[Congressional Record (Bound Edition), Volume 146 (2000), Part 13]
[House]
[Pages 18609-18618]
[From the U.S. Government Publishing Office, www.gpo.gov]



          SMALL BUSINESS COMPETITION PRESERVATION ACT OF 2000

  Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 582 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 582

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 4945) to amend the Small Business Act to 
     strengthen existing protections for small business 
     participation in the Federal procurement contracting process, 
     and for other purposes. The first reading of the bill shall 
     be dispensed with. Points of order against consideration of 
     the bill for failure to comply with clause 4(a) of rule XIII 
     are waived. General debate shall be confined to the bill and 
     shall not exceed one hour equally divided and controlled by 
     the chairman and ranking minority member of the Committee on 
     Small Business. After general debate the bill shall be 
     considered for amendment under the five-minute rule. The bill 
     shall be considered as read. During consideration of the bill 
     for amendment, the Chairman of the Committee of the Whole may 
     accord priority in recognition on the basis of whether the 
     Member offering an amendment has caused it to be printed in 
     the portion of the Congressional Record designated for that 
     purpose in clause 8 of rule XVIII. Amendments so printed 
     shall be considered as read. The Chairman of the Committee of 
     the Whole may: (1) postpone until a time during further 
     consideration in the Committee of the Whole a request for a 
     recorded vote on any amendment; and (2) reduce to five 
     minutes the minimum time for electronic voting on any 
     postponed question that follows another electronic vote 
     without intervening business, provided that the minimum time 
     for electronic voting on the first in any series of questions 
     shall be 15 minutes. At the conclusion of consideration of 
     the bill for amendment the Committee shall rise and report 
     the bill to the House with such amendments as may have been 
     adopted. The previous question shall be considered as ordered 
     on the bill and amendments thereto to final passage without 
     intervening motion except one motion to recommit with or 
     without instructions.

  The SPEAKER pro tempore. The gentleman from Texas (Mr. Sessions) is 
recognized for 1 hour.
  Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield 
the customary 30 minutes to the gentleman from Ohio (Mr. Hall), my 
colleague and my good friend, pending which I yield myself such time as 
I may consume. During consideration of this resolution, all time is 
yielded for the purposes of debate only.
  Mr. Speaker, the legislation before us today is an open rule 
providing for consideration of H.R. 4945, the Small Business 
Competition Preservation Act of 2000.
  This open rule waives clause 4(a) of rule XIII against the 
consideration of the bill, which requires a 3-day availability of the 
committee report. The rule provides one hour of general debate to be 
equally divided among the chairman and the ranking minority member of 
the Committee on Small Business. The rule provides that the bill shall 
be open to amendment at any point.
  The rule authorizes the Chair to accord priority in recognition to 
Members who have preprinted their amendments in the Congressional 
Record.
  The rule allows the Chairman of the Committee of the Whole to 
postpone votes during consideration of the bill and to reduce to 5 
minutes on a postponed question if the vote follows a 15-minute vote.
  Finally, the rule provides one motion to recommit with or without 
instructions.
  Mr. Speaker, it is often said that small business is the engine that 
drives the American economy. Statistics confirm this. Small businesses 
employ 53 percent of the private workforce and are responsible for 50 
percent of the private gross domestic product.
  I am proud of these facts. I am proud of small businesses and what 
their employees produce for America to keep us strong.
  Small business is a literal powerhouse of job creation. They 
represent 99 percent of all employers and create 80 percent of the new 
jobs in America.
  Small businesses are also more innovative than larger businesses. The 
airplane, audio tape recorder, heart valve, pacemaker, and the personal 
computer are among the important innovations by small firms in the 20th 
century.

                              {time}  1030

  Looking ahead, we have got to make sure that small businesses have 
the needed resources and capital to move forward so that America and 
Americans have the best of what small businesses produce. Looking out 
for the family farm, ranch or store on Main Street is something this 
Congress strongly supports.
  With this in mind, Republicans in Congress have focused on scheduling 
and passing legislation to further help and aid small businesses. For 
example, Congress passed legislation that would help small businesses 
better prepare for the millennium computer bug. We remember that as the 
Y2K bug. Congress also passed the Paperwork Elimination Act of 1999 to 
minimize burdens of Federal paperwork on small businesses by employing 
new technology such as digital signatures. Because small businesses are 
in dire need for more affordable health insurance, Congress passed 
legislation to allow small firms to band together to purchase insurance 
which lowers the cost. Small businesses also stood to benefit a great 
deal from legislation to repeal the death tax, legislation that was 
passed by Congress but vetoed by President Clinton. Had this 
legislation been signed into law, many small businesses would be able 
to stay in the family when the owner dies rather than being sold to pay 
a debt to the IRS.
  Mr. Speaker, with passage of this rule, Congress will once again 
consider important legislation to help small business. The underlying 
legislation, the Small Business Competition Preservation Act of 2000, 
is important to strengthen existing protections for small business 
participating in the Federal procurement contracting process. The 
Federal Government has failed in its goal to spend at least 20 percent 
of their procurement dollars with small businesses, in part because of 
the Federal agencies' practice of bundling individual contracts into 
packages that are too large for small businesses to handle. Federal 
agencies contend that contract bundling saves taxpayers money while 
improving the quality of products and the services provided by the 
government. However, none of this has been substantiated.
  The database, analyses, and reporting requirements in H.R. 4945 will 
ensure that adequate data exists concerning the benefits of contract 
bundling, thus allowing Congress to make better decisions and to better 
assess the small business and the needs that they have. Bundling is one 
of the most important issues facing small businesses today. The 
ultimate cost of bundling is passed on to the taxpayers in the form of 
lower quality goods and services and higher taxes.
  Mr. Speaker, the rule before us is a fair and open rule. It allows 
any Member to offer an amendment at any time. This rule, which was 
reported out of the Committee on Rules last night by a voice vote, will 
enable the House to consider this fair and bipartisan legislation.
  I urge my colleagues to support this rule.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HALL of Ohio. Mr. Speaker, I yield myself such time as I may 
consume.

[[Page 18610]]

  Mr. Speaker, I thank the gentleman from Texas (Mr. Sessions) for 
yielding me this time and his work on this bill and certainly on the 
rule. It is an open rule. It is the kind of rule that the minority 
likes. It will allow consideration of the Small Business Competition 
Preservation Act of 2000.
  As my colleague has described, this rule provides for 1 hour of 
general debate to be equally divided and controlled by the chairman and 
ranking minority member of the Committee on Small Business. The rule 
permits amendments under the 5-minute rule, which is the normal 
amending process in the House. All Members on both sides of the aisle 
will have the opportunity to offer germane amendments.
  In recent years, the Federal Government often bundles together 
separate small contracts into one larger contract. This is because in 
some cases it might be cheaper and more efficient to let one larger 
contract instead of several smaller ones. However, there is some 
evidence that bundling is not always the best deal for taxpayers. There 
is also some concern that small businesses are shut out of the process 
when contracts are bundled.
  The bill requires the Small Business Administration to collect, 
analyze and report information about bundling so that the 
administration and Congress can better evaluate this practice. Wright 
Patterson Air Force Base, which is located partially in my district, 
handles more contracts than any other Federal agency in the State of 
Ohio. Therefore, I am particularly concerned about the efficiency of 
the process and the fairness to small businesses. The Dayton Area 
Chamber of Commerce, which has set up an innovative electronic program 
that notifies small businesses which contracts are available, is also 
monitoring the effects of bundling contracts.
  Mr. Speaker, it has long been the policy of the Federal Government to 
encourage small businesses because of their enormous potential to 
increase economic growth. This bill takes an important step towards 
protecting small businesses and improving government contracting 
operations. This is an open rule. I urge its adoption.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  I would like to echo the words of the gentleman from Ohio (Mr. Hall). 
His State not unlike my State of Texas and not unlike many States 
around this country depend upon small businesses who depend upon 
employees, good, hardworking employees to show up for work every day 
and produce a product that makes America stronger and better. We 
concur. This is bipartisan. It is an opportunity to begin the process 
so that we can know the facts and figures in an orderly process. We 
believe it is the right thing to do. I applaud my colleague for his 
opportunity to once again work together.
  Mr. Speaker, we believe this is a fair and open rule and would ask 
that our colleagues support this rule.
  Mr. Speaker, I yield back the balance of my time, and I move the 
previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore (Mr. Sessions). Pursuant to House Resolution 
582 and rule XVIII, the Chair declares the House in the Committee of 
the Whole House on the State of the Union for the consideration of the 
bill, H.R. 4945.

                              {time}  1038


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the consideration of the bill 
(H.R. 4945) to amend the Small Business Act to strengthen existing 
protections for small business participation in the Federal procurement 
contracting process, and for other purposes, with Mr. Cooksey in the 
chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered as having 
been read the first time.
  Under the rule, the gentleman from Missouri (Mr. Talent) and the 
gentlewoman from New York (Ms. Velazquez) each will control 30 minutes.
  The Chair recognizes the gentleman from Missouri (Mr. Talent).
  Mr. TALENT. Mr. Chairman, I yield myself such time as I may consume. 
I want to thank the Committee on Rules for giving us an hour on a 
bipartisan basis under an open rule to discuss a very important 
subject, H.R. 4945.
  The purpose of the bill, Mr. Chairman, is very simple. It is to 
ensure that the Small Business Administration has sufficient 
information concerning the impact of contract consolidation, or 
bundling, on small businesses. H.R. 4945 mandates that the 
administrator of the Small Business Administration develop a database 
of these consolidated, or bundled, contracts.
  Mr. Chairman, contract bundling is one of the most important issues 
facing small business today. The Federal Government spends almost $200 
billion a year procuring goods and services. Congress has mandated a 
goal for Federal agencies to spend at least 20 percent of those dollars 
with small businesses. We do that, both because we believe in small 
business as an avenue for opportunity and economic growth for our 
citizens and because we believe that competition among small businesses 
is presumptively to the benefit of the taxpayer both in terms of cost 
and quality. Yet the Federal Government fails routinely to meet that 
goal of 20 percent.
  At present, Federal procurement policies evidently place a greater 
premium on presumed efficiencies and easing the workload of contracting 
officials than on the goals of including small business and ensuring a 
diverse and competitive industrial base. In this scenario, the ultimate 
loser is the taxpayer who faces the long-term prospect of their 
government buying lower-quality goods and services at higher prices. 
Other losers are the small business community and particularly minority 
small businesspeople who are always disproportionately affected when 
the government withdraws business from small businesses.
  How does a contract bundle work, Mr. Chairman? Here is how it works. 
The government takes contracts which have typically in the past been 
bid out on a smaller basis. So, for example, a base, a military base 
may need food services for its mess hall so it bids those out routinely 
and typically to local food service providers which are typically small 
businesses and they win the contract and then go in and provide the 
food service. A bundled contract is a contract that puts a bunch of 
those bids together, if you will, in a bundle; and it could do it on a 
geographic basis so it may require that you be able to provide the 
service to a whole region of the United States, or it may do it on a 
functional basis, so that, for example, for a construction contract 
that bids out not only electrical services but it bids out electrical 
and carpentry services and plumbing services, and in either case, Mr. 
Chairman, the colleagues can see how this would eliminate radically 
small businesses from participating, because they cannot deliver the 
services on a regional basis and they are often organized along 
specialized lines, so they cannot deliver all the different 
construction trade requirements. And so only big businesses can bid.
  Typically the government will say, this will lower cost, it will 
improve quality. We have found in our hearings over and over again that 
quality suffers as one would expect when you eliminate competition from 
small businesses. Even costs are not saved because when you force out 
small businesses from a market and then you have to rebid these bundled 
contracts after a year or two, there is much less competition and the 
costs go way up.
  Here is what we want to do. We want to at least get a handle on how 
big the problem is. Under this bill the SBA will be required to assess 
whether these contracts have achieved the savings or improvements in 
quality that the procuring agency anticipated when it initially 
consolidated the contract. We want to know whether these bundled

[[Page 18611]]

contracts have the savings that the agencies always claim for them, 
because they say they get great savings and improved quality. Then when 
we go back and try to investigate it, they cannot provide the 
information. H.R. 4945 will also provide information so the SBA can 
effectively negotiate with Federal agencies and determine whether they 
should adjust their procurement strategies in order to meet the small 
business participation goals established in the Small Business Act, and 
then all this information will be reported to the House and Senate 
small business committees so we can do our job effectively of 
overseeing these requirements that we have placed into the law.
  Mr. Chairman, I do not want to take time away from other Members. Let 
me just give a couple of examples so Members can understand what I am 
talking about. These are real-life bundles. I expect that Members have 
been approached by small business constituents back home over the last 
several years complaining about this. Let me give Members an example. 
Right now military bases when they bid out their travel agency services 
typically bid out the business end of the travel services, so somebody 
traveling on business, that is bid out and bid on by particular travel 
agencies and then they separately bid out the holiday or the leisure 
travel, the holiday or the leisure business, and those two things are 
bid separately. The proposal is now to bundle those, so they will 
bundle together holiday business and business travel. Typically small 
businesses, therefore, will not be able to bid on the contract because 
they are usually organized either to handle holiday, personal, leisure 
travel or business travel, and the two ends of the business are very 
different. So the department is proposing to bundle all these contracts 
together.
  One excuse they often give for bundling is that that way they will 
ape the market, they will do what private companies do. Mr. Chairman, 
private companies do not bundle together business travel and holiday 
travel. They do it separately. That is why travel agencies are 
typically organized along those lines because the two lines of business 
are very different. The effect of it would be to withdraw the $20 to 
$25 billion worth of government travel business from competition from 
small business, which would increase the costs and decrease the quality 
available to our servicemen and women.
  One other example I will give. Right now in the Marine Corps when 
they have a need for food service on a base or in a commissary, they 
bid it out to local food service businesses. The proposal is to 
regionalize that so that you have to be able to bid on all the business 
in a region which will mean only the big businesses will be able to 
bid. Here is how the food will then be provided in the future. They 
will cook it up in central kitchens, they will chill it, and then they 
will bring it on base and heat it up. So now in the name of efficiency, 
and we have no idea whether it will actually save any money in the long 
run, we are going to be serving our servicemen and women, in effect, 
airline food rather than bidding this thing out the way it has 
traditionally been done so that small food service preparation 
businesses can bid on it.
  I could go on and on. I mean that, Mr. Chairman. As the chairman of 
the Committee on Small Business, I have encountered this over and over 
and over again. We have worked with the agencies to try and do 
something about it. The ranking member and I have worked together on 
this. We are united as a committee on this. Members will see this today 
in the debate. We are absolutely committed to stopping this practice or 
at least requiring that it be justified. That is the purpose for this 
bill.
  Let me just say the bill is supported by all the small business 
groups, NFIB, the Chamber, and it is supported by minority small 
business groups like the Black Chamber and the National Small and 
Disadvantaged Business Association. Right now we have no certain 
definition of what bundling is, we have no information about the number 
of bundles, we have no information about whether they are a success 
even on their own terms within the agencies.

                              {time}  1045

  Mr. Chairman, that needs to stop for the sake of small business 
opportunity, for the sake of our entrepreneurs for the sake of 
advancing participation by minorities and the economy and for the sake 
of the taxpayers, and that is why this bill is offered. That is why I 
have unburdened myself so much on the subject of it.
  Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I rise today in support of H.R. 4945, the Small 
Business Competition Preservation Act of 2000. Mr. Chairman, we 
continue to talk about what a strong economy we have and how our 
Nation's small businesses are largely responsible for this. In fact, it 
has become almost cliche to say that small businesses are the backbone 
of our Nation's economy. Everywhere we turn we see them as the 
innovators and cutting edge leaders of every industry from construction 
to technology, everywhere except the Federal Government.
  Indeed, we are seeing an alarming downward trend in the number of 
Federal prime contracts awarded to small businesses. For example, from 
1997 to 1999, the number of contracts offered to small business by the 
Department of Defense dropped by over 34 percent. In response to 
concerns from small business, the Democrats commissioned a study on the 
poor state of contracting for small businesses.
  The result was even worse than we feared. Our results showed the 
Federal Government failing small businesses in every conceivable way, 
with the worst offender being the Department of Defense. The number of 
contracts awarded to minority-owned firms has decreased by over 25 
percent, and most dramatically the number of contracts awarded to 
women-owned businesses has decreased by over 38 percent.
  The reality is, that the Federal Government thinks it can put these 
big contracts together to reduce costs and increase quality. Well, Mr. 
Chairman, the committee has had a number of hearings on this issue. 
There is not one documented case in which a contract bundle has 
actually saved money and increased quality, not one.
  This legislation begins the process of making common sense changes to 
the caring of contract bundling statute while requiring the SBA to file 
a report with Congress which will provide much more information on the 
scope of the bundling issue.
  In addition to requiring further information on contract bundling, 
this bill requires the Small Business Administration to develop a 
database. This database will provide us the missing link of information 
to assist us in tracking critical information on bundled contracts. We 
will now be able to learn what happens to firms who are displaced by 
bundling, do these firms become subcontractors? Do they go out of 
business?
  One of the most egregious examples of contract bundling is the Air 
Force FAST contract. This bill will help to provide reliable data on 
contracts such as this. In a hearing before the Committee on Small 
Business in November of last year, the Department of Defense agreed to 
commission a study of contract bundling. Within 3 months, it became 
evident that the Department has no data to conduct an accurate and 
comprehensive bundling study. With the passage of this bill today, 
agencies can no longer plead ignorance on the issue of contract 
bundling.
  We are all aware that Federal agencies are operating in a do-more-
with less environment, and operating an efficient Federal system. 
However, we must also ensure that the Federal marketplace is inclusive 
of our country's small businesses. We must take steps right here and 
right now to ensure that our small businesses are not streamlined out 
of the process.
  I am not opposed to the Federal Government streamlining its processes 
as long as small businesses are not left behind in the wake, and as 
long as the quality of services remains at least

[[Page 18612]]

equal to what was provided prior to the bundle. And make no mistake, 
because I want this to be clearly understood, the passage of this bill 
serves as both a message and a warning to those who believe contract 
bundling is a good idea.
  We are watching you closely.
  Let me conclude by commending the gentleman from Missouri (Chairman 
Talent) for introducing this bill and providing further protection for 
our Nation's small businesses.
  Mr. Chairman, I yield 3 minutes to the gentleman from Illinois (Mr. 
Davis).
  Mr. DAVIS of Illinois. Mr. Chairman, first of all, I want to thank 
the gentleman from Missouri (Chairman Talent) and the gentlewoman from 
New York (Ms. Velazquez), the ranking member, for this very important 
legislation, as well as for their overall effectiveness and the 
bipartisan manner in which this committee has operated during the last 
session.
  Mr. Chairman, last year the Small Business Committee conducted 
hearings on Federal Government procurement policies. In that hearing we 
found what many of us already knew, that small and minority-owned 
businesses have serious difficulty contracting with the Federal 
Government. As a result, the Small Business Committee with the 
leadership of the gentlewoman from New York (Ms. Velazquez), our 
ranking member, and the gentleman from Missouri (Chairman Talent) 
conducted a study to reveal which agencies were implementing and 
reaching their federally mandated goals.
  This study known as the scorecard revealed that because of contract 
bundling, many agencies conducted little, if any, business with small 
and minority-owned businesses. Mr. Chairman, contract bundling is 
disheartening and devastating to small businesses while and at the same 
time showing no measurable savings to the American taxpayer.
  These are now exciting times for small businesses. On the private 
side of business, we are witnessing a revolution, a complete 
transformation of how businesses operate. Today our Nation's 22 million 
businesses are using innovative ways to hire, train and create better 
products and make extraordinary profits.
  The easy good ole boy network of doing business is becoming outdated, 
outmoded, and obsolete in the private sector; therefore, it should be 
obsolete in our government. Therefore, for us to see Departments like 
Energy, Education and Labor to be named the worst Federal agencies in 
small business procurement, and our Nation's Department of Defense to 
have virtually no 8A goal for minority and small businesses is an 
embarrassment.
  It is time to change. It is time to innovate. No longer should these 
Departments be allowed to posture and pose as friends of small 
businesses when their actions show something totally different. It is 
time for us to work together to preserve and expand our small 
businesses.
  H.R. 4945 takes the first step, and I urge my colleagues to join with 
me in passing this greatly needed legislation.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 3 minutes to the gentleman from 
New Jersey (Mr. Pascrell).
  Mr. PASCRELL. Mr. Chairman, I thank the gentlewoman from New York 
(Ms. Velazquez) for yielding me the time.
  Mr. Chairman, I am pleased to rise today in support of the passage of 
H.R. 4945. This important bipartisan legislation introduced by the 
gentleman from Missouri (Chairman Talent) and the gentlewoman from New 
York (Ms. Velazquez), our ranking members, seeks to correct the way 
many Federal agencies set their contracting criteria that excludes 
small businesses.
  If I may, Mr. Chairman, I want to commend both the gentleman from 
Missouri (Chairman Talent) and the gentlewoman from New York (Ms. 
Velazquez), the ranking member, for making bipartisanship a reality not 
just empty words. That is important in this House.
  The Small Business Committee has conducted several hearings on the 
issue of contract bundling. Bundling is defined simply as the combining 
of several smaller contracts into one large contract, which is awarded 
to and performed by a large government contractor.
  In recent years, Federal Government contracting with small businesses 
has been falling far short of expectations. Most Federal agencies have 
not been held accountable for contract bundling. They are just doing 
whatever they please. This report, which the gentleman from Illinois 
(Mr. Davis) just referred to, speaks for itself. It grades every agency 
in the Federal Government as to whether it is responsive to small 
businesses or not. Most are not. The best we could come up with is a C 
minus report card. That is not acceptable to any of us.
  In July of last year, this report card was very clearly presented. 
Agencies are giving multiple contracts to one large contractor at the 
expense of millions of small businesses. This report also showed that 
the number of contracts being awarded to small businesses has decreased 
over the last 3 years by 23 percent.
  Minority- and women-owned businesses have suffered greatly, with 
nearly every Federal agency failing to meet the negotiated small 
business goals. We all know and recognize that small businesses are the 
backbone of the Nation. Every speaker refers to it today.
  H.R. 4945 responds to the lack of empirical data available on the 
impact of contract bundling we heard the gentlewoman from New York (Ms. 
Velazquez), the ranking member, talk about. We cannot even get 
statistics because data is not held by each of these agencies, and 
obviously for the very specific reason, they do not want us to know. 
Those of us who have been elected, those of us who are really on the 
front lines, they do not want us to know how they let those contracts 
out there.
  But now this legislation will call them up. It puts everything on top 
of the table where it should be. This is taxpayers' dollars that are 
being spent here. We are trying to protect those dollars, and we are 
trying to also preserve the bulk of business in this country which is 
small business.
  While this bill helps to correct the problems associated with 
contract bundling, there is more that must be done to help these firms 
succeed in the Federal procurement arena. It is appropriate, Mr. 
Chairman, for Congress to require better accountability from Federal 
agencies on procurement goals, that is why I support H.R. 4945 as a 
member of the committee, but also as a good American and a good 
congressman, I hope.
  Ms. VELAZQUEZ. Mr. Chairman, I reserve the balance of my time.
  Mr. TALENT. Mr. Chairman, I yield myself 30 seconds to say that I 
appreciate the words of the gentleman from New Jersey (Mr. Pascrell). 
The gentleman is a good American and a good congressman. He is not 
overstating the case. We want Members of Congress to know what the 
trends that are going on here. This is as much a question of whether 
the will of this body is to prevail in light of the mandates we have 
put in the statutes or whether these agencies are going to continue 
going to do what they want to do regardless of the will of Congress.
  Mr. Chairman, I yield 3 minutes to the gentleman from Pennsylvania 
(Mr. English), my friend, to speak on this subject.
  Mr. ENGLISH. Mr. Chairman, I would also like to salute the gentleman 
from Missouri (Chairman Talent) and the gentlewoman from New York (Ms. 
Velazquez), the ranking member, of the Small Business Committee for 
bringing forward this legislation now and on a bipartisan basis.
  Mr. Chairman, America's 23 million small businesses employ more than 
50 percent of the private workforce and they generate more than half of 
the Nation's gross domestic product. They are the principal source of 
new jobs in the U.S. economy and the primary source of dynamism in the 
U.S. economy. But no matter how they shape our economy, small 
businesses in general, and notably women-owned businesses, still face 
an uphill battle when

[[Page 18613]]

it comes to obtaining Federal contracts, that is why I rise in strong 
support of this legislation, the Small Business Competition 
Preservation Act of 2000.
  Mr. Chairman, small businesses have an inherent disadvantage of scale 
because of their size and resources.

                              {time}  1100

  It is difficult for them to compete in a procurement landscape 
dominated by big business. Congress has, as the gentleman noted, 
enacted goals for Federal agencies that give small businesses a 
fighting chance in a playing field slanted toward the big boys. One 
goal calls for small business to be awarded just 20 percent of Federal 
contracts; but, Mr. Chairman, not a single Federal agency, not one, has 
met that goal.
  Federal agencies, and particularly the Department of Defense, have 
ignored these goals and instead instituted procurement policies more 
focused on alleged efficiencies in the procurement system. By 
consolidating numerous jobs into one contract, Federal agencies erect a 
barrier to participation by small business. Small businesses have 
limited resources to draw on and work at a disadvantage when it comes 
to bidding on a bundled Federal contract.
  I have heard from many small business and women-owned business owners 
who have expressed their concerns and shared their stories of the 
quality services that they could offer the Federal Government but are 
unable to do so because a Federal agency chooses a bundling process 
with contracts instead of a series of small contracts. After all, how 
can a small business grow and expand if the Federal Government 
consistently penalizes them for their size by only offering bundled 
contracts, which are often too large for a single small business to 
handle?
  That slants the playing field toward big business, making it 
impossible for smaller players to compete.
  I hope my colleagues will join me in support of H.R. 4945. After all, 
the Federal Government should be fostering the dreams that this Nation 
was built on, which is what this legislation is intended to do.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 3 minutes to the gentlewoman 
from the Virgin Islands (Mrs. Christensen).
  Mrs. CHRISTENSEN. Mr. Chairman, I rise today to join my colleagues on 
both sides of the aisle in support of H.R. 4945, the Small Business 
Competitive Preservation Act. During the past two congressional terms, 
my colleagues and I from the Committee on Small Business, under the 
distinguished and very effective leadership of the gentleman from 
Missouri (Mr. Talent) and the gentlewoman from New York (Ms. 
Velazquez), the ranking member, have devoted many hours to conducting 
hearings on contract bundling and the negative impact that this 
practice has had on small business.
  From these hearings, we have clearly seen that there is no direct 
evidence which shows that bundling has saved the government money or 
that a higher quality of product was delivered by larger companies.
  Just before our summer recess, our ranking member, the gentlewoman 
from New York (Ms. Velazquez), and the Democratic members of the 
Committee on Small Business released a contracting study, which we have 
heard about, known as a ``score card,'' which showed that a number of 
Federal agencies, in particular the Department of Defense, rely on 
contract bundling. This study further showed that minority- and women-
owned businesses have felt the hardest impact from contract bundling 
and that nearly every Federal agency failed to meet the negotiated 
small business goals for fiscal year 1999.
  Perhaps the most revealing evidence that has been produced from the 
hearings on contract bundling is that there is no hard data on the 
impact of this practice. There is no way to track exactly what is 
happening or to hold anyone accountable; most importantly, no way to 
develop a remedy.
  Mr. Chairman, we have had enough hearings. Now it is time to act, and 
we are doing so in H.R. 4945. H.R. 4945 imposes the establishment of a 
record-keeping mechanism that would allow the Small Business 
Administration to keep track, among other things, of whether the 
measurably substantial benefits alleged by the Federal agencies in 
support of contract bundling are actually achieved. It requires 
specific reporting to Congress and it further closes loopholes which 
have allowed this procedure to continue to grow and to bypass mandates 
of law.
  Mr. Chairman, small businesses and minority-owned businesses have 
suffered tremendously under bundling. I urge my colleagues to preserve 
the integrity of the Federal Government and the survival of small 
businesses by voting in support of H.R. 4945.
  Mr. TALENT. Mr. Chairman, I yield 3 minutes to the gentlewoman from 
New York (Mrs. Kelly).
  Mrs. KELLY. Mr. Chairman, I rise in support of H.R. 4945, the Small 
Business Competition Preservation Act of 2000. Small businesses are a 
key factor in the growth of the American economy, and women-owned 
businesses are a vital element. Nevertheless, there remains one sector 
of the American economy in which small businesses in general and women-
owned businesses face difficulty entering: the provision of goods and 
services to the Federal Government. Congress has enacted goals for 
small business participation of 20 percent and for women-owned 
businesses 5 percent. Not one Federal agency has met either of these 
goals.
  Despite the goals, Federal agencies and, in particular the Department 
of Defense, have instituted procurement policies that are more focused 
on alleged efficiencies in the procurement system than in meeting the 
statutory goals. By putting together and bundling a number of 
requirements into one contract, the Federal agencies erect a barrier to 
participation by small businesses.
  I have cosponsored H.R. 4945 because I believe it is a necessary step 
in eliminating unnecessary contract bundling. I sat in committee 
hearings listening to both Federal bureaucrats and small businesses 
disagree over the impact of the same contract. Obviously, each side has 
their own slant on whether the contract will benefit or detract from 
small businesses; but, of course, intuitively it makes sense that the 
larger the requirements for a contract the less likely that a small 
business will have the resources to win that contract.
  H.R. 4945 provides Congress and the Federal Government with the 
necessary data to properly assess contract bundling. H.R. 4945 requires 
the SBA to maintain a database of bundled contracts, determine how many 
small businesses are displaced as prime contractors and analyze bundled 
contracts to determine whether real savings or other benefits have 
accrued to the Federal Government.
  It seems very sensible to me. Even though the Small Business 
Reauthorization Act of 1997 requires procuring agencies to perform such 
studies, we all know that the agencies can clearly bias their 
analytical information to support the result they wish it to be, in a 
regulation or specific contracting action.
  In the same way that the Truth in Regulating Act gives the Government 
Accounting Office the authority to provide Congress with information 
about regulations, H.R. 4945 authorizes the Small Business 
Administration to provide unbiased information to Congress on the 
effects of contract bundling on small businesses.
  Once we have this data, Congress will then be able to sensibly 
consider what changes are needed to Federal Government procurement 
statutes to ensure that small businesses, especially women-owned 
businesses, are not excluded from providing goods and services to the 
Federal Government. I urge the Members to support H.R. 4945 and bring 
to light the Federal Government's procurement practices that hinder 
small business participation, reduce competition and ultimately cost 
the American taxpayer.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 3 minutes to the gentlewoman 
from California (Ms. Millender-McDonald).

[[Page 18614]]


  Ms. MILLENDER-McDONALD. Mr. Chairman, I would like to thank the 
chairman and the ranking member for their leadership and for bringing 
this much-needed legislation to this body.
  Mr. Chairman, as the ranking member of the Subcommittee on 
Empowerment of the Committee on Small Business, I rise in strong 
support of the Small Business Competition Preservation Act. America's 
hard-working small business owners, entrepreneurs and employees are the 
bedrock of our Nation's unprecedented economic growth. Small businesses 
represent over 99 percent of all employers and employ 52 percent of the 
private workers; 61 percent of the private workers on public 
assistance; and employ 38 percent of the private workers in high-tech 
companies. They provide 51 percent of the private sector output and 
represent 96 percent of all exporters of goods. These hard-working 
businessmen and women need us to pass the Small Business Competition 
Preservation Act to assess the effectiveness of contract bundling, 
which has dominated the Federal procurement market for years.
  This legislation would require the administrator of the SBA to 
determine whether bundling contracts actually achieves the savings that 
Federal agencies assume. The bill will also require the administrator 
to maintain a database that would track the number of small businesses 
who are displaced as prime contractors as a result of contract 
bundling.
  Currently, there is no data available which shows contract bundling 
is effectively cutting costs. However, our Federal agencies have 
insisted on bundling most of its procurement contracts. This has shut 
out too many qualified small businesses, especially women- and 
minority-owned businesses, which are growing at the fastest rates. The 
number of African American-owned businesses soared by 46 percent from 
1987 to 1992. Hispanic-owned businesses are among the fastest growing 
segments of the U.S. business population, with 82.9 percent rate of 
growth during the same period. Businesses owned by Asian Americans, 
American Indians and other minorities increased by 87.2 percent during 
this same period.
  This same success has been achieved by women-owned businesses. In 
1992, there were just over 400,000 women-owned businesses. Today, they 
total 8.5 million and represent one-third of all U.S. companies. Women-
owned businesses generate $3.1 trillion in revenue, an increase of 209 
percent between 1987 and 1997 after adjusting for inflation. This 
resounding rate of growth has outpaced all other business growth in 
each of the 50 States.
  I urge my colleagues, Mr. Chairman, to join the gentleman from 
Missouri (Mr. Talent), the gentlewoman from New York (Ms. Velazquez), 
and me in voting for America's small businesses by voting for the Small 
Business Competition Preservation Act. We cannot give them anything 
less.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 2 minutes to the gentlewoman 
from Ohio (Mrs. Jones).
  Mrs. JONES of Ohio. Mr. Chairman, I would like to thank the chairman 
of the Committee on Small Business, the gentleman from Missouri (Mr. 
Talent), and my ranking member, the gentlewoman from New York (Ms. 
Velazquez), for their hard work on the Committee on Small Business.
  During my first term in Congress, I have had an opportunity to work 
very hard with each of them in trying to preserve the small businesses 
in our country. I also succeeded my good colleague, the gentleman from 
Maryland (Mr. Wynn), who has been working very hard on behalf of the 
Congressional Black Caucus on this issue of bundling.
  I will not be repetitive, Mr. Chairman, in my remarks. My colleagues 
have put on the record very important information about the impact that 
bundling has had on small business. The businesses from the 11th 
Congressional District of Ohio, which I represent, which is Cleveland 
and the surrounding suburbs, have come to me on more than one occasion 
saying, this bundling is keeping us from having an opportunity to do 
business with the United States Government. What can you do about it? 
What can you do about it?
  I am pleased to be supportive of my colleagues on this issue. I kind 
of think of it sometimes as an impact of a business in my own 
community, where they say I have been making this ice cream for 100 
years in my community but the larger companies keep making ice cream. 
My ice cream is as good. It tastes as good, but I cannot competitively 
offer the same price. Give me a chance to get to the table. Give me a 
smaller contract where I can do business with my people, so the people 
in my community can eat, send their kids to school, live in a nice 
house. So what we are just saying is we need the opportunity.
  What this bill will do will prove what we are saying. It will show 
that small businesses in our country have been displaced and basically 
put out of business as a result of not having access to government 
contracts. The bundling has killed their opportunity to be competitive, 
and we want them to be competitive once again.
  So I am going to stop at this point and just say that I am glad to be 
a part of a committee, the Committee on Small Business, that gets to 
issues, passes partisanship, and gets to issues that are important to 
the small businesses of our community.
  Mr. TALENT. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, we do not have any more speakers over here. I notice 
the gentlewoman has some; and if she needs some extra time, I am more 
than happy to yield. I appreciated very much the comments of the last 
two speakers, the gentlewoman from Ohio (Mrs. Jones), and the 
gentlewoman from California (Ms. Millender-McDonald). I appreciate 
their contribution to the committee on this and other issues.
  The gentlewoman from California (Ms. Millender-McDonald) made the 
point very strongly about the impact of this bundling on minority 
participation in particular, and she is absolutely correct. The small 
business growth in the minority community and among women is tremendous 
and we have not seen that reflected among the agencies, and bundling is 
one of the reasons. It has a disproportionate impact on these kinds of 
entrepreneurs; and this is ironic, given the fact that periodically we 
see somebody in one of the agencies with some huge photo op about how 
they are trying to help minority small businesspeople and then they 
will bundle contracts which automatically yanks away a lot of business 
from them.
  One of the ways they do this, Mr. Chairman, is through something they 
called IDIQ contracts, which is indefinite delivery, indefinite 
quantity contracts. So they will take a particular line of business 
which they have been contracting out, maybe ordering paper for the 
copier, and they have been contracting that out as just straight 
contracts. Small businesses have been participating in bidding; and 
usually when they bid, they win because they are more efficient and 
they provide better quality. So then what they will do is they will 
say, oh, no, what we need is you have to be able to provide as much 
paper as we want on a moment's notice. It is an indefinite delivery and 
indefinite quantity.

                              {time}  1115

  Well, this, of course, makes it more difficult for small business 
people. They do not maintain the kinds of staff and the kind of 
reserves that bigger businesses do, and then they will expand that and 
they will say, now it has to be all office supplies you have to be able 
to provide.
  Then, when the small businesses complain and they come to us, as they 
came to the gentlewoman from Ohio and she complains, and the committee 
complains, the Committee on Small Business complains and the Small 
Business Administration complains, if we do it long enough and strong 
enough, eventually they will say okay, well, here, we will set aside a 
contract, an IDIQ contract for a minority businessperson, so yes, we 
have them on the schedule now and then they never order anything from 
them, or they do not get any business that way, either.

[[Page 18615]]

  As we can see, Mr. Chairman, and as the House can see, we are tired 
of it. We have been living with this on the committee for several years 
and it is time for the agencies and the government to pay attention to 
it.
  I will give another example, Mr. Chairman. The GSA, for years, 
contracted out elevator repair in Federal buildings on a building-by-
building basis and then they bundled it into eight regional contracts. 
So while before it used to be on a building basis or a city-wide basis 
so that small elevator repair firms could do it and now they cannot, 
and it makes it virtually impossible for small businesses to compete 
logistically or financially. And then, again and again, the 
justification is it helps the taxpayer or we get better quality, and 
then when we investigate to try and find out how it helps the taxpayer 
or to get better quality, they cannot even justify it on their own 
terms. This bill is designed to make sure that they do at least that.
  So I want to thank the gentlewoman from New York for her leadership 
on this issue, as well as her assistance on this bill.
  Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 5 minutes to the gentleman from 
Maryland (Mr.Wynn).
  Mr. WYNN. Mr. Chairman, let me begin by thanking first the gentleman 
from Missouri (Mr. Talent), the chairman of the Committee on Small 
Business for his keen insight, hard work and dedication on this issue. 
He has worked very hard and I am most impressed, and I thank him for 
his leadership. I also thank the gentlewoman from New York (Ms. 
Velazquez), the ranking member, for her tenacity and determination for 
bringing this bill to the floor, the result of which is a bipartisan 
piece of legislation that will help the small business community in 
America.
  Mr. Chairman, I rise in strong support of this legislation. As we 
have heard, small businesses are the engine of growth in America. Small 
businesses are a source of important competition in America, and small 
businesses are a source of diversity in America, as women-owned 
businesses, African American-owned businesses, Hispanic-owned 
businesses and Asian-owned businesses and others are coming to the 
American workplace offering their goods and services to the United 
States Government. The sad fact, however, is that bundling has begun to 
displace these businesses, has squeezed many of these businesses out, 
and I believe that is wrong, unfair, and not good for this country.
  In 1995, the White House held a conference on small business and one 
of the major recommendations from that conference was that we limit and 
restrict bundling because it was displacing small business.
  Now, the response from the other side is that we need this bundling 
because it is more efficient. The problem is, they have never been able 
to prove that. What has happened, however, is that big companies have 
gotten these contracts to the disadvantage of small businesses.
  Let me tell my colleagues what happens, and it is really an 
unfortunate situation. A contract where we may have had 10 or 12 
competitors competing to offer the government the best price are now 
squeezed out because that contract is now consolidated into one huge 
contract. So the big company with very little or no competition gets 
this huge regional contract and then, with no competition from the 
little guys, does not necessarily give the Government the best price. 
What they do, however, is skim off the profit margin from that contract 
and then subcontract back out the contract to small businesses, leaving 
them with no profitability. That is one of the perhaps lesser known 
problems with the contract bundling.
  Unfortunately, bundling is proliferating. There are currently four 
major contracts within DOD alone projected to surpass $25 billion. The 
Navy Internet contract, the Air Force FAST contract, the Marine food 
service contract, and the Navy janitorial contract in San Diego. In 
each instance, analysis shows these contracts can be performed by small 
businesses, and that there is no national security threat that would 
justify bidding these contracts on a bundled basis.
  What has been the result of this pattern? Well, although DOD 
procurement has increased from $109 billion to $116 billion from 1998 
to 1999, we have had a decrease of 34 percent in the number of small 
business prime contractors, a decrease of 25 percent in the number of 
minority-owned firms, and a decrease of 38 percent in the number of 
women-owned businesses.
  To be brief, we are losing our small businesses, they are being 
squeezed out, displaced, or they are having their profitability denied 
because of the practice of contract bundling, and we need to stop it. 
We need to demand that if the taxpayers are going to be served by 
bundling, that the people doing the bundling document and prove it. 
That is what this bill requires, and that is why I think it is so 
important.
  One final note. It is important that small businesses not be just 
subcontractors, that they be prime contractors, because one of the 
requirements of bids is that one has experience as a prime contract, so 
not only does bundling deny small businesses, it precludes their 
growing into larger, more profitable companies. We have an excellent 
bill here, it is a bipartisan bill, it will enable us to find out 
whether bundling is good for America or bad for America, and it will 
give, ultimately, small businesses a fair chance.
  Mr. Chairman, I urge passage of the bill, and I thank both the 
chairman and the ranking member for their leadership.
  Mr. TALENT. Mr. Chairman, I yield myself such time as I may consume.
  Before the gentleman from Maryland leaves, if he would just engage in 
a little colloquy with me on my time, because he raised a point in 
closing, and I know he did not have enough time to elaborate, but it is 
an excellent point, so on my time if the gentleman would elaborate with 
me a little bit.
  He made the point about how important it is that small business 
people be prime contractors as well as subcontractors, and the 
gentleman is right. I wonder if he has had this experience that I have 
had.
  Small businesses come to me and say, well, okay, they will say, it is 
okay because you are a subcontractor, and I have had a lot of minority 
small businesses in particular tell me this, so that we get listed as a 
subcontractor by the prime contractor, and then when it comes time for 
the prime contractor to do the contract, they never give us any 
business, so they are not a prime contractor or a subcontractor.
  Mr. Chairman, I would ask the gentleman if he has had that 
experience.
  Mr. WYNN. Mr. Chairman, will the gentleman yield?
  Mr. TALENT. I yield to the gentleman from Maryland.
  Mr. WYNN. Mr. Chairman, I absolutely have had that experience, and I 
thank the chairman for raising that point. As a matter of fact, I 
introduced legislation, I do not think it is going anywhere this 
session, which would say that if an agency lists a subcontractor, they 
have to use that subcontractor or justify in some legitimate way, for 
some legitimate reason, not using that contractor; otherwise, it is 
essentially fraud, it is a fraud on the public, it is a disservice to 
the contractor. So I think the chairman's point is certainly very well 
taken.
  Mr. TALENT. Mr. Chairman, I thank the gentleman, and I will reclaim 
my time and just say, if that bill gets assigned to my committee, it is 
going to go some place, I will tell my colleague that.
  The problem here, and the House needs to know this, is that these 
bills sometimes get sequential referrals and get caught up in the 
process. In this case we have jurisdiction, so we were able to get this 
one out.
  I really want to thank the gentleman for his work and efforts in this 
area, and his expertise as well.
  Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 2 minutes to the gentleman from 
Texas (Mr. Ortiz).
  Mr. ORTIZ. Mr. Chairman, I rise in support of the Small Business 
Preservation Competition Act, and thank the

[[Page 18616]]

gentlewoman from New York (Ms. Velazquez) for her leadership on this 
issue that affects so many businesses across the country, particularly 
in rural areas such as the one I represent in south Texas.
  Every time I go home, I see a small businessman or businesswoman in 
my travels around town. They tell me about how the contracts that were 
once part of the healthy competition in the area are finding more and 
more that they are edged out of business by the mega corporations that 
can afford to combine a function and underbid for a multitude of 
services.
  Many times, to compete for contracts that are over hundreds of 
millions of dollars, small businesses just do not have the financial 
resources. Now, they have the experience, they have the skills, but it 
is the financing resources or bonding capacity to compete for these 
contracts. We have to realize, Mr. Chairman, that the small business 
community happens to be the backbone of our economy. It is small 
businesses that are bigger than General Motors, but slowly and surely, 
we are leaving them out of the process.
  As a member of the Committee on Armed Services and the ranking member 
on the Subcommittee on Military Readiness, I have seen this happen all 
the time. I am concerned about one of the issues that is happening in 
my district about trying to regionalize and getting several bases 
together. Sometimes we are wondering whether they are doing this 
because if a small businessperson comes with a contract of $700,000 and 
then there is another contract more or less similar at the other base, 
they combine them, and the small businessperson cannot compete for that 
project.
  This is why this is so, so important.
  Mr. Chairman, I appreciate the fact that many of my colleagues are 
convinced that contracting out services of the Federal Government would 
save money. As a member of the Committee on Armed Services, in many 
instances, I have seen that this is just the opposite. We need to be 
able to give the small business people the opportunity for them to 
compete, and I favor this piece of legislation.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may 
consume.
  I would like to close by again encouraging full support for this very 
important piece of legislation, H.R. 4945.
  Mr. Chairman, this legislation, the Small Business Competition 
Preservation Act of 2000, is an excellent starting point for making 
common sense changes to the contract bundling statute. During this 
Congress and the last, we have heard a lot of talk about 
accountability. We have asked accountability for everyone from welfare 
recipients to teachers. It is time also for Federal agencies to be 
accountable for their actions, and that is what this bill is really 
about.
  As the Committee on Small Business has so often heard, data is just 
not currently being collected on these mega contracts barring from 
gauging the true impact bundling is having on small businesses who want 
to do business with our government.
  Mr. Chairman, H.R. 4945 will set up a database to track not only all 
bundled contracts, but also the small businesses displaced by 
consolidations. It also requires analysis and directs the SBA to file a 
report with Congress aimed at providing greater information about the 
scope of contract consolidations within the Federal marketplace.
  Mr. Chairman, this legislation focuses on the need for greater equity 
in Federal procurement for our Nation's small businesses and the 
adverse effect of increased contract size. Federal agencies are relying 
on combining contracts in an effort to streamline government and 
increase its efficiency.
  While these are laudable goals, in not one instance has a Federal 
agency come before the committee and pointed to an instance where 
taxpayer dollars were saved and the government received better quality 
from a large business. They are not proving cost savings and small 
businesses are being shut out of the Federal marketplace. This bill 
gives us the ability to collect the one commodity that will help us 
make real changes. That commodity is information. That information can 
then be turned into common sense solutions to solve the problem of 
bundling.
  Mr. Chairman, I strongly encourage the passage of H.R. 4945.
  Mr. Chairman, I yield back the balance of my time.
  Mr. TALENT. Mr. Chairman, I yield myself such time as I may consume.
  In closing, I thank the gentlewoman for her comments and her 
leadership on this issue.
  Mr. Chairman, one of the responsibilities of the Committee on Small 
Business is to inform the Members of the House when its will regarding 
opportunity for small business is not being carried out within the 
Federal agencies; specifically, as we have heard today, most 
predominantly within the Department of Defense. I appreciated very much 
the comments of the gentleman from Texas (Mr. Ortiz), who sits on the 
Committee on Armed Services with me and sees this constant flouting of 
our will regarding small business over and over again from that 
perspective as well. This is not just partisanship for small business. 
I think that would be appropriate, Mr. Chairman. Not only is small 
business the backbone of the economy, as Members have said so 
eloquently today, but it is increasingly the backbone of opportunity.

                              {time}  1130

  It may be the only source of opportunity for so many people in our 
country: for single moms, who will not have an opportunity to get a 
postgraduate education; or for people reentering the workforce after 
raising kids; or people coming from distressed neighborhoods or 
disadvantaged backgrounds. They do not have the same kind of 
opportunities that other people may have, but they can start a small 
business. And we have had evidences of that and testimonies of that 
over and over again before the Committee on Small Business.
  We think the government ought to favor small business. Certainly it 
ought not to disadvantage them. And that is what is at stake here. This 
is a question of fairness for our entrepreneurs around the country. We 
have given numerous examples. We could give more of them, but I do not 
think it is necessary.
  This bill simply allows us to find out what is going on. It has a 
unitary definition of bundling. It establishes a database, instructs 
the Committee on Small Business to operate that database and tell us 
what is going on, and then analyze whether any of these contracts 
actually save money, as they say it will, or produce higher quality, as 
they say it will. We have not found any evidence of that, and we have 
looked pretty hard for the last year and a half.
  So it is up to the Members to decide what they want to do. I am going 
to get a rollcall vote on this issue, Mr. Chairman. I hope Members do 
not mind. As the gentlewoman from New York said, one of the reasons for 
this bill is to send a message, if the House wants to send it, 
regarding contracting and procurement for small businesses. We just 
have to decide. Do we want to vote for opportunity for small business 
people, or convenience or the latest trend in procurement within the 
Federal bureaucracy? Do we want to vote for continued excuses and 
evasions when we ask the agencies to justify what they are doing, or do 
we want to vote to enforce and send a message about the will of this 
body regarding opportunities for small entrepreneurs around this 
country?
  I know how I am going to vote, Mr. Chairman. I suspect that I know 
how the Members of the House are going to vote.
  Mr. HINOJOSA. Mr. Chairman, I rise today to help try to right a 
grievous wrong that America's small businesses have suffered far too 
long. Time and time again, we talk about how small businesses are the 
backbone of America. Why then, does it seem as if small businesses are 
constantly fighting an uphill battle? Take for example, the issue 
before us today, contract bundling. What could be more unfair? I am 
glad that as a body, we are taking a united stand today to try and 
change this practice and to hold Federal agencies that fail to provide 
a fair and competitive market for small businesses accountable for 
their actions. This is long overdue.
  You are going to hear numerous facts from my colleagues documenting 
why this practice

[[Page 18617]]

is so abhorrent, but the point I want to make is--wrong is wrong. We 
should all be starting from a level playing field. The Federal 
Government took on this responsibility when it promised small 
businesses would receive a fair opportunity to compete for Federal 
contracts. It has fallen short of meeting this promise. However, we 
don't know to what degree this has occurred. We do know that relying on 
contract bundling devastates small businesses and shows no measurable 
savings to American taxpayers. We do know that the Government awarded 
$200 billion in Federal contracts but small businesses only received 
$43 billion in contract dollars. We do know that this is clearly not a 
level playing field.
  The Small Business Competitive Preservation Act of 2000 will allow 
for us to provide the Small Business Administration with the tools to 
right the wrongs of contract bundling. It will broaden the definition 
of contract bundling, it will also require the SBA Administrator to 
maintain a contract bundling database, and it will inform the House 
Small Business Committee as to whether or not there are measurable and 
substantial benefits to contract bundling. Through the passage of this 
legislation, we will mend the promise broken by meaningless words. We 
will not only claim that small businesses are the foundation for 
America's continued prosperity, but we will show them that we mean it.
  Mr. UDALL of Colorado. Mr. Chairman, I rise in support of H.R. 4945, 
the Small Business Competition Preservation Act of 2000 (SBCPA) and 
urge its adoption.
  H.R. 4945 is a response to the lack of empirical data available on 
the issue of bundling. This legislation will provide a number of 
different methods of collecting information on the how, what, when, 
where and why of contract bundling. For example, SBCPA requires the 
Small Business Administration (SBA) to develop and maintain a database 
of these contracts within the federal government. This database not 
only will track agency bundled contracts but it will also maintains 
statistical information on the tangible effects of bundling on smaller 
companies and in particular industries of the small business community.
  SBCPA also calls for the SBA to analyze renewable bundled to 
contracts to determine whether they have achieved the savings and 
benefits used to justify consolidation in the first place. In addition, 
the SBA would then be required to evaluate whether those savings and 
benefits would continue if the contract remains bundled. Once this 
information is fully analyzed, the SBA Administrator would then be 
asked to put together an annual report.
  The numbers tell the whole story. The federal government awarded 
almost $200 billion in federal contracts in 1999, yet small businesses 
suffered a significant drop in the number of available contracts. Small 
businesses received only 4.9 million contracts which totaled $43 
billion in total contract dollars. This represents almost a 23 percent 
drop in a three-year period (1997-1999).
  Minority and women-owned businesses have been particularly effected, 
with nearly every federal agency failing to meet their negotiated small 
business goals. In addition, some agencies have simply ignored these 
goals and declared them ``not legally binding.''
  I believe this bill takes an important step towards protect 
contracting opportunities for small business in the federal 
marketplace. I urge my colleagues to support this bill.
  Mrs. McCARTHY of New York. Mr. Chairman, I rise in support of the 
Small Business Preservation Competition Act. This important legislation 
will keep track of bundled contracts and their impact on small 
businesses.
  A recent Contracting Study, also known as the ``Scorecard'', released 
by the House Small Business Committee shows a number of federal 
agencies, particularly the Department of Defense, are relying on 
contracting bundling which is devastating small businesses while 
showing no measurable savings to the American taxpayer.
  This study also concluded that the federal government awarded almost 
$200 billion in federal contracts in 1999, but small businesses 
suffered a significant drop in the number of available contracts. Of 
that, small businesses received only 4.9 million contracts which 
totaled $43 billion in total contract dollars. This represents almost a 
23 percent drop in a three-year period (1997-1999).
  And with the decreasing number of federal prime contracts available 
small businesses stand to be shut out of a multi-billion dollar 
marketplace. Unfortunately, with a lack of available data, the ability 
to obtain critical information about bundled contracts is severely 
hampered.
  This bill is a response to the lack of empirical data available on 
the impact of contract bundling. SBPCA allows Congress to get a handle 
on the effects and bring agency justification for these bundling 
contracts into public view. In addition, the bill calls for agency 
accountability of the cost savings of each bundled contract.
  We all know that small business provides the very foundation for 
America's continued prosperity. And while SBPCA helps to correct the 
problems associated with contract bundling, there is more that must be 
done to help these firms succeed in the federal procurement arena.
  I urge my colleagues to support this important legislation.
  Mr. TALENT. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the bill is considered as having been read for 
amendment under the 5-minute rule.
  The text of the bill is as follows:

                               H.R. 4945

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

     SECTION 1. SHORT TITLE.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Competition Preservation Act of 2000''.

     SEC. 2. DATABASE, ANALYSIS, AND ANNUAL REPORT WITH RESPECT TO 
                   BUNDLED CONTRACTS.

       Section 15 of the Small Business Act (15 U.S.C. 644) is 
     amended by adding at the end the following new subsection:
       ``(p) Database, Analysis, and Annual Report With Respect to 
     Bundled Contracts.--
       ``(1) Bundled contract defined.--In this subsection, the 
     term `bundled contract' includes--
       ``(A) each contract that meets the definition set forth in 
     section 3(o) regardless of whether the contracting agency has 
     conducted a study of the effects of the solicitation for the 
     contract on civilian or military personnel of the United 
     States; and
       ``(B) each new procurement requirement that permits the 
     consolidation of 2 or more procurement requirements.
       ``(2) Database.--
       ``(A) In general.--Not later than 180 days after the date 
     of enactment of this subsection, the Administrator of the 
     Small Business Administration shall develop and shall 
     thereafter maintain a database containing data and 
     information regarding--
       ``(i) each bundled contract awarded by a Federal agency; 
     and
       ``(ii) each small business concern that has been displaced 
     as a prime contractor as a result of the award of such a 
     contract.
       ``(3) Analysis.--For each bundled contract that is to be 
     recompeted as a bundled contract, the Administrator shall 
     determine--
       ``(A) the amount of savings and benefits (in accordance 
     with subsection (e)) achieved under the bundling of contract 
     requirements; and
       ``(B) whether such savings and benefits will continue to be 
     realized if the contract remains bundled, and whether such 
     savings and benefits would be greater if the procurement 
     requirements were divided into separate solicitations 
     suitable for award to small business concerns.
       ``(4) Annual report on contract bundling.--
       ``(A) In general.--Not later than 1 year after the date of 
     enactment of this paragraph, and annually in March 
     thereafter, the Administration shall transmit a report on 
     contract bundling to the Committees on Small Business of the 
     House of Representatives and the Senate.
       ``(B) Contents.--Each report transmitted under subparagraph 
     (A) shall include--
       ``(i) data on the number, arranged by industrial 
     classification, of small business concerns displaced as prime 
     contractors as a result of the award of bundled contracts by 
     Federal agencies; and
       ``(ii) a description of the activities with respect to 
     previously bundled contracts of each Federal agency during 
     the preceding year, including--

       ``(I) data on the number and total dollar amount of all 
     contract requirements that were bundled; and
       ``(II) with respect to each bundled contract, data or 
     information on--

       ``(aa) the justification for the bundling of contract 
     requirements;
       ``(bb) the cost savings realized by bundling the contract 
     requirements over the life of the contract;
       ``(cc) the extent to which maintaining the bundled status 
     of contract requirements is projected to result in continued 
     cost savings;
       ``(dd) the extent to which the bundling of contract 
     requirements complied with the contracting agency's small 
     business subcontracting plan, including the total dollar 
     value awarded to small business concerns as subcontractors 
     and the total dollar value previously awarded to small 
     business concerns as prime contractors; and
       ``(ee) the impact of the bundling of contract requirements 
     on small business concerns unable to compete as prime 
     contractors for the consolidated requirements and on the 
     industries of such small business concerns, including a 
     description of any changes to the proportion of any such 
     industry that is composed of small business concerns.''.


[[Page 18618]]


  The CHAIRMAN. During consideration of the bill for amendment, the 
Chair may accord priority in recognition to a Member offering an 
amendment that he has printed in the designated place in the 
Congressional Record. Those amendments will be considered read.
  The Chairman of the Committee of the Whole may postpone a demand for 
a recorded vote on any amendment and may reduce to a minimum of 5 
minutes the time for voting on any postponed question that immediately 
follows another vote, provided that the time for voting on the first 
question shall be a minimum of 15 minutes.
  Are there any amendments to the bill?
  If not, under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Largent) having assumed the chair, Mr. Cooksey, Chairman of the 
Committee of the Whole House on the State of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 4945) to 
amend the Small Business Act to strengthen existing protections for 
small business participation in the Federal procurement contracting 
process, and for other purposes, pursuant to House Resolution 582, he 
reported the bill back to the House.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. TALENT. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 422, 
nays 0, not voting 11, as follows:

                             [Roll No. 482]

                               YEAS--422

     Abercrombie
     Ackerman
     Aderholt
     Allen
     Andrews
     Archer
     Armey
     Baca
     Bachus
     Baird
     Baker
     Baldacci
     Baldwin
     Ballenger
     Barcia
     Barr
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Becerra
     Bentsen
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bonior
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Canady
     Cannon
     Capps
     Capuano
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Chenoweth-Hage
     Clay
     Clayton
     Clement
     Clyburn
     Coble
     Coburn
     Collins
     Combest
     Condit
     Conyers
     Cook
     Cooksey
     Costello
     Cox
     Coyne
     Cramer
     Crane
     Crowley
     Cubin
     Cummings
     Cunningham
     Danner
     Davis (FL)
     Davis (IL)
     Davis (VA)
     Deal
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     DeMint
     Deutsch
     Dickey
     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Edwards
     Ehlers
     Ehrlich
     Emerson
     Engel
     English
     Eshoo
     Etheridge
     Evans
     Everett
     Ewing
     Farr
     Fattah
     Filner
     Fletcher
     Foley
     Forbes
     Ford
     Fossella
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Goodling
     Gordon
     Goss
     Graham
     Granger
     Green (TX)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Hooley
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hutchinson
     Hyde
     Inslee
     Isakson
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E.B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kanjorski
     Kaptur
     Kasich
     Kelly
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Knollenberg
     Kolbe
     Kucinich
     Kuykendall
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Larson
     Latham
     LaTourette
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Luther
     Maloney (CT)
     Maloney (NY)
     Manzullo
     Markey
     Martinez
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McCrery
     McDermott
     McGovern
     McHugh
     McInnis
     McIntyre
     McKeon
     McKinney
     McNulty
     Meehan
     Meeks (NY)
     Menendez
     Metcalf
     Mica
     Millender-McDonald
     Miller (FL)
     Miller, Gary
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Murtha
     Myrick
     Nadler
     Napolitano
     Neal
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Ose
     Owens
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pease
     Pelosi
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Riley
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Royce
     Rush
     Ryan (WI)
     Ryun (KS)
     Sabo
     Salmon
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaffer
     Schakowsky
     Scott
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Sherwood
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stark
     Stearns
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Sweeney
     Talent
     Tancredo
     Tanner
     Tauscher
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Tierney
     Toomey
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Waters
     Watkins
     Watt (NC)
     Watts (OK)
     Waxman
     Weiner
     Weldon (FL)
     Weldon (PA)
     Weller
     Wexler
     Weygand
     Whitfield
     Wicker
     Wilson
     Wolf
     Woolsey
     Wu
     Wynn
     Young (AK)
     Young (FL)

                             NOT VOTING--11

     Brady (TX)
     Campbell
     Diaz-Balart
     Green (WI)
     Klink
     Lazio
     McIntosh
     Meek (FL)
     Nethercutt
     Vento
     Wise

                              {time}  1156

  Mr. METCALF changed his vote from ``nay'' to ``yea.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. GREEN of Wisconsin. Mr. Speaker, on rollcall No. 482, had I been 
present, I would have voted ``yea.''
  Mr. DIAZ-BALART. Mr. Speaker, on rollcall No. 482, had I been 
present, I would have voted ``yea.''

                          ____________________