[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3867 Reported in House (RH)]






                                                 Union Calendar No. 254
110th CONGRESS
  1st Session
                                H. R. 3867

                          [Report No. 110-400]

  To update and expand the procurement programs of the Small Business 
                Administration, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 17, 2007

  Ms. Velazquez (for herself, Ms. Fallin, Ms. Clarke, and Mr. Reyes) 
 introduced the following bill; which was referred to the Committee on 
                             Small Business

                            October 22, 2007

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed

_______________________________________________________________________

                                 A BILL


 
  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 13360.
    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.
       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. Allowing small business concerns that are not HUBZone program 
                            participants to protest HUBZone awards.
                 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. Allowing small business concerns that are not section 8(a) 
                            program participants to protest section 
                            8(a) awards.
                        TITLE VI--OTHER MATTERS

Sec. 601. Affiliation for certain franchises.

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 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 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.''.

    TITLE II--PROTECTING TAXPAYERS AND ENSURING PROGRAM CONSISTENCY

SEC. 201. REQUIRING BUSINESS INTEGRITY OF SMALL BUSINESS CONCERNS.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended by adding 
at the end the following new section:

``SEC. 38. REQUIRING BUSINESS INTEGRITY OF SMALL BUSINESS CONCERNS.

    ``(a) Section 8(a) Program Background Check.--No applicant may be 
approved for participation in the section 8(a) program unless the 
Administrator first performs a background check on the applicant and 
determines that the applicant does not lack business integrity.
    ``(b) HUBZone Program Background Check.--No award of a second 
contract under the authority of section 31(b)(2)(A) or 31(b)(2)(B) may 
be made unless the Administrator first performs a background check on 
the applicant and determines that the applicant does not lack business 
integrity.
    ``(c) Random Background Check.--The Administrator shall have random 
background checks performed on owners and officers of small business 
concerns that have been awarded a contract under section 8(m), 36(a), 
or 36(b) to determine whether such owners and officers lacks 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''.

       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) Determination by head of department or 
                agency.--Until such time as the Administrator completes 
                the identification of industries required by 
                subparagraph (A), the determination as to whether an 
                industry is one in which small business concerns owned 
                and controlled by women are under-represented in 
                Federal contracting shall be made by the head of the 
                department or agency for which the contract is to be 
                performed.
                    ``(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. ALLOWING SMALL BUSINESS CONCERNS THAT ARE NOT HUBZONE PROGRAM 
              PARTICIPANTS TO PROTEST HUBZONE AWARDS.

    Section 31(c) of the Small Business Act (15 U.S.C. 657a(c)) is 
amended by adding at the end the following new paragraph:
            ``(5) Protests by small business concerns.--For purposes of 
        this subsection, the term `interested party' shall include any 
        small business concern.''.

                 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. ALLOWING SMALL BUSINESS CONCERNS THAT ARE NOT SECTION 8(A) 
              PROGRAM PARTICIPANTS TO PROTEST SECTION 8(A) AWARDS.

    Section 8(a) of the Small Business Act (15 U.S.C. 637(a)) is 
amended by adding at the end the following new paragraph:
            ``(22) Rules similar to the rules of paragraphs (5) and (6) 
        of subsection (m) shall apply for purposes of this 
        subsection.''.

                        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--
                    ``(A) disregard--
                            ``(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.''.
                                                 Union Calendar No. 254

110th CONGRESS

  1st Session

                               H. R. 3867

                          [Report No. 110-400]

_______________________________________________________________________

                                 A BILL

  To update and expand the procurement programs of the Small Business 
                Administration, and for other purposes.

_______________________________________________________________________

                            October 22, 2007

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed