[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5044 Introduced in Senate (IS)]
<DOC>
117th CONGRESS
2d Session
S. 5044
To improve the Federal contracting programs of the Small Business
Administration, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 29, 2022
Mr. Cardin (for himself and Ms. Duckworth) introduced the following
bill; which was read twice and referred to the Committee on Small
Business and Entrepreneurship
_______________________________________________________________________
A BILL
To improve the Federal contracting programs of the Small Business
Administration, 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.
This Act may be cited as the ``Federal Contracting Fairness Act of
2022''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) There remain disparities in education, employment, and
business history, which includes unequal contracting
opportunities, unequal access to credit or capital, and
acquisition of credit or capital under commercially unfavorable
circumstances, between individuals defined as socially and
economically disadvantaged under the Small Business Act (15
U.S.C. 631 et seq.) and other individuals.
(2) The following statistics reiterate the disparities
described in paragraph (1):
(A) Of the 16,300,000 students enrolled in 4-year
undergraduate university in the fall of 2016, 9,100,000
were White, 3,200,000 were Hispanic, 2,200,000 were
Black, and 1,100,000 million were Asian. In 2018, 41
percent of all 18- to 24-year-olds were enrolled in
college. However, 37 percent of Black 18- to 24-year-
olds and 26 percent of Hispanic 18- to 24-year-olds
were enrolled in college. Additionally, in 2019, 29
percent of Black adults had a bachelor's degree or
higher, 21 percent of Latino or Hispanic adults had a
bachelor's degree or higher, and 22 percent of Pacific
Islander adults had a bachelor's degree or higher, as
compared to 45 percent of White adults.
(B) In 2020, 24 percent of Black employees and 24
percent of Hispanic employees report having been
discriminated against at work, compared to 15 percent
of White employees reporting discrimination at work. In
the first quarter of 2022, the unemployment rate in the
United States among White workers was 3.6 percent
compared to 6.8 percent among Black workers and 4.9
percent among Hispanic workers.
(C) With regards to contracting, in 2021, 2.78
percent of Federal contracts were awarded to Asian-
owned small businesses, 1.67 percent went to Black-
owned small businesses, 1.78 percent went to Hispanic-
owned small businesses, and 2.69 percent went to Native
American-owned small businesses compared to 15.64
percent of Federal contracts awarded to White-owned
small businesses. In total, 9.4 percent of contracting
dollars went to minority-owned businesses when 19
percent of United States employer businesses are
minority-owned.
(D) In terms of access to capital, in 2021, 15
percent of Asian-owned small businesses received all
the financing they sought, 16 percent of Black-owned
small businesses received all the non-emergency
financing they sought, and 19 percent of Hispanic-owned
small businesses received all the non-emergency
financing they sought, as compared to 35 percent of
White-owned small businesses.
(3) Given these disparities, the program established under
section 8(a) of the Small Business Act (15 U.S.C. 637(a))
remains a vital part in increasing access to Federal
contracting opportunities for business owners considered
socially and economically disadvantaged, as defined in such
Act, and is a critical business development program for
ensuring these individuals can start and grow their businesses
to compete for Federal contracts.
SEC. 3. DEFINITIONS.
In this Act:
(1) Administration; administrator.--The terms
``Administration'' and ``Administrator'' mean the Small
Business Administration and the Administrator thereof,
respectively.
(2) Qualified hubzone small business concern; small
business concern; small business concern owned and controlled
by service-disabled veterans; small business concern owned and
controlled by women.--The terms ``qualified HUBZone small
business concern'', ``small business concern'', ``small
business concern owned and controlled by service-disabled
veterans'', and ``small business concern owned and controlled
by women'' have the meanings given those terms in section 3 of
the Small Business Act (15 U.S.C. 632).
SEC. 4. DURATION OF PARTICIPATION; RAMP-UP PERIOD; TRANSITION PERIOD.
(a) Extension of Program Participation Period.--Section 7(j)(15) of
the Small Business Act (15 U.S.C. 636(j)(15)) is amended--
(1) in the matter preceding subparagraph (A), by striking
``nine years'' and inserting ``10 years'';
(2) in subparagraph (A), by striking ``four years'' and
inserting ``5 years''; and
(3) in subparagraph (B), by striking ``five years'' and
inserting ``5 years''.
(b) Ramp-Up Period.--
(1) Definition.--In this subsection, the term ``covered
small business concern'' means a small business concern that,
as of the date of enactment of this Act--
(A) is in the first 3 years as a participant in the
program established under section 8(a) of the Small
Business Act (15 U.S.C. 637(a));
(B) is an individually owned entity; and
(C) has not been awarded a contract under such
section 8(a), excluding contracts that meet the
simplified acquisition threshold described in section
134 of title 41, United States Code.
(2) Election.--
(A) In general.--Subject to subparagraph (B), a
covered small business concern may elect at the time of
certification to begin the 10-year program
participation period under section 7(j)(15) of the
Small Business Act (15 U.S.C. 636(j)(15)), as amended
by subsection (a), on the earlier of--
(i) the date on which the covered small
business concern is awarded a contract under
section 8(a) of the Small Business Act (15
U.S.C. 637(a)); or
(ii) 3 years after the date on which the
covered small business concern was certified to
participate in the program established under
such section 8(a).
(B) Limitation.--Notwithstanding subparagraph (A),
the program participation period for a covered small
business concern under section 7(j)(15) shall not
exceed 13 years.
(3) Training.--
(A) In general.--Except as provided in subparagraph
(B), if a covered small business concern makes an
election under paragraph (2), the covered small
business concern shall--
(i) participate in 12 hours per year of
marketing, business development training, and
engagement to show intent in building capacity
to participate in the Federal contracting
market, which shall be satisfied through
training provided by the Administration, the
Minority Business Development Agency, resource
partners of the Administration, Procurement
Technical Assistance Centers, or national
organizations with expertise in Federal
contracting or that provide contracting
certifications; and
(ii) log the progress of the covered small
business concern on the training carried out
under subparagraph (A) in the annual review
submitted by the covered small business
concern.
(B) Exception.--
(i) In general.--The requirements under
subparagraph (A)(i) shall be waived for a
covered small business concern if, before
reaching 36 hours of training under
subparagraph (A)(i), the covered small business
concern is awarded a contract under section
8(a) of the Small Business Act (15 U.S.C.
637(a)).
(ii) Requirement to log.--Notwithstanding
clause (i), a covered small business concern
that receives a waiver under clause (i) is
required to log the training in which the small
business concern participates under
subparagraph (A) in accordance with clause (ii)
of such subparagraph.
(c) Transition Period.--
(1) Definitions.--In this subsection--
(A) the term ``covered small business concern''
means a small business concern that is in the final 3
years of participation in the program established under
section 8(a) of the Small Business Act (15 U.S.C.
637(a)); and
(B) the term ``economically disadvantaged
individual'' means an individual described in section
8(a)(6)(A) of the Small Business Act (15 U.S.C.
637(a)(6)(A)).
(2) Increased amounts.--The Administrator may permit the
owner of a covered small business concern to have an adjusted
gross income and personal net worth that is not more than 3
times higher than the amount allowed for the covered small
business program under the program established under section
8(a) of the Small Business Act (15 U.S.C. 637(a)), and continue
to be considered economically disadvantaged for the purposes of
that program, if the owner demonstrates--
(A) an investment in the covered small business
concern to continue to compete in the Federal
contracting market, such as investment in company
infrastructure;
(B) a plan for how the covered small business
concern is being prepared to compete for Federal
contracts after exiting the program established under
section 8(a) of the Small Business Act (15 U.S.C.
637(a)); and
(C) any other metrics as determined by the
Administrator.
SEC. 5. ADMINISTRATIVE REQUIREMENTS FOR 8(A) FIRMS.
Not later than 90 days after the date of enactment of this Act, the
Administrator shall issue or revise regulations to--
(1) make the review process for small business concerns
already certified under section 8(a) of the Small Business Act
(15 U.S.C. 637(a)) less burdensome by modifying the annual
review of each such small business concern, including by--
(A) providing that, with respect to such an annual
review, each such small business concern--
(i) shall submit to the Administrator a new
business plan, including a contract forecast, a
transitional management plan, and an annual
performance of contracts, and a business
capture strategy approach only if the plan or
approach, as applicable, has changed, as
compared with the previous year; and
(ii) may indicate to the Administrator that
there has been no change to the business plan
or business capture strategy approach described
in clause (i) during the previous year; and
(B) making such other reductions in the number of
forms and documents submitted by each such small
business concern that the Administrator determines
necessary, while still ensuring that each such small
business concern maintains good standing with respect
to the program carried out under such section 8(a);
(2) determine a new process for how the Administrator
processes the annual review of each such small business concern
that, at a minimum, requires the Administrator to conduct a
review, which shall be expedited, of the small business concern
when the small business concern is awarded a contract under
such section 8(a); and
(3) coordinate with the General Services Administration to
streamline the Past Performance Questionnaire form for small
business concerns and Federal agencies participating in the
programs established under sections 8(a), 8(m), 31, and 36 of
the Small Business Act (15 U.S.C. 637(a), 637(m), 657a, 657f).
SEC. 6. SBA REPRESENTATION ON THE FEDERAL ACQUISITION REGULATION
COUNCIL.
Section 1302(b) of title 41, United States Code, is amended--
(1) in paragraph (1)--
(A) in subparagraph (C), by striking ``and'' at the
end;
(B) in subparagraph (D), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(E) the Administrator of the Small Business
Administration.''; and
(2) in paragraph (2)(A), by striking ``subparagraphs (B) to
(D)'' and inserting ``subparagraphs (B) through (E)''.
SEC. 7. OFFICE OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION;
DIRECTOR.
Section 15(k)(3) of the Small Business Act (15 U.S.C. 644(k)(3)) is
amended by inserting ``be at a level that is not less senior than the
Under Secretary of Defense for Policy or the Under Secretary of Defense
for Acquisition and Sustainment,'' after ``appraisals),''.
SEC. 8. SOLE SOURCE THRESHOLDS.
The Small Business Act (15 U.S.C. 631 et seq.) is amended--
(1) in section 8 (15 U.S.C. 637)--
(A) in subsection (a)(1)(D)(i), by striking
subclause (II) and inserting the following:
``(II) the anticipated award price
of the contract (including options and
options periods) will exceed--
``(aa) $12,000,000 in the
case of a contract opportunity
assigned a North American
Industry Classification System
code for research and
development, except that such
amount shall be $14,000,000 if
the small business concern is a
participating or graduated
mentor in, or a joint venture
established under, the mentor-
protege program under section
45;
``(bb) $14,000,000 (or
$16,000,000, if the small
business concern is a
participating or graduated
mentor in, or a joint venture
established under, the mentor-
protege program under section
45) in the case of a contract
opportunity described in item
(aa), if the small business
concern subcontracts with an
institution of higher education
described in section 371(a) of
the Higher Education Act of
1965 (20 U.S.C. 1067q(a)), for
which the limitations on
subcontracting under section 46
shall not apply;
``(cc) $14,000,000 in the
case of a contract opportunity
assigned a North American
Industry Classification System
code for manufacturing, except
that such amount shall be
$16,000,000 if the small
business concern is a
participating or graduated
mentor in, or a joint venture
established under, the mentor-
protege program under section
45; or
``(dd) $10,000,000 in the
case of any other contract
opportunity, except that such
amount shall be $12,000,000 if
the small business concern is a
participating or graduated
mentor in, or a joint venture
established under, the mentor-
protege program under section
45.''; and
(B) in subsection (m)--
(i) in paragraph (7)(B), by striking
clauses (i) and (ii) and inserting the
following:
``(i) $12,000,000 in the case of a contract
opportunity assigned a North American Industry
Classification System code for research and
development;
``(ii) $14,000,000 in the case of a
contract opportunity described in item (aa), if
the small business concern partners with an
institution of higher education described in
section 371(a) of the Higher Education Act of
1965 (20 U.S.C. 1067q(a));
``(iii) $14,000,000 in the case of a
contract opportunity assigned a North American
Industry Classification System code for
manufacturing; or
``(iv) $10,000,000 in the case of any other
contract opportunity; and''; and
(ii) in paragraph (8)(B), by striking
clauses (i) and (ii) and inserting the
following:
``(i) $12,000,000 in the case of a contract
opportunity assigned a North American Industry
Classification System code for research and
development;
``(ii) $14,000,000 in the case of a
contract opportunity described in item (aa), if
the small business concern partners with an
institution of higher education described in
section 371(a) of the Higher Education Act of
1965 (20 U.S.C. 1067q(a));
``(iii) $14,000,000 in the case of a
contract opportunity assigned a North American
Industry Classification System code for
manufacturing; or
``(iv) $10,000,000 in the case of any other
contract opportunity; and'';
(2) in section 31(c)(2)(A)(ii) (15 U.S.C.
657a(c)(2)(A)(ii)), by striking subclauses (I) and (II) and
inserting the following:
``(I) $12,000,000 in the case of a
contract opportunity assigned a North
American Industry Classification System
code for research and development;
``(II) $14,000,000 in the case of a
contract opportunity described in item
(aa), if the qualified HUBZone small
business concern partners with an
institution of higher education
described in section 371(a) of the
Higher Education Act of 1965 (20 U.S.C.
1067q(a));
``(III) $14,000,000 in the case of
a contract opportunity assigned a North
American Industry Classification System
code for manufacturing; or
``(IV) $10,000,000 in the case of
any other contract opportunity; and'';
and
(3) in section 36(c)(2) (15 U.S.C. 657f(c)(2)), by striking
subparagraphs (A) and (B) and inserting the following:
``(A) $12,000,000 in the case of a contract
opportunity assigned a North American Industry
Classification System code for research and
development;
``(B) $14,000,000 in the case of a contract
opportunity described in item (aa), if the small
business concern partners with an institution of higher
education described in section 371(a) of the Higher
Education Act of 1965 (20 U.S.C. 1067q(a));
``(C) $14,000,000 in the case of a contract
opportunity assigned a North American Industry
Classification System code for manufacturing; or
``(D) $10,000,000 in the case of any other contract
opportunity; and''.
SEC. 9. MENTOR-PROTEGE PROGRAM.
(a) Removal of Restriction on Number of Mentors.--
(1) In general.--Section 45(b)(3)(A) of the Small Business
Act (15 U.S.C. 657r(b)(3)(A)) is amended by striking ``,
including any restrictions'' and all that follows through the
end of the subparagraph and inserting a period.
(2) Regulations.--The Administrator shall issue regulations
to provide that there is no restriction on the number of
mentors under section 45 of the Small Business Act (15 U.S.C.
657r) that a small business concern participating in the
program established under section 8(a) of the Small Business
Act (15 U.S.C. 637(a)) may have while participating in the
program, if the mentor-protege relationships do not conflict or
compete with each other.
(b) Database.--The Administrator shall create an online centralized
database for mentors and proteges (as defined in section 45 of the
Small Business Act (15 U.S.C. 657r)) to foster connection and support
business development between the 2 groups.
(c) Streamlined Process.--The Administrator shall issue regulations
to streamline the process for applying to the mentor-protege program
established under section 45 of the Small Business Act (15 U.S.C.
657r).
SEC. 10. CERTIFICATION PROCESS.
(a) Regulations.--Not later than 1 year after the date of enactment
of this Act, the Administrator shall issue regulations to streamline
the certification process for small business concerns seeking to become
certified as--
(1) a participant in the program established under section
8(a) of the Small Business Act (15 U.S.C. 637(a));
(2) a small business concern owned and controlled by women;
(3) a qualified HUBZone small business concern; or
(4) a small business concern owned and controlled by
service-disabled veterans.
(b) Report.--Not later than 180 days after the date of enactment of
this Act, 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 that outlines how the
Administrator plans to streamline the certification process described
in subsection (a).
SEC. 11. REPEAL OF BONAFIDE OFFICE RULE.
Section 8(a) of the Small Business Act (15 U.S.C. 637(a)) is
amended by repealing paragraph (11).
SEC. 12. REPORTS.
(a) Demographic Data.--Not later than 180 days after the date of
enactment of this Act, and annually thereafter, the Administrator
shall--
(1) make publicly available on the website of the
Administration--
(A) disaggregated data on the size and number of
contracts in total by the Federal Government and by
each Federal agency to small business concerns by
demographics, including, at a minimum, the gender,
race, and ethnicity categories published by the
Administration in the disaggregated Federal contracting
data in December 2021, and the size of the small
business concern; and
(B) data on the number of small business concerns
owned and controlled by disabled individuals that are
participating in the program established under section
8(a); and
(2) with consultation with the Administrator of General
Services, include on SAM.gov the ability for small business
concerns to report the data described in paragraph (1)(B).
(b) Review of Size Standards.--Not later than 180 days after the
date of enactment of this Act, the Administrator shall conduct a review
of and submit to Congress a report on the size standards applicable to
participants in the program established under section 8(a) of the Small
Business Act (15 U.S.C. 637(a)), and outline ways in which the
Administration can modify size standards to allow program participants
to grow and continue to exist after exiting the program.
(c) Ability To Obtain Set-Aside and Sole Source Contracts.--Not
later than 1 year after the date of enactment of this Act, the
Administrator shall submit to Congress a report on--
(1) the ability of small business concerns participating in
the program established under 8(a) of the Small Business Act
(15 U.S.C. 637(a)) that are not owned by Alaska Native
Corporations or Native Hawaiian Organizations to compete for
and successfully obtain set-aside contracts, including by
reporting data comparing the distribution of awarded set-aside
contracts among--
(A) small business concerns participating in that
program that are not owned by Alaska Native
Corporations or Native Hawaiian Organizations; and
(B) small business concerns participating in that
program that are owned by Alaska Native Corporations or
Native Hawaiian Organizations; and
(2) the best sole source thresholds to enable small
business concerns participating in the program established
under 8(a) of the Small Business Act (15 U.S.C. 637(a)) to
secure available sole source contracts.
(d) Changes to 8(a) Program.--Not later than 180 days after the
date of enactment of this Act, the Administrator shall submit to
Congress a report on a plan to implement the changes to the program
established under section 8(a) of the Small Business Act (15 U.S.C.
637(a)) required under this Act and the amendments made by this Act.
SEC. 13. AUTHORIZATION OF APPROPRIATIONS.
There is authorized to be appropriated to the Administration--
(1) for fiscal year 2023 and every fiscal year thereafter--
(A) $20,000,000 to increase the number of
procurement center representatives under section 15(l)
of the Small Business Act (15 U.S.C. 644(l)) and
commercial marketing representatives, of which
$2,000,000 of those amounts shall be used to provide
those individuals with increased training on the
process to be awarded a sole-source contract;
(B) $20,000,000 to increase the number of district
office business specialists available under the 8(a)
program;
(C) $5,000,000 for costs related to certifying
small business concerns as small business concerns
owned and controlled by women; and
(D) $400,000 for costs related to processing
applications to participate in the mentor-protege
program established under section 45 of the Small
Business Act (15 U.S.C. 657r); and
(2) for fiscal year 2023, to remain available until
expended, $2,500,000 to replace the dynamic small business
search database of the Administration.
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