[Congressional Record (Bound Edition), Volume 153 (2007), Part 8]
[House]
[Pages 11881-11896]
[From the U.S. Government Publishing Office, www.gpo.gov]




               SMALL BUSINESS FAIRNESS IN CONTRACTING ACT

  The SPEAKER pro tempore. Pursuant to House Resolution 383 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. 1873.

                              {time}  1852


                     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. 1873) to reauthorize the programs and activities of the Small 
Business Administration relating to procurement, and for other 
purposes, with Mr. Lincoln Davis of Tennessee in the chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered read the 
first time.
  The gentlewoman from New York (Ms. Velazquez) and the gentleman from 
Ohio (Mr. Chabot) each will control 30 minutes.
  The Chair recognizes the gentlewoman from New York.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, there is no question that the Federal marketplace 
continues to grow at record rates. Just last year, the Federal 
Government spent $417 billion on goods and services. While the 
government's buying power is increasing, small businesses' 
opportunities and access to this market is decreasing. With unfair 
competition and the combining of government projects, entrepreneurs are 
being shut out of the Federal market. Currently, the state of 
procurement for small businesses is one that does more to create 
barriers than it does to encourage participation.
  What we have heard time and time again is that access to government 
projects is out of the reach of small firms. The barriers in the way of 
accessing this work is clear, among them, the bundling of contracts, 
the lack of a strongly enforced small business contracting goal and 
large firms receiving contracts intended for small firms.
  For the past 6 years, the government has failed to meet its 23 
percent small business contracting goal, costing entrepreneurs last 
year alone as much as $4.5 billion in lost contracting opportunities. 
With small businesses creating three out of every four new jobs in this 
country, they deserve to compete on a level playing field for 
government work. Small firms do not deserve to be left out of the 
Federal marketplace but, instead, to be given every tool needed to 
continue to spur economic growth.
  The number one reason the small business contracting goal is not 
being met is because of the bundling of contracts. Individual contracts 
being combined works to exclude small firms from bidding on them and 
often results in higher costs to taxpayers and decreased value for the 
government. For every $1,800 awarded in a bundled contract, there is a 
$33 decrease to small businesses. When contracts are bundled together 
creating ``super-contracts,'' they become too large for entrepreneurs 
to compete.
  In 2002, the President pledged during the administration's 
announcement of their small business agenda that, ``We're going to 
insist we break down large Federal contracts so that small business 
owners have got a fair shot at Federal contracting.'' This legislation 
finally puts his words into action.
  To create the illusion that the goal is being met, agencies are using 
contracts awarded to large companies and including them toward their 
small business contracting goal. In 2005, approximately $12 billion in 
contracts were falsely counted. This gives the impression that agencies 
are doing more work with small firms than they actually are.
  Access to the Federal marketplace is an important mechanism for 
growth for small businesses. If competition for government projects is 
not fair, there is no way we can expect entrepreneurs to grow and 
expand their ventures. This not only benefits entrepreneurs, but also 
puts taxpayers' dollars to good use. For every dollar in contracts, $7 
in revenue is generated for the Federal Government.
  Clearly, large businesses have more resources than small firms. 
Oftentimes they have access to more capital, can hire more staff and 
have fewer barriers in the way of marketing and expanding their 
companies. The last thing they need to be doing is taking contracts 
intended for small businesses.
  H.R. 1873 is a bipartisan effort introduced by Mr. Braley. I want to 
commend Mr. Braley for his work on addressing small business 
procurement issues and bringing this bill up for consideration.
  This legislation will help open the marketplace for small business 
contracts. It ensures that fair competition is enforced and that small 
firms are given the opportunities they deserve to work with the Federal 
Government.
  With the government being the largest buyer of services and goods and 
small businesses being the largest job creators, increased partnership 
between these two is the best value for the taxpayer dollar, and not 
only benefits entrepreneurs, but communities all across the country.
  I strongly urge my colleagues to vote for the Small Business Fairness 
in Contracting Act.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CHABOT. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, tonight I rise in support of H.R. 1873, the Small 
Business Fairness in Contracting Act. As an original cosponsor of this 
legislation, we worked closely with Chairwoman Velazquez and 
Representative Braley to draft a good, bipartisan bill that passed the 
Small Business Committee by voice vote and was cosponsored by nearly 
all the members of the committee.
  Our legislation was intended to reform the contracting process, 
increase competition and provide a better value to the taxpayer. The 
legislation also takes steps to provide greater opportunities to small 
businesses and addresses problems with the Federal procurement 
database.
  Promoting competition and increasing suppliers depends on the active 
participation of small businesses, the fastest growing segment of the 
American economy.

                              {time}  1900

  Without small business's participation, the government is forced to 
rely on fewer and fewer businesses to satisfy its need for goods and 
services. This concentration is bad for the government and worse for 
the tax-paying public. For that reason, utilization of small businesses 
to fulfill government contracts has been a long-standing policy, a 
policy that is neither Republican nor Democrat.

[[Page 11882]]

  Unfortunately, the bill we are considering today, while making many 
important reforms, is watered down from the original version we 
introduced.
  I commend Chairman Velazquez and her staff for working tirelessly to 
try and protect the sound work done by the Committee on Small Business.
  I also want to thank the Rules Committee, and especially Chairwoman 
Slaughter and Ranking Member Dreier, for allowing me to offer three 
important amendments, along with three of my Democratic colleagues, to 
restore significant provisions of the original bill.
  One amendment that I proposed with Mr. Sestak, however, was not ruled 
in order. This amendment would have restored a provision of our 
original Small Business Committee bill related to contract bundling. 
Contract bundling is a procurement strategy that represents a potential 
obstacle to small business participation in the Federal marketplace. 
Contract bundling allows Federal procurement officials to manage the 
procurement process using fewer contracts. At times, contract bundling 
may be appropriate. At other times, it may reduce competition by 
combining multiple contracts for goods or services that could be 
provided separately into a single contract that small businesses are 
incapable of performing.
  Nothing in our original bill as reported by the Committee on Small 
Business would have completely prevented the Federal Government from 
bundling contracts, nor is there anything in the bill that we are 
debating today that prevents contracts from being bundled. Instead, we 
take the view that bundling can be beneficial if the government gets 
substantial, measurable benefits in terms of better prices or higher 
quality or critical delivery terms.
  However, our original bill would have required that Federal 
contracting officers examine their contracting strategies to ensure 
that the government was receiving real benefits through bundled 
contracts and also consider the potential loss of competition from 
small businesses being excluded. Or as President Reagan might have put 
it, trust but verify.
  The bill we are debating now reduces the amount of contracts subject 
to the trust but verify standard as compared to our original bill. It 
does, however, represent an increase from current law in the number of 
contracts that will be scrutinized. With that in mind and with the 
amendments made in order, including a separate amendment by Mr. Sestak, 
the bill moves us modestly in the right direction.
  I would hope that as we proceed, and especially in conference, we 
continue to strengthen the trust but verify standards relative to 
bundled contracts.
  While this may create more work for Federal contracting officers, it 
also ensures that the Federal procurement process protects competition 
in the long run while ensuring that the government benefits in the 
short run from necessary bundled contracts.
  As we work through the legislative process with the Senate, it is 
important that a sensible mechanism exist for an independent arbiter to 
resolve disputes between the SBA and the agency issuing a bundled 
contract. It seems unfair that the SBA's only avenue of appeal is to 
the agency that is doing the procurement. Would anybody be surprised to 
learn that the administrator has never won an appeal on an agency head 
on a disputed bundled contract? Not once.
  Nor should the legislation as it works its way to final passage 
substitute an appeals process by affected small businesses for that of 
the Small Business Administrator. Requiring a small business to 
challenge an agency's decision pits a David against a Goliath. But, 
unlike the biblical account, Goliath usually win these battles.
  In addition to the provisions on bundling, the bill we are 
considering today increases the goals for prime Federal contracts to 
small businesses. But in my estimation and why I offered amendments is 
that the increase in the bill does not recognize the 10 percent growth 
in the number of small businesses since 1997, the last time the goals 
were raised. Nor does the modest increase from 23 to 25 percent 
recognize substantial technological changes and the capacity of small 
businesses to perform contracts overseas. Amendments we will be 
considering will raise those standards to appropriate levels and 
recognize the capacity of small businesses to perform work overseas.
  In addition, I would ask the chairwoman that we work together to 
remove a provision included in the bill by the Committee on Oversight 
and Government Reform that treads on the sole jurisdiction of the 
Committee on Small Business. I believe that sets a bad precedent for 
future legislation in the House.
  I also find that the provisions in title III of the bill are worthy 
of support. I congratulate the Committee on Oversight and Government 
Reform as well as members of the Committee on Small Business on working 
to eradicate errors in critical Federal procurement databases. These 
changes, although seemingly arcane, will ensure that contracting 
officers award contracts intended to small businesses to actual small 
businesses.
  While this bill is not as strong as the version adopted by the Small 
Business Committee, it nevertheless represents an improvement over 
existing law. I will continue to work to further strengthen this bill 
and to ensure that small businesses have their fair opportunity to 
participate in the Federal procurement process
  Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield to the gentleman from California 
(Mr. Waxman), chairman of the Committee on Oversight and Government 
Reform, such time as he may consume; and I want to take this 
opportunity to thank him for his work on this legislation.
  Mr. WAXMAN. Mr. Chairman, H.R. 1873, the Small Business Fairness in 
Contracting Act, would make a number of improvements to the preferences 
given small businesses in Federal contracts.
  The bill is the product of much hard work by both the Small Business 
Committee and the Oversight Committee and reflects our consensus view 
on many important issues, and I would like to thank Chairwoman 
Velazquez and the Small Business Committee for working with us to 
address their legitimate concerns and to reach the correct balance in 
this bill.
  I would also like to commend Congressman Braley, a member of both the 
Small Business and Oversight Committees, for his leadership on this 
issue. I also thank the ranking member of the Oversight Committee, 
Congressman Tom Davis.
  The bill represents a delicate balance between appropriate assistance 
for small businesses through the Federal acquisition system and the 
overriding purpose of the system, which must always be to ensure that 
taxpayers get the best value for their money.
  The bill also starts us on the path of addressing the current 
contracting preference enjoyed by Alaska Native Corporations. These 
groups can be awarded Federal contracts of any size without 
competition.
  To address these concerns about ANC contracts and promote competition 
in contracting, the bill includes a provision which would give Congress 
until the end of the year to adopt legislation addressing sole-source 
contracting by Alaska Native Corporations and economically 
disadvantaged Indian tribes. If we fail to act during this 
``placeholder'' period, the bill would then require the administration 
to consult with Alaska Natives and Indian tribes to establish an 
appropriate limit on the size of the sole-source awards to these 
groups.
  In crafting this provision, I have worked closely with the gentleman 
from Michigan (Mr. Kildee), who is Democratic Chair of the 
Congressional Native American Caucus; and at this time I yield to the 
gentleman from Michigan (Mr. Kildee) for the purpose of engaging in a 
colloquy.
  Mr. KILDEE. I want to thank my chairman for yielding to engage in a 
colloquy on a matter of great importance to Native Americans.
  Congress has long been concerned about addressing the social ills 
that

[[Page 11883]]

plague our Native American communities which stem from the policies of 
the United States that were designed to terminate tribal nations and 
their culture.
  While we cannot erase the deplorable history of Indian policy in the 
United States, Congress has sought to honor the political status of 
tribal governments by enacting a wide range of laws designed to promote 
Indian self-determination and economic self-sufficiency. The entirety 
of title 25 of the United States Code is a compilation of all Federal 
laws relating to Indians that seek to achieve those goals.
  Congress has established the Native 8(a) program in furtherance of 
those Federal policies to foster strong economies in Native 
communities. The program is an important tool which has significant 
benefits to Native communities.
  I understand that the authorizing committees have concerns relating 
to the Native 8(a) program, and I thank Chairman Waxman for agreeing to 
placeholder language at section 211 so we may continue our dialogue 
with the participants of that program to find a permanent solution to 
the committee's concern.
  In addressing the committee's concerns, however, it is my strong 
desire that we balance the interest of all parties and that any change 
to that program take into account our trust relationship with tribal 
nations and the communities they serve.
  I thank the gentleman for yielding.
  Mr. WAXMAN. I think the gentleman makes a number of excellent points 
about the sorry history of Indian policy in the United States. I agree 
with him that the intent of this provision is to start a dialogue which 
can recognize the legitimate concerns of Alaska Natives and American 
Indians, while at the same time preserving the integrity of the Federal 
contracting process.
  I congratulate the chairwoman of the Small Business Committee and 
thank her for her willingness to work with us
  Mr. CHABOT. Mr. Chairman, I continue to reserve the balance of my 
time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield such time as he may consume to 
the gentleman from Iowa (Mr. Braley), the sponsor of the bill and the 
chairman of the Contracting and Technology Subcommittee of the Small 
Business Committee.
  Mr. BRALEY of Iowa. I thank the gentlewoman for yielding me this 
time.
  Last month, I introduced H.R. 1873, the Small Business Fairness in 
Contracting Act. Today, I rise as a voice for small business owners 
everywhere who want a fighting chance to compete for Federal contracts.
  I would like to take a moment to thank Chairwoman Nydia Velazquez and 
Ranking Member Steve Chabot. I am pleased H.R. 1873 has such strong 
bipartisan support and is co-sponsored by nearly the entire Small 
Business Committee.
  Additionally, I would like to thank Oversight and Government Reform 
Chairman Henry Waxman and Ranking Member Tom Davis for their prompt 
consideration of this bill.
  Finally, I would like to thank Rules Committee Chairwoman Louise 
Slaughter and Ranking Member David Dreier for acting on this bill. It 
is clear to me that members of all these committees understand the 
important role small businesses play in our communities.
  Over the past 5 years, government agencies have greatly increased the 
practice known as contract bundling, oftentimes combining work that 
small businesses could perform into giant packages that exceed small 
firms' ability to compete for this work. During this same time, total 
government contracting has increased by 60 percent, while the number of 
small business contracts has decreased by 55 percent.
  This is unacceptable; and that is why it is so important that today 
we are considering the Small Business Fairness in Contracting Act, 
sending a message to small businesses that this Congress is serious 
about leveling the playing field for them by improving their 
opportunities to compete for Federal contracts.
  H.R. 1873 also increases competition in the contracting process, 
which can lead to lower prices for the government.
  As we know, small businesses are the number one job creators in this 
country, and we must ensure that this engine remains not only healthy 
but also has the support it needs to grow. It is essential to remove 
the barriers blocking small businesses from entering the nearly $400 
billion per year Federal marketplace.
  Public support for this bill is broad and bipartisan. The Small 
Business Fairness in Contracting Act was co-sponsored by 29 
Representatives, 17 Democrats and 12 Republicans. H.R. 1873 has been 
endorsed by the National Federation of Independent Business, the 
Associated General Contractors, the National Small Business 
Association, Women in Public Policy, the U.S. Women's Chamber of 
Commerce, and the U.S. Hispanic Chamber of Commerce.
  My State of Iowa ranks near the bottom in terms of government 
contracting dollars awarded to small businesses. Even though 477 small 
businesses in my district are registered with the Small Business 
Administration, the dollar value of contracts awarded to those 
businesses is a tiny fraction of the Federal contract pie. Everyone in 
this House understands the important role that small businesses play in 
each of our districts. Allowing them a fair opportunity to bid on 
Federal contracts will bring economic vitality to our towns and cities.
  I thank all of my colleagues who join me today in standing up for the 
interests of small businesses in this country.
  Mr. CHABOT. Mr. Chairman, we have no further speakers, and I yield 
back the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I would like to close by saying that it 
has been over a decade since a small business contracting bill has come 
to the floor. Clearly, addressing the concerns of entrepreneurs in 
regards to procurement is long overdue and much needed.
  I just want to take this opportunity to thank Ranking Member Chabot 
for all of his hard work and his collaboration in working on this 
legislation. I also want to thank Mr. Braley and to take this 
opportunity to thank the staff that worked on this bill.

                              {time}  1915

  From the minority staff, Barry Pineles; from Mr. Braley's staff, Tom 
Wolf and Mike Goodman; from Mr. Waxman's staff, Mark Stevens and Phil 
Barnett; and from the majority staff, LeAnn Delaney and Melody Reis and 
Russ Orban.
  I strongly urge my colleagues to vote for the Small Business Fairness 
in Contracting Act
  Mr. HOLT. Mr. Chairman, I rise today in support of H.R. 1873, the 
Small Business Fairness in Contracting Act.
  Small businesses are a big part of the U.S. economy. In fact, small 
businesses employ more than half of all private sector employees and 
pay 45 percent of the total U.S. private payroll. New jobs come 
disproportionately from small businesses, which generated 60 to 80 
percent of new jobs in the past 10 years.
  Although federal government contracting practices are required by law 
to be supportive of small businesses, the bundling of contracts has 
prevented many small businesses from being able to compete fairly. This 
is a significant loss to small businesses, as federal contracts pay a 
total of $400 billion annually to contractors. H.R. 1873 gives small 
businesses a fair chance at competing for these contracts by preventing 
the contract bundling that has excluded them from being considered. In 
doing this, the Act also insures that taxpayer money is spent more 
efficiently, as more competition for government contracts will 
necessarily result in better use of public funds.
  The Act further improves small business contracting practices by 
creating a system by which small businesses and opportunities for small 
businesses can be better catalogued and tracked. If a business has 
grown and should no longer be considered small, we will know, and well 
give priority to true small businesses. If a large business has not 
subcontracted enough to small businesses, we will know, and we will 
assist small businesses in finding these subcontracting opportunities.
  When small businesses can compete fairly and are made aware of the 
opportunities provided them, jobs are created, entrepreneurship

[[Page 11884]]

thrives, and the overall economy prospers. I therefore encourage my 
colleagues to support this resolution.
  Ms. HIRONO. Mr. Chairman, I rise in support of H.R. 1873, the Small 
Business Fairness in Contracting Act.
  This bill creates a competitive bid process in the federal 
marketplace by restricting the ability of federal agencies to generate 
contracts that are too large for small businesses to compete 
effectively. Within the last 7 years, larger firms have benefited from 
the bundling of contracts while the total number of contracts received 
by small businesses has declined nationwide by 55 percent. H.R. 1873 
increases the goal for small-business participation in federal 
contracts to at least 25 percent and requires the Small Business 
Administration to work with government agencies each fiscal year to 
establish and meet contracting goals that benefit small businesses.
  Small businesses represent the overwhelming majority of businesses in 
Hawaii and play a vital role in economic growth for the state. H.R. 
1873 will provide increased opportunities for Hawaii's small business 
community to compete for federal contracts that formerly were bundled 
and ended up going to larger out-of-state corporations.
  Of course, this bill will help small businesses throughout the 
country compete for their fair share of federally funded projects.
  I urge my colleagues to support this measure.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I rise in strong support of 
H.R. 1873, the Small Business Fairness in Contracting Act. From the 
bodegas of the Bronx to your favorite family owned restaurant scattered 
across the plains of small town America, small businesses are the 
backbone of the American economy. These entities epitomize the spirit 
of the American dream, and they speak to everything that is wonderful 
about our society. Small businesses represent an opportunity for those 
individuals who dare to dream, who take a chance, and who wish to 
fulfill that entrepreneurial spirit that built this mighty Nation. I 
find it interesting that we are giving this bill consideration in the 
midst of a heated immigration debate, because one will find that a 
significant number of immigrants start small businesses as a means to 
realizing the American dream. They enrich the local community while 
bringing in much needed tax revenue, the same revenue that helped build 
New York City, Chicago, and Boston back at the turn of the 20th 
century. Turning our focus back to H.R. 1873, the Small Business 
Fairness in Contracting Act, I rise in strong support of this 
legislation as it ensures that the federal government maintains a 
strong commitment to small businesses, as they try to remain 
competitive in a growing global economy.
  This legislation increases the government-wide goal for participation 
by small-business concerns in all contracts awarded in a fiscal year to 
no less than 25 percent, from the current 23 percent. This legislation 
also increases the government-wide goal for procurement for small 
disadvantaged and women-owned businesses to 8 percent from 5 percent. 
The bill also requires each federal agency to submit to the SBA and 
Congress a detailed plan outlining how the agency plans to meet its 
small-business goals each fiscal year.
  As a body, we the members of this 110th Congress have a duty to 
protect the needs of the average American. By passing this legislation 
we ensure the owners of small businesses across the country that the 
110th Congress eagerly performed their duties.
  Mr. LARSON of Connecticut. Mr. Chairman, I regret that I could not be 
present today because of a family medical situation and I would like to 
submit this statement for the record in support of H.R. 1873, the Small 
Business Fairness in Contracting Act.
  All too often mega contracts are too large for small business to 
compete for in the federal marketplace. Last year, the federal 
government spent more than $417 billion on goods and services in over 8 
million contracts in 2006, of which small businesses won about $80 
billion (22 percent). Of the $80 billion for small business contracts, 
$12 billion was actually awarded to large businesses, not small 
businesses.
  For the past six years, the federal government has failed to meet its 
23 percent small business contracting goal. The bill before the House 
today would create a fair and open federal contracting system, that 
would ensure all small businesses have an equal opportunity to secure 
government contracts. This bill would increase the government-wide goal 
for small-business participation in federal contracts, limit the 
ability of federal agencies to bundle small projects into large 
contracts, and require the Small Business Administration to take steps 
to reduce erroneous entries in the government's contractor registry. 
The Small Businesses Fairness in Contracting Act would require no less 
than 25 percent, an increase from 23 percent, of all contracts be 
awarded to small-business in a fiscal year. It would also increase the 
government-wide goal for procurement for small disadvantaged and women-
owned businesses to 8 percent from 5 percent.
  This bill is a vital step for America's 26 million small businesses, 
including Connecticut's 341,000 small businesses. It is an investment 
in our nation's small businesses. For every $1 invested, small 
businesses will contribute $7 to the economy. I call upon my colleagues 
to join me in supporting a bill that supports a vital national 
interest--America's small businesses and economy.
  Mr. CONYERS. Mr. Chairman, today I rise in support for H.R. 1873, the 
Small Business Fairness in Contracting Act and join my colleagues in 
efforts to ensure that small businesses are given a fair opportunity to 
compete for Federal contracts. I recognize that government agencies 
have recently been bundling hundreds of small contracts into single 
mega-contracts, which are awarded to only the largest contractors.
  H.R. 1873, the Small Business Fairness in Contracting Act, will un-
bundle many of these contracts and level the playing field for small 
businesses. The bill addresses the major problems that have resulted in 
limited opportunities for small businesses in the Federal marketplace. 
The bill ensures that more contracting opportunities are available to 
small firms, fights fraud in the contracting process and raises the 
Federal small business government-wide contracting goal. H.R. 1873 
implements changes that will remove a number of the barriers facing 
entrepreneurs in accessing Federal contracts, creating a more level 
playing field for this Nation's 26 million small businesses.
  I want to thank Chairwoman Nydia Velazquez for bringing this 
legislation to the committee and to the floor. The Detroit region's 
420,000 small businesses account for 99.2 percent of all firms; this 
includes almost 300,000 sole proprietors. Small businesses with 
employees other than themselves employ 915,000 people or 47 percent of 
the region's employees. While big businesses have consolidated a large 
portion of their services and number of employees they hire, small 
business has helped mitigate the pain with modest but steady employment 
gains. The continued growth in the small business sector, especially in 
the formation of fair contracting for the diverse population not only 
in Detroit, but throughout Michigan, will create much-needed jobs and 
assist in the diversification of our region's economy.
  By law, Federal organizations are required to support small 
businesses. However, contract bundling has resulted in less small 
business participation in Federal contracts. It is essential to help 
remove the barriers blocking small businesses from entering the nearly 
$400 billion per year Federal marketplace.
  I believe in the value of small businesses as the number one job 
creators in this country and strongly support this legislation.
  Ms. VELAZQUEZ. Mr. Chairman, I yield back the balance of our time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
recommended by the Committee on Oversight and Government Reform, 
printed in the bill, is considered as an original bill for the purpose 
of amendment and is considered read.
  The text of the committee amendment in the nature of a substitute is 
as follows:

                               H.R. 1873

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Fairness in Contracting Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Regulations.

                       TITLE I--CONTRACT BUNDLING

Sec. 101. Definitions of bundling of contract requirements and related 
              terms.
Sec. 102. Justification.
Sec. 103. Appeals.
Sec. 104. Third-party review.

    TITLE II--INCREASING THE NUMBER OF SMALL BUSINESS CONTRACTS AND 
                              SUBCONTRACTS

Sec. 201. Small business goal.
Sec. 202. Include overseas contracts in small business goal.
Sec. 203. Annual goal negotiation.
Sec. 204. Goal reasonableness.
Sec. 205. Usage of small companies in goal achievement.
Sec. 206. Annual plan for each agency explaining how agency will meet 
              small business goals.

[[Page 11885]]

Sec. 207. Making small businesses the first choice.
Sec. 208. Uniform metric for subcontracting achievements.
Sec. 209. Subcontracting database.
Sec. 210. National database.
Sec. 211. Review of subcontracting plans.
Sec. 212. Agency obligation for fulfilling contracting goals.

             TITLE III--PROTECTION OF TAXPAYERS FROM FRAUD

Sec. 301. Small business size protest notification.
Sec. 302. Review of national registry.
Sec. 303. Recertification of compliance with size standards and 
              registration with Central Contractor Registry.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

Sec. 401. Authorization of appropriations.

     SEC. 2. REGULATIONS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act--
       (1) the Administrator of the Small Business Administration 
     shall promulgate regulations to implement this Act and the 
     amendments made by this Act; and
       (2) the Federal Acquisition Regulation shall be revised to 
     implement this Act and the amendments made by this Act.
       (b) Notice and Comment.--The regulations required by 
     subsection (a) shall be promulgated after opportunity for 
     notice and comment as required by section 553(b) of title 5, 
     United States Code.

                       TITLE I--CONTRACT BUNDLING

     SEC. 101. DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS 
                   AND RELATED TERMS.

       Section 3 of the Small Business Act (15 U.S.C. 632) is 
     amended by amending subsection (o) to read as follows:
       ``(o) Definitions of Bundling of Contract Requirements and 
     Related Terms.--For purposes of this Act:
       ``(1) Bundled contract.--
       ``(A) In general.--The term `bundled contract' means a 
     contract or order that is entered into to meet procurement 
     requirements that are consolidated in a bundling of contract 
     requirements, without regard to its designation by the 
     procuring agency or whether a study of the effects of the 
     solicitation on civilian or military personnel has been made.
       ``(B) Exceptions.--The term does not include--
       ``(i) a contract or order with an aggregate dollar value 
     below the dollar threshold specified in paragraph (4); or
       ``(ii) a contract or order that is entered into to meet 
     procurement requirements, all of which are exempted 
     requirements under paragraph (5).
       ``(2) Bundling of contract requirements.--
       ``(A) In general.--The term `bundling of contract 
     requirements' means the use of any bundling methodology to 
     satisfy 2 or more procurement requirements for new or 
     existing goods or services, including any construction 
     services, that is likely to be unsuitable for award to a 
     small business concern due to--
       ``(i) the diversity, size, or specialized nature of the 
     elements of the performance specified;
       ``(ii) the aggregate dollar value of the anticipated award;
       ``(iii) the geographical dispersion of the contract or 
     order performance sites; or
       ``(iv) any combination of the factors described in clauses 
     (i), (ii), and (iii).
       ``(B) Exceptions.--The term does not include--
       ``(i) the use of a bundling methodology for an anticipated 
     award with an aggregate dollar value below the dollar 
     threshold specified in paragraph (4); or
       ``(ii) the use of a bundling methodology to meet 
     procurement requirements, all of which are exempted 
     requirements under paragraph (5).
       ``(3) Bundling methodology.--The term `bundling 
     methodology' means--
       ``(A) a solicitation to obtain offers for a single contract 
     or order, or a multiple award contract or order;
       ``(B) a solicitation of offers for the issuance of a task 
     or a delivery order under an existing single or multiple 
     award contract or order; or
       ``(C) the creation of any new procurement requirement that 
     permits a consolidation of contract or order requirements.
       ``(4) Dollar threshold.--The term `dollar threshold' 
     means--
       ``(A) $65,000,000, if solely for construction services; and
       ``(B) $1,500,000, in all other cases.
       ``(5) Exempted requirements.--The term `exempted 
     requirement' means one or more of the following:
       ``(A) A procurement requirement solely for items that are 
     not commercial items (as the term `commercial item' is 
     defined in section 4(12) of the Office of Federal Procurement 
     Policy Act (41 U.S.C. 403(12))).
       ``(B) A procurement requirement with respect to which a 
     determination that it is unsuitable for award to a small 
     business concern has previously been made by the agency. 
     However, the Administrator shall have authority to review and 
     reverse such a determination for purposes of this paragraph 
     and, if the Administrator does reverse that determination, 
     the term `exempted requirement' shall not apply to that 
     procurement requirement.
       ``(6) Procurement requirement.--The term `procurement 
     requirement' means a determination by an agency that a 
     specified good or service is needed to satisfy the mission of 
     the agency.''.

     SEC. 102. JUSTIFICATION.

       Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) 
     is amended--
       (1) by striking ``is in a quantity or estimated dollar 
     value the magnitude of which renders small business prime 
     contract participation unlikely'' and inserting ``would now 
     be combined with other requirements for goods and services'';
       (2) by striking ``(2) why delivery schedules'' and 
     inserting ``(2) the names, addresses and size of the 
     incumbent contract holders; (3) a description of the 
     industries that might be interested in bidding on the 
     contract requirements; (4) the number of small businesses 
     listed in the industry categories that could be excluded from 
     future bidding if the contract is combined or packaged; (5) 
     why delivery schedules'';
       (3) by striking ``(3) why the proposed acquisition'' and 
     inserting ``(6) why the proposed acquisition'';
       (4) by striking ``(4) why construction'' and inserting 
     ``(7) why construction'';
       (5) by striking ``(5) why the agency'' and inserting ``(8) 
     why the agency'';
       (6) by striking ``justified.'' and inserting ``justified. 
     The statement shall also set forth the proposed procurement 
     strategy required by subsection (e) and, if applicable, the 
     specifications required by subsection (e)(3). Concurrently, 
     the statement shall be made available to the public, 
     including through dissemination in the Federal contracting 
     opportunities database.''; and
       (7) by inserting after ``prime contracting opportunities.'' 
     the following: ``If no notification of the procurement and 
     accompanying statement is received, but the Administrator 
     determines that there is cause to believe the contract 
     combines requirements or a contract (single or multiple 
     award) or task or delivery order for construction services or 
     includes unjustified bundling, then the Administrator can 
     demand that such a statement of work goods or services be 
     completed by the procurement activity and sent to the 
     Procurement Center Representative and the solicitation 
     process postponed for at least 10 days to allow the 
     Administrator to review the statement and make 
     recommendations as described in this section before the 
     procurement is continued.''.

     SEC. 103. APPEALS.

       Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) 
     is amended--
       (1) by striking ``If a proposed procurement includes in its 
     statement'' and inserting ``If a proposed procurement would 
     negatively affect one or more small business concerns, or if 
     a proposed procurement includes in its statement''; and
       (2) by inserting before ``Whenever the Administration and 
     the contracting procurement agency fail to agree,'' the 
     following: ``If a small business concern would be adversely 
     affected, directly or indirectly, by the procurement as 
     proposed, and that small business concern or a trade 
     association on behalf of that small business concern so 
     requests, the Administrator may, in the Administrator's 
     discretion, take action to further the interests of that 
     small business concern.''.

     SEC. 104. THIRD-PARTY REVIEW.

       Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) 
     is amended by striking the sentence beginning ``Whenever the 
     Administration and the contracting procurement agency fail to 
     agree,'' and inserting the following: ``Whenever the 
     Administrator and the contracting procurement agency fail to 
     agree, the Administrator shall submit the matter to the 
     Administrator of the Office of Federal Procurement Policy 
     within the Office of Management and Budget, who shall render 
     his decision regarding the matter not later than 10 days 
     after receiving the matter.''.

    TITLE II--INCREASING THE NUMBER OF SMALL BUSINESS CONTRACTS AND 
                              SUBCONTRACTS

     SEC. 201. SMALL BUSINESS GOAL.

       Section 15(g)(1) of the Small Business Act (15 U.S.C. 
     644(g)(1)) is amended by striking ``23 percent'' and 
     inserting ``30 percent''.

     SEC. 202. INCLUDE OVERSEAS CONTRACTS IN SMALL BUSINESS GOAL.

       Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) 
     is amended by adding at the end the following:
       ``(3) The procurement goals required by this subsection 
     apply to all procurement contracts, without regard to whether 
     the contract is for work within or outside the United 
     States.''.

     SEC. 203. ANNUAL GOAL NEGOTIATION.

       Section 15(g)(1) of the Small Business Act (15 U.S.C. 
     644(g)(1)) is amended by striking ``The President shall 
     annually establish Government-wide goals for procurement 
     contracts'' and inserting ``The President shall before the 
     close of each fiscal year establish new Government-wide 
     procurement goals for the following fiscal year for 
     procurement contracts''.

     SEC. 204. GOAL REASONABLENESS.

       Section 15(g)(1) of the Small Business Act (15 U.S.C. 
     644(g)(1)) is amended by striking ``Notwithstanding the 
     Government-wide goal, each agency shall have an annual goal'' 
     and inserting ``Each agency shall have an annual goal, not 
     lower than the Government-wide goal,''.

     SEC. 205. USAGE OF SMALL COMPANIES IN GOAL ACHIEVEMENT.

       Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) 
     is amended by adding at the end the following:
       ``(4) For purposes of this subsection and subsection (h), a 
     small business concern shall be counted toward one additional 
     category goal only, even if that small business concern 
     otherwise qualifies under more than one category goal. In 
     this paragraph, the term `category goal' means a goal 
     described in paragraph (2).''.

[[Page 11886]]



     SEC. 206. ANNUAL PLAN FOR EACH AGENCY EXPLAINING HOW AGENCY 
                   WILL MEET SMALL BUSINESS GOALS.

       Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) 
     is amended by adding at the end the following:
       ``(5) Before the beginning of each fiscal year, the head of 
     each Federal agency shall submit to the Administrator of the 
     Small Business Administration and to Congress a detailed plan 
     explaining how the agency intends to meet the small business 
     goals under this subsection that apply to that agency for 
     that fiscal year.''.

     SEC. 207. MAKING SMALL BUSINESSES THE FIRST CHOICE.

       Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) 
     is amended--
       (1) in paragraph (1)--
       (A) by inserting ``or order'' after ``Each contract''; and
       (B) by striking ``$100,000'' and insert ``the Simplified 
     Acquisition Threshold''; and
       (2) in paragraph (3), by striking ``subsection (a) of 
     section 8'' and inserting ``section 8, 31, or 36''.

     SEC. 208. UNIFORM METRIC FOR SUBCONTRACTING ACHIEVEMENTS.

       Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
     is amended by adding at the end the following:.
       ``(12) In carrying out this subsection, the Administrator 
     shall require each prime contractor to report small business 
     subcontract usage at all tiers based on the percentage of the 
     total dollar amount of the contract award.''.

     SEC. 209. SUBCONTRACTING DATABASE.

       Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
     is amended by adding at the end the following:
       ``(13) In carrying out this subsection, the Administrator 
     shall develop and maintain a password-protected database that 
     will enable the Administration to assist small businesses in 
     marketing to large corporations that have not achieved their 
     small business goals.''.

     SEC. 210. NATIONAL DATABASE.

       The Administrator of the Small Business Administration 
     shall ensure that whenever a small business enters its 
     information in the Central Contractor Registry, or any 
     successor to that registry, the Administrator contacts that 
     business within 30 days regarding the likelihood of Federal 
     contracting opportunities. The Administrator shall ensure 
     that each small business that so registers is, for each 
     industry code entered by that small business, provided with 
     the total dollar value of government contract awards to small 
     businesses for that industry.

     SEC. 211. REVIEW OF SUBCONTRACTING PLANS.

       Not later than 120 days after the date of the enactment of 
     this section, the Administrator of the Small Business 
     Administration shall, after an opportunity for notice and 
     comment, prescribe regulations to govern the Administrator's 
     review of subcontracting plans, including standards for 
     determining good faith effort in compliance with the 
     subcontracting plans.

     SEC. 212. AGENCY OBLIGATION FOR FULFILLING CONTRACTING GOALS.

       Section 15(h) of the Small Business Act (15 U.S.C. 644(h)) 
     is amended by adding at the end the following:
       ``(4) At the conclusion of each fiscal year, the head of 
     each Federal agency shall submit to Congress a report 
     specifying the percentage of contracts awarded by that agency 
     for that fiscal year that were awarded to small business 
     concerns. If the percentage is less than 30 percent, the head 
     of the agency shall, in the report, explain why the 
     percentage is less than 30 percent and what will be done to 
     ensure that the percentage for the following fiscal year will 
     not be less than 30 percent.''.

             TITLE III--PROTECTION OF TAXPAYERS FROM FRAUD

     SEC. 301. SMALL BUSINESS SIZE PROTEST NOTIFICATION.

       (a) In General.--The Administrator of the Small Business 
     Administration shall work with appropriate Federal agencies 
     to ensure that whenever a business concern is awarded a 
     contract on the basis that it qualifies as small and then is 
     determined not to qualify as small, a notification of those 
     facts (that an award was made on such a basis, and that such 
     a determination was made) shall be placed adjacent to that 
     concern's listing in the Central Contractor Registry (or any 
     successor to that registry).
       (b) Comptroller General Certification.--The Administrator 
     shall, in making any report of small business goal 
     accomplishments, qualify the accomplishments as 
     ``estimated'', until the Administrator obtains from the 
     Comptroller General the Comptroller General's certification 
     that there are no data integrity issues with respect to the 
     national repository of contract award information known as 
     Federal Procurement Data System-Next Generation (FPDS-NG), or 
     any successor to that repository.
       (c) Awards to Large Businesses.--For each Federal agency, 
     the Inspector General of that agency shall, on an annual 
     basis, submit to Congress a report on the number and dollar 
     value of contract awards that were coded as awards to small 
     business concerns but in fact were made to businesses that 
     did not qualify as small business concerns.

     SEC. 302. REVIEW OF NATIONAL REGISTRY.

       The Administrator of the Small Business Administration 
     shall ensure, on a biannual basis, that an independent audit 
     is performed of the Central Contractor Registry, or any 
     successor to that registry, and that the Dynamic Small 
     Business Search portion of the registry, or any successor to 
     that portion of the registry, is purged of any businesses 
     that are not in fact small businesses. If a business that has 
     been so purged attempts, while not in fact a small business, 
     to re-register, that business is subject to debarment as a 
     Federal contractor and is further subject to penalties 
     outlined in section 16 of the Small Business Act (15 U.S.C. 
     645).

     SEC. 303. RECERTIFICATION OF COMPLIANCE WITH SIZE STANDARDS 
                   AND REGISTRATION WITH CENTRAL CONTRACTOR 
                   REGISTRY.

       Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) 
     is amended by adding at the end the following:
       ``(5) Recertification.--
       ``(A) In general.--If a business concern is awarded a 
     contract because of a standard by which it is determined to 
     be a small business concern, and the business concern is 
     close to exceeding that standard at the time the award is 
     made, then the business concern must, annually after the date 
     of the award, recertify to the agency awarding the contract 
     whether it meets that standard.
       ``(B) `Close to exceeding'.--For purposes of subparagraph 
     (A), a business concern is close to exceeding--
       ``(i) a number-of-employees standard if the number of 
     employees of the business concern is 95 percent or more of 
     the maximum number of employees allowed under the standard; 
     and
       ``(ii) a dollar-volume-of-business standard if the dollar 
     volume of business is 80 percent or more of the maximum 
     dollar volume allowed under the standard.
       ``(6) Registry.--For a business concern to be awarded a 
     contract because of a standard by which it is determined to 
     be a small business concern, the business concern must, 
     annually after the end of the fiscal year used by the 
     business concern, update its listing in the Central 
     Contractor Registry.''.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

     SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as may be 
     necessary to carry out this Act and the amendments made by 
     this Act.

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Fairness in Contracting Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Regulations.

                       TITLE I--CONTRACT BUNDLING

Sec. 101. Definitions of bundling of contract requirements and related 
              terms.
Sec. 102. Justification.
Sec. 103. Appeals.
Sec. 104. Review.

    TITLE II--INCREASING THE NUMBER OF SMALL BUSINESS CONTRACTS AND 
                              SUBCONTRACTS

Sec. 201. Small business goal.
Sec. 202. Annual goal negotiation.
Sec. 203. Usage of small companies in goal achievement.
Sec. 204. Annual plan for each agency explaining how agency will meet 
              small business goals.
Sec. 205. Making small businesses the first choice.
Sec. 206. Uniform metric for subcontracting achievements.
Sec. 207. Subcontracting database.
Sec. 208. National database.
Sec. 209. Review of subcontracting plans.
Sec. 210. Agency obligation for fulfilling contracting goals.
Sec. 211. Appropriate limits on value of sole source contracts.

             TITLE III--PROTECTION OF TAXPAYERS FROM FRAUD

Sec. 301. Small business size protest notification.
Sec. 302. Review of national registry.
Sec. 303. Recertification of compliance with size standards and 
              registration with Central Contractor Registry.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

Sec. 401. Authorization of appropriations.

     SEC. 2. REGULATIONS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act--
       (1) the Administrator of the Small Business Administration 
     shall promulgate regulations to implement this Act and the 
     amendments made by this Act; and
       (2) the Federal Acquisition Regulation shall be revised to 
     implement this Act and the amendments made by this Act.
       (b) Notice and Comment.--The regulations required by 
     subsection (a) shall be promulgated after opportunity for 
     notice and comment as required by section 553(b) of title 5, 
     United States Code.

                       TITLE I--CONTRACT BUNDLING

     SEC. 101. DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS 
                   AND RELATED TERMS.

       Section 3 of the Small Business Act (15 U.S.C. 632) is 
     amended by amending subsection (o) to read as follows:
       ``(o) Definitions of Bundling of Contract Requirements and 
     Related Terms.--For purposes of this Act:
       ``(1) Bundled contract.--
       ``(A) In general.--The term `bundled contract' means a 
     contract or order that is entered into to meet procurement 
     requirements that are consolidated in a bundling of

[[Page 11887]]

     contract requirements, without regard to its designation by 
     the procuring agency or whether a study of the effects of the 
     solicitation on civilian or military personnel has been made.
       ``(B) Exceptions.--The term does not include--
       ``(i) a contract or order with an aggregate dollar value 
     below the dollar threshold specified in paragraph (4); or
       ``(ii) a contract or order that is entered into to meet 
     procurement requirements, all of which are exempted 
     requirements under paragraph (5).
       ``(2) Bundling of contract requirements.--
       ``(A) In general.--The term `bundling of contract 
     requirements' means the use of any bundling methodology to 
     satisfy 2 or more procurement requirements for goods or 
     services, including any construction services, previously 
     supplied or performed under separate smaller contracts or 
     orders that is likely to be unsuitable for award to a small 
     business concern due to--
       ``(i) the diversity, size, or specialized nature of the 
     elements of the performance specified;
       ``(ii) the aggregate dollar value of the anticipated award;
       ``(iii) the geographical dispersion of the contract or 
     order performance sites; or
       ``(iv) any combination of the factors described in clauses 
     (i), (ii), and (iii).
       ``(B) Inclusion of new features or functions.--A 
     combination of contract requirements that would meet the 
     definition of a bundling of contract requirements but for the 
     addition of a procurement requirement with at least one new 
     good or service shall be considered to be a bundling of 
     contract requirements unless the new features or functions 
     substantially transform the goods or services previously 
     performed.
       ``(C) Exceptions.--The term does not include--
       ``(i) the use of a bundling methodology for an anticipated 
     award with an aggregate dollar value below the dollar 
     threshold specified in paragraph (5); or
       ``(ii) the use of a bundling methodology to meet 
     procurement requirements, all of which are exempted 
     requirements under paragraph (6).
       ``(3) Bundling methodology.--The term `bundling 
     methodology' means--
       ``(A) a solicitation to obtain offers for a single contract 
     or order, or a multiple award contract or order; or
       ``(B) a solicitation of offers for the issuance of a task 
     or a delivery order under an existing single or multiple 
     award contract or order.
       ``(4) Separate smaller contract.--The term `separate 
     smaller contract', with respect to bundling of contract 
     requirements, means a contract or order that has been 
     performed by 1 or more small business concerns or was 
     suitable for award to 1 or more small business concerns.
       ``(5) Dollar threshold.--The term `dollar threshold' 
     means--
       ``(A) $65,000,000, if solely for construction services; and
       ``(B) $5,000,000, in all other cases.
       ``(6) Exempted requirements.--The term `exempted 
     requirement' means a procurement requirement solely for items 
     that are not commercial items (as the term `commercial item' 
     is defined in section 4(12) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 403(12)).
       ``(7) Procurement requirement.--The term `procurement 
     requirement' means a determination by an agency that a 
     specified good or service is needed to satisfy the mission of 
     the agency.''.

     SEC. 102. JUSTIFICATION.

       Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) 
     is amended--
       (1) by striking ``(2) why delivery schedules'' and 
     inserting ``(2) the names, addresses and size of the 
     incumbent contract holders; (3) a description of the 
     industries that might be interested in bidding on the 
     contract requirements; (4) the number of small businesses 
     listed in the industry categories that could be excluded from 
     future bidding if the contract is combined or packaged; (5) 
     why delivery schedules'';
       (2) by striking ``(3) why the proposed acquisition'' and 
     inserting ``(6) why the proposed acquisition'';
       (3) by striking ``(4) why construction'' and inserting 
     ``(7) why construction'';
       (4) by striking ``(5) why the agency'' and inserting ``(8) 
     why the agency'';
       (5) by striking ``justified.'' and inserting ``justified. 
     The statement shall also set forth the proposed procurement 
     strategy required by subsection (e) and, if applicable, the 
     specifications required by subsection (e)(3). The statement 
     shall be made available to the public, including through 
     dissemination in the Federal contracting opportunities 
     database, concurrently with the issuance of the 
     solicitation.''; and
       (6) by inserting after ``prime contracting opportunities.'' 
     the following: ``If no notification of the procurement and 
     accompanying statement is received, but the Administrator 
     determines that there is cause to believe the contract 
     combines requirements or a contract (single or multiple 
     award) or task or delivery order for construction services or 
     includes unjustified bundling, then the Administrator may 
     request that such a statement of work goods or services be 
     completed by the procurement activity and sent to the 
     Procurement Center Representative and the solicitation 
     process postponed for 10 days to allow the Administrator to 
     review the statement and make recommendations as described in 
     this section before the procurement is continued.''.

     SEC. 103. APPEALS.

       Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) 
     is amended by inserting before ``Whenever the Administration 
     and the contracting procurement agency fail to agree,'' the 
     following: ``If a small business concern would be adversely 
     affected, directly or indirectly, by the procurement as 
     proposed, and that small business concern or a trade 
     association on behalf of that small business concern so 
     requests, the Administrator may, in the Administrator's 
     discretion, take action to further the interests of that 
     small business concern.''.

     SEC. 104. REVIEW.

       Section 15(a) of the Small Business Act (15 U.S.C. 644(a)) 
     is amended by striking the sentence beginning ``Whenever the 
     Administration and the contracting procurement agency fail to 
     agree,'' and inserting the following: ``Whenever the 
     Administration and the contracting procurement agency fail to 
     agree, the Administrator shall submit the matter to the head 
     of the agency for a determination. The head of the agency 
     shall provide a written response to the Administrator. A copy 
     of such response shall also be provided to the Committees on 
     Small Business of the House of Representatives and Senate, 
     the Committee on Oversight and Government Reform of the House 
     of Representatives, and the Committee on Homeland Security 
     and Governmental Affairs of the Senate.''.

    TITLE II--INCREASING THE NUMBER OF SMALL BUSINESS CONTRACTS AND 
                              SUBCONTRACTS

     SEC. 201. SMALL BUSINESS GOAL.

       (a) Government-Wide Goal.--Section 15(g)(1) of the Small 
     Business Act (15 U.S.C. 644(g)(1)) is amended by striking 
     ``23 percent'' and inserting ``25 percent''.
       (b) Goals for Small Disadvantaged Businesses and Women-
     Owned Businesses.--Section 15(g)(1) of such Act is further 
     amended by striking ``5 percent'' both places it appears and 
     inserting ``8 percent''.

     SEC. 202. ANNUAL GOAL NEGOTIATION.

       Section 15(g)(1) of the Small Business Act (15 U.S.C. 
     644(g)(1)) is amended by striking ``The President shall 
     annually establish Government-wide goals for procurement 
     contracts'' and inserting ``The President shall before the 
     close of each fiscal year establish new Government-wide 
     procurement goals for the following fiscal year for 
     procurement contracts''.

     SEC. 203. USAGE OF SMALL COMPANIES IN GOAL ACHIEVEMENT.

       Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) 
     is amended by adding at the end the following:
       ``(4) For purposes of this subsection and subsection (h), a 
     small business concern shall be counted toward one additional 
     category goal only, even if that small business concern 
     otherwise qualifies under more than one category goal. In 
     this paragraph, the term `category goal' means a goal 
     described in paragraph (2).''.

     SEC. 204. ANNUAL PLAN FOR EACH AGENCY EXPLAINING HOW AGENCY 
                   WILL MEET SMALL BUSINESS GOALS.

       Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) 
     is amended by adding at the end the following:
       ``(5) Before the beginning of each fiscal year, the head of 
     each Federal agency shall submit to the Administrator of the 
     Small Business Administration and to Congress a detailed plan 
     explaining how the agency intends to meet the small business 
     goals under this subsection that apply to that agency for 
     that fiscal year.''.

     SEC. 205. MAKING SMALL BUSINESSES THE FIRST CHOICE.

       Section 15(j) of the Small Business Act (15 U.S.C. 644(j)) 
     is amended--
       (1) in paragraph (1), by striking ``$100,000'' and 
     inserting ``the Simplified Acquisition Threshold''; and
       (2) in paragraph (3), by striking ``subsection (a) of 
     section 8'' and inserting ``section 8, 31, or 36''.

     SEC. 206. UNIFORM METRIC FOR SUBCONTRACTING ACHIEVEMENTS.

       Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
     is amended by adding at the end the following:
       ``(12) In carrying out this subsection, the Administrator 
     shall require each prime contractor to report small business 
     subcontract usage at all tiers based on the percentage of the 
     total dollar amount of the contract award.''.

     SEC. 207. SUBCONTRACTING DATABASE.

       Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) 
     is amended by adding at the end the following:
       ``(13) In carrying out this subsection, the Administrator 
     shall develop and maintain a password-protected database that 
     will enable the Administration to assist small businesses in 
     marketing to large corporations that have not achieved their 
     small business goals.''.

     SEC. 208. NATIONAL DATABASE.

       The Administrator of the Small Business Administration 
     shall ensure that whenever a

[[Page 11888]]

     small business enters its information in the Central 
     Contractor Registry, or any successor to that registry, the 
     Administrator contacts that business within 30 days regarding 
     the likelihood of Federal contracting opportunities. The 
     Administrator shall ensure that each small business that so 
     registers is, for each industry code entered by that small 
     business, provided with the total dollar value of government 
     contract awards to small businesses for that industry.

     SEC. 209. REVIEW OF SUBCONTRACTING PLANS.

       Not later than 120 days after the date of the enactment of 
     this section, the Administrator of the Small Business 
     Administration shall, after an opportunity for notice and 
     comment, prescribe regulations to govern the Administrator's 
     review of subcontracting plans, including standards for 
     determining good faith effort in compliance with the 
     subcontracting plans.

     SEC. 210. AGENCY OBLIGATION FOR FULFILLING CONTRACTING GOALS.

       Section 15(h) of the Small Business Act (15 U.S.C. 644(h)) 
     is amended by adding at the end the following:
       ``(4) At the conclusion of each fiscal year, the head of 
     each Federal agency shall submit to Congress a report 
     specifying the percentage of contracts awarded by that agency 
     for that fiscal year that were awarded to small business 
     concerns. If the percentage is less than 25 percent, the head 
     of the agency shall, in the report, explain why the 
     percentage is less than 25 percent and what will be done to 
     ensure that the percentage for the following fiscal year will 
     not be less than 25 percent.''.

     SEC. 211. APPROPRIATE LIMITS ON VALUE OF SOLE SOURCE 
                   CONTRACTS.

       (a) Appropriate Limits.--If a law is not enacted by 
     December 31, 2007, revising the limits referred to in this 
     subsection, the Administrator for Federal Procurement Policy, 
     in consultation with the Administrator for Small Business, 
     shall establish appropriate limits on the value of contracts 
     awarded without the use of competitive procedures to 
     participants in the program established by section 8(a) of 
     the Small Business Act (15 USC 637(a)) that are not subject 
     to the limits on the value of such contracts established by 
     paragraph (1)(D) of section 8(a) of such Act.
       (b) Consultation.--In establishing any limit described in 
     subsection (a). the Administrator for Federal Procurement 
     Policy shall consult with representatives of the affected 
     program participants. The Administrator shall also take into 
     account--
       (1) any special circumstances and needs of the affected 
     program participants; and
       (2) the advantages of promoting competition in Federal 
     contracting.

             TITLE III--PROTECTION OF TAXPAYERS FROM FRAUD

     SEC. 301. SMALL BUSINESS SIZE PROTEST NOTIFICATION.

       (a) In General.--The Administrator of the Small Business 
     Administration shall work with appropriate Federal agencies 
     to ensure that whenever a business concern is awarded a 
     contract on the basis that it qualifies as small and then is 
     determined not to qualify as small, a notification of those 
     facts (that an award was made on such a basis, and that such 
     a determination was made) shall be placed adjacent to that 
     concern's listing in the Central Contractor Registry (or any 
     successor to that registry).
       (b) Comptroller General Certification.--The Administrator 
     shall, in making any report of small business goal 
     accomplishments, qualify the accomplishments as 
     ``estimated'', until the Administrator obtains from the 
     Comptroller General the Comptroller General's certification 
     that there are no data integrity issues with respect to the 
     national repository of contract award information known as 
     Federal Procurement Data System-Next Generation (FPDS-NG), or 
     any successor to that repository.
       (c) Awards to Large Businesses.--For each Federal agency, 
     the Inspector General of that agency shall, on an annual 
     basis, submit to Congress a report on the number and dollar 
     value of contract awards that were coded as awards to small 
     business concerns but in fact were made to businesses that 
     did not qualify as small business concerns.

     SEC. 302. REVIEW OF NATIONAL REGISTRY.

       The Administrator of the Small Business Administration 
     shall ensure, on a biannual basis, that an independent audit 
     is performed of the Central Contractor Registry, or any 
     successor to that registry, and that the Dynamic Small 
     Business Search portion of the registry, or any successor to 
     that portion of the registry, is purged of any businesses 
     that are not in fact small businesses. If a business that has 
     been so purged attempts, while not in fact a small business, 
     to re-register, that business is subject to debarment as a 
     Federal contractor and is further subject to penalties 
     outlined in section 16 of the Small Business Act (15 U.S.C. 
     645).

     SEC. 303. RECERTIFICATION OF COMPLIANCE WITH SIZE STANDARDS 
                   AND REGISTRATION WITH CENTRAL CONTRACTOR 
                   REGISTRY.

       Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) 
     is amended by adding at the end the following:
       ``(5) Recertification.--
       ``(A) In general.--If a business concern is awarded a 
     contract because of a standard by which it is determined to 
     be a small business concern, and the business concern is 
     close to exceeding that standard at the time the award is 
     made, then the business concern must, annually after the date 
     of the award, recertify to the agency awarding the contract 
     whether it meets that standard.
       ``(B) `Close to exceeding'.--For purposes of subparagraph 
     (A), a business concern is close to exceeding--
       ``(i) a number-of-employees standard if the number of 
     employees of the business concern is 95 percent or more of 
     the maximum number of employees allowed under the standard; 
     and
       ``(ii) a dollar-volume-of-business standard if the dollar 
     volume of business is 80 percent or more of the maximum 
     dollar volume allowed under the standard.
       ``(6) Registry.--For a business concern to be awarded a 
     contract because of a standard by which it is determined to 
     be a small business concern, the business concern must, 
     annually after the end of the fiscal year used by the 
     business concern, update its listing in the Central 
     Contractor Registry.''.

               TITLE IV--AUTHORIZATION OF APPROPRIATIONS

     SEC. 401. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as may be 
     necessary to carry out this Act and the amendments made by 
     this Act.

  The CHAIRMAN. No amendment to the committee amendment is in order 
except those printed in House Report 110-137. Each amendment may be 
offered only in the order printed in the report, by a Member designated 
in the report, shall be considered read, shall be debatable for the 
time specified in the report, equally divided and controlled by the 
proponent and an opponent of the amendment, shall not be subject to 
amendment, and shall not be subject to a demand for division of the 
question.
  Pursuant to the order of the House of today, amendment No. 4 may be 
offered out of order.


                 Amendment No. 4 Offered by Mr. Sestak

  Mr. SESTAK. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Sestak
       Strike section 101 and insert the following:

     SEC. 101. DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS 
                   AND RELATED TERMS.

       Section 3 of the Small Business Act (15 U.S.C. 632) is 
     amended by amending subsection (o) to read as follows:
       ``(o) Definitions of Bundling of Contract Requirements and 
     Related Terms.--For purposes of this Act:
       ``(1) Bundled contract.--
       ``(A) In general.--The term `bundled contract' means a 
     contract or order that is entered into to meet procurement 
     requirements that are consolidated in a bundling of contract 
     requirements, without regard to its designation by the 
     procuring agency or whether a study of the effects of the 
     solicitation on civilian or military personnel has been made.
       ``(B) Exceptions.--The term does not include--
       ``(i) a contract or order with an aggregate dollar value 
     below the dollar threshold specified in paragraph (4); or
       ``(ii) a contract or order that is entered into to meet 
     procurement requirements, all of which are exempted 
     requirements under paragraph (5).
       ``(2) Bundling of contract requirements.--
       ``(A) In general.--The term `bundling of contract 
     requirements' means the use of any bundling methodology to 
     satisfy 2 or more procurement requirements for goods or 
     services previously supplied or performed under separate 
     smaller contracts or orders, or to satisfy 2 or more 
     procurement requirements for construction services of a type 
     historically performed under separate smaller contracts or 
     orders, that is likely to be unsuitable for award to a small 
     business concern due to--
       ``(i) the diversity, size, or specialized nature of the 
     elements of the performance specified;
       ``(ii) the aggregate dollar value of the anticipated award;
       ``(iii) the geographical dispersion of the contract or 
     order performance sites; or
       ``(iv) any combination of the factors described in clauses 
     (i), (ii), and (iii).
       ``(B) Inclusion of new features or functions.--A 
     combination of contract requirements that would meet the 
     definition of a bundling of contract requirements but for the 
     addition of a procurement requirement with at least one new 
     good or service shall be considered to be a bundling of 
     contract requirements unless the new features or functions 
     substantially transform the goods or services and for which 
     measurably substantial benefits to the government in terms of 
     quality or price are identified.
       ``(C) Exceptions.--The term does not include--

[[Page 11889]]

       ``(i) the use of a bundling methodology for an anticipated 
     award with an aggregate dollar value below the dollar 
     threshold specified in paragraph (5); or
       ``(ii) the use of a bundling methodology to meet 
     procurement requirements, all of which are exempted 
     requirements under paragraph (6).
       ``(3) Bundling methodology.--The term `bundling 
     methodology' means--
       ``(A) a solicitation to obtain offers for a single contract 
     or order, or a multiple award contract or order; or
       ``(B) a solicitation of offers for the issuance of a task 
     or a delivery order under an existing single or multiple 
     award contract or order.
       ``(4) Separate smaller contract.--The term `separate 
     smaller contract', with respect to bundling of contract 
     requirements, means a contract or order that has been 
     performed by 1 or more small business concerns or was 
     suitable for award to 1 or more small business concerns.
       ``(5) Dollar threshold.--The term `dollar threshold' means 
     $65,000,000, if solely for construction services.
       ``(6) Exempted requirements.--The term `exempted 
     requirement' means a procurement requirement solely for items 
     that are not commercial items (as the term `commercial item' 
     is defined in section 4(12) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 403(12)).
       ``(7) Procurement requirement.--The term `procurement 
     requirement' means a determination by an agency that a 
     specified good or service is needed to satisfy the mission of 
     the agency.''.

         Modification to Amendment No. 4 Offered by Mr. Sestak

  Mr. SESTAK. Mr. Chairman, I ask unanimous consent that the amendment 
be modified by the form I have placed at the desk.
  The CHAIRMAN. The Clerk will report the modification.
  The Clerk read as follows:

       Modification to amendment No. 4 offered by Mr. Sestak
       Strike section 101 and insert the following:

     SEC. 101. DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS 
                   AND RELATED TERMS.

       Section 3 of the Small Business Act (15 U.S.C. 632) is 
     amended by amending subsection (o) to read as follows:
       ``(o) Definitions of Bundling of Contract Requirements and 
     Related Terms.--For purposes of this Act:
       ``(1) Bundled contract.--
       ``(A) In general.--The term `bundled contract' means a 
     contract or order that is entered into to meet procurement 
     requirements that are consolidated in a bundling of contract 
     requirements, without regard to its designation by the 
     procuring agency or whether a study of the effects of the 
     solicitation on civilian or military personnel has been made.
       ``(B) Exceptions.--The term does not include--
       ``(i) a contract or order with an aggregate dollar value 
     below the dollar threshold specified in paragraph (4); or
       ``(ii) a contract or order that is entered into to meet 
     procurement requirements, all of which are exempted 
     requirements under paragraph (5).
       ``(2) Bundling of contract requirements.--
       ``(A) In general.--The term `bundling of contract 
     requirements' means the use of any bundling methodology to 
     satisfy 2 or more procurement requirements for goods or 
     services previously supplied or performed under separate 
     smaller contracts or orders, or to satisfy 2 or more 
     procurement requirements for construction services of a type 
     historically performed under separate smaller contracts or 
     orders, that is likely to be unsuitable for award to a small 
     business concern due to--
       ``(i) the diversity, size, or specialized nature of the 
     elements of the performance specified;
       ``(ii) the aggregate dollar value of the anticipated award;
       ``(iii) the geographical dispersion of the contract or 
     order performance sites; or
       ``(iv) any combination of the factors described in clauses 
     (i), (ii), and (iii).
       ``(B) Inclusion of new features or functions.--A 
     combination of contract requirements that would meet the 
     definition of a bundling of contract requirements but for the 
     addition of a procurement requirement with at least one new 
     good or service shall be considered to be a bundling of 
     contract requirements unless the new features or functions 
     substantially transform the goods or services and will 
     provide measurably substantial benefits to the government in 
     terms of quality, performance, or price.
       ``(C) Exceptions.--The term does not include--
       ``(i) the use of a bundling methodology for an anticipated 
     award with an aggregate dollar value below the dollar 
     threshold specified in paragraph (5); or
       ``(ii) the use of a bundling methodology to meet 
     procurement requirements, all of which are exempted 
     requirements under paragraph (6).
       ``(3) Bundling methodology.--The term `bundling 
     methodology' means--
       ``(A) a solicitation to obtain offers for a single contract 
     or order, or a multiple award contract or order; or
       ``(B) a solicitation of offers for the issuance of a task 
     or a delivery order under an existing single or multiple 
     award contract or order.
       ``(4) Separate smaller contract.--The term `separate 
     smaller contract', with respect to bundling of contract 
     requirements, means a contract or order that has been 
     performed by 1 or more small business concerns or was 
     suitable for award to 1 or more small business concerns.
       ``(5) Dollar threshold.--The term `dollar threshold' means 
     $65,000,000, if solely for construction services.
       ``(6) Exempted requirements.--The term `exempted 
     requirement' means a procurement requirement solely for items 
     that are not commercial items (as the term `commercial item' 
     is defined in section 4(12) of the Office of Federal 
     Procurement Policy Act (41 U.S.C. 403(12)).
       ``(7) Procurement requirement.--The term `procurement 
     requirement' means a determination by an agency that a 
     specified good or service is needed to satisfy the mission of 
     the agency.''.

  Mr. SESTAK (during the reading). Mr. Chairman, I ask unanimous 
consent that the modification be considered as read and printed in the 
Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Pennsylvania?
  There was no objection.
  The CHAIRMAN. Without objection, the amendment is modified.
  There was no objection.
  The CHAIRMAN. Pursuant to House Resolution 383, the gentleman from 
Pennsylvania (Mr. Sestak) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Pennsylvania.
  Mr. SESTAK. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise to speak in support of this amendment to 
increase the number of Federal contracts granted to small businesses by 
addressing a practice known as contract bundling, which has allowed 
Federal agencies to award mega-contracts, contracts so large they 
cannot possibly be performed by a small business. This amendment will 
ensure that more large contracts will be reviewed as to their 
appropriateness to be bundled and potentially broken into smaller 
pieces more suitable for small business.
  The goal: enhancing taxpayer savings by a more efficient and 
effective use of our resources by helping the Federal Government meet 
its statutory goal of small business contracts, which it presently does 
not.
  Presently, the bill's current definition would prevent too many large 
contracts to be exempted from a bundling analysis as to their 
appropriateness for access to small business. This amendment will help 
reduce these exemptions by eliminating the monetary threshold for 
nonconstruction Federal contracts to be reviewed. Additionally, bundled 
contracts that ``substantially transform a good or service,'' referring 
to contracts that use a new, innovative contract process, are currently 
exempted from bundling analysis.
  This amendment would mandate that in such cases measurable, 
substantial benefits must be demonstrated to the government in terms of 
quality, performance or price. If that cannot be shown, a bundling 
analysis must be completed.
  This amendment, by also explicitly requiring that a bundling analysis 
be performed for new work and construction contracts, as opposed to 
just previously performed work, will also close the loophole that has 
been used by agencies to avoid unbundling contracts.
  Let me give you an example of why addressing contract bundling is 
important to not just small businesses but also to efficient and 
effective use of our Nation's resources, particularly in new or 
transformational requirements that our Federal agencies increasingly 
contract for.
  Gestalt, a small business located in my district, recently competed 
in an Army contract, which they competed for against a very large 
defense corporation, to fix the Defense Readiness Reporting System.
  Right now, we have in the military a fairly arcane system, where 
obtaining detailed, up-to-date, instantaneous information on the 
readiness of our military and its units is challenging at

[[Page 11890]]

best. What was required was a much more dynamic system that could 
present in real-time the readiness of our forces, in this case, the 
5,000-plus Army units we have, which can greatly impact a commander's 
decision in what has become a fast-paced, battle space environment 
where speed of decision is so highly valued.
  The large defense corporation said it would take 3 years to complete 
the project, while the smaller firm then did it in only 7 months. From 
my time as a vice admiral responsible for executing the Navy's annual 
$67 billion worth of warfare requirements and programs, I know there is 
a tendency, because of ease of execution, to want to go to a large 
corporation and have them subcontract their bundled program to other 
vendors.
  The result, unfortunately, is particularly worrisome at a moment when 
we need to transform not just our military but many of our other 
federally funded efforts. The speed and agility that more 
entrepreneurial small businesses often can provide in a fast-paced, 
globalized and continuously changing world are key to rapidly meeting 
new, evolving requirements of our Nation, particularly in such 
transformational areas as software and information technology.
  It is, therefore, inefficient and ineffective to our competitive edge 
to deny entrepreneurial small businesses direct access to the real 
requirements of the customer, the U.S. government, and it is also 
harmful to our interests to have large corporations bundle certain 
contracts so that only derived requirements are available to the 
subcontractors, these derived requirements having to be interpreted by 
sub-vendors or be interpreted to them by the large corporation, a 
middleman, adding complexity, time and misinterpretation, rather than 
streamlining, to the Federal contracting process.
  In short, undue bundling of contracts cost the taxpayers money. More, 
this inefficiency leads to less effectiveness. By unbundling work 
requirements, this amendment will create new opportunities for small 
firms, expanding the government's access to more qualified contractors. 
Increased competition because of more fair access will lead to lower 
prices and to the improvement of the quality of goods and services 
procured by the Federal Government.
  I urge all my colleagues to support this critical amendment, not only 
for the Nation's entrepreneurial small businesses but for a more 
efficient and effective application of our Nation's resources
  Mr. Chairman, I reserve the balance of my time.
  Mr. CHABOT. Mr. Chairman, I claim the 5 minutes in opposition to the 
amendment, although I do not oppose the amendment. I am in favor of it.
  The CHAIRMAN. The gentleman is recognized for 5 minutes.
  Mr. CHABOT. Mr. Chairman, I yield such time as she might consume to 
the gentlewoman from New York (Ms. Velazquez), if she would like to 
speak at this time.
  Ms. VELAZQUEZ. Mr. Chairman, contract bundling has been a major issue 
for years, and it is increasing. When contracts are combined together 
into mega-contracts, small businesses are unable to compete. In fact, 
some contracts are so large that only a handful of companies would be 
able to perform them. This can create a virtual monopoly, which is 
problematic for taxpayers concerned with getting the best value for 
their money.
  This amendment would save taxpayers money and benefit the economy. It 
will increase competition, providing the government with more options 
to purchase goods and services from. This will ultimately lower prices 
for Federal agencies. Unbundling contracts will create new 
opportunities for entrepreneurs, leading to new jobs and more local tax 
revenue.
  The amendment closes a loophole in current law. This amendment adds 
new work and construction, which previously were not subject to 
bundling analyses. Current law only required contracts that have been 
previously performed to be reviewed for bundling. This amendment closes 
this gap and gives Federal agencies the tools it needs to save the 
taxpayers money.
  The expanded bundling definition will not be overly burdensome. 
Contracts that are not suitable for small businesses will not require a 
bundling analysis. Bundled construction contracts under $65 million 
will not require an analysis. By creating more competition in the 
Federal marketplace, this amendment will save taxpayers money.
  Expanding the definition of bundling will require more contracts to 
be reviewed, and possibly unbundled, than the current statute permits. 
This will create more opportunities for small firms, give the 
government more options and lower costs and increase quality for 
taxpayers.
  I thank both the gentleman from Pennsylvania for his work on this 
issue and Mr. Chabot for all the work that he has done on the 
underlying bill and on this amendment.
  Mr. CHABOT. Mr. Chairman, I yield myself as much time as I may 
consume. I will be brief.
  The amendment offered by Mr. Sestak will increase the protections 
against inappropriate contract bundling. It represents a compromise 
between the Small Business Committee's version and the Committee on 
Government Reform's version of H.R. 1873. I believe it represents an 
adequate resolution of the issue and pledge to work to make the 
protections in the Sestak amendment even stronger as we work through 
the legislative process.
  Mr. Chairman, I reserve the balance of my time.
  Mr. SESTAK. Mr. Chairman, I yield back the balance of my time.
  Mr. CHABOT. I yield back the balance of our time.
  The CHAIRMAN. The question is on the amendment, as modified, offered 
by the gentleman from Pennsylvania (Mr. Sestak).
  The question was taken; and the Chairman announced that the ayes 
appeared to have it.
  Ms. VELAZQUEZ. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentleman from Pennsylvania will be 
postponed.


                  Amendment No. 1 Offered by Mr. Reyes

  The CHAIRMAN. It is now in order to consider amendment No. 1 printed 
in House Report 110-137.
  Mr. REYES. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Reyes

     SEC. 209. REVIEW OF SUBCONTRACTING PLANS.

       (a) In General.--Not later than 180 days after the date of 
     the enactment of this Act, the General Services 
     Administration shall, after an opportunity for notice and 
     comment, begin to make modifications, if necessary, to the 
     Electronic Subcontracting Reporting System (ESRS) for the 
     purpose of tracking companies' compliance with small business 
     subcontracting plans included in successful contract bids. 
     ESRS shall be further developed, if necessary, in such a way 
     that it allows agencies to track whether or not the prime 
     contractor actually subcontracted work out to the 
     subcontracting firms described in the Small Business 
     Subcontracting Plan. Further, ESRS shall be modified, if 
     necessary, so that it facilitates review of a company's 
     record of compliance with small business subcontracting 
     plans.
       (b) Periodic Reports.--Prime contractors shall be required 
     to submit Small Business Subcontracting Plans to ESRS and 
     submit subsequent periodic reports to ESRS describing the 
     extent to which the prime contractor complied with small 
     business subcontracting plans submitted as part of the 
     company's successful contract proposal. Each such report 
     shall include a specific accounting of compliance with 
     subcontracting goals described in the prime contractor's 
     Small Business Subcontracting Plans related to Small 
     Disadvantaged Businesses Concerns, Women-Owned Small Business 
     Concerns, Historically Black Colleges and Universities and 
     Minority Institutions, Service-Disabled Veteran-Owned Small 
     Business Concerns, and HUBZone Small Business Concerns. Each 
     such accounting of compliance shall also be included in ESRS.
       (c) Inclusion in ESRS.--The ``percentage of the total 
     dollar amount of the contract award'' that is paid to small 
     business, as referred to in paragraph (12) of section 8(d) of 
     the Small Business Act (as added by section 206 of this Act) 
     shall also be included in ESRS.
       (d) Availability of ESRS.--ESRS and the information therein 
     shall be made available

[[Page 11891]]

     to agency officials and Source Selection Evaluation Boards 
     (as referred to in Federal Acquisition Regulations 3.104-1) 
     that are charged with evaluating contract proposals, and, 
     when evaluating contract proposals, agencies shall take into 
     consideration the compliance with small business 
     subcontracting plans of companies competing for Federal 
     contracts, and within one year after the date of the 
     enactment of this Act such consideration shall be reflected 
     in the Federal Acquisition Regulations.
       (e) Further Modifications Required.--ESRS shall be modified 
     in such a way that it can generate comparable reports on 
     individual companies' compliance records to be used in the 
     contract proposal evaluation processes of agencies.

  The CHAIRMAN. Pursuant to House Resolution 383, the gentleman from 
Texas (Mr. Reyes) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. REYES. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, my amendment is simple. It uses existing procedures and 
an existing resource to promote fairness in subcontracting. It makes a 
great bill, the Small Business Fairness in Contracting Act of 2007, I 
believe even better. Let me describe the problem as it currently 
exists.
  For large government contracts, applicants are required to submit 
small business subcontracting plans during the bidding process 
detailing their intentions to include small businesses in the work. 
However, too often prime contractors disregard small business 
subcontracting plans submitted as part of winning government bids.
  This is simply, in our eyes, not fair. Small business gets left 
behind, and prime contractors who keep their word, who are doing the 
right thing, end up at a competitive disadvantage with the bad actors.
  This unfortunate practice has particularly adverse effects on the 
small businesses that are included in small business subcontracting 
plans but do not actually receive the contract work. When small 
businesses are included in the small business plans of prime 
contractors, the small businesses will often make investments on the 
front end to prepare themselves to do the subcontract work. If the 
prime does not ultimately subcontract the work to the small business in 
question, however, that small business will often find itself 
overextended. Often, the operating margins of small businesses are very 
small, and unmet subcontract obligations in small business 
subcontracting plans can force these small firms out of business.
  Prime contractors receive bids based on their commitment to include 
small business in the contract, in part, and it is only fair that the 
primes fulfill their end of the deal.
  My amendment provides much-needed accountability over small business 
subcontracting plans by doing two things. One, this amendment takes 
advantage of an existing online tool, the Electronic Subcontracting 
Reporting System, and existing procedures for reporting on contracts to 
accumulate and organize information about prime contractors' compliance 
records with small business subcontracting plans. ESRS will be 
developed to prepare easily comparable reports for tracking prime 
contractors and their compliance through their records.
  We are not reinventing the wheel. This is a commonsense, efficient 
way to allow information to be organized in such a way as to provide 
the necessary accountability over these small business plans.
  Second, this amendment brings fairness to subcontracting by requiring 
that agencies, even when evaluating subcontract or contract proposals, 
take into consideration compliance with small business subcontracting 
plans of companies competing for Federal contracts, and requiring that 
within 1 year after the date of the enactment such consideration be 
reflected in the Federal acquisition regulations.

                              {time}  1930

  This is simply a matter of making sure that prime contractors are 
playing by the rules. This is an issue for us and, for small 
businesses, an issue of fairness. The amendment is fair to small 
businesses who are included in small business subcontracting plans and 
who have, in essence, helped prime contractors receive contract awards. 
The amendment is fair to prime contractors who do play by the rules by 
making sure that their records of helping small businesses are taken 
into account.
  My amendment has the support of the U.S. Hispanic Chamber of Commerce 
and the National Black Chamber of Commerce. With that, I urge my 
colleagues to support it as well.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CHABOT. Mr. Chairman, we accept the amendment. We have no 
objection.
  Ms. VELAZQUEZ. Mr. Chairman, while not opposed to the amendment, I 
ask unanimous consent to claim the time in opposition.
  The CHAIRMAN. Without objection, the gentlewoman from New York is 
recognized for 5 minutes.
  There was no objection.
  Ms. VELAZQUEZ. Mr. Chairman, we are prepared to accept this 
amendment.
  One of the areas in which small businesses could participate much 
more than they currently are is in the area of subcontracting. 
Subcontracting provides a great entry point to the Federal marketplace 
for small businesses.
  The gentleman's amendment would expand the amount of information 
collected on subcontracting in the government-wide database. It also 
reinforces the notion that when prime contractors don't achieve their 
small business goals these should be reflected in their evaluation for 
subsequent contracts.
  I am pleased to support the gentleman's amendment, and I thank the 
gentleman from Texas for his work on this legislation.
  I ask adoption of this amendment.
  Mr. Chairman, I yield back the balance of my time
  The CHAIRMAN. The gentleman from Texas has 1 minute remaining.
  Mr. REYES. Mr. Chairman, I want to thank the chairwoman for her 
tireless work on behalf of small business and her support of small 
business, as well as my good friend, the ranking member. Thank you.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Texas (Mr. Reyes).
  The amendment was agreed to.


                 Amendment No. 2 Offered by Mr. Shuler

  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in House Report 110-137.
  Mr. SHULER. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Shuler:
       After section 201 insert the following (and redesignate 
     succeeding sections accordingly):

     SEC. 202. INCLUDE OVERSEAS CONTRACTS IN SMALL BUSINESS GOAL.

       Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) 
     is amended by adding at the end the following:
       ``(3) The procurement goals required by this subsection 
     apply to all procurement contracts, without regard to whether 
     the contract is for work within or outside the United 
     States.''.

  The CHAIRMAN. Pursuant to House Resolution 383, the gentleman from 
North Carolina (Mr. Shuler) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from North Carolina.
  Mr. SHULER. Mr. Chairman, I yield myself as much time as I may 
consume.
  Mr. Chairman, American small businesses supply goods and services 
throughout the world. These businesses have led the way in providing 
innovative solutions to private and public sector challenges.
  When Federal agencies spend taxpayers' funds, they should look to 
American small businesses first before outsourcing to foreign 
companies. In this age of high-speed communication and global 
transportation, American workers can contribute to American projects 
anywhere on earth.
  This amendment does not require Federal agencies to use American

[[Page 11892]]

small businesses for every project. It simply sets expectations that 
these agencies look first to American small businesses to meet their 
needs.
  I urge passage of this amendment.
  Mr. Chairman, I yield to the cosponsor of this amendment, Mr. Chabot.
  Mr. CHABOT. I want to thank the gentleman for his hard work on this 
particular amendment. I think it's a good amendment. I would urge its 
passage.
  The amendment expands the pool of contracts included in the Federal 
governmentwide goal for participation of small business concerns and 
procurement contracts to include United States small business concern 
contracts performed overseas. Current law and regulations apply the 
small business concern Federal governmentwide goal only to contracts 
performed in the United States.
  The bill as currently written would continue to apply the small 
business concern Federal governmentwide goal to contracts performed 
only in the United States. This methodology clearly does not address 
small business concerns involvement in today's global economy. When 
small business policy was first developed in the 1940 to 1950 
timeframe, small business concern participation in the overseas markets 
was fairly limited.
  In today's global economy, adding contracts where United States small 
business concerns perform overseas work is reasonable because the 
availability of the Internet and advances in technology allows 
contracting officers to acquire information on such activities.
  Therefore, United States small business concerns global activity 
should be recognized and, thus, included as a part of the overall 
Federal governmentwide small business concern goal.
  Again, I want to thank the chairwoman and I want to thank Mr. Shuler 
for their work on this particular amendment.
  Mr. SHULER. Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, while not opposed to the amendment, I 
ask unanimous consent to claim the time in opposition.
  The CHAIRMAN. Without objection, the gentlewoman from New York is 
recognized for 5 minutes.
  There was no objection.
  Ms. VELAZQUEZ. Mr. Chairman, it is important that the small business 
goals apply to contracts performed overseas. For too long there has 
been an exclusive club of contractors for overseas work. This needs to 
change. Extending the small business goals to apply to these contracts 
will expand the pool of contractors available to the government. This 
amendment will help bring overseas opportunity to small businesses.
  A recent study of $6 billion in overseas contracts showed only $122 
million was awarded to small businesses, just 2 percent. This amendment 
gives agencies an incentive to award overseas contracts to small 
businesses. Agencies that do use small businesses for overseas 
contracts will now be able to get credit.
  The Federal Government should be looking to small businesses for 
overseas work. Ninety-seven percent of all exporters are small 
businesses; 30 percent of all goods made for export are made by small 
businesses. Technological improvements give small businesses much 
greater access to worldwide markets than in the past.
  It is important to help small businesses gain access to overseas 
contracting opportunities they have been locked out of. This amendment 
will accomplish this by helping encourage agencies to look to American 
small businesses for this work.
  I thank both gentlemen, Mr. Shuler and Mr. Chabot, for their work on 
this legislation. I urge adoption of this amendment.
  Mr. Chairman, I yield back the balance of my time.
  Mr. SHULER. Mr. Chairman, I want to commend Ranking Member Chabot and 
Chairwoman Velazquez for her hard work and dedication on this 
amendment, along with this bill, an outstanding job.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from North Carolina (Mr. Shuler).
  The question was taken; and the Chairman announced that the ayes 
appeared to have it.
  Ms. VELAZQUEZ. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentleman from North Carolina will be 
postponed.


                  Amendment No. 3 Offered by Ms. Bean

  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in House Report 110-137.
  Ms. BEAN. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Ms. Bean:
       Section 201(a), strike ``25 percent'' and insert ``30 
     percent''.

  The CHAIRMAN. Pursuant to House Resolution 383, the gentlewoman from 
Illinois (Ms. Bean) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentlewoman from Illinois.
  Ms. BEAN. Mr. Chairman, I rise today to offer an amendment to the 
Small Business Fairness in Contracting Act. I would like to thank 
Ranking Member Chabot for cosponsoring and Chairman Velazquez for her 
support. This amendment would increase the Federal Government's small 
business contracting goal from 23 to 30 percent.
  Small businesses are the stimulative engine to our Nation's economy 
and drive our domestic job growth. They make up 97 percent of all 
businesses, provide 50 percent of our gross domestic product and 50 
percent of our non-farm employment. Clearly, small businesses have the 
capacity to compete for Federal contracts.
  The government's small business prime contract goal has not been 
increased since 1997. Since that time, the Nation has added over 3 
million net new small businesses. At the same time, the Federal 
marketplace has doubled and now accounts for over $400 billion in goods 
and services. My amendment reflects that new reality that the number 
and capabilities of small businesses have grown to such an extent that 
an adjustment to our national goal is in the best interests of our 
country.
  The increase would also address a discouraging development that, 
after some early successes in achieving the contracting goal, Federal 
agencies have become complacent in their efforts to provide 
opportunities to small business. Over the last 5 years, they have begun 
to use contract bundling and contract streamlining practices, which 
reduced opportunities for competition. Without competition, we cannot 
ensure that taxpayer dollars are being used most effectively.
  In addition, Federal agencies have become careless in their reporting 
of contract awards, leading them to believe they have exceeded small 
business goals they were, in fact, failing to achieve. As a result, 
small businesses access to prime contracts have suffered. In 2005, the 
Federal marketplace rose by 7 percent, but prime small business 
contracts only rose by 2 percent.
  Last year alone, we found that the Federal Government fell about $12 
billion below their goal level, even though the SBA originally reported 
that they had exceeded their goal.
  By raising our small business prime contracting goal and increasing 
competitive bids, we get a greater return on our tax dollars. At the 
same time, we provide economic stimulus for the small businesses in our 
communities. I urge your support of this amendment.
  I yield to cosponsor Chabot.
  Mr. CHABOT. I thank the gentlewoman for yielding, and I thank her for 
her leadership on this amendment and her hard work, as well as the 
chairwoman's.
  This is a simple amendment. The amendment increases the Federal 
government-wide goal for participation of small business concerns in 
procurement contracts from 23 percent to 30 percent. The bill, as 
currently written, would increase the Federal government-wide goal from 
23 percent to 25

[[Page 11893]]

percent, which is only a 2 percent increase, which is really pretty 
miserable when one considers it. It ought to be, I think, significantly 
more than that, especially when you consider that the Federal market 
for goods and services has doubled in the past 10 years, and the number 
of small businesses has increased by 10 percent during that period of 
time.
  So to maintain the congressional standard in the Small Business Act 
that a fair share Federal government procurement contracts are awarded 
the small business concerns, this amendment increases the goal a modest 
8 percent, which is, quite frankly, long overdue.
  Finally, the goal increase recognizes small business concern's role 
in the economy. Small businesses employ more than 50 percent of all 
employees in the United States, and this would cause increased 
competition, resulting in a downward pressure on pricing, which 
ultimately benefits the taxpayer. Small businesses are the main 
contributors to major technological paradigm breakthroughs, as opposed 
to simply advancing the current knowledge in a specific technological 
field.
  I think this is a very good amendment. I, again, want to thank the 
gentlelady for offering it.
  Ms. BEAN. Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, while not opposed to the amendment, I 
ask unanimous consent to claim the time in opposition.
  The CHAIRMAN. Without objection, the gentlewoman from New York is 
recognized for 5 minutes.
  There was no objection.
  Ms. VELAZQUEZ. Mr. Chairman, since 1977, the minimum goal for small 
businesses in the Federal marketplace has been 23 percent of the total 
value of goods and services acquired. Each year, the administration 
boasts of how it almost made its target. Unfortunately, in 2005 alone, 
at least $12 billion, almost 15 percent of the small business 
accomplishments, as reported by the Small Business Administration, were 
actually awarded to large businesses. Agencies have become so single-
minded about achieving the minimum goal that they have lost sight of 
the intent.
  The goal is a measurement of commitment to small businesses; and when 
the goal isn't achieved, small businesses pay the price. Because the 
minimum has not been met over the past 6 years, small businesses have 
lost almost $10 billion in contracting opportunities. This represents 
nearly 200,000 jobs that could have been created across the country.
  Many people have asked me, if the small business contracting goal 
hasn't been met, why do you support increasing it? As I said, the goal 
is simply a measurement. There are no penalties to an agency for not 
achieving it.
  It is already the policy of the United States, as set forth in the 
statute, that small firms shall have the maximum practical opportunity 
to participate in the performance of contracts let by any Federal 
agency.

                              {time}  1945

  It doesn't say minimum; it says maximum. This is why the Bean-Chabot 
amendment is so important. It gets us away from the small business goal 
as ceiling mentality. It ensures that small business participation is 
maximized, not minimized.
  I congratulate Ms. Bean and Mr. Chabot for this amendment. It was 
included when the Committee on Small Business unanimously reported this 
legislation, and I was disheartened to see that it was diluted as the 
bill progressed. I am pleased to support this amendment, and I look 
forward to working with my colleagues to ensure that this amendment 
creates new opportunity for small businesses in the Federal 
marketplace. I thank Ms. Bean and Mr. Chabot on their work on this 
amendment, and I urge adoption of this amendment.
  Mr. Chairman, I yield back the balance of my time.
  Ms. BEAN. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Illinois (Mr. Bean).
  The question was taken; and the Chairman announced that the ayes 
appeared to have it.
  Ms. VELAZQUEZ. Mr. Chairman, I demand a recorded vote.
  The CHAIRMAN. Pursuant to clause 6 of rule XVIII, further proceedings 
on the amendment offered by the gentlewoman from Illinois will be 
postponed.


            Amendment No. 5 Offered by Mr. Welch of Vermont

  The CHAIRMAN. It is now in order to consider amendment No. 5 printed 
in House Report 110-137.
  Mr. WELCH of Vermont. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 5 offered by Mr. Welch of Vermont:
       At the end of title II, insert the following:

     SEC. 212. SMALL BUSINESS GOALS FOR GREEN SMALL BUSINESS 
                   CONCERNS.

       (a) In General.--Section 15(g) of the Small Business Act 
     (15 U.S.C. 644(g)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``and small business concerns owned and 
     controlled by women'' both places such term appears and 
     inserting ``small business concerns owned and controlled by 
     women, and green small business concerns''; and
       (B) by inserting before ``Notwithstanding the Government-
     wide goal'' the following: ``The Government-wide goal for 
     participation by green small business concerns shall be 
     established at not less than 5 percent of the total value of 
     all prime contract and subcontract awards for each fiscal 
     year.''; and
       (2) in paragraph (2)--
       (A) by striking ``and by small business concerns owned and 
     controlled by women'' both places such term appears and 
     inserting ``by small business concerns owned and controlled 
     by women, and by green small business concerns''; and
       (B) by striking ``and small business concerns owned and 
     controlled by women'' and inserting ``small business concerns 
     owned and controlled by women, and green small business 
     concerns''.
       (b) Conforming Amendments.--
       (1) Definition.--Section 3 of that Act (15 U.S.C. 632) is 
     amended by adding at the end the following:
       ``(s) Definitions Relating to Green Small Business 
     Concerns.--In this Act, the term `green small business 
     concern' means a small business concern that carries out its 
     activities in an environmentally sound manner. The 
     Administrator shall, in consultation with the Environmental 
     Protection Agency, the General Services Administration, and 
     other appropriate agencies, specify detailed definitions or 
     standards by which a small business concern may be determined 
     to be a green small business concern for the purposes of this 
     Act.''.
       (2) Policy.--Section 8(d) of that Act (15 U.S.C. 637(d)) is 
     amended--
       (A) in paragraph (1) (in both places such term appears), 
     paragraph (3)(A) (in both places such term appears), 
     paragraph (4)(D), paragraph (6)(A), paragraph (6)(C), 
     paragraph (6)(F), and paragraph (10)(B) by striking ``and 
     small business concerns owned and controlled by women'' and 
     inserting ``small business concerns owned and controlled by 
     women, and green small business concerns'';
       (B) in paragraph (3)(F) by striking ``or a small business 
     concern owned and controlled by women'' and inserting ``a 
     small business concern owned and controlled by women, or a 
     green small business concern''; and
       (C) in paragraph (4)(E) by striking ``and for small 
     business concerns owned and controlled by women'' and 
     inserting ``for small business concerns owned and controlled 
     by women, and for green small business concerns''.
       (3) Reports on goals.--Section 15(h) of that Act (15 U.S.C. 
     644(h)) is amended, in each of paragraphs (1), (2)(A), 
     (2)(D), and (2)(E) by striking ``and small business concerns 
     owned and controlled by women'' and inserting ``small 
     business concerns owned and controlled by women, and green 
     small business concerns''.
       (4) Penalties.--Section 16 of that Act (15 U.S.C. 645) is 
     amended in each of subsections (d)(1) and (e) by striking 
     ``or a `small business concern owned and controlled by 
     women''' and inserting ``a `small business concern owned and 
     controlled by women', or a `green small business concern'''.

  The Acting CHAIRMAN. Pursuant to House Resolution 383, the gentleman 
from Vermont (Mr. Welch) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Vermont.
  Mr. WELCH of Vermont. Mr. Chairman, I yield myself such time as I may 
consume.
  I first congratulate the gentlelady from New York and the gentleman 
from Ohio on the incredible hardworking committee that is producing 
more legislation that is good for the American people, and I think just

[[Page 11894]]

about everybody else in Congress, so all of us appreciate your good 
work. And it is all about the fact that they recognize, as I think we 
all do, that small businesses are the backbone of our Nation's economy. 
They must have the opportunity to compete for Federal contracts.
  This underlying legislation establishes broad parameters and goals to 
make small business opportunities available to folks in this country 
who have not had access to that opportunity. The purpose of this 
amendment is to establish a goal that will give an opportunity for 
businesses that are green to have access to these contracts.
  Small businesses in my State of Vermont create two out of every three 
jobs, and it is critical that small businesses be encouraged to develop 
and supply products and services in an environmentally sound way. My 
amendment would take a step towards encouraging green businesses by 
recognizing that those practices of companies can be considered in 
Federal Government contracts. This isn't just because it is the right 
thing to do for the environment, it is because there is a growing 
recognition that if we take on the challenge of cleaning up our 
environment, it can be pro-high-tech, pro-growth policies that will 
accomplish that, and I urge favorable consideration.
  Mr. Chairman, I yield to the gentleman from Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. Mr. Chairman, I appreciate the gentleman's courtesy, 
and it is a pleasure to work with him in cosponsoring this amendment.
  Mr. Chairman, the Federal Government is the largest consumer of 
energy in the world. If we harness the ability of our Federal agencies 
in terms of what they do with energy, what they do with procurement, we 
have an opportunity to revolutionize the business practices in this 
country in a way that doesn't require a lot of new rules and 
regulations and fees. It is simply leading by example.
  It has been my privilege early in my career to do work dealing with 
minority enterprises, with women-owned enterprises, with small 
business; because, as the gentleman from Vermont mentions, these are 
areas that are tremendously underserved, but there is a great deal of 
energy and vitality and it has made our economy stronger. This is the 
next logical addition to that portfolio of activities.
  By giving a preference to procurement with small businesses that are 
environmentally sound, it is going to help nurture an explosion of new 
technology, of new business opportunities, and, most important, most 
important, it is going to help to bring these activities to scale. It 
is going to make best green practices more cost effective. It is going 
to be a better value for the taxpayer. It is the cheapest way to 
improve the environment. And, ultimately, it is going to strengthen our 
economy, because areas in the European Union, in Canada and, dare I 
say, even in Asia dealing with China and Japan, progress is being made. 
This is going to help us. It is going to give a better value to the 
taxpayers. It is going to jump start these.
  I look in Portland at TerraClean, Ecos Consulting, Rejuvenation House 
Parts, ecological small businesses. If this is enacted, they will be 
able to do a better job in the future.
  Mr. Chairman, I appreciate the gentleman's courtesy and leadership.
  Mr. WELCH of Vermont. Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, while not opposed to the amendment, I 
ask unanimous consent to claim the time in opposition.
  The CHAIRMAN. Without objection, the gentlewoman from New York is 
recognized for 5 minutes.
  There was no objection.
  Ms. VELAZQUEZ. Mr. Chairman, we accept this amendment by Mr. Welch, 
which proposes a 5 percent goal for Federal contracting with green 
small businesses. I look forward to working with my colleague on this 
amendment, which encourages the government to reward small businesses 
that meet higher environmental standards.
  I thank the gentleman from Vermont for his work on this legislation, 
and I urge adoption of the amendment.
  Mr. Chairman, I yield to the ranking member, Mr. Chabot, for any 
comments that he might have.
  Mr. CHABOT. I thank the gentlelady. We have no objection and support 
the amendment, and thank the gentleman for offering it.
  Ms. VELAZQUEZ. Mr. Chairman, I yield back the balance of my time.
  Mr. WELCH of Vermont. Mr. Chairman, I thank the gentlelady and the 
gentleman, and I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Vermont (Mr. Welch).
  The amendment was agreed to.


                  Amendment No. 6 Offered by Mr. Wynn

  The CHAIRMAN. It is now in order to consider amendment No. 6 printed 
in House Report 110-137.
  Mr. WYNN. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 6 offered by Mr. Wynn:
       At the end of title II, add the following:

     SEC. 2__. STUDY ON PROVIDING FINANCIAL INCENTIVES TO 
                   CONTRACTORS THAT MEET MINORITY AND 
                   DISADVANTAGED BUSINESS ENTERPRISE GOALS.

       The Administrator of the Small Business Administration 
     shall carry out a study on the feasibility and desirability 
     of providing financial incentives to contractors operating 
     under contracts from a federal agency that achieve the 
     percentage goals set forth in said contracts' subcontracting 
     plans for the utilization of small business concerns owned 
     and controlled by socially and economically disadvantaged 
     individuals. The Administrator shall submit to Congress a 
     report on the results of the study, together with any 
     findings, conclusions, and recommendations that the 
     Administrator considers appropriate.

  The CHAIRMAN. Pursuant to House Resolution 383, the gentleman from 
Maryland (Mr. Wynn) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Maryland.
  Mr. WYNN. Mr. Chairman, let me begin by thanking the gentlelady, the 
chairman of the Committee on Small Business, for her leadership over 
the years on this very important issue.
  The amendment I am introducing this evening would require that the 
Small Business Administration study the feasibility and desirability of 
providing financial incentives to encourage prime contractors to meet 
their goals for subcontracting with socially and economically 
disadvantaged businesses.
  Specifically, the amendment would commission the SBA to study 
different types of financial incentives that could help or encourage 
prime contractors to meet their goals set forth in their subcontracting 
claims for the utilization of small business companies owned and 
controlled by socially and economically disadvantaged individuals.
  Ironically, you heard earlier this evening about the problem of prime 
contractors failing to utilize small minority and economically 
disadvantaged businesses. Given the constitutional constraints that we 
as legislators have in legislating mandates for achieving these goals 
for minority and disadvantaged businesses, I believe that we must come 
up with creative and viable alternatives that can help encourage 
greater participation in the Federal contracting process by these 
businesses.
  One such method to encourage greater participation by small minority 
and economically disadvantaged businesses would be to devise a means of 
rewarding prime contractors who meet their small business contracting 
goals rather than penalizing them. This is similar to the incentives 
placed in contracts for meeting deadlines and staying within budget.
  My amendment would simply require that SBA study and report to 
Congress about different types of financial incentives that could be 
implemented that would encourage prime contractors to meet their goals 
for increasing opportunity for socially and economically disadvantaged 
businesses. This would allow us to encourage DB participation rather 
than attempting to penalize contractors who fail to meet

[[Page 11895]]

their goals. This is an approach that offers more carrot and less 
stick.
  Mr. Chairman, I yield to the gentlelady, the chairwoman of the 
committee.
  Ms. VELAZQUEZ. Mr. Chairman, I thank the gentleman for yielding.
  We are prepared to accept this amendment. Many times the proposed 
solution to a problem, particularly in the Federal procurement 
environment, is the assessment of penalties. Sometimes this works. 
Sometimes it doesn't. I have found that when it works best, it is also 
accompanied by incentives for good performance.
  The gentleman from Maryland begins this process. It is a worthy 
endeavor, and I am pleased to support the gentleman's amendment. I want 
to thank him for the work that he is doing on this legislation, and I 
urge adoption of the amendment.
  Mr. CHABOT. Mr. Chairman, we accept the amendment, and we thank the 
gentleman from Maryland for his leadership on this as he has shown such 
great leadership on so many other issues as well.
  Mr. WYNN. I thank the gentleman for his kind comments and for his 
support of the amendment, and, of course, I thank the gentlelady for 
supporting the amendment.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Maryland (Mr. Wynn).
  The amendment was agreed to.


          Amendment No. 7 Offered by Ms. Jackson-Lee of Texas

  The CHAIRMAN. It is now in order to consider amendment No. 7 printed 
in House Report 110-137.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:
       Amendment No. 7 offered by Ms. Jackson-Lee of Texas:
       Section 103, strike ``concern.'' and insert ``concern, and 
     shall make available to the public on the website of the 
     Administration the action taken and the result achieved.''.

  The CHAIRMAN. Pursuant to House Resolution 383, the gentlewoman from 
Texas (Ms. Jackson-Lee) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentlewoman from Texas.
  Ms. JACKSON-LEE of Texas. Let me thank the distinguished Chair for 
yielding and let me also thank the distinguished chairwoman and ranking 
member for their leadership on this very important issue of small 
business, and thank them for the series of bills that have come to the 
floor that are like building blocks in helping small businesses across 
America. I would like to thank the majority committee staff for working 
with my staff. I would like to thank Mr. Tsehai for working on I think 
an important issue.
  Let me quickly say that this amendment comes from experience of some 
of the frustration that small businesses will express coming to your 
office. The Federal Government is big, and the refuge for small 
businesses is the SBA. They look for incentives. They look for 
instruction. They look for guidance. And so my amendment simply says 
that when there is a dispute and there is a response by the FDA and an 
action is taken, any action with regard to any disagreement between the 
SBA and contract procurement agency, this resolve should be put on the 
Web site.
  This is an important part of educating small businesses about their 
action and gives them an empowerment. And I say that in the backdrop of 
so many businesses that were housed in Houston who fled New Orleans 
after Hurricane Katrina. Many businesses were there. They were looking 
to get restarted back in New Orleans. And the confusion of not being 
able to access what happened in their request or what happened in a 
dispute led me to believe that more information on the Web site of the 
SBA would be extremely helpful.
  So I ask my colleagues to support this amendment. It simply provides 
an opportunity for the Small Business Administration to post on their 
Web site any action taken and the result achieved with regards to any 
disagreement between the SBA and any contract procurement agency.
  I yield to the chairwoman of the 
full committee, Congresswoman Velazquez.

                              {time}  2000

  Ms. VELAZQUEZ. I thank the gentlelady for yielding.
  We accept this amendment which will require the Administrator of SBA 
to make public the actions taken on behalf of small businesses or trade 
associations with regard to bundled contracts. More importantly, it 
will publicize the results of their actions.
  I look forward to working with my colleague on this amendment which 
will add transparency to the bundling appeals process.
  I, again, want to thank the gentlewoman from Texas for her work. I 
urge adoption of the amendment, and I yield to Ranking Member Chabot.
  Mr. CHABOT. I thank the chairwoman for yielding.
  I want to thank the gentlelady from Texas for offering this very 
helpful amendment. We've looked over it, and we think it's a very good 
amendment. I've had the pleasure to serve on the Judiciary Committee 
with the gentlelady for the past 13 years. I've agreed with some 
amendments. Unfortunately, oftentimes, I've disagreed with her 
amendments. But it's very nice to be able to agree with one that the 
gentlelady has offered. So we thank the gentlelady for offering it.
  Ms. JACKSON-LEE of Texas. Thank you very much. I thank the chairwoman 
and the ranking member. And, Mr. Chairman, it's always good when light 
comes into this place and we have consensus; and I'd ask my colleagues 
to support this amendment.
  I thank the Chairman and Ranking Member for allowing me to explain my 
amendment to H.R. 1873, the ``Small Business Fairness in Contracting 
Act.''
  My amendment, which enjoys full support from Chairwoman Velazquez, 
brings transparency, accountability and responsiveness to the process 
of procuring federal contracts. By mandating that the Small Business 
Administration (SBA) post on their Web site any action taken and the 
result achieved, with regards to any disagreement between the SBA and 
the contract procurement agency, individuals can be assured that their 
government is open and honest. The purpose of this amendment is to 
ensure transparency and accountability of the SBA to the small 
businesses it was designed to protect and assist.
  My amendment is straightforward. My amendment is vital. My amendment 
is essential. And my amendment is bipartisan.
  We may not realize the impact that small businesses have on our 
lives, but they represent the sole diner that is open on a late night 
trip, the catering service that turns a family gathering into a 
lifetime of memories, or the mechanic that will not allow your first 
car to die.
  In conclusion, we the members of the 110th Congress are sending the 
right message to the American people and small business owners that we 
are committed to eliminating waste, fraud, and abuse.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Texas (Ms. Jackson-Lee).
  The amendment was agreed to.


          Amendment No. 8 Offered by Ms. Jackson-Lee of Texas

  The CHAIRMAN. It is now in order to consider amendment No. 8 printed 
in House Report 110-137.
  Ms. JACKSON-LEE of Texas. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 8 offered by Ms. Jackson-Lee of Texas:
       Section 104, strike ``Senate.'' and insert ``Senate, and 
     any other committee of the House and Senate that has 
     jurisdiction over the agency concerned.''.

  The SPEAKER pro tempore. Pursuant to House Resolution 383, the 
gentlewoman from Texas (Ms. Jackson-Lee) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentlewoman from Texas.
  Ms. JACKSON-LEE of Texas. I thank the distinguished chairman for his 
yielding to me and appreciate his leadership in the Speaker's chair 
this evening.

[[Page 11896]]

  Let me again express my appreciation to the chairwoman of the full 
Committee on Small Business and, as well, the ranking member for their 
assistance in this amendment and their staff and my staff as well.
  This amendment is one that reflects, again, that small businesses are 
small businesses, and they need our assistance. They also work with a 
number of agencies, and those agencies have contracting procurement 
offices. Those, of course, are challenges for many small businesses, 
one, to have a road map of how to get a procurement from a large, if 
you will, government agency. Many times, there may be disputes.
  This amendment simply says that any disagreement between the SBA and 
the contracting procurement agency, the appropriate House and Senate 
committees with jurisdiction over the matter should be informed. This 
includes the Committees on Small Business and Oversight and Government 
Reform. This, of course, is designed to ensure that both the SBA and 
the procuring agency are accountable and forthcoming to the committees 
which have jurisdiction over the procuring agency as it relates to 
small businesses and meeting SBA and congressionally mandated goals. Of 
course, this emphasizes the fact to make sure that we do have the 
widespread of small businesses, women-owned businesses, minority-owned 
businesses.
  My amendment is simple; my amendment is, I think, helpful; and my 
amendment is necessary and bipartisan. Small businesses are the 
backbone of our society, and they represent an American dream for 
numerous families and provide much-needed revenue to the local 
municipalities they live in. So I therefore ask that that amendment be 
accepted.
  I thank the Chairman and Ranking Member for allowing me to explain my 
amendment to H.R. 1873, the ``Small Business Fairness in Contracting 
Act.''
  My amendment has the full support of Chairwoman Velazquez and 
mandates that whenever there is a disagreement between the SBA and the 
contracting procurement agency, the appropriate House and Senate 
committees with jurisdiction over the matter are informed. This 
includes the Committees on Small Business and Oversight & Government 
Reform. This amendment is designed to ensure that both the SBA and the 
procuring agency are accountable and forthcoming to the committees 
which have jurisdiction over the procuring agency, (as it relates to 
small businesses and meeting SBA and congressionally mandated goals.)
  My amendment is simple. My amendment is important. My amendment is 
necessary. And my amendment is bi-partisan.
  Small businesses are the backbone of our society. They represent the 
American dream for numerous families, and provide much needed revenue 
to the local municipalities they serve. The very nature of small 
businesses tend to create a bond between customer and shop owner that 
can not be duplicated within the confines of our super-malls, or on the 
never ending maze we call the internet. Small business owners value the 
relationship they share with their customers, and tend to go above and 
beyond the normal call of duty to meet their clients' needs.
  Mr. Chairman, I would yield to the distinguished gentlelady from New 
York (Ms. Velazquez).
  Ms. VELAZQUEZ. Mr. Chairman, I want to thank the gentlelady for 
yielding.
  We are prepared to accept this amendment. The gentlelady's amendment 
provides a measure of enforcement. It requires agencies to send copies 
of letters in which they have disagreed with the SBA's attempts to 
maximize the usage of small businesses on bundled contracts to the 
relevant authorizing committee.
  The committees will soon become familiar with the extent to which 
agencies within their jurisdiction are bundling contracts and will have 
a better handle on the extent of this problem.
  I urge adoption of this amendment, and I yield to the ranking member, 
Mr. Chabot.
  Mr. CHABOT. I thank the gentlelady for yielding, and I want to again 
commend the gentlewoman for offering a helpful amendment. And we accept 
this amendment as well.
  Ms. JACKSON-LEE of Texas. I thank both the chairwoman and the ranking 
member. I ask my colleagues to support this amendment.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentlewoman from Texas (Ms. Jackson-Lee).
  The amendment was agreed to.
  Ms. VELAZQUEZ. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Ms. 
Sutton) having assumed the chair, Mr. Lincoln Davis of Tennessee, 
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. 1873) to reauthorize the programs and activities of the Small 
Business Administration relating to procurement, and for other 
purposes, had come to no resolution thereon.

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