Protecting Small Business Competitions Act of 2026
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- Crpt 119Hrpt719
Summary
House Report 119–719 of the 119th Congress, dated July 2, 2026, submitted by Mr. WILLIAMS of Texas from the Committee on Small Business to accompany H.R. 2804, the Protecting Small Business Competitions Act of 2026. The committee reports the bill favorably with an amendment to Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) that codifies the Rule of Two, reserving covered contracts above the simplified acquisition threshold for small business concerns when two or more responsible small business offers at a fair market price are expected. Delivery orders and task orders are excluded. The report states the committee ordered the bill reported on May 20, 2026 by a roll call vote of 23 ayes to 0 nos and had not received a Congressional Budget Office cost estimate. It includes changes in existing law and minority views signed by Ranking Member Nydia M. Velázquez.
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119TH CONGRESS REPORT
" HOUSE OF REPRESENTATIVES !
2d Session 119–719
PROTECTING SMALL BUSINESS COMPETITIONS
ACT OF 2026
JULY 2, 2026.—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
together with
MINORITY VIEWS
[To accompany H.R. 2804]
The Committee on Small Business, to whom was referred the bill
(H.R. 2804) to amend the Small Business Act to codify the Rule of
Two, and for other purposes, having considered the same, reports
favorably thereon with an amendment and recommends that the
bill as amended do pass.
CONTENTS
Page
I. Purpose and Bill Summary ........................................................................ 2
II. Need for Legislation .................................................................................... 2
III. Hearings ....................................................................................................... 3
IV. Committee Consideration ........................................................................... 3
V. Committee Votes ......................................................................................... 3
VI. Section-by-Section of H.R. 2804 ................................................................. 5
VII. Congressional Budget Office Cost Estimate ............................................. 5
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditures 5
IX. Oversight Findings & Recommendations .................................................. 5
X. Performance Goals and Objectives ............................................................ 5
XI. Statement of Duplication of Federal Programs ........................................ 6
XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits ..................................................................................................... 6
XIII. Federal Mandates Statement ..................................................................... 6
XIV. Federal Advisory Committee Statement ................................................... 6
XV. Applicability to Legislative Branch ........................................................... 6
XVI. Statement of Constitutional Authority ...................................................... 6
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XVII. Changes in Existing Law Made by the Bill, as Reported ........................ 6
XVIII. Minority Views ............................................................................................ 36
69–006
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The amendment is as follows:
Strike all after the enacting clause and insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Protecting Small Business Competitions Act of
2026’’.
SEC. 2. CODIFICATION OF THE RULE OF TWO.
Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) is amended by adding
at the end the following new paragraph:
‘‘(4) RULE OF TWO.—
‘‘(A) IN GENERAL.—Each covered contract for goods or services that has
an anticipated value greater than the simplified acquisition threshold shall
be reserved for small business concerns when the contracting officer reason-
ably expects—
‘‘(i) to obtain offers from two or more responsible small business con-
cerns; and
‘‘(ii) to award such contract at a fair market price.
‘‘(B) COVERED CONTRACT DEFINED.—In this paragraph, the term ‘covered
contract’ does not include a delivery order or a task order.’’.
I. PURPOSE AND BILL SUMMARY
On April 9, 2025, Ranking Member Nydia Velázquez (D–NY) in-
troduced H.R. 2804, the Protecting Small Business Competitions
Act of 2025. H.R. 2804 codifies the existing ‘‘Rule of Two’’ found in
the Federal Acquisition Regulations for contracts above the sim-
plified acquisition threshold, a requirement that has existed in reg-
ulation since 1984.
II. NEED FOR LEGISLATION
The ‘‘Rule of Two’’ has existed in the Federal Acquisition Regula-
tions (FAR) for decades. Under the ‘‘Rule of Two,’’ any federal con-
tract above the simplified acquisition threshold must be set aside
for small business competition whenever a contracting officer rea-
sonably expects at least two qualified small business offers at a fair
market price.
The Trump Administration underscored the importance of the
‘‘Rule of Two’’ when it was retained in the FAR as part of the Sep-
tember 2025 Revolutionary FAR Overhaul (RFO), calling it ‘‘essen-
tial to sound procurement.’’ Preserving the ‘‘Rule of Two’’ was a de-
fining feature of the RFO and a direct reflection of the Administra-
tion’s commitment to American small businesses.
The purpose of H.R. 2804 is to codify the current requirement
and application of the rule of two as included in the FAR, while
retaining and preserving the existing exemptions, including those
found in the Revolutionary FAR Overhaul Section 19.104–1.
H.R. 2804 does not expand the ‘‘Rule of Two’’ to procurements
outside of its current application. In particular, procurements gov-
erned by different laws and processes, such as mandatory procure-
ments made pursuant to the Javits-Wagner-O’Day Act (41 U.S.C.
8501, et seq.) or other requirements at federal agencies are not af-
fected by H.R. 2804.
Preserving and codifying the ‘‘Rule of Two’’ as applied today will
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restore certainty to small businesses and provide Main Street with
predictable access to federal contracting opportunities.
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III. HEARINGS
The Committee on Small Business held the following hearings
examining matters related to H.R. 2804:
• On February 5, 2025, the Committee held a hearing titled
‘‘Hope on the Horizon: Prioritizing Small Business Growth in
the 119th Congress.’’
• On July 8, 2025, the Committee held a hearing titled ‘‘Lev-
eling the Playing Field: Fostering Opportunities for Small
Business Contractors’’
IV. COMMITTEE CONSIDERATION
The Committee on Small Business met in open session, with a
quorum being present, on May 20, 2026, and ordered H.R. 2804, as
amended, to be reported favorably to the House of Representatives
by a roll call vote of 23 ayes to 0 nos.
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. 2804, as amended, to the House of
Representatives at 4:15 PM.
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VI. SECTION-BY-SECTION OF H.R. 2804
Section 1—Short title
This Act may be cited as the ‘‘Protecting Small Business Com-
petitions Act of 2026’’.
Section 2—Codification of the Rule of Two
This section amends the Small Business Act to codify the ‘‘Rule
of Two’’ for federal procurements above the simplified acquisition
threshold.
This section requires contracting officers to reserve covered con-
tracts for small business concerns when the contracting officer rea-
sonably expects that at least two responsible small businesses will
submit offers and that the award can be made at a fair market
price.
This section clarifies that the term ‘‘covered contract’’ does not
include task orders or delivery orders.
VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
Pursuant to 3(c)(3) of rule XIII of the Rules of the House of Rep-
resentatives, the Committee adopts as its own the cost estimate
prepared by the Director of the Congressional Budget Office pursu-
ant to section 402 of the Congressional Budget Act of 1974. At the
time this report was filed, the Committee has requested but not re-
ceived a cost estimate from the Director of the Congressional Budg-
et Office.
VIII. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND
TAX EXPENDITURES
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the House
of Representatives and section 308(a)(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 section 402 of the Congressional Budget Act of 1974, the
Committee does not believe that there will be any new or increased
costs attributable to this legislation.
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 H.R. 2804,
as amended, are incorporated into the descriptive portions of this
report.
X. PERFORMANCE GOALS AND OBJECTIVES
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With respect to the requirements of clause 3(c)(4) of rule XIII of
the Rules of the House of Representatives, the goal of H.R. 2804
is to codify the ‘‘Rule of Two.’’
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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. 2804 is known to be dupli-
cative of another Federal program, including any program that was
included in a report to Congress pursuant to section 21 of Public
Law 111–139 or the most recent Catalog of Federal Domestic As-
sistance.
XII. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND
LIMITED TARIFF BENEFITS
With respect to clause 9 of rule XXI of the Rules of the House
of Representatives, the Committee finds that the bill does not con-
tain any congressional earmarks, limited tax benefits, or limited
tariff benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI of
the Rules of the House of Representatives.
XIII. FEDERAL MANDATES STATEMENT
The Committee will adopt as its own the estimate of the Federal
mandates prepared by the Director of the Congressional Budget Of-
fice 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,
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as reported, are shown as follows (new matter is printed in italics
and existing law in which no change is proposed is shown in
roman):
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SMALL BUSINESS ACT
* * * * * * *
SEC. 15.
(a) SMALL BUSINESS PROCUREMENTS.—
(1) IN GENERAL.—For purposes of this Act, small business
concerns shall receive any award or contract if such award or
contract is, in the determination of the Administrator and the
contracting agency, in the interest of—
(A) maintaining or mobilizing the full productive capac-
ity of the United States;
(B) war or national defense programs; or
(C) assuring that a fair proportion of the total purchases
and contracts for goods and services of the Government in
each industry category (as defined under paragraph (2))
are awarded to small business concerns.
(2) INDUSTRY CATEGORY DEFINED.—
(A) IN GENERAL.—In this subsection, the term ‘‘industry
category’’ means a discrete group of similar goods and
services, as determined by the Administrator in accordance
with the North American Industry Classification System
codes used to establish small business size standards, ex-
cept that the Administrator shall limit an industry cat-
egory to a greater extent than provided under the North
American Industry Classification System codes if the Ad-
ministrator receives evidence indicating that further seg-
mentation of the industry category is warranted—
(i) due to special capital equipment needs;
(ii) due to special labor requirements;
(iii) due to special geographic requirements, except
as provided in subparagraph (B);
(iv) due to unique Federal buying patterns or re-
quirements; or
(v) to recognize a new industry.
(B) EXCEPTION FOR GEOGRAPHIC REQUIREMENTS.—The
Administrator may not further segment an industry cat-
egory based on geographic requirements unless—
(i) the Government typically designates the geo-
graphic area where work for contracts for goods or
services is to be performed;
(ii) Government purchases comprise the major por-
tion of the entire domestic market for such goods or
services; and
(iii) it is unreasonable to expect competition from
business concerns located outside of the general geo-
graphic area due to the fixed location of facilities, high
mobilization costs, or similar economic factors.
(3) DETERMINATIONS WITH RESPECT TO AWARDS OR CON-
TRACTS.—Determinations made pursuant to paragraph (1) may
be made for individual awards or contracts, any part of an
award or contract or task order, or for classes of awards or con-
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tracts or task orders.
(4) INCREASING PRIME CONTRACTING OPPORTUNITIES FOR
SMALL BUSINESS CONCERNS.—
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(A) DESCRIPTION OF COVERED PROPOSED PROCURE-
MENTS.—The requirements of this paragraph shall apply to
a proposed procurement that includes in its statement of
work goods or services currently being supplied or per-
formed by a small business concern and, as determined by
the Administrator—
(i) is in a quantity or of an estimated dollar value
which makes the participation of a small business con-
cern as a prime contractor unlikely;
(ii) in the case of a proposed procurement for con-
struction, seeks to bundle or consolidate discrete con-
struction projects; or
(iii) is a solicitation that involves an unnecessary or
unjustified bundling of contract requirements.
(B) NOTICE TO PROCUREMENT CENTER REPRESENTA-
TIVES.—With respect to proposed procurements described
in subparagraph (A), at least 30 days before issuing a so-
licitation and concurrent with other processing steps re-
quired before issuing the solicitation, the contracting agen-
cy shall provide a copy of the proposed procurement to the
procurement center representative of the contracting agen-
cy (as described in subsection (l)) along with a statement
explaining—
(i) why the proposed procurement cannot be divided
into reasonably small lots (not less than economic pro-
duction runs) to permit offers on quantities less than
the total requirement;
(ii) why delivery schedules cannot be established on
a realistic basis that will encourage the participation
of small business concerns in a manner consistent
with the actual requirements of the Government;
(iii) why the proposed procurement cannot be offered
to increase the likelihood of the participation of small
business concerns;
(iv) in the case of a proposed procurement for con-
struction, why the proposed procurement cannot be of-
fered as separate discrete projects; or
(v) why the contracting agency has determined that
the bundling of contract requirements is necessary
and justified.
(C) ALTERNATIVES TO INCREASE PRIME CONTRACTING OP-
PORTUNITIES FOR SMALL BUSINESS CONCERNS.—If the pro-
curement center representative believes that the proposed
procurement will make the participation of small business
concerns as prime contractors unlikely, the procurement
center representative, within 15 days after receiving the
statement described in subparagraph (B), shall recommend
to the contracting agency alternative procurement methods
for increasing prime contracting opportunities for small
business concerns.
(D) FAILURE TO AGREE ON AN ALTERNATIVE PROCURE-
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MENT METHOD.—If the procurement center representative
and the contracting agency fail to agree on an alternative
procurement method, the Administrator shall submit the
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matter to the head of the appropriate department or agen-
cy for a determination.
(5) CONTRACTS FOR SALE OF GOVERNMENT PROPERTY.—With
respect to a contract for the sale of Government property,
small business concerns shall receive any such contract if, in
the determination of the Administrator and the disposal agen-
cy, the award of such contract is in the interest of assuring
that a fair proportion of the total sales of Government property
be made to small business concerns.
(6) SALE OF ELECTRICAL POWER OR OTHER PROPERTY.—Noth-
ing in this subsection shall be construed to change any pref-
erences or priorities established by law with respect to the sale
of electrical power or other property by the Federal Govern-
ment.
(7) COSTS EXCEEDING FAIR MARKET PRICE.—A contract may
not be awarded under this subsection if the cost of the contract
to the awarding agency exceeds a fair market price.
(b) With respect to any work to be performed the amount of
which would exceed the maximum amount of any contract for
which a surety may be guaranteed against loss under section 411
of the Small Business Investment Act of 1958 (15 U.S.C. 694(b)),
the contracting procurement agency shall, to the extent practicable,
place contracts so as to allow more than one small business concern
to perform such work.
(c)(1) As used in this subsection:
(A) The term ‘‘Committee’’ means the Committee for Pur-
chase from the Blind and Other Severely Handicapped estab-
lished under the first section of the Act entitled ‘‘An Act to cre-
ate a Committee on Purchases of Blind-made Products, and for
other purposes’’, approved June 25, 1938 (41 U.S.C. 46).
(B) The term ‘‘public or private organization for the handi-
capped’’ has the same meaning given such term in section 3(e).
(C) The term ‘‘handicapped individual’’ has the same mean-
ing given such term in section 3(f).
(2)(A) During fiscal year 1995, public or private organizations for
the handicapped shall be eligible to participate in programs author-
ized under this section in an aggregate amount not to exceed
$40,000,000.
(B) None of the amounts authorized for participation by subpara-
graph (A) may be placed on the procurement list maintained by the
Committee pursuant to section 2 of the Act entitled ‘‘An Act to cre-
ate a Committee on Purchases of Blind-made Products, and for
other purposes’’, approved June 25, 1938 (41 U.S.C. 47).
(3) The Administrator shall monitor and evaluate such participa-
tion.
(4)(A) Not later than ten days after the announcement of a pro-
posed award of a contract by an agency or department to a public
or private organization for the handicapped, a for-profit small busi-
ness concern that has experienced or is likely to experience severe
economic injury as the result of the proposed award may file an ap-
peal of the proposed award with the Administrator.
(B) If such a concern files an appeal of a proposed award under
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subparagraph (A) and the Administrator, after consultation with
the Executive Director of the Committee, finds that the concern has
experienced or is likely to experience severe economic injury as the
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result of the proposed award, not later than thirty days after the
filing of the appeal, the Administration shall require each agency
and department having procurement powers to take such action as
may be appropriate to alleviate economic injury sustained or likely
to be sustained by the concern.
(5) Each agency and department having procurement powers
shall report to the Office of Federal Procurement Policy each time
a contract subject to paragraph (2)(A) is entered into, and shall in-
clude in its report the amount of the next higher bid submitted by
a for-profit small business concern. The Office of Federal Procure-
ment Policy shall collect data reported under the preceding sen-
tence through the Federal procurement data system and shall re-
port to the Administration which shall notify all such agencies and
departments when the maximum amount of awards authorized
under paragraph (2)(A) has been made during any fiscal year.
(6) For the purpose of this subsection, a contract may be awarded
only if at least 75 per centum of the direct labor performed on each
item being produced under the contract in the sheltered workshop
or performed in providing each type of service under the contract
by the sheltered workshop is performed by handicapped individ-
uals.
(7) Agencies awarding one or more contracts to such an organiza-
tion pursuant to the provisions of this subsection may use
multiyear contracts, if appropriate.
(d) For purposes of this section priority shall be given to the
awarding of contracts and the placement of subcontracts to small
business concerns which shall perform a substantial proportion of
the production on those contracts and subcontracts within areas of
concentrated unemployment or underemployment or within labor
surplus areas. Notwithstanding any other provison of law, total
labor surplus area set-asides pursuant to Defense Manpower Policy
Number 4 (32A C.F.R. Chapter 1) or any successor policy shall be
authorized if the Secretary or his designee specifically determines
that there is a reasonable expectation that offers will be obtained
from a sufficient number of eligible concerns so that awards will be
made at reasonable prices. As soon as practicable and to the extent
possible, in determining labor surplus areas, consideration shall be
given to those persons who would be available for employment
were suitable employment available. Until such definition reflects
such number, the present criteria of such policy shall govern.
(e) PROCUREMENT STRATEGIES; CONTRACT BUNDLING.—
(1) IN GENERAL.—To the maximum extent practicable, pro-
curement strategies used by a Federal department or agency
having contracting authority shall facilitate the maximum par-
ticipation of small business concerns as prime contractors, sub-
contractors, and suppliers, and each such Federal department
or agency shall—
(A) provide opportunities for the participation of small
business concerns during acquisition planning processes
and in acquisition plans; and
(B) invite the participation of the appropriate Director of
Small and Disadvantaged Business Utilization in acquisi-
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tion planning processes and provide that Director access to
acquisition plans.
(2) MARKET RESEARCH.—
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(A) IN GENERAL.—Before proceeding with an acquisition
strategy that could lead to a contract containing consoli-
dated procurement requirements, the head of an agency
shall conduct market research to determine whether con-
solidation of the requirements is necessary and justified.
(B) FACTORS.—For purposes of subparagraph (A), con-
solidation of the requirements may be determined as being
necessary and justified if, as compared to the benefits that
would be derived from contracting to meet those require-
ments if not consolidated, the Federal Government would
derive from the consolidation measurably substantial bene-
fits, including any combination of benefits that, in com-
bination, are measurably substantial. Benefits described in
the preceding sentence may include the following:
(i) Cost savings.
(ii) Quality improvements.
(iii) Reduction in acquisition cycle times.
(iv) Better terms and conditions.
(v) Any other benefits.
(C) REDUCTION OF COSTS NOT DETERMINATIVE.—The re-
duction of administrative or personnel costs alone shall not
be a justification for bundling of contract requirements un-
less the cost savings are expected to be substantial in rela-
tion to the dollar value of the procurement requirements
to be consolidated.
(3) STRATEGY SPECIFICATIONS.—If the head of a contracting
agency determines that an acquisition plan for a procurement
involves a substantial bundling of contract requirements, the
head of a contracting agency shall publish a notice on a public
website that such determination has been made not later than
7 days after making such determination. Any solicitation for a
procurement related to the acquisition plan may not be pub-
lished earlier than 7 days after such notice is published. Along
with the publication of the solicitation, the head of a con-
tracting agency shall publish a justification for the determina-
tion, which shall include the following information:
(A) The specific benefits anticipated to be derived from
the bundling of contract requirements and a determination
that such benefits justify the bundling.
(B) An identification of any alternative contracting ap-
proaches that would involve a lesser degree of bundling of
contract requirements.
(C) An assessment of—
(i) the specific impediments to participation by small
business concerns as prime contractors that result
from the bundling of contract requirements; and
(ii) the specific actions designed to maximize partici-
pation of small business concerns as subcontractors
(including suppliers) at various tiers under the con-
tract or contracts that are awarded to meet the re-
quirements.
(4) CONTRACT TEAMING.—
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(A) IN GENERAL.—In the case of a solicitation of offers
for a bundled or consolidated contract that is issued by the
head of an agency, a small business concern that provides
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for use of a particular team of subcontractors or a joint
venture of small business concerns may submit an offer for
the performance of the contract.
(B) EVALUATION OF OFFERS.—The head of the agency
shall evaluate an offer described in subparagraph (A) in
the same manner as other offers, with due consideration to
the capabilities of all of the proposed subcontractors or
members of the joint venture as follows:
(i) TEAMS.—When evaluating an offer of a small
business prime contractor that includes a proposed
team of small business subcontractors, the head of the
agency shall consider the capabilities and past per-
formance of each first tier subcontractor that is part of
the team as the capabilities and past performance of
the small business prime contractor.
(ii) JOINT VENTURES.—When evaluating an offer of a
joint venture of small business concerns, if the joint
venture does not demonstrate sufficient capabilities or
past performance to be considered for award of a con-
tract opportunity, the head of the agency shall con-
sider the capabilities and past performance of each
member of the joint venture as the capabilities and
past performance of the joint venture.
(C) STATUS AS A SMALL BUSINESS CONCERN.—Participa-
tion of a small business concern in a team or a joint ven-
ture under this paragraph shall not affect the status of
that concern as a small business concern for any other
purpose.
(5) PAST PERFORMANCE RATINGS OF JOINT VENTURES FOR
SMALL BUSINESS CONCERNS.—With respect to evaluating an
offer for a prime contract made by a small business concern
that previously participated in a joint venture with another
business concern (whether or not such other business concern
was a small business concern), the Administrator shall estab-
lish regulations—
(A) allowing the small business concern to elect to use
the past performance of the joint venture if the small busi-
ness concern has no relevant past performance of its own;
(B) requiring the small business concern, when making
an election under subparagraph (A)—
(i) to identify to the contracting officer the joint ven-
ture of which the small business concern was a mem-
ber; and
(ii) to inform the contracting officer what duties and
responsibilities the small business concern carried out
as part of the joint venture; and
(C) requiring a contracting officer, if the small business
concern makes an election under subparagraph (A), to con-
sider the past performance of the joint venture when eval-
uating the past performance of the small business concern,
giving due consideration to the information provided under
DMWilson on DSK7X7S144PROD with REPORTS
subparagraph (B)(ii).
(f) CONTRACTING PREFERENCE FOR SMALL BUSINESS CONCERNS IN
A MAJOR DISASTER AREA.—
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13
(1) DEFINITION.—In this subsection, the term ‘‘disaster area’’
means the area for which the President has declared a major
disaster, during the period of the declaration.
(2) CONTRACTING PREFERENCE.—An agency shall provide a
contracting preference for a small business concern located in
a disaster area if the small business concern will perform the
work required under the contract in the disaster area.
(3) CREDIT FOR MEETING CONTRACTING GOALS.—If an agency
awards a contract to a small business concern under the cir-
cumstances described in paragraph (2), the value of the con-
tract shall be doubled for purposes of determining compliance
with the goals for procurement contracts under subsection
(g)(1)(A).
(g)
(1) GOVERNMENTWIDE GOALS.—
(A) ESTABLISHMENT.—The President shall annually es-
tablish Governmentwide goals for procurement contracts
awarded to small business concerns, small business con-
cerns owned and controlled by service-disabled veterans,
qualified HUBZone small business concerns, small busi-
ness concerns owned and controlled by socially and eco-
nomically disadvantaged individuals, and small business
concerns owned and controlled by women in accordance
with the following:
(i) The Governmentwide goal for participation by
small business concerns shall be established at not
less than 23 percent of the total value of all prime con-
tract awards for each fiscal year. In meeting this goal,
the Government shall ensure the participation of
small business concerns from a wide variety of indus-
tries and from a broad spectrum of small business con-
cerns within each industry.
(ii) The Governmentwide goal for participation by
small business concerns owned and controlled by serv-
ice-disabled veterans shall be established at not less
than 5 percent of the total value of all prime contract
and subcontract awards for each fiscal year.
(iii) The Governmentwide goal for participation by
qualified HUBZone small business concerns shall be
established at not less than 3 percent of the total
value of all prime contract and subcontract awards for
each fiscal year.
(iv) The Governmentwide goal for participation by
small business concerns owned and controlled by so-
cially and economically disadvantaged individuals
shall be established at not less than 5 percent of the
total value of all prime contract and subcontract
awards for each fiscal year.
(v) The Governmentwide goal for participation by
small business concerns owned and controlled by
women shall be established at not less than 5 percent
of the total value of all prime contract and subcontract
DMWilson on DSK7X7S144PROD with REPORTS
awards for each fiscal year.
(B) ACHIEVEMENT OF GOVERNMENTWIDE GOALS.—Each
agency shall have an annual goal that presents, for that
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14
agency, the maximum practicable opportunity for small
business concerns, small business concerns owned and con-
trolled 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 con-
trolled by women to participate in the performance of con-
tracts let by such agency. The Small Business Administra-
tion and the Administrator for Federal Procurement Policy
shall, when exercising their authority pursuant to para-
graph (2), insure that the cumulative annual prime con-
tract goals for all agencies meet or exceed the annual Gov-
ernmentwide prime contract goal established by the Presi-
dent pursuant to this paragraph.
(2)(A) The head of each Federal agency shall, after consultation
with the Administration, establish goals for the participation by
small business concerns, by small business concerns owned and
controlled by service-disabled veterans, by qualified HUBZone
small business concerns, by small business concerns owned and
controlled by socially and economically disadvantaged individuals,
and by small business concerns owned and controlled by women in
procurement contracts of such agency. Such goals shall separately
address prime contract awards and subcontract awards for each
category of small business covered.
(B) Goals established under this subsection shall be jointly estab-
lished by the Administration and the head of each Federal agency
and shall realistically reflect the potential of small business con-
cerns, 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 to perform such contracts and to
perform subcontracts under such contracts.
(C) Whenever the Administration and the head of any Federal
agency fail to agree on established goals, the disagreement shall be
submitted to the Administrator for Federal Procurement Policy for
final determination.
(D) After establishing goals under this paragraph for a fiscal
year, the head of each Federal agency shall develop a plan for
achieving such goals at both the prime contract and the sub-
contract level, which shall apportion responsibilities among the
agency’s acquisition executives and officials. In establishing goals
under this paragraph, the head of each Federal agency shall make
a consistent effort to annually expand participation by small busi-
ness concerns from each industry category in procurement con-
tracts and subcontracts of such agency, including participation by
small business concerns owned and controlled by service-disabled
veterans, qualified HUBZone small business concerns, small busi-
ness concerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns owned and
controlled by women.
DMWilson on DSK7X7S144PROD with REPORTS
(E) The head of each Federal agency, in attempting to attain
expanded participation under subparagraph (D), shall con-
sider—
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15
(i) contracts awarded as the result of unrestricted com-
petition; and
(ii) contracts awarded after competition restricted to eli-
gible small business concerns under this section and under
the program established under section 8(a).
(F)(i) Each procurement employee or program manager de-
scribed in clause (ii) shall communicate to the subordinates of
the procurement employee or program manager the importance
of achieving goals established under subparagraph (A).
(ii) A procurement employee or program manager de-
scribed in this clause is a senior procurement executive,
senior program manager, or Director of Small and Dis-
advantaged Business Utilization of a Federal agency hav-
ing contracting authority.
(3) First tier subcontracts that are awarded by Management and
Operating contractors sponsored by the Department of Energy and
by site support prime contractors at the National Energy Tech-
nology Laboratory to small business concerns, small businesses
concerns owned and controlled by service disabled veterans, quali-
fied 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, shall be considered toward the annually established agency
and Government-wide goals for procurement contracts awarded.
(h) REPORTING ON GOALS FOR PROCUREMENT CONTRACTS AWARD-
ED TO SMALL BUSINESS CONCERNS.—
(1) AGENCY REPORTS.—At the conclusion of each fiscal year,
the head of each Federal agency shall submit to the Adminis-
trator a report describing—
(A) the extent of the participation by small business con-
cerns, small business concerns owned and controlled by
veterans (including service-disabled veterans), qualified
HUBZone small business concerns, small business con-
cerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns
owned and controlled by women in the procurement con-
tracts of such agency during such fiscal year;
(B) whether the agency achieved the goals established
for the agency under subsection (g)(2) with respect to such
fiscal year;
(C) any justifications for a failure to achieve such goals;
and
(D) a remediation plan with proposed new practices to
better meet such goals, including analysis of factors lead-
ing to any failure to achieve such goals.
(2) REPORTS BY ADMINISTRATOR.—Not later than 60 days
after receiving a report from each Federal agency under para-
graph (1) with respect to a fiscal year, the Administrator shall
submit to the President and Congress, and to make available
on a public Web site, a report that includes—
(A) a copy of each report submitted to the Administrator
under paragraph (1);
DMWilson on DSK7X7S144PROD with REPORTS
(B) a determination of whether each goal established by
the President under subsection (g)(1) for such fiscal year
was achieved;
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16
(C) a determination of whether each goal established by
the head of a Federal agency under subsection (g)(2) for
such fiscal year was achieved;
(D) the reasons for any failure to achieve a goal estab-
lished under paragraph (1) or (2) of subsection (g) for such
fiscal year and a description of actions planned by the ap-
plicable agency to address such failure, including the Ad-
ministrator’s comments and recommendations on the pro-
posed remediation plan; and
(E) for the Federal Government and each Federal agen-
cy, an analysis of the number and dollar amount of prime
contracts awarded during such fiscal year to—
(i) small business concerns—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through unrestricted competition;
(V) that were purchased by another entity after
the initial contract was awarded and as a result
of the purchase, would no longer be deemed to be
small business concerns for purposes of the initial
contract; and
(VI) that were awarded using a procurement
method that restricted competition to small busi-
ness concerns owned and controlled by service-dis-
abled veterans, qualified HUBZone small business
concerns, small business concerns owned and con-
trolled by socially and economically disadvantaged
individuals, small business concerns owned and
controlled by women, or a subset of any such con-
cerns;
(ii) small business concerns owned and controlled by
service-disabled veterans—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by serv-
ice-disabled veterans;
(V) through unrestricted competition;
(VI) that were purchased by another entity after
the initial contract was awarded and as a result
of the purchase, would no longer be deemed to be
small business concerns owned and controlled by
service-disabled veterans for purposes of the ini-
tial contract; and
(VII) that were awarded using a procurement
method that restricted competition to qualified
HUBZone small business concerns, small business
concerns owned and controlled by socially and eco-
DMWilson on DSK7X7S144PROD with REPORTS
nomically disadvantaged individuals, small busi-
ness concerns owned and controlled by women, or
a subset of any such concerns;
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17
(iii) qualified HUBZone small business concerns—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to qualified
HUBZone small business concerns;
(V) through unrestricted competition where a
price evaluation preference was used;
(VI) through unrestricted competition where a
price evaluation preference was not used;
(VII) that were purchased by another entity
after the initial contract was awarded and as a re-
sult of the purchase, would no longer be deemed
to be qualified HUBZone small business concerns
for purposes of the initial contract; and
(VIII) that were awarded using a procurement
method that restricted competition to small busi-
ness concerns owned and controlled by service-dis-
abled veterans, small business concerns owned
and controlled by socially and economically dis-
advantaged individuals, small business concerns
owned and controlled by women, or a subset of
any such concerns;
(iv) small business concerns owned and controlled by
socially and economically disadvantaged individuals—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by so-
cially and economically disadvantaged individuals;
(V) through unrestricted competition;
(VI) by reason of that concern’s certification as
a small business owned and controlled by socially
and economically disadvantaged individuals;
(VII) that were purchased by another entity
after the initial contract was awarded and as a re-
sult of the purchase, would no longer be deemed
to be small business concerns owned and con-
trolled by socially and economically disadvantaged
individuals for purposes of the initial contract;
and
(VIII) that were awarded using a procurement
method that restricted competition to small busi-
ness concerns owned and controlled by service-dis-
abled veterans, qualified HUBZone small business
concerns, small business concerns owned and con-
trolled by women, or a subset of any such con-
cerns;
(v) small business concerns owned by an Indian
DMWilson on DSK7X7S144PROD with REPORTS
tribe (as such term is defined in section 8(a)(13)) other
than an Alaska Native Corporation—
(I) in the aggregate;
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18
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by so-
cially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity after
the initial contract was awarded and as a result
of the purchase, would no longer be deemed to be
small business concerns owned by an Indian tribe
other than an Alaska Native Corporation for pur-
poses of the initial contract;
(vi) small business concerns owned by a Native Ha-
waiian Organization—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by so-
cially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity after
the initial contract was awarded and as a result
of the purchase, would no longer be deemed to be
small business concerns owned by a Native Ha-
waiian Organization for purposes of the initial
contract;
(vii) small business concerns owned by an Alaska
Native Corporation—
(I) in the aggregate;
(II) through sole source contracts;
(III) through competitions restricted to small
business concerns;
(IV) through competitions restricted to small
business concerns owned and controlled by so-
cially and economically disadvantaged individuals;
(V) through unrestricted competition; and
(VI) that were purchased by another entity after
the initial contract was awarded and as a result
of the purchase, would no longer be deemed to be
small business concerns owned by an Alaska Na-
tive Corporation for purposes of the initial con-
tract; and
(viii) small business concerns owned and controlled
by women—
(I) in the aggregate;
(II) through competitions restricted to small
business concerns;
(III) through competitions restricted using the
authority under section 8(m)(2);
DMWilson on DSK7X7S144PROD with REPORTS
(IV) through competitions restricted using the
authority under section 8(m)(2) and in which the
waiver authority under section 8(m)(3) was used;
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19
(V) through sole source contracts awarded using
the authority under subsection 8(m)(7);
(VI) through sole source contracts awarded
using the authority under section 8(m)(8);
(VII) by industry for contracts described in sub-
clause (III), (IV), (V), or (VI);
(VIII) through unrestricted competition;
(IX) that were purchased by another entity after
the initial contract was awarded and as a result
of the purchase, would no longer be deemed to be
small business concerns owned and controlled by
women for purposes of the initial contract; and
(X) that were awarded using a procurement
method that restricted competition to small busi-
ness concerns owned and controlled by service-dis-
abled veterans, qualified HUBZone small business
concerns, small business concerns owned and con-
trolled by socially and economically disadvantaged
individuals, or a subset of any such concerns; and
(F) for the Federal Government, the number, dollar
amount, and distribution with respect to the North Amer-
ican Industry Classification System of subcontracts award-
ed during such fiscal year to small business concerns,
small business concerns owned and controlled by service-
disabled veterans, qualified HUBZone small business con-
cerns, small business concerns owned and controlled by so-
cially and economically disadvantaged individuals, and
small business concerns owned and controlled by women,
provided that such information is publicly available
through data systems developed pursuant to the Federal
Funding Accountability and Transparency Act of 2006
(Public Law 109–282), or otherwise available as provided
in paragraph (3).
(3) PROCUREMENT DATA.—
(A) FEDERAL PROCUREMENT DATA SYSTEM.—
(i) IN GENERAL.—To assist in the implementation of
this section, the Administrator shall have access to in-
formation collected through the Federal Procurement
Data System, Federal Subcontracting Reporting Sys-
tem, or any new or successor system.
(ii) GSA REPORT.—On the date that the Adminis-
trator makes available the report required under para-
graph (2), the Administrator of the General Services
Administration shall submit to the President and Con-
gress, and shall make available on a public website, a
report in the same form and manner, and including
the same information, as the report required under
paragraph (2). The report shall include all procure-
ments made for the period covered by the report and
may not exclude any contract awarded.
(B) AGENCY PROCUREMENT DATA SOURCES.—To assist in
the implementation of this section, the head of each con-
DMWilson on DSK7X7S144PROD with REPORTS
tracting agency shall provide, upon request of the Adminis-
trator, procurement information collected through agency
data collection sources in existence at the time of the re-
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20
quest. Contracting agencies shall not be required to estab-
lish new data collection systems to provide such data.
(4) BEST IN CLASS SMALL BUSINESS PARTICIPATION REPORT-
ING.—
(A) ADDENDUM.—In addition to the requirements under
paragraph (2) and for each best in class designation, the
Administrator shall include in the report required by such
paragraph—
(i) the total amount of spending Governmentwide in
such designation; and
(ii) the number of small business concerns awarded
contracts and the dollar amount of such contracts
awarded within each such designation to each of the
following—
(I) qualified HUBZone small business concerns;
(II) small business concerns owned and con-
trolled by women;
(III) small business concerns owned and con-
trolled by service-disabled veterans; and
(IV) small business concerns owned and con-
trolled by socially and economically disadvantaged
individuals.
(B) BEST IN CLASS DEFINED.—The term ‘‘best in class’’
has the meaning given such term by the Director of the
Office of Management and Budget.
(C) EFFECTIVE DATE.—The Administrator shall report on
the information described by subparagraph (A) beginning
on the date that such information is available in the Fed-
eral Procurement Data System, the System for Award
Management, or any successor to such systems.
(i) Nothing in this Act or any other provision of law precludes ex-
clusive small business set-asides for procurements of architectural
and engineering services, research, development, test and evalua-
tion, and each Federal agency is authorized to develop such set-
asides to further the interests of small business in those areas.
(j)(1) Each contract for the purchase of goods and services that
has an anticipated value greater than the micro-purchase thresh-
old, but not greater than the simplified acquisition threshold shall
be reserved exclusively for small business concerns unless the con-
tracting officer is unable to obtain offers from two or more small
business concerns that are competitive with market prices and are
competitive with regard to the quality and delivery of the goods or
services being purchased.
(2) In carrying out paragraph (1), a contracting officer shall con-
sider a responsive offer timely received from an eligible small busi-
ness offeror.
(3) Nothing in paragraph (1) shall be construed as precluding an
award of a contract with a value not greater than $100,000 under
the authority of subsection (a) of section 8 of this Act, section 712
of the Business Opportunity Development Reform Act of 1988 (Pub-
lic Law 100–656; 15 U.S.C. 644 note), or section 7102 of the Fed-
eral Acquisition Streamlining Act of 1994.
DMWilson on DSK7X7S144PROD with REPORTS
(4) RULE OF TWO.—
(A) IN GENERAL.—Each covered contract for goods or
services that has an anticipated value greater than the sim-
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21
plified acquisition threshold shall be reserved for small
business concerns when the contracting officer reasonably
expects—
(i) to obtain offers from two or more responsible
small business concerns; and
(ii) to award such contract at a fair market price.
(B) COVERED CONTRACT DEFINED.—In this paragraph,
the term ‘‘covered contract’’ does not include a delivery
order or a task order.
(k) There is hereby established in each Federal agency having
procurement powers an office to be known as the ‘‘Office of Small
and Disadvantaged Business Utilization’’. The management of each
such office shall be vested in an officer or employee of such agency,
with experience serving in any combination of the following roles:
program manager, deputy program manager, or assistant program
manager for Federal acquisition program; chief engineer, systems
engineer, assistant engineer, or product support manager for Fed-
eral acquisition program; Federal contracting officer; small busi-
ness technical advisor; contracts administrator for Federal Govern-
ment contracts; attorney specializing in Federal procurement law;
small business liaison officer; officer or employee who managed
Federal Government contracts for a small business; or individual
whose primary responsibilities were for the functions and duties of
section 8, 15, 31, 36, or 44 of this Act. Such officer or employee—
(1) shall be known as the ‘‘Director of Small and Disadvan-
taged Business Utilization’’ for such agency;
(2) shall be appointed by the head of such agency to a posi-
tion that is a Senior Executive Service position (as such term
is defined under section 3132(a) of title 5, United States Code),
except that, for any agency in which the positions of Chief Ac-
quisition Officer and senior procurement executive (as such
terms are defined under section 44(a) of this Act) are not Sen-
ior Executive Service positions, the Director of Small and Dis-
advantaged Business Utilization may be appointed to a posi-
tion compensated at not less than the minimum rate of basic
pay payable for grade GS–15 of the General Schedule under
section 5332 of such title (including comparability payments
under section 5304 of such title);
(3) shall be responsible only to (including with respect to per-
formance appraisals), and report directly and exclusively to,
the head of such agency or to the deputy of such head, except
that the Director for the Office of the Secretary of Defense
shall be responsible only to (including with respect to perform-
ance appraisals), and report directly and exclusively to, such
Secretary or the Secretary’s designee;
(4) shall be responsible for the implementation and execution
of the functions and duties under sections 8, 15, 31, 36, and
44 of this Act which relate to such agency;
(5) shall identify proposed solicitations that involve signifi-
cant bundling of contract requirements, and work with the
agency acquisition officials and the Administration to revise
DMWilson on DSK7X7S144PROD with REPORTS
the procurement strategies for such proposed solicitations
where appropriate to increase the probability of participation
by small businesses as prime contractors, or to facilitate small
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22
business participation as subcontractors and suppliers, if a so-
licitation for a bundled contract is to be issued;
(6) shall assist small business concerns to obtain payments,
required late payment interest penalties, or information re-
garding payments due to such concerns from an executive
agency or a contractor, in conformity with chapter 39 of title
31, United States Code, or any other protection for contractors
or subcontractors (including suppliers) that is included in the
Federal Acquisition Regulation or any individual agency sup-
plement to such Government-wide regulation;
(7) shall have supervisory authority over personnel of such
agency to the extent that the functions and duties of such per-
sonnel relate to functions and duties under sections 8, 15, 31,
36, and 44 of this Act;
(8) shall assign a small business technical adviser to each of-
fice to which the Administration has assigned a procurement
center representative—
(A) who shall be a full-time employee of the procuring
activity and shall be well qualified, technically trained and
familiar with the supplies or services purchased at the ac-
tivity; and
(B) whose principal duty shall be to assist the Adminis-
tration procurement center representative in his duties
and functions relating to sections 8, 15, 31, 36, and 44 of
this Act,
(9) shall cooperate, and consult on a regular basis, with the
Administration with respect to carrying out the functions and
duties described in paragraph (4) of this subsection;
(10) shall make recommendations to contracting officers as to
whether a particular contract requirement should be awarded
pursuant to subsection (a) or section 8, 15, 31, or 36 of this Act,
and the failure of the contracting officer to accept any such rec-
ommendations shall be documented and included within the
appropriate contract file;
(11) shall review and advise such agency on any decision to
convert an activity performed by a small business concern to
an activity performed by a Federal employee;
(12) shall provide to the Chief Acquisition Officer and senior
procurement executive of such agency advice and comments on
acquisition strategies, market research, and justifications re-
lated to section 44 of this Act;
(13) may provide training to small business concerns and
contract specialists, except that such training may only be pro-
vided to the extent that the training does not interfere with
the Director carrying out other responsibilities under this sub-
section;
(14) shall receive unsolicited proposals and, when appro-
priate, forward such proposals to personnel of the activity re-
sponsible for reviewing such proposals;
(15) shall carry out exclusively the duties enumerated in this
Act, and shall, while the Director, not hold any other title, po-
sition, or responsibility, except as necessary to carry out re-
DMWilson on DSK7X7S144PROD with REPORTS
sponsibilities under this subsection;
(16) shall submit, each fiscal year, to the Committee on
Small Business of the House of Representatives and the Com-
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23
mittee on Small Business and Entrepreneurship of the Senate
a report describing—
(A) the training provided by the Director under para-
graph (13) in the most recently completed fiscal year;
(B) the percentage of the budget of the Director used for
such training in the most recently completed fiscal year;
(C) the percentage of the budget of the Director used for
travel in the most recently completed fiscal year; and
(D) any failure of the agency to comply with section 8,
15, 31, or 36;
(17) shall, when notified by a small business concern prior to
the award of a contract that the small business concern be-
lieves that a solicitation, request for proposal, or request for
quotation unduly restricts the ability of the small business con-
cern to compete for the award—
(A) submit the notice of the small business concern to
the contracting officer and, if necessary, recommend ways
in which the solicitation, request for proposal, or request
for quotation may be altered to increase the opportunity
for competition;
(B) inform the advocate for competition of such agency
(as established under section 1705 of title 41, United
States Code, or section 3249 of title 10, United States
Code) of such notice; and
(C) ensure that the small business concern is aware of
other resources and processes available to address unduly
restrictive provisions in a solicitation, request for proposal,
or request for quotation, even if such resources and proc-
esses are provided by such agency, the Administration, the
Comptroller General, or a procurement technical assist-
ance program established under chapter 388 of title 10,
United States Code;
(18) shall review summary data provided by purchase card
issuers of purchases made by the agency greater than the
micro-purchase threshold (as defined under section 1902 of
title 41, United Stated Code) and less than the simplified ac-
quisition threshold to ensure that the purchases have been
made in compliance with the provisions of this Act and have
been properly recorded in the Federal Procurement Data Sys-
tem, if the method of payment is a purchase card issued by the
Department of Defense pursuant to section 4754 of title 10,
United States Code, or by the head of an executive agency pur-
suant to section 1909 of title 41, United States Code;
(19) shall provide assistance to a small business concern
awarded a contract or subcontract under this Act or under title
10 or title 41, United States Code, in finding resources for edu-
cation and training on compliance with contracting regulations
(including the Federal Acquisition Regulation) after award of
such a contract or subcontract;
(20) shall review all subcontracting plans required by para-
graph (4) or (5) of section 8(d) to ensure that the plan provides
DMWilson on DSK7X7S144PROD with REPORTS
maximum practicable opportunity for small business concerns
to participate in the performance of the contract to which the
plan applies;
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24
(21) shall consult with the appropriate personnel from the
relevant Federal agency to assist small business concerns par-
ticipating in a SBIR or STTR program under section 9 with re-
searching applicable solicitations for the award of a Federal
contract (particularly with the Federal agency that has a fund-
ing agreement, as defined under section 9, with the concern)
to market the research developed by such concern under such
SBIR or STTR program.
This subsection shall not apply to the Administration.
(l) PROCUREMENT CENTER REPRESENTATIVES.—
(1) ASSIGNMENT AND ROLE.—The Administrator shall assign
to each major procurement center a procurement center rep-
resentative with such assistance as may be appropriate.
(2) ACTIVITIES.—A procurement center representative is au-
thorized to—
(A) attend any provisioning conference or similar evaluation
session during which determinations are made as to whether
requirements are to be procured through other than full and
open competition and make recommendations with respect to
such requirements to the members of such conference or ses-
sion;
(B) review, at any time, barriers to small business par-
ticipation in Federal contracting previously imposed on
goods and services through acquisition method coding or
similar procedures, and recommend to personnel of the ap-
propriate activity the prompt reevaluation of such barriers;
(C) review barriers to small business participation in
Federal contracting arising out of restrictions on the rights
of the United States in technical data, and, when appro-
priate, recommend that personnel of the appropriate activ-
ity initiate a review of the validity of such an asserted re-
striction;
(D) review any bundled or consolidated solicitation or
contract in accordance with this Act;
(E) have access to procurement records and other data
of the procurement center commensurate with the level of
such representative’s approved security clearance classi-
fication, with such data provided upon request in elec-
tronic format, when available;
(F) receive unsolicited proposals from small business
concerns and transmit such proposals to personnel of the
activity responsible for reviewing such proposals, who shall
furnish the procurement center representative with infor-
mation regarding the disposition of any such proposal;
(G) consult with the Director the Office of Small and
Disadvantaged Business Utilization of that agency and the
agency personnel described in paragraph (7) and (8) of sub-
section (k) with regard to agency insourcing decisions cov-
ered by subsection (k)(11);
(H) be an advocate for the maximum practicable utiliza-
tion of small business concerns in Federal contracting, in-
cluding by advocating against the consolidation or bun-
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dling of contract requirements when not justified;
(I) assist small business concerns with finding resources
for education and training on compliance with contracting
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25
regulations (including the Federal Acquisition Regulation)
after award of a contract or subcontract;
(J) consult with the appropriate personnel from the rel-
evant Federal agency, to assist small business concerns
participating in a SBIR or STTR program under section 9
with Phase III;
(K) carry out any other responsibility assigned by the
Administrator.
(3) APPEALS.—A procurement center representative is au-
thorized to appeal the failure to act favorably on any rec-
ommendation made pursuant to paragraph (2). Such appeal
shall be filed and processed in the same manner and subject
to the same conditions and limitations as an appeal filed by
the Administrator pursuant to subsection (a).
(4) The Administration shall assign and co-locate at least two
small business technical advisers to each major procurement center
in addition to such other advisers as may be authorized from time
to time. The sole duties of such advisers shall be to assist the pro-
curement center representative for the center to which such advis-
ers are assigned in carrying out the functions described in para-
graph (2) and the representatives referred to in subsection (k)(6).
(5) POSITION REQUIREMENTS.—
(A) IN GENERAL.—A procurement center representative
assigned under this subsection shall—
(i) be a full-time employee of the Administration;
(ii) be fully qualified, technically trained, and famil-
iar with the goods and services procured by the major
procurement center to which that representative is as-
signed; and
(iii) have the certification described in subparagraph
(C).
(B) COMPENSATION.—The Administrator shall establish
personnel positions for procurement center representatives
assigned under this subsection, which are classified at a
grade level of the General Schedule sufficient to attract
and retain highly qualified personnel.
(C) CERTIFICATION REQUIREMENTS.—
(i) IN GENERAL.—Consistent with the requirements
of clause (ii), a procurement center representative
shall have a Level III Federal Acquisition Certification
in Contracting (or any successor certification) or the
equivalent Department of Defense certification, except
that any person serving in such a position on or before
January 3, 2013, may continue to serve in that posi-
tion for a period of 5 years without the required cer-
tification.
(ii) DELAY OF CERTIFICATION REQUIREMENTS.—
(I) TIMING.—The certification described in
clause (i) is not required for any person serving as
a procurement center representative until the
date that is one calendar year after the date such
person is appointed as a procurement center rep-
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resentative.
(II) APPLICATION.—The requirements of sub-
clause (I) shall—
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26
(aa) be included in any initial job posting
for the position of a procurement center rep-
resentative; and
(bb) apply to any person appointed as a pro-
curement center representative after January
3, 2013.
(6) MAJOR PROCUREMENT CENTER DEFINED.—For purposes of
this subsection, the term ‘‘major procurement center’’ means a
procurement center that, in the opinion of the Administrator,
purchases substantial dollar amounts of goods or services, in-
cluding goods or services that are commercially available.
(7) TRAINING.—
(A) AUTHORIZATION.—At such times as the Adminis-
trator deems appropriate, the breakout procurement center
representative shall conduct familiarization sessions for
contracting officers and other appropriate personnel of the
procurement center to which such representative is as-
signed. Such sessions shall acquaint the participants with
the provisions of this subsection and shall instruct them in
methods designed to further the purposes of such sub-
section.
(B) LIMITATION.—A procurement center representative
may provide training under subparagraph (A) only to the
extent that the training does not interfere with the rep-
resentative carrying out other activities under this sub-
section.
(8) ANNUAL BRIEFING AND REPORT.—A procurement center
representative shall prepare and personally deliver an annual
briefing and report to the head of the procurement center to
which such representative is assigned. Such briefing and re-
port shall detail the past and planned activities of the rep-
resentative and shall contain such recommendations for im-
provement in the operation of the center as may be appro-
priate. The head of such center shall personally receive such
briefing and report and shall, within 60 calendar days after re-
ceipt, respond, in writing, to each recommendation made by
such representative.
(9) SCOPE OF REVIEW.—The Administrator—
(A) may not limit the scope of review by the procurement
center representative for any solicitation of a contract or
task order without regard to whether the contract or task
order or part of the contract or task order is set aside for
small business concerns, whether 1 or more contracts or
task order awards are reserved for small business concerns
under a multiple award contract, or whether or not the so-
licitation would result in a bundled or consolidated con-
tract (as defined in subsection (s)) or a bundled or consoli-
dated task order; and
(B) shall, unless the contracting agency requests a re-
view, limit the scope of review by the procurement center
representative for any solicitation of a contract or task
order if such solicitation is awarded by or for the Depart-
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ment of Defense and—
(i) is conducted pursuant to section 22 of the Arms
Export Control Act (22 U.S.C. 2762);
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27
(ii) is a humanitarian operation as defined in section
401(e) of title 10, United States Code;
(iii) is for a contingency operation, as defined in sec-
tion 101(a)(13) of title 10, United States Code;
(iv) is to be awarded pursuant to an agreement with
the government of a foreign country in which Armed
Forces of the United States are deployed; or
(v) both the place of award and the place of perform-
ance are outside of the United States and its terri-
tories.
(m) ADDITIONAL DUTIES OF PROCUREMENT CENTER REPRESENTA-
TIVES.—All procurement center representatives (including those re-
ferred to in subsection (k)(6)), in addition to such other duties as
may be assigned by the Administrator, shall increase, insofar as
possible, the number and dollar value of procurements that may be
used for the programs established under this section and section
8(a).
(n) For purposes of this section, the determination of labor sur-
plus areas shall be made on the basis of the criteria in effect at
the time of the determination, except that any minimum popu-
lation criteria shall not exceed twenty-five thousand. Such deter-
mination, as modified by the preceding sentence, shall be made by
the Secretary of Labor.
(o) LIMITATIONS ON SUBCONTRACTING.—A concern may not be
awarded a contract under subsection (a) as a small business con-
cern unless the concern agrees to satisfy the requirements of sec-
tion 46.
(p) ACCESS TO DATA.—
(1) BUNDLED OR CONSOLIDATED CONTRACT DEFINED.—In this
subsection, the term ‘‘bundled or consolidated contract’’ has the
meaning given in subsection (s).
(2) DATABASE.—Not later than 180 days after the date of the
enactment of this subsection, the Administrator of the Small
Business Administration shall develop and shall thereafter
maintain a database containing data and information regard-
ing—
(A) each bundled contract awarded by a Federal agency;
and
(B) each small business concern that has been displaced
as a prime contractor as a result of the award of such a
contract.
(3) ANALYSIS.—For each bundled contract that is to be re-
competed as a bundled contract, the Administrator shall deter-
mine—
(A) the amount of savings and benefits (in accordance
with subsection (e)) achieved under the bundling of con-
tract requirements; and
(B) whether such savings and benefits will continue to
be realized if the contract remains bundled, and whether
such savings and benefits would be greater if the procure-
ment requirements were divided into separate solicitations
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suitable for award to small business concerns.
(4) ANNUAL REPORT ON BUNDLED OR CONSOLIDATED CON-
TRACTS.—
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28
(A) IN GENERAL.—Not later than 1 year after the date of
the enactment of this paragraph, and annually in March
thereafter, the Administration shall transmit a report on
bundled or consolidated contracts to the Committees on
Small Business of the House of Representatives and the
Senate.
(B) CONTENTS.—Each report transmitted under subpara-
graph (A) shall include—
(i) data on the number, arranged by industrial clas-
sification, of small business concerns displaced as
prime contractors as a result of the award of bundled
or consolidated contracts by Federal agencies; and
(ii) a description of the activities with respect to pre-
viously bundled or consolidated contracts of each Fed-
eral agency during the preceding year, including—
(I) data on the number and total dollar amount
of all contract requirements that were included in
bundled or consolidated contracts; and
(II) with respect to each bundled or consolidated
contract, data or information on—
(aa) the justification for the bundling of con-
tract requirements or the consolidation of con-
tract requirements (as applicable);
(bb) the cost savings realized by the bun-
dling of contract requirements or the consoli-
dation of contract requirements (as applica-
ble) over the life of the contract;
(cc) the extent to which maintaining con-
tract requirements in a bundled or consoli-
dated contract is projected to result in contin-
ued cost savings;
(dd) the extent to which the bundling of
contract requirements or the consolidation of
contract requirements (as applicable) com-
plied with the contracting agency’s small busi-
ness subcontracting plan, including the total
dollar value awarded to small business con-
cerns as subcontractors and the total dollar
value previously awarded to small business
concerns as prime contractors; and
(ee) the impact of the bundling of contract
requirements or the consolidation of contract
requirements (as applicable) on small busi-
ness concerns unable to compete as prime
contractors for the contract and on the indus-
tries of such small business concerns, includ-
ing a description of any changes to the propor-
tion of any such industry that is composed of
small business concerns.
(5) ACCESS TO DATA.—
(A) FEDERAL PROCUREMENT DATA SYSTEM.—To assist in
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the implementation of this section, the Administration
shall have access to information collected through the Fed-
eral Procurement Data System.
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29
(B) AGENCY PROCUREMENT DATA SOURCES.—To assist in
the implementation of this section, the head of each con-
tracting agency shall provide to the Administrator data
and information described in paragraphs (2) and (4).
(q) REPORTS RELATED TO PROCUREMENT CENTER REPRESENTA-
TIVES.—
(1) TEAMING AND JOINT VENTURE REQUIREMENTS.—
(A) IN GENERAL.—Each Federal agency shall include in
each solicitation for any multiple award contract above the
substantial bundling threshold of the Federal agency a
provision soliciting bids from any responsible source, in-
cluding responsible small business concerns and teams or
joint ventures of small business concerns.
(B) TEAMS.—When evaluating an offer of a small busi-
ness prime contractor that includes a proposed team of
small business subcontractors for any multiple award con-
tract above the substantial bundling threshold of the Fed-
eral agency, the head of the agency shall consider the ca-
pabilities and past performance of each first tier subcon-
tractor that is part of the team as the capabilities and past
performance of the small business prime contractor.
(C) JOINT VENTURES.—When evaluating an offer of a
joint venture of small business concerns for any multiple
award contract above the substantial bundling threshold of
the Federal agency, if the joint venture does not dem-
onstrate sufficient capabilities or past performance to be
considered for award of a contract opportunity, the head of
the agency shall consider the capabilities and past per-
formance of each member of the joint venture as the capa-
bilities and past performance of the joint venture.
(2) POLICIES ON REDUCTION OF CONTRACT BUNDLING.—
(A) IN GENERAL.—Not later than 1 year after the date of
enactment of this subsection, the Federal Acquisition Reg-
ulatory Council established under section 25(a) of the Of-
fice of Federal Procurement Policy Act (41 U.S.C. 4219(a))
shall amend the Federal Acquisition Regulation issued
under section 25 of such Act to—
(i) establish a Government-wide policy regarding
contract bundling, including regarding the solicitation
of teaming and joint ventures under paragraph (1);
and
(ii) require that the policy established under clause
(i) be published on the website of each Federal agency.
(B) RATIONALE FOR CONTRACT BUNDLING.—Not later
than 30 days after the date on which the head of a Federal
agency submits data certifications to the Administrator for
Federal Procurement Policy, the head of the Federal agen-
cy shall publish on the website of the Federal agency a list
and rationale for any bundled contract for which the Fed-
eral agency solicited bids or that was awarded by the Fed-
eral agency.
(3) REPORTING.—Not later than 90 days after the date of en-
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actment of this subsection, and every 3 years thereafter, the
Administrator shall submit to the Committee on Small Busi-
ness and Entrepreneurship of the Senate and the Committee
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30
on Small Business of the House of Representatives a report re-
garding procurement center representatives and commercial
market representatives, which shall—
(A) identify each area for which the Administration has
assigned a procurement center representative or a com-
mercial market representative;
(B) explain why the Administration selected the areas
identified under subparagraph (A); and
(C) describe the activities performed by procurement
center representatives and commercial market representa-
tives.
(r) MULTIPLE AWARD CONTRACTS.—Not later than 1 year after
the date of enactment of this subsection, the Administrator for Fed-
eral Procurement Policy and the Administrator, in consultation
with the Administrator of General Services, shall, by regulation, es-
tablish guidance under which Federal agencies may, at their dis-
cretion—
(1) set aside part or parts of a multiple award contract for
small business concerns, including the subcategories of small
business concerns identified in subsection (g)(2);
(2) notwithstanding the fair opportunity requirements under
section 3406(c) of title 10, United States Code, and section
303J(b) of the Federal Property and Administrative Services
Act of 1949 (41 U.S.C. 253j(b)), set aside orders placed against
multiple award contracts for small business concerns, including
the subcategories of small business concerns identified in sub-
section (g)(2); and
(3) reserve 1 or more contract awards for small business con-
cerns under full and open multiple award procurements, in-
cluding the subcategories of small business concerns identified
in subsection (g)(2).
(s) DATA QUALITY IMPROVEMENT PLAN.—
(1) IN GENERAL.—Not later than October 1, 2015, the Admin-
istrator of the Small Business Administration, in consultation
with the Small Business Procurement Advisory Council, the
Administrator for Federal Procurement Policy, and the Admin-
istrator of General Services, shall develop a plan to improve
the quality of data reported on bundled or consolidated con-
tracts in the Federal procurement data system (described in
section 1122(a)(4)(A) of title 41, United States Code).
(2) PLAN REQUIREMENTS.—The plan shall—
(A) describe the roles and responsibilities of the Admin-
istrator of the Small Business Administration, each Direc-
tor of Small and Disadvantaged Business Utilization, the
Administrator for Federal Procurement Policy, the Admin-
istrator of General Services, senior procurement execu-
tives, and Chief Acquisition Officers in—
(i) improving the quality of data reported on bundled
or consolidated contracts in the Federal procurement
data system; and
(ii) contributing to the annual report required by
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subsection (p)(4);
(B) recommend changes to policies and procedures, in-
cluding training procedures of relevant personnel, to prop-
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31
erly identify and mitigate the effects of bundled or consoli-
dated contracts;
(C) recommend requirements for periodic and statis-
tically valid data verification and validation; and
(D) recommend clear data verification responsibilities.
(3) PLAN SUBMISSION.—The Administrator of the Small Busi-
ness Administration shall submit the plan to the Committee on
Small Business of the House of Representatives and the Com-
mittee on Small Business and Entrepreneurship of the Senate
not later than December 1, 2016.
(4) IMPLEMENTATION.—Not later than October 1, 2016, the
Administrator of the Small Business Administration shall im-
plement the plan described in this subsection.
(5) CERTIFICATION.—The Administrator shall annually pro-
vide to the Committee on Small Business of the House of Rep-
resentatives and the Committee on Small Business and Entre-
preneurship of the Senate a certification of the accuracy and
completeness of data reported on bundled and consolidated
contracts.
(6) DEFINITIONS.—In this subsection, the following defini-
tions apply:
(A) CHIEF ACQUISITION OFFICER; SENIOR PROCUREMENT
EXECUTIVE.—The terms ‘‘Chief Acquisition Officer’’ and
‘‘senior procurement executive’’ have the meanings given
such terms in section 44(a) of this Act.
(B) BUNDLED OR CONSOLIDATED CONTRACT.—The term
‘‘bundled or consolidated contract’’ means a bundled con-
tract (as defined in section 3(o)) or a contract resulting
from the consolidation of contracting requirements (as de-
fined in section 44(a)(2)).
(t) GAO REPORT ON SMALL BUSINESS ADMINISTRATION PROGRAMS
IN PUERTO RICO.—Not later than one year after the date of enact-
ment of this subsection, the Comptroller General of the United
States 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 the application and
utilization of contracting activities of the Administration (including
contracting activities relating to HUBZone small business concerns)
in Puerto Rico. The report shall also identify any provisions of Fed-
eral law that may create an obstacle to the efficient implementa-
tion of such contracting activities.
(u) POST-AWARD COMPLIANCE RESOURCES.—The Administrator
shall provide to small business development centers and entities
participating in the Procurement Technical Assistance Cooperative
Agreement Program under chapter 388 of title 10, United States
Code, and shall make available on the website of the Administra-
tion, a list of resources for small business concerns seeking edu-
cation and assistance on compliance with contracting regulations
(including the Federal Acquisition Regulation) after award of a con-
tract or subcontract.
(v) REGULATORY CHANGES AND TRAINING MATERIALS.—Not less
than annually, the Administrator shall provide to the Defense Ac-
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quisition University (established under section 1746 of title 10,
United States Code), the Federal Acquisition Institute (established
under section 1201 of title 41, United States Code), the individual
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32
responsible for mandatory training and education of the acquisition
workforce of each agency (described under section 1703(f)(1)(C) of
title 41, United States Code), small business development centers,
and entities participating in the Procurement Technical Assistance
Cooperative Agreement Program under chapter 388 of title 10,
United States Code—
(1) a list of all changes made in the prior year to regulations
promulgated—
(A) by the Administrator that affect Federal acquisition;
and
(B) by the Federal Acquisition Council that implement
amendments to this Act; and
(2) any materials the Administrator has developed that ex-
plain, train, or assist Federal agencies or departments or small
business concerns with compliance with the regulations de-
scribed in paragraph (1).
(w) SOLICITATION NOTICE REGARDING ADMINISTRATION OF
CHANGE ORDERS FOR CONSTRUCTION.—
(1) IN GENERAL.—With respect to any solicitation for the
award of a contract for construction anticipated to be awarded
to a small business concern, the agency administering such
contract shall provide a notice along with the solicitation to
prospective bidders and offerors that includes—
(A) information about the agency’s policies or practices
in complying with the requirements of the Federal Acquisi-
tion Regulation relating to the timely definitization of re-
quests for an equitable adjustment; and
(B) information about the agency’s past performance in
definitizing requests for equitable adjustments in accord-
ance with paragraph (2).
(2) REQUIREMENTS FOR AGENCIES.—An agency shall provide
the past performance information described under paragraph
(1)(B) as follows:
(A) For the 3-year period preceding the issuance of the
notice, to the extent such information is available.
(B) With respect to an agency that, on the date of the
enactment of this subsection, has not compiled the infor-
mation described under paragraph (1)(B)—
(i) beginning 1 year after the date of the enactment
of this subsection, for the 1-year period preceding the
issuance of the notice;
(ii) beginning 2 years after the date of the enact-
ment of this subsection, for the 2-year period pre-
ceding the issuance of the notice; and
(iii) beginning 3 years after the date of the enact-
ment of this subsection and each year thereafter, for
the 3-year period preceding the issuance of the notice.
(3) FORMAT OF PAST PERFORMANCE INFORMATION.—In the no-
tice required under paragraph (1), the agency shall ensure that
the past performance information described under paragraph
(1)(B) is set forth separately for each definitization action that
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was completed during the following periods:
(A) Not more than 30 days after receipt of a request for
an equitable adjustment.
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33
(B) Not more than 60 days after receipt of a request for
an equitable adjustment.
(C) Not more than 90 days after receipt of a request for
an equitable adjustment.
(D) Not more than 180 days after receipt of a request for
an equitable adjustment.
(E) Not more than 365 days after receipt of a request for
an equitable adjustment.
(F) More than 365 days after receipt of a request for an
equitable adjustment.
(G) After the completion of the performance of the con-
tract through a contract modification addressing all
undefinitized requests for an equitable adjustment re-
ceived during the term of the contract.
(x) SMALL BUSINESS CREDIT FOR PUERTO RICO BUSINESSES AND
COVERED TERRITORY BUSINESSES.—
(1) CREDIT FOR MEETING CONTRACTING GOALS.—If an agency
awards a prime contract to Puerto Rico business or a covered
territory business, or a prime contractor awards a subcontract
(at any tier) to a subcontractor that is a Puerto Rico business
or a covered territory business, during the period beginning on
the date of enactment of this subsection and ending on the
date that is 4 years after such date of enactment, the value of
the contract or subcontract shall be doubled for purposes of de-
termining compliance with the goals for procurement contracts
under subsection (g)(1)(A) during such period.
(2) REPORT.—Along with the report required under sub-
section (h)(1), the head of each Federal agency shall submit to
the Administrator, and make publicly available on the score-
card (as defined in subsection (y)), an analysis of the number
and dollar amount of prime contracts awarded pursuant to
paragraph (1) for each fiscal year of the period described in
such paragraph.
(y) SCORECARD PROGRAM FOR EVALUATING FEDERAL AGENCY
COMPLIANCE WITH SMALL BUSINESS CONTRACTING GOALS.—
(1) USE OF SCORECARD.—The Administrator shall use a
scorecard to annually evaluate whether each Federal agency is
creating the maximum practicable opportunities for the award
of prime contracts and subcontracts to small business concerns,
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
economically disadvantaged individuals, and small business
concerns owned and controlled by women, by assigning a score
to each Federal agency for the previous fiscal year.
(2) CONTENTS OF SCORECARD.—The scorecard shall include,
for each Federal agency and Governmentwide, the following in-
formation:
(A) A determination of whether a Federal agency or the
Federal Government, as applicable, met each of the prime
contract goals established pursuant to subsection (g)(1)(B)
with respect to small business concerns, small business
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concerns owned and controlled by service-disabled vet-
erans, qualified HUBZone small business concerns, small
business concerns owned and controlled by socially and
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34
economically disadvantaged individuals, and small busi-
ness concerns owned and controlled by women.
(B) A determination of whether a Federal agency or the
Federal Government, as applicable, met each of the sub-
contract goals established pursuant to such section with
respect to small business concerns, small business con-
cerns owned and controlled by service-disabled veterans,
qualified HUBZone small business concerns, small busi-
ness concerns owned and controlled by socially and eco-
nomically disadvantaged individuals, and small business
concerns owned and controlled by women.
(C) The number of small business concerns, small busi-
ness 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 award-
ed prime contracts in each North American Industry Clas-
sification System code during the fiscal year and a com-
parison to the number of awarded contracts during the
prior fiscal year, if available.
(D) The number of small business concerns, small busi-
ness 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 award-
ed subcontracts in each North American Industry Classi-
fication System code during the fiscal year and a compari-
son to the number of awarded subcontracts during the
prior fiscal year, if available.
(E) Any other factors that the Administrator deems im-
portant to achieve the maximum practicable utilization of
small business concerns, small business concerns owned
and controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business con-
cerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns
owned and controlled by women.
(3) WEIGHTED FACTORS.—In using the scorecard to evaluate
and assign a score to a Federal agency, the Administrator shall
base—
(A) fifty percent of the score on the dollar value of prime
contracts described in paragraph (2)(A); and
(B) fifty percent of the score on the information provided
in subparagraphs (B) through (E) of paragraph (2), weight-
ed in a manner determined by the Administrator to en-
courage the maximum practicable opportunity for the
award of prime contracts and subcontracts to small busi-
ness concerns, small business concerns owned and con-
trolled by service-disabled veterans, qualified HUBZone
small business concerns, small business concerns owned
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and controlled by socially and economically disadvantaged
individuals, and small business concerns owned and con-
trolled by women.
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35
(4) ADDITIONAL REQUIREMENTS FOR SCORECARDS.—The score-
card shall include, for each Federal agency and Government-
wide, the following information with respect to prime contracts:
(A) The number (expressed as a percentage) and total
dollar amount of awards made to small business concerns
owned and controlled by women through sole source con-
tracts and competitions restricted to small business con-
cerns owned and controlled by women under section 8(m).
(B) The number (expressed as a percentage) and total
dollar amount of awards made to small business concerns
owned and controlled by qualified HUBZone small busi-
ness concerns through sole source contracts and competi-
tions restricted to qualified HUBZone small business con-
cerns under section 31(c)(2).
(C) The number (expressed as a percentage) and total
dollar amount of awards made to small business concerns
owned and controlled by service-disabled veterans through
sole source contracts and competitions restricted to small
business concerns owned and controlled by service-disabled
veterans under section 36.
(D) The number (expressed as a percentage) and total
dollar amount of awards made to socially and economically
disadvantaged small business concerns under section 8(a)
through sole source contracts and competitions restricted
to socially and economically disadvantaged small business
concerns, disaggregated by awards made to such concerns
that are owned and controlled by individuals and awards
made to such concerns that are owned and controlled by
an entity.
(5) PUBLICATION.—The scorecard used by the Administrator
under this subsection shall be submitted to the President and
Congress along with the report submitted under subsection
(h)(2).
(6) SCORECARD DEFINED.—In this subsection, the term
‘‘scorecard’’ means any summary using a rating system to
evaluate the efforts of a Federal agency to meet goals estab-
lished under subsection (g)(1)(B) that—
(A) includes the measures described in paragraph (2);
and
(B) assigns a score to each Federal agency evaluated.
* * * * * * *
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XVIII. MINORITY VIEWS
Section 15(a)(1)(C) of the Small Business Act states that the
Small Business Administration (SBA) shall ‘‘assur[e] that a fair
proportion of the total purchases and contracts for goods and serv-
ices of the Government . . . are awarded to small business con-
cerns.’’ 1 The main authority federal agencies use to create a level
playing field for small businesses is to set aside contracts for small
business-only competitions. Contracting officers can, and in some
cases must, exclude other-than-small firms from participation,
therefore allowing small businesses to compete with firms of simi-
lar size and scale while maintaining the competitive requirements
in the Competition in Contracting Act.
Currently, the Small Business Act requires that federal agencies
default to small business set asides for contracts with values under
the Simplified Acquisition Threshold (SAT/$350,000), unless there
is not a reasonable expectation that two small businesses can and
will make competitive offers. For contracts above the SAT, con-
tracting officers must conduct market research and determine if
there are two or more responsible small businesses that will make
offers and can perform the work at fair market prices.2 If con-
tracting officers have a reasonable expectation that offers will be
received from two or more small businesses, they must set the con-
tracts aside and allow only small businesses to compete. This anal-
ysis is known as the ‘‘Rule of Two’’ and is the process that triggers
small business competition.
The Rule of Two has been a regulatory requirement for forty
years and is the foundation of the Federal Government’s support
for small business prime contracting. The requirement for a Rule
of Two analysis was put in place in recognition of the fact that if
small businesses were required to compete with large corporations,
it would be nearly impossible for any small business to win a con-
tract, let alone be awarded a ‘‘fair proportion.’’ This is especially
true for small businesses seeking federal contracts for the first
time.
The data bears this out: with the Rule of Two in place, over $100
billion dollars is now awarded annually to small business govern-
ment contractors through small business-only competitions. In fis-
cal year 2024 alone, $72 billion was awarded through general small
business set-asides.3 That does not include contracts awarded
through one of SBA’s procurement programs—which this legisla-
tion protects and enables.
1 15 U.S.C. 644(a)(1)(C).
2 13 CFR 125.2(f); 48 CFR 19.502–2.
3 U.S.
SMALL BUS. ADMIN., FINAL FY23 CORRECTIVE ACTION REPORT WITH AGENCY REPORTS
AND ADDENDA, (Sep. 9, 2024) and Small Business Data HUB. https://datahub.certify.sba.gov/
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(last accessed Apr. 24, 2026).
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The Rule of Two has been retained during changes to federal pro-
curement regulations since its initial inclusion in the Federal Ac-
quisition Regulations (FAR) 40 years ago. On April 15, 2025, the
President issued Executive Order (EO) 14275 requiring the govern-
ment to review and rewrite the FAR, initiating the most recent
round of reviews.4 The newest version of the FAR retained the
Rule of Two. However, both EO 14275 and the revised FAR (which
has not yet moved through the formal rulemaking process) include
a section that stated any provision retained in the revision, but not
based on statute, would expire in four years unless extended by the
FAR Council.5 As a result, the Rule of Two’s future as a regulatory
requirement is less secure.
The Committee believes that retaining and codifying the Rule of
Two must be a top priority and has consistently and publicly high-
lighted the need to do so since the signing of EO 14275—including
through hearing records, press releases, op-eds, and outreach to the
community. This effort has demonstrated the overwhelming sup-
port among the small business community for retaining the Rule
of Two and enacting H.R. 2804. The Protecting Small Business
Competitions Act is formally endorsed by more than 35 organiza-
tions and hundreds of small businesses.
For example, the Committee record includes testimony from a
September 10, 2025, Small Business Subcommittee on Contracting
and Infrastructure hearing entitled: ‘‘Leveling the Playing Field:
Fostering Opportunities for Small Business Contractors,’’ which
discussed the FAR rewrite and the necessity of retaining the Rule
of Two. The witnesses invited by both sides of the aisle highlighted
the need to codify the Rule of Two and the strong, bipartisan sup-
port for doing so. Ms. Sue Tellier stated: ‘‘The Rule of Two has his-
torically been a bedrock protection for us. Its erosion results in a
less welcoming environment—reducing opportunities for small in-
novative firms and instead accelerating consolidation.’’ Mr. Michael
Ramos stated: ‘‘If we remove the Rule of Two, that will be dam-
aging to the defense industrial base. I think that’s pretty critical
to understand. If you remove that rule and you do not codify it, you
have this scenario where not only will [small businesses] leave, but
you will just create massive entrenchment of the existing larger
small businesses.’’ 6
The purpose of H.R. 2804 is to codify the current requirement
and application of the Rule of Two as included in the Federal Ac-
quisition Regulation, while retaining and preserving the existing
exemptions, including those found in the Revolutionary FAR Over-
haul’s 19.104–1. H.R. 2804 does not expand the Rule of Two to pro-
curements outside of its current application. In particular, procure-
ments governed by different laws and processes, such as procure-
ments made pursuant to the Javits-Wagner-O’Day Act (41 U.S.C.
8501, et seq.), or current, specific requirements at federal agencies,
are not covered by H.R. 2804.
4 Exec. Order No. 14275, 90 Fed. Reg. 16447 (Apr. 15, 2025).
5 FAR Part 1.109: ‘‘All FAR sections that are not required by statute must expire 4 years after
the effective date of the sections, unless renewed by the Federal Acquisition Regulatory Coun-
cil.’’
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6 Leveling the Playing Field: Fostering Opportunities for Small Business Contractors. Hearing
before the H. COMM. ON SMALL BUS., 119th Cong. (2025).
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38
Preserving and codifying the Rule of Two as applied today will
ensure that both small business competitions and other important
procurement programs and structures remain consistent with the
purpose of their enactment. For example, non-competitive procure-
ments—including acquisitions with a statutorily mandated source
such as Federal Prison Industries or AbilityOne—or procurement
processes with alternative structures—such as procurement con-
ducted for Architect and Engineering services via the Brooks Act,
and small business direct award authorities—have been delib-
erately and specifically crafted to ensure the industrial base can ef-
ficiently support agency missions while realistically supporting
Congressionally directed policy objectives. Among other objectives,
Congress has directed federal agencies to use specific authorities—
through mandatory and competitive procurements—to promote
American’s small business (contracts set-aside for small business
competitions), American products and services (ie: Buy America
Act) and American jobs (AbilityOne and competitions restricted to
small firms in HUBZones). This bill does not repeal any existing
laws and retains, codifies and protects that structure in statute for
the future.
Similarly, the Committee adopted an Amendment in the Nature
of a Substitute to remove the underlying bill’s expansion of the
Rule or Two’s applicability to task and delivery orders. On January
15, 2025, the FAR Council issued a proposed rule to increase small
business participation on certain multiple-award contracts by
among other provisions, expanding the Rule of Two to placement
of task and delivery orders.7 At the time of introduction of H.R.
2804, this rule remained in the proposed rule stage, and therefore,
the bill’s text included ‘‘contracts, task order and delivery orders.’’
The proposed rule was withdrawn on June 12, 2025 8 and no ex-
pansion of the Rule of Two was included in changes made by the
FAR Council.
The bill, as amended and passed, aligns with the current acquisi-
tion regulations regarding the applicability of the Rule of Two to
task and delivery orders.
NYDIA M. VELÁZQUEZ,
Ranking Member.
Æ
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7 90 Fed. Reg. 3753 (Jan. 15, 2025).
8 90 Fed. Reg. 24773 (Jun. 12, 2025).
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