RESTORING AMERICA'S INDUSTRIAL BASE: THE ROLE OF SMALL BUSINESSES IN NATIONAL SECURITY

House Small Business (Select) Committee House June 3, 2026

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[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]

 RESTORING AMERICA'S INDUSTRIAL BASE: THE 
 ROLE OF SMALL BUSINESSES IN NATIONAL 
 SECURITY
=======================================================================

 HEARING

 BEFORE THE

 COMMITTEE ON SMALL BUSINESS
 UNITED STATES
 HOUSE OF REPRESENTATIVES

 ONE HUNDRED NINETEENTH CONGRESS

 SECOND SESSION

 __________

 HEARING HELD
 JUNE 3, 2026

 __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 

 Small Business Committee Document Number 119-038
 Available via the GPO Website: www.govinfo.gov
 
 __________
 
 U.S. GOVERNMENT PUBLISHING OFFICE
63-917 WASHINGTON : 2026
=======================================================================
 
 HOUSE COMMITTEE ON SMALL BUSINESS

 ROGER WILLIAMS, Texas, Chairman
 PETE STAUBER, Minnesota
 DAN MEUSER, Pennsylvania
 BETH VAN DUYNE, Texas
 JAKE ELLZEY, Texas
 MARK ALFORD, Missouri
 BRAD FINSTAD, Minnesota
 TONY WIED, Wisconsin
 ROB BRESNAHAN, Pennsylvania
 BRIAN JACK, Georgia
 KIMBERLYN KING-HINDS, Northern Marina Islands
 DEREK SCHMIDT, Kansas
 JIMMY PATRONIS, Florida
 CLAY FULLER, Georgia
 NYDIA VELAZQUEZ, New York, Ranking Member
 MORGAN MCGARVEY, Kentucky
 HILLARY SCHOLTEN, Michigan
 LAMONICA MCIVER, New Jersey
 GIL CISNEROS, California
 KELLY MORRISON, Minnesota
 GEORGE LATIMER, New York
 DEREK TRAN, California
 LATEEFAH SIMON, California
 JOHNNY OLSZEWSKI, Maryland
 MAGGIE GOODLANDER, New Hampshire

 Sean Dillon, Majority Staff Director
 Melissa Jung, Minority Staff Director
 
 C O N T E N T S

 OPENING STATEMENTS

 Page
Hon. Roger Williams.............................................. 1
Hon. Gil Cisneros................................................ 3

 WITNESSES

Mr. Moshe Schwartz, Senior Fellow for Acquisition Policy, 
 National Defense Industrial Association, Potomac, MD........... 6
Mr. Daniel Jaworowski, Chief Operating Officer and President, 
 Infinity Systems Engineering LLC, Colorado Springs, CO......... 8
Mr. Anthony Closson, Chief Executive Officer and Founder, 
 Colossal Contracting, LLC, Annapolis, MD....................... 9
Ms. Angela Dingle, President and Chief Executive Officer, Women 
 Impacting Public Policy, Washington, DC........................ 11

 APPENDIX

Prepared Statements:
 Mr. Moshe Schwartz, Senior Fellow for Acquisition Policy, 
 National Defense Industrial Association, Potomac, MD....... 38
 Mr. Daniel Jaworowski, Chief Operating Officer and President, 
 Infinity Systems Engineering LLC, Colorado Springs, CO..... 45
 Mr. Anthony Closson, Chief Executive Officer and Founder, 
 Colossal Contracting, LLC, Annapolis, MD................... 47
 Ms. Angela Dingle, President and Chief Executive Officer, 
 Women Impacting Public Policy, Washington, DC.............. 56
Questions for the Record:
 None.
Answers for the Record:
 None.
Additional Material for the Record:
 Women Impacting Public Policy (WIPP) Letter.................. 61

 
 RESTORING AMERICA'S INDUSTRIAL BASE: THE ROLE OF SMALL BUSINESSES IN 
 NATIONAL SECURITY

 ---------- 

 WEDNESDAY, JUNE 3, 2026

 House of Representatives,
 Committee on Small Business,
 Washington, DC.
 The Committee met, pursuant to call, at 10:05 a.m., in Room 
2360, Rayburn House Office Building, Hon. Roger Williams 
[chairman of the Committee] presiding.
 Present: Representatives Williams, Van Duyne, Alford, Wied, 
Bresnahan, Jack, Patronis, Scholten, Cisneros, Morrison, Tran, 
Olszewski, and Goodlander.
 Chairman WILLIAMS. Before we get started, I would like to 
recognize Representative Clay Fuller from the great state of 
Georgia to lead us in the Pledge of Allegiance and a prayer. 
Please stand.
 Mr. FULLER. Dear Heavenly Father, today we give thanks for 
the small business owners who are the backbone of our country. 
We are grateful for the men and women who work long hours, make 
sacrifices, and take risks to provide for their families and 
serve their communities. Lord, bless these business owners and 
their families; strengthen them during the late nights, early 
mornings, and challenging seasons; reward their hard work; 
guide their decisions; and help their businesses to continue to 
grow and prosper.
 We also ask your blessing on the work of this Committee. 
Grant us wisdom, good judgment, and a sprit of service as we 
carry out our responsibilities. May we work together with 
integrity, purpose, and gratitude for the freedoms and 
opportunities we all enjoy in this great nation. May God 
continue to bless our community, our country, the United States 
of America. In your name we pray. Amen.
 ALL. I pledge allegiance to the Flag of the United States 
of America, and to the Republic for which it stands, one 
nation, under God, indivisible, with liberty and justice for 
all.
 Chairman WILLIAMS. Good morning, everybody. And it is great 
to have everybody here today. I now call the Committee on Small 
Business to order. Without objection, the Chair is authorized 
to declare a recess of the Committee at any time.
 Before we get to the main business of today, I ask 
unanimous consent to waive Representative Fuller onto the 
Subcommittee on Oversight, Investigations, and Regulations and 
the Subcommittee on Innovation, Entrepreneurship, and Work 
Force Development. Without objection, so moved. 
Congratulations.
 I now recognize myself for my opening statement.
 Welcome to today's hearing titled `` Restoring America's 
Industrial Base: The Role of Small Business in National 
Security.'' I want to thank our witnesses for joining us today 
and for bringing us expertise and experience to the important 
discussion.
 Our national security relies on more than weapons 
stockpiles. For generations, America's strength has been 
defined by both the power of our military and the tenacity of 
the American people. It is an honored--it is anchored on the 
determination of American entrepreneurs and the belief that in 
this country, if you are willing to build something, create 
something, and contribute something greater than yourself, 
there ought to be a place for you in the American story. And 
nowhere is that more evident than in the small businesses that 
help shape our defense industrial base.
 Sustaining strong and competitive small businesses' 
participation in the defense industrial base is not a choice, 
but it is imperative to the long-term national security 
interests of the United States. What our history teaches us is 
what our adversaries already understand, that the country's 
defense and industrial base is increasingly concentrated in a 
small handful of large companies, which means it is inherently 
fragile.
 Resilience, by definition, requires depth. It requires a 
network capable of adapting when disruption occurs and when 
carrying the load when part of the system is compromised. A 
resilient defense industrial base cannot hinge on a single 
point of failure. That is where the Committee's onus lies.
 For small businesses, participation in the defense 
industrial base has not always been easy. So too often complex 
compliance requirements, limited access to capital, and lawyers 
of bureaucracy make it harder for more--for new and emerging 
small businesses to compete and contribute. These are the 
ongoing challenges we need to continue to address.
 Now more than ever, it is for small--it is time for small 
businesses to activate. We are living through a moment of 
historic investment in America defense and manufacturing. The 
priorities of this Committee, the direction of this Congress, 
and the guidance under this administration will point to the 
capabilities small businesses are uniquely able to provide. The 
door is open for small business.
 None of this happens by accident. The work of this 
Committee is foundational. As a Committee, we must ensure that 
we are doing everything in our power to make good on our 
promises. We are responsible for ensuring American innovation 
is neither stifled by unnecessary complexity nor concentrated 
solely at the top of the supply chain.
 At the same time, capable firms remain on the outside 
looking in. We must ensure that the opportunity is real, 
competition is fair, and American small businesses have a 
genuine chance to contribute to our economy and national 
security. That is the work before us today.
 I want to thank all of you for joining us again today. I 
look forward to the conversation ahead.
 I now yield to our Ranking Member from the great state of 
California, Mr. Cisneros, for his opening remarks.
 Mr. CISNEROS. Thank you, Mr. Chairman, and thank you to our 
witnesses for being here today.
 The Department of Defense obligated $755 billion in 
contracts in fiscal year 2024. Just over $97 billion of that, 
or 26.3 percent of eligible contract dollars, went to small 
defense contractors. These dollars point to the critical role 
small businesses play in supporting the DOD mission and the 
warfighter. So I was encouraged at first by an official 
estimate showing an increase to $98.9 billion going to small 
business firms in fiscal year 2025, an increase at DOD of 
almost $2 billion. However, the dollar figure alone does not 
provide a complete picture of the health of the defense 
industrial base.
 We will discuss today two worrying trends behind these 
numbers. The first is that the percentage of dollars awarded to 
small firms saw a year-over-year decrease to 25.7 percent. 
Small business contracts are not growing at the same rate as 
overall DOD contracts. The second is an issue I have raised 
here and through my work on the House Armed Services Committee 
that must continue to be a top priority: the shrinking 
industrial base. While small business dollars have gone up, 
small business participation has gone down. In fact, the number 
of small businesses in the government's ecosystem has almost 
halved.
 Over a year ago, Ranking Member Velazquez and I wrote about 
the decline of the industrial base in The Hill op-ed. We 
highlighted the importance of the SBA's program and contracting 
authorities that level the playing field for all small 
businesses to enter, compete, and have success in the federal 
market.
 Since then, unfortunately, but typical, the 
administration's actions have made things worse. As one recent 
study summarized, the decline of small business participation 
is an existing trend exacerbated by the disproportionate impact 
of DOGE contract terminations. It is yet to be seen if the 
overhaul of the government's procurement regulations will be 
more than a word-cutting exercise and reduce nonvalue-added 
requirements for small firms. To date, the results appear to be 
uneven.
 While the Rule of Two was retained, it is not secured as 
its future depends on a sunset provision. Some processes were 
streamlined, but particularly harmful buying practices known to 
drive small firms from the market have been bolstered. Further, 
contract consolidation and required use of contract vehicles 
will put more opportunities out of reach for small businesses, 
who we know leave the industrial base as a result.
 Rather than advocate for or assist small business 
government contractors, SBA is AWOL. They have gutted the 
workforce and diverted limited resources to a phishing 
expedition based on unsubstantiated and increasingly unrealized 
accusations in one small business program. DOD has also 
unfairly targeted all small businesses with a slickly produced, 
but factually inaccurate social media video designed to 
intimidate small firms, even those who previously competed and 
won defense contracts.
 If we are serious about strengthening America's industrial 
base and securing our economic future, we should be expanding 
opportunities for all small businesses, not undermining them. 
This is almost--there is almost universal agreement that the 
government's acquisition process has become too cumbersome, too 
burdensome, and needs to be simplified. I saw this firsthand 
during my time at the Department of Defense.
 CMMC has further upended the degree of difficulty, layering 
on new requirements small firms must meet without any guarantee 
of a return on their costly investments. Starting and growing a 
business is already incredibly difficult. Meeting the unique 
requirements to complete--to compete for defense contracts adds 
another layer of complexity, especially for small firms without 
the resources of corporate giants or the ear of this President.
 I look forward to hearing from our witnesses on what we can 
do to revitalize the defense industrial base and to ensure that 
as defense budgets continue to climb, the government is 
incentivized to leverage the capabilities, solutions, 
innovation, and competition that small businesses bring to the 
table.
 Thank you very much.
 Chairman WILLIAMS. The gentleman yields back. We will now 
move to witness introductions.
 Our first witness today is Mr. Moshe Schwartz. Mr. Schwartz 
is a senior fellow for acquisition policy for the National 
Defense Industrial Association. And has spent over 15 years 
advising Congress on acquisition industrial base issues, 
including roles at the Congressional Research Service and GAO. 
Mr. Schwartz has testified before Congress and written 
extensively on defense acquisitions reform, contract policy, 
the Defense Production Act, wartime contracting, and other 
related issues. He holds an MBA and M.S. in public policy from 
Carnegie Mellon University and a J.D. from Yeshiva University's 
Cardozo School of Law. And he also is a baseball guy. There you 
go. And we thank you for being here today.
 Our next witness is Mr. Daniel Jaworowski. Mr. Jaworowski 
is president and chief operating officer at Infinity Systems 
Engineering, a Colorado-based systems engineering and mission 
operations company specializing in payload integration, space 
operations, and systems sustainment. He is responsible for the 
establishing of policies and strategies in fulfilling 
Infinity's mission. Mr. Jaworowski has extensive experience in 
aerospace and defense with a strong track record in portfolio 
management, space system development, and major ground systems 
sustainment programs. He holds a B.A. in geography and an M.S. 
in management information systems from the University of Mary 
Washington, as well as MBA from Pennsylvania State University, 
known as Penn State University to many, right? I look forward 
to your testimony.
 Our next witness today is Mr. Anthony Closson. Mr. Closson 
is the founder and CEO of Colossal Contracting, a Maryland-
based IT and professional services company that provides 
technology, communications, and mission support solutions to 
government and commercial clients. He is a military veteran and 
a former communications specialist deployed in Iraq. During his 
final assignment at Joint Base Andrews as an IT project 
manager, he laid the foundation for Colossal Contracting. 
Thirty percent of Colossal Contracting employees are veterans. 
He earned a degree from the University of Georgia and Terry 
College of Business. Thank you for your service, and we 
appreciate you all being here today.
 I now recognize the Ranking Member, Mr. Cisneros, to 
briefly introduce our last witness appearing before us.
 Mr. CISNEROS. Thank you, Mr. Chairman. It is my pleasure to 
introduce Ms. Angela Dingle, president and chief executive 
officer of Women Impacting Public Policy. W-I-P-P, or WIPP, is 
a national nonpartisan organization that advocates on behalf of 
women entrepreneurs and serves as the voice for the over 14 
million women-owned companies in the U.S. Women Impacting 
Public Policy has a proven track record of working directly 
with our Committee and others in Congress to shape policies 
that create economic opportunities for women-owned small 
businesses and ensure procurement inclusion and access to the 
federal marketplace.
 Prior to serving as the CEO of WIPP, Angela founded Ex 
Nihilo Management, an award-winning technology and management 
consultancy that provides governance, risk management, and 
cybersecurity. She holds a master's degree in management 
information systems and a bachelor's in computer science.
 WIPP has championed key small business government 
contracting initiatives, including the Women-Owned Small 
Business Program, and has built, led, or joined coalitions to 
advocate for small--smart solutions to issues that range from 
access to capital and access to technology to family leave and 
health and childcare. I just read with interest your piece from 
2 weeks ago, `` The Future of Innovation Depends on Whether 
Small Businesses Are at the Table.'' I hope my colleagues will 
as well, and ask unanimous consent to insert this for the 
record.
 Chairman WILLIAMS. So moved.
 Mr. CISNEROS. Thank you, Angela, and to all our witnesses 
for being here today.
 Chairman WILLIAMS. The gentleman yields back, and I also 
want to thank everybody for being here today.
 And before recognizing the witnesses, I would like to 
remind them we got some rules here, rules in Congress, and 
remind all of you that your oral testimony is restricted to 5 
minutes in length. If you see the light turn red in front of 
you, it means your 5 minutes has concluded and you should wrap 
up your testimony. And if you keep talking after 5 minutes, you 
are going to hear this. That will mean you are done. Okay? And 
so forth.
 And also, you may see people coming in and out. There are 
other hearings going on today and so you may see other Members 
going in and out. It is nothing you said, nothing you did. It 
is just trying to cover all the bases.
 So with that, I want to recognize Mr. Schwartz for his 5-
minute opening remarks.

STATEMENTS OF MR. MOSHE SCHWARTZ, SENIOR FELLOW FOR ACQUISITION 
 POLICY, NATIONAL DEFENSE INDUSTRIAL ASSOCIATION; MR. DANIEL 
 JAWOROWSKI, CHIEF OPERATING OFFICER AND PRESIDENT, INFINITY 
 SYSTEMS ENGINEERING LLC; MR. ANTHONY CLOSSON, CHIEF EXECUTIVE 
OFFICER AND FOUNDER, COLOSSAL CONTRACTING, LLC; AND MS. ANGELA 
DINGLE, PRESIDENT AND CHIEF EXECUTIVE OFFICER, WOMEN IMPACTING 
 PUBLIC POLICY

 STATEMENT OF MOSHE SCHWARTZ, SENIOR FELLOW FOR ACQUISITION 
 POLICY, NATIONAL DEFENSE INDUSTRIAL ASSOCIATION

 Mr. SCHWARTZ. Thank you. Chairman Williams, Ranking Member 
Cisneros, Members of the Committee, thank you for inviting me 
today to testify. The views expressed are my own and not 
necessarily those of NDIA.
 The topic for this hearing, the role of small business in 
national security, is an important one. Today I would like to 
make four points.
 First, small businesses play a critical role in the defense 
industrial base. In 1953, President Eisenhower signed the Small 
Business Act because he understood the importance of having a 
level playing field to give small businesses equal opportunity 
to compete for government contracts. General Eisenhower knew 
the importance of small business to national security. Small 
businesses represent 70 percent of the defense industrial base. 
Companies like Onebrief, which supports military operations by 
providing AI-powered software to enhance force deployment, and 
Aurora Engineering, which provides AI machine learning and 
simulation to support NASA missions, are contributing to 
mission success. But what is less well known is that small 
businesses also play a significant role in subcontracting. 
Small businesses make up approximately 50 to 55 percent of the 
subcontractor base for defense prime contractors.
 This brings me to my second point. The defense industrial 
base is shrinking. The defense industrial base has been 
shrinking because fewer companies are willing to work with the 
Department of Defense. As a result, the government has less 
access to advanced technologies and capabilities that 
commercial markets have to offer, less competition, which often 
results in increased costs, and a less resilient supply chain.
 Here are some numbers. From fiscal year 2011 to 2020, the 
number of small businesses receiving DOD contracts decreased by 
43 percent, even as obligations to small businesses increased 
by approximately 15 percent. According to a Bloomberg analysis, 
in fiscal years 2021 and 2022, the number of small businesses 
contracting with DOD decreased an additional 5 percent.
 This decline is occurring precisely when the federal 
government increasingly relies on commercial technologies. The 
reason for this decline was explained by Secretary of Defense 
Hegseth when he said we have been impossible to deal with, a 
bad customer who year after year changes our mind on what we 
want and what we don't want. We have to fix our own house 
first, provide clarity, simplify the system, allow more people 
to access it, give that steady demand signal.
 This brings me to my third point. We need to streamline the 
acquisition rules and help small businesses find the front 
door. There are too many acquisition rules and they are overly 
complicated. In a recent poll by NDIA, companies were asked 
what do you find most difficult about government processes? 
Fifty-six percent cited the burden of the acquisition process 
and paperwork, 33 percent cited regulations. Some may argue 
that streamlining is code for repealing necessary oversight. On 
the contrary, done right, streamlining will increase 
accountability by clarifying lines of authority, shortening 
timelines, and improving outcomes without undermining 
oversight.
 Let me give an example. The Office of the National Cyber 
Director reported that current regulations are harming 
cybersecurity outcomes and increasing costs through 
administrative burdens. Many companies have reported that 
complying with the regulations is actually drawing resources 
away from actual cybersecurity programs and efforts.
 Finally, my last point, we can be smarter in helping small 
businesses. Even though the Department has consistently met its 
overall small businesses target, the number of small 
businesses, as has been mentioned, working with DOD has 
declined. There are other methods that could be just as 
impactful or more in helping small businesses. Here are three 
proposals.
 One, promote the use of shared classified workspaces. Small 
businesses generally do not have the resources to build or 
maintain secure compartment information facilities, or SCIFs, 
creating a barrier to entry. We could encourage more use of 
companies like Nooks, which offers secure, high-end SCIF spaces 
for lease. And by the way, Nooks is a small business. Agencies 
could also provide access to underutilized government-owned 
SCIF space. Such access could help small and other businesses 
compete and provide new capabilities to the Department.
 Two, streamline subcontracting regulations. When 
regulations placed on prime contractors must be included in 
subcontracts, we are actually placing regulations on small 
businesses. Congress and the Department could view regulations 
to see when the benefits of flowing down requirements are 
outweighed by the costs imposed on subcontractors.
 And third, help small businesses submit better SBIR 
applications. Companies often do not get meaningful feedback on 
SBIR proposals that were not accepted. Better communication 
with losing bidders explaining the weaknesses of the offer will 
help them do better next time and help small businesses learn 
how to improve their bids and help DOD by increasing the 
quality of their offers.
 Thank you for the opportunity to share these thoughts. I 
look forward to your questions.
 Chairman WILLIAMS. The gentleman yields back. Thank you 
very much.
 I now recognize Mr. Jaworowski for his 5-minute opening 
remarks.

 STATEMENT OF DANIEL JAWOROWSKI, PRESIDENT & CHIEF OPERATING 
 OFFICER, INFINITY SYSTEMS ENGINEERING LLC

 Mr. JAWOROWSKI. Chairman Williams, Ranking Member Cisneros, 
distinguished Members of the Committee, thank you for the 
opportunity to testify before you today. My name is Dan 
Jaworowski. I am the president and chief operations officer of 
Infinity Systems Engineering in Colorado Springs. We support 
the Air Force, the Space Force, intelligence community, and a 
variety of major industry primes.
 I have got a 30-year career myself in this business. 
Coincidentally, Infinity celebrates our 30th anniversary today. 
And I would like to use my most recent experience working in 
small business to appeal for you to look out for the 
independent small businesses like us that face what can only 
really be described as a second Valley of Death.
 Infinity has successfully scaled, yet we find ourselves 
trapped in a regulatory blind spot, and we are not alone. As a 
small business with fewer than 300 employees and no 
socioeconomic designations, we are too large to benefit from 
entry-level small business set-aside programs. Therefore, we 
are considered a large and forced to compete for full and open 
contracts directly against multibillion-dollar defense primes 
who possess exponentially more proposal, legal, and overhead 
resources. Forcing a growing mid-sized business to jump 
straight into the ring with defense giants is the antithesis of 
healthy competition. There are countless commercial entities 
with valuable capability to bring to the fight who stay away 
from the sector for this reason.
 Small private businesses like ours are really left with 
three choices when we get to this stage. We can stay in the 
fight and try to grow organically, which is what we are 
continuing to do. We can make our own investments in M&A and 
try to scale inorganically, but that takes capital investment 
that we can't handle. And if we take on outside investment, we 
start to lose control of our business. And finally, exit the 
market via an acquisition.
 In the past 6 years, nearly a dozen privately held defense 
firms in Colorado Springs have sold to larger firms and/or 
private equity. All are now a part of significantly larger 
entities, thereby shrinking the base as we so see.
 I am often asked by my peers and counterparts how I feel 
about the recent eight audits taking place in government 
services, including defense. In short, I believe that they are 
necessary, but, in my experience, most of these firms seemingly 
operate within the bounds of the law and with integrity. I do 
work with a lot of these firms that operate under the 
protections offered by legislation that is geared towards 
helping small, disadvantaged firms compete. However, many of 
these firms are very far from small, and they certainly are not 
disadvantaged.
 While intended to assist developing firms, the 8(a) program 
frequently grants immense advantages to massive multi-entity 
holding structures and conglomerations. These firms masquerade 
as small businesses, yet have shared corporate services and 
capital pools that far exceed the reach of an independent and 
truly small business. It is firms like ours that become 
disadvantaged when accommodation is made where accommodation is 
not needed.
 The frequent use of sole source noncompetitive direct 
awards allows these firms to essentially name their price to 
the government. That has an impact on the labor force in that 
local market, and it severely undercuts the small businesses 
that have to compete based on price alone.
 The FAR overhaul designed to bring flexibility and speed is 
both necessary and overdue. However, these changes are only as 
good as the acquisition professionals executing them. Today, 
contracting shops are paralyzed by a weaponized protest culture 
throughout the industry. The fear of frivolous protest traps 
contracting offices in endless acquisition strategy design and 
source selection morass. The result is delayed acquisition 
schedules, sometimes for months or even years. For a small 
business that has already sunk hundreds of thousands of dollars 
into a pursuit, these delays drain vital capital that we need 
to fund independent R&D and to sustain our talent for future 
pursuits. In the end, the government feels this in increased 
rate structures.
 From a legislative perspective, this Committee can do a lot 
to address these concerns, and I am hopeful to see some of 
these things materialize. Number one, legislate directly to 
direct an expansion of NAICS categories and size standards to 
include the middle tier of companies, set-asides for larger 
than X, but smaller than Y companies. Legislate to limit the 
accommodations of the 8(a) program to truly disadvantaged firms 
and prohibit holding companies of any kind from participation.
 Legislate accountability metrics that hold government 
acquisition timelines to the same standard as contractor 
schedules. It should be no more acceptable for the government 
to miss deadlines than it is for the contractor to miss them.
 And finally, introduce clear statutory thresholds and 
financial penalties to curb frivolous bid protests designed 
purely for revenue extension or to force a failed competition. 
This will liberate contracting officers from a culture of fear.
 With that, I thank you, and I look forward to answering 
your questions.
 Chairman WILLIAMS. The gentleman yields back. Thank you.
 And I now recognize Mr. Closson for his 5-minute opening 
remarks.

 STATEMENT OF ANTHONY CLOSSON, FOUNDER & CHIEF EXECUTIVE 
 OFFICER, COLOSSAL CONTRACTING LLC

 Mr. CLOSSON. Chairman Williams, Congressman Cisneros, and 
Members of the Committee, thank you for the opportunity to 
testify today. My name is Anthony Closson, and I am the founder 
and CEO of Colossal Contracting, a service-disabled veteran-
owned small business IT value-added reseller and integrator. As 
a VAR, we deliver comprehensive IT solutions combining 
industry-leading products, engineering expertise, integration 
services, and lifecycle support to maintain mission-critical 
technology environments. Thank you for holding this hearing on 
the important role small businesses play in strengthening 
America's industrial base and supporting national security.
 My journey to entrepreneurship began in the United States 
Air Force as a communications specialist, affectionately known 
as a wire dog. At my duty stations in Japan, Joint Base 
Andrews, deployments to Kuwait and Iraq, I saw firsthand how 
government agencies depend on both public servants and private 
sector partners to accomplish mission-critical missions. In 
2009, I founded Colossal Contracting and believe service to 
this country does not end when we take off the uniform. We 
build our company on the values defined our military service: 
integrity, accountability, teamwork, mission focus. Today, as 
Colossal, we support mission-critical programs across the 
federal government while creating opportunities for veterans, 
military spouses, and other highly skilled professionals who 
want to serve their nation.
 My testimony today focuses on the role of the IT VAR in the 
industrial base. Companies like ours serve as the bridge 
between technology manufacturers and government agencies, 
helping evaluate, integrate, secure, and deploy mission-
critical technology solutions. As the federal government 
pursues modernization initiatives like the GSA OneGov Strategy, 
we support these efforts, leverage buying power, and deliver 
better value to taxpayers.
 However, those efforts must continue to preserve meaningful 
opportunities for small businesses. A strong supplier base 
depends on both innovation from the manufacturer and execution 
from small business like Colossal. There are three issues I 
would like to highlight today.
 First, the federal government's industry classification 
system has not kept pace with modern technology marketplace. 
Today's technology procurements often combine hardware, 
software, cloud, AI, cybersecurity, technical support into one 
single requirement, yet there is no dedicated classification 
for these buys. Establishing a separate IT VAR NAICS code would 
provide greater clarity on how technology solutions are 
delivered to government customers.
 Second, the current 150-employee SBA size standard no 
longer reflects the realities of today's technology sectors. 
Reaching 151 employees does not mean a company is a large 
business, yet it forces those companies to compete against 
multinational corporations that employ tens of thousands of 
people. Increasing the threshold to at least 300 would allow 
successful small businesses to continue to grow and compete 
while strengthening the federal supplier base.
 Third, I strongly support robust cybersecurity 
requirements, including the Cybersecurity Maturity Model 
Certification program. At Colossal, achieving CMMC 
certification required substantial investments in technology, 
compliance, and personnel. As implementation continues, 
cybersecurity requirements should remain risk-based and 
scalable so that small businesses can continue to contribute to 
the industrial base while meeting the government's security 
objectives.
 Before I close, I would like to thank the Committee for its 
leadership in passing H.R. 2804 to codify the Rule of Two. This 
legislation helps preserve small businesses to compete for 
federal work and strengthen the industrial base by ensuring 
continuing to consider qualified small businesses as your first 
solution. Small businesses are innovators. We are job creators. 
We are veteran advocates, problem solvers, and mission 
partners. When small businesses succeed, our government gains 
competition, resilience, and access to the expertise needed to 
meet the ever-evolving national security challenges.
 Thank you for this opportunity to testify today and for 
your continued support on America's small businesses and the 
veteran community, and I look forward to any and all questions. 
Thank you.
 Chairman WILLIAMS. The gentleman yields back.
 I now recognize Ms. Dingle for her 5-minute opening 
remarks.

 STATEMENT OF ANGELA DINGLE, PRESIDENT & CHIEF EXECUTIVE 
 OFFICER, WOMEN IMPACTING PUBLIC POLICY

 Ms. DINGLE. Good morning, Chairman Williams, Ranking Member 
Cisneros, and Members of the Committee. My name is Angela 
Dingle. I am president and CEO of Women Impacting Public 
Policy, a national nonpartisan organization advocating on 
behalf of women-owned businesses. I am also a small business 
owner with more than 20 years of experience in the federal 
marketplace, helping companies navigate it successfully. Thank 
you for the opportunity to testify.
 This hearing asks the right questions. Small businesses are 
not bystanders to America's industrial base. They are its 
foundation. A procurement system built on a broad base of small 
firms is more competitive, more resilient, and harder for our 
adversaries to disrupt. A narrow one built up around a smaller 
pool of larger contractors is a national security risk. And yet 
that base is shrinking. In fiscal year 2024, agencies awarded a 
record $183 billion in prime contracts to small businesses, the 
highest total ever. But the number of firms doing that work has 
been cut nearly in half from roughly 121,000 in 2009 to about 
63,000 in 2022. Record dollars are flowing to fewer and fewer 
companies. As firms leave, agencies grow more dependent on a 
smaller group of large incumbents, reducing competition, 
raising costs, and weakening the government's own leverage. It 
is the opposite of a strong industrial base.
 What is driving small businesses out? In a word, 
unpredictability. As a business owner, I factor risk into every 
decision: how I spend my time, how I price, whether to pursue 
an opportunity at all. I need real confidence that I have a 
chance at winning to justify the investment. When contracts are 
awarded and then abruptly canceled, when policy shifts without 
warning, that confidence erodes and small firms simply walk 
away. Stability and predictability are not luxuries. They are 
conditions that keep us in the market and investing in the 
capacity this country needs.
 This is why the Rule of Two matters so much. It has long 
been a bedrock protection for small businesses, and any threat 
to it, even a potential one, raises risk and accelerates 
consolidation. Congress should retain and codify the Rule of 
Two as a true shall requirement applied consistently across 
contract vehicles. WIPP is proud to support the Protecting 
Small Business Competition Act of 2025, which does just that. 
We commend the Committee for its unanimous approval of this 
bill and hope that the full House will follow your lead.
 I now want to talk about a program that is near to our 
mission at WIPP, the Women-Owned Small Business, or WOSB, 
Program. The WOSB Program and similar programs are not 
handouts, nor are they charity. They exist to level a field 
that is not yet level and to give the government the widest 
possible pool of qualified competitors, and they work. In 
fiscal year 2024, women-owned small businesses won $31.7 
billion in federal contracts, and the certified WOSB Program 
grew to more than 13,400 firms. Women-owned firms are winning 
contracts and delivering, but only when they get a fair shot to 
compete. That is good business and good government.
 A few practical points. Subcontracting and the chance to 
grow into a prime is how small firms become the durable 
suppliers the industrial base relies on. Both deserve 
protection. And the offices meant to champion us inside 
agencies, the OSDBUs, are understaffed or vacant.
 As the administration reexamines federal programs, the wide 
reach of those reviews has inadvertently captured offices and 
resources that are vital to small firms. Even though supporting 
small business is squarely a competition and capacity issue, 
not a peripheral one, a program is only as strong as the people 
charged with making it work. Small businesses are not just 
beneficiaries of federal contracts. We are essential partners 
in this nation's security and prosperity. We bring the 
innovation, agility, and cost savings that lead the government 
to meet its mission quickly and effectively.
 Protect and expand our role, and you strengthen the 
industrial base. But if we keep facing instability and a 
shrinking chance to compete, you should not be surprised when 
fewer of us remain.
 Thank you, and I look forward to answering any of your 
questions.
 Chairman WILLIAMS. The gentlelady yields back. Thank you.
 We will now move to the Member questions under the 5-minute 
rule. I recognize myself for 5 minutes.
 Mr. Schwartz, the number of contractors supporting the 
defense industrial base has shrunk by roughly 40 percent since 
2010. Rising regulatory costs were cited as a major reason 
small businesses are leaving these federal contracting 
programs. For small firms, every dollar spent on compliance is 
a dollar not spent on innovation or production or workforce or 
even cybersecurity. So the question will be, how has the Trump 
administration's revolutionary FAR overhaul addressed that 
challenge?
 Mr. SCHWARTZ. Thank you. So, in a bumper sticker, I would 
say one of the ways to improve acquisition generally, and for 
small businesses as well, is fewer regulations, more 
consistently enforced by an empowered workforce. And this 
effort to rewrite the FAR and then the DFAR, the Defense 
Federal Acquisition Regulation, strikes at two of those. By 
deregulating, like we have talked about, like we have all 
talked about, it gives small businesses more opportunity to 
focus on the business of what they are delivering instead of 
non-added valuate, non-added regulation and compliance. That is 
one.
 But the second thing, which might be the even more 
important impact that people don't necessarily think about, is 
the message we are sending to the workforce. The message we are 
sending is less about compliance and more about doing the right 
thing and empowering them. And I am hopeful that this rewrite 
is really going to send that message because unless we deal 
with the workforce, almost everything else is playing around 
the margins.
 Chairman WILLIAMS. All right. Thank you.
 Mr. Jaworowski, as the national security landscape becomes 
increasingly shaped by cutting-edge software and artificial 
intelligence, the defense industrial base is under pressure to 
modernize faster than traditional acquisition process was 
designed to support. So the question is, from your position 
leading Infinity Systems Engineering, how do you see the role 
of a small business evolving over the next decade, and what 
structural changes are most necessary for the defense 
industrial base to fully leverage main street's capabilities?
 Mr. JAWOROWSKI. Thank you for the question, Mr. Chairman. I 
think that the recent extension of the Small Business 
Innovative Research Program is going to go a long way to help 
satisfy some of that gap that exists, particularly when it 
comes to AI. AI is something--that is an area that we operate. 
We are active in the SBIR Program. I would love to see it 
become permanent, not just a 5-year extension so that we don't 
have another lapse like we did recently. But that program is 
very, very encouraging for new entrants to this market to come 
in and participate. There are a lot of companies out there that 
don't participate in the defense industrial base that can 
absolutely bring capability that is well needed, and that 
program is really the way to do it.
 Chairman WILLIAMS. Okay. Thank you.
 In the limited time I got, Mr. Closson, Colossal 
Contracting's identity as a veteran-owned business speaks to 
something larger happening across the federal landscape, and it 
represents the growing recognition that smaller companies can 
often move faster and more effectively, stay closer to the 
mission needs of government customers. So my question is, in an 
environment where agencies are looking for partners who are 
even--who can rapidly integrate emerging technologies and adapt 
to changing requirements, how does Colossal Contracting 
leverage its veteran-led mindset and small business agility as 
a competitive advantage?
 Mr. CLOSSON. Thank you, sir. Being agile, right? Being 
aggressive. I mean, that is part of who we are and what we are 
trained to be as veterans. That is why I think it is great to 
see so many veterans going into the entrepreneurial, you know, 
mindset and to becoming service-disabled veteran-owned small 
businesses. That value that we are trained with and the ethics 
that we have and the drive from being military have delivered 
absolute value.
 And especially in supporting the defense industrial bases, 
you know, a lot of us veterans are dealing with the missions 
that we dealt with when we served. So we are able to see what 
the issues are, understand their mission, and do what we can to 
elevate it. And because we are not massive, we don't have these 
huge layers, right, we are dealing directly with the program, 
with people that understand the mission. And what we are doing 
is we are taking all the different types of technologies as an 
IT VAR and as a master aggregator and bringing those together 
to answer the mail and to elevate their solution, so--and to 
elevate their mission.
 So, you know, to answer, sir, is who we were trained to be 
is delivering absolute max value. And I believe it will 
continue to do that.
 Chairman WILLIAMS. All right, thank you. The gentleman 
yields back.
 I now recognize the Ranking Member for 5 minutes of 
questions.
 Mr. CISNEROS. Thank you, Mr. Chairman.
 Ms. Dingle, with the administration's ongoing attack on the 
8(a) and legislation to eliminate the women-owned small 
business programs pending, can you reiterate for the Committee 
the value of the SBA's programs not only for small businesses, 
but for the government and the industrial base?
 Ms. DINGLE. Thank you, Ranking Member. The Women-Owned 
Small Business Program and the SBA programs like the 8(a) 
Program--the 8(a) in particular is a business development 
program, and the Women-Owned Small Business Program--they 
create a level playing field. They are not handouts.
 For every contract that I have ever won, I had to compete 
for those contracts, and so do the other businesses. When, as 
my colleague here mentioned in his comments, when we have to 
compete against multibillion-dollar firms who have existed for 
hundreds of years, it is more costly. It creates an 
unpredictable environment that we are not able to determine 
whether or not we should invest the dollars that are necessary. 
And it makes it really hard for business owners to be able to 
grow.
 One contract award in one of those programs can be a game-
changer. It can completely change the trajectory of the company 
because we simply need a foot in the door, and these programs 
create those opportunities for you to get a foot in the door.
 Mr. CISNEROS. Yeah. You know, a company like General 
Dynamics, right, did not start out as a big corporation. It 
started out with kind of doing a small company doing a contract 
for NASA, and, and we need to have those game-changers out 
there.
 But halfway through this fiscal year, Ms. Dingle, documents 
circulated online showing SBA changed their scorecard criteria 
and lowered each agency's spending targets. What will be the 
impact of SBA telling agencies they should spend less, 
potentially $12 billion less on small business?
 Ms. DINGLE. I think it just flies in the face of what this 
Committee and this conversation that we are having. If we 
continue to say that small businesses are the engine of the 
U.S. economy, then we have to create an opportunity for those 
small businesses to compete.
 One of my other colleagues mentioned the burden that is on 
the contracting officers. Some of these programs assist them in 
getting their work done. And sometimes they just need an easy 
button. They will take the least path of resistance. And so if 
you say to an agency, you only have to spend $12 billion less 
than you did, they will simply do that and small businesses 
will be cut out. Ultimately, for the government, that means 
less innovation. It means less competition, and it means 
additional cost because we believe, and I am certain my 
colleagues would agree with me, that small businesses can do it 
cheaper and faster and with more flexibility.
 Mr. CISNEROS. Thank you very much for that answer.
 Mr. Closson, the FAR rewrite removes the justification and 
approval requirements for direct awards when agencies utilize 
the Service-Disabled Veteran-Owned Small Businesses or other 
small business programs. Will these changes make it easier to 
provide contracting opportunities to serve disabled veteran-
owned businesses?
 Mr. CLOSSON. Thank you, sir. I believe so. I believe 
removing the J&A requirements and getting contracting officers 
also comfortable with doing sole sources. The sole source has 
been around for a while for the SDVOSBs, but not many people 
use it. Contracting officers see it as difficult. They don't 
want to have to justify things. So we are hoping that that 
mixed with the Rule of Two is really going to open up some 
things and be able to showcase the service-disabled veteran-
owned small businesses out there and be able to provide that 
max value.
 So to answer, sir, absolutely, I think that it will, 
hopefully, open up some more solid SDVOSBs to doing sole source 
work, and that mixed with the Rule of Two, it should open 
things up.
 Mr. CISNEROS. Since you mentioned the Rule of Two, let me 
ask you this. Can you quickly address what a sunset of the Rule 
of Two would mean for small business participation in the 
industrial base?
 Mr. CLOSSON. It would hurt. If that went away and 
contracting officers and program people were not evaluating the 
value of small business, I think it would impact us greatly. I 
mean, we need the Rule of Two. We need there to be that first 
look, especially, hey, there is the place for the systems 
integrator where they are working on massive programs that 
protect this nation, and I am good with that. And we work with 
a lot of them. But there is a lot of amazing opportunities for 
the agility and the expertise that small businesses bring, and 
we need that Rule of Two.
 Mr. CISNEROS. All right. Ms. Dingle, since you mentioned 
the Rule of Two, in our last 30 seconds here, can you answer 
that same question. What would it mean if this sunsetted?
 Ms. DINGLE. I agree. I mean, it would just be disastrous 
for small businesses. That Rule of Two helps me in my decision-
making as a business owner when I am evaluating whether or not 
I am going to compete on an opportunity. The Rule of Two makes 
it something that is viable for me to consider for competition. 
And the predictability of knowing what is going to happen in 
this environment is what makes me decide whether or not I am 
going to continue to do business in the federal marketplace.
 Mr. CISNEROS. All right. Well, thank you for your 
testimony, and I yield back.
 Chairman WILLIAMS. The gentleman yields back.
 I now recognize Mr. Alford from the great state of Missouri 
for 5 minutes.
 Mr. ALFORD. Well, thank you, Mr. Chair.
 I am also on the Appropriations Committee, and we have two 
markups across the hall, so I am kind of back and forth. But I 
did not get to listen to your testimony, but I did read it, and 
I am high on the end there. I am excited that you are here 
today so thanks for coming here.
 When most people think about our national defense, they 
think about large defense contractors, but behind every major 
weapon system, aircraft, and military platform is a network of 
small businesses providing innovative technology, specialized 
manufacturing, and critical supply chain support. Small 
businesses are essential to maintaining America's technological 
edge, and they are often the first to deploy emerging 
capabilities in areas like artificial intelligence, 
cybersecurity, advanced manufacturing, and electronic warfare, 
and they also provide the competition and innovation necessary 
to make sure that our military has access to the best 
capabilities available.
 However, despite their importance, the number of small 
businesses participating in federal contracting has declined 
significantly, raising concerns about consolidation within the 
defense industrial base and long-term resilience. And as we 
face increasing competition from adversaries such as China, it 
is critical that we expand opportunities for innovative 
American companies to enter and succeed in the defense 
marketplace.
 Today's hearing provides an opportunity to better 
understand those challenges and identify ways Congress can 
strengthen small business participation in our defense 
industrial base. I represent a great base in the DOD family, 
Fort Leonard Wood. We also have Whiteman Air Force Base, but we 
have exciting things going on. We have a technology park, 10 
square miles on the base in Fort Leonard Wood in the 
southeastern part of our district, where we are trying to 
attract more small defense capabilities there.
 So Mr. Jaworowski, did I pronounce that correct?
 Mr. JAWOROWSKI. Very close.
 Mr. ALFORD. All right, very close. Jaworowski, better? All 
right.
 Mr. JAWOROWSKI. Better.
 Mr. ALFORD. Your business started out contracting with DOD 
and then won an SBIR award. What led you and your company to 
pursue that award after receiving multiple defense contracts?
 Mr. JAWOROWSKI. Thank you for your question, sir. We--you 
know, you hit the nail on the head at the beginning of your 
statement and question there. You know, Infinity has been 
around for 30 years, but we were founded on subcontracts with 
the large primes. So some of those large primes today are still 
some of our biggest customers. We are primarily a services 
company providing engineering services to those primes and to 
DOW on the satellite operations front.
 About 5 years ago, we made the decision that we were 
seeking out some higher margin work. We didn't really want to 
leave DOD and go into the commercial space, and we saw SBIR as 
an opportunity to bring some ideas and innovations to the table 
that we saw we saw as gaps with some of the large primes that 
were probably not meaty enough for them to go after themselves, 
but they were difference-making enough for us that we were able 
to innovate and capitalize on that program, and it has been a 
game-changer for us.
 Mr. ALFORD. Mr. Schwartz, as you know, Secretary Hegseth 
proposed a $1.5 trillion defense budget for fiscal year. We are 
going to be taking up the defense appropriations in the coming 
weeks right across the hall. How can Congress make sure that 
small businesses are positioned to compete for these dollars?
 Mr. SCHWARTZ. That is a great question. I think there are a 
lot of examples. There are a lot of things that Congress can do 
to help small businesses have a level playing field, and I will 
just reiterate two of them.
 One is when a company loses an SBIR, right, they don't 
necessarily get the feedback that would help them do a better 
bid next time, right? Now, this actually, because GAO bid 
protests had been mentioned, this was a problem with bid 
protests where companies didn't know why they were losing bid 
protests. So Congress actually legislated and said, DOD, you 
will do enhanced debriefings, and they did. And companies 
thought that was very helpful. And in fact, my understanding is 
the data said that bid protests decreased because companies 
understood. That is one thing that Congress could do. They 
could say you shall give better debriefings for SBIRs, you 
know, so companies know how to compete better.
 And another one very quickly is shared SCIF space. 
Companies don't always have the investment if they are small 
businesses to invest in that, which means they can't compete 
for the bid----
 Mr. ALFORD. Right.
 Mr. SCHWARTZ.--and then they can't perform. Excess SCIF 
space in GSA, for example, is a great way, like, for a pay-for-
fee like a WeWorks----
 Mr. ALFORD. Right.
 Mr. SCHWARTZ.--is another opportunity.
 Mr. ALFORD. Well, two very innovative ideas. I think we had 
similar legislation with other government contracts that passed 
through this Committee and the full House, I believe, that 
required the government to give explanations to small 
businesses of why they did not secure a contract. And I think 
maybe this would be good to look at this in this case and also 
the shared SCIF space.
 Great ideas. We will get to work on that. I yield back. 
Thank you.
 Chairman WILLIAMS. The gentleman yields back.
 I now recognize Ms. Goodlander from the great state of New 
Hampshire for 5 minutes.
 Ms. GOODLANDER. Thank you, Mr. Chairman, and thank you to 
our witnesses for being here today for this really important 
hearing.
 I want to start with two numbers that have come up in this 
hearing: 51 to 5. Fifty-one to five. That is how many prime 
defense contractors we had in this country in 1993, 51. Just 7 
years later, we were down to 5. And this was driven by 
consolidation that the Pentagon itself blessed. You know, fast 
forward to today, we are seeing this same movie once again, 
even more consolidation.
 And Mr. Jaworowski, I want to be sure to emphasize this 
very powerful portion of your written testimony where you 
described the second Valley of Death, this frozen middle where 
small businesses like yours are trapped with three really 
challenging options. The first, and I applaud you for pursuing 
it, to continue to try to operate in this environment where the 
deck is stacked against you, the rules are not written for you. 
And I want to work with you and each one of our witnesses who 
are here today to help us write better rules of the road.
 When I think of President Eisenhower, General Eisenhower, 
Mr. Schwartz, you invoked him, I think he would be very 
disappointed in the progress that we have made since 1953. We 
have reversed course from where we should be. And I came to 
Congress having worked in the Antitrust Division at the Justice 
Department ,where we worked really hard to dust off the federal 
code to give and empower people across our administration, 
including in the Pentagon, the confidence that they can enforce 
the rules that we have on the books. And I am here now and I 
want to write better rules of the road that are going to help 
businesses trapped in the second Valley of Death.
 The three options you have in front of you, can you just 
say a bit more about the two other bad options that are 
available to a small business like yours, sir, in the second 
Valley of Death?
 Mr. JAWOROWSKI. Sure, I am happy to. You know, really 
selling out is what we are seeing most prevalent. Most 
companies are getting to our size and they find that this 
competitive landscape has changed and it gets frustrating and 
it is the easy answer is to just take the exit.
 Ms. GOODLANDER. Sell to a prime.
 Mr. JAWOROWSKI. Sell to a prime or sell to private equity. 
Private equity is what we see more commonly and they are 
consolidating small businesses like ours, ultimately for a sale 
of that entity to probably to a prime in a more strategic 
transaction.
 The second road is really to say, we are going to go try to 
acquire another company ourselves. And that is capital 
intensive.
 Ms. GOODLANDER. Yeah.
 Mr. JAWOROWSKI. And that is a really, really challenging 
decision to make for an independent, privately held company. 
And if--the capital is just not there to do something like 
that. So we would have to take on an outside investment, and 
when we do that, you are probably going to lose some control 
over your company, and we are not interested in doing that 
either.
 Ms. GOODLANDER. Well, I appreciate that.
 Mr. Closson, can you speak to--I gather you are also riding 
through the second Valley of Death.
 Mr. CLOSSON. Yes, I am. You know, we are on that, in our 
world as an IT VAR, as soon as you go over 150, you are now 
competing against systems integrators and very large companies. 
If you walk into Colossal's headquarters today, you will hear 
music playing, people, you know, enjoying life, but it has a 
small business feel, right? It is a culture that we created 
that we will lose, right? If we can't compete, because as soon 
as we go over 151, without things like the gentleman was saying 
here, losing who you are, selling out to private equity, you 
know, making a massive investment that you don't have, right, 
you are going to lose who you are.
 I said the other day to our group that I wish and I hope 
and I will work as hard as I can that Colossal becomes a legacy 
company and that we can stay around for a long time. But like I 
mentioned, I--my fear is I am constantly battling this under 
150. And because we are an IT VAR, people will see that we are 
selling a lot of equipment with our services and look at us and 
say, hey, well, you are a large business, right?
 Ms. GOODLANDER. Right.
 Mr. CLOSSON. Even though we are 105 people. So we are 
constantly in that battle and it is something that we have to 
fight for.
 Ms. GOODLANDER. Well, I really look forward to, you know, 
as you point out, determining whether a business qualifies as 
small sounds like an easy exercise. We clearly have not gotten 
it right under federal law, so I really look forward to working 
with you on this important legislative measure that we should 
correct as soon as we possibly can.
 What you just described as footnote 18, as soon as we are 
talking about footnotes and manuals that aren't in the U.S. 
Code, I think we haven't given you the clarity that you need. 
So I appreciate that.
 I--well, I guess I have run out of time, but I really 
appreciate our witnesses being here today. And with that, I 
yield back.
 Chairman WILLIAMS. The gentlelady yields back.
 I now recognize Mr. Wied from the great state of Wisconsin 
for 5 minutes.
 Mr. WIED. Thank you, Mr. Chairman. Thank you to all of our 
witnesses for being here today.
 Main Street America is not only the backbone of the United 
States economy, but also of our defense industrial base as 
contractors and subcontractors. As the new Chairman of the 
Subcommittee on Contracting and Infrastructure, I am committed 
to ensuring that small businesses are given fair opportunities 
to compete for government contracts. Bills like Protecting 
Small Business Competition Act, which passed out of this 
Committee 2 weeks ago, go a long way to ensuring our nation's 
small businesses are afforded those opportunities. I look 
forward to discussing the state of government contracting for 
small businesses, including the Department of War's newly 
implemented Cybersecurity Maturity Model Certification.
 Mr. Jaworowski, the CMMC, which is the Cybersecurity 
Maturity Model Certification, is a tiered certification process 
that is based off of sensitive data that contractors have 
access to. I have heard from some of the small business owners 
in our area that the cost to comply with the Department of 
War's new cybersecurity requirements can be upwards of 
$100,000. What did this process look like for you?
 Mr. JAWOROWSKI. Thank you for your question. I would, I 
would say upwards of several hundred thousand dollars is 
probably the more likely answer. That is the--that is what we 
have seen.
 For us, we were pretty fortunate. We had made some 
decisions early on about 5 years ago that once the first drafts 
of CMMC compliance were coming out, that we were going to lean 
in and start to do that work. So we started to do that work 
with existing IT infrastructure and existing IT personnel. We 
had to make investments along the way in order to be compliant, 
but we were able to limit the overall cost of that, but it took 
5 years to be ready.
 So if we were to fast forward to today, if I were starting 
that process all over again, I would have to hire a staff of 
several individuals to come in and help us be compliant, and if 
I was trying to do it inside of a year, it would definitely 
cost us several hundred thousand dollars.
 Mr. WIED. Do you think that there are issues with 
overclassification?
 Mr. JAWOROWSKI. Absolutely. Absolutely. There are issues 
with overclassification. And to the degree that CMMC is geared 
towards managing controlled unclassified information, what we 
are seeing now is anything that is unclassified is now being 
called CUI for the sake of CMMC. So it is really when it comes 
to outside entities trying to add to the defense industrial 
base, all we have really done is create another barrier to 
entry.
 Mr. WIED. Thank you.
 Mr. Closson, while large contractors have an easier time 
absorbing the costs associated with CMMC compliance, small 
contractors required to meet the same standards, right, with, I 
mean, a fraction of the resources. So what has achieving CMMC 
compliance looked like for you in your business?
 Mr. CLOSSON. It was extremely difficult. But we understand 
the value. We clearly understand the value of it. But we have, 
you know, we have had things like ISO certifications and CMMI, 
because we do have a lot of work in the defense space. That 
helped us prepare for it. But we had dedicated resources. We 
had, you know, auditors that you have to pay for, we have pre-
auditors that you have to pay for. We understand the value of 
it and I truly do.
 My concern isn't for just Colossal, it is for the when 
Colossal was 10 people. Like, I don't know how that would be 
done. Again, I understand the importance and I stomp that 
completely. But the reality is, is when I was going through 
this, it made me feel, man, when I was 10 people, I would have 
been able to do this. So we would luckily have a great team and 
great partners. So we were able to get it done, but it 
definitely was a big lift.
 Mr. WIED. Well, thank you for serving in the Air Force. And 
thank you for all your efforts in helping those that are 
disabled, disabled veterans. I know that is very important and 
near and dear to your hearts.
 I want to talk a little bit about the--what is--the 
acronyms in the government are great, SDVOSB Program that, of 
course, was designed to ensure that service-disabled veteran-
owned small businesses have a meaningful opportunity to compete 
for federal contractors. In your experience, how has that 
certification changed your ability to compete in the defense 
marketplace as a small business?
 Mr. CLOSSON. It has been amazing. Number one, it is a very 
proud designation that I have been honored to have and that the 
SBA is blessed with creating, but now holding the 
certification. But being able to set things aside has not only 
helped Colossal, but our entire environment.
 I am going to the DAV and speaking to entrepreneurs, and 
they are wanting to start businesses because of this program. 
To see a room of 50 disabled veterans now with the motivation 
to do it because there is proven success, like a Colossal, is 
one of the biggest gifts that I think that I can give the 
veteran community. So for Colossal, it has been an amazing 
thing. Now hopefully getting the Rule of Two to dive in a 
little more and now open up the J&As for more sole sources. I 
hope we attract more people in, but it has been a blessing.
 Mr. WIED. All right, thank you. I yield back.
 Chairman WILLIAMS. The gentleman yields back.
 I now recognize Dr. Morrison from the great state of 
Minnesota for 5 minutes.
 Ms. MORRISON. Thank you very much, Chairman Williams, for 
holding this hearing, and thank you to our witnesses for being 
here today.
 In an era of rapid technological disruption, the agility 
and speed of small businesses are exactly what we need to 
maintain our military advantage. However, we face an urgent 
reality. Small business participation in the defense industrial 
base has steadily stagnated, presenting a serious risk to our 
national security. To reverse this trend, we have to look 
closely at where the barriers are highest and where regional 
solutions are succeeding.
 I am proud to say that my home state of Minnesota is 
combating this challenge head-on, and there are small number 
of--there are a number of small businesses doing phenomenal 
work in the defense ecosystem. One small business based in my 
district, Operative X, is working on the cutting edge of combat 
medicine. And is developing a sophisticated deployment system 
to help triage medical decisions on the battlefield. Using 
advanced AI-based diagnostics, this technology aims to extend 
the capabilities of military hospitals into the field, 
providing combat medics with the information they need to make 
quick, informed decisions that get wounded warfighters the care 
they need as quickly as possible. As a physician myself and the 
wife of an Army combat veteran, I am proud that this great work 
is happening in my backyard.
 Competition is essential for innovation, and it is critical 
that small businesses know how to effectively compete and know 
what resources are available to them across the federal 
government. Aligning these resources is essential to reducing 
barriers for small businesses with the potential to transition 
dual-use capabilities for our urgent national security needs.
 Ms. Dingle, how can federal workforce and education 
programs better align with the needs of small businesses 
supporting the defense industrial base?
 Ms. DINGLE. Thank you for the question. I really think it 
is important to have resources that are available to assist 
small businesses with technical assistance and access to 
training and education that will allow them to take advantage 
of new technologies such as AI. We have worked with our 
partners and we understand how important AI is to the growth of 
small businesses, but decisions about the affordability of 
those technologies, the availability of those technologies, and 
how they might be available, access to them, those 
conversations are happening without those small businesses. And 
it is the small businesses that bring that innovation to the 
defense industrial base.
 So ensuring that small businesses are involved in those 
conversations, that the pricing and access to those 
technologies are available to small businesses because we 
simply can't afford to buy into those technologies and create 
new products and services at the price point that exists right 
now.
 Ms. MORRISON. Thank you for that answer. Another one for 
you. In fiscal year 2024, fewer small businesses received 
government contracts than the year before, and the women-owned 
small businesses receiving contracts decreased by an even 
larger percentage. An SBA report found that women-owned small 
businesses accounted for a quarter of the total small business 
decline in 1 year alone. What factors contribute to more women-
owned firms leaving the industrial base?
 Ms. DINGLE. There are a number of factors that contribute. 
My colleague mentioned the difficulty in getting contracting 
officers to understand the program and how to use the program, 
so more education being available to them. And with a lot of 
the changes that have happened with the federal workforce, then 
we are starting over, having conversations about how you might 
be able to leverage that program.
 There are misunderstandings about the program that, you 
know, it might be some form of handout as opposed to a way to 
increase competition. And then the complexity of complying and 
competing in the federal marketplace just continues to get more 
and more difficult. And so if I have to evaluate the ability to 
compete on a program against a large company, that may cause me 
not to want to compete.
 Some of the DOGE changes that we have seen have just 
completely wiped out business owners. I received a phone call 
very early on last year, as soon as one of the executive orders 
were passed, and one of the business owners--I have received 
many, but this one very early on in January essentially said, I 
will be out of business by May if these things move forward. So 
I think that Congress can really help us by not just saying we 
want to, you know, modernize this process or we want to 
revitalize something, but hearing the voices of small business 
to understand what that looks like.
 WIPP has always--we always come to the Hill and offer we 
are here to help, right? We don't want to--you know, we are not 
here to bash you over the heads, but we really want to be able 
to help you to find solutions around that. And keeping that 
woman-owned small business program and other small business 
programs available and open and usable creates access and 
opportunity for small businesses.
 Ms. MORRISON. Thank you so much.
 One for you, Mr. Closson. A recent study found that 
contract terminations and declining market participation for 
small businesses are creating defense supply chain innovation 
and competition concerns. So what do you think are the short-
term actions we can take to help offset DOGE's negative impact 
on the industrial base?
 Mr. CLOSSON. So the reality is, you know, we have to get 
out there and compete, and this is the landscape that we are in 
right now. I believe there is competition to be had, but we 
need to continue to be agile, and we need contracting officers 
and the government to be able to have enough opportunities out 
there for us in the prime. We will see that number go up as 
opportunities are there. There are still plenty of good small 
businesses out there. We just need to see as many opportunities 
as we can.
 Ms. MORRISON. Thank you for getting an answer.
 And I have exceeded my time, Mr. Chair. I yield back. Thank 
you.
 Chairman WILLIAMS. The gentlelady yields back.
 I now recognize Mr. Fuller from the great state of Georgia 
for 5 minutes.
 Mr. FULLER. Thank you, Mr. Chairman.
 Mr. Closson, great to see another Airman in the room. I was 
going over your bio, had an admonishment for you real quick. I 
didn't see the University of Georgia in the bio that I have. So 
just a quick question, you would agree with me that is a far 
superior school than the TCU or something?
 Mr. CLOSSON. Don't bring me into this.
 Mr. FULLER. And I wanted to ask you real quick, 
specifically related to you were talking about giving speeches 
to veterans at a DAV. One of the things that I think with 
suicide rates in the veteran community being so high, it is 
just losing that sense of purpose, losing that sense of 
service. What is your number one piece of advice that you give 
to veterans in that speech specifically to go through this 
process of making sure you can get the certification for the 
Service Disabled Veteran-Owned Small Business Program?
 Mr. CLOSSON. Right. I am very truthful with them. When I 
speak at the DAV, I don't talk about the clouds and the 
unicorns and all the great stuff that come, you know, 7 years, 
17 years, for me almost 18 years. It is hard and no one is 
going to do it for you, you know. And there has been a lot of 
programs like the DAV now that are available.
 When I sit through these things, you know, we are giving 
them the roadmap, right, but we are just honest with them on 
what it takes, but also to be there for each other. The support 
programs talk a lot about small businesses and SDVOSBs and how 
to be successful in GovCon. But we talk equally about being 
there for each other and removing the stigma of being the tough 
guy and saying, hey, man, are you okay? Right? Because it is 
challenging. I mean, all of us have opened small businesses. 
This is a challenge to get into GovCon. It is not easy.
 So what we focus on is being there for them through their--
the programs like the DAV has that lays out the structure of 
how to get there, and then having a community with you that has 
your back, because it does put a lot of stress on you. And a 
lot of these gentlemen and ladies have PTSD. And--but I have 
seen some amazing success stories come from those programs, and 
we are going to keep seeing it.
 Mr. FULLER. Yeah. Well said. Airpower and I appreciate you 
being here.
 Mr. CLOSSON. Yes, sir.
 Mr. FULLER. Mr. Schwartz, I wanted to turn to you in my 
remaining time here. I don't know if you would agree with me, 
so correct me if you feel like I am wrong. I feel like the 
American defense industrial base is broken. But if you had to 
put it on a scale of 1 to--it is 1 is doing fine to 10 it is 
completely broken. Where would you put the American defense 
industrial base?
 Mr. SCHWARTZ. So first, I disagree with you on the ranking 
of colleges. Put that out there.
 Mr. FULLER. Way to stall for time.
 Mr. SCHWARTZ. Yeah. No, no, second of all, I wouldn't say 
it is broken. I would say it is a system designed for something 
else. Like if you are going into the Rockies in Colorado, you 
probably don't want a Corvette. You probably want a Ford 150, 
right? So we were designed--the acquisition system was designed 
for a different era, for a different concern. And we have not 
shifted to the right system or the right car. It is 
substantially problematic.
 I will just give one example and I think it highlights the 
whole concern. The attack drones that we used most recently in 
Iran were reverse engineered from the Iranian Shaheds. That 
shouldn't have to happen. So if that----
 Mr. FULLER. Yeah, absolutely. And obviously, you have 
highlighted here in your testimony that small businesses can 
help fix those problems. You refer to it as small businesses 
finding the front door, and back home I would call it the front 
porch.
 One of my concerns is that the defense industrial small 
business base that may get into this may be on the coast, East 
and West Coast. I represent Appalachian communities. What would 
be your one piece of advice for me as a legislator or leader to 
make sure small businesses and entrepreneurs in Appalachia are 
getting involved in the defense industrial base? What can I do 
to help them?
 Mr. SCHWARTZ. I am going to say two. I apologize. One is 
work really hard to get rid of all those ancillary regulations 
that are not priorities, right? Cybersecurity is important, but 
you can't focus on your job and cybersecurity when you are also 
given 20, 25 other regulations that really aren't as important 
anymore.
 And the second is help them figure out where to open the 
door, right? And sometimes that might be helping them, giving 
them the contact. Sometimes it might be legislating in ways to 
ensure that DOD is reaching out because what we need from our 
acquisition workforce, and this is, I think, the key here, is 
for them to have the time and the support to slow down and say, 
I don't want to push the easy button. I want to find the best 
solution. And sometimes the best solution is a small business. 
But if you don't have the time to sit back and say let me do my 
market research and really scout out where to go and who is out 
there, we are not going to get them.
 Mr. FULLER. Yes, sir.
 Mr. Chairman, I yield back my time. Thank you for your 
testimony.
 Chairman WILLIAMS. The gentleman yields back.
 I now recognize Mr. Tran from the great state of California 
for 5 minutes.
 Mr. TRAN. Thank you, Mr. Chairman and the Ranking Member, 
for today's hearing. Thank you for our witnesses for being here 
today.
 Los Angeles and Orange Counties are home to one of the 
nation's most dynamic aerospace and defense manufacturing and 
research ecosystems. I am especially proud to represent Auriga 
Space, located in Garden Grove. I have had the chance to tour 
their facility with their CEO, Winnie Lai, and see firsthand 
the amazing work that they are doing to develop the first 
electromagnetic launch system for rockets. From advanced 
manufacturing and satellite technology to defense software and 
precision engineering, small businesses throughout southern 
California are helping build the systems that keep America 
secure.
 Small businesses are often the source of breakthrough 
technologies and specialized capabilities that our national 
security depends on, but there is a troubling disconnect. The 
federal government is spending more on our national security 
than ever before, but the share of contract dollars going to 
small businesses declined. In fiscal year 2025, the Department 
of Defense awarded nearly $500 billion in contracts, but only a 
quarter of those went to small businesses. That is less than 
the year before.
 Far too often, federal procurement remains too complicated, 
too slow, and too expensive to navigate for small businesses. 
They face burdensome compliance requirements, lengthy 
contracting timelines, slow funding disbursements from other 
transaction authority managers, and a maze of regulations that 
often favor companies with dedicated administrative staff and 
teams of consultants. Meanwhile, the Small Business 
Administration has significantly cut staff meant to help with 
government contracting.
 Instead of cutting resources, we should be smartly 
investing in America's industrial base. That means reducing red 
tape, streamlining, streamlining contracting pathways, 
improving outreach, appropriately funding the Offices of Small 
and Disadvantaged Business Utilization, and ensuring agencies 
are held accountable for meeting their small business 
contracting goals because America's national security is 
stronger, more innovative, and more resilient when small 
businesses have a fair shot at contracting opportunities and a 
level playing field to compete.
 Ms. Dingle, despite significant increases in DOD 
contracting spending in fiscal year 2025, the National Defense 
Industrial Association's Vital Signs '26 report found that 
overall small businesses are reporting fewer contracting 
opportunities than last year, with a significant percentage 
seeing a decrease. What do you think we can do to ensure that 
the Department is structuring contracts in a way that small 
businesses can compete and perform?
 Ms. DINGLE. Thank you for that question. I think there are 
a number of things that you can work on. As my colleague 
mentioned, the process of getting into the front door can be 
extremely difficult. So if you are not already in that defense 
industrial base, it is nearly impossible to get in. Less and 
less agencies are permitting new entrants because you need to 
have a clearance in order to get a contract, and you need a 
contract to get a clearance. So that is one of the issues.
 The other is if there is anything that can be done to 
lessen the burden of all of the compliance requirements. I grew 
up in cybersecurity. I have worked in defense for many years. I 
understand the importance. So it is a necessary--it is 
necessary to have cybersecurity provisions in place, but the 
amount of money that it costs for a company to comply is nearly 
impossible, and some companies are getting out.
 Sometimes the procurements come out, and, you know, it is 
180-some-odd pages of things that you have to be able to read 
and respond to. And for small businesses, we just don't have 
the staff that are necessary to be able to navigate those 
things and to respond to those types of requirements. So 
streamlining the requirements in a way that doesn't necessarily 
burden small businesses would be great.
 Mr. TRAN. Thank you for that.
 Ms. Dingle and Mr. Closson, while small businesses may 
receive contracts, the actual funding is frequently delayed. 
Government inefficiencies and other acquisition bottlenecks are 
the cause. As you know, these challenges create severe cash 
flow problems for small businesses. How would you expand 
multiyear procurement authorities that the DOD help create more 
stable business opportunities for both prime contractors and 
subcontractors? And secondary to that is, would this help 
reduce the barrier to entry for small businesses?
 Ladies first.
 Ms. DINGLE. Thank you. You mentioned stability and 
predictability. I think those are just the key, right? When I 
started my business, the sales cycle was about 6 months. That 
sales cycle now is nearly 3 years. It is nearly impossible for 
a small business to hold on to the staff and the resources that 
are necessary to compete. So that is something that is 
important.
 And I apologize, a little bit of noise. I forgot what the 
second half of your question was.
 Mr. TRAN. No problem. I will just go to Mr. Closson. You 
have anything to add, 5 seconds.
 Mr. CLOSSON. Yeah. Okay, 5 seconds. The reality is it is 
tough, right? And we have to find ways to be able to get it 
done. I am hoping that the Rule of Two, using more sole 
sources, I mean, you think about that, the sole source alone 
would be something huge. The Rule of Two and actually executing 
sole sources would expedite everything.
 Mr. TRAN. Thank you. Chairman, I yield back.
 Chairman WILLIAMS. The gentleman yields back.
 I now recognize Ms. Van Duyne from the great state of Texas 
for 5 minutes.
 Ms. VAN DUYNE. And I agree with Mr. Schwartz' assessment on 
the ranking of colleges. TCU rules.
 Thank you, Mr. Chairman. This hearing is important because 
rebuilding America's defense industrial base cannot just mean 
relying on the same large prime contractors. Small businesses 
are a critical part of getting new ideas, faster production, 
and better capabilities to the warfighter.
 Too often Washington makes it harder than it needs to be 
for small businesses to be able to compete. And for a small 
business every dollar that is spent on unnecessary compliance 
is a dollar that cannot be spent hiring workers, developing new 
products, or supporting the mission. And that is why I 
introduced the Small Business Regulatory Reduction Act, which 
passed the House in December and is waiting Senate action. It 
is killing me. I have introduced this for three sessions now. 
We finally got it out of Committee. We got it on the floor. And 
now it is dying a very slow death in the Senate.
 And my bill requires the Small Business Administration to 
ensure that the cost of its rulemaking on small businesses is 
not greater than zero each fiscal year. It requires SBA to 
report on regulations that impact small businesses. And the 
principle is simple: before Washington adds another burden, it 
has to start removing them. And today's hearing shows why that 
matters. If we want a stronger defense industrial base, we need 
more small businesses willing and able to work with the federal 
government and not fewer.
 Mr. Schwartz, in your testimony, you discussed the critical 
role of small businesses in keeping our defense industry 
competitive and innovative. My concern is that even while 
higher contracting dollar amounts are flowing from the 
Department of War to small businesses, we are ignoring that the 
overall number of small businesses that win contracts is 
actually shrinking. So what does the shrinking number of 
contractors say exactly about the health of the defense 
industrial base, and what makes it less attractive now for 
small businesses to work with the government than it was 5 
years ago?
 Mr. SCHWARTZ. So the first one is shrinking, what does it 
say? So you may have noticed I eat kosher and I am Jewish, 
right? I lived in a city--there is a point, really, I promise. 
I lived in a city that had one kosher pizza store. The food 
wasn't great, their service was not great, and it could be 
cleaned up a little bit. One day, another kosher pizza store 
opened up two blocks away. You would be, I guess, not surprised 
how quickly that first pizza store, the pizza got really good, 
and the service was excellent. It is the same thing here. When 
you have that decline in the industrial base, you are losing 
that competition. When you are losing that competition, you are 
losing that hunger to improve and get better to win that 
contract. At the end of the day, that is, I think, the example.
 Okay. Now, I was thinking of food, so I totally forgot the 
second question. I apologize.
 Ms. VAN DUYNE. The last 5 years, do you think that it is--
that government has made it harder or easier for small 
businesses to be able to work with?
 Mr. SCHWARTZ. Oh, I think they have definitely made it 
harder. And I will give one example. As was mentioned, every 
dollar matters for small businesses. And what they need is that 
predictability of business. And yet we saw this year the SBIR 
authority lapse and then get renewed, right? That interruption 
of SBIRs that some companies knew they were going to win and 
got disrupted and lost that cash flow is a huge problem for 
planning on business. So that is just one example of including 
some of the ones that we talked about in cyber.
 So one option to really help small businesses, I think, is 
make some of those authorities permanent so companies know they 
can count on it and don't worry every single year that it is 
going to disrupt their business.
 Ms. VAN DUYNE. I appreciate that. I remember we had a 
witness here in front of the Small Business Committee several 
years ago from the defense industry, and he held up a three-
ring binder that is about four inches thick. And he said, this 
is the regulation we are sitting here talking about today. If 
you pass this, I close my doors. Because while some of the 
major defense companies can afford to have regulatory agencies, 
I cannot. This is going to cost me about $100,000. My margins 
are this thin. So if you pass this, you are literally taking my 
business away from me, just by a regulation.
 Tell me how important--and I understand we have to have 
regulations. That is important. But the layering upon layering 
upon layering, how much have you seen your time being spent on 
that as opposed to what you should actually be focused on?
 Mr. SCHWARTZ. So I can't say my time because I don't run a 
small business for defense. I am here for the NDIA, the 
National Defense Industry Association. But it is one of the 
biggest complaints that companies have. All the small 
businesses in the polls, it is consistently at the top. It is 
the regulations, the paperwork. And it--not only does it take 
up their time. I would argue what is even worse than taking up 
their time is distracting them from what we really want them to 
be doing, which is delivering capability, not working on 
compliance that doesn't really add anything.
 Ms. VAN DUYNE. I appreciate that, and I yield back. Thank 
you.
 Chairman WILLIAMS. The gentlelady yields back.
 I now recognize Mr. Olszewski from the great state of 
Maryland for 5 minutes.
 Mr. OLSZEWSKI. Thank you very much, Mr. Chairman. Thank you 
to our Ranking Member and all of our witnesses for being here 
today.
 I believe that we can all agree that driving American 
innovation for small business is a top priority for Members of 
this Committee and on all sides of the aisle. Maryland, we are 
proud to be home of the Army's oldest active proving ground, 
Aberdeen Proving Ground, where I know the National Defense 
Industrial Association, Mr. Schwartz, has a chapter. Thank you 
for fostering collaboration among government, industry, and 
academia to advance Army modernization efforts. APG features 
expansive test ranges and road courses designed to stress 
military hardware. So if a piece of equipment has--is meant to 
shoot, move, or communicate, it likely has gone through testing 
at APG.
 APG uses Small Business Administration guidelines to award 
research, technology, and service contracts to smaller-scale 
companies. Unfortunately, the Trump administration has gutted 
the SBA's capacity to advocate for small contractors at federal 
agencies like APG. The Office of Government Contracting and 
Business Development has been reduced by 60 percent, meaning 
fewer negotiators to help identify small business opportunities 
and fewer phone calls from small business owners being 
answered, which makes no sense to me, especially as Trump's own 
DOD has said, quote, `` A weakened American industrial base and 
supply chain threatens both the economic security of millions 
of Americans and our country's national security.'' I agree 
wholeheartedly.
 Kneecapping small businesses who want to enter, compete, 
and innovate in the federal market does, in fact, weaken our 
industrial base and supply chain. So I do hope we can work 
together in spite of these challenges to produce positive 
outcomes for the industrial base and for the government 
cluster.
 Ms. Dingle, I will start with you. Since 2015, SBA has made 
multiple unsuccessful attempts to deliver a single IT platform 
to bring all of its small business certifications into place. I 
think this is a great idea, especially if it cuts down on time 
for small businesses to apply and the time SBA to process 
applications. The Unified Certification Platform was deployed 
in 2024, even as the GAO and others raised concerns. The 
Committee no longer receives annual certification data, and it 
is unclear if those outstanding concerns have been addressed.
 I just wanted to wonder, from your perspective, is the 
portal functioning well for small business businesses currently 
seeking certifications with the SBA?
 Ms. DINGLE. Thank you for that question. So I am not 
certain whether the portal is currently functioning well. It 
was. The challenge for our business owners is they don't have a 
person they can contact at the SBA to figure out what is going 
on. The workforce has just been moved around. I won't say 
decimated, but it is--small businesses need a point of contact 
in an agency or in the SBA, for instance, to be able to get the 
answers that they need. Just like we were talking about 
debriefs on a contract, you need a debrief on what is happening 
with your application, and that is not possible right now.
 Mr. OLSZEWSKI. Sure. Hopefully, it is something we can 
address together. I want to thank the Committee for recently 
passing legislation I sponsored requiring the SBA to provide 
Congress more comprehensive information on the certification 
portal and related programs.
 Can you speak a little bit to how having that more complete 
picture of application volumes, processing times, and outcomes 
might help SBA improve the portal and better serve those small 
business applicants?
 Ms. DINGLE. Yeah, I think the small business community, the 
women-owned business community, is all for transparency and 
accountability. It is just how does that come about, right? And 
what we are seeing--I was just having a conversation recently 
and someone says have you spoken to this person at the SBA or 
have you spoken to this? Like, we have little to no contact 
with the resources that used to be able to assist business 
owners. So I think as taxpayers, as business owners, we all 
want transparency and accountability, but we also need the 
resources that are necessary to support that transparency and 
accountability.
 Mr. OLSZEWSKI. Thank you.
 And then, Mr. Closson, I will close with you with my last 
minute. We know that small business-only competitions are 
critical for small firms to participate in the defense 
industrial base, but are a small percentage of those defense 
dollars, making up just over 17 percent. How can we expand 
efforts to protect this small but critical investment rather 
than allow them to exit the industrial base and taking their 
innovation capacity with them?
 Mr. CLOSSON. The Rule of Two, like we mentioned earlier, 
being able to get more small business--prime opportunities for 
small businesses, that is going to be critical. And educating 
on the J&A for the sole sources. I mean, these are two quick 
paths to be able to get more--the companies that are there 
operating and then also bringing in new. But we need more prime 
contracts.
 Right now I would say the majority of our work growing, you 
know, was subcontracting, right? So being able to give us the 
opportunity to compete at the prime level as many times as 
possible is not only going to strengthen who is there, but it 
is going to bring more in.
 Mr. OLSZEWSKI. Thank you very much. I appreciate the 
witnesses' time.
 And Mr. Chairman, I yield back.
 Chairman WILLIAMS. The gentleman yields back.
 I now recognize Mr. Bresnahan from the great state of 
Pennsylvania for 5 minutes.
 Mr. BRESNAHAN. Thank you, Chairman, Ranking Member, and 
thank you to all of our witnesses for being here today.
 The defense industrial base has long been one of the United 
States' most important economic and national security assets, 
creating jobs, strengthening communities, and helping keep the 
American people safe. While many hear defense contracting and 
think of large corporations and mega contractors, small 
businesses located all over the country play a critical role in 
supporting our national defense and military readiness.
 In northeastern Pennsylvania, we see this firsthand. Small 
businesses throughout northeastern Pennsylvania provide 
specialized services and equipment that help ensure our service 
members have the tools they need to complete their missions 
safely and effectively. During the Committee's annual Small 
Business Showcase last month, I was proud to welcome Inert 
Products, a small business representative from Pennsylvania's 
Eighth Congressional District. Inert Products is a veteran-
owned small business developing advanced training aids and 
life-saving equipment that help security forces detect, respond 
to, and defeat explosive threats. Anyone who saw their state-
of-the-art tactical robot at the showcase saw firsthand how 
Inert Products equips our troops and allies with the best 
possible equipment to protect them while they protect us.
 Another standout example is Noble Biomaterials, who produce 
thermal, radar, and electromagnetic interference shielding 
technology that protect our warfighters and critical military 
assets. Based in Scranton, Noble manufactures lightweight, 
flexible, low-observable materials that help our servicemembers 
operate more effectively and avoid detection in high-risk 
environments.
 Small businesses like these protect our troops and save 
American lives, but we must continue to ensure they and 
companies like them are given fair opportunities to thrive in 
the space, which will in turn create local jobs, benefit our 
communities, and provide for their families.
 So my first question is for Mr. Schwartz. In your 
testimony, you cited the overburdensome paperwork and 
regulatory process that often push away potential defense 
contracting small businesses. Obviously, that barrier to enter 
the marketplace shouldn't be impeded by unnecessary paperwork. 
Is there anything tangible that we can be doing in Congress to 
simplify the process?
 Mr. SCHWARTZ. Yes, there are a couple of things, but one is 
there are a lot of regulations that stem from statute. So if 
you look at the Federal Acquisition Regulation overhaul that is 
being done right now, the revolutionary overhaul, what they are 
trying--what they are doing is taking everything that is not 
required by statute and taking it out, right? But there are 
things that are required by statute that have been required by 
statute because of things that are 20, 30 years old that 
perhaps we have not reviewed of late that are still in there 
that is not being reviewed because of this overhaul, because 
the administration has no authority to take that out, or any of 
the agencies.
 So one thing that could be done is a systematic review of 
the statutory requirements and regulation with a very simple 
question: is this doing more good than harm? Right? Because 
some of those--there used to be a regulation that said you had 
to use dollar coins in every vending machine on a base. That 
was ultimately appealed because of something that Congress did, 
or there was a requirement you had to use double-sided paper. 
Right? Those might be requirements that are examples that we 
may want to start reviewing those and getting rid of those so 
we can focus on the important things. So that would be at the 
top of my list.
 Mr. BRESNAHAN. Well, the 11 words you never want to hear: 
we are from the government and we are here to help. So, 
honestly.
 My second question for Mr. Closson. First of all, thank you 
for your service. As the founder of the Service Disabled 
Veteran-Owned Small Business, what advice would you have or to 
give to a veteran in the early stages of starting a small 
business? And this is something that I frequently encounter 
when I am meeting with my constituents. They served our 
country, and sometimes it is incredibly frustrating to get that 
inertia moving to be able to get the business off of the 
ground. So if you can maybe identify perhaps one or two key 
suggestions that I can take back to them.
 Mr. CLOSSON. First is find a good program. Like the DAV has 
programs where they have mentorship programs for starting small 
businesses. It is one of the best ones I have ever seen. I have 
been honored enough to teach a couple of those sessions. 
Extremely valuable for me. I actually sit through some of the 
others to get value. Extremely valuable. So the DAV puts on an 
awesome SDVOSB Entrepreneurial Veteran clinic for people 
starting business.
 Two is understanding how to monetize who you are and the 
value that you have. Being able to take that step, to dig into 
your Rolodex of people you have worked with in government or 
not and be able to monetize your relationships and bring value 
to their mission. Understand your value and how you can impact 
theirs.
 Mr. BRESNAHAN. Thank you for your service as well.
 And Mr. Chairman, I yield.
 Chairman WILLIAMS. The gentleman yields back.
 I now recognize Ms. Scholten from the great state of 
Michigan for 5 minutes.
 Ms. SCHOLTEN. Thank you so much, Mr. Chairman and Mr. 
Ranking Member, and thank you for our witnesses for being here 
today. This is a really, really important conversation.
 You know, there is a through line here, right, that we 
agree small businesses are the backbone of our economy and they 
are foundational to the strength of our defense industrial 
base. On that, we agree. However, according to a 2022 study, 
the number of small businesses competing for awards through the 
Department of Defense dropped by 23 percent. Over that same 
time period, the number of firms that were awarded small-dollar 
contracts, less than $1 million, shrank by even more, by 32 
percent.
 Ms. Dingle, what steps can we take to ensure that there are 
sufficient opportunities for small businesses who compete for 
these lower awards?
 Ms. DINGLE. Thank you for the question. I think we have 
heard from a number of my colleagues here about the Rule of Two 
creating opportunities, right, because that sets aside some of 
the business. But the other thing is consolidations right now 
are causing problems for us, some of the consolidations. And 
again, when you look at it from a taxpayer standpoint, it makes 
sense, but when you look at it from a business standpoint, that 
just takes some small businesses out of competition completely. 
You have got to be at a certain dollar figure to even be able 
to compete. So making small business set-asides available, 
using tools like the Rule of Two, making sure that contracts 
are not necessarily consolidated.
 I will try to be sensitive to time, but as a small business 
owner who has worked in defense, we had existing incumbent work 
that was then moved to a consolidated contract vehicle that we 
weren't eligible to compete on. So even though we had gotten 
our foot in the door, now the door was--we were put on the 
outside of the door and the door was closed so we couldn't get 
back in.
 Ms. SCHOLTEN. Yeah.
 Ms. DINGLE. And so being mindful of those kind of things is 
something that is going to be important.
 Ms. SCHOLTEN. Yeah. Another factor that you have emphasized 
in your testimony is the ever-changing economic landscape and 
the instability. I mean, I know defense contracting or not, 
that is the number one issue that I hear about from our small 
businesses back home.
 A recent op-ed from WIPP emphasizes that the use of AI in 
small business operations presents both a critical opportunity 
and a barrier to entry for certain entrepreneurs. My bill, the 
AI-WISE Act, would address this challenge by requiring the SBA 
to create learning modules to help small business owners adopt 
AI into their operations. We know they want it, but often they 
don't know how to use it. They might be afraid that a changing 
regulatory landscape, for example, could negatively impact them 
down the road. They are afraid of giving up proprietary 
information.
 Can you talk more about the challenges small businesses are 
facing with this new technology, specifically if you are able 
to speak to it, and how it could potentially help them to 
compete for federal contracts?
 Ms. DINGLE. So we know that AI is being used in the 
evaluation process for federal contracts. So first of all, as a 
business owner, I need to understand how my proposals are being 
evaluated. So even having someone at the SBA or in one of the 
agencies be able to provide an informational session to tell us 
that or to have some educational programs.
 And I will use cybersecurity as an example. As the defense 
industrial base was--cybersecurity was rolled out, there were 
roadshows around the country to say, hey, this is what this is 
going to look like----
 Ms. SCHOLTEN. Yeah.
 Ms. DINGLE.--and here is how you need to be prepared. We 
need to be doing that now with AI. Right? So having some 
education for that might be really helpful.
 Making sure that the tools are accessible in terms of the 
cost associated with those tools. There has been some push to 
make sure that there are some cybersecurity tools that are 
available. Doing that same thing from an artificial 
intelligence standpoint would be really helpful.
 Ms. SCHOLTEN. Yeah.
 Ms. DINGLE. Business owners, they want to use the 
technology, but we are concerned, right? There is no real 
regulatory guidance on whether we can use AI as a part of our 
solution. There is no real guidance on what our exposure is 
with respect to privacy and loss of data for our clients. And 
so some assistance in that area would be great.
 Ms. SCHOLTEN. That is very, very helpful feedback. We teach 
our students, the first thing you learn in an English class is 
write for your audience, right? It is almost dystopian to think 
that that audience might be AI. But the reality is, we know 
that this is evaluating our proposals. And so making sure folks 
understand how to prepare that is critically important. We are 
teaching students now how to write smart AI prompts to get it 
to do what they want. You know, getting our small business 
owners prepared for drafting their proposals is a really good 
idea.
 We will follow up with your team. We would love to, you 
know, chat out some specifics there.
 Ms. DINGLE. Thank you.
 Ms. SCHOLTEN. My time is almost up, so I will yield back. 
That was very helpful. Thank you, Ms. Dingle.
 Chairman WILLIAMS. The gentlelady yields back.
 I now recognize Mr. Patronis from the great state of 
Florida for 5 minutes.
 Mr. PATRONIS. Thank you, Mr. Chairman.
 My district, northwest Florida, I have got over 100,000 
veterans. I got 25,000 Active Duty, and it is definitely a 
stable part of the country because of their understanding, 
commitment to service, mission. But I think I am going to leave 
this kind of open for anybody that wants to chime in. What are 
we doing right and doing wrong?
 I know there are so many different organizations and groups 
that assemble to help those warfighters transition into 
careers, small business. But again, I am--I would rather you 
just, you know, throw darts at us where we are dropping the 
ball and creating problems to help those transitions, because 
there is--otherwise there wouldn't be so many different 
organizations trying to be the nonprofit solution, whether it 
be Operation New Uniform or what have you, that tries to help 
that. So I am, Mr. Chairman, I am open to any that wants to 
chime in.
 Mr. CLOSSON. Sure. So as somebody who transitioned you 
know, a while ago now, it has been 17 years, but being--having 
friends that are transitioning now and also working with 
Mission 22 and DAV and all of these agencies, these nonprofits 
trying to transition, is having these programs available within 
the military. Right? Because right now they are having to go 
out outside of that.
 There are--the military has done an amazing job from over 
the last couple of years of doing better transitioning. I was 
talking--we have a former colonel that works with Colossal now, 
and I was asking him because I was curious. He said it is 
getting better, right? And that there is a lot more care into 
that transition.
 But I think specifically around wanting to start an SDVOSB, 
a veteran-owned small business, a small business in general, 
are there classes available during that transition that they 
can point them in that direction and say--because a lot of it 
they train us to go get a job, right? Hey, this is what you 
need to do to go work for Lockheed or Raytheon or whoever else, 
and we are figuring that out. For me, when I made the decision 
just--there wasn't anything available. Right?
 Now, today, there are a lot of these programs like the DAV 
has of the SDVOSB veteran boot camp that they have, and there 
are these other agencies doing it. But my question is, is what 
is the government doing to foster that within the military? 
There may be some programs I am not sure about, so I don't want 
to say that that is not happening, but in the transitioning 
that I am hearing happening is we got to be there for them and 
be able to foster that.
 Mr. PATRONIS. Well, you have been there, done that. Okay. 
So in your career of service, when did you make up your mind 
that you were going to transition out? And ideally, what is the 
perfect timing to try to catch somebody with those transition 
procedures?
 Mr. CLOSSON. Absolutely. With me, it was, you know, when I 
got to Joint Base Andrews, I really got a better view of how 
the contractor can support the mission. And I was like, man, I 
think I could do this. Like, I really believe that I could 
bring value to this mission as a contractor and I can still 
serve the nation, right? Because I didn't want to take the 
uniform off, but I wanted to find a way to continue to serve.
 So in that transfer time is what I started doing is asking 
these companies I was working with as a military member, hey, 
how does this work? You know, I was just interviewing everyone. 
They probably thought I was crazy, but I knew that this is the 
path that I wanted to take, but there was nothing there for me.
 So the answer to your question is it is probably different 
with every member, right? But the reality is, is once that 
transition happens and you decide 6 months into it or a year 
into it, or you are hitting your 18 years and you are getting 
the itch and you got 2 left, is what programs are there to 
train them and to educate them on how to start an SDVOSB or 
veteran-owned small business?
 Mr. PATRONIS. Sure, sure.
 Mr. JAWOROWSKI. Yeah, I would add to that, I think that the 
programs that are there to support transitioning servicemembers 
into industry are great. We utilize them all the time. We hire 
from them frequently. When it comes to Active Duty internships, 
they frequently take place at the very tail end of the career, 
and if you have got somebody that, like Mr. Closson said, that 
has maybe got a few years left, that is a really good time to 
expose them to some of what industry has to offer, the 
challenges that industry faces, so they can make an informed 
decision about where they are going to take their future.
 I think that they can--the more--you know, rotation 
programs, maybe, you know, work with this company for a month 
and then a different company for a month, and they can see what 
the different size companies are really dealing with. I think 
that there is a lot of opportunity to improve there.
 Mr. PATRONIS. Sure.
 Ma'am?
 Ms. DINGLE. Thank you for your question. And might I add 
that doing those rotations would be really helpful for small 
businesses because we want that expertise. And I think that 
exposure for the folks that are still in will give them a sense 
of what the two environments look like because it can be pretty 
shocking to come out of the military or come out of federal 
service, like myself, and then transition into business.
 Mr. PATRONIS. Gotcha. Thank you.
 Mr. SCHWARTZ. Do I have time to answer? Oh, thank you. I 
will be very quick.
 Chairman WILLIAMS. You got 15 seconds.
 Mr. SCHWARTZ. Fifteen seconds. One of the things I think is 
very often overlooked is many veterans who leave the Department 
leave and they are like, I saw this problem, I know how to fix 
it in a way that other people don't. And that is something that 
I think we should really leverage when people leave. Like the 
company Onebrief that I mentioned earlier in the testimony, 
that person left the military and said, I saw this problem, I 
can fix it, and started a company to fix it. If we can capture 
that, we would really benefit.
 Mr. PATRONIS. Sure. Great answers.
 Chairman WILLIAMS. The gentleman's time is up.
 Mr. PATRONIS. Thank you.
 Chairman WILLIAMS. I now recognize Mr. Jack from the great 
state of Georgia for 5 minutes.
 Mr. JACK. Thank you very much, Mr. Chairman.
 If I could start with Mr. Schwartz, I appreciate your 
testimony today, and I want to talk a little bit about, you 
know, you had a great graph that you included in your testimony 
that shows the declining number of companies contracting with 
the federal government, and would welcome your thoughts as to 
why you believe it is harder for small businesses to contract 
with the federal government, particularly within the defense 
industrial space.
 Mr. SCHWARTZ. So first, thank you for reading the written 
testimony. Appreciate it.
 I think there are a lot of challenges. Let me start with 
the workforce. Right? Is if you are a contracting officer and 
you have a lot of pressures and there is a perception of 
compliance that you have to do and you have to move fast, it is 
very difficult to sit back and say, okay, I can do this really 
fast or I can go slow, do more market research, figure out what 
the right companies are, who is offering the best thing, and 
find them. That go find them is hard because who knows about a 
small business?
 We had to find a plumber recently and we had no idea where 
to start except Roto-Rooter because they were right there. 
Right? They are easy. It is a lot harder to find some of these 
small businesses. I think that is one of the biggest challenges 
is the visibility or people knowing this is what they have to 
offer.
 Mr. JACK. You also included in your testimony the crushing 
burden of overregulation. Would welcome thoughts to this 
Committee as to how we as a Small Business Committee and a 
Republican majority can help reduce regulatory costs and 
burdens to small businesses trying to get involved.
 Mr. SCHWARTZ. Right. I will just review two.
 The first one is, as we were talking before, there are a 
number of small businesses that are subcontractors. And it is 
not infrequent that a requirement on a prime contractor is 
required to be flowed down through the contract to every lower 
tier, which means we are also putting those regulations on 
small businesses that are the subcontractors. Well, perhaps 
let's review those requirements of what has to go flow down and 
say, do we really need to flow that down? Is it really 
important?
 And related to that is systematically go through all of the 
regulations and say this was--this is a regulation because 
something that was passed in 1992. Do we really need it anymore 
or can we amend it to alleviate the burden?
 Mr. JACK. That is how I feel, too.
 Mr. Jaworowski, appreciate your testimony as well, and I 
would welcome for this Committee an answer to this question, 
because as a small business that does not have an SBA 
certification and must compete in the broader small business 
category, how challenging is it for those types of businesses 
to win awards? And do you believe you are at a disadvantage in 
terms of the contracts offered to you because of it?
 Mr. JAWOROWSKI. We are definitely at a disadvantage because 
the contract space and opportunity space for a company that is 
our size that doesn't apply for a set-aside that is set aside 
for socioeconomic basis forces us to compete at a higher level. 
And in my testimony, I talked about how there is this pool of 
companies that really punch above their weight. They are large 
businesses masquerading as small businesses that get to operate 
based on 8(a) criteria in similar spaces to us. So it is really 
a 300-person company going up against a behemoth that can be 
several thousand employees at times.
 So it is very, very challenging to find the right 
opportunity space. And frequently, if those companies that are 
large are pursuing a small business set-aside where we can 
compete, we often see contracting officers electing to do a 
direct award to an 8(a) rather than have a full-blown 
competition. The Rule of Two should apply there, but there is 
still subjectivity that can be applied to the Rule of Two, 
which can limit competition.
 Mr. JACK. Thank you.
 Next question, Mr. Closson, since we are talking about 
certificates, would welcome your opinion and perspective as to 
how the SDVOSB Certification has changed your ability to 
compete in the defense marketplace?
 Mr. CLOSSON. It has been extremely valuable. It has helped 
shape the company in every way. We started off just fighting 
any way that we could, but I think we hit it on two values that 
helped our grow. As they started setting aside for SDVOSB, we 
started working with the VA more and started getting some work 
there, and then started working with the Air Force, got a 
couple prime contracts, were awarded some GWACs that we are 
able to set aside, like SOOP and ITES, that have set aside 
requirements for SDVOSB. And, you know, also the large, you 
know, partners that we work with also have set aside standards 
within their large contracts.
 You just got to get to be out there and work as hard as you 
can and find the avenues. They don't run and punch you in the 
face. You got to go look for them and hunt them down through 
your relationships. But they are out there and we really hope 
to see more.
 Mr. JACK. Well, I appreciate you all's testimony today.
 With that, Mr. Chairman, I yield back.
 Chairman WILLIAMS. The gentleman yields back.
 And I would like to thank our witnesses today for your 
testimony and for appearing before us. It has been a great 
hearing. I hope when you go back home you can tell your friends 
that there are hearings that people don't yell and scream at. 
And there is a lot of--much of what we talked about, the 
Ranking Member and I were just talking about how much we agree 
from party to party on small businesses today. So I want to 
thank you for being here.
 Without objection, Members have 5 legislative days to 
submit additional materials and written questions for the 
witnesses to the Chair, which will be forwarded to the 
witnesses. I ask the witnesses to please respond promptly if 
that happens.
 If there is no further business, without objection, the 
Committee is adjourned. Thank you.
 [Whereupon, at 11:51 a.m., the committee was adjourned.]
 
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