[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1994 Reported in Senate (RS)]






                                                       Calendar No. 624
107th CONGRESS
  2d Session
                                S. 1994

                          [Report No. 107-294]

    To establish a priority preference among certain small business 
  concerns for purposes of Federal contracts, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 6, 2002

  Mr. Kerry (for himself and Mr. Bond) introduced the following bill; 
 which was read twice and referred to the Committee on Small Business 
                          and Entrepreneurship

                            October 1, 2002

                 Reported by Mr. Kerry, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL


 
    To establish a priority preference among certain small business 
  concerns for purposes of Federal contracts, 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 ``Combined 8(a) and HUBZone Priority 
Preference Act''.

SEC. 2. DEFINITIONS.

<DELETED>    In this Act the following definitions shall 
apply:</DELETED>
        <DELETED>    (1) Contracting officer.--The term ``contracting 
        officer'' has the same meaning as in section 27(f)(5) of the 
        Office of Federal Procurement Policy Act (41 U.S.C. 
        423(f)(5)).</DELETED>
        <DELETED>    (2) 8(a) hubzone small business concern.--The term 
        ``8(a) HUBZone small business concern'' means a qualified 
        HUBZone small business concern that is also a section 8(a) 
        small business concern.</DELETED>
        <DELETED>    (3) Qualified hubzone small business concern.--The 
        term ``qualified HUBZone small business concern'' has the same 
        meaning as in section 3(p)(5) of the Small Business Act (15 
        U.S.C. 632(p)(5)).</DELETED>
        <DELETED>    (4) Section 8(a) small business concern.--The term 
        ``section 8(a) small business concern'' means a small business 
        concern that is certified by the Small Business Administration 
        as eligible to receive benefits under section 8(a) of the Small 
        Business Act (15 U.S.C. 637(a)).</DELETED>
        <DELETED>    (5) Small business concern.--The term ``small 
        business concern'' has the same meaning as in section 3(a) of 
        the Small Business Act (15 U.S.C. 632(a)).</DELETED>
        <DELETED>    (6) Small business concern owned and controlled by 
        socially and economically disadvantaged individuals.--The term 
        ``small business concern owned and controlled by socially and 
        economically disadvantaged individuals'' has the same meaning 
        as in section 8(a)(4)(A) of the Small Business Act (15 U.S.C. 
        637(a)(4)(A)).</DELETED>
    Section 3(p) of the Small Business Act (15 U.S.C. 632(p)) is 
amended by adding at the end the following:
            ``(9) Best value contract.--The term `best value contract' 
        means a contract that includes factors or subfactors unrelated 
        to cost or price under section 2305(a)(2)(A) of title 10, 
        United States Code, or section 303A(b)(1) of the Federal 
        Property and Administrative Services Act of 1949 (41 U.S.C. 
        253a(b)(1)).
            ``(10) Best value factor relative importance.--The term 
        `best value factor relative importance' means the relative 
        importance assigned to the factors or subfactors in a best 
        value contract.
            ``(11) Contracting officer.--The term `contracting officer' 
        has the same meaning as in section 27(f)(5) of the Office of 
        Federal Procurement Policy Act (41 U.S.C. 423(f)(5)).
            ``(12) 8(a) hubzone small business concern.--The term `8(a) 
        HUBZone small business concern' means a qualified HUBZone small 
        business concern that is also a section 8(a) small business 
        concern.
            ``(13) Section 8(a) small business concern.--The term 
        `section 8(a) small business concern' means a small business 
        concern that is certified by the Administration as eligible to 
        receive benefits under section 8(a).''.

SEC. 3. ESTABLISHMENT OF PRIORITY PREFERENCE.

<DELETED>    (a) Effect of Priority Preference on Restricted 
Competition Contracts.--</DELETED>
        <DELETED>    (1) Section 8(a) contracts.--In determining the 
        successful offeror for a restricted competition contract under 
        section 8(a)(1)(D) of the Small Business Act (15 U.S.C. 
        637(a)(1)(D)), the contracting officer shall select an offer 
        from an 8(a) HUBZone small business concern over a comparable 
        offer from a section 8(a) small business concern that is not a 
        qualified HUBZone small business concern.</DELETED>
        <DELETED>    (2) HUBZone contracts.--In determining the 
        successful offeror for a restricted competition contract under 
        section 31(b)(2)(B) of the Small Business Act (15 U.S.C. 
        657a(b)(2)(B)), the contracting officer shall select an offer 
        from an 8(a) HUBZone small business concern over a comparable 
        offer from a qualified HUBZone small business concern that is 
        not a section 8(a) small business concern.</DELETED>
<DELETED>    (b) Effect of Priority Preference on Price Evaluation 
Preference.--</DELETED>
        <DELETED>    (1) In general.--Subject to paragraphs (2) and 
        (3), in any case in which a Federal procurement contract is to 
        be awarded on the basis of full and open competition in 
        accordance with section 303 of the Federal Property and 
        Administrative Services Act of 1949 (41 U.S.C. 253), the price 
        offered by an 8(a) HUBZone small business concern shall be 
        deemed as being lower than the price offered by another 
        offeror, if the price offered by the 8(a) HUBZone small 
        business concern is not more than 20 percent higher than the 
        price offered by the otherwise lowest and responsive 
        offeror.</DELETED>
        <DELETED>    (2) Other small business concern.--If the 
        competing offeror under paragraph (1) is a small business 
        concern, the price evaluation preference given to the 8(a) 
        HUBZone small business concern shall be 10 percent.</DELETED>
        <DELETED>    (3) Responsive offer.--An 8(a) HUBZone small 
        business concern shall not receive a price evaluation 
        preference under this section if it does not make a responsive 
        offer.</DELETED>
<DELETED>    (c) Exclusion.--This section does not provide any priority 
preference to a small business concern owned and controlled by socially 
and economically disadvantaged individuals that is also a qualified 
HUBZone small business concern, unless such business has been certified 
by the Small Business Administration as eligible to receive benefits 
under section 8(a) of the Small Business Act (15 U.S.C. 
637(a)).</DELETED>
    (a) Section 8(a) Contracts.--Section 8(a)(1)(D) of the Small 
Business Act (15 U.S.C. 637(a)(1)(D)) is amended by adding at the end 
the following:
            ``(iii) If a contract to be awarded by competition 
        restricted to eligible Program Participants will be awarded as 
        a best value contract, the contract shall include an evaluation 
        factor for a bidding Program Participant that is also a 
        qualified HUBZone small business concern. Such factor shall not 
        be assigned a best value factor relative importance that 
        exceeds 10 percent of the best value factor relative importance 
        assigned to price as an evaluation factor.''.
    (b) Qualified HUBZone Small Business Concern.--Section 31(b)(2)(B) 
of the Small Business Act (15 U.S.C. 657a(b)(2)(B)) is amended to read 
as follows:
                    ``(B) a contract opportunity shall not be awarded 
                under this section on the basis of competition 
                restricted to qualified HUBZone small business 
                concerns, unless--
                            ``(i) the contracting officer has a 
                        reasonable expectation that not less than 2 
                        qualified HUBZone small business concerns will 
                        submit offers;
                            ``(ii) the award can be made at a fair 
                        market price;
                            ``(iii) if the contract will be awarded as 
                        a best value contract, the contract includes an 
                        evaluation factor for a bidding qualified 
                        HUBZone small business concern that is also 
                        eligible to receive benefits under section 
                        8(a); and
                            ``(iv) the evaluation factor included under 
                        clause (iii) is not assigned a best value 
                        factor relative importance that exceeds 10 
                        percent of the best value factor relative 
                        importance assigned to price as an evaluation 
                        factor.''.
    (c) Effect on Price Evaluation Preference.--Section 31(b)(3) of the 
Small Business Act (15 U.S.C. 657a(b)(3)) is amended by adding at the 
end the following:
                    ``(D) Effect on price evaluation preference.--
                            ``(i) Combined preference with 8(a) 
                        firms.--Subject to clauses (ii) and (iii), in 
                        any case in which a Federal contract is to be 
                        awarded on the basis of full and open 
                        competition in accordance with section 303 of 
                        the Federal Property and Administrative 
                        Services Act of 1949 (41 U.S.C. 253), the price 
                        offered by an 8(a) HUBZone small business 
                        concern shall be deemed as lower than the price 
                        offered by another offeror, if the price 
                        offered by the 8(a) HUBZone small business 
                        concern is not more than 12 percent higher than 
                        the price offered by the otherwise lowest and 
                        responsive offeror.
                            ``(ii) Other small business concern.--If 
                        the competing offeror under clause (i) is a 
                        small business concern, the price evaluation 
                        preference given to the 8(a) HUBZone small 
                        business concern shall be 10 percent.
                            ``(iii) Responsive offer.--An 8(a) HUBZone 
                        small business concern shall not receive a 
                        price evaluation preference under this 
                        subparagraph if it does not make a responsive 
                        offer.
                            ``(iv) Exclusion.--This subparagraph does 
                        not provide any additional price evaluation 
                        preference to a small business concern owned 
                        and controlled by socially and economically 
                        disadvantaged individuals that is also a 
                        qualified HUBZone small business concern, 
                        unless such business has been certified by the 
                        Small Business Administration as eligible to 
                        receive benefits under section 8(a) of the 
                        Small Business Act (15 U.S.C. 637(a)).''.

SEC. 4. HUBZONE SMALL BUSINESS CONCERNS.

    Section 3(p) of the Small Business Act (15 U.S.C. 632(p)) is 
amended--
            (1) by redesignating paragraphs (4) through (7) as 
        paragraphs (5) through (8), respectively; and
            (2) by inserting after paragraph (3) the following:
            ``(4) Rule of construction relating to citizenship.--
                    ``(A) In general.--A small business concern 
                described in subparagraph (B) meets the United States 
                citizenship requirement of paragraph (3)(A) if, at the 
                time of application by the concern to become a 
                qualified HUBZone small business concern for purposes 
                of any contract and at such times as the Administrator 
                shall require, non-citizens do not constitute more than 
                15 percent of the beneficial ownership of the 
                outstanding shares of that small business concern, as 
                measured by disclosures filed under section 13(d)(1) of 
                the Securities Exchange Act of 1934 (15 U.S.C. 
                78m(d)(1)).
                    ``(B) Concerns described.--A small business concern 
                is described in this subparagraph if the small business 
                concern--
                            ``(i) has a class of securities registered 
                        under section 12 of the Securities Exchange Act 
                        of 1934 (15 U.S.C. 78l); and
                            ``(ii) files reports with the Securities 
                        and Exchange Commission as a small business 
                        issuer.
                    ``(C) Non-citizens.--In this paragraph, the term 
                `non-citizen' means
                            ``(i) an individual that is not a United 
                        States citizen; and
                            ``(ii) any other person that is not 
                        organized under the laws of any State or the 
                        United States.''.

SEC. <DELETED>4. </DELETED>5. MODIFICATION OF SOLE SOURCE THRESHOLDS.

    (a) Section 8(a) Small Business Concern.--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 
        ``$6,000,000''; and
            (2) by striking ``$3,000,000'' and inserting 
        ``$4,000,000''.
    (b) Qualified HUBZone Small Business Concern.--Section 
31(b)(2)(A)(ii) of the Small Business Act (15 U.S.C. 657a(b)(2)(A)(ii)) 
is amended--
            (1) in subclause (I), by striking ``$5,000,000'' and 
        inserting ``$6,000,000''; and
            (2) in subclause (II), by striking ``$3,000,000'' and 
        inserting ``$4,000,000''.




                                                       Calendar No. 624

107th CONGRESS

  2d Session

                                S. 1994

                          [Report No. 107-294]

_______________________________________________________________________

                                 A BILL

    To establish a priority preference among certain small business 
  concerns for purposes of Federal contracts, and for other purposes.

_______________________________________________________________________

                            October 1, 2002

                        Reported with amendments