Pilot program for transitioning small businesses in the construction or engineering industries

The Small Business Act (15 U.S.C. 631 et seq.) is amended by inserting after section 32 the following:

33.

Pilot program for transitioning small businesses in the construction or engineering industries

(a)

Definitions

In this section:(1)

Eligible concern

The term eligible concern means a concern that has grown to exceed the size standard applicable to the North American Industry Classification System code corresponding to—(A)commercial and institutional building construction; or(B)engineering services.(2)

Participant

The term Participant means an eligible concern that—(A)meets the criteria described in subsection (d); and(B)participates in the Program.(3)

Program

The term Program means the pilot program for transitioning small businesses established under paragraph (b).(b)

Establishment

Not later than 1 year after the date of enactment of this section, the Administrator shall promulgate regulations establishing a pilot program to foster the continued success of eligible concerns by permitting those concerns to qualify as small for certain contracts during a transitional period.(c)

Purpose

The purpose of the Program is to assist eligible concerns in their transition from small business concerns to other-than-small and thereby increase competition in the unrestricted Federal marketplace.(d)

Criteria for participation

(1)

Election

An eligible concern may make a one-time election, which shall not be changed, to participate, with respect to the primary activity of the eligible concern, under—(A)the North American Industry Classification System Code corresponding to commercial and institutional building construction; or (B)the North American Industry Classification System Code corresponding to engineering services.(2)

Registration

An eligible concern shall—(A)register as a Participant with the System for Award Management (or any successor system) on the date on which the eligible concern makes the election under paragraph (1) in the registry described in subsection (h); and (B)ensure that the registration of the eligible concern is current and accurate.(3)

Term of the transitional period

(A)

In general

Except as provided in subparagraph (B), the transitional period, during which an eligible concern may be eligible to participate in the Program, shall—(i)begin on the date which the eligible concern first exceeds the size standard applicable to the North American Industry Classification System code corresponding to the industry elected by the concern pursuant to paragraph (1); and (ii)not exceed 7 consecutive years.(B)

Exception

An eligible concern first exceeding the size standard described in subparagraph (A)(i) within the 7-year period immediately preceding the effective date of regulations issued under subsection (b) shall be eligible to participate in the Program for the remainder of the 7-year period beginning on the date which the concern first exceeded the size standard.(4)

Activity targets

The regulations described in subsection (b) shall establish non-small business set aside business activity targets that—(A)are applicable to Participants during the third year and each succeeding year of Program participation; and(B)during the period of time described in subparagraph (A), shall reflect a reasonably consistent increase in sales other than obtained through contracts set aside for small business concerns, expressed as a percentage of total sales.(5)

Cap on average annual receipts

Each Participant shall be subject to a cap on average annual receipts that is 5 times the size standard applicable to the North American Industry Classification System code corresponding to the industry elected by the concern, calculated consistent with the method in 121.104 of title 13, Code of Federal Regulations, or any successor regulation. (6)

Certification

(A)

In general

Each Participant shall be required to annually certify in the System for Award Management (or any successor system) as to whether or not the Participant has—(i)met the activity target established under paragraph (4) for the preceding year; and(ii)complied with the restrictions described in subsection (e).(B)

Noncompliance

If a Participant certifies that the Participant has not met the applicable activity targets established under paragraph (4) for 2 consecutive years, or certifies that the Participant has not complied with the restrictions described in subsection (e), the Participant shall no longer be eligible to participate in the Program.(7)

Participant report

The regulations issued under subsection (b) shall establish—(A)requirements for annual reporting by Participants to the Administrator during Program participation, to include reporting on compliance with activity targets established under paragraph (4), the number and dollar value of contracts awarded based on eligibility under subsection (f)(1), and information required for the registry under subsection (h); and(B)reporting requirements applicable for a period of not less than 5 years after exiting the Program.(8)

No reinstatement

Upon the expiration of the transitional period, or once a Participant otherwise becomes ineligible for the Program, the concern shall not be eligible for reinstatement in the Program.(e)

Restrictions

(1)

Mentor-protégé

(A)

In general

A Participant may not apply to be a protégé under a mentor-protégé program established under this Act. (B)

Existing protégés

A Participant that is already a protégé prior to registration under the Program under subsection (d)(2) may, in years 1 and 2 of the transitional period of the Program, continue to submit proposals in a mentor-protégé program established under this Act.(2)

Additional restrictions

In addition to the restrictions described in paragraph (1), the Administrator may include additional restrictions for Participants consistent with the purposes of this Act.(f)

Purposes for which participants may qualify as small

Subject to the restrictions in paragraph (e), a Participant may otherwise qualify as small for purposes of the following:(1)Contracts that are set aside for small business concerns and assigned a North American Industry Classification System code corresponding to the industry elected by the Participant under subsection (d)(1) and—(A)the Government of the United States expects to be equal to or exceed— (i)for commercial and institutional building construction, $5,000,000; and(ii)for engineering services, $1,000,000; and(B)any orders under such contracts irrespective of the value of the order.(2)Goals established pursuant to section 15(g) for participation by 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, and small business concerns owned and controlled by women.(g)

Termination

(1)

In general

The Program shall terminate on the date that is 10 years after the date of enactment of this section.(2)

Continuation of participation

Notwithstanding paragraph (1), any Participant in the program as of the date on which the Program terminates under paragraph (1) may continue to participate until the expiration of the term of the Participant under subsection (d)(3).(h)

Publication of registry required

The Administrator shall establish and maintain in the System for Award Management (or any successor system) a registry of eligible Participants, which registry shall, to the extent practicable—(1)include the name, address, transitional period entry and exit dates, and elected North American Industry Classification System code with respect to each Participant; and(2)be updated by the Administrator not less than annually.(i)

Additional information To be maintained

The Administrator shall maintain data regarding—(1)the number of Participants in the Program;(2)the number of former Participants that have exited the Program;(3)the number of former Participants that have successfully transitioned to other-than-small, under such criteria as the Administrator may establish;(4)the number of former Participants that have returned to being small under North American Industry Classification System code elected by the Participant under subsection (d)(1); and(5)the total dollar value of small business awards made each fiscal year to Participants by each Federal agency.(j)

GAO study and report

(1)

Study

Not later than 2 years after the date of enactment of this section, the Comptroller General of the United States shall begin conducting a study to evaluate the implementation of the Program.(2)

Report

Not later than 8 years after the date of enactment of this section, the Comptroller General of the United States shall submit to Congress a report on the results of the study required under paragraph (1), which shall include—(A)an assessment of the feasibility and advisability of broadening the Program to include additional industries, as defined under the North American Industry Classification System;(B)the effects of the Program, if any, on Participants and on the industrial base;(C)any recommendations for improving the Program, including whether the Program should be made permanent; and(D)any additional findings and recommendations as the Comptroller General of the United States considers appropriate.