Small Business Contracting Transparency Act of 2023
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- Crpt 118Hrpt179
Summary
House Report 118–179 of the 118th Congress, 1st Session, submitted September 1, 2023 by Mr. Williams of Texas from the Committee on Small Business to accompany H.R. 4670, the Small Business Contracting Transparency Act of 2023. The committee reports the bill favorably without amendment and recommends that it pass. The report states that the bill requires the SBA to report on certification activities and contract awards in the WOSB, HUBZone and SDVOSB programs, and that the committee held a hearing on May 11, 2023 and ordered the bill reported on July 18, 2023. A section-by-section analysis describes annual reports starting no later than May 1, 2024. The report closes with the required House statements and a showing of changes in existing law to the Small Business Act.
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118TH CONGRESS REPORT
" HOUSE OF REPRESENTATIVES !
1st Session 118–179
SMALL BUSINESS CONTRACTING TRANSPARENCY
ACT OF 2023
SEPTEMBER 1, 2023.—Committed to the Committee of the Whole House on the State
of the Union and ordered to be printed
Mr. WILLIAMS of Texas, from the Committee on Small Business,
submitted the following
R E P O R T
[To accompany H.R. 4670]
The Committee on Small Business, to whom was referred the bill
(H.R. 4670) to amend the Small Business Act to require reporting
on additional information with respect to small business concerns
owned and controlled by women, qualified HUBZone small business
concerns, and small business concerns owned and controlled by vet-
erans, 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 ........................................................................ 2
II. Need for Legislation .................................................................................... 2
III. Hearings ....................................................................................................... 2
IV. Committee Consideration ........................................................................... 2
V. Committee Votes ......................................................................................... 2
VI. Section-by-Section of H.R. 4670 ................................................................. 5
VII. Congressional Budget Office Cost Estimate ............................................. 5
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures 6
IX. Oversight Findings & Recommendations .................................................. 6
X. Performance Goals and Objectives ............................................................ 6
XI. Statement of Duplication of Federal Programs ........................................ 6
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits ..................................................................................................... 6
XIII. Federal Mandates Statement ..................................................................... 7
XIV. Federal Advisory Committee Statement ................................................... 7
XV. Applicability to Legislative Branch ........................................................... 7
XVI. Statement of Constitutional Authority ...................................................... 7
XVII. Changes in Existing Law, Made by the Bill, As Reported ...................... 7
39–006
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I. PURPOSE AND BILL SUMMARY
H.R. 4670 was introduced by Rep. Houlahan (D–PA), Rep.
Scholten (D–MI) and Rep. Stauber (R–MN) on July 17, 2023. The
purpose of H.R. 4670, the ‘‘Small Business Contracting Trans-
parency Act’’, is to require the SBA to provide a report on certifi-
cation activities and contract awards within the Women’s Owned
Small Business (WOSB), HUBZone (Historically Underutilized
Business Zones), and Service-Disabled Veteran Owned Small Busi-
ness (SDVOSB) programs.
II. NEED FOR LEGISLATION
Small businesses play a vital role in America’s industrial base.
Their ability to provide agile innovation ensures the Federal gov-
ernment can fully execute its mission. To help small businesses
better compete in the federal marketplace, the Small Business Ad-
ministration (SBA) administers contracting programs that provide
unique procurement opportunities to small businesses. Small busi-
nesses in SBA’s WOSB, SDVOSB, and HUBZone contracting pro-
grams can access set-aside contract opportunities and sole-source
awards, among other benefits.
To participate in these SBA contracting programs, small busi-
nesses must gain certification to become eligible. SBA is respon-
sible for ensuring that participating small businesses are accu-
rately representing themselves, while ensuring those businesses re-
main eligible through recertification and examinations.
While SBA has a duty to examine these firms, more oversight is
needed to ensure that is being done properly and efficiently enough
as to not harm small businesses with delays. H.R. 4670 would pro-
vide deeper insights into certification activities within HUBZone,
SDVOSB, and WOSB programs.
III. HEARINGS
In the 118th Congress, the Committee held one hearing exam-
ining the issues covered in H.R. 4670. On May 11, 2023, the Com-
mittee held a hearing titled ‘‘Leveling the Playing Field: The State
of Small Business Contracting.’’ Hearing witnesses discussed the
importance of certification in the small business procurement, and
how delays in bureaucratic processes contribute to the eroding
small business role in the industrial base.
IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on July 18, 2023 and ordered H.R. 4670 re-
ported favorably to the House of Representatives. During the mark-
up 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 to favorably report H.R. 4670 to the House of Representatives
at 11:58 a.m.
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Insert offset folio 5 here HR179.001
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Insert offset folio 6 here HR179.002
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VI. SECTION-BY-SECTION OF H.R. 4670
Section 1. Short title
This Act may be cited as the ‘‘Small Business Contracting Trans-
parency Act of 2023’’.
Section 2. Report on small business concerns owned and controlled
by women
The Administrator of the SBA is directed to submit an annual re-
port, starting no later than May 1, 2024, on small businesses con-
trolled by women (WOSBs). The report shall include WOSB certifi-
cation by the Administrator and by a national certifying entity, in-
cluding any fees charged.
The report must include prime contract award dollar amounts for
sole sourced contracts for economically disadvantaged women-
owned small businesses and for contracts in industries substan-
tially underrepresented by women owned small businesses. The re-
port must include awards made to firms incorrectly when they are
not in an industry underrepresented by women owned firms.
The report must count the number of women owned small busi-
nesses that were found ineligible due to re-examination or
verification of their eligibility. The SBA must provide the number
of anticipated re-certification examinations and the number con-
ducted. The report must include the number of firms de-certified
due to these examinations, by each program. The Administrator
may include additional items as necessary.
Section 3. Report on small business concerns owned and controlled
by qualified HUBZone small business concerns
This section requires a similar report for businesses certified as
HUBZone firms. The report must include the total dollar amount
and percentage of prime contract awards to HUBZones overall.
Section 4. Report on small business concerns owned and controlled
by service-disabled veterans
This section requires a similar report for businesses certified as
firms controlled by service-disabled veterans (SDVOSB). The report
must include the total dollar amount and percentage of prime con-
tract awards to SDVOSBs overall.
Section 5. Compliance with CUTGO
This section does not authorize any additional appropriations for
this bill.
VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
Pursuant to clause 3(d)(1) of House rule XIII, the Committee
adopts as its own the cost estimate prepared by the Director of the
Congressional Budget Office pursuant to section 402 of the Con-
gressional Budget Act of 1974. The Committee has requested but
not received from the Director of the Congressional Budget Office
a cost estimate for the Committee’s provisions. Once available, the
cost estimate will be published in the Congressional Record.
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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)(I) of the Congressional Budg-
et Act of 1974, the Committee provides the following opinion and
estimate with respect to new budget authority, entitlement author-
ity, and tax expenditures. While the Committee has not received an
estimate of new budget authority contained in the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to Sec. 402 of the Congressional Budget Act of 1974, the Com-
mittee does not believe that there will be any additional costs at-
tributable to this legislation. H.R. 4670 does not direct new spend-
ing, but instead reallocates funding independently authorized and
appropriated.
IX. OVERSIGHT FINDINGS & 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.
4670 are incorporated into the descriptive portions of this report.
X. PERFORMANCE GOALS AND OBJECTIVES
With respect to the requirements of clause 3(c)(1) of rule XIII of
the Rules of the House of Representatives, the performance goals
and objectives of H.R. 4670 are to require an annual report on the
number of certifications determinations, number of small business
concerns certified as a WOSB, SDVOSB, and HUBZone, amount of
fees charged, total dollar amount and percentage of prime contracts
awarded to small business concerns through WOSB, SDVOSB, and
HUBZone, number of contracts awarded incorrectly to WOSB,
SDVOSB, or HUBZone, and the name of the awarding agency, and
steps the SBA Administrator has taken to train Federal personnel.
The report must also include the number of firms that were due
for recertification, the number of firms recertified, number found
ineligible, the number decertified, and the total number of firms
controlled by women, service-disabled veterans, or HUBZone.
XI. STATEMENT OF 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. 4670 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.
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XIII. FEDERAL MANDATES STATEMENT
The Committee adopts as its own the estimate of Federal man-
dates prepared by the Director of the Congressional Budget Office
pursuant to section 423 of the Unfunded Mandates Reform Act.
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
accommodations within the meaning of section 102(b)(3) of the Con-
gressional Accountability Act.
XVI. STATEMENT OF CONSTITUTIONAL AUTHORITY
Pursuant to clause 7 of rule XII of the Rules of the House, the
Committee finds that the authority for this legislation in Art. I, § 8,
cl.1 of the Constitution of the United States.
XVII. 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):
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
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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
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
contracts 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 dis-
advantaged 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 Pro-
gram Participant eligible for award of the contract on
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the date specified for receipt of offers contained in the
contract 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
eligible 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 (includ-
ing options) will exceed $7,000,000 in the case of a contract
opportunity 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 Busi-
ness 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 Partici-
pants even if the anticipated award price is not expected to ex-
ceed the dollar amounts specified in clause (i)(II). Such approv-
als shall be granted only on a limited basis.
(2) Notwithstanding subsections (a) and (c) of the first section
of the Act entitled ‘‘An Act requiring contracts for the construction,
alteration, 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
appropriate 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 de-
velop, within a reasonable period of time, such financial and
other capability as may be needed to obtain such bonds as the
Administration may subsequently require for the successful
completion of any program conducted under the authority of
this subsection;
(C) the Administration finds that such small business is
unable 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.
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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
subsection 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 pro-
curement requirement, or a requirement that does not have a satis-
factory 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-
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 disadvan-
taged individuals,
(II) an economically disadvantaged Indian tribe (or a
wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian
organization, 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 disadvan-
taged individuals,
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(II) an economically disadvantaged Indian tribe (or a
wholly owned business entity of such tribe), or
(III) an economically disadvantaged Native Hawaiian
organization.
(B) A small business concern meets the requirements of this
subparagraph 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 so-
cially disadvantaged individuals whose ability to compete in the
free enterprise system has been impaired due to diminished capital
and credit opportunities as compared to others in the same busi-
ness area who are not socially disadvantaged. In determining the
degree of diminished credit and capital opportunities the Adminis-
tration shall consider, but not be limited to, the assets and net
worth of such socially disadvantaged individual. In determining the
economic 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
paragraph.
(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.
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(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
(II) require an appropriate reinvestment of funds or other
assets and such other steps as the Administration may deem
necessary 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 account under this paragraph when comparing such con-
cerns 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 Administra-
tion determines that with contract, financial, technical, and man-
agement 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-
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13
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 Ad-
ministration, 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 accord-
ance 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 de-
termination 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
conducted under the authority of this paragraph, shall be sustained
unless it is found to be arbitrary, capricious, or contrary to law.
(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 Adminis-
tration’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
paragraph shall be completed and a decision rendered, insofar as
practicable, 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-
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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.
(C) Each executive agency reporting to the Federal Procure-
ment Data System contract actions with an aggregate value in ex-
cess of $50,000,000 in fiscal year 1988, or in any succeeding fiscal
year, shall prepare a forecast of expected contract opportunities or
classes of contract opportunities for the next and succeeding fiscal
years that small business concerns, including those owned and con-
trolled 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 opportu-
nities (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
substantial annual purchases.
(F) Such forecasts shall be available to small business con-
cerns.
(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-
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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
business concern unless the concern agrees to satisfy the re-
quirements of section 46.
(15) For purposes of this subsection, the term ‘‘Native Hawai-
ian Organization’’ means any community service organization serv-
ing Native Hawaiians in the State of Hawaii which—
(A) is a nonprofit corporation that has filed articles of in-
corporation with the director (or the designee thereof) of the
Hawaii 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.
(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 respon-
sible contractor with respect to performance of such contract
opportunity;
(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
contracts awarded pursuant to this subsection.
(17)(A) An otherwise responsible business concern that is in
compliance with the requirements of subparagraph (B) shall not be
denied 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
subparagraph (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
offered the Government or be specifically exempted from such
section by section 7(j)(13)(C); and
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(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 determina-
tion by the contracting officer that no small business man-
ufacturer 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
products), after determining that no small business manu-
facturer or processor is available to participate in the Fed-
eral 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 employ-
ment, if such person participated personally (either directly or indi-
rectly) in decision-making responsibilities relating to such Program
Participant or with respect to the administration of any assistance
provided to Program Participants generally under this subsection,
section 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 own-
ership 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
submit a written certification to the Administration regarding com-
pliance 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
appropriate.
(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).
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(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
subsection 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 sub-
paragraph (A) shall be subject to disciplinary action, which may
consist of separation from service, reduction in grade, suspension,
or reprimand.
(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.
(D) The prohibitions of subparagraph (A), and remedial meas-
ures 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
listed 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 require-
ments of this subsection and applicable regulations shall be consid-
ered ‘‘good cause’’ for the initiation of a termination proceeding pur-
suant to section 7(j)(10)(F).
(21)(A) Subject to the provisions of subparagraph (B), a con-
tract (including options) awarded pursuant to this subsection shall
be performed by the concern that initially received such contract.
Notwithstanding the provisions of the preceding sentence, if the
owner or owners upon whom eligibility was based relinquish own-
ership or control of such concern, or enter into any agreement to
relinquish such ownership or control, such contract or option shall
be terminated for the convenience of the Government, except that
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18
no repurchase costs or other damages may be assessed against
such concerns 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
surrender 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 con-
tract is being performed certifies that termination of the con-
tract would severely impair attainment of the agency’s pro-
gram objectives or missions;
(iii) Ownership and control of the concern that is per-
forming the contract will pass to another small business con-
cern 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 inca-
pacity or death; or
(v) When, in order to raise equity capital, it is necessary
for the disadvantaged owners of the concern to relinquish own-
ership of a majority of the voting stock of such concern, but
only if—
(I) such concern has exited the Capital Ownership De-
velopment 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
subsection shall be required to notify the Administration imme-
diately 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 pur-
poses of determining ownership and control of a concern under this
section, any potential ownership interests held by investment com-
panies 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
hereby empowered, whenever it determines such action is nec-
essary—
(1)(A) to provide—
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(i) technical, managerial, and informational aids to
small business concerns—
(I) by advising and counseling on matters in con-
nection with Government procurement and policies,
principles, 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 informa-
tion on managing, financing, and operating small busi-
ness enterprises; and
(IV) by disseminating such information, including
through recognition events, and by other activities
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 Administra-
tion 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 coopera-
tion 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
cosponsorship mailing labels, but not lists of
names and addresses of small business concerns
compiled by the Administration;
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20
(ee) all printed materials containing the
names of both the Administration and the cospon-
sor shall include a prominent disclaimer that the
cooperation does not constitute or imply an en-
dorsement 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
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 partici-
pating with it in furtherance of the purposes of subparagraphs
(A) and (B) to use the Administration’s office facilities and re-
lated material and services as the Administration deems ap-
propriate, 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
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21
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
outstanding, except upon a specific request signed by such
client for assistance in connection with such matter.
(D) Notwithstanding any other provision of law, no pay-
ment for supportive services or reimbursement of out-of-pocket
expenses 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,
disability, 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 agree-
ments) to any public or private institution of higher education
for the establishment and operation of a small business insti-
tute, which shall be used to provide business counseling and
assistance to small business concerns through the activities of
students enrolled at the institution, which students shall be
entitled to receive educational credits for their activities.
(F) Notwithstanding any other provision of law and pursu-
ant to regulations which the Administrator shall provide, coun-
sel 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 volun-
teers 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
Business Ownership Act of 1988, the Administration is author-
ized 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 sub-
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22
contracts and to take action to encourage the letting of sub-
contracts by prime contractors to small-business concerns at
prices and on conditions and terms which are fair and equi-
table;
(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-
business concerns’’, as authorized and directed under this para-
graph;
(7)(A) to certify to Government procurement officers, and
officers 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 oth-
erwise 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
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23
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 pro-
curement or production such reports concerning the letting of
contracts 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;
(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 infor-
mation and assistance as may be appropriate, including infor-
mation 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
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24
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
section 3204 of title 39, United States Code, data and informa-
tion, in such form as it shall deem appropriate, to public agen-
cies, private organizations, and the general public;
(16) to make studies of matters materially affecting the
competitive 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 coop-
erative 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,
United States Code), veterans, and members of a reserve com-
ponent of the Armed Forces.
(c) [Reserved.]
(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
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25
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
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
socially 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 con-
trolled 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 busi-
ness, 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 con-
trolled 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
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26
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
representations 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 concern owned and controlled by socially and eco-
nomically disadvantaged individuals, or a small business con-
cern 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).
(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 nego-
tiated 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 amend-
ment 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
Federal agency concerned, the apparent successful offeror fails to
negotiate the subcontracting plan required by this paragraph, such
offeror shall become ineligible to be awarded the contract. Prior
compliance of the offeror with other such subcontracting plans
shall be considered by the Federal agency in determining the re-
sponsibility 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
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27
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.
(F)(i) Each contract subject to the requirements of this para-
graph or paragraph (5) shall contain a clause for the payment of
liquidated damages upon a finding that a prime contractor has
failed to make a good faith effort to comply with the requirements
imposed 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 ap-
parent 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 Fed-
eral agency as significant factors for purposes of evaluating of-
fers for a bundled contract where the head of the agency deter-
mines that the contract offers a significant opportunity for sub-
contracting:
(i) A factor that is based on the rate provided under
the subcontracting plan for small business participation in
the performance of the contract.
(ii) For the evaluation of past performance of an offer-
or, a factor that is based on the extent to which the offeror
attained applicable goals for small business participation
in the performance of contracts.
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28
(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
method 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
Federal agency concerned, the bidder selected to be awarded the
contract fails to submit the subcontracting plan required by this
paragraph, such bidder shall become ineligible to be awarded the
contract. 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 of-
feror or bidder who will administer the subcontracting program
of the offeror or bidder and a description of the duties of such
individual;
(C) a description of the efforts the offeror or bidder will
take to assure that 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 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-
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29
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’ re-
ports;
(v) compare the performance of their subcontractors to
subcontracting plans and goals; and
(vi) discuss performance with subcontractors when
necessary to ensure their subcontractors make a good faith
effort 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
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 offer-
or 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
controlled by service-disabled veterans, qualified HUBZone
small business concerns, small business concerns owned and
controlled by socially and economically disadvantaged individ-
uals, 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 offer-
or 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 offer-
or 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 estab-
lished in accordance with subparagraph (D) of this paragraph,
including—
(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-
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30
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 ob-
jectives set forth in subcontracting plans submitted pursu-
ant to this subsection; and
(B) the agency periodically reviews data collected and
reported pursuant to subparagraph (A) for the purpose of
ensuring that such contractors comply in good faith with
the requirements of this subsection and subcontracting
plans submitted by the contractors pursuant to this sub-
section.
(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
subcontractor 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 con-
tract 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 para-
graphs (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 sub-
section, including the formulation of subcontracting plans pur-
suant to paragraph (4);
(B) review any solicitation for any contract to be let pursu-
ant 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
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31
(C) evaluate compliance with subcontracting plans as a
supplement to evaluations performed by the contracting agen-
cy, either on a contract-by-contract basis or, in the case of con-
tractors having multiple contracts, on an aggregate basis.
(12) For purposes of determining the attainment of a sub-
contract utilization goal under any subcontracting plan entered
into with any executive agency pursuant to this subsection, a men-
tor firm providing development assistance to a protege firm under
the Mentor-Protege Program established under section 4902 of title
10, United States Code, shall be granted credit for such assistance
in accordance with subsection (f) 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.—
(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
covered contract determines that a prime contractor has a his-
tory 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 con-
tractor may be determined to have a history of unjustified,
untimely 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 iden-
tify a small business concern as a potential subcontractor in a
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32
bid or proposal for the contract, or in a plan submitted pursu-
ant to this subsection in connection with the contract, shall no-
tify the small business concern prior to making such identifica-
tion.
(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 wheth-
er or not a prime contractor has attained the percentage
goals specified in paragraph (6)—
(i) if the subcontracting goals pertain only to a
single contract with a Federal agency, the prime con-
tractor may elect to receive credit for small business
concerns performing as first tier subcontractors or
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 re-
ported pursuant to clause (i) for the purpose of ensur-
ing that such contractors comply in good faith with the
requirements of this subsection.
(C) RULE OF CONSTRUCTION.—Nothing in this para-
graph shall be construed to allow a Federal agency to es-
tablish a goal for an number of subcontracts with a sub-
contractor at any tier for a prime contractor otherwise eli-
gible to receive 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.
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33
(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 pro-
posals for a contract for property or services shall post, for a
period of not less than ten days, in a public place at the con-
tracting office issuing the solicitation a notice of solicitation de-
scribed in subsection (f)—
(i) in the case of an executive agency other than the
Department of Defense, if the contract is for a price ex-
pected to exceed $10,000, but not to exceed $25,000; and
(ii) in the case of the Department of Defense, if the
contract is for a price expected to exceed $5,000, but not
to exceed $25,000; and
(C) an executive agency awarding a contract for property
or services for a price exceeding $100,000, or placing an order
referred to in clause (A)(ii) exceeding $100,000, shall furnish
for publication by the Secretary of Commerce a notice announc-
ing 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 Busi-
ness 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 great-
er than the simplified acquisition threshold, establish a dead-
line 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 ear-
lier than the date 30 days after the date the notice re-
quired by paragraph (1)(A)(ii) is published;
(ii) in the case of a solicitation for research and devel-
opment, 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—
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34
(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 re-
spond to the solicitation will not be furnished as part of
such solicitation, and identify the source in the Govern-
ment, if any, from which the technical data may be ob-
tained; and
(B) state whether an offeror, its product, or service
must meet a qualification requirement in order to be eligi-
ble for award, and, if so, identify the office from which a
qualification 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 justi-
fying the use of such procedures and the identity of the in-
tended 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
awarding 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 so-
licitation 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 accept-
ance of—
(i) any unsolicited proposal that demonstrates a
unique and innovative research concept and the publica-
tion of any notice of such unsolicited research proposal
would disclose the originality of thought or innovativeness
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35
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
supplies;
(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.
(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 Administrator for Federal Procurement Policy and the Admin-
istrator of the Small Business Administration, that it is not appro-
priate or reasonable to publish a notice before issuing a solicitation.
(h)(1) An executive agency may not award a contract using pro-
cedures 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
procedures under title III of the Federal Property and Adminis-
trative Services Act of 1949 (41 U.S.C. 251 et sq.) or sections
3201 through 3205 of title 10, United States Code, as appro-
priate, 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
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36
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
concern, or the authorized representative of such concern, the com-
plete solicitation package for any on-going procurement announced
pursuant to a notice under subsection (e). An executive agency may
require the payment of a fee, not exceeding the actual cost of dupli-
cation, 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.—
(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 exec-
utive 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
opportunity shall include—
(A) a description of the business opportunity that is
comparable 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 AF-
FECTED BY MILITARY OPERATIONS.—
(1) IN GENERAL.—The Administration shall utilize, as ap-
propriate, its entrepreneurial development and management
assistance programs, including programs involving State or
private sector partners, to provide business counseling and
training to any small business concern adversely affected by
the deployment 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
Congress or by the President; or
(C) a period of a contingency operation, as defined in
section 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 of-
ficer’’ 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 CON-
TROLLED BY WOMEN.—The term ‘‘small business concern
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37
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 expecta-
tion that two or more small business concerns owned and
controlled by women will submit offers for the contract;
(C) the contract is for the procurement of goods or
services with respect to an industry identified by the Ad-
ministrator pursuant to øparagraph (3)¿ paragraph (4);
(D) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price;
and
(E) each of the concerns is certified by a Federal agen-
cy, a State government, the Administrator, or a national
certifying 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 under-
represented 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 accu-
racy 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-
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38
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
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 (includ-
ing options) will not exceed—
(i) $7,000,000, in the case of a contract oppor-
tunity assigned a standard industrial classification
code for manufacturing; or
(ii) $4,000,000, in the case of any other contract
opportunity; and
(C) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
(8) AUTHORITY FOR SOLE SOURCE CONTRACTS FOR SMALL
BUSINESS CONCERNS OWNED AND CONTROLLED BY WOMEN IN
SUBSTANTIALLY UNDERREPRESENTED INDUSTRIES.—A con-
tracting officer 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 indus-
try in which small business concerns owned and controlled by
women are substantially underrepresented (as determined by
the Administrator 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 (includ-
ing options) will not exceed—
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39
(i) $7,000,000, in the case of a contract oppor-
tunity assigned a standard industrial classification
code for manufacturing; or
(ii) $4,000,000, in the case of any other contract
opportunity; and
(C) in the estimation of the contracting officer, the
contract award can be made at a fair and reasonable price.
(9) REPORT.—Not later than May 1, 2024, and annually
thereafter, the Administrator shall submit to the Committee on
Small Business of the House of Representatives and the Com-
mittee on Small Business and Entrepreneurship of the Senate
a report on small business concerns owned and controlled by
women. Such report shall include, for the fiscal year preceding
the date of the report, the following:
(A) The number of applications for certification as a
small business concern owned and controlled by women
that have sufficient information for the Administrator to
make a certification determination, disaggregated by—
(i) the number of applications certified;
(ii) the number of applications denied; and
(iii) the number of applications for which a deter-
mination has not been made.
(B) The number of concerns certified as small business
concerns owned and controlled by women by a national cer-
tifying entity approved by the Administrator.
(C) The amount of fees, if any, charged by each na-
tional certifying entity for such certification.
(D) The total dollar amount and total percentage of
prime contracts awarded to small business concerns owned
and controlled by women pursuant to paragraph (2) or pur-
suant to a waiver granted under paragraph (3).
(E) The total dollar amount and total percentage of
prime contracts awarded to small business concerns owned
and controlled by women pursuant to paragraphs (7) and
(8).
(F) With respect to a contract incorrectly awarded pur-
suant to this subsection because it was awarded based on
an industry in which small business concerns owned and
controlled by women are not underrepresented—
(i) the number of such contracts;
(ii) the Federal agencies that issued such contracts;
and
(iii) any steps taken by Administrator to train the
personnel of such Federal agency on the use of the au-
thority provided under this subsection.
(G) With respect to an examination described in para-
graph (5)(B)—
(i) the number of examinations due because of re-
certification requirements and the actual number of
such examinations conducted; and
(ii) the number of examinations conducted for any
other reason.
(H) The number of small business concerns owned and
controlled by women that were found to be ineligible to be
awarded a contract under this subsection as a result of an
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40
examination conducted pursuant to paragraph (5)(B) or
failure to request an examination pursuant to section
127.400 of title 13, Code of Federal Regulations (or a suc-
cessor rule).
(I) The number of small business concerns owned and
controlled by women that were decertified.
(J) The total number of small business concerns owned
and controlled by women.
(K) Any other information the Administrator deter-
mines necessary.
(n) BUSINESS GRANTS AND COOPERATIVE AGREEMENTS.—
(1) IN GENERAL.—In accordance with this subsection, the
Administrator 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 be-
tween large and small businesses; and
(B) to provide businesses, directly or indirectly, with
online information and a database of companies that are
interested 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
paragraph (1) only if the coalition provides for activities de-
scribed 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 author-
ized to be appropriated to carry out this subsection $6,600,000,
to remain available until expended, for each of fiscal years
2001 through 2006.
* * * * * * *
SEC. 31. HUBZONE PROGRAM.
(a) IN GENERAL.—There is established within the Administra-
tion a program (to be known as the HUBZone program) to be car-
ried out by the Administrator to provide for Federal contracting as-
sistance, including promoting economic development in economi-
cally distressed areas (as defined in section 7(m)(11)), to qualified
HUBZone small business concerns in accordance with this section.
(b) DEFINITIONS RELATING TO HUBZONES.—In this section:
(1) HISTORICALLY UNDERUTILIZED BUSINESS ZONE.—The
terms ‘‘historically underutilized business zone’’ or ‘‘HUBZone’’
mean any area located within 1 or more—
(A) qualified census tracts;
(B) qualified nonmetropolitan counties;
(C) lands within the external boundaries of an Indian
reservation;
(D) redesignated areas;
(E) base closure areas;
(F) qualified disaster areas; or
(G) a Governor-designated covered area.
(2) HUBZONE SMALL BUSINESS CONCERN.—The term
‘‘HUBZone small business concern’’ means—
(A) a small business concern that is at least 51 percent
owned and controlled by United States citizens;
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41
(B) a small business concern that is—
(i) an Alaska Native Corporation owned and con-
trolled by Natives (as determined pursuant to section
29(e)(1) of the Alaska Native Claims Settlement Act
(43 U.S.C. 1626(e)(1))); or
(ii) a direct or indirect subsidiary corporation,
joint venture, or partnership of an Alaska Native Cor-
poration qualifying pursuant to section 29(e)(1) of the
Alaska Native Claims Settlement Act (43 U.S.C.
1626(e)(1)), if that subsidiary, joint venture, or part-
nership is owned and controlled by Natives (as deter-
mined pursuant to section 29(e)(2)) of the Alaska Na-
tive Claims Settlement Act (43 U.S.C. 1626(e)(2)));
(C) a small business concern—
(i) that is wholly owned by one or more Indian
tribal governments, or by a corporation that is wholly
owned by one or more Indian tribal governments; or
(ii) that is owned in part by one or more Indian
tribal governments, or by a corporation that is wholly
owned by one or more Indian tribal governments, if all
other owners are either United States citizens or small
business concerns;
(D) a small business concern—
(i) that is wholly owned by one or more Native
Hawaiian Organizations (as defined in section
8(a)(15)), or by a corporation that is wholly owned by
one or more Native Hawaiian Organizations; or
(ii) that is owned in part by one or more Native
Hawaiian Organizations, or by a corporation that is
wholly owned by one or more Native Hawaiian Orga-
nizations, if all other owners are either United States
citizens or small business concerns;
(E) a small business concern that is—
(i) wholly owned by a community development cor-
poration that has received financial assistance under
part 1 of subchapter A of the Community Economic
Development Act of 1981 (42 U.S.C. 9805 et seq.); or
(ii) owned in part by one or more community de-
velopment corporations, if all other owners are either
United States citizens or small business concerns; or
(F) a small business concern that is—
(i) a small agricultural cooperative organized or
incorporated in the United States;
(ii) wholly owned by 1 or more small agricultural
cooperatives organized or incorporated in the United
States; or
(iii) owned in part by 1 or more small agricultural
cooperatives organized or incorporated in the United
States, if all owners are small business concerns or
United States citizens.
(3) QUALIFIED AREAS.—
(A) QUALIFIED CENSUS TRACT.—
(i) IN GENERAL.—The term ‘‘qualified census tract’’
means a census tract that is covered by the definition
of ‘‘qualified census tract’’ in section 42(d)(5)(B)(ii) of
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42
the Internal Revenue Code of 1986 and that is re-
flected in an online tool prepared by the Administrator
described under subsection (d)(7).
(ii) EXCEPTION.—For any metropolitan statistical
area in the Commonwealth of Puerto Rico, the term
‘‘qualified census tract’’ has the meaning given that
term in section 42(d)(5)(B)(ii) of the Internal Revenue
Code of 1986 as applied without regard to subclause
(II) of such section and that is reflected in the online
tool described under clause (i), except that this clause
shall only apply—
(I) 10 years after the date that the Adminis-
trator implements this clause, or
(II) the date on which the Financial Oversight
and Management Board for the Commonwealth of
Puerto Rico created by the Puerto Rico Oversight,
Management, and Economic Stability Act ceases
to exist,
whichever event occurs first.
(B) QUALIFIED NONMETROPOLITAN COUNTY.—The term
‘‘qualified nonmetropolitan county’’ means any county that
is reflected in the online tool described under subpara-
graph (A)(i) and—
(i) that was not located in a metropolitan statis-
tical area (as defined in section 143(k)(2)(B) of the In-
ternal Revenue Code of 1986) at the time of the most
recent census taken for purposes of selecting qualified
census tracts under section 42(d)(5)(B)(ii) of the Inter-
nal Revenue Code of 1986; and
(ii) in which—
(I) the median household income is less than
80 percent of the State median household income,
based on a 5-year average of the available data
from the Bureau of the Census of the Department
of Commerce;
(II) the unemployment rate is not less than
140 percent of the average unemployment rate for
the United States or for the State in which such
county is located, whichever is less, based on a 5-
year average of the available data from the Sec-
retary of Labor; or
(III) there is located a difficult development
area, as designated by the Secretary of Housing
and Urban Development in accordance with sec-
tion 42(d)(5)(B)(iii) of the Internal Revenue Code
of 1986, within Alaska, Hawaii, or any territory or
possession of the United States outside the 48
contiguous States.
(C) REDESIGNATED AREA.—The term ‘‘redesignated
area’’ means any census tract that ceases to be qualified
under subparagraph (A) and any nonmetropolitan county
that ceases to be qualified under subparagraph (B) for a
period of 3 years after the date on which the census tract
or nonmetropolitan county ceased to be so qualified.
(D) BASE CLOSURE AREA.—
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43
(i) IN GENERAL.—Subject to clause (ii), the term
‘‘base closure area’’ means—
(I) lands within the external boundaries of a
military installation that were closed through a
privatization process under the authority of—
(aa) the Defense Base Closure and Re-
alignment Act of 1990 (part A of title XXIX of
division B of Public Law 101–510; 10 U.S.C.
2687 note);
(bb) title II of the Defense Authorization
Amendments and Base Closure and Realign-
ment Act (Public Law 100–526; 10 U.S.C.
2687 note);
(cc) section 2687 of title 10, United States
Code; or
(dd) any other provision of law author-
izing or directing the Secretary of Defense or
the Secretary of a military department to dis-
pose of real property at the military installa-
tion for purposes relating to base closures of
redevelopment, while retaining the authority
to enter into a leaseback of all or a portion of
the property for military use;
(II) the census tract or nonmetropolitan coun-
ty in which the lands described in subclause (I)
are wholly contained;
(III) a census tract or nonmetropolitan county
the boundaries of which intersect the area de-
scribed in subclause (I); and
(IV) a census tract or nonmetropolitan county
the boundaries of which are contiguous to the area
described in subclause (II) or subclause (III).
(ii) LIMITATION.—A census tract or nonmetropoli-
tan county described in clause (i) shall be considered
to be a base closure area for a period beginning on the
date on which the Administrator designates such cen-
sus tract or nonmetropolitan county as a base closure
area and ending on the date on which the base closure
area ceases to be a qualified census tract under sub-
paragraph (A) or a qualified nonmetropolitan county
under subparagraph (B) in accordance with the online
tool prepared by the Administrator described under
subsection (d)(7), except that such period may not be
less than 8 years.
(iii) DEFINITIONS.—In this subparagraph:
(I) CENSUS TRACT.—The term ‘‘census tract’’
means a census tract delineated by the United
States Bureau of the Census in the most recent
decennial census that is not located in a non-
metropolitan county and does not otherwise qual-
ify as a qualified census tract.
(II) NONMETROPOLITAN COUNTY.—The term
‘‘nonmetropolitan county’’ means a county that
was not located in a metropolitan statistical area
(as defined in section 143(k)(2)(B) of the Internal
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44
Revenue Code of 1986) at the time of the most re-
cent census taken for purposes of selecting quali-
fied census tracts and does not otherwise qualify
as a qualified nonmetropolitan county.
(E) QUALIFIED DISASTER AREA.—
(i) IN GENERAL.—Subject to clause (ii), the term
‘‘qualified disaster area’’ means any census tract or
nonmetropolitan county located in an area where a
major disaster has occurred or an area in which a cat-
astrophic incident has occurred if such census tract or
nonmetropolitan county ceased to be qualified under
subparagraph (A) or (B), as applicable, during the pe-
riod beginning 5 years before the date on which the
President declared the major disaster or the cata-
strophic incident occurred.
(ii) DURATION.—A census tract or nonmetropolitan
county shall be considered to be a qualified disaster
area under clause (i) only for the period of time ending
on the date the area ceases to be a qualified census
tract under subparagraph (A) or a qualified nonmetro-
politan county under subparagraph (B), in accordance
with the online tool prepared by the Administrator de-
scribed under subsection (d)(7) and beginning—
(I) in the case of a major disaster, on the date
on which the President declared the major dis-
aster for the area in which the census tract or
nonmetropolitan county, as applicable, is located;
or
(II) in the case of a catastrophic incident, on
the date on which the catastrophic incident oc-
curred in the area in which the census tract or
nonmetropolitan county, as applicable, is located.
(iii) DEFINITIONS.—In this subparagraph:
(I) MAJOR DISASTER.—The term ‘‘major dis-
aster’’ means a major disaster declared by the
President under section 401 of the Robert T. Staf-
ford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5170).
(II) OTHER DEFINITIONS.—The terms ‘‘census
tract’’ and ‘‘nonmetropolitan county’’ have the
meanings given such terms in subparagraph
(D)(iii).
(F) GOVERNOR-DESIGNATED COVERED AREA.—
(i) IN GENERAL.—A ‘‘Governor-designated covered
area’’ means a covered area that the Administrator
has designated by approving a petition described
under clause (ii).
(ii) PETITION.—For a covered area to receive a des-
ignation as a Governor-designated covered area, the
Governor of the State in which the covered area is
wholly contained shall include such covered area in a
petition to the Administrator requesting such a des-
ignation. In reviewing a request for designation in-
cluded in such a petition, the Administrator may con-
sider—
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45
(I) the potential for job creation and invest-
ment in the covered area;
(II) the demonstrated interest of small busi-
ness concerns in the covered area to be designated
as a Governor-designated covered area;
(III) how State and local government officials
have incorporated the covered area into an eco-
nomic development strategy; and
(IV) if the covered area was a HUBZone be-
fore becoming the subject of the petition, the im-
pact on the covered area if the Administrator did
not approve the petition.
(iii) LIMITATIONS.—Each calendar year, a Gov-
ernor may submit not more than 1 petition described
under clause (ii). Such petition shall include all cov-
ered areas in a State for which the Governor seeks
designation as a Governor-designated covered area, ex-
cept that the total number of covered areas included
in such petition may not exceed 10 percent of the total
number of covered areas in the State.
(iv) CERTIFICATION.—If the Administrator grants a
petition described under clause (ii), the Governor of
the Governor-designated covered area shall, not less
frequently than annually, submit data to the Adminis-
trator certifying that each Governor-designated cov-
ered area continues to meet the requirements of clause
(v)(I).
(v) DEFINITIONS.—In this subparagraph:
(I) COVERED AREA.—The term ‘‘covered area’’
means an area in a State—
(aa) that is located outside of an urban-
ized area, as determined by the Bureau of the
Census;
(bb) with a population of not more than
50,000; and
(cc) for which the average unemployment
rate is not less than 120 percent of the aver-
age unemployment rate of the United States
or of the State in which the covered area is lo-
cated, whichever is less, based on the most re-
cent data available from the American Com-
munity Survey conducted by the Bureau of
the Census.
(II) GOVERNOR.—The term ‘‘Governor’’ means
the chief executive of a State.
(III) STATE.—The term ‘‘State’’ means each of
the several States, the District of Columbia, the
Commonwealth of Puerto Rico, the United States
Virgin Islands, Guam, the Commonwealth of the
Northern Mariana Islands, and American Samoa.
(4) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.—The
term ‘‘qualified HUBZone small business concern’’ means a
HUBZone small business concern that has been certified by the
Administrator in accordance with the procedures described in
this section.
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46
(5) NATIVE AMERICAN SMALL BUSINESS CONCERNS.—
(A) ALASKA NATIVE CORPORATION.—The term ‘‘Alaska
Native Corporation’’ has the same meaning as the term
‘‘Native Corporation’’ in section 3 of the Alaska Native
Claims Settlement Act (43 U.S.C. 1602).
(B) ALASKA NATIVE VILLAGE.—The term ‘‘Alaska Na-
tive Village’’ has the same meaning as the term ‘‘Native
village’’ in section 3 of the Alaska Native Claims Settle-
ment Act (43 U.S.C. 1602).
(C) INDIAN RESERVATION.—The term ‘‘Indian reserva-
tion’’—
(i) has the same meaning as the term ‘‘Indian
country’’ in section 1151 of title 18, United States
Code, except that such term does not include—
(I) any lands that are located within a State
in which a tribe did not exercise governmental ju-
risdiction on the date of the enactment of this
paragraph, unless that tribe is recognized after
that date of the enactment by either an Act of
Congress or pursuant to regulations of the Sec-
retary of the Interior for the administrative rec-
ognition that an Indian group exists as an Indian
tribe (part 83 of title 25, Code of Federal Regula-
tions); and
(II) lands taken into trust or acquired by an
Indian tribe after the date of the enactment of
this paragraph if such lands are not located with-
in the external boundaries of an Indian reserva-
tion or former reservation or are not contiguous to
the lands held in trust or restricted status on that
date of the enactment; and
(ii) in the State of Oklahoma, means lands that—
(I) are within the jurisdictional areas of an
Oklahoma Indian tribe (as determined by the Sec-
retary of the Interior); and
(II) are recognized by the Secretary of the In-
terior as eligible for trust land status under part
151 of title 25, Code of Federal Regulations (as in
effect on the date of the enactment of this para-
graph).
(6) AGRICULTURAL COMMODITY.—The term ‘‘agricultural
commodity’’ has the same meaning as in section 102 of the Ag-
ricultural Trade Act of 1978 (7 U.S.C. 5602).
(c) ELIGIBLE CONTRACTS.—
(1) DEFINITIONS.—In this subsection—
(A) the term ‘‘contracting officer’’ has the meaning
given that term in section 27(f)(5) of the Office of Federal
Procurement Policy Act (41 U.S.C. 423(f)(5)); and
(B) the term ‘‘full and open competition’’ has the
meaning given that term in section 4 of the Office of Fed-
eral Procurement Policy Act (41 U.S.C. 403).
(2) AUTHORITY OF CONTRACTING OFFICER.—
(A) SOLE SOURCE CONTRACTS.—A contracting officer
may award sole source contracts under this section to any
qualified HUBZone small business concern, if—
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47
(i) the qualified HUBZone small business concern
is determined to be a responsible contractor with re-
spect to performance of such contract opportunity, and
the contracting officer does not have a reasonable ex-
pectation that 2 or more qualified HUBZone small
business concerns will submit offers for the con-
tracting opportunity;
(ii) the anticipated award price of the contract (in-
cluding options) will not exceed—
(I) $7,000,000, in the case of a contract oppor-
tunity assigned a standard industrial classifica-
tion code for manufacturing; or
(II) $3,000,000, in the case of all other con-
tract opportunities; and
(iii) in the estimation of the contracting officer,
the contract award can be made at a fair and reason-
able price.
(B) RESTRICTED COMPETITION.—A contract opportunity
may be awarded pursuant to this section on the basis of
competition restricted to qualified HUBZone small busi-
ness concerns if the contracting officer has a reasonable
expectation that not less than 2 qualified HUBZone small
business concerns will submit offers and that the award
can be made at a fair market price.
(C) APPEALS.—Not later than 5 days from the date the
Administration is notified of a procurement officer’s deci-
sion not to award a contract opportunity under this section
to a qualified HUBZone small business concern, the Ad-
ministrator may notify the contracting officer of the intent
to appeal the contracting officer’s decision, and within 15
days of such date the Administrator may file a written re-
quest for reconsideration of the contracting officer’s deci-
sion with the Secretary of the department or agency head.
(3) PRICE EVALUATION PREFERENCE IN FULL AND OPEN COM-
PETITIONS.—
(A) IN GENERAL.—Subject to subparagraph (B), in any
case in which a contract is to be awarded on the basis of
full and open competition, the price offered by a qualified
HUBZone small business concern shall be deemed as being
lower than the price offered by another offeror (other than
another small business concern), if the price offered by the
qualified HUBZone small business concern is not more
than 10 percent higher than the price offered by the other-
wise lowest, responsive, and responsible offeror.
(B) PROCUREMENT OF COMMODITIES.—For purchases
by the Secretary of Agriculture of agricultural commod-
ities, the price evaluation preference shall be—
(i) 10 percent, for the portion of a contract to be
awarded that is not greater than 25 percent of the
total volume being procured for each commodity in a
single invitation;
(ii) 5 percent, for the portion of a contract to be
awarded that is greater than 25 percent, but not
greater than 40 percent, of the total volume being pro-
cured for each commodity in a single invitation; and
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48
(iii) zero, for the portion of a contract to be award-
ed that is greater than 40 percent of the total volume
being procured for each commodity in a single invita-
tion.
(C) PROCUREMENT OF COMMODITIES FOR INTER-
NATIONAL FOOD AID EXPORT OPERATIONS.—The price eval-
uation preference for purchases of agricultural commod-
ities by the Secretary of Agriculture for export operations
through international food aid programs administered by
the Farm Service Agency shall be 5 percent on the first
portion of a contract to be awarded that is not greater
than 20 percent of the total volume of each commodity
being procured in a single invitation.
(D) TREATMENT OF PREFERENCE.—A contract awarded
to a HUBZone small business concern under a preference
described in subparagraph (B) shall not be counted toward
the fulfillment of any requirement partially set aside for
competition restricted to small business concerns.
(4) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.—
A procurement may not be made from a source on the basis of
a preference provided in paragraph (2) or (3), if the procure-
ment would otherwise be made from a different source under
section 4124 or 4125 of title 18, United States Code, or the
Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.).
(d) ELIGIBILITY REQUIREMENTS; ENFORCEMENT.—
(1) CERTIFICATION.—In order to be eligible for certification
by the Administrator as a qualified HUBZone small business
concern, a HUBZone small business concern shall submit docu-
mentation to the Administrator stating that—
(A) at the time of certification and at each examina-
tion conducted pursuant to paragraph (4), the principal of-
fice of the concern is located in a HUBZone and not fewer
than 35 percent of its employees reside in a HUBZone;
(B) the concern will attempt to maintain the applica-
ble employment percentage under subparagraph (A) dur-
ing the performance of any contract awarded to such con-
cern on the basis of a preference provided under subsection
(c); and
(C) the concern will ensure that the requirements of
section 46 are satisfied with respect to any subcontract en-
tered into by such concern pursuant to a contract awarded
under this section.
(2) VERIFICATION.—In carrying out this section, the Admin-
istrator shall establish procedures relating to—
(A) the filing, investigation, and disposition by the Ad-
ministration of any challenge to the eligibility of a
HUBZone small business concern to receive assistance
under this section (including a challenge, filed by an inter-
ested party, relating to the veracity of documentation pro-
vided to the Administration by such a concern under para-
graph (1)); and
(B) verification by the Administrator of the accuracy of
any documentation provided by a HUBZone small business
concern under paragraph (1).
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49
(3) TIMING.—The Administrator shall verify the eligibility
of a HUBZone small business concern using the procedures de-
scribed in paragraph (2) within a reasonable time and not later
than 60 days after the date on which the Administrator re-
ceives sufficient and complete documentation from a HUBZone
small business concern under paragraph (1).
(4) RECERTIFICATION.—Not later than 3 years after the
date that such HUBZone small business concern was certified
as a qualified HUBZone small business concern, and every 3
years thereafter, the Administrator shall verify the accuracy of
any documentation provided by a HUBZone small business
concern under paragraph (1) to determine if such HUBZone
small business concern remains a qualified HUBZone small
business concern.
(5) EXAMINATIONS.—The Administrator shall conduct pro-
gram examinations of qualified HUBZone small business con-
cerns, using a risk-based analysis to select which concerns are
examined, to ensure that any concern examined meets the re-
quirements of paragraph (1).
(6) LOSS OF CERTIFICATION.—A HUBZone small business
concern that, based on the results of an examination conducted
pursuant to paragraph (5) no longer meets the requirements of
paragraph (1), shall have 30 days to submit documentation to
the Administrator to be eligible to be certified as a qualified
HUBZone small business concern. During the 30-day period,
such concern may not compete for or be awarded a contract
under this section. If such concern fails to meet the require-
ments of paragraph (1) by the last day of the 30-day period,
the Administrator shall not certify such concern as a qualified
HUBZone small business concern.
(7) HUBZONE ONLINE TOOL.—
(A) IN GENERAL.—The Administrator shall develop a
publicly accessible online tool that depicts HUBZones.
Such online tool shall be updated—
(i) with respect to HUBZones described under sub-
paragraphs (A) and (B) of subsection (b)(3), beginning
on January 1, 2020, and every 5 years thereafter;
(ii) with respect to a HUBZone described under
subsection (b)(3)(C), immediately after the area be-
comes, or ceases to be, a redesignated area; and
(iii) with respect to HUBZones described under
subparagraphs (D), (E), and (F) of subsection (b)(3),
immediately after an area is designated as a base clo-
sure area, qualified disaster area, or Governor-des-
ignated covered area, respectively.
(B) DATA.—The online tool required under subpara-
graph (A) shall clearly and conspicuously provide access to
the data used by the Administrator to determine whether
or not an area is a HUBZone in the year in which the on-
line tool was prepared.
(C) NOTIFICATION OF UPDATE.—The Administrator
shall include in the online tool a notification of the date on
which the online tool, and the data used to create the on-
line tool, will be updated.
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50
(8) LIST OF QUALIFIED HUBZONE SMALL BUSINESS CON-
CERNS.—The Administrator shall establish and publicly main-
tain on the internet a list of qualified HUBZone small business
concerns that shall—
(A) to the extent practicable, include the name, ad-
dress, and type of business with respect to such concern;
(B) be updated by the Administrator not less than an-
nually; and
(C) be provided upon request to any Federal agency or
other entity.
(9) PROVISION OF DATA.—Upon the request of the Adminis-
trator, the Secretary of Labor, the Administrator of the Federal
Emergency Management Agency, the Secretary of Housing and
Urban Development, and the Secretary of the Interior (or the
Assistant Secretary for Indian Affairs), shall promptly provide
to the Administrator such information as the Administrator de-
termines to be necessary to carry out this subsection.
(10) PENALTIES.—In addition to the penalties described in
section 16(d), any small business concern that is determined by
the Administrator to have misrepresented the status of that
concern as a ‘‘qualified HUBZone small business concern’’ for
purposes of this section shall be subject to liability for fraud,
including section 1001 of title 18, United States Code, and sec-
tions 3729 through 3733 of title 31, United States Code.
(e) PERFORMANCE METRICS.—
(1) IN GENERAL.—Not later than 1 year after the date of
the enactment of this subsection, the Administrator shall pub-
lish performance metrics designed to measure the success of
the HUBZone program established under this section in meet-
ing the program’s objective of promoting economic development
in economically distressed areas (as defined in section
7(m)(11)).
(2) COLLECTING AND MANAGING HUBZONE DATA.—The Ad-
ministrator shall develop processes to incentivize each regional
office of the Administration to collect and manage data on
HUBZones within the geographic area served by such regional
office.
(3) REPORT.—Not later than 90 days after the last day of
each fiscal year, the Administrator shall submit to the Com-
mittee on Small Business and Entrepreneurship of the Senate
and the Committee on Small Business of the House of Rep-
resentatives a report analyzing the data from the performance
metrics established under this subsection and including—
(A) the number of HUBZone small business concerns
that lost certification as a qualified HUBZone small busi-
ness concern because of the results of an examination per-
formed under subsection (d)(5); and
(B) the number of those concerns that did not submit
documentation to be recertified under subsection (d)(6).
ø(f)¿ (g) AUTHORIZATION OF APPROPRIATIONS.—There is author-
ized to be appropriated to carry out the program established by
this section $10,000,000 for each of fiscal years 2020 through 2025.
(e) REPORT.—Not later than May 1, 2024, and annually there-
after, the Administrator shall submit to the Committee on Small
Business of the House of Representatives and the Committee on
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51
Small Business and Entrepreneurship of the Senate a report on
HUBZone small business concerns. Such report shall include, for
the fiscal year preceding the date of the report, the following:
(1) The number of applications for certification as a quali-
fied HUBZone small business concern that have sufficient infor-
mation for the Administrator to make a certification determina-
tion, disaggregated by—
(A) the number of applications certified;
(B) the number of applications denied; and
(C) the number of applications for which a determina-
tion has not been made.
(2) The total dollar amount and total percentage of prime
contracts awarded to qualified HUBZone small business con-
cerns pursuant to this section.
(3) The total dollar amount and percent of sole source con-
tracts awarded to qualified HUBZone small business concerns
under subsection (c)(2)(A).
(4) With respect to an examination described in subsection
(d)(5)—
(A) the number of examinations due because of recer-
tification requirements and the actual number of such ex-
aminations conducted; and
(B) the number of examinations conducted for any
other reason.
(5) The number of HUBZone small business concerns that
were found to be ineligible to be awarded a contract under this
subsection as a result of an examination conducted pursuant to
subsection (d)(5) or a verification conducted pursuant to sub-
section (d)(2).
(6) The number of small business concerns that were decer-
tified as qualified HUBZone small business concerns.
(7) The number of qualified HUBZone small business con-
cerns.
(8) Any other information the Administrator determines
necessary.
* * * * * * *
SEC. 36. PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS
OWNED AND CONTROLLED BY SERVICE-DISABLED VET-
ERANS.
(a) CONTRACTING OFFICER DEFINED.—For purposes of this sec-
tion, the term ‘‘contracting officer’’ has the meaning given such
term in section 2101 of title 41, United States Code.
(b) CERTIFICATION OF SMALL BUSINESS CONCERNS OWNED AND
CONTROLLED BY SERVICE-DISABLED VETERANS.—With respect to a
procurement program or preference established under this Act that
applies to prime contractors, the Administrator shall—
(1) certify the status of a concern as a small business con-
cern owned and controlled by service-disabled veterans; and
(2) require the periodic recertification of such status.
(c) SOLE SOURCE CONTRACTS.—In accordance with this section,
a contracting officer may award a sole source contract to any small
business concern owned and controlled by service-disabled veterans
if—
(1) such concern is determined to be a responsible con-
tractor with respect to performance of such contract oppor-
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52
tunity and the contracting officer does not have a reasonable
expectation that 2 or more small business concerns owned and
controlled by service-disabled veterans will submit offers for
the contracting opportunity;
(2) the anticipated award price of the contract (including
options) will not exceed—
(A) $7,000,000, in the case of a contract opportunity
assigned a standard industrial classification code for man-
ufacturing; or
(B) $3,000,000, in the case of any other contract oppor-
tunity; and
(3) in the estimation of the contracting officer, the contract
award can be made at a fair and reasonable price.
(d) RESTRICTED COMPETITION.—In accordance with this section,
a contracting officer may award contracts on the basis of competi-
tion restricted to small business concerns owned and controlled by
service-disabled veterans certified under subsection (b) if the con-
tracting officer has a reasonable expectation that not less than 2
small business concerns owned and controlled by service-disabled
veterans will submit offers and that the award can be made at a
fair market price.
(e) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.—A
procurement may not be made from a source on the basis of a pref-
erence provided under subsection (a) or (b) if the procurement
would otherwise be made from a different source under section
4124 or 4125 of title 18, United States Code, or the Javits-Wagner-
O’Day Act (41 U.S.C. 46 et seq.).
(f) DATABASE OF VETERAN-OWNED BUSINESSES.—(1) Subject to
paragraphs (2) through (6), the Administrator shall maintain a
database of small business concerns owned and controlled by vet-
erans, small business concerns owned and controlled by service-dis-
abled veterans, and the veteran owners of such business concerns.
(2)(A) To be eligible for inclusion in the database, such a vet-
eran shall submit to the Administrator such information as the Ad-
ministrator may require with respect to the small business concern
or the veteran. Application for inclusion in the database shall con-
stitute permission under section 552a of title 5, United States
Code, (commonly referred to as the Privacy Act) for the Adminis-
trator to obtain from the Secretary of Veterans Affairs such per-
sonal information maintained by the Secretary as may be nec-
essary to verify the information contained in the application.
(B) For purposes of this subsection—
(i) the Secretary of Veterans Affairs shall—
(I) verify an individual’s status as a veteran or a serv-
ice-disabled veteran; and
(II) establish a system to permit the Administrator to
access, but not alter, the verification of such status; and
(ii) the Administrator shall verify—
(I) the status of a business concern as a small business
concern; and
(II) the ownership and control of such business con-
cern.
(C) The Administrator may not certify a concern under sub-
section (b) or section 36A if the Secretary of Veterans Affairs can-
not provide the verification described under subparagraph (B)(i)(I).
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53
(3) Information maintained in the database shall be submitted
on a voluntary basis by a veteran described in paragraph (1).
(4) the Administrator shall make the database available to all
Federal departments and agencies and shall notify each such de-
partment and agency of the availability of the database.
(5) If the Administrator determines that the public dissemina-
tion of certain types of information maintained in the database is
inappropriate, the Administrator shall take such steps as are nec-
essary to maintain such types of information in a secure and con-
fidential manner.
(6)(A) If a small business concern is not included in the data-
base because the Administrator does not certify the status of the
concern as a small business concern owned and controlled by vet-
erans (under section 36A) or a small business concern owned and
controlled by service-disabled veterans (under subsection (g) of this
section), the concern may appeal the denial of certification to the
Office of Hearings and Appeals of the Administration (as estab-
lished under section 5(i)). The decision of the Office of Hearings
and Appeals shall be considered a final agency action.
(B)(i) If an interested party challenges the inclusion in the
database of a small business concern owned and controlled by vet-
erans or a small business concern owned and controlled by service-
disabled veterans based on the status of the concern as a small
business concern or the ownership or control of the concern, the
challenge shall be heard by the Office of Hearings and Appeals as
described in subparagraph (A). The decision of the Office of Hear-
ings and Appeals shall be considered final agency action.
(ii) In this subparagraph, the term ‘‘interested party’’
means—
(I) the Secretary of Veterans Affairs or the Adminis-
trator; or
(II) in the case of a small business concern that is
awarded a contract, the applicable contracting officer or
another small business concern that submitted an offer for
the contract that was awarded to the small business con-
cern that is the subject of a challenge made under clause
(i).
(g) CERTIFICATION REQUIREMENT.—Notwithstanding subsection
(c), a contracting officer may only award a sole source contract to
a small business concern owned and controlled by service-disabled
veterans or a contract on the basis of competition restricted to
small business concerns owned and controlled by service-disabled
veterans if such a concern is certified by the Administrator as a
small business concern owned and controlled by service-disabled
veterans.
(h) ENFORCEMENT; PENALTIES.—
(1) VERIFICATION OF ELIGIBILITY.—In carrying out this sec-
tion, the Administrator shall establish procedures relating to—
(A) the filing, investigation, and disposition by the Ad-
ministration of any challenge to the eligibility of a small
business concern to receive assistance under this section
(including a challenge, filed by an interested party, relat-
ing to the veracity of a certification made or information
provided to the Administration by a small business con-
cern under subsection (b)); and
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54
(B) verification by the Administrator of the accuracy of
any certification made or information provided to the Ad-
ministration by a small business concern under subsection
(b).
(2) EXAMINATIONS.—The procedures established under
paragraph (1) shall provide for a program of examinations by
the Administrator of any small business concern making a cer-
tification or providing information to the Administrator under
subsection (b), to determine the veracity of any statements or
information provided as part of such certification or otherwise
provided under subsection (b).
(3) ENFORCEMENT; PENALTIES.—Rules similar to the rules
of paragraphs (5) and (6) of section 8(m) shall apply for pur-
poses of this section and section 36A.
(i) PROVISION OF DATA.—Upon the request of the Adminis-
trator, the head of any Federal department or agency shall prompt-
ly provide to the Administrator such information as the Adminis-
trator determines to be necessary to carry out subsection (b) or to
be able to certify the status of the concern as a small business con-
cern owned and controlled by veterans under section 36A.
(j) REPORT.—Not later than May 1, 2024, and annually there-
after, the Administrator shall submit to the Committee on Small
Business of the House of Representatives and the Committee on
Small Business and Entrepreneurship of the Senate a report on
small business concerns owned and controlled by service-disabled
veterans. Such report shall include, for the fiscal year preceding the
date of the report, the following:
(1) The total number of small business concerns certified as
small business concerns owned and controlled by service-dis-
abled veterans.
(2) The total dollar amount and total percentage of prime
contracts awarded to small business concerns owned and con-
trolled by service-disabled veterans pursuant to this section.
(3) The total dollar amount and percent of sole source con-
tracts awarded to owned and controlled by service-disabled vet-
erans pursuant to subsection (c).
(4) With respect to an examination described in subsection
(h)(2)—
(A) the number of examinations due because of recer-
tification requirements and the actual number of such ex-
aminations conducted; and
(B) the number of examinations conducted for any
other reason.
(5) The number of small business concerns owned and con-
trolled by service-disabled veterans that were found to be ineli-
gible to be awarded a contract under this subsection as a result
of an examination conducted pursuant to subsection (h)(2).
(6) The number of small business concerns decertified as
small business concerns owned and controlled by service-dis-
abled veterans.
(7) The total number of small business concerns owned and
controlled by service-disabled veterans.
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55
(8) Any other information the Administrator determines
necessary.
* * * * * * *
Æ
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