Strengthening Subcontracting for Small Businesses Act of 2022
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Summary
House Report 117–332 of the 117th Congress, 2d Session, submitted May 17, 2022 by Ms. Velázquez from the Committee on Small Business to accompany H.R. 7694, the Strengthening Subcontracting for Small Businesses Act of 2022. The committee reports the bill favorably without amendment and recommends that it pass. The report states that the bill extends the requirement that agencies consider prior compliance with subcontracting plans when evaluating an offeror's past performance to all contracts that must include a subcontracting plan and are awarded using negotiated procedures. It describes the committee's markup on May 11, 2022, where the bill was ordered reported by voice vote, and a section-by-section analysis of the amendments to Section 8(d)(4)(G) of the Small Business Act. The report closes with a Changes in Existing Law section reprinting Section 8 of the Small Business Act.
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“Strengthening Subcontracting for Small Businesses Act of 2022.”
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117TH CONGRESS REPORT
" HOUSE OF REPRESENTATIVES !
2d Session 117–332
STRENGTHENING SUBCONTRACTING FOR SMALL
BUSINESSES ACT OF 2022
MAY 17, 2022.—Committed to the Committee of the Whole House on the State of
the Union and ordered to be printed
Ms. VELÁZQUEZ, from the Committee on Small Business,
submitted the following
R E P O R T
[To accompany H.R. 7694]
The Committee on Small Business, to whom was referred the bill
(H.R. 7694) to amend the Small Business Act to modify the require-
ments relating to the evaluation of the subcontracting plans of cer-
tain offerors, and for other purposes, having considered the same,
reports favorably thereon without amendment and recommends
that the bill do pass.
CONTENTS
Page
I. Purpose and Bill Summary ........................................................................... 1
II. Background and Need for Legislation .......................................................... 2
III. Hearings ......................................................................................................... 2
IV. Committee Consideration .............................................................................. 3
V. Committee Votes ............................................................................................ 3
VI. Section-by-Section for H.R. 7694 .................................................................. 3
VII. Congressional Budget Cost Estimate ........................................................... 3
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures 3
IX. Committee Oversight Findings and Recommendations .............................. 4
X. Statement of General Performance Goals and Objectives .......................... 4
XI. Duplication of Federal Programs .................................................................. 4
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff Ben-
efits .............................................................................................................. 4
XIII. Federal Mandates Statement ....................................................................... 4
XIV. Federal Advisory Committee Statement ...................................................... 4
XV. Applicability to Legislative Branch .............................................................. 4
XVI. Changes in Existing Law Made by the Bill, as Reported ........................... 5
I. PURPOSE AND BILL SUMMARY
The purpose of H.R. 7694, the ‘‘Strengthening Subcontracting for
Small Businesses Act of 2022’’, is to encourage compliance with
29–006
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subcontracting plans by extending the requirement that an agency
must consider prior compliance with these plans when evaluating
an offeror’s past performance to all contracts that must include a
subcontracting plan and are awarded using negotiated procedures.
II. BACKGROUND AND NEED FOR LEGISLATION
H.R. 7694 was introduced by Representatives Pete Stauber (R–
MN) and Kweisi Mfume (D–MD) on May 10, 2022.
The Small Business Act establishes that small businesses shall
have the maximum practicable opportunity to participate in the
performance of Federal contracts, either as prime contractors or
subcontractors.1 For many small businesses, particularly nascent
firms, subcontracting is the best and only method to gain a foothold
into the federal marketplace.
To facilitate the subcontracting process, Section 8(d)(4) of the Act
and acquisition regulations require prospective contractors to sub-
mit subcontracting plans in contracts that exceed $750,000 ($1.5
million forconstruction), have subcontracting possibilities and will
be awarded using negotiated procedures.2 Prime contractors use
these subcontracting plans to establish subcontracting goals for
small businesses and for socioeconomic categories of small busi-
nesses. If the subcontracting plan is approved by the contracting of-
ficer, the prime contractor must engage in good faith efforts to com-
ply with it. The contractor is also required to submit periodic re-
ports to the Electronic Subcontracting Reporting System (eSRS)
during the course of the contract, detailing its progress in meeting
the subcontracting plan.
Failure to engage in good faith efforts to comply with the subcon-
tracting plan may result in the imposition of liquidated damages.3
However, this standard is ambiguous and can be interpreted loose-
ly, allowing contractors to not face any consequences if they fail to
meet the plan, all of which is to the detriment of small business
concerns that rely on these subcontracting opportunities for work.
Thus, additional mechanisms must be created to encourage con-
tractors to meet their subcontracting plans.
III. HEARINGS
On October 13, 2021, the Subcommittee on Contracting and In-
frastructure held a hearing on growing the small business supplier
base in government contracting. Mr. Victor P. Holt, President, V
Tech Solutions, Inc., testified at the hearing on behalf of the
HUBZone Contractors National Council. In his testimony, Mr. Holt
stated that the Committee should look for ways to reward prime
contractors that adhere to subcontracting plans and penalize those
that do not. Furthermore, he urged the Committee to look at incen-
tives to spur subcontracting compliance since subcontracting is
often the only way for small businesses to enter the federal mar-
ketplace.
1 15 U.S.C. § 637(d)(1)
2 15 U.S.C. § § 637(d)(4), FAR 19.702(a)(1)(i)
3 15 U.S.C. § 637(d)(4)(F)
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IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on May 11, 2022, and ordered H.R. 7694 fa-
vorably reported to the House of Representatives. During the
markup, no amendments were offered.
V. COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of Representa-
tives requires the Committee to list the recorded votes on the mo-
tion to report legislation and amendments thereto. The Committee
voted by voice vote to favorably report H.R. 7694 to the House at
11:13 A.M.
VI. SECTION-BY-SECTION FOR H.R. 7694
Section 1. Short title
This Act may be cited as the ‘‘Strengthening Subcontracting for
Small Businesses Act of 2022’’.
Section 2. Evaluation of subcontracting plans
This section amends Section 8(d)(4)(G) of the Small Business Act
to strike the language in this section that limits the scope of the
provision. Currently, Section 8(d)(4)(G) requires an agency to con-
sider prior compliance with subcontracting plans when evaluating
an offeror’s past performance in negotiated acquisitions. However,
this section is only applicable to the award of ‘‘bundled’’ contracts
that, pursuant to the head of a Federal agency, provide significant
small business subcontracting opportunities. The new language in
this section expands the scope of subparagraph (G), making it ap-
plicable to all contracts that are required to have a statutory small
business subcontracting plan and are awarded using negotiated
procedures.
The section further amends Section 8(d)(4)(G)(i) by striking the
phrase ‘‘the rate provided under the subcontracting plan for small
business participation’’. The term ‘‘rate’’ is confusing and could be
misinterpreted as referring to price. This section replaces this lan-
guage with more precise language describing the actual intent of
this subsection, requiring that one of the factors for evaluating of-
fers shall be based on the contractor’s proposed utilization of small
business concerns as subcontractors.
VII. CONGRESSIONAL BUDGET COST ESTIMATE
The Committee has requested but not received a cost estimate
from the Director of the Congressional Budget Office.
VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX
EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House
of Representatives and section 308(a) of the Congressional Budget
Act of 1974, the Committee provides the following opinion and esti-
mate with respect to new budget authority, entitlement authority,
and tax expenditures. While the Committee has not received an es-
timate of new budget authority contained in the cost estimate pre-
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4
pared by the Director of the Congressional Budget Office pursuant
to Sec. 402 of the Congressional Budget Act of 1974, the Committee
does not believe that there will be any additional costs attributable
to this legislation.
IX. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS
In accordance with clause 3(c)(1) of rule XIII and clause 2(b)(1)
of rule X of the Rules of the House of Representatives, the over-
sight findings and recommendations of the Committee on Small
Business with respect to the subject matter contained in the H.R.
7694 are incorporated into the descriptive portions of this report.
X. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirements of clause 3(c)(4) of rule XIII of
the Rules of the House of Representatives, the performance goals
and objectives of H.R. 7694 are to require agencies to evaluate
prior compliance with subcontracting plans as part of assessing
past performance, when considering proposals for a contract that
must include a subcontracting plan.
XI. DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the House
of Representatives, no provision of H.R. 7694 is known to be dupli-
cative of another Federal program, including any program that was
included in a report to Congress pursuant to section 21 of Public
Law 111–139 or the most recent Catalog of Federal Domestic As-
sistance.
XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND
LIMITED TARIFF BENEFITS
With respect to clause 9 of rule XXI of the Rules of the House
of Representatives, the Committee finds that the bill does not con-
tain any congressional earmarks, limited tax benefits, or limited
tariff benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI of
the Rules of the House of Representatives.
XIII. FEDERAL MANDATES STATEMENT
An estimate of Federal mandates prepared by the Director of the
Congressional Budget Office pursuant to section 423 of the Un-
funded Mandates Reform Act was not made available to the Com-
mittee in time for the filing of this report. The Chairwoman of the
Committee shall cause such estimate to be printed in the Congres-
sional Record upon its receipt by the Committee.
XIV. FEDERAL ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b) of the
Federal Advisory Committee Act were created by this legislation.
XV. APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to the
terms and conditions of employment or access to public services or
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accommodations within the meaning of section 102(b)(3) of the Con-
gressional Accountability Act.
XVI. 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, as shown as follows: existing law proposed to be omit-
ted is enclosed in black brackets, new matter is printed in italic,
and existing law in which no change is proposed is shown in
roman:
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 omit-
ted is enclosed in black brackets, new matter is printed in italics,
and existing law in which no change is proposed is shown in
roman):
SMALL BUSINESS ACT
* * * * * * *
SEC. 8. (a)(1) It shall be the duty of the Administration and it
is hereby empowered, whenever it determines such action is nec-
essary or appropriate—
(A) to enter into contracts with the United States Govern-
ment and any department, agency, or officer thereof having
procurement powers obligating the Administration to furnish
articles, equipment, supplies, services, or materials to the Gov-
ernment or to perform construction work for the Government.
In any case in which the Administration certifies to any officer
of the Government having procurement powers that the Ad-
ministration is competent and responsible to perform any spe-
cific Government procurement contract to be let by any such
officer, such officer shall be authorized in his discretion to let
such procurement contract to the Administration upon such
terms and conditions as may be agreed upon between the Ad-
ministration and the procurement officer. Whenever the Ad-
ministration and such procurement officer 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. Not later than 5 days from the date the Admin-
istration is notified of a procurement officer’s adverse decision,
the Administration may notify the contracting officer of the in-
tent to appeal such adverse decision, and within 15 days of
such date the Administrator shall file a written request for a
reconsideration of the adverse decision with the Secretary of
the department or agency head. For the purposes of this sub-
paragraph, a procurement officer’s adverse decision includes a
decision not to make available for award pursuant to this sub-
section a particular procurement requirement or the failure to
agree on the terms and conditions of a contract to be awarded
noncompetitively under the authority of this subsection. Upon
receipt of the notice of intent to appeal, the Secretary of the
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6
department or the agency head shall suspend further action re-
garding the procurement until a written decision on the Ad-
ministrator’s request for reconsideration has been issued by
such Secretary or agency head, unless such officer makes a
written determination that urgent and compelling cir-
cumstances which significantly affect interests of the United
States will not permit waiting for a reconsideration of the ad-
verse decision. If the Administrator’s request for reconsider-
ation is denied, the Secretary of the department or agency
head shall specify the reasons why the selected firm was deter-
mined to be incapable to perform the procurement require-
ment, and the findings supporting such determination, which
shall be made a part of the contract file for the requirement.
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;
(B) to arrange for the performance of such procurement con-
tracts by negotiating or otherwise letting subcontracts to so-
cially and economically disadvantaged small business concerns
for construction work, services, or the manufacture, supply, as-
sembly of such articles, equipment, supplies, materials, or
parts thereof, or servicing or processing in connection there-
with, or such management services as may be necessary to en-
able the Administration to perform such contracts;
(C) to make an award to a small business concern owned
and controlled by socially and economically disadvantaged
individuals which has completed its period of Program
Participation as prescribed by section 7(j)(15), if—
(i) the contract will be awarded as a result of an
offer (including price) submitted in response to a pub-
lished solicitation relating to a competition conducted
pursuant to subparagraph (D); and
(ii) the prospective contract awardee was a Program
Participant eligible for award of the contract on the
date specified for receipt of offers contained in the con-
tract solicitation; and
(D)(i) A contract opportunity offered for award pursuant to
this subsection shall be awarded on the basis of competition re-
stricted to eligible Program Participants if—
(I) there is a reasonable expectation that at least two eli-
gible Program Participants will submit offers and that
award can be made at a fair market price, and
(II) the anticipated award price of the contract (including
options) will exceed $7,000,000 in the case of a contract op-
portunity assigned a standard industrial classification code
for manufacturing and $3,000,000 (including options) in
the case of all other contract opportunities.
(ii) The Associate Administrator for Minority Small Business
and Capital Ownership Development, on a nondelegable basis,
is authorized to approve a request from an agency to award a
contract opportunity under this subsection on the basis of a
competition restricted to eligible Program Participants even if
the anticipated award price is not expected to exceed the dollar
amounts specified in clause (i)(II). Such approvals shall be
granted only on a limited basis.
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(2) Notwithstanding subsections (a) and (c) of the first section of
the Act entitled ‘‘An Act requiring contracts for the construction, al-
teration, and repair of any public building or public work of the
United States to be accompanied by a performance bond protecting
the United States and by additional bond for the protection of per-
sons furnishing material and labor for the construction, alteration,
or repair of said public buildings or public work,’’ approved August
24, 1935 (49 Stat. 793), no small business concern shall be required
to provide any amount of any bond as a condition or receiving any
subcontract under this subsection if the Administrator determines
that such amount is inappropriate for such concern in performing
such contract: Provided, That the Administrator shall exercise the
authority granted by the paragraph only if—
(A) the Administration takes such measures as it deems ap-
propriate for the protection of persons furnishing materials and
labor to a small business receiving any benefit pursuant to this
paragraph;
(B) the Administration assists, insofar as practicable, a small
business receiving the benefits of this paragraph to develop,
within a reasonable period of time, such financial and other ca-
pability as may be needed to obtain such bonds as the Admin-
istration may subsequently require for the successful comple-
tion of any program conducted under the authority of this sub-
section;
(C) the Administration finds that such small business is un-
able to obtain the requisite bond or bonds from a surety and
that no surety is willing to issue such bond or bonds subject
to the guarantee provisions of Title IV of the Small Business
Investment Act of 1958; and
(D) that small business is determined to be a start-up con-
cern and such concern has not been participating in any pro-
gram conducted under the authority of this subsection for a pe-
riod exceeding one year.
The authority to waive bonds provided in this paragraph (2) may
not be exercised after September 30, 1988.
(3)(A) Any Program Participant selected by the Administration to
perform a contract to be let noncompetitively pursuant to this sub-
section shall, when practicable, participate in any negotiation of
the terms and conditions of such contract.
(B)(i) For purposes of paragraph (1) a ‘‘fair market price’’ shall
be determined by the agency offering the procurement requirement
to the Administration, in accordance with clauses (ii) and (iii).
(ii) The estimate of a current fair market price for a new procure-
ment requirement, or a requirement that does not have a satisfac-
tory procurement history, shall be derived from a price or cost
analysis. Such analysis may take into account prevailing market
conditions, commercial prices for similar products or services, or
data obtained from any other agency. Such analysis shall consider
such cost or pricing data as may be timely submitted by the Ad-
ministration.
(iii) The estimate of a current fair market price for a procure-
ment requirement that has a satisfactory procurement history shall
be based on recent award prices adjusted to insure comparability.
Such adjustments shall take into account differences in quantities,
performance times, plans, specifications, transportation costs, pack-
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aging and packing costs, labor and materials costs, overhead costs,
and any other additional costs which may be deemed appropriate.
(C) An agency offering a procurement requirement for potential
award pursuant to this subsection shall, upon the request of the
Administration, promptly submit to the Administration a written
statement detailing the method used by the agency to estimate the
current fair market price for such contract, identifying the informa-
tion, studies, analyses, and other data used by such agency. The
agency’s estimate of the current fair market price (and any sup-
porting data furnished to the Administration) shall not be disclosed
to any potential offeror (other than the Administration).
(D) A small business concern selected by the Administration to
perform or negotiate a contract to be let pursuant to this sub-
section may request the Administration to protest the agency’s esti-
mate of the fair market price for such contract pursuant to para-
graph (1)(A).
(4)(A) For purposes of this section, the term ‘‘socially and eco-
nomically disadvantaged small business concern’’ means any small
business concern which meets the requirements of subparagraph
(B) and—
(i) which is at least 51 per centum unconditionally owned
by—
(I) one or more socially and economically disadvantaged
individuals,
(II) an economically disadvantaged Indian tribe (or a
wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian or-
ganization, or
(ii) in the case of any publicly owned business, at least 51
per centum of the stock of which is unconditionally owned by—
(I) one or more socially and economically disadvantaged
individuals,
(II) an economically disadvantaged Indian tribe (or a
wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian or-
ganization.
(B) A small business concern meets the requirements of this sub-
paragraph if the management and daily business operations of
such small business concern are controlled by one or more—
(i) socially and economically disadvantaged individuals de-
scribed in subparagraph (A)(i)(I) or subparagraph (A)(ii)(I),
(ii) members of an economically disadvantaged Indian tribe
described in subparagraph (A)(i)(II) or subparagraph (A)(ii)(II),
or
(iii) Native Hawaiian organizations described in subpara-
graph (A)(i)(III) or subparagraph (A)(ii)(III).
(C) Each Program Participant shall certify, on an annual basis,
that it meets the requirements of this paragraph regarding owner-
ship and control.
(5) Socially disadvantaged individuals are those who have been
subjected to racial or ethnic prejudice or cultural bias because of
their identity as a member of a group without regard to their indi-
vidual qualities.
(6)(A) Economically disadvantaged individuals are those socially
disadvantaged individuals whose ability to compete in the free en-
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9
terprise system has been impaired due to diminished capital and
credit opportunities as compared to others in the same business
area who are not socially disadvantaged. In determining the degree
of diminished credit and capital opportunities the Administration
shall consider, but not be limited to, the assets and net worth of
such socially disadvantaged individual. In determining the eco-
nomic disadvantage of an Indian tribe, the Administration shall
consider, where available, information such as the following: the
per capita income of members of the tribe excluding judgment
awards, the percentage of the local Indian population below the
poverty level, and the tribe’s access to capital markets.
(B) Each Program Participant shall annually submit to the Ad-
ministration—
(i) a personal financial statement for each disadvantaged
owner;
(ii) a record of all payments made by the Program Partici-
pant to each of its disadvantaged owners or to any person or
entity affiliated with such owners; and
(iii) such other information as the Administration may deem
necessary to make the determinations required by this para-
graph.
(C)(i) Whenever, on the basis of information provided by a Pro-
gram Participant pursuant to subparagraph (B) or otherwise, the
Administration has reason to believe that the standards to estab-
lish economic disadvantage pursuant to subparagraph (A) have not
been met, the Administration shall conduct a review to determine
whether such Program Participant and its disadvantaged owners
continue to be impaired in their ability to compete in the free en-
terprise system due to diminished capital and credit opportunities
when compared to other concerns in the same business area, which
are not socially disadvantaged.
(ii) If the Administration determines, pursuant to such review,
that a Program Participant and its disadvantaged owners are no
longer economically disadvantaged for the purpose of receiving as-
sistance under this subsection, the Program Participant shall be
graduated pursuant to section 7(j)(10)(G) subject to the right to a
hearing as provided for under paragraph (9).
(D)(i) Whenever, on the basis of information provided by a Pro-
gram Participant pursuant to subparagraph (B) or otherwise, the
Administration has reason to believe that the amount of funds or
other assets withdrawn from a Program Participant for the per-
sonal benefit of its disadvantaged owners or any person or entity
affiliated with such owners may have been unduly excessive, the
Administration shall conduct a review to determine whether such
withdrawal of funds or other assets was detrimental to the achieve-
ment of the targets, objectives, and goals contained in such Pro-
gram Participant’s business plan.
(ii) If the Administration determines, pursuant to such review,
that funds or other assets have been withdrawn to the detriment
of the Program Participant’s business, the Administration shall—
(I) initiate a proceeding to terminate the Program Partici-
pant pursuant to section 7(j)(10)(F), subject to the right to a
hearing under paragraph (9); or
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(II) require an appropriate reinvestment of funds or other as-
sets and such other steps as the Administration may deem nec-
essary to ensure the protection of the concern.
(E) Whenever the Administration computes personal net worth
for any purpose under this paragraph, it shall exclude from such
computation—
(i) the value of investments that disadvantaged owners have
in their concerns, except that such value shall be taken into ac-
count under this paragraph when comparing such concerns to
other concerns in the same business area that are owned by
other than socially disadvantaged persons;
(ii) the equity that disadvantaged owners have in their pri-
mary personal residences, except that any portion of such eq-
uity that is attributable to unduly excessive withdrawals from
a Program Participant or a concern applying for program par-
ticipation shall be taken into account.
(7)(A) No small business concern shall be deemed eligible for any
assistance pursuant to this subsection unless the Administration
determines that with contract, financial, technical, and manage-
ment support the small business concern will be able to perform
contracts which may be awarded to such concern under paragraph
(1)(C) and has reasonable prospects for success in competing in the
private sector.
(B) Limitations established by the Administration in its regula-
tions and procedures restricting the award of contracts pursuant to
this subsection to a limited number of standard industrial classi-
fication codes in an approved business plan shall not be applied in
a manner that inhibits the logical business progression by a par-
ticipating small business concern into areas of industrial endeavor
where such concern has the potential for success.
(8) All determinations made pursuant to paragraph (5) with re-
spect to whether a group has been subjected to prejudice or bias
shall be made by the Administrator after consultation with the As-
sociate Administrator for Minority Small Business and Capital
Ownership Development. All other determinations made pursuant
to paragraphs (4), (5), (6), and (7) shall be made by the Associate
Administrator for Minority Small Business and Capital Ownership
Development under the supervision of, and responsible to, the Ad-
ministrator.
(9)(A) Subject to the provisions of subparagraph (E), the Admin-
istration, prior to taking any action described in subparagraph (B),
shall provide the small business concern that is the subject of such
action, an opportunity for a hearing on the record, in accordance
with chapter 5 of title 5, United States Code.
(B) The actions referred to in subparagraph (A) are—
(i) denial of program admission based upon a negative deter-
mination pursuant to paragraph (4), (5), or (6);
(ii) a termination pursuant to section 7(j)(10)(F);
(iii) a graduation pursuant to section 7(j)(10)(G); and
(iv) the denial of a request to issue a waiver pursuant to
paragraph (21)(B).
(C) The Administration’s proposed action, in any proceeding con-
ducted under the authority of this paragraph, shall be sustained
unless it is found to be arbitrary, capricious, or contrary to law.
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11
(D) A decision rendered pursuant to this paragraph shall be the
final decision of the Administration and shall be binding upon the
Administration and those within its employ.
(E) The adjudicator selected to preside over a proceeding con-
ducted under the authority of this paragraph shall decline to accept
jurisdiction over any matter that—
(i) does not, on its face, allege facts that, if proven to be true,
would warrant reversal or modification of the Administration’s
position;
(ii) is untimely filed;
(iii) is not filed in accordance with the rules of procedure
governing such proceedings; or
(iv) has been decided by or is the subject of an adjudication
before a court of competent jurisdiction over such matters.
(F) Proceedings conducted pursuant to the authority of this para-
graph shall be completed and a decision rendered, insofar as prac-
ticable, within ninety days after a petition for a hearing is filed
with the adjudicating office.
(10) The Administration shall develop and implement an out-
reach program to inform and recruit small business concerns to
apply for eligibility for assistance under this subsection. Such pro-
gram shall make a sustained and substantial effort to solicit appli-
cations for certification from small business concerns located in
areas of concentrated unemployment or underemployment or with-
in labor surplus areas and within States having relatively few Pro-
gram Participants and from small disadvantaged business concerns
in industry categories that have not substantially participated in
the award of contracts let under the authority of this subsection.
(11) To the maximum extent practicable, construction sub-
contracts awarded by the Administration pursuant to this sub-
section shall be awarded within the county or State where the
work is to be performed.
(12)(A) The Administration shall require each concern eligible to
receive subcontracts pursuant to this subsection to annually pre-
pare and submit to the Administration a capability statement.
Such statement shall briefly describe such concern’s various con-
tract performance capabilities and shall contain the name and tele-
phone number of the Business Opportunity Specialist assigned
such concern. The Administration shall separate such statements
by those primarily dependent upon local contract support and those
primarily requiring a national marketing effort. Statements pri-
marily dependent upon local contract support shall be disseminated
to appropriate buying activities in the marketing area of the con-
cern. The remaining statements shall be disseminated to the Direc-
tors of Small and Disadvantaged Business Utilization for the ap-
propriate agencies who shall further distribute such statements to
buying activities with such agencies that may purchase the types
of items or services described on the capability statements.
(B) Contracting activities receiving capability statements shall,
within 60 days after receipt, contact the relevant Business Oppor-
tunity Specialist to indicate the number, type, and approximate
dollar value of contract opportunities that such activities may be
awarding over the succeeding 12-month period and which may be
appropriate to consider for award to those concerns for which it has
received capability statements.
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(C) Each executive agency reporting to the Federal Procurement
Data System contract actions with an aggregate value in excess of
$50,000,000 in fiscal year 1988, or in any succeeding fiscal year,
shall prepare a forecast of expected contract opportunities or class-
es of contract opportunities for the next and succeeding fiscal years
that small business concerns, including those owned and controlled
by socially and economically disadvantaged individuals, are capable
of performing. Such forecast shall be periodically revised during
such year. To the extent such information is available, the agency
forecasts shall specify:
(i) The approximate number of individual contract opportuni-
ties (and the number of opportunities within a class).
(ii) The approximate dollar value, or range of dollar values,
for each contract opportunity or class of contract opportunities.
(iii) The anticipated time (by fiscal year quarter) for the
issuance of a procurement request.
(iv) The activity responsible for the award and administra-
tion of the contract.
(D) The head of each executive agency subject to the provisions
of subparagraph (C) shall within 10 days of completion furnish
such forecasts to—
(i) the Director of the Office of Small and Disadvantaged
Business Utilization established pursuant to section 15(k) for
such agency; and
(ii) the Administrator.
(E) The information reported pursuant to subparagraph (D) may
be limited to classes of items and services for which there are sub-
stantial annual purchases.
(F) Such forecasts shall be available to small business concerns.
(13) For purposes of this subsection, the term ‘‘Indian tribe’’
means any Indian tribe, band, nation, or other organized group or
community of Indians, including any Alaska Native village or re-
gional or village corporation (within the meaning of the Alaska Na-
tive Claims Settlement Act) which—
(A) is recognized as eligible for the special programs and
services provided by the United States to Indians because of
their status as Indians, or
(B) is recognized as such by the State in which such tribe,
band, nation, group, or community resides.
(14) LIMITATIONS ON SUBCONTRACTING.—A concern may not
be awarded a contract under this subsection as a small busi-
ness concern unless the concern agrees to satisfy the require-
ments of section 46.
(15) For purposes of this subsection, the term ‘‘Native Hawaiian
Organization’’ means any community service organization serving
Native Hawaiians in the State of Hawaii which—
(A) is a nonprofit corporation that has filed articles of incor-
poration with the director (or the designee thereof) of the Ha-
waii Department of Commerce and Consumer Affairs, or any
successor agency,
(B) is controlled by Native Hawaiians, and
(C) whose business activities will principally benefit such
Native Hawaiians.
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(16)(A) The Administration shall award sole source contracts
under this section to any small business concern recommended by
the procuring agency offering the contract opportunity if—
(i) the Program Participant is determined to be a responsible
contractor with respect to performance of such contract oppor-
tunity;
(ii) the award of such contract would be consistent with the
Program Participant’s business plan; and
(iii) the award of the contract would not result in the Pro-
gram Participant exceeding the requirements established by
section 7(j)(10)(I).
(B) To the maximum extent practicable, the Administration shall
promote the equitable geographic distribution of sole source con-
tracts awarded pursuant to this subsection.
(17)(A) An otherwise responsible business concern that is in com-
pliance with the requirements of subparagraph (B) shall not be de-
nied the opportunity to submit and have considered its offer for
any procurement contract, which contract has as its principal pur-
pose the supply of a product to be let pursuant to this subsection,
subsection (m), section 15(a), section 31, or section 36, solely be-
cause such concern is other than the actual manufacturer or proc-
essor of the product to be supplied under the contract.
(B) To be in compliance with the requirements referred to in sub-
paragraph (A), such a business concern shall—
(i) be primarily engaged in the wholesale or retail trade;
(ii) be a small business concern under the numerical size
standard for the Standard Industrial Classification Code as-
signed to the contract solicitation on which the offer is being
made;
(iii) be a regular dealer, as defined pursuant to section 35(a)
of title 41, United States Code (popularly referred to as the
Walsh-Healey Public Contracts Act), in the product to be of-
fered the Government or be specifically exempted from such
section by section 7(j)(13)(C); and
(iv) represent that it will supply the product of a domestic
small business manufacturer or processor, unless a waiver of
such requirement is granted—
(I) by the Administrator, after reviewing a determination
by the contracting officer that no small business manufac-
turer or processor can reasonably be expected to offer a
product meeting the specifications (including period for
performance) required of an offeror by the solicitation; or
(II) by the Administrator for a product (or class of prod-
ucts), after determining that no small business manufac-
turer or processor is available to participate in the Federal
procurement market.
(C) LIMITATION.—This paragraph shall not apply to a con-
tract that has as its principal purpose the acquisition of serv-
ices or construction.
(18)(A) No person within the employ of the Administration shall,
during the term of such employment and for a period of two years
after such employment has been terminated, engage in any activity
or transaction specified in subparagraph (B) with respect to any
Program Participant during such person’s term of employment, if
such person participated personally (either directly or indirectly) in
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14
decision-making responsibilities relating to such Program Partici-
pant or with respect to the administration of any assistance pro-
vided to Program Participants generally under this subsection, sec-
tion 7(j)(10), or section 7(a)(20).
(B) The activities and transactions prohibited by subparagraph
(A) include—
(i) the buying, selling, or receiving (except by inheritance) of
any legal or beneficial ownership of stock or any other owner-
ship interest or the right to acquire any such interest;
(ii) the entering into or execution of any written or oral
agreement (whether or not legally enforceable) to purchase or
otherwise obtain any right or interest described in clause (i);
or
(iii) the receipt of any other benefit or right that may be an
incident of ownership.
(C)(i) The employees designated in clause (ii) shall annually sub-
mit a written certification to the Administration regarding compli-
ance with the requirements of this paragraph.
(ii) The employees referred to in clause (i) are—
(I) regional administrators;
(II) district directors;
(III) the Associate Administrator for Minority Small Busi-
ness and Capital Ownership Development;
(IV) employees whose principal duties relate to the award of
contracts or the provision of other assistance pursuant to this
subsection or section 7(j)(10); and
(V) such other employees as the Administrator may deem ap-
propriate.
(iii) Any present or former employee of the Administration who
violates this paragraph shall be subject to a civil penalty, assessed
by the Attorney General, that shall not exceed 300 per centum of
the maximum amount of gain such employee realized or could have
realized as a result of engaging in those activities and transactions
prescribed by subparagraph (B).
(iv) In addition to any other remedy or sanction provided for
under law or regulation, any person who falsely certifies pursuant
to clause (i) shall be subject to a civil penalty under the Program
Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801–3812).
(19)(A) Any employee of the Administration who has authority to
take, direct others to take, recommend, or approve any action with
respect to any program or activity conducted pursuant to this sub-
section or section 7(j), shall not, with respect to any such action,
exercise or threaten to exercise such authority on the basis of the
political activity or affiliation of any party. Employees of the Ad-
ministration shall expeditiously report to the Inspector General of
the Administration any such action for which such employee’s par-
ticipation has been solicitated or directed.
(B) Any employee who willfully and knowingly violates subpara-
graph (A) shall be subject to disciplinary action, which may consist
of separation from service, reduction in grade, suspension, or rep-
rimand.
(C) Subparagraph (A) shall not apply to any action taken as a
penalty or other enforcement of a violation of any law, rule, or reg-
ulation prohibiting or restricting political activity.
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(D) The prohibitions of subparagraph (A), and remedial measures
provided for under subparagraphs (B) and (C) with regard to such
prohibitions, shall be in addition to, and not in lieu of, any other
prohibitions, measures or liabilities that may arise under any other
provision of law.
(20)(A) Small business concerns participating in the Program
under section 7(j)(10) and eligible to receive contracts pursuant to
this section shall semiannually report to their assigned Business
Opportunity Specialist the following:
(i) A listing of any agents, representatives, attorneys, ac-
countants, consultants, and other parties (other than employ-
ees) receiving compensation to assist in obtaining a Federal
contract for such Program Participant.
(ii) The amount of compensation received by any person list-
ed under clause (i) during the relevant reporting period and a
description of the activities performed in return for such com-
pensation.
(B) The Business Opportunity Specialist shall promptly review
and forward such report to the Associate Administrator for Minor-
ity Small Business and Capital Ownership Development. Any re-
port that raises a suspicion of improper activity shall be reported
immediately to the Inspector General of the Administration.
(C) The failure to submit a report pursuant to the requirements
of this subsection and applicable regulations shall be considered
‘‘good cause’’ for the initiation of a termination proceeding pursuant
to section 7(j)(10)(F).
(21)(A) Subject to the provisions of subparagraph (B), a contract
(including options) awarded pursuant to this subsection shall be
performed by the concern that initially received such contract. Not-
withstanding the provisions of the preceding sentence, if the owner
or owners upon whom eligibility was based relinquish ownership or
control of such concern, or enter into any agreement to relinquish
such ownership or control, such contract or option shall be termi-
nated for the convenience of the Government, except that no repur-
chase costs or other damages may be assessed against such con-
cerns due solely to the provisions of this subparagraph.
(B) The Administrator may, on a nondelegable basis, waive the
requirements of subparagraph (A) only if one of the following condi-
tions exist:
(i) When it is necessary for the owners of the concern to sur-
render partial control of such concern on a temporary basis in
order to obtain equity financing.
(ii) The head of the contracting agency for which the contract
is being performed certifies that termination of the contract
would severely impair attainment of the agency’s program ob-
jectives or missions;
(iii) Ownership and control of the concern that is performing
the contract will pass to another small business concern that
is a program participant, but only if the acquiring firm would
otherwise be eligible to receive the award directly pursuant to
subsection (a);
(iv) The individuals upon whom eligibility was based are no
longer able to exercise control of the concern due to incapacity
or death; or
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16
(v) When, in order to raise equity capital, it is necessary for
the disadvantaged owners of the concern to relinquish owner-
ship of a majority of the voting stock of such concern, but only
if—
(I) such concern has exited the Capital Ownership Devel-
opment Program;
(II) the disadvantaged owners will maintain ownership
of the largest single outstanding block of voting stock (in-
cluding stock held by affiliated parties); and
(III) the disadvantaged owners will maintain control of
daily business operations.
(C) The Administrator may waive the requirements of sub-
paragraph (A) if—
(i) in the case of subparagraph (B) (i), (ii) and (iv), he is
requested to do so prior to the actual relinquishment of
ownership or control; and
(ii) in the case of subparagraph (B)(iii), he is requested
to do so as soon as possible after the incapacity or death
occurs.
(D) Concerns performing contracts awarded pursuant to this sub-
section shall be required to notify the Administration immediately
upon entering an agreement (either oral or in writing) to transfer
all or part of its stock or other ownership interest to any other
party.
(E) Notwithstanding any other provision of law, for the purposes
of determining ownership and control of a concern under this sec-
tion, any potential ownership interests held by investment compa-
nies licensed under the Small Business Investment Act of 1958
shall be treated in the same manner as interests held by the indi-
viduals upon whom eligibility is based.
(b) It shall also be the duty of the Administration and it is here-
by empowered, whenever it determines such action is necessary—
(1)(A) to provide—
(i) technical, managerial, and informational aids to small
business concerns—
(I) by advising and counseling on matters in connec-
tion with Government procurement and policies, prin-
ciples, and practices of good management;
(II) by cooperating and advising with—
(aa) voluntary business, professional, edu-
cational, and other nonprofit organizations, asso-
ciations, and institutions (except that the Admin-
istration shall take such actions as it determines
necessary to ensure that such cooperation does not
constitute or imply an endorsement by the Admin-
istration of the organization or its products or
services, and shall ensure that it receives appro-
priate recognition in all printed materials); and
(bb) other Federal and State agencies;
(III) by maintaining a clearinghouse for information
on managing, financing, and operating small business
enterprises; and
(IV) by disseminating such information, including
through recognition events, and by other activities
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17
that the Administration determines to be appropriate;
and
(ii) through cooperation with a profit-making concern
(referred to in this paragraph as a ‘‘cosponsor’’), training,
information, and education to small business concerns, ex-
cept that the Administration shall—
(I) take such actions as it determines to be appro-
priate to ensure that—
(aa) the Administration receives appropriate
recognition and publicity;
(bb) the cooperation does not constitute or imply
an endorsement by the Administration of any
product or service of the cosponsor;
(cc) unnecessary promotion of the products or
services of the cosponsor is avoided; and
(dd) utilization of any one cosponsor in a mar-
keting area is minimized; and
(II) develop an agreement, executed on behalf of the
Administration by an employee of the Administration
in Washington, the District of Columbia, that pro-
vides, at a minimum, that—
(aa) any printed material to announce the co-
sponsorship or to be distributed at the cospon-
sored activity, shall be approved in advance by the
Administration;
(bb) the terms and conditions of the cooperation
shall be specified;
(cc) only minimal charges may be imposed on
any small business concern to cover the direct
costs of providing the assistance;
(dd) the Administration may provide to the co-
sponsorship mailing labels, but not lists of names
and addresses of small business concerns compiled
by the Administration;
(ee) all printed materials containing the names
of both the Administration and the cosponsor shall
include a prominent disclaimer that the coopera-
tion does not constitute or imply an endorsement
by the Administration of any product or service of
the cosponsor; and
(ff) the Administration shall ensure that it re-
ceives appropriate recognition in all cosponsorship
printed materials.
(B) To establish, conduct, and publicize, and to recruit, se-
lect, and train volunteers for (and to enter into contracts,
grants, or cooperative agreements therefor), volunteer pro-
grams, including a Service Corps of Retired Executives
(SCORE) and an Active Corps of Executive (ACE) for the pur-
poses of section 8(b)(1)(A) of this Act. To facilitate the imple-
mentation of such volunteer programs the Administration shall
maintain at its headquarters and pay the salaries, benefits,
and expenses of a volunteer and professional staff to manage
and oversee the program. Any such payments made pursuant
to this subparagraph shall be effective only to such extent or
in such amounts as are provided in advance in appropriation
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18
Acts. Notwithstanding any other provision of law, SCORE may
solicit cash and in-kind contributions from the private sector to
be used to carry out its functions under this Act, and may use
payments made by the Administration pursuant to this sub-
paragraph for such solicitation and the management of the
contributions received.
(C) To allow any individual or group of persons participating
with it in furtherance of the purposes of subparagraphs (A)
and (B) to use the Administration’s office facilities and related
material and services as the Administration deems appro-
priate, including clerical and stenographic service:
(i) such volunteers, while carrying out activities under
section 8(b)(1) of this Act shall be deemed Federal employ-
ees for the purposes of the Federal tort claims provisions
in title 28, United States Code; and for the purposes of
subchapter I of chapter 81 of title 5, United States Code
(relative to compensation to Federal employees for work
injuries) shall be deemed civil employees of the United
States within the meaning of the term ‘‘employee’’ as de-
fined in section 8101 of title 5, United States Code, and
the provisions of that subchapter shall apply except that
in computing compensation benefits for disability or death,
the monthly pay of a volunteer shall be deemed that re-
ceived under the entrance salary for a grade GS–11 em-
ployee:
(ii) the Administrator is authorized to reimburse such
volunteers for all necessary out-of-pocket expenses incident
to their provision of services under this Act, or in connec-
tion with attendance at meetings sponsored by the Admin-
istration, or for the cost of malpractice insurance, as the
Administrator shall determine, in accordance with regula-
tions which he or she shall prescribe, and, while they are
carrying out such activities away from their homes or reg-
ular places of business, for travel expenses (including per
diem in lieu of subsistence) as authorized by section 5703
of title 5, United States Code, for individuals serving with-
out pay; and
(iii) such volunteers shall in no way provide services to
a client of such Administration with a delinquent loan out-
standing, except upon a specific request signed by such cli-
ent for assistance in connection with such matter.
(D) Notwithstanding any other provision of law, no payment
for supportive services or reimbursement of out-of-pocket ex-
penses made to persons serving pursuant to section 8(b)(1) of
this Act shall be subject to any tax or charge or be treated as
wages or compensation for the purposes of unemployment, dis-
ability, retirement, public assistance, or similar benefit pay-
ments, or minimum wage laws.
(E) In carrying out its functions under subparagraph (A), to
make grants (including contracts and cooperative agreements)
to any public or private institution of higher education for the
establishment and operation of a small business institute,
which shall be used to provide business counseling and assist-
ance to small business concerns through the activities of stu-
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19
dents enrolled at the institution, which students shall be enti-
tled to receive educational credits for their activities.
(F) Notwithstanding any other provision of law and pursuant
to regulations which the Administrator shall provide, counsel
may be employed and counsel fees, court costs, bail, and other
expenses incidental to the defense of volunteers may be paid
in judicial or Administrative proceedings arising directly out of
the performance of activities pursuant to section 8(b)(1) of this
Act, as amended (15 U.S.C. 637(b)(1)) to which volunteers have
been made parties.
(G) In carrying out its functions under this Act and to carry
out the activities authorized by title IV of the Women’s Busi-
ness Ownership Act of 1988, the Administration is authorized
to accept, in the name of the Administration, and employ or
dispose of in furtherance of the purposes of this Act, any
money or property, real, personal, or mixed, tangible, or intan-
gible, received by gift, devise, bequest, or otherwise; and, fur-
ther, to accept gratuitous services and facilities.
(2) to make a complete inventory of all productive facilities
of small-business concerns or to arrange for such inventory to
be made by any other governmental agency which has the fa-
cilities. In making any such inventory, the appropriate agen-
cies in the several States may be requested to furnish an in-
ventory of the productive facilities of small-business concerns
in each respective State if such an inventory is available or in
prospect;
(3) to coordinate and to ascertain the means by which the
productive capacity of small-business concerns can be most ef-
fectively utilized;
(4) to consult and cooperative with officers of the Govern-
ment having procurement or property disposal powers, in order
to utilize the potential productive capacity of plants operated
by small-business concerns;
(5) to obtain information as to methods and practices which
Government prime contractors utilize in letting subcontracts
and to take action to encourage the letting of subcontracts by
prime contractors to small-business concerns at prices and on
conditions and terms which are fair and equitable;
(6) to determine within any industry the concerns, firms,
persons, corporations, partnerships, cooperatives, or other busi-
ness enterprises which are to be designated ‘‘small-business
concerns’’ for the purpose of effectuating the provisions of this
Act. To carry out this purpose the Administrator, when re-
quested to do so, shall issue in response to each such request
an appropriate certificate certifying an individual concern as a
‘‘small-business concern’’ in accordance with the criteria ex-
pressed in this Act. Any such certificate shall be subject to rev-
ocation when the concern covered thereby ceases to be a
‘‘small-business concern.’’ Offices of the Government having
procurement or lending powers, or engaging in the disposal of
Federal property or allocating materials or supplies, or promul-
gating regulations affecting the distribution of materials or
supplies, shall accept as conclusive the Administration’s deter-
mination as to which enterprises are to be designated ‘‘small-
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20
business concerns’’, as authorized and directed under this para-
graph;
(7)(A) to certify to Government procurement officers, and of-
ficers engaged in the sale and disposal of Federal property,
with respect to all elements of responsibility, including, but not
limited to, capability, competency, capacity, credit, integrity,
perseverance, and tenacity, of any small business concern or
group of such concerns to receive and perform a specific Gov-
ernment contract. A Government procurement officer or an of-
ficer engaged in the sale and disposal of Federal property may
not, for any reason specified in the preceding sentence, pre-
clude any small business concern or group of such concerns
from being awarded such contract without referring the matter
for a final disposition to the Administration.
(B) if a Government procurement officer finds that an other-
wise qualified small business concern may be ineligible due to
the provisions of section 35(a) of title 41, United States Code
(the Walsh-Healey Public Contracts Act), he shall notify the
Administration in writing of such finding. The Administration
shall review such finding and shall either dismiss it and certify
the small business concern to be an eligible Government con-
tractor for a specific Government contract or if it concurs in the
finding, forward the matter to the Secretary of Labor for final
disposition, in which case the Administration may certify the
small business concern only if the Secretary of Labor finds the
small business concern not to be in violation.
(C) in any case in which a small business concern or group
of such concerns has been certified by the Administration pur-
suant to (A) or (B) to be a responsible or eligible Government
contractor as to a specific Government contract, the officers of
the Government having procurement or property disposal pow-
ers are directed to accept such certification as conclusive, and
shall let such Government contract to such concern or group of
concerns without requiring it to meet any other requirement of
responsibility or eligibility. Notwithstanding the first sentence
of this subparagraph, the Administration may not establish an
exemption from referral or notification or refuse to accept a re-
ferral or notification from a Government procurement officer
made pursuant to subparagraph (A) or (B) of this paragraph,
but nothing in this paragraph shall require the processing of
an application for certification if the small business concern to
which the referral pertains declines to have the application
processed.
(8) to obtain from any Federal department, establishment, or
agency engaged in procurement or in the financing of procure-
ment or production such reports concerning the letting of con-
tracts and subcontracts and the making of loans to business
concerns as it may deem pertinent in carrying out its functions
under this Act;
(9) to obtain from any Federal department, establishment, or
agency engaged in the disposal of Federal property such re-
ports concerning the solicitation of bids, time of sale, or other-
wise as it may deem pertinent in carrying out its functions
under this Act;
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21
(10) to obtain from suppliers of materials information per-
taining to the method of filling orders and the bases for allo-
cating their supply, whenever it appears that any small busi-
ness is unable to obtain materials from its normal sources;
(11) to make studies and recommendations to the appro-
priate Federal agencies to insure that a fair proportion of the
total purchases and contracts for property and services for the
Government be placed with small-business enterprises, to in-
sure that a fair proportion of Government contacts for research
and development be placed with small-business concerns, to in-
sure that a fair proportion of the total sales of Government
property be made to small-business concerns, and to insure a
fair and equitable share of materials, supplies, and equipment
to small-business concerns;
(12) to consult and cooperate with all Government agencies
for the purpose of insuring that small-business concerns shall
receive fair and reasonable treatment from such agencies;
(13) to establish such advisory boards and committees as
may be necessary to achieve the purposes of this Act and of the
Small Business Investment Act of 1958; to call meetings of
such boards and committees from time to time; to pay the
transportation expenses and a per diem allowance in accord-
ance with section 5703 of title 5, United States Code, to the
members of such boards and committees for travel and subsist-
ence expenses incurred at the request of the Administration in
connection with travel to points more than fifty miles distant
from the homes of such members in attending the meetings of
such boards and committees; and to rent temporarily, within
the District of Columbia or elsewhere, such hotel or other ac-
commodations as are needed to facilitate the conduct of such
meetings;
(14) to provide at the earliest practicable time such informa-
tion and assistance as may be appropriate, including informa-
tion concerning eligibility for loans under section 7(b)(3), to
local public agencies (as defined in section 110(h) of the Hous-
ing Act of 1949) and to small-business concerns to be displaced
by federally aided urban renewal projects in order to assist
such small-business concerns in reestablishing their oper-
ations;
(15) to disseminate, without regard to the provisions of sec-
tion 3204 of title 39, United States Code, data and information,
in such form as it shall deem appropriate, to public agencies,
private organizations, and the general public;
(16) to make studies of matters materially affecting the com-
petitive strength of small business, and of the effect on small
business of Federal laws, programs, and regulations, and to
make recommendations to the appropriate Federal agency or
agencies for the adjustment of such programs and regulations
to the needs of small business; and
(17) to make grants to, and enter into contracts and coopera-
tive agreements with, educational institutions, private busi-
nesses, veterans’ nonprofit community-based organizations,
and Federal, State, and local departments and agencies for the
establishment and implementation of outreach programs for
disabled veterans (as defined in section 4211(3) of title 38,
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22
United States Code), veterans, and members of a reserve com-
ponent of the Armed Forces.
(c)
(d)(1) It is the policy of the United States that small business
concerns, small business concerns owned and controlled by vet-
erans, small business concerns owned and controlled by service-dis-
abled veterans, qualified HUBZone small business concerns, small
business concerns owned and controlled by socially and economi-
cally disadvantaged individuals, and small business concerns
owned and controlled by women, shall have the maximum prac-
ticable opportunity to participate in the performance of contracts
let by any Federal agency, including contracts and subcontracts for
subsystems, assemblies, components, and related services for major
systems. It is further the policy of the United States that its prime
contractors establish procedures to ensure the timely payment of
amounts due pursuant to the terms of their subcontracts with
small business concerns, small business concerns owned and con-
trolled by veterans, 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.
(2) The clause stated in paragraph (3) shall be included in all
contracts let by any Federal agency except any contract which—
(A) does not exceed the simplified acquisition threshold;
(B) including all subcontracts under such contracts will be
performed entirely outside of any State, territory, or possession
of the United States, the District of Columbia, or the Common-
wealth of Puerto Rico; or
(C) is for services which are personal in nature.
(3) The clause required by paragraph (2) shall be as follows:
(A) It is the policy of the United States that small business
concerns, small business concerns owned and controlled by vet-
erans, small business concerns owned and controlled by serv-
ice-disabled veterans, qualified HUBZone small business con-
cerns, small business concerns owned and controlled by socially
and economically disadvantaged individuals, and small busi-
ness concerns owned and controlled by women shall have the
maximum practicable opportunity to participate in the per-
formance of contracts let by any Federal agency, including con-
tracts and subcontracts for subsystems, assemblies, compo-
nents, and related services for major systems. It is further the
policy of the United States that its prime contractors establish
procedures to ensure the timely payment of amounts due pur-
suant to the terms of their subcontracts with small business
concerns, small business concerns owned and controlled by vet-
erans, small business concerns owned and controlled by serv-
ice-disabled veterans, qualified HUBZone small business con-
cerns, small business concerns owned and controlled by socially
and economically disadvantaged individuals, and small busi-
ness concerns owned and controlled by women.
(B) The contractor hereby agrees to carry out this policy in
the awarding of subcontracts to the fullest extent consistent
with the efficient performance of this contract. The contractor
further agrees to cooperate in any studies or surveys as may
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23
be conducted by the United States Small Business Administra-
tion or the awarding agency of the United States as may be
necessary to determine the extent of the contractor’s compli-
ance with this clause.
(C) As used in this contract, the term ‘‘small business con-
cern’’ shall mean a small business as defined pursuant to sec-
tion 3 of the Small Business Act and relevant regulations pro-
mulgated pursuant thereto. The term ‘‘small business concern
owned and controlled by socially and economically disadvan-
taged individuals’’ shall mean a small business concern—
(i) which is at least 51 per centum owned by one or more
socially and economically disadvantaged individuals; or, in
the case of any publicly owned business, at least 51 per
centum of the stock of which is owned by one or more so-
cially and economically disadvantaged individuals; and
(ii) whose management and daily business operations
are controlled by one or more of such individuals.
The contractor shall presume that socially and economically
disadvantaged individuals include Black Americans, Hispanic
Americans, Native Americans, Asian Pacific Americans, and
other minorities, or any other individual found to be disadvan-
taged by the Administration pursuant to section 8(a) of the
Small Business Act.
(D) The term ‘‘small business concern owned and controlled
by women’’ shall mean a small business concern—
(i) which is at least 51 per centum owned by one or more
women; or, in the case of any publicly owned business, at
least 51 per centum of the stock of which is owned by one
or more women; and
(ii) whose management and daily business operations
are controlled by one or more women.
(E) The term ‘‘small business concern owned and controlled
by veterans’’ shall mean a small business concern—
(i) which is at least 51 per centum owned by one or more
eligible veterans; or, in the case of any publicly owned
business, at least 51 per centum of the stock of which is
owned by one or more veterans; and
(ii) whose management and daily business operations
are controlled by such veterans. The contractor shall treat
as veterans all individuals who are veterans within the
meaning of the term under section 3(q) of the Small Busi-
ness Act.
(F) Contractors acting in good faith may rely on written rep-
resentations by their subcontractors regarding their status as
either a small business concern, small business concern owned
and controlled by veterans, small business concern owned and
controlled by service-disabled veterans, a small business con-
cern owned and controlled by socially and economically dis-
advantaged individuals, or a small business concern owned and
controlled by women.
(G) In this contract, the term ‘‘qualified HUBZone small
business concern’’ has the meaning given that term in section
31(b).
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24
(H) In this contract, the term ‘‘small business concern owned
and controlled by service-disabled veterans’’ has the meaning
given that term in section 3(q).
(4)(A) Each solicitation of an offer for a contract to be let by a
Federal agency which is to be awarded pursuant to the negotiated
method of procurement and which may exceed $1,000,000, in the
case of a contract for the construction of any public facility, or
$500,000, in the case of all other contracts, shall contain a clause
notifying potential offering companies of the provisions of this sub-
section relating to contracts awarded pursuant to the negotiated
method of procurement.
(B) Before the award of any contract to be let, or any amendment
or modification to any contract let, by any Federal agency which—
(i) is to be awarded, or was let, pursuant to the negotiated
method of procurement,
(ii) is required to include the clause stated in paragraph (3),
(iii) may exceed $1,000,000 in the case of a contract for the
construction of any public facility, or $500,000 in the case of
all other contracts, and
(iv) which offers subcontracting possibilities,
the apparent successful offeror shall negotiate with the procure-
ment authority a subcontracting plan which incorporates the infor-
mation prescribed in paragraph (6). The subcontracting plan shall
be included in and made a material part of the contract.
(C) If, within the time limit prescribed in regulations of the Fed-
eral agency concerned, the apparent successful offeror fails to nego-
tiate the subcontracting plan required by this paragraph, such of-
feror shall become ineligible to be awarded the contract. Prior com-
pliance of the offeror with other such subcontracting plans shall be
considered by the Federal agency in determining the responsibility
of that offeror for the award of the contract.
(D) No contract shall be awarded to any offeror unless the pro-
curement authority determines that the plan to be negotiated by
the offeror pursuant to this paragraph provides the maximum prac-
ticable opportunity for small business concerns, qualified HUBZone
small business concerns, small business concerns owned and con-
trolled by veterans, small business concerns owned and controlled
by service-disabled veterans, 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 the contract.
(E) Notwithstanding any other provisions of law, every Federal
agency, in order to encourage subcontracting opportunities for
small business concerns, small business concerns owned and con-
trolled by veterans, small business concerns owned and controlled
by service-disabled veterans, qualified HUBZone small business
concerns, and small business concerns owned and controlled by the
socially and economically disadvantaged individuals as defined in
paragraph (3) of this subsection and for small business concerns
owned and controlled by women, is hereby authorized to provide
such incentives as such Federal agency may deem appropriate in
order to encourage such subcontracting opportunities as may be
commensurate with the efficient and economical performance of the
contact: Provided, That, this subparagraph shall apply only to con-
tracts let pursuant to the negotiated method of procurement.
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25
(F)(i) Each contract subject to the requirements of this paragraph
or paragraph (5) shall contain a clause for the payment of liq-
uidated damages upon a finding that a prime contractor has failed
to make a good faith effort to comply with the requirements im-
posed on such contractor by this subsection.
(ii) The contractor shall be afforded an opportunity to dem-
onstrate a good faith effort regarding compliance prior to the con-
tracting officer’s final decision regarding the impositon of damages
and the amount thereof. The final decision of a contracting officer
regarding the contractor’s obligation to pay such damages, or the
amounts thereof, shall be subject to the Contract Disputes Act of
1978 (41 U.S.C. 601–613).
(iii) Each agency shall ensure that the goals offered by the appar-
ent successful bidder or offeror are attainable in relation to—
(I) the subcontracting opportunities available to the con-
tractor, commensurate with the efficient and economical per-
formance of the contract;
(II) the pool of eligible subcontractors available to fulfill the
subcontracting opportunities; and
(III) the actual performance of such contractor in fulfilling
the subcontracting goals specified in prior plans.
(G) The following factors shall be designated by the Federal
agency as significant factors for purposes of evaluating offers
for a øbundled contract where the head of the agency deter-
mines that the contract offers a significant opportunity for sub-
contracting¿ contract that includes a subcontracting plan re-
quired under this paragraph:
(i) A factor that is based on øthe rate provided under the
subcontracting plan for small business participation¿ the
description in the subcontracting plan of the extent to
which the offeror proposes to use small business concerns
as subcontractors (at any tier) in the performance of the
contract.
(ii) For the evaluation of past performance of an offeror,
a factor that is based on the extent to which the offeror at-
tained applicable goals for small business participation in
the performance of contracts.
(5)(A) Each solicitation of a bid for any contract to be let, or any
amendment or modification to any contract let, by any Federal
agency which—
(i) is to be awarded pursuant to the formal advertising meth-
od of procurement,
(ii) is required to contain the clause stated in paragraph (3)
of this subsection,
(iii) may exceed $1,000,000 in the case of a contract for the
construction of any public facility, or $500,000, in the case of
all other contracts, and
(iv) offers subcontracting possibilities,
shall contain a clause requiring any bidder who is selected to be
awarded a contract to submit to the Federal agency concerned a
subcontracting plan which incorporates the information prescribed
in paragraph (6).
(B) If, within the time limit prescribed in regulations of the Fed-
eral agency concerned, the bidder selected to be awarded the con-
tract fails to submit the subcontracting plan required by this para-
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26
graph, such bidder shall become ineligible to be awarded the con-
tract. Prior compliance of the bidder with other such subcon-
tracting plans shall be considered by the Federal agency in deter-
mining the responsibility of such bidder for the award of the con-
tract. The subcontracting plan of the bidder awarded the contract
shall be included in and made a material part of the contract.
(6) Each subcontracting plan required under paragraph (4) or (5)
shall include—
(A) percentage goals for the utilization as subcontractors of
small business concerns, small business concerns owned and
controlled by veterans, small business concerns owned and con-
trolled by service-disabled veterans, qualified HUBZone small
business concerns, small business concerns owned and con-
trolled by socially and economically disadvantaged individuals,
and small business concerns owned and controlled by women;
(B) the name of an individual within the employ of the offer-
or or bidder who will administer the subcontracting program of
the offeror or bidder and a description of the duties of such in-
dividual;
(C) a description of the efforts the offeror or bidder will take
to assure that small business concerns, small business con-
cerns owned and controlled by veterans, small business con-
cerns owned and controlled by service-disabled veterans, quali-
fied HUBZone small business concerns, small business con-
cerns owned and controlled by socially and economically dis-
advantaged individuals, and small business concerns owned
and controlled by women will have an equitable opportunity to
compete for subcontracts;
(D) assurances that the offeror or bidder will include the
clause required by paragraph (2) of this subsection in all sub-
contracts which offer further subcontracting opportunities, and
that the offeror or bidder will require all subcontractors (except
small business concerns) who receive subcontracts in excess of
$1,000,000 in the case of a contract for the construction of any
public facility, or in excess of $500,000 in the case of all other
contracts, to adopt a plan similar to the plan required under
paragraph (4) or (5), and assurances at a minimum that the of-
feror or bidder, and all subcontractors required to maintain
subcontracting plans pursuant to this paragraph, will—
(i) review and approve subcontracting plans submitted
by their subcontractors;
(ii) monitor subcontractor compliance with their ap-
proved subcontracting plans;
(iii) ensure that subcontracting reports are submitted by
their subcontractors when required;
(iv) acknowledge receipt of their subcontractors’ reports;
(v) compare the performance of their subcontractors to
subcontracting plans and goals; and
(vi) discuss performance with subcontractors when nec-
essary to ensure their subcontractors make a good faith ef-
fort to comply with their subcontracting plans;
(E) assurances that the offeror or bidder will submit such
periodic reports and cooperate in any studies or surveys as
may be required by the Federal agency or the Administration
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27
in order to determine the extent of compliance by the offeror
or bidder with the subcontracting plan;
(F) a recitation of the types of records the successful offeror
or bidder will maintain to demonstrate procedures which have
been adopted to comply with the requirements and goals set
forth in this plan, including the establishment of source lists
of small business concerns, small business concerns owned and
controlled by veterans, small business concerns owned and con-
trolled by service-disabled veterans, qualified HUBZone small
business concerns, small business concerns owned and con-
trolled by socially and economically disadvantaged individuals,
and small business concerns owned and controlled by women;
and efforts to identify and award subcontracts to such small
business concerns;
(G) a recitation of the types of records the successful offeror
or bidder will maintain to demonstrate that procedures have
been adopted to substantiate the credit the successful offeror
or bidder will elect to receive under paragraph (16)(A);
(H) a recitation of the types of records the successful offeror
or bidder will maintain to demonstrate procedures which have
been adopted to ensure subcontractors at all tiers comply with
the requirements and goals set forth in the plan established in
accordance with subparagraph (D) of this paragraph, includ-
ing—
(i) the establishment of source lists of small business
concerns, small business concerns owned and controlled by
veterans, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small busi-
ness concerns, small business concerns owned and con-
trolled by socially and economically disadvantaged individ-
uals, and small business concerns owned and controlled by
women; and
(ii) efforts to identify and award subcontracts to such
small business concerns; and
(I) a representation that the offeror or bidder will—
(i) make a good faith effort to acquire articles, equip-
ment, supplies, services, or materials, or obtain the per-
formance of construction work from the small business
concerns used in preparing and submitting to the con-
tracting agency the bid or proposal, in the same amount
and quality used in preparing and submitting the bid or
proposal; and
(ii) provide to the contracting officer a written expla-
nation if the offeror or bidder fails to acquire articles,
equipment, supplies, services, or materials or obtain the
performance of construction work as described in clause (i).
(7) The head of the contracting agency shall ensure that—
(A) the agency collects and reports data on the extent to
which contractors of the agency meet the goals and objec-
tives set forth in subcontracting plans submitted pursuant
to this subsection; and
(B) the agency periodically reviews data collected and re-
ported pursuant to subparagraph (A) for the purpose of en-
suring that such contractors comply in good faith with the
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28
requirements of this subsection and subcontracting plans
submitted by the contractors pursuant to this subsection.
(8) The provisions of paragraphs (4), (5), and (6) shall not apply
to offerors or bidders who are small business concerns.
(9) MATERIAL BREACH.—The failure of any contractor or sub-
contractor to comply in good faith with—
(A) the clause contained in paragraph (3) of this sub-
section,
(B) any plan required of such contractor pursuant to the
authority of this subsection to be included in its contract
or subcontract, or
(C) assurances provided under paragraph (6)(E),
shall be a material breach of such contract or subcontract and
may be considered in any past performance evaluation of the
contractor.
(10) Nothing contained in this subsection shall be construed to
supersede the requirements of Defense Manpower Policy Number
4A (32A CFR Chap. 1) or any successor policy.
(11) In the case of contracts within the provisions of paragraphs
(4), (5), and (6), the Administration is authorized to—
(A) assist Federal agencies and businesses in complying with
their responsibilities under the provisions of this subsection,
including the formulation of subcontracting plans pursuant to
paragraph (4);
(B) review any solicitation for any contract to be let pursuant
to paragraphs (4) and (5) to determine the maximum prac-
ticable opportunity for small business concerns, small business
concerns owned and controlled by veterans, small business con-
cerns owned and controlled by service-disabled veterans, quali-
fied HUBZone small business concerns, small business con-
cerns owned and controlled by socially and economically dis-
advantaged individuals, and small business concerns owned
and controlled by women to participate as subcontractors in
the performance of any contract resulting from any solicitation,
and to submit its findings, which shall be advisory in nature,
to the appropriate Federal agency; and
(C) evaluate compliance with subcontracting plans as a sup-
plement to evaluations performed by the contracting agency,
either on a contract-by-contract basis or, in the case of contrac-
tors having multiple contracts, on an aggregate basis.
(12) For purposes of determining the attainment of a subcontract
utilization goal under any subcontracting plan entered into with
any executive agency pursuant to this subsection, a mentor firm
providing development assistance to a protege firm under the pilot
Mentor-Protege Program established pursuant to section 831 of the
National Defense Authorization Act for Fiscal Year 1991 (Public
Law 101–510; 10 U.S.C. 2301 note) shall be granted credit for such
assistance in accordance with subsection (g) of such section.
(13) PAYMENT OF SUBCONTRACTORS.—
(A) DEFINITION.—In this paragraph, the term ‘‘covered con-
tract’’ means a contract relating to which a prime contractor is
required to develop a subcontracting plan under paragraph (4)
or (5).
(B) NOTICE.—
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29
(i) IN GENERAL.—A prime contractor for a covered con-
tract shall notify in writing the contracting officer for the
covered contract if the prime contractor pays a reduced
price to a subcontractor for goods and services upon com-
pletion of the responsibilities of the subcontractor or the
payment to a subcontractor is more than 90 days past due
for goods or services provided for the covered contract for
which the Federal agency has paid the prime contractor.
(ii) CONTENTS.—A prime contractor shall include the
reason for the reduction in a payment to or failure to pay
a subcontractor in any notice made under clause (i).
(C) PERFORMANCE.—A contracting officer for a covered con-
tract shall consider the unjustified failure by a prime con-
tractor to make a full or timely payment to a subcontractor in
evaluating the performance of the prime contractor.
(D) CONTROL OF FUNDS.—If the contracting officer for a cov-
ered contract determines that a prime contractor has a history
of unjustified, untimely payments to contractors, the con-
tracting officer shall record the identity of the contractor in ac-
cordance with the regulations promulgated under subpara-
graph (E).
(E) REGULATIONS.—Not later than 1 year after the date of
enactment of this paragraph, the Federal Acquisition Regu-
latory Council established under section 25(a) of the Office of
Federal Procurement Policy Act (41 U.S.C. 421(a)) shall amend
the Federal Acquisition Regulation issued under section 25 of
such Act to—
(i) describe the circumstances under which a contractor
may be determined to have a history of unjustified, un-
timely payments to subcontractors;
(ii) establish a process for contracting officers to record
the identity of a contractor described in clause (i); and
(iii) require the identity of a contractor described in
clause (i) to be incorporated in, and made publicly avail-
able through, the Federal Awardee Performance and Integ-
rity Information System, or any successor thereto.
(14) An offeror for a covered contract that intends to identify
a small business concern as a potential subcontractor in a bid
or proposal for the contract, or in a plan submitted pursuant
to this subsection in connection with the contract, shall notify
the small business concern prior to making such identification.
(15) The Administrator shall establish a reporting mecha-
nism that allows a subcontractor or potential subcontractor to
report fraudulent activity or bad faith by a contractor with re-
spect to a subcontracting plan submitted pursuant to this sub-
section.
(16) CREDIT FOR CERTAIN SMALL BUSINESS CONCERN SUB-
CONTRACTORS.—
(A) IN GENERAL.—For purposes of determining whether
or not a prime contractor has attained the percentage
goals specified in paragraph (6)—
(i) if the subcontracting goals pertain only to a sin-
gle contract with a Federal agency, the prime con-
tractor may elect to receive credit for small business
concerns performing as first tier subcontractors or
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30
subcontractors at any tier pursuant to the subcon-
tracting plans required under paragraph (6)(D) in an
amount equal to the total dollar value of any sub-
contracts awarded to such small business concerns;
and
(ii) if the subcontracting goals pertain to more than
one contract with one or more Federal agencies, or to
one contract with more than one Federal agency, the
prime contractor may only receive credit for first tier
subcontractors that are small business concerns.
(B) COLLECTION AND REVIEW OF DATA ON SUBCON-
TRACTING PLANS.—The head of each contracting agency
shall ensure that the agency—
(i) collects and reports data on the extent to which
prime contractors of the agency meet the goals and ob-
jectives set forth in subcontracting plans submitted
pursuant to this subsection; and
(ii) periodically reviews data collected and reported
pursuant to clause (i) for the purpose of ensuring that
such contractors comply in good faith with the require-
ments of this subsection.
(C) RULE OF CONSTRUCTION.—Nothing in this paragraph
shall be construed to allow a Federal agency to establish
a goal for an number of subcontracts with a subcontractor
at any tier for a prime contractor otherwise eligible to re-
ceive credit under this paragraph.
(17) PAST PERFORMANCE RATINGS FOR CERTAIN SMALL BUSI-
NESS SUBCONTRACTORS.—Upon request by a small business
concern that performed as a first tier subcontractor on a cov-
ered contract (as defined in paragraph (13)(A)), the prime con-
tractor for such covered contract shall submit to such small
business concern a record of past performance for such small
business concern with respect to such covered contract. If a
small business concern elects to use such record of past per-
formance, a contracting officer shall consider such record of
past performance when evaluating an offer for a prime contract
made by such small business concern.
(e)(1) Except as provided in subsection (g)—
(A) an executive agency intending to—
(i) solicit bids or proposals for a contract for property or
services for a price expected to exceed $25,000; or
(ii) place an order, expected to exceed $25,000, under a
basic agreement, basis ordering agreement, or similar ar-
rangement,
shall publish a notice described in subsection (f);
(B) an executive agency intending to solicit bids or proposals
for a contract for property or services shall post, for a period
of not less than ten days, in a public place at the contracting
office issuing the solicitation a notice of solicitation described
in subsection (f)—
(i) in the case of an executive agency other than the De-
partment of Defense, if the contract is for a price expected
to exceed $10,000, but not to exceed $25,000; and
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31
(ii) in the case of the Department of Defense, if the con-
tract is for a price expected to exceed $5,000, but not to ex-
ceed $25,000; and
(C) an executive agency awarding a contract for property or
services for a price exceeding $100,000, or placing an order re-
ferred to in clause (A)(ii) exceeding $100,000, shall furnish for
publication by the Secretary of Commerce a notice announcing
the award or order if there is likely to be any subcontract
under such contract or order.
(2)(A) A notice of solicitation required to be published under
paragraph (1) may be published—
(i) by electronic means that meet the accessibility require-
ments under section 18(a)(7) of the Office of Federal Procure-
ment Policy Act (41 U.S.C. 416(a)(7)); or
(ii) by the Secretary of Commerce in the Commerce Business
Daily.
(B) The Secretary of Commerce shall promptly publish in the
Commerce Business Daily each notice or announcement received
under this subsection for publication by that means.
(3) Whenever an executive agency is required by paragraph
(1)(A) to publish a notice of solicitation, such executive agency may
not—
(A) issue the solicitation earlier than 15 days after the date
on which the notice is published; or
(B) in the case of a contract or order estimated to be greater
than the simplified acquisition threshold, establish a deadline
for the submission of all bids or proposals in response to the
notice required by paragraph (1)(A) that—
(i) in the case of an order under a basic agreement, basic
ordering agreement, or similar arrangement, is earlier
than the date 30 days after the date the notice required
by paragraph (1)(A)(ii) is published;
(ii) in the case of a solicitation for research and develop-
ment, is earlier than the date 45 days after the date the
notice required by paragraph (1)(A)(i) is published; or
(iii) in any other case, is earlier than the date 30 days
after the date the solicitation is issued.
(f) Each notice of solicitation required by subparagraph (A) or (B)
of subsection (e)(1) shall include—
(1) an accurate description of the property or services to be
contracted for, which description (A) shall not be unnecessarily
restrictive of competition, and (B) shall include, as appropriate,
the agency nomenclature, National Stock Number or other part
number, and a brief description of the item’s form, fit, or func-
tion, physical dimensions, predominant material of manufac-
ture, or similar information that will assist a prospective con-
tractor to make an informed business judgment as to whether
a copy of the solicitation should be requested;
(2) provisions that—
(A) state whether the technical data required to respond
to the solicitation will not be furnished as part of such so-
licitation, and identify the source in the Government, if
any, from which the technical data may be obtained; and
(B) state whether an offeror, its product, or service must
meet a qualification requirement in order to be eligible for
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32
award, and, if so, identify the office from which a qualifica-
tion requirement may be obtained;
(3) the name, business address, and telephone number of the
contracting officer;
(4) a statement that all responsible sources may submit a
bid, proposal, or quotation (as appropriate) which shall be con-
sidered by the agency;
(5) in the case of a procurement using procedures other than
competitive procedures, a statement of the reason justifying
the use of such procedures and the identity of the intended
source; and
(6) in the case of a contract in an amount estimated to be
greater than $25,000 but not greater than the simplified acqui-
sition threshold—
(A) a description of the procedures to be used in award-
ing the contract; and
(B) a statement specifying the periods for prospective
offerors and the contracting officer to take the necessary
preaward and award actions.
(g)(1) A notice is not required under subsection (e)(1) if—
(A) the proposed procurement is for an amount not greater
than the simplified acquisition threshold and is to be con-
ducted by—
(i) using widespread electronic public notice of the solici-
tation in a form that allows convenient and universal user
access through a single, Government-wide point of entry;
and
(ii) permitting the public to respond to the solicitation
electronically.
(B) the notice would disclose the executive agency’s needs
and the disclosure of such needs would compromise the na-
tional security;
(C) the proposed procurement would result from acceptance
of—
(i) any unsolicited proposal that demonstrates a unique
and innovative research concept and the publication of any
notice of such unsolicited research proposal would disclose
the originality of thought or innovativeness of the proposal
or would disclose proprietary information associated with
the proposal; or
(ii) a proposal submitted under section 9 of this Act;
(D) the procurement is made against an order placed under
a requirements contract;
(E) the procurement is made for perishable subsistence sup-
plies;
(F) the procurement is for utility services, other than tele-
communication services, and only one source is available; or
(G) the procurement is for the services of an expert for use
in any litigation or dispute (including preparation for any fore-
seeable litigation or dispute) that involves or could involve the
Federal Government in any trial, hearing, or proceeding before
any court, administrative tribunal, or agency, or in any part of
an alternative dispute resolution process, whether or not the
expert is expected to testify.
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33
(2) The requirements of subsection (a)(1)(A) do not apply to any
procurement under conditions described in paragraph (2), (3), (4),
(5), or (7) of section 303(c) of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 253(c)) or paragraph (2), (3),
(4), (5), and (7) of section 3204(a) of title 10, United States Code.
(3) The requirements of subsection (a)(1)(A) shall not apply in the
case of any procurement for which the head of the executive agency
makes a determination in writing, after consultation with the Ad-
ministrator for Federal Procurement Policy and the Administrator
of the Small Business Administration, that it is not appropriate or
reasonable to publish a notice before issuing a solicitation.
(h)(1) An executive agency may not award a contract using proce-
dures other than competitive procedures unless—
(A) except as provided in paragraph (2), a written justifica-
tion for the use of such procedures has been approved—
(i) in the case of a contract for an amount exceeding
$100,000 (but equal to or less than $1,000,000), by the ad-
vocate for competition for the procuring activity (without
further delegation);
(ii) in the case of a contract for an amount exceeding
$1,000,000 (but equal to or less than $10,000,000), by the
head of the procuring activity or a delegate who, if a mem-
ber of the Armed Forces, is a general or flag officer, or, if
a civilian, is serving in a position in grade GS–16 or above
under the General Schedule (or in a comparable or higher
position under another schedule); or
(iii) in the case of a contract for an amount exceeding
$10,000,000, by the senior procurement executive of the
agency designated pursuant to section 16(3) of the Office
of Federal Procurement Policy Act (41 U.S.C. 414(3)) (with-
out further delegation); and
(B) all other requirements applicable to the use of such pro-
cedures under title III of the Federal Property and Administra-
tive Services Act of 1949 (41 U.S.C. 251 et sq.) or sections 3201
through 3205 of title 10, United States Code, as appropriate,
have been satisfied.
(2) The same exceptions as are provided in section 303(f)(2) of the
Federal Property and Administrative Services Act of 1949 (41
U.S.C. 253(f)(2)) or paragraphs (3) and (4) of section 3204(e) of title
10, United States Code, shall apply with respect to the require-
ments of paragraph (1)(A) of this subsection in the same manner
as such exceptions apply to the requirements of section 303(f)(1) of
such Act or paragraphs (3) and (4) of section 3204(e) of such title,
as appropriate.
(i) An executive agency shall make available to any business con-
cern, or the authorized representative of such concern, the complete
solicitation package for any on-going procurement announced pur-
suant to a notice under subsection (e). An executive agency may re-
quire the payment of a fee, not exceeding the actual cost of duplica-
tion, for a copy of such package.
(j) For purposes of this section, the term ‘‘executive agency’’ has
the meaning provided such term in section 4(1) of the Office of Fed-
eral Procurement Policy Act (41 U.S.C. 403(1)).
(k) NOTICES OF SUBCONTRACTING OPPORTUNITIES.—
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34
(1) IN GENERAL.—Notices of subcontracting opportunities
may be submitted for publication on the appropriate Federal
Web site (as determined by the Administrator) by—
(A) a business concern awarded a contract by an execu-
tive agency subject to subsection (e)(1)(C); and
(B) a business concern that is a subcontractor or sup-
plier (at any tier) to such contractor having a subcon-
tracting opportunity in excess of $10,000.
(2) CONTENT OF NOTICE.—The notice of a subcontracting op-
portunity shall include—
(A) a description of the business opportunity that is com-
parable to the description specified in paragraphs (1), (2),
(3), and (4) of subsection (f); and
(B) the due date for receipt of offers.
(l) MANAGEMENT ASSISTANCE FOR SMALL BUSINESSES AFFECTED
BY MILITARY OPERATIONS.—
(1) IN GENERAL.—The Administration shall utilize, as appro-
priate, its entrepreneurial development and management as-
sistance programs, including programs involving State or pri-
vate sector partners, to provide business counseling and train-
ing to any small business concern adversely affected by the de-
ployment of units of the Armed Forces of the United States in
support of a period of military conflict.
(2) DEFINITION OF PERIOD OF MILITARY CONFLICT.—In this
subsection, the term ‘‘period of military conflict’’ means—
(A) a period of war declared by the Congress;
(B) a period of national emergency declared by the Con-
gress or by the President; or
(C) a period of a contingency operation, as defined in sec-
tion 101(a) of title 10, United States Code.
(m) PROCUREMENT PROGRAM FOR WOMEN-OWNED SMALL BUSI-
NESS CONCERNS.—
(1) DEFINITIONS.—In this subsection, the following defini-
tions apply:
(A) CONTRACTING OFFICER.—The term ‘‘contracting offi-
cer’’ has the meaning given such term in section 27(f)(5) of
the Office of Federal Procurement Policy Act (41 U.S.C.
423(f)(5)).
(B) SMALL BUSINESS CONCERN OWNED AND CONTROLLED
BY WOMEN.—The term ‘‘small business concern owned and
controlled by women’’ has the meaning given such term in
section 3(n), except that ownership shall be determined
without regard to any community property law.
(2) AUTHORITY TO RESTRICT COMPETITION.—In accordance
with this subsection, a contracting officer may restrict competi-
tion for any contract for the procurement of goods or services
by the Federal Government to small business concerns owned
and controlled by women, if—
(A) each of the concerns is not less than 51 percent
owned by one or more women who are economically dis-
advantaged (and such ownership is determined without re-
gard to any community property law);
(B) the contracting officer has a reasonable expectation
that two or more small business concerns owned and con-
trolled by women will submit offers for the contract;
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35
(C) the contract is for the procurement of goods or serv-
ices with respect to an industry identified by the Adminis-
trator pursuant to paragraph (3);
(D) in the estimation of the contracting officer, the con-
tract award can be made at a fair and reasonable price;
and
(E) each of the concerns is certified by a Federal agency,
a State government, the Administrator, or a national certi-
fying entity approved by the Administrator as a small
business concern owned and controlled by women.
(3) WAIVER.—With respect to a small business concern
owned and controlled by women, the Administrator may waive
subparagraph (2)(A) if the Administrator determines that the
concern is in an industry in which small business concerns
owned and controlled by women are substantially underrep-
resented.
(4) IDENTIFICATION OF INDUSTRIES.—The Administrator shall
conduct a study to identify industries in which small business
concerns owned and controlled by women are underrepresented
with respect to Federal procurement contracting.
(5) ENFORCEMENT; PENALTIES.—
(A) VERIFICATION OF ELIGIBILITY.—In carrying out this
subsection, the Administrator shall establish procedures
relating to—
(i) the filing, investigation, and disposition by the
Administration of any challenge to the eligibility of a
small business concern to receive assistance under this
subsection (including a challenge, filed by an inter-
ested party, relating to the veracity of a certification
made or information provided to the Administration
by a small business concern under paragraph (2)(E));
and
(ii) verification by the Administrator of the accuracy
of any certification made or information provided to
the Administration by a small business concern under
paragraph (2)(E).
(B) EXAMINATIONS.—The procedures established under
subparagraph (A) may provide for program examinations
(including random program examinations) by the Adminis-
trator of any small business concern making a certification
or providing information to the Administrator under para-
graph (2)(E).
(C) PENALTIES.—In addition to the penalties described in
section 16(d), any small business concern that is deter-
mined by the Administrator to have misrepresented the
status of that concern as a small business concern owned
and controlled by women for purposes of this subsection,
shall be subject to—
(i) section 1001 of title 18, United States Code; and
(ii) sections 3729 through 3733 of title 31, United
States Code.
(6) PROVISION OF DATA.—Upon the request of the Adminis-
trator, the head of any Federal department or agency shall
promptly provide to the Administrator such information as the
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36
Administrator determines to be necessary to carry out this sub-
section.
(7) AUTHORITY FOR SOLE SOURCE CONTRACTS FOR ECONOMI-
CALLY DISADVANTAGED SMALL BUSINESS CONCERNS OWNED AND
CONTROLLED BY WOMEN.—A contracting officer may award a
sole source contract under this subsection to any small busi-
ness concern owned and controlled by women described in
paragraph (2)(A) and certified under paragraph (2)(E) if—
(A) such concern is determined to be a responsible con-
tractor with respect to performance of the contract oppor-
tunity and the contracting officer does not have a reason-
able expectation that 2 or more businesses described in
paragraph (2)(A) will submit offers;
(B) the anticipated award price of the contract (including
options) will not exceed—
(i) $7,000,000, in the case of a contract opportunity
assigned a standard industrial classification code for
manufacturing; or
(ii) $4,000,000, in the case of any other contract op-
portunity; and
(C) in the estimation of the contracting officer, the con-
tract award can be made at a fair and reasonable price.
(8) AUTHORITY FOR SOLE SOURCE CONTRACTS FOR SMALL BUSI-
NESS CONCERNS OWNED AND CONTROLLED BY WOMEN IN SUB-
STANTIALLY UNDERREPRESENTED INDUSTRIES.—A contracting of-
ficer may award a sole source contract under this subsection
to any small business concern owned and controlled by women
certified under paragraph (2)(E) that is in an industry in which
small business concerns owned and controlled by women are
substantially underrepresented (as determined by the Adminis-
trator under paragraph (3)) if—
(A) such concern is determined to be a responsible con-
tractor with respect to performance of the contract oppor-
tunity and the contracting officer does not have a reason-
able expectation that 2 or more businesses in an industry
that has received a waiver under paragraph (3) will sub-
mit offers;
(B) the anticipated award price of the contract (including
options) will not exceed—
(i) $7,000,000, in the case of a contract opportunity
assigned a standard industrial classification code for
manufacturing; or
(ii) $4,000,000, in the case of any other contract op-
portunity; and
(C) in the estimation of the contracting officer, the con-
tract award can be made at a fair and reasonable price.
(n) BUSINESS GRANTS AND COOPERATIVE AGREEMENTS.—
(1) IN GENERAL.—In accordance with this subsection, the Ad-
ministrator may make grants to and enter into cooperative
agreements with any coalition of private entities, public enti-
ties, or any combination of private and public entities—
(A) to expand business-to-business relationships between
large and small businesses; and
(B) to provide businesses, directly or indirectly, with on-
line information and a database of companies that are in-
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37
terested in mentor-protege programs or community-based,
statewide, or local business development programs.
(2) MATCHING REQUIREMENT.—Subject to subparagraph (B),
the Administrator may make a grant to a coalition under para-
graph (1) only if the coalition provides for activities described
in paragraph (1)(A) or (1)(B) an amount, either in kind or in
cash, equal to the grant amount.
(3) AUTHORIZATION OF APPROPRIATIONS.—There is authorized
to be appropriated to carry out this subsection $6,600,000, to
remain available until expended, for each of fiscal years 2001
through 2006.
* * * * * * *
Æ
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