Congressional Record, Volume 168 Issue 97 (Tuesday, June 7, 2022)

[Congressional Record Volume 168, Number 97 (Tuesday, June 7, 2022)]
[House]
[Pages H5258-H5260]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

STRENGTHENING SUBCONTRACTING FOR SMALL BUSINESSES ACT OF 2022

Ms. VELAZQUEZ. Madam Speaker, I move to suspend the rules and pass
the

[[Page H5259]]

bill (H.R. 7694) to amend the Small Business Act to modify the
requirements relating to the evaluation of the subcontracting plans of
certain offerors, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 7694

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 ``Strengthening Subcontracting
for Small Businesses Act of 2022''.

SEC. 2. EVALUATION OF SUBCONTRACTING PLANS.

Section 8(d)(4)(G) of the Small Business Act (15 U.S.C.
637(d)(4)(G)) is amended--
(1) in the matter preceding clause (i), by striking
``bundled contract'' and all that follows through ``for
subcontracting'' and inserting ``contract that includes a
subcontracting plan required under this paragraph''; and
(2) in clause (i), by striking ``the rate provided under
the subcontracting plan for small business participation''
and inserting ``the description in the subcontracting plan of
the extent to which the offeror proposes to use small
business concerns as subcontractors (at any tier)''.

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

General Leave

Ms. VELAZQUEZ. Madam Speaker, I ask unanimous consent that all
Members may have 5 legislative days in which to revise and extend their
remarks and include extraneous material on the measure under
consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from New York?
There was no objection.
Ms. VELAZQUEZ. Madam Speaker, I yield myself such time as I may
consume.
Madam Speaker, I rise today in support of H.R. 7694, the
Strengthening Subcontracting for Small Businesses Act of 2022.
Subcontracting plans are an important mechanism for small business
utilization. In fact, for many small businesses, subcontracting plans
represent the only way to participate in Federal contracts. That is why
the Small Business Act requires contractors to have subcontracting
plans in certain situations.
For example, subcontracting plans are required for contracts that
exceed certain thresholds, have subcontracting possibilities, and are
awarded using negotiated procedures. While having these plans in place
is an important first step, it will not make a difference if the prime
does not implement them.
The Small Business Act has a provision that allows agencies to
subject prime contractors to liquidated damages if they do not employ
good faith efforts to meet the subcontracting plans. However, the
standard is ambiguous and not always enforced. As a result, primes
often face no consequences for failing to meet their subcontracting
plans. That is simply unacceptable.
We must do more to ensure prime contractors comply with their
subcontracting plans. This is precisely what H.R. 7694 does. It
requires agencies to evaluate past performance in meeting
subcontracting plans when considering offers for new contract awards.
In other words, by making sure that previous compliance with these
plans is taken into consideration when making new awards, it would
encourage more compliance with subcontracting plans.
I thank Representative Stauber and Representative Mfume for leading
this effort, which represents an innovative solution to a longstanding
problem.
Madam Speaker, I urge Members to support this legislation, and I
reserve the balance of my time.
Mr. WILLIAMS of Texas. Madam Speaker, I yield myself such time as I
may consume.
Madam Speaker, I rise in support of H.R. 7694. All contractors know
the importance of subcontractors. Their work responsibilities are
crucial to completing jobs on time and on budget. H.R. 7694 translates
the importance of subcontracting to Federal contracting and especially
those who participate within the SBA's contracting programs. Simply
put, past performance should be acknowledged on all future dealings.
Madam Speaker, I thank the gentleman from Minnesota (Mr. Stauber), my
friend, who is one of the biggest advocates for small businesses and
subcontractors, and the gentleman from Maryland (Mr. Mfume) for working
in a bipartisan manner to highlight this issue.
I also again thank the chair for bringing this bill forward, and I
urge my colleagues to support H.R. 7694.
Madam Speaker, I reserve the balance of my time.
Ms. VELAZQUEZ. Madam Speaker, I continue to reserve the balance of my
time.
Mr. WILLIAMS of Texas. Madam Speaker, I yield such time as he may
consume to the gentleman from Minnesota (Mr. Stauber), one of the
biggest advocates for small businesses and subcontractors.
Mr. STAUBER. Madam Speaker, I thank the gentleman for yielding.
Madam Speaker, thanks to this administration's bad policies, small
businesses are struggling with skyrocketing inflation, record-high gas
prices, and supply chain and labor crises. It is imperative that
Congress help our small businesses find success despite this economic
landscape. One way we can do this is by improving the Federal contract
marketplace.
A common theme we have heard in the contracting space is that prime
contracting opportunities for small businesses are dwindling at an
alarming rate. This means that subcontracting opportunities are more
important than ever for our small businesses. While large prime
contractors are statutorily required to have subcontracting plans,
there is little incentive for prime contractors to comply with their
own goals.
Further, there is no requirement that a contracting officer take into
consideration a contractor's past performance in subcontracting with
small businesses when deliberating new awards. While it is laudable
that prime contractors have subcontracting plans, these plans seem to
have minimal influence on a contractor's motivation to award work to
small businesses.
This bill, the Strengthening Subcontracting for Small Businesses Act,
addresses this problem in a few ways:
First, the legislation will require the consideration of a
contractor's proposed utilization of small businesses in its
subcontracting plans.
Second, the legislation will require the consideration of the
contractor's past performance in meeting its previous goals.
In short, this bill creates a strong incentive for large prime
contractors to comply with their own goals since it will now impact
their ability to win new work.
Madam Speaker, I thank my colleague, Congressman Mfume, for his
collaboration on this bill. Together, I believe we have created a
meaningful piece of legislation that will make a real and significant
impact on small businesses, and I look forward to continuing our
relationship.
Ms. VELAZQUEZ. Madam Speaker, I yield 3 minutes to the gentleman from
Maryland (Mr. Mfume).
Mr. MFUME. Madam Speaker, I particularly thank the chair for yielding
this time but also for her very important leadership on the Committee
on Small Business and for the excellence of her example--getting all of
us to the point of where we are today.

At a time when, as has been said, small businesses are at risk of
being pushed out of the Federal procurement space due to forces outside
of their control, it is imperative that we unite across the aisle, as
has been stated, to stand up for small business concerns and to help
grow their presence in the Federal contracting space where possible.
I am very pleased to work with Representative Stauber, the
distinguished gentleman from Minnesota, who, on committee and at this
time, jointly share an interest in this legislation because of what it
does. I look forward to working with Mr. Stauber in the future on other
joint endeavors.
I also thank the staff of the Committee on Small Business for working
very hard to pull together this commonsense bill that protects small
businesses by incentivizing large prime contractors to adhere to their
contracting plans.
Now, some might say, well, why do you have to do that? Unfortunately,
if we don't do it, they will continue as

[[Page H5260]]

they have done, to not adhere to those plans, and it hurts the overall
small business community.
Currently, prime contractors have very little economic incentive to
do the right things, to abide by their subcontracting plans, and these
are the plans that they, themselves have negotiated. So when prime
contractors disregard these pre-negotiated terms, the only recourse
that we have is to make sure that we find a way to involve ourselves
before they are left with their only alternative, which is to file a
lawsuit.
Given the nature of the courts, any small business relief that may
come to them could prove to be too little, too late.
Madam Speaker, again, I thank the gentleman from Minnesota. This bill
creates an economic incentive for prime contractors to follow their
subcontracting plans by requiring any agency of the government to
assess those plans and to offer advice and an opinion on whether or not
they have complied.
The SPEAKER PRO TEMPORE. The time of the gentleman has expired.
Ms. VELAZQUEZ. Madam Speaker, I yield an additional 30 seconds to the
gentleman from Maryland.
Mr. MFUME. Madam Speaker, by amending the language of the Small
Business Act, by expanding its scope, this legislation will give
contractors that treat small businesses the right and the fair way, a
greater chance at winning Federal contractors. And it will hopefully
incentivize those contractors that are not, to finally do the right
thing.
Madam Speaker, I respectfully ask that my colleagues vote in support
of H.R. 7694, the Strengthening Subcontracting for Small Businesses Act
of 2022.
Mr. WILLIAMS of Texas. Madam Speaker, I yield myself such time as I
may consume to close.
Madam Speaker, as contract consolidation continues to build momentum,
opportunities will continue to falter. Overall, this trendline is
heading in the wrong direction. As a result, the emphasis and
importance will be placed on subcontracting.
H.R. 7694 takes an important step by requiring that past performance
is taken into account on all future contracts. Congress will need to
continue to study this issue carefully, and H.R. 7694 will assist us
along the way.
Madam Speaker, I urge my colleagues to support this legislation, and
I yield back the balance of my time.
Ms. VELAZQUEZ. Madam Speaker, I would just say thank you to both
gentlemen, Mr. Stauber and Mr. Mfume, for their hard work, and I urge
my colleagues to support this bill.
Madam Speaker, I yield back the balance of my time.
Ms. JACKSON LEE. Madam Speaker, I rise in strong support of H.R.
7694, the ``Strengthening Subcontracting for Small Businesses Act of
2022.''
This legislation would amend the Small Business Act to ensure that
companies awarded government contracts utilize small businesses in
their subcontracting plans.
H.R. 7694 would ensure that small businesses are not excluded from
the government contracting process, which is an important concern in
Congress.
With more than 65 percent of small businesses having experienced at
least a moderately negative impact from the COVID-19 pandemic according
to Statista Research, it is more vital than ever that we continue to
strengthen small business.
This legislation will provide that urgently needed support.
As small businesses account for 44 percent of U.S. economic activity,
they are the powerhouse behind the American workforce, creating two-
thirds of the new jobs over the last 15 years.
Small business is vital in times of crisis, giving our economy the
ability to be more flexible, innovative, and productive.
In my home district in Houston, there are over 600,000 small
businesses engaged in industries across the spectrum.
Many of these small businesses received subcontracts following the
devastation of Hurricanes Ike and Harvey, and their work helped rebuild
Houston as well as restore local economic growth.
Just this week, there was a briefing on the COVID-19 pandemic
response that underscored how important small business subcontracts
were, and continue to be, to our capacity for COVID testing,
quarantine, and much more.
Small businesses are always serving our communities, and this
legislation on subcontracting will allow them to do more of what
they're already doing: improving life for us all.
We need legislation that reinforces the value and capability that
small businesses provide to the American economy, especially through
contracts with the federal government.
I urge all my colleagues to support H.R. 7694, the Strengthening
Subcontracting for Small Businesses Act.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from New York (Ms. Velazquez) that the House suspend the
rules and pass the bill, H.R. 7694.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. ROY. Madam Speaker, on that I demand the yeas and nays.
The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution
8, the yeas and nays are ordered.
Pursuant to clause 8 of rule XX, further proceedings on this motion
are postponed.

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