SBA Management Review: Office of Field Operations (House Small Business Committee hearing, January 29, 2020)

Summary

The printed record of a House Committee on Small Business hearing, SBA Management Review: Office of Field Operations, held January 29, 2020, Small Business Committee Document Number 116–068. The committee met at 11:34 a.m. in Room 2360 of the Rayburn House Office Building with Chairwoman Nydia Velázquez presiding; she and Ranking Member Steve Chabot gave opening statements. The sole witness was Michael A. Vallante, Associate Administrator of the Office of Field Operations, which the chairwoman describes as the top of a field structure of 68 district and 10 regional offices that sets and monitors district performance goals and issues policy guidance. The appendix carries Vallante's prepared statement and his responses to questions for the record from Velázquez; no additional material was submitted.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“SBA Management Review: Office of Field Operations (House Small Business Committee hearing, January 29, 2020).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/sba-management-review-office-of-field-operations-house-small-business-280cac5709/, SHA-256 d43c09be16806418a981e8066123fab9e71ffc0c5fc36f29f10848bdacb08f6c.

Full text

SBA MANAGEMENT REVIEW: OFFICE OF FIELD
OPERATIONS

HEARING
BEFORE THE

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

HEARING HELD
JANUARY 29, 2020

Small Business Committee Document Number 116–068
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
39–457 WASHINGTON : 2020

SBD026 with DISTILLER
Congress.#13
VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 F:\DOCS\39457.TXT DEBBIE
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
ABBY FINKENAUER, Iowa
JARED GOLDEN, Maine
ANDY KIM, New Jersey
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
JUDY CHU, California
MARC VEASEY, Texas
DWIGHT EVANS, Pennsylvania
BRAD SCHNEIDER, Illinois
ADRIANO ESPAILLAT, New York
ANTONIO DELGADO, New York
CHRISSY HOULAHAN, Pennsylvania
ANGIE CRAIG, Minnesota
STEVE CHABOT, Ohio, Ranking Member
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
TROY BALDERSON, Ohio
KEVIN HERN, Oklahoma
JIM HAGEDORN, Minnesota
PETE STAUBER, Minnesota
TIM BURCHETT, Tennessee
ROSS SPANO, Florida
JOHN JOYCE, Pennsylvania
DAN BISHOP, North Carolina

MELISSA JUNG, Majority Staff Director
JUSTIN PELLETIER, Majority Deputy Staff Director and Chief Counsel
KEVIN FITZPATRICK, Staff Director

(II)

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 F:\DOCS\39457.TXT DEBBIE
CONTENTS
OPENING STATEMENTS
Page
Hon. Nydia Velázquez ............................................................................................. 1
Hon. Steve Chabot ................................................................................................... 2

WITNESSES
Mr. Michael A. Vallante, Associate Administrator, Office of Field Operations,
United States Small Business Administration, Washington, DC .................... 4

APPENDIX
Prepared Statements:
Mr. Michael A. Vallante, Associate Administrator, Office of Field Oper-
ations, United States Small Business Administration, Washington, DC . 22
Questions and Responses for the Record:
Questions from Hon. Nydia Velázquez to Mr. Michael A. Vallante and
Responses from Mr. Michael A. Vallante .................................................... 26
Additional Material for the Record:
None.

(III)

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 0486 F:\DOCS\39457.TXT DEBBIE
SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 0486 F:\DOCS\39457.TXT DEBBIE
SBA MANAGEMENT REVIEW: OFFICE OF
FIELD OPERATIONS

WEDNESDAY, JANUARY 29, 2020

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The Committee met, pursuant to call, at 11:34 a.m., in Room
2360, Rayburn House Office Building. Hon. Nydia Velázquez
[chairwoman of the Committee] presiding.
Present: Representatives Velázquez, Finkenauer, Golden, Kim,
Davids, Chu, Veasey, Evans, Schneider, Delgado, Craig, Chabot,
Burchett, and Bishop.
Chairwoman VELÁZQUEZ. Good morning. The Committee will
come to order.
Today, the Committee will examine the management and per-
formance of SBA’s field operations, which serve as SBA’s ‘‘boots on
the ground’’ across the country and are vital in connecting small
business owners with the resources they need to succeed. SBA’s
programs and services are delivered throughout 68 district and 10
regional offices located across the United States and its territories.
At the top of the field structure is the Office of Field Operations
(OFO), headed by today’s witness, Associate Administrator Michael
Vallante. Welcome, Mr. Vallante.
OFO serves as the representative for four field offices at SBA
headquarters in Washington, D.C. Among other responsibilities,
OFO establishes and monitors district offices’ performance goals,
and provides policy guidance to help district offices implement the
Administration’s priorities uniformly throughout the country.
District offices provide critical business development assistance
to entrepreneurs and small-business owners. They also work with
lenders to facilitate small businesses’ access to capital. Addition-
ally, they help ensure compliance with SBA program requirements,
such as those for the 8(a) business development and HUBZone pro-
grams.
Field staff regularly interact with small businesses in local com-
munities to promote SBA’s mission. In recent years, district offices
have conducted more than 20,000 outreach events annually, such
as lender trainings, workshops, and career fairs.
I applaud the hard work of SBA’s field staff and their ability to
do more with less, but they and their small business customers are
currently facing a number of challenges. First, I am concerned over
the reductions in full-time equivalents, or FTEs, over the years. Ac-
cording to SBA, there are currently 687 employees in the regional
(1)

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
2

and district offices, compared to 813 in fiscal year 2014, a 15 per-
cent reduction.
While I understand the constraints the agency must be facing
due to level funding of the salaries and expenses account over the
past years, I would like to learn more about how this reduction in
force is affecting your operations and the services being provided
to our small businesses.
On another note, district offices are required to collect and report
data on their outreach events and activities, so that SBA may track
the performance of each office. However, SBA stopped using its re-
porting system in July 2019 due to budget constraints and began
using a temporary reporting tool. I hope to hear more today about
how OFO is currently capturing and evaluating this important
data.
Relatedly, I was troubled to see a report from the Office of the
Inspector General (OIG) that found SBA lacked sufficient controls
over district offices’ performance data. The OIG concluded that dis-
trict directors did not use performance data to strategize where to
target outreach initiatives, which may limit SBA’s ability to service
under-served areas. The OIG also cautioned that OFO lacked an
established process to evaluate customer feedback on the services
provided by district offices.
Without assessing customer feedback regularly, capturing per-
formance data accurately, or reporting outreach activities correctly,
SBA will not be able to maximize its programs’ impact. We are also
concerned over the lines of communication, or lack thereof, between
headquarters and the district offices that was brought to our atten-
tion by a recent GAO review of SBA’s HBCU initiative.
Troublingly, GAO found that SBA headquarters failed to commu-
nicate its fiscal year 2018 plan to promote HBCUs to district of-
fices, including those with HBCUs in their service areas. As a re-
sult, field staff were unaware of SBA’s goals for engaging with
HBCUs. The lack of communication about HBCU engagement is
particularly troubling, and I hope to learn more about the steps
OFO is taking to ensure this does not happen again.
SBA’s field team serves on the front line of the effort to deliver
high-quality services to small businesses and entrepreneurs. Sim-
ply put, a well-functioning field team is vital to the success of
SBA’s mission.
It is, therefore, imperative that district offices receive the re-
sources they need to succeed; that SBA’s field operation is struc-
tured logically; and that SBA headquarters communicates its goals
and policies to the field team clearly.
Mr. Vallante, I hope we hear more today about whether SBA
leadership is satisfying each of these goals.
I now would like to yield to the Ranking Member, Mr. Chabot,
for his opening statement.
Mr. CHABOT. Thank you, Madam Chairwoman. And thank you
for holding this hearing today.
When a lightbulb goes on and an idea becomes a business ven-
ture, questions of what to do next often challenge an entrepreneur.
Similarly, when an existing small business confronts a hurdle they
have not yet scaled, they are hoping to find assistance in over-
coming their challenge. Confronting tough questions or tough situa-

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
3

tions in the world of a small business owner is commonplace. When
facing roadblocks, some small businesses sometimes turn to family
or friends or acquaintances or the Internet or the resources avail-
able to them at the U.S. Small Business Administration (SBA).
This important hearing will explore the office at the SBA charged
with executing and implementing many of the resources available
to small businesses, entrepreneurs and startups. The Office of Field
Operations, which oversees 68 district offices and works closely
with 10 regional offices, delivers answers to the questions facing
many small businesses across the country. From contracting to
counseling to capital access, the SBA’s Office of Field Operations
supports small businesses in determining their next move. The of-
fice also acts as a customer service unit that connects America’s
hardest working companies with the SBA’s resource partners, such
as SBDCs or WBCs.
The office employs the experts on the ground who deal with
small businesses in a daily basis. In their quest to help small busi-
nesses, they are often the first to hear their complaints. They are
also enlisted to jump into action to assist victims during and after
a disaster by setting up recovery centers. These offices are the eyes
and ears on the ground for the Federal agency charged with help-
ing small businesses grow, expand, and most importantly, create
jobs for Americans.
I am looking forward to hearing from the associate administrator
of this office today. The offices that he oversees must be as nimble
and as quick as the small businesses that populate Main Streets
all across America. Additionally, these offices must utilize tech-
nology to meet the needs of America’s 21st Century small busi-
nesses.
This Committee strives to create an atmosphere where small
businesses can grow. The Office of Field Operations is an impor-
tant part of this endeavor.
I want to thank the witness for being here with us today and
look forward to hearing about the office’s 2020 goals.
And Madam Chairwoman, I yield back.
Chairwoman VELÁZQUEZ. Thank you. The gentleman yields
back.
If Committee Members have an opening statement, we would ask
that they be submitted for the record.
I would like to take a minute to explain the timing rules. Mr.
Vallante, you will have 5 minutes to testify and each Member will
have 5 minutes for questioning. There is a lighting system to assist
you. The green light will be on when you begin, and the yellow
light comes on when you have 1 minute remaining. The red light
comes on when you are out of time, and we ask that you stay with-
in that timeframe to the best of your ability.
Today we welcome Mr. Michael Vallante, the Associate Adminis-
trator of SBA’s Office of Field Operations. Mr. Vallante became the
acting Associate Administrator in March 2019, and he was ap-
pointed the permanent Associate Administrator in May 2019. Pre-
viously, Mr. Vallante served as Regional Administrator for SBA Re-
gion 9, which covers California, Nevada, Arizona, Hawaii, and
Guam.
Mr. Vallante, welcome.

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
4
STATEMENT OF MICHAEL A. VALLANTE, ASSOCIATE ADMINIS-
TRATOR, OFFICE OF FIELD OPERATIONS, UNITED STATES
SMALL BUSINESS ADMINISTRATION
Mr. VALLANTE. Thank you, Congresswoman. Thank you, Chair-
man Velázquez and everyone.
Good morning. Again, thank you Chairwoman Velázquez, Rank-
ing Member Chabot, Members of the Committee, for your kind invi-
tation to talk about the Small Business Administration’s field oper-
ations.
My name is Michael Vallante, and as Associate Administrator of
the Office of Field Operations, I am here today representing the
hundreds of men and women who work in the SBA District Offices
around the country. These are the men and women who bring our
agency’s products, services, and resources to America’s small busi-
nesses, who in turn create two out of every three new jobs in our
country.
Many of you have met and interacted with my colleagues, wheth-
er it is Small Business Saturday, Veterans Small Business Week,
your town halls, expos, or chamber events. I thank the Members
of this Committee for your support of our employees in the field.
In my nearly 3 years at SBA, including the last 8 months as As-
sociate Administrator, I have seen some amazing things that per-
petuate the good about our workforce.
The first is the unbelievable scope and scale of SBA programs
and services available to small business owners. But these pro-
grams do not get to the people who need them without our field
staff. They provide the personal touch in each of your districts to
make small businesses aware of everything we have to offer. I want
our field staff out of their offices and in their communities evangel-
izing the many services SBA and our resource partners provide.
The second is that for most of our agency’s field staff, working
for the SBA is not just a government job. Working for this agency
is an honor, a passion, and a privilege to make a difference in their
communities. At every single event I have been to where small
businesses are honored, the small business honored recognizes,
praises, and thanks our staff by name. For these business owners,
their gratitude is very personal because you hear over and over, ‘‘I
would not be where I am if not for the SBA.’’ There is no dollar
value you can put on that.
Our field staff wear many hats on any given day, but let me
share some updates on specific outreach that I know many of you
are interested in.
In the first quarter of fiscal year 2020, our District Offices have
engaged in over a dozen HBCU-related events with almost 400
attendees, including a Youth Entrepreneurship Summit conducted
at Bowie State in November and an SBIC event at Jackson State
University in December. Each District Office that has an HBCU in
its region has been tasked with doing events with their schools
tying it to major SBA initiatives like opportunity zones, rural pro-
grams, lending of government contracting.
For those districts, and there are many, that do not have HBCUs
in their regions, we have tasked District Offices to do events at vo-
cational, trade, and technical colleges, as well as community col-
leges so we can ensure we are reaching young entrepreneurs.

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
5

With our rural outreach, our district offices have done over 600
activities, attended by over 11,000 people, since October 1, includ-
ing lender training, HUBZone education, expos, roundtables with
USDA and SBA. Whether it is lending training to Farmers Bank
in Montana, the Tolland Chamber of Commerce partnership visit
in Connecticut, or the Women Mean Business entrepreneurial out-
reach event in Minnesota, our district offices have been and are
reaching out into rural communities.
While our field people continue to work tirelessly, we also face
some challenges and realities. Let me give you one example.
You should know that our field staff face a higher average attri-
tion rate than the Federal average. Twenty-six percent of our OFO
workforce is eligible to retire. Forty-two percent of our District and
Deputy District Directors, the frontline managers in the field are
fully retirement eligible today. To address this, a team of District
Directors with over 100 years of experience in the field came to-
gether with HR specialists to help create a more flexible workforce
that does not work in silos and is able to do outreach and mar-
keting. They rewrote position descriptions, came up with two new
positions dedicated to marketing and outreach, and a career ladder
that helps us bring in employees at a grade level that saves the
agency money in the short term. And there were more examples of
our approach to finding positive solutions to challenges that we
face that I hope to share with you during this hearing.
I am honored and blessed to work with SBA’s field team who
work tirelessly every single day to make a difference for our coun-
try’s 30 million plus small businesses.
Thank you very much for inviting me. I look forward to your
questions.
Chairwoman VELÁZQUEZ. Thank you, Mr. Vallante.
I will recognize myself for 5 minutes.
We are of the understanding that the historical FTE count for
the Office of Field Operations is approximately 800 employees. This
past year there were only 687. Can you explain to us why we are
not near the historical average today?
Mr. VALLANTE. Thank you for the question, Madam Chair-
woman.
I cannot address what happened before. I do know that there has
been a path of reduction in the number. But what I will say is
what I have seen is there are several factors that are involved.
One, we have, because HR is a fluid situation and it is more so
with OFO, we have a higher attrition rate within our department,
14 percent attrition rate compared to 9 percent. So, people are mov-
ing out. I mentioned some of the numbers a minute ago. We have
on the front side an issue with hiring in the sense that 100 days
is the goal between when a position is posted to when it is filled.
So, we have people that can walk out the door tomorrow, but it
takes 100 days to fill the positions.
Chairwoman VELÁZQUEZ. You mentioned that a hiring pause
contributed to the declining FTEs in field offices. Can you tell us
when was this pause was implemented and what reasons were
given for this pause?
Mr. VALLANTE. One of the factors was the hiring pause that
happened at the Agency in early spring. It was either late April or

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
6

early May. And basically, it was a situation where we were told
that based on the number of positions that were in the queue, that
were going through a hiring process, there was a question of
whether they would be able to be sustained because of the increase
in costs for employees. And so that is when the pause took place.
Chairwoman VELÁZQUEZ. Is the pause still in effect?
Mr. VALLANTE. No. What happened is after the pause was
done, we had a switch in the model of hiring and the pause is not
still in effect.
Chairwoman VELÁZQUEZ. You mentioned that SBA may not
have had sufficient resources to allow OFO to fill vacancies in its
pipeline. Can you please elaborate on the lack of resources?
Mr. VALLANTE. Well, I think in terms of lack of resources, what
we had in OFO is that anything related to HR has the greatest im-
pact because we have the largest number. But we had a certain
number of people that were in place when the pause was put on.
We had a certain number of people that were in the pipeline. There
were a large number of actions in the pipeline as well for the rest
of the agency. It was not just OFO specific. And at some point it
was decided that we had to take a pause to make sure that if we
did all of the actions that were in place there would be enough fi-
nancial resources.
Chairwoman VELÁZQUEZ. Before and after the pause, how is
that affecting your operation?
Mr. VALLANTE. Well, the biggest thing of the pause was a
change in the way we do hiring. Before it was with an FTE model
and now we do it with a compensation model. So, there was a
change there as I came in, and one of the things that we have tried
to do with our district office who do an amazing job is——
Chairwoman VELÁZQUEZ. Okay. Thank you.
Mr. VALLANTE. All right.
Chairwoman VELÁZQUEZ. I heard when you mentioned the
steps that you are taking to ensure that district offices are aware
of SBA’s annual goals pursuant to the White House initiatives on
HBCUs.
Mr. VALLANTE. Yes, ma’am.
Chairwoman VELÁZQUEZ. Okay. Are you going to be
proactively organized in doing outreach and working with the
HBCUs?
Mr. VALLANTE. We already are. In the first quarter we have
done over a dozen HBCU events with our district offices and re-
source partners. Over 300 people have attended. They have been
directed. They have to do at least a couple.
Chairwoman VELÁZQUEZ. Okay.
Mr. VALLANTE. The report is not due yet, but we are not wait-
ing for the report.
Chairwoman VELÁZQUEZ. Can you tell me what have you
heard from district office staff regarding Certify?
Mr. VALLANTE. Yes. Certify was one of the things I want to say
is to give a shout-out to our Business Opportunity Specialists who
had to deal with Certify. They encountered some challenges with
that program. They came up with workaround solutions that got
businesses’ annual reviews done. I give them a lot of credit for
that. They could have said this is a problem, we are not going to

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
7

do anything. But they went forward and did it. It is something that
we need to deal with going forward because we have to make sure
these businesses get their annual reviews done in time.
Chairwoman VELÁZQUEZ. My time has expired.
Mr. Chabot?
Mr. CHABOT. Thank you, Madam Chair.
Mr. VALLANTE. Thank you.
Mr. CHABOT. Mr. Vallante, no matter the industry, most small
businesses nowadays utilize technology in one form or another.
From retail stores having daily email offerings to high-tech
startups developing software, technology is pretty ubiquitous. Does
the SBA’s Office of Field Operations have the technology in place
to keep up with today’s 21st century businesses?
Mr. VALLANTE. I think we do have. We just had a changeover
in technology, an upgrade in our technology for the people in the
field, which I think has made a difference. I think more impor-
tantly, too, is that our District Offices are aware of some of the
challenges that are faced with their customers or clients, the small
businesses. And so, one of the things that they do in terms of the
training that they do for small businesses is to help educate them
in the challenges that may be out there on technology. And you
know, one of the things that we are very concerned about and ad-
dressing is cybersecurity, especially as it relates to small busi-
nesses. Our District Offices in the month of December dedicate
time to do training on cybersecurity for small businesses because
that is when you have the greatest amount of action in terms of
people trying to defraud businesses. So, we are dealing with that.
And more importantly, I think our district offices are doing a great
job of connecting with small businesses and helping educate them
as well.
Mr. CHABOT. Thank you. I am very glad to hear that you are
trying to be as on top of, as much as possible, cybersecurity. We
have had a number of hearings in this Committee, both when Re-
publicans were in the majority and now the Democrats are in the
majority. So, I think we both feel very strongly about this. And it
is a pretty high percentage of small businesses that literally go out
of businesses if they are hacked, and so those people lose their jobs.
So, anything we can do, and I know we have been trying to get the
SBDCs to have best practices available for small business folks out
there.
Mr. VALLANTE. Absolutely.
Mr. CHABOT. So I would urge you to continue that. Thank you
for doing that.
You mentioned in your testimony the incredible scope and scale
of small business resources available at the SBA. Often on this
Committee, we hear that a small business owner was not aware of
the SBA resources that are available out there. Could you tell us
how does your office market and advertise all the SBA resources
that are available to small businesses and entrepreneurs and
startups?
Mr. VALLANTE. I think one of the things that our offices are
very, very good at, is that they know their districts better than
anybody. One of the things that I have done from the OFO is to
turn to our District Offices and say rather than someone in Wash-

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
8

ington telling you you have to do X number of things, tell us what
are the best ways you can be effective in your community to get
the message out about SBA and become literally evangelists about
what we have to offer. By doing that, one of the areas that came
up was veterans’ outreach. We have a veterans’ person in every
district office. We have VBOCs. But one of things District Offices
said is they want to be able to do more veterans outreach and we
now have the ability to have them do that.
One of the other things that we have done in some of our District
Offices is we have large businesses that use a lot of small busi-
nesses as contractors. A lot of those small businesses are in the mi-
nority community. So, we have worked with the Office of Diversity
Inclusion in these large businesses to be able to access some of
those small businesses that could use either lending assistance,
training, building a business plan, those kind of counseling serv-
ices. So, we are trying the usual things of lender roundtables, edu-
cation events, attending events, hundreds of events. But we are
also trying some new things to reach some of our audience.
Mr. CHABOT. Thank you very much.
I have got about a minute left, so let me mention one final thing.
In our written testimony you had mentioned the SBA’s Office of
International Trade and also the USMCA agreement which was re-
cently passed in the House, the Senate, and I believe the president
signed it into law?
Mr. VALLANTE. Signing it today, I think.
Mr. CHABOT. So, and I think that is huge. And we also saw
phase one in the China deal happen, which also is encouraging.
How are you all working with small businesses that are interested
in overseas marketing? And, you know, the vast majority of con-
sumers on this globe that we all share live outside the borders of
the United States. You have got a pretty small percentage of small
businesses actually trade and sell internationally. So, what do you
all do there?
Mr. VALLANTE. Great question. To your point, I think one of
the things most people are not aware of is the products and serv-
ices from the Office of International Trade that SBA has. It has not
been really one of those things that we have marketed very well.
We, you know, earlier this year had a new Director of that office
come in and we partner with them. We have people in the district
offices that work specifically on international trade, and we partner
at the national level with the Office of International Trade to make
sure our districts and our Regional Administrators are aware of all
the products and services OIT has to offer to small businesses to
open up to foreign markets.
Mr. CHABOT. Thank you very much.
My time has expired, Madam Chair.
Mr. VALLANTE. Thank you, sir.
Mr. CHABOT. Thank you.
Chairwoman VELÁZQUEZ. Time has expired.
Now we recognize the gentlelady from California, Judy Chu,
Chairwoman of the Subcommittee on Investigations, Oversight,
and Regulations.
Ms. CHU. Mr. Vallante, this past November I held a field hear-
ing in my district in southern California to examine the ways that

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
9

SBA can better connect with and support immigrant entrepreneurs.
As a fellow southern California resident, you understand that our
communities are rich with immigrants who come to this country
and start small businesses. But I learned at this hearing that en-
trepreneurs and business owners are too often unaware of SBA and
the services available to them because outreach and services are
not provided in languages other than English. Now, in Southern
California we have whole gigantic populations where the primary
language is Chinese or Korean or Vietnamese.
So, could you discuss any strategies within the Offices of Field
Operations to improve in-language resources and outreach to these
communities?
Mr. VALLANTE. Thank you. I appreciate that question because
as you said, where we come from is hugely diverse in southern
California. And what we have is in the minority communities, we
have the largest growth of the young entrepreneurs that we need
to reach.
One of the strategies that we have developed is while it may be
difficult to reach everyone, one of the things we have recognized is
that whether it is in the Asian community or the Latino commu-
nity, reaching out through the media, to the media that represent
those communities is one very effective way to reach a larger audi-
ence. While we do have people that speak the language and people
who can represent us at different events, what we have found is
that in those communities especially, they listen, the folks in those
communities listen to the media. They trust them. And so, what we
have done in certain areas is partner with the media to commu-
nicate into undeserved communities.
To just give one quick example, we pulled together in Region 9
our Public Information Officers and Public Affairs Specialists to do
a training. When we did it, we did it in Fresno at the Studio of
Univision because what we wanted folks to do was to understand
what the news people are looking for from SBA that will allow
them to be able to communicate our message. In some districts we
have our Deputy District Directors who are fluent in other lan-
guages that are on at least once a month on radio shows talking
about SBA. Again, what we are trying to do is use that broad ave-
nue to be able to reach a greater audience than what we can do
individually.
Ms. CHU. So you said you use the media, but if somebody comes
in and they primarily speak another language then——
Mr. VALLANTE. We do have some marketing materials that are
in different languages that we can make available to them. I think
one of the things we are very proud of is a lot of our district staff
do represent the communities that they serve. And so, they are
able to answer questions.
Ms. CHU. Do you have a breakdown of the language capabilities?
Mr. VALLANTE. I do not, ma’am, but I would be happy to get
it to you if I can.
Ms. CHU. Yeah. I would be very interested in that and will defi-
nitely follow up on that one.
Okay. Mr. Vallante, the Committee is aware of health and sani-
tation concerns at the Los Angeles District Office, which is the re-
sult of significant flooding that occurred in October. I understand

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
10

that employees were placed on telework status while the General
Services Administration and the landlord worked to remediate the
damages caused by the flood.
So, Mr. Vallante, can you provide the Committee an update on
the progress being made to reopen the Los Angeles in a safe and
clean condition?
Mr. VALLANTE. Thank you for that question. It is one that hits
very close to home.
Yes. We had a situation where we moved into a new property.
Shortly after moving in there, literally days later, there was a
flood. It was clear from what took place after that that it was not
going to be a quick process to get that cleaned up or remediated
properly. My goal, and the agency’s goal, is the health and well-
being and safety of our employees first. And so, we were able to
work with a team from GSA and SBA leadership that moved quick-
ly to move us out of the place that we were into, a swing space,
which is smaller. It is in downtown Los Angeles. It is smaller. It
is in a L.A. County courthouse. But I will say while it is a smaller
space, and it is a temporary space. It is clean. It is sanitary. The
people that take care of the building are amazing. It is a night and
day difference, and we are grateful for that. And my goal here is
to ensure wherever we move to next is not only conducive to our
clients but more importantly is safe, clean, and the health and
safety of the people that work in the office.
Ms. CHU. So you are not going back to the place that was flood-
ed then?
Mr. VALLANTE. That is to be determined between GSA and
SBA.
Ms. CHU. Oh.
Mr. VALLANTE. But right now, we are in a swing space.
Ms. CHU. And is the landlord paying for the damages?
Mr. VALLANTE. No. The answer is no. We are not paying rent
there at this point in time but no, we had to move. We decided to
move out because we saw that it was not going to be—in good con-
science we cannot keep our people or ask them to go into a place
that is not, in our opinion, healthy and safe.
Ms. CHU. Yeah. Thank you. I yield back.
Chairwoman VELÁZQUEZ. The gentlelady’s time has expired.
Now we recognize the gentleman from Tennessee, Mr. Burchett,
for 5 minutes.
Mr. BURCHETT. Thank you, Chairlady, Ranking Member.
Thank you for being here. And I have your name hyphenated,
spelled out here so I will say it right, Mr. Vallante.
Mr. VALLANTE. Yes.
Mr. BURCHETT. We have trouble in this Committee saying peo-
ple’s names. And I am guilty as charged. I have a good time. The
Chairlady and the Ranking Member have been very kind to me,
and I forgive them for their lack——
Chairwoman VELÁZQUEZ. That is true.
Mr. CHABOT. But our patience is limited.
Mr. BURCHETT. Excuse me. You both are out of order.
But thank you, brother, for being here.
Chairwoman VELÁZQUEZ. I control the time.

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
11

Mr. BURCHETT. Yes, ma’am. I know. Ma’am, I have a wife and
a daughter. I completely—yes, ma’am. You are correct. Let me get
that right.
I appreciate your testimony as well as your efforts for small busi-
nesses, of course, and your career. Do you, or any of your field of-
fices host roundtables with local small business owners to hear
them out on what they need from the SBA? And when I say that
I do not mean some kind of staged event for, you know, for the
media, and you call folks in and you feed them the questions and
then, you know, and they just come in and tell you how it is sun-
shine and unicorns everywhere. I get ticked off about that because
we do it up here and we do it for the press and we do it for our
good friends at C-SPAN and the rest of it. And to me it is just a
big, freaking waste of time, brother, and I would like to see if you
all are really out there listening to these folks. Because I represent
a lot of hardworking folks, a lot of our inner city, and they are still
struggling. They have jobs but I like to see these empty buildings
in these deserted areas, something done about it and it kind of
wears me out. Sorry I went to preaching. It is not in my notes but
my guys, they do not—just like the president’s teleprompter oper-
ator. They are just looking around, where did he get that? Where
did he get that? Anyway, brother, go ahead.
Mr. VALLANTE. Well, to answer your question, congressman, I
would say our District Office folks, with everything that they have
on their plate, with all of the things that they have to do from a
compliance and outreach and marketing and a training standpoint,
quite frankly, do not have the time to do the kind of show, if you
will.
Mr. BURCHETT. So let me stop you there.
Are we covering you up with bureaucracy? Just me and you talk-
ing, off the record.
Mr. VALLANTE. No. No, I do not think so. I think what we are
trying to achieve with our district offices is with the resources that
we have, to give them more, not only have us have more account-
ability so that we can report to you the activities and the achieve-
ments that they are doing, but to give to them who know their dis-
tricts the best the opportunity to make the greatest impact in their
districts. In some places that will be rural actions. In some places
it will be opportunity zones. In some places it is lender outreach.
In many places it is doing more activities for our veterans’ commu-
nity. We are trying to empower them with the resources that we
have, to go as far as possible and to do things that are real and
not make believe.
Mr. BURCHETT. What else can we do here in Congress to help
you help our small business owners?
Mr. VALLANTE. I think one of the great things, and we have
it already, and anything we can build on is a relationship that our
SBA district offices have with their congressional members and
their staff in the district. Anytime that we can be at events that
you are having—sorry about that—that you are having or holding
that we can be at and pitch SBA and our products and services
that are available, we want to do that. Anytime that we are doing
events that you can introduce us to or we need you at, we would
love to have you at them. I think all of that, with not just SBA but

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
12

also our resource partners—our SBDCs, our Women Business Cen-
ters, our SCORE volunteers—all of that is a synergy that helps cre-
ate a better business climate, a better opportunity for the business
to succeed. There are a ton of things out there to help small busi-
ness. We have some. The states have some. Municipalities have
some. All of them working together can help those small busi-
nesses.
Mr. BURCHETT. I appreciate all that. I just feel like some of our
least served folks, just hardworking people, they did not have the
shot I had with two wonderful parents. And I just have been very
fortunate, and God has been very kind to me. But I sure would,
maybe if you could have one of your folks get in touch with me.
Mr. VALLANTE. Absolutely.
Mr. BURCHETT. I would like to have one of those roundtables
with some of those working people and not just some staged event.
Mr. VALLANTE. We would love to do it, Congressman. Abso-
lutely.
Mr. BURCHETT. Thank you, brother. I appreciate that.
Mr. VALLANTE. Thank you.
Mr. BURCHETT. We will do it.
Chairlady, I yield back my remainder of 3 seconds.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Pennsylvania, Mr. Evans,
Vice Chair of the Committee.
Mr. EVANS. Thank you, Madam Chair.
According to November 2019, the GAO report, the SBA had
signed several alliance memorandums with historical black colleges
in 2008 to 2018. These memorandums are 2-year agreements with
historical black colleges that state the parties would develop and
foster working relationships with the intent of strengthening small
business development areas. November 2019, the GAO report
found both positive and negative experiences in historical black col-
leges resulting from these memorandums.
Mr. Vallante, how many strategic alliance memorandums with
historical black colleges are still in effect?
Mr. VALLANTE. Quite honestly, I do not know. I would have to
get that from our Office of Entrepreneurial Development, which is
where that would be housed, and I would be happy to get that for
you.
Mr. EVANS. Okay.
Do you track the performance of the SBA in relation to these
memorandums?
Mr. VALLANTE. Now, that I can answer, sir.
Yes, we do. And one of the things that we have changed, as the
Chairwoman had mentioned in her remarks that I wanted to make
sure we made clear, one of the problems or the challenges that we
had is we were not properly recording some of the activities that
are being done. And so, we changed our reporting tool that we had
to ensure that District Offices that are working in partnership with
HBCUs and our Resource Partners record all of their activities.
And not only record them to have done something, but what it was,
and how many people attended; get into the granular part of it be-
cause what we are trying to do is not only see what is being done

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
13

but see what else we can do elsewhere that is not being done and
take some of those best practices.
Mr. EVANS. Has the SBA addressed the issues outlined in the
November 29th GAO report, not including the memorandums, pro-
ducing any results?
Mr. VALLANTE. I would say that the results that we have as
of October 1 to December 31 is right now over a dozen HBCU
events that have been done with over 400 attendees and more that
are planned by district offices. We have just finished quarter one.
One of the things that happens with the tracking tool that we have
is our Regional Administrators will sit with District Directors who
have been charged with reaching out to the HBCUs and see what
has been done and ensure that those things get done before the end
of the year. The report, I believe, is expected to come out from the
White House sometime this year but we are not waiting. We know
that this is an important constituency that we need to reach out
to and be part of our everyday plan in the District Offices and they
are doing it.
Mr. EVANS. Who is specifically in charge of the SBA outreach
to historically black colleges?
Mr. VALLANTE. It is done from the District Offices. And what
they do is they partner with our Resource Partners, our SBDCs
and do the outreach into the HBCUs.
Mr. EVANS. Have the SBA resource partners submit plans for
SBA outreach with historically black colleges?
Mr. VALLANTE. The plans are part of the overall operating
plans that our District Offices have. That is one of the goals that
they are set to achieve is at least doing two events related to the
major programs that SBA has.
And as I mentioned in my opening, the other part about that is
we looked at that report and said where are other places that we
are not reaching out to that we should be reaching out to that are
opportunities that we are missing? One of the things that we iden-
tified was vocational trade, technical schools, community colleges.
And so, places that do not have HBCUs we have tasked the Dis-
trict Offices to do outreach into those areas as well.
Mr. EVANS. Are these plans publicly available?
Mr. VALLANTE. The results that we have are in our internal
document which we call GMAT, which goes to one of the GAO rec-
ommendations that was given to us. What we do is we roll those
up. We take a look at them because they are a measuring tool. And
they are not public information. They are internal documents. But
I am happy to share with any of you all of the activities we have
been doing specifically with HBCUs to not only the dates and the
places and the number of people.
Mr. EVANS. Real quick. Do you think they should be public?
Mr. VALLANTE. I think a lot of that is internal for our use to
be able to strategize and be able to go to places, or know where we
are not meeting goals and where others are exceeding goals and
how we can use that to improve our performance. But I think it
is something that is more internal.
Mr. EVANS. Thank you.
I yield back the balance of my time.
Mr. VALLANTE. Thank you, Congressman.

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
14

Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from North Carolina, Mr.
Bishop.
Mr. BISHOP. Thank you, Madam Chairman. Thank you, Ma’am.
Mr. Vallante, I am a new member. I have been here all of 4
months, and so I wonder if the beginning, and perhaps it was cov-
ered, but as you were giving your comments, and I have heard it
otherwise, you mentioned that your district and regional offices
work hand-in-hand with your resource partners. And you men-
tioned specifically, some of these I know what they are, but I do
not know what the Small Business Development Center is, the
SBDC. Would you explain what that does? And are they more
widely geographically distributed or what?
Mr. VALLANTE. The SBDCs, they operate under our Office of
Entrepreneurial Development. They are given grants. They are
more in the communities. They are more storefronts, if you will.
Mr. BISHOP. All right.
Mr. VALLANTE. And they are a key Resource Partner for us in
that we are able to leverage our ability to outreach and open the
doors to lending opportunities that exist. I would say that there are
SCORE volunteers who provide the counseling and the training.
Our Women Business Centers, our Veterans Business Outreach
Centers, all of those are the ecosystem that we work with to be-
come a force multiplier in the field.
Mr. BISHOP. I see.
You know, and most of these hearings for me, I am sitting here
on my phone and trying to learn about background that might give
me some insights. I do not know much about how SBA operates in
my own district, so I looked it up and it looks like North Carolina
has a district office in my hometown of Charlotte. And then I go
seven counties east in a very rural district and there are a couple
of satellite district offices as I see them. And interestingly, they are
located, a couple of them are located at community colleges. Is that
a common strategy? It seems to make some sense to me.
Mr. VALLANTE. It does make sense. I was about to say you are
fortunate and blessed, if you will, because you have a state that
has what we call ‘‘alternate worksites.’’ Because you do have, I
mean, obviously, one office in Charlotte, North Carolina, is not able
to cover an entire state. So, you have an office which is able to
focus on rural areas. We actually advertised just recently for a po-
sition in Wilkes-Barre, Pennsylvania, for the same kind of thing.
It is in a rural area.
Alternate worksites I think are things that we should be looking
at because it allows us to not only get into a community but plant
a flag there. Our folks are there every single day and they can be-
come part of the community. That is one of the challenges that we
have when you do not have the resources to be able to do that. But
I think those are things as we go forward I want to continue to look
at because I think one of the things, and I mention it in my com-
ments, is that when you are there all the time, whether it is on
any kind of issue, and you build credibility with the community,
they are going to trust you. And when they trust you, they are
going to say, here is where I am strong. Here is where I am weak.
How can you help me? And I think having these kinds of alternate

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
15

worksites like you mentioned that you are fortunate to have in
North Carolina is something that I think we can look at or look at
in other places as well.
Mr. BISHOP. Final question with the time I have got remaining,
when you were talking about accountability and sort of metrics,
how you measure the operations of your Office of Field Operations
and all the various district offices and so forth, that you talked
about types of meetings and types of events and attendance and so
forth. I get the sense that you are measuring sort of outputs, seeing
what the individual officers do in terms of specific activities. But
do you do anything to go deeper than that to figure out what the
impacts are? That is to say you may be having a lot of events, but
the attendance is not large. Or even if the attendance is significant,
it does not result actually in penetrating the market with the infor-
mation that is needed so that utilization increases.
Does that make some sense?
Mr. VALLANTE. Outcomes versus outputs.
Mr. BISHOP. I think that is well said. You summarized it in two
words.
Mr. VALLANTE. I think that is absolutely right. One of the
things that we are trying to do is, we are able to capture success
stories, which are, you know, any time you listen to them it is ev-
erything from the mom and pop store to biotech company or biotech
small one-person firms that are creating technologies that are
going to change the way people live. It is amazing stories that we
have.
One of the things that we are doing, it was referenced that we
have addressed it because of a GAO recommendation, is what we
call our customer service experience, which was a recommendation
which we took to heart, and we started in 2019. And we are con-
tinuing to get feedback from people that attend our evens. What
worked, what did not work, what did they use, what was the out-
come of that? I think that is a measure that we have just started
to do earlier in 2019 that I think will help us bridge that gap.
Chairwoman VELÁZQUEZ. The time has expired.
Now we recognize the gentleman from Illinois, Mr. Schneider.
Mr. SCHNEIDER. Thank you, Madam Chairwoman. And Mr.
Vallante, thank you for joining us today.
Mr. VALLANTE. Thank you for having me.
Mr. SCHNEIDER. And sharing your perspective.
We have had a number of events in my district. I represent the
northern suburbs of Chicago in Illinois. It has been very good work-
ing with the Illinois District Office on a number of these different
events. In particular, I cannot speak more highly of the Small Busi-
ness Development Center. Our events have, many of them, been
standing room only, so there clearly is a demand for this informa-
tion and the chance to work with the SBA
We have also, the Illinois office has coordinated $60 million in
SBA loans just in my district just last year. So, thank you again
for what you all are doing.
As far as reaching out, preparing for an event, events that often-
times are largely led by your team, leaving no empty seat in the
room, we can get bigger rooms. If we are going to get bigger rooms,
we need to bring in more people. What kind of data can we tap into

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
16

that you guys might have on industry data to identify potential tar-
gets to reach out to and bring into these events?
Mr. VALLANTE. I would say that one of the things that we are
finding, and again, I do not mean to go back to it, but our customer
service experience that we have started is to get feedback from peo-
ple as to what it is that they are looking for. I mean, we just start-
ed getting data in because it just started, but one of the things that
we found is for a large group of people that filled out the survey,
we are seeing that they prefer to do webinars rather than brick-
and-mortar events. So, we are going to dig a little deeper into that.
I think one of the other things that our district offices are really
good at is providing a variety of different things that people can at-
tend specifically targeted to whatever subject matter that they are
particularly interested in. I know in some of my district offices they
will bring in other Federal partners to talk about programs that
are there. They will bring in the IRS to talk about taxes. Anything
that we can do to bring people into the door or online with
webinars, to educate everything that we have to offer as a one-stop
place to find out how you can grow your business.
Mr. SCHNEIDER. Great. And one thing I will add, I think the
ability to integrate the web series, as well as then the occasional
in-person to bring people together, that face to face still has value.
I think you can reinforce it with webinars, and if we can help you
with that, I would be interested in it.
I want to touch for a second on you talked about your hiring
process. You said it is 100 days from the time vacancies open. And
you know, there are three processes to fill that—recruiting quali-
fied candidates. Second is the evaluation, interviewing, selecting
the candidates. And then onboarding the new hires. Is there a spe-
cific place you are having trouble? Are you struggling to get appli-
cants? Are you struggling to do the evaluations? Is it onboarding?
One hundred days is a long time.
Mr. VALLANTE. It is a long time. And it is the standard of suc-
cess that they define within government; from the time it is posted
to the time it is filled. One of the things that we are doing in OFO
is we are encouraging our managers in the field, rather than just
doing blanket announcements, to look at different hiring authori-
ties that could shorten the timeframe. That would help us tremen-
dously because, as I mentioned before, we have people going out
the door at a quicker rate, and those people can go out the door
on any given day. They can give 2 weeks if they want to, but we
had, you know, instances last year where a District Director calls
on a Friday and says I am retiring on a Saturday. And so now we
have that period of time.
So, there is some special hiring authorities that are available to
us and we have been educating our field staff on how to use those.
They include military spouses, 30 percent veteran disability, sched-
ule A, Peace Corps volunteers. All of those things will shorten the
process that we can do something about.
Mr. SCHNEIDER. And again, the best way to avoid that is to try
to reduce the turnover. And if there is anything we can do to help
with that we would like to.
My last topic is looking for ways that we can coordinate more ef-
fectively, to coordinate with your office with our team among pro-

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
17

grams. You touched on it. Everything from the mom and pop to the
next breakthrough technology, we have those conversations with
folks in our district. I am sure we are not unique, that that is
across the country. But are there ways that we can better coordi-
nate to work with your office to get the message out and help facili-
tate the access to capital?
Mr. VALLANTE. I think it is amazing to me, someone had said
to me when I was doing this, well, maybe you need to explain how
the District Offices work with the members of Congress. And I was
like, no, I do not need to explain that because the District Offices
work with the Members of Congress in their district. I think just
the continued cooperation and communication back and forth
makes a huge difference. If we can let you know what is going on
and your office asks us to participate in things, whether they are
large or small, anything that we can do collectively and collabo-
ratively I think will help make a difference and get that word out.
Mr. SCHNEIDER. I am past time but the last thing I will say
to emphasize your point is the more we can partner your offices
with our members of Congress, there is little of greater impact that
we as members can do than helping our small businesses succeed.
Chairwoman VELÁZQUEZ. If the gentleman will yield?
Mr. SCHNEIDER. I will yield my extra time.
Chairwoman VELÁZQUEZ. What I will say is that oftentimes,
Members of Congress reach out to you so that we can set up work-
shops, but other times you organize workshops and events in our
districts. I would suggest that you reach out to the Member to let
them know that this is happening and that they are welcome to
come.
Mr. VALLANTE. I will make note of that and make sure that
happens. I appreciate that, Chairwoman.
Chairwoman VELÁZQUEZ. Time has expired.
Now we recognize the gentlelady from Kansas, Ms. Davids.
Ms. DAVIDS. Thank you, Chairwoman. And to you and to the
Ranking Member for holding this hearing today.
So, I represent the Kansas 3rd Congressional District, which is
in the Kansas City Metro Area. It is on the Missouri side, the
Great Plains Regional Office in Kansas City. But actually, this con-
versation about the relationship and the communication between
regional offices and various members I have found, and maybe it
is because entrepreneurship is kind of baked into the DNA of our
region, that we have begun to develop a really good line of commu-
nication. So, when events are going on, we definitely reach out to
the office and let them know. And we have been fortunate enough
to have people from the SBA reach out to us when events are going
on. And I hope to keep that collaboration going.
One of the things that you mentioned in your testimony was the
personal touch and the frontline that the folks who are in districts
and the employees who are on the ground have. I am curious if you
could tell us a little bit about that process for both how the district
offices interact with the leadership and how their feedback and in-
tegrated. And then how the feedback from, the more recent, you
were mentioning the outcomes and measures that you were taking
from customer, basically the customer feedback.

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
18

Can you tell us a little bit about the process of how that is going
to be integrated since I know that is a newer thing for you all?
Mr. VALLANTE. Absolutely. Thank you for the question.
I think to your point, first about the personal touch. This is very
personal for people. I mean, what I have seen is that they are cre-
ating opportunity not just for themselves but for their families.
They are the ones that hire people in the communities. They are
the ones that sponsor Little League teams and things like that. So,
and sometimes it takes a long period of time to get to that outcome
of actually providing the service that they needed. And our people
in the field stick with theme every step of the way. So, there is an
investment of that.
To answer your question about collecting information. Again, one
of the challenges that we have, and someone mentioned a nimble
workforce, the more information and data that we can collect that
can help our district offices spend the resources that they have in
a more targeted manner, in a more effective manner, I think helps
everybody. And so, we have a wide-open line of communication be-
tween the field and OFO. You know, I still serve as the Regional
Administrator for Region 9, as well as the Associate Administrator.
So, we have a great line of communication with the field.
I will tell you some of the challenges that we had with GAO.
What we did was we went to the field and asked them to help solve
the problem. The thing that we had on our tracking of our metrics,
if we had gone with the system that was in place it would have
cost us in the vicinity of $300,000, and it would have lasted about
3 months. Instead what we said is, let’s come up with a better sys-
tem. And we turned to people in the field to come up with the sys-
tem because they are the end user. We ended up with a much bet-
ter system and it cost the taxpayers absolutely nothing. That did
not happen because of me; that happened because we turned to
people who are the end users. Many times, I think what happens
is we do not reach out to the field or we have not reached out to
the field and say, how does this impact you and your ability to do
the job? We do that now.
Ms. DAVIDS. Thank you. So I just want to, first of all, thank you
for acknowledging the fact that the folk who are on the ground
working with the people who are coming in and trying to get help
with starting their small businesses, being on the ground, that is
a lot of times where some of the best ideas come from and some
of the most effective solutions to issues that we are facing come
from the people who are really on the front lines.
I will yield back in just a second. I just want to say that I have
very much appreciated the work at the regional level, in the Great
Plains region, that I have seen from our SBA. Sometimes there are
issues, but I do feel like we have a good line of communication
there. And I will look forward to hearing more from you in the fu-
ture about how we can just make sure that we are continuing to
innovate and make this much better for the folks who are trying
to start small businesses.
Mr. VALLANTE. I appreciate that.
Ms. DAVIDS. I yield back.
Chairwoman VELÁZQUEZ. The gentlelady yields back.
Now we recognize the gentleman from Maine, Mr. Golden.

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
19

Mr. GOLDEN. Thank you, Madam Chair.
First of all, sir, I want to be sure to be complimentary to the
team in Maine. Amy Bassett is our district director and her team
I think has done great work in Maine for years now. But they have
been great to work with. With our office I could not possibly have
any complaints in regards to the communication, the willingness to
work with us in setting up our own tables and other events and
just kind of seeing the handoff of constituents’’ business owners
that we come across out in the field with my staff who are looking
for some help.
Mr. VALLANTE. That is great to hear. They are great people.
Mr. GOLDEN. I appreciate it very much.
I represent the second most rural house district in the United
States of America, though, and I can tell you, it is a numbers
game. People do not necessarily think of SBA as anything more
perhaps than a lender. And about those lending programs. So,
when I think about other distance they have to cover, 6 hours from
north to south driving in my district and about the same east to
west, they do not have enough boots on the ground for that phys-
ical presence.
And I wanted to talk to a little bit about the force multiplier ef-
fect. You know, given how difficult it can be in big rural geographic
areas. I am interested to know how far SBA’s commitment is to
standing up to Office of Rural Affairs in 2020. And you may be
aware that I, along with a number of colleagues, many who are on
this Committee, sent a letter to SBA last year asking for some spe-
cifics about the mission of the office, the characteristics, and what
is the status given that that office was established in 1990 and
under multiple administrations, really, was never stood up
Mr. VALLANTE. I would say first to your point about the dis-
tance, you are absolutely right. I am proud of our field staff. Amy
and her team, and across the country, after the MOU was signed
by former Administrator McMahon with the USDA, we really took
the task at the field level to go out and partner with USDA and
get to as many places as possible as many ways as possible to edu-
cate people about the two different programs and what each has to
offer. They are complementary. Putting out marketing documents
that market SBA and USDA products so that when each staff is
out and the other is not with them, they can market it.
Just this past year alone, because——
Mr. GOLDEN. I appreciate the work that they are doing. I really
do.
Mr. VALLANTE. Right.
Mr. GOLDEN. But I do want to focus my time on the Office of
Rural Affairs.
We sent a letter in July. I think we are pretty patient. We have
not gotten a response yet. My understanding is that the response
has been drafted. It just has not made its way through like the con-
gressional liaison process. And at this point I am curious when we
might expect it.
Mr. VALLANTE. I can give you an update on that. The letter
was drafted. It was circulated. The letter was drafted. And I be-
lieve right now it is at OMB waiting for them to sign off on it and
get it back to you.

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
20

Mr. GOLDEN. Thank you. That is very helpful.
Do you know whether SBA will include a funding line for the of-
fice in its 2020 budget request?
Mr. VALLANTE. I do not know if that is going to be included
right now. It is funded through OFO.
Mr. GOLDEN. And is that something you might support?
Mr. VALLANTE. I think what I am supporting at this point is
being able to do everything we can. I look at the Rural Affairs Di-
rector Office as a value-add to everything that we are doing. It
gives a national voice to all of the work that has been done and
is done every single day by the people in the field. It gives a na-
tional voice to that. It also is a way to coordinate with other Fed-
eral partners. There are numerous programs, whether it is Labor,
Energy, that we have the ability to partner with into the rural
community, and it gives us someone who can do that coordination.
Mr. GOLDEN. In response to the letter, I assume it is in re-
sponse, and I think it was a positive one, Director Michelle Chris-
tian was assigned to the position and I believe has like a half a
staff member. And I just want to point out she came to my district
last week.
Mr. VALLANTE. Yes.
Mr. GOLDEN. We had a great tour around the district. Met with
multiple businesses in multiple communities. Had a number of ac-
tion items, just like you just talked about. Different agencies that
might be able to help them as they try and bridge some gap fund-
ing and other things, talking about opportunity zones, talking with
Amy and trying to coordinate an effort to get some wraparound
services. And already I have seen in a week two out of three action
items followed up on. And I think it is that singular focus that I
think is the potential asset to you of that asset. Obviously, though,
it would need some resources in order to be effective across the
country.
Mr. VALLANTE. I believe that what you just mentioned, I know
Michelle has about four or five in the next month, events similar
to what you experienced. We have a whole bunch of opportunity
zone events that are taking place. She is dovetailing on some of
those to do rural opportunity zones. Again, we have a huge vet-
erans’ event in Las Cruces, New Mexico. SBA event. She is
partnering with that because it is rural. There is a lot of value-add
there. There is no doubt about it, and it does help.
Mr. GOLDEN. Madam Chair, I am well past time, but I can-
not——
Mr. VALLANTE. I appreciate that.
Mr. GOLDEN.—express to you enough how impressed we were,
and we want to see that office succeed.
Mr. VALLANTE. That is great to hear. I appreciate that.
Chairwoman VELÁZQUEZ. The gentleman yields back.
I want to thank Mr. Vallante for being here today. As I stated
in my opening remarks, district offices are integral to the success
of SBA’s mission. We cannot effectively facilitate access to capital
in underserved markets, provide counseling to small businesses in
emerging areas, help rural small business export their products
around the world, or deliver SBA’s other important programs with-
out robust field operations on the ground.

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
21

Mr. Vallante, I also hope that if you feel that you do not have
the resources available to staff your field operations and your dis-
trict offices, that you will relate that to the new Administrator so
that we see a budget submission that really reflects the needs of
your office.
Mr. VALLANTE. Thank you.
Chairwoman VELÁZQEZ. Today’s hearing highlighted challenges
currently facing OFO, and this Committee will continue with its
oversight of OFO’s operations to ensure SBA leadership addresses
these challenges.
But I want to again applaud SBA’s field staff for their diligent
work on behalf of American small businesses.
I will ask unanimous consent that members have 5 legislative
days to submit statements and supporting materials for the record.
Without objection, so ordered.
And if there is no further business to come before the Committee,
we are adjourned. Thank you.
Mr. VALLANTE. Thank you, Chairman.
Chairwoman VELÁZQUEZ. Thank you.
[Whereupon, at 12:38 p.m., the committee was adjourned.]

SBD026 with DISTILLER

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 F:\DOCS\39457.TXT DEBBIE
22

APPENDIX

SBD026 with DISTILLER Insert offset folio 22 here 39457.001

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00026 Fmt 6602 Sfmt 6602 F:\DOCS\39457.TXT DEBBIE
23

SBD026 with DISTILLER Insert offset folio 23 here 39457.002

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00027 Fmt 6602 Sfmt 6602 F:\DOCS\39457.TXT DEBBIE
24

SBD026 with DISTILLER Insert offset folio 24 here 39457.003

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00028 Fmt 6602 Sfmt 6602 F:\DOCS\39457.TXT DEBBIE
25

SBD026 with DISTILLER Insert offset folio 25 here 39457.004

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00029 Fmt 6602 Sfmt 6602 F:\DOCS\39457.TXT DEBBIE
26

SBD026 with DISTILLER Insert offset folio 26 here 39457.005

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00030 Fmt 6602 Sfmt 6602 F:\DOCS\39457.TXT DEBBIE
27

SBD026 with DISTILLER Insert offset folio 27 here 39457.006

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00031 Fmt 6602 Sfmt 6602 F:\DOCS\39457.TXT DEBBIE
28

SBD026 with DISTILLER Insert offset folio 28 here 39457.007

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00032 Fmt 6602 Sfmt 6602 F:\DOCS\39457.TXT DEBBIE
29

SBD026 with DISTILLER Insert offset folio 29 here 39457.008

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00033 Fmt 6602 Sfmt 6602 F:\DOCS\39457.TXT DEBBIE
30

SBD026 with DISTILLER Insert offset folio 30 here 39457.009

VerDate Mar 15 2010 14:57 Sep 24, 2020 Jkt 000000 PO 00000 Frm 00034 Fmt 6602 Sfmt 6011 F:\DOCS\39457.TXT DEBBIE

File and source

File: CHRG-116hhrg39457.pdf
Size: 726,584 bytes
SHA-256: d43c09be16806418a981e8066123fab9e71ffc0c5fc36f29f10848bdacb08f6c
Our copy: CHRG-116hhrg39457.pdf
Original: www.govinfo.gov