To modify the contract consolidation requirements in the Small Business Act, and for other purposes.

January 24, 2005

Mr. KERRY introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship

To modify the contract consolidation requirements in the Small Business Act, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Small Business Federal Contractor Safeguard Act of 2005'.

SEC. 2. CONTRACT CONSOLIDATION.

(a) Definitions- Section 3(o) of the Small Business Act (15 U.S.C. 632(o)) is amended to read as follows:

`(o) Definitions Relating to Consolidation of Contract Requirements- For purposes of this Act--

`(1) the terms `consolidation of contract requirements' and `consolidation', with respect to contract requirements of a military department, Defense Agency, Department of Defense Field Activity, or any other Federal department or agency having contracting authority mean a use of a solicitation to obtain offers for a single contract or a multiple award contract to satisfy 2 or more requirements of that department, agency, or activity for goods or services that--

`(A) have previously been provided to or performed for that department, agency, or activity under 2 or more separate contracts that are smaller in cost than the total cost of the contract for which the offers are solicited; or

`(B) are of a type capable of being provided or performed by a small business concern for that department, agency, or activity under 2 or more separate contracts that are smaller in cost than the total cost of the contract for which the offers are solicited;

`(2) the term `multiple award contract' means--

`(A) a contract that is entered into by the Administrator of General Services under the multiple award schedule program referred to in section 2302(2)(C) of title 10, United States Code;

`(B) a multiple award task order contract or delivery order contract that is entered into under the authority of sections 2304a through 2304d of title 10, United States Code, or sections 303H through 303K of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 253h through 253k); and

`(C) any other indeterminate delivery, indeterminate quantity contract that is entered into by the head of a Federal agency with 2 or more sources pursuant to the same solicitation; and

`(3) the term `senior procurement executive' means--

`(A) with respect to a military department, the official designated under section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C. 414(3)) as the senior procurement executive for the military department;

`(B) with respect to a Defense Agency or a Department of Defense Field Activity, the official so designated for the Department of Defense; and

`(C) with respect to a Federal department or agency other than those referred to in subparagraphs (A) and (B), the official so designated by that department or agency.'.

(b) Procurement Strategies- Section 15(e) of the Small Business Act (15 U.S.C. 644(e)) is amended--

(1) in paragraph (2)--

(A) by striking `-

`(A) IN GENERAL '; and

(B) by striking subparagraphs (B) and (C); and

(2) by amending paragraph (3) to read as follows:

`(3) LIMITATION ON USE OF ACQUISITION STRATEGIES INVOLVING CONSOLIDATION-

`(A) CERTAIN DEFENSE CONTRACT REQUIREMENTS- An official of a military department, defense agency, or Department of Defense Field Activity shall not execute an acquisition strategy that includes a consolidation of contract requirements of the military department, agency, or activity with a total value in excess of $5,000,000, unless the senior procurement executive first--

`(i) conducts market research;

`(ii) identifies any alternative contracting approaches that would involve a lesser degree of consolidation of contract requirements; and

`(iii) determines that the consolidation is necessary and justified.

`(B) CERTAIN CIVILIAN AGENCY CONTRACT REQUIREMENTS- The head of a Federal agency not described in subparagraph (A) that has contracting authority shall not execute an acquisition strategy that includes a consolidation of contract requirements of the agency with a total value in excess of $2,000,000, unless the senior procurement executive of the agency first--

`(i) conducts market research;

`(ii) identifies any alternative contracting approaches that would involve a lesser degree of consolidation of contract requirements; and

`(iii) determines that the consolidation is necessary and justified.

`(C) ADDITIONAL REQUIREMENTS FOR HIGHER VALUE CONSOLIDATED CONTRACTS- In addition to meeting the requirements under subparagraph (A) or (B), a procurement strategy by a civilian agency that includes a consolidated contract valued at more than $5,000,000, or by a defense agency that includes a consolidated contract valued at more than $7,000,000 shall include--

`(i) an assessment of the specific impediments to participation by small business concerns as prime contractors that will result from the consolidation;

`(ii) the identification of the alternative strategies that would reduce or minimize the scope of the consolidation and the rationale for not choosing those alternatives;

`(iii) actions designed to maximize small business participation as prime contractors, including provisions that encourage small business teaming for the consolidated requirement; and

`(iv) actions designed to maximize small business participation as subcontractors (including suppliers) at any tier under the contract or contracts that may be awarded to meet the requirements.

`(D) NECESSARY AND JUSTIFIED- A senior procurement executive may determine that an acquisition strategy involving a consolidation of contract requirements is necessary and justified for purposes of subparagraph (A), (B), or (C), if the benefits of the acquisition strategy substantially exceed the benefits of each of the possible alternative contracting approaches identified under clause (ii) of any of those subparagraphs, as applicable. Savings in administrative or personnel costs alone shall not constitute, for such purpose, a sufficient justification for a consolidation of contract requirements in a procurement, unless the total amount of the cost savings is expected to be substantial in relation to the total cost of the procurement.

`(E) BENEFITS- Benefits considered for purposes of this paragraph may include cost and, regardless of whether quantifiable in dollar amounts--

`(i) quality;

`(ii) acquisition cycle;

`(iii) terms and conditions; and

`(iv) any other benefit directly related to national security or homeland defense.'.

(c) Additional to Technical Advisers- Section 15(k) of the Small Business Act (15 U.S.C. 644(k)) is amended--

(1) in paragraph (5), by striking `bundled contract' and inserting `consolidated contract'; and

(2) in paragraph (8), by striking `representative--' and inserting `representative at each major procurement center under subsection (l)(1)--'.

(d) Procurement Center Representatives- Section 15(l) of the Small Business Act (15 U.S.C. 644(l)) is amended--

(1) by redesignating paragraphs (2) through (7) as paragraphs (3) through (8), respectively;

(2) by striking `(l)(1)' and inserting `(2)';

(3) by inserting before paragraph (2), as redesignated, the following:

`(l)(1) The Administration shall assign not fewer than 1 procurement center representative at each major procurement center, in addition to not fewer than 1 for each State.';

(4) in paragraph (2), as redesignated, by striking `to the representative referred to in subsection (k)(6)' and inserting `to the traditional procurement center representative and the commercial market representative, with each such position filled by a different individual, and each such representative having separate and distinct duties and responsibilities.'; and

(5) by striking `paragraph (2)' each place that term appears and inserting `paragraph (3)'.

(e) Report Requirements- Section 15(p)(4)(B) of the Small Business Act (15 U.S.C. 644(p)(4)(B)) is amended--

(1) in clause (i), by striking `and' at the end;

(2) in clause (ii), by striking the period at the end and inserting the following: `; and'; and

(3) by adding at the end the following:

`(iii) a description of best practices for maximizing small business prime and subcontracting opportunities.'.

(f) Conforming Amendments- Section 15(p) of the Small Business Act (15 U.S.C. 644(p)) is amended--

(1) in the subsection heading, by striking `Bundled Contracts' and inserting `Consolidated Contracts';

(2) in the heading to paragraph (1), by striking `BUNDLED CONTRACT' and inserting `CONSOLIDATED CONTRACT';

(3) in the heading to paragraph (4), by striking `CONTRACT BUNDLING' and inserting `CONTRACT CONSOLIDATION';

(4) by striking `bundled contracts' each place that term appears and inserting `consolidated contracts';

(5) by striking `bundled contract' each place that term appears and inserting `consolidated contract';

(6) by striking `bundling of contract requirements' each place that term appears and inserting `consolidation of contract requirements';

(7) in paragraph (4)(B)(ii), by striking `previously bundled' and inserting `previously consolidated';

(8) in paragraph (4)(B)(ii)(I), by striking `were bundled' and inserting `were consolidated';

(9) in paragraph (4)(B)(ii)(II)(bb), by striking `bundling the contract requirements' and inserting `the consolidation of contract requirements'; and

(10) in paragraph (4)(B)(ii)(II)(cc), by striking `bundled status' and inserting `consolidated status'.

SEC. 3. AGENCY ACCOUNTABILITY.

(a) In General- Each procurement employee--

(1) shall communicate to their subordinates the importance of achieving small business goals; and

(2) shall have as an annual performance evaluation factor, if appropriate, the success of that procurement employee in small business utilization, in accordance with the goals established under this section.

(b) Definition- As used in this section, the term `procurement employee' means a senior procurement executive, senior program manager, or small and disadvantaged business utilization manager of a Federal agency having contracting authority.

SEC. 4. SMALL BUSINESS PARTICIPATION IN PRIME CONTRACTING.

(a) Reserved Contracts- Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) is amended by adding at the end the following:

`(4) Any adjustment to the simplified acquisition threshold (as defined in section 4(11) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(11))), shall be immediately matched by an identical adjustment to the small business reserve for purposes of this subsection.'.

(b) Participation in Multiple Award Contracts- Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) is amended--

(1) in paragraph (2), by striking `(2) In carrying out paragraph (1)' and inserting `(3) In carrying out paragraphs (1) and (2)';

(2) in paragraph (3), by striking `(3) Nothing in paragraph (1)' and inserting `(4) Nothing in this subsection'; and

(3) by inserting after paragraph (1) the following:

`(2)(A) In the case of orders under multiple award contracts, including Federal Supply Schedule contracts and multi-agency contracts, that are subject to the small business reserve, contracting officers shall consider not fewer than 2 small business concerns if such small business concerns can offer the items sought by the contracting officer on competitive terms, with respect to price, quality, and delivery schedule, with the goods or services available in the market.

`(B) If only 1 small business concern can satisfy the requirement, the contracting officer shall include such small business concern in their evaluation.'.

(c) Report Requirement-

(1) IN GENERAL- Not less than once every 180 days, the Comptroller General of the United States shall submit a report on the level of participation in multiple award contracts, including the Federal Supply Schedule to--

(A) the Small Business Administration;

(B) the Committee on Small Business and Entrepreneurship of the Senate; and

(C) the Committee on Small Business of the House of Representatives.

(2) CONTENTS- Each report submitted under paragraph (1) shall contain, for the 6-month reporting period--

(A) the total number of multiple award contracts;

(B) the total number of small business concerns that received multiple award contracts;

(C) the total number of orders;

(D) the total value of orders;

(E) the number of orders received by small business concerns;

(F) the value of orders received by small business concerns;

(G) the number of small business concerns that received orders; and

(H) such other information that the Comptroller General considers relevant.

SEC. 5. SMALL BUSINESS PARTICIPATION IN SUBCONTRACTING.

(a) Certifications Required- Section 8(d)(6) of the Small Business Act (15 U.S.C. 637(d)(6)) is amended--

(1) in subparagraph (E), by striking `and' at the end;

(2) in subparagraph (F), by striking the period at the end and inserting `; and'; and

(3) by adding at the end the following:

`(G) certification that the offeror or bidder will acquire articles, equipment, supplies, services, or materials, or obtain the performance of construction work from small business concerns in the amount and quality used in preparing the bid or proposal, unless such small business concerns are no longer in business or can no longer meet the quality, quantity, or delivery date.'.

(b) Penalties for False Certifications- Section 16(f) of the Small Business Act (15 U.S.C. 645(f)) is amended by striking `of this Act' and inserting `or the reporting requirements of section 8(d)(11)'.

SEC. 6. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING CONTRACTS.

(a) Significant Factors- Section 8(d)(4)(G) of the Small Business Act (15 U.S.C. 637(d)(4)(G)) is amended by striking `a bundled' and inserting `any'.

(b) Evaluation Reports- Section 8(d)(10) of the Small Business Act (15 U.S.C. 637(d)(10)) is amended--

(1) by striking `is authorized to' and inserting `shall';

(2) in subparagraph (B), by striking `and' at the end;

(3) in subparagraph (C), by striking the period at the end and inserting `; and'; and

(4) by adding at the end the following:

`(D) report the results of each evaluation under subparagraph (C) to the appropriate contracting officers.'.

(c) Centralized Database; Payments Pending Reports- Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended--

(1) by redesignating paragraph (11) as paragraph (14); and

(2) by inserting after paragraph (10) the following:

`(11) Certification- A report submitted by the prime contractor pursuant to paragraph (6)(E) to determine the attainment of a subcontract utilization goal under any subcontracting plan entered into with a Federal agency under this subsection shall contain the name and signature of the president or chief executive officer of the contractor, certifying that the subcontracting data provided in the report are accurate and complete.

`(12) Centralized database- The results of an evaluation under paragraph (10)(C) shall be included in a national centralized governmentwide database.

`(13) Payments pending reports- Each Federal agency having contracting authority shall ensure that the terms of each contract for goods and services includes a provision allowing the contracting officer of an agency to withhold an appropriate amount of payment with respect to a contract (depending on the size of the contract) until the date of receipt of complete, accurate, and timely subcontracting reports in accordance with paragraph (11).'.

(d) Referral of Material Breach to Inspectors General- Section 8(d)(8) of the Small Business Act (15 U.S.C. 637(d)(8)) is amended by adding at the end the following: `A material breach described in this paragraph shall be referred for investigation to the Inspector General (or the equivalent) of the affected agency.'.

SEC. 7. BUSINESSLINC REPORT TO CONGRESS.

Section 8(n) of the Small Business Act (15 U.S.C. 637(n)) is amended--

(1) by redesignating paragraph (3) as paragraph (4); and

(2) by adding after paragraph (2) the following:

`(3) ANNUAL REPORT-

`(A) IN GENERAL- The Associate Administrator of Business Development of the Administration shall collect data on the BusinessLINC program and submit an annual report by April 30 of each year on the effectiveness of the program to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives.

`(B) CONTENTS- The report submitted under subparagraph (A) shall include--

`(i) the number of programs administered in each State;

`(ii) the corresponding grant awards and the date of each award;

`(iii) the dollar amount of the contracts in effect in each State as a result of the BusinessLINC program; and

`(iv) the number of teaming arrangements or partnerships created as a result of the BusinessLINC program.'.

END