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110th Congress                                            Rept. 110-111
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 2

======================================================================



 
               SMALL BUSINESS FAIRNESS IN CONTRACTING ACT

                                _______
                                

                  May 3, 2007.--Ordered to be printed

                                _______
                                

  Mr. Waxman, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1873]

  The Committee on Oversight and Government Reform, to whom was 
referred the bill (H.R. 1873) to reauthorize the programs and 
activities of the Small Business Administration relating to 
procurement, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     6
Background and Need for Legislation..............................     7
Legislative History..............................................     7
Section-by-Section...............................................     8
Explanation of Amendments........................................    12
Committee Consideration..........................................    12
Rollcall Votes...................................................    12
Application of Law to the Legislative Branch.....................    12
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    13
Statement of General Performance Goals and Objectives............    13
Constitutional Authority Statement...............................    13
Federal Advisory Committee Act...................................    13
Unfunded Mandates Statement......................................    13
Earmark Identification...........................................    13
Committee Estimate...............................................    13
Changes in Existing Law Made by the Bill as Reported.............    14

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Small Business 
Fairness in Contracting Act''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Regulations.

                       TITLE I--CONTRACT BUNDLING

Sec. 101. Definitions of bundling of contract requirements and related 
terms.
Sec. 102. Justification.
Sec. 103. Appeals.
Sec. 104. Review.

    TITLE II--INCREASING THE NUMBER OF SMALL BUSINESS CONTRACTS AND 
                              SUBCONTRACTS

Sec. 201. Small business goal.
Sec. 202. Annual goal negotiation.
Sec. 203. Usage of small companies in goal achievement.
Sec. 204. Annual plan for each agency explaining how agency will meet 
small business goals.
Sec. 205. Making small businesses the first choice.
Sec. 206. Uniform metric for subcontracting achievements.
Sec. 207. Subcontracting database.
Sec. 208. National database.
Sec. 209. Review of subcontracting plans.
Sec. 210. Agency obligation for fulfilling contracting goals.
Sec. 211. Appropriate limits on value of sole source contracts.

             TITLE III--PROTECTION OF TAXPAYERS FROM FRAUD

Sec. 301. Small business size protest notification.
Sec. 302. Review of national registry.
Sec. 303. Recertification of compliance with size standards and 
registration with Central Contractor Registry.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

Sec. 401. Authorization of appropriations.

SEC. 2. REGULATIONS.

  (a) In General.--Not later than 180 days after the date of the 
enactment of this Act--
          (1) the Administrator of the Small Business Administration 
        shall promulgate regulations to implement this Act and the 
        amendments made by this Act; and
          (2) the Federal Acquisition Regulation shall be revised to 
        implement this Act and the amendments made by this Act.
  (b) Notice and Comment.--The regulations required by subsection (a) 
shall be promulgated after opportunity for notice and comment as 
required by section 553(b) of title 5, United States Code.

                       TITLE I--CONTRACT BUNDLING

SEC. 101. DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS AND RELATED 
                    TERMS.

  Section 3 of the Small Business Act (15 U.S.C. 632) is amended by 
amending subsection (o) to read as follows:
  ``(o) Definitions of Bundling of Contract Requirements and Related 
Terms.--For purposes of this Act:
          ``(1) Bundled contract.--
                  ``(A) In general.--The term `bundled contract' means 
                a contract or order that is entered into to meet 
                procurement requirements that are consolidated in a 
                bundling of contract requirements, without regard to 
                its designation by the procuring agency or whether a 
                study of the effects of the solicitation on civilian or 
                military personnel has been made.
                  ``(B) Exceptions.--The term does not include--
                          ``(i) a contract or order with an aggregate 
                        dollar value below the dollar threshold 
                        specified in paragraph (4); or
                          ``(ii) a contract or order that is entered 
                        into to meet procurement requirements, all of 
                        which are exempted requirements under paragraph 
                        (5).
          ``(2) Bundling of contract requirements.--
                  ``(A) In general.--The term `bundling of contract 
                requirements' means the use of any bundling methodology 
                to satisfy 2 or more procurement requirements for goods 
                or services, including any construction services, 
                previously supplied or performed under separate smaller 
                contracts or orders that is likely to be unsuitable for 
                award to a small business concern due to--
                          ``(i) the diversity, size, or specialized 
                        nature of the elements of the performance 
                        specified;
                          ``(ii) the aggregate dollar value of the 
                        anticipated award;
                          ``(iii) the geographical dispersion of the 
                        contract or order performance sites; or
                          ``(iv) any combination of the factors 
                        described in clauses (i), (ii), and (iii).
                  ``(B) Inclusion of new features or functions.--A 
                combination of contract requirements that would meet 
                the definition of a bundling of contract requirements 
                but for the addition of a procurement requirement with 
                at least one new good or service shall be considered to 
                be a bundling of contract requirements unless the new 
                features or functions substantially transform the goods 
                or services previously performed.
                  ``(C) Exceptions.--The term does not include--
                          ``(i) the use of a bundling methodology for 
                        an anticipated award with an aggregate dollar 
                        value below the dollar threshold specified in 
                        paragraph (5); or
                          ``(ii) the use of a bundling methodology to 
                        meet procurement requirements, all of which are 
                        exempted requirements under paragraph (6).
          ``(3) Bundling methodology.--The term `bundling methodology' 
        means--
                  ``(A) a solicitation to obtain offers for a single 
                contract or order, or a multiple award contract or 
                order; or
                  ``(B) a solicitation of offers for the issuance of a 
                task or a delivery order under an existing single or 
                multiple award contract or order.
          ``(4) Separate smaller contract.--The term `separate smaller 
        contract', with respect to bundling of contract requirements, 
        means a contract or order that has been performed by 1 or more 
        small business concerns or was suitable for award to 1 or more 
        small business concerns.
          ``(5) Dollar threshold.--The term `dollar threshold' means--
                  ``(A) $65,000,000, if solely for construction 
                services; and
                  ``(B) $5,000,000, in all other cases.
          ``(6) Exempted requirements.--The term `exempted requirement' 
        means a procurement requirement solely for items that are not 
        commercial items (as the term `commercial item' is defined in 
        section 4(12) of the Office of Federal Procurement Policy Act 
        (41 U.S.C. 403(12)).
          ``(7) Procurement requirement.--The term `procurement 
        requirement' means a determination by an agency that a 
        specified good or service is needed to satisfy the mission of 
        the agency.''.

SEC. 102. JUSTIFICATION.

  Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) is 
amended--
          (1) by striking ``(2) why delivery schedules'' and inserting 
        ``(2) the names, addresses and size of the incumbent contract 
        holders; (3) a description of the industries that might be 
        interested in bidding on the contract requirements; (4) the 
        number of small businesses listed in the industry categories 
        that could be excluded from future bidding if the contract is 
        combined or packaged; (5) why delivery schedules'';
          (2) by striking ``(3) why the proposed acquisition'' and 
        inserting ``(6) why the proposed acquisition'';
          (3) by striking ``(4) why construction'' and inserting ``(7) 
        why construction'';
          (4) by striking ``(5) why the agency'' and inserting ``(8) 
        why the agency'';
          (5) by striking ``justified.'' and inserting ``justified. The 
        statement shall also set forth the proposed procurement 
        strategy required by subsection (e) and, if applicable, the 
        specifications required by subsection (e)(3). The statement 
        shall be made available to the public, including through 
        dissemination in the Federal contracting opportunities 
        database, concurrently with the issuance of the 
        solicitation.''; and
          (6) by inserting after ``prime contracting opportunities.'' 
        the following: ``If no notification of the procurement and 
        accompanying statement is received, but the Administrator 
        determines that there is cause to believe the contract combines 
        requirements or a contract (single or multiple award) or task 
        or delivery order for construction services or includes 
        unjustified bundling, then the Administrator may request that 
        such a statement of work goods or services be completed by the 
        procurement activity and sent to the Procurement Center 
        Representative and the solicitation process postponed for 10 
        days to allow the Administrator to review the statement and 
        make recommendations as described in this section before the 
        procurement is continued.''.

SEC. 103. APPEALS.

  Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) is amended 
by inserting before ``Whenever the Administration and the contracting 
procurement agency fail to agree,'' the following: ``If a small 
business concern would be adversely affected, directly or indirectly, 
by the procurement as proposed, and that small business concern or a 
trade association on behalf of that small business concern so requests, 
the Administrator may, in the Administrator's discretion, take action 
to further the interests of that small business concern.''.

SEC. 104. REVIEW.

  Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) is amended 
by striking the sentence beginning ``Whenever the Administration and 
the contracting procurement agency fail to agree,'' and inserting the 
following: ``Whenever the Administration and the contracting 
procurement agency fail to agree, the Administrator shall submit the 
matter to the head of the agency for a determination. The head of the 
agency shall provide a written response to the Administrator. A copy of 
such response shall also be provided to the Committees on Small 
Business of the House of Representatives and Senate, the Committee on 
Oversight and Government Reform of the House of Representatives, and 
the Committee on Homeland Security and Governmental Affairs of the 
Senate.''.

    TITLE II--INCREASING THE NUMBER OF SMALL BUSINESS CONTRACTS AND 
                              SUBCONTRACTS

SEC. 201. SMALL BUSINESS GOAL.

  (a) Government-Wide Goal.--Section 15(g)(1) of the Small Business Act 
(15 U.S.C. 644(g)(1)) is amended by striking ``23 percent'' and 
inserting ``25 percent''.
  (b) Goals for Small Disadvantaged Businesses and Women-Owned 
Businesses.--Section 15(g)(1) of such Act is further amended by 
striking ``5 percent'' both places it appears and inserting ``8 
percent''.

SEC. 202. ANNUAL GOAL NEGOTIATION.

  Section 15(g)(1) of the Small Business Act (15 U.S.C. 644(g)(1)) is 
amended by striking ``The President shall annually establish 
Government-wide goals for procurement contracts'' and inserting ``The 
President shall before the close of each fiscal year establish new 
Government-wide procurement goals for the following fiscal year for 
procurement contracts''.

SEC. 203. USAGE OF SMALL COMPANIES IN GOAL ACHIEVEMENT.

  Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended 
by adding at the end the following:
  ``(4) For purposes of this subsection and subsection (h), a small 
business concern shall be counted toward one additional category goal 
only, even if that small business concern otherwise qualifies under 
more than one category goal. In this paragraph, the term `category 
goal' means a goal described in paragraph (2).''.

SEC. 204. ANNUAL PLAN FOR EACH AGENCY EXPLAINING HOW AGENCY WILL MEET 
                    SMALL BUSINESS GOALS.

  Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended 
by adding at the end the following:
  ``(5) Before the beginning of each fiscal year, the head of each 
Federal agency shall submit to the Administrator of the Small Business 
Administration and to Congress a detailed plan explaining how the 
agency intends to meet the small business goals under this subsection 
that apply to that agency for that fiscal year.''.

SEC. 205. MAKING SMALL BUSINESSES THE FIRST CHOICE.

  Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) is 
amended--
          (1) in paragraph (1), by striking ``$100,000'' and inserting 
        ``the Simplified Acquisition Threshold''; and
          (2) in paragraph (3), by striking ``subsection (a) of section 
        8'' and inserting ``section 8, 31, or 36''.

SEC. 206. UNIFORM METRIC FOR SUBCONTRACTING ACHIEVEMENTS.

  Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended 
by adding at the end the following:.
  ``(12) In carrying out this subsection, the Administrator shall 
require each prime contractor to report small business subcontract 
usage at all tiers based on the percentage of the total dollar amount 
of the contract award.''.

SEC. 207. SUBCONTRACTING DATABASE.

  Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended 
by adding at the end the following:
  ``(13) In carrying out this subsection, the Administrator shall 
develop and maintain a password-protected database that will enable the 
Administration to assist small businesses in marketing to large 
corporations that have not achieved their small business goals.''.

SEC. 208. NATIONAL DATABASE.

  The Administrator of the Small Business Administration shall ensure 
that whenever a small business enters its information in the Central 
Contractor Registry, or any successor to that registry, the 
Administrator contacts that business within 30 days regarding the 
likelihood of Federal contracting opportunities. The Administrator 
shall ensure that each small business that so registers is, for each 
industry code entered by that small business, provided with the total 
dollar value of government contract awards to small businesses for that 
industry.

SEC. 209. REVIEW OF SUBCONTRACTING PLANS.

  Not later than 120 days after the date of the enactment of this 
section, the Administrator of the Small Business Administration shall, 
after an opportunity for notice and comment, prescribe regulations to 
govern the Administrator's review of subcontracting plans, including 
standards for determining good faith effort in compliance with the 
subcontracting plans.

SEC. 210. AGENCY OBLIGATION FOR FULFILLING CONTRACTING GOALS.

  Section 15(h) of the Small Business Act (15 U.S.C. 644(h)) is amended 
by adding at the end the following:
  ``(4) At the conclusion of each fiscal year, the head of each Federal 
agency shall submit to Congress a report specifying the percentage of 
contracts awarded by that agency for that fiscal year that were awarded 
to small business concerns. If the percentage is less than 25 percent, 
the head of the agency shall, in the report, explain why the percentage 
is less than 25 percent and what will be done to ensure that the 
percentage for the following fiscal year will not be less than 25 
percent.''.

SEC. 211. APPROPRIATE LIMITS ON VALUE OF SOLE SOURCE CONTRACTS.

  (a) Appropriate Limits.--If a law is not enacted by December 31, 
2007, revising the limits referred to in this subsection, the 
Administrator for Federal Procurement Policy, in consultation with the 
Administrator for Small Business, shall establish appropriate limits on 
the value of contracts awarded without the use of competitive 
procedures to participants in the program established by section 8(a) 
of the Small Business Act (15 USC 637(a)) that are not subject to the 
limits on the value of such contracts established by paragraph (1)(D) 
of section 8(a) of such Act.
  (b) Consultation.--In establishing any limit described in subsection 
(a). the Administrator for Federal Procurement Policy shall consult 
with representatives of the affected program participants. The 
Administrator shall also take into account--
          (1) any special circumstances and needs of the affected 
        program participants; and
          (2) the advantages of promoting competition in Federal 
        contracting.

             TITLE III--PROTECTION OF TAXPAYERS FROM FRAUD

SEC. 301. SMALL BUSINESS SIZE PROTEST NOTIFICATION.

  (a) In General.--The Administrator of the Small Business 
Administration shall work with appropriate Federal agencies to ensure 
that whenever a business concern is awarded a contract on the basis 
that it qualifies as small and then is determined not to qualify as 
small, a notification of those facts (that an award was made on such a 
basis, and that such a determination was made) shall be placed adjacent 
to that concern's listing in the Central Contractor Registry (or any 
successor to that registry).
  (b) Comptroller General Certification.--The Administrator shall, in 
making any report of small business goal accomplishments, qualify the 
accomplishments as ``estimated'', until the Administrator obtains from 
the Comptroller General the Comptroller General's certification that 
there are no data integrity issues with respect to the national 
repository of contract award information known as Federal Procurement 
Data System-Next Generation (FPDS-NG), or any successor to that 
repository.
  (c) Awards to Large Businesses.--For each Federal agency, the 
Inspector General of that agency shall, on an annual basis, submit to 
Congress a report on the number and dollar value of contract awards 
that were coded as awards to small business concerns but in fact were 
made to businesses that did not qualify as small business concerns.

SEC. 302. REVIEW OF NATIONAL REGISTRY.

  The Administrator of the Small Business Administration shall ensure, 
on a biannual basis, that an independent audit is performed of the 
Central Contractor Registry, or any successor to that registry, and 
that the Dynamic Small Business Search portion of the registry, or any 
successor to that portion of the registry, is purged of any businesses 
that are not in fact small businesses. If a business that has been so 
purged attempts, while not in fact a small business, to re-register, 
that business is subject to debarment as a Federal contractor and is 
further subject to penalties outlined in section 16 of the Small 
Business Act (15 U.S.C. 645).

SEC. 303. RECERTIFICATION OF COMPLIANCE WITH SIZE STANDARDS AND 
                    REGISTRATION WITH CENTRAL CONTRACTOR REGISTRY.

  Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) is amended 
by adding at the end the following:
  ``(5) Recertification.--
          ``(A) In general.--If a business concern is awarded a 
        contract because of a standard by which it is determined to be 
        a small business concern, and the business concern is close to 
        exceeding that standard at the time the award is made, then the 
        business concern must, annually after the date of the award, 
        recertify to the agency awarding the contract whether it meets 
        that standard.
          ``(B) `Close to exceeding'.--For purposes of subparagraph 
        (A), a business concern is close to exceeding--
                  ``(i) a number-of-employees standard if the number of 
                employees of the business concern is 95 percent or more 
                of the maximum number of employees allowed under the 
                standard; and
                  ``(ii) a dollar-volume-of-business standard if the 
                dollar volume of business is 80 percent or more of the 
                maximum dollar volume allowed under the standard.
  ``(6) Registry.--For a business concern to be awarded a contract 
because of a standard by which it is determined to be a small business 
concern, the business concern must, annually after the end of the 
fiscal year used by the business concern, update its listing in the 
Central Contractor Registry.''.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated such sums as may be necessary 
to carry out this Act and the amendments made by this Act.

                          Purpose and Summary

    H.R. 1873, the Small Business Fairness in Contracting Act 
of 2007, was introduced on April 17, 2007, by Reps. Bruce L. 
Braley Steve Chabot, and Nydia M. Velazquez. The bill amends 
the Small Business Act to address issues relating to small 
business participation in federal procurement. This report 
summarizes H.R. 1873, as ordered reported by the Committee on 
Oversight and Government Reform.
    H.R. 1873 contains provisions concerning contract bundling, 
government procurement goals for small business contracts, and 
the accuracy of contracting data maintained in federal 
databases.
    As reported by the Oversight Committee, the bill expands 
the definition of contract bundling to ensure that small 
businesses have access to work previously available for small 
business. The bill improves the current bundling dispute 
process by allowing small businesses to request that the Small 
Business Administration (SBA) appeal a contract award to the 
contracting agency on their behalf and by requiring agencies to 
provide written responses to SBA. The bill increases the 
government-wide small business contracting goal and raises the 
threshold for set-asides of small business contracts to the 
Simplified Acquisition Threshold. The bill would provide for 
the establishment of appropriate limitations on the award of 
contracts without competition to Alaska Native Corporations and 
other economically disadvantaged Indian tribes. The bill 
requires improvements to federal contracting databases.

                  Background and Need for Legislation

    H.R. 1873 improves small business access to federal 
procurement opportunities. Concerns have been raised that some 
agencies may be combining work previously awarded to small 
businesses and then adding some small new requirement so the 
agency can avoid conducting the required contract bundling 
analysis. As reported by the Oversight Committee, H.R. 1873 
addresses this concern by covering under the definition of a 
contract bundling a combination of contract requirements that 
would meet the definition of a bundling if it were not for the 
addition of a new feature or function that does not 
substantially transform the goods or services previously 
performed.
    Federal contracting law provides a limited privilege for 
small minority and economically disadvantaged businesses. These 
companies can be awarded contracts worth up to $5 million 
without competition. In 1986, Congress made Alaska Native 
Corporations and economically disadvantaged Indian tribes 
eligible to participate in the program but provided that the $5 
million ceiling did not apply to those groups. These firms are 
thus eligible to receive noncompetitive federal contracts of 
any value. The number and value of noncompetitive federal 
contracts awarded to Alaska Native Corporations has increased 
in recent years. In 2000, Alaska Native Corporations received 
$265 million in federal contracts while in 2005, spending on 
these contracts grew to more than $1 billion per year. As 
reported by the Oversight Committee, H.R. 1873 puts in place a 
mechanism to begin to address this loophole. The bill contains 
a ``placeholder'' provision that gives Congress until the end 
of the year to revise the statute. If Congress fails to act, 
the Office of Management and Budget would set ``appropriate 
limits'' after a consultation process.
    Concerns have been raised about the validity and usefulness 
of the data maintained in federal contractor databases. 
According to the Inspector General for the Small Business 
Administration, agencies are getting credit toward their small 
business procurement goals for contracts which are actually 
awarded to large companies. This bill addresses these concerns 
by requiring changes to the information that is available in 
federal contractor databases and by requiring a biannual audit 
of the Central Contractor Registry.

                          Legislative History

    H.R. 1873 was introduced on April 17, 2007, and referred to 
the Committee on Small Business. The Committee on Small 
Business held a markup to consider the bill on April 24, 2007, 
and ordered the bill reported, as amended, on a voice vote.
    The bill was sequentially referred to the Committee on 
Oversight and Government Reform. The Committee held a markup to 
consider H.R. 1873 on May 1, 2007, and ordered the bill to be 
reported, as amended, on a voice vote.

                           Section-by-Section


Section 1. Short title; table of contents

    This section provides that the short title of H.R. 1873 is 
the ``Small Business Fairness in Contracting Act of 2007.'' 
This section also contains a table of contents.

Section 2. Regulations

    This section requires the SBA Administrator to issue 
regulations, after providing the opportunity for notice and 
comment, implementing this Act. This section also requires the 
Federal Acquisition Regulation to be revised to implement the 
Act and the amendments made by the Act.

                       Title I--Contract Bundling


Section 101. Definitions of bundling of contract requirements and 
        related terms

    This section clarifies the definition of contract bundling 
and related terms. The term ``bundled contract'' is amended to 
include a contract or an order that is entered into to meet 
requirements that are consolidated in a bundling of contract 
requirements without regard to its designation by the procuring 
agency or whether a study of the effects of the solicitation on 
civilian or military personnel has been made. This provision is 
intended to cover single award or multiple award ``task and 
delivery'' orders under requirements-type contracts and 
indefinite delivery indefinite quantity contracts. This 
expansion of the current statutory coverage ensures that small 
businesses have an appropriate opportunity to share in the 
federal business opportunities offered through task and 
delivery orders under already existing contracts.
    Under the current definition, a contract is considered 
bundled if it involves the consolidation of work that has been 
previously performed. This section expands the definition of 
``bundling of contract requirements'' to cover construction 
services and to cover a combination of contract requirements 
that would meet the definition of a bundling if it were not for 
the addition of a procurement requirement with at least one new 
good or service if the new features or functions do not 
substantially transform the good or services previously 
performed. None of these definitions apply if the anticipated 
aggregate dollar value of the award is under $65 million for 
construction services or under $5 million for all other 
contracts, or if it applies only to non-commercial items.
    The bill, as introduced, could have been read to change the 
definition of contract bundling to include virtually all 
contracts the federal government puts out for bid. This would 
require agencies to conduct time-consuming and burdensome 
economic analyses for almost all federal contracts. This 
section, as amended during Committee consideration, provides a 
balanced expansion that improves small business access to 
federal contracts while preserving the discretion of agency 
contracting officials.

Section 102. Justification

    This section requires a contracting agency to provide the 
small business representative for the agency with information 
on incumbent contract holders, a description of the industries 
which might be interested in bidding on the contract 
requirements, and the number of small businesses listed in the 
industry categories which potentially could be excluded if the 
contract is combined or packaged. This section allows the SBA 
Administrator to intervene and request a statement of work for 
goods or services and to request that the solicitation process 
be postponed 10 days to allow the Administrator to review the 
statement and make recommendations.

Section 103. Appeals

    This section allows a small business or a trade association 
acting on behalf of a small business adversely affected by a 
proposed procurement to request that SBA take actions to 
further the interests of that small business concern.

Section 104. Review

    Under current law, when SBA and a procuring agency disagree 
on a contract bundling issue, the head of the contracting 
agency resolves the dispute. This section improves 
accountability by requiring the head of the agency to provide a 
written response to the SBA Administrator and to provide copies 
of the response to Congress.
    This section was amended during Committee consideration to 
eliminate the requirement that OMB become involved in disputes 
between SBA and other federal agencies over whether a contract 
is bundled. The authority to resolve these disputes should 
ultimately remain with the individual responsible for ensuring 
that the contract is fulfilled and not with political 
appointees at OMB. The reporting requirements of this section 
will ensure appropriate oversight of the issue.

    Title II--Increasing the Number of Small Business Contracts and 
                              Subcontracts


Section 201. Small business goal

    This section increases the government-wide small business 
procurement goal from 23% to 25%. This section would also raise 
the government-wide procurement goal for small disadvantaged 
businesses and women-owned businesses from 5% to 8%. This 
section was amended during Committee consideration. As 
introduced, the bill would have raised the small business 
procurement goal to 30%. The federal government barely meets 
the current goal of 23% and 25% will be a significant 
improvement.

Section 202. Annual goal negotiation

    This section requires the President, before the close of 
each fiscal year, to establish new government-wide procurement 
goals for the following fiscal year. This provision is intended 
to ensure that new goals are set each year.

Section 203. Usage of small companies in goal achievement

    This section would only permit agencies to count a small 
business toward one additional procurement category goal (small 
businesses owned by service disabled veterans, socially and 
economically disadvantaged individuals, qualified HUB Zone 
concerns, and women) even if the small business would otherwise 
qualify to be counted under more than one goal.

Section 204. Annual plan for each agency explaining how agency will 
        meet small business goals

    This section requires the head of each agency to submit to 
the SBA Administrator and Congress a detailed plan on how the 
agency intends to meet its small business procurement goals for 
that fiscal year.

Section 205. Making small business the first choice

    This section would require that the maximum dollar value 
for the small business threshold be raised to that of the 
Simplified Acquisition Threshold. The Simplified Acquisition 
Threshold is adjusted based on inflation. Tying the maximum 
small business threshold to the Simplified Acquisition 
Threshold allows both thresholds to be adjusted to inflation at 
the same time. H.R. 1873, as introduced, included a provision 
that would extend the small business reservation to orders 
under existing contracts. This provision was eliminated in the 
bill as reported by the Oversight Committee.

Section 206. Uniform metric for subcontracting achievements

    This section requires prime contractors to report small 
business usage, at all tiers, based on the percentage of the 
total dollar amount of the contract award. This provision 
establishes a uniform way of measuring subcontracting 
performance.

Section 207. Subcontracting database

    This section requires the SBA Administrator to develop and 
maintain a password protected database to enable agencies to 
assist small businesses in marketing to large corporations that 
have not achieved their small business goals.

Section 208. National database

    This section requires the SBA Administrator to ensure that 
whenever a small business enters its information in the Central 
Contractor Registry, the Administrator contacts the business 
within 30 days regarding the likelihood of federal contracting 
opportunities. This section also requires the Administrator to 
ensure that each small business is provided with the total 
dollar value of government contract awards to small businesses 
for each of its relevant industries.

Section 209. Review of subcontracting plans

    This section requires the SBA Administrator, within 120 
days and after an opportunity for notice and comment, to 
prescribe regulations governing the Administrator's review of 
subcontracting plans, including standards for determining good 
faith effort in compliance with the subcontracting plans.

Section 210. Agency obligation for fulfilling contracting goals

    This section requires the head of each federal agency to 
submit to Congress a report on the percentage of contracts the 
agency awarded to small businesses for that fiscal year. If it 
is less than 25%, the head of the agency must explain why and 
what the agency will do to ensure that the percentage will not 
be less than 25% for the next fiscal year.

Section 211. Change in threshold for sole source contracts for certain 
        entities

    This section gives Congress until the end of the year to 
adopt legislation addressing sole-source contracting by Alaska 
Native Corporations and economically disadvantaged Indian 
tribes. If Congress fails to act during this ``placeholder'' 
period, the section requires the Administrator for Federal 
Procurement Policy, in consultation with the SBA Administrator, 
to establish appropriate limits on the value of sole-source 
contracts awarded to these groups. In setting these limits, the 
Administrator must consult with representatives of affected 
Alaska Natives and Indian tribes and take into account any 
special circumstances and needs of the affected program 
participants and the advantages of promoting competition in 
federal contracting.
    These changes are intended to preserve the integrity of the 
contracting privileges afforded to Alaska Native Corporations 
and economically disadvantaged Indian tribes by introducing 
competition into the program.

             Title III--Protection of Taxpayers From Fraud


Section 301. Small business size protest notification

    Subsection (a) requires the SBA Administrator to work with 
agencies to ensure that whenever a business fails to prevail in 
a size protest and the determination is made that the business 
is not small, a note is made in the Central Contractor 
Registry.
    Subsection (b) requires the SBA Administrator, in any 
report on small business goal accomplishments, to qualify the 
accomplishments as ``estimated'' until the Comptroller General 
certifies to the Administrator that there are no data integrity 
issues with respect to the Federal Procurement Data System-Next 
Generation.
    Subsection (c) requires the Inspector General of each 
agency to report annually on contracts that were coded as 
awards to small businesses but were in fact awarded to 
businesses that did not qualify as small.

Section 302. Review of national registry

    This section requires the SBA Administrator to ensure, on a 
biannual basis, that an independent audit is performed of the 
Central Contractor Registry and that the Dynamic Small Business 
Search portion of the registry is purged of any businesses that 
are not small businesses. This section provides that if a 
business that has been purged attempts to re-register, it will 
be subject to debarment as a federal contractor and will be 
subject to penalties outlined in section 645 of chapter 15 of 
the United States Code.

Section 303. Recertification of compliance with size standards and 
        registration with central contractor registry

    This section requires businesses that are, at the time of a 
contract award, close to exceeding their size standards, to 
annually recertify throughout the duration of the contract.
    This provision is intended to ensure that small businesses 
that outgrow the small business classification do not continue 
to be eligible for small business awards and to ensure that 
agencies do not receive credit toward their small business 
procurement goals for awarding contracts to such businesses. 
This provision does not require a business that outgrows its 
small business designation to lose its contract.

               Title IV--Authorization of Appropriations


Section 401. Authorization of appropriations

    This section authorizes necessary appropriations for 
implementation.

                       Explanation of Amendments

    The following amendments were adopted in Committee:
    Mr. Waxman and Mr. Davis offered an amendment, passed by 
voice vote, in the nature of a substitute. The amendment makes 
a number of changes to H.R. 1873. The amendment changes the 
definition of contract bundling and eliminates the requirement 
that OMB become involved in contract-specific disputes between 
SBA and other federal agencies over contract bundling. The 
amendment requires the contracting agency to provide a written 
opinion to SBA and to Congress regarding such disputes. The 
amendment changes the increase in the government-wide small 
business procurement goal to 25% from 30% as included in the 
bill as it was referred to the Committee. The amendment gives 
Congress until the end of the year to address sole-source 
contracting by Alaska Native Corporations and economically 
disadvantaged Indian tribes. The amendment also eliminated 
provisions of the bill, as introduced, which would have 
required overseas contracts to be included in determining 
achievement of procurement goals and to require agencies to 
negotiate individual procurement goals, not lower than the 
national goal.
    Mr. Clay and Mr. Cummings offered an amendment, passed by 
voice vote, to raise the government-wide procurement goal for 
small disadvantaged businesses and women-owned businesses from 
5% to 8%.

                        Committee Consideration

    On Tuesday, May 1, 2007, the Committee met in open session 
and favorably ordered the bill, H.R. 1873, to be reported as 
amended, by a voice vote.

                             Rollcall Votes

    No rollcall votes were held.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to terms and conditions of 
employment or access to public services and accommodations.
    H.R. 1873 does not relate to the terms and conditions of 
employment or access to public services and accommodations 
within the meaning of Section 102(b)(3).

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(l) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report, including the need to establish appropriate limits 
for certain sole-source contracts and the need for improvements 
in the accuracy of contracting data maintained in federal 
databases.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(a) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are reflected in the descriptive portions 
of this report, including improving the federal procurement 
system.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress to enact the law 
proposed by H.R. 1873. Article I, Section 8, Clause 18, of the 
Constitution of the United States grants the Congress the power 
to enact this law.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                      Unfunded Mandates Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement on 
whether the provisions of the report include unfunded mandates. 
In compliance with this law, and in the absence of an estimate 
from the Congressional Budget Office, the committee states that 
the bill deals only with the functions and operations of the 
federal government and, as such, contains no unfunded mandates.

                         Earmark Identification

    H.R. 1873 does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(f) of rule XXI.

                           Committee Estimate

    At the time of the filing of this report on H.R. 1873, the 
cost estimate of the Congressional Budget Office was not 
available. In compliance with clause 3(d)(2) of rule XIII of 
the Rules of the House of Representatives, and based on the 
best information available at this time the Committee on 
Oversight and Government Reform provides the following 
estimate. The Committee on Small Business, in its report on 
H.R. 1873, estimated that should the bill be enacted, it would 
cost $2.5 million in fiscal year 2008 and $2 million each year 
thereafter. Most of the costs fall within budget function 370 
and other budget functions that procure goods and services. If 
the bill is enacted prior to fiscal year 2008 and necessary 
amounts are appropriated near the start of each fiscal year 
thereafter, the five year cost of the bill reported by the 
Committee on Small Business from 2008 to 2012 would be $10.5 
million. The bill as reported by the Committee on Oversight and 
Government Reform may reduce those cost due to differences in 
bundling and goaling requirements.

         Changes in Existing Law Made by the Bill, as Reported

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

                           SMALL BUSINESS ACT




           *       *       *       *       *       *       *
  Sec. 3. (a)(1) * * *

           *       *       *       *       *       *       *

  (5) Recertification.--
          (A) In general.--If a business concern is awarded a 
        contract because of a standard by which it is 
        determined to be a small business concern, and the 
        business concern is close to exceeding that standard at 
        the time the award is made, then the business concern 
        must, annually after the date of the award, recertify 
        to the agency awarding the contract whether it meets 
        that standard.
          (B) ``Close to exceeding''.--For purposes of 
        subparagraph (A), a business concern is close to 
        exceeding--
                  (i) a number-of-employees standard if the 
                number of employees of the business concern is 
                95 percent or more of the maximum number of 
                employees allowed under the standard; and
                  (ii) a dollar-volume-of-business standard if 
                the dollar volume of business is 80 percent or 
                more of the maximum dollar volume allowed under 
                the standard.
  (6) Registry.--For a business concern to be awarded a 
contract because of a standard by which it is determined to be 
a small business concern, the business concern must, annually 
after the end of the fiscal year used by the business concern, 
update its listing in the Central Contractor Registry.

           *       *       *       *       *       *       *

  [(o) Definitions of Bundling of Contract Requirements and 
Related Terms.--In this Act:
          [(1) Bundled contract.--The term ``bundled contract'' 
        means a contract that is entered into to meet 
        requirements that are consolidated in a bundling of 
        contract requirements.
          [(2) Bundling of contract requirements.--The term 
        ``bundling of contract requirements'' means 
        consolidating 2 or more procurement requirements for 
        goods or services previously provided or performed 
        under separate smaller contracts into a solicitation of 
        offers for a single contract that is likely to be 
        unsuitable for award to a small-business concern due 
        to--
                  [(A) the diversity, size, or specialized 
                nature of the elements of the performance 
                specified;
                  [(B) the aggregate dollar value of the 
                anticipated award;
                  [(C) the geographical dispersion of the 
                contract performance sites; or
                  [(D) any combination of the factors described 
                in subparagraphs (A), (B), and (C).
          [(3) Separate smaller contract.--The term ``separate 
        smaller contract'', with respect to a bundling of 
        contract requirements, means a contract that has been 
        performed by 1 or more small business concerns or was 
        suitable for award to 1 or more small business 
        concerns.]
  (o) Definitions of Bundling of Contract Requirements and 
Related Terms.--For purposes of this Act:
          (1) Bundled contract.--
                  (A) In general.--The term ``bundled 
                contract'' means a contract or order that is 
                entered into to meet procurement requirements 
                that are consolidated in a bundling of contract 
                requirements, without regard to its designation 
                by the procuring agency or whether a study of 
                the effects of the solicitation on civilian or 
                military personnel has been made.
                  (B) Exceptions.--The term does not include--
                          (i) a contract or order with an 
                        aggregate dollar value below the dollar 
                        threshold specified in paragraph (4); 
                        or
                          (ii) a contract or order that is 
                        entered into to meet procurement 
                        requirements, all of which are exempted 
                        requirements under paragraph (5).
          (2) Bundling of contract requirements.--
                  (A) In general.--The term ``bundling of 
                contract requirements'' means the use of any 
                bundling methodology to satisfy 2 or more 
                procurement requirements for goods or services, 
                including any construction services, previously 
                supplied or performed under separate smaller 
                contracts or orders that is likely to be 
                unsuitable for award to a small business 
                concern due to--
                          (i) the diversity, size, or 
                        specialized nature of the elements of 
                        the performance specified;
                          (ii) the aggregate dollar value of 
                        the anticipated award;
                          (iii) the geographical dispersion of 
                        the contract or order performance 
                        sites; or
                          (iv) any combination of the factors 
                        described in clauses (i), (ii), and 
                        (iii).
                  (B) Inclusion of new features or functions.--
                A combination of contract requirements that 
                would meet the definition of a bundling of 
                contract requirements but for the addition of a 
                procurement requirement with at least one new 
                good or service shall be considered to be a 
                bundling of contract requirements unless the 
                new features or functions substantially 
                transform the goods or services previously 
                performed.
                  (C) Exceptions.--The term does not include--
                          (i) the use of a bundling methodology 
                        for an anticipated award with an 
                        aggregate dollar value below the dollar 
                        threshold specified in paragraph (5); 
                        or
                          (ii) the use of a bundling 
                        methodology to meet procurement 
                        requirements, all of which are exempted 
                        requirements under paragraph (6).
          (3) Bundling methodology.--The term ``bundling 
        methodology'' means--
                  (A) a solicitation to obtain offers for a 
                single contract or order, or a multiple award 
                contract or order; or
                  (B) a solicitation of offers for the issuance 
                of a task or a delivery order under an existing 
                single or multiple award contract or order.
          (4) Separate smaller contract.--The term ``separate 
        smaller contract'', with respect to bundling of 
        contract requirements, means a contract or order that 
        has been performed by 1 or more small business concerns 
        or was suitable for award to 1 or more small business 
        concerns.
          (5) Dollar threshold.--The term ``dollar threshold'' 
        means--
                  (A) $65,000,000, if solely for construction 
                services; and
                  (B) $5,000,000, in all other cases.
          (6) Exempted requirements.--The term ``exempted 
        requirement'' means a procurement requirement solely 
        for items that are not commercial items (as the term 
        ``commercial item'' is defined in section 4(12) of the 
        Office of Federal Procurement Policy Act (41 U.S.C. 
        403(12)).
          (7) Procurement requirement.--The term ``procurement 
        requirement'' means a determination by an agency that a 
        specified good or service is needed to satisfy the 
        mission of the agency.

           *       *       *       *       *       *       *

  Sec. 8.(a) * * *

           *       *       *       *       *       *       *

  (d)(1) * * *

           *       *       *       *       *       *       *

  (12) In carrying out this subsection, the Administrator shall 
require each prime contractor to report small business 
subcontract usage at all tiers based on the percentage of the 
total dollar amount of the contract award.
  (13) In carrying out this subsection, the Administrator shall 
develop and maintain a password-protected database that will 
enable the Administration to assist small businesses in 
marketing to large corporations that have not achieved their 
small business goals.

           *       *       *       *       *       *       *

  Sec. 15. (a) To effectuate the purposes of this Act, small-
business concerns within the meaning of this Act shall receive 
any award or contract or any part thereof, and be awarded any 
contract for the sale of Government property, as to which it is 
determined by the Administration and the contracting 
procurement or disposal agency (1) to be in the interest of 
maintaining or mobilizing the Nation's full productive 
capacity, (2) to be in the interest of war or national defense 
programs, (3) to be in the interest of assuring that a fair 
proportion of the total purchases and contracts for property 
and services for the Government in each industry category are 
placed with small-business concerns, or (4) to be in the 
interest of assuring that a fair proportion of the total sales 
of Government property be made to small-business concerns; but 
nothing contained in this Act shall be construed to change any 
preferences or priorities established by law with respect to 
the sale of electrical power or other property by the 
Government or any agency thereof. These determinations may be 
made for individual awards or contracts or for classes of 
awards or contracts. If a proposed procurement includes in its 
statement of work goods or services currently being performed 
by a small business, and if the proposed procurement is in a 
quantity or estimated dollar value the magnitude of which 
renders small business prime contract participation unlikely, 
or if a proposed procurement for construction seeks to package 
or consolidate discrete construction projects, or the 
solicitation involves an unnecessary or unjustified bundling of 
contract requirements, as determined by the Administration, the 
Procurement Activity shall provide a copy of the proposed 
procurement to the Procurement Activity's Small Business 
Procurement Center Representative at least 30 days prior to the 
solicitation's issuance along with a statement explaining (1) 
why the proposed acquisition cannot be divided into reasonably 
small lots (not less than economic production runs) to permit 
offers on quantities less than the total requirement, [(2) why 
delivery schedules] (2) the names, addresses and size of the 
incumbent contract holders; (3) a description of the industries 
that might be interested in bidding on the contract 
requirements; (4) the number of small businesses listed in the 
industry categories that could be excluded from future bidding 
if the contract is combined or packaged; (5) why delivery 
schedules cannot be established on a realistic basis that will 
encourage small business participation to the extent consistent 
with the actual requirements of the Government, [(3) why the 
proposed acquisition] (6) why the proposed acquisition cannot 
be offered so as to make small business participation likely, 
[(4) why construction] (7) why construction cannot be procured 
as separate discrete projects, or [(5) why the agency] (8) why 
the agency has determined that the bundled contract (as defined 
in section 3(o)) is necessary and [justified.] justified. The 
statement shall also set forth the proposed procurement 
strategy required by subsection (e) and, if applicable, the 
specifications required by subsection (e)(3). The statement 
shall be made available to the public, including through 
dissemination in the Federal contracting opportunities 
database, concurrently with the issuance of the solicitation. 
The thirty-day notification process shall occur concurrently 
with other processing steps required prior to issuance of the 
solicitation. Within 15 days after receipt of the proposed 
procurement and accompanying statement, if the Procurement 
Center Representative believes that the procurement as proposed 
will render small business prime contract participation 
unlikely, the Representative shall recommend to the Procurement 
Activity alternative procurement methods which would increase 
small business prime contracting opportunities. [Whenever the 
Administration and the contracting procurement agency fail to 
agree, the matter shall be submitted for determination to the 
Secretary or the head of the appropriate department or agency 
by the Administrator.] If no notification of the procurement 
and accompanying statement is received, but the Administrator 
determines that there is cause to believe the contract combines 
requirements or a contract (single or multiple award) or task 
or delivery order for construction services or includes 
unjustified bundling, then the Administrator may request that 
such a statement of work goods or services be completed by the 
procurement activity and sent to the Procurement Center 
Representative and the solicitation process postponed for 10 
days to allow the Administrator to review the statement and 
make recommendations as described in this section before the 
procurement is continued. If a small business concern would be 
adversely affected, directly or indirectly, by the procurement 
as proposed, and that small business concern or a trade 
association on behalf of that small business concern so 
requests, the Administrator may, in the Administrator's 
discretion, take action to further the interests of that small 
business concern. Whenever the Administration and the 
contracting procurement agency fail to agree, the Administrator 
shall submit the matter to the head of the agency for a 
determination. The head of the agency shall provide a written 
response to the Administrator. A copy of such response shall 
also be provided to the Committees on Small Business of the 
House of Representatives and Senate, the Committee on Oversight 
and Government Reform of the House of Representatives, and the 
Committee on Homeland Security and Governmental Affairs of the 
Senate. For purposes of clause (3) of the first sentence of 
this subsection, an industry category is a discrete group of 
similar goods and services. Such groups shall be determined by 
the Administration in accordance with the definition of a 
``United States industry'' under the North American Industry 
Classification System, as established by the Office of 
Management and Budget, except that the Administration shall 
limit such an industry category to a greater extent than 
provided under such classification codes if the Administration 
receives evidence indicating that further segmentation for 
purposes of this paragraph is warranted due to special capital 
equipment needs or special labor or geographic requirements or 
to recognize a new industry. A market for goods or services may 
not be segmented under the preceding sentence due to geographic 
requirements unless the Government typically designates the 
area where work for contracts for such goods or services is to 
be performed and Government purchases comprise the major 
portion of the entire domestic market for such goods or 
services and, due to the fixed location of facilities, high 
mobilization costs, or similar economic factors, it is 
unreasonable to expect competition from business concerns 
located outside of the general areas where such concerns are 
located. A contract may not be awarded under this subsection if 
the award of the contract would result in a cost to the 
awarding agency which exceeds a fair market price.

           *       *       *       *       *       *       *

  (g)(1) [The President shall annually establish Government-
wide goals for procurement contracts] The President shall 
before the close of each fiscal year establish new Government-
wide procurement goals for the following fiscal year for 
procurement contracts awarded to small business concerns, small 
business concerns owned and controlled by service disabled 
veterans, qualified HUBZone small business concerns, small 
business concerns owned and controlled by socially and 
economically disadvantaged individuals, and small business 
concerns owned and controlled by women. The Government-wide 
goal for participation by small business concerns shall be 
established at not less than [23 percent] 25 percent of the 
total value of all prime contract awards for each fiscal year. 
The Government-wide goal for participation by small business 
concerns owned and controlled by service-disabled veterans 
shall be established at not less than 3 percent of the total 
value of all prime contract and subcontract awards for each 
fiscal year. The Governmentwide goal for participation by 
qualified HUBZone small business concerns shall be established 
at not less than 1 percent of the total value of all prime 
contract awards for fiscal year 1999, not less than 1.5 percent 
of the total value of all prime contract awards for fiscal year 
2000, not less than 2 percent of the total value of all prime 
contract awards for fiscal year 2001, not less than 2.5 percent 
of the total value of all prime contract awards for fiscal year 
2002, and not less than 3 percent of the total value of all 
prime contract awards for fiscal year 2003 and each fiscal year 
thereafter. The Government-wide goal for participation by small 
business concerns owned and controlled by socially and 
economically disadvantaged individuals shall be established at 
not less than [5 percent] 8 percent of the total value of all 
prime contract and subcontract awards for each fiscal year. The 
Government-wide goal for participation by small business 
concerns owned and controlled by women shall be established at 
not less than [5 percent] 8 percent of the total value of all 
prime contract and subcontract awards for each fiscal year. 
Notwithstanding the Government-wide goal, each agency shall 
have an annual goal that presents, for that agency, the maximum 
practicable opportunity for small business concerns, small 
business concerns owned and controlled by service-disabled 
veterans, qualified HUBZone small business concerns, small 
business concerns owned and controlled by socially and 
economically disadvantaged individuals, and small business 
concerns owned and controlled by women to participate in the 
performance of contracts let by such agency. The Administration 
and the Administrator of the Office of Federal Procurement 
Policy shall, when exercising their authority pursuant to 
paragraph (2), insure that the cumulative annual prime contract 
goals for all agencies meet or exceed the annual Government-
wide prime contract goal established by the President pursuant 
to this paragraph.

           *       *       *       *       *       *       *

  (4) For purposes of this subsection and subsection (h), a 
small business concern shall be counted toward one additional 
category goal only, even if that small business concern 
otherwise qualifies under more than one category goal. In this 
paragraph, the term ``category goal'' means a goal described in 
paragraph (2).
  (5) Before the beginning of each fiscal year, the head of 
each Federal agency shall submit to the Administrator of the 
Small Business Administration and to Congress a detailed plan 
explaining how the agency intends to meet the small business 
goals under this subsection that apply to that agency for that 
fiscal year.
  (h)(1) * * *

           *       *       *       *       *       *       *

  (4) At the conclusion of each fiscal year, the head of each 
Federal agency shall submit to Congress a report specifying the 
percentage of contracts awarded by that agency for that fiscal 
year that were awarded to small business concerns. If the 
percentage is less than 25 percent, the head of the agency 
shall, in the report, explain why the percentage is less than 
25 percent and what will be done to ensure that the percentage 
for the following fiscal year will not be less than 25 percent.

           *       *       *       *       *       *       *

  (j)(1) Each contract for the purchase of goods and services 
that has an anticipated value greater than $2,500 but not 
greater than [$100,000] the Simplified Acquisition Threshold 
shall be reserved exclusively for small business concerns 
unless the contracting officer is unable to obtain offers from 
two or more small business concerns that are competitive with 
market prices and are competitive with regard to the quality 
and delivery of the goods or services being purchased.

           *       *       *       *       *       *       *

  (3) Nothing in paragraph (1) shall be construed as precluding 
an award of a contract with a value not greater than $100,000 
under the authority of [subsection (a) of section 8] section 8, 
31, or 36 of this Act, section 2323 of title 10, United States 
Code, section 712 of the Business Opportunity Development 
Reform Act of 1988 (Public Law 100-656; 15 U.S.C. 644 note), or 
section 7102 of the Federal Acquisition Streamlining Act of 
1994.

           *       *       *       *       *       *       *