Short title; table of contents

(a)

Short title

This Act may be cited as the

Create Opportunities and Networks for Talented, Ready, and Able Contractors To Succeed Act of 2024

or the

CONTRACTS Act of 2024

. (b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Definitions.

Sec. 3. Database on contract awards to disadvantaged small businesses.

Sec. 4. Outreach and recruitment to expand participation of disadvantaged small businesses in Federal contracting.

Sec. 5. Determination of the date of commencement of participation in the 8(a) program.

Sec. 6. Inclusion of concerns owned by HBCU business entities in definition of socially and economically disadvantaged small business concern.

Sec. 7. Agency OSDBU technical assistance.

Sec. 8. Federal disadvantaged small business task force.

Sec. 9. Requirements relating to prompt payment, progress payments, and performance-based payments.

Sec. 10. Reports on subcontractor engagement.

Sec. 11. Modifications to subcontracting plans to enhance opportunities for small business concerns owned and controlled by socially and economically disadvantaged individuals.

Sec. 12. Diversity and inclusion reporting requirements for covered contractors.

Sec. 13. Chief Counsel for Advocacy report to Congress.

Definitions

In this Act: (1)

8(a) Program

The term 8(a) Program means the program described under section 8(a) of the Small Business Act (15 U.S.C. 637(a)). (2)

Administration; Administrator

The terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively. (3)

Agency OSDBU

The term Agency OSDBU means the Office of Small and Disadvantaged Business Utilization (established pursuant to section 15(k) of the Small Business Act (15 U.S.C. 644(k))) of a Federal agency. (4)

Demographic classifications

The term demographic classifications means classifications by race, gender, veteran status, or ethnicity. (5)

Disadvantaged small business

The term disadvantaged small business means— (A)a socially and economically disadvantaged small business concern, as defined in section 8(a)(4)(A) of the Small Business Act (15 U.S.C. 637(a)(4)(A)); (B)a small business concern owned and controlled by socially and economically disadvantaged individuals, as defined in section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C)); or (C)a small business concern owned and controlled by a socially and economically disadvantaged individual covered under section 47113 of title 49, United States Code. (6)

MBDA Under Secretary

The term MBDA Under Secretary means the Under Secretary of Commerce for Minority Business Development of the Minority Business Development Agency (established under section 100002 of the Minority Business Development Act of 2021 (15 U.S.C. 9501)). (7)

Small business concern

The term small business concern has the meaning given under section 3 of the Small Business Act (15 U.S.C. 632). (8)

Small business development center

The term small business development center has the meaning given in section 3 of the Small Business Act (15 U.S.C. 632).

Database on contract awards to disadvantaged small businesses

(a)

Database required

The head of each Agency OSDBU shall establish and maintain a public online database that identifies each contract awarded by the Federal agency under the 8(a) Program. Such database shall include the following: (1)The aggregate number and dollar value of contracts awarded to socially and economically disadvantaged small business concern (as defined in section 8(a)(4)(A) of the Small Business Act (15 U.S.C. 637(a)(4)(A))) during the 3-year period preceding the date of the enactment of Public Law 95–507, disaggregated by race and ethnic group. (2)The aggregate number and dollar value of contracts awarded to disadvantaged small businesses pursuant to Public Law 95–507 during the 10-year period preceding the date of the enactment of this Act, disaggregated by race and ethnic group. (3)Data on offers for Federal contracts submitted by a disadvantaged small business which has previously been awarded a Federal contract or subcontract with the assistance of an Agency OSDBU during such 10-year period. (b)

Factual and historical record of instances of discrimination against disadvantaged small businesses

(1)

Record required

The Administrator shall establish a program under which the Administrator shall direct Federal departments and agencies, in coordination with institutions of higher education and other research organizations, to develop and periodically update a factual and historical record of instances of discrimination against disadvantaged small businesses desiring award of a Federal contract or subcontract from such Federal department or agency. (2)

Elements

The record described in paragraph (1) shall include the following: (A)Operational barriers that disadvantaged small businesses have historically experienced in Federal contracting and subcontracting. (B)Qualitative and quantitative trends in Federal contracting with disadvantaged small businesses, disaggregated by North American Industry Classification System code. (C)Recommendations for Governmentwide reforms to increase participation by disadvantaged small businesses in Federal contracts and the estimated qualitative and quantitative effects of such recommendations. (c)

Uses of database and record

The database required under subsection (a) or a record developed under subsection (b) may be used— (1)by the Administrator and heads of Federal departments and agencies to develop procurement policies, practices, and strategies that reduce discrimination, establish contracting and subcontracting goals for disadvantaged small businesses, enhance contract compliance monitoring, and increase disadvantaged small business participation in Federal contracting and subcontracting by mechanisms that may include dividing large contracts into multiple smaller contracts, establishing mentor-mentee relationships between businesses, and pairing disadvantaged small businesses with larger businesses for partnering in contract fulfillment; (2)by the head of a Federal department or agency to substantiate an award of a contract under the 8(a) Program; (3)by the head of a Federal department or agency to substantiate any contracting preference program for disadvantaged small businesses administered by the Federal agency; (4)by a disadvantaged small business that seeks an award of a contract under the 8(a) Program to develop a narrative of discrimination; and (5)by a disadvantaged small business that requires proof of discrimination for purpose of a judicial or administrative action or by a person assisting a disadvantaged small business for that purpose.

Outreach and recruitment to expand participation of disadvantaged small businesses in Federal contracting

(a)

Outreach and recruitment

The Administrator, in coordination with the MBDA Under Secretary, shall engage in outreach and education to expand participation of disadvantaged small businesses in Federal contracting. Such efforts may include the following: (1)Convening events to engage and inform disadvantaged small businesses, including— (A)business, professional, and industry-specific conferences; (B)informational fairs; and (C)networking events. (2)Providing briefings and electronic or printed materials to disadvantaged small businesses and to national and local business associations and organizations that represent disadvantaged small businesses about Federal contracting and subcontracting opportunities and procedures, including opportunities to participate in mentor-protegee programs of Federal agencies. (3)Partnering with organizations that assist disadvantaged small businesses, historically Black colleges and universities, minority-serving institutions, alumni networks of such colleges and universities and institutions, small business development centers, and other organizations that have the ability to facilitate relationships between prospective disadvantaged small business subcontractors and prime contractors seeking subcontractors. (4)Creating a publicly accessible online directory of disadvantaged small businesses that are subcontractors or that seek to become subcontractors, including details about the North American Industry Classification System code of such businesses, the goods and services provided by such businesses, and past performance information of such subcontractors. (5)Creating a publicly accessible online directory of available Federal contracting and subcontracting opportunities that, in the determination of the Administrator, are appropriate for disadvantaged small businesses based on factors that may include the size or scope of the contract or subcontract, the North American Industry Classification System code of the business, or other relevant factors. (b)

Agency OSDBUs

Pursuant to guidelines established by the Administrator, the Director of each Agency OSDBU shall engage in outreach and education to expand participation of disadvantaged small businesses in contracts and subcontracts with the Federal agency. Such activities shall include the following: (1)Facilitating interactions between prospective disadvantaged small business subcontractors and prime contractors seeking subcontractors. (2)Establishing a system to facilitate matching prime contractors seeking subcontractors with prospective disadvantaged small business subcontractors, including through the development of mentor-mentee relationships. (3)Advertising subcontracting opportunities through media and business or trade association channels that are effective in reaching prospective disadvantaged small business subcontractors that provide the goods or services for which the advertisement is placed. (4)Directing contracting officers to provide to prime contractors seeking subcontractors a list of prospective disadvantaged small business subcontractors that provide the needed goods or services. (5)Creating a publicly accessible online directory of disadvantaged small businesses that are eligible to participate in Federal contracting and subcontracting opportunities that includes the North American Industry Classification System codes of such businesses.

Determination of the date of commencement of participation in the 8(a) program

Section 7(j)(10)(C) of the Small Business Act (15 U.S.C. 636(j)(10)(C)) is amended— (1)by redesignating clause (ii) as clause (iii); and (2)by inserting after clause (i) the following:

(ii)A small business concern that has commenced participation in the Program established under this paragraph on or after the date of the enactment of this clause, shall be considered to have begun such participation one year before the date on which such concern has attained, in the determination of the Administrator, the full benefits of participation in the Program. Such determination may include consideration of the date on which such concern was first awarded a contract or subcontract because of participation of such concern in the Program.

Inclusion of concerns owned by HBCU business entities in definition of socially and economically disadvantaged small business concern

(a)

HBCU business entity defined

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:

(21)

HBCU business entity

In this subsection, the term HBCU business entity means an entity owned and operated by a part B institution (as defined under section 322 of the Higher Education Act of 1965 (20 U.S.C. 1061); commonly referred to as a historically Black college or university) for purposes of— (A)participation in interstate commerce; or (B)participation in the program described under section 8(a).

(b)

Inclusion in definition of socially and economically disadvantaged small business concern

Section 8(a)(4) of the Small Business Act (15 U.S.C. 637(a)(4)) is amended— (1)in subparagraph (A)— (A)in clause (i)— (i)in subclause (I), by striking the comma at the end and inserting a semicolon; (ii)in subclause (II), by striking , or and inserting a semicolon; (iii)in subclause (III), by striking , or and inserting ; or; and (iv)by adding at the end the following new subclause:

(IV)a HBCU business entity; or

; and

(B)in clause (ii)— (i)in subclause (I), by striking the comma at the end and inserting a semicolon; (ii)in subclause (II), by striking , or and inserting a semicolon; (iii)in subclause (III), by striking the period at the end and inserting ; or; and (iv)by adding at the end the following new subclause:

(IV)a HBCU business entity.

; and

(2)in subparagraph (B)— (A)in clause (i), by striking the comma at the end and inserting a semicolon; (B)in clause (ii), by striking , or and inserting a semicolon; (C)in clause (iii), by striking the period at the end and inserting ; or; and (D)by adding at the end the following new subclause:

(IV)a HBCU business entity described in subparagraph (A)(i)(IV) or subparagraph (A)(ii)(IV).

(c)

Inclusion in HUBZone small business concern definition

Section 31(b)(2) of the Small Business Act (15 U.S.C. 657a(b)(2))— (1)in subparagraph (E)(ii), by striking or at the end; (2)in subparagraph (F)(iii), by striking the period at the end and inserting ; or; and (3)by adding at the end the following new subparagraph:

(G)a small business concern— (i)that is wholly owned by one or more HBCU business entities (as defined in section 8(a)(21)), or by a corporation that is wholly owned by one or more HBCU business entities; or (ii)that is owned in part by one or more HBCU business entities, or by a corporation that is wholly owned by one or more HBCU business entities, if all other owners are either United States citizens or small business concerns.

Agency OSDBU technical assistance

Section 15(k) of the Small Business Act (15 U.S.C. 644(k)) is amended— (1)in paragraph (16)— (A)by redesignating subparagraphs (A) through (D) as subparagraphs (B) through (E), respectively; and (B)by inserting before subparagraph (B) (as so redesignated) the following:

(A)the training provided by the Director under paragraph (23) in the most recently completed fiscal year;

;

(2)in paragraph (21), by striking the period at the end and inserting ; and; and (3)by adding at the end the following new paragraphs:

(22)shall provide or contract with an entity (which may include a small business development center) to provide, in coordination with the Under Secretary of Commerce for Minority Business Development of the Minority Business Development Agency (established under section 100002 of the Minority Business Development Act of 2021), technical assistance to small business concerns owned and controlled by socially and economically disadvantaged individuals (as defined under section 8(d)(3)(C)) or socially and economically disadvantaged small business concerns (as defined in section 8(a)(4)(A)) for the development of individualized, specific narratives of discrimination; and (23)shall provide or contract with an entity (which may include a small business development center) to provide training to prepare small business concerns owned and controlled by socially and economically disadvantaged individuals or socially and economically disadvantaged small business concerns to become better situated to submit an offer for a contract offered under section 8(a).

Federal disadvantaged small business task force

(a)

Establishment

Not later than 4 months after the date of the enactment of this Act, the President shall establish a task force (in this section referred to as the Task Force) to— (1)make recommendations to increase opportunities for disadvantaged small businesses in Federal contracting and subcontracting; (2)coordinate and optimize participation by disadvantaged small business in Federal contracting and subcontracting, including by— (A)attempting to eliminate any discrimination against such businesses; and (B)removing any barriers to participation such participation; (3)encourage compliance by prime contractors with the requirements of covered Executive orders; (4)expand outreach for Federal contracting and subcontracting opportunities to disadvantaged small businesses; (5)enhance strategies to match disadvantaged small businesses with prime contractors; and (6)recommend policies or revisions to policies relating to Federal contracting and subcontracting for disadvantaged small businesses. (b)

Membership

The members of the Task Force shall include: (1)The MBDA Under Secretary, who shall also serve as the chair of the Task Force. (2)The Administrator of the Small Business Administration. (3)The Administrator of the Office of Federal Procurement Policy within the Office of Management and Budget. (4)The Director of the Domestic Policy Council. (5)The Administrator of General Services. (6)The Secretary of Defense. (7)The Secretary of Transportation. (8)The Administrator of the National Aeronautics and Space Administration. (9)The Secretary of the Treasury. (10)The Secretary of Labor. (11)The Secretary of Homeland Security. (12)The Secretary of Housing and Urban Development. (13)The Secretary of Agriculture. (14)The heads of such other Federal agencies or offices as the President may designate. (c)

Meetings

The Task Force shall meet not later than 3 months after the date of establishment and not less frequently than once every 3 months thereafter until the termination date. To the extent practicable, each meeting of the Task Force shall include a presentation by at least one representative from an institution of higher education (as defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001)) or other research organization with expertise in matters related to— (1)the duties of the Task Force; (2)the legal basis for the processes and findings of the Task Force; (3)historical or current discrimination in Federal contracting against disadvantaged small businesses; or (4)potential remedies to historical or current discrimination in Federal contracting against disadvantaged small businesses. (d)

Duties

The duties of the Task Force shall include determining the following: (1)Best practices among Federal agencies to promote participation in Federal contracting and subcontracting for disadvantaged small businesses, including practices described in section 4. (2)The needs of disadvantaged small businesses that desire to participate in the 8(a) Program and any contracting programs for disadvantaged small businesses administered by a Federal agency. (3)Methods and initiatives to expand the participation of disadvantaged small businesses in Federal contracting and subcontracting, including by unbundling large contracts into separate smaller contracts, by increasing flexibility for such businesses to demonstrate eligibility for Federal contracts and subcontracts and to demonstrate past performance of a same or similar contract, and by enforcing compliance by prime contractors with the requirements of covered Executive orders. (4)Methods and initiatives to expand access to capital, credit, surety bonds, loan guarantees, financial training, and credit counseling for disadvantaged small businesses. (5)Strategies to improve the compliance of Federal agencies with contracting and subcontracting objectives set forth in the Executive Order 13985 titled Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (86 Fed. Reg. 7009), including the following: (A)For Federal agencies that fail to meet such objectives— (i)opportunities for training of contracting officers on how to increase the number of contracts awarded to disadvantaged small businesses; and (ii)commencing a study led by the Inspector General for such Federal agency to determine the causes of such failure, evaluate disadvantaged small business participation in prime contracts, and make recommendations for improvement. (B)For Federal agencies that meet such objectives, incentives to assist such Federal agencies to exceed such objectives. (e)

Reports

(1)

Activities and findings report

Not later than 4 months after the first meeting date of the Task Force, and biannually thereafter, the chair of the Task Force shall submit to Congress a report on the activities and findings of the Task Force and any recommendations to increase participation of disadvantaged small businesses in Federal contracting and subcontracting. (2)

Disparity study report

Not later than 12 months after the first meeting date of the Task Force, the chair of the Task Force shall submit to Congress a report on the results of a study on disadvantaged small businesses that includes— (A)a quantitative and qualitative analysis of the disadvantaged small businesses that are eligible to perform Federal contracts and subcontracts that were offered during the 5-year period beginning on the date of the establishment of the Task Force under this section; (B)the number and the North American Industry Classification System code of each such business that submitted an offer (or bid) for a contracting or subcontracting opportunity during such period, including information regarding contracts and subcontracts that each such business was previously awarded; (C)the number of such businesses that were awarded such Federal contracts and subcontracts; and (D)any conclusions regarding the presence, absence, or extent of discrimination against, or underrepresentation of, disadvantaged small businesses (disaggregated by demographic classification) in Federal contracting and subcontracting. (f)

Termination date

The Task Force established under this section shall terminate on the date that is 10 years after the first meeting date of the Task Force. (g)

Covered Executive Order defined

In this section, the term covered Executive Order means the following: (1)Executive Order 13985, titled Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (January 20, 2021). (2)Executive Order 14035, titled Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce (June 25, 2021). (3)Executive Order 14091, titled Further Advancing Racial Equity and Support for Underserved Communities Through The Federal Government (February 16, 2023).

Requirements relating to prompt payment, progress payments, and performance-based payments

(a)

Disclosures for payments on certain contracts

(1)

In general

Chapter 39 of title 31, United States Code, is amended by inserting after section 3905 the following:

3906.

Disclosures for prompt payments on certain contracts

(a)

In general

Each covered contract shall include a clause that requires the prime contractor to include in each subcontract entered into by the prime contractor and a subcontractor for the purpose of performing such covered contract— (1)a payment clause which obligates the prime contractor to pay the subcontractor (at any tier) for satisfactory performance under its subcontract within 14 calendar days of receipt of payment from the agency; and (2)an interest penalty clause which obligates the prime contractor to pay to the subcontractor (at any tier) an interest penalty on amounts due in the case of each payment not made in accordance with the payment clause described in paragraph (1)— (A)for the period beginning on the day after the required payment date and ending on the date on which payment of the amount due is made; and (B)computed at the rate specified by section 3902(a) of this title. (b)

Covered contract defined

In this section, the term covered contract means a contract awarded by the head of an agency to a prime contractor that is not a disadvantaged small business (as defined in the CONTRACTS Act of 2024) with a proposed value greater than the simplified acquisition threshold.

(2)

Clerical amendment

The table of contents for chapter 39 of title 31, United States Code, is amended by inserting after the item relating to section 3905 the following:

3906. Disclosures for payments on certain contracts.

(b)

Disclosures; reports; evaluations

(1)

Disclosure

The head of a Federal agency shall include in any contract terms, and in any modification to such contract, a requirement that a prime contractor disclose to each potential subcontractor that is a disadvantaged small business— (A)whether the prime contractor is receiving progress payments or performance-based payments under such contract; and (B)whether the prime contractor will provide progress payments to a subcontractor for such contract. (2)

Acknowledgment

The prime contractor shall ensure that each potential subcontractor in receipt of a disclosure described in paragraph (1) submits to such prime contractor a signed acknowledgment of receipt of such disclosure. (3)

Subcontracting reports

A prime contractor for a Federal contract shall include in any subcontracting reports required to be submitted under Section 8(d)(6)(E) of the Small Business Act (15 U.S.C. 637(d)(6)(E)) verification of the timely remittance of any payments to each subcontractor of such prime contractor. (4)

Performance evaluations

The head of a Federal agency shall include in any contract performance evaluation of a prime contractor for such contract an evaluation of the prime contractor's compliance with the requirements of this subsection and the requirements of section 3906 of title 31, United States Code. (5)

Subsequent contract ineligibility

If a prime contractor submits an offer for a subsequent contract to the head of a Federal agency through a sealed bid or negotiated acquisition proposal and such head determines such contractor is not in compliance with paragraph (1), such head may not award the subsequent contract to such contractor— (A)until such contractor is in compliance with paragraph (1), as determined by such head; and (B)unless such head determines that such award is in the national interest.

10.

Reports on subcontractor engagement

(a)

In general

Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is amended by adding at the end the following new paragraph:

(18)

Reports on subcontractor engagement

(A)

In general

Each prime contractor that is not a disadvantaged small business that has been awarded a major prime contract shall submit to the head of the Federal agency that awarded such contract an annual report on subcontracts awarded pursuant to such contract, including— (i)the total number of subcontracts awarded under the contract; (ii)the number of subcontracts and a description of such subcontracts awarded to disadvantaged small businesses, disaggregated by demographic characteristics, including the North American Industry Classification System code for each such business; (iii)the total dollar value of payments made to subcontractors; and (iv)the total dollar value of payments made to disadvantaged small businesses, disaggregated by demographic characteristics. (B)

Definitions

In this paragraph: (i)

CONTRACTS Act of 2024 definitions

The terms demographic characteristics anddisadvantaged small business have the meanings given, respectively, in the CONTRACTS Act of 2024. (ii)

Major prime contract

The term major prime contract means— (I)the 50 highest dollar value prime contracts of a Federal agency; and (II)each contract of a Federal agency that has a total dollar value greater than or equal to $10,000,000.

(b)

Applicability

This section and the amendments made by this section shall apply with respect to a major prime contract (as defined in section 8(d)(18) of the Small Business Act (15 U.S.C. 637(d))) entered into on or after the date of the enactment of this section.

11.

Modifications to subcontracting plans to enhance opportunities for small business concerns owned and controlled by socially and economically disadvantaged individuals

(a)

In general

Each covered person that is required to submit a subcontracting plan under paragraph (4) or (5) of section 8(d) of the Small Business Act (15 U.S.C. 637(d)) for a contract shall update such subcontracting plan to include the following: (1)The names, addresses, phone numbers, types of business, and North American Industrial Classification System code of the small business concerns owned and controlled by socially and economically disadvantaged individuals, disaggregated by demographic characteristics, that were considered or solicited as subcontractors. (2)With respect to such concerns that were considered or solicited but not included in the updated subcontracting plan, the reasons for the decision not to include such concerns. (3)Information on the process and efforts of the covered person in developing such subcontracting plan, including— (A)the actions taken by the covered person to identify, solicit, and provide outreach to small business concerns owned and controlled by socially and economically disadvantaged individuals for possible inclusion in its subcontracting plan; (B)the information provided by the covered person to such concerns about subcontracting opportunities under the contract; (C)the means by which the subcontractors that were included in the subcontracting plan were selected by the covered person; and (D)the directories or lists of small business concerns owned and controlled by socially and economically disadvantaged individuals, websites and website search tools, business or professional associations, industry databases, and other resources that the covered person consulted or used to identify such concerns for possible inclusion in the subcontracting plan. (4)A description of the plans of the covered person to— (A)increase the number of disadvantaged small businesses in the subcontracting plan for subsequent years of contract performance; and (B)increase the dollar amount under the contract allocated for goods and services provided by such concerns. (b)

Enforcement

(1)

Compliance with subcontracting plan

A covered person described in subsection (a) that is awarded a prime contract and granted a modification of a contract by the head of a Federal agency under such subsection shall remain in compliance with the terms of the updated subcontracting plan during the term of performance of the contract before receiving any amounts related to such modification. (2)

Subsequent contract ineligibility

If a covered person described in paragraph (1) submits an offer for a subsequent contract to such head of a Federal agency through a sealed bid or negotiated acquisition proposal and such head determines such covered person is not in compliance with a subcontracting plan described in subsection (a), such head may not award the subsequent contract to such contractor— (A)until such covered person is in compliance with subsection (a), as determined by such head; and (B)unless such head determines that such award is in the national interest. (3)

Subsequent contract offer scores

(A)

Adjustment to score

If a covered person described in paragraph (1) submits an offer for a subsequent contract to such head of a Federal agency through a sealed bid or negotiated acquisition proposal, the evaluation score of the contracting officer given to such offer shall be adjusted as follows: (i)For a covered person that achieved subcontractor diversity in the performance of the prior contract, such score shall be increased by one point. (ii)For a covered person that failed to achieve subcontractor diversity in the performance of the prior contract, such score shall be decreased by one point. (B)

Subcontractor diversity determination

For purposes of this paragraph, the contracting officer that awarded the covered person a contract under subsection (a) shall make a determination as to whether the covered person achieved subcontractor diversity using the information in the subcontracting plan of the covered person and the standards used by such contracting officer to evaluation subcontractor diversity. (c)

Accountability

The appropriate head of a Federal agency shall consider the performance of a contracting officer of responsibilities under this section in any evaluation of the performance of the contracting officer, including such contracting officer’s— (1)collection and analysis of prime contractor data to assess subcontractor diversity (as described in subsection (b)(3)(B)); (2)failure to identify a covered person’s failure to achieve subcontractor diversity or to comply with an applicable subcontracting plan; and (3)efforts for monitoring and determinations regarding the receipt of payments by disadvantaged small business subcontractors from prime contractors in accordance with relevant contractual terms. (d)

Applicability

This section and the requirements of this section shall apply with respect to a subcontracting plan entered into on or after the date of the enactment of this section. (e)

Definitions

In this section: (1)The term small business concerns owned and controlled by socially and economically disadvantaged individuals has the meaning given under section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C)). (2)The term covered person means an apparently successful offeror, bidder for a contract, or contractor seeking a modification of a contract.

12.

Diversity and inclusion reporting requirements for covered contractors

(a)

Governmentwide requirement

Chapter 47 of division C of subtitle I of title 41, United States Code, is amended by inserting after section 4714 the following new section:

4715.

Diversity and inclusion reporting requirements for covered contractors

(a)

Covered contractor reports

(1)

In general

The head of each executive agency shall require each covered contractor awarded a major contract to submit to such head by the last day of each full fiscal year that occurs during the period of performance of any major contract a report on diversity and inclusion. (2)

Elements

Each report under paragraph (1) shall include, for the fiscal year covered by the report the following: (A)A description of each major contract with a period of performance during the fiscal year covered by the report, including the period of performance, expected total value, and value to date of each major contract. (B)The total value of payments received under all major contracts of each covered contractor during such fiscal year. (C)The total number of participants in the board of directors of each covered contractor, nominees for the board of directors of the covered contractor, and the senior leaders of the covered contractor, disaggregated by demographic classifications. (D)With respect to employees of each covered contractor— (i)the total number of such employees; and (ii)the number of such employees (expressed as a numeral and as a percentage of the total number), disaggregated by demographic classification and major occupational group. (E)The value of first-tier subcontracts under each major contract entered into during such fiscal year. (F)With respect to employees of each covered subcontractor— (i)the total number of such employees; and (ii)the number of such employees (expressed as a numeral and as a percentage of the total number), disaggregated by demographic classification and major occupational group. (G)Whether the board of directors of the covered contractor has, as of the date on which the covered contractor submits a report under this section, adopted any policy, plan, or strategy to promote racial, ethnic, and gender diversity among the members of the board of directors of the covered contractor, nominees for the board of directors of the covered contractor, or the senior leaders of the covered contractor. (H)A description of participation by the contractor in diversity programs, to include the number of hours spent implementing, funds expended in support of, and the number of unique relationships established by each such diversity program. (b)

Annual summary report

(1)

Report required

Not later than 60 days after the first day of each fiscal year, the head of each executive agency shall submit to each relevant committee of Congress a report that summarizes the reports submitted pursuant to subsection (a). (2)

Elements

Each report under paragraph (1) shall include the following: (A)An index of the reports submitted pursuant to subsection (a). (B)A compilation of the data described in such subsection, disaggregated as described in such subsection. (C)An aggregation of the data provided in such reports. (D)A narrative that analyzes the information disclosed in such reports and identifies any year-to-year trends in such information. (c)

Public availability

Each report required under this subsection shall be posted on a single publicly available website of the relevant executive agency and made available in a machine-readable format that is downloadable, searchable, and sortable. (d)

Executive agency

Notwithstanding section 3101(c)(1) of this title, this section applies to the Department of Defense, the Coast Guard, and the National Aeronautics and Space Administration. (e)

Definitions

In this section: (1)

Covered contractor

The term covered contractor means a contractor awarded a major contract. (2)

Covered subcontractor

The term covered subcontractor means a subcontractor performing a subcontract that is one of the 10 highest aggregate value subcontracts under a major contract and any subcontract that has a total dollar value of $10,000,000 or more. (3)

Demographic classifications

The term demographic classifications means classifications by race, gender, veteran status, or ethnicity. (4)

Diversity program

The term diversity program means— (A)any contracting program of an executive agency that awards contracts pursuant to section 8(a) of the Small Business Act (15 U.S.C. 637(a)); and (B)any contracting program for disadvantaged small businesses (as defined in the CONTRACTS Act of 2024) administered by the executive agency. (5)

Major contract

The term major contract means— (A)the largest 50 contracts (by total dollar value) of each agency; and (B)each contract that has a total dollar value of $10,000,000 or more. (6)

Major occupational group

The term major occupational group means a major occupational group as defined by the Bureau of Labor Statistics. (7)

Senior leader

The term senior leader means— (A)the president of a covered contractor; (B)any vice president in charge of a principal business unit, division, or function of a covered contractor; (C)any other officer of a covered contractor who performs a policy-making function; or (D)an individual responsible for the direct or indirect management of more than 200 individuals.

(b)

Technical and conforming amendment

The table of sections for chapter 47 of division C of subtitle I of title 41, United States Code, is amended by inserting after the item for section 4714 the following new item:

Sec. 4715. Diversity and inclusion reporting requirements for covered contractors.

(c)

Applicability

The amendments made by this section shall apply with respect to contracts entered into on or after January 1, 2025.

13.

Chief Counsel for Advocacy report to Congress

Not later than 1 year after the date of the enactment of this Act and annually thereafter, the Chief Counsel for Advocacy of the Office of Advocacy of the Small Business Administration shall submit to Congress a report evaluating the implementation of this Act and the amendments made by this Act and the effects on Federal contracting and subcontracting opportunities for disadvantaged small businesses.