[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4206 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 4206

To amend the Small Business Act to provide for increased penalties for 
               contracting fraud, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 19, 2012

   Mr. Coffman of Colorado (for himself and Mr. Graves of Missouri) 
 introduced the following bill; which was referred to the Committee on 
Small Business, and in addition to the Committee on the Judiciary, for 
a period to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Small Business Act to provide for increased penalties for 
               contracting fraud, 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 ``Contracting Oversight for Small 
Business Jobs Act of 2012''.

SEC. 2. INCREASED PENALTIES FOR FRAUD.

    (a) In General.--Chapter 47 of title 18, United States Code, is 
amended by adding at the end the following:
``Sec. 1041. Misrepresentation of status as a small business concern
    ``(a) In General.--Whoever knowingly--
            ``(1) falsifies, conceals, or covers up by any trick, 
        scheme, or device a material fact;
            ``(2) makes any materially false, fictitious, or fraudulent 
        statement or representation; or
            ``(3) makes or uses any false writing or document, 
        including electronically, knowing the same to contain any 
        materially false, fictitious, or fraudulent statement or entry;
concerning status as a small business concern or compliance with the 
requirements of the Small Business Act in an effort to obtain, retain, 
or complete a federal government contract shall be fined $1,000,000 or 
in a sum equal to twice the amount or value of goods or services under 
the contract or order, whichever is greater, imprisoned not more than 5 
years, or both.''.
    (b) Technical Amendment.--The table of sections for such chapter is 
amended by inserting after the item relating to the following section:

``1041. Misrepresentation of status as a small business concern.''.

SEC. 3. SAFE HARBOR FOR GOOD FAITH COMPLIANCE EFFORTS.

    (a) Small Business Fraud.--Section 16(d) of the Small Business Act 
(15 U.S.C. 16(d)) is amended by inserting after paragraph (2) the 
following:
            ``(3) This subsection shall not apply to any conduct in 
        violation of subsection (a) if the defendant acted in reliance 
        on a written advisory opinion from a licensed attorney who is 
        not an employee of the defendant.''.
    (b) Misrepresentation of Status.--Section 1041 of title 18, United 
States Code, as added by section 2 of this Act, is amended by inserting 
after subsection (a) the following:
    ``(b) Exception.--This section shall not apply to any conduct in 
violation of paragraph (2) or (3) of subsection (a) if the defendant 
acted in reliance on a written advisory opinion from a licensed 
attorney who is not an employee of the defendant.''.
    (c) Regulations.--Not later than 270 days after the date of 
enactment of this Act, the Administrator of the Small Business 
Administration shall issue rules defining what constitutes an adequate 
advisory opinion for purposes of section 16(d)(3) of the Small Business 
Act.
    (d) Small Business Compliance Guide.--Not later than 270 days after 
the date of enactment of this Act, the Administrator of the Small 
Business Administration shall issue (pursuant to section 212 of the 
Small Business Regulatory Enforcement Fairness Act of 1996) a 
compliance guide to assist business concerns in accurately determining 
their status as a small business concern.

SEC. 4. OFFICE OF HEARINGS AND APPEALS.

    (a) Chief Hearing Officer.--Section 4(b)(1) of the Small Business 
Act is amended by adding at the end the following: ``One shall be 
designated at the time of his or her appointment as the Chief Hearing 
Officer, who shall head and administer the Office of Hearings and 
Appeals within the Administration.''.
    (b) Office of Hearings and Appeals Established in Administration.--
Section 5 of the Small Business Act (15 U.S.C. 634) is amended by 
adding at the end the following:
    ``(i) Office of Hearings and Appeals.--
            ``(1) In general.--There is established in the 
        Administration an Office of Hearings and Appeals--
                    ``(A) to impartially decide such matters, where 
                Congress designates that a hearing on the record is 
                required or which the Administrator designates by 
                regulation or otherwise; and
                    ``(B) which shall contain the Administration's 
                Freedom of Information/Privacy Acts Office.
            ``(2) Chief hearing officer.--The Chief Hearing Officer 
        shall be a career member of the Senior Executive Service and an 
        attorney duly licensed by any State, commonwealth, territory, 
        or the District of Columbia.
                    ``(A) Duties.--The Chief Hearing Officer shall--
                            ``(i) serve as the Chief Administrative Law 
                        Judge; and
                            ``(ii) be responsible for the operation and 
                        management of the Office of Hearings and 
                        Appeals, pursuant to the rules of practice 
                        established by the Administrator.
                    ``(B) Alternative dispute resolution.--The Chief 
                Hearing Officer may also assign a matter for mediation 
                or other means of alternative dispute resolution.
            ``(3) Administrative law judges.--
                    ``(A) In general.--An administrative law judge 
                shall be an attorney duly licensed by any State, 
                commonwealth, territory, or the District of Columbia.
                    ``(B) Conditions of employment.--(i) An 
                administrative law judge shall serve in the excepted 
                service as an employee of the Administration under 
                section 2103 of title 5, United States Code, and under 
                the supervision of the Chief Hearing Officer.
                    ``(ii) Administrative law judge positions shall be 
                classified at Senior Level, as such term is defined in 
                section 5376 of title 5, United States Code.
                    ``(iii) Compensation for administrative law judge 
                positions shall be set in accordance with the pay rates 
                of section 5376 of title 5, United States Code.
                    ``(C) Treatment of current personnel.--An 
                individual serving as a Judge in the Office of Hearings 
                and Appeals (as that position and office are designated 
                in section 134.101 of title 13, Code of Federal 
                Regulations (as in effect on January 1, 2012)) on the 
                effective date of this subsection shall be considered 
                as qualified to be and redesignated as administrative 
                law judges.
                    ``(D) Powers.--An administrative law judge shall 
                have the authority to conduct hearings in accordance 
                with sections 554, 556, and 557 of title 5, United 
                States Code.''.

SEC. 5. REQUIREMENT FRAUDULENT BUSINESSES BE SUSPENDED OR DEBARRED.

    (a) In General.--Section 16(d)(2) of the Small Business Act (15 
U.S.C. 645(d)(3)) is amended by striking ``on the basis that such 
misrepresentation indicates a lack of business integrity that seriously 
and directly affects the present responsibility to perform any contract 
awarded by the Federal Government or a subcontract under such a 
contract'' and inserting ``if the misrepresentation is established by a 
preponderance of the evidence (in the case of debarment) or adequate 
evidence (in the case of suspension)''.
    (b) Revision to FAR.--Not later than 270 days after the date of 
enactment of this Act, the Federal Acquisition Regulation shall be 
revised to implement the amendment made by this section.
    (c) Publication of Procedures Regarding Suspension and Debarment.--
Not later than 270 days after the date of enactment of this Act, the 
Administrator shall publish on the Administration's Web site the 
standard operating procedures for suspension and debarment in effect, 
and the name and contact information for the individual designated by 
the Administrator as the senior individual responsible for suspension 
and debarment proceedings.
    (d) Required Regulations.--Not later than 270 days after the date 
of enactment of this Act, the Administrator of the Small Business 
Administration shall issue regulations defining the term ``adequate 
evidence'' for purposes of section 16(d)(2) of the Small Business Act.

SEC. 6. ANNUAL REPORT ON SUSPENSIONS AND DEBARMENTS PROPOSED BY SMALL 
              BUSINESS ADMINISTRATION.

    (a) Report Requirement.--The Administrator of the Small Business 
Administration shall submit each year to the Committee on Small 
Business and Entrepreneurship of the Senate, and the Committee on Small 
Business of the House of Representatives a report on the suspension and 
debarment actions taken by the Administrator during the year preceding 
the year of submission of the report.
    (b) Matters Covered.--The report required by subsection (a) shall 
include the following information for the year covered by the report:
            (1) Number.--The number of contractors proposed for 
        suspension or debarment.
            (2) Source.--The office within a Federal agency that 
        originated each proposal for suspension or debarment.
            (3) Reasons.--The reason for each proposal for suspension 
        or debarment.
            (4) Results.--The result of each proposal for suspension or 
        debarment, and the reason for such result.
            (5) Referrals.--The number of suspensions or debarments 
        referred to the Inspector General of the Small Business 
        Administration or another agency, or to the Attorney General 
        (for purposes of this paragraph, the Administrator may redact 
        identifying information on names of companies or other 
        information in order to protect the integrity of any ongoing 
        criminal or civil investigation).

SEC. 7. SENSE OF CONGRESS.

    It is the sense of Congress that the Administrator of the Small 
Business Administration should present to the Inspector General of the 
Administration or the Attorney General any evidence of a violation or 
potential violation of section 1041, title 18, United States Code, or 
section 16(d) of the Small Business Act, presented in a proceeding 
conducted by the Office of Hearings and Appeals established in section 
4 of this Act.
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