Contracts with small business concerns owned and controlled by veterans

Section 8127 of title 38, United States Code, is amended— (1)by redesignating subsection (l) as subsection (m); and (2)by inserting after subsection (k) the following new subsection (l):

(l)

Limitations on subcontracting

(1) (A)The requirements applicable to a small business concern under section 46 of the Small Business Act (15 U.S.C. 657s) shall apply with respect to a small business concern owned and controlled by a veteran with a service-connected disability or a small business concern owned and controlled by a veteran that is awarded a contract under this section. (B)For purposes of applying the requirements of section 46 of the Small Business Act (15 U.S.C. 657s) pursuant to subparagraph (A)— (i)a small business concern owned and controlled by a veteran shall be treated as a small business concern owned and controlled by a veteran with a service-connected disability; and (ii)the term similarly situated entity used in such section 46 means a subcontractor for a small business concern owned and controlled by a veteran with a service-connected disability or a small business concern owned and controlled by a veteran described in such subparagraph (A). (2)Upon awarding a contract to a small business concern under this section, the Secretary shall obtain from an offeror a certification that the offeror will comply with the requirements described in paragraph (1)(A) if awarded the contract. Such certification shall— (A)specify the exact performance requirements applicable under such paragraph; and (B)explicitly acknowledge that the certification is subject to section 1001 of title 18. (3)If the Secretary determines that a small business concern that is awarded a contract under this section did not act in good faith with respect to the requirements described in paragraph (1)(A), the small business concern shall be subject to the penalties specified in— (A)section 16(g)(1) of the Small Business Act (15 U.S.C. 645(g)(1)); and (B)section 1001 of title 18. (4) (A)The Director of the Office of Small and Disadvantaged Business Utilization established by section 15(k) of the Small Business Act (15 U.S.C. 644(k)) and the Chief Acquisition Officer established under section 1702 of title 41 shall jointly implement a process using the systems described in section 16(g)(2) of the Small Business Act (15 U.S.C. 645(g)(2)), or any other systems available, to monitor compliance with this subsection. The Director and the Chief Acquisition Officer shall jointly refer any violations of this subsection to the Inspector General of the Department of Veterans Affairs. (B)The Inspector General shall submit to the Committees on Veterans’ Affairs of the House of Representatives and the Senate an annual report that includes— (i)the number of referred violations received under subparagraph (A); and (ii)the disposition of such referred violations, including the number of small business concerns suspended or debarred from Federal contracting or referred to the Attorney General for prosecution.