Chairmen Bartlett and Quinn, Ranking Members and Members of the Subcommittees, good morning. I am Darryl Dennis, the Associate Deputy Administrator for Entrepreneurial Development at the U.S. Small Business Administration (SBA). Administrator Alvarez has asked me to appear on behalf of the Agency and would like to thank you for affording this opportunity to discuss SBA’s commitment to our nation’s veterans and their entrepreneurial needs as well as our progress on implementing the Veterans Entrepreneurship and Small Business Development Act of 1999 (the Veteran’s Act).

The mission of the SBA is to help small businesses get in business, stay in business and grow their businesses. We offer a variety of financial, management and procurement assistance programs to accomplish this mission. The finance programs range from microloans to equity financing while the management assistance programs vary from group training sessions on how to start a small business to one on one counseling in specific areas such as exporting. We also provide anytime, anywhere classes and counseling via the Internet. Small business veteran entrepreneurs and prospective entrepreneurs are eligible for and do utilize these programs. For FY1999:

• 11.2%, $1.4 billion, of all SBA loans were made to veteran-owned businesses.
• Approximately 72,000 veteran entrepreneurs received business counseling and training through SBA’s resource partners, i.e., Small Business Development Centers, Service Corps of Retired Executives, Business Information Centers, and Women’s Business Centers.
• 6.5% of all 8(a) Participants were veteran-owned and received approximately 15% of all 8(a) contracts and modifications equating to approximately $720 million dollars.

SBA will continue to build depth to its Veterans Affairs home page. Our goal is to make this on-line "one-stop" portal a dynamic and interactive information and training resource center for eligible veteran entrepreneurs seeking federal, state and local resources in all aspects of business development.

We are building a rich curriculum of new on-line, interactive courses for veteran entrepreneurs. These courses will include a variety of subjects to include individual credit repair, home based start-up business information, and business plan development. These courses will be available via two locations on the SBA’s web site the Veterans Affairs home page (http://www.sba.gov/vets/) and the Agency’s Small Business Classroom (/classroom/). Other courses to be offered by the SBA will focus on eCommerce issues and applications, specifically designed to help businesses build on-line trading channels and compete globally.

In July 1999, the SBA entered into a Partnership Agreement with the Bank of America and the Association for Service Disabled Veterans (ASDV) to develop and implement the Comprehensive Rehabilitation Opportunity Program (CROP). This Program, operated by the Service Disabled Veterans Business Association (a division of the ASDV), is specifically designed to provide work experience and income-generating business opportunities to in-patient and outpatient disabled veterans. SDVBA has identified and is developing fifteen locations in fourteen states and the District of Columbia to offer entrepreneurial information and training to service-disabled veterans interested in starting their small business enterprise. SDVBA anticipates opening the doors to the centers by the end of April. In FY 2001, the SDVBA expects to establish eleven additional centers.

In addition, SBA is very enthusiastic about its new Veterans Business Outreach Program (VBOP) designed to provide business training, counseling, technical assistance and mentoring assistance to service-disabled veteran entrepreneurs. This program, aside from providing services to small groups, also provides business training and counseling on a one-to-one basis; permitting service disabled veterans not able to participate in group activities to receive individualized assistance.

Under this program, grants have been awarded to four training organizations – the University of Texas, TEP Consulting, University of West Florida and the University of New York. They will provide entrepreneurial assistance to veterans in four regions of the country, covering twenty states and the District of Columbia, Puerto Rico and the Virgin Islands. These four organizations, which are situated in four regions of the country, provide business development services that are accessible to 55% of the Veterans population. They are situated in independent locales or with our SBA resource partners. FY 2000 will be the first full year of operation and in FY 2001, SBA is proposing to expand this program to additional states.

While we feel this is a good story, we know that we can and must do more for this most deserving population that has sacrificed so much for our country. We are pleased that the Veteran’s Act has provided us with a vehicle to make SBA programs accountable to veterans and we have aggressively been working on its implementation. As you requested in your invitation letter, I would now like to outline where we are in that implementation:

1. Establishment of an Office of Veterans Business Development administered by an Associate Administrator who is a Senior Executive Service appointee.

• SBA’s current Office of Veterans Affairs will be re-established as the Office of Veterans Business Development after the selection of the new Associate Administrator.
• We are in the final selection stage of the Associate Administrator and expect a decision in March 2000.

2. Establishment of the National Veterans Business Development Corporation (NVBDC).

• SBA legally established the NVBDC October 1, 1999.
• The nominees for the Corporation Board are in the final vetting process at the White House. At the conclusion of that process the President will name the board members and Mr., Chairman we are hopeful that the board is named within the next few weeks. No money was appropriated for the NVBDC in FY2000. However, SBA has submitted a supplemental request for $500,000 to fund the NVBDC and will offer free office space at the SBA for the remainder of the fiscal year.

3. Establishment of the SBA Advisory Committee on Veterans Business Affairs.

• At the request of Congress, the Administrator will make the appointments after the President appoints the NVDBC board members.

4. On February 14, 2000 the Agency entered into a Memorandum of Understanding (MOU) with the Service Corps of Retired Executives.

SCORE will appoint a National Veterans Business Coordinator within SCORE, to establish an Internet web site, to aid in the collection of statistics concerning services provided by SCORE to veterans, including service disabled veterans. A toll free telephone number has been established and will be maintained by SCORE.

5. Enter into an MOU with the Secretary of Veterans Affairs and the Association of Small Business Development Centers (ASBDC) to provide entrepreneurial assistance to veterans, and service-disabled veterans through the SBDCs.

• MOU was signed on February 14, 2000.

6. Enter into an MOU with the DVA and Department of Labor to provide for the coordination of technical, financial, managerial and vocational rehabilitation services to veterans and the collection of information relating to veteran-owned businesses. The process of certifying veterans for their vast experience and skills acquired while in the service is important and will be fully utilized through the civilian credentialing process.

• MOU is in final stages of negotiation and will be concluded in May 2000.

7. Publicize the loan assistance deferral to active duty military reservists and establish guidelines for enhancing business development and management assistance for small businesses owned by eligible military reservists.

• Initially we notified all SBA official and the Veterans community on the loan assistance to reservist that will be made available. Now we are in the process of developing procedural notices on the implementation of the program and services and expect to finalize this process in the very near future.

8. Implement disaster loan assistance for military reservists called to active duty.

• Regulations have been formally submitted to the Office of Management and Budget and upon approval, the proposed rule will be sent to the Federal Register for publication.

9. Collect information concerning the procurement practices and procedures of each federal department and agency.

• The Agency is working with the Office of Federal Procurement Policy (OFPP) and the General Services Administration to make appropriate changes to the Federal Procurement Data System to collect additional statistics on procurements awarded to veteran and service–disabled veteran-owned small businesses.

10. Reissue the Administrator’s order giving special consideration to veterans in SBA’s programs.

• The initial order was issued in October of 1999 but the SBA will reissue this Agency wide order in April FY 2000 to reiterate the commitment of the Administrator to this important issue.

11. Implement 3% Federal procurement goal for service disabled veteran-owned small businesses.

• SBA sent draft regulations with appropriate changes to the Federal Acquisition Regulation Council (FAR) for inclusion in the FAR regulations.
• SBA is changing its procurement goaling guidance.
• The SBA will work with the OFPP to change the "Policy Letter 99-1, Small Business Procurement Goals" to include guidance on the 3% goal to ensure that federal agencies and departments are fully aware of the 3% prime and subcontracting goal for prime and subcontracts to service-disabled veteran-owned small business.
• To ensure that federal agencies and departments are fully aware of the 3% goal, SBA will address the Small and Disadvantaged Business Utilization (SADBU) Council on March 15, 2000 where we will highlight this new Act. In fact we have already briefed Defense Department officials, in the Office of the Assistant Secretary of Reserve Affairs, on the new law and the benefits to our nation’s veterans and active duty reservists.
• SBA will also conduct outreach to the Veterans service organizations on its small business procurement programs such as the 8(a) Business Development Program, the HUBZone Empowerment Contracting Program, the Mentor-Protégé Program and the Small Disadvantaged Business Program. This will serve as a major component in assisting veteran-owned small businesses in the procurement arena.

SBA is acutely aware of your strong commitment to these issues and will keep the Congress and veteran’s community well informed as we continue the implementation process.

I would also like to give you a progress report regarding the Title VII Study and Report required by "The Small Business Reauthorization Act of 1997." The report required findings and recommendations on:

• The needs of small business concerns owned and controlled by eligible veterans;
• The availability and utilization of Administration programs by small business concerns owned and controlled by eligible veterans
• The percentage and dollar value of Federal contracts awarded to small business concerns owned and controlled by eligible veterans in the preceding 5 fiscal years;
• Methods to improve Administration and other agency programs to serve the need of small business concerns owned and controlled by eligible veterans.

The SBA has been working with the contractor, The William Joiner Center (WJC) at the University of Massachusetts at Boston, to conduct the study and develop the subsequent report. Mr. Chairmen we have developed a plan that will include existing data sources and focus groups that will generate significant information on Veterans’ small business needs. SBA, the contractor, and with consultations with the Small Business Committee staff, have developed this plan and we expect to complete the report this fall.

In conclusion, I would like to say that I have mentioned statistics, MOUs regulations, guidelines and studies but the following is the true bottom line-the success stories of some of the veterans that we have helped.

When Veteran Bill Lyons, president of Manastrip Corporation, realized he was paying excessive interest on a business loan, he asked the SBA Small Business Development Center in Albany NY to help him in refinancing and restructuring the company debt. SBDC business advisors helped Mr. Lyons review and amend his business plan to reflect current business realities, conducted a site visit, and reviewed pertinent tax and accounting information. Together, Mr. Lyons and his SBDC counselor developed a loan application for SBA and bank approval. In July of 1999, Lyons secured a $100,000 loan package guaranteed by a mortgage on the property he rents to Manastrip Corporation. Five jobs were saved.

In 1992 Bruce Valley, a veteran and President of Globenet, Inc., began exporting US made aviation spare parts. With the successful attainment of two SBA loans and a line of credit, Mr. Valley has transformed his business from a three employee firm generating $375, 000 annual sales to an eight employee firm generating over one million dollars of annual revenue. Mr. Valley attributes his success to the company’s strong commitment to quality products, an unfailing emphasis on total customer satisfaction, and the assistance provided by the SBA.

The Mount Vernon community where Globenet conducts business benefits directly from the company’s success. Since 1995, Globenet has offered internships to aspiring business students from the near-by Mount Vernon High School and has employed several retired professionals. Finally Mr. Valley, with Globenet, has shown significant leadership in his commitment to hiring individuals with disabilities.

These are examples of the types of success, economic development, and leadership the SBA is committed to fostering among veteran-owned small businesses throughout the United States.

Thank you for the invitation and the opportunity to update you and the veteran’s community about the SBA’s progress in implementing the new law and our efforts to ensure that the entrepreneurial needs of our nation’s veterans are realized. I will be happy to answer any questions from you or the other Members.