passed this Committee in our markup yes-
terday which provides CTE graduates with additional support as
they enter the skilled workforce. While this bill is a great first step
in connecting CTE professionals and as a lot of kids are dropping
out of school they need this so they can realize they can do other
things and not go back to school. Congress and the Biden adminis-
tration need to do more to address the technical worker shortage
that is hurting industries across the country. And of the business
owners trying to currently hire workers, we talked about this this
morning, an astounding 93 percent reported having only a few or
no qualified applicants for the position they were trying to fill and
that is because this administration is paying people not to work
rather than to work and we have got to fix that.
So, Ms. Burns. I have a question for you. As an aerospace manu-
facturer, I know this technical worker shortage is not news to you.
Would you elaborate quickly on the biggest challenges your small
business is facing when recruiting and training skilled workers,
and how is your woman-owned business adapting to this skilled
labor shortage?
Ms. BURNS. Well, it is a challenge. And we are trying to get peo-
ple however we can, basically. We are bringing in people that are
in other career or maybe, you know, like other types of work that
have not had more advanced training that can come in and grow
their skills and their career in aerospace manufacturing. And
sometimes they do not have, you know, schooling past high school
and they are more mechanical and they like these types of jobs.
And——
Mr. WILLIAMS. If I might interrupt you, it just shows that
training is important and that sometimes you have to go get people
from another company rather than training them; correct?
Ms. BURNS. Yes. Actually, we try not to do that too much but
there are a lot of people who are switching between aerospace jobs
who are getting recruited to other aerospace companies as well.
Mr. WILLIAMS. Well, thank you. I will have another question
for you here in a minute.
So, Biden is skyrocketing inflation. We talked about that. Every-
body is affected with this inflation and we have got no fix to it
right now according to this administration. Continues to create un-
certainty and has replaced the labor shortage as the top concern
for small business owners. And on top of that, the Bureau of Labor
Statistics released its April Consumer Price Index reporting that
consumer prices, and all of you saw this, increased by 8.3 percent,
which is worse than experts expected. Plus, we have a negative
GDP. Another month of raging inflation from this administration
means more bad news for business owners like all of us. And so,
16

as a business owner when you get this, you have got to decide
whether to reduce capital investment, lay off, or cut pay for em-
ployees, or pass the costs along to consumers in order to offset
these increased costs, and that is not that easy to pass it on.
So these are difficult decisions business owners should not be
forced to make, and so many people in Congress, my colleagues,
never have to make it because they have never owned a business.
That is a big problem.
So let me ask you this quickly, Ms. Burns. Can you expand on
how the rising costs of goods and gas and labor has impaired your
business and your customers? I am sure you cannot pass it on to
consumers. You just in many cases have to expense it; right?
Ms. BURNS. Right. We are going to have to expense those costs.
I am not quite sure how we are going to cover it yet but while we
are increasing business, I would say there is one good thing in the
business environment now. Since we are coming out of COVID
there seem to be a lot of new opportunities, which I think, will help
grow our business if we can make sure that we get enough quali-
fied people to help expand.
Mr. WILLIAMS. And I think you touched on that, too. And ev-
erybody did here. The tax cuts that we passed in 2016, we need to
make them permanent. Everybody is taking advantage of those.
That is the debate we had back and forth between the two parties,
but the tax cuts did as much to help this economy as anything, and
I am glad to hear our witnesses say that.
So with that in mind, Mr. Chairman, I will yield back.
Chairman CROW. Thank you. The gentleman yields back.
I will now recognize the gentlelady from New York, Ms. Tenney,
for 5 minutes.
Ms. TENNEY. Thank you, Mr. Crow, Chairman Crow, and Rank-
ing Member Young Kim for holding this meeting. And thank you
to the witnesses for your time, your insight, and being business
owners in a tough economy right now.
I am honored to represent New York’s 22nd Congressional Dis-
trict which stretches from the shores of Lake Ontario in the north,
all the way to the Pennsylvania border and everything in between.
This region has a strong innovation heritage and centuries of pio-
neers in the Industrial Revolution, starting back with the digging
of the Erie Canal in my district. And it is also the birthplace of
IBM, the headquarters for the Air Force Research Lab Directorate,
otherwise known as Rome Lab, which is a greater center for inno-
vation in our communities. The area around Rome Lab especially
hosts a vibrant ecosystem of aerospace companies developing the
future of drones and their potential to improve our lives and our
national security. This is aided by the New York Unmanned Aerial
Systems Test Site, which includes a state-of-the-art, 50-mile long
testing corridor that stretches from Rome, New York, to Syracuse,
New York. However, one of our biggest constraints holding back
progress has been the bureaucratic uncertainty from the FAA and
the federal government, as well as the inability to secure needed
components. We need a federal rulemaking process that actively in-
corporates the needs of small businesses and not just the en-
trenched interests that tend to be larger. We also must ensure that
regulators are fully transparent about their plans and intentions so
17

small companies can plan and adapt. The shortage of components
is tied to the country’s decades-long failure to curate a strong do-
mestic supply chain and a line of important products and parts. As
our aerospace industry increasingly pushes the boundaries of tech-
nology, it becomes more and more evident and important to ensure
that our companies can access the semiconductors and the special-
ized components they need. This is a crisis for national security
and our manufacturing capacity.
I want to first address my questions to Ms. Burns, and I want
to say thank you for bringing up the 2017 Tax Cuts and Jobs Act
and the need to make them permanent. That has been one of the
greatest things that has happened to our small business commu-
nity in upstate New York. We have finally gotten a breather from
the oppressive tax and spend type of policies coming out of New
York State from the federal side thanks to that Tax Cuts and Jobs
Act. Not only has it give us more growth in terms of our small
business community; it has given them a little bit of an edge
against some of their bigger competitors. So thank you for that,
and I appreciate my colleague mentioning it.
I wanted to first ask you though, in your testimony you wrote
how the aerospace industry supply chain disruptions and rising
prices have only worsened and that these constraints make it hard-
er to carry out your long-term contracts with your customers.
Would you be able to give an example of some important products
that you are unable to purchase domestically and have to import
from foreign sources and where you have to import them from?
Ms. BURNS. Okay. Thank you for the question.
We actually only use U.S. made products for our manufacturing.
We do not outsource or have any foreign sources for our product.
It is all U.S. made. But some of the prices in materials, such as
aluminum, titanium, stainless steel, those types of things have, you
know, some of them have gone up like double. Aluminum, for in-
stance, is much more expensive than it was previously.
Ms. TENNEY. Is your aluminum and your titanium, are they do-
mestically sourced through the companies or are they—obviosuly,
they are coming from somewhere else.
Ms. BURNS. They are domestically sourced. Yes. So they are
made in the U.S. and I do not know why but there seems to be a
shortage of some things right now. A shortage of supply. I am not
really totally sure why.
Ms. TENNEY. Thank you. I think it has to do with our policies.
I quickly want to ask Mr. Fanning a question, and thank you for
your question, Ms. Burns.
You wrote that a January 2022 tax change has significant im-
pacted America’s innovators and their ability to recuperate some of
their research and development expenses. Can you talk more about
how this tax change is harmful and how it is hurting small busi-
nesses?
Mr. FANNING. The change that occurred this year was to amor-
tize R&D investments over 5 years rather than getting the credit
in the year the expense was made. Seventy percent of R&D comes
out of the private sector, and 70 percent of R&D expenses go to
wages and salaries. So it is good for the economy. It is good to at-
tract new workforce, and it is good for small business because a lot
18

of small businesses are pulled into the research and development
programs.
Simultaneous to that, China is doubling down and giving a 200
percent deduction for R&D expenses. And so we look at it both
from an innovation standpoint but also from a national security
standpoint that we are making a change that could disincentivize
private investment in R&D.
Ms. TENNEY. Thank you for that. I appreciate it. And I think
my time has run out so I yield back. Thanks, Mr. Chairman and
Ranking Member.
Chairman CROW. Thank you. The gentlelady’s time has expired.
I will now recognize the gentlelady from Pennsylvania, Ms.
Houlahan, for 5 minutes.
Ms. HOULAHAN. Thank you. Thank you, Mr. Chair, and thank
you to all of you all for being here today.
As an engineer and a former Air Force officer, I understand the
very critical role that this industry and your industry plays in sup-
porting our nation’s defenses and to promote innovation across our
economy. In my community in Pennsylvania, Boeing employs ap-
proximately 462 of my constituents contributing to an estimate
$492 million of annual economic impact throughout Pennsylvania.
The industry’s impact reverberates across all of our local economies
and supports small businesses in manufacturing and innovation. A
common theme that I have heard in your testimonies is the need
for greater federal investments in STEM and STEAM workforce de-
velopment. To address this need, I have introduced a bipartisan
STEM Restart Act to provide funding to small and middle-sized
businesses, STEM businesses in particular, to offer robust, paid,
mid-career internships, known as returnships, for mid-career work-
ers. This would particularly benefit women who are seeking to re-
turn or transition into the STEM workforce.
For Mr. Fanning, could you please talk a little bit about how pro-
viding funding for flexible workforce development opportunities,
such as the returnships that are created by the STEM Restart Act,
would help address the workforce development and diversity chal-
lenges that are faced by the aerospace and defense industry?
Mr. FANNING. I think one of the things we have learned from
COVID is the value of flexibility when you can afford it. And often-
times, people leave the workforce because they cannot balance the
competing needs they have outside of their job. And so providing
that flexibility, recognizing it, implementing what we have learned
during COVID we think will entice more people back into the
workforce, and in particular, as you pointed out, women, which will
help diversify our workforce.
Ms. HOULAHAN. I appreciate that. It has definitely been my
personal experience that it was very hard to kind of balance every-
thing when my family was young.
To Ms. Mackey, in your testimony you spoke about the impor-
tance of federal investments in Research and Development. On this
Committee, I have introduced other bipartisan legislation that
would enhance SBA’s SBIR and STTR programs which have been
shown to provide significant returns on R&D investments at the
Department of Defense. Could you speak to the importance of reau-
19

thorizing these programs and share your views on how the pro-
gram can be enhanced?
Ms. MACKEY. Yeah. So it is incredulous to many of my col-
leagues in industry, at trade associations, and the government that
the SBIR is at risk of being reauthorized. What is it, $1.2 billion
a year of innovation. And as you talked about, that first step to en-
gage with the Department of Defense and bring mission critical
technology forward.
So to your first point, it is almost ludicrous that we are even con-
sidering whether we should reauthorize it. But of course, we should
reauthorize it and focus more on it. One of the things, I was at a
Harvard Business School event 2 weeks ago with a lot of leadership
from DoD and there were a lot of students look about how can we
get into national security and how can we bring our emerging tech-
nologies and entrepreneurial interests forward? And one of the con-
versations was, and it is a lot like what you said, that SBIR is a
gateway. I hesitate to call it a gateway but a gateway into the com-
munity that is an easy path into what is a different place than tra-
ditional commercial contracting. So we are a nontraditional defense
contractor. The SBIR program let us first explore things that our
more risk averse customers would not have explored. And then it
exposed us to a whole new marketplace that is quite compelling in
terms of personal satisfaction in what you deliver.
So I do not know if that answers your question or if there is any-
thing else.
Ms. HOULAHAN. No, I appreciate that. Thank you. And with
the limited the that I have left, I am really happy to hear that
there is increased attention back to our conversation about diver-
sity and inclusion in the aerospace industry, particularly with re-
gard to female representation. According to AIA’s 2021 Aerospace
and Defense Work Study, only 25 percent of the workers in the in-
dustry are women. Additional data has shown that nearly 90 per-
cent of professional airline pilots are white men.
So to Mr. Fanning, how is the industry making strides in train-
ing, recruiting, and retaining women as part of its commitment to
increase diversity and inclusion? And what can we do to be helpful?
Mr. FANNING. Well, first of all, it is a priority because as we
need to grow our workforce and are in a hunt for talent, we need
to make sure that we are accessing everything that is out there.
And so if we are leaving some parts of the country off the table,
it is not going to be very effective for our recruiting efforts. Aero-
space and defense companies are doubling down on efforts to pro-
vide mentoring, to provide paths for development and career
growth and promotion, to recruit from different areas than they
have in the past to try and find that talent. And we are, back to
the other conversation, doing a number of things to attract people
into STEM earlier. For example, we run the world’s largest student
rocketry challenge, and we just partnered with the Girl Scouts this
year to get more girls into the program, get them excited about
STEM, and then find paths for them through middle school and
high school and into the industry.
Ms. HOULAHAN. Thank you. I know my time has run out. I will
foot stomp again on the importance of returnships. I think we are
20

doing our very best to bring young girls along but we have to keep
them once we get them.
So I appreciate it, and I yield back.
Chairman CROW. The gentlelady yields back.
I will now recognize the gentleman from New York, Mr.
Garbarino, for 5 minutes.
Mr. GARBARINO. Thank you, Mr. Chairman. And thank you to
the Ranking Member for holding this hearing. And thank you to
the witnesses for being here.
A question for Mr. Fanning, and maybe Ms. Mackey can add on
to what she thinks after he answers, but Mr. Fanning, the week
before last, the Senate Armed Services Committee held a hearing
regarding the health of the defense industry industrial base fea-
turing the president/CEO of the Professional Services Council,
David Berteau, and former Undersecretary of Defense for Acquisi-
tion and Sustainment, Ellen Lord. Our hearing focus today is a lit-
tle bit broader than that but both witnesses spoke repeatedly about
the need for industry to have a clear demand and signal from DoD.
For example, Secretary Lord stated, ‘‘If you do not have a clear de-
mand cycle and you do not know what is being purchased over the
next 5 years, you cannot invest your resources, whether that be you
plant, your equipment, your tooling, your people, in something
where you do not know where the return is. And because there has
been such an erratic demand cycle and purchasing cycle, companies
start to go out of business or they put themselves up for sale. So
the most critical thing that the government could do is be very
clear about how much of what is going to be procured over multiple
years and then have long-term multiyear contracts.’’ And then Mr.
Berteau reinforced this key message by saying, ‘‘In order to be suc-
cessful, the company has to predict what DoD is going to need.
They have to invest in that years in advance, and then they have
to maintain that investment until such time as the contract is
awarded. This is very lengthy.’’
I am from Long Island. Northrup Grumman used to have a big
footprint. They left Long Island but a lot of their subcontractors are
still on Long Island and I have met with a bunch of them. They
run through an organization called the DAPS. It is an aerospace
and defense trade association. And all of them have said the same
thing as what these two witnesses said, they need more clarity in
what kind of money is being spent and what is going to happen.
And it is not just limited to procurement though, either. It is
also, as you heard from, you know, research and development.
What could the federal government, in particular DoD, do to send
a clear demand signal to industry regarding its priorities for avia-
tion systems sustainment to enable greater involvement in innova-
tion and workforce development?
Mr. FANNING. Thank you for that question. And I agree com-
pletely with what David Berteau and Ellen Lord said. Having
spent most of my life on the government side in the Pentagon, now
working with industry, I see how industry has to guess oftentimes.
Not only is the clarity not there all the time but the consistency
is not there. And so the 5-year defense program provides some clar-
ity but is not always consistent over those 5 years. And one key
element that is missing from that is sustainment costs. Seventy
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percent of the lifecycle costs of what the Pentagon guys are actually
in the sustainment of it. That is not included in the 5-year defense
plan and that would be another element that would be very helpful
for industry in its planning to take some of the guesswork out
which would actually serve the Department of Defense better in
the long run as well.
Mr. GARBARINO. I appreciate that.
Ms. Mackey, do you have anything to add about what the federal
government and DoD can do?
Ms. MACKEY. So I would just add that the reality, the picture
from a small business owner and from my colleagues at NDIA, and
that is in plain speak, our bottoms are closer to the bottom line.
We do not need it be easier but we need it to be consistent. So all
of the strategic advice that you just gave, as well as once you re-
lease a procurement, make sure that you stay consistent to how
you said you wanted to acquire. We have businesses inside NDIA
right now that are working issues of having invested in order to
do some of these larger procurements that really take them to the
next level and then the playing field changes at the last minute
and the ability to absorb those fits and starts and changes is really
hard for small business. So I think consistency is the piece that I
would like to recommend from the small business perspective.
Mr. GARBARINO. Yeah, the bigger businesses might be able to
manage it better than the small businesses. I have heard that as
well from the member companies in my district.
And just quickly, I know I am running out of time soon, a couple
of you all spoke about what your company or your member compa-
nies are doing for recruitment because workforce has been very
tough to fill. And I know what community colleges are doing. There
has been a big push to get community colleges involved. Are we
seeing any resistance from high schools, or really specifically high
schools from pushing people into these trade jobs instead of push-
ing them to colleges or have you seen high schools being willing to
send people to be part of these programs, students? And that is for
anybody who has experience.
Mr. FANNING. I do not know that we are seeing resistance but
I do know we need to do a better job of explaining to schools, and
to parents, why these are good paths. These are high-paying jobs
that can support families and are doing interesting things. And so
I think that is one thing we have identified we need to do better
at which is explain why these paths are good paths.
Mr. GARBARINO. All right. Thank you so much. I have run out
of time so I yield back. Thank you, Mr. Chairman.
Chairman CROW. Thank you. The gentleman yields back.
One of the things that this Committee does a lot is talk about
the supply of pilots, which is essential to making a lot of this work.
And as additional background and context on that issue I want to
submit a paper into the record with substantially more background
by the Airline Pilots Association to make sure that we are getting
the pilots’ perspective on training and supply pilots as well.
So thank you again to our witnesses for testifying today. This
hearing has showcased the importance of the aerospace industry to
our nation. The pandemic created unprecedented challenges but
today the sector is on its way to recovery. However, these labor
22

shortages will continue to hold back this industry and the entire
economy if they persist. So I am hopeful we can work together to
advance workforce development solutions that help upskill workers
and ensure that small businesses of all types can find the right em-
ployees.
Without objection, Members have 5 legislative days to submit
statements and supporting materials for the record.
And I want to just thank again all of the witnesses for your per-
spective, and this is the type of stuff that is actually called legis-
lating and getting things done. And this is one of the more bipar-
tisan committees in Congress, and I look forward to working with
all Members to actually get these things done.
So if there is no further business to come before the Committee,
without objection, we are adjourned. Thank you.
[Whereupon, at 11:09 a.m., the subcommittee was adjourned.]
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