SMALL AND DISADVANTAGED BUSINESS ENHANCEMENT ACT OF 2016; Congressional Record Vol. 162, No. 60
(House of Representatives - April 19, 2016)

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[Pages H1835-H1837]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        SMALL AND DISADVANTAGED BUSINESS ENHANCEMENT ACT OF 2016

  Mr. CHABOT. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 4326) to amend the Small Business Act to expand the duties 
of the Office of Small and Disadvantaged Business Utilization, and for 
other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 4326

       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 ``Small and Disadvantaged 
     Business Enhancement Act of 2016''.

     SEC. 2. EXPANDING DUTIES OF THE OFFICE OF SMALL AND 
                   DISADVANTAGED BUSINESS UTILIZATION.

       (a) In General.--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 defined in section 1902(a) 
     of title 41, United States Code, 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.''.
       (b) Technical Amendment.--Section 3(m) of the Small 
     Business Act (15 U.S.C. 632(m)) is amended to read as 
     follows:
       ``(m) Simplified Acquisition Threshold.--In this Act, the 
     term `simplified acquisition threshold' has the meaning given 
     such term in section 134 of title 41, United States Code.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Ohio (Mr. Chabot) and the gentlewoman from New York (Ms. Velazquez) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Ohio.


                             General Leave

  Mr. CHABOT. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days to revise and extend their remarks and include 
extraneous materials on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the Offices of Small and Disadvantaged Business 
Utilization were created in 1978 to serve as advocates within Federal 
agencies for small businesses seeking prime contracts and subcontracts.
  These small offices help review contracts to prevent bundling, make 
sure small companies are paid promptly, and ensure that solicitations 
are written in a manner that maximizes the use of small businesses.
  H.R. 4326, introduced by Ms. Adams of North Carolina, makes two 
improvements to this program.
  First, H.R. 4326 makes a technical correction to the Small Business 
Act. When these offices were created in 1978, there was no contracting 
program for service-disabled, veteran-owned small businesses or for 
businesses located in and employing people from distressed areas, 
commonly known as HUBZones.
  Therefore, H.R. 4326 updates the act to make it clear that these 
small-business advocates are authorized to provide assistance to 
service-disabled veterans and HUBZone small businesses.
  Second, the bill allows the Offices of Small and Disadvantaged 
Business Utilization to crack down on credit card fraud by Federal 
employees.

[[Page H1836]]

  Last year we learned that the Department of Veterans Affairs had 
ignored the law and hidden almost $6 billion in spending by using these 
credit cards.
  These contracts should have gone to service-disabled, veteran-owned 
small businesses, but the small-business office didn't have access to 
the data that would have let them catch this fraud. H.R. 4326 gives 
these small-business advocates access to this data.
  This legislation was included, as I mentioned some of the other bills 
were, as part of a larger bill that passed the Small Business Committee 
in January, and it received bipartisan support.
  Mr. Speaker, I urge my colleagues to support and pass H.R. 4326.
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise in support of H.R. 4326, the Small and 
Disadvantaged Business Enhancement Act of 2016. Over the years, 
Congress has sought to ensure that small businesses have fair 
opportunities to compete for Federal contracting opportunities.
  There are various provisions that require agencies to set aside or 
reserve contracts for performance by small businesses so long as they 
can perform at a fair and reasonable price.

                              {time}  1545

  These tools have provided small businesses with opportunities that 
may have otherwise been closed to them. They have also diversified the 
government's available suppliers and increased competition, thereby 
strengthening our country's industrial base.
  However, last year, the Committees on Small Business and Veterans' 
Affairs held a hearing in which senior procurement officials at the 
Department of Veterans Affairs alleged that the Department was 
circumventing contracting regulations. Rather than using a contracting 
vehicle, contracting personnel used purchase cards to buy goods and 
services such as pharmaceuticals and prosthetics.
  If true, these uses of purchase cards by the VA directly violated 
contracting regulations. Many of these purchases were of such value, 
that they should have been procured using either the small business 
reserve or set-asides. Additionally, as a result of their use, veterans 
were put at risk, as the goods purchased using these cards came without 
the warranties and protections provided under a contract.
  The Small and Disadvantaged Business Enhancement Act of 2016, 
introduced by Ms. Adams and Mr. Hardy, seeks to ensure that the fraud 
alleged at the VA does not happen there or at any other agency. The 
bill will require the Office of Small and Disadvantaged Business 
Utilization to review agency purchases made using government purchase 
cards to ensure compliance with the contracting mechanisms set forth in 
the Small Business Act.
  Additionally, the bill provides OSDBU the ability to ensure that all 
small businesses have access to their services. We cannot allow 
agencies to bypass the protections afforded to small businesses.
  I, therefore, ask my fellow Members to support this bill.
  I reserve the balance of my time.
  Mr. CHABOT. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Nevada (Mr. Hardy), who is the chairman of the 
Subcommittee on Investigations, Oversight, and Regulations.
  Mr. HARDY. Mr. Speaker, we hear about fraud, waste, and abuse as it 
pertains to the Federal Government spending too much in this country.
  Last year, the Subcommittee on Investigations, Oversight, and 
Regulations within the Small Business Committee held a joint hearing 
with the Veterans' Affairs Committee to investigate the reports of 
fraud and manipulation at the VA when it comes to reporting small 
business goals. What we heard was shocking.
  The VA unlawfully spent millions of dollars on medicine, medical 
care, and prosthetic contracts. And even more troubling, these 
contracts, if administered lawfully and transparently, would have 
allowed veteran and service-disabled veteran-owned small businesses the 
opportunity to compete.
  That is why I stand in support of my colleague's bill, H.R. 4326, the 
Small and Disadvantaged Business Enhancement Act of 2016. It contains 
language to equip small businesses with the tools to root out deception 
and fraud.
  By having access to data in their toolbox, the small business offices 
would have not only reduced fraud activities, but it could also have 
potentially saved money by allowing competition in the process.
  I urge my colleagues to support this commonsense language to help 
reduce fraud, waste, and abuse.
  Ms. VELAZQUEZ. Mr. Speaker, I yield such time as she may consume to 
the gentlewoman from North Carolina (Ms. Adams), the author of H.R. 
4326 and the ranking member of the Subcommittee on Investigations, 
Oversight, and Regulations.
  Ms. ADAMS. Mr. Speaker, I rise today to encourage my colleagues to 
support H.R. 4326, the Small and Disadvantaged Business Enhancement 
Act.
  This bill will expand oversight over the government purchase card 
system by ensuring that all small businesses contracting programs are 
under the purview of the Office of Small and Disadvantaged Business 
Utilization.
  This legislation follows a joint Small Business Subcommittee on 
Investigations, Oversight, and Regulations and House Veterans' Affairs 
Subcommittee on Oversight and Investigations hearing, where we 
discussed reports that cited irregularities at the Department of 
Veterans Affairs. This hearing uncovered numerous violations of Federal 
procurement laws with regard to government purchase cards.
  According to witness testimony, including individuals from the 
Department of Veterans Affairs, the VA's Office of Management issued 
government purchase cards that were being used illegally. This includes 
recipients using government purchase cards above the micro-purchase 
threshold in the same manner as micro-purchases.
  As ranking member of the Small Business Subcommittee on 
Investigations, Oversight, and Regulations, I believe we must ensure 
that our small businesses have access to Federal contracts by 
guaranteeing that money associated with government purchase cards are 
not used for wasteful spending.
  The reckless misuse of government funding uncovered at the VA has 
prevented some small businesses from accessing the Federal dollars owed 
to them. This legislation would ensure that every agency properly 
monitors purchase card activity to better free up the funds allocated 
to small businesses, including disadvantaged businesses.
  We have a responsibility to our Nation's small businesses to 
guarantee that there is a level playing field for them to offer their 
products and services. We cannot provide that level playing field if 
there are inefficiencies and waste occurring within our Federal 
agencies.
  Before I close, I would like to thank Representative Hardy for his 
support and cosponsorship.
  I want to urge my colleagues to support the Small and Disadvantaged 
Business Enhancement Act because supporting small business is simply 
the right thing to do.
  Mr. CHABOT. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Colorado (Mr. Coffman). He is the chairman of the 
Oversight and Investigations Subcommittee of the Committee on Veterans' 
Affairs.
  Mr. COFFMAN. Mr. Speaker, I rise today in support of the Small and 
Disadvantaged Business Enhancement Act of 2016.
  In part, H.R. 4326 is the result of the outstanding joint effort 
between the House Veterans' Affairs Committee's Subcommittee on 
Oversight and Investigations and the Small Business Committee's 
Subcommittee on Contracting and Workforce.
  Our investigative work and joint hearing on the improper, and at 
times illegal, use of purchase cards revealed billions of dollars worth 
of inappropriate purchases within the Department of Veterans Affairs 
alone. This work underscores the need for the reform legislation to be 
applied across the Federal Government.
  The bill requires purchase card procurements to be reviewed if they 
are above $3,500 and less than $150,000, and requires them to be 
properly entered into the Federal Procurement Data System. You might 
think this was already a clearcut requirement, but it

[[Page H1837]]

wasn't. H.R. 4326 corrects this glaring loophole. The bill also spells 
out the role of the Office of Small and Disadvantaged Business 
Utilization, a much-needed clarification.

  I encourage all Members to support this outstanding, bipartisan piece 
of legislation.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  In closing, last year, we saw the government achieve record high 
percentages of dollars awarded to small business. Unfortunately, these 
numbers have been called into question due to allegations of fraud, 
waste, and abuse at the VA.
  Ultimately, we do not know the total value of small business 
contracts at the VA, but estimates suggest that small businesses lost 
out between $2.8 billion and $3.7 billion of contracts as a result of 
personnel using their purchase cards. If this is true, it is a failure 
not just of the VA, but of the procurement system more broadly.
  Time and time again, we are presented with similar allegations in 
which opportunities were improperly diverted away from those that they 
were intended to reach. Every time this happens, a deserving small 
business loses out on revenue that could help create jobs in local 
communities. The truth is that we need more oversight, and H.R. 4326 
will provide it.
  Before I yield back, I want to thank Ms. Adams for her efforts and 
the efforts of all of the members of the committee to work in a 
bipartisan manner to help small businesses gain access to the Federal 
marketplace.
  I also would like to take this opportunity to thank Chairman Chabot 
for his leadership on these matters, as well as other legislation that 
has passed out of the committee. I am happy to be working with him 
again to ensure that small businesses get the help they need to grow 
and continue to create jobs for our communities.
  I also would like to add a thank you note to the staff on the 
majority, Emily Murphy, and on the minority, Eminence Griffin.
  I yield back the balance of my time.
  Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
  In closing, allowing service-disabled veterans access to small 
business advocates in Federal agencies is simply common sense. Allowing 
those advocates the tools necessary to detect fraud is good government.
  This bill deserves the support of the House. I want to thank Mr. 
Hardy of Nevada for his leadership, Mr. Coffman of Colorado, Ms. Adams 
of North Carolina, and, as always, the ranking member, Ms. Velazquez, 
for her leadership in this matter and all the other bills we had today. 
I urge passage of H.R. 4326.
  I also want to thank the Speaker pro tempore for his time this 
afternoon. I particularly enjoyed his pronunciation of the great State 
of Ohio.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Ohio (Mr. Chabot) that the House suspend the rules and 
pass the bill, H.R. 4326.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________