[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4341 Reported in House (RH)]
<DOC>
Union Calendar No. 545
114th CONGRESS
2d Session
H. R. 4341
[Report No. 114-704, Part I]
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.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 7, 2016
Mr. Chabot (for himself and Ms. Velazquez) introduced the following
bill; which was referred to the Committee on Small Business, and in
addition to the Committees on Armed Services, Oversight and Government
Reform, and Veterans' Affairs, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
July 25, 2016
Reported from the Committee on Small Business with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
July 25, 2016
The Committees on Armed Services, Oversight and Government Reform, and
Veterans' Affairs discharged; committed to the Committee of the Whole
House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on January
7, 2016]
_______________________________________________________________________
A BILL
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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
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.
Union Calendar No. 545
114th CONGRESS
2d Session
H. R. 4341
[Report No. 114-704, Part I]
_______________________________________________________________________
A BILL
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.
_______________________________________________________________________
July 25, 2016
Reported from the Committee on Small Business with an amendment
July 25, 2016
The Committees on Armed Services, Oversight and Government Reform, and
Veterans' Affairs discharged; committed to the Committee of the Whole
House on the State of the Union and ordered to be printed