[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2720 Introduced in Senate (IS)]

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118th CONGRESS
  1st Session
                                S. 2720

      To amend the Small Business Act regarding Federal contract 
                             requirements.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 5, 2023

   Ms. Ernst introduced the following bill; which was read twice and 
    referred to the Committee on Small Business and Entrepreneurship

_______________________________________________________________________

                                 A BILL


 
      To amend the Small Business Act regarding Federal contract 
                             requirements.

    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 ``Accountability and Clarity in 
Contracts to Engage Small Suppliers and Small Businesses Act''.

SEC. 2. SMALL BUSINESS INDUSTRIAL BASE FEDERAL CONTRACTING MATTERS.

    (a) Accessibility and Clarity in Small Business Contracts.--
            (1) Definitions.--In this section--
                    (A) the term ``covered notice'' means a notice 
                pertaining to small business concerns, such as a 
                sources sought notice or solicitation restricted to 
                competition among small business concerns or covered 
                small business concerns, published by a Federal agency 
                on SAM.gov or any successor website marketing Federal 
                contract opportunities;
                    (B) the term ``covered small business concern'' 
                means--
                            (i) a small business concern owned and 
                        controlled by women, a small business concern 
                        owned and controlled by veterans, a small 
                        business concern owned and controlled by 
                        service-disabled veterans, or a qualified 
                        HUBZone small business concern, as those terms 
                        are defined in section 3 of the Small Business 
                        Act (15 U.S.C. 632); and
                            (ii) 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)); and
                    (C) the terms ``Federal agency'' and ``small 
                business concern'' have the meanings given those terms 
                in section 3 of the Small Business Act (15 U.S.C. 632).
            (2) Inclusion of key words in notices for small business 
        contract actions.--Each covered notice shall, to the maximum 
        extent practicable, include key words and contract requirements 
        in the title or description of the covered notice such that 
        small business concerns seeking contract opportunities using 
        the search function of SAM.gov or any successor website can 
        easily identify and understand those opportunities.
            (3) Plain language.--
                    (A) In general.--Each covered notice shall be 
                written in a manner that is clear, concise, and 
                accessible to the reader such that a small business 
                concern can easily understand the intent of the Federal 
                agency.
                    (B) Exception.--If the covered notice cannot meet 
                the requirement under subparagraph (A) due to 
                requirements applicable to the covered notice from 
                regulation or law, the Federal agency shall include 
                with the covered notice a cover page adequately 
                summarizing the contents of the covered notice, written 
                in a clear, concise, and accessible manner, such that a 
                small business concern can easily understand the intent 
                of the Federal agency.
            (4) Attachments.--A Federal agency may not meet the 
        requirement in paragraph (2) by only including key words and 
        contract requirements in a document that is attached to the 
        covered notice.
            (5) Rulemaking.--Not later than 90 days after the date of 
        enactment of this Act, the Administrator of the Small Business 
        Administration shall promulgate regulations to carry out this 
        section.
    (b) Prioritizing Engaging More Small Businesses in Federal 
Procurement.--
            (1) In general.--Section 15 of the Small Business Act (15 
        U.S.C. 644) is amended--
                    (A) in subsection (g)--
                            (i) by inserting after ``(g)'' the 
                        following: ``Goals for Participation of Small 
                        Business Concerns in Procurement Contracts.--
                        ''; and
                            (ii) in paragraph (1)--
                                    (I) in subparagraph (A)(i), by 
                                striking the second sentence; and
                                    (II) by adding at the end the 
                                following:
                    ``(C) Requirement.--In meeting each of the goals 
                under subparagraph (A), the Government shall ensure the 
                participation of a broad spectrum of small business 
                concerns from a wide variety of industries.'';
                    (B) in subsection (h)(1)--
                            (i) in subparagraph (C), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (D), by striking the 
                        period at the end and inserting ``; and''; and
                            (iii) by adding at the end the following:
                    ``(E) the information described in clauses (ii) 
                through (iv) of subsection (y)(2)(B).''; and
                    (C) in subsection (y)--
                            (i) in paragraph (2)--
                                    (I) by redesignating subparagraphs 
                                (A) and (B) as clauses (i) and (ii), 
                                respectively, and adjusting the margins 
                                accordingly;
                                    (II) by inserting before clause 
                                (i), as so redesignated, the following:
                    ``(A) Goals.--'';
                                    (III) in clause (i), as so 
                                redesignated, by inserting ``Prime 
                                contract goals.--'' before ``A 
                                determination'';
                                    (IV) in clause (ii), as so 
                                redesignated, by inserting 
                                ``Subcontract goals.--'' before ``A 
                                determination'';
                                    (V) by striking subparagraphs (C) 
                                and (D) and inserting the following:
                    ``(B) Composition of the small business industrial 
                base.--
                            ``(i) Total number of small business 
                        concerns.--The number of 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--
                                    ``(I) awarded prime contracts 
                                during the fiscal year compared to the 
                                prior fiscal year, including a 
                                breakdown by North American Industry 
                                Classification System code, if 
                                available; and
                                    ``(II) awarded subcontracts during 
                                the fiscal year compared to the prior 
                                fiscal year, including a breakdown by 
                                North American Industry Classification 
                                System code, if available.
                            ``(ii) Maturity of small business 
                        concerns.--A breakdown of the number of new 
                        small business entrants, recent small business 
                        entrants, and established small business 
                        concerns awarded prime contracts or 
                        subcontracts during the fiscal year, including 
                        a breakdown of such entities that are 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.
                            ``(iii) Dollar distribution among small 
                        business concerns.--The total dollar value of 
                        prime contract awards for the top 20 small 
                        business concerns that received the most 
                        Federal procurement funding in the fiscal year, 
                        compared to the combined total dollar value for 
                        the remaining small business concerns, and a 
                        comparison of that data with the prior fiscal 
                        year.
                            ``(iv) Small business participation by 
                        industry.--The total dollar value of prime 
                        contract awards made to small business concerns 
                        in all industry sectors and sorted by highest 
                        dollar amount per major industry sector to the 
                        least, including--
                                    ``(I) the number of individual 
                                small business contractors awarded 
                                contracts in each industry sector; and
                                    ``(II) the top 10 industries in 
                                which 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 participate, compared to the 
                                10 industries in which those concerns 
                                have the least participation.''; and
                                    (VI) in subparagraph (E), by 
                                striking ``(E)'' and inserting ``(C) 
                                Other factors.--''; and
                            (ii) in paragraph (3), by striking 
                        subparagraphs (A) and (B) and inserting the 
                        following:
                    ``(A) not more than 40 percent of the score on the 
                dollar value of prime contracts described in paragraph 
                (2)(A), as determined by the Administrator;
                    ``(B) not less than 30 percent of the score on the 
                information provided in paragraph (2)(B), as determined 
                by the Administrator; and
                    ``(C) the appropriate percent of the score on the 
                information provided in paragraph (2)(C), as determined 
                by the Administrator.''.
            (2) Regulations.--Not later than 90 days after the date of 
        enactment of this Act, the Administrator of the Small Business 
        Administration shall issue regulations to define the terms 
        ``new small business entrant'', ``recent small business 
        entrant'', and ``established small business concern'' for 
        purposes of subparagraph (B)(ii) of section 15(y)(2) of the 
        Small Business Act (15 U.S.C. 644(y)(2)), as added by paragraph 
        (1).
    (c) Limitation on Federal Agency Credit for Meeting Contracting 
Goals.--Section 15(g) of the Small Business Act (15 U.S.C. 644(g)), as 
amended by subsection (b), is amended by adding at the end the 
following:
            ``(4) Limitation on credit for meeting contracting goals.--
                    ``(A) Definitions.--In this paragraph--
                            ``(i) the term `covered category of small 
                        business concern' means--
                                    ``(I) a small business concern 
                                owned and controlled by service-
                                disabled veterans;
                                    ``(II) a qualified HUBZone small 
                                business concern;
                                    ``(III) a small business concern 
                                owned and controlled by socially and 
                                economically disadvantaged individuals; 
                                or
                                    ``(IV) a small business concern 
                                owned and controlled by women; and
                            ``(ii) the term `credit' means the value of 
                        a prime contract.
                    ``(B) General rule.--A Federal agency may allocate 
                credit for a single prime contract awarded to a small 
                business concern not more than 2 times for purposes of 
                demonstrating compliance with the goals of the Federal 
                agency established under paragraph (2)(A).
                    ``(C) Allocation of credit.--
                            ``(i) First allocation.--The first 
                        allocation of credit described in subparagraph 
                        (B) shall be applied towards the goal of the 
                        Federal agency established under paragraph 
                        (2)(A) for participation by small business 
                        concerns.
                            ``(ii) Second allocation.--A second 
                        allocation of credit described in subparagraph 
                        (B) shall be applied as follows:
                                    ``(I) If the prime contract was 
                                awarded as a sole-source contract or 
                                through competition restricted to a 
                                covered category of small business 
                                concern, the credit shall be applied 
                                towards the goal of the Federal agency 
                                established under paragraph (2)(A) for 
                                participation by the applicable covered 
                                category of small business concern.
                                    ``(II) If the prime contract was 
                                not awarded as a sole-source contract 
                                or through competition restricted to a 
                                covered category of small business 
                                concern, the credit may only be applied 
                                towards a single goal of the Federal 
                                agency established under paragraph 
                                (2)(A), determined at the election of 
                                the contracting officer, for 
                                participation by a covered category of 
                                small business concern that is 
                                applicable to the recipient of the 
                                prime contract, without regard to 
                                whether the recipient of the prime 
                                contract qualifies as more than 1 
                                covered category of small business 
                                concern.''.
    (d) Testimony on Small Business Engagement Before Congress.--
Section 15(g) of the Small Business Act (15 U.S.C. 644(g)), as amended 
by subsections (b) and (c), is amended--
            (1) in paragraph (2)--
                    (A) by striking ``(2) (A) The head'' and inserting 
                the following:
            ``(2) Agency goals.--
                    ``(A) Establishment.--The head'';
                    (B) by moving subparagraphs (B), (C), and (D) 2 ems 
                to the right;
                    (C) in subparagraph (B), by inserting 
                ``Requirements for goals.--'' before ``Goals 
                established'';
                    (D) in subparagraph (C), by inserting ``Failure to 
                agree on goals.--'' before ``Whenever'';
                    (E) in subparagraph (D), by inserting ``Plan for 
                achieving goals.--'' before ``After establishing'';
                    (F) in subparagraph (E), by inserting 
                ``Considerations for achieving goals.--'' before ``The 
                head'';
                    (G) in subparagraph (F)--
                            (i) by inserting ``Communication of 
                        goals.--'' after (F);
                            (ii) by striking ``(i) Each'' and 
                        inserting:
                            ``(i) In general.--Each''; and
                            (iii) by striking ``(ii) A procurement'' 
                        and inserting:
                            ``(ii) Procurement employee or program 
                        manager defined.--A procurement''; and
                    (H) by adding at the end the following:
                    ``(G) Remediation.--Any Federal agency failing to 
                receive a score equivalent to a letter grade of `A' or 
                above in a letter graded rating system, as established 
                under subsection (y), in a fiscal year shall--
                            ``(i) submit to the Committee on Small 
                        Business and Entrepreneurship of the Senate and 
                        the Committee on Small Business of the House of 
                        Representatives the report required under 
                        subsection (h)(1); and
                            ``(ii) testify before the Committee on 
                        Small Business and Entrepreneurship of the 
                        Senate and the Committee on Small Business of 
                        the House of Representatives on the reasons for 
                        failing to meet a letter grade of `A' or above, 
                        and the details of the report submitted under 
                        clause (i), in particular the justifications 
                        and remediation plan described in subparagraphs 
                        (C) and (D) of subsection (h)(1).''; and
            (2) by striking ``(3) First'' and inserting the following:
            ``(3) Department of energy subcontracts.--First''.
    (e) Evaluation of Offers for Contracts Including Subcontracting 
Plans.--Section 8(d)(4) of the Small Business Act (15 U.S.C. 637(d)(4)) 
is amended--
            (1) by moving subparagraph (G) 2 ems to the left; and
            (2) in subparagraph (G)--
                    (A) in the matter preceding clause (i), by striking 
                ``bundled contract where the head of the agency 
                determines that the contract offers a significant 
                opportunity for subcontracting'' and inserting 
                ``contract that includes a subcontracting plan required 
                under this paragraph or paragraph (5)''; and
                    (B) in clause (i), by striking ``the rate provided 
                under the subcontracting plan for small business 
                participation'' and inserting ``a description of the 
                extent to which the offeror proposes to use small 
                business concerns as subcontractors at any tier''.
    (f) Rule of Two Analysis Applies Before Using a Multiple Award 
Contract.--Section 15(r) of the Small Business Act (15 U.S.C. 644(r)) 
is amended--
            (1) by redesignating paragraphs (1) and (2) as 
        subparagraphs (A) and (B), respectively, and adjusting the 
        margins accordingly;
            (2) in the matter before subparagraph (A), as so 
        redesignated, by striking ``Not later than'' and all that 
        follows through ``discretion--'' and inserting the following:
            ``(1) In general.--Except as provided in paragraph (2), 
        Federal agencies shall--'';
            (3) in paragraph (1)(A), as so redesignated, by adding 
        ``and'' at the end;
            (4) in paragraph (1)(B), as so redesignated, by striking 
        ``; and'' and inserting a period;
            (5) by striking paragraph (3); and
            (6) by adding at the end the following:
            ``(2) Exceptions.--The requirements in paragraph (1) shall 
        not apply--
                    ``(A) in the case of contracts, including orders, 
                awarded under subpart 8.4 of the Federal Acquisition 
                Regulation (or any successor regulation); or
                    ``(B) if the contracting officer is unable to 
                obtain offers from 2 or more small business concerns 
                that are--
                            ``(i) competitive with market prices; and
                            ``(ii) competitive with regard to the 
                        quality and delivery of the goods or services 
                        being purchased.
            ``(3) Small business reserve.--Notwithstanding paragraphs 
        (1) and (2), a Federal agency may reserve 1 or more contract 
        awards for small business concerns under full and open multiple 
        award procurements, including the subcategories of small 
        business concerns identified in subsection (g)(2).''.
    (g) Aligning OSDBU and PCR Collaboration Regarding Bundled or 
Consolidated Contracts.--Section 15 of the Small Business Act (15 
U.S.C. 644) is amended--
            (1) in subsection (k)--
                    (A) in paragraph (5)--
                            (i) by inserting ``or consolidation'' after 
                        ``bundling'';
                            (ii) by inserting ``procurement center 
                        representative,'' after ``work with the'';
                            (iii) by inserting a comma after 
                        ``acquisition officials''; and
                            (iv) by inserting ``or consolidated'' after 
                        ``bundled'';
                    (B) in paragraph (8), in the matter preceding 
                subparagraph (A), by inserting ``, as required under 
                subsection (l)(4)'' after ``procurement center 
                representative,''; and
                    (C) in paragraph (17)--
                            (i) in subparagraph (B), by striking 
                        ``and'' at the end;
                            (ii) by redesignating subparagraph (C) as 
                        subparagraph (D); and
                            (iii) by inserting after subparagraph (B) 
                        the following:
                    ``(C) inform the procurement center representative 
                at such agency of the notice if the notice pertains to 
                contract bundling or consolidation and work with the 
                procurement center representative and appropriate 
                agency personnel to increase the opportunity for 
                competition; and''; and
            (2) in subsection (l)(2)--
                    (A) by moving subparagraph (A) 2 ems to the right;
                    (B) by redesignating subparagraphs (H), (I), (J), 
                and (K) as subparagraphs (I), (J), (K), and (L), 
                respectively;
                    (C) by inserting after subparagraph (G) the 
                following:
                    ``(H) consult with the Director of the Office of 
                Small and Disadvantaged Business Utilization of that 
                agency and appropriate agency personnel with regard 
                to--
                            ``(i) proposed solicitations involving 
                        significant bundling or consolidation of 
                        contract requirements as described in 
                        subsection (k)(5); and
                            ``(ii) notices by small business concerns 
                        of undue restrictions on the ability of the 
                        small business concern to compete for the award 
                        due to significant bundling or consolidation of 
                        contract requirements, as described in 
                        subsection (k)(17);''; and
                    (D) in subparagraph (K), as so redesignated, by 
                adding ``and'' at the end.
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