HR 3867
10-30-07, Bill Passed House 334-80
Referred to Senate Committee
on Small Business & Entrepreneurship
110th CONGRESS
1st Session
H. R. 3867
IN THE SENATE OF THE UNITED STATES
November 1, 2007
Received; read twice and referred to the Committee on Small Business
and Entrepreneurship
AN ACT
To update and expand the procurement programs of the Small Business
Administration, 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; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Small Business Contracting
Program Improvements Act'.
(b) Table of Contents- The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--ENSURING GOVERNMENT CONTRACT OPPORTUNITIES FOR SMALL BUSINESS
CONCERNS OWNED AND CONTROLLED BY SERVICE-DISABLED VETERANS
Sec. 101. Expanding procurement opportunities.
Sec. 102. Penalties for misrepresentation.
Sec. 103. Implementation of Executive Order No. 13360.
Sec. 104. Priority for severely disabled veterans.
TITLE II--PROTECTING TAXPAYERS AND ENSURING PROGRAM CONSISTENCY
Sec. 201. Requiring business integrity of small business concerns.
Sec. 202. Establishment of goals.
Sec. 203. Small business concern subcontracting policy.
Sec. 204. Increased size of available contracts.
Sec. 205. Expanding protest authorization.
Sec. 206. Prohibition on contract awards to contractors in violation
of immigration laws.
TITLE III--EXPANDING OPPORTUNITIES FOR WOMEN ENTREPRENEURS
Sec. 301. Implement the women's procurement program.
TITLE IV--STRENGTHENING COMMUNITY DEVELOPMENT
Sec. 401. On-site verification.
Sec. 402. Limitation on construction contracts.
Sec. 403. Study on effectiveness of HUBZone program in reaching rural
areas.
TITLE V--MODERNIZING THE 8(a) PROGRAM
Sec. 501. Modernizing the section 8(a) program net worth limitations.
Sec. 502. Extension of the section 8(a) program term.
Sec. 503. Report on implementation.
Sec. 504. Assistance study.
Sec. 505. Examination of list of groups the members of which are presumed
to be socially disadvantaged for purposes of small disadvantaged business
program.
TITLE VI--OTHER MATTERS
Sec. 601. Affiliation for certain franchises.
Sec. 602. Sense of the House of Representatives on acquisitions conducted
under the General Services Administration's Federal Supply Schedule.
Sec. 603. Study on frivolous protests.
Sec. 604. Small Business Administration Liaison.
Sec. 605. Prohibition on business-class or first-class airline travel.
TITLE I--ENSURING GOVERNMENT CONTRACT OPPORTUNITIES FOR SMALL BUSINESS
CONCERNS OWNED AND CONTROLLED BY SERVICE-DISABLED VETERANS
SEC. 101. EXPANDING PROCUREMENT OPPORTUNITIES.
(a) Service-Disabled Veterans- Section 36(a) of the Small Business Act
(15 U.S.C. 657f(a)) is amended--
(1) in the matter preceding paragraph (1), by striking `may' and inserting
`shall'; and
(2) in paragraph (1), by striking `and the contracting officer' and
all that follows through `contracting opportunity'.
(b) HUBZone- Section 31(b)(2)(B) of such Act (15 U.S.C. 657a(b)(2)(B))
is amended by striking `shall' and inserting `may'.
SEC. 102. PENALTIES FOR MISREPRESENTATION.
Section 16(d)(1) of the Small Business Act (15 U.S.C. 645(d)(1)) is amended
by inserting `a `small business concern owned and controlled by service-disabled
veterans',' before `or a `small business concern owned and controlled
by women'.
SEC. 103. IMPLEMENTATION OF EXECUTIVE ORDER NO. 13360.
Section 36 of the Small Business Act (15 U.S.C. 657f) is amended by adding
at the end the following new subsection:
`(f) Implementation of Executive Order No. 13360- The Administrator shall--
`(1) provide small business concerns owned and controlled by service-disabled
veterans with information and assistance concerning participation in
Federal contracting;
`(2) advise and assist other agencies in their strategies to expand
procurement opportunities for such concerns; and
`(3) make training assistance on Federal contract law, procedures, and
practices available to such concerns.'.
SEC. 104. PRIORITY FOR SEVERELY DISABLED VETERANS.
In developing regulations to implement section 101, the Administrator
shall give a priority to those certified service-disabled veterans that
are severely disabled.
TITLE II--PROTECTING TAXPAYERS AND ENSURING PROGRAM CONSISTENCY
SEC. 201. REQUIRING BUSINESS INTEGRITY OF SMALL BUSINESS CONCERNS.
Section 8 of the Small Business Act (15 U.S.C. 637) is amended by adding
at the end the following new subsection:
`(o) Requirement of Business Integrity- No small business concern may
receive any benefit under section 8(a), 8(m), 31(b)(2)(A), 31(b)(2)(B),
36(a), or 36(b) unless the Administrator first performs a background check
on the owners and officers of such small business concern and determines
that the owners and officers do not lack business integrity. For purposes
of such a determination, previous criminal convictions will create a presumption
of a lack of business integrity.'.
SEC. 202. ESTABLISHMENT OF GOALS.
(a) Establishment of Government-Wide Goals- Section 15(g)(1) of the Small
Business Act (15 U.S.C. 644(g)(1)) is amended by striking the first sentence
and inserting `The President shall annually establish Government-wide
goals for procurement contracts awarded to small business concerns, small
business concerns owned and controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business concerns owned and controlled
by socially and economically disadvantaged individuals, small business
concerns participating in the program established by section 8(a), and
small business concerns owned and controlled by women.'.
(b) Technical Corrections- Section 15 of the Small Business Act (15 U.S.C.
644) is amended--
(1) in subsection (g) by adding at the end the following:
`(3) Each agency shall, in consultation with the Administrator, establish
goals for the usage, as prime contractors, of small business concerns
that participate in the program under section 8(a).'; and
(2) in subsection (h) by adding at the end the following:
`(4) Each prime contractor shall, in consultation with the Administrator,
establish goals for the usage, as subcontractors, of small business concerns
that participate in the program under section 8(a).'.
SEC. 203. SMALL BUSINESS CONCERN SUBCONTRACTING POLICY.
Section 8(d)(1) of the Small Business Act (15 U.S.C. 637(d)(1)) is amended
by striking the first sentence and inserting `It is the policy of the
Unites States that small business concerns, small business concerns owned
and controlled by veterans, small business concerns owned and controlled
by service-disabled veterans, qualifying HUBZone small business concerns,
small business concerns owned and controlled by socially and economically
disadvantaged individuals, small business concerns participating in the
program established by section 8(a), and small business concerns owned
and controlled by women, shall have the maximum practicable opportunity
to participate in the performance contracts let by any Federal agency,
including contracts and subcontracts for subsystems, assemblies, components,
and related services for major systems.'.
SEC. 204. INCREASED SIZE OF AVAILABLE CONTRACTS.
(a) Section 8(a) Program- Section 8(a)(1)(D)(i)(II) of the Small Business
Act (15 U.S.C. 637(a)(1)(D)(i)(II)) is amended--
(1) by striking `$5,000,000' and inserting `$5,500,000'; and
(2) by striking `$3,000,000' and inserting `$5,100,000'.
(b) HUBZone Program- Section 31(b)(2)(A)(ii) of such Act (15 U.S.C. 657a(b)(2)(A)(ii))
is amended--
(1) by striking `$5,000,000' and inserting `$5,500,000'; and
(2) by striking `$3,000,000' and inserting `$5,100,000'.
(c) Service-Disabled Veteran Program- Section 36(a)(2) of such Act (15
U.S.C. 657f(a)(2)) is amended--
(1) by striking `$5,000,000' and inserting `$5,500,000'; and
(2) by striking `$3,000,000' and inserting `$5,100,000'.
SEC. 205. EXPANDING PROTEST AUTHORIZATION.
Section 8(a) of the Small Business Act (15 U.S.C. 637(a)) is amended by
adding at the end the following new paragraphs:
`(22) Rules similar to the rules of paragraphs (5) and (6) of subsection
(m) shall apply for purposes of this subsection.
`(23) For the purposes of challenging the eligibility of a small business
concern to receive an award under section 8(a), 8(m), 31(b)(2)(A), 31(b)(2)(B),
36(a), or 36(b), the term `interested party' shall include any small
business concern.'.
SEC. 206. PROHIBITION ON CONTRACT AWARDS TO CONTRACTORS IN VIOLATION
OF IMMIGRATION LAWS.
Any employer found, based on a determination by the Secretary of Homeland
Security or the Attorney General to have engaged in a pattern or practice
of hiring, recruiting or referring for a fee, for employment in the United
States an alien knowing the person is an unauthorized alien shall be subject
to debarment from the receipt of future Federal contracts under this Act.
TITLE III--EXPANDING OPPORTUNITIES FOR WOMEN ENTREPRENEURS
SEC. 301. IMPLEMENT THE WOMEN'S PROCUREMENT PROGRAM.
Subsection (m) of section 8 of the Small Business Act (15 U.S.C. 637(m))
is amended--
(1) by striking paragraphs (1) through (4) and inserting the following:
`(1) DEFINITION- In this subsection, the term `small business concern
owned and controlled by women' has the meaning given such term in section
3(n), except that ownership shall be determined without regard to any
community property law.
`(2) AUTHORITY TO RESTRICT COMPETITION-
`(A) IN GENERAL- In accordance with this subsection, a contracting
officer may restrict competition for any contract for the procurement
of goods or services by the Federal Government to small business concerns
owned and controlled by women, if--
`(i) each of the concerns is not less than 51 percent owned by 1
or more women who are economically disadvantaged (and such ownership
is determined without regard to any community property law);
`(ii) the contracting officer has a reasonable expectation that
2 or more small business concerns owned and controlled by women
will submit offers for the contract;
`(iii) the contract is for the procurement of goods or services
with respect to an industry identified pursuant to paragraph (4);
`(iv) in the estimation of the contracting officer, the contract
award can be made at a fair and reasonable price; and
`(v) each concern is certified in a manner described in subparagraph
(B).
`(B) ACCEPTANCE OF CERTIFICATION- For purposes of subparagraph (A)(v),
a contracting officer is required to accept a small business concern's
certification as a small business concern owned and controlled by
women when such certification is made by--
`(i) a Federal agency or a State or local government;
`(ii) a national certifying entity approved by the Administrator;
or
`(iii) the small business concern, when such concern certifies to
the contracting officer that it is a small business concern owned
and controlled by women and provides adequate documentation in accordance
with standards established by the Administrator to support such
certification.
`(3) WAIVER- With respect to a small business concern owned and controlled
by women, the Administrator may waive paragraph (2)(A)(i) if--
`(A) such concern is in an industry identified pursuant to paragraph
(4); and
`(B) the Administrator determines that such concern is in an industry
in which small business concerns owned and controlled by women are
substantially under-represented in Federal contracting.
`(4) IDENTIFICATION OF INDUSTRIES-
`(A) IN GENERAL- Not less often than every five years, the Administrator
shall conduct a study to identify, for purposes of paragraphs (2)(A)(iii)
and (3)(A), industries in which small business concerns owned and
controlled by women are under-represented in Federal contracting.
The parameters for the study shall be as follows:
`(i) For purposes of this paragraph, the Administrator shall identify
an industry if, and only if, the share of Federal contracts awarded
to small business concerns owned and controlled by women in such
industry is small relative to the prevalence of business concerns
owned and controlled by women in the pool of business concerns in
such industry that have at least one employee.
`(ii) The study shall measure utilization and availability by--
`(I) using the two best available data sources;
`(II) including only business concerns that have at least one
employee; and
`(III) measuring only Federal contracts awarded for amounts over
$25,000.
`(iii) The study shall include four sets of disparity measurement
tables to compute disparity ratios. The four sets are--
`(I) all business concerns in the United States relative to the
number of Federal contracts awarded to small business concerns
owned and controlled by women;
`(II) small business concerns owned and controlled by women that
have demonstrated an interest in or that have secured Federal
contracts relative to the number of Federal contracts awarded
to small business concerns owned and controlled by women;
`(III) all business concerns in the United States relative to
the dollar amounts of Federal contracts awarded to small business
concerns owned and controlled by women; and
`(IV) small business concerns owned and controlled by women that
have demonstrated an interest in or that have secured government
contracts relative to the dollar amounts of Federal contracts
awarded.
`(B) UNDERREPRESENTED INDUSTRIES- Until such time as the Administrator
completes the identification of industries required by subparagraph
(A), the following industries, as identified by their 2-Digit North
American Industry Classification System Code, are deemed underrepresented
by women in Federal contracting: 11 (Forestry), 21 (Mining), 22 (Utilities),
23 (Construction), 31 (Manufacturing), 32 (Manufacturing), 33 (Manufacturing),
42 (Wholesale Trade), 44 (Retail Trade), 45 (Retail Trade), 48 (Transportation),
49 (Transportation), 51 (Information), 52 (Finance and Insurance),
53 (Real Estate and Rental and Leasing), 54 (Professional, Scientific,
and Technical Services), 56 (Administrative and Support, Waste Management,
and Remediation Services), 61 (Education Services), 62 (Health Care
and Social Assistance), 71 (Arts, Entertainment, and Recreation),
72 (Accommodation and Food Services), and 81 (Other Services).
`(C) DEADLINE- Not later than 90 days after the date of the enactment
of this subparagraph, the Administrator shall--
`(i) ensure the completion of the first study required by subparagraph
(A);
`(ii) approve national certifying entities for the purposes of paragraph
(2)(B)(ii);
`(iii) establish procedures required by paragraph (5)(A); and
`(iv) establish standards described in paragraph (2)(B)(iii).';
(2) in paragraph (5), by striking `(2)(F)' in each place it appears
and inserting `(2)(B)'; and
(3) in paragraph (5), by adding at the end the following new subparagraph:
`(D) PROTESTS BY SMALL BUSINESS CONCERNS- For purposes of this paragraph,
the term `interested party' shall include any small business concern.'.
TITLE IV--STRENGTHENING COMMUNITY DEVELOPMENT
SEC. 401. ON-SITE VERIFICATION.
Section 31(b) of the Small Business Act (15 U.S.C. 657a(b)) is amended
by adding at the end the following:
`(5) ON-SITE VERIFICATION OF STATUS-
`(A) VERIFICATION- When a small business concern that has previously
been awarded a contract under paragraph (2)(A) or (2)(B) is to be
awarded a second contract under paragraph (2)(A) or (2)(B), the Administrator
shall perform an on-site inspection to determine whether such small
business concern is a qualified HUBZone small business concern. This
paragraph does not require such an inspection before the award of
a third or subsequent contract. This paragraph does not prevent a
second contract from being awarded before such inspection is completed.
`(B) NOTIFICATION BY SMALL BUSINESS CONCERN- The Administrator shall
require a small business concern to notify the Administrator, prior
to being awarded a second contract under paragraph (2)(A) or (2)(B),
of such business concern's attempt to be awarded a second contract
under paragraph (2)(A) or (2)(B). Not later than 90 days after the
date of the enactment of this subparagraph, the Administrator shall
establish procedures to implement this subparagraph.'.
SEC. 402. LIMITATION ON CONSTRUCTION CONTRACTS.
Section 31(b) of the Small Business Act (15 U.S.C. 657a(b)) is amended
by adding at the end the following:
`(6) LIMIT HUBZONE PROGRAM CONSTRUCTION CONTRACTS IN OR NEAR A HUBZONE-
A small business concern may not obtain a construction contract by reason
of the HUBZone program unless the construction project is located in
or near the HUBZone in which the small business concern has its principal
place of business. The Administrator shall prescribe standards for determining
when a project is located `near' a HUBZone for purposes of this paragraph,
except that under no circumstances can a project located more than 150
miles from a HUBZone be located `near' that HUBZone.'.
SEC. 403. STUDY ON EFFECTIVENESS OF HUBZONE PROGRAM IN REACHING RURAL
AREAS.
The Administrator of the Small Business Administration shall carry out
a study on the effectiveness of the HUBZone program in reaching rural
areas to determine whether there are needy areas that do not qualify under
the program and whether there are areas that currently qualify under the
program that are inconsistent with the program's original intent. Not
later than 6 months after the date of the enactment of this Act, the Administrator
shall submit to Congress a report containing the results of the study
and any recommendations that the Administrator considers appropriate for
alternative ways to evaluate eligibility for HUBZones in rural areas.
TITLE V--MODERNIZING THE 8(a) PROGRAM
SEC. 501. MODERNIZING THE SECTION 8(a) PROGRAM NET WORTH LIMITATIONS.
(a) Modifications to 8(a) Program- Notwithstanding any provision of the
Small Business Act (15 U.S.C. 631 et seq.), the Administrator shall administer
the program under section 8(a) of such Act with the following modifications:
(1) DETERMINATION FOR TERM OF PROGRAM- For the purpose of this section,
an individual who has been determined by the Administrator to be economically
disadvantaged at the time of program entry shall be deemed to be economically
disadvantaged for the term of the program.
(2) MATTERS EXCLUDED- In determining personal net worth, the Administrator
shall exclude from such determination the following:
(A) The value of any investment of an economically disadvantaged owner
in the small business concern, except that such value shall be taken
into account under this paragraph when comparing such concerns to
other concerns in the same business area that are owned by other than
socially disadvantaged individuals.
(B) The equity of an economically disadvantaged owner in a primary
personal residence.
(3) MAXIMUM NET WORTH- When considering an individual's net worth for
the purpose of determining the degree of diminished credit and capital
opportunities of such individual, the Administrator shall consider an
individual net worth of $550,000 or less as tending to show diminished
credit and capital opportunities.
(b) Effective Date for Modifications to the 8(a) Program- This section
shall apply with respect to small business concerns that apply to the
program under section 8(a) of the Small Business Act (15 U.S.C. 637(a))
after the date of the enactment of this Act.
SEC. 502. EXTENSION OF THE SECTION 8(a) PROGRAM TERM.
(a) Program Term- The program term for the program under section 8(a)
of the Small Business Act shall be 10 years. The first 6 years shall be
the developmental phase, and the last 4 years shall be the transitional
phase.
(b) Effective Date for Modifications to the 8(a) Program-
(1) IN GENERAL- This section shall apply with respect to small business
concerns that apply to the program under section 8(a) of the Small Business
Act (15 U.S.C. 637(a)) after the date of the enactment of this Act.
(2) TRANSITIONAL RULE- A small business concern participating in the
program under section 8(a) of such Act (15 U.S.C. 637(a)) may participate
for not more than 10 years.
SEC. 503. REPORT ON IMPLEMENTATION.
Section 155 of the Small Business Reauthorization and Manufacturing Assistance
Act of 2004 (15 U.S.C. 657g) is amended by adding at the end the following:
`Annually, concurrent with the submission of the Small Business Administration's
budget request to the Congress, the Administrator shall submit to the
Committee on Small Business and Entrepreneurship of the Senate and the
Committee on Small Business of the House of Representatives a report detailing
progress the Administrator has made towards the implementation of this
section.'.
SEC. 504. ASSISTANCE STUDY.
(a) Study- The Administrator of the Small Business Administration shall
conduct a study to determine what changes would be required to provide
greater Federal contracting assistance to participants in the program
created by section 8(a) of the Small Business Act that have less equity
in their business concerns than other participants in the program.
(b) Report- Not later than 6 months after the date of the enactment of
this Act, the Administrator shall submit to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small Business
of the House of Representatives a report detailing the results of the
study described in subsection (a).
SEC. 505. EXAMINATION OF LIST OF GROUPS THE MEMBERS OF WHICH ARE PRESUMED
TO BE SOCIALLY DISADVANTAGED FOR PURPOSES OF SMALL DISADVANTAGED BUSINESS
PROGRAM.
The Administrator of the Small Business Administration shall examine the
list of groups the members of which are presumed to be socially disadvantaged
for purposes of the Small Disadvantaged Business program under section
8(a) of the Small Business Act and shall consider whether the list should
be updated to include additional groups. Not later than 6 months after
the date of the enactment of this Act, the Administrator shall submit
to Congress a report on the results of the examination.
TITLE VI--OTHER MATTERS
SEC. 601. AFFILIATION FOR CERTAIN FRANCHISES.
Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) is amended by
adding at the end the following new paragraph:
`(5) SPECIAL RULE RELATING TO FRANCHISES IN THE TEMPORARY EMPLOYEE SERVICES
INDUSTRY- In determining whether a franchisee is affiliated with a franchisor
in the temporary employee services industry, the Administrator shall--
`(i) whether the franchisor finances the payroll of the temporary
staffing personnel (including billing, collecting, and remitting
client fees); and
`(ii) whether the temporary staffing personnel are treated as employees
or independent contractors of the franchisor for tax or other purposes;
and
`(B) consider the processing of payroll and billing by a franchisor
as customary and common practice in the temporary employee services
industry that does not provide probative weight.'.
SEC. 602. SENSE OF THE HOUSE OF REPRESENTATIVES ON ACQUISITIONS CONDUCTED
UNDER THE GENERAL SERVICES ADMINISTRATION'S FEDERAL SUPPLY SCHEDULE.
(a) Findings- Congress finds the following:
(1) The Small Business Act was adopted by Congress to ensure that small
business concerns receive fair access to, and a fair share of, Federal
government contracts and subcontracts.
(2) There is a disagreement between the General Services Administration
and the Small Business Administration on whether the Small Business
Act applies to the acquisitions under the General Services Administration's
Federal Supply Schedule, which account for over $30,000,000,000 in procurement
dollars awarded each year.
(3) As demonstrated in proceedings of the White House Acquisition Advisory
Panel, small businesses hold 79.6 percent of contracts under the Federal
Supply Schedule, but receive only 37.1 percent of dollars awarded under
the Federal Supply Schedule, and this disparity has a significant impact
on the competitive viability of small business concerns in government
contracting.
(b) Sense of the House- Therefore, it is the sense of the House of Representatives
that small business set-asides should not be excluded from any acquisitions
under the General Services Administration's Federal Supply Schedule.
SEC. 603. STUDY ON FRIVOLOUS PROTESTS.
(a) Study- The Administrator of the Small Business Administration shall
conduct a study to determine, with respect to small business contracts,
whether incumbent Federal contractors submit frivolous protests to extend
the length of current contracts before protest decisions are resolved.
(b) Contents- In conducting the study, the Administrator shall--
(1) determine the number of Government Accountability Office bid protests
and Small Business Administration size protests filed by incumbent Federal
contractors with respect to small business contracts, the number of
incumbent contracts extended because of the protest, the extra costs
of extending incumbent contracts during the protest, and the final rulings
of these protests;
(2) determine the financial impact of protests filed by incumbent Federal
contractors on small businesses that were originally awarded the protested
small business contracts, including costs associated with defending
the protests and costs incurred by Federal agencies;
(3) identify the incumbent Federal contractors that file the most unsuccessful
protests on small business contracts; and
(4) develop recommendations--
(A) to ease any financial burden on small businesses during the protest
of small business contracts; and
(B) to discourage frivolous protests by incumbent Federal contractors
on small business contracts.
(c) Consultation- In conducting the study, the Administrator shall consult
with the Government Accountability Office, any necessary Federal agencies,
and the Office of Federal Procurement Policy.
(d) Report- Not later than 180 days after the date of the enactment of
this Act, the Administrator shall submit to Congress a report on the results
of the study, together with the recommendations developed under subsection
(b)(4).
SEC. 604. SMALL BUSINESS ADMINISTRATION LIAISON.
(a) Establishment- The Administrator of the Small Business Administration
shall create a liaison position whose duty it is to ensure that section
2(i) of the Small Business Act is carried out.
(b) Functions- In carrying out the duty described in subsection (a), the
liaison shall consult with the Assistant Secretary of the Department of
Homeland Security for United States Immigration and Customs Enforcement.
SEC. 605. PROHIBITION ON BUSINESS-CLASS OR FIRST-CLASS AIRLINE TRAVEL.
In carrying out the provisions of the Small Business Contracting Program
Improvements Act, the Small Business Administrator or any employee may
not purchase business-class or first-class airline travel in contravention
of sections 301-10.122 through 301-10.124 of title 41, Code of Federal
Regulations.
Passed the House of Representatives October 30, 2007.
Attest:
LORRAINE C. MILLER,
Clerk.
END
