[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
     MARKUP OF COMMITTEE VIEWS AND ESTIMATES ON THE SMALL BUSINESS 
  ADMINISTRATION FY2013 BUDGET, H.R. 3850, H.R. 3851, H.R. 4121, H.R. 
                     3893, H.R. 3980, AND H.R. 4118 

=======================================================================

                                HEARING

                               before the
                      COMMITTEE ON SMALL BUSINESS

                             UNITED STATES

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD

                             MARCH 7, 2012

                               __________

                   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

            Small Business Committee Document Number 112-056
              Available via the GPO Website: www.fdsys.gov

                               ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

77-845 PDF                       WASHINGTON : 2013 

For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
Washington, DC 20402-0001 


                   HOUSE COMMITTEE ON SMALL BUSINESS
                              112th Roster

                     SAM GRAVES, Missouri, Chairman
                       ROSCOE BARTLETT, Maryland
                           STEVE CHABOT, Ohio
                            STEVE KING, Iowa
                         MIKE COFFMAN, Colorado
                     MICK MULVANEY, South Carolina
                         SCOTT TIPTON, Colorado
                         JEFF LANDRY, Louisiana
                   JAIME HERRERA BEUTLER, Washington
                          ALLEN WEST, Florida
                     RENEE ELLMERS, North Carolina
                          JOE WALSH, Illinois
                       LOU BARLETTA, Pennsylvania
                        RICHARD HANNA, New York
                       ROBERT SCHILLING, Illinois
               NYDIA VELAZQUEZ, New York, Ranking Member
                         KURT SCHRADER, Oregon
                        MARK CRITZ, Pennsylvania
                        YVETTE CLARKE, New York
                          JUDY CHU, California
                     DAVID CICILLINE, Rhode Island
                       CEDRIC RICHMOND, Louisiana
                        JANICE HAHN, California
                         GARY PETERS, Michigan
                          BILL OWENS, New York
                      BILL KEATING, Massachusetts



                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Hon. Sam Graves..................................................     1
Hon. Nydia Velazquez.............................................     2

                               WITNESSES

None.

                                APPENDIX

Additional Materials for the Record:
    Amendments...................................................    32
    Cicciline Statement for the Record...........................    36


     MARKUP OF COMMITTEE VIEWS AND ESTIMATES ON THE SMALL BUSINESS 
 ADMINISTRATION FY 2013 BUDGET; H.R. 3850; H.R. 3851; H.R. 4121; H.R. 
                     3893; H.R. 3980; AND H.R. 4118

                              ----------                              

                        WEDNESDAY, MARCH 7, 2012

                           House of Representatives
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 1 p.m., in room 
2360, Rayburn House Office Building. Hon. Sam Graves (chairman 
of the Committee) presiding.
    Present: Representatives Graves, West, Herrera Beutler, 
Ellmers, Barlett, Hanna, Schilling, Keating, Owens, Peters, 
Bartletta, Velazquez, Schrader, Critz, Clarke, Chu, Cicilline, 
Richmond, Hahn, Mulvaney, Tipton, Coffman, Walsh, King.
    Chairman Graves. Good afternoon, everyone. I call this 
Small Business Committee meeting to order.
    Today our first order of business is to consider our views 
on the Small Business Administration's budget for fiscal year 
2013. After considering the views and estimates, we will move 
into marking up legislation on improving the environment for 
small businesses interested in federal contracting.
    The president has often talked about the importance of 
small business to the American economy. Despite this, the 
administration could provide no one to defend the budget in a 
timely fashion so views and estimates could be submitted to the 
Committee on the budget by March 9, 2012.
    The president held a press conference in which he touted 
the need to restructure services offered by the government to 
help small businesses. Of course, this presumes that the best 
way to help small businesses is for the government to offer 
services. Instead, the best way, I think, to help small 
businesses is to revise the tax code, reduce unnecessary 
regulations, provide certainty with respect to health care 
costs, and lower the deficit. The budget certainly does none of 
these things.
    Given the significant debt owed by the federal government, 
the budget fails to take the opportunity to provide a roadmap 
for making the hard choices needed to reduce spending on small 
business programs without undercutting the capacity to provide 
the most necessary services to assist the growth of small 
businesses. For example, the budget requests an additional $10 
million for entrepreneurial outreach and education on programs 
not authorized by Congress or even examined by Congress. Even 
if the goals of such programs are worthy, it is irresponsible 
for the SBA to make such requests given the existing budget 
situation.
    Nor does the budget provide a roadmap on efforts needed to 
reduce spending by the SBA. The largest increase in the SBA's 
budget is for subsidies needed to operate the guaranteed loan 
programs so small businesses can obtain scarce capital. A key 
component in determining the amount needed is how much the 
government can expect to recover if the loan defaults. The SBA 
provides no path to improve such recoveries or plans for 
revamping the computer systems that manage these loans.
    Even though the president did not offer a budget which made 
hard choices and no one from the SBA was available to provide 
insight into the budget, the views and estimates before us 
today do make hard choices and provide a roadmap for a leaner 
but still robust agency that can provide necessary services to 
small businesses.
    The views and estimates letter recommends eliminating a 
variety of duplicative programs at the SBA. Even with these 
cuts, the SBA will necessarily face an increase in their 
budget.
    The budgetary increases stem entirely from the costs of 
operating the SBA's conventional and disaster lending programs. 
Yet, the president's budget made no recommendations on 
processes that might reduce such costs. The views and estimates 
letter before us provides such a path through ways to increase 
recoveries after defaults and requiring that programs which are 
supposed to operate without any appropriation actually do so. 
Additionally, the letter before us requests that no 
appropriations be allocated for pilot or other initiatives 
until the SBA has a modern, fully functional loan management 
accounting system.
    Despite these cuts, the core functions of the SBA to make 
capital available, provide advice, and increase utilization of 
small businesses as federal government contractors are 
preserved. The sensible approach outlined in the views and 
estimates letter will represent this Committee's effort at 
reducing the federal spending.
    And now I am very happy to recognize the ranking member for 
her opening remarks.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Today's consideration of the Committee's views and estimate 
on the SBA budget is occurring as the economy is showing 
increasingly promising signs of a recovery. GDP, growth, 
surplus, expectations last quarter rose 3 percent, the fastest 
pace since early 2010. And other positive signs are everywhere. 
American factory output grew at the fastest rate in five years, 
while consumer confidence hit a one-year high. All of this good 
news is finally translating into job gains as employers added 
one million workers to payrolls since July, leading to the 
biggest decline in the unemployment rate since 1984. At 8.3 
percent, unemployment is the lowest in almost three years.
    But the truth of the matter is that much more needs to be 
done on the job creation front and this is where SBA plays a 
crucial role. The agency's near-term blueprint for 
accomplishing this goal is its fiscal year 2013 budget request 
of $1.1 billion. The most notable aspect of the summation is 
the rising credit subsidy costs for the 7A and 504 programs. 
With the Federal Reserve reporting that lending standards have 
still not recovered to pre-recession levels, it remains 
difficult for many businesses to access capital. As a result, 
SBA lending programs are as important as ever and these costs, 
while rising are absolutely necessary and appropriate to 
preserve this source of capital.
    Unfortunately, to help defray these additional expenses, 
the agency imposes a 10 percent across-the-board cut on proven 
programs that actually generate taxable revenue and pay for 
themselves, all the while continuing to seek funding for 
unauthorized initiatives. Programs like the Small Business 
Development Centers are successful and not only creating new 
businesses but also the jobs that come with them. While we 
understand the need to cut programs, it makes little sense to 
reduce the very programs that work, while increasing spending 
on programs that are untested. For instance, the SBA chooses to 
spend on countless, unauthorized initiatives, including 6 
million on the Business USA website; 3 million on clusters; and 
another 7 million for a new veteran effort. There are at least 
six other such unauthorized programs included in the SBA's 
fiscal year 2013 budget. In times of tight budgets, the agency 
should not be cutting results-oriented programs like SBDCs and 
then proposing to spend millions on ideas that have not been 
vetted by Congress, nor objectively reviewed.
    With regard to the majority of these views and estimates 
letter, I support several of its provisions. It recommends the 
elimination of many of the aforementioned unauthorized 
programs. It is right to terminate them as other established 
programs show long-term benefits to the taxpayer. However, 
there are some areas of concern. By proposing to eliminate 
funding for the Veterans Business Outreach Center program, it 
is limiting the ability of the 190,000 veterans of the wars in 
Iraq and Afghanistan to start their own businesses. These men 
and women have unique skills and needs which justify the 
veterans' program approach. Many of these centers are run by 
veterans themselves which made them an appropriate means to 
provide training to would-be veteran entrepreneurs.
    In addition, while the majority talks about its concerns 
that the SBA is too concentrated in Washington, D.C., it fails 
to provide concrete steps for distributing personnel. It simply 
proposes to reduce both field staff and headquarters staff 
alike which does not necessarily lead to a more diffused SBA. 
Instead, the agency's personnel structure should be evaluated 
and steps taken to ensure that all areas of the country have 
access to the SBA resources they need.
    As we all know, this agreement and priorities in the 
agency's annual budget is not unusual. Although Chairman Graves 
and I do not fully agree on our views, it is rather obvious 
that we both believe more work needs to be done at the SBA in 
setting its priorities. Put simply, continually spending 
taxpayer money on priorities not approved by Congress is not a 
good use of resources.
    While the recent downturn required many business owners to 
reimagine their company to stay competitive, the SBA should be 
taking similar steps. This means recommitting itself to 
existing programs that work while reducing waste and fraud and 
other key initiatives. Doing so will bring tangible benefits to 
small businesses while also making sure that taxpayers are 
given a positive return on their investment.
    And with that I yield back.
    Chairman Graves. Are there any other members who wish to be 
recognized for a statement on views and estimates?
    The Committee now moves to consideration of the views and 
estimates letter. The clerk will read the title of the 
document.
    The Clerk. Views and estimate of the Committee on Small 
Business on matters to be set forth in the concurrent 
resolution of the budget for fiscal year 2013.
    Chairman Graves. Without objection, the views and estimates 
letter is considered as read and open for amendment in its 
entirety. Does any member seek recognition for the purpose of 
offering an amendment on views and estimates?
    Seeing none, the question on adopting the views and 
estimates letter, all those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All opposed say no.
    In the opinion of the chair the ayes have it. The views and 
estimates are agreed to.
    Ms. Velazquez. Mr. Chairman.
    Chairman Graves. I recognize ranking member.
    Ms. Velazquez. I would like to give notice pursuant to 
House Rule 11, clause 21, that the Committee's democrats will 
be finding additional views with the Committee on Budget on the 
SBA's fiscal year 2013 budget submission.
    Chairman Graves. Absolutely. Without objection that is so 
ordered. Without objection the Committee is authorized to 
correct punctuation and to make other necessary technical 
adjustments on the document considered today.
    All right. We now move to the markup of contracting 
legislation. Given that the federal government spends over half 
a trillion dollars each year through contracts, this is an 
incredibly important market for small businesses. Improving 
small business opportunities for federal contracts is a triple 
play. Small businesses win more contracts, workers win as the 
small businesses create jobs and taxpayers win because small 
businesses bring competition, innovation, and lower prices to 
save the government money. Recognizing that this is a crucial 
area for small businesses over the past year, the Committee has 
held 10 hearings or subcommittee hearings on federal 
procurement issues. these have resulted in eight bills 
introduced by the majority, and this package has been supported 
by over 20 trade associations, such as the Association of 
General Contractors, Minority Business Roundtable, the Chamber 
of Commerce, the Financial Services Roundtable, National 
Association of Home Builders, Mason Contractors Association, 
the Sheet Metal and Air Conditioning Contractors, National 
Association of Surety Bond Producers, National Association of 
Small Disadvantaged Businesses, the U.S. Black Chamber, the 
National Women Business Owners' Corporation, Women Impacting 
Public Policy, and American Institutes of Architects. And many, 
many others.
    Additionally, our minority just introduced three 
contracting bills bringing us to a total of 11 contracting 
bills which we are committed to marking up. Now, that is a 
testament to the bipartisan nature I believe of this Small 
Business Committee and to the issues that are obviously before 
us.
    Today we are going to mark up the first six of these bills. 
And while we discuss each bill briefly before we mark it up, I 
want to emphasize how crucial it is that we have bipartisan 
contracting reform that is going to improve opportunities for 
small businesses.
    I look forward to working with all of you today to move 
these bills one step closer to law, and I now recognize Ranking 
Member Velazquez for her opening statement.
    Ms. Velazquez. Thank you, Mr. Chairman.
    With the federal marketplace accounting for half a billion 
dollars annually, procurement policy can be a powerful 
instrument for job creation. One of the most effective things 
we can do in this area is ensure small businesses win their 
fair share of contracts and that more small businesses can get 
involved in the process. When large corporations win contracts, 
their existing workforce can take on the new work. However, 
when entrepreneurs are hired by the federal government, they 
bring on new employees, creating opportunities for working 
families. Reforming the procurement process can therefore help 
us create badly needed jobs without having to spend additional 
taxpayer dollars. After all, these expenditures will already be 
made. The question is whether small firms can compete for them 
fairly or not.
    The fact is the federal government's record omitting small 
business contracting goals has been disappointing at best. The 
government as a whole consistently fails to ensure 23 percent 
of its contracting dollars go to small businesses and agencies 
regularly fail to meet their individual goals, not only for 
small businesses but other disadvantaged entrepreneurs like 
veterans, women, and minorities. Improving this process and 
empowering more small firms to grow with the government as a 
customer can be vital to not only the small business sector but 
our economy as a whole.
    I thank the Chairman for working with us on this 
legislation and I yield back the balance of my time.
    Chairman Graves. Thank you very much. Are there any other 
members who wish to be recognized for the purpose of an opening 
statement?
    Seeing none we will move forward with H.R. 3850. We will 
now consider--in fact, we will go through all six of these 
contracting bills in the order listed in the notice. And copies 
of each of the bills have been provided.
    The first item is 3850, Government Efficiency through Small 
Business Contracting Act of 2012. I introduced this bill with 
Congressman Owens and Congressman Schilling to increase 
contracting opportunities for small businesses. This bill does 
this by increasing the businesses' prime contracting goal from 
23 percent to 25 percent, which will result in approximately 11 
billion more in prime contracts for small businesses each year. 
The bill strengthens subcontracting opportunities by 
instituting a statutory 40 percent goal when there was 
previously only Administrative Goal 35.9. The bill also 
clarifies how contracts should be counted for the purposes of 
the goal and does something small businesses have been 
clamoring for--holds agencies accountable for meeting the goal. 
Specifically it says that no senior executive at any agency is 
eligible for a bonus if the agency does not meet its small 
business goals.
    The changes made by this legislation will motivate agencies 
to meet their obligations to small businesses and improve 
contracting to the benefit of taxpayers and small businesses 
alike. I would urge the Committee to pass this important piece 
of legislation. I now recognize Ranking Member Velazquez for 
her opening comments on 3850.
    Ms. Velazquez. Thank you, Mr. Chairman.
    The legislation before us makes significant changes to the 
federal small business governing program. This effort 
originally established in the Business Opportunity Development 
Reform Act of 1988 requires the government to attempt to 
annually achieve a certain goal for contracts awarded to small 
businesses. Unfortunately, since the goal was raised to 23 
percent in the Small Business Reauthorization of 1997, it has 
not been achieved. The reasons for this are many. Agencies lack 
the tools and resources to effectively channel many contracts 
to small firms. For instance, only last year did we finally see 
a women-owned procurement program implemented even though women 
received less than 4 percent of contracting dollars.
    Compounding this is an understaffed acquisition workforce 
including a lack of PCRs and CMRs who traditionally focus on 
increasing opportunity for small businesses but are clearly 
undermanned. The result is that contract consolidations 
continue to occur, leaving smaller companies locked out of some 
of the most lucrative opportunities. In addition, it appears 
that what was once a goal may have effectively become a cap on 
small business procurement participation. Fourteen years is a 
long time to not achieve a reasonable goal and even the 
staunchest small business advocates have to wonder if a goal is 
leading to agency underperformance in this area.
    Other problems plague the program, including that the 
performance data and reporting mechanisms are so error filled 
that some years the golden grapes have been essentially 
meaningless. As a result of all these concerns, one has to 
question whether goals are helping or hurting our own goal of 
increasing small business participation in the federal 
procurement marketplace.
    While the legislation certainly attempts to get more 
contracts in the hands of small businesses, raising goals 
without providing agencies with the tools and resources 
necessary to achieve them may well fall short. Without such 
assistance as well as comprehensive procurement reforms, I am 
afraid that we will simply be back in this very room 
contemplating why agencies are still unable to achieve their 
goals. The truth is that small businesses need more than just 
goals to succeed in the federal marketplace and I look forward 
to working toward that goal in the future.
    Thank you, Mr. Chairman. I yield back.
    Chairman Graves. Are there any other members that wish to 
be recognized for a statement on 3850?
    Seeing none, the Committee now moves to consideration of 
H.R. 3850. The clerk will report the title of the bill.
    The Clerk. H.R. 3850. To Amend the Small Business Act with 
Respect to Goals for Procurement Contracts Awarded to Small 
Business Contractors and For Other Purposes.
    Chairman Graves. Without objection, H.R. 3850 is considered 
as read and open for amendment at this point. Does anyone seek 
to be recognized? I think we are going to start with 
Congresswoman Hahn.
    Ms. Hahn. Thank you, Chairman Graves, for working with me 
on this important amendment.
    My amendment to H.R. 3850, the Government Efficiency 
through Small Business Contracting Act of 2012 is a simple step 
towards ensuring transparency in government. It requires the 
congressionally mandated SBA report to Congress and the 
president also be made available to the public by publishing 
the report online. This simple sentence will make a world of 
difference in creating transparency and accountability and the 
SBA's mandate to give a bite at federal contracting dollars to 
the true backbone of the American economy, the real job 
creators, American small businesses. The American people 
deserve to see how we are empowering small businesses, and they 
should not have to go any further than their computer to see 
whether or not we are living up to these goals. Thank you.
    Chairman Graves. We are kind of going a little backwards 
but will the clerk please read the amendment?
    The Clerk. Amendment 1 to H.R. 3850 offered by Ms. Hahn of 
California.
    Chairman Graves. Without objection the amendment is 
considered as read and Ms. Hahn has adequately explained her 
amendment. Does anyone else wish to be heard on the amendment?
    And with that the gentlelady's amendment makes sense to me. 
The report on Small Business Contracting should be made 
available online so all small businesses and taxpayers can see 
it. So I support the amendment.
    Ms. Hahn. Thank you.
    Chairman Graves. If there is no other further discussion on 
the lady's amendment being offered, all those--we will just 
open it up. That is amendment No. 1 sponsored by Ms. Hahn. All 
those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    In the opinion of the chair, the ayes have it. The 
amendment is agreed to.
    The next amendment would be Representative Chu.
    Ms. Chu. Mr. Chairman. Thank you. I have Amendment No. 2. 
And I want to thank you for including a robust reporting 
section on contracts awarded to small businesses.
    Chairman Graves. Just bring it up and we will let the 
amendment be reported and then you will have five minutes.
    The Clerk. Amendment 2 to H.R. 3850 offered by Ms. Chu of 
California.
    Chairman Graves. Without objection the amendment is 
considered as read. The member is recognized for five minutes. 
Thank you.
    Ms. Chu. Well, Mr. Chairman, again, thank you for the 
robust reporting section on contracts awarded to small 
business.
    Until we have a good idea of how agencies are conducting 
their contract activities and an accurate report on who is 
getting the contracts, we cannot make the right changes to 
ensure that small businesses participate in federal 
contracting. I have a small and straightforward transparency 
amendment to offer under the reporting section. My amendment 
seeks to gain further transparency in the reporting process by 
requiring data on why the firms are considered socially and 
economically disadvantaged. The current data does not give 
enough detail about what firms are actually securing the 
contracts. By collecting this data we can learn more about the 
firms that are currently receiving federal contracts. This 
amendment simply says that the reports by the administrator 
will also include the reason that the certification of the 
small business is considered socially and economically 
disadvantaged. Thus, we will get a better picture of the small 
and disadvantaged business category.
    Again, this amendment is simple and straightforward and I 
ask for the Committee's support.
    Chairman Graves. Does anyone else wish to be heard on the 
amendment?
    With that, when H.R. 3850 was drafted it sought to increase 
transparency into who is receiving contracts and how they were 
receiving those contracts. The gentlelady's amendment furthers 
that goal giving us additional insight into which companies are 
winning government contracts, and I do support the amendment.
    Ms. Velazquez. Mr. Chairman?
    Chairman Graves. Yes.
    Ms. Velazquez. If I may.
    Chairman Graves. Absolutely.
    Ms. Velazquez. I will encourage my colleagues to support 
this straightforward common sense amendment. As we have seen 
with prior reports from GAO, many businesses that are not 
qualified as small businesses are getting contracts and this is 
a way to add another layer of transparency.
    Chairman Graves. So with that the question is on the 
amendment offered by Ms. Chu. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    The ayes appear to have it. The ayes do have it. It is the 
opinion of the chair that the amendment is agreed to.
    Let us see here. The next amendment would be Representative 
Peters. Clerk, would you please read the amendment?
    The Clerk. Amendment 3 to H.R. 3850 offered by Mr. Peters 
of Michigan.
    Chairman Graves. Without objection the amendment is 
considered as read. The member is recognized for five minutes.
    Mr. Peters. Thank you, Mr. Chairman.
    I am certainly pleased that H.R. 3850, the Small Business 
Contracting Act, raises the small businesses contracting goal 
from 23 to 25 percent. This is certainly going to mean a 
substantial amount of new business for small businesses. In 
fact, probably around $11 billion worth, which is an incredible 
accomplishment. However, my amendment would simply increase the 
government-wide goal for participation by small businesses that 
are owned and controlled by socially and economically 
disadvantaged individuals. Currently set at 5 percent, it would 
move it up to 7\1/2\ percent. While I recognize this appears to 
be a significant increase, it is one that is certainly very 
achievable. In fact, the SBA has reported that prime 
contracting achievement of almost 8 percent in 2010 and it was 
above 7\1/2\ percent in 2009. So this amendment will simply 
ensure that the government continues its recent successes in 
contracting with small businesses that are owned by socially or 
economically disadvantaged folks. Meeting this goal for the 
socially and economically disadvantages small businesses will 
certainly help us reach the overall goal of 25 percent. 
Certainly, the bar of 5 percent has been met. It has been 
achieved and actually exceeded. This amendment will make sure 
that we do not backslide from our current levels which are over 
7\1/2\ percent and I would urge my colleagues to put this 
benchmark in place having already achieved the other one.
    Thank you, Mr. Chairman.
    Chairman Graves. Does any other member wish to be 
recognized on the amendment?
    Ms. Hahn. Excellent. Excellent amendment.
    Mr. Coffman. Mr. Chairman, how do you define socially 
disadvantaged? I think there would probably be people that 
would place me in that category. How do you define that? Mr. 
Peters?
    Chairman Graves. The gentleman is recognized.
    Mr. Peters. It is already determined in the legislation. We 
are not adding a new definition that does not already exist in 
the statute. Basically, economic disadvantaged is determined by 
personal net worth, which is outlined in the legislation 
already. Social disadvantage includes a broad array of groups. 
African Americans, Hispanic Americans, Native Americans, Alaska 
Natives, Native Hawaiians, or enrolled members of federally or 
state recognized Indian tribes, Asian-Pacific Americans, and 
members of other groups that have been designated by the SBA. 
So this amendment does not change any of those designations. It 
simply puts the goal, which has already been achieved, just 
sets that floor what we are already achieving so we do not 
backslide from where we are.
    Chairman Graves. Ms. Velazquez.
    Ms. Velazquez. Yes. I would like to say, Mr. Chairman, that 
I commend the gentleman's amendment. There are over 323,000 
active profiles of businesses who have registered to contract 
with the federal government. Of this, more than 53 percent are 
self-certified or SBA certified small business disadvantaged 
businesses whose contracts are eligible to be counted towards 
this category. The current 5 percent goal really does not 
represent this business participation in the federal 
marketplace. This amendment will ensure that the goals more 
closely meter the market participation of this class of small 
businesses.
    Additionally, the federal government has met and exceeded 
the goal for contracts to this category of small businesses. By 
raising this goal we are ensuring that we do not remain 
stagnant in awarding contracts to small businesses. And I will 
ask my colleagues to support this amendment.
    Chairman Graves. Does any other member wish to be heard?
    Mr. Cicilline. Mr. Chairman.
    Chairman Graves. Yes. Mr. Cicilline.
    Mr. Cicilline. Thank you, Mr. Chairman. I, too, want to 
compliment the sponsor of this amendment, and at a time when I 
think there is enormous empirical evidence that the divide 
between many communities in this country is growing wider and 
wider and becoming more and more challenging for new start up 
small businesses and having just raised the goal to 25 percent 
I think it is really important that we ensure that we at the 
same time raise this goal. And I want to compliment the 
gentlemen for this excellent amendment and urge everyone to 
support it.
    Chairman Graves. Does any other member wish to be heard?
    Seeing none, as Chairman of the Small Business Committee I 
have tried not to favor one group of small businesses over 
another and I do not want to pick winners and losers, and I 
want to help all small businesses compete. And right now we 
have one small business goal and four subcategory goals--women, 
service-disabled veterans, HUBZone firms, and small 
disadvantaged businesses. Each of these subcategories of small 
businesses can compete for small business contracts, so they 
all win when we increase the small business goal. However, when 
we increase the small disadvantaged business goal, only about 
9,200 firms benefit instead of the 350,000 small firms 
currently seeking to do business with the federal government. 
Indeed, this amendment will completely subsume a 2 percent 
increased proposal by H.R. 3850 and then take another half 
percent, reducing opportunities for firms that are not small 
disadvantaged businesses. Therefore, I am afraid I cannot 
support the amendment.
    With that the question is on the amendment by Mr. Peters. 
All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    [Chorus of noes.]
    Chairman Graves. It is the opinion of the chair that the 
nos have it. The nos do have it.
    Ms. Velazquez. Mr. Chairman.
    Chairman Graves. Yes.
    Ms. Velazquez. Call for a vote.
    Chairman Graves. Okay.
    Mr. Peters. May I request a record roll call?
    Chairman Graves. Absolutely. A recorded vote is requested. 
Pursuant to Rule 10 of the Committee's Rules of Proceedings on 
the Bill Amendment will be postponed. What we are going to do 
is stack so that we do not get members hung up because we have 
got a vote coming up here pretty quick and then we will try to 
get everybody back over and we will pick that up so we have one 
recorded vote now on Mr. Peters.
    Next recognize--will the clerk--we have got Ms. Ellmers' 
amendment up on 3850. Will the clerk please read the title?
    The Clerk. Amendment 4 to H.R. 3850 offered by Ms. Ellmers 
from North Carolina.
    Chairman Graves. Without objection the amendment is 
considered as read.
    Ms. Ellmers, you are recognized for five minutes.
    Ms. Ellmers. Thank you, Mr. Chairman.
    My amendment directs agencies, including the GSA, to abide 
by small business contracting goals of the Small Business Act 
when using commercial leasing services. Small business brokers 
such as Carpenter/Robbins, ICI, and Public Properties have had 
several projects in my home state of North Carolina. Recently, 
Public Properties provided support for the completion of a VA 
outpatient clinic in Wilmington, North Carolina and a VA health 
care clinic in Charlotte, North Carolina. My amendment would 
allow these small business brokers to compete for these leases. 
That completion will in turn provide lower prices for the 
federal government and taxpayers. Further, these small brokers 
offer specialized services, such as finding a hospital for the 
VA or a port for the NOAA.
    Under current law, GSA is not legally bound to follow small 
business goals to procure leases with nonappropriated funds. 
This amendment protects small business government procurement 
contracting opportunities by (1) ensuring that the GSA must 
abide by the small business contracting goals outlined in the 
Small Business Act, as well as the amendments here in H.R. 
3850, makes the SBA; and (2) ensures small business concerns 
are protected in commercial leasing. And I ask my colleagues of 
the Committee to approve and support this amendment. Thank you.
    Chairman Graves. Does any other member wish to be heard on 
the amendment?
    Ms. Velazquez. Yes, Mr. Chairman.
    Chairman Graves. Ms. Velazquez.
    Ms. Velazquez. I strike the last word. In the broadest 
context, commercial leasing services can include the renting of 
equipment, automobiles, and trucks. It is also understood to 
include real estate advisory services. Given the breadth of 
this definition, it is curious that this Committee will go on 
record to endorse the application of the Small Business Act 
contracting provisions to such commercial leasing services. At 
the very least, commercial leasing services should be defined 
not just so members know what it means but so this legally 
vague jargon is not applied in an unintended manner.
    In addition, the small business contracting provisions 
include several programs, including those for minorities, 
women, and veterans. Applying such certifieds, as well as the 
goal for these demographics to private sector commercial 
leasing services, could lead to unintended consequences. This 
could mean that we are calling for the establishment of private 
sector contracting goals, as well as requiring private sector 
transactions to be subject to federal set-asides for minority 
women and veterans.
    Given these concerns, I would like to yield to the 
gentlelady for the purpose of providing some clarification on 
her amendment. And I would like to ask the gentlelady if the 
intent to apply the small business contracting provision to 
contracts among private entities.
    Ms. Ellmers. Well, the goal of this amendment is to allow 
some of the smaller entities, some of the small business 
entities, brokers, to be able to compete for some of these 
leasing projects that some of the larger entities basically are 
able to obtain.
    Ms. Velazquez. Your amendment reads, ``It is the sense of 
Congress that the contracting provision of the Small Business 
Act shall apply to commercial leasing services.'' So it means 
private buildings in the private sector?
    Reclaiming my time, in your amendment it states what I 
read. And this is not specific to contracts entered into by a 
federal agency with a commercial leasing agent. Therefore, this 
amendment could be interpreted that you are applying the Small 
Business Act contracting provision from goals to set-asides to 
contracts negotiated between two private parties.
    So just to be clear, it is your intent to apply the 
minority and women set-aside programs and the accompanying 
goals for these demographic groups to commercial leasing 
services contracts?
    Ms. Ellmers. What we can do is offer a clarifying amendment 
if that will allow your concerns.
    Ms. Velazquez. Well, I would like to ask the gentlelady to 
withdraw your amendment and to work with the minority and then 
when we go to the floor we can work on the language.
    Ms. Ellmers. Well, what I would like to do is vote on it 
and see where we are. And if we need to put forward a 
clarifying amendment we can do so.
    Chairman Graves. Could the counsel clarify the amendment?
    Counsel. Yes. I believe the intent of the amendment was to 
focus solely on awarding contracts to commercial leasing 
services that obtained office space for buildings for the 
federal government.
    Ms. Velazquez. But we are not here to discuss intent; we 
are here to discuss the language of the amendment. It is not 
about the intent. It is about what the language reads. It says, 
``Should apply to commercial leasing services.''
    Counsel. And I would argue that in the context of federal 
government contracting the commercial leasing services that we 
are talking about relates to public buildings and the obtaining 
of leases on public buildings.
    Ms. Velazquez. So could I ask the counsel to show me in the 
language of this amendment where it says public buildings?
    Counsel. It does not. But the definition of commercial 
leasing services is those services in which if I was the 
federal government and I needed office space or I needed some 
other type of office space, it is not a--it is a term of art 
essentially, making the argument that it is a commercial lease 
in the same way that if I was in the private sector seeking 
office space, I was an attorney seeking office space, that is 
what I----
    Ms. Velazquez. Is that defining the small business statute?
    Counsel. Excuse me. I am sorry. I did not----
    Ms. Velazquez. The explanation, the definition of 
commercial leasing, is that defined in the small business 
statute? In the Small Business Act?
    Counsel. No, it is not.
    Ms. Velazquez. Okay.
    Chairman Graves. Would it be possible--could we--while we 
take a break for votes--to perfect this? Is that possible?
    Ms. Ellmers. From my end that is agreeable.
    Chairman Graves. And we will just skip over. We will try to 
get another one. We will just stop at the moment if you guys 
think you can work it out.
    Ms. Velazquez. Would the gentlelady ask unanimous consent 
to withdraw the amendment?
    Chairman Graves. If you want to, Ms. Ellmers, if you want 
to withdraw it and then we will come back to it if you guys can 
perfect it over this vote series, whatever it is.
    Ms. Ellmers. Okay. I would ask unanimous consent to 
withdraw at this time with that intent.
    Chairman Graves. Try to work that out and then we will come 
right back to it. So we will postpone what we are doing on 
3850.
    We will move directly to 3851, which is the next order of 
business, the Small Business Advocate Act of 2012. The purpose 
of this bill is to ensure that the Offices of Small and 
Disadvantaged Business utilization within each federal agency 
have the clout to be effective advocates for small business 
concerns and that they focus their resources in a way that 
helps small businesses compete for contracts.
    As the Committee uncovered this year, some agencies have 
been selling small businesses shot by making the director of 
the Office of Small and Disadvantaged Business Utilization also 
serve as the chief acquisition officer, chief financial 
officer, and one of a half dozen other titles. In each case the 
responsibility for small businesses got passed down to a lower 
level individual so small businesses lack the senior advocate 
envisioned by the statute. This bill addresses the problem by 
promoting the directors to enroll where they are the peer of 
the senior acquisition personnel and requiring that small 
businesses be the director's primary responsibility. It also 
clarifies the types of assistance the office should provide and 
reinforces the role of the office when it comes to government-
wide procurement policy.
    Again, I believe that this bill deserves bipartisan 
support. I urge the Committee to pass it, and I now recognize 
Ranking Member Velazquez for her remarks.
    Ms. Velazquez. I do not have a statement to make at this 
point, Mr. Chairman.
    Chairman Graves. Okay, now, the Committee now moves 
consideration of 3851. Clerk, please report the bill.
    The Clerk. H.R. 3851, To Amend the Small Business Act with 
Respect to Offices of Small and Disadvantaged Business 
Utilization and for Other Purposes.
    Chairman Graves. Without objection, H.R. 3851 is considered 
read and open for amendment at any point. And I do have an 
amendment. Will the clerk please report the amendment.
    The Clerk. Amendment 1 to H.R. 3851 offered by Mr. Graves 
of Missouri.
    Chairman Graves. Without objection the amendment is 
considered as read.
    What this amendment does is develop through cooperation 
with the ranking member and improves 3851 by adding minimum 
requirements for the position of director of the Office of 
Small and Disadvantaged Business Utilization. Specifically, it 
requires that the director have at least 10 years of experience 
in government contracting and enumerates how this experience 
can be gained. Small businesses need strong advocates to 
require that they have a base level of knowledge makes sense, 
and I urge the Committee to accept the amendment.
    Are there any other members wishing to be heard on the 
amendment?
    Seeing none the question is on the amendment by myself, the 
chairman. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    The opinion of the chair is that the ayes have it. The ayes 
do have it.
    Now we have an amendment from Representative Hahn. Will the 
clerk please read the amendment.
    The Clerk. Amendment 2 to H.R. 3851 offered by Ms. Hahn of 
California.
    Chairman Graves. Without objection the amendment is 
considered as read.
    Congresswoman Hahn, you are recognized for five minutes.
    Ms. Hahn. Thank you, Mr. Chairman and Ranking Member 
Velazquez.
    I am offering this amendment because my hometown of Los 
Angeles is facing a severe unemployment crisis and although it 
has improved over the past year the unemployment rate is still 
10.9 percent in Los Angeles, well above the national average of 
8.3 percent. We know small businesses are the engines of our 
economic growth and the heartbeat of the American economy. It 
is these entrepreneurs who put Americans to work and fuel the 
innovation and development that has made this economy the best 
in the world.
    My amendment requires small business specialists to give 
priority to small businesses located in areas like Los Angeles 
where the unemployment rate is higher than the national 
average. This will ensure that assistance will be focused where 
it is needed most and fastest. Not only is this a win for small 
businesses struggling to succeed in ailing local economies but 
it is a win for workers who have been unable to find work in 
the worst job markets in this country. Thank you.
    Chairman Graves. Does anyone else wish to be heard on the 
amendment? We have 12 minutes. Oh, it has been called.
    Seeing none, I think this amendment is going to encourage 
small business advocates to provide technical assistance in 
areas with high unemployment rates. And since the Office of 
Small and Disadvantaged Business Utilization currently provides 
assistance to all small businesses, I do not anticipate this 
will take assistance away from any small business; instead, it 
will help focus them on the fact that small businesses are job 
creators and it is going to help the overall economy. I do 
support the amendment.
    With that the question is on the amendment by the 
gentlelady Ms. Hahn. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    The ayes appear to have it. The ayes do have it.
    Does anyone else wish to have an amendment? I do not think 
they do.
    Seeing none then the question is going to be on agreeing to 
H.R. 3851 as amended. All those in favor say aye.
    Mr. Keating. Mr. Chairman.
    Chairman Graves. Yes. Who is calling? Yes. Mr. Keating.
    Mr. Keating. Point of order.
    Chairman Graves. Absolutely.
    Mr. Keating. We do not have the redrafted amendment before 
us. We were going to do that afterwards.
    Chairman Graves. That is the bill before this.
    Mr. Keating. Okay.
    Chairman Graves. We postponed that. This is the second bill 
we are going to try to run through. This is 3851. The one that 
was postponed with the amendment was 3850.
    Mr. Keating. Thank you.
    Chairman Graves. Absolutely. No problem.
    It is the opinion of the chair that the ayes do have it and 
H.R. 3851 ----
    Mr. Keating. Mr. Chairman.
    Chairman Graves. Yes.
    Mr. Keating. I request a recorded vote.
    Chairman Graves. All right. A recorded vote has been 
requested. Let us go ahead and dispense with this one. Clerk, 
please call the roll, 3851.
    The Clerk. Chairman Graves.
    Chairman Graves. Aye.
    The Clerk. Chairman Graves votes aye.
    Mr. Barletta.
    Mr. Barletta. Aye.
    The Clerk. I am sorry. Mr. Bartlett.
    Mr. Chabot.
    The Clerk. Mr. King.
    Mr. Coffman.
    Mr. Coffman. Aye.
    The Clerk. Mr. Coffman votes aye.
    Mr. Mulvaney.
    Mr. Mulvaney. Aye.
    The Clerk. Mr. Mulvaney votes aye.
    Mr. Tipton.
    The Clerk. Mr. Landry.
    Ms. Herrera Beutler.
    Mr. West.
    Mr. West. Aye.
    The Clerk. Mr. West votes aye.
    Ms. Ellmers.
    Ms. Ellmers. Aye.
    The Clerk. Ms. Ellmers votes aye.
    Mr. Walsh.
    Mr. Barletta.
    Mr. Barletta. Aye.
    The Clerk. Mr. Barletta votes aye.
    Mr. Hanna.
    Mr. Schilling.
    Mr. Schilling. Aye.
    The Clerk. Mr. Schilling votes aye.
    Ranking Member Velazquez.
    Ms. Velazquez. Aye.
    The Clerk. Ranking Member Velazquez votes aye.
    The Clerk. Mr. Schrader.
    Mr. Schrader. Aye.
    The Clerk. Mr. Schrader votes aye.
    Mr. Critz.
    Mr. Critz. Aye.
    The Clerk. Mr. Critz votes aye.
    Ms. Clarke.
    Ms. Clarke. Aye.
    The Clerk. Ms. Clarke votes aye.
    Ms. Chu.
    Ms. Chu. No.
    The Clerk. Ms. Chu votes no.
    Mr. Cicilline.
    Mr. Cicilline. No.
    The Clerk. Mr. Cicilline votes no.
    Mr. Richmond.
    Mr. Richmond. No.
    The Clerk. Mr. Richmond votes no.
    Ms. Hahn.
    Ms. Hahn. I like my amendment but I am going to vote no on 
the bill.
    The Clerk. Ms. Hahn votes no.
    Mr. Peters.
    Mr. Peters. No.
    The Clerk. Mr. Peters votes no.
    Mr. Owens.
    Mr. Owens. No.
    The Clerk. Mr. Owens votes no.
    Mr. Keating.
    Mr. Keating. No.
    The Clerk. Mr. Keating votes no.
    Chairman Graves. Are there any other members wishing to 
vote? Seeing none, report----
    The Clerk. 11 ayes, 7 nos.
    Chairman Graves. The vote is 11 ayes, 7 nos. The bill is 
favorably reported to the House. And without objection the 
Committee is authorized to correct punctuation and make other 
necessary technical corrections on the document concerned 
today. So ordered.
    When we come back we are going to move onto, if we can 
dispense with 3850. We will try if you all get it worked out. 
If not, we will move on to 3891. And with that we have 7 
minutes 52 seconds. Well, you have got it up there. So we are 
recessed until as soon as we get back. So please hurry back.
    [Recess.]
    Chairman Graves. The Committee will come back to order.
    Let us see. We are going to go out of order real quick 
while we get the rest of our members here. And we are going to 
now pick up H.R. 4121, the Early Stage Small Business 
Contracting Act. Let us see.
    Can the clerk report the file?
    The Clerk. H.R. 4121, To Provide for a Program to Provide 
Federal Contracts to Early Stage Small Businesses and for Other 
Purposes.
    Chairman Graves. All right. Without objection--we will 
assume that it has been read. The bill has been read, 4121.
    H.R. 4121 helps the early stage small businesses by 
removing the barriers to entry in the federal procurement, 
making sure that the smallest businesses have the opportunity 
to compete and make sense and this bill does have my support. 
And with that I recognize Ranking Member Velazquez for any 
remarks on 4121.
    Ms. Velazquez. With the economy facing challenging times 
over the last few years much has been stated about the power of 
small businesses to lead us forward. However, what is clear is 
that among small firms, those that generate the greatest number 
of jobs also happen to be in the early stages. In fact, recent 
research shows that these early stage small businesses are 
responsible for the majority of job creations over the last 30 
years. This means that it is imperative to not simply think 
about small businesses when we are designing policies but more 
specifically those firms that show a greater likelihood to grow 
and create employment gains.
    With this in mind, channeling a small portion of the half 
trillion dollar federal marketplace to these very small firms 
is sensible policy. For this reason I am strongly supporting 
H.R. 4121. It builds on past efforts to accomplish this goal, 
enabling agencies to award contracts based on the existing 
mechanism used in other government-wide programs, including the 
general small business HUBZone, service disabled veterans, and 
the 8A. Such a move is appropriate and it will help educate and 
train these firms in government procurement practice which is 
critical as they grow larger.
    I want to thank Mr. Schrader for his work on this issue and 
also again recognize the chairman for his openness in working 
with us on this legislation. Early stage businesses are an 
important engine for job creation and I look forward to 
advancing this legislation that will help these companies 
expand and grow stronger.
    Thank you and I yield back.
    Chairman Graves. Thank you, Ms. Velazquez.
    H.R. 4121 is now under consideration and will now consider 
amendments to it.
    Ms. Velazquez. Are you going to recognize him?
    Chairman Graves. Oh, I did not realize--absolutely. 
Absolutely. I did not realize----
    Mr. Schrader. Just a comment, if I may. I appreciate that, 
Mr. Chairman.
    I appreciate consumer confidence is increasing and it looks 
like the jobless claims are finally at a three year low but 
more needs to be done I think for our truly small businesses. 
These early stage small firms are critical to both our national 
economy and also to my home state of Oregon. We have 108,000 
businesses and more than one-quarter of those are very small 
firms with less than 25 employees. So helping these firms to 
mature and grow will be a key ingredient to getting our 
unemployment back and our economy back on track.
    For manufacturing, technology, and R&D, many new young 
businesses I think would be very well positioned to do business 
with the federal government. Unfortunately, they face 
significant hurdles tapping into the marketplace. They do not 
have an in-house contracting team. They lack the experience 
navigating complexities of this whole process. So hopefully 
this legislation will make a huge difference in making it 
easier for these guys to start up. In fact, I think in Oregon 
alone it is estimated that this could be 500 or more contracts 
for struggling small businesses for hard-working Oregonians and 
ultimately Americans.
    So if we do not want to foster early stage businesses I 
would urge an aye vote. And thank you very much for hearing the 
bill, sir.
    Chairman Graves. Absolutely. Does any other member wish to 
be recognized on 4121?
    Seeing none it is now open for amendment, which I have an 
amendment to offer. Will the clerk please report the amendment.
    The Clerk. Amendment 1 to H.R. 4121, Chairman Graves of 
Missouri.
    Chairman Graves. Without objection the amendment is 
considered as read. What this amendment does is it simply 
strikes a note to the current statute that is going to be 
obsolete and confusing if Mr. Schrader's bill becomes law. And 
I urge the Committee to accept the amendment. Does anyone wish 
to be heard on the amendment?
    With that, seeing none, the question is on the amendment by 
myself, Mr. Graves, to 4121. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All opposed, no.
    The ayes appear to have it. The ayes do have it. The 
amendment is adopted. Does anyone else have any other 
amendments?
    All right. Seeing none the question is on agreeing to H.R. 
4121 as amended. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    The opinion of the chair is the ayes have it. The ayes do 
have it. H.R. 4121 is agreed to. And without objection and a 
quorum being present, the bill is favorably reported to the 
House.
    Okay. Are we ready to go back? Just go back in line. Okay, 
now we will get back in order.
    The next order would be 3893, the Subcontracting 
Transparency and Reliability Act of 2012 introduced by Mr. 
Mulvaney, which I strongly support the bill and I yield to Mr. 
Mulvaney to speak on 3893.
    Mr. Mulvaney. Thank you, Mr. Chairman. The Subcontracting 
Transparency and Reliability Act, H.R. 3893, addresses a number 
of small business contracting issues that we identified during 
our subcommittee hearings first. It changes the limitations on 
subcontracting provisions from cost to price to make it easier 
for legitimate small businesses to determine if they are 
complying with limitations. The bill adds a penalty for small 
businesses that do not comply with limitations and cracks down 
on those small businesses that front for larger businesses. 
Also, the bill allows small businesses to team with other 
similar small businesses in order to complete the contract, 
giving more businesses the opportunity to learn and participate 
in the federal contracting process.
    Secondly, the bill strengthens the prime contractor 
reporting requirements. This makes it easier for contracting 
officer to determine if there are real subcontracting 
opportunities for small business and to catch and punish large 
businesses who are bad actors. These provisions bring 
additional transparency and reliability to the contracting 
process.
    Finally, the bill addresses the problem of in-sourcing, the 
subject of several hearings that we had. It is the process by 
which the government takes work currently awarded through 
private sector competition and converts it into work performed 
by federal employees. The act requires or the bill requires 
federal agencies to publish their insourcing processes and give 
small businesses standing to challenge agency insourcing 
decisions.
    Thank you, Mr. Chairman.
    Chairman Graves. I now recognize Ranking Member Velazquez 
for her remarks on 3893.
    Ms. Velazquez. I do not have any remarks on the bill. I 
have remarks on the amendment.
    Chairman Graves. All right. Any other members wish to seek 
recognition on 3893? Seeing none, I support H.R. 3893 because 
it will make it easier for small businesses to comply with 
rules about how much of the work they must perform on a set-
aside contract and make it easier for the government to catch 
businesses fronting for dishonest large firms, a practice 
commonly known as pass-throughs. It also improves opportunities 
for small businesses as subcontractors. And finally, it adds 
transparency to insourcing practices by requiring that agencies 
publish the process by which they make insourcing decisions.
    Again, I believe that this bill deserves bipartisan support 
and I urge the Committee to pass it.
    The Committee now moves consideration of H.R. 3893. The 
clerk please report the title.
    The Clerk. H.R. 3893, To Amend the Small Business Act with 
Respect to Subcontracting and Insourcing and for Other 
Purposes.
    Chairman Graves. Without objection, H.R. 3893 is considered 
as read and open for amendment at this point. Does anyone have 
an amendment? I think Mr. Mulvaney has the first one.
    Mr. Mulvaney. I do. We have a manager's amendment, Mr. 
Chairman. Two small things. The act, as originally drafted, 
codified limitations on subcontracting for construction 
contracts. In speaking with the administration, however, we 
learned that this was traditionally done through public 
rulemaking and not through statutes. So the manager's amendment 
resolves that. It removes the limitation on subcontracting for 
construction and statute and allows the administrator to 
continue the established practice of setting the limitations 
through rulemaking. It also provides some flexibility at the 
agency level to address small business needs in construction 
contracts. Finally, there is a technical change to further 
clarify that small businesses are the entities which have 
standing to challenge in-sourcing decisions.
    Chairman Graves. We will go ahead--I forgot to report the 
amendment. Will the clerk please read the title?
    The Clerk. Amendment 1, the H.R. 3893 offered by Mr. 
Mulvaney of South Carolina.
    Chairman Graves. Okay. The amendment is considered read. 
Does any other member wish to be heard on the amendment?
    Ms. Velazquez. Yes.
    Chairman Graves. Ranking Member Velazquez, please.
    Ms. Velazquez. Thank you, Mr. Chairman.
    This amendment offered by Congressman Mulvaney will 
simplify the limitations on subcontracting for small businesses 
as it moves the calculations from cost spend to total price of 
the contract. Additionally, it significantly scales back the 
in-sourcing provisions of the original text. Without this 
amendment, any business will be able to challenge the decision 
of agencies to convert the performance of a function to federal 
employees. A DoD-alone action for more than $900 million worth 
of contracts will have been eligible for protest; 846 million 
being performed by large businesses. This will have been 
detrimental to the contracting process as agencies will have to 
spend their time litigating cases rather than ensuring that 
functions essential to running their departments were being 
performed. However, under this new language only small 
businesses will be able to challenge when functions that they 
are performing are converted to performance by federal 
employees. At DoD, this will mean that only 6 percent of their 
insourcing decisions will have been eligible for protest. Small 
businesses can use this as a tool to ensure the functions being 
performed by small businesses are not being converted before 
those functions are performed by large businesses.
    And with that I support the amendment.
    Chairman Graves. Thank you, Ranking Member Velazquez. Does 
anyone else wish to be heard on the amendment?
    Seeing none this amendment was developed in a bipartisan 
manner with the ranking member. It does clarify the intention 
of the bill and I think it is going to improve the process for 
small businesses and it has my support.
    The question is on the adoption of the amendment. All those 
in favor say aye.
    Chairman Graves. All those opposed, no.
    The opinion of the chair is the ayes have it. The amendment 
is agreed to.
    The next amendment is Representative Clarke. And will the 
clerk please report.
    The Clerk. Amendment 2 to H.R. 3893 offered by Ms. Clarke 
of New York.
    Chairman Graves. Without objection the amendment is 
considered as read.
    Ms. Clarke, five minutes.
    Ms. Clarke. Thank you, Mr. Chairman.
    Chairman Graves. Yes, ma'am.
    Ms. Clarke. Everyone here supports federal contracting, and 
I consider myself to be an ardent, outspoken, forceful, and 
unapologetic advocate for minority women and veteran-owned 
federal contractors. However, the provisions of this bill that 
my amendment strikes does nothing more than make it nearly 
impossible for federal agencies to even have the option to 
insource without a prolonged delay regardless of the reason for 
the insourcing. While there are parts of this bill that I find 
agreeable, I unfortunately cannot support it in its current 
form. I urge my colleagues to support this amendment, and I 
yield to my colleague and friend, Ms. Chu.
    Ms. Chu. Thank you, Representative Clarke, for yielding 
some time.
    First of all, I would like to say that I appreciate 
Representative Mulvaney's efforts to improve subcontracting 
opportunities for small business. The hearing that we held 
together on subcontracting exposed a number of areas where 
small businesses were taken advantage of by the prime 
contractor. We were both dismayed at this since subcontracting 
is an important entry point for small firms to get experience 
in federal contracting. With this bill, the federal 
subcontracting reporting system can track compliance with 
subcontracting plans so that contracting officers, SBA, and the 
Office of Small and Disadvantaged Business Utilization can be 
notified of any potential violations. This is a positive step 
forward for small businesses.
    However, I do support Representative Clarke's amendment to 
strike the language in the bill regarding insourcing. The 
insourcing provision will expand legal standing to any small 
business contractor to challenge any agency's decision to 
insource any function when contractors already have legal 
standing sufficient to challenge agencies' decisions in the 
Court of Federal Claims as well as in the Government 
Accountability Office. This provision can delay decisions made 
by agencies until they are wholly made public for comment. Some 
functions of agencies are not appropriate for public 
consumption nor made for contract lawyers and procurement 
judges. Besides that, the National Defense Authorization Act 
has twice codified the use of insourcing as an effective tool 
to rebalance the workforce, to realign inherently governmental 
work and to generate resource efficiencies. I agree that we 
have to do all that we can to support small businesses 
receiving federal contracts but I do not think that restricting 
insourcing is the right answer.
    Thank you, and I yield back.
    Chairman Graves. Does any other member wish to be heard on 
the amendment? Do you want to go?
    Ms. Velazquez. He should go.
    Chairman Graves. Mr. Mulvaney.
    Mr. Mulvaney. Very briefly, and I appreciate the comments. 
Keep in mind, the language that we are talking about here is 
fairly simple and straightforward. The language that they are 
seeking to strike in this amendment reads--it takes 15 
seconds--''a federal agency may only convert a function.'' That 
is the formal word for insource. ``May only convert a function 
that is being performed by small business to performance by a 
federal employee if (1) the agency has made publicly available 
after providing notice and an opportunity for public comment 
the procedures of the agency with respect to decisions to 
convert.'' All we are asking is that these agencies will 
publish and give folks the terms and conditions under which 
they want to consider insourcing.
    We had regular testimony here--I think we did two separate 
hearings on this--about folks simply--small businesses not 
knowing what rules an agency was going to play by; that they 
did not know what targets they were trying to hit. They did not 
know the conditions under which their contract might be 
insourced and you could easily make the case that if we would 
simply publish these rules and let the small businesses know 
the terms and conditions under which they are up for possible 
insourcing, that small business could adjust their contract, 
adjust their services in order to keep the service being 
performed by small business. So I think in the long run and the 
short-term this will continue to encourage the use of small 
business when it comes to government contracts.
    Regarding the standing, I think the criticisms are fair but 
I think they are more applicable to the original version of the 
bill. I think we solved many, if not all of the standing--the 
potential abuses of the standing issue and the manager's 
amendment which we have already adopted. So while I think it is 
a valid criticism, I think we have already solved that problem 
and the standing issue is now limited only to bona fide small 
businesses who are actually impacted by the decision. So with 
that I would encourage a yea vote on the amendment.
    Thank you, Mr. Chairman.
    Chairman Graves. Ranking Member Velazquez.
    Ms. Velazquez. Mr. Chairman, I strike the last word.
    I have been clear today. Insourcing has supporters on both 
sides of the issue. Proponents believe that private businesses 
can perform tasks more efficiently than federal employees. 
Contrarily, opponents believe that certain functions are 
inherently governmental and should be only undertaken by 
employees. For work being performed by small businesses, this 
issue only becomes more important because small firms 
themselves create jobs at a rate that far exceeds other sectors 
of the economy. In this regard, I recognize the efforts of the 
chairman to put forward a manager's amendment to clarify that 
the insourcing provisions only pertain to small firms. In fact, 
prior to that change 100 percent of agencies' insourcing 
decisions would have been subject to the bill's provision. Now, 
the scope has been dramatically reduced so that, for example, 
only 6 percent of the Department of Defense contracts are 
subject to that restriction.
    While reducing the impact of the bill by 94 percent is a 
good start, we need to continue to work towards ensuring that 
there is no impact at all. There is still work to be done to 
ensure that this process does not simply create a web of costly 
litigation for agencies without the intended increase in new 
jobs, except possibly for the attorneys contesting the protest. 
It is crucial that this new protest procedure does not simply 
waste scarce government resources, clog the GAO, and delay 
legitimate protests and provide no proven benefit to the 
taxpayers.
    With this concern in mind, I am supporting the gentlelady's 
amendment and urging a yes vote. However, it is important to 
again recognize that we have come a long way, and again, I want 
to thank the chairman for truly minimizing the effect of this 
provision. With that I yield back.
    Chairman Graves. Does any other member wish to be heard on 
the amendment?
    Do you want to clarify your position?
    Mr. Mulvaney. Yes, other than to change my encouragement 
for an aye vote to a no vote. Yes, I got the word wrong. But 
other than that the sentiment remains the same. Thank you, Mr. 
Chairman.
    Chairman Graves. Any other member wish to be recognized?
    This amendment would strip all the insourcing protections I 
think for the small businesses from H.R. 3893 and there seems 
to be three arguments against insourcing provisions. First, 
there is a question of whether the Offices of Small and 
Disadvantaged Businesses and the Procurement Center 
representatives should even be involved in the process. 
Frankly, I do not understand why this is an issue because the 
administration's own Office of Federal Procurement Policy, SBA, 
Administrator Mills, and the Director of the Minority Business 
Development Agency sent out a guidance last year directing the 
agencies to involve the small business representatives when 
insourcing small business work. And that is exactly what we are 
trying to do with this bill.
    Second, there is a question as to whether insourcing 
guidance should be published. Right now I know of a business 
that may have its contract insource this month for cost 
purposes and they requested information on the contracting 
agency's insourcing processes under the Freedom of Information 
Act, only to have their FOIA request denied. A small business 
should not be losing a contract under secret process. 
Transparent, repeated processes must be required. Repeatable 
processes must be required.
    And finally, there is the question of GAO protests. The 
process that governs outsourcing allows the government 
employees to protest to GAO and this provision would simply 
give small businesses the same rights. Since I know of small 
businesses that have lost their companies after insourcing 
decisions, they should have some due process right. And for 
these reasons I cannot support the gentlelady's amendment, and 
I urge my colleagues to oppose it.
    With that the question is on Ms. Clarke's amendment to 
3893. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    [Chorus of noes.]
    Chairman Graves. The nos appear to have it. The nos do have 
it.
    With that--thank you very much--with that we will move on 
to the next order of business.
    Are there any other amendments, I guess, before we close? 
Any other amendments?
    Seeing none, the question now is agreeing to H.R. 3893 as 
amended. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    [Chorus of noes.]
    Chairman Graves. It is the opinion of the chair that the 
ayes have it. The ayes do have it.
    H.R. 3893 is agreed to. Without objection, a quorum being 
present, the bill is favorably reported to the House.
    Without objection, the Committee is authorized to correct 
punctuation and make any other necessary technical corrections 
of the document considered today. Without any objection that is 
so ordered.
    The next order of business. The next order of business is 
H.R. 3980, the Small Business Opportunity Act of 2012 
introduced by Ms. Herrera Beutler and Mr. Schrader. I yield to 
Ms. Herrera Beutler to speak on 3980.
    Ms. Herrera Beutler. Thank you, Mr. Chairman. And I would 
like to say publicly thank you, Chairman Graves and to your 
staff for helping make this important bill--help us bring it 
before this Committee today. I would also like to thank Ranking 
Member Velazquez. And further, my partner in this effort, Mr. 
Schrader, for joining me in introducing this bipartisan piece 
of legislation. And all my colleagues who have co-sponsored the 
bill.
    You know, I am pleased, Mr. Chairman, to introduce the 
Small Business Opportunity Act. This bill improves the 
acquisition planning process and empowers procurement center 
representatives--PCRs is what I am going to refer to them as--
to be better advocates for small businesses. This is going to 
mean more jobs and more economic opportunities in Southwest 
Washington where I represent and across the country.
    Procurement center representatives are Small Business 
Administration employees inside federal agencies. So they are 
advocates inside these agencies directly responsible for 
ensuring small businesses get the opportunity to compete for 
federal contracts. They review federal contracts with the 
single goal of providing small businesses a level playing field 
on which to compete. Unfortunately, Mr. Chairman, PCRs are not 
given the opportunity to perform their jobs to the best of 
their abilities.
    Why, you might ask. At times agencies fail to send those 
procurement documents for their review. When they do receive 
those documents, at times the review is the last step in the 
procurement process, meaning they get it once the package is 
only complete. Everything has been all but finalized but when 
the PCR actually receives it. So this limits the PCR's ability 
to meaningful alter or improve the contracts that will benefit 
small businesses. So basically it is keeping them off the table 
or not at the table. So instead of reviewing contracts, 
procurement center representatives often spend a great deal of 
time contracting personnel, training contracting personnel in 
various small business contracting programs. This task does not 
appear in their job description. So with only 58 PCRs across 
the country, Mr. Chairman, they certainly do not need to be 
spending their time doing other people's jobs.
    So perhaps the biggest obstacles that small businesses face 
when they are competing for contracts is the fact that PCRs are 
directed to specifically not review contracts on commercially 
available items or services. A commercially available item is 
anything an everyday person would be able to purchase from a 
store. Anything from a box of pencils to a laundry service. 
There is absolutely no reason that small businesses should not 
be given the opportunity to compete for these contracts. 
Without proper input from the PCRs, many times they are 
excluded.
    So how do we fix this? Well, this bill, the Small Business 
Opportunity Act, changes this playing field; it levels it. The 
legislation clarifies that PCRs shall have access to all 
documents in the acquisition planning process. Further, they 
will now be consulted at the beginning of the planning process 
rather than at the end when everything is put together and 
given an opportunity to weigh in on behalf of small businesses 
throughout the development of each contract. The Federal 
acquisition Institute and the Defense Acquisition University, 
which are already funded to educate federal acquisition 
workforce, will be responsible for all the training, which 
means we are taking it off the PCRs' plate, and it allows them 
to focus on their main goal, which is advocating for small 
businesses.
    Mr. Chairman, small businesses across the country are eager 
to compete for these contracts--for these federal contracts. 
There are over 900 of them in Southwest Washington alone, in my 
district, and when we have double digit unemployment and we 
know that small businesses--they are the engines of our 
economy, they should be given the opportunity to compete. Not 
only will allowing them to better compete benefit the small 
businesses in jobs that they are going to create, it is going 
to increase competition, which is going to bring down bidding 
prices and the dollars saved on those lower bids are taxpayer 
dollars. So it is an efficient, effective use of this system, 
and the Small Business Opportunity Act reforms it in a very 
commonsense way.
    So I urge my colleagues to adopt, and again, I thank the 
ranking member and the chairman and my partner in this effort, 
Mr. Schrader. I yield back.
    Chairman Graves. Ms. Velazquez.
    Ms. Velazquez. I do not have a statement.
    Chairman Graves. I am sure Mr. Schrader does. Mr. Schrader.
    Mr. Schrader. Thank you, Mr. Chairman.
    I just briefly want to express my support for Congresswoman 
Herrera Beutler's bill. It simply clarifies the procurement 
process for small businesses through enabling the PCRs to do 
their job and it is a good bipartisan bill and I hope everyone 
will vote for it. Thank you.
    Chairman Graves. Are there any other members that wish to 
be recognized for a statement on 3980?
    With that I support H.R. 3980. It does modernize the role 
of the procurement center representatives. Doing so will ensure 
that we have qualified individuals supporting small businesses 
in a manner consistent with current procurement practices. It 
is also going to ensure that small businesses are considered 
throughout the acquisition process, not just at the end, which 
will increase small business opportunities. I believe that this 
bill deserves bipartisan support and I urge the Committee to 
pass it.
    The Committee now moves to consideration of H.R. 3980. The 
clerk will report the title.
    The Clerk. H.R. 3980, To Amend the Small Business Act with 
Respect to Procurement Center Representatives and Acquisition 
Planning and for Other Purposes.
    Chairman Graves. Without objection 3980 is considered read 
and open for amendment at any point. Does anyone have an 
amendment? And I believe the first one is Mr. Schilling.
    Mr. Schilling. Thank you, Chairman Graves and Ranking 
Member Velazquez.
    Chairman Graves. Hang on just a second. Let the clerk 
report.
    The Clerk. Amendment 1 to H.R. 380 offered by Mr. Schilling 
of Illinois.
    Chairman Graves. Without objection the amendment is 
considered read. Mr. Schilling, you have five minutes.
    Mr. Schilling. Thank you again. Also, I want to thank 
Representative Herrera Beutler and Mr. Schrader for their 
bipartisan legislation on this issue.
    As we all know, PCRs are an important part of making 
certain that small businesses have the opportunity to compete 
for government contracts. They provide invaluable service 
advice and assistance to small firms during the sometimes 
lengthy and complicated procurement process. That being said, 
it is important that these advocates have the necessary 
training to advise small businesses. My amendment adds an 
important clarification for PCRs who have not achieved the 
certification requirements in this legislation.
    As currently written, I believe H.R. 3980 may result in the 
SBA having to let go of PCRs that do not meet the certification 
requirements in the bill. I fear this would harm small 
businesses by abruptly interrupting the process but also these 
PCRs could lose their jobs which we do not need any more 
unemployment, of course. But my amendment would provide current 
PCRs with an additional time, five years, to receive the 
necessary certification and training to comply with the 
improvements offered by H.R. 3980 and help them properly assist 
our job creators. It is a good bill. I think it is a short, 
sweet amendment and I would hope to have your support on it. I 
yield back.
    Chairman Graves. Does anyone else wish to be heard on the 
Amendment No. 1 by Mr. Schilling?
    With that, this member provides a phase-in period for 
requiring procurement center representatives to obtain federal 
contracting certification. I think this amendment makes sense. 
I do support the gentleman's amendment.
    The question is on the amendment offered by Mr. Schilling. 
All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All opposed, no.
    The ayes appear to have it. The ayes do have it. The 
amendment is adopted.
    The next amendment would be Ms. Chu. Would the clerk please 
report the title.
    The Clerk. Amendment 2 to H.R. 3980 offered by Ms. Chu of 
California.
    Chairman Graves. Without objection the amendment is 
considered read. You have five minutes.
    Ms. Chu. Mr. Chair, I am supportive of the improvements 
that this bill is making to procurement center representatives 
and acquisition planning. Many of these comments and changes 
are long overdue. With the same thought in mind, my amendment 
would require training in small business prime contracting 
programs for PCRs, OSDBU directors, contracting officers, and 
business opportunity specialists. Basically, personnel involved 
in contracting and procurement for small business. The prime 
contracting programs include the 8A program, the HUBZone 
program, the service-disabled veteran-owned small business 
program, and the women-owned small business program. It is 
surprising, but not all contracting officers and PCRs 
understand the requirements of the unique characteristics each 
business owner faces. By giving them this training on these 
businesses, these personnel can only be more successful in 
their work on behalf of small businesses.
    Chairman Graves. Any other member wish to be heard on the 
amendment?
    Ms. Velazquez. Well, I would encourage all the members to 
support this amendment. It is straightforward common sense. It 
will add to the federal acquisition process and will enable 
those PCRs to really understand when to help small businesses. 
And I encourage support for this amendment.
    Chairman Graves. Any other member wish to be heard?
    Seeing none, this amendment does clarify that training on 
the Small Business Act's contract and provisions means that all 
the small business contracting programs--it requires that other 
small business contracting advocates, not just PCRs have a 
federal contracting certification. Educating contractors and 
small business advocates is going to increase the quality of 
government contracting and the number of awards to small 
businesses. I do support the amendment.
    And with that, the question is on the amendment offered by 
Ms. Chu. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All opposed, no.
    The ayes appear to have it. The ayes do have it. The 
amendment is adopted.
    The next amendment is with Mr. Richmond. Will the clerk 
please report the title.
    The Clerk. Amendment 3 to H.R. 3980 offered by Mr. Richmond 
of Louisiana.
    Chairman Graves. Without objection, the amendment is 
considered as read. Mr. Richmond, you have five minutes.
    Mr. Richmond. Thank you, Mr. Chairman. And I want to thank 
both sides and the authors for bringing this bill.
    My amendment simply acknowledges the fact that we are 
losing a large number of our acquisition workforce and this 
would request that the GAO look at that and see--and report 
back to us on the impact that it is having on small businesses 
so that we can make sure that staffing levels in the future 
will not impact the sustainability of small businesses. And 
that is simply what it does. And I would ask everyone to 
support it.
    Chairman Graves. Anyone else wish to be heard on the 
amendment?
    Seeing none, this amendment, it does require, just as Mr. 
Richmond pointed out, it requires GAO to report on potential 
retirements in the acquisition workforce and how they are going 
to relate to small businesses. When the workforce is 
inadequate, they tend to bundle contracts and that is a real 
problem as we have seen in this Committee. I do think this 
topic is worth further study and I support the amendment.
    With that, the question is on the amendment by Mr. 
Richmond. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All opposed, no.
    The ayes appear to have it. The ayes do have it. The 
amendment is adopted.
    Are there any other amendments?
    Seeing none, the question is on agreeing to H.R. 3980 as 
amended. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed no.
    In the opinion of the chair the ayes have it and H.R. 3980 
is agreed to. Without objection, a quorum being present, the 
bill is favorably reported to the House. And without objection, 
the Committee is authorized to correct punctuation and make 
other necessary technical corrections to the document 
considered today which is so ordered.
    So this brings us back to 3850. Is that correct?
    [Recess.]
    Chairman Graves. All right. I missed 4118. The next order 
of business is 4118. Then we will come back to 3850.
    The next order of business is 4118, Small Business 
Procurement Improvement Act of 2012 offered by Mr. Critz. 4118 
addresses the problem of how the procurement program of the 
Small Business Act apply to multiple award contracts and the 
role of the Small Business Administration in making those 
procurement policies. The Small Business Act never exempted 
multiple award contracts, but agencies have routinely acted as 
it did despite the Government Accountability Office holding 
otherwise. This bill corrects that problem and puts the SBA on 
the Federal Acquisition Regulation Council, which is going to 
ensure that small businesses have a larger voice in federal 
procurement. This bill does have my support.
    I recognize Ranking Member Velazquez. Or do you want to go 
to Mr. Critz?
    Ms. Velazquez. Over the last decade, historically 
significant trends have overtaken the federal procurement 
marketplace. While the government has nearly doubled its 
spending to half a trillion dollars, the acquisition workforce 
that oversees these contracts has only grown by 10 percent. The 
result is not surprising. The use of multiple award contracts 
is growing rapidly, allowing agencies to award more dollars 
with less time and staffing resources. This is the future of 
federal contracting. These type of contracts now represent 
nearly 30 percent of the federal procurement marketplace and 
more than $40 billion are now awarded annually. When counting 
other types of multiple award contracts, the total dollar 
amount approaches $200 billion.
    Given these astonishing trends, it is absolutely critical 
that businesses are not left behind as these newer procurement 
vehicles expand and grow. Doing so not only gives smaller firms 
an opportunity to compete for awards but also gives the 
government more suppliers to choose from. This improves quality 
and price competition and is the number one reason this 
Committee continues to fight to open up more federal contracts 
to small businesses. It is against this backdrop that I offer 
my strong support for H.R. 4118. At its core, the legislation 
recognizes that procurement practices are evolving and this 
Committee needs to act to ensure small firms are at the 
forefront of these changes rather than an afterthought. 
Importantly, it also places an emphasis on small business as 
the highest level of federal procurement policy, a change that 
is long overdue.
    I want to commend Mr. Critz and also thank Chairman Graves 
and his staff for their work on this important piece of 
legislation. And with that I yield back.
    Chairman Graves. Does any other member wish to be 
recognized for a statement on H.R. 4118?
    Mr. Critz.
    Mr. Critz. Thank you, Mr. Chairman. And thank you, Ranking 
Member Velazquez----
    Chairman Graves. Is it St. Patrick's Day already?
    Mr. Critz. There was a party today. [Laughter.]
    We will not be here for St. Patrick's Day so we celebrate 
early. I appreciate you noticing. And often. Thank you.
    Thank you, Mr. Chairman and Ranking Member Velazquez for 
all your work and for allowing me to present this bill. The 
federal marketplace, as you know, continues growing and is now 
approaching over half a trillion dollars annually. 
Unfortunately, there is also a pattern of federal agencies 
regularly missing their small business procurement goals of 23 
percent. The total value of federal procurement marketplace 
last year was $535 billion with small businesses winning $92 
billion or a mere 17 percent, only three-quarters of their 
goal. About 17\1/2\ billion in federal awards went to our 
Pennsylvania companies, which I represent, but less than 16 
percent of that went to small firms, much lower than the 
national average.
    In short, we are letting our small businesses down, 
depriving them of opportunities that could create badly needed 
jobs. In Pennsylvania we have about 485,000 citizens who are 
seeking work but cannot find it. By channeling more work to 
local entrepreneurs, we can help reduce those numbers, offering 
more Americans the opportunity they need to secure a strong, 
stable job.
    The Small Business Procurement Improvement Act takes 
several steps that will broaden small firms' participation in 
the federal marketplace. Currently, projects no larger than 
$150,000 are reserved for small businesses. However, given the 
inability of the government to achieve its 23 percent goal, 
more needs to be done to get contracts in the hands of small 
businesses. By raising this limit to $200,000, we can expand 
the number of contracts that are reserved specifically for 
small businesses. This means more opportunity for small growing 
firms which translates into more jobs.
    Just as the size of contracts have changed, so, too, has 
the specifics of how they are structured. Today federal 
agencies use a variety of complex vehicles to meet their 
acquisition needs. Agencies have the flexibility to purchase 
goods and services through multiple award contracts like those 
on the GSA schedule or effectively enter into a contract with 
other federal agencies. As these types of arrangements grow 
more common, it is important that small businesses be able to 
win their fair share. This legislation would require that 
agencies begin setting small business contracting goals that 
apply to these new procurement techniques. The legislation also 
enhances the SBA's ability to advocate for small firms in the 
federal marketplace. By ensuring entrepreneurs have a voice at 
the table, we can enhance SBA's ability to advocate for our 
nation's 27.5 million small businesses, including 
Pennsylvania's one million small firms. Taken together these 
reforms will mean that more contracts flow to small companies, 
creating jobs locally and helping drive our economic recovery 
forward.
    I urge my colleagues to support this legislation. I thank 
the chairman and the ranking member once again and yield back 
the balance of my time.
    Chairman Graves. Thank you, Mr. Critz. Anybody else wish to 
be heard on the bill?
    The Committee now moves to consideration of H.R. 4118. The 
clerk, please report the title.
    The Clerk. H.R. 4118, to Amend the Small Business Act to 
Provide for Increased Small Business Participation in Multiple 
Award Contracts and for Other Purposes.
    Chairman Graves. Without objection, 4118 is considered as 
read and open for amendment at any point. Does anyone wish to 
offer an amendment? I do not think there are any.
    Seeing none, the question is on agreeing to--where are we 
at? Seeing none, the question is on agreeing to 4118. All those 
in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    The opinion of the chair is the ayes have it. 4118 is 
agreed, and without objection and a quorum being present, the 
bill is favorably reported to the House. And without objection 
the Committee is authorized to correct punctuation and make 
other necessary technical documents or corrections on the 
documents considered today.
    Okay. With that we are going to go back to 3850 and clean 
it up which we have an amendment by Ms. Ellmers which was to be 
worked out over the vote break. The Committee will now resume 
consideration of H.R. 3850 in which further proceedings had 
been postponed to allow the gentlewoman from North Carolina to 
fix her amendment for what purpose is the gentlewoman 
recognized.
    Ms. Ellmers. Yes, Mr. Chairman, I do have a clarification 
to the amendment to be added on the end of the bill.
    Chairman Graves. Will the clerk please report the 
amendment.
    The Clerk. Amendment 5 to H.R. 3850 offered by Ms. Ellmers 
of North Carolina.
    Chairman Graves. The gentlelady is recognized.
    Ms. Ellmers. And I am to read the----
    Chairman Graves. Yes.
    Ms. Ellmers. Yes. Okay. And I believe this is agreeable to 
the ranking member and I thank all of the staff for working on 
this on the break.
    It is the sense of Congress that the contracting provisions 
of the Small Business Act shall apply to the leasing of 
buildings and office space by the United States and shall not 
apply to any leasing transactions between private parties.
    Chairman Graves. Does anyone else wish to be heard on the 
amendment? I think the amendment has been distributed.
    Ms. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman. I want to take this 
opportunity to thank the gentlelady for her flexibility in 
revising this amendment. I still feel like the amendment is 
still a solution in search of a problem but at least now we 
know what the solution is.
    With that I thank the chairman.
    Chairman Graves. Does anyone else wish to be heard on the 
amendment?
    Seeing none, the question before us is on the amendment 
offered by Ms. Ellmers to, let us see, what was it, 3850. All 
those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All those opposed, no.
    The ayes appear to have it. The ayes do have it. The 
amendment is adopted.
    We have one recorded vote that is pending which appears No. 
3 to H.R. 3850. Does the gentleman wish to be recognized?
    Mr. Peters. Yes, thank you, Mr. Chairman.
    During the vote series we had a chance to discuss this 
amendment with the chairman and the ranking member. It is my 
understanding there is some willingness to work on this issue 
further before this bill comes to the floor. And with that in 
mind and in the spirit of goodwill of working on this issue I 
would move to withdraw the amendment at this time.
    Chairman Graves. Mr. Peters, you have my word. We will work 
on it. I am more than willing to work with folks to try to 
figure something out and try to get things done and I will be 
happy to work with you on it.
    Mr. Peters. I appreciate that, Mr. Chairman.
    Chairman Graves. Are there any other amendments? 3850. Are 
there any other amendments to 3850?
    Seeing none, the question is on agreeing to--oh, yes, 
ma'am.
    Ms. Velazquez. Mr. Chairman, before you proceed.
    Chairman Graves. Absolutely.
    Ms. Velazquez. Just to clarify, we are going to be working 
both sides to include some type of language in the manager's 
amendment regarding Mr. Peters.
    Chairman Graves. Yes, we are.
    Ms. Velazquez. Okay.
    Chairman Graves. Anybody else wish to be heard?
    Seeing none, the question is on agreeing to H.R. 3850 as 
amended. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Graves. All opposed, no.
    The ayes appear to have it. The ayes do have it.
    Without objection and a quorum being present, the bill is 
favorably reported to the House. Without objection, the 
Committee is authorized to correct punctuation and make other 
necessary technical corrections on the document considered 
today. Without objection that is so ordered.
    I think that is everything. Have I forgotten anything?
    Why all the long faces? This was a good day.
    With that, I appreciate everybody being here. It has been a 
long afternoon but we got a lot of good stuff. We have got more 
to come on this contracting stuff. We will have another hearing 
in a few weeks, two weeks, to finish this stuff up. But with 
that, thank you very much. I appreciate it. This hearing is 
adjourned.
    [Whereupon, at 3:50 p.m., the Committee was adjourned.]

                         Amendment to H.R. 3850


                   Offered by Ms. Hahn of California


  Page 8, line 5, strike ``paragraph (2)'' and insert 
``subsection (h)(2)''.

  Page 8, beginning on line 23, strike ``competition in the 
Contract Act'' and insert ``the Competition in Contracting Act 
of 1984''.

  Page 10, line 11, insert after ``President and Congress'' the 
following: ``, and to make available on a public website,''.
                              ----------                              


                         Amendment to H.R. 3850


                    Offered by Ms. Chu of California


  Page 13, line 9, strike ``and''.

  Page 13, line 11, insert ``and'' at the end.

  Page 13, insert after line 11 the following (and redesignate 
provisions accordingly):

                                  (VI) by reason of that 
                                concern's certification as a 
                                small business owned and 
                                controlled by socially and 
                                economically disadvantaged 
                                individuals;
                              ----------                              


                         Amendment to H.R. 3850


                   Offered by Mr. Peters of Michigan


  Page 3, line 18, strike ``5 percent'' and insert ``7.5 
percent''.

  Page 3, line 19, strike ``5 percent'' and insert ``7.5 
percent''.
                              ----------                              


                         Amendment to H.R. 3850


               Offered by Mrs. Ellmers of North Carolina


  Add, at the end of the bill, the following:

SEC. 5. SENSE OF CONGRESS.

  It is the sense of Congress that the contracting provisions 
of the Small Business Act shall apply to commercial leasing 
services.
                              ----------                              


                         Amendment to H.R. 3851


                   Offered by Mr. Graves of Missouri


  Page 4, insert after line 19 the following (and redesignate 
provisions accordingly):

  (e) Requirement of Contracting Experience for OSDBU 
Director.--Section 15(k) of the Small Business Act (15 U.S.C. 
644(k)), as amended by this Act, is further amended, in the 
matter preceding paragraph (1), by striking ``who shall'' and 
insert the following: ``, with at least 10 years of experience 
serving in any combination of the following roles: federal 
contracting officer, small business technical advisor, 
contracts administrator for federal government contracts, 
attorney specializing in federal procurement law, small 
business liaison officer, officer or employee who managed 
federal government contracts for a small business, or 
individual whose primary responsibilities were for the 
functions and duties of sections 8, 15 or 44 of this Act. Such 
officer or employee shall''.
                              ----------                              


                         Amendment to H.R. 3851


                   Offered by Ms. Hahn of California


  Page 3, beginning on line 4, strike ``Section (15)(k)(8)(B)'' 
and insert the following:

          (1) Expansion of role.--Section (15)(k)(8)(B)

SSSS  Page 3, line 6, strike ``by striking'' and insert the 
following: 
``--
          (1) by striking''

  Page 3, insert after line 7 the following:

          (2) by inserting after ``of this Act'' the following: 
        ``(giving priority in assigning to small business that 
        are in metropolitan statistical areas for which the 
        unemployment rate is higher than the national average 
        unemployment rate for the United States)''.
                              ----------                              


                         Amendment to H.R. 3893


               Offered by Mr. Mulvaney of South Carolina


  Page 2, beginning on line 13, strike ``(except 
construction)''.

  Strike page 2, line 17, and all that follows through page 3, 
line 7, and redesignate provisions accordingly.

  Page 4, strike line 5 and all that follows through line 12, 
and redesignate provisions accordingly.

  Page 6, insert after line 3 the following:

          (3) Construction projects.--The Administrator shall 
        establish, through public rulemaking, requirements 
        similar to those specified in paragraph (1) to be 
        applicable to contracts for general and specialty 
        construction and to contracts for any other industry 
        category not otherwise subject to the requirements of 
        such paragraph. The percentage applicable to any such 
        requirement shall be determined in accordance with 
        paragraph (2).

  Page 18, line 2, strike ``private sector entity'' and insert 
``small business concern''.

  Page 18, line 12, strike ``includes any'' and insert ``means 
a''.
                              ----------                              


                         Amendment to H.R. 3893


                   Offered by Ms. Clarke of New York


  Beginning on page 17, line 18, strike all that follows 
through the end of the bill, and redesignate provisions 
accordingly.
                              ----------                              


                         Amendment to H.R. 3980


                  Offered by Mr. Schilling of Illinois


  Page 6, line 14, insert after ``certification'' the 
following: ``, except that any person serving in such a 
position on the date of enactment of this clause may continue 
to serve in that position for a period of 5 years without the 
required certification''.
                              ----------                              


                         Amendment to H.R. 3980


                    Offered by Ms. Chu of California


  Page 8, line 24, insert ``, including the requirements for 
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, small business concerns 
owned and controlled by women,'' before the period at the end.

  Page 9, insert after line 5 the following:

  (c) Requirement That Business Opportunity Specialists Be 
Certified.--Section 7(j)(10)(D)(i) of the Small Business Act 
(15 U.S.C. 636(j)(10)(D)(i)) is amended by inserting after ``to 
assist such Program Participant.'' the following: ``The 
Business Opportunity Specialist shall have a Level I Federal 
Acquisition Certification in Contracting (or any successor 
certification) or the equivalent Department of Defense 
certification, except that a Business Opportunity Specialist 
serving at the time of the date of enactment of the Small 
Business Opportunity Act of 2012 may continue to serve as a 
Business Opportunity Specialist for a period of 5 years 
beginning on that date of enactment without such a 
certification.''.
                              ----------                              


                         Amendment to H.R. 3980


                  Offered by Mr. Richmond of Louisiana


  Page 9, insert after line 5 the following:

  (c) GAO Report.--Not later than 365 days after the date of 
enactment of this Act, the Comptroller General of the United 
States shall conduct a study and submit a report to the 
Committee on Small Business of the House of Representatives and 
the Committee on Small Business and Entrepreneurship of the 
Senate on the relationship between the size and quality of the 
acquisition workforce and the Federal government's ability to 
maximize the utilization of small businesses in Federal 
procurement. The report shall specifically address the 
following:
          (1) The extent to which training on small business 
        contracting laws affects a contracting officer's 
        determination to use one of the contracting authorities 
        provided in the Small Business Act.
          (2) The relationship between a robust Federal 
        acquisition workforce and small business success in 
        obtaining Federal contracting opportunities.
          (3) The effect on economic growth if small businesses 
        experienced a significant reduction in small business 
        procurement activities.
          (4) The effect of the anticipated acceleration of 
        retirements by the acquisition workforce on small 
        business procurement opportunities.
                              ----------                              


                         Amendment to H.R. 4121


                   Offered by Mr. Graves of Missouri


  Page 5, insert after line 14 the following:

SEC. 3. REPEAL OF SIMILAR PROGRAM.

  Section 304 of the Small Business Administration 
Reauthorization and Amendments Act of 1994 (15 U.S.C. 644 note) 
is repealed.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

