II 112th CONGRESS 1st Session S. 1590 IN THE SENATE OF THE UNITED STATES September 21, 2011 Mrs. McCaskill introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To require the Administrator of the Small Business Administration to develop a new classification system for small business size determinations and to promulgate rules to eliminate the nonmanufacturer exception to small business size determinations, and for other purposes.

1.

Short title

This Act may be cited as the Fairness for Small Businesses in Federal Contracting Act of 2011.

2.

New classification system for small business size determinations

(a)

In general

Section 3(a)(2) of the Small Business Act (15 U.S.C. 632(a)(2)) is amended by adding at the end the following: (D)

Revision of classification

(i)

In general

Not later than 180 days after the date of enactment of the Fairness for Small Businesses in Federal Contracting Act of 2011, and in consultation with the Federal Acquisition Regulatory Council, the Administrator shall establish a classification system for industries for purposes of determining whether business concerns meet the size standards established under this paragraph that replaces the North American Industrial Classification System. (ii)

Amendment of FAR

The Federal Acquisition Regulatory Council shall amend the Federal Acquisition Regulation as appropriate to integrate the classification system established under clause (i). (iii)

Integration of system

The Administrator of General Services shall integrate the classification system established under clause (i) into the Integrated Acquisition Environment. (iv)

Criteria

The classification system established under clause (i) shall— (I)consist of not more than 20 industries; (II)include as industries manufacturing, construction, professional services, wholesale, and retail industries; and (III)be based on market conditions as identified by the most recent Economic Census of the United States. (v)

Reviews

The Administrator shall review the classification system established under clause (i) as part of the review of size standards under section 1344 of the Small Business Jobs Act of 2010 (15 U.S.C. 632 note). (vi)

Report

Not later than 180 days after the date on which the Administrator establishes the classification system under clause (i), the Administrator shall submit to Congress a report on the establishment and use of the classification system. . (b)

Technical and conforming amendments

The Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) is amended— (1)in section 501(e)(6)(A) (15 U.S.C. 695(e)(6)(A)), by striking in sector 31, 32, or 33 of the North American Industrial Classification System and inserting as manufacturing under the classification system established under section 3(a)(2)(D) of the Small Business Act (15 U.S.C. 632(a)(2)(D)); and (2)in section 502(2)(B)(i) (15 U.S.C. 696(2)(B)(i)), by striking in sector 31, 32, or 33 of the North American Industrial Classification System and inserting as manufacturing under the classification system established under section 3(a)(2)(D) of the Small Business Act (15 U.S.C. 632(a)(2)(D)).

3.

Eliminating the nonmanufacturer exception to small business size determinations

(a)

Definitions

In this section— (1)the term manufacturing— (A)means being engaged in the mechanical, physical, or chemical transformation of materials, substances, or components into new products; and (B)does not include construction; and (2)the term offeror means the bidder on a contract solicitation. (b)

Regulations

Not later than 120 days after the date of enactment of this Act, the Administrator of the Small Business Administration shall promulgate regulations that— (1)eliminate the nonmanufacturer exception to small business size determinations under section 121.402(b) of title 13 and section 19.102(f) of title 48, Code of Federal Regulations; (2)require contracting officers to use the size standards established by the Administrator for retail and wholesale industries in procurements for products and services by the Federal Government that are not manufactured by the offeror; and (3)require contracting officers to only use size standards established by the Administrator for manufacturing industries if the Federal Government issues a contract for the purchase of a product or good and the product or good is manufactured by the offeror.