[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1873 Referred in Senate (RFS)]

  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.

    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 
Fairness in Contracting Act''.
    (b) 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.

SEC. 2. REGULATIONS.

    (a) In General.--Not later than 180 days after the date of the 
enactment of this Act--
            (1) the Administrator of the Small Business Administration 
        shall promulgate regulations to implement this Act and the 
        amendments made by this Act; and
            (2) the Federal Acquisition Regulation shall be revised to 
        implement this Act and the amendments made by this Act.
    (b) 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.

                       TITLE I--CONTRACT BUNDLING

SEC. 101. 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:
    ``(o) Definitions of Bundling of Contract Requirements and Related 
Terms.--For purposes of this Act:
            ``(1) Bundled contract.--
                    ``(A) 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.
                    ``(B) Exceptions.--The term does not include--
                            ``(i) a contract or order with an aggregate 
                        dollar value below the dollar threshold 
                        specified in paragraph (4); or
                            ``(ii) a contract or order that is entered 
                        into to meet procurement requirements, all of 
                        which are exempted requirements under paragraph 
                        (5).
            ``(2) Bundling of contract requirements.--
                    ``(A) 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--
                            ``(i) the diversity, size, or specialized 
                        nature of the elements of the performance 
                        specified;
                            ``(ii) the aggregate dollar value of the 
                        anticipated award;
                            ``(iii) the geographical dispersion of the 
                        contract or order performance sites; or
                            ``(iv) any combination of the factors 
                        described in clauses (i), (ii), and (iii).
                    ``(B) 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.
                    ``(C) Exceptions.--The term does not include--
                            ``(i) the use of a bundling methodology for 
                        an anticipated award with an aggregate dollar 
                        value below the dollar threshold specified in 
                        paragraph (5); or
                            ``(ii) the use of a bundling methodology to 
                        meet procurement requirements, all of which are 
                        exempted requirements under paragraph (6).
            ``(3) Bundling methodology.--The term `bundling 
        methodology' means--
                    ``(A) a solicitation to obtain offers for a single 
                contract or order, or a multiple award contract or 
                order; or
                    ``(B) a solicitation of offers for the issuance of 
                a task or a delivery order under an existing single or 
                multiple award contract or order.
            ``(4) 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.
            ``(5) Dollar threshold.--The term `dollar threshold' means 
        $65,000,000, if solely for construction services.
            ``(6) 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)).
            ``(7) 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.''.

SEC. 102. JUSTIFICATION.

    Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) is 
amended--
            (1) 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'';
            (2) by striking ``(3) why the proposed acquisition'' and 
        inserting ``(6) why the proposed acquisition'';
            (3) by striking ``(4) why construction'' and inserting 
        ``(7) why construction'';
            (4) by striking ``(5) why the agency'' and inserting ``(8) 
        why the agency'';
            (5) 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
            (6) 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.''.

SEC. 103. 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.''.

SEC. 104. 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.''.

    TITLE II--INCREASING THE NUMBER OF SMALL BUSINESS CONTRACTS AND 
                              SUBCONTRACTS

SEC. 201. SMALL BUSINESS GOAL.

    (a) 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''.
    (b) 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''.

SEC. 202. 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:
    ``(3) 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.''.

SEC. 203. 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''.

SEC. 204. 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:
    ``(4) 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).''.

SEC. 205. 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:
    ``(5) 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.''.

SEC. 206. MAKING SMALL BUSINESSES THE FIRST CHOICE.

    Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) is 
amended--
            (1) in paragraph (1), by striking ``$100,000'' and 
        inserting ``the Simplified Acquisition Threshold''; and
            (2) in paragraph (3), by striking ``subsection (a) of 
        section 8'' and inserting ``section 8, 31, or 36''.

SEC. 207. 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:
    ``(12) 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.''.

SEC. 208. 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:
    ``(13) 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.''.

SEC. 209. 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.

SEC. 210. REVIEW OF SUBCONTRACTING PLANS.

    (a) 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.
    (b) 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.
    (c) 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.
    (d) 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.
    (e) 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.

SEC. 211. 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:
    ``(4) 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.''.

SEC. 212. APPROPRIATE LIMITS ON VALUE OF SOLE SOURCE CONTRACTS.

    (a) 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.
    (b) 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--
            (1) any special circumstances and needs of the affected 
        program participants; and
            (2) the advantages of promoting competition in Federal 
        contracting.

SEC. 213. SMALL BUSINESS GOALS FOR GREEN SMALL BUSINESS CONCERNS.

    (a) In General.--Section 15(g) of the Small Business Act (15 U.S.C. 
644(g)) is amended--
            (1) in paragraph (1)--
                    (A) 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
                    (B) 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
            (2) in paragraph (2)--
                    (A) 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
                    (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''.
    (b) Conforming Amendments.--
            (1) Definition.--Section 3 of that Act (15 U.S.C. 632) is 
        amended by adding at the end the following:
    ``(s) 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.''.
            (2) Policy.--Section 8(d) of that Act (15 U.S.C. 637(d)) is 
        amended--
                    (A) 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'';
                    (B) 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
                    (C) 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''.
            (3) 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''.
            (4) 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 `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'''.

SEC. 214. 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.

             TITLE III--PROTECTION OF TAXPAYERS FROM FRAUD

SEC. 301. SMALL BUSINESS SIZE PROTEST NOTIFICATION.

    (a) 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).
    (b) 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.
    (c) 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.

SEC. 302. 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).

SEC. 303. 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:
    ``(5) Recertification.--
            ``(A) 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.
            ``(B) `Close to exceeding'.--For purposes of subparagraph 
        (A), a business concern is close to exceeding--
                    ``(i) 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
                    ``(ii) 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.
    ``(6) 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.''.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

SEC. 401. 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.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.