Remarks by Secretary Eric K. Shinseki
National Veteran Small Business Conference and Exposition
New Orleans, LA
August 16, 2011
Tom, thank you for that kind introduction, and for your leadership of VA's Veterans business enterprise. Thank you also for this bold, new concept for the National Veteran Small Business Conference—a first, solo effort by the Department of Veterans Affairs to help revitalize the economy and generate jobs for Veterans.
Congressman Richardson, thank you for being with us today. More importantly, thank you for your unwavering support for our Nation's Veterans.
Mayor Mitch Landrieu, thank you for such terrific hospitality and the very special welcome amidst your own efforts to recover, rebuild, and oversee the rebirth of this beautiful city. Leadership counts, and yours shows with each return visit to New Orleans. It's exciting to be back and to be working with you on our joint projects.
General Russ Honoré, U.S. Army, Retired—former commander of Joint Task Force-Katrina, who led military relief efforts across the Gulf Coast; a proud Louisiana native and a Veteran business owner. It's good to see you again.
Members of the Veteran Small Business Federal Interagency Council—thanks for your superb support of our Nation's Veteran business community.
Our local VA leadership on the ground: Buzz Gray, Director, VISN 16; Julie Catalier, Director, New Orleans VA Medical System; and all your wonderful people.
Fellow Veterans, especially all you tough, determined, ambitious small business owners; other VA colleagues and distinguished guests; ladies and gentlemen:
It's great to be back at this annual meeting of our country's Veteran-entrepreneurs for two reasons: First, like you, VA is also in "business." We are in the business of serving Veterans with healthcare, benefits, memorials, and advocating for Veteran-owned and service-disabled, Veteran-owned small businesses. Second, your business successes help sustain ours, because small firms, like yours, are increasingly our partners in providing the services and supplies that underpin our network of care.
We have all heard the saying, "the business of the American people is business." From Paul Revere's silver shop to today's high-tech ventures, entrepreneurship is at the very heart of our economy.
Small businesses are the story of America. Written, chapter by chapter, by bold and determined men and women who saw possibility, sought opportunity, pursued breakthrough despite obstacles, and worked long and hard to ready themselves to leverage that first big contract.
More than most, you understand Thomas Edison's maxim: "Everything comes to him who hustles—while he waits." That's why you're here at this conference. You see possibility, you seek opportunity, you are pursuing breakthroughs, readying yourselves for that first big contract. We hope it comes for you, and we have organized this conference and exposition to provide you opportunity.
Small business is the stuff of big dreams. Google began as a research project. Hewlett Packard started out in a garage. And Warner Brothers Pictures was launched by three brothers with a single movie projector, traveling across Pennsylvania's mining towns showing that remarkable new invention—silent movies.
Almost everyone in this room is involved in, or thinking about, leveraging a new idea, a new service, a new product, or maybe reinventing an old one. Every year, over 500,000 new employer businesses are started—100,000 of them by Veterans. Another 300,000 Veterans will choose self-employment. This week's training will provide you the chance to grow and build your capacity as small business owners. You will be able to connect directly with VA's procurement decision-makers. Our goal is to increase the number of Veteran-owned small businesses by teaching you:
- How to navigate the start up;
- How to survive the crucial first years;
- How to write proposals that bring in contracts;
- How to network;
- And, how to manage growth.
That's our goal. But this is a first time for us, after being in the "observe and assist" role at previous versions of this conference. So with two years of understudy experience, we felt there was both room and need to expand and redirect this annual gathering to a genuinely, business-oriented growth and development training conference. We will measure our success in future years, at future conferences, by how many of you can report making the grade in navigating, surviving, writing contracts, and growing successfully. VA continues to study any initiative that would create or expand programs and provide new opportunities for your businesses.
Our newest venture, VA's Mentor-Protégé Program, was begun just this year. With solid management controls and oversight, we link protégé businesses with mentor firms to provide developmental assistance in financial, organizational, and business management, as well as in technical assistance, loans, and personnel training. The program is structured to:
- Advance knowledge and know-how;
- Enhance your company's competitiveness in securing VA contracts, either as a prime or as a sub;
- Foster important relationship-building;
- And increase the number of Veteran-owned firms receiving VA contracts and subcontracts.
There are criteria to participate. Protégé firms must be verified prior to acceptance, and must sell a product or service that VA buys. Mentor firms, large or small, must be in good standing to receive federal contracts; must demonstrate financial responsibility; and must be able to provide the guidance and assistance needed by protégé companies.
There are benefits. Mentor firms may receive evaluation consideration in their contract bids as well as additional subcontracting credit towards a specific VA contract. So this new program is a win-win opportunity for both start-ups and established firms.
If you're interested, the window for submitting applications began on 1 August and ends 31 August. This year, we had 25 firms in the program, and we're looking to expand that number to 100 in 2012.
VA is about Veterans in all that we do—first, last, and always. The numbers tell the story. Since the start of the fiscal year last October, under our Vet First buying initiative, VA has spent more than $2.0 billion with Veteran-owned small businesses—almost 20 percent of our total procurement dollars. And of that $2.0 billion, $1.8 billion was spent with service-disabled Veteran-owned businesses. That's over 17 percent of our procurement dollars—and it was money well spent.
For the second year in a row, VA has received an "A" on the Small Business Administration's procurement scorecard in recognition of our consistently strong support of Veteran-owned businesses.
Now, I also understand that the $3.5 billion we spent last year does not mean much to the Veteran small business owner who did not secure a VA contract because it went to an ineligible bidder instead. Let me assure you that we have tightened verification controls and, while we work to speed up the application process, we are committed to ensuring only eligible firms are verified for work with VA.
We will continue to aggressively pursue those who falsely claim Veteran status or use their Veteran status to front for non-Veteran-owned companies. Our debarment committee is on point and, where the evidence warrants, proceeding with suspensions and disbarments. To better support our commitment to you, I have charged VA's acquisition executives to implement rigorous training for VA's contracting community to detect fraud and to better ensure accurate and timely review of responses to solicitations.
As I have said previously from this podium: "There are rules for doing business with VA. If you abide by them, we will do all we can to support you; if you don't, we will find you." There are a number of firms who did not believe me, and they have been found and are being dealt with, in some cases, with incarceration for fraud.
VA's newly-established Subcontracting Compliance Review Program is another part of our effort to root out performance fraud, intentional or otherwise. For example: It's the last fiscal quarter and firms are pushing to secure end-of-year contracts. As it turns out, the requests for proposal submitted result in a firm being awarded more contracts than it could possibly handle. So, as a result, the work is handed off or passed through to subcontractors, sometimes in its entirety.
To maintain the integrity of our contract, subcontract, reserved, and set-aside clauses—and eliminate "pass through" business relationships and other fraudulent acts—VA will work to ensure its contractors are performing in accordance with stipulated subcontracting requirements. Firms receiving a VA contract will be subject to review to ensure they are in compliance with the limitations on subcontracting or percentage-of-work performance requirements. Here again, there will be reporting requirements and stiff consequences for violators. This is all about maintaining the integrity of contracts and best-serving our Nation's Veteran business owners.
The President, his administration, and VA are all working together as advocates for the Nation's 3.7 million Veteran-owned businesses. Let me take a few moments to update you on some of the investments we are making.
We know Veterans are a sizable segment of the business community. They represent 10% of small business owners and employ 10% of America's working population, about nine million Americans. As President Obama often says, small business is key to strengthening the Nation's economy.
So less than two weeks ago, the President again demonstrated his unwavering support for Veterans and business in his announcement of four, new, bold initiatives to better serve both:
- First, a Returning Heroes Tax Credit for firms that hire unemployed Veterans—a maximum of $2,400 for every short-term unemployed hire and $4,800 for every long-term hire. Also, the existing Wounded Warriors tax credit for all Veterans with service-connected disabilities will continue, with an increase for firms that hire Veterans with service-connected disabilities, who are long-term "unemployeds"—a maximum credit of $9,600 per Veteran.
- Second, the Department of Defense and the Department of Veterans Affairs will work closely with other federal departments and the President's economic and domestic policy teams to develop reforms that ensure every member of the military services receives the training, education, and credentials needed to successfully transition to the civilian workforce, or to pursue higher education.
If we can dedicate nine weeks in boot camp to getting youngsters ready to join their first operational units, and potentially deploy to combat, we should be able to find the requisite time and put together quality transition programs that assure success in returning to communities ready to work or go to school with high performance outcomes.
- Third, the Department of Labor will establish an enhanced career development and job search service package for better transitioning to the private sector.
- And last, a challenge to the private sector to hire or train 100,000 unemployed Veterans or their spouses by the end of 2013.
These initiatives are good for all Veterans, but they particularly serve the "9/11 Generation" well—the more than five million Americans who have served in the military during the past decade—three million of them joining after 9/11, knowing full well that they would be deploying to combat. Their accomplishments are extraordinary: Unseating the Taliban, pushing al Qaeda from its sanctuaries, capturing Saddam Hussein, delivering justice to Osama bin Laden, and training Iraqi and Afghani forces to defend their own countries.
This generation includes more military women who have served in combat than ever before. And hundreds of thousands of the 9/11 Generation troops have deployed multiple times. They have all borne a heavy burden on behalf of the Nation. Yet, as of June of this year, one million Veterans were unemployed and the jobless rate for post-9/11 Veterans was 13.3 percent. And as troops return from Iraq and Afghanistan, an additional one million servicemembers are projected to leave the military between 2011 and 2016.
The President's leadership and personal support—and the budgets he and the Congress have provided to VA—constitute strong direction, unwavering support, and the requisite resources to make mission. Because of that, we have opportunity—let's leverage it.
For one thing, we are working closely with the Department of Labor and the Office of Personnel Management to increase the number of Veterans on the federal employment rolls. We know Veterans bring a spectrum of unique qualities to the workplace.
- Razor-sharp decision-making skills, honed under the precision and stress of combat;
- Demonstrated competencies for clear thinking, quick assessments, and determination that come from operating in high-risk, high-stakes situations;
- A fine sense of teamwork; and,
- A positive, mission-first, no-fail, no-quit attitude.
Those are valuable qualifications for any organization, public or private, military or non-military. Veterans are "game breakers"—and more than in any time in my memory—now is when these skills, knowledge, and attributes are most needed. The country needs your talents, drive, and leadership right now. So what do we want to do about it?
We can complain about how many things are not right, and as we await perfection, lose opportunity, miss contracts, and surrender success to others. Or we can ruck it up, and start climbing—picking our boots up and laying them down as we climb our mountains. Which is it going to be?
Today, about a third of VA's more than 300,000 employees are Veterans—over 100,000 of them—and we are working to increase that number to 40%. In similar fashion, we recently awarded seven of our 15 major T4 [Transformation Twenty-One Total Technology] IT contracts to service-disabled, Veteran-owned, or Veteran-owned small businesses. And we are requiring the awardees of all 15 contracts to meet our aggressive subcontracting goals for service-disabled and Veteran-owned small businesses on their teams.
Why? Because in the marketplace, we know that Veterans hire Veterans. They know what they are getting when they do—among other things, those forward-leaning, tough-minded attributes I just mentioned. By advocating for, and helping to boost the number of Veteran-owned small businesses, VA intends to also create more jobs for Veterans.
But you all have to do your part—navigate, survive, write great proposals, win contracts, and grow smartly with all the appropriate controls in place. And then you can do your part to hire unemployed Veterans. We are counting on you.
There's a lot being done—more than VA has ever done before to ramp things up for Veteran-owned small businesses. But, there's still a lot more to do. We welcome your insights into the issues that matter most to you. Talk to us this week. Get engaged, and have fun.
One last thought. There's no question that we are in tough economic times—the toughest I've seen in my lifetime. We will not achieve economic recovery without growth in the small business sector. That is where the tough guys are needed. If you are faint of heart, you are probably wasting your time here. We need one-eyed kings to make a difference—one-eyed kings, creative risk-takers who are confident in their agility to adjust as the unknowns become visible.
You've faced other, tougher challenges—missions in uniform where the risks and uncertainty were far greater than even today's economic instability. And what carried you through those tough missions is what will carry you now. I am talking about perseverance, discipline, leveraging every advantage that comes your way, and always, always keeping your eye on that final objective—the goal you have set for yourselves.
We, in VA, believe in your abilities, your resolve, and your determination to succeed.
Let's get this economy moving. As we used to say in my units, "Lead or get the hell out of the way."
Godspeed in your endeavors! Thank you.