IB Union Calendar No. 531 112th CONGRESS 2d Session H. R. 4206 [Report No. 112–728, Part I] 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 December 21, 2012 Additional sponsors: Mr. Tipton and Mrs. Ellmers December 21, 2012 Reported from the Committee on Small Business with amendments Omit the part struck through and insert the part printed in italic December 21, 2012 The Committee on the Judiciary discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed A BILL To amend the Small Business Act to provide for increased penalties for contracting fraud, and for other purposes.

1.

Short title

This Act may be cited as the Contracting Oversight for Small Business Jobs Act of 2012.

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:

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: relating to section 1040 the following: 1041. Misrepresentation of status as a small business concern. .

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)

Limitation on liability

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. On the date that the Administrator issues the compliance guide under this section, the Administrator shall also issue a version of the compliance guide translated into Spanish and such translation may be provided in digital form by the Administrator.

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. .

5.

Requirement fraudulent businesses be suspended or debarred

(a)

In general

Section 16(d)(2) 16(d)(2)(C) of the Small Business Act (15 U.S.C. 645(d)(3) 645(d)(2)(C)) 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.

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).

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.

December 21, 2012 Reported from the Committee on Small Business with amendments December 21, 2012 The Committee on the Judiciary discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed