IIB
110th CONGRESS
1st Session
H. R. 1873
IN THE SENATE OF THE UNITED STATES
May 11, 2007
Received; read twice and referred to the Committee on Small Business and Entrepreneurship
AN ACT
To reauthorize the programs and activities of the Small Business Administration relating to procurement, and for other purposes.
Short title; table of contents
Short title
This Act may be cited
as the Small Business Fairness in
Contracting Act
.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Regulations.
Title I—Contract Bundling
Sec. 101. Definitions of bundling of contract requirements and related terms.
Sec. 102. Justification.
Sec. 103. Appeals.
Sec. 104. Review.
Title II—Increasing the Number of Small Business Contracts and Subcontracts
Sec. 201. Small business goal.
Sec. 202. Include overseas contracts in small business goal.
Sec. 203. Annual goal negotiation.
Sec. 204. Usage of small companies in goal achievement.
Sec. 205. Annual plan for each agency explaining how agency will meet small business goals.
Sec. 206. Making small businesses the first choice.
Sec. 207. Uniform metric for subcontracting achievements.
Sec. 208. Subcontracting database.
Sec. 209. National database.
Sec. 210. Review of subcontracting plans.
Sec. 211. Agency obligation for fulfilling contracting goals.
Sec. 212. Appropriate limits on value of sole source contracts.
Sec. 213. Small business goals for green small business concerns.
Sec. 214. Study on providing financial incentives to contractors that meet minority and disadvantaged business enterprise goals.
Title III—Protection of Taxpayers from Fraud
Sec. 301. Small business size protest notification.
Sec. 302. Review of national registry.
Sec. 303. Recertification of compliance with size standards and registration with Central Contractor Registry.
Title IV—Authorization of Appropriations
Sec. 401. Authorization of appropriations.
Regulations
In general
Not later than 180 days after the date of the enactment of this Act—
the Administrator of the Small Business Administration shall promulgate regulations to implement this Act and the amendments made by this Act; and
the Federal Acquisition Regulation shall be revised to implement this Act and the amendments made by this Act.
Notice and comment
The regulations required by subsection (a) shall be promulgated after opportunity for notice and comment as required by section 553(b) of title 5, United States Code.
Contract Bundling
Definitions of bundling of contract requirements and related terms
Section 3 of the Small Business Act (15 U.S.C. 632) is amended by amending subsection (o) to read as follows:
Definitions of bundling of contract requirements and related terms
For purposes of this Act:
Bundled contract
In general
The term bundled contract means a contract or order that is entered into to meet procurement requirements that are consolidated in a bundling of contract requirements, without regard to its designation by the procuring agency or whether a study of the effects of the solicitation on civilian or military personnel has been made.
Exceptions
The term does not include—
a contract or order with an aggregate dollar value below the dollar threshold specified in paragraph (4); or
a contract or order that is entered into to meet procurement requirements, all of which are exempted requirements under paragraph (5).
Bundling of contract requirements
In general
The term bundling of contract requirements means the use of any bundling methodology to satisfy 2 or more procurement requirements for goods or services previously supplied or performed under separate smaller contracts or orders, or to satisfy 2 or more procurement requirements for construction services of a type historically performed under separate smaller contracts or orders, that is likely to be unsuitable for award to a small business concern due to—
the diversity, size, or specialized nature of the elements of the performance specified;
the aggregate dollar value of the anticipated award;
the geographical dispersion of the contract or order performance sites; or
any combination of the factors described in clauses (i), (ii), and (iii).
Inclusion of new features or functions
A combination of contract requirements that would meet the definition of a bundling of contract requirements but for the addition of a procurement requirement with at least one new good or service shall be considered to be a bundling of contract requirements unless the new features or functions substantially transform the goods or services and will provide measurably substantial benefits to the government in terms of quality, performance, or price.
Exceptions
The term does not include—
the use of a bundling methodology for an anticipated award with an aggregate dollar value below the dollar threshold specified in paragraph (5); or
the use of a bundling methodology to meet procurement requirements, all of which are exempted requirements under paragraph (6).
Bundling methodology
The term bundling methodology means—
a solicitation to obtain offers for a single contract or order, or a multiple award contract or order; or
a solicitation of offers for the issuance of a task or a delivery order under an existing single or multiple award contract or order.
Separate smaller contract
The term separate smaller contract
, with
respect to bundling of contract requirements, means a contract or order that
has been performed by 1 or more small business concerns or was suitable for
award to 1 or more small business concerns.
Dollar threshold
The term dollar threshold
means
$65,000,000, if solely for construction services.
Exempted requirements
The term exempted requirement
means a
procurement requirement solely for items that are not commercial items (as the
term commercial item
is defined in section 4(12) of the Office
of Federal Procurement Policy Act (41 U.S.C. 403(12)).
Procurement requirement
The term
procurement requirement
means a determination by an agency that
a specified good or service is needed to satisfy the mission of the
agency.
.
Justification
Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) is amended—
by striking
(2) why delivery schedules
and inserting (2) the names,
addresses and size of the incumbent contract holders; (3) a description of the
industries that might be interested in bidding on the contract requirements;
(4) the number of small businesses listed in the industry categories that could
be excluded from future bidding if the contract is combined or packaged; (5)
why delivery schedules
;
by striking
(3) why the proposed acquisition
and inserting (6) why
the proposed acquisition
;
by striking
(4) why construction
and inserting (7) why
construction
;
by striking
(5) why the agency
and inserting (8) why the
agency
;
by striking
justified.
and inserting justified. The statement shall
also set forth the proposed procurement strategy required by subsection (e)
and, if applicable, the specifications required by subsection (e)(3). The
statement shall be made available to the public, including through
dissemination in the Federal contracting opportunities database, concurrently
with the issuance of the solicitation.
; and
by inserting after
prime contracting opportunities.
the following: If no
notification of the procurement and accompanying statement is received, but the
Administrator determines that there is cause to believe the contract combines
requirements or a contract (single or multiple award) or task or delivery order
for construction services or includes unjustified bundling, then the
Administrator may request that such a statement of work goods or services be
completed by the procurement activity and sent to the Procurement Center
Representative and the solicitation process postponed for 10 days to allow the
Administrator to review the statement and make recommendations as described in
this section before the procurement is continued.
.
Appeals
Section 15(a) of the Small Business Act (15
U.S.C. 644(a)) is amended by inserting before Whenever the
Administration and the contracting procurement agency fail to agree,
the following: If a small business concern would be adversely affected,
directly or indirectly, by the procurement as proposed, and that small business
concern or a trade association on behalf of that small business concern so
requests, the Administrator may, in the Administrator’s discretion, take action
to further the interests of that small business concern, and shall make
available to the public on the website of the Administration the action taken
and the result achieved.
.
Review
Section 15(a) of the
Small Business Act (15 U.S.C. 644(a))
is amended by striking the sentence beginning Whenever the
Administration and the contracting procurement agency fail to agree,
and inserting the following: Whenever the Administration and the
contracting procurement agency fail to agree, the Administrator shall submit
the matter to the head of the agency for a determination. The head of the
agency shall provide a written response to the Administrator. A copy of such
response shall also be provided to the Committees on Small Business of the
House of Representatives and Senate, the Committee on Oversight and Government
Reform of the House of Representatives, and the Committee on Homeland Security
and Governmental Affairs of the Senate, and any other committee of the House
and Senate that has jurisdiction over the agency concerned.
.
Increasing the Number of Small Business Contracts and Subcontracts
Small business goal
Government-Wide Goal
Section 15(g)(1) of the
Small Business Act (15 U.S.C. 644(g)(1)) is amended by striking 23
percent
and inserting 30 percent
.
Goals for small disadvantaged businesses and women-owned businesses
Section
15(g)(1) of such Act is further amended by striking 5 percent
both places it appears and inserting 8 percent
.
Include overseas contracts in small business goal
Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended by adding at the end the following:
The procurement goals required by this subsection apply to all procurement contracts, without regard to whether the contract is for work within or outside the United States.
.
Annual goal negotiation
Section 15(g)(1)
of the Small Business Act (15 U.S.C. 644(g)(1)) is amended by striking
The President shall annually establish Government-wide goals for
procurement contracts
and inserting The President shall before
the close of each fiscal year establish new Government-wide procurement goals
for the following fiscal year for procurement contracts
.
Usage of small companies in goal achievement
Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended by adding at the end the following:
For purposes of this subsection and subsection (h), a small business concern shall be counted toward one additional category goal only, even if that small business concern otherwise qualifies under more than one category goal. In this paragraph, the term category goal means a goal described in paragraph (2).
.
Annual plan for each agency explaining how agency will meet small business goals
Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended by adding at the end the following:
Before the beginning of each fiscal year, the head of each Federal agency shall submit to the Administrator of the Small Business Administration and to Congress a detailed plan explaining how the agency intends to meet the small business goals under this subsection that apply to that agency for that fiscal year.
.
Making small businesses the first choice
Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) is amended—
in paragraph (1),
by striking $100,000
and inserting the Simplified
Acquisition Threshold
; and
in paragraph (3),
by striking subsection (a) of section 8
and inserting
section 8, 31, or 36
.
Uniform metric for subcontracting achievements
Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended by adding at the end the following:
In carrying out this subsection, the Administrator shall require each prime contractor to report small business subcontract usage at all tiers based on the percentage of the total dollar amount of the contract award.
.
Subcontracting database
Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended by adding at the end the following:
In carrying out this subsection, the Administrator shall develop and maintain a password-protected database that will enable the Administration to assist small businesses in marketing to large corporations that have not achieved their small business goals.
.
National database
The Administrator of the Small Business Administration shall ensure that whenever a small business enters its information in the Central Contractor Registry, or any successor to that registry, the Administrator contacts that business within 30 days regarding the likelihood of Federal contracting opportunities. The Administrator shall ensure that each small business that so registers is, for each industry code entered by that small business, provided with the total dollar value of government contract awards to small businesses for that industry.
Review of subcontracting plans
In general
Not later than 180 days after the date of the enactment of this Act, the General Services Administration shall, after an opportunity for notice and comment, begin to make modifications, if necessary, to the Electronic Subcontracting Reporting System (ESRS) for the purpose of tracking companies’ compliance with small business subcontracting plans included in successful contract bids. ESRS shall be further developed, if necessary, in such a way that it allows agencies to track whether or not the prime contractor actually subcontracted work out to the subcontracting firms described in the Small Business Subcontracting Plan. Further, ESRS shall be modified, if necessary, so that it facilitates review of a company’s record of compliance with small business subcontracting plans.
Periodic reports
Prime contractors shall be required to submit Small Business Subcontracting Plans to ESRS and submit subsequent periodic reports to ESRS describing the extent to which the prime contractor complied with small business subcontracting plans submitted as part of the company’s successful contract proposal. Each such report shall include a specific accounting of compliance with subcontracting goals described in the prime contractor’s Small Business Subcontracting Plans related to Small Disadvantaged Businesses Concerns, Women-Owned Small Business Concerns, Historically Black Colleges and Universities and Minority Institutions, Service-Disabled Veteran-Owned Small Business Concerns, and HUBZone Small Business Concerns. Each such accounting of compliance shall also be included in ESRS.
Inclusion in ESRS
The percentage of the total dollar amount of the
contract award
that is paid to small business, as referred to in
paragraph (12) of section 8(d) of the Small Business Act (as added by section
206 of this Act) shall also be included in ESRS.
Availability of ESRS
ESRS and the information therein shall be made available to agency officials and Source Selection Evaluation Boards (as referred to in Federal Acquisition Regulations 3.104–1) that are charged with evaluating contract proposals, and, when evaluating contract proposals, agencies shall take into consideration the compliance with small business subcontracting plans of companies competing for Federal contracts, and within one year after the date of the enactment of this Act such consideration shall be reflected in the Federal Acquisition Regulations.
Further modifications required
ESRS shall be modified in such a way that it can generate comparable reports on individual companies’ compliance records to be used in the contract proposal evaluation processes of agencies.
Agency obligation for fulfilling contracting goals
Section 15(h) of the Small Business Act (15 U.S.C. 644(h)) is amended by adding at the end the following:
At the conclusion of each fiscal year, the head of each Federal agency shall submit to Congress a report specifying the percentage of contracts awarded by that agency for that fiscal year that were awarded to small business concerns. If the percentage is less than 25 percent, the head of the agency shall, in the report, explain why the percentage is less than 25 percent and what will be done to ensure that the percentage for the following fiscal year will not be less than 25 percent.
.
Appropriate limits on value of sole source contracts
Appropriate limits
If a law is not enacted by December 31, 2007, revising the limits referred to in this subsection, the Administrator for Federal Procurement Policy, in consultation with the Administrator for Small Business, shall establish appropriate limits on the value of contracts awarded without the use of competitive procedures to participants in the program established by section 8(a) of the Small Business Act (15 U.S.C. 637(a)) that are not subject to the limits on the value of such contracts established by paragraph (1)(D) of section 8(a) of such Act.
Consultation
In establishing any limit described in subsection (a). the Administrator for Federal Procurement Policy shall consult with representatives of the affected program participants. The Administrator shall also take into account—
any special circumstances and needs of the affected program participants; and
the advantages of promoting competition in Federal contracting.
Small business goals for green small business concerns
In general
Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended—
in paragraph (1)—
by striking
and small business concerns owned and controlled by women
both
places such term appears and inserting small business concerns owned and
controlled by women, and green small business concerns
; and
by inserting
before Notwithstanding the Government-wide goal
the following:
The Government-wide goal for participation by green small business
concerns shall be established at not less than 5 percent of the total value of
all prime contract and subcontract awards for each fiscal year.
; and
in paragraph (2)—
by striking
and by small business concerns owned and controlled by women
both places such term appears and inserting by small business concerns
owned and controlled by women, and by green small business concerns
;
and
by striking
and small business concerns owned and controlled by women
and
inserting small business concerns owned and controlled by women, and
green small business concerns
.
Conforming amendments
Definition
Section 3 of that Act (15 U.S.C. 632) is amended by adding at the end the following:
Definitions relating to green small business concerns
In this Act, the term green small
business concern
means a small business concern that carries out its
activities in an environmentally sound manner. The Administrator shall, in
consultation with the Environmental Protection Agency, the General Services
Administration, and other appropriate agencies, specify detailed definitions or
standards by which a small business concern may be determined to be a green
small business concern for the purposes of this Act.
.
Policy
Section 8(d) of that Act (15 U.S.C. 637(d)) is amended—
in paragraph (1)
(in both places such term appears), paragraph (3)(A) (in both places such term
appears), paragraph (4)(D), paragraph (6)(A), paragraph (6)(C), paragraph
(6)(F), and paragraph (10)(B) by striking and small business concerns
owned and controlled by women
and inserting small business
concerns owned and controlled by women, and green small business
concerns
;
in paragraph (3)(F)
by striking or a small business concern owned and controlled by
women
and inserting a small business concern owned and
controlled by women, or a green small business concern
; and
in paragraph
(4)(E) by striking and for small business concerns owned and controlled
by women
and inserting for small business concerns owned and
controlled by women, and for green small business concerns
.
Reports on goals
Section 15(h) of that Act (15 U.S.C. 644(h)) is amended, in
each of paragraphs (1), (2)(A), (2)(D), and (2)(E) by striking and small
business concerns owned and controlled by women
and inserting
small business concerns owned and controlled by women, and green small
business concerns
.
Penalties
Section
16 of that Act (15 U.S.C. 645) is amended in each of subsections (d)(1) and (e)
by striking or a
and inserting small business concern owned and controlled by
women
a
.small business concern
owned and controlled by women
, or a green small business
concern
Study on providing financial incentives to contractors that meet minority and disadvantaged business enterprise goals
The Administrator of the Small Business Administration shall carry out a study on the feasibility and desirability of providing financial incentives to contractors operating under contracts from a Federal agency that achieve the percentage goals set forth in said contracts’ subcontracting plans for the utilization of small business concerns owned and controlled by socially and economically disadvantaged individuals. The Administrator shall submit to Congress a report on the results of the study, together with any findings, conclusions, and recommendations that the Administrator considers appropriate.
Protection of Taxpayers from Fraud
Small business size protest notification
In general
The Administrator of the Small Business Administration shall work with appropriate Federal agencies to ensure that whenever a business concern is awarded a contract on the basis that it qualifies as small and then is determined not to qualify as small, a notification of those facts (that an award was made on such a basis, and that such a determination was made) shall be placed adjacent to that concern’s listing in the Central Contractor Registry (or any successor to that registry).
Comptroller general certification
The
Administrator shall, in making any report of small business goal
accomplishments, qualify the accomplishments as estimated
, until
the Administrator obtains from the Comptroller General the Comptroller
General’s certification that there are no data integrity issues with respect to
the national repository of contract award information known as Federal
Procurement Data System-Next Generation (FPDS–NG), or any successor to that
repository.
Awards to large businesses
For each Federal agency, the Inspector General of that agency shall, on an annual basis, submit to Congress a report on the number and dollar value of contract awards that were coded as awards to small business concerns but in fact were made to businesses that did not qualify as small business concerns.
Review of national registry
The Administrator of the Small Business Administration shall ensure, on a biannual basis, that an independent audit is performed of the Central Contractor Registry, or any successor to that registry, and that the Dynamic Small Business Search portion of the registry, or any successor to that portion of the registry, is purged of any businesses that are not in fact small businesses. If a business that has been so purged attempts, while not in fact a small business, to re-register, that business is subject to debarment as a Federal contractor and is further subject to penalties outlined in section 16 of the Small Business Act (15 U.S.C. 645).
Recertification of compliance with size standards and registration with Central Contractor Registry
Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) is amended by adding at the end the following:
Recertification
In general
If a business concern is awarded a contract because of a standard by which it is determined to be a small business concern, and the business concern is close to exceeding that standard at the time the award is made, then the business concern must, annually after the date of the award, recertify to the agency awarding the contract whether it meets that standard.
Close to
exceeding
For purposes of subparagraph (A), a business concern is close to exceeding—
a number-of-employees standard if the number of employees of the business concern is 95 percent or more of the maximum number of employees allowed under the standard; and
a dollar-volume-of-business standard if the dollar volume of business is 80 percent or more of the maximum dollar volume allowed under the standard.
Registry
For a business concern to be awarded a contract because of a standard by which it is determined to be a small business concern, the business concern must, annually after the end of the fiscal year used by the business concern, update its listing in the Central Contractor Registry.
.
Authorization of Appropriations
Authorization of appropriations
There are authorized to be appropriated such sums as may be necessary to carry out this Act and the amendments made by this Act.
Passed the House of Representatives May 10, 2007.
Lorraine C. Miller,
Clerk.