[Congressional Record Volume 164, Number 158 (Tuesday, September 25, 2018)]
[House]
[Pages H8812-H8813]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 CLARITY ON SMALL BUSINESS PARTICIPATION IN CATEGORY MANAGEMENT ACT OF 
                                  2018

  Mr. CHABOT. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6382) to amend the Small Business Act to require the 
Administrator of the Small Business Administration to report certain 
information to the Congress and to the President, and for other 
purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6382

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Clarity on Small Business 
     Participation in Category Management Act of 2018''.

     SEC. 2. REPORTING.

       Section 15(h) of the Small Business Act (15 U.S.C. 644(h)) 
     is amended by adding at the end the following:
       ``(4) Best in class small business participation 
     reporting.--
       ``(A) Addendum.--The Administrator, in addition to the 
     requirements under paragraph (2), shall include in the report 
     required by such paragraph, for each best in class 
     designation--
       ``(i) the total amount of spending government wide in such 
     designation;
       ``(ii) the number of small business concerns awarded 
     contracts and the dollar amount of contracts within such 
     category awarded to each of the following--

       ``(I) HUBZone small business concerns;
       ``(II) small business concerns owned and controlled by 
     women;
       ``(III) small business concerns owned and controlled by 
     service-disabled veterans; and
       ``(IV) socially and economically disadvantaged small 
     business concerns.

       ``(B) Best in class.--The term `best in class' has the 
     meaning given to it by the Director of the Office of 
     Management and Budget.
       ``(C) Effective date.--The Administrator shall be required 
     to report on the information described by subparagraph (A) 
     beginning on the date that such information is available in 
     the Federal Procurement Data System, the System for Award 
     Management, or any successor to such systems.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Ohio (Mr. Chabot) and the gentlewoman from New York (Ms. Velazquez) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Ohio.


                             General Leave

  Mr. CHABOT. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days to revise and extend their remarks and include 
extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume.
  I would like to thank Ms. Adams for leading this important piece of 
legislation.
  Category management is a procurement initiative that is currently 
being rolled out across the Federal Government. It can be a positive 
tool, allowing the Federal Government to better understand its 
purchasing habits and identify cost savings where appropriate. However, 
setting mandatory targets to manage agency spending may result in 
unintended consequences.
  Specifically, there is concern that this initiative may have the 
effect of reducing competition to only a few select vendors. As we 
continue to see increased use of these best-in-class vehicles by 
Federal agencies, it is important to remember that it is not the job of 
the government to pick winners and losers. We must be vigilant and 
ensure that maximum opportunities are given to small businesses, even 
as we continue to pursue cost savings across the Federal Government.
  H.R. 6382, as amended, takes that critical first step by tracking the 
potential impacts of category management on small businesses. The bill 
requires the SBA to report exactly how much of these dollars spent 
through best-in-class vehicles are awarded to small businesses. 
Obtaining this data and identifying trends or patterns affecting small 
businesses will become increasingly important as category management 
continues to be used in years to come.
  This is a commonsense piece of oversight legislation, and I urge my 
colleagues to support the measure.
  Mr. Speaker, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may 
consume.
  I rise in support of H.R. 6382, the Clarity on Small Business 
Participation in Category Management Act of 2018.
  Our committee has long acknowledged small businesses' critical role 
in

[[Page H8813]]

the $500 billion a year Federal marketplace. When small firms are 
awarded Federal contracts, the result is a win-win.
  While category management is billed as the strategy to get agencies 
the lowest price, we have heard the contrary in our committee, in that 
more contracts are being consolidated out of the reach of small 
businesses.
  By requiring that contracting activity under this new regime be 
reported in the annual goaling report from agencies to Congress, 
today's bill protects the industrial base by creating a mechanism for 
much needed accountability.
  I am proud to be a cosponsor of H.R. 6382, and commend Congresswoman 
Adams for her work to provide accountability to the category management 
regime.
  I urge Members to support this legislation, and I reserve the balance 
of my time.
  Mr. CHABOT. Mr. Speaker, I have no further speakers, and I reserve 
the balance of my time.
  Ms. VELAZQUEZ. Mr. Speaker, I yield 5 minutes to the gentlewoman from 
North Carolina (Ms. Adams), who is the sponsor of the bill and ranking 
member of the Subcommittee on Investigations, Oversight and 
Regulations.
  Ms. ADAMS. Mr. Speaker, I rise in support of my bill, H.R. 6382, the 
Clarity on Small Business Participation in Category Management Act.
  Small businesses are the heart of American enterprise, and we must 
ensure a level playing field for all of them to compete for Federal 
contracts. My legislation is the first step to addressing the many 
concerns of the small business community regarding the current 
administration's efforts to expand the use of category management.
  Although category management has been billed as the procurement 
strategy that can get Federal agencies the lowest price, the actual 
numbers tell a very different story. In fact, the data shows us that 
small business vendors on the Multiple Award Schedule continually 
provided agencies with lower prices than those offered by category 
management contract holders.
  However, due to the changes under this administration, many Federal 
agencies and contracting officers can no longer take advantage of 
increased competition and lower prices because some category management 
vehicles are the only option available.
  Unfortunately, the current trend of this administration is to 
increase the number of agencies heading in this misguided direction. 
This will result in wasteful spending of taxpayer dollars because a 
reduction of competing vendors means Federal agencies will pay more 
than necessary for goods and services.
  Furthermore, the harmful effect of the use of the category management 
business model could mean further exclusion of minorities, women, 
veterans, and other already disadvantaged small business owners in the 
Federal marketplace.
  My bill requires the Small Business Administration to include in 
their annual report information on best-in-class contractors, which are 
the companies that largely benefit from category management.
  This bill would also provide lawmakers with information on whether 
category management is reducing the role of small firms, women-owned 
firms, minority-owned companies, and veteran-owned enterprises in 
Federal contracting.
  I am also proud to say that my bill is endorsed by the National 
Defense Industrial Association, an association whose 1,600 corporate 
members and over 85,000 individual members are 70 percent small 
business. NDIA works to help small companies grow and remain a strong 
part of the defense industrial base.
  The ability for Congress to see this data allows us to determine the 
effectiveness of such contracting vehicles for small firms and to make 
needed changes where appropriate.

                              {time}  1800

  Mr. Speaker, I urge Members to support this legislation. I thank very 
much our chairman and our ranking member for their support.
  Ms. VELAZQUEZ. Mr. Speaker, I want to thank the gentlewoman from 
North Carolina (Ms. Adams) for introducing this important piece of 
legislation to provide much needed oversight of small business 
participation in the streamlined acquisition strategy known as category 
management.
  Mr. Speaker, I urge all the Members to support this important piece 
of legislation.
  Mr. Speaker, I yield back the balance of my time.
  Mr. CHABOT. Mr. Speaker, I yield myself such time as I may consume to 
close.
  Mr. Speaker, I would like to thank Ms. Adams for her leadership on 
this measure and congratulate her for its passage here shortly.
  This legislation raises the profile of this important issue and 
requires that the SBA keep track of how much Federal spending is made 
through best-in-class vehicles. I applaud the administration for 
looking for ways to ensure taxpayer dollars are utilized in the most 
efficient ways possible.
  At the same time, we must be watchful to safeguard small businesses' 
proper importance and place in the Federal marketplace. Enacting this 
legislation will help ensure that the correct data is collected and 
reported to help maintain that balance.
  Mr. Speaker, I urge my colleagues to support this bipartisan 
legislation, and I yield back the balance of my time.
  Ms. JACKSON LEE. Mr. Speaker, I rise in support of H.R. 6382, the 
``Clarity on Small Business Participation in Category Management Act of 
2018''.
  H.R. 6382 amends the Small Business Act to require the Administrator 
of the Small Business Administration to report certain information to 
the Congress and to the President.
  This bill directs the administrator of the Small Business 
Administration to report to congress on: the total amount of spending 
government wide in such designation; the number of small business 
concerns awarded contracts and the dollar amount of contracts within 
such category awarded to each of the following--
  1. HUBZone small business concerns;
  2. Small business concerns owned and controlled by women;
  3. Small business concerns owned and controlled by service-disabled 
veterans; and
  4. Socially and economically disadvantaged small business concerns.
  More than 99 percent of Houston's businesses are considered small.
  In 2016, roughly seven businesses in the Houston District received a 
loan averaging $500,000 each weekday.
  Small businesses are the lifeblood of our economy in Houston and 
across America.
  Small business was key for the nation's recovery from the recession.
  Between the middle of 2009 and the middle of 2013, 60 percent of the 
jobs created were from small businesses.
  I am committed to producing tangible results in suffering communities 
through legislation that creates jobs, fosters minority business 
opportunities, and builds a foundation for the future.
  Studies have shown that supporting small businesses is good for the 
American economy. For every $1 invested, small businesses will 
contribute $7 to the economy.
  Every American deserves the right to be gainfully employed or own a 
successful business and I know we are all committed to that right and 
will not rest until all Americans have access to economic opportunity.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Ohio (Mr. Chabot) that the House suspend the rules and 
pass the bill, H.R. 6382, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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