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114th Congress }                                        { Rept. 114-704
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                         {Part 1

======================================================================
 
           DEFENDING AMERICA'S SMALL CONTRACTORS ACT OF 2016

                                _______
                                

 July 25, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Chabot, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 4341]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 4341) to amend the Small Business Act to improve 
transparency and clarity for small businesses, to clarify the 
role of small business advocates, to increase opportunities for 
competition in subcontracting, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

   I. Amendment.......................................................1
  II. Purpose of the Bill and Summary................................15
 III. Background and the Need for Legislation........................15
  IV. Hearings.......................................................47
   V. Committee Consideration........................................48
  VI. Committee Votes................................................49
 VII. Section-by-Section Analysis of H.R. 3850.......................49
VIII. Congressional Budget Cost Estimate.............................58
  IX. Unfunded Mandates..............................................58
   X. New Budget Authority, Entitlement Authority, and Tax Expenditur58
  XI. Oversight Findings.............................................58
 XII. Statement of Constitutional Authority..........................58
XIII. Congressional Accountability Act...............................59
 XIV. Federal Advisory Committee Statement...........................59
  XV. Statement of No Earmarks.......................................59
 XVI. Performance Goals and Objectives...............................59
XVII. Changes in Existing Law Made by the Bill, as Reported..........59

                              I. Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  (a) Short Title.--This Act may be cited as the ``Defending America's 
Small Contractors Act of 2016''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title.

    TITLE I--IMPROVING TRANSPARENCY AND CLARITY FOR SMALL BUSINESSES

Sec. 101. Plain language rewrite of requirements for small business 
procurements.
Sec. 102. Improving reporting on small business goals.
Sec. 103. Transparency in small business goals.
Sec. 104. Uniformity in procurement terminology.

       TITLE II--CLARIFYING THE ROLES OF SMALL BUSINESS ADVOCATES

Sec. 201. Scope of review by procurement center representatives.
Sec. 202. Responsibilities of Commercial Market Representatives.
Sec. 203. Duties of the Office of Small and Disadvantaged Business 
Utilization.
Sec. 204. Improving contractor compliance.
Sec. 205. Responsibilities of Business Opportunity Specialists.

       TITLE III--STRENGTHENING OPPORTUNITIES FOR COMPETITION IN 
                             SUBCONTRACTING

Sec. 301. Good faith in subcontracting.
Sec. 302. Pilot program to provide opportunities for qualified 
subcontractors to obtain past performance ratings.

                   TITLE IV--MENTOR-PROTEGE PROGRAMS

Sec. 401. Amendments to the Mentor-Protege Program of the Department of 
Defense.
Sec. 402. Improving cooperation between the mentor-protege programs of 
the Small Business Administration and the Department of Defense.

                         TITLE V--MISCELLANEOUS

Sec. 501. Improving education on small business regulations.
Sec. 502. Protecting task order competition.
Sec. 503. Improvements to size standards for small agricultural 
producers.
Sec. 504. Uniformity in service-disabled veteran definitions.
Sec. 505. GAO review of the Office of Government Contracting and 
Business Development of the Small Business Administration.
Sec. 506. Required reports pertaining to capital planning and 
investment control.
Sec. 507. GAO review of surety bonds.

    TITLE I--IMPROVING TRANSPARENCY AND CLARITY FOR SMALL BUSINESSES

SEC. 101. PLAIN LANGUAGE REWRITE OF REQUIREMENTS FOR SMALL BUSINESS 
                    PROCUREMENTS.

  Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) is amended 
to read as follows:
  ``(a) Small Business Procurements.--
          ``(1) In general.--For purposes of this Act, small business 
        concerns shall receive any award or contract if such award or 
        contract is, in the determination of the Administrator and the 
        contracting agency, in the interest of--
                  ``(A) maintaining or mobilizing the full productive 
                capacity of the United States;
                  ``(B) war or national defense programs; or
                  ``(C) assuring that a fair proportion of the total 
                purchase and contracts for goods and services of the 
                Government in each industry category (as described 
                under paragraph (2)) are awarded to small business 
                concerns.
          ``(2) Industry category defined.--
                  ``(A) In general.--In this subsection, the term 
                `industry category' means a discrete group of similar 
                goods and services, as determined by the Administrator 
                in accordance with the North American Industry 
                Classification System codes used to establish small 
                business size standards, except that the Administrator 
                shall limit an industry category to a greater extent 
                than provided under the North American Industry 
                Classification codes if the Administrator receives 
                evidence indicating that further segmentation of the 
                industry category is warranted--
                          ``(i) due to special capital equipment needs;
                          ``(ii) due to special labor requirements;
                          ``(iii) due to special geographic 
                        requirements, except as provided in 
                        subparagraph (B);
                          ``(iv) due to unique Federal buying patterns 
                        or requirements; or
                          ``(v) to recognize a new industry.
                  ``(B) Exception for geographic requirements.--The 
                Administrator may not further segment an industry 
                category based on geographic requirements unless--
                          ``(i) the Government typically designates the 
                        geographic area where work for contracts for 
                        goods or services is to be performed;
                          ``(ii) Government purchases comprise the 
                        major portion of the entire domestic market for 
                        such goods or services; and
                          ``(iii) it is unreasonable to expect 
                        competition from business concerns located 
                        outside of the general geographic area due to 
                        the fixed location of facilities, high 
                        mobilization costs, or similar economic 
                        factors.
          ``(3) Determinations with respect to awards or contracts.--
        Determinations made pursuant to paragraph (1) may be made for 
        individual awards or contracts, any part of an award or 
        contract or task order, or for classes of awards or contracts 
        or task orders.
          ``(4) Increasing prime contracting opportunities for small 
        business concerns.--
                  ``(A) Description of covered proposed procurements.--
                The requirements of this paragraph shall apply to a 
                proposed procurement that includes in its statement of 
                work goods or services currently being supplied or 
                performed by a small business concern and, as 
                determined by the Administrator--
                          ``(i) is in a quantity or of an estimated 
                        dollar value which makes the participation of a 
                        small business concern as a prime contractor 
                        unlikely;
                          ``(ii) in the case of a proposed procurement 
                        for construction, if such proposed procurement 
                        seeks to bundle or consolidate discrete 
                        construction projects; or
                          ``(iii) is a solicitation that involves an 
                        unnecessary or unjustified bundling of contract 
                        requirements.
                  ``(B) Notice to procurement center representatives.--
                With respect to proposed procurements described in 
                subparagraph (A), at least 30 days before issuing a 
                solicitation and concurrent with other processing steps 
                required before issuing the solicitation, the 
                contracting agency shall provide a copy of the proposed 
                procurement to the procurement center representative of 
                the contracting agency (as described in subsection (l)) 
                along with a statement explaining--
                          ``(i) why the proposed procurement cannot be 
                        divided into reasonably small lots (not less 
                        than economic production runs) to permit offers 
                        on quantities less than the total requirement;
                          ``(ii) why delivery schedules cannot be 
                        established on a realistic basis that will 
                        encourage the participation of small business 
                        concerns in a manner consistent with the actual 
                        requirements of the Government;
                          ``(iii) why the proposed procurement cannot 
                        be offered to increase the likelihood of the 
                        participation of small business concerns;
                          ``(iv) in the case of a proposed procurement 
                        for construction, why the proposed procurement 
                        cannot be offered as separate discrete 
                        projects; or
                          ``(v) why the agency has determined that the 
                        bundling of contract requirements is necessary 
                        and justified.
                  ``(C) Alternatives to increase prime contracting 
                opportunities for small business concerns.--If the 
                procurement center representative believes that the 
                proposed procurement will make the participation of 
                small business concerns as prime contractors unlikely, 
                the procurement center representative, within 15 days 
                after receiving the statement described in subparagraph 
                (B), shall recommend to the contracting agency 
                alternative procurement methods for increasing prime 
                contracting opportunities for small business concerns.
                  ``(D) Failure to agree on an alternative procurement 
                method.--If the procurement center representative and 
                the contracting agency fail to agree on an alternative 
                procurement method, the Administrator shall submit the 
                matter to the head of the appropriate department or 
                agency for a determination.
          ``(5) Contracts for sale of government property.--With 
        respect to a contract for the sale of Government property, 
        small business concerns shall receive any such contract if, in 
        the determination of the Administrator and the disposal agency, 
        the award of such contract is in the interest of assuring that 
        a fair proportion of the total sales of Government property be 
        made to small business concerns.
          ``(6) Sale of electrical power or other propery.--Nothing in 
        this subsection shall be construed to change any preferences or 
        priorities established by law with respect to the sale of 
        electrical power or other property by the Federal Government.
          ``(7) Costs exceeding fair market price.--A contract may not 
        be awarded under this subsection if the cost of the contract to 
        the awarding agency exceeds a fair market price.''.

SEC. 102. IMPROVING REPORTING ON SMALL BUSINESS GOALS.

  Section 15(h)(2)(E) of the Small Business Act (15 U.S.C. 
644(h)(2)(E)) is amended--
          (1) in clause (i)--
                  (A) in subclause (III), by striking ``and'' at the 
                end; and
                  (B) by adding at the end the following new 
                subclauses:
                                  ``(V) that were purchased by another 
                                entity after the initial contract was 
                                awarded and as a result of the 
                                purchase, would no longer be deemed to 
                                be small business concerns for purposes 
                                of the initial contract; and
                                  ``(VI) that were awarded using a 
                                procurement method that restricted 
                                competition to small business concerns 
                                owned and controlled by service-
                                disabled veterans, qualified HUBZone 
                                small business concerns, small business 
                                concerns owned and controlled by 
                                socially and economically disadvantaged 
                                individuals, small business concerns 
                                owned and controlled by women, or a 
                                subset of any such concerns;'';
          (2) in clause (ii)--
                  (A) in subclause (IV), by striking ``and'' at the 
                end; and
                  (B) by adding at the end the following new 
                subclauses:
                                  ``(VI) that were purchased by another 
                                entity after the initial contract was 
                                awarded and as a result of the 
                                purchase, would no longer be deemed to 
                                be small business concerns owned and 
                                controlled by service-disabled veterans 
                                for purposes of the initial contract; 
                                and
                                  ``(VII) that were awarded using a 
                                procurement method that restricted 
                                competition to qualified HUBZone small 
                                business concerns, small business 
                                concerns owned and controlled by 
                                socially and economically disadvantaged 
                                individuals, small business concerns 
                                owned and controlled by women, or a 
                                subset of any such concerns;'';
          (3) in clause (iii)--
                  (A) in subclause (V), by striking ``and'' at the end; 
                and
                  (B) by adding at the end the following new 
                subclauses:
                                  ``(VII) that were purchased by 
                                another entity after the initial 
                                contract was awarded and as a result of 
                                the purchase, would no longer be deemed 
                                to be qualified HUBZone small business 
                                concerns for purposes of the initial 
                                contract; and
                                  ``(VIII) that were awarded using a 
                                procurement method that restricted 
                                competition to small business concerns 
                                owned and controlled by service-
                                disabled veterans, small business 
                                concerns owned and controlled by 
                                socially and economically disadvantaged 
                                individuals, small business concerns 
                                owned and controlled by women, or a 
                                subset of any such concerns;'';
          (4) in clause (iv)--
                  (A) in subclause (V), by striking ``and'' at the end; 
                and
                  (B) by adding at the end the following new 
                subclauses:
                                  ``(VII) that were purchased by 
                                another entity after the initial 
                                contract was awarded and as a result of 
                                the purchase, would no longer be deemed 
                                to be small business concerns owned and 
                                controlled by socially and economically 
                                disadvantaged individuals for purposes 
                                of the initial contract; and
                                  ``(VIII) that were awarded using a 
                                procurement method that restricted 
                                competition to small business concerns 
                                owned and controlled by service-
                                disabled veterans, qualified HUBZone 
                                small business concerns, small business 
                                concerns owned and controlled by women, 
                                or a subset of any such concerns;'';
          (5) in clause (v)--
                  (A) in subclause (IV), by striking ``and'' at the 
                end;
                  (B) in subclause (V), by inserting ``and'' at the 
                end; and
                  (C) by adding at the end the following new subclause:
                                  ``(VI) that were purchased by another 
                                entity after the initial contract was 
                                awarded and as a result of the 
                                purchase, would no longer be deemed to 
                                be small business concerns owned by an 
                                Indian tribe other than an Alaska 
                                Native Corporation for purposes of the 
                                initial contract;'';
          (6) in clause (vi)--
                  (A) in subclause (IV), by striking ``and'' at the 
                end; and
                  (B) by adding at the end the following new subclause:
                                  ``(VI) that were purchased by another 
                                entity after the initial contract was 
                                awarded and as a result of the 
                                purchase, would no longer be deemed to 
                                be small business concerns owned by a 
                                Native Hawaiian Organization for 
                                purposes of the initial contract;'';
          (7) in clause (vii)--
                  (A) in subclause (IV), by striking ``and'' at the 
                end; and
                  (B) by adding at the end the following new subclause:
                                  ``(VI) that were purchased by another 
                                entity after the initial contract was 
                                awarded and as a result of the 
                                purchase, would no longer be deemed to 
                                be small business concerns owned by an 
                                Alaska Native Corporation for purposes 
                                of the initial contract; and''; and
          (8) in clause (viii)--
                  (A) in subclause (VII), by striking ``and'' at the 
                end;
                  (B) in subclause (VIII), by striking ``and'' at the 
                end; and
                  (C) by adding at the end the following new 
                subclauses:
                                  ``(IX) that were purchased by another 
                                entity after the initial contract was 
                                awarded and as a result of the 
                                purchase, would no longer be deemed to 
                                be small business concerns owned and 
                                controlled by women for purposes of the 
                                initial contract; and
                                  ``(X) that were awarded using a 
                                procurement method that restricted 
                                competition to small business concerns 
                                owned and controlled by service-
                                disabled veterans, qualified HUBZone 
                                small business concerns, small business 
                                concerns owned and controlled by 
                                socially and economically disadvantaged 
                                individuals, or a subset of any such 
                                concerns; and''.

SEC. 103. TRANSPARENCY IN SMALL BUSINESS GOALS.

  Section 15(g) of the Small Business Act is amended by adding at the 
end the following new paragraph:
          ``(4) Determinations of the total value of contract awards.--
        For purposes of the goals established under paragraphs (1) and 
        (2), the total value of contract awards for a fiscal year may 
        not be determined in a manner that excludes the value of a 
        contract based on--
                  ``(A) where the contract is awarded;
                  ``(B) where the contract is performed;
                  ``(C) whether the contract is mandated by Federal law 
                to be performed by an entity other than a small 
                business concern;
                  ``(D) whether funding for the contract is made 
                available in an appropriations Act, if the contract is 
                subject to the requirements of chapter 33 of title 41, 
                United States Code, or chapter 137 of title 10, United 
                States Code, and the Federal Acquisition Regulation; or
                  ``(E) whether the contract is otherwise subject to 
                the Federal Acquisition Regulation.''.

SEC. 104. UNIFORMITY IN PROCUREMENT TERMINOLOGY.

  (a) In General.--Section 15(j)(1) of the Small Business Act (15 
U.S.C. 644(j)(1)) is amended by striking ``greater than $2,500 but not 
greater than $100,000'' and inserting ``greater than the micro-purchase 
threshold, but not greater than the simplified acquisition threshold''.
  (b) Technical Amendment.--Section 3(m) of the Small Business Act (15 
U.S.C. 632(m)) is amended to read as follows:
  ``(m) Definitions Pertaining to Contracting.--In this Act:
          ``(1) Prime contract.--The term `prime contract' has the 
        meaning given such term in section 8701(4) of title 41, United 
        States Code.
          ``(2) Prime contractor.--The term `prime contractor' has the 
        meaning given such term in section 8701(5) of title 41, United 
        States Code.
          ``(3) Simplified acquisition threshold.--The term `simplified 
        acquisition threshold' has the meaning given such term in 
        section 134 of title 41, United States Code.
          ``(4) Micro-purchase threshold.--The term `micro-purchase 
        threshold' has the meaning given such term in section 1902(a) 
        of title 41, United States Code.
          ``(5) Total purchase and contracts for property and 
        services.--The term `total purchases and contracts for property 
        and services' shall mean total number and total dollar amount 
        of contracts and orders for property and services.''.

       TITLE II--CLARIFYING THE ROLES OF SMALL BUSINESS ADVOCATES

SEC. 201. SCOPE OF REVIEW BY PROCUREMENT CENTER REPRESENTATIVES.

  Section 15(l) of the Small Business Act (15 U.S.C. 644(l)) is amended 
by adding at the end the following:
          ``(9) Scope of review.--The Administrator shall not limit the 
        scope of review by the Procurement Center Representative for 
        any solicitation of a contract or task order without regard to 
        whether the contract or task order or part of the contract or 
        task order is set aside for small business concerns, whether 1 
        or more contract or task order awards are reserved for small 
        business concerns under a multiple award contract, or whether 
        or not the solicitation would result in a bundled or 
        consolidated contract (as defined in subsection (s)) or a 
        bundled or consolidated task order.''.

SEC. 202. RESPONSIBILITIES OF COMMERCIAL MARKET REPRESENTATIVES.

  Section 4(h) of the Small Business Act (as added by section 865 of 
the National Defense Authorization Act for Fiscal Year 2016 (Public Law 
114-92)) is amended--
          (1) in the subsection heading, by striking ``Certification 
        Requirements for'';
          (2) in paragraph (2), by redesignating subparagraphs (A) and 
        (B) as clauses (i) and (ii), respectively (and conforming the 
        margins accordingly);
          (3) by amending clause (ii) (as so redesignated) to read as 
        follows:
                          ``(ii) Application.--The requirements of 
                        clause (i) shall be included in any initial job 
                        posting for the position of a commercial market 
                        representative and shall apply to any person 
                        appointed as a commercial market representative 
                        after November 25, 2015.'';
          (4) in clause (i) (as so redesignated), by striking 
        ``paragraph (1)'' and inserting ``subparagraph (A)'';
          (5) by redesignating paragraphs (1) and (2) as subparagraphs 
        (A) and (B), respectively (and conforming the margins 
        accordingly);
          (6) in subparagraph (A) (as so redesignated), by striking 
        ``paragraph (2)'' and inserting ``subparagraph (B)''; and
          (7) by inserting before subparagraph (A) (as so redesignated) 
        the following:
          ``(1) Duties.--The principal duties of a Commercial Market 
        Representative employed by the Administrator and reporting to 
        the senior official appointed by the Administrator with 
        responsibilities under sections 8, 15, 31, and 36 (or the 
        designee of such official) shall be to advance the policies 
        established in section 8(d)(1) relating to subcontracting. Such 
        duties shall include--
                  ``(A) helping prime contractors to find small 
                business concerns that are capable of performing 
                subcontracts;
                  ``(B) for contractors awarded contracts containing 
                the clause described in section 8(d)(3), providing--
                          ``(i) counseling on the contractor's 
                        responsibility to maximize subcontracting 
                        opportunities for small business concerns;
                          ``(ii) instruction on methods and tools to 
                        identify potential subcontractors that are 
                        small business concerns; and
                          ``(iii) assistance to increase awards to 
                        subcontractors that are small business concerns 
                        through visits, training, and reviews of past 
                        performance;
                  ``(C) providing counseling on how a small business 
                concern may promote its capacity to contractors awarded 
                contracts containing the clause described in section 
                8(d)(3); and
                  ``(D) conducting periodic reviews of contractors 
                awarded contracts containing the clause described in 
                section 8(d)(3) to assess compliance with 
                subcontracting plans required under section 8(d)(6).
          ``(2) Certification requirements.--''.

SEC. 203. DUTIES OF THE OFFICE OF SMALL AND DISADVANTAGED BUSINESS 
                    UTILIZATION.

  Section 15(k) of the Small Business Act (15 U.S.C. 644(k)), as 
amended by section 870 of the National Defense Authorization Act for 
Fiscal Year 2016 (Public Law 114-92), is amended--
          (1) by striking ``section 8, 15 or 44'' and inserting 
        ``section 8, 15, 31, 36, or 44'';
          (2) by striking ``sections 8 and 15'' each place such term 
        appears and inserting ``sections 8, 15, 31, 36, and 44'';
          (3) in paragraph (10), by striking ``section 8(a)'' and 
        inserting ``section 8, 15, 31, or 36'';
          (4) by redesignating paragraphs (15), (16), and (17) as 
        paragraphs (16), (17), and (18), respectively;
          (5) by inserting after paragraph (14) the following new 
        paragraph:
          ``(15) shall review purchases made by the agency greater than 
        the micro-purchase threshold, and less than the simplified 
        acquisition threshold to ensure that the purchases have been 
        made in compliance with the provisions of this Act and have 
        been properly recorded in the Federal Procurement Data System, 
        if the method of payment is a purchase card issued by the 
        Department of Defense pursuant to section 2784 of title 10, 
        United States Code, or by the head of an executive agency 
        pursuant to section 1909 of title 41, United States Code;''; 
        and
          (6) in paragraph (17) (as so redesignated)--
                  (A) in subparagraph (B), by striking ``and'' at the 
                end;
                  (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(D) any failure of the agency to comply with 
                section 8, 15, 31, or 36.''.

SEC. 204. IMPROVING CONTRACTOR COMPLIANCE.

  (a) Requirements for the Office of Small and Disadvantaged Business 
Utilization.--Section 15(k) of the Small Business Act (15 U.S.C. 
644(k)(8)), as amended by section 203, is further amended--
          (1) by redesignating paragraphs (16), (17), and (18) as 
        paragraphs (17), (18), and (19), respectively; and
          (2) by inserting after paragraph (15) the following new 
        paragraph:
          ``(16) shall provide assistance to a small business concern 
        awarded a contract or subcontract under this Act or under title 
        10 or title 41, United States Code, in finding resources for 
        education and training on compliance with contracting 
        regulations (including the Federal Acquisition Regulation) 
        after award of such a contract or subcontract.''.
  (b) Requirements Under the Mentor-Protege Program of the Department 
of Defense.--Section 831(e)(1) of the National Defense Authorization 
Act for Fiscal Year 1991 (Public Law 101-510; 104 Stat. 1607; 10 U.S.C. 
2302 note) is amended--
          (1) in subparagraph (B), by striking ``and'' at the end;
          (2) in subparagraph (C), by striking the period at the end 
        and inserting ``; and''; and
          (3) by inserting at the end the following new subparagraph:
                  ``(D) the assistance the mentor firm will provide to 
                the protege firm in understanding contract regulations 
                of the Federal Government and the Department of Defense 
                (including the Federal Acquisition Regulation and the 
                Defense Federal Acquisition Regulation Supplement) 
                after award of a subcontract under this section, if 
                applicable.''.
  (c) Resources for Small Business Concerns.--Section 15 of the Small 
Business Act (15 U.S.C. 644) is amended by adding at the end the 
following new subsection:
  ``(t) Post-Award Compliance Resources.--The Administrator shall 
provide to small business development centers and entities 
participating in the Procurement Technical Assistance Cooperative 
Agreement Program under chapter 142 of title 10, United States Code, 
and shall make available on the website of the Administration, a list 
of resources for small business concerns seeking education and 
assistance on compliance with contracting regulations (including the 
Federal Acquisition Regulation) after award of a contract or 
subcontract.''.
  (d) Requirements for Procurement Center Representatives.--Section 
15(l)(2) of the Small Business Act (15 U.S.C. 644(l)(2)) is amended--
          (1) by redesignating subparagraph (I) as subparagraph (J);
          (2) in subparagraph (H), by striking ``and'' at the end; and
          (3) by inserting after subparagraph (H) the following new 
        subparagraph:
                  ``(I) assist small business concerns with finding 
                resources for education and training on compliance with 
                contracting regulations (including the Federal 
                Acquisition Regulation) after award of a contract or 
                subcontract; and''.
  (e) Requirements Under the Mentor-Protege Program of the Small 
Business Administration.--Section 45(b)(3) of the Small Business Act 
(15 U.S.C. 657r(b)(3)) is amended by adding at the end the following 
new subparagraph:
                  ``(K) The extent to which assistance with compliance 
                with the requirements of contracting with the Federal 
                Government after award of a contract or subcontract 
                under this section.''.

SEC. 205. RESPONSIBILITIES OF BUSINESS OPPORTUNITY SPECIALISTS.

  Section 4(g) of the Small Business Act (as added by section 865 of 
the National Defense Authorization Act for Fiscal Year 2016 (Public Law 
114-92)) is amended--
          (1) in the subsection heading, by striking ``Certification 
        Requirements for'';
          (2) in paragraph (2), by redesignating subparagraphs (A) and 
        (B) as clauses (i) and (ii), respectively (and conforming the 
        margins accordingly);
          (3) by amending clause (ii) (as so redesignated) to read as 
        follows:
                          ``(ii) Application.--The requirements of 
                        clause (i) shall be included in any initial job 
                        posting for the position of a Business 
                        Opportunity Specialist and shall apply to any 
                        person appointed as a Business Opportunity 
                        Specialist after January 3, 2013.'';
          (4) in clause (i) (as so redesignated), by striking 
        ``paragraph (1)'' and inserting ``subparagraph (A)''
          (5) by redesignating paragraphs (1) and (2) as subparagraphs 
        (A) and (B), respectively (and conforming the margins 
        accordingly);
          (6) in subparagraph (A) (as so redesignated), by striking 
        ``paragraph (2)'' and inserting ``subparagraph (B)''; and
          (7) by inserting before subparagraph (A) (as so redesignated) 
        the following:
          ``(1) Duties.--The exclusive duties of a Business Opportunity 
        Specialist employed by the Administrator and reporting to the 
        senior official appointed by the Administrator with 
        responsibilities under sections 8, 15, 31, and 36 (or the 
        designee of such official) shall be to implement sections 7, 8, 
        and 45 and to complete other duties related to contracting 
        programs under this Act. Such duties shall include--
                  ``(A) with respect to small business concerns 
                eligible to receive contracts and subcontracts pursuant 
                to section 8(a)--
                          ``(i) providing guidance, counseling, and 
                        referrals for assistance with technical, 
                        management, financial, or other matters that 
                        will improve the competitive viability of such 
                        concerns;
                          ``(ii) identifying causes of success or 
                        failure of such concerns;
                          ``(iii) providing comprehensive assessments 
                        of such concerns, including identifying the 
                        strengths and weaknesses of such concerns;
                          ``(iv) monitoring and documenting compliance 
                        with the requirements of sections 7 and 8 and 
                        any regulations implementing those sections;
                          ``(v) explaining the requirements of sections 
                        7, 8, 15, 31, 36 and 45; and
                          ``(vi) advising on compliance with 
                        contracting regulations (including the Federal 
                        Acquisition Regulation) after award of such a 
                        contract or subcontract;
                  ``(B) reviewing and monitoring compliance with 
                mentor-protege agreements under section 45;
                  ``(C) representing the interests of the Administrator 
                and small business concerns in the award, modification, 
                and administration of contracts and subcontracts 
                awarded pursuant to section 8(a); and
                  ``(D) reporting fraud or abuse under section 7, 8, 
                15, 31, 36 or 45 or any regulations implementing such 
                sections.
          ``(2) Certification requirements.--''.

       TITLE III--STRENGTHENING OPPORTUNITIES FOR COMPETITION IN 
                             SUBCONTRACTING

SEC. 301. GOOD FAITH IN SUBCONTRACTING.

  (a) Transparency in Subcontracting Goals.--Section 8(d)(9) of the 
Small Business Act (15 U.S.C. 637(d)(9)) is amended--
          (1) by striking ``(9) The failure'' and inserting the 
        following:
          ``(9) Material breach.--The failure'';
          (2) in subparagraph (A), by striking ``or'' at the end;
          (3) in subparagraph (B), by inserting ``or'' at the end; and
          (4) by inserting after subparagraph (B) the following:
          ``(C) assurances provided under paragraph (6)(E),''.
  (b) Authority of the Administrator of the Small Business 
Administration.--Section 8(d)(11) of the Small Business Act (15 U.S.C. 
637(d)(11)) is amended--
          (1) by striking ``(11) In the case of'' and inserting the 
        following:
          ``(11) Authority of administrator.--In the case of''; and
          (2) in subparagraph (B), by striking ``, which shall be 
        advisory in nature,''.
  (c) Review and Acceptance of Subcontracting Plans.--Section 8(d) of 
the Small Business Act (15 U.S.C. 637(d)) is amended by adding at the 
end the following:
          ``(17) Review and acceptance of subcontracting plans.--
                  ``(A) Definition.--In this paragraph, the term 
                `covered small business concerns' means--
                          ``(i) small business concerns;
                          ``(ii) qualified HUBZone small business 
                        concerns;
                          ``(iii) small business concerns owned and 
                        controlled by veterans;
                          ``(iv) small business concerns owned and 
                        controlled by service-disabled veterans;
                          ``(v) small business concerns owned and 
                        controlled by socially and economically 
                        disadvantaged individuals, as defined in 
                        paragraph (3)(C); and
                          ``(vi) small business concerns owned and 
                        controlled by women.
                  ``(B) Delayed acceptance of plan.--Except as provided 
                in subparagraph (E), if a procurement center 
                representative or commercial market representative 
                determines that a subcontracting plan required under 
                paragraph (4) or (5) fails to provide the maximum 
                practicable opportunity for covered small business 
                concerns to participate in the performance of the 
                contract to which the plan applies, the representative 
                may delay acceptance of the plan in accordance with 
                subparagraph (C).
                  ``(C) Process for delayed acceptance.--
                          ``(i) In general.--Except as provided in 
                        clause (ii), a procurement center 
                        representative or commercial market 
                        representative who makes a determination under 
                        subparagraph (B) with respect to a 
                        subcontracting plan may delay acceptance of the 
                        plan for a 30-day period by providing written 
                        notice of the determination to the head of the 
                        procuring activity of the contracting agency 
                        that includes recommendations for altering the 
                        plan to provide the maximum practicable 
                        opportunity described in that subparagraph.
                          ``(ii) Exception.--In the case of the 
                        Department of Defense--
                                  ``(I) a procurement center 
                                representative or commercial market 
                                representative who makes a 
                                determination under subparagraph (B) 
                                with respect to a subcontracting plan 
                                may delay acceptance of the plan for a 
                                15-day period by providing written 
                                notice of the determination to 
                                appropriate personnel of the Department 
                                of Defense that includes 
                                recommendations for altering the plan 
                                to provide the maximum practicable 
                                opportunity described in that 
                                subparagraph; and
                                  ``(II) the authority of a procurement 
                                center representative or commercial 
                                market representative to delay 
                                acceptance of a subcontracting plan as 
                                provided in subparagraph (B) does not 
                                include the authority to delay the 
                                award or performance of the contract 
                                concerned.
                  ``(D) Disagreements.--If a procurement center 
                representative or commercial market representative 
                delays the acceptance of a subcontracting plan under 
                subparagraph (C) and does not reach agreement with the 
                head of the procuring activity of the contracting 
                agency to alter the plan to provide the maximum 
                practicable opportunity described in subparagraph (B) 
                not later than 30 days after the date on which written 
                notice was provided, the disagreement shall be 
                submitted to the head of the contracting agency by the 
                Administrator for a final determination.
                  ``(E) Exception.--A procurement center representative 
                or commercial market representative may not delay the 
                acceptance of a subcontracting plan if the head of the 
                contracting agency certifies that the need of the 
                agency for the supplies or services is of such an 
                unusual and compelling urgency that the United States 
                would be seriously injured unless the agency is 
                permitted to accept the subcontracting plan.''.
  (d) Good Faith Compliance.--Not later than 270 days after the date of 
enactment of this Act, the Administrator of the Small Business 
Administration shall issue regulations providing examples of activities 
that would be considered a failure to make a good faith effort to 
comply with the requirements imposed on an entity (other than a small 
business concern as defined under section 3 of the Small Business Act 
(15 U.S.C. 632)) that is awarded a prime contract containing the 
clauses required under paragraph (4) or (5) of section 8(d) of the 
Small Business Act (15 U.S.C. 637(d)).

SEC. 302. PILOT PROGRAM TO PROVIDE OPPORTUNITIES FOR QUALIFIED 
                    SUBCONTRACTORS TO OBTAIN PAST PERFORMANCE RATINGS.

  Section 8(d) of the Small Business Act (15 U.S.C. 637(d)), as amended 
by section 301, is further amended by adding at the end the following 
new paragraph:
          ``(18) Pilot program providing past performance ratings for 
        other small business subcontractors.--
                  ``(A) Establishment.--The Administrator shall 
                establish a pilot program for a small business concern 
                performing as a first tier subcontractor for a covered 
                contract (as defined in paragraph 13(A)) to request a 
                past performance rating in the system used by the 
                Federal Government to monitor or record contractor past 
                performance.
                  ``(B) Application.--A small business concern 
                described in subparagraph (A) shall submit an 
                application to the appropriate official for a past 
                performance rating. Such application shall include 
                written evidence of the past performance factors for 
                which the small business concern seeks a rating and a 
                suggested rating.
                  ``(C) Determination.--The appropriate official shall 
                submit the application from the small business concern 
                to the contracting officer (or a designee of such 
                officer) for the covered contract and to the prime 
                contractor for review. The contracting officer (or 
                designee) and the prime contractor shall, not later 
                than 30 days after receipt of the application, submit 
                to the appropriate official a response regarding the 
                application.
                          ``(i) Agreement on rating.--If the 
                        contracting officer (or designee) and the prime 
                        contractor agree on a past performance rating, 
                        or if either the contracting officer (or 
                        designee) or the prime contractor fail to 
                        respond and the responding individual agrees 
                        with the rating of the applicant small business 
                        concern, the appropriate official shall enter 
                        the agreed-upon past performance rating in the 
                        system described in subparagraph (A).
                          ``(ii) Disagreement on rating.--If the 
                        contracting officer (or designee) and the prime 
                        contractor fail to respond within 30 days or if 
                        they disagree about the rating, or if either 
                        the contracting officer (or designee) or the 
                        prime contractor fail to respond and the 
                        responding individual disagrees with the rating 
                        of the applicant small business concern, the 
                        contracting officer (or designee) or the prime 
                        contractor shall submit a notice contesting the 
                        application to appropriate official. The 
                        appropriate official shall follow the 
                        requirements of subparagraph (D).
                  ``(D) Procedure for rating.--Not later than 14 
                calendar days after receipt of a notice under 
                subparagraph (C)(ii), the appropriate official shall 
                submit such notice to the applicant small business 
                concern. Such concern may submit comments, rebuttals, 
                or additional information relating to the past 
                performance of such concern not later 14 calendar days 
                after receipt of such notice. The appropriate official 
                shall enter the into the system described in 
                subparagraph (A) a rating that is neither favorable nor 
                unfavorable along with the initial application from the 
                small business concern, the responses of the 
                contracting officer (or designee) and the prime 
                contractor, and any additional information provided by 
                the small business concern.
                  ``(E) Use of information.--A small business 
                subcontractor may use a past performance rating given 
                under this paragraph to establish its past performance 
                for a prime contract.
                  ``(F) Duration.--The pilot program established under 
                this paragraph shall terminate 3 years after the date 
                on which the first small business concern receives a 
                past performance rating for performance as a first tier 
                subcontractor.
                  ``(G) Report.--The Comptroller General of the United 
                States shall begin an assessment of the pilot program 1 
                year after the establishment of such program. Not later 
                than 6 months after beginning such assessment, the 
                Comptroller General shall submit a report to the 
                Committee on Small Business and Entrepreneurship of the 
                Senate and the Committee on Small Business of the House 
                of Representatives, which shall include--
                          ``(i) the number of small business concerns 
                        that have received past performance ratings 
                        under the pilot program;
                          ``(ii) the number of applications in which 
                        the contracting officer (or designee) or the 
                        prime contractor contested the application of 
                        the small business concern;
                          ``(iii) any suggestions or recommendations 
                        the Comptroller General or the small business 
                        concerns participating in the program have to 
                        address disputes between the small business 
                        concern, the contracting officer (or designee), 
                        and the prime contractor on past performance 
                        ratings; and
                          ``(iv) any suggestions or recommendation the 
                        Comptroller General has to improve the 
                        operation of the pilot program.
                  ``(H) Appropriate official defined.--In this 
                paragraph, the term `appropriate official' means a 
                Commercial Market Representative or other individual 
                designated by the senior official appointed by the 
                Administrator with responsibilities under sections 8, 
                15, 31, and 36.''.

                   TITLE IV--MENTOR-PROTEGE PROGRAMS

SEC. 401. AMENDMENTS TO THE MENTOR-PROTEGE PROGRAM OF THE DEPARTMENT OF 
                    DEFENSE.

  Section 831 of the National Defense Authorization Act for Fiscal Year 
1991 (Public Law 101-510; 104 Stat. 1607; 10 U.S.C. 2302 note) is 
amended--
          (1) in subsection (d)--
                  (A) by amending paragraph (1) to read as follows:
          ``(1) prior to the approval of that agreement, the 
        Administrator of the Small Business Administration had made no 
        finding of affiliation between the mentor firm and the protege 
        firm;'';
                  (B) by redesignating paragraph (2) as paragraph (3); 
                and
                  (C) by inserting after paragraph (1) the following 
                new paragraph:
          ``(2)(A) the Administrator of the Small Business 
        Administration does not have a current finding of affiliation 
        between the mentor firm and protege firm; or
          ``(B) the Secretary, after considering the regulations 
        promulgated by the Administrator of the Small Business 
        Administration regarding affiliation--
                  ``(i) does not have reason to believe that the mentor 
                firm affiliated with the protege firm; or
                  ``(ii) has received a formal determination of no 
                affiliation between the mentor firm and protege firm 
                from the Administrator after having submitted a 
                question of affiliation to the Administrator; and'';
          (2) in subsection (n), by amending paragraph (9) to read as 
        follows:
          ``(9) The term `affiliation', with respect to a relationship 
        between a mentor firm and a protege firm, means a relationship 
        described under section 121.103 of title 13, Code of Federal 
        Regulations (or any successor regulation).''; and
          (3) in subsection (f)(6)--
                  (A) in subparagraph (B), by striking ``or'' at the 
                end;
                  (B) in subparagraph (C), by striking the period at 
                the end and inserting ``; or''; and
                  (C) by adding at the end the following:
                  ``(D) women's business centers described in section 
                29 of the Small Business Act (15 U.S.C. 656).''.

SEC. 402. IMPROVING COOPERATION BETWEEN THE MENTOR-PROTEGE PROGRAMS OF 
                    THE SMALL BUSINESS ADMINISTRATION AND THE 
                    DEPARTMENT OF DEFENSE.

  Section 45(b)(4) of the Small Business Act (15 U.S.C. 657r(b)(4)) is 
amended by striking subparagraph (A) and redesignating subparagraphs 
(B) and (C) as subparagraphs (A) and (B), respectively.

                         TITLE V--MISCELLANEOUS

SEC. 501. IMPROVING EDUCATION ON SMALL BUSINESS REGULATIONS.

  Section 15 of the Small Business Act (15 U.S.C. 644), as amended by 
section 204(c), is further amended by adding at the end the following 
new subsection:
  ``(u) Regulatory Changes and Training Materials.--Not less than 
annually, the Administrator shall provide to the Defense Acquisition 
University (established under section 1746 of title 10, United States 
Code), the Federal Acquisition Institute (established under section 
1201 of title 41, United States Code), the individual responsible for 
mandatory training and education of the acquisition workforce of each 
agency (described under section 1703(f)(1)(C) of title 41, United 
States Code), small business development centers, and entities 
participating in the Procurement Technical Assistance Cooperative 
Agreement Program under chapter 142 of title 10, United States Code--
          ``(1) a list of all changes made in the prior year to 
        regulations promulgated--
                  ``(A) by the Administrator that affect Federal 
                acquisition; and
                  ``(B) by the Federal Acquisition Council that 
                implement changes to this Act; and
          ``(2) any materials the Administrator has developed to 
        explain, train, or assist Federal agencies or departments or 
        small business concerns to comply with the regulations 
        specified in paragraph (1).''.

SEC. 502. PROTECTING TASK ORDER COMPETITION.

  Section 4106(f) of title 41, United States Code, is amended by 
striking paragraph (3).

SEC. 503. IMPROVEMENTS TO SIZE STANDARDS FOR SMALL AGRICULTURAL 
                    PRODUCERS.

  (a) Amendment to Definition of Agricultural Enterprises.--Paragraph 
(1) of section 18(b) of the Small Business Act (15 U.S.C. 647(b)(1)) is 
amended by striking ``businesses'' and inserting ``small business 
concerns''.
  (b) Equal Treatment of Small Farms.--Paragraph (1) of section 3(a) of 
the Small Business Act (15 U.S.C. 632(a)(1)) is amended by striking 
``operation: Provided,'' and all that follows through the period at the 
end and inserting ``operation.''.
  (c) Updated Size Standards.--
          (1) In general.--Not later than 18 months after the date of 
        enactment of this section, the Administrator of the Small 
        Business Administration shall, by rule, establish size 
        standards in accordance with section 3 of the Small Business 
        Act (15 U.S.C. 632) for agricultural enterprises (as such term 
        is defined in section 18(b)(1) of such Act).
          (2) Review.--Size standards established under subsection (a) 
        are subject to the rolling review procedures established under 
        section 1344(a) of the Small Business Jobs Act of 2010 (15 
        U.S.C. 632 note).

SEC. 504. UNIFORMITY IN SERVICE-DISABLED VETERAN DEFINITIONS.

  (a) Small Business Definition of Small Business Concern 
Consolidated.--Section 3(q) of the Small Business Act (15 U.S.C. 
632(q)) is amended--
          (1) by amending paragraph (2) to read as follows:
          ``(2) Small business concern owned and controlled by service-
        disabled veterans.--The term `small business concern owned and 
        controlled by service-disabled veterans' means any of the 
        following:
                  ``(A) A small business concern--
                          ``(i) not less than 51 percent of which is 
                        owned by one or more service-disabled veterans 
                        or, in the case of any publicly owned business, 
                        not less than 51 percent of the stock (not 
                        including any stock owned by an ESOP) of which 
                        is owned by one or more service-disabled 
                        veterans; and
                          ``(ii) the management and daily business 
                        operations of which are controlled by one or 
                        more service-disabled veterans or, in the case 
                        of a veteran with permanent and severe 
                        disability, the spouse or permanent caregiver 
                        of such veteran.
                  ``(B) A small business concern--
                          ``(i) not less than 51 percent of which is 
                        owned by one or more service-disabled veterans 
                        with a disability that is rated by the 
                        Secretary of Veterans Affairs as a permanent 
                        and total disability who are unable to manage 
                        the daily business operations of such concern; 
                        or
                          ``(ii) in the case of a publicly owned 
                        business, not less than 51 percent of the stock 
                        (not including any stock owned by an ESOP) of 
                        which is owned by one or more such veterans.
                  ``(C)(i) During the time period described in clause 
                (ii), a small business concern that was a small 
                business concern described in subparagraph (A) or (B) 
                immediately prior to the death of a service-disabled 
                veteran who was the owner of the concern, the death of 
                whom causes the concern to be less than 51 percent 
                owned by one or more service-disabled veterans, if--
                          ``(I) the surviving spouse of the deceased 
                        veteran acquires such veteran's ownership 
                        interest in such concern;
                          ``(II) such veteran had a service-connected 
                        disability (as defined in section 101(16) of 
                        title 38, United States Code) rated as 100 
                        percent disabling under the laws administered 
                        by the Secretary of Veterans Affairs or such 
                        veteran died as a result of a service-connected 
                        disability; and
                          ``(III) immediately prior to the death of 
                        such veteran, and during the period described 
                        in clause (ii), the small business concern is 
                        included in the database described in section 
                        8127(f) of title 38, United States Code.
                  ``(ii) The time period described in this clause is 
                the time period beginning on the date of the veteran's 
                death and ending on the earlier of--
                          ``(I) the date on which the surviving spouse 
                        remarries;
                          ``(II) the date on which the surviving spouse 
                        relinquishes an ownership interest in the small 
                        business concern; or
                          ``(III) the date that is 10 years after the 
                        date of the death of the veteran.''; and
          (2) by adding at the end the following new paragraphs:
          ``(6) ESOP.--The term `ESOP' has the meaning given the term 
        `employee stock ownership plan' in section 4975(e)(7) of the 
        Internal Revenue Code of 1986 (26 U.S.C. 4975(e)(7)).
          ``(7) Surviving spouse.--The term `surviving spouse' has the 
        meaning given such term in section 101(3) of title 38, United 
        States Code.''.
  (b) Veterans Affairs Definition of Small Business Concern 
Consolidated.--
          (1) In general.--Section 8127 of title 38, United States 
        Code, is amended--
                  (A) by striking subsection (h) and redesignating 
                subsections (i) through (l) as subsections (h) through 
                (k), respectively; and
                  (B) in subsection (k), as so redesignated--
                          (i) by amending paragraph (2) to read as 
                        follows:
          ``(2) The term `small business concern owned and controlled 
        by veterans' has the meaning given that term under section 
        3(q)(3) of the Small Business Act (15 U.S.C. 632(q)(3)).''; and
                          (ii) by adding at the end the following new 
                        paragraph:
          ``(3) The term `small business concern owned and controlled 
        by veterans with service-connected disabilities' has the 
        meaning given the term `small business concern owned and 
        controlled by service-disabled veterans' under section 3(q)(2) 
        of the Small Business Act (15 U.S.C. 632(q)(2)).''.
          (2) Conforming amendments.--Such section is further amended--
                  (A) in subsection (b), by inserting ``or a small 
                business concern owned and controlled by veterans with 
                service-connected disabilities'' after ``a small 
                business concern owned and controlled by veterans'';
                  (B) in subsection (c), by inserting ``or a small 
                business concern owned and controlled by veterans with 
                service-connected disabilities'' after ``a small 
                business concern owned and controlled by veterans'';
                  (C) in subsection (d) by inserting ``or small 
                business concerns owned and controlled by veterans with 
                service-connected disabilities'' after ``small business 
                concerns owned and controlled by veterans'' both places 
                it appears; and
                  (D) in subsection (f)(1), by inserting ``, small 
                business concerns owned and controlled by veterans with 
                service-connected disabilities,'' after ``small 
                business concerns owned and controlled by veterans''.
  (c) Technical Correction.--Section 8(d)(3) of the Small Business Act 
(15 U.S.C. 637(d)(3)), is amended by adding at the end the following 
new subparagraph:
          ``(H) In this contract, the term `small business concern 
        owned and controlled by service-disabled veterans' has the 
        meaning given that term in section 3(q).''.
  (d) Regulations Relating to Database of the Secretary of Veterans 
Affairs.--
          (1) Requirement to use certain small business administration 
        regulations.--Section 8127(f)(4) of title 38, United States 
        Code, is amended by striking ``verified'' and inserting 
        ``verified, using regulations issued by the Administrator of 
        the Small Business Administration with respect to the status of 
        the concern as a small business concern and the ownership and 
        control of such concern,''.
          (2) Prohibition on secretary of veterans affairs issuing 
        certain regulations.--Section 8127(f) of title 38, United 
        States Code, is amended by adding at the end the following new 
        paragraph:
  ``(7) The Secretary may not issue regulations related to the status 
of a concern as a small business concern and the ownership and control 
of such small business concern.''.
  (e) Delayed Effective Date.--The amendments made by subsections (a), 
(b), (c), and (d) shall take effect on the date on which the 
Administrator of the Small Business Administration and the Secretary of 
Veterans Affairs jointly issue regulations implementing such sections. 
Such date shall be not later than 18 months after the date of enactment 
of this Act.
  (f) Appeals of Inclusion in Database.--
          (1) In general.--Section 8127(f) of title 38, United States 
        Code, as amended by section 504(d)(2), is further amended by 
        adding at the end the following new paragraph:
  ``(8)(A) If the Secretary does not verify a concern for inclusion in 
the database under this subsection based on the status of the concern 
as a small business concern or the ownership or control of the concern, 
the concern may appeal the denial of verification to the Office of 
Hearings and Appeals of the Small Business Administration (as 
established under section 5(i) of the Small Business Act). The decision 
of the Office of Hearings and Appeals shall be considered a final 
agency action.
  ``(B)(i) If an interested party challenges the inclusion in the 
database of a small business concern owned and controlled by veterans 
or a small business concern owned and controlled by veterans with 
service-connected disabilities based on the status of the concern as a 
small business concern or the ownership or control of the concern, the 
challenge shall be heard by the Office of Hearings and Appeals of the 
Small Business Administration as described in subparagraph (A). The 
decision of the Office of Hearings and Appeals shall be considered 
final agency action.
  ``(ii) In this subparagraph, the term `interested party' means--
          ``(I) the Secretary; and
          ``(II) in the case of a small business concern that is 
        awarded a contract, the contracting officer of the Department 
        or another small business concern that submitted an offer for 
        the contract that was awarded to the small business concern 
        that submitted an offer under clause (i).
  ``(C) For each fiscal year, the Secretary shall reimburse the 
Administrator of the Small Business Administration in an amount 
necessary to cover any cost incurred by the Office of Hearings and 
Appeals of the Small Business Administration for actions taken by the 
Office under this paragraph. The Administrator is authorized to accept 
such reimbursement. The amount of any such reimbursement shall be 
determined jointly by the Secretary and the Administrator and shall be 
provided from fees collected by the Secretary under multiple-award 
schedule contracts. Any disagreement about the amount shall be resolved 
by the Director of the Office of Management and Budget.''.
          (2) Effective date.--Paragraph (8) of subsection (f) of title 
        38, United States Code, as added by paragraph (1), shall apply 
        with respect to a verification decision made by the Secretary 
        of Veterans Affairs on or after the date of the enactment of 
        this Act.

SEC. 505. GAO REVIEW OF THE OFFICE OF GOVERNMENT CONTRACTING AND 
                    BUSINESS DEVELOPMENT OF THE SMALL BUSINESS 
                    ADMINISTRATION.

  (a) Study.--Not later than 60 days after the date of the enactment of 
this Act, the Comptroller General of the United States shall initiate a 
review of the Office of Government Contracting and Business Development 
of the Small Business Administration. Such review shall examine--
          (1) the extent to which the personnel of the Small Business 
        Administration who carry out procurement and business 
        development programs report to the Office of Government 
        Contracting and Business Development;
          (2) whether greater efficiency and consistency in the 
        certification process of procurement and business development 
        programs could be achieved by creating a single organizational 
        unit of employees to process all certifications required by 
        procurement and business development programs;
          (3) whether greater efficiency and efficacy in the 
        performance of procurement and business development programs 
        could be achieved by improving the alignment of the field 
        personnel assigned to such programs;
          (4) how the Office of Government Contracting and Business 
        Development could improve its staffing of regulatory drafting 
        functions and its coordination with the Federal Acquisition 
        Regulatory Council to ensure timely rulemaking by the Small 
        Business Administration; and
          (5) any other areas in which the Comptroller General 
        determines that the Small Business Administration could improve 
        its performance with respect to procurement and business 
        development programs.
  (b) Report.--Not later than 1 year after initiating the review 
required by paragraph (1), the Comptroller General shall submit a 
report including the results of the review, along with any 
recommendations for improvements or other suggestions with respect to 
procurement and business development programs, to the Committee on 
Small Business of the House of Representatives and the Committee on 
Small Business and Entrepreneurship of the Senate.
  (c) Procurement and Business Development Program Defined.--In this 
Act, the term ``procurement and business development program'' means a 
program related to procurement or business development established 
under section 7, 8, 15, 31, 36, 44, 45, or 46 of the Small Business Act 
(15 U.S.C. 631 et seq.).

SEC. 506. REQUIRED REPORTS PERTAINING TO CAPITAL PLANNING AND 
                    INVESTMENT CONTROL.

  The information described in 11302(c)(3)(B)(ii) of title 40, United 
States Code, shall be submitted to the Senate Committee on Small 
Business and Entrepreneurship and the Committee on Small Business of 
the House of Representatives within 10 days of transmittal to the 
Director.

SEC. 507. GAO REVIEW OF SURETY BONDS.

  Not later than 60 days after the date of the enactment of this Act, 
the Comptroller General of the United States shall initiate a review of 
surety bonds as they apply to federal small business procurement 
contracts. The review shall examine how frequently bonding requirements 
are waived by federal agencies, an explanation of the standard and 
process for waiving the requirements, an explanation of the review 
process for such waivers, and in cases when bond requirements are 
waived, how results compare to instances where requirements are not 
waived, and the process that whistleblowers go through when instances 
of fraud related to surety bonds are reported.

                      II. Purpose and Bill Summary

    The purpose of H.R. 4341, the ``Defending America's Small 
Contractors Act of 2016,'' is to amend the Small Business Act 
(the Act)\1\ and titles 10, 38 and 41 of the United States Code 
to reduce barriers to the participation of small businesses as 
prime contractors and subcontractors on federal procurements. 
Small business\2\ participation brings necessary competition to 
the government marketplace, adds innovation, and creates new 
jobs. Contracting officers, however, generally prefer 
contractors with whom they have experience; typically, this 
preference hampers the ability of small businesses to obtain 
federal contracts. Thus, the top 100 contractors to the federal 
government routinely receive 25 percent of the total value of 
contracts spent in a fiscal year, whereas the over 300,000 
small businesses competing for federal contracts struggle to 
eclipse the 20 percent mark. This overreliance on a limited 
corps of contractors is not good for the industrial base, 
competition, innovation, job creation, or the needs of the 
federal government.
---------------------------------------------------------------------------
    \1\Originally, title II of the Act of July 30, 1953, c. 282, 67 
Stat. 232 was designated as the Small Business Act of 1953. A plethora 
of amendments in subsequent Congresses led to a rewrite in 1958. Pub. 
L. No. 85-536, Sec. 1, 72 Stat. 384 (1958). The Act is codified at 15 
U.S.C. Sec. Sec. 631-657s.
    \2\The Act uses the term ``small business concern.'' However, this 
report will use the terms ``small business'' and ``small business 
concern'' interchangeably unless the context requires a specific 
reference to the term ``small business concern.''
---------------------------------------------------------------------------
    H.R. 4341 seeks to promote small business contracting in 
five ways. First, improves transparency by ensuring that terms 
used throughout federal procurement are used consistently in 
the Act, and by improving the process by which small business 
participation in federal procurement are reported. Second, it 
clarifies the roles of the small business advocates at the 
Small Business Administration (SBA) and in other federal 
agencies, while improving compliance assistance. Third, it 
promotes opportunities for small subcontractors, including a 
pilot program to provide past performance experience to first 
tier subcontractors, which will assist small subcontractors 
seeking to transition to prime contracting. Fourth, it 
strengthens the mentor-protege program at the Department of 
Defense (DOD), and increases coordination between the SBA 
mentor-protege program and the DOD program. Finally, H.R. 4341 
improves the process by which agencies are educated on small 
business rules, promotes competition on task orders, allows SBA 
to use reasonable size standards for small agricultural 
producers, reduces the confusion between the service-disabled 
veteran-owned small business (SDVOSB) contracting program run 
by SBA and a similar program at the Department of Veterans 
Affairs (VA), and asks the Comptroller General to review 
operational issues at SBA.

                       III. Need for Legislation

    The Act finds that awarding prime contracts to small 
businesses serves the nation in three ways. First, small 
business contracting is in ``the interest of maintaining or 
mobilizing the Nation's full productive capacity.''\3\ Second, 
small business contracting is ``in the interest of war or 
national defense programs.''\4\ Third, it serves ``the interest 
of assuring that a fair proportion of the total purchases and 
contracts for property and services for the government in each 
industry category are placed with small-business concerns.''\5\ 
Ensuring that small businesses can compete for federal 
contracts offers several benefits--business growth, job 
creation, greater competition, lower prices, and innovation. 
During the 114th Congress, the Small Business Committee has 
held numerous hearings on small businesses in the industrial 
base. As shown in Chart 1, the use of small businesses is 
declining even as the percentage of dollars awarded to small 
businesses increases.\6\
---------------------------------------------------------------------------
    \3\Small Business Act, Sec. 15(a), 15 U.S.C. Sec. 644(a).
    \4\Id.
    \5\Id.
    \6\Additionally, it is worth noting that in obtaining its A grade, 
the federal government did not meet half of its numerical goals SBA, 
``FY 2013 Procurement Scorecard,'' available at https://www.sba.gov/
sites/default/files/files/FY13_Government-
Wide_SB_Procurement_Scorecard_ Public_View_2014-04-28.pdf.
    \7\Id.

                                                                        CHART 1. SMALL BUSINESS CONTRACTING FY10-FY14\7\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                   Average Value   Average Value
                                                                  Total Contract    Total Small                      Total DoD       Total DoD     Total Number      of Small      of DoD Small
                               FY                                   Dollars (in    Business (SB)   Total Number      Contract     Small Business     of DoD SB       Business        Business
                                                                     Billions)        Dollars      of SB Actions      Dollars         Dollars         Actions        Contract        Contract
                                                                                                                                                                      Action          Action
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11..............................................................          $549.6          $103.6       3,346,553          $374.1           $60.4       2,325,622      $30,957.23      $25,971.55
12..............................................................           518.3           100.0       2,584,893           290.1            60.2       1,453,952       38,686.32       41,404.39
13..............................................................           462.3            91.9       1,560,467           308.5            50.0         711,998       58,892.63       70,224.92
14..............................................................           444.7            98.9       1,390,987           284.7            55.6         745,626       71,100.59       74,568.22
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    From FY11 through FY14, the percentage of dollars awarded 
to small businesses increased each year, from just over 18 
percent to approximately 22.25 percent.\8\ At the same time, 
despite a decline in overall federal spending, the dollars 
awarded to small businesses remained fairly constant during 
this period. While this would normally be heralded as a 
success, a deeper dive into the numbers shows that the number 
of small business contract actions fell by almost 60 percent 
and the average size of a contract action increased 230 
percent. This reflects that fewer small businesses are winning 
contracts, but those contracts are worth more, which may 
indicate that some small businesses are doing very well but 
many others are losing opportunities to compete.
---------------------------------------------------------------------------
    \8\Analysis based upon FPDS, available at https://www.fpds.gov 
(last accessed January 28, 2015). Copies of reports are on file with 
the Committee.
---------------------------------------------------------------------------
    Alarmingly, at the Department of Defense (DoD), which is 
arguably a better reflection of the federal government's 
ability to maintain a healthy industrial base capable of 
supporting defense programs, the results were worse. The 
percentage of contract dollars awarded to small businesses at 
DoD increased from just over 16 percent to just over 19 
percent, but the actual dollars only fluctuated by about 10 
percent. The number of small business contract actions at DoD 
fell by almost 70 percent, and the value of those contract 
actions rose by nearly 290 percent.
    The declining number of contract actions with small 
businesses cannot simply be explained by shrinking budgets or 
sequestration, because during the same period, the number of 
contract actions with large businesses increased by 8 percent. 
However, the dollar value of the average contract action with a 
small business increased 230 percent, meaning that fewer small 
companies are getting contracts, but the contracts they get are 
getting much bigger.
    Furthermore, the number of companies registered to do 
business with the federal government has dropped by over 
100,000 from 2012, so that only 273,072 small businesses are 
still registered to compete for federal contracts.\9\ This 
speaks to a greater problem in the industrial base--a declining 
participation rate.
---------------------------------------------------------------------------
    \9\Data retrieved from the System for Award Management, available 
at www.sam.gov (last accessed January 28, 2015). This number is down by 
over 100,000 small businesses from 2012, when DSBS reported 382,092 
active small businesses.
---------------------------------------------------------------------------
    Therefore, all the provisions in H.R. 4341 support the 
better opportunities for small contractors and the 
replenishment of the industrial base. However, the need for 
specific provisions varies, and will be discussed thematically.

                               A. TITLE I

1. Sections 101 and 104

    First, H.R. 4341 attempts to make the Act more accessible. 
Indeed, the provision in the Act that explains why federal 
small business contracting is importation--section 15(a) of the 
Act--is itself well-nigh unintelligible. It exists as a series 
of run-on sentences in one subsection that cover issues as 
diverse as how industries should be defined, geographic 
requirements in contracting, the use of set-aside contracts, 
the federal government's policy on contract bundling and 
consolidation, the process by which bundling is appealed, 
contracts for the sale of federal property, sales of timber, 
sales of electric power, and the requirement that the 
government not pay more than fair market price. As critical as 
these policies are, it is nearly impossible to locate or 
discuss them in the current format. Likewise, the use of 
procurement terminology in the Act that differs from terms with 
the same meaning in titles 10, 38, and 41 of the United States 
Code and SBA's own regulations creates unnecessary confusion 
for small businesses. Thus, 32 years after the rest of the 
government decided to adopt uniform procurement terminology, 
sections 101 and 104 of H.R. 4341 amend the Act to make use the 
same words adopted by the rest of the federal government.

2. Sections 102 and 103

    Second, H.R. 4341 addresses the reporting on the use of 
small businesses. Since the enactment of Public Law 95-507,\10\ 
the SBA has been responsible for negotiating on small business 
contracting and subcontracting goals with federal departments 
and agencies and then reporting on the attainment of these 
goals. These requirements became stricter in 1988, when 
President Reagan signed the Business Opportunity Development 
Reform Act of 1988 (BODRA), which for the first time 
established a statutorily mandated government-wide small 
business goal of ``not less than 20 percent of the total value 
of all prime contract awards for each Fiscal Year.'' This goal 
was increased to 23 percent by the Small Business 
Reauthorization Act of 1997 (SBRA). However, there is still 
little transparency into how the numbers reported by SBA are 
achieved. Sections 102 and 103 of H.R. 4341 continue the work 
of the past 38 years.
---------------------------------------------------------------------------
    \10\Pub. L. No. 95-507 (1978). This Act has no common name and is 
simply An Act of October 24, 1978.
---------------------------------------------------------------------------
    H.R. 4341 does so by requiring that SBA count all dollars 
awarded federal prime contracts each year, rather than 
excluding 19 percent of those dollars before it calculates the 
percentage awarded to small businesses. When the concept of 
goals was introduced through the 1978 and 1988 legislation, 
none of the Congressional authors believed that the phrase 
``the total value of all prime contract awards for each fiscal 
year'' needed further explanation to define the types of 
contracts to which the goal applied, or that agencies needed 
encouragement to reach the goals. However, in 1991 the Office 
of Federal Procurement Policy (OFPP) began allowing\11\ DOE to 
count subcontracts awarded by its management and operations 
(M&O;) contractors as if they were prime contracts awarded by 
the DOE.\12\ This allowed DOE to count 18 percent of its prime 
contract dollars as being awarded to small businesses until 
1999, when OFPP reversed its decision on the M&O; contracts,\13\ 
and it became apparent that DOE had only been awarding 3 
percent of its prime contract dollars to small businesses. As 
previously noted, over a decade later, DOE only has a goal of 6 
percent small business participation, so the goals are clearly 
not motivating the agency to improve its performance.
---------------------------------------------------------------------------
    \11\OFPP Policy Letter 91-1 (1991).
    \12\See, e.g., Acquisition Regulation: Implementation of Section 
3021 of the Energy Policy Act of 1992, Notice of Proposed Rulemaking, 
59 Fed. Reg. 35,294, 35,295 (July 11, 1994).
    \13\OFPP Policy Letter 99-1 (1999) rescinding OFPP Policy Letter 
91-1.
---------------------------------------------------------------------------
    After OFPP changed course on the inclusion of M&O; 
subcontracts, SBA in rules published in 2003\14\ began allowing 
agencies to exclude certain types of contracts from 
consideration before the goal achievements were calculated. 
Under this method, approximately 20 percent of all prime 
contract dollars are excluded from the contracting base before 
the goals are calculated, thus inflating the performance of all 
agencies. It is these exclusions that have allowed the federal 
government to meet the 23 percent goal.
---------------------------------------------------------------------------
    \14\SBA, Goaling Guidelines for the Small Business Preference 
Programs for Prime and Subcontract Federal Procurement Goals and 
Achievements, 68 Fed. Reg. 43,566 (July 23, 2003).
---------------------------------------------------------------------------
    To make the goals themselves more meaningful, the Defending 
America's Small Contractors Act defines what types of contracts 
must be included in the goaling base. Examining Fiscal Year 
2014 data, this essentially adds nearly $100 billion to the 
denominator and $10 billion to the numerator when calculating 
small business goal achievement. Recalculating using the more 
appropriate universe of contracts indicates that the federal 
government achievement is only 22.25 percent, rather than the 
24.99 percent reported by SBA.\15\
---------------------------------------------------------------------------
    \15\SBA, FY 2014 Scorecard Summary (2015) available at https://
www.sba.gov/sites/default/files/files/
FY14_Scorecard_Summary_by_Prime_Spend_Subk_and_Plan_Progress_ 
Scores_2015-05-04.pdf.
---------------------------------------------------------------------------
    Likewise, the bill requires that SBA report on how the 
goals are achieved in two meaningful ways. First, it requires 
that SBA report separately on contracts counted as awards to 
small businesses if the company has since lost its small 
business status. Second, it asks the SBA to segregate dollars 
attributed to any of the socio-economic subgoals if a 
procurement preference for another program was used. Take, for 
example, a firm that qualifies as a SDVOSB and historically 
underutilized business zone (HUBZone) participant. If that firm 
wins an award using a SDVOSB set-aside procurement, when SBA 
reports the award for purposes of the HUBZone goaling report, 
it does not distinguish this award from one that used a HUBZone 
set-aside procurement. This masks important information about 
the health of the small business programs.

                              B. TITLE II

    The bill also furthers the goals of the National Defense 
Authorization Acts (NDAA) of FY 13, 14, 15, and 16, which have 
attempted to elevate the roles of small business advocates 
within SBA and at other federal agencies.\16\ The FY 13 NDAA 
modernized the responsibilities of the Offices of Small and 
Disadvantaged Business Utilization and the Procurement Center 
Representatives (PCR).\17\ It further implemented minimum 
training standards for the PCRs and the Business Opportunity 
Specialists (BOS).\18\ Likewise, the FY 16 NDAA provided 
minimum requirements for the Commercial Market Representatives 
(CMR).\19\ Title II of H.R. 4341 builds on this foundation.
---------------------------------------------------------------------------
    \16\FY 13 NDAA, Pub. L. No. 112-239 (2013); FY 14 NDAA, Pub. L. No. 
113-66 (2013); FY 15 NDAA, Pub. L. No. 113-291 (2014); FY 16 NDAA Pub. 
L. No. 114-92 (2015).
    \17\FY 13 NDAA at Sec. Sec. 1621, 1691.
    \18\Id. at Sec. 1622.
    \19\FY 16 NDAA at Sec. 865 (2015).
---------------------------------------------------------------------------

1. Section 201

    First, H.R. 4341 addresses a problem with the regulatory 
functions of PCRs. The PCR is the last best defense of small 
businesses when contracts are being structured in a way that 
limits small business participation. The Committee and its 
Subcommittee on Contracting and Workforce have held numerous 
hearings exploring how contracts that include small business 
set-asides, partial set-asides, or small business reserves may 
still be harmful to small businesses and to principles of 
competition, specifically in cases of strategic sourcing and 
consolidation. Indeed, a contract may be a total small business 
contract and still be consolidated, meaning that many small 
businesses were unable to compete.
    Therefore, it is problematic that SBA's regulations provide 
that the PCR will only ``review all acquisitions that are not 
set-aside or reserved for small businesses above or below the 
Simplified Acquisition Threshold.''\20\ Thus, none of the 
consolidated Federal Strategic Sourcing Contracts--which have 
excluded thousands of small competitors--are subject to PCR 
review.\21\ Section 201 of H.R. 4341 terminates this 
prohibition.
---------------------------------------------------------------------------
    \20\13 C.F.R. Sec. 125.2(b)(i).
    \21\See, e.g., Committee Memorandum, ``Contracting and Industrial 
Base II: Bundling, Goaling, and the Office of Hearings and Appeals'' 2-
18 (2015), available at http://smbiz.house.gov/uploadedfiles/3-17-
2015_hearing_memo.pdf.
---------------------------------------------------------------------------

2. Sections 202 and 205

    Both the CMR and the BOS lack clear, up to date job 
descriptions. While, as previously mentioned, the 24 CMRs at 
SBA have educational requirements in the Act, there is no other 
job description of their roles in statute.\22\ Instead, their 
responsibilities are covered by SBA's Standard Operating 
Procedure (SOP) for the Subcontracting Assistance Plan.\23\ 
Unfortunately, this job description has not been updated to 
reflect significant legislative changes to the subcontracting 
requirements. For example, the FY 13 NDAA changed the 
requirements for subcontracting plans.\24\ The FY 14 NDAA 
allowed prime contractors to take credit for lower tier 
subcontracts awarded to small businesses--something the current 
SOP does not reflect.\25\ The FY 15 NDAA altered subcontracting 
requirements for some of the largest defense contractors.\26\ 
The FY 16 NDAA made senior agency executives responsible for 
subcontracting goals.\27\ None of these changes are reflected 
in the SOP or the job description. Indeed, the SOP does not 
even recognize the existence of the federal subcontracting 
reporting system (FSRS) which has been in place for nearly ten 
years.
---------------------------------------------------------------------------
    \22\15 U.S.C. Sec. -633(h).
    \23\SBA, SOP 60-03 (2006).
    \24\FY 13 NDAA at Sec. 1653.
    \25\FY 14 NDAA at Sec. 1614.
    \26\FY 15 NDAA at Sec. 821.
    \27\FY 16 NDAA at Sec. 871.
---------------------------------------------------------------------------
    Likewise, the BOS has educational requirements imposed by 
statute, and is tangentially referenced in the Act without a 
job description or a clear statement of responsibilities.\28\ 
So, like the CMR, the BOS is reduced to an out-of-date SOP to 
understand the full job description.\29\ However, to understand 
their role, it is first necessary to understand the SBA's 8(a) 
Business Development Program (8(a) program).
---------------------------------------------------------------------------
    \28\15 U.S.C. Sec. 633(g).
    \29\SBA, SOP 80-05-3A (2008).
---------------------------------------------------------------------------
    The 8(a) program is a subset of the small and disadvantaged 
business (SDB) program. SDBs are small businesses at least 51 
percent unconditionally owned by one or more socially and 
economically disadvantaged individuals.\30\ Social disadvantage 
is presumed for members of designated groups, or may be 
established by a preponderance of the evidence for any other 
individual. Economic disadvantage is defined as a net worth of 
less than $750,000, after excluding the value of the 
individual's ownership interest the small business and the 
value of the individual's equity in a primary personal 
residence.\31\ A firm certifies as an SDB to either the 
procuring agency or to a third-party certifier, although all 
8(a) firms are automatically considered SDBs.\32\ There is a 
statutory goal of awarding five percent of all prime contract 
and five percent of all subcontract dollars to SDBs.\33\
---------------------------------------------------------------------------
    \30\13 C.F.R. Sec. 124.1002.
    \31\13 C.F.R. Sec. 124.
    \32\Id.
    \33\15 U.S.C. Sec. 633(g).
---------------------------------------------------------------------------
    The 8(a) program is an important subset of the SDB program. 
8(a) firms are small businesses owned and controlled by 
socially and economically disadvantaged individuals who have 
applied for and been accepted into a nine-year business 
development program at SBA.\34\ While the definition of social 
disadvantage is the same in the 8(a) program as it is in the 
SDB program, the definition of economic disadvantage is much 
stricter, with a $250,000 cap on assets outside of the business 
and primary residence, and a requirement that the individual 
demonstrate a limited access to capital.\35\ Participation in 
the 8(a) program provides important contracting preferences 
such as sole-source contracts up to $4 million ($6.5 million 
for manufacturing contracts) are the preferred contracting 
method, although competitive 8(a) awards are allowed with the 
permission of the SBA.\36\
---------------------------------------------------------------------------
    \34\13 C.F.R. Sec. 124.
    \35\Id. at Sec. 124.104.
    \36\Id. at Sec. 124.506.
---------------------------------------------------------------------------
    In the 8(a) program, SBA is considered the prime 
contractor, and the 8(a) firm is its subcontractor, which 
requires agencies to negotiate awards with SBA.\37\ However, 
since the 1990s, SBA has been entering into Memorandums of 
Understanding (MOUs) with agencies, allowing agencies to bypass 
SBA and award contracts directly to the 8(a) firms.\38\ The 
8(a) certification is processed by SBA, and annual reviews are 
required throughout the nine years of program participation to 
ensure a firm's continued eligibility.\39\ Unlike other small 
business programs, the eligibility of an 8(a) participant 
cannot be challenged by another 8(a) firm or any other 
party.\40\ It is the BOS who monitors 8(a) firms to ensures 
their continued eligibility for the program, negotiate 
contracts, and otherwise protect the firms and the taxpayers.
---------------------------------------------------------------------------
    \37\There is a rebuttable presumption that ``Black Americans; 
Hispanic Americans; Native Americans (American Indians, Eskimos, 
Aleuts, or Native Hawaiians); Asian Pacific Americans (persons with 
origins from Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, 
Japan, China (including Hong Kong), Taiwan, Laos, Cambodia (Kampuchea), 
Vietnam, Korea, The Philippines, U.S. Trust Territory of the Pacific 
Islands (Republic of Palau), Republic of the Marshall Islands, 
Federated States of Micronesia, the Commonwealth of the Northern 
Mariana Islands, Guam, Samoa, Macao, Fiji, Tonga, Kiribati, Tuvalu, or 
Nauru); Subcontinent Asian Americans (persons with origins from India, 
Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or 
Nepal)'' are socially disadvantaged. 13 C.F.R. Sec. 124.103.
    \38\15 U.S.C. Sec. 637(a).
    \39\13 C.F.R. Sec. 124.508.
    \40\Id. at Sec. 124.201, 124.601.
---------------------------------------------------------------------------
    Unlike the CMR and the PCR, there is no comprehensive list 
of BOS available from SBA. Instead, a small business concern 
must visit each district office's website. A visit to these 
sites reveals that while an average of two to three BOS are 
assigned to each office, most of these BOS are also serve as 
the HUBZone program liaison, veteran-owned small business 
liaison, and woman-owned small business liaison. However, the 
BOS have an incredibly important responsibility that should not 
be diluted: they are able to authorize sole source contracts, 
and last year these contracts exceeded $9 billion.\41\ The BOS 
are the government's defense against waste, fraud and abuse in 
these programs--necessary as federal data shows that over $115 
million in 8(a) contracts went to companies that are not 8(a) 
firms.\42\
---------------------------------------------------------------------------
    \41\Data from the Federal Procurement Data System (on file with the 
Committee).
    \42\Id.
---------------------------------------------------------------------------
    Sections 202 and 205 remedy this issue by providing 
statutory job descriptions for both the CMRs and the BOSs, 
including lines of authority and incorporating changes made to 
the contracting programs in recent legislation. This should 
standardize the assistance provided to small businesses, make 
it easier to deter bad actors, and prevent SBA from diverting 
these individuals to fill other roles.

3. Section 203

    Section 203 of the bill provides updates to the OSDBU 
program. When Public Law 95-507 was first enacted and created 
the OSDBU, there were no programs in the Act to help SDVOSB or 
HUBZone companies. Therefore, section 203 updates the Act to 
include responsibility for providing assistance to SDVOSBs and 
HUBZones as part of the job description for the OSDBU.
    Additionally, this section provide an opportunity to limit 
waste, fraud and abuse. In 2015, the Senior Procurement 
Executive of the VA testified that the agency had intentionally 
concealed at least $6 billion, and as much as $12 billion, in 
purchases each year.\43\ VA accomplished this by illegally 
using government purchase cards without an underlying contract 
vehicle for purchases above $3,000 and below $150,000.\44\ 
Compounding this injury, small businesses have priority for 
contracts for less than $150,000 but were excluded from even 
bidding on these purchases.\45\ The VA OSDBU also claimed 
ignorance of the existence of these purchases. Therefore, 
section 203 allows OSDBUs to access credit card data and 
hopefully prevent a repeat of this travesty.
---------------------------------------------------------------------------
    \43\Committee Memorandum, ``Manipulation and Fraud in the Reporting 
of VA Small Business Goals'' (2015), available at http://
smbiz.house.gov/uploadedfiles/6-23-2015_hearing_memo.pdf.
    \44\Id.
    \45\15 U.S.C. Sec. 644(j).
---------------------------------------------------------------------------

4. Section 204

    Further, the PCRs, BOS, and OSDBUs exert a great deal of 
effort to help small businesses obtain contracts, but very 
little effort is made to help small businesses understand the 
compliance requirements that come with that contract. This can 
lead to the small business giving the government the good or 
service it desires in a successful fashion, but failing to 
successfully fulfill the contract due to a miscomprehension of 
regulatory peculiarities. There are private sector resources 
available to assist these small companies, including the 
Defense Industries Initiative and the Procurement Technical 
Assistance Center program. Therefore, section 204 of the bill 
requires that SBA and these advocates help small businesses 
connect with these resources.

                              C. TITLE III

1. Section 301

    Public Law 95-507 also sought to increase subcontracting 
opportunities for small businesses by requiring that other than 
small businesses receiving prime contracts negotiate 
subcontracting plans with the federal government that would 
incorporate goals for the use of small businesses.\46\ 
According to Committee reports, this requirement was added 
because small businesses were receiving only 37.5 percent of 
subcontract dollars.\47\ Since that time, it has been the 
responsibility of the SBA to establish a government-wide 
subcontracting goal. However, the current SBA-established goal 
is 34.06 percent, which is more than 3 percent less than the 
actual results thirty-eight years ago that spurred the creation 
of government-wide subcontracting goals.\48\
---------------------------------------------------------------------------
    \46\15 U.S.C. Sec. 637(d).
    \47\H.R. Rep. No. 95-949, at 5 (1978).
    \48\FY 2014 Scorecard Summary.
---------------------------------------------------------------------------
    As the graph below illustrates, while SBA has steadily 
decreased the subcontracting goals from 36 percent to 34 
percent over the last five years, subcontracting achievements 
have fallen from 35 percent to 33 percent. Each time SBA 
decreases the goals, agencies manage to subcontract less with 
small businesses. This results in real losses to small 
businesses. For example, FY 2013, small businesses received 
$86.7 billion in subcontracts, which is just about $5 billion 
less than they received in prime contracts. If federal agencies 
had met the then-goal of 36 percent, subcontract would have 
accounted for more dollars to small business than prime 
contracts. The fact that the goal keeps decreasing indicates 
that less and less is being provided to small subcontractors.

                Subcontracting Goals versus Results\49\

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    To figure out why this backsliding is occurring, it is 
important to understand how subcontracting opportunities are 
established and tracked. According to the Act, any procurement 
exceeding $700,000 ($1.5 million for construction) that is 
awarded to an other-than-small business must include a 
negotiated subcontracting plan detailing opportunities for 
small business participation.\50\ While PCRs may review these 
plans, they may not protest a solicitation or award on belief 
that the goals are inadequate. The prime contractor is then 
required to report its subcontracting, including the percentage 
awarded to each type of small business, either every six months 
or once a year, depending on the type of plan.\51\ Failure to 
make a good faith effort to comply with the plan can result in 
a prime contractor being assessed liquidated damages.\52\
---------------------------------------------------------------------------
    \49\Graph based on data from FY 2014 Procurement Scorecard, FY 2013 
Procurement Scorecard; SBA ``FY 2012 Procurement Scorecard,'' available 
at https://www.sba.gov/sites/default/files/files/
FY12_Final_Scorecard_Government_Wide_2013-06-20.pdf (last accessed 
November 16, 2015); SBA, ``FY 2011 Procurement Scorecard,'' available 
at https://www.sba.gov/sites/default/files/files/
FY11%20Final%20Scorecard%20Government-Wide_2012-06-29.pdf (last 
accessed November 16, 2015); SBA, ``FY 2010 Procurement Scorecard,'' 
available at https://www.sba.gov/sites/default/files/files/
FY10%20SB%20Procurement%20Scorecard_FINAL_ GOVERNMENT%20WIDE.pdf (last 
accessed November 16, 2015).
    \50\15 U.S.C. Sec. 637(d).
    \51\FAR Sec. 19.7.
    \52\15 U.S.C. Sec. 637(d).

    However, reviews of the data submitted to the combined 
federal subcontracting reporting system (FSRS) and the 
electronic subcontracting reporting system (eSRS) demonstrate 
that approximately 40 percent of companies required to have 
with subcontracting plans are not reporting the required data. 
This means that the 32 percent achievement level reported by 
SBA is overinflated, since it does not account for those 
---------------------------------------------------------------------------
contractors not reporting any data.

    Recent audits by the DoD Inspector General (DODIG) also 
found discrepancies.\53\ For example, the DODIG reviewed seven 
contracts at the National Capital Region (NCR) that under the 
Act needed to have a subcontracting plan.\54\ Of these, only 
one contract met the statutory and regulatory requirements.\55\ 
NCR awarded two contracts without any subcontracting plan, and 
two contracts that had a subcontracting plan that failed to 
include any small business subcontracting goals.\56\ These four 
contracts were valued at $58.2 million.\57\ Additionally, the 
NCR review found that there were two contracts valued at $790 
million where the contracting officers had met the requirements 
to incorporate a subcontracting plan and goals only to fail to 
track whether the prime contractors met the subcontracting 
requirements.\58\ The DODIG concluded that ``small businesses 
may not have received subcontract work that large businesses 
were required to provide, and NCR officials may have missed an 
opportunity to recoup potential liquidated damages of up to 
$153.5 million which they may have been entitled to.''\59\
---------------------------------------------------------------------------
    \53\DODIG, Small Business Contracting at Regional Contracting 
Office--National Capital Region Needs Improvement (DODIG-2015-095), 
available at http://www.dodig.mil/pubs/documents/DODIG-2015-095.pdf 
[hereinafter ``NCR Report'']; DODIG, Small Business Contracting at 
Marine Corps Systems Command Needs Improvement (DODIG 2016-019), 
available at http://www.dodig.mil/pubs/documents/DODIG-2016-019.pdf 
[hereinafter ``MCSC Report''].
    \54\NCR Report at 10.
    \55\Id.
    \56\NCR Report at 10-11. One of the contracts without a 
subcontracting plan was a follow on to a contract that also lacked a 
subcontracting plan. Id.
    \57\Id.
    \58\Id.
    \59\Id. at 10.
---------------------------------------------------------------------------
    Similarly, in its review of the Marine Corps Systems 
Command, (MCSC), the DODIG's results were similar. Of the 19 
contracts worth $1.3 billion reviewed, six were awarded without 
subcontracting plans and two were awarded without verifying 
that there was an approved subcontracting plan.\60\ On four 
contracts, MCSC failed to track compliance with the 
subcontracting plan, and on two contracts knew the prime 
contractor was not meeting its small business goals but failed 
to inquire into why the promised subcontracting opportunities 
had not materialized.\61\ In one of these cases, the prime 
contractor had committed to $19 million in subcontracts with 
small businesses, but delivered only $1.3 million--less than 10 
percent of the contractually agreed to amount.\62\ On the other 
contract, only 25 percent of the promised small business 
subcontracting dollars materialized.\63\
---------------------------------------------------------------------------
    \60\MCSC Report at 11.
    \61\Id.
    \62\Id. at 15.
    \63\Id. at 16.
---------------------------------------------------------------------------
    To address these issues, section 301 makes three changes to 
the Act. First, it requires that failure to submit a 
subcontracting report may be considered a material breach of 
the Act. Second, it allows PCRs to protest an absent or 
insufficient subcontracting plan. Finally, it requires that SBA 
issue regulations that explain what it means to fail to make a 
good faith effort to comply, including the fact that failure to 
file a required report is itself evidence of a lack of good 
faith.

2. Section 302

    Small subcontractors often complain that any efforts to 
transition to prime contractor status are hampered by the lack 
of a past performance rating. As such, it may only receive a 
neutral rating in that category, meaning that if all other 
factors are equal it may well lose a contract during proposal 
evaluations. To address this problem without creating a 
significant bureaucracy, H.R. 4341 creates a pilot program for 
small subcontractors seeking a past performance rating.

                              D. TITLE IV

1. Section 401

    The FY 2016 NDAA made significant changes to the DoD 
mentor-protege program established by the FY 1991 NDAA.\64\ 
While most were positive, there were a few unintended 
consequences. The statutory purpose of the DoD program is ``to 
provide incentives for major Department of Defense contractors 
to furnish disadvantaged small business concerns with 
assistance designed to enhance the capabilities of 
disadvantaged small business concerns to perform as 
subcontractors and suppliers under Department of Defense 
contracts and other contracts and subcontracts in order to 
increase the participation of such business concerns as 
subcontractors and suppliers under Department of Defense 
contracts, other Federal Government contracts, and commercial 
contracts.''\65\ The FY 16 NDAA altered the purpose to add a 
requirement that the assistance ``increase the participation of 
such business concerns as subcontractors and suppliers under 
Department of Defense contracts, other Federal Government 
contracts, and commercial contracts.''\66\ This change altered 
the program's purpose to better reflect the goals of the SBA 
and civilian mentor-protege programs.
---------------------------------------------------------------------------
    \64\FY 2016 NDAA at Sec. 861; FY 1991 NDAA, Pub. L. No. 101-510 
Sec. 831 (1990).
    \65\10 U.S.C. Sec. 2302 note; Pub. L. No. 101-510 Sec. 831(a), as 
amended.
    \66\H.R. 1481 at Sec. 861(a).
---------------------------------------------------------------------------
    The DoD program allows small disadvantaged businesses, 
HUBZone business concerns, service-disabled veteran-owned small 
business concerns and women-owned small business concerns to 
participate as proteges.\67\ These entities may participate as 
proteges at any time.\68\ The FY 16 NDAA altered eligibility so 
that firms could only participate as proteges for five years 
after they enter their first mentor protege agreement.\69\ It 
also stated that protege firms must be less than half the SBA 
size standard assigned to the corresponding NAICS code, and 
that the small business either be a nontraditional defense 
contractor or be currently provide goods or services in the 
private sector that are critical to enhancing the capabilities 
of the defense supplier base and fulfilling key Department of 
Defense needs.
---------------------------------------------------------------------------
    \67\It is worth noting that DoD considers organizations employing 
the severely disabled, tribal businesses, historically black colleges 
and universities and minority institutions of higher learning to be 
small disadvantaged businesses for purposes of this program. Pub. L. 
No. 101-510 Sec. 831(l).
    \68\Id. at (c)(2).
    \69\FY 2016 NDAA at Sec. 861(a).
---------------------------------------------------------------------------
    Likewise, while firms with more than $100 million in 
receipts are permitted to act as mentors if the ``mentor firm 
demonstrates the capability to assist in the development of 
protege firms,''\70\ the FY 16 NDAA also requiree that the 
mentor not be affiliated with the protege, and that the mentor 
demonstrate that it: (1) is qualified to provide assistance in 
keeping with the purposes of the program; (2) is in good 
financial health and has not been suspended or debarred; and 
(3) ``can impart value to a protege firm because of experience 
gained as a Department of Defense contractor or through 
knowledge of general business operations and government 
contracting.''\71\ The legislation continues to define 
affiliation using the principles delineated by the SBA in 
regulation. Each of these would lead to greater alignment with 
the SBA program, but does raise questions about having DoD 
determine affiliation. It is to this change that H.R. 4341 
first addresses itself.
---------------------------------------------------------------------------
    \70\Pub. L. No. 101-510 Sec. 831(d).
    \71\FY 2016 NDAA at Sec. 861(a).
---------------------------------------------------------------------------
    If DoD is allowed to determine affiliation of small 
business, and thus determine when a business is small or other-
than-small, it creates the possibility of a conflict. Thus, DoD 
could find that a firm is unaffiliated, and therefore small, 
while SBA could determine that the firm was affiliated and 
therefore other-than-small. Such a conflict could become 
untenable, since it would affect which contracts are counted 
towards the governmentwide procurement goals, or the 
eligibility of these companies for other contracts. It also 
creates a workload for DoD's OSDBU office, when the SBA's 
Office of Hearings and Appeals (OHA) already has expertise in 
these areas. Therefore, section 401 allows DoD to send cases of 
possible affiliation to SBA rather than resolving them 
internally.
    DoD mentor-protege agreement must detail the assistance to 
be provided to the protege.\72\ This must include a 
developmental plan, a program participation term, and 
termination procedures. The FY 16 NDAA provided greater 
specificity for the contents of the developmental plan. It 
required that the plan provide: (1)``factors to assess the 
protege firm's developmental progress;'' (2) qualitative and 
quantitate benefits'' to DoD, if any; and (3) ``goals for 
additional awards that the protege firm can compete for'' 
outside of the DoD program.\73\ These measures create higher 
expectations for program performance.
---------------------------------------------------------------------------
    \72\Id.
    \73\Id.
---------------------------------------------------------------------------
    Finally, to incentivize mentors, DoD offers reimbursements 
and credits. DoD reimburses mentors for progress payment or 
advance payment made to proteges under the program if the 
protege is acting as a subcontractors on a DoD contract held by 
the mentor. Additionally, DoD may reimburse costs associated 
with six types of eligible assistance provided by the mentor. 
First, DoD allows the protege to use mentor personnel to aid 
with, general business management, engineering and technical 
matters, and other areas detained in the developmental 
plan.\74\ The statute explicitly allows business development 
assistance. Second, it allows the protege to receive 
noncompetitive subcontracts from its mentor. Third, it allows 
mentors to pay progress payments for the protege. Fourth, it 
allows advance payments. Fifth, it allows loans. Sixth, it 
allows the mentor to purchase up to ten percent of the protege. 
Until the FY 2016 NDAA, mentors could be reimbursed for 
referring the protege to a small business development center 
(SBDC), procurement technical assistance center (PTAC), or a 
historically Black college or university or a minority 
institution of higher education (HBCU/MI).\75\ While H.R. 4341 
leaves the exclusion for reimbursement in place for this last 
category of technical assistance, it does expand the sources of 
technical assistance to include Women's Business Centers (WBC).
---------------------------------------------------------------------------
    \74\Pub. L. No. 101-510 Sec. 831(f).
    \75\FY 2016 NDAA at Sec. 861(a).
---------------------------------------------------------------------------

2. Section 402

    The FY 16 NDAA added reporting requirements for mentor 
firms and review requirements for the DoD OSDBU.\76\ First, it 
required that mentors annual report on the assistance provided 
to protege firms. Second, it required OSBP to review the 
reports and program participants, and terminate those not 
furthering the purpose of the program. This was done to bring 
the DoD program and objectives further in line with the 
government wide mentor-protege program managed by SBA.
---------------------------------------------------------------------------
    \76\Id.
---------------------------------------------------------------------------
    Currently, DoD measures success in its program by looking 
at three factors which it tracks for up to two years after 
completion of the mentor-protege agreement.\77\ First, it 
examines whether the dollar value of contracts, subcontracts 
and revenue received by the protege has increased. Second, DoD 
tracks increases in number and dollar value of subcontracts 
awarded to protege firms and former protege firms by the mentor 
firm. Third, it looks for an increase in the employment levels 
of the protege firm. As of July 31, 2015, DoD had published the 
following performance results for program.
---------------------------------------------------------------------------
    \77\OSBP, DoD Mentor-Protege Program 9 (2015), available at http://
www.acq.osd.mil/osbp/docs/DoD%20MPP%20Briefing-v07%20-
%2031%20JUL%2015.pdf.

                                                        FY 10-FY 14 DoD Mentor-Protege Results78
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Net Employee    Net Revenue Gains/    Net Employee
                            FY                               Program Budget   Net Revenue Gains        Gains             Company         Gains/Company
--------------------------------------------------------------------------------------------------------------------------------------------------------
14.......................................................            $20.1 M             $396 M                808             $6.6 M               13.5
13.......................................................             25.4 M              238 M                743              3.6 M               11.4
12.......................................................             28.0 M              700 M                660             11.3 M               10.6
11.......................................................             27.6 M              633 M              1,531              7.6 M               18.4
10.......................................................             26.3 M              660 M              1,223              6.7 M                 12
--------------------------------------------------------------------------------------------------------------------------------------------------------

      
---------------------------------------------------------------------------
    \78\Id. at 14.
---------------------------------------------------------------------------
    While this chart demonstrates growth in each category, it 
fails to control for the involvement of the DoD. Specifically, 
if DoD is paying companies to subcontract with specific small 
businesses, it cannot come as a surprise that those small 
businesses hire employees and increase their revenues. As the 
mentor firm was required to subcontract with small businesses 
in any case, would the companies receiving the subcontracts 
have received similar benefits without a mentor-protege 
agreement? Further, since DoD continues to reward mentors for 
subcontracting with proteges after the proteges leave the 
program, tracking two years post program completion does not 
capture whether the benefits are sustainable.
    To further promote better reconciliation of the measures of 
success and data sharing, H.R. 4341 amends the Act to remove 
the exemption previously granted to DoD.

                               E. TITLE V

1. Section 501

    As previously noted in this document, the FY 2013-FY 2016 
NDAAs contained substantial reforms to the Act. The SBA has 
been less than prompt in implementing these changes. As of 
April 14, 2016, the SBA still was missing seven proposed rules, 
13 final rules, and 17 other actions. Unfortunately, once SBA 
issues a final rule, the Federal Acquisition Council still 
needs to itself issue proposed and then final rules. At the 
current rate, it is taking in excess of seven years to get 
statutory changes fully implemented.
    As expected, this has led to confusion among small 
contractors and contracting offices who are unsure which rules 
and provisions are in effect. Thus, section 501 requires the 
SBA to annually report to the Federal Acquisition Institute and 
the Defense Acquisition University on any new laws or 
regulations affecting small business contracting.

2. Section 502

    In FY 2015, the federal government purchased more than $186 
billion in goods and services using task order contracts.\79\ 
Since 2008, offerors have been able to protest task orders 
above $10 million at the Government Accountability Office.\80\ 
This has resulted in an increase of less than a thousand 
additional protests being filed per year, but provides 
important protections for competition.\81\ The FY 2012 NDAA 
made this authority permanent for DoD, but the authority is set 
to expire on September 30, 2016 for civilian agencies.\82\ This 
would leave over $64 billion in procurements without protest 
authority.\83\ Section 502 makes the authority permanent for 
civilian agencies.
---------------------------------------------------------------------------
    \79\FPDS Data (April 14, 2016).
    \80\Pub. L. No. 110-181, Sec. 843(a)(2)(C).
    \81\Compare GAO, GAO Bid Protest Annual Report to Congress for 
Fiscal Year 2015 (2015) with GAO, GAO Bid Protest Annual Report to 
Congress for Fiscal Year 2007 (2007).
    \82\Pub. L. No. 111-383, Sec. 825 (2012).
    \83\FPDS Data (April 14, 2016).
---------------------------------------------------------------------------

3. Section 503

    The SBA size standards establish the maximum size a 
business can be and still be considered small. Section 3(a)(1) 
of the Act provides that ``a small business concern . . . shall 
be deemed to be one which is independently owned and operated 
and which is not dominant in its field of operation.''\84\ This 
definition includes ``enterprises that are engaged in the 
business of production of food and fiber, ranching and raising 
of livestock, agriculture, and all other farming and 
agricultural related industries,'' although the Act never 
defines the term ``agricultural related industries.''\85\ 
However, the Act further states that, ``notwithstanding any 
other provision of law, an agricultural enterprise shall be 
deemed to be a small business concern if it (including its 
affiliates) has annual receipts not in excess of 
$750,000.''\86\ For all other industries, the Act authorizes 
the Administrator of the SBA to establish small business size 
standards for the purposes of the Small Business Act and any 
other statute.\87\
---------------------------------------------------------------------------
    \84\15 U.S.C. Sec. 632(a)(1).
    \85\Id.
    \86\Id.
    \87\Id. at Sec. 632(a)(2). The Administrator's size standards apply 
to all other federal programs unless that program contains its own 
definition of small business. Id. at Sec. 632(a)(2)(C).
---------------------------------------------------------------------------
    Small business size standards determine whether small 
businesses may qualify for special treatment in the sale of 
goods and services to the federal government;\88\ access to 
guaranteed loans and other types of financial assistance; and 
obtain technical advice through various SBA resource partners. 
They also may be utilized by federal agencies as part of their 
regulatory analyses during the rulemaking process.
---------------------------------------------------------------------------
    \88\There are numerous procurement programs available to small 
businesses that restrict competition for federal contracts or give 
small businesses a preference. See Comm. on Small Bus., Small Business 
Act Programs for Small Federal Contractors (2013), available at http://
smallbusiness.house.gov/uploadedfiles/
small_business_act_programs_for_small_federal_ contractors.pdf, for a 
discussion of small business procurement programs.
---------------------------------------------------------------------------
    Before 1985, the size standard for agricultural enterprises 
was established by the SBA through the notice and comment 
rulemaking process. On February 9, 1984, the SBA published a 
final rule establishing the size standard for agricultural 
producers as $100,000.\89\ However, Congress soon expressed 
concerns with the $100,000 size standard for agricultural 
enterprises.
---------------------------------------------------------------------------
    \89\SBA, Small Business Size Standards, Final Rule, 49 Fed. Reg. 
5024 (Feb. 9, 1984).
---------------------------------------------------------------------------
    A report issued by the Senate Committee on Small Business 
in early 1985 stated, ``this standard is much lower than that 
used for any other industry, and it excludes virtually all 
viable family farms in many areas of the country.''\90\ The 
report additionally stated that while Senators Tom Harkin, Max 
Baucus and Dale Bumpers had offered an amendment to raise the 
size standard to $500,000, they later withdrew the amendment in 
favor of an assurance that SBA would immediately revisit the 
issue.\91\ Later that year, the Senate Committee on Small 
Business recommended to the Senate Committee on the Budget that 
the amendment be incorporated into omnibus budget legislation 
and noted that the amendment would have no budgetary 
impact.\92\
---------------------------------------------------------------------------
    \90\S. Rep. No. 99-20, at 48 (1985).
    \91\Id.
    \92\S. Rep. No. 99-146, at 530 (1985).
---------------------------------------------------------------------------
    The recommended amendment was included in the omnibus 
legislation that was enacted in 1986. The definition of a small 
business concern was amended to state, ``[p]rovided, [t]hat 
notwithstanding any other provision of law, an agricultural 
enterprise shall be deemed to be a small business concern if it 
(including its affiliates) has annual receipts not in excess of 
$500,000.''\93\ The $500,000 size standard was increased to 
$750,000 in 2000.\94\ The statutory size standard applies to 46 
diverse categories of agricultural enterprises including: 
cotton farming; orange groves; tree nut farming; beef cattle 
ranching and farming; and shellfish farming.\95\
---------------------------------------------------------------------------
    \93\Consolidated Omnibus Budget Reconciliation Act of 1985, Pub. L. 
No. 99-272, Tit. XVIII, Sec. 18016, 100 Stat. 82, 371 (1986).
    \94\Consolidated Appropriations Act of 2001, Pub. L. No. 106-544, 
App. I, Tit. VIII, Sec. 806, 114 Stat. 2763, 2763A-706 (2000). 
Unfortunately, there is no discussion of the provision in the 
accompanying report.
    \95\These industry categories are delineated under the North 
American Industry Classification System (NAICS), which is the standard 
used by federal statistical agencies to classify business 
establishments for the purposes of collecting, analyzing, and 
publishing statistical data related to the United States economy. 
https://www.census.gov/eos/www/naics/.
---------------------------------------------------------------------------
    The consequences associated with establishing a single size 
standard for agricultural enterprises via statute may not have 
been fully realized or appreciated when the decision was made 
30 years ago. For example, the authors included no forcing 
mechanism to require periodic review of the agricultural 
producer size standard to determine whether it was still 
appropriate. Periodic review of all other size standards--at 
least once every five years--is now required pursuant to the 
Small Business Jobs Act of 2010.\96\ The purpose of 
periodically reviewing size standards is to account for changes 
in industry structure and economic conditions, such as 
inflation.\97\ Commodity prices and production inputs can 
fluctuate dramatically. Moreover, the single standard for 46 
different agricultural industry subsectors does not distinguish 
between the various types of agricultural enterprises that may 
have significantly different economic characteristics. A 
statutory standard leaves it up to future Congresses to review 
and update the standard, which has not been done with any 
regularity.
---------------------------------------------------------------------------
    \96\Pub. L. No. 111-240, Sec. 1344, 124 Stat. 2504, 2545-46 (2010).
    \97\SBA White Paper supra note 8, at 38.
---------------------------------------------------------------------------
    For non-agricultural industries, the SBA size standard 
methodology can best be described as a granular analysis of 
specific industry characteristics.\98\ The agency performs a 
statistical analysis of primary and secondary factors to 
establish a size standard for a specific industry, and that 
standard is expressed as the number of full-time employees at 
the concern over 12 months, the average annual receipts of the 
business over three years, or as an alternate size standard 
that looks at the level of production.\99\
---------------------------------------------------------------------------
    \98\A detailed explanation of SBA's size standard methodology may 
be found in SBA, SBA Size Standard Methodology (2009) [hereinafter SBA 
White Paper], available at http://www.sba.gov/sites/default/files/
size_standards_methodology.pdf.
    \99\Id. at 10. This mirrors the grant of authorization in the 
statute. 15 U.S.C. Sec. 632(a)(2)-(3).
---------------------------------------------------------------------------
    The primary factors assessed by the SBA include an 
examination of four economic characteristics of the industry, 
such as average firm size, startup costs and entry barriers, 
industry competition, and the distribution of firms by 
size.\100\ An additional factor is the impact of a size 
standard change on SBA's federal contract assistance to small 
businesses.\101\ The SBA also may assess industry specific 
considerations, such as technological changes and industry 
growth trends.\102\
---------------------------------------------------------------------------
    \100\SBA White Paper, supra note 8, at 11.
    \101\Id. Despite the applicability of these size standards across 
federal agencies, the SBA does not examine the implications of such 
change on other federal statutes or programs.
    \102\Id. at 12.
---------------------------------------------------------------------------
    Upon completing its analysis, the SBA then publishes a 
proposed size standard in the Federal Register. Final size 
standards are selected after input from the public through 
notice and comment rulemaking. In addition, size standards are 
subject to periodic review and revision every five years,\103\ 
again through notice and comment rulemaking.
---------------------------------------------------------------------------
    \103\Id. at 1.
---------------------------------------------------------------------------
    In 2013, Congress enacted reforms to the Act that codify 
the factors SBA must consider and address when revising, 
modifying, or establishing size standards. As part of the 
notice of the proposed and final rule, the SBA must include: 
(1) a detailed description of the industry; (2) an analysis of 
the competitive environment for that industry; (3) the approach 
and sources of all data used to develop the proposed 
rulemaking; and (4) the anticipated effects of the proposed 
rule on the industry.\104\ This ensures that the size standard 
setting process is transparent and interested parties have 
adequate information on which to comment.
---------------------------------------------------------------------------
    \104\FY 2013 NDAA at Sec. 1661.
---------------------------------------------------------------------------
    In short, the process established by Congress as 
implemented by the SBA for determining size standards creates a 
logical method for establishing small business size standards 
in order to facilitate the accomplishment of federal policy 
objectives as they relate to small business concerns. 
Unfortunately, the definition of a small business agricultural 
enterprise does not follow the same granular analysis as it is 
set by statute and only would be subject to periodic review if 
Congress acted regularly. As the production of agricultural 
goods has changed and is likely to change, a static definition 
of small business agricultural enterprise may not achieve 
various policy objectives designed to help small businesses.
    Specifically, the modern structure of agricultural 
operations has evolved so that a single dollar size standard is 
no longer appropriate. The United States agriculture industry 
continues to be defined by a large number of closely-held, 
family-owned operations.\105\ Of the nation's approximately 2.1 
million farms and ranches, approximately 97.6 percent of farms 
are family-owned.\106\ These family farms account for 85 
percent of domestic agricultural production.\107\
---------------------------------------------------------------------------
    \105\Erik J. O'Donoghue, Economic Research Service, United States 
Dep't of Agriculture, Exploring Alternative Farm Definitions: 
Implications for Agricultural Statistics and Program Eligibility 22-23 
(2009), available at http://www.ers.usda.gov/publications/eib-economic-
information-bulletin/eib49.aspx.
    \106\James MacDonald, Economic Research Service, United States 
Dep't of Agriculture, Family Farming in the United States (2014) 
[hereinafter USDA Family Farms], available at http://www.ers.usda.gov/
amber-waves/2014-march/family-farming-in-the-united-
states.aspx#.U8K3pk1OW70. However, it should be noted that the relative 
share of production these farms contribute varies depending on 
commodity group, with family-owned farms accounting for 96 percent of 
corn, cotton, wheat and soybean production, 75 percent of dairy 
production, and 62 percent of fruits, vegetables and nursery 
production. Id.
    \107\Id.
---------------------------------------------------------------------------
    However, over the past few decades, a number of factors 
have altered the structure of farms and industry dynamics. New 
technologies and production methods have increased the 
productivity of the agriculture sector.\108\ This productivity 
also has resulted in increased competition\109\ among producers 
which has resulted in more output per acre and lower relative 
prices for agriculture commodities.
---------------------------------------------------------------------------
    \108\Elizabeth Bechdol, Allan Gray, and Brent Gloy, Forces 
Affecting Crop Production Agriculture, 25 Choices 2 (2010), available 
at http://www.choicesmagazine.org/magazine/pdf/article_152.pdf. In 
addition to increased competition, there are relatively low barriers to 
entry into agriculture markets. Id. These factors are accounted for in 
the SBA's size standard methodology, but not in the statutory 
definition.
    \109\Id.
---------------------------------------------------------------------------
    These changes compel agricultural enterprises to achieve 
larger economies of scale in comparison to their predecessors 
in order to maintain a viable agriculture production 
enterprise.\110\ Achieving these economies of scale often 
requires the addition of more lands or livestock in order to 
justify investments in new production technologies.\111\ As the 
Subcommittee previously examined at a February 2, 2012 
hearing,\112\ many individually family-owned farms have 
consolidated their individual operations into larger, 
enterprise unit family-owned operations in order to achieve 
economies of scale.\113\ However, on 86.1 percent of farms, 
families still provide the majority of the labor.\114\
---------------------------------------------------------------------------
    \110\Id.
    \111\Id.
    \112\The Future of the Family Farm: The Effect of Proposed DOL 
Regulations on Small Business Producers: Before the Subcomm. on 
Agriculture, Energy and Trade of the H. Comm. on Small Bus., 112th 
Cong. (2012), available at http://www.gpo.gov/fdsys/pkg/CHRG-
112hhrg76459/pdf/CHRG-112hhrg76459.pdf.
    \113\Carolyn Dimitri, et. al., Economic Research Service, United 
States Dep't of Agriculture, the 20th Century Transformation of U.S. 
Agriculture and Farm Policy 12 (2005), available at http://
www.ers.usda.gov/publications/eib-economic-information-bulletin/
eib3.aspx.
    \114\USDA Family Farms, supra note 16.
---------------------------------------------------------------------------
    Unfortunately, the influences of these changes may not 
fully be reflected in the current size standard for small 
agricultural enterprises. If the current definition does not 
encapsulate these changes in the agricultural sector, there 
could be negative consequences for small agricultural 
enterprises. An incorrect size standard may result in negative 
effects on federal small business policymaking objectives. 
Primary among these are procurement opportunities, as 
procurement represents the sole scenario when alternative 
federal programs or standards are not available.\115\
---------------------------------------------------------------------------
    \115\Generally speaking, size standards also are used to determine 
eligibility for SBA's loan programs, technical assistance programs, and 
as agencies attempt to assess the effects of regulations on small 
business concerns under the Regulatory Flexibility Act, 5 U.S.C. 
Sec. Sec. 601-12 (RFA). However, since agricultural enterprises receive 
the vast majority of financial and technical assistance from the United 
States Department of Agriculture (USDA), these are not relevant to the 
memorandum. See, e.g. USDA, Rural Development, Business and Industry 
Guaranteed Loans (2014), available at http://www.rurdev.usda.gov/
bcp_gar.html. Likewise, if USDA believes the size standard is incorrect 
for purposes of the RFA, a process exists to establish an alternative 
size standard. However, USDA has not utilized this process in the past 
ten years, and doing so would likely only create additional work for 
USDA. See Office of Advocacy, SBA: How to Comply with the Regulatory 
Flexibility Act 14 (2012), available at http://www.sba.gov/sites/
default/files/rfaguide_0512_0.pdf. To the extent that agencies utilize 
the SBA's standard, a too low standard may lead agencies to improperly 
conclude and certify their proposed regulations as not affecting a 
substantial number of small businesses. Letter from the Hon. Donald 
Manzullo and the Hon. Nydia Velazquez to Gary M. Jackson, Assistant 
Administrator for Size Standards, SBA, Comment Proposed Rule, Proposed 
Rule: Small Business Size Standards: Restructuring Size Standards (July 
8, 2004) (on file with the Committee Chief Counsel). The USDA's 2010 
proposed livestock marketing rule is an example of an agency adopting 
the statutory definition of small agricultural enterprise when 
conducting its threshold analysis for a proposed rule. USDA, 
Implementation of Regulations Required Under Title XI of the Food, 
Conservation and Energy Act of 2008; Conduct in Violation of the Act, 
75 Fed. Reg. 35,338, 35,348 (June 22, 2010).
---------------------------------------------------------------------------
    In terms of contracting and procurement opportunities, a 
more accurate definition of small agricultural enterprises 
would increase competition, thereby reducing prices, and 
strengthen our industrial base. In FY 2014, the federal 
government spent nearly $400 million on raw agricultural 
goods.\116\ Small businesses received over 89 percent of the 
awards in agricultural industries where SBA had established 
size standards.\117\ However, in those industries using the 
$750,000 statutory size standard, small businesses received 
only 27 percent of awards.\118\ If more concerns were easily 
identifiable as small businesses, it could increase the 
opportunity for competition limited to small businesses, or at 
a minimum for outreach to small agricultural producers.
---------------------------------------------------------------------------
    \116\Report generated on November 4, 2015, using the Federal 
Procurement Data System. [Hereinafter FPDS Report]. Report on file with 
the Committee.
    \117\Id. Small businesses received $263,647, 420.29 out of 
$295,699,071.59.
    \118\Id. Small businesses received $25,265,178.86 out of 
$92,239,568.96.
---------------------------------------------------------------------------
    While the $92 million in prime contracting opportunities 
awarded to industries with a $750,000 size standard is not a 
large amount in terms of federal contract spending, a 
definitional change also could affect subcontracting and grant 
opportunities. States receive agricultural block grants may 
choose to prioritize purchases from small businesses, using the 
SBA definition. At a federal level, programs such as the Food 
for Peace Program\119\ may create opportunities for small 
business sales. Most importantly, though, are subcontracting 
opportunities.
---------------------------------------------------------------------------
    \119\7 U.S.C. Sec. 1691.
---------------------------------------------------------------------------
    Pursuant to the Act, federal prime contractors, other than 
small business concerns, receiving prime contracts in excess of 
$650,000 must negotiate a subcontracting plan with the 
government detailing how they will use small businesses as 
subcontractors.\120\ This requirement also applies to 
subcontractors other than small businesses who receive 
subcontracts in excess of $650,000.\121\ This is important 
because in FY 2014, federal government spent $5.8 billion on 
food manufacturing. This included nearly $4 billion in 
contracts requiring subcontracting plans.\122\ Given that the 
current administratively set goal for subcontracting with small 
businesses is 34.06 percent of all subcontracted dollars, and 
food manufacturing requires that the contractor obtain raw 
agricultural products, the application of subcontracting rules 
to these contracts could result in billions of dollars of 
subcontracts being competed among small agricultural 
enterprises.\123\ Holding all else constant, to the extent that 
an updated size standard increases the number of small 
agriculture enterprises, more small firms would be able to 
compete for these contracts, which would strengthen the base of 
small agricultural enterprises.
---------------------------------------------------------------------------
    \120\15 U.S.C. Sec. 637(d)(4).
    \121\Id.
    \122\FPDS Report, supra note 35.
    \123\SBA, Government-Wide Procurement Scorecard (2015), available 
at https://www.sba.gov/sites/default/files/files/FY14_Government-
Wide_SB_Procurement_Scorecard_Public_View_2015-04-29.pdf.
---------------------------------------------------------------------------
    In the 113th Congress, the Subcommittee on Agriculture, 
Energy and Trade and held a hearing to examine whether the 
existing statutory size standard for agricultural enterprises 
meets the needs of small agricultural businesses.\124\ The 
Subcommittee received testimony from the SBA, a farmer, a 
cattle rancher, and an agriculture industry representative. The 
witnesses discussed how the input and labor costs of producing 
crops and livestock has risen and that the annual receipts of 
agricultural operations can vary significantly from year to 
year. Furthermore, the witnesses representing agricultural 
enterprises recommended that Congress consider eliminating the 
statutory size standard and allowing the SBA to establish size 
standards through the rulemaking process.\125\ In his 
testimony, Mr. John Shoraka, the Associate Administrator for 
Government Contracting at the SBA, stated that the agency was 
capable of conducting the analyses to establish size standards 
for agricultural enterprises, and if given the authority, the 
SBA would use the same notice and comment process it currently 
uses to establish size standards for other industries.\126\ As 
a result, section 503 will abolish the $750,000 size standard 
in favor of one regulatorily established by SBA.
---------------------------------------------------------------------------
    \124\Modernizing Agriculture Producer Size Standards: Before the 
Subcomm. on Agriculture, Energy and Trade of the H. Comm. on Small 
Bus., 113th Cong. (2014), available at http://www.gpo.gov/fdsys/pkg/
CHRG-113hhrg88924/pdf/CHRG-113hhrg88924.pdf.
    \125\Id. at 5-10.
    \126\Id. at 4.
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4. Section 504

    Both the SBA and the VA operate procurement programs for 
SDVOSBs. The SBA program applies to procurements at all 
agencies other than VA, whereas the VA program applies only to 
VA contracts. While both programs apply nearly identical 
statutory definitions of a SDVOSB, the Committee has received 
complaints that the application of the statutory programs is 
resulting in disparate decisions.
    The Veterans Benefits Act of 2003 (VBA) amended the Act to 
create a government wide procurement program for small 
businesses,\127\ while the Veterans Benefits, Health Care, and 
Information Technology Act of 2006 (VBHCITA) created the SDVOSB 
contracting program at VA.\128\ The statutory foundations of 
the two SDVOSB programs vary in three principal ways. First, 
the definition of a SDVOSB is slightly different. Second, the 
scope of the contracts to be awarded differs. Finally, the 
relationship between the SDVOSB program and other small 
business contracting programs is different.
---------------------------------------------------------------------------
    \127\Pub. L. No. 108-183, Title III, Sec. 308, 117 Stat. 2662 
(2003) (codified at 15 U.S.C. Sec. 657f).
    \128\Pub. L. No. 109-461, 120 Stat. 3431 (2006) (codified at 38 
U.S.C. Sec. Sec. 8127-8128). The VBHCITA also create a set-aside 
program for Veteran-Owned Small Businesses (VOSBs). While there is only 
a subcontracting goal for VOSBs under the Small Business Act, the 
certification issues described herein are generally applicable to VOSBs 
except for the lack of a prime contracting certification process at 
SBA.
---------------------------------------------------------------------------
    With a few important exceptions, the VBA and the VBHCITA 
use the same definitions, relying on the VA's definitions of 
veteran or service-disabled veteran (SDV) to determine whether 
an individual qualifies for the program, and using the Small 
Business Act definitions of small business.\129\ This is 
eminently sensible, as it entrusts to each agency that which 
the agency has the most experience defining. The only 
difference occurs when the two concepts are combined in an 
attempt to define SDVOSBs. Both statutes agree that the term 
means a small business concern that is at least 51 percent 
owned by one or more SDVs or, in the case of any publicly owned 
business, not less than 51 percent of the stock of which is 
owned by one or more SDVs.\130\ However, there are three 
critical differences. First, the VBA, but not the VBHCITA, 
explicitly extends benefits to firms that, ``in the case of a 
veteran with permanent and severe disability, the spouse or 
permanent caregiver of such veteran.''\131\ The discrepancy 
regarding permanent caregivers is addressed by VA in its 
regulations, which extends rights to these individuals.\132\ 
Second, the VBHCITA but not the VBA allows the surviving spouse 
of a veteran to continue participating as a SDVOSB for up to 
ten years if, after the death of a veteran, the surviving 
spouse of such veteran acquires ownership rights.\133\ Third, 
the VBA permits self-certification by SDVOSBs, subject to 
protests, while the VBHCITA requires that VA maintain a 
database of SDVOSBs that are certified as such by the VA.\134\ 
While these differences may seem minor, the result is that a 
firm may qualify as a SDVOSB at VA but not for a contract at 
another agency, or vice versa. For these reasons, section 504 
reconciles the definitions between the Act and title 38 of the 
United States Code.
---------------------------------------------------------------------------
    \129\Section 3(q) of the Small Business Act defines ``veteran'' in 
accordance with 38 U.S.C. Sec. 101(2) and service-disabled veteran is 
defined per 38 U.S.C. Sec. 101(16). VBHCITA adds the definition of 
small business found in Section 3(a) of the Small Business Act to 38 
U.S.C. Sec. 8127(k)(1).
    \130\Small Business Act, Sec. 3(q)(2)(A); 38 U.S.C. 
Sec. 8127(k)(2). c.f., The VBHCITA actually requires that the service 
disabled veterans ``are unable to manage the daily business operations 
of such concern,'' but in regulation this has been interpreted to 
require the management of the daily business operations. 38 C.F.R. 
Sec. 74.1.
    \131\Small Business Act, Sec. 3(q)(2)(B).
    \132\38 C.F.R. Sec. 74.1.
    \133\38 U.S.C. Sec. 8127(h).
    \134\Small Business Act, Sec. 36(q)(2)(B). 38 U.S.C. Sec. 8127(f).
---------------------------------------------------------------------------
    Reconciling the statutory divergence is the first obstacle, 
as SBA and VA have both received criticism alleging that the 
regulatory differences between the two SDVOSB programs exceed 
those differences that would be expected given the statutory 
discrepancies. Thus, SBA and VA have undertaken joint review of 
the regulations governing each program and produced a chart 
that provides a section-by-section comparison of the existing 
regulations each believes are relevant (VA Chart).\135\ VA has 
stated that this analysis demonstrates that there are only 
three differences between the regulations: (1) VA allows 
surviving spouses to inherit limited benefits; (2) VA requires 
change of ownership notification; and (3) VA has a program for 
veteran-owned small businesses (VOSB).\136\ Furthermore, VA 
stated that they were aware of only one interpretive difference 
in the application of the regulations, and that concerned a 
question of whether SDVs control a company with a three-person 
board if one SDV and one non-SDV could align against a second 
SDV.\137\ Based on this, the conflict would appear minimal at 
best. However, SBA has stated ``while it is true that the 
wording of the regulations pertaining to the VA's and SBA's 
eligibly [sic] requirements is similar, there are some key 
differences in interpretations.''\138\
---------------------------------------------------------------------------
    \135\On file with the Committee.
    \136\Comments of Tom Leney, Executive Director of the Veterans and 
Small Business Programs for VA, to VET-Force (Feb. 12, 2013).
    \137\Id.
    \138\GAO, Veteran-Owned Small Businesses: Planning and Data System 
for VA'S Verification Program Need Improvement 56 (2013) (GAO-13-95) 
(hereinafter Planning and Data).
---------------------------------------------------------------------------
    The VA Chart compares three sources of regulations--VA's 
SDVOSB regulations, SBA's SDVOSB regulations, and SBA's 8(a) 
business development (8(a)) program regulations.\139\ This 
framing of the discussion itself presents two problems. First, 
looking at the regulations regarding the 8(a) program may be 
informative, but should not be controlling since the programs 
have different statutory purposes. The 8(a) program is a time-
limited program intended to assist socially and economically 
disadvantaged individuals trying to establish successful small 
businesses, and contracting is used as a tool in the 
development process.\140\ In contrast, both SDVOSB programs are 
contracting programs intended to help the federal government 
meet its statutory goals of awarding at least 3 percent of all 
prime contract and subcontract dollars to SDVOSBs.\141\ When VA 
patterned its rules off of the 8(a) program regulations, it 
failed to recognize this dichotomy. This has led to situations 
such as that where VA requires SDVOSB living in community 
property states to have their spouses preemptively relinquish 
any interest in the firm lest the spouse be considered an 
owner, even though VBHCITA will allow the same spouse to 
qualify for the program after the SDV's death--a requirement 
not found in SBA's SDVOSB program.\142\ Additionally, like the 
8(a) program, VA requires that SDVs receive the majority of the 
pay or profits of the firm.\143\ SBA has not included this 
requirement in the SDVOSB regulations, although distribution of 
profits would be considered in analyzing control, because pay 
itself is not always determinative of control.
---------------------------------------------------------------------------
    \139\38 C.F.R. Sec. 74; 13 C.F.R. Sec. Sec. 125.8-125.29; 13 C.F.R. 
Sec. 124. See Small Business Act Programs at 4-5 for additional 
information on this program.
    \140\13 C.F.R. Sec. 124.1.
    \141\Small Business Act, Sec. 15(g); 38 U.S.C. Sec. 8127(c).
    \142\13 C.F.R. Sec. 121.105(k); 38 C.F.R. Sec. 74.3(f); supra note 
7.
    \143\38 C.F.R. Sec. 74.3(d)
---------------------------------------------------------------------------
    Perhaps more egregiously though, the VA Chart excludes the 
relevant SBA's regulations that address issues fundamental to 
whether a SDV owns and controls a firm and whether the firm is 
itself small, which are found at 13 C.F.R. Sec. 121. These 
regulations provide the underpinnings for the ownership and 
control provisions found in SBA's SDVOSB and 8(a) programs. For 
example, it is this additional section of regulation that tells 
firms how stock ownership will be used to determine control of 
a company, and how board composition affects this 
calculus\144\--the very situation VA admitted caused 
interpretive differences.\145\ However, these regulations go 
far beyond that one example--they address when agreements to 
act in the future will be given present effect, how to treat 
companies with common management, companies with substantially 
identical business or economic interests, companies spun off 
from other companies, joint ventures, companies that are unduly 
reliant on an ostensible subcontractor, companies with 
franchise and license agreements, or companies where the 
totality of the circumstances indicate that the business is not 
independently owned and controlled.\146\ To attempt to 
determine if a firm is a SDVOSB without examining it in light 
of these regulations belies VBHCITA's direction to use SBA's 
definition of a small business, because these are the 
regulations that define whether a firm is small.\147\
---------------------------------------------------------------------------
    \144\13 C.F.R. Sec. 121.103(c). For an in depth discussion of 
affiliation and control issues, see Committee on Small Business, ``What 
is a Small Business for Purpose of Federal Contracting?'' 6-16 (2013), 
available at http://smallbusiness.house.gov/resources/committee-
publications.htm.
    \145\Supra note 17.
    \146\13 C.F.R. Sec. Sec. 121.103(a)(5); 121.103 (d)-(i).
    \147\Supra note 3.
---------------------------------------------------------------------------
    This has led to bright line rules at VA that do not exist 
at SBA. For example, VA will deny SDVOSB status if ownership in 
the entity carries with it the requirement that a right of 
first refusal to purchase the SDV's ownership interest will be 
offered to another owner or third party.\148\ While SBA does 
consider agreements regarding transfer of ownership, it looks 
at each agreement to determine whether its terms mean that the 
SDV does not unconditionally control the company. Similarly, VA 
requires that that at least one SDV who ``manage[s] the 
applicant or participant must devote full-time to the business 
during the normal working hours of firms in the same or similar 
line of business.''\149\ SBA does not require this, as long as 
SDVs can prove actual ownership and control over day-to-day 
decisions.
---------------------------------------------------------------------------
    \148\VA, Verification Assistance Brief--Transfer Restrictions, 
available at http://www.va.gov/osdbu/veteran/
transferRestrictionsBrief.asp.
    \149\38 C.F.R. Sec. 74.4(c)(4).
---------------------------------------------------------------------------
    Indeed, the regulatory and interpretive differences are 
being borne out by case law. Within SBA, any appeal regarding a 
firm's size or status is heard by OHA, a body of administrative 
judges that provides final agency action through published 
decisions. Recently, OHA identified fourteen cases:

          in connection with SDVO set-asides where (1) OHA 
        determined the subject business concern was not small 
        and thus was ineligible for the contract at issue, and 
        (2) had the [VA regulations] been the sole governing 
        rules, the business concern would have been eligible 
        for the contract. In each of these 14 cases, the 
        different outcome is owed to the operation of SBA's 
        affiliation rule at 13 C.F.R. Sec. 121.103. The 
        affiliation rule, an integral part of small business 
        size analysis, is not a part of the DVA's SDVO status 
        regulations.\150\
---------------------------------------------------------------------------
    \150\Email from SBA to Committee Staff, ``OHA decisions on Service-
Disabled Veteran-Owned Status and Size Cases,'' (Feb. 12, 2013). The 
cases are: Size Appeal of Chu & Gassman, Inc., SBA No. SIZ-5394 (2012); 
Size Appeal of Chu & Gassman, Inc., SBA No. SIZ-5344 (2012); Size 
Appeal of EarthCare Solutions, Inc., SBA No. SIZ-5183 (2011); Size 
Appeal of Specialized Veterans, LLC, SBA No. SIZ-5138 (2010); Size 
Appeal of A1 Procurement, LLC, SBA No. SIZ-5121 (2010); Size Appeal of 
J.M. Waller Associates, Inc., SBA No. SIZ-5108 (2010); Size Appeal of 
DooleyMack Government Contracting, LLC, SBA No. SIZ-5086 (2009); Size 
Appeal of DooleyMack Government Contracting, LLC, SBA No. SIZ-5085 
(2009); Size Appeal of Blue Cord Construction, Inc., SBA No. SIZ-5077 
(2009); Size Appeal of Taylor Consultants, Inc., SBA No. SIZ-5049 
(2009); Size Appeal of Heritage of America, LLC, SBA No. SIZ-5017 
(2008); Size Appeal of Mission Solutions, Inc., SBA No. SIZ-4828 
(2006); Size Appeal of B & M Construction, Inc., SBA No. SIZ-4805 
(2006) Size Appeal of Catapult Technology, Ltd., SBA No. SIZ-4795 
(2006).

    These cases should not be seen as an exhaustive list, since 
OHA does not have the ability to review cases that VA denies, 
nor does OHA see each case that VA approves. However, it does 
illustrate how different applications of regulations by even 
the most well-intentioned parties can lead to regulatory and 
interpretive discrepancies. Therefore, section 504 requires 
that VA and SBA decide questions of ownership and control, but 
not of veteran status, using SBA's regulations.
    Both SBA and VA processes for certifying SDVOSBs are 
imperfect. SBA relies upon a process of self-certification, but 
allows contracting officers, SBA, or other interested parties 
to raise a protest to the SBA Director of the Office of 
Government Contracting (DGC).\151\ The DGC then has 15 days to 
investigate and issue a decision.\152\ Appeals of the DGC's 
decision are heard by OHA and decided in 15 days, at which time 
a published decision is made publicly available.\153\ While 
this process has the advantage of allowing nearly 13,000 
SDVOSBs to quickly begin competing for contracts, it also 
leaves open the door for fraud.\154\
---------------------------------------------------------------------------
    \151\13 C.F.R. Sec. 125.24-25.
    \152\13 C.F.R. Sec. 125. 25-27.
    \153\13 C.F.R. Sec. 134-514.
    \154\SDVOSB numbers are taken from the SBA's Dynamic Small Business 
Search tool, available at www.dsbs.sba.gov; for information on fraud, 
see, e.g. GAO, Case Studies Show Fraud and Abuse Allowed Ineligible 
Firms to Obtain Millions of Dollars in Contracts (2009)(GAO-10-108) 
(hereinafter Case Studies).
---------------------------------------------------------------------------
    In contrast, VA's SDVOSB program has 4,102 SDVOSBs 
currently certified in its database, each of which must be 
certified yearly.\155\ Additionally, in fiscal year 2012, VA 
received 4,900 new initial applications for both the SDVOSB and 
VOSB program.\156\ VA uses over 200 full time equivalents and 
spends $33 million a year running a four step certification 
process after an application is submitted:
---------------------------------------------------------------------------
    \155\www.vip.vetbiz.gov; 38 C.F.R. Sec. 74.15; c.f. http://
www.va.gov/osdbu/faqs/verification.asp (recertification is required 
every two years).
    \156\Planning and Data at 44.
---------------------------------------------------------------------------
           VA employees screen it to ensure that it 
        meets the minimum eligibility requirements;
           VA contractors conduct an initial evaluation 
        and make a preliminary recommendation for approval, 
        denial or additional review;
           VA contractors and employees review the 
        initial recommendation, and if necessary, conduct site 
        visits; and
           VA supervisors make a formal determination 
        and issue a letter decision to the applicant.\157\
---------------------------------------------------------------------------
    \157\Planning and Data at 8.
---------------------------------------------------------------------------
    This process takes approximately 85 days, and 61 percent of 
applicants are accepted.\158\ Those that are rejected may 
appeal the decision through a Request for Consideration, which 
is conducted by the VA's Office of General Counsel.\159\ 
Requests for reconsideration are granted on 48 percent of 
appeals, but generally take an additional 147 days. In contrast 
with SBA's process where appeals are decided by independent 
judges ``where the standard of review is whether the 
determination of eligibility was based on a clear error of fact 
or law or whether the decision was arbitrary, capricious or 
contrary to law[, VA] has no such appellate procedure.''\160\ 
VA's decisions are not published, and do not represent legal 
precedent.
---------------------------------------------------------------------------
    \158\Id. at 14, 44.
    \159\Id. at 44; supra note 16. VA's regulations require a decision 
in 60 days. 38 C.F.R. Sec. 74.11.
    \160\Planning and Data at 56.
---------------------------------------------------------------------------
    GAO and the federal courts have taken issue with VA's 
process. GAO recently found that while ``VA has made progress 
toward reducing its vulnerability to fraud and abuse,'' the 
agency's strategic planning and data capabilities necessary to 
prevent that fraud remain inadequate.\161\ The Court of Federal 
Claims (COFC), when examining transfer restrictions and appeals 
under the VA process, found that VA's appeals process does not 
allow ``basic procedural due process'' and that the examination 
``contravened the minimal requirements for informal 
adjudication set forth in Section 555 of the [Administrative 
Procedures Act (APA)].''\162\ While the GAO finding highlighted 
the lack of long term planning and data systems that allow VA 
to monitor applications and processes to ensure consistence, 
the COFC holdings go to a more crucial question--whether the 
verification system is able to address the tension between 
providing due process to SDVs firms and preventing fraudulent 
contracting.
---------------------------------------------------------------------------
    \161\Id. at 33-34.
    \162\Miles Construction, LLC v. United States, No. 12-597C 13, 25 
(Fed. Cl. 2013); see also KWV, Inc. v. United States, No. 12-882C (Fed. 
Cl. 2013).
---------------------------------------------------------------------------
    To insure that the new regulations are uniformly 
implemented and to protect the due process rights of all 
potential SDVOSBs, section 504 provides that OHA will hear all 
appeals dealing with ownership and control. VA will continue to 
hear appeals dealing with an individual's status as a veteran.

5. Section 505

    The Office of Government Contracts and Business Development 
(GCBD) at SBA is overseen by an associate administrator 
appointed by the President, supported by five senior executives 
and a head of operations. It is depicted in the following 
chart.

      Office of Government Contracts and Business Development\163\




    The GCBD programs exist within five suboffices: Policy, 
Planning and Liaison (PPL), Government Contracting (GC), 
Business Development (BD), HUBZone (HZ) and Operations. PPL has 
three primary responsibilities: (1) regulations; (2) goaling; 
and (3) size standards. On the regulatory front, PPL drafts all 
the amendments to the contracting regulations within chapter 13 
of the Code of Federal Regulations.\164\ Additionally, PPL 
represents SBA on the Civilian Agency Acquisition Council 
(CAAC). The CAAC and its defense counterpart, the Defense 
Acquisition Regulatory Council (DARC) draft all of the 
regulations promulgated as part of the Federal Acquisition 
Regulation, which governs almost all federal contracts.
---------------------------------------------------------------------------
    \163\All charts are based on information provided by SBA.
    \164\It is worth noting that position responsible for drafting 
regulations has been vacant since 2014, despite the high backlog of 
regulations waiting for SBA action.
---------------------------------------------------------------------------
    Additionally, PPL creates specific size standards for each 
industry that determine which businesses qualify as small 
businesses. The office assigns revenue- or employee-based size 
standards to each of the more than 1,100 North American 
Industrial Classification System (NAICS) codes, as further 
discussed in section 502.\165\ These size standards then govern 
which firms can compete for restricted contracts.
---------------------------------------------------------------------------
    \165\15 U.S.C. Sec. 632(a). In a few instances, other factors are 
also considered, such as production or assets. For further information, 
please see the Committee Memorandum, ``What is a Small Business for 
Purposes of Federal Contracting?'' (2013), available at http://
smbiz.house.gov/uploadedfiles/
what_is_a_small_business_for_purpose_of_federal_contracting.pdf.
---------------------------------------------------------------------------
    Finally, PPL develops and negotiates prime contracting and 
subcontracting goals with each of the federal agencies. SBA is 
required to report to Congress annually on the goal 
achievements.\166\
---------------------------------------------------------------------------
    \166\Id. at Sec. 644(h)(2).
---------------------------------------------------------------------------
    The GC office oversees the contracting assistance programs 
and most of GCBD's field operations, including the six area 
offices. The best known function of GC is that its area offices 
house the Procurement Center Representatives (PCRs) and 
Commercial Market Representatives (CMRs) discussed most 
recently during the December 9, 2015 Subcommittee on 
Contracting and Workforce Hearing titled, ``Supporting Success: 
Empowering Small Business Advocates.'' As explained in that 
hearing memorandum, the PCRs are located at major federal 
procurement activities and review solicitations to ensure that 
small businesses have the chance to compete.\167\ Likewise, the 
CMRs help small businesses compete for federal 
subcontracts.\168\
---------------------------------------------------------------------------
    \167\Committee Staff Memorandum, Supporting Success: Empowering 
Small Business Advocates 1-2 (2015), available at http://
smbiz.house.gov/uploadedfiles/12-09-2015_hearing_memo.pdf.
    \168\Id. at 3.
---------------------------------------------------------------------------
    Additionally, GC oversees the Certificate of Competency 
Program, Natural Resources Assistance Program, Waivers of the 
Nonmanufacturer Rule, and the Small Business Size Determination 
Program. The Certificate of Competency Program allows 
contracting officers unsure of whether a small business has the 
ability to complete a task to refer the contract to SBA for 
evaluation.\169\ The Natural Resources Assistance Program aids 
small businesses seeking to purchase timber from the federal 
government.\170\ The nonmanufacturer rule requires that any 
contract for goods in which competition is limited to small 
businesses or a subset thereof require that the goods delivered 
be the product of a domestic small business unless SBA has 
determined that no such businesses are available.\171\ The 
Small Business Size Determinations Program applies the size 
standards promulgated by PPL to adjudicate whether a firm is 
small for purposes of a specific contract.\172\ C also manages 
four contracting programs: the small business prime contracting 
program, the small business subcontracting program, the 
Service-Disabled Veteran-Owned Small Business (SDVOSB) Program, 
and the Women-Owned Small Business (WOSB) Program.
---------------------------------------------------------------------------
    \169\15 U.S.C. Sec. 637(b)(7).
    \170\15 U.S.C. Sec. 644(a).
    \171\15 U.S.C. Sec. 637(a)(17); 15 U.S.C. Sec. 657s(a)(4).
    \172\13 C.F.R. Sec. Sec. 121.1001 through 121.1009.
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    The BD Office has oversight of the 8(a) business 
development program (8(a) program) and the small disadvantaged 
business program as described in sections 202 and 205.
    A HUBZone is a geographic area with high poverty or high 
unemployment, as defined through a complicated statutory 
framework.\173\ HUBZone small business concerns are small 
businesses whose principal office is located in a HUBZone, that 
are at least 51 percent owned by United States citizens, and 
which draw at least 35 percent of their employees from 
HUBZones.\174\ These firms can receive set-aside contracts if 
two or more HUBZone concerns are expected to make a fair and 
reasonable offer.\175\ Sole-source awards are permitted for 
contracts below $4 million ($6.5 million for manufacturing 
contracts).\176\ A price evaluation adjustment of 10 percent is 
granted when bidding on contracts offered through full and open 
competition.\177\ To certify as a HUBZone firm, a small 
business must apply on the SBA website, recertify every three 
years, certify through SAM, and qualify at the time of offer 
and the time of award.\178\ SBA has the authority to conduct 
program examinations of firms to verify their continued 
eligibility\179\ or to hear appeals regarding a firm's 
size\180\ or eligibility for the program.\181\ There is a 
statutory goal of awarding three percent of all prime contract 
dollars and three percent of all subcontract dollars to HUBZone 
firms\182\ The HUBZone office at SBA publishes the lists and 
maps of eligible HUBZones, reviews applications, and conducts 
reviews of firms. SBA does not provide details of the 
organizational structure.
---------------------------------------------------------------------------
    \173\17 HUBZone are defined as any area located in a qualified 
census tract, qualified nonmetropolitan county, within the external 
boundaries of an Indian reservation or an area subject to the Base 
Realignment and Closure Act (BRAC). 15 U.S.C. Sec. 632(p). Qualified 
census tracts are tracts designated by the Department of Housing and 
Urban Development (HUD) in which either 50 percent or more of the 
households have an income which is less than 60 percent of the area 
median gross income for such year or which has a poverty rate of at 
least 25 percent, but no more than 20 percent of a metropolitan 
statistical area may qualify. 26 U.S.C. Sec. 42(d)(5)(B)(ii). Qualified 
nonmetropolitan counties are those in which median household income is 
at less than 80 percent of the nonmetropolitan State median household 
income, the unemployment rate at least 140 percent of the average 
unemployment rate for the United States or for the State in which such 
county is located, whichever is less, or which is located in a 
difficult development area, as designated by HUD. 15 U.S.C. 
Sec. 632(p).
    \174\15 U.S.C. Sec. 632(p)(5).
    \175\48 C.F.R. Sec. 19.1305-1307.
    \176\Id.
    \177\Id.
    \178\13 C.F.R. Sec. 126.300.
    \179\Id. at Sec. 126.401.
    \180\Id.
    \181\Id at Sec. 121.1001. SBA, the contracting officer, or any 
other interested party may protest the apparent successful offeror's 
qualified HUBZone SBC status. 13 C.F.R. Sec. 126.801.
    \182\15 U.S.C. Sec. 644(g)(1).
---------------------------------------------------------------------------
    Finally, GCBD's operations group manages the information 
technology and develops training to support the GCBD offices. 
It provides additional administrative support to the Associate 
Administrator.
    The recent GAO report examining challenges at SBA 
identified a number of open recommendations for GCBD, but it 
also identified broad reaching issues within SBA that are 
affecting the ability of GCBD to perform its mission.\183\ The 
following is a brief overview of the specific open 
recommendations, and of the systemic issues.
---------------------------------------------------------------------------
    \183\GAO, Small Business Administration: Leadership Attention 
Needed to Overcome Management Challenges (GAO-15-347) (2015), available 
at http://www.gao.gov/products/GAO-15-347 [hereinafter ``GAO Management 
Report''].
---------------------------------------------------------------------------
    In a 2011 report, GAO stated that:

          [t]o help ensure that [Government Contracting Area 
        Report (GCAR)] data are accurate and that SBA reliably 
        can use the data to monitor PCR and CMR performance and 
        determine whether established goals have been achieved, 
        we recommend that SBA's Director of Government 
        Contracting take the following two steps:
           provide clear and complete guidance to PCRs 
        and CMRs on accurately recording and maintaining the 
        appropriate backup documentation for accomplishments 
        reported in the GCAR monthly report, and
           require that monthly GCAR data are verified 
        and that documentation for PCR and CMR records are 
        periodically reviewed for quality and 
        completeness.''\184\
---------------------------------------------------------------------------
    \184\GAO, Improvements Needed to Help Ensure Reliability of SBA's 
Performance Data on Procurement Center Representatives 9 (GAO-11-549R) 
(2011).
---------------------------------------------------------------------------
    While additional guidance has been provided, GAO in its 
Management Report still recommends that ``[t]o help ensure that 
[GCAR] data are accurate and that SBA reliably can use the data 
to monitor [PCR] and [CMR] performance and determine whether 
established goals have been achieved, SBA's Director of 
Government Contracting should require that monthly GCAR data 
are verified and that documentation for PCR and CMR records are 
periodically reviewed for quality and completeness.''\185\ As 
discussed in a 2011 hearing of this Subcommittee, GCAR data is 
essential for tracking instances of bundling, consolidation, 
and failure of contracting agencies to follow the Act.\186\
---------------------------------------------------------------------------
    \185\Management Report at 106.
    \186\See Helping Small Businesses Compete: Challenges Within 
Programs Designed to Assist Small Contractors Subcommittee on 
Contracting and Workforce (2011).
---------------------------------------------------------------------------
    In a 2013 report, GAO found that agencies did not 
understand the rule regarding bundling and consolidation and 
were not fully complying with the law.\187\ GAO recommended 
that SBA submit the statutorily required bundling reports to 
Congress to increase accountability and promote 
compliance.\188\ While SBA agreed, the recommendation had not 
been complied with at the time of the Management Report, 
prompting GAO to again recommend that SBA file the required 
reports.\189\ Given the increased attention this Subcommittee 
has focused on bundling and consolidation, most recently at a 
March 17, 2015 hearing, and requiring in law that agencies 
improve their reporting on bundling and consolidation\190\ it 
would improve the Committee's oversight if SBA were to provide 
timely reports.
---------------------------------------------------------------------------
    \187\GAO, Small Business Contracting: Updated Guidance and 
Reporting Needed for Consolidated Contracts 8 (GAO-14-36) (2013).
    \188\Id. at 19.
    \189\Management Report at 106.
    \190\The FY 2015 and FY 2016 NDAAs each included a data quality 
improvement plan for bundling and consolidation. See Pub. L. No. 113-
291 Sec. 822 and Pub. L. No. 114-92 Sec. 862.
---------------------------------------------------------------------------
    The use of third-party certifiers for WOSB and EDWOSB 
programs came under scrutiny in a 2014 report that led to two 
outstanding recommendations.\191\ Specifically, GAO found that 
the lack of clear guidance and oversight allowed for abuse of 
the program.\192\ However, despite language in the FY 2015 NDAA 
requiring SBA to move to discontinue self-certification,\193\ 
SBA has not closed two recommendations. Specifically, the 
Management Report echoed the recommendation that ``[t]o improve 
management and oversight of the [WOSB] program, and to help 
ensure the effective oversight of third-party certifiers, the 
[SBA] should establish and implement comprehensive procedures 
to monitor and assess performance of certifiers in accord with 
the requirements of the third-party certifier agreement and 
program regulations.''\194\ Further, GAO recommended that 
``[t]o improve management and oversight of the WOSB program, 
and to provide reasonable assurance that only eligible 
businesses obtain WOSB set-aside contracts, [SBA] should 
enhance examination of businesses that register to participate 
in the WOSB program, including actions such as: (1) promptly 
completing the development of procedures to conduct annual 
eligibility examinations and implementing such procedures; (2) 
analyzing examination results and individual businesses found 
to be ineligible to better understand the cause of the high 
rate of ineligibility in annual reviews, and determine what 
actions are needed to address the causes; and (3) implementing 
ongoing reviews of a sample of all businesses that have 
represented their eligibility to participate in the 
program.''\195\ If any set-aside program fails to implement the 
appropriate controls, it opens itself to waste, fraud and 
abuse. Therefore, these recommendations remain critical.
---------------------------------------------------------------------------
    \191\GAO, Woman-Owned Small Business Program: Certifier Oversight 
and Additional Eligibility Controls Are Needed (GAO-15-54) (2014).
    \192\Id. at 15.
    \193\Pub. L. No. 113-291 Sec. 825.
    \194\Management Report at 106.
    \195\Id.
---------------------------------------------------------------------------
    While the HUBZone program does not rely upon third-party 
verification programs, the outstanding GAO recommendations are 
very similar. Based on a 2015 report that examined lacks of 
controls and communication in the HUBZone program, GAO made two 
recommendations.\196\ First, GAO recommended that ``[t]o 
improve SBA's administration and oversight of the [HUBZone] 
program and reduce the risk that firms that no longer meet 
program eligibility criteria receive HUBZone contracts, [SBA] 
should conduct an assessment of the recertification process and 
implement additional controls, such as developing criteria and 
guidance on using a risk-based approach to requesting and 
verifying firm information, allowing firms to initiate the 
recertification process, and ensuring that sufficient staff 
will be dedicated to the effort so that a significant backlog 
in recertifications does not recur.''\197\ Further, GAO 
recommended that ``SBA should establish a mechanism to better 
ensure that firms are notified of changes to HUBZone 
designations that may affect their participation in the 
program, such as ensuring that all certified firms and newly 
certified firms are signed up for the broadcast e-mail system 
or including more specific information in certification letters 
about how location in a redesignated area can affect their 
participation in the program.''\198\ Given that factors such as 
the residences of employees can change daily, and that the 
HUBZone program was designed to continually shift between 
locations so that only the most underutilized areas would 
qualify, both recommendations are common sense.
---------------------------------------------------------------------------
    \196\GAO, Small Business Contracting: Opportunities Exist to 
Further Improve Hubzone Oversight (GAO-15-234) (2015).
    \197\Management Report at 106.
    \198\Id. at 106-107.
---------------------------------------------------------------------------
    In September 2011 and again in 2015, the Subcommittee on 
Contracting and Workforce held hearings examining mentor-
protege programs. This was spurred in part by a 2011 GAO 
report,\199\ which has led to legislation reforming the mentor-
protege programs.\200\ The crux of the report was that, while 
well-intentioned, there was little to no tracking of protege 
firms to see if the programs produced lasting benefits.\201\ 
Thus, GAO recommended and SBA agreed that the program would 
benefit from post award tracking. However, nearly six years 
later, the recommendation that ``[t]o more fully evaluate the 
effectiveness of their mentor-protege programs, . . . the 
Mentor-Protege Program Directors of the . . . SBA . . . should 
consider collecting and maintaining protege postcompletion 
information'' remains open.\202\ This is particularly 
problematic now that SBA has been given statutory authority 
over all civilian agency mentor-protege programs.
---------------------------------------------------------------------------
    \199\GAO, Mentor-Protege Programs Have Policies That Aim to Benefit 
Participants but Do Not Require Postagreement Tracking (GAO-11-548R) 
(2011).
    \200\NDAA for Fiscal Year 2013, Pub. L. No. 112-239 Sec. 1641 
(2013).
    \201\Mentor-Protege Programs Have Policies That Aim to Benefit 
Participants but Do Not Require Postagreement Tracking at 9.
    \202\Management Report at 107.
---------------------------------------------------------------------------
    In addition to the specific recommendations that were 
outstanding for GCBD, other agency-wide issues are posing 
challenges to the effectiveness of the GCBD programs and 
organization. Specifically, human capital, contracting and 
information technology and organizational structure are 
hampering GCBD. GAO noted in its management report that SBA's 
Inspector General (OIG) ``has included human capital as one of 
the most serious management challenges at SBA since fiscal year 
2001.''\203\ Within GCBD, this has led to the use of Voluntary 
Early Retirement Authority and Voluntary Separation Incentive 
Payments (VERA/VSIP) programs for fiscal years 2012 and 
2014.\204\ In a VERA/VSIP action, the agency pays employees up 
to $25,000 to retire, but then may only replace a fraction of 
the retiring employees to achieve cost savings. GAO notes that 
``SBA officials stated that each program office was consulted 
to determine which positions were eligible for VERA/
VSIP.''\205\ However, in GCBD the VERA/VSIP action led to the 
loss of statutorily mandated positions, such as PCRs, and the 
loss of numerous senior executives. As a consequence, GCBD has 
been operating without a Deputy, PPL lost its director of 
Policy and Research, the BD program lost its head of management 
and technical assistance, and numerous PCRs, BOS, and CMRs 
left. Sixteen months later these positions have not been 
filled. This has led to a backlog of regulations: based on the 
FY13-FY16 NDAAs, SBA still needs to produce seven proposed 
rules, thirteen final rules, and take seventeen other actions. 
Fewer than fifty PCRs are responsible for over $400 billion in 
contracts each year, and the majority of those PCRs carry other 
job assignments. GCBD's ability to fulfill its mission is 
jeopardized, which begs the question of why GCBD leadership 
approved buyouts for crucial positions.
---------------------------------------------------------------------------
    \203\Management Report at 20.
    \204\Id. at 49.
    \205\Id. at 43 footnote 103.
---------------------------------------------------------------------------
    While information technology (IT) remains a challenge for 
SBA generally, within GCBD it has led to a lack of oversight of 
the 8(a) and HUBZone programs. Specifically, GAO cites a 
February 2014 report by the OIG in which SBA failed to follow 
contracting law when purchasing its OneTrack system.\206\ One 
Track was intended to track participants in the 8(a) and 
HUBZone programs, as well as SBA's loan programs, to reduce 
fraud. However, since SBA ``failed to perform market research 
or use a modular contracting strategy intended to reduce 
acquisition risks'' the agency was left with a system that 
still is not deployed and which does not meet the needs of 
GCBD.\207\
---------------------------------------------------------------------------
    \206\Id. at 28-29.
    \207\Id.
---------------------------------------------------------------------------
    In a 2003 report, GAO criticized SBA's organizational 
structure as creating complex overlapping relationships among 
offices that contributed to challenges in delivering services 
to small businesses.\208\ GAO again specified that the 
``working relationships between headquarters and field offices 
. . . differ from reporting relationships, potentially posing 
programmatic challenges.''\209\ A''[d]istrict officials 
work[ing] with program offices at SBA's headquarters to 
implement the agency's programs, but [reporting] to regional 
administrators, who themselves report to the Office of Field 
Operations,'' GAO cited the BOS ``in the district offices [who] 
work with [GCBD] at SBA headquarters to assist small businesses 
with securing government contracts but report to district 
office management.''\210\
---------------------------------------------------------------------------
    \208\Management Report at 58, citing GAO, Major Management 
Challenges and Program Risks: SBA (GAO-03-116) (2003).
    \209\Id.
    \210\Id.
---------------------------------------------------------------------------
    GAO also cited as problem that ``some officials have the 
same duties.''\211\ While not identified as such by GAO, within 
GCBD the delineation between GC and PPL is tenuous, as 
illustrated by SBA's own website. PPL does not have a website, 
but GC does.\212\ The GC website says that it is responsible 
for goaling, and that it plays a major role in federal 
regulations on government contracting.\213\ Indeed, PPL and GC 
have previously been a single organization as recently as 2015.
---------------------------------------------------------------------------
    \211\Id.
    \212\https://www.sba.gov/offices/headquarters/ogc/about-us.
    \213\Id.
---------------------------------------------------------------------------
    Given this myriad of organizational and operational issues, 
section 505 requires that the Comptroller General conduct a 
substantial review of the GCBD and report back with 
recommendations on how to restructure the office to achieve 
greater efficiencies.

6. Section 506

    Section 506 requires that reports SBA provides to the 
Office of Management and Budget regarding data security be 
provided to the Committee as well. This will help the Committee 
perform better oversight of important IT security issues.

7. Section 507

    Surety bonds protect the government and small businesses 
alike by providing a third party guarantee that the prime 
contractor will complete construction, commonly called a 
performance bond, and that the prime contractor will pay its 
suppliers and subcontractors, commonly called a payment bond. 
Under federal law, to bid on most federal construction and 
architectural or engineering projects above $150,000, the prime 
contractor must provide the contracting officer with a surety 
bond, and both the performance and payment bonds become binding 
upon contract award.\214\ Thus, when bonds are issued by a 
surety, the surety vouches for the creditworthiness and 
capacity of the contractor, protects the government against 
uncompleted projects and liens, and protects subcontractors 
against unscrupulous or over extended prime contractors. 
However, when the requirement to bond is waived, it may expose 
the federal government, subcontractors and taxpayers to risk. 
Section 507 requires that the Comptroller General assess 
whether better outcomes are obtained when surety bonds are 
required.
---------------------------------------------------------------------------
    \214\40 USC Sec. 3131(b).
---------------------------------------------------------------------------

                              IV. Hearings

    In the 114th Congress, the Committee held numerous hearings 
that looked at the issues covered by H.R. 4341.
    In the 114th Congress, the Committee held thirteen hearings 
that looked at the issues covered by H.R. 4341. On February 12, 
2015, the Full Committee held a hearing titled ``Contracting 
and the Industrial Base'' that examined surety bond issues. On 
March 7, 2015, the Subcommittee on Contracting and Workforce 
held a hearing titled ``Contracting and the Industrial Base II: 
Bundling, Goaling and the Office of Hearings and Appeals'' that 
looked at the use of subcontracting, and at the role of the 
PCR. On March 19, 2015, the Subcommittee on Contracting and 
Workforce held a hearing on ``Contracting and the Industrial 
Base III: Reverse Auctions, Verification and the SBA's Role in 
Rulemaking,'' that examined the SDVOSB verification process, 
and GCBD organizational issues. On June 4, 2015, the 
Subcommittee on Contracting and Workforce held a hearing titled 
``Sizing Up Small Businesses: SBA's Failure to Implement 
Congressional Direction,'' that looked at size standards and 
GCBD organizational issues. On June 23, 2015, the Subcommittee 
on Oversight and Investigations held a joint hearing with the 
Veterans' Affairs Committee of the House of Representatives 
(HVAC) Subcommittee on Oversight and Investigations called 
``Manipulation and Fraud in Reporting VA Small Business Goals'' 
that looked at the role of the OSDBU and the use of purchase 
cards. On October 27, 2015, at a hearing called ``Maximizing 
Mentoring: How are the SBA and DoD Mentor-Protege Programs 
Serving Small Businesses?'' the Subcommittee on Contracting and 
Workforce examined the DoD and SBA mentor-protege programs. At 
a hearing called ``An Examination of Continued Changes in VA's 
Vets First Verification Process,'' on November 4, 2015, the 
Subcommittee on Contracting and Workforce and the HVAC 
Subcommittee on Investigations, Oversight and Regulations 
examined the VA and SBA verification programs for SDVOSB 
contractors. On November 18, 2015, the Subcommittee on 
Contracting and Workforce held a hearing called ``Continuing 
Challenges for Small Contractors,'' that examined 
subcontracting issues and goaling and transparency challenges. 
The Subcommittee on Agriculture, Energy and Trade held a 
hearing on size standards for agricultural producers on 
November 19, 2015 called ``Improving Size Standards for Small 
Farmers and Ranchers.'' The PCR, OSDBU, CMR, and BOS programs 
were the subject of a hearing of the Subcommittee on 
Contracting and Workforce on December 9, 2015 called 
``Supporting Success: Empowering Small Business Advocates.'' On 
February 3, 2016, the Subcommittee on Contracting and Workforce 
held a hearing called ``SBA Management Review: Office of 
Government Contracts and Business Development'' that looked at 
the management of GCBD. On February 25, 2016, the Subcommittee 
on Contracting and Workforce looked at compliance with 
subcontracting plans in a hearing called ``Hotline Truths: 
Issues Raised by Recent Audits of Defense Contracting.'' 
Finally, on April 5, 2016, the Subcommittee on Contracting and 
Workforce held a hearing on ``Challenges for Small Defense 
Contractors'' that examined compliance challenges and other 
issues.

                       V. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on January 13, 2016 and ordered H.R. 4341 
reported, as amended, to the House by a voice vote at 10:36 
a.m. During the markup, seven amendments were offered. All 
amendments were adopted. Disposition of the amendments is 
addressed below and is based on the order amendments were filed 
with the Clerk of the Committee and not necessarily in the 
order that they were considered at the markup.
    Amendment Number One filed by Ms. Velazquez (D-NY) added 
section 205 to H.R. 4341 and provide the roles and 
responsibilities of the BOS at SBA. The amendment was adopted 
by voice vote at 10:16 a.m.
    Amendment Number Two filed by Ms. Lawrence (D-MI) added 
section 506 to H.R. 4341 and requires that SBA share data on IT 
security with the Committee. The amendment was adopted by voice 
vote at 10:19 a.m.
    Amendment Number Three filed by Mr. Takai (D-HI) allows 
mentors participating in DoD mentor-protege programs to refer 
protege firms to Women's Business Centers for technical 
assistance. The amendment was adopted by voice vote at 10:22 
a.m.
    Amendment Number Four filed by Mr. Chabot (R-OH) made 
technical corrections. The amendment was adopted by voice vote 
at 10:35 a.m.
    Amendment Number Five filed by Ms. Hahn (D-CA) clarified 
that a task order is a contract for purposes of section 15 of 
the Act. The amendment was adopted by voice vote at 10:28 a.m.
    Amendment Number Six filed by Ms. Chu (D-CA) clarified that 
SBA may create additional industry groups and new size 
standards to reflect federal buying patterns. The amendment was 
adopted by voice vote at 10:31 a.m.
    Amendment Number Seven filed by Mr. King (R-IA) required 
that GAO conduct a review on the use of surety bonds on small 
business contracts. After the adoption of a perfecting 
amendment by unanimous consent, the amendment was adopted by 
voice vote at 10:33 a.m.

                          VI. Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report the legislation and amendments 
thereto. There were no recorded votes on H.R. 4341.

              VII. Section-by-Section Analysis of H.R. 527


          SECTION-BY-SECTION ANALYSIS OF H.R. 4341 AS AMENDED

Section 1. Short title

    This Section designates the bill as the ``Defending 
America's Small Contractors Act of 2016''

Section 2. Table of contents

    This section provides the table of contents, and divided 
the bill into five titles.

    TITLE I--IMPROVING TRANSPARENCY AND CLARITY FOR SMALL BUSINESSES

Section 101. Plain language rewrite of requirements for small business 
        procurements

    This section strikes and replaces the current section 
15(a). It makes no substantive changes to the Act, but merely 
restructures the subsection to aid with comprehension.

Section 102. Improving reporting on small business goals

    This section amends section 15(h)(2)(E) of the Act in eight 
paragraphs.
            Paragraph (1)
    Paragraph (1) amends clause (i) of section 15(h)(2)(E) of 
the Act by adding two new subclauses. The new subclause (V) 
requires that when SBA reports on annual prime contract awards 
to small business, it must also report on awards to small 
businesses that were purchased by another entity after the 
initial contract was awarded and as a result of the purchase, 
would no longer be deemed to be small businesses. The new 
subclause (VI) requires that when SBA reports on annual prime 
contract awards to small business, it must also report on 
awards to small businesses that were awarded using a 
procurement method other than a small business set-aside or 
full and open competition.
            Paragraph (2)
    Paragraph (2) amends clause (ii) of section 15(h)(2)(E) of 
the Act by adding two new subclauses. The new subclause (VI) 
requires that when SBA reports on annual prime contract awards 
to SDVOSBs, it must also report on awards to SDVOSBs that were 
purchased by another entity after the initial contract was 
awarded and as a result of the purchase, would no longer be 
deemed to be SDVOSBs. The new subclause (VII) requires that 
when SBA reports on annual prime contract awards to SDVOSBs, it 
must also report on awards to SDVOSBs that were awarded using a 
procurement method other than a SDVOSB set-aside or full and 
open competition.
            Paragraph (3)
    Paragraph (3) amends clause (iii) of section 15(h)(2)(E) of 
the Act by adding two new subclauses. The new subclause (VII) 
requires that when SBA reports on annual prime contract awards 
to HUBZones, it must also report on awards to SDVOSBs that were 
purchased by another entity after the initial contract was 
awarded and as a result of the purchase, would no longer be 
deemed to be HUBZones. The new subclause (VIII) requires that 
when SBA reports on annual prime contract awards to HUBZones, 
it must also report on awards to SDVOSBs that were awarded 
using a procurement method other than a HUBZones set-aside or 
full and open competition.
            Paragraph (4)
    Paragraph (4) amends clause (iv) of section 15(h)(2)(E) of 
the Act by adding two new subclauses. The new subclause (VII) 
requires that when SBA reports on annual prime contract awards 
to SDBs, it must also report on awards to SDBs that were 
purchased by another entity after the initial contract was 
awarded and as a result of the purchase, would no longer be 
deemed to be SDBs. The new subclause (VIII) requires that when 
SBA reports on annual prime contract awards to SDBs, it must 
also report on awards to SDBs that were awarded using a 
procurement method other than a preference for SDBs or full and 
open competition.
            Paragraph (5)
    Paragraph (5) amends clause (v) of section 15(h)(2)(E) of 
the Act by adding two new subclauses. The new subclause (VI) 
requires that when SBA reports on annual prime contract awards 
to Indian Tribes other than Alaska Native Corporations (ANC), 
it must also report on awards to Indian Tribes that were 
purchased by another entity after the initial contract was 
awarded and as a result of the purchase, would no longer be 
deemed to be Indian Tribes. The new subclause (VII) requires 
that when SBA reports on annual prime contract awards to Indian 
Tribes other than ANCs, it must also report on awards to Indian 
Tribes that were awarded using a procurement method other than 
a preference for SDBs or full and open competition.
            Paragraph (6)
    Paragraph (6) amends clause (vi) of section 15(h)(2)(E) of 
the Act by adding two new subclauses. The new subclause (VI) 
requires that when SBA reports on annual prime contract awards 
to Native Hawaiian Organizations (NHO), it must also report on 
awards to NHOs that were purchased by another entity after the 
initial contract was awarded and as a result of the purchase, 
would no longer be deemed to be NHOs. The new subclause (VII) 
requires that when SBA reports on annual prime contract awards 
to NHOs, it must also report on awards to Indian Tribes that 
were awarded using a procurement method other than a preference 
for SDBs or full and open competition.
            Paragraph (7)
    Paragraph (7) amends clause (vii) of section 15(h)(2)(E) of 
the Act by adding two new subclauses. The new subclause (VI) 
requires that when SBA reports on annual prime contract awards 
to ANCs, it must also report on awards to ANCs that were 
purchased by another entity after the initial contract was 
awarded and as a result of the purchase, would no longer be 
deemed to be ANCs. The new subclause (VII) requires that when 
SBA reports on annual prime contract awards to ANCs, it must 
also report on awards to ANCs that were awarded using a 
procurement method other than a preference for SDBs or full and 
open competition.
            Paragraph (8)
    Paragraph (8) amends clause (viii) of section 15(h)(2)(E) 
of the Act by adding two new subclauses. The new subclause (IX) 
requires that when SBA reports on annual prime contract awards 
to WOSBs, it must also report on awards to WOSBs that were 
purchased by another entity after the initial contract was 
awarded and as a result of the purchase, would no longer be 
deemed to be WOSBs. The new subclause (X) requires that when 
SBA reports on annual prime contract awards to WOSBs, it must 
also report on awards to WOSBs that were awarded using a 
procurement method other than a preference for WOSBs or full 
and open competition.

Section 103. Transparency in small business goals

    This section amends section 15(g) of the Act by adding a 
new paragraph (4). The new paragraph directs that the 
Administrator of the SBA may not, when calculating whether the 
federal government met the 23 percent goal for federal prime 
contracting, exclude contracts from the base for any of five 
reasons. Those reasons are based on where the contract as 
awarded, where it was performed, whether another law directs 
that the contract go to another entity, such as Federal Prison 
Industries, or whether funding for the contract is from fees 
collected by the agency rather than appropriations if the 
contract is subject to a bid protest, and finally whether the 
contract is covered by the Federal Acquisition Regulation. This 
will prohibit the current practice of excluding nearly twenty 
percent of federal contract dollars and artificially inflating 
the goals.

Section 104. Uniformity in procurement terminology

            Subsection (a)--In General
    This subsection amends section 15(j)(1) of the Act (15 
U.S.C. 644(j)(1)) to replace the words ``greater than $2,500 
but not greater than $100,000'' with the phrase ``greater than 
the micro-purchase threshold, but not greater than the 
simplified acquisition threshold.'' Given that the dollar 
thresholds applicable to this program adjust every five years 
and so no longer reflect the values provided in the Act, the 
implementing regulations have already adopted the terms micro-
purchase threshold and simplified acquisition threshold. This 
change keeps the statute and the regulations consistent.
            Subsection (b)--Technical Amendment
    This subsection amends section 3(m) of the Small Business 
Act to ensure that the definitions used for the terms prime 
contract, prime contractor, simplified acquisition threshold, 
and micro-purchase threshold are given the same meaning as they 
are in title 41 of the United States Code. Further, it 
clarifies that the term ``total purchase and contracts for 
property and services'' means ``total number and total dollar 
amount of contracts and orders for property and services.''

       TITLE II--CLARIFYING THE ROLES OF SMALL BUSINESS ADVOCATES

Section 201. Scope of review by procurement center representatives

    This section amends section 15(l) of the Act to add a new 
paragraph (9). The new paragraph directs that the SBA 
Administrator may not prevent PCRs from reviewing contracts and 
task orders that are set aside for small business concerns, 
partially set aside for small business concerns, contain a 
small business reserve, or would result in a bundled or 
consolidated contract.

Section 202. Responsibilities of commercial market representatives

    This section amends section 4(h) of the Act.
            Paragraph (1)
    Paragraph (1) retitles the subsection ``Commercial Market 
Representatives.''
            Paragraph (2)
    Paragraph (2) redesignates subparagraphs (A) and (B) as 
clauses (i) and (ii).
            Paragraph (3)
    Paragraph (3) amends the new clause (ii) to state the 
educational requirements must be included in any posting 
seeking to hire a CMR.
            Paragraph (4)
    Paragraph (4) amends the new clause (i) by striking 
``paragraph (2)'' and inserting ``paragraph (1).''
            Paragraph (5)
    Paragraph (5) redesignates paragraphs (1) and (2) as 
subparagraphs (A) and (B).
            Paragraph (6)
    Paragraph (6) strikes ``paragraph (2)'' the new 
subparagraph (A) and inserts ``subparagraph (B).''
            Paragraph (7)
    Paragraph (7) by inserts a new paragraph (1). The new 
paragraph provides that CMR should report to GCBD. It further 
explains that their responsibilities are to advance the use of 
small business concerns on federal subcontractors, including 
helping prime contractors find qualified subcontractors and 
assisting prime contractors with meeting their responsibilities 
under their subcontracting plans. Further, the CMR should help 
small business concerns improve their capacity to perform as 
subcontractors.

Section 203. Duties of the Office of Small and Disadvantaged Business 
        Utilization

    This section amends section 15(k) of the Act.
            Paragraph (1)
    Paragraph (1) strikes the references to section 8, 15 or 44 
in section 15(k) of the Act and replaces it with section 8, 15, 
31, 36, or 44. This allows the OSDBU to provide assistance to 
SDVOSBs and HUBZones.
            Paragraph (2)
    Paragraph (2) strikes references to section 8 or 15 in 
section 15(k) of the Act and replaces it with section 8, 15, 
31, 36, or 44. This allows the OSDBU to provide assistance to 
SDVOSBs and HUBZones and to provide assistance with bundling 
and consolidation.
            Paragraph (3)
    Paragraph (3) strikes the reference to section 8 paragraph 
(10) of section 15(k) of the Act and replaces it with section 
8, 15, 31, 36, or 44. This allows the OSDBU to provide 
assistance to small businesses, SDVOSBs and HUBZones and to 
provide assistance with bundling and consolidation.
            Paragraph (4)
    Paragraph (4) redesignates paragraphs (15), (16), and (17) 
as paragraphs (16), (17), and (18).
            Paragraph (5)
    Paragraph (5) inserts as new paragraph (15) that requires 
the OSDBU to review purchases exceeding the micro-purchase 
threshold but below the simplified acquisition threshold made 
using purchase cards to ensure that the purchases follow the 
laws related to small businesses and that they have been 
entered into the Federal Procurement Data System.
            Paragraph (6)
    Paragraph (6) amends the new paragraph (17) to requires 
that the OSDBU annually report on any violations of the Act by 
their agency.

Section 204. Improving contractor compliance

            Subsection (a)--Requirements for the Office of Small and 
                    Disadvantaged Business Utilization
    Subsection (a) amends section 15(k) of the Act by 
redesignating paragraphs (16), (17), and 7 (18) as paragraphs 
(17), (18), and (19). It then adds a new paragraph (16) that 
requires that the OSDBU should assist small businesses 
receiving federal contracts or subcontracts in finding 
resources for education and training on compliance with 
contracting regulations.
            Subsection (b)--Requirements Under the Mentor-Protege 
                    Program of the Department of Defense
    Subsection (B) amends section 831(e)(1) of the FY 1991 NDAA 
by adding a new subparagraph (D). The new subparagraph requires 
that mentors in approved mentor-protege agreements shall 
provide compliance assistance to proteges.
            Subsection (c)--Resources for Small Business Concerns
    This subsection amends section 15 of the Act by adding a 
new subsection (t), titled ``Post-Award Compliance 
Assistance.'' The new subsection requires that SBA provide 
small business development centers and Procurement Technical 
Assistance Centers a list of resources for small businesses 
seeking education and assistance with complying with federal 
procurement regulations. Further, SBA is required to put the 
list on its website.
            Subsection (d)--Requirements for Procurement Center 
                    Represenatives
    This subsection amends section 15(l)(2) of the Act by 
adding a new subparagraph (I) to requires that PCRs assist 
small business concerns with finding resources for education 
and training on compliance with federal contracting 
regulations.
            Subsection (e)--Requirements under the the Mentor-Protege 
                    Program of the Department of the Small Business 
                    Administration
    This subsection amends section 45(b)(3) of the Act by 
adding a new subparagraph (K) the new subparagraph requires 
that a mentor protege agreement should address the extent to 
which the mentor will provide the protege with assistance 
complying with federal contracting regulations.

Section 205. Responsibilities of Business Opportunity Specialists

    This section amends section 4(g) of the Act.
            Paragraph (1)
    This paragraph changes the heading for the subsection to 
``Business Opportunity Specialists.''
            Paragraph (2)
    This paragraph makes technical amendments.
            Paragraph (3)
    This paragraph amends clause (ii) to require that any job 
advertisement for BOSs must include the educational 
requirements.
            Paragraph (4)--Paragraph (6)
    These paragraphs make technical amendments.
            Paragraph (7)
    This paragraph inserts a new paragraph (1) that enumerates 
the duties of the BOS. First, it requires that BOSs report to 
GCBD, not to field operations. Second, it makes it clear that 
the primary duties of the BOS shall be to implement the 8(a) 
and mentor-protege programs. In doing so, the BOS is required 
to provide eligible firms with counseling, referrals, 
identifying why firms succeed or fail, and assessing the 
strengths and weaknesses of the firms. Further, the BOS should 
monitor and document the firm's compliance with theprogram, and 
explain the contracting programs of the Act to participant. The 
BOS may also assist with post-award compliance assistance, and 
shall represent the SBA's interests in negotiations regarding 
8(a) contracts.

       TITLE III--STRENGTHENING OPPORTUNITIES FOR COMPETITION IN 
                             SUBCONTRACTING

Section 301. Good faith in subcontracting

            Subsection (a)--Transparency in Subcontracting Goals
    This subsection amends section 8(d)(9) of the Act to 
provide that failure to submit a required subcontracting report 
may be a material breach of the contract.
            Subsection (b)--Authority of the Administrator of the Small 
                    Business Administration
    This subsection amends section 8(d)(11) of the Act to state 
that reviews by PCRs and CMRs of subcontracting plans are not 
advisory in nature.
            Subsection (c)--Review and Acceptance of Subcontracting 
                    Plans
    This subsection adds a new subsection 8(d)(17) to the Act 
that provides authority for a PCR or CMR to assess whether a 
proposed subcontracting plan provides the maximum practicable 
opportunity for small business concerns to participate. If the 
PCR or CMR believes that the plan does not provide sufficient 
opportunities for small business participation, the PCR or CMR 
is permitted to delay acceptance of the subcontracting plan for 
up to 30 days. However, if the PCR or CMR fails to reach an 
agreement with the contracting agency's personnel on a plan to 
provide the maximum practicable opportunity; this subsection 
provides that the disagreement shall be decided by the head of 
the contracting agency.
            Subsection (d)--Good Faith Compliance
    This subsection directs the SBA to issue rules explaining 
what it means to fail to make a good faith effort to comply 
with a subcontracting plan. It directs that failure to submit a 
report shall be considered failure to make a good faith effort.

Section 302. Pilot program to provide opportunities for qualified 
        subcontractors to obtain past performance ratings

    This section amends section 8(d) of the Act to add a new 
paragraph (18). The new paragraph establishes a three year 
pilot program by which small first tier subcontractors may 
obtain a past performance rating. The pilot requires that the 
subcontractor make the application to SBA, and that SBA 
coordinate the response of the contracting agency and the prime 
contractor. Any dispute between the entities shall result in a 
neutral past performance rating. The GAO is also directed to 
review the success of the pilot and offer recommendations on 
how it could be improved.

                   TITLE IV--MENTOR-PROTEGE PROGRAMS

Section 401. Amendments to the Mentor-Protege Program of the Department 
        of Defense

    This section amends section 831 of the FY 1991 NDAA.
            Paragraph (1)
    This paragraph amends paragraph (1) of section 831 to 
require that DoD ascertain that any potential protege not have 
been found affiliated with the proposed mentor. It further adds 
a new paragraph (2) that requires that if there is any reason 
to believe that there may be affiliation between the potential 
mentor and protege, that DoD refer the case to SBA's OHA.
            Paragraph (2)
    This paragraph removes the definition of behaviors that 
could lead to a finding of affiliation and replaces it with a 
reference to the SBA's affiliation regulations.
            Paragraph (3)
    Paragraph (3) clarifies that mentors may refer protege 
firms to Women's Business Centers for technical assistance.

Section 402. Improving cooperation between the mentor-protege programs 
        of the Small Business Administration and the Department of 
        Defense

    This section amends section 45(b) of the Act to remove the 
exemption previously provided to DoD. This will require that 
DoD coordinate its mentor-protege program with the SBA's 
government wide program.

                         TITLE V--MISCELLANEOUS

Section 501. Improving education on small business regulations

    This section adds a new subsection (u) to section 15 of the 
Act. The new subsection requires that the SBA annually report 
to the Federal Acquisition Institute, Defense Acquisition 
University, small business development centers, Procurement 
Technical Assistance Centers, and the acquisition workforce 
trading coordinator in each agency on regulations promulgated 
during the prior year that affect small business contracting. 
Further, the SBA must provide any training materials it has 
developed.

Section 502. Protecting task order competition

    This section makes permanent the authority in section 
4106(f) of title 41, United States Code, that allows 
contractors to protest the award of task orders above $10 
million. Currently, the authority is set to expire on September 
30, 2016.

Section 503. Improvements to size standards for small agricultural 
        producers

            Subsection (a)--Amendment to definition of agricultural 
                    enterprises
    This subsection amends section 18(b) of the Act to 
uniformly use the term ``small business concerns'' rather than 
``small businesses.''
            Subsection (b)--Treatment of small farms
    This subsection amends section 3(a) to remove the statutory 
cap of $750,000 currently applied to small agricultural 
producers.
            Subsection (c)--Updated size standards
    This subsection directs SBA to issue new size standards for 
agricultural producers within 18 months. It further clarifies 
that these size standards shall be reviewed and updated every 
five years.

Section 504. Uniformity in service-disabled veteran definitions

            Subsection (a)--Small business definition of small business 
                    concerns consolidated
    This subsection amends the definition of SDVOSB found in 
section 3(q) of the Act. It changes it to clarify that 
ownership by an employee stock ownership plan shall not 
automatically disqualify a firm from the program. It further 
adds a provision allowing that the surviving spouse of a 
completely disabled veteran may continue the program for ten 
years or until the surviving spouse remarries, or relinquishes 
ownership.
            Subsection (b)--Veterans Affairs definition of small 
                    business concern consolidated
    This subsection amends section 8127 of title 38, United 
States Code. It replaces the current definition of SDVOSB and 
VOSB with the definitions found in section 3 of the Act.
            Subsection (c)--Technical correction
    This subsection corrects disparities in how the term SDVOSB 
is used in title 38.
            Subsection (d)--Regulations relating to database of the 
                    Secretary of Veterans Affairs
    This subsection requires that VA use the regulations 
promulgated by SBA to determine whether a firm is owned or 
controlled by veterans or service-disabled veterans. It allows 
VA to use its own regulations to determine whether individuals 
are veterans or service-disabled veterans.
            Subsection (e)--Delayed effective date
    This subsection delays the effect of these changes until 
the regulations are promulgated.
            Subsection (f)--Appeals of inclusion in the database
    This subsection allows SBA's OHA to hear appeals of a 
firm's eligibility as a SDVOSB or VOSB. It also requires VA to 
reimburse SBA for hearing these appeals.

Section 505. GAO review of the Office of Government Contracting and 
        Business Development of the Small Business Administration

    This section requires that GAO evaluate the operation of 
the GCBD Office at SBA. It further asks GAO to recommend 
improvements to the operations of this office.

Section 506. Required reports pertaining to capital planning and 
        investment control

    This section requires that SBA provide the Committees of 
jurisdiction with copies of reports relating to IT security.

Section 507. GAO review of surety bonds

    This section requires GAO to evaluate small business 
contracts to assess whether the use of a surety bond increases 
the success of the contract, and whether waivers of surety 
bonds threaten performance.

            VIII. Congressional Budget Office Cost Estimate

    At the time H.R. 4341 was reported to the House, the 
Congressional Budget Office had not provided a cost estimate.

                         IX. Unfunded Mandates

    H.R. 4341 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act, Pub. 
L. No. 104-4, and would impose no costs on state, local or 
tribal governments.

  X. New Budget Authority, Entitlement Authority and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House, the Committee provides the following opinion and 
estimate with respect to new budget authority, entitlement 
authority and tax expenditures. While the Committee has not 
received an estimate of new budget authority contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to Sec. 402 of the Congressional Budget 
Act of 1974, the Committee does not believe that any additional 
appropriation will be required due to the enactment of H.R. 
4341. H.R. 4341 does not direct new spending, but instead 
addresses the opportunity to increase competition for federal 
contractors. Increased competition may save taxpayer funds.

                         XI. Oversight Findings

    In accordance with clause (2)(b)(1) of rule X of the Rules 
of the House, the oversight findings and recommendations of the 
Committee on Small Business with respect to the subject matter 
contained in H.R. 4341 are incorporated into the descriptive 
portions of this report.

               XII. Statement of Constitutional Authority

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
authority for this legislation in Art. I, Sec. 8, cls. 1, 3, 
and 18 and Art. IV, Sec. 3, cl.2 of the Constitution of the 
United States.

                 XIII. Congressional Accountability Act

    H.R. 4341 does not relate to the terms and conditions of 
employment or access to public services or accommodations 
within the meaning of Sec. 102(b)(3) of Pub. L. No. 104-1.

             XIV. Federal Advisory Committee Act Statement

    H.R. 4341 does not establish or authorize the establishment 
of any new advisory committees as that term is defined in the 
Federal Advisory Committee Act, 5 U.S.C. App. 2.

                      XV. Statement of No Earmarks

    Pursuant to clause 9 of rule XXI, H.R. 4341 does not 
contain any congressional earmarks, limited tax benefits or 
limited tariff benefits as defined in subsections (d), (e) or 
(f) of clause 9 of rule XXI of the Rules of the House.

                 XVI. Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
          H.R. 4341 includes a number of provisions designed to 
        improve the competitive viability of small businesses 
        as federal prime and subcontractors and to improve 
        agency compliance with the Small Business Act.

      XVII. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                           SMALL BUSINESS ACT




           *       *       *       *       *       *       *
SEC. 3. DEFINITIONS.

  (a) Small Business Concerns.--
          (1) In general.--For the purposes of this Act, a 
        small-business concern, including but not limited to 
        enterprises that are engaged in the business of 
        production of food and fiber, ranching and raising of 
        livestock, aquaculture, and all other farming and 
        agricultural related industries, shall be deemed to be 
        one which is independently owned and operated and which 
        is not dominant in its field of [operation: Provided, 
        That notwithstanding any other provision of law, an 
        agricultural enterprise shall be deemed to be a small 
        business concern if it (including its affiliates) has 
        annual receipts not in excess of $750,000.] operation.
          (2) Establishment of size standards.--
                  (A) In general.--In addition to the criteria 
                specified in paragraph (1), the Administrator 
                may specify detailed definitions or standards 
                by which a business concern may be determined 
                to be a small business concern for the purposes 
                of this Act or any other Act.
                  (B) Additional criteria.--The standards 
                described in paragraph (1) may utilize number 
                of employees, dollar volume of business, net 
                worth, net income, a combination thereof, or 
                other appropriate factors.
                  (C) Requirements.--Unless specifically 
                authorized by statute, no Federal department or 
                agency may prescribe a size standard for 
                categorizing a business concern as a small 
                business concern, unless such proposed size 
                standard--
                          (i) is proposed after an opportunity 
                        for public notice and comment;
                          (ii) provides for determining--
                                  (I) the size of a 
                                manufacturing concern as 
                                measured by the manufacturing 
                                concern's average employment 
                                based upon employment during 
                                each of the manufacturing 
                                concern's pay periods for the 
                                preceding 12 months;
                                  (II) the size of a business 
                                concern providing services on 
                                the basis of the annual average 
                                gross receipts of the business 
                                concern over a period of not 
                                less than 3 years;
                                  (III) the size of other 
                                business concerns on the basis 
                                of data over a period of not 
                                less than 3 years; or
                                  (IV) other appropriate 
                                factors; and
                          (iii) is approved by the 
                        Administrator.
          (3) Variation by industry and consideration of other 
        factors.--When establishing or approving any size 
        standard pursuant to paragraph (2), the Administrator 
        shall ensure that the size standard varies from 
        industry to industry to the extent necessary to reflect 
        the differing characteristics of the various industries 
        and consider other factors deemed to be relevant by the 
        Administrator.
          (4) Exclusion of certain security expenses from 
        consideration for purpose of small business size 
        standards.--
                  (A) Determination required.--Not later than 
                30 days after the date of enactment of this 
                paragraph, the Administrator shall review the 
                application of size standards established 
                pursuant to paragraph (2) to small business 
                concerns that are performing contracts in 
                qualified areas and determine whether it would 
                be fair and appropriate to exclude from 
                consideration in the average annual gross 
                receipts of such small business concerns any 
                payments made to such small business concerns 
                by Federal agencies to reimburse such small 
                business concerns for the cost of subcontracts 
                entered for the sole purpose of providing 
                security services in a qualified area.
                  (B) Action required.--Not later than 60 days 
                after the date of enactment of this paragraph, 
                the Administrator shall either--
                          (i) initiate an adjustment to the 
                        size standards, as described in 
                        subparagraph (A), if the Administrator 
                        determines that such an adjustment 
                        would be fair and appropriate; or
                          (ii) provide a report to the 
                        Committee on Small Business and 
                        Entrepreneurship of the Senate and the 
                        Committee on Small Business of the 
                        House of Representatives explaining in 
                        detail the basis for the determination 
                        by the Administrator that such an 
                        adjustment would not be fair and 
                        appropriate.
                  (C) Qualified areas.--In this paragraph, the 
                term ``qualified area'' means--
                          (i) Iraq,
                          (ii) Afghanistan, and
                          (iii) any foreign country which 
                        included a combat zone, as that term is 
                        defined in section 112(c)(2) of the 
                        Internal Revenue Code of 1986, at the 
                        time of performance of the relevant 
                        Federal contract or subcontract.
          (5) Alternative Size Standard.--
                  (A) In general.--The Administrator shall 
                establish an alternative size standard for 
                applicants for business loans under section 
                7(a) and applicants for development company 
                loans under title V of the Small Business 
                Investment Act of 1958 (15 U.S.C. 695 et seq.), 
                that uses maximum tangible net worth and 
                average net income as an alternative to the use 
                of industry standards.
                  (B) Interim rule.--Until the date on which 
                the alternative size standard established under 
                subparagraph (A) is in effect, an applicant for 
                a business loan under section 7(a) or an 
                applicant for a development company loan under 
                title V of the Small Business Investment Act of 
                1958 may be eligible for such a loan if--
                          (i) the maximum tangible net worth of 
                        the applicant is not more than 
                        $15,000,000; and
                          (ii) the average net income after 
                        Federal income taxes (excluding any 
                        carry-over losses) of the applicant for 
                        the 2 full fiscal years before the date 
                        of the application is not more than 
                        $5,000,000.
          (6) Proposed rulemaking.--In conducting rulemaking to 
        revise, modify or establish size standards pursuant to 
        this section, the Administrator shall consider, and 
        address, and make publicly available as part of the 
        notice of proposed rulemaking and notice of final rule 
        each of the following:
                  (A) a detailed description of the industry 
                for which the new size standard is proposed;
                  (B) an analysis of the competitive 
                environment for that industry;
                  (C) the approach the Administrator used to 
                develop the proposed standard including the 
                source of all data used to develop the proposed 
                rule making; and
                  (D) the anticipated effect of the proposed 
                rulemaking on the industry, including the 
                number of concerns not currently considered 
                small that would be considered small under the 
                proposed rule making and the number of concerns 
                currently considered small that would be deemed 
                other than small under the proposed rulemaking.
          (7) Common size standards.--In carrying out this 
        subsection, the Administrator may establish or approve 
        a single size standard for a grouping of 4-digit North 
        American Industry Classification System codes only if 
        the Administrator makes publicly available, not later 
        than the date on which such size standard is 
        established or approved, a justification demonstrating 
        that such size standard is appropriate for each 
        individual industry classification included in the 
        grouping.
          (8) Number of size standards.--The Administrator 
        shall not limit the number of size standards 
        established pursuant to paragraph (2), and shall assign 
        the appropriate size standard to each North American 
        Industry Classification System Code.
          (9) Petitions for reconsideration of size 
        standards.--
                  (A) In general.--A person may file a petition 
                for reconsideration with the Office of Hearings 
                and Appeals (as established under section 5(i)) 
                of a size standard revised, modified, or 
                established by the Administrator pursuant to 
                this subsection.
                  (B) Time limit.--A person filing a petition 
                for reconsideration described in subparagraph 
                (A) shall file such petition not later than 30 
                days after the publication in the Federal 
                Register of the notice of final rule to revise, 
                modify, or establish size standards described 
                in paragraph (6).
                  (C) Process for agency review.--The Office of 
                Hearings and Appeals shall use the same process 
                it uses to decide challenges to the size of a 
                small business concern to decide a petition for 
                review pursuant to this paragraph.
                  (D) Judicial review.--The publication of a 
                final rule in the Federal Register described in 
                subparagraph (B) shall be considered final 
                agency action for purposes of seeking judicial 
                review. Filing a petition for reconsideration 
                under subparagraph (A) shall not be a condition 
                precedent to judicial review of any such size 
                standard.
  (b) For purposes of this Act, any reference to an agency or 
department of the United States, and the term ``Federal 
agency,'' shall have the meaning given the term ``agency'' by 
section 551(1) of title 5, United States Code, but does not 
include the United States Postal Service or the General 
Accounting Office.
  (c)(1) For purposes of this Act, a qualified employee trust 
shall be eligible for any loan guarantee under section 7(a) 
with respect to a small business concern on the same basis as 
if such trust were the same legal entity as such concern.
  (2) For purposes of this Act, the term ``qualified employee 
trust'' means, with respect to a small business concern, a 
trust--
          (A) which forms part of an employee stock ownership 
        plan (as defined in section 4975(e)(7) of the Internal 
        Revenue Code of 1954)--
                  (i) which is maintained by such concern, and
                  (ii) which provides that each participant in 
                the plan is entitle to direct the plan as to 
                the manner in which voting rights under 
                qualifying employer securities (as defined in 
                section 4975(e)(8) of such Code) which are 
                allocated to the account of such participant 
                are to be exercised with respect to a corporate 
                matter which (by law or charter) must be 
                decided by a majority vote of outstanding 
                common shares voted; and
          (B) in the case of any loan guarantee under section 
        7(a), the trustee of which enters into an agreement 
        with the Administrator of which enters into an 
        agreement with the Administrator which is binding on 
        the trust and no such small business concern and which 
        provides that--
                  (i) the loan guaranteed under section 7(a) 
                shall be used solely for the purchase of 
                qualifying employer securities of such concern.
                  (ii) all funds acquired by the concern in 
                such purchase shall be used by such concern 
                solely for the purposes for which such loan was 
                guaranteed,
                  (iii) such concern will provide such funds as 
                may be necessary for the timely repayment of 
                such loan, and the property of such concern 
                shall be available as security for repayment of 
                such loan, and
                  (iv) all qualifying employer securities 
                acquired by such trust in such purchase shall 
                be allocated to the accounts of participants in 
                such plan who are entitled to share in such 
                allocation, and each participant has a 
                nonforfeitable right, not later than the date 
                such loan is repaid, to all such qualifying 
                employer securities which are so allocated to 
                the participant's account.
  (3) Under regulations which may be prescribed by the 
Administrator, a trust may be treated as a qualified employee 
trust with respect to a small business concern if--
          (A) the trust is maintained by an employee 
        organization which represents at least 51 percent of 
        the employee of such concern, and
          (B) such concern maintains a plan--
                  (i) which is an employee benefit plan which 
                is designed to invest primarily in qualifying 
                employer securities (as defined in section 
                4975(e)(8) of the Internal Revenue Code of 
                1954).
                  (ii) which provides that each participant in 
                the plan is entitled to direct the plan as to 
                the manner in which voting rights under 
                qualifying employer securities which are 
                allocated to the account of such participant 
                are to be exercised with respect to a corporate 
                matter which (by law or charter) must be 
                decided by a majority vote of the outstanding 
                common shares voted,
                  (iii) which provides that each participant 
                who is entitled to distribution from the plan 
                has a right, in the case of qualifying employer 
                securities which are not readily tradable on an 
                established market, to require that the concern 
                repurchase such securities under a fair 
                valuation formula, and
                  (iv) which meets such other requirements 
                (similar to requirements applicable to employee 
                ownership plans as defined in section 
                4975(e)(7) of the Internal Revenue Code of 
                1954) as the Administrator may prescribe, and
          (C) in the case of a loan guarantee under section 
        7(a), such organization enters into an agreement with 
        the Administration which is described in paragraph 
        (2)(B).
  (d) For purposes of section 7 of this Act, the term 
``qualified Indian tribe'' means an Indian tribe as defined in 
section 4(a) of the Indian Self-Determination and Education 
Assistance Act, which owns and controls 100 per centum of a 
small business concern.
  (e) For purposes of section 7 of this Act, the term ``public 
or private organization for the handicapped'' means one--
          (1) which is organized under the laws of the United 
        States or of any State, operated in the interest of 
        handicapped individuals, the net income of which does 
        not insure in whole or in part to the benefit of any 
        shareholder or other individual;
          (2) which complies with any applicable occupational 
        health and safety standard prescribed by the Secretary 
        of Labor; and
          (3) which, in the production of commodities and in 
        the provision of services during any fiscal year in 
        which it received financial assistance under this 
        subsection, employs handicapped individuals for not 
        less than 75 per centum of the man-hours required for 
        the production or provision of the commodities or 
        services.
  (f) For purposes of section 7 of this Act, the term 
``handicapped individual'' means an individual--
          (1) who has a physical, mental, or emotional 
        impairment, defect, ailment, disease, or disability of 
        a permanent nature which in any way limits the 
        selection of any type of employment for which the 
        person would otherwise be qualified or qualifiable; or
          (2) who is a service-disabled veteran.
  (g) For purposes of section 7 of this Act, the term ``energy 
measures'' includes--
          (1) solar thermal energy equipment which is either of 
        the active type based upon mechanically forced energy 
        transfer or of the passive type based on convective, 
        conductive, or radiant energy transfer or some 
        combination equipment;
          (2) photovoltaic cells and related equipment;
          (3) a product or service the primary purpose of which 
        is conservation of energy through devices or techniques 
        which increase the energy through devices or techniques 
        which increase the energy efficiency of existing 
        equipment, methods of operation, or systems which use 
        fossil fuels, and which is on the Energy Conservation 
        Measures list of the Secretary of Energy or which the 
        Administrator determines to be consistent with the 
        intent of this subsection;
          (4) equipment the primary purpose of which is 
        production of energy from wood, biological waste, 
        grain, or other biomass source of energy;
          (5) equipment the primary purpose of which is 
        industrial cogeneration of energy, district heating, or 
        production of energy from industrial waste;
          (6) hydroelectric power equipment;
          (7) wind energy conversion equipment; and
          (8) engineering, architectural, consulting, or other 
        professional services which are necessary or 
        appropriate to aid citizens in using any of the 
        measures described in paragraph (1) through (7).
  (h) For purposes of this Act, the term ``credit elsewhere'' 
means the availability of credit from non-Federal sources on 
reasonable terms and conditions taking into consideration the 
prevailing rates and terms in the community in or near where 
the concern transacts business, or the homeowner resides, for 
similar purposes and periods of time.
  (i) For purposes of section 7 of this Act, the term 
``homeowners'' includes owners and lessees of residential 
property and also includes personal property.
  (j) For the purposes of this Act, the term ``small 
agricultural cooperative'' means an association (corporate or 
otherwise) acting pursuant to the provisions of the 
Agricultural Marketing Act (12 U.S.C. 1141j), whose size does 
not exceed the size standard established by the Administration 
for other similar agricultural small business concerns. In 
determining such size, the Administration shall regard the 
association as a business concern and shall not include the 
income or employees of any member shareholder of such 
cooperative.
  (k)(1) For the purposes of this Act, the term ``disaster'' 
means a sudden event which causes severe damage including, but 
not limited to, floods, hurricanes, tornadoes, earthquakes, 
fires, explosions, volcanoes, windstorms, landslides or 
mudslides, tidal waves, commercial fishery failures or fishery 
resource disasters (as determined by the Secretary of Commerce 
under section 308(b) of the Interjurisdictional Fisheries Act 
of 1986), ocean conditions resulting in the closure of 
customary fishing waters, riots, civil disorders or other 
catastrophes, except it does not include economic dislocations.
  (2) For purposes of section 7(b)(2), the term ``disaster'' 
includes--
          (A) drought;
          (B) below average water levels in the Great Lakes, or 
        on any body of water in the United States that supports 
        commerce by small business concerns; and
          (C) ice storms and blizzards.
  (l) For purposes of this Act--
          (1) the term ``computer crime'' means''--
                  (A) any crime committed against a small 
                business concern by means of the use of a 
                computer; and
                  (B) any crime involving the illegal use of, 
                or tampering with, a computer owned or utilized 
                by a small business concern.
  [(m) For purposes of this Act, the term ``simplified 
acquisition threshold'' has the meaning given such term in 
section 4(11) of the Office of Federal Procurement Policy Act 
(41 U.S.C. 403(11)).]
  (m) Definitions Pertaining to Contracting.--In this Act:
          (1) Prime contract.--The term ``prime contract'' has 
        the meaning given such term in section 8701(4) of title 
        41, United States Code.
          (2) Prime contractor.--The term ``prime contractor'' 
        has the meaning given such term in section 8701(5) of 
        title 41, United States Code.
          (3) Simplified acquisition threshold.--The term 
        ``simplified acquisition threshold'' has the meaning 
        given such term in section 134 of title 41, United 
        States Code.
          (4) Micro-purchase threshold.--The term ``micro-
        purchase threshold'' has the meaning given such term in 
        section 1902(a) of title 41, United States Code.
          (5) Total purchase and contracts for property and 
        services.--The term ``total purchases and contracts for 
        property and services'' shall mean total number and 
        total dollar amount of contracts and orders for 
        property and services.
  (n) For the purposes of this Act, a small business concern is 
a small business concern owned and controlled by women if--
          (1) at least 51 percent of small business concern is 
        owned by one or more women or, in the case of any 
        publicly owned business, at least 51 percent of the 
        stock of which is owned by one or more women; and
          (2) the management and daily business operations of 
        the business are controlled by one or more women.
  (o) Definitions of Bundling of Contract Requirements and 
Related Terms.--In this Act:
          (1) Bundled contract.--The term ``bundled contract'' 
        means a contract that is entered into to meet 
        requirements that are consolidated in a bundling of 
        contract requirements.
          (2) Bundling of contract requirements.--The term 
        ``bundling of contract requirements'' means 
        consolidating 2 or more procurement requirements for 
        goods or services previously provided or performed 
        under separate smaller contracts into a solicitation of 
        offers for a single contract that is likely to be 
        unsuitable for award to a small-business concern due 
        to--
                  (A) the diversity, size, or specialized 
                nature of the elements of the performance 
                specified;
                  (B) the aggregate dollar value of the 
                anticipated award;
                  (C) the geographical dispersion of the 
                contract performance sites; or
                  (D) any combination of the factors described 
                in subparagraphs (A), (B), and (C).
          (3) Separate smaller contract.--The term ``separate 
        smaller contract'', with respect to a bundling of 
        contract requirements, means a contract that has been 
        performed by 1 or more small business concerns or was 
        suitable for award to 1 or more small business 
        concerns.
  (p) Definitions Relating to HUBZones.--In this Act:
          (1) Historically underutilized business zone.--The 
        term ``historically underutilized business zone'' means 
        any area located within 1 or more--
                  (A) qualified census tracts;
                  (B) qualified nonmetropolitan counties;
                  (C) lands within the external boundaries of 
                an Indian reservation;
                  (D) redesignated areas;
                  (E) base closure areas; or
                  (F) qualified disaster areas.
          (2) HUBZone.--The term ``HUBZone'' means a 
        historically underutilized business zone.
          (3) Hubzone small business concern.--The term 
        ``HUBZone small business concern'' means--
                  (A) a small business concern that is at least 
                51 percent owned and controlled by United 
                States citizens;
                  (B) a small business concern that is--
                          (i) an Alaska Native Corporation 
                        owned and controlled by Natives (as 
                        determined pursuant to section 29(e)(1) 
                        of the Alaska Native Claims Settlement 
                        Act (43 U.S.C. 1626(e)(1))); or
                          (ii) a direct or indirect subsidiary 
                        corporation, joint venture, or 
                        partnership of an Alaska Native 
                        Corporation qualifying pursuant to 
                        section 29(e)(1) of the Alaska Native 
                        Claims Settlement Act (43 U.S.C. 
                        1626(e)(1)), if that subsidiary, joint 
                        venture, or partnership is owned and 
                        controlled by Natives (as determined 
                        pursuant to section 29(e)(2)) of the 
                        Alaska Native Claims Settlement Act (43 
                        U.S.C. 1626(e)(2)));
                  (C) a small business concern--
                          (i) that is wholly owned by one or 
                        more Indian tribal governments, or by a 
                        corporation that is wholly owned by one 
                        or more Indian tribal governments; or
                          (ii) that is owned in part by one or 
                        more Indian tribal governments, or by a 
                        corporation that is wholly owned by one 
                        or more Indian tribal governments, if 
                        all other owners are either United 
                        States citizens or small business 
                        concerns;
                  (D) a small business concern--
                          (i) that is wholly owned by one or 
                        more Native Hawaiian Organizations (as 
                        defined in section 8(a)(15)), or by a 
                        corporation that is wholly owned by one 
                        or more Native Hawaiian Organizations; 
                        or
                          (ii) that is owned in part by one or 
                        more Native Hawaiian Organizations, or 
                        by a corporation that is wholly owned 
                        by one or more Native Hawaiian 
                        Organizations, if all other owners are 
                        either United States citizens or small 
                        business concerns;
                  (E) a small business concern that is--
                          (i) wholly owned by a community 
                        development corporation that has 
                        received financial assistance under 
                        part 1 of subchapter A of the Community 
                        Economic Development Act of 1981 (42 
                        U.S.C. 9805 et seq.); or
                          (ii) owned in part by one or more 
                        community development corporations, if 
                        all other owners are either United 
                        States citizens or small business 
                        concerns; or
                  (F) a small business concern that is--
                          (i) a small agricultural cooperative 
                        organized or incorporated in the United 
                        States;
                          (ii) wholly owned by 1 or more small 
                        agricultural cooperatives organized or 
                        incorporated in the United States; or
                          (iii) owned in part by 1 or more 
                        small agricultural cooperatives 
                        organized or incorporated in the United 
                        States, if all owners are small 
                        business concerns or United States 
                        citizens.
          (4) Qualified areas.--
                  (A) Qualified census tract.--The term 
                ``qualified census tract'' has the meaning 
                given that term in section 42(d)(5)(C)(ii) of 
                the Internal Revenue Code of 1986.
                  (B) Qualified nonmetropolitan county.--The 
                term ``qualified nonmetropolitan county'' means 
                any county--
                          (i) that was not located in a 
                        metropolitan statistical area (as 
                        defined in section 143(k)(2)(B) of the 
                        Internal Revenue Code of 1986) at the 
                        time of the most recent census taken 
                        for purposes of selecting qualified 
                        census tracts under section 
                        42(d)(5)(C)(ii) of the Internal Revenue 
                        Code of 1986; and
                          (ii) in which--
                                  (I) the median household 
                                income is less than 80 percent 
                                of the nonmetropolitan State 
                                median household income, based 
                                on the most recent data 
                                available from the Bureau of 
                                the Census of the Department of 
                                Commerce;
                                  (II) the unemployment rate is 
                                not less than 140 percent of 
                                the average unemployment rate 
                                for the United States or for 
                                the State in which such county 
                                is located, whichever is less, 
                                based on the most recent data 
                                available from the Secretary of 
                                Labor; or
                                  (III) there is located a 
                                difficult development area, as 
                                designated by the Secretary of 
                                Housing and Urban Development 
                                in accordance with section 
                                42(d)(5)(C)(iii) of the 
                                Internal Revenue Code of 1986, 
                                within Alaska, Hawaii, or any 
                                territory or possession of the 
                                United States outside the 48 
                                contiguous States.
                  (C) Redesignated area.--The term 
                ``redesignated area'' means any census tract 
                that ceases to be qualified under subparagraph 
                (A) and any nonmetropolitan county that ceases 
                to be qualified under subparagraph (B), except 
                that a census tract or a nonmetropolitan county 
                may be a ``redesignated area'' only until the 
                later of--
                          (i) the date on which the Census 
                        Bureau publicly releases the first 
                        results from the 2010 decennial census; 
                        or
                          (ii) 3 years after the date on which 
                        the census tract or nonmetropolitan 
                        county ceased to be so qualified.
                  (D) Base closure area.--
                          (i) In general.--Subject to clause 
                        (ii), the term ``base closure area'' 
                        means--
                                  (I) lands within the external 
                                boundaries of a military 
                                installation that were closed 
                                through a privatization process 
                                under the authority of--
                                          (aa) the Defense Base 
                                        Closure and Realignment 
                                        Act of 1990 (part A of 
                                        title XXIX of division 
                                        B of Public Law 101-
                                        510; 10 U.S.C. 2687 
                                        note);
                                          (bb) title II of the 
                                        Defense Authorization 
                                        Amendments and Base 
                                        Closure and Realignment 
                                        Act (Public Law 100-
                                        526; 10 U.S.C. 2687 
                                        note);
                                          (cc) section 2687 of 
                                        title 10, United States 
                                        Code; or
                                          (dd) any other 
                                        provision of law 
                                        authorizing or 
                                        directing the Secretary 
                                        of Defense or the 
                                        Secretary of a military 
                                        department to dispose 
                                        of real property at the 
                                        military installation 
                                        for purposes relating 
                                        to base closures of 
                                        redevelopment, while 
                                        retaining the authority 
                                        to enter into a 
                                        leaseback of all or a 
                                        portion of the property 
                                        for military use;
                                  (II) the census tract or 
                                nonmetropolitan county in which 
                                the lands described in 
                                subclause (I) are wholly 
                                contained;
                                  (III) a census tract or 
                                nonmetropolitan county the 
                                boundaries of which intersect 
                                the area described in subclause 
                                (I); and
                                  (IV) a census tract or 
                                nonmetropolitan county the 
                                boundaries of which are 
                                contiguous to the area 
                                described in subclause (II) or 
                                subclause (III).
                          (ii) Limitation.--A base closure area 
                        shall be treated as a HUBZone--
                                  (I) with respect to a census 
                                tract or nonmetropolitan county 
                                described in clause (i), for a 
                                period of not less than 8 
                                years, beginning on the date 
                                the military installation 
                                undergoes final closure and 
                                ending on the date the 
                                Administrator makes a final 
                                determination as to whether or 
                                not to implement the applicable 
                                designation described in 
                                subparagraph (A) or (B) in 
                                accordance with the results of 
                                the decennial census conducted 
                                after the area was initially 
                                designated as a base closure 
                                area; and
                                  (II) if such area was treated 
                                as a HUBZone at any time after 
                                2010, until such time as the 
                                Administrator makes a final 
                                determination as to whether or 
                                not to implement the applicable 
                                designation described in 
                                subparagraph (A) or (B), after 
                                the 2020 decennial census.
                          (iii) Definitions.--In this 
                        subparagraph:
                                  (I) Census tract.--The term 
                                ``census tract'' means a census 
                                tract delineated by the United 
                                States Bureau of the Census in 
                                the most recent decennial 
                                census that is not located in a 
                                nonmetropolitan county and does 
                                not otherwise qualify as a 
                                qualified census tract.
                                  (II) Nonmetropolitan 
                                county.--The term 
                                ``nonmetropolitan county'' 
                                means a county that was not 
                                located in a metropolitan 
                                statistical area (as defined in 
                                section 143(k)(2)(B) of the 
                                Internal Revenue Code of 1986) 
                                at the time of the most recent 
                                census taken for purposes of 
                                selecting qualified census 
                                tracts and does not otherwise 
                                qualify as a qualified 
                                nonmetropolitan county.
                  (E) Qualified disaster area.--
                          (i) In general.--Subject to clause 
                        (ii), the term ``qualified disaster 
                        area'' means any census tract or 
                        nonmetropolitan county located in an 
                        area for which the President has 
                        declared a major disaster under section 
                        401 of the Robert T. Stafford Disaster 
                        Relief and Emergency Assistance Act (42 
                        U.S.C. 5170) or located in an area in 
                        which a catastrophic incident has 
                        occurred if such census tract or 
                        nonmetropolitan county ceased to be 
                        qualified under subparagraph (A) or 
                        (B), as applicable, during the period 
                        beginning 5 years before the date on 
                        which the President declared the major 
                        disaster or the catastrophic incident 
                        occurred and ending 2 years after such 
                        date, except that such census tract or 
                        nonmetropolitan county may be a 
                        ``qualified disaster area'' only--
                                  (I) in the case of a major 
                                disaster declared by the 
                                President, during the 5-year 
                                period beginning on the date on 
                                which the President declared 
                                the major disaster for the area 
                                in which the census tract or 
                                nonmetropolitan county, as 
                                applicable, is located; and
                                  (II) in the case of a 
                                catastrophic incident, during 
                                the 10-year period beginning on 
                                the date on which the 
                                catastrophic incident occurred 
                                in the area in which the census 
                                tract or nonmetropolitan 
                                county, as applicable, is 
                                located.
                          (ii) Limitation.--A qualified 
                        disaster area described in clause (i) 
                        shall be treated as a HUBZone for a 
                        period of not less than 8 years, 
                        beginning on the date the Administrator 
                        makes a final determination as to 
                        whether or not to implement the 
                        designations described in subparagraphs 
                        (A) and (B) in accordance with the 
                        results of the decennial census 
                        conducted after the area was initially 
                        designated as a qualified disaster 
                        area.
          (5) Qualified hubzone small business concern.--
                  (A) In general.--A HUBZone small business 
                concern is ``qualified'', if----
                          (i) the small business concern has 
                        certified in writing to the 
                        Administrator (or the Administrator 
                        otherwise determines, based on 
                        information submitted to the 
                        Administrator by the small business 
                        concern, or based on certification 
                        procedures, which shall be established 
                        by the Administration by regulation) 
                        that--
                                  (I) it is a HUBZone small 
                                business concern--
                                          (aa) pursuant to 
                                        subparagraph (A), (B), 
                                        (C), (D), (E), or (F) 
                                        of paragraph (3), and 
                                        that its principal 
                                        office is located in a 
                                        HUBZone and not fewer 
                                        than 35 percent of its 
                                        employees reside in a 
                                        HUBZone;
                                          (bb) pursuant to 
                                        subparagraph (A), (B), 
                                        (C), (D), (E), or (F) 
                                        of paragraph (3), that 
                                        its principal office is 
                                        located within a base 
                                        closure area and that 
                                        not fewer than 35 
                                        percent of its 
                                        employees reside in 
                                        such base closure area 
                                        or in another HUBZone; 
                                        or
                                          (cc) pursuant to 
                                        paragraph (3)(C), and 
                                        not fewer than 35 
                                        percent of its 
                                        employees engaged in 
                                        performing a contract 
                                        awarded to the small 
                                        business concern on the 
                                        basis of a preference 
                                        provided under section 
                                        31(b) reside within any 
                                        Indian reservation 
                                        governed by one or more 
                                        of the tribal 
                                        government owners, or 
                                        reside within any 
                                        HUBZone adjoining any 
                                        such Indian 
                                        reservation;
                                  (II) the small business 
                                concern will attempt to 
                                maintain the applicable 
                                employment percentage under 
                                subclause (I) during the 
                                performance of any contract 
                                awarded to the small business 
                                concern on the basis of a 
                                preference provided under 
                                section 31(b); and
                                  (III) with respect to any 
                                subcontract entered into by the 
                                small business concern pursuant 
                                to a contract awarded to the 
                                small business concern under 
                                section 31, the small business 
                                concern will ensure that the 
                                requirements of section 46 are 
                                satisfied; and
                          (ii) no certification made or 
                        information provided by the small 
                        business concern under clause (i) has 
                        been, in accordance with the procedures 
                        established under section 31(c)(1)--
                                  (I) successfully challenged 
                                by an interested party; or
                                  (II) otherwise determined by 
                                the Administrator to be 
                                materially false.
                  (B) List of qualified small business 
                concerns.--The Administrator shall establish 
                and maintain a list of qualified HUBZone small 
                business concerns, which list shall, to the 
                extent practicable--
                          (i) once the Administrator has made 
                        the certification required by 
                        subparagraph (A)(i) regarding a 
                        qualified HUBZone small business 
                        concern and has determined that 
                        subparagraph (A)(ii) does not apply to 
                        that concern, include the name, 
                        address, and type of business with 
                        respect to each such small business 
                        concern;
                          (ii) be updated by the Administrator 
                        not less than annually; and
                          (iii) be provided upon request to any 
                        Federal agency or other entity.
          (6) Native american small business concerns.--
                  (A) Alaska native corporation.--The term 
                ``Alaska Native Corporation'' has the same 
                meaning as the term ``Native Corporation'' in 
                section 3 of the Alaska Native Claims 
                Settlement Act (43 U.S.C. 1602).
                  (B) Alaska native village.--The term ``Alaska 
                Native Village'' has the same meaning as the 
                term ``Native village'' in section 3 of the 
                Alaska Native Claims Settlement Act (43 U.S.C. 
                1602).
                  (C) Indian reservation.--The term ``Indian 
                reservation''--
                          (i) has the same meaning as the term 
                        ``Indian country'' in section 1151 of 
                        title 18, United States Code, except 
                        that such term does not include--
                                  (I) any lands that are 
                                located within a State in which 
                                a tribe did not exercise 
                                governmental jurisdiction on 
                                the date of the enactment of 
                                this paragraph, unless that 
                                tribe is recognized after that 
                                date of the enactment by either 
                                an Act of Congress or pursuant 
                                to regulations of the Secretary 
                                of the Interior for the 
                                administrative recognition that 
                                an Indian group exists as an 
                                Indian tribe (part 83 of title 
                                25, Code of Federal 
                                Regulations); and
                                  (II) lands taken into trust 
                                or acquired by an Indian tribe 
                                after the date of the enactment 
                                of this paragraph if such lands 
                                are not located within the 
                                external boundaries of an 
                                Indian reservation or former 
                                reservation or are not 
                                contiguous to the lands held in 
                                trust or restricted status on 
                                that date of the enactment; and
                          (ii) in the State of Oklahoma, means 
                        lands that--
                                  (I) are within the 
                                jurisdictional areas of an 
                                Oklahoma Indian tribe (as 
                                determined by the Secretary of 
                                the Interior); and
                                  (II) are recognized by the 
                                Secretary of the Interior as 
                                eligible for trust land status 
                                under part 151 of title 25, 
                                Code of Federal Regulations (as 
                                in effect on the date of the 
                                enactment of this paragraph).
          (7) Agricultural commodity.--The term ``agricultural 
        commodity'' has the same meaning as in section 102 of 
        the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
  (q) Definitions Relating to Veterans.--In this Act, the 
following definitions apply:
          (1) Service-disabled veteran.--The term ``service-
        disabled veteran'' means a veteran with a disability 
        that is service-connected (as defined in section 
        101(16) of title 38, United States Code).
          [(2) Small business concern owned and controlled by 
        service-disabled veterans.--The term ``small business 
        concern owned and controlled by service-disabled 
        veterans'' means a small business concern--
                  [(A) not less than 51 percent of which is 
                owned by one or more service-disabled veterans 
                or, in the case of any publicly owned business, 
                not less than 51 percent of the stock of which 
                is owned by one or more service-disabled 
                veterans; and
                  [(B) the management and daily business 
                operations of which are controlled by one or 
                more service-disabled veterans or, in the case 
                of a veteran with permanent and severe 
                disability, the spouse or permanent caregiver 
                of such veteran.]
          (2) Small business concern owned and controlled by 
        service-disabled veterans.--The term ``small business 
        concern owned and controlled by service-disabled 
        veterans'' means any of the following:
                  (A) A small business concern--
                          (i) not less than 51 percent of which 
                        is owned by one or more service-
                        disabled veterans or, in the case of 
                        any publicly owned business, not less 
                        than 51 percent of the stock (not 
                        including any stock owned by an ESOP) 
                        of which is owned by one or more 
                        service-disabled veterans; and
                          (ii) the management and daily 
                        business operations of which are 
                        controlled by one or more service-
                        disabled veterans or, in the case of a 
                        veteran with permanent and severe 
                        disability, the spouse or permanent 
                        caregiver of such veteran.
                  (B) A small business concern--
                          (i) not less than 51 percent of which 
                        is owned by one or more service-
                        disabled veterans with a disability 
                        that is rated by the Secretary of 
                        Veterans Affairs as a permanent and 
                        total disability who are unable to 
                        manage the daily business operations of 
                        such concern; or
                          (ii) in the case of a publicly owned 
                        business, not less than 51 percent of 
                        the stock (not including any stock 
                        owned by an ESOP) of which is owned by 
                        one or more such veterans.
                  (C)(i) During the time period described in 
                clause (ii), a small business concern that was 
                a small business concern described in 
                subparagraph (A) or (B) immediately prior to 
                the death of a service-disabled veteran who was 
                the owner of the concern, the death of whom 
                causes the concern to be less than 51 percent 
                owned by one or more service-disabled veterans, 
                if--
                          (I) the surviving spouse of the 
                        deceased veteran acquires such 
                        veteran's ownership interest in such 
                        concern;
                          (II) such veteran had a service-
                        connected disability (as defined in 
                        section 101(16) of title 38, United 
                        States Code) rated as 100 percent 
                        disabling under the laws administered 
                        by the Secretary of Veterans Affairs or 
                        such veteran died as a result of a 
                        service-connected disability; and
                          (III) immediately prior to the death 
                        of such veteran, and during the period 
                        described in clause (ii), the small 
                        business concern is included in the 
                        database described in section 8127(f) 
                        of title 38, United States Code.
                  (ii) The time period described in this clause 
                is the time period beginning on the date of the 
                veteran's death and ending on the earlier of--
                          (I) the date on which the surviving 
                        spouse remarries;
                          (II) the date on which the surviving 
                        spouse relinquishes an ownership 
                        interest in the small business concern; 
                        or
                          (III) the date that is 10 years after 
                        the date of the death of the veteran.
          (3) Small business concern owned and controlled by 
        veterans.--The term ``small business concern owned and 
        controlled by veterans'' means a small business 
        concern--
                  (A) not less than 51 percent of which is 
                owned by one or more veterans or, in the case 
                of any publicly owned business, not less than 
                51 percent of the stock of which is owned by 
                one or more veterans; and
                  (B) the management and daily business 
                operations of which are controlled by one or 
                more veterans.
          (4) Veteran.--The term ``veteran'' has the meaning 
        given the term in section 101(2) of title 38, United 
        States Code.
          (5) Relief from time limitations.--
                  (A) In general.--Any time limitation on any 
                qualification, certification, or period of 
                participation imposed under this Act on any 
                program that is available to small business 
                concerns shall be extended for a small business 
                concern that--
                          (i) is owned and controlled by--
                                  (I) a veteran who was called 
                                or ordered to active duty under 
                                a provision of law specified in 
                                section 101(a)(13)(B) of title 
                                10, United States Code, on or 
                                after September 11, 2001; or
                                  (II) a service-disabled 
                                veteran who became such a 
                                veteran due to an injury or 
                                illness incurred or aggravated 
                                in the active military, naval, 
                                or air service during a period 
                                of active duty pursuant to a 
                                call or order to active duty 
                                under a provision of law 
                                referred to in subclause (I) on 
                                or after September 11, 2001; 
                                and
                          (ii) was subject to the time 
                        limitation during such period of active 
                        duty.
                  (B) Duration.--Upon submission of proper 
                documentation to the Administrator, the 
                extension of a time limitation under 
                subparagraph (A) shall be equal to the period 
                of time that such veteran who owned or 
                controlled such a concern was on active duty as 
                described in that subparagraph.
                  (C) Exception for programs subject to federal 
                credit reform act of 1990.--The provisions of 
                subparagraphs (A) and (B) shall not apply to 
                any programs subject to the Federal Credit 
                Reform Act of 1990 (2 U.S.C. 661 et seq.).
          (6) ESOP.--The term ``ESOP'' has the meaning given 
        the term ``employee stock ownership plan'' in section 
        4975(e)(7) of the Internal Revenue Code of 1986 (26 
        U.S.C. 4975(e)(7)).
          (7) Surviving spouse.--The term ``surviving spouse'' 
        has the meaning given such term in section 101(3) of 
        title 38, United States Code.
  (r) Definitions Relating to Small Business Lending 
Companies.--As used in section 23 of this Act:
          (1) Small business lending company.--The term ``small 
        business lending company'' means a business concern 
        that is authorized by the Administrator to make loans 
        pursuant to section 7(a) and whose lending activities 
        are not subject to regulation by any Federal or State 
        regulatory agency.
          (2) Non-federally regulated sba lender.--The term 
        ``non-Federally regulated SBA lender'' means a business 
        concern if--
                  (A) such concern is authorized by the 
                Administrator to make loans under section 7;
                  (B) such concern is subject to regulation by 
                a State; and
                  (C) the lending activities of such concern 
                are not regulated by any Federal banking 
                authority.
  (s) Major Disaster.--In this Act, the term ``major disaster'' 
has the meaning given that term in section 102 of the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5122).
  (t) Small Business Development Center.--In this Act, the term 
``small business development center'' means a small business 
development center described in section 21.
  (u) Region of the Administration.--In this Act, the term 
``region of the Administration'' means the geographic area 
served by a regional office of the Administration established 
under section 4(a).
  (v) Multiple Award Contract.--In this Act, the term 
``multiple award contract'' means--
          (1) a multiple award task order contract or delivery 
        order contract that is entered into under the authority 
        of sections 303H through 303K of the Federal Property 
        and Administrative Services Act of 1949 (41 U.S.C. 253h 
        through 253k); and
          (2) any other indefinite delivery, indefinite 
        quantity contract that is entered into by the head of a 
        Federal agency with 2 or more sources pursuant to the 
        same solicitation.
  (w) Presumption.--
          (1) In general.--In every contract, subcontract, 
        cooperative agreement, cooperative research and 
        development agreement, or grant which is set aside, 
        reserved, or otherwise classified as intended for award 
        to small business concerns, there shall be a 
        presumption of loss to the United States based on the 
        total amount expended on the contract, subcontract, 
        cooperative agreement, cooperative research and 
        development agreement, or grant whenever it is 
        established that a business concern other than a small 
        business concern willfully sought and received the 
        award by misrepresentation.
          (2) Deemed certifications.--The following actions 
        shall be deemed affirmative, willful, and intentional 
        certifications of small business size and status:
                  (A) Submission of a bid or proposal for a 
                Federal grant, contract, subcontract, 
                cooperative agreement, or cooperative research 
                and development agreement reserved, set aside, 
                or otherwise classified as intended for award 
                to small business concerns.
                  (B) Submission of a bid or proposal for a 
                Federal grant, contract, subcontract, 
                cooperative agreement, or cooperative research 
                and development agreement which in any way 
                encourages a Federal agency to classify the bid 
                or proposal, if awarded, as an award to a small 
                business concern.
                  (C) Registration on any Federal electronic 
                database for the purpose of being considered 
                for award of a Federal grant, contract, 
                subcontract, cooperative agreement, or 
                cooperative research agreement, as a small 
                business concern.
          (3) Certification by signature of responsible 
        official.--
                  (A) In general.--Each solicitation, bid, or 
                application for a Federal contract, 
                subcontract, or grant shall contain a 
                certification concerning the small business 
                size and status of a business concern seeking 
                the Federal contract, subcontract, or grant.
                  (B) Content of certifications.--A 
                certification that a business concern qualifies 
                as a small business concern of the exact size 
                and status claimed by the business concern for 
                purposes of bidding on a Federal contract or 
                subcontract, or applying for a Federal grant, 
                shall contain the signature of an authorized 
                official on the same page on which the 
                certification is contained.
          (4) Regulations.--The Administrator shall promulgate 
        regulations to provide adequate protections to 
        individuals and business concerns from liability under 
        this subsection in cases of unintentional errors, 
        technical malfunctions, and other similar situations.
  (x) Annual Certification.--
          (1) In general.--Each business certified as a small 
        business concern under this Act shall annually certify 
        its small business size and, if appropriate, its small 
        business status, by means of a confirming entry on the 
        Online Representations and Certifications Application 
        database of the Administration, or any successor 
        thereto.
          (2) Regulations.--Not later than 1 year after the 
        date of enactment of this subsection, the 
        Administrator, in consultation with the Inspector 
        General and the Chief Counsel for Advocacy of the 
        Administration, shall promulgate regulations to ensure 
        that--
                  (A) no business concern continues to be 
                certified as a small business concern on the 
                Online Representations and Certifications 
                Application database of the Administration, or 
                any successor thereto, without fulfilling the 
                requirements for annual certification under 
                this subsection; and
                  (B) the requirements of this subsection are 
                implemented in a manner presenting the least 
                possible regulatory burden on small business 
                concerns.
  (y) Policy on Prosecutions of Small Business Size and Status 
Fraud.--Not later than 1 year after the date of enactment of 
this subsection, the Administrator, in consultation with the 
Attorney General, shall issue a Government-wide policy on 
prosecution of small business size and status fraud, which 
shall direct Federal agencies to appropriately publicize the 
policy.
  (z) Aquaculture Business Disaster Assistance.--Subject to 
section 18(a) and notwithstanding section 18(b)(1), the 
Administrator may provide disaster assistance under section 
7(b)(2) to aquaculture enterprises that are small businesses.
  (aa) Venture Capital Operating Company.--In this Act, the 
term ``venture capital operating company'' means an entity 
described in clause (i), (v), or (vi) of section 121.103(b)(5) 
of title 13, Code of Federal Regulations (or any successor 
thereto).
  (bb) Hedge Fund.--In this Act, the term ``hedge fund'' has 
the meaning given that term in section 13(h)(2) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).
  (cc) Private Equity Firm.--In this Act, the term ``private 
equity firm'' has the meaning given the term ``private equity 
fund'' in section 13(h)(2) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1851(h)(2)).
  (dd) Definitions Pertaining to Subcontracting.--In this Act:
          (1) Subcontract.--The term ``subcontract'' means a 
        legally binding agreement between a contractor that is 
        already under contract to another party to perform 
        work, and a third party, hereinafter referred to as the 
        subcontractor, for the subcontractor to perform a part, 
        or all, of the work that the contractor has undertaken.
          (2) First tier subcontractor.--The term ``first tier 
        subcontractor'' means a subcontractor who has a 
        subcontract directly with the prime contractor.
          (3) At any tier.--The term ``at any tier'' means any 
        subcontractor other than a subcontractor who is a first 
        tier subcontractor.
  Sec. 4. (a) In order to carry out the policies of this Act 
there is hereby created an agency under the name ``Small 
Business Administration'' (herein referred to as the 
Administration), which Administration shall be under the 
general direction and supervision of the President and shall 
not be affiliated with or be within any other agency or 
department of the Federal Government. The principal office of 
the Administration shall be located in the District of 
Columbia. The Administration may establish such branch and 
regional offices in other places in the United States as may be 
determined by the Administrator of the Administration. As used 
in this Act, the term ``United States'' includes the several 
States, the Territories and possessions of the United States, 
the Commonwealth of Puerto Rico, the Trust territory of the 
Pacific Islands, and the District of Columbia.
  (b)(1) The management of the Administration shall be vested 
in an Administrator who shall be appointed from civilian life 
by the President, by and with the advice and consent of the 
Senate, and who shall be a person of outstanding qualifications 
known to be familiar and sympathetic with small business needs 
and problems. The Administrator shall not engage in any other 
business, vocation, or employment than that of serving as 
Administrator. In carrying out the programs administered by the 
Small Business Administration including its lending and 
guaranteeing functions, the Administrator shall not 
discriminate on the basis of sex or marital status against any 
person or small business concern applying for or receiving 
assistance from the Small Business Administration, and the 
Small Business Administration shall give special consideration 
to veterans of the Armed Forces of the United States and their 
survivors or dependents. The President also may appoint a 
Deputy Administrator, by and with the advice and consent of the 
Senate. The Administrator is authorized to appoint Associate 
Administrators (including the Associate Administrator specified 
in section 201 of the Small Business Investment Act of 1958) to 
assist in the execution of the functions vested in the 
Administration. One such Associate Administrator shall be the 
Associate Administrator for Veterans Business Development, who 
shall administer the Office of Veterans Business Development 
established under section 32. One of the Associate 
Administrators shall be designated at the time of his 
appointment as the Associate Administrator for Minority Small 
Business and Capital Ownership Development who shall be an 
employee in the competitive service or in the Senior Executive 
Service and a career appointee and shall be responsible to the 
Administrator for the formulation and execution of the policies 
and programs under sections 7(j) and 8(a) of this Act which 
provide assistance to minority small business concerns. One 
such Associate Administrator shall be the Associate 
Administrator for International Trade, who shall be the head of 
the Office of International Trade established under section 22. 
One such Associate Administrator shall be the Chief Hearing 
Officer, who shall administer the Office of Hearings and 
Appeals established under section 5(i).
  (2) the Administrator also shall be responsible for--
          (A) establishing and maintaining an external small 
        business economic data base for the purpose of 
        providing the Congress and the Administration 
        information on the economic condition and the expansion 
        or contraction of the small business sector. To that 
        end, the Administrator shall publish on a regular basis 
        national small business economic indices and, to the 
        extent feasible, regional small business economic 
        indices, which shall include, but need not be limited 
        to, data on--
                  (i) employment layoffs, and new hires;
                  (ii) number of business establishments and 
                the types of such establishments such as sole 
                proprietorships, corporations, and 
                partnerships;
                  (iii) number of business formation and 
                failures;
                  (iv) sales and new orders;
                  (v) back orders;
                  (vi) investment in plant and equipment;
                  (vii) changes in inventory and rate of 
                inventory turnover;
                  (viii) sources and amounts of capital 
                investment, including debt, equity, and 
                internally generated funds;
                  (ix) debt to equity ratios;
                  (x) exports;
                  (xi) number and dollar amount of mergers and 
                acquisitions by size of acquiring and acquired 
                firm; and
                  (xii) concentration ratios; and
          (B) publishing annually a report giving a comparative 
        analysis and interpretation of the historical trends of 
        the small business sector as reflected by the data 
        acquired pursuant to subparagraph (A) of this 
        subsection.
          (3) Risk management database.--
                  (A) Establishment.--The Administration shall 
                establish, within the management system for the 
                loan programs authorized by subsections (a) and 
                (b) of section 7 of this Act and title V of the 
                Small Business Investment Act of 1958, a 
                management information system that will 
                generate a database capable of providing timely 
                and accurate information in order to identify 
                loan underwriting, collections, recovery, and 
                liquidation problems.
                  (B) Information to be maintained.--In 
                addition to such other information as the 
                Administration considers appropriate, the 
                database established under subparagraph (A) 
                shall, with respect to each loan program 
                described in subparagraph (A), include 
                information relating to--
                          (i) the identity of the institution 
                        making the guaranteed loan or issuing 
                        the debenture;
                          (ii) the identity of the borrower;
                          (iii) the total dollar amount of the 
                        loan or debenture;
                          (iv) the total dollar amount of 
                        government exposure in each loan;
                          (v) the district of the 
                        Administration in which the borrower 
                        has its principal office;
                          (vi) the principal line of business 
                        of the borrower, as identified by 
                        Standard Industrial Classification Code 
                        (or any successor to that system);
                          (vii) the delinquency rate for each 
                        program (including number of instances 
                        and days overdue);
                          (viii) the number and amount of 
                        repurchases, losses, and recoveries in 
                        each program;
                          (ix) the number of deferrals or 
                        forbearances in each program (including 
                        days and number of instances);
                          (x) comparisons on the basis of loan 
                        program, lender, district and region of 
                        the Administration, for all the data 
                        elements maintained; and
                          (xi) underwriting characteristics of 
                        each loan that has entered into 
                        default, including term, amount and 
                        type of collateral, loan-to-value and 
                        other actual and projected ratios, line 
                        of business, credit history, and type 
                        of loan.
                  (C) Deadline for operational capability.--The 
                database established under subparagraph (A) 
                shall--
                          (i) be operational not later than 
                        June 30, 1997; and
                          (ii) capture data beginning on the 
                        first day of the second quarter of 
                        fiscal year 1997 beginning after such 
                        date and thereafter.
  (4)(A) The Administrator shall establish a small business 
computer security and education program to--
          (i) provide small business concerns information 
        regarding--
                  (I) utilization and management of computer 
                technology;
                  (II) computer crimes committed against small 
                business concerns; and
                  (III) security for computers owned or 
                utilized by small business concerns;
          (ii) provide for periodic forums for small business 
        concerns to improve their knowledge of the matters 
        described in clause (i); and
          (iii) provide training opportunities to educate small 
        business users on computer security techniques.
  (B) The Administrator, after consultation with the Director 
of Institute of Computer Sciences and Technology within the 
Department of Commerce, shall develop information and materials 
to carry out the activities described in subparagraph (A) of 
this paragraph.
  (c)(1) There are hereby established in the Treasury the 
following revolving funds; (A) a disaster loan fund which shall 
be available for financing functions performed under section 
7(b)(1), 7(b)(2), 7(b)(3), 7(b)(4), 7(d)(2), and 7(m) of this 
Act; and (B) a business loan and investment fund which shall be 
available for financing functions performed under sections 
5(g), 7(a), and 8(a) of this Act, and titles III, IV and V of 
the Small Business Investment Act of 1958.
  (2) All repayments of loans and debentures, payments of 
interest and other receipts arising out of transactions 
heretofore or hereafter entered into by the Administration (A) 
pursuant to sections 7(b)(1), 7(b)(2), 7(b)(3), 7(b)(4), 
7(b)(5), 7(b)(6), (7(b)(7), 7(b)(8), 7(d)(2), and 7(g) of this 
Act shall be paid into a disaster loan fund; and (B) pursuant 
to sections 5(g), 7(a), 7(h), 7(i), 7(l), 7(m), and 8(a) of 
this Act, and titles III, IV and V of the Small Business 
Investment Act of 1958, shall be paid into the business loan 
and investment fund.
  (3) Unexpended balances of appropriations made to the fund 
pursuant to this subsection, as in effect immediately prior to 
the effective date of this paragraph, shall be allocated, 
together with related assets and liabilities, to the funds 
established by paragraph (1) in such amounts as the 
Administrator shall determine.
  (4) The Administration shall submit to the Committees on 
Appropriations. Senate Select Committee on Small Business, and 
the Committee on Small Business of the House of 
Representatives, as soon as possible after the beginning of 
each calendar quarter, a full and complete report on the status 
of each of the funds established by paragraph (1). Business-
type budgets for each of the funds established by paragraph (1) 
shall be prepared, transmitted to the Committees on 
Appropriations, the Senate Select Committee on Small Business, 
and the Committee on Small Business of the House of 
Representatives, and considered, and enacted in the manner 
prescribed by law (sections 102, 103, and 104 of the Government 
Corporation Control Act (31 U.S.C. 847-849)) for wholly owned 
Government corporations.
  (5)(A) The Administration is authorized to make and issue 
notes to the Secretary of the Treasury for the purpose of 
obtaining funds necessary for discharging obligations under the 
revolving funds created by section 4(c)(1) of this Act and for 
authorized expenditures out of the funds. Such notes shall be 
in such form and denominations and have such maturities and be 
subject to such terms and conditions as may be prescribed by 
the Administration with the approval of the Secretary of the 
Treasury. Such notes shall bear interest at a rate fixed by the 
Secretary of the Treasury, taking into consideration the 
current average market yield of outstanding marketable 
obligations of the United States having maturities comparable 
to the notes issued by the Administration under this paragraph. 
The Secretary of the Treasury is authorized and directed to 
purchase any notes of the Administration issued hereunder, and, 
for that purpose, the Secretary of the Treasury is authorized 
to use as a public debt transaction the proceeds from the sale 
of any securities issued under the Second Liberty Bond Act, as 
amended, and the purposes for which such securities may be 
issued under such Act, as amended, are extended to include the 
purchase of notes issued by the Administration. All 
redemptions, purchases, and sales by the Secretary of the 
Treasury of such notes shall be treated as public debt 
transactions of the United States. All borrowing authority 
contained herein shall be effective only to such extent or in 
such amounts as are provided in advance in appropriation Acts.
  (B)(i) Moneys in the funds established in subsection (c)(1) 
not needed for current operations may be paid into 
miscellaneous receipts of the Treasury.
  (ii) Following the close of each fiscal year, the 
Administration shall pay into the miscellaneous receipts of the 
United States Treasury the actual interest that the 
Administration collects during that fiscal year on all 
financings made under this Act.
  (C) Except on those loan disbursements on which interest is 
paid under subsection (B)(ii), the Administration shall pay 
into miscellaneous receipts of the Treasury, following the 
close of each fiscal year, interest received by the 
Administration on financing functions performed under this Act 
and titles III and V of the Small business Investment Act of 
1958 providing the capital used to perform such functions 
originated from appropriated funds. Such payments shall be 
treated by the Department of the Treasury as interest income, 
not as retirement of indebtedness.
  (D) There are authorized to be appropriated, in any fiscal 
year, such sums as may be necessary for losses and interest 
subsidies incurred by the funds established by subsection 
(c)(1), but not previously reimbursed.
  (d) There is hereby created the Loan Policy Board of the 
Small Business Administration, which shall consist of the 
following members, all ex officio: The Administration, as 
Chairman, the Secretary of the Treasury, and the Secretary of 
Commerce. Either of the said Secretaries may designate an 
officer of his Department, who has been appointed by the 
President by and with the advice and consent of the Senate, to 
act in his stead as a member of the Loan Policy Board with 
respect to any matter or matters. The Loan Policy Board shall 
establish general policies (particularly with reference to the 
public interest involved in the granting and denial of 
applications for financial assistance by the Administration and 
with reference to the coordination of the functions of the 
Administration with other activities and policies of the 
Government), which shall govern the granting and denial of 
applications for financial assistance by the Administration.
  (e) Prohibition on the Provision of Assistance.--
Notwithstanding any other provision of law, the Administration 
is prohibited from providing any financial or other assistance 
to any business concern or other person engaged in the 
production or distribution of any product or service that has 
been determined to be obscene by a court of competent 
jurisdiction.
  (f) Certification of Compliance With Child Support 
Obligations.--
          (1) In general.--For financial assistance approved 
        after the promulgation of final regulations to 
        implement this section, each recipient of financial 
        assistance under this Act, including a recipient of a 
        direct loan or a loan guarantee, shall certify that the 
        recipient is not more than 60 days delinquent under the 
        terms of any----
                  (A) administrative order;
                  (B) court order; or
                  (C) repayment agreement entered into between 
                the recipient and the custodial parent or State 
                agency providing child support enforcement 
                services,
        that requires the recipient to pay child support, as 
        such term is defined in section 462(b) of the Social 
        Security Act.
          (2) Enforcement.--Not later than 6 months after the 
        date of enactment of this subsection, the 
        Administration shall promulgate such regulations as may 
        be necessary to enforce compliance with the 
        requirements of this subsection.
  (g)  [Certification Requirements for] Business Opportunity 
Specialists.--
          (1) Duties.--The exclusive duties of a Business 
        Opportunity Specialist employed by the Administrator 
        and reporting to the senior official appointed by the 
        Administrator with responsibilities under sections 8, 
        15, 31, and 36 (or the designee of such official) shall 
        be to implement sections 7, 8, and 45 and to complete 
        other duties related to contracting programs under this 
        Act. Such duties shall include--
                  (A) with respect to small business concerns 
                eligible to receive contracts and subcontracts 
                pursuant to section 8(a)----
                          (i) providing guidance, counseling, 
                        and referrals for assistance with 
                        technical, management, financial, or 
                        other matters that will improve the 
                        competitive viability of such concerns;
                          (ii) identifying causes of success or 
                        failure of such concerns;
                          (iii) providing comprehensive 
                        assessments of such concerns, including 
                        identifying the strengths and 
                        weaknesses of such concerns;
                          (iv) monitoring and documenting 
                        compliance with the requirements of 
                        sections 7 and 8 and any regulations 
                        implementing those sections;
                          (v) explaining the requirements of 
                        sections 7, 8, 15, 31, 36 and 45; and
                          (vi) advising on compliance with 
                        contracting regulations (including the 
                        Federal Acquisition Regulation) after 
                        award of such a contract or 
                        subcontract;
                  (B) reviewing and monitoring compliance with 
                mentor-protege agreements under section 45;
                  (C) representing the interests of the 
                Administrator and small business concerns in 
                the award, modification, and administration of 
                contracts and subcontracts awarded pursuant to 
                section 8(a); and
                  (D) reporting fraud or abuse under section 7, 
                8, 15, 31, 36 or 45 or any regulations 
                implementing such sections.
          (2) Certification requirements.--
                  [(1)] (A) In general.--Consistent with the 
                requirements of [paragraph (2)] subparagraph 
                (B), a Business Opportunity Specialist 
                described under section 7(j)(10)(D) shall have 
                a Level I Federal Acquisition Certification in 
                Contracting (or any successor certification) or 
                the equivalent Department of Defense 
                certification, except that a Business 
                Opportunity Specialist who was serving on or 
                before January 3, 2013, may continue to serve 
                as a Business Opportunity Specialist for a 
                period of 5 years beginning on such date 
                without such a certification.
                  [(2)] (B) Delay of certification 
                requirement.--
                          [(A)] (i) Timing.--The certification 
                        described in [paragraph (1)] 
                        subparagraph (A) is not required for 
                        any person serving as a Business 
                        Opportunity Specialist until the date 
                        that is one calendar year after the 
                        date such person is appointed as a 
                        Business Opportunity Specialist.
                          [(B) Application.--The requirements 
                        of subparagraph (A) shall--]
                                  [(i) be included in any 
                                initial job posting for the 
                                position of a Business 
                                Opportunity Specialist; and
                                  [(ii) apply to any person 
                                appointed as a Business 
                                Opportunity Specialist after 
                                January 3, 2013.]
                                  (ii) Application.--The 
                                requirements of clause (i) 
                                shall be included in any 
                                initial job posting for the 
                                position of a Business 
                                Opportunity Specialist and 
                                shall apply to any person 
                                appointed as a Business 
                                Opportunity Specialist after 
                                January 3, 2013.

           *       *       *       *       *       *       *

  (h)  [Certification Requirements for] Commercial Market 
Representatives.--
          (1) Duties.--The principal duties of a Commercial 
        Market Representative employed by the Administrator and 
        reporting to the senior official appointed by the 
        Administrator with responsibilities under sections 8, 
        15, 31, and 36 (or the designee of such official) shall 
        be to advance the policies established in section 
        8(d)(1) relating to subcontracting. Such duties shall 
        include----
                  (A) helping prime contractors to find small 
                business concerns that are capable of 
                performing subcontracts;
                  (B) for contractors awarded contracts 
                containing the clause described in section 
                8(d)(3), providing----
                          (i) counseling on the contractor's 
                        responsibility to maximize 
                        subcontracting opportunities for small 
                        business concerns;
                          (ii) instruction on methods and tools 
                        to identify potential subcontractors 
                        that are small business concerns; and
                          (iii) assistance to increase awards 
                        to subcontractors that are small 
                        business concerns through visits, 
                        training, and reviews of past 
                        performance;
                  (C) providing counseling on how a small 
                business concern may promote its capacity to 
                contractors awarded contracts containing the 
                clause described in section 8(d)(3); and
                  (D) conducting periodic reviews of 
                contractors awarded contracts containing the 
                clause described in section 8(d)(3) to assess 
                compliance with subcontracting plans required 
                under section 8(d)(6).
          (2) Certification requirements.--
                  [(1)] (A) In general.--Consistent with the 
                requirements of paragraph (2), a commercial 
                market representative referred to in section 
                15(q)(3) shall have a Level I Federal 
                Acquisition Certification in Contracting (or 
                any successor certification) or the equivalent 
                Department of Defense certification, except 
                that a commercial market representative who was 
                serving on or before the date of the enactment 
                of the National Defense Authorization Act for 
                Fiscal Year 2016 may continue to serve as a 
                commercial market representative for a period 
                of 5 years beginning on such date without such 
                a certification.
                  [(2)] (B) Delay of certification 
                requirement.--
                          [(A)] (i) Timing.--The certification 
                        described in [paragraph (1)] 
                        subparagraph (A) is not required for 
                        any person serving as a commercial 
                        market representative until the date 
                        that is one calendar year after the 
                        date such person is appointed as a 
                        commercial market representative.
                          [(B) Application.--The requirements 
                        of subparagraph (A) shall--]
                                  [(i) be included in any 
                                initial job posting for the 
                                position of a commercial market 
                                representative; and
                                  [(ii) apply to any person 
                                appointed as a commercial 
                                market representative after the 
                                date of the enactment of the 
                                National Defense Authorization 
                                Act for Fiscal Year 2016.]
                                  (ii) Application.--The 
                                requirements of clause (i) 
                                shall be included in any 
                                initial job posting for the 
                                position of a commercial market 
                                representative and shall apply 
                                to any person appointed as a 
                                commercial market 
                                representative after November 
                                25, 2015.

           *       *       *       *       *       *       *

  Sec. 8. (a)(1) It shall be the duty of the Administration and 
it is hereby empowered, whenever it determines such action is 
necessary or appropriate--
          (A) to enter into contracts with the United States 
        Government and any department, agency, or officer 
        thereof having procurement powers obligating the 
        Administration to furnish articles, equipment, 
        supplies, services, or materials to the Government or 
        to perform construction work for the Government. In any 
        case in which the Administration certifies to any 
        officer of the Government having procurement powers 
        that the Administration is competent and responsible to 
        perform any specific Government procurement contract to 
        be let by any such officer, such officer shall be 
        authorized in his discretion to let such procurement 
        contract to the Administration upon such terms and 
        conditions as may be agreed upon between the 
        Administration and the procurement officer. Whenever 
        the Administration and such procurement officer fail to 
        agree, the matter shall be submitted for determination 
        to the Secretary or the head of the appropriate 
        department or agency by the Administrator. Not later 
        than 5 days from the date the Administration is 
        notified of a procurement officer's adverse decision, 
        the Administration may notify the contracting officer 
        of the intent to appeal such adverse decision, and 
        within 15 days of such date the Administrator shall 
        file a written request for a reconsideration of the 
        adverse decision with the Secretary of the department 
        or agency head. For the purposes of this subparagraph, 
        a procurement officer's adverse decision includes a 
        decision not to make available for award pursuant to 
        this subsection a particular procurement requirement or 
        the failure to agree on the terms and conditions of a 
        contract to be awarded noncompetitively under the 
        authority of this subsection. Upon receipt of the 
        notice of intent to appeal, the Secretary of the 
        department or the agency head shall suspend further 
        action regarding the procurement until a written 
        decision on the Administrator's request for 
        reconsideration has been issued by such Secretary or 
        agency head, unless such officer makes a written 
        determination that urgent and compelling circumstances 
        which significantly affect interests of the United 
        States will not permit waiting for a reconsideration of 
        the adverse decision. If the Administrator's request 
        for reconsideration is denied, the Secretary of the 
        department or agency head shall specify the reasons why 
        the selected firm was determined to be incapable to 
        perform the procurement requirement, and the findings 
        supporting such determination, which shall be made a 
        part of the contract file for the requirement. A 
        contract may not be awarded under this subsection if 
        the award of the contract would result in a cost to the 
        awarding agency which exceeds a fair market price;
          (B) to arrange for the performance of such 
        procurement contracts by negotiating or otherwise 
        letting subcontracts to socially and economically 
        disadvantaged small business concerns for construction 
        work, services, or the manufacture, supply, assembly of 
        such articles, equipment, supplies, materials, or parts 
        thereof, or servicing or processing in connection 
        therewith, or such management services as may be 
        necessary to enable the Administration to perform such 
        contracts;
                  (C) to make an award to a small business 
                concern owned and controlled by socially and 
                economically disadvantaged individuals which 
                has completed its period of Program 
                Participation as prescribed by section 
                7(j)(15), if----
                          (i) the contract will be awarded as a 
                        result of an offer (including price) 
                        submitted in response to a published 
                        solicitation relating to a competition 
                        conducted pursuant to subparagraph (D); 
                        and
                          (ii) the prospective contract awardee 
                        was a Program Participant eligible for 
                        award of the contract on the date 
                        specified for receipt of offers 
                        contained in the contract solicitation; 
                        and
          (D)(i) A contract opportunity offered for award 
        pursuant to this subsection shall be awarded on the 
        basis of competition restricted to eligible Program 
        Participants if--
                  (I) there is a reasonable expectation that at 
                least two eligible Program Participants will 
                submit offers and that award can be made at a 
                fair market price, and
                  (II) the anticipated award price of the 
                contract (including options) will exceed 
                $5,000,000 in the case of a contract 
                opportunity assigned a standard industrial 
                classification code for manufacturing and 
                $3,000,000 (including options) in the case of 
                all other contract opportunities.
          (ii) The Associate Administrator for Minority Small 
        Business and Capital Ownership Development, on a 
        nondelegable basis, is authorized to approve a request 
        from an agency to award a contract opportunity under 
        this subsection on the basis of a competition 
        restricted to eligible Program Participants even if the 
        anticipated award price is not expected to exceed the 
        dollar amounts specified in clause (i)(II). Such 
        approvals shall be granted only on a limited basis.
  (2) Notwithstanding subsections (a) and (c) of the first 
section of the Act entitled ``An Act requiring contracts for 
the construction, alteration, and repair of any public building 
or public work of the United States to be accompanied by a 
performance bond protecting the United States and by additional 
bond for the protection of persons furnishing material and 
labor for the construction, alteration, or repair of said 
public buildings or public work,'' approved August 24, 1935 (49 
Stat. 793), no small business concern shall be required to 
provide any amount of any bond as a condition or receiving any 
subcontract under this subsection if the Administrator 
determines that such amount is inappropriate for such concern 
in performing such contract: Provided, That the Administrator 
shall exercise the authority granted by the paragraph only if--
          (A) the Administration takes such measures as it 
        deems appropriate for the protection of persons 
        furnishing materials and labor to a small business 
        receiving any benefit pursuant to this paragraph;
          (B) the Administration assists, insofar as 
        practicable, a small business receiving the benefits of 
        this paragraph to develop, within a reasonable period 
        of time, such financial and other capability as may be 
        needed to obtain such bonds as the Administration may 
        subsequently require for the successful completion of 
        any program conducted under the authority of this 
        subsection;
          (C) the Administration finds that such small business 
        is unable to obtain the requisite bond or bonds from a 
        surety and that no surety is willing to issue such bond 
        or bonds subject to the guarantee provisions of Title 
        IV of the Small Business Investment Act of 1958; and
          (D) that small business is determined to be a start-
        up concern and such concern has not been participating 
        in any program conducted under the authority of this 
        subsection for a period exceeding one year.
The authority to waive bonds provided in this paragraph (2) may 
not be exercised after September 30, 1988.
  (3)(A) Any Program Participant selected by the Administration 
to perform a contract to be let noncompetitively pursuant to 
this subsection shall, when practicable, participate in any 
negotiation of the terms and conditions of such contract.
  (B)(i) For purposes of paragraph (1) a ``fair market price'' 
shall be determined by the agency offering the procurement 
requirement to the Administration, in accordance with clauses 
(ii) and (iii).
  (ii) The estimate of a current fair market price for a new 
procurement requirement, or a requirement that does not have a 
satisfactory procurement history, shall be derived from a price 
or cost analysis. Such analysis may take into account 
prevailing market conditions, commercial prices for similar 
products or services, or data obtained from any other agency. 
Such analysis shall consider such cost or pricing data as may 
be timely submitted by the Administration.
  (iii) The estimate of a current fair market price for a 
procurement requirement that has a satisfactory procurement 
history shall be based on recent award prices adjusted to 
insure comparability. Such adjustments shall take into account 
differences in quantities, performance times, plans, 
specifications, transportation costs, packaging and packing 
costs, labor and materials costs, overhead costs, and any other 
additional costs which may be deemed appropriate.
  (C) An agency offering a procurement requirement for 
potential award pursuant to this subsection shall, upon the 
request of the Administration, promptly submit to the 
Administration a written statement detailing the method used by 
the agency to estimate the current fair market price for such 
contract, identifying the information, studies, analyses, and 
other data used by such agency. The agency's estimate of the 
current fair market price (and any supporting data furnished to 
the Administration) shall not be disclosed to any potential 
offeror (other than the Administration).
  (D) A small business concern selected by the Administration 
to perform or negotiate a contract to be let pursuant to this 
subsection may request the Administration to protest the 
agency's estimate of the fair market price for such contract 
pursuant to paragraph (1)(A).
  (4)(A) For purposes of this section, the term ``socially and 
economically disadvantaged small business concern'' means any 
small business concern which meets the requirements of 
subparagraph (B) and----
          (i) which is at least 51 per centum unconditionally 
        owned by----
                  (I) one or more socially and economically 
                disadvantaged individuals,
                  (II) an economically disadvantaged Indian 
                tribe (or a wholly owned business entity of 
                such tribe), or
                  (III) an economically disadvantaged Native 
                Hawaiian organization, or
          (ii) in the case of any publicly owned business, at 
        least 51 per centum of the stock of which is 
        unconditionally owned by--
                  (I) one or more socially and economically 
                disadvantaged individuals,
                  (II) an economically disadvantaged Indian 
                tribe (or a wholly owned business entity of 
                such tribe), or
                  (III) an economically disadvantaged Native 
                Hawaiian organization.
  (B) A small business concern meets the requirements of this 
subparagraph if the management and daily business operations of 
such small business concern are controlled by one or more--
          (i) socially and economically disadvantaged 
        individuals described in subparagraph (A)(i)(I) or 
        subparagraph (A)(ii)(I),
          (ii) members of an economically disadvantaged Indian 
        tribe described in subparagraph (A)(i)(II) or 
        subparagraph (A)(ii)(II), or
          (iii) Native Hawaiian organizations described in 
        subparagraph (A)(i)(III) or subparagraph (A)(ii)(III).
  (C) Each Program Participant shall certify, on an annual 
basis, that it meets the requirements of this paragraph 
regarding ownership and control.
  (5) Socially disadvantaged individuals are those who have 
been subjected to racial or ethnic prejudice or cultural bias 
because of their identity as a member of a group without regard 
to their individual qualities.
  (6)(A) Economically disadvantaged individuals are those 
socially disadvantaged individuals whose ability to compete in 
the free enterprise system has been impaired due to diminished 
capital and credit opportunities as compared to others in the 
same business area who are not socially disadvantaged. In 
determining the degree of diminished credit and capital 
opportunities the Administration shall consider, but not be 
limited to, the assets and net worth of such socially 
disadvantaged individual. In determining the economic 
disadvantage of an Indian tribe, the Administration shall 
consider, where available, information such as the following: 
the per capita income of members of the tribe excluding 
judgment awards, the percentage of the local Indian population 
below the poverty level, and the tribe's access to capital 
markets.
  (B) Each Program Participant shall annually submit to the 
Administration--
          (i) a personal financial statement for each 
        disadvantaged owner;
          (ii) a record of all payments made by the Program 
        Participant to each of its disadvantaged owners or to 
        any person or entity affiliated with such owners; and
          (iii) such other information as the Administration 
        may deem necessary to make the determinations required 
        by this paragraph.
  (C)(i) Whenever, on the basis of information provided by a 
Program Participant pursuant to subparagraph (B) or otherwise, 
the Administration has reason to believe that the standards to 
establish economic disadvantage pursuant to subparagraph (A) 
have not been met, the Administration shall conduct a review to 
determine whether such Program Participant and its 
disadvantaged owners continue to be impaired in their ability 
to compete in the free enterprise system due to diminished 
capital and credit opportunities when compared to other 
concerns in the same business area, which are not socially 
disadvantaged.
  (ii) If the Administration determines, pursuant to such 
review, that a Program Participant and its disadvantaged owners 
are no longer economically disadvantaged for the purpose of 
receiving assistance under this subsection, the Program 
Participant shall be graduated pursuant to section 7(j)(10)(G) 
subject to the right to a hearing as provided for under 
paragraph (9).
  (D)(i) Whenever, on the basis of information provided by a 
Program Participant pursuant to subparagraph (B) or otherwise, 
the Administration has reason to believe that the amount of 
funds or other assets withdrawn from a Program Participant for 
the personal benefit of its disadvantaged owners or any person 
or entity affiliated with such owners may have been unduly 
excessive, the Administration shall conduct a review to 
determine whether such withdrawal of funds or other assets was 
detrimental to the achievement of the targets, objectives, and 
goals contained in such Program Participant's business plan.
  (ii) If the Administration determines, pursuant to such 
review, that funds or other assets have been withdrawn to the 
detriment of the Program Participant's business, the 
Administration shall----
          (I) initiate a proceeding to terminate the Program 
        Participant pursuant to section 7(j)(10)(F), subject to 
        the right to a hearing under paragraph (9); or
          (II) require an appropriate reinvestment of funds or 
        other assets and such other steps as the Administration 
        may deem necessary to ensure the protection of the 
        concern.
  (E) Whenever the Administration computes personal net worth 
for any purpose under this paragraph, it shall exclude from 
such computation----
          (i) the value of investments that disadvantaged 
        owners have in their concerns, except that such value 
        shall be taken into account under this paragraph when 
        comparing such concerns to other concerns in the same 
        business area that are owned by other than socially 
        disadvantaged persons;
          (ii) the equity that disadvantaged owners have in 
        their primary personal residences, except that any 
        portion of such equity that is attributable to unduly 
        excessive withdrawals from a Program Participant or a 
        concern applying for program participation shall be 
        taken into account.
  (7)(A) No small business concern shall be deemed eligible for 
any assistance pursuant to this subsection unless the 
Administration determines that with contract, financial, 
technical, and management support the small business concern 
will be able to perform contracts which may be awarded to such 
concern under paragraph (1)(C) and has reasonable prospects for 
success in competing in the private sector.
  (B) Limitations established by the Administration in its 
regulations and procedures restricting the award of contracts 
pursuant to this subsection to a limited number of standard 
industrial classification codes in an approved business plan 
shall not be applied in a manner that inhibits the logical 
business progression by a participating small business concern 
into areas of industrial endeavor where such concern has the 
potential for success.
  (8) All determinations made pursuant to paragraph (5) with 
respect to whether a group has been subjected to prejudice or 
bias shall be made by the Administrator after consultation with 
the Associate Administrator for Minority Small Business and 
Capital Ownership Development. All other determinations made 
pursuant to paragraphs (4), (5), (6), and (7) shall be made by 
the Associate Administrator for Minority Small Business and 
Capital Ownership Development under the supervision of, and 
responsible to, the Administrator.
  (9)(A) Subject to the provisions of subparagraph (E), the 
Administration, prior to taking any action described in 
subparagraph (B), shall provide the small business concern that 
is the subject of such action, an opportunity for a hearing on 
the record, in accordance with chapter 5 of title 5, United 
States Code.
  (B) The actions referred to in subparagraph (A) are----
          (i) denial of program admission based upon a negative 
        determination pursuant to paragraph (4), (5), or (6);
          (ii) a termination pursuant to section 7(j)(10)(F);
          (iii) a graduation pursuant to section 7(j)(10)(G); 
        and
          (iv) the denial of a request to issue a waiver 
        pursuant to paragraph (21)(B).
  (C) The Administration's proposed action, in any proceeding 
conducted under the authority of this paragraph, shall be 
sustained unless it is found to be arbitrary, capricious, or 
contrary to law.
  (D) A decision rendered pursuant to this paragraph shall be 
the final decision of the Administration and shall be binding 
upon the Administration and those within its employ.
  (E) The adjudicator selected to preside over a proceeding 
conducted under the authority of this paragraph shall decline 
to accept jurisdiction over any matter that----
          (i) does not, on its face, allege facts that, if 
        proven to be true, would warrant reversal or 
        modification of the Administration's position;
          (ii) is untimely filed;
          (iii) is not filed in accordance with the rules of 
        procedure governing such proceedings; or
          (iv) has been decided by or is the subject of an 
        adjudication before a court of competent jurisdiction 
        over such matters.
  (F) Proceedings conducted pursuant to the authority of this 
paragraph shall be completed and a decision rendered, insofar 
as practicable, within ninety days after a petition for a 
hearing is filed with the adjudicating office.
  (10) The Administration shall develop and implement an 
outreach program to inform and recruit small business concerns 
to apply for eligibility for assistance under this subsection. 
Such program shall make a sustained and substantial effort to 
solicit applications for certification from small business 
concerns located in areas of concentrated unemployment or 
underemployment or within labor surplus areas and within States 
having relatively few Program Participants and from small 
disadvantaged business concerns in industry categories that 
have not substantially participated in the award of contracts 
let under the authority of this subsection.
  (11) To the maximum extent practicable, construction 
subcontracts awarded by the Administration pursuant to this 
subsection shall be awarded within the county or State where 
the work is to be performed.
  (12)(A) The Administration shall require each concern 
eligible to receive subcontracts pursuant to this subsection to 
annually prepare and submit to the Administration a capability 
statement. Such statement shall briefly describe such concern's 
various contract performance capabilities and shall contain the 
name and telephone number of the Business Opportunity 
Specialist assigned such concern. The Administration shall 
separate such statements by those primarily dependent upon 
local contract support and those primarily requiring a national 
marketing effort. Statements primarily dependent upon local 
contract support shall be disseminated to appropriate buying 
activities in the marketing area of the concern. The remaining 
statements shall be disseminated to the Directors of Small and 
Disadvantaged Business Utilization for the appropriate agencies 
who shall further distribute such statements to buying 
activities with such agencies that may purchase the types of 
items or services described on the capability statements.
  (B) Contracting activities receiving capability statements 
shall, within 60 days after receipt, contact the relevant 
Business Opportunity Specialist to indicate the number, type, 
and approximate dollar value of contract opportunities that 
such activities may be awarding over the succeeding 12-month 
period and which may be appropriate to consider for award to 
those concerns for which it has received capability statements.
  (C) Each executive agency reporting to the Federal 
Procurement Data System contract actions with an aggregate 
value in excess of $50,000,000 in fiscal year 1988, or in any 
succeeding fiscal year, shall prepare a forecast of expected 
contract opportunities or classes of contract opportunities for 
the next and succeeding fiscal years that small business 
concerns, including those owned and controlled by socially and 
economically disadvantaged individuals, are capable of 
performing. Such forecast shall be periodically revised during 
such year. To the extent such information is available, the 
agency forecasts shall specify:
          (i) The approximate number of individual contract 
        opportunities (and the number of opportunities within a 
        class).
          (ii) The approximate dollar value, or range of dollar 
        values, for each contract opportunity or class of 
        contract opportunities.
          (iii) The anticipated time (by fiscal year quarter) 
        for the issuance of a procurement request.
          (iv) The activity responsible for the award and 
        administration of the contract.
  (D) The head of each executive agency subject to the 
provisions of subparagraph (C) shall within 10 days of 
completion furnish such forecasts to--
          (i) the Director of the Office of Small and 
        Disadvantaged Business Utilization established pursuant 
        to section 15(k) for such agency; and
          (ii) the Administrator.
  (E) The information reported pursuant to subparagraph (D) may 
be limited to classes of items and services for which there are 
substantial annual purchases.
  (F) Such forecasts shall be available to small business 
concerns.
  (13) For purposes of this subsection, the term ``Indian 
tribe'' means any Indian tribe, band, nation, or other 
organized group or community of Indians, including any Alaska 
Native village or regional or village corporation (within the 
meaning of the Alaska Native Claims Settlement Act) which--
          (A) is recognized as eligible for the special 
        programs and services provided by the United States to 
        Indians because of their status as Indians, or
          (B) is recognized as such by the State in which such 
        tribe, band, nation, group, or community resides.
          (14) Limitations on subcontracting.--A concern may 
        not be awarded a contract under this subsection as a 
        small business concern unless the concern agrees to 
        satisfy the requirements of section 46.
  (15) For purposes of this subsection, the term ``Native 
Hawaiian Organization'' means any community service 
organization serving Native Hawaiians in the State of Hawaii 
which----
          (A) is a nonprofit corporation that has filed 
        articles of incorporation with the director (or the 
        designee thereof) of the Hawaii Department of Commerce 
        and Consumer Affairs, or any successor agency,
          (B) is controlled by Native Hawaiians, and
          (C) whose business activities will principally 
        benefit such Native Hawaiians.
  (16)(A) The Administration shall award sole source contracts 
under this section to any small business concern recommended by 
the procuring agency offering the contract opportunity if----
          (i) the Program Participant is determined to be a 
        responsible contractor with respect to performance of 
        such contract opportunity;
          (ii) the award of such contract would be consistent 
        with the Program Participant's business plan; and
          (iii) the award of the contract would not result in 
        the Program Participant exceeding the requirements 
        established by section 7(j)(10)(I).
  (B) To the maximum extent practicable, the Administration 
shall promote the equitable geographic distribution of sole 
source contracts awarded pursuant to this subsection.
  (17)(A) An otherwise responsible business concern that is in 
compliance with the requirements of subparagraph (B) shall not 
be denied the opportunity to submit and have considered its 
offer for any procurement contract, which contract has as its 
principal purpose the supply of a product to be let pursuant to 
this subsection, subsection (m), section 15(a), section 31, or 
section 36, solely because such concern is other than the 
actual manufacturer or processor of the product to be supplied 
under the contract.
  (B) To be in compliance with the requirements referred to in 
subparagraph (A), such a business concern shall--
          (i) be primarily engaged in the wholesale or retail 
        trade;
          (ii) be a small business concern under the numerical 
        size standard for the Standard Industrial 
        Classification Code assigned to the contract 
        solicitation on which the offer is being made;
          (iii) be a regular dealer, as defined pursuant to 
        section 35(a) of title 41, United States Code 
        (popularly referred to as the Walsh-Healey Public 
        Contracts Act), in the product to be offered the 
        Government or be specifically exempted from such 
        section by section 7(j)(13)(C); and
          (iv) represent that it will supply the product of a 
        domestic small business manufacturer or processor, 
        unless a waiver of such requirement is granted--
                  (I) by the Administrator, after reviewing a 
                determination by the contracting officer that 
                no small business manufacturer or processor can 
                reasonably be expected to offer a product 
                meeting the specifications (including period 
                for performance) required of an offeror by the 
                solicitation; or
                  (II) by the Administrator for a product (or 
                class of products), after determining that no 
                small business manufacturer or processor is 
                available to participate in the Federal 
                procurement market.
          (C) Limitation.--This paragraph shall not apply to a 
        contract that has as its principal purpose the 
        acquisition of services or construction.
  (18)(A) No person within the employ of the Administration 
shall, during the term of such employment and for a period of 
two years after such employment has been terminated, engage in 
any activity or transaction specified in subparagraph (B) with 
respect to any Program Participant during such person's term of 
employment, if such person participated personally (either 
directly or indirectly) in decision-making responsibilities 
relating to such Program Participant or with respect to the 
administration of any assistance provided to Program 
Participants generally under this subsection, section 7(j)(10), 
or section 7(a)(20).
  (B) The activities and transactions prohibited by 
subparagraph (A) include----
          (i) the buying, selling, or receiving (except by 
        inheritance) of any legal or beneficial ownership of 
        stock or any other ownership interest or the right to 
        acquire any such interest;
          (ii) the entering into or execution of any written or 
        oral agreement (whether or not legally enforceable) to 
        purchase or otherwise obtain any right or interest 
        described in clause (i); or
          (iii) the receipt of any other benefit or right that 
        may be an incident of ownership.
  (C)(i) The employees designated in clause (ii) shall annually 
submit a written certification to the Administration regarding 
compliance with the requirements of this paragraph.
  (ii) The employees referred to in clause (i) are----
          (I) regional administrators;
          (II) district directors;
          (III) the Associate Administrator for Minority Small 
        Business and Capital Ownership Development;
          (IV) employees whose principal duties relate to the 
        award of contracts or the provision of other assistance 
        pursuant to this subsection or section 7(j)(10); and
          (V) such other employees as the Administrator may 
        deem appropriate.
  (iii) Any present or former employee of the Administration 
who violates this paragraph shall be subject to a civil 
penalty, assessed by the Attorney General, that shall not 
exceed 300 per centum of the maximum amount of gain such 
employee realized or could have realized as a result of 
engaging in those activities and transactions prescribed by 
subparagraph (B).
  (iv) In addition to any other remedy or sanction provided for 
under law or regulation, any person who falsely certifies 
pursuant to clause (i) shall be subject to a civil penalty 
under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 
3801-3812).
  (19)(A) Any employee of the Administration who has authority 
to take, direct others to take, recommend, or approve any 
action with respect to any program or activity conducted 
pursuant to this subsection or section 7(j), shall not, with 
respect to any such action, exercise or threaten to exercise 
such authority on the basis of the political activity or 
affiliation of any party. Employees of the Administration shall 
expeditiously report to the Inspector General of the 
Administration any such action for which such employee's 
participation has been solicitated or directed.
  (B) Any employee who willfully and knowingly violates 
subparagraph (A) shall be subject to disciplinary action, which 
may consist of separation from service, reduction in grade, 
suspension, or reprimand.
  (C) Subparagraph (A) shall not apply to any action taken as a 
penalty or other enforcement of a violation of any law, rule, 
or regulation prohibiting or restricting political activity.
  (D) The prohibitions of subparagraph (A), and remedial 
measures provided for under subparagraphs (B) and (C) with 
regard to such prohibitions, shall be in addition to, and not 
in lieu of, any other prohibitions, measures or liabilities 
that may arise under any other provision of law.
  (20)(A) Small business concerns participating in the Program 
under section 7(j)(10) and eligible to receive contracts 
pursuant to this section shall semiannually report to their 
assigned Business Opportunity Specialist the following:
          (i) A listing of any agents, representatives, 
        attorneys, accountants, consultants, and other parties 
        (other than employees) receiving compensation to assist 
        in obtaining a Federal contract for such Program 
        Participant.
          (ii) The amount of compensation received by any 
        person listed under clause (i) during the relevant 
        reporting period and a description of the activities 
        performed in return for such compensation.
  (B) The Business Opportunity Specialist shall promptly review 
and forward such report to the Associate Administrator for 
Minority Small Business and Capital Ownership Development. Any 
report that raises a suspicion of improper activity shall be 
reported immediately to the Inspector General of the 
Administration.
  (C) The failure to submit a report pursuant to the 
requirements of this subsection and applicable regulations 
shall be considered ``good cause'' for the initiation of a 
termination proceeding pursuant to section 7(j)(10)(F).
  (21)(A) Subject to the provisions of subparagraph (B), a 
contract (including options) awarded pursuant to this 
subsection shall be performed by the concern that initially 
received such contract. Notwithstanding the provisions of the 
preceding sentence, if the owner or owners upon whom 
eligibility was based relinquish ownership or control of such 
concern, or enter into any agreement to relinquish such 
ownership or control, such contract or option shall be 
terminated for the convenience of the Government, except that 
no repurchase costs or other damages may be assessed against 
such concerns due solely to the provisions of this 
subparagraph.
  (B) The Administrator may, on a nondelegable basis, waive the 
requirements of subparagraph (A) only if one of the following 
conditions exist:
          (i) When it is necessary for the owners of the 
        concern to surrender partial control of such concern on 
        a temporary basis in order to obtain equity financing.
          (ii) The head of the contracting agency for which the 
        contract is being performed certifies that termination 
        of the contract would severely impair attainment of the 
        agency's program objectives or missions;
          (iii) Ownership and control of the concern that is 
        performing the contract will pass to another small 
        business concern that is a program participant, but 
        only if the acquiring firm would otherwise be eligible 
        to receive the award directly pursuant to subsection 
        (a);
          (iv) The individuals upon whom eligibility was based 
        are no longer able to exercise control of the concern 
        due to incapacity or death; or
          (v) When, in order to raise equity capital, it is 
        necessary for the disadvantaged owners of the concern 
        to relinquish ownership of a majority of the voting 
        stock of such concern, but only if----
                  (I) such concern has exited the Capital 
                Ownership Development Program;
                  (II) the disadvantaged owners will maintain 
                ownership of the largest single outstanding 
                block of voting stock (including stock held by 
                affiliated parties); and
                  (III) the disadvantaged owners will maintain 
                control of daily business operations.
          (C) The Administrator may waive the requirements of 
        subparagraph (A) if----
                  (i) in the case of subparagraph (B) (i), (ii) 
                and (iv), he is requested to do so prior to the 
                actual relinquishment of ownership or control; 
                and
                  (ii) in the case of subparagraph (B)(iii), he 
                is requested to do so as soon as possible after 
                the incapacity or death occurs.
  (D) Concerns performing contracts awarded pursuant to this 
subsection shall be required to notify the Administration 
immediately upon entering an agreement (either oral or in 
writing) to transfer all or part of its stock or other 
ownership interest to any other party.
  (E) Notwithstanding any other provision of law, for the 
purposes of determining ownership and control of a concern 
under this section, any potential ownership interests held by 
investment companies licensed under the Small Business 
Investment Act of 1958 shall be treated in the same manner as 
interests held by the individuals upon whom eligibility is 
based.
  (b) It shall also be the duty of the Administration and it is 
hereby empowered, whenever it determines such action is 
necessary----
          (1)(A) to provide----
                  (i) technical, managerial, and informational 
                aids to small business concerns--
                          (I) by advising and counseling on 
                        matters in connection with Government 
                        procurement and policies, principles, 
                        and practices of good management;
                          (II) by cooperating and advising 
                        with----
                                  (aa) voluntary business, 
                                professional, educational, and 
                                other nonprofit organizations, 
                                associations, and institutions 
                                (except that the Administration 
                                shall take such actions as it 
                                determines necessary to ensure 
                                that such cooperation does not 
                                constitute or imply an 
                                endorsement by the 
                                Administration of the 
                                organization or its products or 
                                services, and shall ensure that 
                                it receives appropriate 
                                recognition in all printed 
                                materials); and
                                  (bb) other Federal and State 
                                agencies;
                          (III) by maintaining a clearinghouse 
                        for information on managing, financing, 
                        and operating small business 
                        enterprises; and
                          (IV) by disseminating such 
                        information, including through 
                        recognition events, and by other 
                        activities that the Administration 
                        determines to be appropriate; and
                  (ii) through cooperation with a profit-making 
                concern (referred to in this paragraph as a 
                ``cosponsor''), training, information, and 
                education to small business concerns, except 
                that the Administration shall----
                          (I) take such actions as it 
                        determines to be appropriate to ensure 
                        that----
                                  (aa) the Administration 
                                receives appropriate 
                                recognition and publicity;
                                  (bb) the cooperation does not 
                                constitute or imply an 
                                endorsement by the 
                                Administration of any product 
                                or service of the cosponsor;
                                  (cc) unnecessary promotion of 
                                the products or services of the 
                                cosponsor is avoided; and
                                  (dd) utilization of any one 
                                cosponsor in a marketing area 
                                is minimized; and
                          (II) develop an agreement, executed 
                        on behalf of the Administration by an 
                        employee of the Administration in 
                        Washington, the District of Columbia, 
                        that provides, at a minimum, that--
                                  (aa) any printed material to 
                                announce the cosponsorship or 
                                to be distributed at the 
                                cosponsored activity, shall be 
                                approved in advance by the 
                                Administration;
                                  (bb) the terms and conditions 
                                of the cooperation shall be 
                                specified;
                                  (cc) only minimal charges may 
                                be imposed on any small 
                                business concern to cover the 
                                direct costs of providing the 
                                assistance;
                                  (dd) the Administration may 
                                provide to the cosponsorship 
                                mailing labels, but not lists 
                                of names and addresses of small 
                                business concerns compiled by 
                                the Administration;
                                  (ee) all printed materials 
                                containing the names of both 
                                the Administration and the 
                                cosponsor shall include a 
                                prominent disclaimer that the 
                                cooperation does not constitute 
                                or imply an endorsement by the 
                                Administration of any product 
                                or service of the cosponsor; 
                                and
                                  (ff) the Administration shall 
                                ensure that it receives 
                                appropriate recognition in all 
                                cosponsorship printed 
                                materials.
          (B) To establish, conduct, and publicize, and to 
        recruit, select, and train volunteers for (and to enter 
        into contracts, grants, or cooperative agreements 
        therefor), volunteer programs, including a Service 
        Corps of Retired Executives (SCORE) and an Active Corps 
        of Executive (ACE) for the purposes of section 
        8(b)(1)(A) of this Act. To facilitate the 
        implementation of such volunteer programs the 
        Administration shall maintain at its headquarters and 
        pay the salaries, benefits, and expenses of a volunteer 
        and professional staff to manage and oversee the 
        program. Any such payments made pursuant to this 
        subparagraph shall be effective only to such extent or 
        in such amounts as are provided in advance in 
        appropriation Acts. Notwithstanding any other provision 
        of law, SCORE may solicit cash and in-kind 
        contributions from the private sector to be used to 
        carry out its functions under this Act, and may use 
        payments made by the Administration pursuant to this 
        subparagraph for such solicitation and the management 
        of the contributions received.
          (C) To allow any individual or group of persons 
        participating with it in furtherance of the purposes of 
        subparagraphs (A) and (B) to use the Administration's 
        office facilities and related material and services as 
        the Administration deems appropriate, including 
        clerical and stenographic service:
                  (i) such volunteers, while carrying out 
                activities under section 8(b)(1) of this Act 
                shall be deemed Federal employees for the 
                purposes of the Federal tort claims provisions 
                in title 28, United States Code; and for the 
                purposes of subchapter I of chapter 81 of title 
                5, United States Code (relative to compensation 
                to Federal employees for work injuries) shall 
                be deemed civil employees of the United States 
                within the meaning of the term ``employee'' as 
                defined in section 8101 of title 5, United 
                States Code, and the provisions of that 
                subchapter shall apply except that in computing 
                compensation benefits for disability or death, 
                the monthly pay of a volunteer shall be deemed 
                that received under the entrance salary for a 
                grade GS-11 employee:
                  (ii) the Administrator is authorized to 
                reimburse such volunteers for all necessary 
                out-of-pocket expenses incident to their 
                provision of services under this Act, or in 
                connection with attendance at meetings 
                sponsored by the Administration, or for the 
                cost of malpractice insurance, as the 
                Administrator shall determine, in accordance 
                with regulations which he or she shall 
                prescribe, and, while they are carrying out 
                such activities away from their homes or 
                regular places of business, for travel expenses 
                (including per diem in lieu of subsistence) as 
                authorized by section 5703 of title 5, United 
                States Code, for individuals serving without 
                pay; and
                  (iii) such volunteers shall in no way provide 
                services to a client of such Administration 
                with a delinquent loan outstanding, except upon 
                a specific request signed by such client for 
                assistance in connection with such matter.
          (D) Notwithstanding any other provision of law, no 
        payment for supportive services or reimbursement of 
        out-of-pocket expenses made to persons serving pursuant 
        to section 8(b)(1) of this Act shall be subject to any 
        tax or charge or be treated as wages or compensation 
        for the purposes of unemployment, disability, 
        retirement, public assistance, or similar benefit 
        payments, or minimum wage laws.
          (E) In carrying out its functions under subparagraph 
        (A), to make grants (including contracts and 
        cooperative agreements) to any public or private 
        institution of higher education for the establishment 
        and operation of a small business institute, which 
        shall be used to provide business counseling and 
        assistance to small business concerns through the 
        activities of students enrolled at the institution, 
        which students shall be entitled to receive educational 
        credits for their activities.
          (F) Notwithstanding any other provision of law and 
        pursuant to regulations which the Administrator shall 
        provide, counsel may be employed and counsel fees, 
        court costs, bail, and other expenses incidental to the 
        defense of volunteers may be paid in judicial or 
        Administrative proceedings arising directly out of the 
        performance of activities pursuant to section 8(b)(1) 
        of this Act, as amended (15 U.S.C. 637(b)(1)) to which 
        volunteers have been made parties.
          (G) In carrying out its functions under this Act and 
        to carry out the activities authorized by title IV of 
        the Women's Business Ownership Act of 1988, the 
        Administration is authorized to accept, in the name of 
        the Administration, and employ or dispose of in 
        furtherance of the purposes of this Act, any money or 
        property, real, personal, or mixed, tangible, or 
        intangible, received by gift, devise, bequest, or 
        otherwise; and, further, to accept gratuitous services 
        and facilities.
          (2) to make a complete inventory of all productive 
        facilities of small-business concerns or to arrange for 
        such inventory to be made by any other governmental 
        agency which has the facilities. In making any such 
        inventory, the appropriate agencies in the several 
        States may be requested to furnish an inventory of the 
        productive facilities of small-business concerns in 
        each respective State if such an inventory is available 
        or in prospect;
          (3) to coordinate and to ascertain the means by which 
        the productive capacity of small-business concerns can 
        be most effectively utilized;
          (4) to consult and cooperative with officers of the 
        Government having procurement or property disposal 
        powers, in order to utilize the potential productive 
        capacity of plants operated by small-business concerns;
          (5) to obtain information as to methods and practices 
        which Government prime contractors utilize in letting 
        subcontracts and to take action to encourage the 
        letting of subcontracts by prime contractors to small-
        business concerns at prices and on conditions and terms 
        which are fair and equitable;
          (6) to determine within any industry the concerns, 
        firms, persons, corporations, partnerships, 
        cooperatives, or other business enterprises which are 
        to be designated ``small-business concerns'' for the 
        purpose of effectuating the provisions of this Act. To 
        carry out this purpose the Administrator, when 
        requested to do so, shall issue in response to each 
        such request an appropriate certificate certifying an 
        individual concern as a ``small-business concern'' in 
        accordance with the criteria expressed in this Act. Any 
        such certificate shall be subject to revocation when 
        the concern covered thereby ceases to be a ``small-
        business concern.'' Offices of the Government having 
        procurement or lending powers, or engaging in the 
        disposal of Federal property or allocating materials or 
        supplies, or promulgating regulations affecting the 
        distribution of materials or supplies, shall accept as 
        conclusive the Administration's determination as to 
        which enterprises are to be designated ``small-business 
        concerns'', as authorized and directed under this 
        paragraph;
          (7)(A) to certify to Government procurement officers, 
        and officers engaged in the sale and disposal of 
        Federal property, with respect to all elements of 
        responsibility, including, but not limited to, 
        capability, competency, capacity, credit, integrity, 
        perseverance, and tenacity, of any small business 
        concern or group of such concerns to receive and 
        perform a specific Government contract. A Government 
        procurement officer or an officer engaged in the sale 
        and disposal of Federal property may not, for any 
        reason specified in the preceding sentence, preclude 
        any small business concern or group of such concerns 
        from being awarded such contract without referring the 
        matter for a final disposition to the Administration.
          (B) if a Government procurement officer finds that an 
        otherwise qualified small business concern may be 
        ineligible due to the provisions of section 35(a) of 
        title 41, United States Code (the Walsh-Healey Public 
        Contracts Act), he shall notify the Administration in 
        writing of such finding. The Administration shall 
        review such finding and shall either dismiss it and 
        certify the small business concern to be an eligible 
        Government contractor for a specific Government 
        contract or if it concurs in the finding, forward the 
        matter to the Secretary of Labor for final disposition, 
        in which case the Administration may certify the small 
        business concern only if the Secretary of Labor finds 
        the small business concern not to be in violation.
          (C) in any case in which a small business concern or 
        group of such concerns has been certified by the 
        Administration pursuant to (A) or (B) to be a 
        responsible or eligible Government contractor as to a 
        specific Government contract, the officers of the 
        Government having procurement or property disposal 
        powers are directed to accept such certification as 
        conclusive, and shall let such Government contract to 
        such concern or group of concerns without requiring it 
        to meet any other requirement of responsibility or 
        eligibility. Notwithstanding the first sentence of this 
        subparagraph, the Administration may not establish an 
        exemption from referral or notification or refuse to 
        accept a referral or notification from a Government 
        procurement officer made pursuant to subparagraph (A) 
        or (B) of this paragraph, but nothing in this paragraph 
        shall require the processing of an application for 
        certification if the small business concern to which 
        the referral pertains declines to have the application 
        processed.
          (8) to obtain from any Federal department, 
        establishment, or agency engaged in procurement or in 
        the financing of procurement or production such reports 
        concerning the letting of contracts and subcontracts 
        and the making of loans to business concerns as it may 
        deem pertinent in carrying out its functions under this 
        Act;
          (9) to obtain from any Federal department, 
        establishment, or agency engaged in the disposal of 
        Federal property such reports concerning the 
        solicitation of bids, time of sale, or otherwise as it 
        may deem pertinent in carrying out its functions under 
        this Act;
          (10) to obtain from suppliers of materials 
        information pertaining to the method of filling orders 
        and the bases for allocating their supply, whenever it 
        appears that any small business is unable to obtain 
        materials from its normal sources;
          (11) to make studies and recommendations to the 
        appropriate Federal agencies to insure that a fair 
        proportion of the total purchases and contracts for 
        property and services for the Government be placed with 
        small-business enterprises, to insure that a fair 
        proportion of Government contacts for research and 
        development be placed with small-business concerns, to 
        insure that a fair proportion of the total sales of 
        Government property be made to small-business concerns, 
        and to insure a fair and equitable share of materials, 
        supplies, and equipment to small-business concerns;
          (12) to consult and cooperate with all Government 
        agencies for the purpose of insuring that small-
        business concerns shall receive fair and reasonable 
        treatment from such agencies;
          (13) to establish such advisory boards and committees 
        as may be necessary to achieve the purposes of this Act 
        and of the Small Business Investment Act of 1958; to 
        call meetings of such boards and committees from time 
        to time; to pay the transportation expenses and a per 
        diem allowance in accordance with section 5703 of title 
        5, United States Code, to the members of such boards 
        and committees for travel and subsistence expenses 
        incurred at the request of the Administration in 
        connection with travel to points more than fifty miles 
        distant from the homes of such members in attending the 
        meetings of such boards and committees; and to rent 
        temporarily, within the District of Columbia or 
        elsewhere, such hotel or other accommodations as are 
        needed to facilitate the conduct of such meetings;
          (14) to provide at the earliest practicable time such 
        information and assistance as may be appropriate, 
        including information concerning eligibility for loans 
        under section 7(b)(3), to local public agencies (as 
        defined in section 110(h) of the Housing Act of 1949) 
        and to small-business concerns to be displaced by 
        federally aided urban renewal projects in order to 
        assist such small-business concerns in reestablishing 
        their operations;
          (15) to disseminate, without regard to the provisions 
        of section 3204 of title 39, United States Code, data 
        and information, in such form as it shall deem 
        appropriate, to public agencies, private organizations, 
        and the general public;
          (16) to make studies of matters materially affecting 
        the competitive strength of small business, and of the 
        effect on small business of Federal laws, programs, and 
        regulations, and to make recommendations to the 
        appropriate Federal agency or agencies for the 
        adjustment of such programs and regulations to the 
        needs of small business; and
          (17) to make grants to, and enter into contracts and 
        cooperative agreements with, educational institutions, 
        private businesses, veterans' nonprofit community-based 
        organizations, and Federal, State, and local 
        departments and agencies for the establishment and 
        implementation of outreach programs for disabled 
        veterans (as defined in section 4211(3) of title 38, 
        United States Code), veterans, and members of a reserve 
        component of the Armed Forces.
  (c)
  (d)(1) It is the policy of the United States that small 
business concerns, small business concerns owned and controlled 
by veterans, small business concerns owned and controlled by 
service-disabled veterans, qualified HUBZone small business 
concerns, small business concerns owned and controlled by 
socially and economically disadvantaged individuals, and small 
business concerns owned and controlled by women, shall have the 
maximum practicable opportunity to participate in the 
performance of contracts let by any Federal agency, including 
contracts and subcontracts for subsystems, assemblies, 
components, and related services for major systems. It is 
further the policy of the United States that its prime 
contractors establish procedures to ensure the timely payment 
of amounts due pursuant to the terms of their subcontracts with 
small business concerns, small business concerns owned and 
controlled by veterans, small business concerns owned and 
controlled by service-disabled veterans, qualified HUBZone 
small business concerns, small business concerns owned and 
controlled by socially and economically disadvantaged 
individuals, and small business concerns owned and controlled 
by women.
  (2) The clause stated in paragraph (3) shall be included in 
all contracts let by any Federal agency except any contract 
which----
          (A) does not exceed the simplified acquisition 
        threshold;
          (B) including all subcontracts under such contracts 
        will be performed entirely outside of any State, 
        territory, or possession of the United States, the 
        District of Columbia, or the Commonwealth of Puerto 
        Rico; or
          (C) is for services which are personal in nature.
  (3) The clause required by paragraph (2) shall be as follows:
          (A) It is the policy of the United States that small 
        business concerns, small business concerns owned and 
        controlled by veterans, small business concerns owned 
        and controlled by service-disabled veterans, qualified 
        HUBZone small business concerns, small business 
        concerns owned and controlled by socially and 
        economically disadvantaged individuals, and small 
        business concerns owned and controlled by women shall 
        have the maximum practicable opportunity to participate 
        in the performance of contracts let by any Federal 
        agency, including contracts and subcontracts for 
        subsystems, assemblies, components, and related 
        services for major systems. It is further the policy of 
        the United States that its prime contractors establish 
        procedures to ensure the timely payment of amounts due 
        pursuant to the terms of their subcontracts with small 
        business concerns, small business concerns owned and 
        controlled by veterans, small business concerns owned 
        and controlled by service-disabled veterans, qualified 
        HUBZone small business concerns, small business 
        concerns owned and controlled by socially and 
        economically disadvantaged individuals, and small 
        business concerns owned and controlled by women.
          (B) The contractor hereby agrees to carry out this 
        policy in the awarding of subcontracts to the fullest 
        extent consistent with the efficient performance of 
        this contract. The contractor further agrees to 
        cooperate in any studies or surveys as may be conducted 
        by the United States Small Business Administration or 
        the awarding agency of the United States as may be 
        necessary to determine the extent of the contractor's 
        compliance with this clause.
          (C) As used in this contract, the term ``small 
        business concern'' shall mean a small business as 
        defined pursuant to section 3 of the Small Business Act 
        and relevant regulations promulgated pursuant thereto. 
        The term ``small business concern owned and controlled 
        by socially and economically disadvantaged 
        individuals'' shall mean a small business concern----
                  (i) which is at least 51 per centum owned by 
                one or more socially and economically 
                disadvantaged individuals; or, in the case of 
                any publicly owned business, at least 51 per 
                centum of the stock of which is owned by one or 
                more socially and economically disadvantaged 
                individuals; and
                  (ii) whose management and daily business 
                operations are controlled by one or more of 
                such individuals.
        The contractor shall presume that socially and 
        economically disadvantaged individuals include Black 
        Americans, Hispanic Americans, Native Americans, Asian 
        Pacific Americans, and other minorities, or any other 
        individual found to be disadvantaged by the 
        Administration pursuant to section 8(a) of the Small 
        Business Act.
          (D) The term ``small business concern owned and 
        controlled by women'' shall mean a small business 
        concern----
                  (i) which is at least 51 per centum owned by 
                one or more women; or, in the case of any 
                publicly owned business, at least 51 per centum 
                of the stock of which is owned by one or more 
                women; and
                  (ii) whose management and daily business 
                operations are controlled by one or more women.
          (E) The term ``small business concern owned and 
        controlled by veterans'' shall mean a small business 
        concern----
                  (i) which is at least 51 per centum owned by 
                one or more eligible veterans; or, in the case 
                of any publicly owned business, at least 51 per 
                centum of the stock of which is owned by one or 
                more veterans; and
                  (ii) whose management and daily business 
                operations are controlled by such veterans. The 
                contractor shall treat as veterans all 
                individuals who are veterans within the meaning 
                of the term under section 3(q) of the Small 
                Business Act.
          (F) Contractors acting in good faith may rely on 
        written representations by their subcontractors 
        regarding their status as either a small business 
        concern, small business concern owned and controlled by 
        veterans, small business concern owned and controlled 
        by service-disabled veterans, a small business concern 
        owned and controlled by socially and economically 
        disadvantaged individuals, or a small business concern 
        owned and controlled by women.
          (G) In this contract, the term ``qualified HUBZone 
        small business concern'' has the meaning given that 
        term in section 3(p) of the Small Business Act.
          (H) In this contract, the term ``small business 
        concern owned and controlled by service-disabled 
        veterans'' has the meaning given that term in section 
        3(q).
  (4)(A) Each solicitation of an offer for a contract to be let 
by a Federal agency which is to be awarded pursuant to the 
negotiated method of procurement and which may exceed 
$1,000,000, in the case of a contract for the construction of 
any public facility, or $500,000, in the case of all other 
contracts, shall contain a clause notifying potential offering 
companies of the provisions of this subsection relating to 
contracts awarded pursuant to the negotiated method of 
procurement.
  (B) Before the award of any contract to be let, or any 
amendment or modification to any contract let, by any Federal 
agency which----
          (i) is to be awarded, or was let, pursuant to the 
        negotiated method of procurement,
          (ii) is required to include the clause stated in 
        paragraph (3),
          (iii) may exceed $1,000,000 in the case of a contract 
        for the construction of any public facility, or 
        $500,000 in the case of all other contracts, and
          (iv) which offers subcontracting possibilities,
the apparent successful offeror shall negotiate with the 
procurement authority a subcontracting plan which incorporates 
the information prescribed in paragraph (6). The subcontracting 
plan shall be included in and made a material part of the 
contract.
  (C) If, within the time limit prescribed in regulations of 
the Federal agency concerned, the apparent successful offeror 
fails to negotiate the subcontracting plan required by this 
paragraph, such offeror shall become ineligible to be awarded 
the contract. Prior compliance of the offeror with other such 
subcontracting plans shall be considered by the Federal agency 
in determining the responsibility of that offeror for the award 
of the contract.
  (D) No contract shall be awarded to any offeror unless the 
procurement authority determines that the plan to be negotiated 
by the offeror pursuant to this paragraph provides the maximum 
practicable opportunity for small business concerns, qualified 
HUBZone small business concerns, small business concerns owned 
and controlled by veterans, small business concerns owned and 
controlled by service-disabled veterans, small business 
concerns owned and controlled by socially and economically 
disadvantaged individuals, and small business concerns owned 
and controlled by women to participate in the performance of 
the contract.
  (E) Notwithstanding any other provisions of law, every 
Federal agency, in order to encourage subcontracting 
opportunities for small business concerns, small business 
concerns owned and controlled by veterans, small business 
concerns owned and controlled by service-disabled veterans, 
qualified HUBZone small business concerns, and small business 
concerns owned and controlled by the socially and economically 
disadvantaged individuals as defined in paragraph (3) of this 
subsection and for small business concerns owned and controlled 
by women, is hereby authorized to provide such incentives as 
such Federal agency may deem appropriate in order to encourage 
such subcontracting opportunities as may be commensurate with 
the efficient and economical performance of the contact: 
Provided, That, this subparagraph shall apply only to contracts 
let pursuant to the negotiated method of procurement.
  (F)(i) Each contract subject to the requirements of this 
paragraph or paragraph (5) shall contain a clause for the 
payment of liquidated damages upon a finding that a prime 
contractor has failed to make a good faith effort to comply 
with the requirements imposed on such contractor by this 
subsection.
  (ii) The contractor shall be afforded an opportunity to 
demonstrate a good faith effort regarding compliance prior to 
the contracting officer's final decision regarding the 
impositon of damages and the amount thereof. The final decision 
of a contracting officer regarding the contractor's obligation 
to pay such damages, or the amounts thereof, shall be subject 
to the Contract Disputes Act of 1978 (41 U.S.C. 601-613).
  (iii) Each agency shall ensure that the goals offered by the 
apparent successful bidder or offeror are attainable in 
relation to--
          (I) the subcontracting opportunities available to the 
        contractor, commensurate with the efficient and 
        economical performance of the contract;
          (II) the pool of eligible subcontractors available to 
        fulfill the subcontracting opportunities; and
          (III) the actual performance of such contractor in 
        fulfilling the subcontracting goals specified in prior 
        plans.
          (G) The following factors shall be designated by the 
        Federal agency as significant factors for purposes of 
        evaluating offers for a bundled contract where the head 
        of the agency determines that the contract offers a 
        significant opportunity for subcontracting:
                  (i) A factor that is based on the rate 
                provided under the subcontracting plan for 
                small business participation in the performance 
                of the contract.
                  (ii) For the evaluation of past performance 
                of an offeror, a factor that is based on the 
                extent to which the offeror attained applicable 
                goals for small business participation in the 
                performance of contracts.
  (5)(A) Each solicitation of a bid for any contract to be let, 
or any amendment or modification to any contract let, by any 
Federal agency which--
          (i) is to be awarded pursuant to the formal 
        advertising method of procurement,
          (ii) is required to contain the clause stated in 
        paragraph (3) of this subsection,
          (iii) may exceed $1,000,000 in the case of a contract 
        for the construction of any public facility, or 
        $500,000, in the case of all other contracts, and
          (iv) offers subcontracting possibilities,
shall contain a clause requiring any bidder who is selected to 
be awarded a contract to submit to the Federal agency concerned 
a subcontracting plan which incorporates the information 
prescribed in paragraph (6).
  (B) If, within the time limit prescribed in regulations of 
the Federal agency concerned, the bidder selected to be awarded 
the contract fails to submit the subcontracting plan required 
by this paragraph, such bidder shall become ineligible to be 
awarded the contract. Prior compliance of the bidder with other 
such subcontracting plans shall be considered by the Federal 
agency in determining the responsibility of such bidder for the 
award of the contract. The subcontracting plan of the bidder 
awarded the contract shall be included in and made a material 
part of the contract.
  (6) Each subcontracting plan required under paragraph (4) or 
(5) shall include--
          (A) percentage goals for the utilization as 
        subcontractors of small business concerns, small 
        business concerns owned and controlled by veterans, 
        small business concerns owned and controlled by 
        service-disabled veterans, qualified HUBZone small 
        business concerns, small business concerns owned and 
        controlled by socially and economically disadvantaged 
        individuals, and small business concerns owned and 
        controlled by women;
          (B) the name of an individual within the employ of 
        the offeror or bidder who will administer the 
        subcontracting program of the offeror or bidder and a 
        description of the duties of such individual;
          (C) a description of the efforts the offeror or 
        bidder will take to assure that small business 
        concerns, small business concerns owned and controlled 
        by veterans, small business concerns owned and 
        controlled by service-disabled veterans, qualified 
        HUBZone small business concerns, small business 
        concerns owned and controlled by socially and 
        economically disadvantaged individuals, and small 
        business concerns owned and controlled by women will 
        have an equitable opportunity to compete for 
        subcontracts;
          (D) assurances that the offeror or bidder will 
        include the clause required by paragraph (2) of this 
        subsection in all subcontracts which offer further 
        subcontracting opportunities, and that the offeror or 
        bidder will require all subcontractors (except small 
        business concerns) who receive subcontracts in excess 
        of $1,000,000 in the case of a contract for the 
        construction of any public facility, or in excess of 
        $500,000 in the case of all other contracts, to adopt a 
        plan similar to the plan required under paragraph (4) 
        or (5), and assurances at a minimum that the offeror or 
        bidder, and all subcontractors required to maintain 
        subcontracting plans pursuant to this paragraph, will--
        --
                  (i) review and approve subcontracting plans 
                submitted by their subcontractors;
                  (ii) monitor subcontractor compliance with 
                their approved subcontracting plans;
                  (iii) ensure that subcontracting reports are 
                submitted by their subcontractors when 
                required;
                  (iv) acknowledge receipt of their 
                subcontractors' reports;
                  (v) compare the performance of their 
                subcontractors to subcontracting plans and 
                goals; and
                  (vi) discuss performance with subcontractors 
                when necessary to ensure their subcontractors 
                make a good faith effort to comply with their 
                subcontracting plans;
          (E) assurances that the offeror or bidder will submit 
        such periodic reports and cooperate in any studies or 
        surveys as may be required by the Federal agency or the 
        Administration in order to determine the extent of 
        compliance by the offeror or bidder with the 
        subcontracting plan;
          (F) a recitation of the types of records the 
        successful offeror or bidder will maintain to 
        demonstrate procedures which have been adopted to 
        comply with the requirements and goals set forth in 
        this plan, including the establishment of source lists 
        of small business concerns, small business concerns 
        owned and controlled by veterans, small business 
        concerns owned and controlled by service-disabled 
        veterans, qualified HUBZone small business concerns, 
        small business concerns owned and controlled by 
        socially and economically disadvantaged individuals, 
        and small business concerns owned and controlled by 
        women; and efforts to identify and award subcontracts 
        to such small business concerns;
          (G) a recitation of the types of records the 
        successful offeror or bidder will maintain to 
        demonstrate procedures which have been adopted to 
        ensure subcontractors at all tiers comply with the 
        requirements and goals set forth in the plan 
        established in accordance with subparagraph (D) of this 
        paragraph, including----
                  (i) the establishment of source lists of 
                small business concerns, small business 
                concerns owned and controlled by veterans, 
                small business concerns owned and controlled by 
                service-disabled veterans, qualified HUBZone 
                small business concerns, small business 
                concerns owned and controlled by socially and 
                economically disadvantaged individuals, and 
                small business concerns owned and controlled by 
                women; and
                  (ii) efforts to identify and award 
                subcontracts to such small business concerns; 
                and
          (H) a representation that the offeror or bidder 
        will----
                  (i) make a good faith effort to acquire 
                articles, equipment, supplies, services, or 
                materials, or obtain the performance of 
                construction work from the small business 
                concerns used in preparing and submitting to 
                the contracting agency the bid or proposal, in 
                the same amount and quality used in preparing 
                and submitting the bid or proposal; and
                  (ii) provide to the contracting officer a 
                written explanation if the offeror or bidder 
                fails to acquire articles, equipment, supplies, 
                services, or materials or obtain the 
                performance of construction work as described 
                in clause (i).
          (7) The head of the contracting agency shall ensure 
        that----
                  (A) the agency collects and reports data on 
                the extent to which contractors of the agency 
                meet the goals and objectives set forth in 
                subcontracting plans submitted pursuant to this 
                subsection; and
                  (B) the agency periodically reviews data 
                collected and reported pursuant to subparagraph 
                (A) for the purpose of ensuring that such 
                contractors comply in good faith with the 
                requirements of this subsection and 
                subcontracting plans submitted by the 
                contractors pursuant to this subsection.
  (8) The provisions of paragraphs (4), (5), and (6) shall not 
apply to offerors or bidders who are small business concerns.
  [(9) The failure]
  (9) Material breach._The failure of any contractor or 
subcontractor to comply in good faith with----
          (A) the clause contained in paragraph (3) of this 
        subsection, [or]
          (B) any plan required of such contractor pursuant to 
        the authority of this subsection to be included in its 
        contract or subcontract, or
          (C) assurances provided under paragraph (6)(E),
shall be a material breach of such contract or subcontract and 
may be considered in any past performance evaluation of the 
contractor.
  (10) Nothing contained in this subsection shall be construed 
to supersede the requirements of Defense Manpower Policy Number 
4A (32A CFR Chap. 1) or any successor policy.
  [(11) In the case of]
  (11) Authority of administrator._In the case of contracts 
within the provisions of paragraphs (4), (5), and (6), the 
Administration is authorized to--
          (A) assist Federal agencies and businesses in 
        complying with their responsibilities under the 
        provisions of this subsection, including the 
        formulation of subcontracting plans pursuant to 
        paragraph (4);
          (B) review any solicitation for any contract to be 
        let pursuant to paragraphs (4) and (5) to determine the 
        maximum practicable opportunity for small business 
        concerns, small business concerns owned and controlled 
        by veterans, small business concerns owned and 
        controlled by service-disabled veterans, qualified 
        HUBZone small business concerns, small business 
        concerns owned and controlled by socially and 
        economically disadvantaged individuals, and small 
        business concerns owned and controlled by women to 
        participate as subcontractors in the performance of any 
        contract resulting from any solicitation, and to submit 
        its findings[, which shall be advisory in nature,] to 
        the appropriate Federal agency; and
          (C) evaluate compliance with subcontracting plans as 
        a supplement to evaluations performed by the 
        contracting agency, either on a contract-by-contract 
        basis or, in the case of contractors having multiple 
        contracts, on an aggregate basis.
  (12) For purposes of determining the attainment of a 
subcontract utilization goal under any subcontracting plan 
entered into with any executive agency pursuant to this 
subsection, a mentor firm providing development assistance to a 
protege firm under the pilot Mentor-Protege Program established 
pursuant to section 831 of the National Defense Authorization 
Act for Fiscal Year 1991 (Public Law 101-510; 10 U.S.C. 2301 
note) shall be granted credit for such assistance in accordance 
with subsection (g) of such section.
  (13) Payment of Subcontractors.--
          (A) Definition.--In this paragraph, the term 
        ``covered contract'' means a contract relating to which 
        a prime contractor is required to develop a 
        subcontracting plan under paragraph (4) or (5).
          (B) Notice.--
                  (i) In general.--A prime contractor for a 
                covered contract shall notify in writing the 
                contracting officer for the covered contract if 
                the prime contractor pays a reduced price to a 
                subcontractor for goods and services upon 
                completion of the responsibilities of the 
                subcontractor or the payment to a subcontractor 
                is more than 90 days past due for goods or 
                services provided for the covered contract for 
                which the Federal agency has paid the prime 
                contractor.
                  (ii) Contents.--A prime contractor shall 
                include the reason for the reduction in a 
                payment to or failure to pay a subcontractor in 
                any notice made under clause (i).
          (C) Performance.--A contracting officer for a covered 
        contract shall consider the unjustified failure by a 
        prime contractor to make a full or timely payment to a 
        subcontractor in evaluating the performance of the 
        prime contractor.
          (D) Control of funds.--If the contracting officer for 
        a covered contract determines that a prime contractor 
        has a history of unjustified, untimely payments to 
        contractors, the contracting officer shall record the 
        identity of the contractor in accordance with the 
        regulations promulgated under subparagraph (E).
          (E) Regulations.--Not later than 1 year after the 
        date of enactment of this paragraph, the Federal 
        Acquisition Regulatory Council established under 
        section 25(a) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 421(a)) shall amend the Federal 
        Acquisition Regulation issued under section 25 of such 
        Act to--
                  (i) describe the circumstances under which a 
                contractor may be determined to have a history 
                of unjustified, untimely payments to 
                subcontractors;
                  (ii) establish a process for contracting 
                officers to record the identity of a contractor 
                described in clause (i); and
                  (iii) require the identity of a contractor 
                described in clause (i) to be incorporated in, 
                and made publicly available through, the 
                Federal Awardee Performance and Integrity 
                Information System, or any successor thereto.
          (14) An offeror for a covered contract that intends 
        to identify a small business concern as a potential 
        subcontractor in a bid or proposal for the contract, or 
        in a plan submitted pursuant to this subsection in 
        connection with the contract, shall notify the small 
        business concern prior to making such identification.
          (15) The Administrator shall establish a reporting 
        mechanism that allows a subcontractor or potential 
        subcontractor to report fraudulent activity or bad 
        faith by a contractor with respect to a subcontracting 
        plan submitted pursuant to this subsection.
  (16) Credit for Certain Subcontractors.--
          (A) For purposes of determining whether or not a 
        prime contractor has attained the percentage goals 
        specified in paragraph (6)--
                  (i) if the subcontracting goals pertain only 
                to a single contract with the executive agency, 
                the prime contractor shall receive credit for 
                small business concerns performing as first 
                tier subcontractors or subcontractors at any 
                tier pursuant to the subcontracting plans 
                required under paragraph (6)(D) in an amount 
                equal to the dollar value of work awarded to 
                such small business concerns; and
                  (ii) if the subcontracting goals pertain to 
                more than one contract with one or more 
                executive agencies, or to one contract with 
                more than one executive agency, the prime 
                contractor may only count first tier 
                subcontractors that are small business 
                concerns.
          (B) Nothing in this paragraph shall abrogate the 
        responsibility of a prime contractor to make a good-
        faith effort to achieve the first tier small business 
        subcontracting goals negotiated under paragraph (6)(A), 
        or the requirement for subcontractors with further 
        opportunities for subcontracting to make a good-faith 
        effort to achieve the goals established under paragraph 
        (6)(D).
          (17) Review and acceptance of subcontracting plans.--
                  (A) Definition.--In this paragraph, the term 
                ``covered small business concerns'' means----
                          (i) small business concerns;
                          (ii) qualified HUBZone small business 
                        concerns;
                          (iii) small business concerns owned 
                        and controlled by veterans;
                          (iv) small business concerns owned 
                        and controlled by service-disabled 
                        veterans;
                          (v) small business concerns owned and 
                        controlled by socially and economically 
                        disadvantaged individuals, as defined 
                        in paragraph (3)(C); and
                          (vi) small business concerns owned 
                        and controlled by women.
                  (B) Delayed acceptance of plan.--Except as 
                provided in subparagraph (E), if a procurement 
                center representative or commercial market 
                representative determines that a subcontracting 
                plan required under paragraph (4) or (5) fails 
                to provide the maximum practicable opportunity 
                for covered small business concerns to 
                participate in the performance of the contract 
                to which the plan applies, the representative 
                may delay acceptance of the plan in accordance 
                with subparagraph (C).
                  (C) Process for delayed acceptance.--
                          (i) In general.--Except as provided 
                        in clause (ii), a procurement center 
                        representative or commercial market 
                        representative who makes a 
                        determination under subparagraph (B) 
                        with respect to a subcontracting plan 
                        may delay acceptance of the plan for a 
                        30-day period by providing written 
                        notice of the determination to the head 
                        of the procuring activity of the 
                        contracting agency that includes 
                        recommendations for altering the plan 
                        to provide the maximum practicable 
                        opportunity described in that 
                        subparagraph.
                          (ii) Exception.--In the case of the 
                        Department of Defense----
                                  (I) a procurement center 
                                representative or commercial 
                                market representative who makes 
                                a determination under 
                                subparagraph (B) with respect 
                                to a subcontracting plan may 
                                delay acceptance of the plan 
                                for a 15-day period by 
                                providing written notice of the 
                                determination to appropriate 
                                personnel of the Department of 
                                Defense that includes 
                                recommendations for altering 
                                the plan to provide the maximum 
                                practicable opportunity 
                                described in that subparagraph; 
                                and
                                  (II) the authority of a 
                                procurement center 
                                representative or commercial 
                                market representative to delay 
                                acceptance of a subcontracting 
                                plan as provided in 
                                subparagraph (B) does not 
                                include the authority to delay 
                                the award or performance of the 
                                contract concerned.
                  (D) Disagreements.--If a procurement center 
                representative or commercial market 
                representative delays the acceptance of a 
                subcontracting plan under subparagraph (C) and 
                does not reach agreement with the head of the 
                procuring activity of the contracting agency to 
                alter the plan to provide the maximum 
                practicable opportunity described in 
                subparagraph (B) not later than 30 days after 
                the date on which written notice was provided, 
                the disagreement shall be submitted to the head 
                of the contracting agency by the Administrator 
                for a final determination.
                  (E) Exception.--A procurement center 
                representative or commercial market 
                representative may not delay the acceptance of 
                a subcontracting plan if the head of the 
                contracting agency certifies that the need of 
                the agency for the supplies or services is of 
                such an unusual and compelling urgency that the 
                United States would be seriously injured unless 
                the agency is permitted to accept the 
                subcontracting plan.
          (18) Pilot program providing past performance ratings 
        for other small business subcontractors.--
                  (A) Establishment.--The Administrator shall 
                establish a pilot program for a small business 
                concern performing as a first tier 
                subcontractor for a covered contract (as 
                defined in paragraph 13(A)) to request a past 
                performance rating in the system used by the 
                Federal Government to monitor or record 
                contractor past performance.
                  (B) Application.--A small business concern 
                described in subparagraph (A) shall submit an 
                application to the appropriate official for a 
                past performance rating. Such application shall 
                include written evidence of the past 
                performance factors for which the small 
                business concern seeks a rating and a suggested 
                rating.
                  (C) Determination.--The appropriate official 
                shall submit the application from the small 
                business concern to the contracting officer (or 
                a designee of such officer) for the covered 
                contract and to the prime contractor for 
                review. The contracting officer (or designee) 
                and the prime contractor shall, not later than 
                30 days after receipt of the application, 
                submit to the appropriate official a response 
                regarding the application.
                          (i) Agreement on rating.--If the 
                        contracting officer (or designee) and 
                        the prime contractor agree on a past 
                        performance rating, or if either the 
                        contracting officer (or designee) or 
                        the prime contractor fail to respond 
                        and the responding individual agrees 
                        with the rating of the applicant small 
                        business concern, the appropriate 
                        official shall enter the agreed-upon 
                        past performance rating in the system 
                        described in subparagraph (A).
                          (ii) Disagreement on rating.--If the 
                        contracting officer (or designee) and 
                        the prime contractor fail to respond 
                        within 30 days or if they disagree 
                        about the rating, or if either the 
                        contracting officer (or designee) or 
                        the prime contractor fail to respond 
                        and the responding individual disagrees 
                        with the rating of the applicant small 
                        business concern, the contracting 
                        officer (or designee) or the prime 
                        contractor shall submit a notice 
                        contesting the application to 
                        appropriate official. The appropriate 
                        official shall follow the requirements 
                        of subparagraph (D).
                  (D) Procedure for rating.--Not later than 14 
                calendar days after receipt of a notice under 
                subparagraph (C)(ii), the appropriate official 
                shall submit such notice to the applicant small 
                business concern. Such concern may submit 
                comments, rebuttals, or additional information 
                relating to the past performance of such 
                concern not later 14 calendar days after 
                receipt of such notice. The appropriate 
                official shall enter the into the system 
                described in subparagraph (A) a rating that is 
                neither favorable nor unfavorable along with 
                the initial application from the small business 
                concern, the responses of the contracting 
                officer (or designee) and the prime contractor, 
                and any additional information provided by the 
                small business concern.
                  (E) Use of information.--A small business 
                subcontractor may use a past performance rating 
                given under this paragraph to establish its 
                past performance for a prime contract.
                  (F) Duration.--The pilot program established 
                under this paragraph shall terminate 3 years 
                after the date on which the first small 
                business concern receives a past performance 
                rating for performance as a first tier 
                subcontractor.
                  (G) Report.--The Comptroller General of the 
                United States shall begin an assessment of the 
                pilot program 1 year after the establishment of 
                such program. Not later than 6 months after 
                beginning such assessment, the Comptroller 
                General shall submit a report to the Committee 
                on Small Business and Entrepreneurship of the 
                Senate and the Committee on Small Business of 
                the House of Representatives, which shall 
                include--
                          (i) the number of small business 
                        concerns that have received past 
                        performance ratings under the pilot 
                        program;
                          (ii) the number of applications in 
                        which the contracting officer (or 
                        designee) or the prime contractor 
                        contested the application of the small 
                        business concern;
                          (iii) any suggestions or 
                        recommendations the Comptroller General 
                        or the small business concerns 
                        participating in the program have to 
                        address disputes between the small 
                        business concern, the contracting 
                        officer (or designee), and the prime 
                        contractor on past performance ratings; 
                        and
                          (iv) any suggestions or 
                        recommendation the Comptroller General 
                        has to improve the operation of the 
                        pilot program.
                  (H) Appropriate official defined.--In this 
                paragraph, the term ``appropriate official'' 
                means a Commercial Market Representative or 
                other individual designated by the senior 
                official appointed by the Administrator with 
                responsibilities under sections 8, 15, 31, and 
                36.
  (e)(1) Except as provided in subsection (g)----
          (A) an executive agency intending to----
                  (i) solicit bids or proposals for a contract 
                for property or services for a price expected 
                to exceed $25,000; or
                  (ii) place an order, expected to exceed 
                $25,000, under a basic agreement, basis 
                ordering agreement, or similar arrangement,
        shall publish a notice described in subsection (f);
          (B) an executive agency intending to solicit bids or 
        proposals for a contract for property or services shall 
        post, for a period of not less than ten days, in a 
        public place at the contracting office issuing the 
        solicitation a notice of solicitation described in 
        subsection (f)--
                  (i) in the case of an executive agency other 
                than the Department of Defense, if the contract 
                is for a price expected to exceed $10,000, but 
                not to exceed $25,000; and
                  (ii) in the case of the Department of 
                Defense, if the contract is for a price 
                expected to exceed $5,000, but not to exceed 
                $25,000; and
          (C) an executive agency awarding a contract for 
        property or services for a price exceeding $100,000, or 
        placing an order referred to in clause (A)(ii) 
        exceeding $100,000, shall furnish for publication by 
        the Secretary of Commerce a notice announcing the award 
        or order if there is likely to be any subcontract under 
        such contract or order.
  (2)(A) A notice of solicitation required to be published 
under paragraph (1) may be published--
          (i) by electronic means that meet the accessibility 
        requirements under section 18(a)(7) of the Office of 
        Federal Procurement Policy Act (41 U.S.C. 416(a)(7)); 
        or
          (ii) by the Secretary of Commerce in the Commerce 
        Business Daily.
  (B) The Secretary of Commerce shall promptly publish in the 
Commerce Business Daily each notice or announcement received 
under this subsection for publication by that means.
  (3) Whenever an executive agency is required by paragraph 
(1)(A) to publish a notice of solicitation, such executive 
agency may not--
          (A) issue the solicitation earlier than 15 days after 
        the date on which the notice is published; or
          (B) in the case of a contract or order estimated to 
        be greater than the simplified acquisition threshold, 
        establish a deadline for the submission of all bids or 
        proposals in response to the notice required by 
        paragraph (1)(A) that--
                  (i) in the case of an order under a basic 
                agreement, basic ordering agreement, or similar 
                arrangement, is earlier than the date 30 days 
                after the date the notice required by paragraph 
                (1)(A)(ii) is published;
                  (ii) in the case of a solicitation for 
                research and development, is earlier than the 
                date 45 days after the date the notice required 
                by paragraph (1)(A)(i) is published; or
                  (iii) in any other case, is earlier than the 
                date 30 days after the date the solicitation is 
                issued.
  (f) Each notice of solicitation required by subparagraph (A) 
or (B) of subsection (e)(1) shall include----
          (1) an accurate description of the property or 
        services to be contracted for, which description (A) 
        shall not be unnecessarily restrictive of competition, 
        and (B) shall include, as appropriate, the agency 
        nomenclature, National Stock Number or other part 
        number, and a brief description of the item's form, 
        fit, or function, physical dimensions, predominant 
        material of manufacture, or similar information that 
        will assist a prospective contractor to make an 
        informed business judgment as to whether a copy of the 
        solicitation should be requested;
          (2) provisions that----
                  (A) state whether the technical data required 
                to respond to the solicitation will not be 
                furnished as part of such solicitation, and 
                identify the source in the Government, if any, 
                from which the technical data may be obtained; 
                and
                  (B) state whether an offeror, its product, or 
                service must meet a qualification requirement 
                in order to be eligible for award, and, if so, 
                identify the office from which a qualification 
                requirement may be obtained;
          (3) the name, business address, and telephone number 
        of the contracting officer;
          (4) a statement that all responsible sources may 
        submit a bid, proposal, or quotation (as appropriate) 
        which shall be considered by the agency;
          (5) in the case of a procurement using procedures 
        other than competitive procedures, a statement of the 
        reason justifying the use of such procedures and the 
        identity of the intended source; and
          (6) in the case of a contract in an amount estimated 
        to be greater than $25,000 but not greater than the 
        simplified acquisition threshold----
                  (A) a description of the procedures to be 
                used in awarding the contract; and
                  (B) a statement specifying the periods for 
                prospective offerors and the contracting 
                officer to take the necessary preaward and 
                award actions.
  (g)(1) A notice is not required under subsection (e)(1) if--
          (A) the proposed procurement is for an amount not 
        greater than the simplified acquisition threshold and 
        is to be conducted by--
                  (i) using widespread electronic public notice 
                of the solicitation in a form that allows 
                convenient and universal user access through a 
                single, Government-wide point of entry; and
                  (ii) permitting the public to respond to the 
                solicitation electronically.
          (B) the notice would disclose the executive agency's 
        needs and the disclosure of such needs would compromise 
        the national security;
          (C) the proposed procurement would result from 
        acceptance of----
                  (i) any unsolicited proposal that 
                demonstrates a unique and innovative research 
                concept and the publication of any notice of 
                such unsolicited research proposal would 
                disclose the originality of thought or 
                innovativeness of the proposal or would 
                disclose proprietary information associated 
                with the proposal; or
                  (ii) a proposal submitted under section 9 of 
                this Act;
          (D) the procurement is made against an order placed 
        under a requirements contract;
          (E) the procurement is made for perishable 
        subsistence supplies;
          (F) the procurement is for utility services, other 
        than telecommunication services, and only one source is 
        available; or
          (G) the procurement is for the services of an expert 
        for use in any litigation or dispute (including 
        preparation for any foreseeable litigation or dispute) 
        that involves or could involve the Federal Government 
        in any trial, hearing, or proceeding before any court, 
        administrative tribunal, or agency, or in any part of 
        an alternative dispute resolution process, whether or 
        not the expert is expected to testify.
  (2) The requirements of subsection (a)(1)(A) do not apply to 
any procurement under conditions described in paragraph (2), 
(3), (4), (5), or (7) of section 303(c) of the Federal Property 
and Administrative Services Act of 1949 (41 U.S.C. 253(c)) or 
paragraph (2), (3), (4), (5), and (7) of section 2304(c) of 
title 10, United States Code.
  (3) The requirements of subsection (a)(1)(A) shall not apply 
in the case of any procurement for which the head of the 
executive agency makes a determination in writing, after 
consultation with the Administrator for Federal Procurement 
Policy and the Administrator of the Small Business 
Administration, that it is not appropriate or reasonable to 
publish a notice before issuing a solicitation.
  (h)(1) An executive agency may not award a contract using 
procedures other than competitive procedures unless----
          (A) except as provided in paragraph (2), a written 
        justification for the use of such procedures has been 
        approved----
                  (i) in the case of a contract for an amount 
                exceeding $100,000 (but equal to or less than 
                $1,000,000), by the advocate for competition 
                for the procuring activity (without further 
                delegation);
                  (ii) in the case of a contract for an amount 
                exceeding $1,000,000 (but equal to or less than 
                $10,000,000), by the head of the procuring 
                activity or a delegate who, if a member of the 
                Armed Forces, is a general or flag officer, or, 
                if a civilian, is serving in a position in 
                grade GS-16 or above under the General Schedule 
                (or in a comparable or higher position under 
                another schedule); or
                  (iii) in the case of a contract for an amount 
                exceeding $10,000,000, by the senior 
                procurement executive of the agency designated 
                pursuant to section 16(3) of the Office of 
                Federal Procurement Policy Act (41 U.S.C. 
                414(3)) (without further delegation); and
          (B) all other requirements applicable to the use of 
        such procedures under title III of the Federal Property 
        and Administrative Services Act of 1949 (41 U.S.C. 251 
        et sq.) or chapter 137 of title 10, United States Code, 
        as appropriate, have been satisfied.
  (2) The same exceptions as are provided in section 303(f)(2) 
of the Federal Property and Administrative Services Act of 1949 
(41 U.S.C. 253(f)(2)) or section 2304(f)(2) of title 10, United 
States Code, shall apply with respect to the requirements of 
paragraph (1)(A) of this subsection in the same manner as such 
exceptions apply to the requirements of section 303(f)(1) of 
such Act or section 2304(f)(1) of such title, as appropriate.
  (i) An executive agency shall make available to any business 
concern, or the authorized representative of such concern, the 
complete solicitation package for any on-going procurement 
announced pursuant to a notice under subsection (e). An 
executive agency may require the payment of a fee, not 
exceeding the actual cost of duplication, for a copy of such 
package.
  (j) For purposes of this section, the term ``executive 
agency'' has the meaning provided such term in section 4(1) of 
the Office of Federal Procurement Policy Act (41 U.S.C. 
403(1)).
  (k) Notices of Subcontracting Opportunities.--
          (1) In general.--Notices of subcontracting 
        opportunities may be submitted for publication on the 
        appropriate Federal Web site (as determined by the 
        Administrator) by--
                  (A) a business concern awarded a contract by 
                an executive agency subject to subsection 
                (e)(1)(C); and
                  (B) a business concern that is a 
                subcontractor or supplier (at any tier) to such 
                contractor having a subcontracting opportunity 
                in excess of $10,000.
          (2) Content of notice.--The notice of a 
        subcontracting opportunity shall include----
                  (A) a description of the business opportunity 
                that is comparable to the description specified 
                in paragraphs (1), (2), (3), and (4) of 
                subsection (f); and
                  (B) the due date for receipt of offers.
  (l) Management Assistance for Small Businesses Affected by 
Military Operations.--The Administration shall utilize, as 
appropriate, its entrepreneurial development and management 
assistance programs, including programs involving State or 
private sector partners, to provide business counseling and 
training to any small business concern adversely affected by 
the deployment of units of the Armed Forces of the United 
States in support of a period of military conflict (as defined 
in section 7(n)(1)).
  (m) Procurement Program for Women-owned Small Business 
Concerns.--
          (1) Definitions.--In this subsection, the following 
        definitions apply:
                  (A) Contracting officer.--The term 
                ``contracting officer'' has the meaning given 
                such term in section 27(f)(5) of the Office of 
                Federal Procurement Policy Act (41 U.S.C. 
                423(f)(5)).
                  (B) Small business concern owned and 
                controlled by women.--The term ``small business 
                concern owned and controlled by women'' has the 
                meaning given such term in section 3(n), except 
                that ownership shall be determined without 
                regard to any community property law.
          (2) Authority to restrict competition.--In accordance 
        with this subsection, a contracting officer may 
        restrict competition for any contract for the 
        procurement of goods or services by the Federal 
        Government to small business concerns owned and 
        controlled by women, if--
                  (A) each of the concerns is not less than 51 
                percent owned by one or more women who are 
                economically disadvantaged (and such ownership 
                is determined without regard to any community 
                property law);
                  (B) the contracting officer has a reasonable 
                expectation that two or more small business 
                concerns owned and controlled by women will 
                submit offers for the contract;
                  (C) the contract is for the procurement of 
                goods or services with respect to an industry 
                identified by the Administrator pursuant to 
                paragraph (3);
                  (D) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price; and
                  (E) each of the concerns is certified by a 
                Federal agency, a State government, the 
                Administrator, or a national certifying entity 
                approved by the Administrator as a small 
                business concern owned and controlled by women.
          (3) Waiver.--With respect to a small business concern 
        owned and controlled by women, the Administrator may 
        waive subparagraph (2)(A) if the Administrator 
        determines that the concern is in an industry in which 
        small business concerns owned and controlled by women 
        are substantially underrepresented.
          (4) Identification of industries.--The Administrator 
        shall conduct a study to identify industries in which 
        small business concerns owned and controlled by women 
        are underrepresented with respect to Federal 
        procurement contracting.
          (5) Enforcement; penalties.--
                  (A) Verification of eligibility.--In carrying 
                out this subsection, the Administrator shall 
                establish procedures relating to--
                          (i) the filing, investigation, and 
                        disposition by the Administration of 
                        any challenge to the eligibility of a 
                        small business concern to receive 
                        assistance under this subsection 
                        (including a challenge, filed by an 
                        interested party, relating to the 
                        veracity of a certification made or 
                        information provided to the 
                        Administration by a small business 
                        concern under paragraph (2)(E)); and
                          (ii) verification by the 
                        Administrator of the accuracy of any 
                        certification made or information 
                        provided to the Administration by a 
                        small business concern under paragraph 
                        (2)(E).
                  (B) Examinations.--The procedures established 
                under subparagraph (A) may provide for program 
                examinations (including random program 
                examinations) by the Administrator of any small 
                business concern making a certification or 
                providing information to the Administrator 
                under paragraph (2)(E).
                  (C) Penalties.--In addition to the penalties 
                described in section 16(d), any small business 
                concern that is determined by the Administrator 
                to have misrepresented the status of that 
                concern as a small business concern owned and 
                controlled by women for purposes of this 
                subsection, shall be subject to--
                          (i) section 1001 of title 18, United 
                        States Code; and
                          (ii) sections 3729 through 3733 of 
                        title 31, United States Code.
          (6) Provision of data.--Upon the request of the 
        Administrator, the head of any Federal department or 
        agency shall promptly provide to the Administrator such 
        information as the Administrator determines to be 
        necessary to carry out this subsection.
          (7) Authority for sole source contracts for 
        economically disadvantaged small business concerns 
        owned and controlled by women.--A contracting officer 
        may award a sole source contract under this subsection 
        to any small business concern owned and controlled by 
        women described in paragraph (2)(A) and certified under 
        paragraph (2)(E) if--
                  (A) such concern is determined to be a 
                responsible contractor with respect to 
                performance of the contract opportunity and the 
                contracting officer does not have a reasonable 
                expectation that 2 or more businesses described 
                in paragraph (2)(A) will submit offers;
                  (B) the anticipated award price of the 
                contract (including options) will not exceed--
                --
                          (i) $6,500,000, in the case of a 
                        contract opportunity assigned a 
                        standard industrial classification code 
                        for manufacturing; or
                          (ii) $4,000,000, in the case of any 
                        other contract opportunity; and
                  (C) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price.
          (8) Authority for sole source contracts for small 
        business concerns owned and controlled by women in 
        substantially underrepresented industries.--A 
        contracting officer may award a sole source contract 
        under this subsection to any small business concern 
        owned and controlled by women certified under paragraph 
        (2)(E) that is in an industry in which small business 
        concerns owned and controlled by women are 
        substantially underrepresented (as determined by the 
        Administrator under paragraph (3)) if----
                  (A) such concern is determined to be a 
                responsible contractor with respect to 
                performance of the contract opportunity and the 
                contracting officer does not have a reasonable 
                expectation that 2 or more businesses in an 
                industry that has received a waiver under 
                paragraph (3) will submit offers;
                  (B) the anticipated award price of the 
                contract (including options) will not exceed--
                --
                          (i) $6,500,000, in the case of a 
                        contract opportunity assigned a 
                        standard industrial classification code 
                        for manufacturing; or
                          (ii) $4,000,000, in the case of any 
                        other contract opportunity; and
                  (C) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price.
  (n) Business Grants and Cooperative Agreements.--
          (1) In general.--In accordance with this subsection, 
        the Administrator may make grants to and enter into 
        cooperative agreements with any coalition of private 
        entities, public entities, or any combination of 
        private and public entities----
                  (A) to expand business-to-business 
                relationships between large and small 
                businesses; and
                  (B) to provide businesses, directly or 
                indirectly, with online information and a 
                database of companies that are interested in 
                mentor-protege programs or community-based, 
                statewide, or local business development 
                programs.
          (2) Matching requirement.--Subject to subparagraph 
        (B), the Administrator may make a grant to a coalition 
        under paragraph (1) only if the coalition provides for 
        activities described in paragraph (1)(A) or (1)(B) an 
        amount, either in kind or in cash, equal to the grant 
        amount.
          (3) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        subsection $6,600,000, to remain available until 
        expended, for each of fiscal years 2001 through 2006.

           *       *       *       *       *       *       *

  Sec. 15. [(a) To effectuate the purposes of this Act, small-
business concerns within the meaning of this Act shall receive 
any award or contract or any part thereof, and be awarded any 
contract for the sale of Government property, as to which it is 
determined by the Administration and the contracting 
procurement or disposal agency (1) to be in the interest of 
maintaining or mobilizing the Nation's full productive 
capacity, (2) to be in the interest of war or national defense 
programs, (3) to be in the interest of assuring that a fair 
proportion of the total purchases and contracts for property 
and services for the Government in each industry category are 
placed with small-business concerns, or (4) to be in the 
interest of assuring that a fair proportion of the total sales 
of Government property be made to small-business concerns; but 
nothing contained in this Act shall be construed to change any 
preferences or priorities established by law with respect to 
the sale of electrical power or other property by the 
Government or any agency thereof. These determinations may be 
made for individual awards or contracts or for classes of 
awards or contracts. If a proposed procurement includes in its 
statement of work goods or services currently being performed 
by a small business, and if the proposed procurement is in a 
quantity or estimated dollar value the magnitude of which 
renders small business prime contract participation unlikely, 
or if a proposed procurement for construction seeks to package 
or consolidate discrete construction projects, or the 
solicitation involves an unnecessary or unjustified bundling of 
contract requirements, as determined by the Administration, the 
Procurement Activity shall provide a copy of the proposed 
procurement to the Procurement Activity's Small Business 
Procurement Center Representative at least 30 days prior to the 
solicitation's issuance along with a statement explaining (1) 
why the proposed acquisition cannot be divided into reasonably 
small lots (not less than economic production runs) to permit 
offers on quantities less than the total requirement, (2) why 
delivery schedules cannot be established on a realistic basis 
that will encourage small business participation to the extent 
consistent with the actual requirements of the Government, (3) 
why the proposed acquisition cannot be offered so as to make 
small business participation likely, (4) why construction 
cannot be procured as separate discrete projects, or (5) why 
the agency has determined that the bundled contract (as defined 
in section 3(o)) is necessary and justified. The thirty-day 
notification process shall occur concurrently with other 
processing steps required prior to issuance of the 
solicitation. Within 15 days after receipt of the proposed 
procurement and accompanying statement, if the Procurement 
Center Representative believes that the procurement as proposed 
will render small business prime contract participation 
unlikely, the Representative shall recommend to the Procurement 
Activity alternative procurement methods which would increase 
small business prime contracting opportunities. Whenever the 
Administration and the contracting procurement agency fail to 
agree, the matter shall be submitted for determination to the 
Secretary or the head of the appropriate department or agency 
by the Administrator. For purposes of clause (3) of the first 
sentence of this subsection, an industry category is a discrete 
group of similar goods and services. Such groups shall be 
determined by the Administration in accordance with the 
definition of a ``United States industry'' under the North 
American Industry Classification System, as established by the 
Office of Management and Budget, except that the Administration 
shall limit such an industry category to a greater extent than 
provided under such classification codes if the Administration 
receives evidence indicating that further segmentation for 
purposes of this paragraph is warranted due to special capital 
equipment needs or special labor or geographic requirements or 
to recognize a new industry. A market for goods or services may 
not be segmented under the preceding sentence due to geographic 
requirements unless the Government typically designates the 
area where work for contracts for such goods or services is to 
be performed and Government purchases comprise the major 
portion of the entire domestic market for such goods or 
services and, due to the fixed location of facilities, high 
mobilization costs, or similar economic factors, it is 
unreasonable to expect competition from business concerns 
located outside of the general areas where such concerns are 
located. A contract may not be awarded under this subsection if 
the award of the contract would result in a cost to the 
awarding agency which exceeds a fair market price.]
  (a) Small Business Procurements.--
          (1) In general.--For purposes of this Act, small 
        business concerns shall receive any award or contract 
        if such award or contract is, in the determination of 
        the Administrator and the contracting agency, in the 
        interest of--
                  (A) maintaining or mobilizing the full 
                productive capacity of the United States;
                  (B) war or national defense programs; or
                  (C) assuring that a fair proportion of the 
                total purchase and contracts for goods and 
                services of the Government in each industry 
                category (as described under paragraph (2)) are 
                awarded to small business concerns.
          (2) Industry category defined.--
                  (A) In general.--In this subsection, the term 
                ``industry category'' means a discrete group of 
                similar goods and services, as determined by 
                the Administrator in accordance with the North 
                American Industry Classification System codes 
                used to establish small business size 
                standards, except that the Administrator shall 
                limit an industry category to a greater extent 
                than provided under the North American Industry 
                Classification codes if the Administrator 
                receives evidence indicating that further 
                segmentation of the industry category is 
                warranted----
                          (i) due to special capital equipment 
                        needs;
                          (ii) due to special labor 
                        requirements;
                          (iii) due to special geographic 
                        requirements, except as provided in 
                        subparagraph (B);
                          (iv) due to unique Federal buying 
                        patterns or requirements; or
                          (v) to recognize a new industry.
                  (B) Exception for geographic requirements.--
                The Administrator may not further segment an 
                industry category based on geographic 
                requirements unless--
                          (i) the Government typically 
                        designates the geographic area where 
                        work for contracts for goods or 
                        services is to be performed;
                          (ii) Government purchases comprise 
                        the major portion of the entire 
                        domestic market for such goods or 
                        services; and
                          (iii) it is unreasonable to expect 
                        competition from business concerns 
                        located outside of the general 
                        geographic area due to the fixed 
                        location of facilities, high 
                        mobilization costs, or similar economic 
                        factors.
          (3) Determinations with respect to awards or 
        contracts.--Determinations made pursuant to paragraph 
        (1) may be made for individual awards or contracts, any 
        part of an award or contract or task order, or for 
        classes of awards or contracts or task orders.
          (4) Increasing prime contracting opportunities for 
        small business concerns.--
                  (A) Description of covered proposed 
                procurements.--The requirements of this 
                paragraph shall apply to a proposed procurement 
                that includes in its statement of work goods or 
                services currently being supplied or performed 
                by a small business concern and, as determined 
                by the Administrator----
                          (i) is in a quantity or of an 
                        estimated dollar value which makes the 
                        participation of a small business 
                        concern as a prime contractor unlikely;
                          (ii) in the case of a proposed 
                        procurement for construction, if such 
                        proposed procurement seeks to bundle or 
                        consolidate discrete construction 
                        projects; or
                          (iii) is a solicitation that involves 
                        an unnecessary or unjustified bundling 
                        of contract requirements.
                  (B) Notice to procurement center 
                representatives.--With respect to proposed 
                procurements described in subparagraph (A), at 
                least 30 days before issuing a solicitation and 
                concurrent with other processing steps required 
                before issuing the solicitation, the 
                contracting agency shall provide a copy of the 
                proposed procurement to the procurement center 
                representative of the contracting agency (as 
                described in subsection (l)) along with a 
                statement explaining--
                          (i) why the proposed procurement 
                        cannot be divided into reasonably small 
                        lots (not less than economic production 
                        runs) to permit offers on quantities 
                        less than the total requirement;
                          (ii) why delivery schedules cannot be 
                        established on a realistic basis that 
                        will encourage the participation of 
                        small business concerns in a manner 
                        consistent with the actual requirements 
                        of the Government;
                          (iii) why the proposed procurement 
                        cannot be offered to increase the 
                        likelihood of the participation of 
                        small business concerns;
                          (iv) in the case of a proposed 
                        procurement for construction, why the 
                        proposed procurement cannot be offered 
                        as separate discrete projects; or
                          (v) why the agency has determined 
                        that the bundling of contract 
                        requirements is necessary and 
                        justified.
                  (C) Alternatives to increase prime 
                contracting opportunities for small business 
                concerns.--If the procurement center 
                representative believes that the proposed 
                procurement will make the participation of 
                small business concerns as prime contractors 
                unlikely, the procurement center 
                representative, within 15 days after receiving 
                the statement described in subparagraph (B), 
                shall recommend to the contracting agency 
                alternative procurement methods for increasing 
                prime contracting opportunities for small 
                business concerns.
                  (D) Failure to agree on an alternative 
                procurement method.--If the procurement center 
                representative and the contracting agency fail 
                to agree on an alternative procurement method, 
                the Administrator shall submit the matter to 
                the head of the appropriate department or 
                agency for a determination.
          (5) Contracts for sale of government property.--With 
        respect to a contract for the sale of Government 
        property, small business concerns shall receive any 
        such contract if, in the determination of the 
        Administrator and the disposal agency, the award of 
        such contract is in the interest of assuring that a 
        fair proportion of the total sales of Government 
        property be made to small business concerns.
          (6) Sale of electrical power or other propery.--
        Nothing in this subsection shall be construed to change 
        any preferences or priorities established by law with 
        respect to the sale of electrical power or other 
        property by the Federal Government.
          (7) Costs exceeding fair market price.--A contract 
        may not be awarded under this subsection if the cost of 
        the contract to the awarding agency exceeds a fair 
        market price.
  (b) With respect to any work to be performed the amount of 
which would exceed the maximum amount of any contract for which 
a surety may be guaranteed against loss under section 411 of 
the Small Business Investment Act of 1958 (15 U.S.C. 694(b)), 
the contracting procurement agency shall, to the extent 
practicable, place contracts so as to allow more than one small 
business concern to perform such work.
  (c)(1) As used in this subsection:
          (A) The term ``Committee'' means the Committee for 
        Purchase from the Blind and Other Severely Handicapped 
        established under the first section of the Act entitled 
        ``An Act to create a Committee on Purchases of Blind-
        made Products, and for other purposes'', approved June 
        25, 1938 (41 U.S.C. 46).
          (B) The term ``public or private organization for the 
        handicapped'' has the same meaning given such term in 
        section 3(e).
          (C) The term ``handicapped individual'' has the same 
        meaning given such term in section 3(f).
  (2)(A) During fiscal year 1995, public or private 
organizations for the handicapped shall be eligible to 
participate in programs authorized under this section in an 
aggregate amount not to exceed $40,000,000.
  (B) None of the amounts authorized for participation by 
subparagraph (A) may be placed on the procurement list 
maintained by the Committee pursuant to section 2 of the Act 
entitled ``An Act to create a Committee on Purchases of Blind-
made Products, and for other purposes'', approved June 25, 1938 
(41 U.S.C. 47).
  (3) The Administrator shall monitor and evaluate such 
participation.
  (4)(A) Not later than ten days after the announcement of a 
proposed award of a contract by an agency or department to a 
public or private organization for the handicapped, a for-
profit small business concern that has experienced or is likely 
to experience severe economic injury as the result of the 
proposed award may file an appeal of the proposed award with 
the Administrator.
  (B) If such a concern files an appeal of a proposed award 
under subparagraph (A) and the Administrator, after 
consultation with the Executive Director of the Committee, 
finds that the concern has experienced or is likely to 
experience severe economic injury as the result of the proposed 
award, not later than thirty days after the filing of the 
appeal, the Administration shall require each agency and 
department having procurement powers to take such action as may 
be appropriate to alleviate economic injury sustained or likely 
to be sustained by the concern.
  (5) Each agency and department having procurement powers 
shall report to the Office of Federal Procurement Policy each 
time a contract subject to paragraph (2)(A) is entered into, 
and shall include in its report the amount of the next higher 
bid submitted by a for-profit small business concern. The 
Office of Federal Procurement Policy shall collect data 
reported under the preceding sentence through the Federal 
procurement data system and shall report to the Administration 
which shall notify all such agencies and departments when the 
maximum amount of awards authorized under paragraph (2)(A) has 
been made during any fiscal year.
  (6) For the purpose of this subsection, a contract may be 
awarded only if at least 75 per centum of the direct labor 
performed on each item being produced under the contract in the 
sheltered workshop or performed in providing each type of 
service under the contract by the sheltered workshop is 
performed by handicapped individuals.
  (7) Agencies awarding one or more contracts to such an 
organization pursuant to the provisions of this subsection may 
use multiyear contracts, if appropriate.
  (d) For purposes of this section priority shall be given to 
the awarding of contracts and the placement of subcontracts to 
small business concerns which shall perform a substantial 
proportion of the production on those contracts and 
subcontracts within areas of concentrated unemployment or 
underemployment or within labor surplus areas. Notwithstanding 
any other provison of law, total labor surplus area set-asides 
pursuant to Defense Manpower Policy Number 4 (32A C.F.R. 
Chapter 1) or any successor policy shall be authorized if the 
Secretary or his designee specifically determines that there is 
a reasonable expectation that offers will be obtained from a 
sufficient number of eligible concerns so that awards will be 
made at reasonable prices. As soon as practicable and to the 
extent possible, in determining labor surplus areas, 
consideration shall be given to those persons who would be 
available for employment were suitable employment available. 
Until such definition reflects such number, the present 
criteria of such policy shall govern.
  (e) Procurement Strategies; Contract Bundling.--
          (1) In general.--To the maximum extent practicable, 
        procurement strategies used by a Federal department or 
        agency having contracting authority shall facilitate 
        the maximum participation of small business concerns as 
        prime contractors, subcontractors, and suppliers, and 
        each such Federal department or agency shall--
                  (A) provide opportunities for the 
                participation of small business concerns during 
                acquisition planning processes and in 
                acquisition plans; and
                  (B) invite the participation of the 
                appropriate Director of Small and Disadvantaged 
                Business Utilization in acquisition planning 
                processes and provide that Director access to 
                acquisition plans.
          (2) Market research.--
                  (A) In general.--Before proceeding with an 
                acquisition strategy that could lead to a 
                contract containing consolidated procurement 
                requirements, the head of an agency shall 
                conduct market research to determine whether 
                consolidation of the requirements is necessary 
                and justified.
                  (B) Factors.--For purposes of subparagraph 
                (A), consolidation of the requirements may be 
                determined as being necessary and justified if, 
                as compared to the benefits that would be 
                derived from contracting to meet those 
                requirements if not consolidated, the Federal 
                Government would derive from the consolidation 
                measurably substantial benefits, including any 
                combination of benefits that, in combination, 
                are measurably substantial. Benefits described 
                in the preceding sentence may include the 
                following:
                          (i) Cost savings.
                          (ii) Quality improvements.
                          (iii) Reduction in acquisition cycle 
                        times.
                          (iv) Better terms and conditions.
                          (v) Any other benefits.
                  (C) Reduction of costs not determinative.--
                The reduction of administrative or personnel 
                costs alone shall not be a justification for 
                bundling of contract requirements unless the 
                cost savings are expected to be substantial in 
                relation to the dollar value of the procurement 
                requirements to be consolidated.
          (3) Strategy specifications.--If the head of a 
        contracting agency determines that an acquisition plan 
        for a procurement involves a substantial bundling of 
        contract requirements, the head of a contracting agency 
        shall publish a notice on a public website that such 
        determination has been made not later than 7 days after 
        making such determination. Any solicitation for a 
        procurement related to the acquisition plan may not be 
        published earlier than 7 days after such notice is 
        published. Along with the publication of the 
        solicitation, the head of a contracting agency shall 
        publish a justification for the determination, which 
        shall include the following information:
                  (A) The specific benefits anticipated to be 
                derived from the bundling of contract 
                requirements and a determination that such 
                benefits justify the bundling.
                  (B) An identification of any alternative 
                contracting approaches that would involve a 
                lesser degree of bundling of contract 
                requirements.
                  (C) An assessment of--
                          (i) the specific impediments to 
                        participation by small business 
                        concerns as prime contractors that 
                        result from the bundling of contract 
                        requirements; and
                          (ii) the specific actions designed to 
                        maximize participation of small 
                        business concerns as subcontractors 
                        (including suppliers) at various tiers 
                        under the contract or contracts that 
                        are awarded to meet the requirements.
          (4) Contract teaming.--
                  (A) In general.--In the case of a 
                solicitation of offers for a bundled or 
                consolidated contract that is issued by the 
                head of an agency, a small business concern 
                that provides for use of a particular team of 
                subcontractors or a joint venture of small 
                business concerns may submit an offer for the 
                performance of the contract.
                  (B) Evaluation of offers.--The head of the 
                agency shall evaluate an offer described in 
                subparagraph (A) in the same manner as other 
                offers, with due consideration to the 
                capabilities of all of the proposed 
                subcontractors or members of the joint venture 
                as follows:
                          (i) Teams.--When evaluating an offer 
                        of a small business prime contractor 
                        that includes a proposed team of small 
                        business subcontractors, the head of 
                        the agency shall consider the 
                        capabilities and past performance of 
                        each first tier subcontractor that is 
                        part of the team as the capabilities 
                        and past performance of the small 
                        business prime contractor.
                          (ii) Joint ventures.--When evaluating 
                        an offer of a joint venture of small 
                        business concerns, if the joint venture 
                        does not demonstrate sufficient 
                        capabilities or past performance to be 
                        considered for award of a contract 
                        opportunity, the head of the agency 
                        shall consider the capabilities and 
                        past performance of each member of the 
                        joint venture as the capabilities and 
                        past performance of the joint venture.
                  (C) Status as a small business concern.--
                Participation of a small business concern in a 
                team or a joint venture under this paragraph 
                shall not affect the status of that concern as 
                a small business concern for any other purpose.
  (f) Contracting Preference for Small Business Concerns in a 
Major Disaster Area.--
          (1) Definition.--In this subsection, the term 
        ``disaster area'' means the area for which the 
        President has declared a major disaster, during the 
        period of the declaration.
          (2) Contracting preference.--An agency shall provide 
        a contracting preference for a small business concern 
        located in a disaster area if the small business 
        concern will perform the work required under the 
        contract in the disaster area.
          (3) Credit for meeting contracting goals.--If an 
        agency awards a contract to a small business concern 
        under the circumstances described in paragraph (2), the 
        value of the contract shall be doubled for purposes of 
        determining compliance with the goals for procurement 
        contracts under subsection (g)(1)(A).
  (g)
          (1) Governmentwide goals.--
                  (A) Establishment.--The President shall 
                annually establish Governmentwide goals for 
                procurement contracts awarded to small business 
                concerns, small business concerns owned and 
                controlled by service-disabled veterans, 
                qualified HUBZone small business concerns, 
                small business concerns owned and controlled by 
                socially and economically disadvantaged 
                individuals, and small business concerns owned 
                and controlled by women in accordance with the 
                following:
                          (i) The Governmentwide goal for 
                        participation by small business 
                        concerns shall be established at not 
                        less than 23 percent of the total value 
                        of all prime contract awards for each 
                        fiscal year. In meeting this goal, the 
                        Government shall ensure the 
                        participation of small business 
                        concerns from a wide variety of 
                        industries and from a broad spectrum of 
                        small business concerns within each 
                        industry.
                          (ii) The Governmentwide goal for 
                        participation by small business 
                        concerns owned and controlled by 
                        service-disabled veterans shall be 
                        established at not less than 3 percent 
                        of the total value of all prime 
                        contract and subcontract awards for 
                        each fiscal year.
                          (iii) The Governmentwide goal for 
                        participation by qualified HUBZone 
                        small business concerns shall be 
                        established at not less than 3 percent 
                        of the total value of all prime 
                        contract and subcontract awards for 
                        each fiscal year.
                          (iv) The Governmentwide goal for 
                        participation by small business 
                        concerns owned and controlled by 
                        socially and economically disadvantaged 
                        individuals shall be established at not 
                        less than 5 percent of the total value 
                        of all prime contract and subcontract 
                        awards for each fiscal year.
                          (v) The Governmentwide goal for 
                        participation by small business 
                        concerns owned and controlled by women 
                        shall be established at not less than 5 
                        percent of the total value of all prime 
                        contract and subcontract awards for 
                        each fiscal year.
                  (B) Achievement of governmentwide goals.--
                Each agency shall have an annual goal that 
                presents, for that agency, the maximum 
                practicable opportunity for small business 
                concerns, small business concerns owned and 
                controlled by service-disabled veterans, 
                qualified HUBZone small business concerns, 
                small business concerns owned and controlled by 
                socially and economically disadvantaged 
                individuals, and small business concerns owned 
                and controlled by women to participate in the 
                performance of contracts let by such agency. 
                The Small Business Administration and the 
                Administrator for Federal Procurement Policy 
                shall, when exercising their authority pursuant 
                to paragraph (2), insure that the cumulative 
                annual prime contract goals for all agencies 
                meet or exceed the annual Governmentwide prime 
                contract goal established by the President 
                pursuant to this paragraph.
  (2)(A) The head of each Federal agency shall, after 
consultation with the Administration, establish goals for the 
participation by small business concerns, by small business 
concerns owned and controlled by service-disabled veterans, by 
qualified HUBZone small business concerns, by small business 
concerns owned and controlled by socially and economically 
disadvantaged individuals, and by small business concerns owned 
and controlled by women in procurement contracts of such 
agency. Such goals shall separately address prime contract 
awards and subcontract awards for each category of small 
business covered.
  (B) Goals established under this subsection shall be jointly 
established by the Administration and the head of each Federal 
agency and shall realistically reflect the potential of small 
business concerns, small business concerns owned and controlled 
by service-disabled veterans, qualified HUBZone small business 
concerns, small business concerns owned and controlled by 
socially and economically disadvantaged individuals, and small 
business concerns owned and controlled by women to perform such 
contracts and to perform subcontracts under such contracts.
  (C) Whenever the Administration and the head of any Federal 
agency fail to agree on established goals, the disagreement 
shall be submitted to the Administrator for Federal Procurement 
Policy for final determination.
  (D) After establishing goals under this paragraph for a 
fiscal year, the head of each Federal agency shall develop a 
plan for achieving such goals at both the prime contract and 
the subcontract level, which shall apportion responsibilities 
among the agency's acquisition executives and officials. In 
establishing goals under this paragraph, the head of each 
Federal agency shall make a consistent effort to annually 
expand participation by small business concerns from each 
industry category in procurement contracts and subcontracts of 
such agency, including participation by small business concerns 
owned and controlled by service-disabled veterans, qualified 
HUBZone small business concerns, small business concerns owned 
and controlled by socially and economically disadvantaged 
individuals, and small business concerns owned and controlled 
by women.
          (E) The head of each Federal agency, in attempting to 
        attain expanded participation under subparagraph (D), 
        shall consider----
                  (i) contracts awarded as the result of 
                unrestricted competition; and
                  (ii) contracts awarded after competition 
                restricted to eligible small business concerns 
                under this section and under the program 
                established under section 8(a).
          (F)(i) Each procurement employee or program manager 
        described in clause (ii) shall communicate to the 
        subordinates of the procurement employee or program 
        manager the importance of achieving goals established 
        under subparagraph (A).
                  (ii) A procurement employee or program 
                manager described in this clause is a senior 
                procurement executive, senior program manager, 
                or Director of Small and Disadvantaged Business 
                Utilization of a Federal agency having 
                contracting authority.
  (3) First tier subcontracts that are awarded by Management 
and Operating contractors sponsored by the Department of Energy 
to small business concerns, small businesses concerns owned and 
controlled by service disabled veterans, qualified HUBZone 
small business concerns, small business concerns owned and 
controlled by socially and economically disadvantaged 
individuals, and small business concerns owned and controlled 
by women, shall be considered toward the annually established 
agency and Government-wide goals for procurement contracts 
awarded.
          (4) Determinations of the total value of contract 
        awards.--For purposes of the goals established under 
        paragraphs (1) and (2), the total value of contract 
        awards for a fiscal year may not be determined in a 
        manner that excludes the value of a contract based on--
        --
                  (A) where the contract is awarded;
                  (B) where the contract is performed;
                  (C) whether the contract is mandated by 
                Federal law to be performed by an entity other 
                than a small business concern;
                  (D) whether funding for the contract is made 
                available in an appropriations Act, if the 
                contract is subject to the requirements of 
                chapter 33 of title 41, United States Code, or 
                chapter 137 of title 10, United States Code, 
                and the Federal Acquisition Regulation; or
                  (E) whether the contract is otherwise subject 
                to the Federal Acquisition Regulation.
  (h) Reporting on Goals for Procurement Contracts Awarded to 
Small Business Concerns.--
          (1) Agency reports.--At the conclusion of each fiscal 
        year, the head of each Federal agency shall submit to 
        the Administrator a report describing--
                  (A) the extent of the participation by small 
                business concerns, small business concerns 
                owned and controlled by veterans (including 
                service-disabled veterans), qualified HUBZone 
                small business concerns, small business 
                concerns owned and controlled by socially and 
                economically disadvantaged individuals, and 
                small business concerns owned and controlled by 
                women in the procurement contracts of such 
                agency during such fiscal year;
                  (B) whether the agency achieved the goals 
                established for the agency under subsection 
                (g)(2) with respect to such fiscal year;
                  (C) any justifications for a failure to 
                achieve such goals; and
                  (D) a remediation plan with proposed new 
                practices to better meet such goals, including 
                analysis of factors leading to any failure to 
                achieve such goals.
          (2) Reports by administrator.--Not later than 60 days 
        after receiving a report from each Federal agency under 
        paragraph (1) with respect to a fiscal year, the 
        Administrator shall submit to the President and 
        Congress, and to make available on a public Web site, a 
        report that includes--
                  (A) a copy of each report submitted to the 
                Administrator under paragraph (1);
                  (B) a determination of whether each goal 
                established by the President under subsection 
                (g)(1) for such fiscal year was achieved;
                  (C) a determination of whether each goal 
                established by the head of a Federal agency 
                under subsection (g)(2) for such fiscal year 
                was achieved;
                  (D) the reasons for any failure to achieve a 
                goal established under paragraph (1) or (2) of 
                subsection (g) for such fiscal year and a 
                description of actions planned by the 
                applicable agency to address such failure, 
                including the Administrator's comments and 
                recommendations on the proposed remediation 
                plan; and
                  (E) for the Federal Government and each 
                Federal agency, an analysis of the number and 
                dollar amount of prime contracts awarded during 
                such fiscal year to--
                          (i) small business concerns----
                                  (I) in the aggregate;
                                  (II) through sole source 
                                contracts;
                                  (III) through competitions 
                                restricted to small business 
                                concerns; [and]
                                  (IV) through unrestricted 
                                competition;
                                  (V) that were purchased by 
                                another entity after the 
                                initial contract was awarded 
                                and as a result of the 
                                purchase, would no longer be 
                                deemed to be small business 
                                concerns for purposes of the 
                                initial contract; and
                                  (VI) that were awarded using 
                                a procurement method that 
                                restricted competition to small 
                                business concerns owned and 
                                controlled by service-disabled 
                                veterans, qualified HUBZone 
                                small business concerns, small 
                                business concerns owned and 
                                controlled by socially and 
                                economically disadvantaged 
                                individuals, small business 
                                concerns owned and controlled 
                                by women, or a subset of any 
                                such concerns;
                          (ii) small business concerns owned 
                        and controlled by service-disabled 
                        veterans--
                                  (I) in the aggregate;
                                  (II) through sole source 
                                contracts;
                                  (III) through competitions 
                                restricted to small business 
                                concerns;
                                  (IV) through competitions 
                                restricted to small business 
                                concerns owned and controlled 
                                by service-disabled veterans; 
                                [and]
                                  (V) through unrestricted 
                                competition;
                                  (VI) that were purchased by 
                                another entity after the 
                                initial contract was awarded 
                                and as a result of the 
                                purchase, would no longer be 
                                deemed to be small business 
                                concerns owned and controlled 
                                by service-disabled veterans 
                                for purposes of the initial 
                                contract; and
                                  (VII) that were awarded using 
                                a procurement method that 
                                restricted competition to 
                                qualified HUBZone small 
                                business concerns, small 
                                business concerns owned and 
                                controlled by socially and 
                                economically disadvantaged 
                                individuals, small business 
                                concerns owned and controlled 
                                by women, or a subset of any 
                                such concerns;
                          (iii) qualified HUBZone small 
                        business concerns----
                                  (I) in the aggregate;
                                  (II) through sole source 
                                contracts;
                                  (III) through competitions 
                                restricted to small business 
                                concerns;
                                  (IV) through competitions 
                                restricted to qualified HUBZone 
                                small business concerns;
                                  (V) through unrestricted 
                                competition where a price 
                                evaluation preference was used; 
                                [and]
                                  (VI) through unrestricted 
                                competition where a price 
                                evaluation preference was not 
                                used;
                                  (VII) that were purchased by 
                                another entity after the 
                                initial contract was awarded 
                                and as a result of the 
                                purchase, would no longer be 
                                deemed to be qualified HUBZone 
                                small business concerns for 
                                purposes of the initial 
                                contract; and
                                  (VIII) that were awarded 
                                using a procurement method that 
                                restricted competition to small 
                                business concerns owned and 
                                controlled by service-disabled 
                                veterans, small business 
                                concerns owned and controlled 
                                by socially and economically 
                                disadvantaged individuals, 
                                small business concerns owned 
                                and controlled by women, or a 
                                subset of any such concerns;
                          (iv) small business concerns owned 
                        and controlled by socially and 
                        economically disadvantaged 
                        individuals----
                                  (I) in the aggregate;
                                  (II) through sole source 
                                contracts;
                                  (III) through competitions 
                                restricted to small business 
                                concerns;
                                  (IV) through competitions 
                                restricted to small business 
                                concerns owned and controlled 
                                by socially and economically 
                                disadvantaged individuals;
                                  (V) through unrestricted 
                                competition; [and]
                                  (VI) by reason of that 
                                concern's certification as a 
                                small business owned and 
                                controlled by socially and 
                                economically disadvantaged 
                                individuals;
                                  (VII) that were purchased by 
                                another entity after the 
                                initial contract was awarded 
                                and as a result of the 
                                purchase, would no longer be 
                                deemed to be small business 
                                concerns owned and controlled 
                                by socially and economically 
                                disadvantaged individuals for 
                                purposes of the initial 
                                contract; and
                                  (VIII) that were awarded 
                                using a procurement method that 
                                restricted competition to small 
                                business concerns owned and 
                                controlled by service-disabled 
                                veterans, qualified HUBZone 
                                small business concerns, small 
                                business concerns owned and 
                                controlled by women, or a 
                                subset of any such concerns;
                          (v) small business concerns owned by 
                        an Indian tribe (as such term is 
                        defined in section 8(a)(13)) other than 
                        an Alaska Native Corporation--
                                  (I) in the aggregate;
                                  (II) through sole source 
                                contracts;
                                  (III) through competitions 
                                restricted to small business 
                                concerns;
                                  (IV) through competitions 
                                restricted to small business 
                                concerns owned and controlled 
                                by socially and economically 
                                disadvantaged individuals; 
                                [and]
                                  (V) through unrestricted 
                                competition; and
                                  (VI) that were purchased by 
                                another entity after the 
                                initial contract was awarded 
                                and as a result of the 
                                purchase, would no longer be 
                                deemed to be small business 
                                concerns owned by an Indian 
                                tribe other than an Alaska 
                                Native Corporation for purposes 
                                of the initial contract;
                          (vi) small business concerns owned by 
                        a Native Hawaiian Organization----
                                  (I) in the aggregate;
                                  (II) through sole source 
                                contracts;
                                  (III) through competitions 
                                restricted to small business 
                                concerns;
                                  (IV) through competitions 
                                restricted to small business 
                                concerns owned and controlled 
                                by socially and economically 
                                disadvantaged individuals; 
                                [and]
                                  (V) through unrestricted 
                                competition; and
                                  (VI) that were purchased by 
                                another entity after the 
                                initial contract was awarded 
                                and as a result of the 
                                purchase, would no longer be 
                                deemed to be small business 
                                concerns owned by a Native 
                                Hawaiian Organization for 
                                purposes of the initial 
                                contract;
                          (vii) small business concerns owned 
                        by an Alaska Native Corporation--
                                  (I) in the aggregate;
                                  (II) through sole source 
                                contracts;
                                  (III) through competitions 
                                restricted to small business 
                                concerns;
                                  (IV) through competitions 
                                restricted to small business 
                                concerns owned and controlled 
                                by socially and economically 
                                disadvantaged individuals; 
                                [and]
                                  (V) through unrestricted 
                                competition; and
                                  (VI) that were purchased by 
                                another entity after the 
                                initial contract was awarded 
                                and as a result of the 
                                purchase, would no longer be 
                                deemed to be small business 
                                concerns owned by an Alaska 
                                Native Corporation for purposes 
                                of the initial contract; and
                          (viii) small business concerns owned 
                        and controlled by women----
                                  (I) in the aggregate;
                                  (II) through competitions 
                                restricted to small business 
                                concerns;
                                  (III) through competitions 
                                restricted using the authority 
                                under section 8(m)(2);
                                  (IV) through competitions 
                                restricted using the authority 
                                under section 8(m)(2) and in 
                                which the waiver authority 
                                under section 8(m)(3) was used;
                                  (V) through sole source 
                                contracts awarded using the 
                                authority under subsection 
                                8(m)(7);
                                  (VI) through sole source 
                                contracts awarded using the 
                                authority under section 
                                8(m)(8);
                                  (VII) by industry for 
                                contracts described in 
                                subclause (III), (IV), (V), or 
                                (VI); [and]
                                  (VIII) through unrestricted 
                                competition; [and]
                                  (IX) that were purchased by 
                                another entity after the 
                                initial contract was awarded 
                                and as a result of the 
                                purchase, would no longer be 
                                deemed to be small business 
                                concerns owned and controlled 
                                by women for purposes of the 
                                initial contract; and
                                  (X) that were awarded using a 
                                procurement method that 
                                restricted competition to small 
                                business concerns owned and 
                                controlled by service-disabled 
                                veterans, qualified HUBZone 
                                small business concerns, small 
                                business concerns owned and 
                                controlled by socially and 
                                economically disadvantaged 
                                individuals, or a subset of any 
                                such concerns; and
                  (F) for the Federal Government, the number, 
                dollar amount, and distribution with respect to 
                the North American Industry Classification 
                System of subcontracts awarded during such 
                fiscal year to small business concerns, small 
                business concerns owned and controlled by 
                service-disabled veterans, qualified HUBZone 
                small business concerns, small business 
                concerns owned and controlled by socially and 
                economically disadvantaged individuals, and 
                small business concerns owned and controlled by 
                women, provided that such information is 
                publicly available through data systems 
                developed pursuant to the Federal Funding 
                Accountability and Transparency Act of 2006 
                (Public Law 109-282), or otherwise available as 
                provided in paragraph (3).
          (3) Access to data.--
                  (A) Federal procurement data system.--To 
                assist in the implementation of this section, 
                the Administration shall have access to 
                information collected through the Federal 
                Procurement Data System, Federal Subcontracting 
                Reporting System, or any new or successor 
                system.
                  (B) Agency procurement data sources.--To 
                assist in the implementation of this section, 
                the head of each contracting agency shall 
                provide, upon request of the Administration, 
                procurement information collected through 
                agency data collection sources in existence at 
                the time of the request. Contracting agencies 
                shall not be required to establish new data 
                collection systems to provide such data.
  (i) Nothing in this Act or any other provision of law 
precludes exclusive small business set-asides for procurements 
of architectural and engineering services, research, 
development, test and evaluation, and each Federal agency is 
authorized to develop such set-asides to further the interests 
of small business in those areas.
  (j)(1) Each contract for the purchase of goods and services 
that has an anticipated value [greater than $2,500 but not 
greater than $100,000] greater than the micro-purchase 
threshold, but not greater than the simplified acquisition 
threshold shall be reserved exclusively for small business 
concerns unless the contracting officer is unable to obtain 
offers from two or more small business concerns that are 
competitive with market prices and are competitive with regard 
to the quality and delivery of the goods or services being 
purchased.
  (2) In carrying out paragraph (1), a contracting officer 
shall consider a responsive offer timely received from an 
eligible small business offeror.
  (3) Nothing in paragraph (1) shall be construed as precluding 
an award of a contract with a value not greater than $100,000 
under the authority of subsection (a) of section 8 of this Act, 
section 2323 of title 10, United States Code, section 712 of 
the Business Opportunity Development Reform Act of 1988 (Public 
Law 100-656; 15 U.S.C. 644 note), or section 7102 of the 
Federal Acquisition Streamlining Act of 1994.
  (k) There is hereby established in each Federal agency having 
procurement powers an office to be known as the ``Office of 
Small and Disadvantaged Business Utilization''. The management 
of each such office shall be vested in an officer or employee 
of such agency, with experience serving in any combination of 
the following roles: program manager, deputy program manager, 
or assistant program manager for Federal acquisition program; 
chief engineer, systems engineer, assistant engineer, or 
product support manager for Federal acquisition program; 
Federal contracting officer; small business technical advisor; 
contracts administrator for Federal Government contracts; 
attorney specializing in Federal procurement law; small 
business liaison officer; officer or employee who managed 
Federal Government contracts for a small business; or 
individual whose primary responsibilities were for the 
functions and duties of [section 8, 15 or 44] section 8, 15, 
31, 36, or 44 of this Act. Such officer or employee----
          (1) shall be known as the ``Director of Small and 
        Disadvantaged Business Utilization'' for such agency;
          (2) shall be appointed by the head of such agency to 
        a position that is a Senior Executive Service position 
        (as such term is defined under section 3132(a) of title 
        5, United States Code), except that, for any agency in 
        which the positions of Chief Acquisition Officer and 
        senior procurement executive (as such terms are defined 
        under section 44(a) of this Act) are not Senior 
        Executive Service positions, the Director of Small and 
        Disadvantaged Business Utilization may be appointed to 
        a position compensated at not less than the minimum 
        rate of basic pay payable for grade GS-15 of the 
        General Schedule under section 5332 of such title 
        (including comparability payments under section 5304 of 
        such title);
          (3) shall be responsible only to (including with 
        respect to performance appraisals), and report directly 
        and exclusively to, the head of such agency or to the 
        deputy of such head, except that the Director for the 
        Office of the Secretary of Defense shall be responsible 
        only to (including with respect to performance 
        appraisals), and report directly and exclusively to, 
        such Secretary or the Secretary's designee;
          (4) shall be responsible for the implementation and 
        execution of the functions and duties under [sections 8 
        and 15] sections 8, 15, 31, 36, and 44 of this Act 
        which relate to such agency;
          (5) shall identify proposed solicitations that 
        involve significant bundling of contract requirements, 
        and work with the agency acquisition officials and the 
        Administration to revise the procurement strategies for 
        such proposed solicitations where appropriate to 
        increase the probability of participation by small 
        businesses as prime contractors, or to facilitate small 
        business participation as subcontractors and suppliers, 
        if a solicitation for a bundled contract is to be 
        issued;
          (6) shall assist small business concerns to obtain 
        payments, required late payment interest penalties, or 
        information regarding payments due to such concerns 
        from an executive agency or a contractor, in conformity 
        with chapter 39 of title 31, United States Code, or any 
        other protection for contractors or subcontractors 
        (including suppliers) that is included in the Federal 
        Acquisition Regulation or any individual agency 
        supplement to such Government-wide regulation;
          (7) shall have supervisory authority over personnel 
        of such agency to the extent that the functions and 
        duties of such personnel relate to functions and duties 
        under [sections 8 and 15] sections 8, 15, 31, 36, and 
        44 of this Act;
          (8) shall assign a small business technical adviser 
        to each office to which the Administration has assigned 
        a procurement center representative--
                  (A) who shall be a full-time employee of the 
                procuring activity and shall be well qualified, 
                technically trained and familiar with the 
                supplies or services purchased at the activity; 
                and
                  (B) whose principal duty shall be to assist 
                the Administration procurement center 
                representative in his duties and functions 
                relating to [sections 8 and 15] sections 8, 15, 
                31, 36, and 44 of this Act,
          (9) shall cooperate, and consult on a regular basis, 
        with the Administration with respect to carrying out 
        the functions and duties described in paragraph (4) of 
        this subsection;
          (10) shall make recommendations to contracting 
        officers as to whether a particular contract 
        requirement should be awarded pursuant to subsection 
        (a), [section 8(a)] section 8, 15, 31, or 36 of this 
        Act, or section 2323 of title 10, United States Code, 
        which shall be made with due regard to the requirements 
        of subsection (m), and the failure of the contracting 
        officer to accept any such recommendations shall be 
        documented and included within the appropriate contract 
        file;
          (11) shall review and advise such agency on any 
        decision to convert an activity performed by a small 
        business concern to an activity performed by a Federal 
        employee;
          (12) shall provide to the Chief Acquisition Officer 
        and senior procurement executive of such agency advice 
        and comments on acquisition strategies, market 
        research, and justifications related to section 44 of 
        this Act;
          (13) may provide training to small business concerns 
        and contract specialists, except that such training may 
        only be provided to the extent that the training does 
        not interfere with the Director carrying out other 
        responsibilities under this subsection;
          (14) shall receive unsolicited proposals and, when 
        appropriate, forward such proposals to personnel of the 
        activity responsible for reviewing such proposals;
          (15) shall review purchases made by the agency 
        greater than the micro-purchase threshold, and less 
        than the simplified acquisition threshold to ensure 
        that the purchases have been made in compliance with 
        the provisions of this Act and have been properly 
        recorded in the Federal Procurement Data System, if the 
        method of payment is a purchase card issued by the 
        Department of Defense pursuant to section 2784 of title 
        10, United States Code, or by the head of an executive 
        agency pursuant to section 1909 of title 41, United 
        States Code;
          (16) shall provide assistance to a small business 
        concern awarded a contract or subcontract under this 
        Act or under title 10 or title 41, United States Code, 
        in finding resources for education and training on 
        compliance with contracting regulations (including the 
        Federal Acquisition Regulation) after award of such a 
        contract or subcontract.
          [(15)] (17) shall carry out exclusively the duties 
        enumerated in this Act, and shall, while the Director, 
        not hold any other title, position, or responsibility, 
        except as necessary to carry out responsibilities under 
        this subsection;
          [(16)] (18) shall submit, each fiscal year, to the 
        Committee on Small Business of the House of 
        Representatives and the Committee on Small Business and 
        Entrepreneurship of the Senate a report describing--
                  (A) the training provided by the Director 
                under paragraph (13) in the most recently 
                completed fiscal year;
                  (B) the percentage of the budget of the 
                Director used for such training in the most 
                recently completed fiscal year; and
                  (C) the percentage of the budget of the 
                Director used for travel in the most recently 
                completed fiscal year; and
          [(17)] (19) shall, when notified by a small business 
        concern prior to the award of a contract that the small 
        business concern believes that a solicitation, request 
        for proposal, or request for quotation unduly restricts 
        the ability of the small business concern to compete 
        for the award--
                  (A) submit the notice of the small business 
                concern to the contracting officer and, if 
                necessary, recommend ways in which the 
                solicitation, request for proposal, or request 
                for quotation may be altered to increase the 
                opportunity for competition;
                  (B) inform the advocate for competition of 
                such agency (as established under section 1705 
                of title 41, United States Code, or section 
                2318 of title 10, United States Code) of such 
                notice; [and]
                  (C) ensure that the small business concern is 
                aware of other resources and processes 
                available to address unduly restrictive 
                provisions in a solicitation, request for 
                proposal, or request for quotation, even if 
                such resources and processes are provided by 
                such agency, the Administration, the 
                Comptroller General, or a procurement technical 
                assistance program established under chapter 
                142 of title 10, United States Code[.]; and
                  (D) any failure of the agency to comply with 
                section 8, 15, 31, or 36.
This subsection shall not apply to the Administration.
  (l) Procurement Center Representatives.--
          (1) Assignment and role.--The Administrator shall 
        assign to each major procurement center a procurement 
        center representative with such assistance as may be 
        appropriate.
          (2) Activities.--A procurement center representative 
        is authorized to--
          (A) attend any provisioning conference or similar 
        evaluation session during which determinations are made 
        as to whether requirements are to be procured through 
        other than full and open competition and make 
        recommendations with respect to such requirements to 
        the members of such conference or session;
                  (B) review, at any time, barriers to small 
                business participation in Federal contracting 
                previously imposed on goods and services 
                through acquisition method coding or similar 
                procedures, and recommend to personnel of the 
                appropriate activity the prompt reevaluation of 
                such barriers;
                  (C) review barriers to small business 
                participation in Federal contracting arising 
                out of restrictions on the rights of the United 
                States in technical data, and, when 
                appropriate, recommend that personnel of the 
                appropriate activity initiate a review of the 
                validity of such an asserted restriction;
                  (D) review any bundled or consolidated 
                solicitation or contract in accordance with 
                this Act;
                  (E) have access to procurement records and 
                other data of the procurement center 
                commensurate with the level of such 
                representative's approved security clearance 
                classification, with such data provided upon 
                request in electronic format, when available;
                  (F) receive unsolicited proposals from small 
                business concerns and transmit such proposals 
                to personnel of the activity responsible for 
                reviewing such proposals, who shall furnish the 
                procurement center representative with 
                information regarding the disposition of any 
                such proposal;
                  (G) consult with the Director the Office of 
                Small and Disadvantaged Business Utilization of 
                that agency and the agency personnel described 
                in paragraph (7) and (8) of subsection (k) with 
                regard to agency insourcing decisions covered 
                by subsection (k)(11);
                  (H) be an advocate for the maximum 
                practicable utilization of small business 
                concerns in Federal contracting, including by 
                advocating against the consolidation or 
                bundling of contract requirements when not 
                justified; [and]
                  (I) assist small business concerns with 
                finding resources for education and training on 
                compliance with contracting regulations 
                (including the Federal Acquisition Regulation) 
                after award of a contract or subcontract; and
                  [(I)] (J) carry out any other responsibility 
                assigned by the Administrator.
          (3) Appeals.--A procurement center representative is 
        authorized to appeal the failure to act favorably on 
        any recommendation made pursuant to paragraph (2). Such 
        appeal shall be filed and processed in the same manner 
        and subject to the same conditions and limitations as 
        an appeal filed by the Administrator pursuant to 
        subsection (a).
  (4) The Administration shall assign and co-locate at least 
two small business technical advisers to each major procurement 
center in addition to such other advisers as may be authorized 
from time to time. The sole duties of such advisers shall be to 
assist the procurement center representative for the center to 
which such advisers are assigned in carrying out the functions 
described in paragraph (2) and the representatives referred to 
in subsection (k)(6).
          (5) Position requirements.--
                  (A) In general.--A procurement center 
                representative assigned under this subsection 
                shall--
                          (i) be a full-time employee of the 
                        Administration;
                          (ii) be fully qualified, technically 
                        trained, and familiar with the goods 
                        and services procured by the major 
                        procurement center to which that 
                        representative is assigned; and
                          (iii) have the certification 
                        described in subparagraph (C).
                  (B) Compensation.--The Administrator shall 
                establish personnel positions for procurement 
                center representatives assigned under this 
                subsection, which are classified at a grade 
                level of the General Schedule sufficient to 
                attract and retain highly qualified personnel.
                  (C) Certification requirements.--
                          (i) In general.--Consistent with the 
                        requirements of clause (ii), a 
                        procurement center representative shall 
                        have a Level III Federal Acquisition 
                        Certification in Contracting (or any 
                        successor certification) or the 
                        equivalent Department of Defense 
                        certification, except that any person 
                        serving in such a position on or before 
                        January 3, 2013, may continue to serve 
                        in that position for a period of 5 
                        years without the required 
                        certification.
                          (ii) Delay of certification 
                        requirements.--
                                  (I) Timing.--The 
                                certification described in 
                                clause (i) is not required for 
                                any person serving as a 
                                procurement center 
                                representative until the date 
                                that is one calendar year after 
                                the date such person is 
                                appointed as a procurement 
                                center representative.
                                  (II) Application.--The 
                                requirements of subclause (I) 
                                shall--
                                          (aa) be included in 
                                        any initial job posting 
                                        for the position of a 
                                        procurement center 
                                        representative; and
                                          (bb) apply to any 
                                        person appointed as a 
                                        procurement center 
                                        representative after 
                                        January 3, 2013.
          (6) Major procurement center defined.--For purposes 
        of this subsection, the term ``major procurement 
        center'' means a procurement center that, in the 
        opinion of the Administrator, purchases substantial 
        dollar amounts of goods or services, including goods or 
        services that are commercially available.
          (7) Training.--
                  (A) Authorization.--At such times as the 
                Administrator deems appropriate. the breakout 
                procurement center representative shall conduct 
                familiarization sessions for contracting 
                officers and other appropriate personnel of the 
                procurement center to which such representative 
                is assigned. Such sessions shall acquaint the 
                participants with the provisions of this 
                subsection and shall instruct them in methods 
                designed to further the purposes of such 
                subsection.
                  (B) Limitation.--A procurement center 
                representative may provide training under 
                subparagraph (A) only to the extent that the 
                training does not interfere with the 
                representative carrying out other activities 
                under this subsection.
          (8) Annual briefing and report.--A procurement center 
        representative shall prepare and personally deliver an 
        annual briefing and report to the head of the 
        procurement center to which such representative is 
        assigned. Such briefing and report shall detail the 
        past and planned activities of the representative and 
        shall contain such recommendations for improvement in 
        the operation of the center as may be appropriate. The 
        head of such center shall personally receive such 
        briefing and report and shall, within 60 calendar days 
        after receipt, respond, in writing, to each 
        recommendation made by such representative.
          (9) Scope of review.--The Administrator shall not 
        limit the scope of review by the Procurement Center 
        Representative for any solicitation of a contract or 
        task order without regard to whether the contract or 
        task order or part of the contract or task order is set 
        aside for small business concerns, whether 1 or more 
        contract or task order awards are reserved for small 
        business concerns under a multiple award contract, or 
        whether or not the solicitation would result in a 
        bundled or consolidated contract (as defined in 
        subsection (s)) or a bundled or consolidated task 
        order.
  (m)(1) Each agency subject to the requirements of section 
2323 of title 10, United States Code, shall, when implementing 
such requirements--
          (A) establish policies and procedures that insure 
        that there will be no reduction in the number of dollar 
        value of contracts awarded pursuant to this section and 
        section 8(a) in order to achieve any goal or other 
        program objective; and
          (B) assure that such requirements will not alter or 
        change the procurement process used to implement this 
        section or section 8(a).
  (2) All procurement center representatives (including those 
referred to in subsection (k)(6)), in addition to such other 
duties as may be assigned by the Administrator, shall--
          (A) monitor the performance of the procurement 
        activities to which they are assigned to ascertain the 
        degree of compliance with the requirements of paragraph 
        (1);
          (B) report to their immediate supervisors all 
        instances of noncompliance with such requirements; and
          (C) increase, insofar as possible, the number and 
        dollar value of procurements that may be used for the 
        programs established under this section, section 8(a), 
        and section 2323 of title 10, United States Code.
  (n) For purposes of this section, the determination of labor 
surplus areas shall be made on the basis of the criteria in 
effect at the time of the determination, except that any 
minimum population criteria shall not exceed twenty-five 
thousand. Such determination, as modified by the preceding 
sentence, shall be made by the Secretary of Labor.
  (o) Limitations on Subcontracting.--A concern may not be 
awarded a contract under subsection (a) as a small business 
concern unless the concern agrees to satisfy the requirements 
of section 46.
  (p) Access to Data.--
          (1) Bundled contract defined.--In this subsection, 
        the term ``bundled contract'' has the meaning given 
        such term in section 3(o)(1).
          (2) Database.--
                  (A) In general.--Not later than 180 days 
                after the date of the enactment of this 
                subsection, the Administrator of the Small 
                Business Administration shall develop and shall 
                thereafter maintain a database containing data 
                and information regarding--
                          (i) each bundled contract awarded by 
                        a Federal agency; and
                          (ii) each small business concern that 
                        has been displaced as a prime 
                        contractor as a result of the award of 
                        such a contract.
          (3) Analysis.--For each bundled contract that is to 
        be recompeted as a bundled contract, the Administrator 
        shall determine--
                  (A) the amount of savings and benefits (in 
                accordance with subsection (e)) achieved under 
                the bundling of contract requirements; and
                  (B) whether such savings and benefits will 
                continue to be realized if the contract remains 
                bundled, and whether such savings and benefits 
                would be greater if the procurement 
                requirements were divided into separate 
                solicitations suitable for award to small 
                business concerns.
          (4) Annual report on contract bundling.--
                  (A) In general.--Not later than 1 year after 
                the date of the enactment of this paragraph, 
                and annually in March thereafter, the 
                Administration shall transmit a report on 
                contract bundling to the Committees on Small 
                Business of the House of Representatives and 
                the Senate.
                  (B) Contents.--Each report transmitted under 
                subparagraph (A) shall include--
                          (i) data on the number, arranged by 
                        industrial classification, of small 
                        business concerns displaced as prime 
                        contractors as a result of the award of 
                        bundled contracts by Federal agencies; 
                        and
                          (ii) a description of the activities 
                        with respect to previously bundled 
                        contracts of each Federal agency during 
                        the preceding year, including--
                                  (I) data on the number and 
                                total dollar amount of all 
                                contract requirements that were 
                                bundled; and
                                  (II) with respect to each 
                                bundled contract, data or 
                                information on--
                                          (aa) the 
                                        justification for the 
                                        bundling of contract 
                                        requirements;
                                          (bb) the cost savings 
                                        realized by bundling 
                                        the contract 
                                        requirements over the 
                                        life of the contract;
                                          (cc) the extent to 
                                        which maintaining the 
                                        bundled status of 
                                        contract requirements 
                                        is projected to result 
                                        in continued cost 
                                        savings;
                                          (dd) the extent to 
                                        which the bundling of 
                                        contract requirements 
                                        complied with the 
                                        contracting agency's 
                                        small business 
                                        subcontracting plan, 
                                        including the total 
                                        dollar value awarded to 
                                        small business concerns 
                                        as subcontractors and 
                                        the total dollar value 
                                        previously awarded to 
                                        small business concerns 
                                        as prime contractors; 
                                        and
                                          (ee) the impact of 
                                        the bundling of 
                                        contract requirements 
                                        on small business 
                                        concerns unable to 
                                        compete as prime 
                                        contractors for the 
                                        consolidated 
                                        requirements and on the 
                                        industries of such 
                                        small business 
                                        concerns, including a 
                                        description of any 
                                        changes to the 
                                        proportion of any such 
                                        industry that is 
                                        composed of small 
                                        business concerns.
          (5) Access to data.--
                  (A) Federal procurement data system.--To 
                assist in the implementation of this section, 
                the Administration shall have access to 
                information collected through the Federal 
                Procurement Data System.
                  (B) Agency procurement data sources.--To 
                assist in the implementation of this section, 
                the head of each contracting agency shall 
                provide, upon request of the Administration, 
                procurement information collected through 
                existing agency data collection sources.
  (q) Reports Related to Procurement Center Representatives.--
          (1) Teaming and joint venture requirements.--
                  (A) In general.--Each Federal agency shall 
                include in each solicitation for any multiple 
                award contract above the substantial bundling 
                threshold of the Federal agency a provision 
                soliciting bids from any responsible source, 
                including responsible small business concerns 
                and teams or joint ventures of small business 
                concerns.
                  (B) Teams.--When evaluating an offer of a 
                small business prime contractor that includes a 
                proposed team of small business subcontractors 
                for any multiple award contract above the 
                substantial bundling threshold of the Federal 
                agency, the head of the agency shall consider 
                the capabilities and past performance of each 
                first tier subcontractor that is part of the 
                team as the capabilities and past performance 
                of the small business prime contractor.
                  (C) Joint ventures.--When evaluating an offer 
                of a joint venture of small business concerns 
                for any multiple award contract above the 
                substantial bundling threshold of the Federal 
                agency, if the joint venture does not 
                demonstrate sufficient capabilities or past 
                performance to be considered for award of a 
                contract opportunity, the head of the agency 
                shall consider the capabilities and past 
                performance of each member of the joint venture 
                as the capabilities and past performance of the 
                joint venture.
          (2) Policies on reduction of contract bundling.--
                  (A) In general.--Not later than 1 year after 
                the date of enactment of this subsection, the 
                Federal Acquisition Regulatory Council 
                established under section 25(a) of the Office 
                of Federal Procurement Policy Act (41 U.S.C. 
                4219(a)) shall amend the Federal Acquisition 
                Regulation issued under section 25 of such Act 
                to--
                          (i) establish a Government-wide 
                        policy regarding contract bundling, 
                        including regarding the solicitation of 
                        teaming and joint ventures under 
                        paragraph (1); and
                          (ii) require that the policy 
                        established under clause (i) be 
                        published on the website of each 
                        Federal agency.
                  (B) Rationale for contract bundling.--Not 
                later than 30 days after the date on which the 
                head of a Federal agency submits data 
                certifications to the Administrator for Federal 
                Procurement Policy, the head of the Federal 
                agency shall publish on the website of the 
                Federal agency a list and rationale for any 
                bundled contract for which the Federal agency 
                solicited bids or that was awarded by the 
                Federal agency.
          (3) Reporting.--Not later than 90 days after the date 
        of enactment of this subsection, and every 3 years 
        thereafter, the Administrator shall submit to the 
        Committee on Small Business and Entrepreneurship of the 
        Senate and the Committee on Small Business of the House 
        of Representatives a report regarding procurement 
        center representatives and commercial market 
        representatives, which shall--
                  (A) identify each area for which the 
                Administration has assigned a procurement 
                center representative or a commercial market 
                representative;
                  (B) explain why the Administration selected 
                the areas identified under subparagraph (A); 
                and
                  (C) describe the activities performed by 
                procurement center representatives and 
                commercial market representatives.
  (r) Multiple Award Contracts.--Not later than 1 year after 
the date of enactment of this subsection, the Administrator for 
Federal Procurement Policy and the Administrator, in 
consultation with the Administrator of General Services, shall, 
by regulation, establish guidance under which Federal agencies 
may, at their discretion--
          (1) set aside part or parts of a multiple award 
        contract for small business concerns, including the 
        subcategories of small business concerns identified in 
        subsection (g)(2);
          (2) notwithstanding the fair opportunity requirements 
        under section 2304c(b) of title 10, United States Code, 
        and section 303J(b) of the Federal Property and 
        Administrative Services Act of 1949 (41 U.S.C. 
        253j(b)), set aside orders placed against multiple 
        award contracts for small business concerns, including 
        the subcategories of small business concerns identified 
        in subsection (g)(2); and
          (3) reserve 1 or more contract awards for small 
        business concerns under full and open multiple award 
        procurements, including the subcategories of small 
        business concerns identified in subsection (g)(2).
  (s) Data Quality Improvement Plan.--
          (1) In general.--Not later than October 1, 2015, the 
        Administrator of the Small Business Administration, in 
        consultation with the Small Business Procurement 
        Advisory Council, the Administrator for Federal 
        Procurement Policy, and the Administrator of General 
        Services, shall develop a plan to improve the quality 
        of data reported on bundled or consolidated contracts 
        in the Federal procurement data system (described in 
        section 1122(a)(4)(A) of title 41, United States Code).
          (2) Plan requirements.--The plan shall--
                  (A) describe the roles and responsibilities 
                of the Administrator of the Small Business 
                Administration, each Director of Small and 
                Disadvantaged Business Utilization, the 
                Administrator for Federal Procurement Policy, 
                the Administrator of General Services, senior 
                procurement executives, and Chief Acquisition 
                Officers in--
                          (i) improving the quality of data 
                        reported on bundled or consolidated 
                        contracts in the Federal procurement 
                        data system; and
                          (ii) contributing to the annual 
                        report required by subsection (p)(4);
                  (B) recommend changes to policies and 
                procedures, including training procedures of 
                relevant personnel, to properly identify and 
                mitigate the effects of bundled or consolidated 
                contracts;
                  (C) recommend requirements for periodic and 
                statistically valid data verification and 
                validation; and
                  (D) recommend clear data verification 
                responsibilities.
          (3) Plan submission.--The Administrator of the Small 
        Business Administration shall submit the plan to the 
        Committee on Small Business of the House of 
        Representatives and the Committee on Small Business and 
        Entrepreneurship of the Senate not later than December 
        1, 2016.
          (4) Implementation.--Not later than October 1, 2016, 
        the Administrator of the Small Business Administration 
        shall implement the plan described in this subsection.
          (5) Certification.--The Administrator shall annually 
        provide to the Committee on Small Business of the House 
        of Representatives and the Committee on Small Business 
        and Entrepreneurship of the Senate a certification of 
        the accuracy and completeness of data reported on 
        bundled and consolidated contracts.
          (6) Definitions.--In this subsection, the following 
        definitions apply:
                  (A) Chief acquisition officer; senior 
                procurement executive.--The terms ``Chief 
                Acquisition Officer'' and ``senior procurement 
                executive'' have the meanings given such terms 
                in section 44(a) of this Act.
                  (B) Bundled or consolidated contract.--The 
                term ``bundled or consolidated contract'' means 
                a bundled contract (as defined in section 3(o)) 
                or a contract resulting from the consolidation 
                of contracting requirements (as defined in 
                section 44(a)(2)).
  (t) Post-Award Compliance Resources.--The Administrator shall 
provide to small business development centers and entities 
participating in the Procurement Technical Assistance 
Cooperative Agreement Program under chapter 142 of title 10, 
United States Code, and shall make available on the website of 
the Administration, a list of resources for small business 
concerns seeking education and assistance on compliance with 
contracting regulations (including the Federal Acquisition 
Regulation) after award of a contract or subcontract.
  (u) Regulatory Changes and Training Materials.--Not less than 
annually, the Administrator shall provide to the Defense 
Acquisition University (established under section 1746 of title 
10, United States Code), the Federal Acquisition Institute 
(established under section 1201 of title 41, United States 
Code), the individual responsible for mandatory training and 
education of the acquisition workforce of each agency 
(described under section 1703(f)(1)(C) of title 41, United 
States Code), small business development centers, and entities 
participating in the Procurement Technical Assistance 
Cooperative Agreement Program under chapter 142 of title 10, 
United States Code--
          (1) a list of all changes made in the prior year to 
        regulations promulgated--
                  (A) by the Administrator that affect Federal 
                acquisition; and
                  (B) by the Federal Acquisition Council that 
                implement changes to this Act; and
          (2) any materials the Administrator has developed to 
        explain, train, or assist Federal agencies or 
        departments or small business concerns to comply with 
        the regulations specified in paragraph (1).

           *       *       *       *       *       *       *

  Sec. 18. (a) The Administration shall not duplicate the work 
or activity of any other department or agency of the Federal 
Government,, and nothing contained in this Act shall be 
construed to authorize any such duplication unless such work or 
activity is expressly provided for in this Act. If loan 
applications are being refused or loans denied by such other 
department or agency responsible for such work or activity due 
to administrative withholding from obligation or withholding 
from apportionment, or due to administratively declared 
moratorium, then, for purposes of this section, no duplication 
shall be deemed to have occurred.
  (b) As used in this Act--
          (1) ``agricultural enterprises'' means those 
        [businesses] small business concerns engaged in the 
        production of food and fiber, ranching, and raising of 
        livestock, aquaculture, and all other farming and 
        agricultural related industries; and
          (2) ``credit elsewhere'' means the availability of 
        sufficient credit from non-Federal sources at 
        reasonable rates and terms, taking into consideration 
        prevailing private rates and terms in the community in 
        or near where the concern transacts business for 
        similar purposes and periods of time.

           *       *       *       *       *       *       *


SEC. 45. MENTOR-PROTEGE PROGRAMS.

  (a) Administration Program.--
          (1) Authority.--The Administrator is authorized to 
        establish a mentor-protege program for all small 
        business concerns.
          (2) Model for program.--The mentor-protege program 
        established under paragraph (1) shall be identical to 
        the mentor-protege program of the Administration for 
        small business concerns that participate in the program 
        under section 8(a) (as in effect on the date of 
        enactment of this section), except that the 
        Administrator may modify the program to the extent 
        necessary given the types of small business concerns 
        included as proteges.
  (b) Programs of Other Agencies.--
          (1) Approval required.--Except as provided in 
        paragraph (4), a Federal department or agency may not 
        carry out a mentor-protege program for small business 
        concerns unless--
                  (A) the head of the department or agency 
                submits a plan to the Administrator for the 
                program; and
                  (B) the Administrator approves such plan.
          (2) Basis for approval.--The Administrator shall 
        approve or disapprove a plan submitted under paragraph 
        (1) based on whether the program proposed--
                  (A) will assist proteges to compete for 
                Federal prime contracts and subcontracts; and
                  (B) complies with the regulations issued 
                under paragraph (3).
          (3) Regulations.--Not later than 270 days after the 
        date of enactment of this section, the Administrator 
        shall issue, subject to notice and comment, regulations 
        with respect to mentor-protege programs, which shall 
        ensure that such programs improve the ability of 
        proteges to compete for Federal prime contracts and 
        subcontracts and which shall address, at a minimum, the 
        following:
                  (A) Eligibility criteria for program 
                participants, including any restrictions on the 
                number of mentor-protege relationships 
                permitted for each participant.
                  (B) The types of developmental assistance to 
                be provided by mentors, including how the 
                assistance provided shall improve the 
                competitive viability of the proteges.
                  (C) Whether any developmental assistance 
                provided by a mentor may affect the status of a 
                program participant as a small business concern 
                due to affiliation.
                  (D) The length of mentor-protege 
                relationships.
                  (E) The effect of mentor-protege 
                relationships on contracting.
                  (F) Benefits that may accrue to a mentor as a 
                result of program participation.
                  (G) Reporting requirements during program 
                participation.
                  (H) Postparticipation reporting requirements.
                  (I) The need for a mentor-protege pair, if 
                accepted to participate as a pair in a mentor-
                protege program of any Federal department or 
                agency, to be accepted to participate as a pair 
                in all Federal mentor-protege programs.
                  (J) Actions to be taken to ensure benefits 
                for proteges and to protect a protege against 
                actions by a mentor that--
                          (i) may adversely affect the 
                        protege's status as a small business 
                        concern; or
                          (ii) provide disproportionate 
                        economic benefits to the mentor 
                        relative to those provided the protege.
                  (K) The extent to which assistance with 
                compliance with the requirements of contracting 
                with the Federal Government after award of a 
                contract or subcontract under this section.
          (4) Limitation on applicability.--Paragraph (1) does 
        not apply to the following:
                  [(A) Any mentor-protege program of the 
                Department of Defense.]
                  [(B)] (A) Any mentoring assistance provided 
                under a Small Business Innovation Research 
                Program or a Small Business Technology Transfer 
                Program.
                  [(C)] (B) Until the date that is 1 year after 
                the date on which the Administrator issues 
                regulations under paragraph (3), any Federal 
                department or agency operating a mentor-protege 
                program in effect on the date of enactment of 
                this section.
  (c) Reporting.--
          (1) In general.--Not later than 2 years after the 
        date of enactment of this section, and annually 
        thereafter, the Administrator shall submit to the 
        Committee on Small Business of the House of 
        Representatives and the Committee on Small Business and 
        Entrepreneurship of the Senate a report that--
                  (A) identifies each Federal mentor-protege 
                program;
                  (B) specifies the number of participants in 
                each such program, including the number of 
                participants that are--
                          (i) small business concerns;
                          (ii) small business concerns owned 
                        and controlled by service-disabled 
                        veterans;
                          (iii) qualified HUBZone small 
                        business concerns;
                          (iv) small business concerns owned 
                        and controlled by socially and 
                        economically disadvantaged individuals; 
                        or
                          (v) small business concerns owned and 
                        controlled by women;
                  (C) describes the type of assistance provided 
                to proteges under each such program;
                  (D) describes the benefits provided to 
                mentors under each such program; and
                  (E) describes the progress of proteges under 
                each such program with respect to competing for 
                Federal prime contracts and subcontracts.
          (2) Provision of information.--The head of each 
        Federal department or agency carrying out a mentor-
        protege program shall provide to the Administrator, on 
        an annual basis, the information necessary for the 
        Administrator to submit a report required under 
        paragraph (1).
  (d) Definitions.--In this section, the following definitions 
apply:
          (1) Mentor.--The term ``mentor'' means a for-profit 
        business concern, of any size, that--
                  (A) has the ability to assist and commits to 
                assisting a protege to compete for Federal 
                prime contracts and subcontracts; and
                  (B) satisfies any other requirements imposed 
                by the Administrator.
          (2) Mentor-protege program.--The term ``mentor-
        protege program'' means a program that pairs a mentor 
        with a protege for the purpose of assisting the protege 
        to compete for Federal prime contracts and 
        subcontracts.
          (3) Protege.--The term ``protege'' means a small 
        business concern that--
                  (A) is eligible to enter into Federal prime 
                contracts and subcontracts; and
                  (B) satisfies any other requirements imposed 
                by the Administrator.
  (e) Current Mentor Protege Agreements.--Mentors and proteges 
with approved agreement in a program operating pursuant to 
subsection (b)(4)(C) shall be permitted to continue their 
relationship according to the terms specified in their 
agreement until the expiration date specified in the agreement.
  (f) Submission of Agency Plans.--Agencies operating mentor 
protege programs pursuant to subsection (b)(4)(C) shall submit 
the plans specified in subsection (b)(1)(A) to the 
Administrator within 6 months of the promulgation of rules 
required by subsection (b)(3). The Administrator shall provide 
initial comments on each plan within 60 days of receipt, and 
final approval or denial of each plan within 180 days after 
receipt.

           *       *       *       *       *       *       *

                              ----------                              


        NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 1991



           *       *       *       *       *       *       *
DIVISION A--DEPARTMENT OF DEFENSE AUTHORIZATIONS

           *       *       *       *       *       *       *


  TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED 
MATTERS

           *       *       *       *       *       *       *


Part D--Miscellaneous

           *       *       *       *       *       *       *


SEC. 831. MENTOR-PROTEGE PILOT PROGRAM.

  (a) Establishment of Pilot Program.--The Secretary of Defense 
shall establish a pilot program to be known as the ``Mentor-
Protege Program''.
  (b) Purpose.--The purpose of the program is to provide 
incentives for major Department of Defense contractors to 
furnish disadvantaged small business concerns with assistance 
designed to--
          (1) enhance the capabilities of disadvantaged small 
        business concerns to perform as subcontractors and 
        suppliers under Department of Defense contracts and 
        other contracts and subcontracts; and
          (2) increase the participation of such business 
        concerns as subcontractors and suppliers under 
        Department of Defense contracts, other Federal 
        Government contracts, and commercial contracts.
  (c) Program Participants.--(1) A business concern meeting the 
eligibility requirements set out in subsection (d) may enter 
into agreements under subsection (e) and furnish assistance to 
disadvantaged small business concerns upon making application 
to the Secretary of Defense and being approved for 
participation in the pilot program by the Secretary. A business 
concern participating in the pilot program pursuant to such an 
approval shall be known, for the purposes of the program, as a 
``mentor firm''.
          (2) A disadvantaged small business concern eligible 
        for the award of Federal contracts may obtain 
        assistance from a mentor firm upon entering into an 
        agreement with the mentor firm as provided in 
        subsection (e). A disadvantaged small business concern 
        may not be a party to more than one agreement 
        concurrently, and the authority to enter into 
        agreements under subsection (e) shall only be available 
        to such concern during the 5-year period beginning on 
        the date such concern enters into the first such 
        agreement. A disadvantaged small business concern 
        receiving such assistance shall be known, for the 
        purposes of the program, as a ``protege firm''.
          (3) In entering into an agreement pursuant to 
        subsection (e), a mentor firm may rely in good faith on 
        a written representation of a business concern that 
        such business concern is a disadvantaged small business 
        concern. The Small Business Administration shall 
        determine the status of such business concern as a 
        disadvantaged small business concern in the event of a 
        protest regarding the status of such business concern. 
        If at any time the business concern is determined by 
        the Small Business Administration not to be a 
        disadvantaged small business concern, assistance 
        furnished such business concern by the mentor firm 
        after the date of the determination may not be 
        considered assistance furnished under the program.
  (d) Mentor Firm Eligibility.--Subject to subsection (c)(1), a 
mentor firm eligible for award of Federal contracts may enter 
into an agreement with one or more protege firms under 
subsection (e) and provide assistance under the program 
pursuant to that agreement if--
          [(1) the mentor firm is not affiliated with the 
        protege firm prior to the approval of that agreement; 
        and]
          (1) prior to the approval of that agreement, the 
        Administrator of the Small Business Administration had 
        made no finding of affiliation between the mentor firm 
        and the protege firm;
          (2)(A) the Administrator of the Small Business 
        Administration does not have a current finding of 
        affiliation between the mentor firm and protege firm; 
        or
          (B) the Secretary, after considering the regulations 
        promulgated by the Administrator of the Small Business 
        Administration regarding affiliation--
                  (i) does not have reason to believe that the 
                mentor firm affiliated with the protege firm; 
                or
                  (ii) has received a formal determination of 
                no affiliation between the mentor firm and 
                protege firm from the Administrator after 
                having submitted a question of affiliation to 
                the Administrator; and
          [(2)] (3) the mentor firm demonstrates that it--
                  (A) is qualified to provide assistance that 
                will contribute to the purpose of the program;
                  (B) is of good financial health and character 
                and does not appear on a Federal list of 
                debarred or suspended contractors; and
                  (C) can impart value to a protege firm 
                because of experience gained as a Department of 
                Defense contractor or through knowledge of 
                general business operations and government 
                contracting, as demonstrated by evidence that--
                          (i) during the fiscal year preceding 
                        the fiscal year in which the mentor 
                        firm enters into the agreement, the 
                        total amount of the Department of 
                        Defense contracts awarded such mentor 
                        firm and the subcontracts awarded such 
                        mentor firm under Department of Defense 
                        contracts was equal to or greater than 
                        $100,000,000; or
                          (ii) the mentor firm demonstrates the 
                        capability to assist in the development 
                        of protege firms, and is approved by 
                        the Secretary of Defense pursuant to 
                        criteria specified in the regulations 
                        prescribed pursuant to subsection (k).
  (e) Mentor-Protege Agreement.--Before providing assistance to 
a protege firm under the program, a mentor firm shall enter 
into a mentor-protege agreement with the protege firm regarding 
the assistance to be provided by the mentor firm. The agreement 
shall include the following:
          (1) A developmental program for the protege firm, in 
        such detail as may be reasonable, including--
                  (A) factors to assess the protege firm's 
                developmental progress under the program;
                  (B) a description of the quantitative and 
                qualitative benefits to the Department of 
                Defense from the agreement, if applicable; 
                [and]
                  (C) goals for additional awards that protege 
                firm can compete for outside the Mentor-Protege 
                Program[.]; and
                  (D) the assistance the mentor firm will 
                provide to the protege firm in understanding 
                contract regulations of the Federal Government 
                and the Department of Defense (including the 
                Federal Acquisition Regulation and the Defense 
                Federal Acquisition Regulation Supplement) 
                after award of a subcontract under this 
                section, if applicable.
          (2) A program participation term for any period of 
        not more than three years, except that the term may be 
        a period of up to five years if the Secretary of 
        Defense determines in writing that unusual 
        circumstances justify a program participation term in 
        excess of three years.
          (3) Procedures for the protege firm to terminate the 
        agreement voluntarily and for the mentor firm to 
        terminate the agreement for cause.
  (f) Forms of Assistance.--A mentor firm may provide a protege 
firm the following:
          (1) Assistance, by using mentor firm personnel, in--
                  (A) general business management, including 
                organizational management, financial 
                management, and personnel management, 
                marketing, and overall business planning;
                  (B) engineering and technical matters such as 
                production, inventory control, and quality 
                assurance; and
                  (C) any other assistance designed to develop 
                the capabilities of the protege firm under the 
                developmental program referred to in subsection 
                (e).
          (2) Award of subcontracts on a noncompetitive basis 
        to the protege firm under the Department of Defense or 
        other contracts.
          (3) Payment of progress payments for performance of 
        the protege firm under such a subcontract in amounts as 
        provided for in the subcontract, but in no event may 
        any such progress payment exceed 100 percent of the 
        costs incurred by the protege firm for the performance.
          (4) Advance payments under such subcontracts.
          (5) Loans.
          (6) Assistance obtained by the mentor firm for the 
        protege firm from one or more of the following--
                  (A) small business development centers 
                established pursuant to section 21 of the Small 
                Business Act (15 U.S.C. 648);
                  (B) entities providing procurement technical 
                assistance pursuant to chapter 142 of title 10, 
                United States Code; [or]
                  (C) a historically Black college or 
                university or a minority institution of higher 
                education[.]; or
                  (D) women's business centers described in 
                section 29 of the Small Business Act (15 U.S.C. 
                656).
  (g) Incentives for Mentor Firms.--(1) The Secretary of 
Defense may provide to a mentor firm reimbursement for the 
total amount of any progress payment or advance payment made 
under the program by the mentor firm to a protege firm in 
connection with a Department of Defense contract awarded the 
mentor firm.
          (2)(A) The Secretary of Defense may provide to a 
        mentor firm reimbursement for the costs of the 
        assistance furnished to a protege firm pursuant to 
        paragraphs (1) and (6) of subsection (f) (except as 
        provided in subparagraph (D)) as provided for in a line 
        item in a Department of Defense contract under which 
        the mentor firm is furnishing products or services to 
        the Department, subject to a maximum amount of 
        reimbursement specified in such contract, except that 
        this sentence does not apply in a case in which the 
        Secretary of Defense determines in writing that unusual 
        circumstances justify reimbursement using a separate 
        contract.
  (B) The determinations made in annual performance reviews of 
a mentor firm's mentor-protege agreement shall be a major 
factor in the determinations of amounts of reimbursement, if 
any, that the mentor firm is eligible to receive in the 
remaining years of the program participation term under the 
agreement.
  (C) The total amount reimbursed under this paragraph to a 
mentor firm for costs of assistance furnished in a fiscal year 
to a protege firm may not exceed $1,000,000, except in a case 
in which the Secretary of Defense determines in writing that 
unusual circumstances justify a reimbursement of a higher 
amount.
  (D) The Secretary may not reimburse any fee assessed by the 
mentor firm for services provided to the protege firm pursuant 
to subsection (f)(6) or for business development expenses 
incurred by the mentor firm under a contract awarded to the 
mentor firm while participating in a joint venture with the 
protege firm.
          (3)(A) Costs incurred by a mentor firm in providing 
        assistance to a protege firm that are not reimbursed 
        pursuant to paragraph (2) shall be recognized as credit 
        in lieu of subcontract awards for purposes of 
        determining whether the mentor firm attains a 
        subcontracting participation goal applicable to such 
        mentor firm under a Department of Defense contract, 
        under a contract with another executive agency, or 
        under a divisional or company-wide subcontracting plan 
        negotiated with the Department of Defense or another 
        executive agency.
  (B) The amount of the credit given a mentor firm for any such 
unreimbursed costs shall be equal to--
          (i) four times the total amount of such costs 
        attributable to assistance provided by entities 
        described in subsection (f)(6);
          (ii) three times the total amount of such costs 
        attributable to assistance furnished by the mentor 
        firm's employees; and
          (iii) two times the total amount of any other such 
        costs.
  (C) Under regulations prescribed pursuant to subsection (k), 
the Secretary of Defense shall adjust the amount of credit 
given a mentor firm pursuant to subparagraphs (A) and (B) if 
the Secretary determines that the firm's performance regarding 
the award of subcontracts to disadvantaged small business 
concerns has declined without justifiable cause.
          (4) A mentor firm shall receive credit toward the 
        attainment of a subcontracting participation goal 
        applicable to such mentor firm for each subcontract for 
        a product or service awarded under such contract by a 
        mentor firm to a business concern that, except for its 
        size, would be a small business concern owned and 
        controlled by socially and economically disadvantaged 
        individuals, but only if--
          (A) the size of such business concern is not more 
        than two times the maximum size specified by the 
        Administrator of the Small Business Administration for 
        purposes of determining whether a business concern 
        furnishing such product or service is a small business 
        concern; and
          (B) the business concern formerly had a mentor-
        protege agreement with such mentor firm that was not 
        terminated for cause.
  (h) Relationship to Small Business Act.--(1) For purposes of 
the Small Business Act (15 U.S.C. 631 et seq.), no 
determination of affiliation or control (either direct or 
indirect) may be found between a protege firm and its mentor 
firm on the basis that the mentor firm has agreed to furnish 
(or has furnished) to its protege firm pursuant to a mentor-
protege agreement any form of developmental assistance 
described in subsection (f).
          (2) Notwithstanding section 8 of the Small Business 
        Act (15 U.S.C. 637), the Small Business Administration 
        may not determine a disadvantaged small business 
        concern to be ineligible to receive any assistance 
        authorized under the Small Business Act on the basis 
        that such business concern has participated in the 
        Mentor-Protege Program or has received assistance 
        pursuant to any developmental assistance agreement 
        authorized under such program.
          (3) The Small Business Administration may not require 
        a firm that is entering into, or has entered into, an 
        agreement under subsection (e) as a protege firm to 
        submit the agreement, or any other document required by 
        the Secretary of Defense in the administration of the 
        Mentor-Protege Program, to the Small Business 
        Administration for review, approval, or any other 
        purpose.
  (i) Participation in Mentor-Protege Program not To Be a 
Condition for Award of a Contract or Subcontract.--A mentor 
firm may not require a business concern to enter into an 
agreement with the mentor firm pursuant to subsection (e) as a 
condition for being awarded a contract by the mentor firm, 
including a subcontract under a contract awarded to the mentor 
firm.
  (j) Expiration of Authority.--(1) No mentor-protege agreement 
may be entered into under subsection (e) after September 30, 
2018.
          (2) No reimbursement may be paid, and no credit 
        toward the attainment of a subcontracting goal may be 
        granted, under subsection (g) for any cost incurred 
        after September 30, 2021.
  (k) Regulations.--The Secretary of Defense shall prescribe 
regulations to carry out the pilot Mentor-Protege Program. Such 
regulations shall include the requirements set forth in section 
8(d) of the Small Business Act (15 U.S.C. 637(d)) and shall 
prescribe procedures by which mentor firms may terminate 
participation in the program. The Secretary shall publish the 
proposed regulations not later than the date 180 days after the 
date of the enactment of this Act. The Secretary shall 
promulgate the final regulations not later than the date 270 
days after the date of the enactment of this Act. The 
Department of Defense policy regarding the pilot Mentor-Protege 
Program shall be published and maintained as an appendix to the 
Department of Defense Supplement to the Federal Acquisition 
Regulation.
  (l) Report by Mentor Firms.--To comply with section 8(d)(7) 
of the Small Business Act (15 U.S.C. 637(d)(7)), each mentor 
firm shall submit a report to the Secretary not less than once 
each fiscal year that includes, for the preceding fiscal year--
          (1) all technical or management assistance provided 
        by mentor firm personnel for the purposes described in 
        subsection (f)(1);
          (2) any new awards of subcontracts on a competitive 
        or noncompetitive basis to the protege firm under 
        Department of Defense contracts or other contracts, 
        including the value of such subcontracts;
          (3) any extensions, increases in the scope of work, 
        or additional payments not previously reported for 
        prior awards of subcontracts on a competitive or 
        noncompetitive basis to the protege firm under 
        Department of Defense contracts or other contracts, 
        including the value of such subcontracts;
          (4) the amount of any payment of progress payments or 
        advance payments made to the protege firm for 
        performance under any subcontract made under the 
        Mentor-Protege Program;
          (5) any loans made by mentor firm to the protege 
        firm;
          (6) all Federal contracts awarded to the mentor firm 
        and the protege firm as a joint venture, designating 
        whether the award was a restricted competition or a 
        full and open competition;
          (7) any assistance obtained by the mentor firm for 
        the protege firm from one or more--
                  (A) small business development centers 
                established pursuant to section 21 of the Small 
                Business Act (15 U.S.C. 648);
                  (B) entities providing procurement technical 
                assistance pursuant to chapter 142 of title 10, 
                United States Code; or
                  (C) historically Black colleges or 
                universities or minority institutions of higher 
                education;
          (8) whether there have been any changes to the terms 
        of the mentor-protege agreement; and
          (9) a narrative describing the success assistance 
        provided under subsection (f) has had in addressing the 
        developmental needs of the protege firm, the impact on 
        Department of Defense contracts, and addressing any 
        problems encountered.
  (m) Review of Report by the Office of Small Business 
Programs.--The Office of Small Business Programs of the 
Department of Defense shall review the report required by 
subsection (l) and, if the Office finds that the mentor-protege 
agreement is not furthering the purpose of the Mentor-Protege 
Program, decide not to approve any continuation of the 
agreement.
  (n) Definitions.--In this section:
          (1) The term ``small business concern'' has the 
        meaning given such term under section 3 of the Small 
        Business Act (15 U.S.C. 632).
          (2) The term ``disadvantaged small business concern'' 
        means a firm that has less than half the size standard 
        corresponding to its primary North American Industry 
        Classification System code, is not owned or managed by 
        individuals or entities that directly or indirectly 
        have stock options or convertible securities in the 
        mentor firm, and is--
                  (A) a small business concern owned and 
                controlled by socially and economically 
                disadvantaged individuals;
                  (B) a business entity owned and controlled by 
                an Indian tribe as defined by section 8(a)(13) 
                of the Small Business Act (15 U.S.C. 
                637(a)(13));
                  (C) a business entity owned and controlled by 
                a Native Hawaiian Organization as defined by 
                section 8(a)(15) of the Small Business Act (15 
                U.S.C. 637(a)(15));
                  (D) a qualified organization employing 
                severely disabled individuals;
                  (E) a small business concern owned and 
                controlled by women, as defined in section 
                8(d)(3)(D) of the Small Business Act (15 U.S.C. 
                637(d)(3)(D));
                  (F) a small business concern owned and 
                controlled by service-disabled veterans (as 
                defined in section 8(d)(3) of the Small 
                Business Act); and
                  (G) a qualified HUBZone small business 
                concern (as defined in section 3(p) of the 
                Small Business Act (15 U.S.C. 632(p)); or
                  (H) a small business concern that--
                          (i) is a nontraditional defense 
                        contractor, as such term is defined in 
                        section 2302 of title 10, United States 
                        Code; or
                          (ii) currently provides goods or 
                        services in the private sector that are 
                        critical to enhancing the capabilities 
                        of the defense supplier base and 
                        fulfilling key Department of Defense 
                        needs.
          (3) The term ``small business concern owned and 
        controlled by socially and economically disadvantaged 
        individuals'' has the meaning given such term in 
        section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 
        637(d)(3)(C)).
          (4) The term ``historically Black college and 
        university'' means any of the historically Black 
        colleges and universities referred to in section 2323 
        of title 10, United States Code.
          (5) The term ``minority institution of higher 
        education'' means an institution of higher education 
        with a student body that reflects the composition 
        specified in section 312(b)(3), (4), and (5) of the 
        Higher Education Act of 1965 (20 U.S.C. 1058(b)(3), 
        (4), and (5)).
          (6) The term ``subcontracting participation goal'', 
        with respect to a Department of Defense contract, means 
        a goal for the extent of the participation by 
        disadvantaged small business concerns in the 
        subcontracts awarded under such contract, as 
        established pursuant to section 2323 of title 10, 
        United States Code, and section 8(d) of the Small 
        Business Act (15 U.S.C. 637(d)).
          (7) The term ``qualified organization employing the 
        severely disabled'' means a business entity operated on 
        a for-profit or nonprofit basis that--
                  (A) uses rehabilitative engineering to 
                provide employment opportunities for severely 
                disabled individuals and integrates severely 
                disabled individuals into its workforce;
                  (B) employs severely disabled individuals at 
                a rate that averages not less than 20 percent 
                of its total workforce;
                  (C) employs each severely disabled individual 
                in its workforce generally on the basis of 40 
                hours per week; and
                  (D) pays not less than the minimum wage 
                prescribed pursuant to section 6 of the Fair 
                Labor Standards Act (29 U.S.C. 206) to those 
                employees who are severely disabled 
                individuals.
          (8) The term ``severely disabled individual'' means 
        an individual who is blind (as defined in section 8501 
        of title 41, United States Code) or a severely disabled 
        individual (as defined in such section).
          [(9) The term ``affiliated'', with respect to the 
        relationship between a mentor firm and a protege firm, 
        means--
                  [(A) the mentor firm shares, directly or 
                indirectly, with the protege firm ownership or 
                management of the protege firm;
                  [(B) the mentor firm has an agreement, at the 
                time the mentor firm enters into a mentor-
                protege agreement under subsection (e), to 
                merge with the protege firm;
                  [(C) the owners and managers of the mentor 
                firm are the parent, child, spouse, sibling, 
                aunt, uncle, niece, nephew, grandparent, 
                grandchild, or first cousin of an owner or 
                manager of the protege firm;
                  [(D) the mentor firm has, during the 2-year 
                period before entering into a mentor-protege 
                agreement, employed any officer, director, 
                principal stock holder, managing member, or key 
                employee of the protege firm;
                  [(E) the mentor firm has engaged in a joint 
                venture with the protege firm during the 2-year 
                period before entering into a mentor-protege 
                agreement, unless such joint venture was 
                approved by the Small Business Administration 
                prior to making any offer on a contract;
                  [(F) the mentor firm is, directly or 
                indirectly, the primary party providing 
                contracts to the protege firm, as measured by 
                the dollar value of the contracts; and
                  [(G) the Small Business Administration has 
                made a determination of affiliation or control 
                under subsection (h).]
          (9) The term ``affiliation'', with respect to a 
        relationship between a mentor firm and a protege firm, 
        means a relationship described under section 121.103 of 
        title 13, Code of Federal Regulations (or any successor 
        regulation).

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                      TITLE 41, UNITED STATES CODE

SUBTITLE I--FEDERAL PROCUREMENT POLICY

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CHAPTER 41--TASK AND DELIVERY ORDER CONTRACTS

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Sec. 4106. Orders

  (a) Application.--This section applies to task and delivery 
order contracts entered into under sections 4103 and 4105 of 
this title.
  (b) Actions Not Required for Issuance of Orders.--The 
following actions are not required for issuance of a task or 
delivery order under a task or delivery order contract:
          (1) A separate notice for the order under section 
        1708 of this title or section 8(e) of the Small 
        Business Act (15 U.S.C. 637(e)).
          (2) Except as provided in subsection (c), a 
        competition (or a waiver of competition approved in 
        accordance with section 3304(e) of this title) that is 
        separate from that used for entering into the contract.
  (c) Multiple Award Contracts.--When multiple contracts are 
awarded under section 4103(d)(1)(B) or 4105(f) of this title, 
all contractors awarded the contracts shall be provided a fair 
opportunity to be considered, pursuant to procedures set forth 
in the contracts, for each task or delivery order in excess of 
$2,500 that is to be issued under any of the contracts, 
unless--
          (1) the executive agency's need for the services or 
        property ordered is of such unusual urgency that 
        providing the opportunity to all of those contractors 
        would result in unacceptable delays in fulfilling that 
        need;
          (2) only one of those contractors is capable of 
        providing the services or property required at the 
        level of quality required because the services or 
        property ordered are unique or highly specialized;
          (3) the task or delivery order should be issued on a 
        sole-source basis in the interest of economy and 
        efficiency because it is a logical follow-on to a task 
        or delivery order already issued on a competitive 
        basis; or
          (4) it is necessary to place the order with a 
        particular contractor to satisfy a minimum guarantee.
  (d) Enhanced Competition for Orders in Excess of 
$5,000,000.--In the case of a task or delivery order in excess 
of $5,000,000, the requirement to provide all contractors a 
fair opportunity to be considered under subsection (c) is not 
met unless all such contractors are provided, at a minimum--
          (1) a notice of the task or delivery order that 
        includes a clear statement of the executive agency's 
        requirements;
          (2) a reasonable period of time to provide a proposal 
        in response to the notice;
          (3) disclosure of the significant factors and 
        subfactors, including cost or price, that the executive 
        agency expects to consider in evaluating such 
        proposals, and their relative importance;
          (4) in the case of an award that is to be made on a 
        best value basis, a written statement documenting--
                  (A) the basis for the award; and
                  (B) the relative importance of quality and 
                price or cost factors; and
          (5) an opportunity for a post-award debriefing 
        consistent with the requirements of section 3704 of 
        this title.
  (e) Statement of Work.--A task or delivery order shall 
include a statement of work that clearly specifies all tasks to 
be performed or property to be delivered under the order.
  (f) Protests.--
          (1) Protest not authorized.--A protest is not 
        authorized in connection with the issuance or proposed 
        issuance of a task or delivery order except for--
                  (A) a protest on the ground that the order 
                increases the scope, period, or maximum value 
                of the contract under which the order is 
                issued; or
                  (B) a protest of an order valued in excess of 
                $10,000,000.
          (2) Jurisdiction over protests.--Notwithstanding 
        section 3556 of title 31, the Comptroller General shall 
        have exclusive jurisdiction of a protest authorized 
        under paragraph (1)(B).
          [(3) Effective period.--Paragraph (1)(B) and 
        paragraph (2) of this subsection shall not be in effect 
        after September 30, 2016.]
  (g) Task and Delivery Order Ombudsman.--
          (1) Appointment or designation and 
        responsibilities.--The head of each executive agency 
        who awards multiple task or delivery order contracts 
        under section 4103(d)(1)(B) or 4105(f) of this title 
        shall appoint or designate a task and delivery order 
        ombudsman who shall be responsible for reviewing 
        complaints from the contractors on those contracts and 
        ensuring that all of the contractors are afforded a 
        fair opportunity to be considered for task or delivery 
        orders when required under subsection (c).
          (2) Who is eligible.--The task and delivery order 
        ombudsman shall be a senior agency official who is 
        independent of the contracting officer for the 
        contracts and may be the executive agency's advocate 
        for competition.

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                      TITLE 38, UNITED STATES CODE



           *       *       *       *       *       *       *
PART VI--ACQUISITION AND DISPOSITION OF PROPERTY

           *       *       *       *       *       *       *


   CHAPTER 81--ACQUISITION AND OPERATION OF HOSPITAL AND DOMICILIARY 
    FACILITIES; PROCUREMENT AND SUPPLY; ENHANCED-USE LEASES OF REAL 
PROPERTY

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SUBCHAPTER II--PROCUREMENT AND SUPPLY

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Sec. 8127. Small business concerns owned and controlled by veterans: 
                    contracting goals and preferences

  (a) Contracting Goals.--(1) In order to increase contracting 
opportunities for small business concerns owned and controlled 
by veterans and small business concerns owned and controlled by 
veterans with service-connected disabilities, the Secretary 
shall--
          (A) establish a goal for each fiscal year for 
        participation in Department contracts (including 
        subcontracts) by small business concerns owned and 
        controlled by veterans who are not veterans with 
        service-connected disabilities in accordance with 
        paragraph (2); and
          (B) establish a goal for each fiscal year for 
        participation in Department contracts (including 
        subcontracts) by small business concerns owned and 
        controlled by veterans with service-connected 
        disabilities in accordance with paragraph (3).
  (2) The goal for a fiscal year for participation under 
paragraph (1)(A) shall be determined by the Secretary.
  (3) The goal for a fiscal year for participation under 
paragraph (1)(B) shall be not less than the Government-wide 
goal for that fiscal year for participation by small business 
concerns owned and controlled by veterans with service-
connected disabilities under section 15(g)(1) of the Small 
Business Act (15 U.S.C. 644(g)(1)).
  (4) The Secretary shall establish a review mechanism to 
ensure that, in the case of a subcontract of a Department 
contract that is counted for purposes of meeting a goal 
established pursuant to this section, the subcontract was 
actually awarded to a business concern that may be counted for 
purposes of meeting that goal.
  (b) Use of Noncompetitive Procedures for Certain Small 
Contracts.--For purposes of meeting the goals under subsection 
(a), and in accordance with this section, in entering into a 
contract with a small business concern owned and controlled by 
veterans or a small business concern owned and controlled by 
veterans with service-connected disabilities for an amount less 
than the simplified acquisition threshold (as defined in 
section 134 of title 41), a contracting officer of the 
Department may use procedures other than competitive 
procedures.
  (c) Sole Source Contracts for Contracts Above Simplified 
Acquisition Threshold.--For purposes of meeting the goals under 
subsection (a), and in accordance with this section, a 
contracting officer of the Department may award a contract to a 
small business concern owned and controlled by veterans or a 
small business concern owned and controlled by veterans with 
service-connected disabilities using procedures other than 
competitive procedures if--
          (1) such concern is determined to be a responsible 
        source with respect to performance of such contract 
        opportunity;
          (2) the anticipated award price of the contract 
        (including options) will exceed the simplified 
        acquisition threshold (as defined in section 134 of 
        title 41) but will not exceed $5,000,000; and
          (3) in the estimation of the contracting officer, the 
        contract award can be made at a fair and reasonable 
        price that offers best value to the United States.
  (d) Use of Restricted Competition.--Except as provided in 
subsections (b) and (c), for purposes of meeting the goals 
under subsection (a), and in accordance with this section, a 
contracting officer of the Department shall award contracts on 
the basis of competition restricted to small business concerns 
owned and controlled by veterans or small business concerns 
owned and controlled by veterans with service-connected 
disabilities if the contracting officer has a reasonable 
expectation that two or more small business concerns owned and 
controlled by veterans or small business concerns owned and 
controlled by veterans with service-connected disabilities will 
submit offers and that the award can be made at a fair and 
reasonable price that offers best value to the United States.
  (e) Eligibility of Small Business Concerns.--A small business 
concern may be awarded a contract under this section only if 
the small business concern and the veteran owner of the small 
business concern are listed in the database of veteran-owned 
businesses maintained by the Secretary under subsection (f).
  (f) Database of Veteran-Owned Businesses.--(1) Subject to 
paragraphs (2) through (6), the Secretary shall maintain a 
database of small business concerns owned and controlled by 
veterans, small business concerns owned and controlled by 
veterans with service-connected disabilities, and the veteran 
owners of such business concerns.
  (2)(A) To be eligible for inclusion in the database, such a 
veteran shall submit to the Secretary such information as the 
Secretary may require with respect to the small business 
concern or the veteran. Application for inclusion in the 
database shall constitute permission under section 552a of 
title 5 (commonly referred to as the Privacy Act) for the 
Secretary to access such personal information maintained by the 
Secretary as may be necessary to verify the information 
contained in the application.
  (B) If the Secretary receives an application for inclusion in 
the database from an individual whose status as a veteran 
cannot be verified because the Secretary does not maintain 
information with respect to the veteran status of the 
individual, the Secretary may not include the small business 
concern owned and controlled by the individual in the database 
maintained by the Secretary until the Secretary receives such 
information as may be necessary to verify that the individual 
is a veteran.
  (3) Information maintained in the database shall be submitted 
on a voluntary basis by such veterans.
  (4) No small business concern may be listed in the database 
until the Secretary has [verified] verified, using regulations 
issued by the Administrator of the Small Business 
Administration with respect to the status of the concern as a 
small business concern and the ownership and control of such 
concern, that--
          (A) the small business concern is owned and 
        controlled by veterans; and
          (B) in the case of a small business concern for which 
        the person who owns and controls the concern indicates 
        that the person is a veteran with a service-connected 
        disability, that the person is a veteran with a 
        service-connected disability.
  (5) The Secretary shall make the database available to all 
Federal departments and agencies and shall notify each such 
department and agency of the availability of the database.
  (6) If the Secretary determines that the public dissemination 
of certain types of information maintained in the database is 
inappropriate, the Secretary shall take such steps as are 
necessary to maintain such types of information in a secure and 
confidential manner.
  (7) The Secretary may not issue regulations related to the 
status of a concern as a small business concern and the 
ownership and control of such small business concern.
  (8)(A) If the Secretary does not verify a concern for 
inclusion in the database under this subsection based on the 
status of the concern as a small business concern or the 
ownership or control of the concern, the concern may appeal the 
denial of verification to the Office of Hearings and Appeals of 
the Small Business Administration (as established under section 
5(i) of the Small Business Act). The decision of the Office of 
Hearings and Appeals shall be considered a final agency action.
  (B)(i) If an interested party challenges the inclusion in the 
database of a small business concern owned and controlled by 
veterans or a small business concern owned and controlled by 
veterans with service-connected disabilities based on the 
status of the concern as a small business concern or the 
ownership or control of the concern, the challenge shall be 
heard by the Office of Hearings and Appeals of the Small 
Business Administration as described in subparagraph (A). The 
decision of the Office of Hearings and Appeals shall be 
considered final agency action.
  (ii) In this subparagraph, the term ``interested party'' 
means--
          (I) the Secretary; and
          (II) in the case of a small business concern that is 
        awarded a contract, the contracting officer of the 
        Department or another small business concern that 
        submitted an offer for the contract that was awarded to 
        the small business concern that submitted an offer 
        under clause (i).
  (C) For each fiscal year, the Secretary shall reimburse the 
Administrator of the Small Business Administration in an amount 
necessary to cover any cost incurred by the Office of Hearings 
and Appeals of the Small Business Administration for actions 
taken by the Office under this paragraph. The Administrator is 
authorized to accept such reimbursement. The amount of any such 
reimbursement shall be determined jointly by the Secretary and 
the Administrator and shall be provided from fees collected by 
the Secretary under multiple-award schedule contracts. Any 
disagreement about the amount shall be resolved by the Director 
of the Office of Management and Budget.
  (g) Enforcement Penalties for Misrepresentation.--(1) Any 
business concern that is determined by the Secretary to have 
willfully and intentionally misrepresented the status of that 
concern as a small business concern owned and controlled by 
veterans or as a small business concern owned and controlled by 
service-disabled veterans for purposes of this subsection shall 
be debarred from contracting with the Department for a period 
of not less than five years.
  (2) In the case of a debarment under paragraph (1), the 
Secretary shall commence debarment action against the business 
concern by not later than 30 days after determining that the 
concern willfully and intentionally misrepresented the status 
of the concern as described in paragraph (1) and shall complete 
debarment actions against such concern by not later than 90 
days after such determination.
  (3) The debarment of a business concern under paragraph (1) 
includes the debarment of all principals in the business 
concern for a period of not less than five years.
  [(h) Treatment of Businesses After Death of Veteran-Owner.--
(1) Subject to paragraph (3), if the death of a veteran causes 
a small business concern to be less than 51 percent owned by 
one or more veterans, the surviving spouse of such veteran who 
acquires ownership rights in such small business concern shall, 
for the period described in paragraph (2), be treated as if the 
surviving spouse were that veteran for the purpose of 
maintaining the status of the small business concern as a small 
business concern owned and controlled by veterans.
  [(2) The period referred to in paragraph (1) is the period 
beginning on the date on which the veteran dies and ending on 
the earliest of the following dates:
          [(A) The date on which the surviving spouse 
        remarries.
          [(B) The date on which the surviving spouse 
        relinquishes an ownership interest in the small 
        business concern.
          [(C) The date that is ten years after the date of the 
        veteran's death.
  [(3) Paragraph (1) only applies to a surviving spouse of a 
veteran with a service-connected disability rated as 100 
percent disabling or who dies as a result of a service-
connected disability.]
  [(i)] (h) Priority for Contracting Preferences.--Preferences 
for awarding contracts to small business concerns shall be 
applied in the following order of priority:
          (1) Contracts awarded pursuant to subsection (b), 
        (c), or (d) to small business concerns owned and 
        controlled by veterans with service-connected 
        disabilities.
          (2) Contracts awarded pursuant to subsection (b), 
        (c), or (d) to small business concerns owned and 
        controlled by veterans that are not covered by 
        paragraph (1).
          (3) Contracts awarded pursuant to--
                  (A) section 8(a) of the Small Business Act 
                (15 U.S.C. 637(a)); or
                  (B) section 31 of such Act (15 U.S.C. 657a).
          (4) Contracts awarded pursuant to any other small 
        business contracting preference.
  [(j)] (i) Applicability of Requirements to Contracts.--(1) If 
after December 31, 2008, the Secretary enters into a contract, 
memorandum of understanding, agreement, or other arrangement 
with any governmental entity to acquire goods or services, the 
Secretary shall include in such contract, memorandum, 
agreement, or other arrangement a requirement that the entity 
will comply, to the maximum extent feasible, with the 
provisions of this section in acquiring such goods or services.
  (2) Nothing in this subsection shall be construed to 
supersede or otherwise affect the authorities provided under 
the Small Business Act (15 U.S.C. 631 et seq.).
  [(k)] (j) Annual Reports.--Not later than December 31 each 
year, the Secretary shall submit to Congress a report on small 
business contracting during the fiscal year ending in such 
year. Each report shall include, for the fiscal year covered by 
such report, the following:
          (1) The percentage of the total amount of all 
        contracts awarded by the Department during that fiscal 
        year that were awarded to small business concerns owned 
        and controlled by veterans.
          (2) The percentage of the total amount of all such 
        contracts awarded to small business concerns owned and 
        controlled by veterans with service-connected 
        disabilities.
          (3) The percentage of the total amount of all 
        contracts awarded by each Administration of the 
        Department during that fiscal year that were awarded to 
        small business concerns owned and controlled by 
        veterans.
          (4) The percentage of the total amount of all 
        contracts awarded by each such Administration during 
        that fiscal year that were awarded to small business 
        concerns owned and controlled by veterans with service-
        connected disabilities.
  [(l)] (k) Definitions.--In this section:
          (1) The term ``small business concern'' has the 
        meaning given that term under section 3 of the Small 
        Business Act (15 U.S.C. 632).
          [(2) The term ``small business concern owned and 
        controlled by veterans'' means a small business 
        concern--
                  [(A)(i) not less than 51 percent of which is 
                owned by one or more veterans or, in the case 
                of a publicly owned business, not less than 51 
                percent of the stock of which is owned by one 
                or more veterans; and
                  [(ii) the management and daily business 
                operations of which are controlled by one or 
                more veterans; or
                  [(B) not less than 51 percent of which is 
                owned by one or more veterans with service-
                connected disabilities that are permanent and 
                total who are unable to manage the daily 
                business operations of such concern or, in the 
                case of a publicly owned business, not less 
                than 51 percent of the stock of which is owned 
                by one or more such veterans.]
          (2) The term ``small business concern owned and 
        controlled by veterans'' has the meaning given that 
        term under section 3(q)(3) of the Small Business Act 
        (15 U.S.C. 632(q)(3)).
          (3) The term ``small business concern owned and 
        controlled by veterans with service-connected 
        disabilities'' has the meaning given the term ``small 
        business concern owned and controlled by service-
        disabled veterans'' under section 3(q)(2) of the Small 
        Business Act (15 U.S.C. 632(q)(2)).

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