[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9832 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 9832
To make improvements to Federal contracting practices for disadvantaged
small businesses, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
September 25, 2024
Mr. Ivey (for himself, Mr. Horsford, and Mrs. Beatty) introduced the
following bill; which was referred to the Committee on Small Business,
and in addition to the Committee on Oversight and Accountability, 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
_______________________________________________________________________
A BILL
To make improvements to Federal contracting practices for disadvantaged
small businesses, 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Create
Opportunities and Networks for Talented, Ready, and Able Contractors To
Succeed Act of 2024'' or the ``CONTRACTS Act of 2024''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Database on contract awards to disadvantaged small businesses.
Sec. 4. Outreach and recruitment to expand participation of
disadvantaged small businesses in Federal
contracting.
Sec. 5. Determination of the date of commencement of participation in
the 8(a) program.
Sec. 6. Inclusion of concerns owned by HBCU business entities in
definition of socially and economically
disadvantaged small business concern.
Sec. 7. Agency OSDBU technical assistance.
Sec. 8. Federal disadvantaged small business task force.
Sec. 9. Requirements relating to prompt payment, progress payments, and
performance-based payments.
Sec. 10. Reports on subcontractor engagement.
Sec. 11. Modifications to subcontracting plans to enhance opportunities
for small business concerns owned and
controlled by socially and economically
disadvantaged individuals.
Sec. 12. Diversity and inclusion reporting requirements for covered
contractors.
Sec. 13. Chief Counsel for Advocacy report to Congress.
SEC. 2. DEFINITIONS.
In this Act:
(1) 8(a) program.--The term ``8(a) Program'' means the
program described under section 8(a) of the Small Business Act
(15 U.S.C. 637(a)).
(2) Administration; administrator.--The terms
``Administration'' and ``Administrator'' mean the Small
Business Administration and the Administrator thereof,
respectively.
(3) Agency OSDBU.--The term ``Agency OSDBU'' means the
Office of Small and Disadvantaged Business Utilization
(established pursuant to section 15(k) of the Small Business
Act (15 U.S.C. 644(k))) of a Federal agency.
(4) Demographic classifications.--The term ``demographic
classifications'' means classifications by race, gender,
veteran status, or ethnicity.
(5) Disadvantaged small business.--The term ``disadvantaged
small business'' means--
(A) a socially and economically disadvantaged small
business concern, as defined in section 8(a)(4)(A) of
the Small Business Act (15 U.S.C. 637(a)(4)(A));
(B) a small business concern owned and controlled
by socially and economically disadvantaged individuals,
as defined in section 8(d)(3)(C) of the Small Business
Act (15 U.S.C. 637(d)(3)(C)); or
(C) a small business concern owned and controlled
by a socially and economically disadvantaged individual
covered under section 47113 of title 49, United States
Code.
(6) MBDA under secretary.--The term ``MBDA Under
Secretary'' means the Under Secretary of Commerce for Minority
Business Development of the Minority Business Development
Agency (established under section 100002 of the Minority
Business Development Act of 2021 (15 U.S.C. 9501)).
(7) Small business concern.--The term ``small business
concern'' has the meaning given under section 3 of the Small
Business Act (15 U.S.C. 632).
(8) Small business development center.--The term ``small
business development center'' has the meaning given in section
3 of the Small Business Act (15 U.S.C. 632).
SEC. 3. DATABASE ON CONTRACT AWARDS TO DISADVANTAGED SMALL BUSINESSES.
(a) Database Required.--The head of each Agency OSDBU shall
establish and maintain a public online database that identifies each
contract awarded by the Federal agency under the 8(a) Program. Such
database shall include the following:
(1) The aggregate number and dollar value of contracts
awarded to socially and economically disadvantaged small
business concern (as defined in section 8(a)(4)(A) of the Small
Business Act (15 U.S.C. 637(a)(4)(A))) during the 3-year period
preceding the date of the enactment of Public Law 95-507,
disaggregated by race and ethnic group.
(2) The aggregate number and dollar value of contracts
awarded to disadvantaged small businesses pursuant to Public
Law 95-507 during the 10-year period preceding the date of the
enactment of this Act, disaggregated by race and ethnic group.
(3) Data on offers for Federal contracts submitted by a
disadvantaged small business which has previously been awarded
a Federal contract or subcontract with the assistance of an
Agency OSDBU during such 10-year period.
(b) Factual and Historical Record of Instances of Discrimination
Against Disadvantaged Small Businesses.--
(1) Record required.--The Administrator shall establish a
program under which the Administrator shall direct Federal
departments and agencies, in coordination with institutions of
higher education and other research organizations, to develop
and periodically update a factual and historical record of
instances of discrimination against disadvantaged small
businesses desiring award of a Federal contract or subcontract
from such Federal department or agency.
(2) Elements.--The record described in paragraph (1) shall
include the following:
(A) Operational barriers that disadvantaged small
businesses have historically experienced in Federal
contracting and subcontracting.
(B) Qualitative and quantitative trends in Federal
contracting with disadvantaged small businesses,
disaggregated by North American Industry Classification
System code.
(C) Recommendations for Governmentwide reforms to
increase participation by disadvantaged small
businesses in Federal contracts and the estimated
qualitative and quantitative effects of such
recommendations.
(c) Uses of Database and Record.--The database required under
subsection (a) or a record developed under subsection (b) may be used--
(1) by the Administrator and heads of Federal departments
and agencies to develop procurement policies, practices, and
strategies that reduce discrimination, establish contracting
and subcontracting goals for disadvantaged small businesses,
enhance contract compliance monitoring, and increase
disadvantaged small business participation in Federal
contracting and subcontracting by mechanisms that may include
dividing large contracts into multiple smaller contracts,
establishing mentor-mentee relationships between businesses,
and pairing disadvantaged small businesses with larger
businesses for partnering in contract fulfillment;
(2) by the head of a Federal department or agency to
substantiate an award of a contract under the 8(a) Program;
(3) by the head of a Federal department or agency to
substantiate any contracting preference program for
disadvantaged small businesses administered by the Federal
agency;
(4) by a disadvantaged small business that seeks an award
of a contract under the 8(a) Program to develop a narrative of
discrimination; and
(5) by a disadvantaged small business that requires proof
of discrimination for purpose of a judicial or administrative
action or by a person assisting a disadvantaged small business
for that purpose.
SEC. 4. OUTREACH AND RECRUITMENT TO EXPAND PARTICIPATION OF
DISADVANTAGED SMALL BUSINESSES IN FEDERAL CONTRACTING.
(a) Outreach and Recruitment.--The Administrator, in coordination
with the MBDA Under Secretary, shall engage in outreach and education
to expand participation of disadvantaged small businesses in Federal
contracting. Such efforts may include the following:
(1) Convening events to engage and inform disadvantaged
small businesses, including--
(A) business, professional, and industry-specific
conferences;
(B) informational fairs; and
(C) networking events.
(2) Providing briefings and electronic or printed materials
to disadvantaged small businesses and to national and local
business associations and organizations that represent
disadvantaged small businesses about Federal contracting and
subcontracting opportunities and procedures, including
opportunities to participate in mentor-protegee programs of
Federal agencies.
(3) Partnering with organizations that assist disadvantaged
small businesses, historically Black colleges and universities,
minority-serving institutions, alumni networks of such colleges
and universities and institutions, small business development
centers, and other organizations that have the ability to
facilitate relationships between prospective disadvantaged
small business subcontractors and prime contractors seeking
subcontractors.
(4) Creating a publicly accessible online directory of
disadvantaged small businesses that are subcontractors or that
seek to become subcontractors, including details about the
North American Industry Classification System code of such
businesses, the goods and services provided by such businesses,
and past performance information of such subcontractors.
(5) Creating a publicly accessible online directory of
available Federal contracting and subcontracting opportunities
that, in the determination of the Administrator, are
appropriate for disadvantaged small businesses based on factors
that may include the size or scope of the contract or
subcontract, the North American Industry Classification System
code of the business, or other relevant factors.
(b) Agency OSDBUs.--Pursuant to guidelines established by the
Administrator, the Director of each Agency OSDBU shall engage in
outreach and education to expand participation of disadvantaged small
businesses in contracts and subcontracts with the Federal agency. Such
activities shall include the following:
(1) Facilitating interactions between prospective
disadvantaged small business subcontractors and prime
contractors seeking subcontractors.
(2) Establishing a system to facilitate matching prime
contractors seeking subcontractors with prospective
disadvantaged small business subcontractors, including through
the development of mentor-mentee relationships.
(3) Advertising subcontracting opportunities through media
and business or trade association channels that are effective
in reaching prospective disadvantaged small business
subcontractors that provide the goods or services for which the
advertisement is placed.
(4) Directing contracting officers to provide to prime
contractors seeking subcontractors a list of prospective
disadvantaged small business subcontractors that provide the
needed goods or services.
(5) Creating a publicly accessible online directory of
disadvantaged small businesses that are eligible to participate
in Federal contracting and subcontracting opportunities that
includes the North American Industry Classification System
codes of such businesses.
SEC. 5. DETERMINATION OF THE DATE OF COMMENCEMENT OF PARTICIPATION IN
THE 8(A) PROGRAM.
Section 7(j)(10)(C) of the Small Business Act (15 U.S.C.
636(j)(10)(C)) is amended--
(1) by redesignating clause (ii) as clause (iii); and
(2) by inserting after clause (i) the following:
``(ii) A small business concern that has commenced
participation in the Program established under this
paragraph on or after the date of the enactment of this
clause, shall be considered to have begun such
participation one year before the date on which such
concern has attained, in the determination of the
Administrator, the full benefits of participation in
the Program. Such determination may include
consideration of the date on which such concern was
first awarded a contract or subcontract because of
participation of such concern in the Program.''.
SEC. 6. INCLUSION OF CONCERNS OWNED BY HBCU BUSINESS ENTITIES IN
DEFINITION OF SOCIALLY AND ECONOMICALLY DISADVANTAGED
SMALL BUSINESS CONCERN.
(a) HBCU Business Entity Defined.--Section 8(a) of the Small
Business Act (15 U.S.C. 637(a)) is amended by adding at the end the
following new paragraph:
``(21) HBCU business entity.--In this subsection, the term
`HBCU business entity' means an entity owned and operated by a
part B institution (as defined under section 322 of the Higher
Education Act of 1965 (20 U.S.C. 1061); commonly referred to as
a `historically Black college or university') for purposes of--
``(A) participation in interstate commerce; or
``(B) participation in the program described under
section 8(a).''.
(b) Inclusion in Definition of Socially and Economically
Disadvantaged Small Business Concern.--Section 8(a)(4) of the Small
Business Act (15 U.S.C. 637(a)(4)) is amended--
(1) in subparagraph (A)--
(A) in clause (i)--
(i) in subclause (I), by striking the comma
at the end and inserting a semicolon;
(ii) in subclause (II), by striking ``,
or'' and inserting a semicolon;
(iii) in subclause (III), by striking ``,
or'' and inserting ``; or''; and
(iv) by adding at the end the following new
subclause:
``(IV) a HBCU business entity;
or''; and
(B) in clause (ii)--
(i) in subclause (I), by striking the comma
at the end and inserting a semicolon;
(ii) in subclause (II), by striking ``,
or'' and inserting a semicolon;
(iii) in subclause (III), by striking the
period at the end and inserting ``; or''; and
(iv) by adding at the end the following new
subclause:
``(IV) a HBCU business entity.'';
and
(2) in subparagraph (B)--
(A) in clause (i), by striking the comma at the end
and inserting a semicolon;
(B) in clause (ii), by striking ``, or'' and
inserting a semicolon;
(C) in clause (iii), by striking the period at the
end and inserting ``; or''; and
(D) by adding at the end the following new
subclause:
``(IV) a HBCU business entity
described in subparagraph (A)(i)(IV) or
subparagraph (A)(ii)(IV).''.
(c) Inclusion in HUBZone Small Business Concern Definition.--
Section 31(b)(2) of the Small Business Act (15 U.S.C. 657a(b)(2))--
(1) in subparagraph (E)(ii), by striking ``or'' at the end;
(2) in subparagraph (F)(iii), by striking the period at the
end and inserting ``; or''; and
(3) by adding at the end the following new subparagraph:
``(G) a small business concern--
``(i) that is wholly owned by one or more
HBCU business entities (as defined in section
8(a)(21)), or by a corporation that is wholly
owned by one or more HBCU business entities; or
``(ii) that is owned in part by one or more
HBCU business entities, or by a corporation
that is wholly owned by one or more HBCU
business entities, if all other owners are
either United States citizens or small business
concerns.''.
SEC. 7. AGENCY OSDBU TECHNICAL ASSISTANCE.
Section 15(k) of the Small Business Act (15 U.S.C. 644(k)) is
amended--
(1) in paragraph (16)--
(A) by redesignating subparagraphs (A) through (D)
as subparagraphs (B) through (E), respectively; and
(B) by inserting before subparagraph (B) (as so
redesignated) the following:
``(A) the training provided by the Director under
paragraph (23) in the most recently completed fiscal
year;'';
(2) in paragraph (21), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following new paragraphs:
``(22) shall provide or contract with an entity (which may
include a small business development center) to provide, in
coordination with the Under Secretary of Commerce for Minority
Business Development of the Minority Business Development
Agency (established under section 100002 of the Minority
Business Development Act of 2021), technical assistance to
small business concerns owned and controlled by socially and
economically disadvantaged individuals (as defined under
section 8(d)(3)(C)) or socially and economically disadvantaged
small business concerns (as defined in section 8(a)(4)(A)) for
the development of individualized, specific narratives of
discrimination; and
``(23) shall provide or contract with an entity (which may
include a small business development center) to provide
training to prepare small business concerns owned and
controlled by socially and economically disadvantaged
individuals or socially and economically disadvantaged small
business concerns to become better situated to submit an offer
for a contract offered under section 8(a).''.
SEC. 8. FEDERAL DISADVANTAGED SMALL BUSINESS TASK FORCE.
(a) Establishment.--Not later than 4 months after the date of the
enactment of this Act, the President shall establish a task force (in
this section referred to as the ``Task Force'') to--
(1) make recommendations to increase opportunities for
disadvantaged small businesses in Federal contracting and
subcontracting;
(2) coordinate and optimize participation by disadvantaged
small business in Federal contracting and subcontracting,
including by--
(A) attempting to eliminate any discrimination
against such businesses; and
(B) removing any barriers to participation such
participation;
(3) encourage compliance by prime contractors with the
requirements of covered Executive orders;
(4) expand outreach for Federal contracting and
subcontracting opportunities to disadvantaged small businesses;
(5) enhance strategies to match disadvantaged small
businesses with prime contractors; and
(6) recommend policies or revisions to policies relating to
Federal contracting and subcontracting for disadvantaged small
businesses.
(b) Membership.--The members of the Task Force shall include:
(1) The MBDA Under Secretary, who shall also serve as the
chair of the Task Force.
(2) The Administrator of the Small Business Administration.
(3) The Administrator of the Office of Federal Procurement
Policy within the Office of Management and Budget.
(4) The Director of the Domestic Policy Council.
(5) The Administrator of General Services.
(6) The Secretary of Defense.
(7) The Secretary of Transportation.
(8) The Administrator of the National Aeronautics and Space
Administration.
(9) The Secretary of the Treasury.
(10) The Secretary of Labor.
(11) The Secretary of Homeland Security.
(12) The Secretary of Housing and Urban Development.
(13) The Secretary of Agriculture.
(14) The heads of such other Federal agencies or offices as
the President may designate.
(c) Meetings.--The Task Force shall meet not later than 3 months
after the date of establishment and not less frequently than once every
3 months thereafter until the termination date. To the extent
practicable, each meeting of the Task Force shall include a
presentation by at least one representative from an institution of
higher education (as defined in section 101 of the Higher Education Act
of 1965 (20 U.S.C. 1001)) or other research organization with expertise
in matters related to--
(1) the duties of the Task Force;
(2) the legal basis for the processes and findings of the
Task Force;
(3) historical or current discrimination in Federal
contracting against disadvantaged small businesses; or
(4) potential remedies to historical or current
discrimination in Federal contracting against disadvantaged
small businesses.
(d) Duties.--The duties of the Task Force shall include determining
the following:
(1) Best practices among Federal agencies to promote
participation in Federal contracting and subcontracting for
disadvantaged small businesses, including practices described
in section 4.
(2) The needs of disadvantaged small businesses that desire
to participate in the 8(a) Program and any contracting programs
for disadvantaged small businesses administered by a Federal
agency.
(3) Methods and initiatives to expand the participation of
disadvantaged small businesses in Federal contracting and
subcontracting, including by unbundling large contracts into
separate smaller contracts, by increasing flexibility for such
businesses to demonstrate eligibility for Federal contracts and
subcontracts and to demonstrate past performance of a same or
similar contract, and by enforcing compliance by prime
contractors with the requirements of covered Executive orders.
(4) Methods and initiatives to expand access to capital,
credit, surety bonds, loan guarantees, financial training, and
credit counseling for disadvantaged small businesses.
(5) Strategies to improve the compliance of Federal
agencies with contracting and subcontracting objectives set
forth in the Executive Order 13985 titled ``Advancing Racial
Equity and Support for Underserved Communities Through the
Federal Government'' (86 Fed. Reg. 7009), including the
following:
(A) For Federal agencies that fail to meet such
objectives--
(i) opportunities for training of
contracting officers on how to increase the
number of contracts awarded to disadvantaged
small businesses; and
(ii) commencing a study led by the
Inspector General for such Federal agency to
determine the causes of such failure, evaluate
disadvantaged small business participation in
prime contracts, and make recommendations for
improvement.
(B) For Federal agencies that meet such objectives,
incentives to assist such Federal agencies to exceed
such objectives.
(e) Reports.--
(1) Activities and findings report.--Not later than 4
months after the first meeting date of the Task Force, and
biannually thereafter, the chair of the Task Force shall submit
to Congress a report on the activities and findings of the Task
Force and any recommendations to increase participation of
disadvantaged small businesses in Federal contracting and
subcontracting.
(2) Disparity study report.--Not later than 12 months after
the first meeting date of the Task Force, the chair of the Task
Force shall submit to Congress a report on the results of a
study on disadvantaged small businesses that includes--
(A) a quantitative and qualitative analysis of the
disadvantaged small businesses that are eligible to
perform Federal contracts and subcontracts that were
offered during the 5-year period beginning on the date
of the establishment of the Task Force under this
section;
(B) the number and the North American Industry
Classification System code of each such business that
submitted an offer (or bid) for a contracting or
subcontracting opportunity during such period,
including information regarding contracts and
subcontracts that each such business was previously
awarded;
(C) the number of such businesses that were awarded
such Federal contracts and subcontracts; and
(D) any conclusions regarding the presence,
absence, or extent of discrimination against, or
underrepresentation of, disadvantaged small businesses
(disaggregated by demographic classification) in
Federal contracting and subcontracting.
(f) Termination Date.--The Task Force established under this
section shall terminate on the date that is 10 years after the first
meeting date of the Task Force.
(g) Covered Executive Order Defined.--In this section, the term
``covered Executive Order'' means the following:
(1) Executive Order 13985, titled ``Advancing Racial Equity
and Support for Underserved Communities Through the Federal
Government'' (January 20, 2021).
(2) Executive Order 14035, titled ``Diversity, Equity,
Inclusion, and Accessibility in the Federal Workforce'' (June
25, 2021).
(3) Executive Order 14091, titled ``Further Advancing
Racial Equity and Support for Underserved Communities Through
The Federal Government'' (February 16, 2023).
SEC. 9. REQUIREMENTS RELATING TO PROMPT PAYMENT, PROGRESS PAYMENTS, AND
PERFORMANCE-BASED PAYMENTS.
(a) Disclosures for Payments on Certain Contracts.--
(1) In general.--Chapter 39 of title 31, United States
Code, is amended by inserting after section 3905 the following:
``SEC. 3906. DISCLOSURES FOR PROMPT PAYMENTS ON CERTAIN CONTRACTS.
``(a) In General.--Each covered contract shall include a clause
that requires the prime contractor to include in each subcontract
entered into by the prime contractor and a subcontractor for the
purpose of performing such covered contract--
``(1) a payment clause which obligates the prime contractor
to pay the subcontractor (at any tier) for satisfactory
performance under its subcontract within 14 calendar days of
receipt of payment from the agency; and
``(2) an interest penalty clause which obligates the prime
contractor to pay to the subcontractor (at any tier) an
interest penalty on amounts due in the case of each payment not
made in accordance with the payment clause described in
paragraph (1)--
``(A) for the period beginning on the day after the
required payment date and ending on the date on which
payment of the amount due is made; and
``(B) computed at the rate specified by section
3902(a) of this title.
``(b) Covered Contract Defined.--In this section, the term `covered
contract' means a contract awarded by the head of an agency to a prime
contractor that is not a disadvantaged small business (as defined in
the CONTRACTS Act of 2024) with a proposed value greater than the
simplified acquisition threshold.''.
(2) Clerical amendment.--The table of contents for chapter
39 of title 31, United States Code, is amended by inserting
after the item relating to section 3905 the following:
``3906. Disclosures for payments on certain contracts.''.
(b) Disclosures; Reports; Evaluations.--
(1) Disclosure.--The head of a Federal agency shall include
in any contract terms, and in any modification to such
contract, a requirement that a prime contractor disclose to
each potential subcontractor that is a disadvantaged small
business--
(A) whether the prime contractor is receiving
progress payments or performance-based payments under
such contract; and
(B) whether the prime contractor will provide
progress payments to a subcontractor for such contract.
(2) Acknowledgment.--The prime contractor shall ensure that
each potential subcontractor in receipt of a disclosure
described in paragraph (1) submits to such prime contractor a
signed acknowledgment of receipt of such disclosure.
(3) Subcontracting reports.--A prime contractor for a
Federal contract shall include in any subcontracting reports
required to be submitted under Section 8(d)(6)(E) of the Small
Business Act (15 U.S.C. 637(d)(6)(E)) verification of the
timely remittance of any payments to each subcontractor of such
prime contractor.
(4) Performance evaluations.--The head of a Federal agency
shall include in any contract performance evaluation of a prime
contractor for such contract an evaluation of the prime
contractor's compliance with the requirements of this
subsection and the requirements of section 3906 of title 31,
United States Code.
(5) Subsequent contract ineligibility.--If a prime
contractor submits an offer for a subsequent contract to the
head of a Federal agency through a sealed bid or negotiated
acquisition proposal and such head determines such contractor
is not in compliance with paragraph (1), such head may not
award the subsequent contract to such contractor--
(A) until such contractor is in compliance with
paragraph (1), as determined by such head; and
(B) unless such head determines that such award is
in the national interest.
SEC. 10. REPORTS ON SUBCONTRACTOR ENGAGEMENT.
(a) In General.--Section 8(d) of the Small Business Act (15 U.S.C.
637(d)) is amended by adding at the end the following new paragraph:
``(18) Reports on subcontractor engagement.--
``(A) In general.--Each prime contractor that is
not a disadvantaged small business that has been
awarded a major prime contract shall submit to the head
of the Federal agency that awarded such contract an
annual report on subcontracts awarded pursuant to such
contract, including--
``(i) the total number of subcontracts
awarded under the contract;
``(ii) the number of subcontracts and a
description of such subcontracts awarded to
disadvantaged small businesses, disaggregated
by demographic characteristics, including the
North American Industry Classification System
code for each such business;
``(iii) the total dollar value of payments
made to subcontractors; and
``(iv) the total dollar value of payments
made to disadvantaged small businesses,
disaggregated by demographic characteristics.
``(B) Definitions.--In this paragraph:
``(i) CONTRACTS act of 2024 definitions.--
The terms `demographic characteristics'
and`disadvantaged small business' have the
meanings given, respectively, in the CONTRACTS
Act of 2024.
``(ii) Major prime contract.--The term
`major prime contract' means--
``(I) the 50 highest dollar value
prime contracts of a Federal agency;
and
``(II) each contract of a Federal
agency that has a total dollar value
greater than or equal to
$10,000,000.''.
(b) Applicability.--This section and the amendments made by this
section shall apply with respect to a major prime contract (as defined
in section 8(d)(18) of the Small Business Act (15 U.S.C. 637(d)))
entered into on or after the date of the enactment of this section.
SEC. 11. MODIFICATIONS TO SUBCONTRACTING PLANS TO ENHANCE OPPORTUNITIES
FOR SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY
SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.
(a) In General.--Each covered person that is required to submit a
subcontracting plan under paragraph (4) or (5) of section 8(d) of the
Small Business Act (15 U.S.C. 637(d)) for a contract shall update such
subcontracting plan to include the following:
(1) The names, addresses, phone numbers, types of business,
and North American Industrial Classification System code of the
small business concerns owned and controlled by socially and
economically disadvantaged individuals, disaggregated by
demographic characteristics, that were considered or solicited
as subcontractors.
(2) With respect to such concerns that were considered or
solicited but not included in the updated subcontracting plan,
the reasons for the decision not to include such concerns.
(3) Information on the process and efforts of the covered
person in developing such subcontracting plan, including--
(A) the actions taken by the covered person to
identify, solicit, and provide outreach to small
business concerns owned and controlled by socially and
economically disadvantaged individuals for possible
inclusion in its subcontracting plan;
(B) the information provided by the covered person
to such concerns about subcontracting opportunities
under the contract;
(C) the means by which the subcontractors that were
included in the subcontracting plan were selected by
the covered person; and
(D) the directories or lists of small business
concerns owned and controlled by socially and
economically disadvantaged individuals, websites and
website search tools, business or professional
associations, industry databases, and other resources
that the covered person consulted or used to identify
such concerns for possible inclusion in the
subcontracting plan.
(4) A description of the plans of the covered person to--
(A) increase the number of disadvantaged small
businesses in the subcontracting plan for subsequent
years of contract performance; and
(B) increase the dollar amount under the contract
allocated for goods and services provided by such
concerns.
(b) Enforcement.--
(1) Compliance with subcontracting plan.--A covered person
described in subsection (a) that is awarded a prime contract
and granted a modification of a contract by the head of a
Federal agency under such subsection shall remain in compliance
with the terms of the updated subcontracting plan during the
term of performance of the contract before receiving any
amounts related to such modification.
(2) Subsequent contract ineligibility.--If a covered person
described in paragraph (1) submits an offer for a subsequent
contract to such head of a Federal agency through a sealed bid
or negotiated acquisition proposal and such head determines
such covered person is not in compliance with a subcontracting
plan described in subsection (a), such head may not award the
subsequent contract to such contractor--
(A) until such covered person is in compliance with
subsection (a), as determined by such head; and
(B) unless such head determines that such award is
in the national interest.
(3) Subsequent contract offer scores.--
(A) Adjustment to score.--If a covered person
described in paragraph (1) submits an offer for a
subsequent contract to such head of a Federal agency
through a sealed bid or negotiated acquisition
proposal, the evaluation score of the contracting
officer given to such offer shall be adjusted as
follows:
(i) For a covered person that achieved
subcontractor diversity in the performance of
the prior contract, such score shall be
increased by one point.
(ii) For a covered person that failed to
achieve subcontractor diversity in the
performance of the prior contract, such score
shall be decreased by one point.
(B) Subcontractor diversity determination.--For
purposes of this paragraph, the contracting officer
that awarded the covered person a contract under
subsection (a) shall make a determination as to whether
the covered person achieved subcontractor diversity
using the information in the subcontracting plan of the
covered person and the standards used by such
contracting officer to evaluation subcontractor
diversity.
(c) Accountability.--The appropriate head of a Federal agency shall
consider the performance of a contracting officer of responsibilities
under this section in any evaluation of the performance of the
contracting officer, including such contracting officer's--
(1) collection and analysis of prime contractor data to
assess subcontractor diversity (as described in subsection
(b)(3)(B));
(2) failure to identify a covered person's failure to
achieve subcontractor diversity or to comply with an applicable
subcontracting plan; and
(3) efforts for monitoring and determinations regarding the
receipt of payments by disadvantaged small business
subcontractors from prime contractors in accordance with
relevant contractual terms.
(d) Applicability.--This section and the requirements of this
section shall apply with respect to a subcontracting plan entered into
on or after the date of the enactment of this section.
(e) Definitions.--In this section:
(1) The term ``small business concerns owned and controlled
by socially and economically disadvantaged individuals'' has
the meaning given under section 8(d)(3)(C) of the Small
Business Act (15 U.S.C. 637(d)(3)(C)).
(2) The term ``covered person'' means an apparently
successful offeror, bidder for a contract, or contractor
seeking a modification of a contract.
SEC. 12. DIVERSITY AND INCLUSION REPORTING REQUIREMENTS FOR COVERED
CONTRACTORS.
(a) Governmentwide Requirement.--Chapter 47 of division C of
subtitle I of title 41, United States Code, is amended by inserting
after section 4714 the following new section:
``Sec. 4715. Diversity and inclusion reporting requirements for covered
contractors
``(a) Covered Contractor Reports.--
``(1) In general.--The head of each executive agency shall
require each covered contractor awarded a major contract to
submit to such head by the last day of each full fiscal year
that occurs during the period of performance of any major
contract a report on diversity and inclusion.
``(2) Elements.--Each report under paragraph (1) shall
include, for the fiscal year covered by the report the
following:
``(A) A description of each major contract with a
period of performance during the fiscal year covered by
the report, including the period of performance,
expected total value, and value to date of each major
contract.
``(B) The total value of payments received under
all major contracts of each covered contractor during
such fiscal year.
``(C) The total number of participants in the board
of directors of each covered contractor, nominees for
the board of directors of the covered contractor, and
the senior leaders of the covered contractor,
disaggregated by demographic classifications.
``(D) With respect to employees of each covered
contractor--
``(i) the total number of such employees;
and
``(ii) the number of such employees
(expressed as a numeral and as a percentage of
the total number), disaggregated by demographic
classification and major occupational group.
``(E) The value of first-tier subcontracts under
each major contract entered into during such fiscal
year.
``(F) With respect to employees of each covered
subcontractor--
``(i) the total number of such employees;
and
``(ii) the number of such employees
(expressed as a numeral and as a percentage of
the total number), disaggregated by demographic
classification and major occupational group.
``(G) Whether the board of directors of the covered
contractor has, as of the date on which the covered
contractor submits a report under this section, adopted
any policy, plan, or strategy to promote racial,
ethnic, and gender diversity among the members of the
board of directors of the covered contractor, nominees
for the board of directors of the covered contractor,
or the senior leaders of the covered contractor.
``(H) A description of participation by the
contractor in diversity programs, to include the number
of hours spent implementing, funds expended in support
of, and the number of unique relationships established
by each such diversity program.
``(b) Annual Summary Report.--
``(1) Report required.--Not later than 60 days after the
first day of each fiscal year, the head of each executive
agency shall submit to each relevant committee of Congress a
report that summarizes the reports submitted pursuant to
subsection (a).
``(2) Elements.--Each report under paragraph (1) shall
include the following:
``(A) An index of the reports submitted pursuant to
subsection (a).
``(B) A compilation of the data described in such
subsection, disaggregated as described in such
subsection.
``(C) An aggregation of the data provided in such
reports.
``(D) A narrative that analyzes the information
disclosed in such reports and identifies any year-to-
year trends in such information.
``(c) Public Availability.--Each report required under this
subsection shall be posted on a single publicly available website of
the relevant executive agency and made available in a machine-readable
format that is downloadable, searchable, and sortable.
``(d) Executive Agency.--Notwithstanding section 3101(c)(1) of this
title, this section applies to the Department of Defense, the Coast
Guard, and the National Aeronautics and Space Administration.
``(e) Definitions.--In this section:
``(1) Covered contractor.--The term `covered contractor'
means a contractor awarded a major contract.
``(2) Covered subcontractor.--The term `covered
subcontractor' means a subcontractor performing a subcontract
that is one of the 10 highest aggregate value subcontracts
under a major contract and any subcontract that has a total
dollar value of $10,000,000 or more.
``(3) Demographic classifications.--The term `demographic
classifications' means classifications by race, gender, veteran
status, or ethnicity.
``(4) Diversity program.--The term `diversity program'
means--
``(A) any contracting program of an executive
agency that awards contracts pursuant to section 8(a)
of the Small Business Act (15 U.S.C. 637(a)); and
``(B) any contracting program for disadvantaged
small businesses (as defined in the CONTRACTS Act of
2024) administered by the executive agency.
``(5) Major contract.--The term `major contract' means--
``(A) the largest 50 contracts (by total dollar
value) of each agency; and
``(B) each contract that has a total dollar value
of $10,000,000 or more.
``(6) Major occupational group.--The term `major
occupational group' means a major occupational group as defined
by the Bureau of Labor Statistics.
``(7) Senior leader.--The term `senior leader' means--
``(A) the president of a covered contractor;
``(B) any vice president in charge of a principal
business unit, division, or function of a covered
contractor;
``(C) any other officer of a covered contractor who
performs a policy-making function; or
``(D) an individual responsible for the direct or
indirect management of more than 200 individuals.''.
(b) Technical and Conforming Amendment.--The table of sections for
chapter 47 of division C of subtitle I of title 41, United States Code,
is amended by inserting after the item for section 4714 the following
new item:
``Sec. 4715. Diversity and inclusion reporting requirements for
covered contractors.''.
(c) Applicability.--The amendments made by this section shall apply
with respect to contracts entered into on or after January 1, 2025.
SEC. 13. CHIEF COUNSEL FOR ADVOCACY REPORT TO CONGRESS.
Not later than 1 year after the date of the enactment of this Act
and annually thereafter, the Chief Counsel for Advocacy of the Office
of Advocacy of the Small Business Administration shall submit to
Congress a report evaluating the implementation of this Act and the
amendments made by this Act and the effects on Federal contracting and
subcontracting opportunities for disadvantaged small businesses.
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