Pentagon Lags on Business Help for Disabled Vets

Congress passed a law eight years ago that would set aside 3 percent of all federal procurement dollars for service-disabled veteran entrepreneurs. Is the government living up to expectations?

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JOHN YDSTIE, host:

This is WEEKEND EDITION from NPR News. I'm John Ydstie.

Coming up, Fats Domino wows the crowd at Tipitina's nightclub.

But first, Memorial Day is a time to remember veterans who've made the ultimate sacrifice, given their lives in service to their country. There's another group of veterans, those disabled while on active duty, who've also given an extra measure. Retired Army Captain Dawn Halfaker is one of them. She lost an arm while on patrol in Baqubah, 30 miles northeast of Baghdad, in 2004.

Captain DAWN HALFAKER (U.S. Army; Retired): We came around a corner and all of a sudden, we're ambushed with small-arms fire and rocket-propelled grenades. One of which came through the front windshield of the truck I was in and came right down the side and took off my right arm and left some other nasty shrapnel wounds and also severely injured one of the other soldiers in the vehicle.

YDSTIE: Halfaker, who is 27 years old, now runs a small national security consulting firm in Washington. To aid veterans like Halfaker, disabled during their military service, Congress passed a law in 1999 mandating that three percent of all federal procurement dollars should go to businesses owned by service-disabled veterans. That would amount to about $10 billion this year. But the vast majority of government departments have failed to make their goal. That's despite an executive order from President Bush in 2004 reinforcing the program.

Ironically, the Department of Defense is among those with the worst record. The most recent data available for budget year 2005 shows that barely one-half of one percent of the Pentagon's contracting dollars went to businesses run by disabled veterans.

Capt. HALFAKER: Numbers don't lie. DoD needs to step up. And I think that they sort of need to be the leader in this, I mean, just because it's they're own.

YDSTIE: As she sits at her dining room table, Dawn Halfaker still has the trim look and straight bearing of a West Point graduate. A tailored black business suit has replaced her Army uniform. The suit's right sleeve is empty. Halfaker isn't wearing a prosthetic arm today. Shrapnel migrating out of her wound makes it too painful.

Though her Army career was cut short by her injury, Dawn Halfaker says she wanted to continue to serve her country. She was fascinated by the work of DARPA, the Defense Advanced Research Projects Agency, and approached a retired colonel who was a DARPA contractor.

Capt. HALFAKER: I wanted to be close to the mission and help improve capabilities and come up with new technology that was going to be supportive to the war fighters. So I said, well, I definitely want to come work for you, Colonel. What do I have to do? He said, well, you've got to start a business. You can do business with the government. And I was just - so I was a little bit intimidated but I decided this is really what I wanted to do. This is what I was passionate about and it's been a lot of work, a lot more work than I could have ever imagine.

YDSTIE: Her business now consults with the government through several contracts and has grown to 12 employees in about a year and a half. Halfaker is projecting $2.5 million in revenue for 2007. But she's frustrated that the Defense Department doesn't seem committed to reaching the three percent goal. She says there are contracting officials who remain uninformed about the program and there's no enforcement, no penalty for failing to make the goal.

Capt. HALFAKER: These companies are all people that have served, they are people that, you know, really understand, in my opinion, understand the DoD mission and, if anything, would be very capable in carrying out the work that DoD needs to be done.

Senator JOHN KERRY (Democrat, Massachusetts; Chairman, Small Business Committee): We can find a chair for you, I think, can we?

YDSTIE: At a Senate Small Business Committee hearing earlier this year, Chairman John Kerry of Massachusetts invited Halfaker from the audience to the witness table.

Sen. KERRY: Just to identify who you are so the record has that.

Capt. HALFAKER: My name is Dawn Halfaker. I'm a small business owner, service-disabled veteran business owner.

YDSTIE: Halfaker concluded her short testimony with this plea.

Capt. HALFAKER: We do have the skills and we're ready. We just need the ability to get our foot in the door and get access to these federal contracts.

Sen. KERRY: Well, thank you so, so much for your service and for the comments this morning. It was really very, very helpful - very important.

YDSTIE: In an interview this past week, Kerry, whose committee oversees the disabled veteran small business program, echoed Halfaker's impatience with the Defense Department.

Sen. KERRY: In 2005, the Defense Department awarded only 0.499 percent of contracts to service-disabled firms. It's very hard for anybody to believe that less than one-half of 1 percent of all the contracts is the maximum practical opportunity, which is the language of the bill that they can fulfill.

YDSTIE: Kerry says that given DoD's special relationship with disabled veterans, it should be leading the way in contracting with their companies.

Sen. KERRY: I mean, you've got some, you know, over 20,000 people or so who have been wounded over the course of these two wars - Afghanistan and Iraq. You would want the Defense Department to have the best record of any agency in the entire government. And it ought to be a natural for them to be able to say to their future recruits, look at what we do if you serve your country.

YDSTIE: The director of the Office of Small Business Programs for the Defense Department, Anthony Martocia(ph), acknowledges the Pentagon has fallen short. But he says DoD is committed to working with the more than 10,000 disabled veteran-owned businesses registered with the government to reach the three percent goal.

Mr. ANTHONY MARTOCIA (Director, Office of Small Business Programs, Department of Defense): The veterans provided the ultimate sacrifice for this country and we want to treat the veterans and give them the opportunities that they deserve when they come back to this country. They deserve it, they've earned it and we owe it to them.

YDSTIE: Martocia, who just took over the Pentagon's Office of Small Business Programs a couple of weeks ago, says one reason the DoD isn't meeting its goal is that the guidelines for the program weren't written until 2004, that's five years after the program was authorized by the Congress. Senator Kerry says that's a poor excuse and remains the fault of the Pentagon bureaucracy. But ultimately, Kerry holds the Bush administration responsible.

Sen. KERRY: We are not, at the federal level, seeing this administration keep faith with those who've served. It's not keeping the promises to our veterans. And on Memorial Day, particularly, I think it's important for people, not just to put a flag at the cemetery, not just to remember but to make certain that we're going to live up to those promises.

YDSTIE: Veterans groups say they're planning to meet with Defense Secretary Robert Gates and other administration officials over the Memorial Day weekend and hope to make progress on this issue.

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