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Hearing of the House Armed Services Committee - Doing Business with DOD: Contracting and Regulatory Issues


Location: Washington, DC

The Panel on Business Challenges within the Defense Industry held a hearing on Monday on "Doing Business with DOD: Contracting and Regulatory Issues." Panel Chairman Bill Shuster (PA) made the following remarks:

"As most of you know, this panel has traveled around the country over the past few months to hold roundtable discussions with companies that are trying to do business with the Department of Defense. No matter where we went, or what sector of the industrial base we met with, we heard time and again that red tape and bureaucracy are getting in the way of innovation, efficiency and jobs.

In Rock Island, Illinois we heard complaints that export controls are overly restrictive. Many of the businesses we spoke to highlighted that we currently take a "one-size fits all" approach to determining what is placed on the US Munitions List, there is no mechanism for items to smartly be moved off the list as technology advances and specific items become readily available on the global market.

In Santa Clarita, California, we heard from a gentleman who owned a company that was last audited by the Defense Contract Audit Agency in 2005 and the audit was still open due failures on the part of DCAA. He estimated that having this open audit on the books had cost his company $3-4 million in lost business over the last six years.

In Akron, Ohio we heard that although programs like the Small Business Innovative Research Program aid in technology development, the technology rarely goes anywhere because there is no mechanism to assist in completing the stringent military test requirements, nor is there resourcing to get the technology into production.

In Honolulu, Hawaii, we met with a small business owner who commented that small businesses are simply not equipped to deal with the bureaucracy of the DOD acquisition system.

In San Diego, California we heard from a businessman who felt that the large primes don't want small businesses to innovate and another who commented that anyone that wants to partner with a small business simply wants your technology. Both of these gentlemen agreed that more needs to be done to protect the intellectual property of small businesses.

"Here's the thing….it wasn't just one guy in Ohio, or a CEO in California or a Small Business owner in Illinois. These issues were consistently raised everywhere we went -- from the shipyard workers in Hawaii to the nanotechnology developers Ohio.

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