[House Report 115-943]
[From the U.S. Government Publishing Office]


115th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                     {      115-943

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



 
  EXPANDING CONTRACTING OPPORTUNITIES FOR SMALL BUSINESSES ACT OF 2018

                                _______
                                

 September 12, 2018.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Chabot, from the Committee on Small Business, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 6369]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 6369) to amend the Small Business Act to eliminate 
the inclusion of option years in the award price for sole 
source contracts, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.

                                CONTENTS

                                                                   Page
   I. Purpose and Bill Summary........................................4
  II. Need for Legislation............................................4
 III. Hearings........................................................6
  IV. Committee Consideration.........................................7
   V. Committee Votes.................................................7
  VI. Section-by-Section of H.R. 6369.................................9
 VII. Congressional Budget Office Cost Estimate......................10
VIII. Unfunded Mandates..............................................10
  IX. New Budget Authority, Entitlement Authority, and Tax Expenditur10
   X. Oversight Findings.............................................10
  XI. Statement of Constitutional Authority..........................10
 XII. Congressional Accountability Act...............................10
XIII. Federal Advisory Committee Act Statement.......................10
 XIV. Statement of No Earmarks.......................................10
  XV. Statement of Duplication of Federal Programs...................11
 XVI. Disclosure of Directed Rule Makings............................11
XVII. Performance Goals and Objectives...............................11
XVIII.Changes in Existing Law, Made by the Bill, As Reported.........11


    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Expanding Contracting Opportunities 
for Small Businesses Act of 2018''.

SEC. 2. AMENDMENTS TO CONTRACTING AUTHORITY FOR CERTAIN SMALL BUSINESS 
                    CONCERNS.

  (a) Qualified HUBZone Small Business Concerns.--Subparagraph (A) of 
section 31(b)(2) of the Small Business Act (15 U.S.C. 657a(b)(2)) is 
amended to read as follows:
                  ``(A) Sole source contracts.--A contracting officer 
                may award sole source contracts under this section to 
                any qualified HUBZone small business concern, if--
                          ``(i) the qualified HUBZone small business 
                        concern is determined to be a responsible 
                        contractor with respect to performance of such 
                        contract opportunity;
                          ``(ii) the contracting officer does not have 
                        a reasonable expectation that two or more 
                        qualified HUBZone small business concerns will 
                        submit offers for the contracting opportunity;
                          ``(iii) the anticipated award price of the 
                        contract will not exceed--
                                  ``(I) $7,000,000, in the case of a 
                                contract opportunity assigned a 
                                standard industrial classification code 
                                for manufacturing; or
                                  ``(II) $4,000,000, in the case of all 
                                other contract opportunities; and
                          ``(iv) in the estimation of the contracting 
                        officer, the contract award can be made at a 
                        fair and reasonable price.''.
  (b) Small Business Concern Owned and Controlled by Service-Disabled 
Veterans.--Subsection (a) of section 36 of the Small Business Act (15 
U.S.C. 657f) is amended to read as follows:
  ``(a) Sole Source Contracts.--In accordance with this section, a 
contracting officer may award a sole source contract to any small 
business concern owned and controlled by service-disabled veterans if--
          ``(1) such concern is determined to be a responsible 
        contractor with respect to performance of such contract 
        opportunity;
          ``(2) the contracting officer does not have a reasonable 
        expectation that two or more small business concerns owned and 
        controlled by service-disabled veterans will submit offers for 
        the contracting opportunity;
          ``(3) the anticipated award price of the contract will not 
        exceed--
                  ``(A) $7,000,000, in the case of a contract 
                opportunity assigned a standard industrial 
                classification code for manufacturing; or
                  ``(B) $4,000,000, in the case of any other contract 
                opportunity;
          ``(4) in the estimation of the contracting officer, the 
        contract award can be made at a fair and reasonable price;
          ``(5) the contracting officer has notified the Administration 
        of the intent to make such award and requested that the 
        Administration determine the concern's eligibility for award; 
        and
          ``(6) the Administration has determined that such concern is 
        eligible for award.''.
  (c) Certain Small Business Concerns Owned and Controlled by Women.--
Section 8(m) of the Small Business Act (15 U.S.C. 637(m)) is amended--
          (1) by amending paragraph (7) to read as follows:
          ``(7) Authority for sole source contracts for economically 
        disadvantaged small business concerns owned and controlled by 
        women.--A contracting officer may award a sole source contract 
        under this subsection to any small business concern owned and 
        controlled by women described in paragraph (2)(A) and certified 
        under paragraph (2)(E) if--
                  ``(A) such concern is determined to be a responsible 
                contractor with respect to performance of the contract 
                opportunity;
                  ``(B) the contracting officer does not have a 
                reasonable expectation that two or more businesses 
                described in paragraph (2)(A) will submit offers;
                  ``(C) the anticipated award price of the contract 
                will not exceed--
                          ``(i) $7,000,000, in the case of a contract 
                        opportunity assigned a standard industrial 
                        classification code for manufacturing; or
                          ``(ii) $4,000,000, in the case of any other 
                        contract opportunity;
                  ``(D) in the estimation of the contracting officer, 
                the contract award can be made at a fair and reasonable 
                price;
                  ``(E) the contracting officer has notified the 
                Administration of the intent to make such award and 
                requested that the Administration determine the 
                concern's eligibility for award; and
                  ``(F) the Administration has determined that such 
                concern is eligible for award.''; and
          (2) by amending paragraph (8) to read as follows:
          ``(8) Authority for sole source contracts for small business 
        concerns owned and controlled by women in substantially 
        underrepresented industries.--A contracting officer may award a 
        sole source contract under this subsection to any small 
        business concern owned and controlled by women certified under 
        paragraph (2)(E) that is in an industry in which small business 
        concerns owned and controlled by women are substantially 
        underrepresented (as determined by the Administrator under 
        paragraph (3)) if--
                  ``(A) such concern is determined to be a responsible 
                contractor with respect to performance of the contract 
                opportunity;
                  ``(B) the contracting officer does not have a 
                reasonable expectation that two or more businesses in 
                an industry that has received a waiver under paragraph 
                (3) will submit offers;
                  ``(C) the anticipated award price of the contract 
                will not exceed--
                          ``(i) $7,000,000, in the case of a contract 
                        opportunity assigned a standard industrial 
                        classification code for manufacturing; or
                          ``(ii) $4,000,000, in the case of any other 
                        contract opportunity;
                  ``(D) in the estimation of the contracting officer, 
                the contract award can be made at a fair and reasonable 
                price;
                  ``(E) the contracting officer has notified the 
                Administration of the intent to make such award and 
                requested that the Administration determine the 
                concern's eligibility for award; and
                  ``(F) the Administration has determined that such 
                concern is eligible for award.''.
  (d) Elimination of the Inclusion of Option Years in the Award Price 
for Contracts.--Section 8 of the Small Business Act (15 U.S.C. 637) is 
amended by striking ``(including options)'' each place such term 
appears.

SEC. 3. SBA CERTIFICATION PROGRAM NOTIFICATION.

  The Administrator of the Small Business Administration shall notify 
the Committee on Small Business of the House of Representatives and the 
Committee on Small Business and Entrepreneurship of the Senate when the 
Administrator has implemented each of the following:
          (1) A program to certify small business concerns owned and 
        controlled by women.
          (2) A program to certify small business concerns owned and 
        controlled by service-disabled veterans.

SEC. 4. GAO REPORT.

  (a) Study.--With respect to the Small Business Administration's 
procurement programs for women-owned small business concerns and for 
small business concerns owned and controlled by service-disabled 
veterans, the Comptroller General of the United States shall conduct an 
evaluation of the policies and practices used by the Administration and 
other Federal agencies to provide assurance that contracting officers 
are properly classifying sole source awards under those programs in the 
Federal Procurement Data System and that sole source contracts awarded 
under those programs are being awarded to eligible concerns.
  (b) Report.--No later than 18 months after the Small Business 
Administration implements the certification programs described under 
section 3, the Comptroller General shall issue a report to the 
Committee on Small Business of the House of Representatives and the 
Committee on Small Business and Entrepreneurship of the Senate 
containing the findings made in carrying out the study required under 
subsection (a).
  (c) SBA Consideration of GAO Report.--
          (1) In general.--The Administrator of the Small Business 
        Administration shall review the report issued under subsection 
        (b) and take such actions as the Administrator may determine 
        appropriate to address any concerns raised in such report and 
        any recommendations contained in such report.
          (2) Report to congress.--After the review described under 
        paragraph (1), the Administrator shall issue a report to the 
        Congress--
                  (A) stating that no additional actions were necessary 
                to address any concerns or recommendations contained in 
                the report; or
                  (B) describing the actions taken by the Administrator 
                to resolve such concerns or implement such 
                recommendations.

SEC. 5. REMOVAL OF ELIGIBILITY DETERMINATION UPON IMPLEMENTATION OF 
                    CERTIFICATION PROGRAMS.

  Effective upon the notification described under section 3, the Small 
Business Act (15 U.S.C. 631 et seq.) is amended--
          (1) in section 8(m)--
                  (A) in paragraph (7)--
                          (i) in subparagraph (C), by adding ``and'' at 
                        the end;
                          (ii) in subparagraph (D), by striking the 
                        semicolon at the end and inserting a period; 
                        and
                          (iii) by striking subparagraphs (E) and (F); 
                        and
                  (B) in paragraph (8)--
                          (i) in subparagraph (C), by adding ``and'' at 
                        the end;
                          (ii) in subparagraph (D), by striking the 
                        semicolon at the end and inserting a period; 
                        and
                          (iii) by striking subparagraphs (E) and (F); 
                        and
          (2) in section 36(a)--
                  (A) in paragraph (3), by adding ``and'' at the end;
                  (B) in paragraph (4), by striking the semicolon at 
                the end and inserting a period; and
                  (C) by striking paragraphs (5) and (6).

                      I. Purpose and Bill Summary

    The purpose of H.R. 6369, the ``Expanding Contracting 
Opportunities for Small Businesses Act of 2018,'' is to promote 
greater use of sole-source contracting to small businesses by 
contracting officers while also ensuring only eligible firms 
receive these contracts.
    H.R. 6369 raises the dollar amount of sole-source awards so 
that they are closer in line with the size of current contracts 
being awarded in the procurement landscape. To mitigate the 
risk of fraud and abuse, the bill strengthens oversight by 
instituting a new eligibility determination check by the Small 
Business Administration (SBA) before sole-source contracts are 
awarded, and by requiring SBA to notify Congress when front-end 
certification programs for Women-Owned Small Businesses (WOSBs) 
and Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) 
are implemented. The bill also provides insight into federal 
sole source contracting activities by requiring the Government 
Accountability Office (GAO) to assess whether federal sole-
source award data is accurate and identifying sole-source 
awards made to ineligible entities. The bill also mitigates 
errors made where the GAO has identified ineligible sole-source 
awards by requiring the SBA to take corrective action as 
needed.

                II. Background and Need for Legislation

    H.R. 6369 was introduced by Rep. Roger Marshall (R-KS) and 
Rep. Bradley Schneider (D-IL) on July 13, 2018. Background on 
each of these provisions will be provided along with an 
explanation of the need for legislation.

                        A. SOLE SOURCE CONTRACTS

    Under the Small Business Act, the SBA plays a critical role 
in safeguarding federal contracting opportunities for small 
businesses. The SBA negotiates agency-specific small business 
goals to help ensure that the federal government collectively 
meets the 23 percent statutory goal for contract dollars 
awarded to small businesses. In addition, SBA administers the 
8(a) Business Development program, the HUBZone program, the 
SDVOSB program, and the WOSB programs\1\ that are intended to 
assist small businesses of various socioeconomic categories. 
The Small Business Act also provides contracting officers with 
the authority to award sole-source, or uncompetitive contracts 
to certain small businesses, provided they meet the eligibility 
criteria and are the only firm in that socioeconomic group 
eligible and willing to perform the contract at a reasonable 
price.\2\ However, the current statutory dollar upper-limit 
threshold for sole-source awards has fallen behind, failing to 
keep pace with the size of contract awards favored by 
contracting officers and agencies presently.
---------------------------------------------------------------------------
    \1\15 U.S.C. Sec. 631(a), 644(a).
    \2\Contracting officers are permitted to award sole-source 
contracts to 8(a) firms even if the firm is not the only 8(a) firm 
eligible and willing to perform the contract at a reasonable price.
---------------------------------------------------------------------------

                 B. WOMEN-OWNED SMALL BUSINESS PROGRAM

    In order to increase federal contracting opportunities for 
WOSBs, in 1994, Congress established an annual goal of not less 
than 5 percent of prime contract and subcontract awards for 
each fiscal year for WOSBs. In 2000, Congress authorized the 
WOSB program and SBA issued implementing regulations that 
became effective in 2011. Under the program, set-aside and 
sole-source contracts are reserved for WOSBs and economically 
disadvantaged WOSBs (EDWOSBs) in designated industries in which 
they were historically underrepresented.\3\ Among other 
eligibility requirements, a business must be at least 51 
percent owned and controlled by one or more women; it must be 
certified as eligible by a third party or be self-certified by 
the business owner; and the owner must provide documents 
demonstrating that the business meets program requirements.
---------------------------------------------------------------------------
    \3\Set-asides and sole source contracts can be made only in 
industries in which WOSBs were substantially underrepresented and 
economically disadvantaged WOSBs were underrepresented, according to 
the program regulation.
---------------------------------------------------------------------------
    Various changes have been made to the WOSB program since it 
was established, including allowing sole source awards starting 
in October 2015. Additionally, in Section 825 of the National 
Defense Authorization Act for Fiscal Year 2015, the Small 
Business Act was amended to remove the option of self-
certification for WOSBs, thereby ending self-certification for 
WOSBs and EDWOSBs, requiring the SBA to implement a front-end 
certification process. As of the date of this report, SBA has 
not issued rules for certifying WOSBs and EDWOSBs. Due in part 
to the lack of accountability through the current self-
certification scheme, the SBA Inspector General released a 
report finding that contracting officers and firms failed to 
comply with federal regulations for a significant portion of 
WOSB sole-source contracts sampled, indicating low assurance 
that these sole-source contracts were awarded to eligible 
WOSBs.\4\
---------------------------------------------------------------------------
    \4\https://www.sba.gov/sites/default/files/oig/SBA-OIG-Report-18-
18.pdf?utm_medium=email&utm_source=govdelivery.
---------------------------------------------------------------------------

        C. SERVICE-DISABLED VETERAN-OWNED SMALL BUSINESS PROGRAM

    The Veterans Entrepreneurship and Small Business 
Development Act of 1999 established an annual government-wide 
goal of not less than 3 percent of the total value of all prime 
contract and subcontract awards for SDVOSBs.\5\ In addition, 
the Veterans Benefits Act of 2003 gave federal contracting 
officers the authority to restrict competition to SDVOSBs and 
award a sole source or set-aside contract where certain 
criteria are met.\6\ To be eligible, the business must be 
majority-owned by one or more service-disabled veterans who 
manage and control daily business operations, and it must 
qualify as a small business under SBA's size standards. There 
is currently no front-end certification program in place at the 
SBA; SDVOSBs are permitted to self-certify their status.
---------------------------------------------------------------------------
    \5\Pub. L. No. 106-50, Sec. 502, 113 Stat. 233, 247 (1999).
    \6\Pub. L. No. 108-183, Sec. 308, 117 Stat. 2651, 2662 (2003).
---------------------------------------------------------------------------

                      D. THE NEED FOR LEGISLATION

    As the federal government continues to exercise contract 
consolidation principles, contract awards and task orders 
continue to grow in size and scope. Even as typical contract 
awards continue to grow, the statutory maximum dollar threshold 
for sole-source contracts has remained stagnant and unchanged, 
even to adjust for inflation. The authority to award sole-
source contracts prescribes upper-limit dollar thresholds that 
encompass the entirety of the contract, including base and 
option years. Current sole source awards do not reflect the 
true size of contracts typically issued by contracting 
officers, resulting in these types of awards becoming 
increasingly rare and difficult to use, disadvantaging small 
businesses that are eligible for these types of awards. H.R. 
6369 raises the dollar limit prescribed in statute to adjust 
for inflation and removes the limitation imposed by inclusion 
of option years to the total dollar amount. This removal should 
increase the size of sole source contracts, incentivizing 
greater use of sole-source awards by contracting officers.
    Furthermore, the SBA has been slow to implement a front-end 
certification program for WOSBs and the SBA's SDVOSB program 
relies on self-certification. This poses risks of fraud and 
abuse when and if sole source awards are made to WOSBs and 
SDVOSBs. H.R. 6369 establishes a new oversight procedure in 
order to mitigate this risk. The new process requires 
contracting officers to contact the SBA prior to awarding a 
sole source contract to a WOSB or SDVOSB. The SBA would be 
required to confirm the status of the WOSB or SDVOSB prior to 
the contracting officer making the sole-source award. This new 
oversight process will expire once the SBA implements a front-
end certification program for WOSB and SDVOSB.

                             III. Hearings

    The Committee did not hold any hearing specifically on the 
issues addressed in H.R. 6369. However, in the 115th Congress, 
the Committee held a hearing examining the federal government's 
growing dependence on using large, multiple-award contracts and 
continued use of contract consolidation principles. This 
hearing, held on June 13, 2018 by the Committee on Small 
Business, was titled ``The Impact of Category Management on the 
Small Business Industrial Base.'' The primary concern examined 
in this hearing focused on the potential significant loss of 
small business contracting opportunities. Witnesses included 
subject matter experts representing the HUBZone Contractors 
National Council, Professional Services Council, National 
Defense Industrial Association, and the U.S. Women's Chamber of 
Commerce.

                      IV. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on July 18, 2018 and ordered H.R. 6369 
favorably reported to the House. During the markup, one 
amendment was offered.
          Amendment Number One was offered by Rep. Bradley 
        Schneider of Illinois. This amendment eliminated the 
        inclusion of option years in the award price for 
        contracts in section 8 of the Small Business Act, 
        ensuring that all contracting programs comport with the 
        intent of this bill. The amendment also removed the 
        eligibility determinations established in this bill 
        upon implementation of government certification 
        programs by the SBA. The amendment passed by voice vote 
        at 11:39 am.

                           V. Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the recorded 
votes on the motion to report legislation and amendments 
thereto. The Committee voted by voice vote to favorably report 
H.R. 6369 to the House at 11:39 am.


              VI. Section-by-Section Analysis of H.R. 6369


Section 1. Short title

    This section designates the bill as the ``Expanding 
Contracting Opportunities for Small Businesses Act of 2018.''

Section 2. Amendments to contracting authority for certain small 
        business concerns

    Section 2(a) amends 15 U.S.C. 657a, the HUBZone Program 
statutes in the Small Business Act, to remove the option year 
inclusion limiting the sole-source contract dollar award 
threshold for HUBZone small business concerns. This section 
also adjusts these dollar amounts in statute for inflation.
    Section 2(b) amends 15 U.S.C. 657f, the Service-Disabled 
Veteran-Owned Small Business (SDVOSB) Program statutes in the 
Small Business Act, to remove the option year inclusion 
limiting the sole-source contract dollar award threshold for 
SDVOSBs, and adjusts these dollar amounts for inflation. This 
section also implements a new eligibility determination 
process, which requires a contracting officer to notify the 
Small Business Administration (SBA) of its intent to award a 
sole-source contract to a SDVOSB; the SBA to determine whether 
the SDVOSB is in fact an eligible SDVOSB; and for the SBA to 
notify the contracting officer of its findings. The contracting 
officer must receive a positive determination by the SBA that 
the SDVOSB is eligible before making the sole-source contract 
award to that SDVOSB.
    Section 2(c) amends the sole-source contracting authority 
in 15 U.S.C. 637m, the Women-Owned Small Business (WOSB) 
Program statutes in the Small Business Act, with parallel 
changes reflected in the sole-source statutes for both 
economically-disadvantaged WOSBs and WOSBs in substantially 
underrepresented industries. These amendments remove the option 
year inclusion limiting the sole-source contract dollar award 
threshold for WOSBs, and adjusts these dollar amounts for 
inflation. This section also implements a new eligibility 
determination process, which requires a contracting officer to 
notify the SBA of their intent to award a sole-source contract 
to a WOSB; the SBA to determine whether the WOSB is in fact an 
eligible WOSB; and for the SBA to notify the contracting 
officer of its findings. The contracting officer must receive a 
positive determination by the SBA that the WOSB is eligible 
before making the sole-source contract award to that WOSB.

Section 3. SBA certification program notification

    Section 3 requires the SBA to notify Congress when the 
agency has implemented front-end eligibility certification 
programs for WOSBs and SDVOSBs.

Section 4. GAO report

    Section 4 requires the Government Accountability Office 
(GAO) to issue a report within a year of enactment of this bill 
assessing whether contracting officers are accurately entering 
WOSB and SDVOSB sole-source award information into the federal 
procurement database, and whether these awards are being made 
to eligible WOSB and SDVOSB entities. This section further 
requires the SBA to consider the findings and recommendations 
arising from this report, take appropriate actions as 
necessary, and notify Congress of any SBA actions resulting 
from the GAO's report.

             VII. Congressional Budget Office Cost Estimate

    At the time H.R. 6369 was reported to the House, the 
Congressional Budget Office had not provided a cost estimate.

                        VIII. Unfunded Mandates

    H.R. 6369 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act, Public 
Law No. 104-4, and would impose no costs on state, local, or 
tribal governments.

 IX. New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House, the Committee provides the following opinion and 
estimate with respect to new budget authority, entitlement 
authority, and tax expenditures. While the Committee has not 
received an estimate of new budget authority contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to Sec. 402 of the Congressional Budget 
Act of 1974, the Committee does not believe that there will be 
any additional costs attributable to this legislation. H.R. 
6369 does not direct new spending, but instead reallocates 
funding independently authorized and appropriated.

                         X. Oversight Findings

    In accordance with clause 2(b)(1) of rule X of the Rules of 
the House, the oversight findings and recommendations of the 
Committee on Small Business with respect to the subject matter 
contained in H.R. 6369 are incorporated into the descriptive 
portions of this report.

               XI. Statement of Constitutional Authority

    Pursuant to clause 7 of rule VII of the Rules of the House, 
the Committee finds that the authority for this legislation in 
Art. I, Sec. 8, cl.1.

                 XII. Congressional Accountability Act

    H.R. 6369 does not relate to the terms and conditions of 
employment or access to public services or accommodations 
within the meaning of Sec. 102(b)(3) of Public Law No. 104-1.

             XIII. Federal Advisory Committee Act Statement

    H.R. 6369 does not establish or authorize the establishment 
of any new advisory committees as that term is defined in the 
Federal Advisory Committee Act, 5 U.S.C. App.2.

                     XIV. Statement of No Earmarks

    Pursuant to clause 9 of rule XXI, H.R. 6369 does not 
contain any congressional earmarks, limited tax benefits, or 
limited tariff benefits as defined in subsections (d), (e), or 
(f) of clause 9 of rule XXI of the Rules of the House.

            XV. Statement of Duplication of Federal Programs

    Pursuant to clause 3 of rule XIII of the Rules of the 
House, no provision of H.R. 6369 establishes or reauthorizes a 
program of the federal government known to be duplicative of 
another federal program, a program that was included in any 
report from the United States Government Accountability Office 
pursuant to Sec. 21 of Pub. L. No. 111-139, or a program 
related to a program identified in the most recent catalog of 
federal domestic assistance.

                XVI. Disclosure of Directed Rulemakings

    Pursuant to clause 3 of the rule XIII of the Rules of the 
House, H.R. 6369 does not direct any rulemaking.

                 XVII. Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House, the Committee establishes the following performance-
related goals and objectives for this legislation:
          H.R. 6369 adjusts the statutory dollar amount for 
        small business sole-source contracts for inflation and 
        removes the option year limitation to that dollar 
        amount. The bill also includes a new oversight process 
        requiring contracting officers to confirm the status of 
        a women-owned or service-disabled veteran-owned small 
        business with the Small Business Administration prior 
        to awarding the sole-source contract.

      XVIII. Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause (E) of rule XIII of the Rules of 
the House, changes in existing law made by the bill, as 
reported, are shown as follows: existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                           SMALL BUSINESS ACT



           *       *       *       *       *       *       *
  Sec. 8. (a)(1) It shall be the duty of the Administration and 
it is hereby empowered, whenever it determines such action is 
necessary or appropriate--
          (A) to enter into contracts with the United States 
        Government and any department, agency, or officer 
        thereof having procurement powers obligating the 
        Administration to furnish articles, equipment, 
        supplies, services, or materials to the Government or 
        to perform construction work for the Government. In any 
        case in which the Administration certifies to any 
        officer of the Government having procurement powers 
        that the Administration is competent and responsible to 
        perform any specific Government procurement contract to 
        be let by any such officer, such officer shall be 
        authorized in his discretion to let such procurement 
        contract to the Administration upon such terms and 
        conditions as may be agreed upon between the 
        Administration and the procurement officer. Whenever 
        the Administration and such procurement officer fail to 
        agree, the matter shall be submitted for determination 
        to the Secretary or the head of the appropriate 
        department or agency by the Administrator. Not later 
        than 5 days from the date the Administration is 
        notified of a procurement officer's adverse decision, 
        the Administration may notify the contracting officer 
        of the intent to appeal such adverse decision, and 
        within 15 days of such date the Administrator shall 
        file a written request for a reconsideration of the 
        adverse decision with the Secretary of the department 
        or agency head. For the purposes of this subparagraph, 
        a procurement officer's adverse decision includes a 
        decision not to make available for award pursuant to 
        this subsection a particular procurement requirement or 
        the failure to agree on the terms and conditions of a 
        contract to be awarded noncompetitively under the 
        authority of this subsection. Upon receipt of the 
        notice of intent to appeal, the Secretary of the 
        department or the agency head shall suspend further 
        action regarding the procurement until a written 
        decision on the Administrator's request for 
        reconsideration has been issued by such Secretary or 
        agency head, unless such officer makes a written 
        determination that urgent and compelling circumstances 
        which significantly affect interests of the United 
        States will not permit waiting for a reconsideration of 
        the adverse decision. If the Administrator's request 
        for reconsideration is denied, the Secretary of the 
        department or agency head shall specify the reasons why 
        the selected firm was determined to be incapable to 
        perform the procurement requirement, and the findings 
        supporting such determination, which shall be made a 
        part of the contract file for the requirement. A 
        contract may not be awarded under this subsection if 
        the award of the contract would result in a cost to the 
        awarding agency which exceeds a fair market price;
          (B) to arrange for the performance of such 
        procurement contracts by negotiating or otherwise 
        letting subcontracts to socially and economically 
        disadvantaged small business concerns for construction 
        work, services, or the manufacture, supply, assembly of 
        such articles, equipment, supplies, materials, or parts 
        thereof, or servicing or processing in connection 
        therewith, or such management services as may be 
        necessary to enable the Administration to perform such 
        contracts;
                  (C) to make an award to a small business 
                concern owned and controlled by socially and 
                economically disadvantaged individuals which 
                has completed its period of Program 
                Participation as prescribed by section 
                7(j)(15), if--
                          (i) the contract will be awarded as a 
                        result of an offer (including price) 
                        submitted in response to a published 
                        solicitation relating to a competition 
                        conducted pursuant to subparagraph (D); 
                        and
                          (ii) the prospective contract awardee 
                        was a Program Participant eligible for 
                        award of the contract on the date 
                        specified for receipt of offers 
                        contained in the contract solicitation; 
                        and
          (D)(i) A contract opportunity offered for award 
        pursuant to this subsection shall be awarded on the 
        basis of competition restricted to eligible Program 
        Participants if--
                  (I) there is a reasonable expectation that at 
                least two eligible Program Participants will 
                submit offers and that award can be made at a 
                fair market price, and
                  (II) the anticipated award price of the 
                contract [(including options)] will exceed 
                $5,000,000 in the case of a contract 
                opportunity assigned a standard industrial 
                classification code for manufacturing and 
                $3,000,000 [(including options)] in the case of 
                all other contract opportunities.
          (ii) The Associate Administrator for Minority Small 
        Business and Capital Ownership Development, on a 
        nondelegable basis, is authorized to approve a request 
        from an agency to award a contract opportunity under 
        this subsection on the basis of a competition 
        restricted to eligible Program Participants even if the 
        anticipated award price is not expected to exceed the 
        dollar amounts specified in clause (i)(II). Such 
        approvals shall be granted only on a limited basis.
  (2) Notwithstanding subsections (a) and (c) of the first 
section of the Act entitled ``An Act requiring contracts for 
the construction, alteration, and repair of any public building 
or public work of the United States to be accompanied by a 
performance bond protecting the United States and by additional 
bond for the protection of persons furnishing material and 
labor for the construction, alteration, or repair of said 
public buildings or public work,'' approved August 24, 1935 (49 
Stat. 793), no small business concern shall be required to 
provide any amount of any bond as a condition or receiving any 
subcontract under this subsection if the Administrator 
determines that such amount is inappropriate for such concern 
in performing such contract: Provided, That the Administrator 
shall exercise the authority granted by the paragraph only if--
          (A) the Administration takes such measures as it 
        deems appropriate for the protection of persons 
        furnishing materials and labor to a small business 
        receiving any benefit pursuant to this paragraph;
          (B) the Administration assists, insofar as 
        practicable, a small business receiving the benefits of 
        this paragraph to develop, within a reasonable period 
        of time, such financial and other capability as may be 
        needed to obtain such bonds as the Administration may 
        subsequently require for the successful completion of 
        any program conducted under the authority of this 
        subsection;
          (C) the Administration finds that such small business 
        is unable to obtain the requisite bond or bonds from a 
        surety and that no surety is willing to issue such bond 
        or bonds subject to the guarantee provisions of Title 
        IV of the Small Business Investment Act of 1958; and
          (D) that small business is determined to be a start-
        up concern and such concern has not been participating 
        in any program conducted under the authority of this 
        subsection for a period exceeding one year.
The authority to waive bonds provided in this paragraph (2) may 
not be exercised after September 30, 1988.
  (3)(A) Any Program Participant selected by the Administration 
to perform a contract to be let noncompetitively pursuant to 
this subsection shall, when practicable, participate in any 
negotiation of the terms and conditions of such contract.
  (B)(i) For purposes of paragraph (1) a ``fair market price'' 
shall be determined by the agency offering the procurement 
requirement to the Administration, in accordance with clauses 
(ii) and (iii).
  (ii) The estimate of a current fair market price for a new 
procurement requirement, or a requirement that does not have a 
satisfactory procurement history, shall be derived from a price 
or cost analysis. Such analysis may take into account 
prevailing market conditions, commercial prices for similar 
products or services, or data obtained from any other agency. 
Such analysis shall consider such cost or pricing data as may 
be timely submitted by the Administration.
  (iii) The estimate of a current fair market price for a 
procurement requirement that has a satisfactory procurement 
history shall be based on recent award prices adjusted to 
insure comparability. Such adjustments shall take into account 
differences in quantities, performance times, plans, 
specifications, transportation costs, packaging and packing 
costs, labor and materials costs, overhead costs, and any other 
additional costs which may be deemed appropriate.
  (C) An agency offering a procurement requirement for 
potential award pursuant to this subsection shall, upon the 
request of the Administration, promptly submit to the 
Administration a written statement detailing the method used by 
the agency to estimate the current fair market price for such 
contract, identifying the information, studies, analyses, and 
other data used by such agency. The agency's estimate of the 
current fair market price (and any supporting data furnished to 
the Administration) shall not be disclosed to any potential 
offeror (other than the Administration).
  (D) A small business concern selected by the Administration 
to perform or negotiate a contract to be let pursuant to this 
subsection may request the Administration to protest the 
agency's estimate of the fair market price for such contract 
pursuant to paragraph (1)(A).
  (4)(A) For purposes of this section, the term ``socially and 
economically disadvantaged small business concern'' means any 
small business concern which meets the requirements of 
subparagraph (B) and--
          (i) which is at least 51 per centum unconditionally 
        owned by--
                  (I) one or more socially and economically 
                disadvantaged individuals,
                  (II) an economically disadvantaged Indian 
                tribe (or a wholly owned business entity of 
                such tribe), or
                  (III) an economically disadvantaged Native 
                Hawaiian organization, or
          (ii) in the case of any publicly owned business, at 
        least 51 per centum of the stock of which is 
        unconditionally owned by--
                  (I) one or more socially and economically 
                disadvantaged individuals,
                  (II) an economically disadvantaged Indian 
                tribe (or a wholly owned business entity of 
                such tribe), or
                  (III) an economically disadvantaged Native 
                Hawaiian organization.
  (B) A small business concern meets the requirements of this 
subparagraph if the management and daily business operations of 
such small business concern are controlled by one or more--
          (i) socially and economically disadvantaged 
        individuals described in subparagraph (A)(i)(I) or 
        subparagraph (A)(ii)(I),
          (ii) members of an economically disadvantaged Indian 
        tribe described in subparagraph (A)(i)(II) or 
        subparagraph (A)(ii)(II), or
          (iii) Native Hawaiian organizations described in 
        subparagraph (A)(i)(III) or subparagraph (A)(ii)(III).
  (C) Each Program Participant shall certify, on an annual 
basis, that it meets the requirements of this paragraph 
regarding ownership and control.
  (5) Socially disadvantaged individuals are those who have 
been subjected to racial or ethnic prejudice or cultural bias 
because of their identity as a member of a group without regard 
to their individual qualities.
  (6)(A) Economically disadvantaged individuals are those 
socially disadvantaged individuals whose ability to compete in 
the free enterprise system has been impaired due to diminished 
capital and credit opportunities as compared to others in the 
same business area who are not socially disadvantaged. In 
determining the degree of diminished credit and capital 
opportunities the Administration shall consider, but not be 
limited to, the assets and net worth of such socially 
disadvantaged individual. In determining the economic 
disadvantage of an Indian tribe, the Administration shall 
consider, where available, information such as the following: 
the per capita income of members of the tribe excluding 
judgment awards, the percentage of the local Indian population 
below the poverty level, and the tribe's access to capital 
markets.
  (B) Each Program Participant shall annually submit to the 
Administration--
          (i) a personal financial statement for each 
        disadvantaged owner;
          (ii) a record of all payments made by the Program 
        Participant to each of its disadvantaged owners or to 
        any person or entity affiliated with such owners; and
          (iii) such other information as the Administration 
        may deem necessary to make the determinations required 
        by this paragraph.
  (C)(i) Whenever, on the basis of information provided by a 
Program Participant pursuant to subparagraph (B) or otherwise, 
the Administration has reason to believe that the standards to 
establish economic disadvantage pursuant to subparagraph (A) 
have not been met, the Administration shall conduct a review to 
determine whether such Program Participant and its 
disadvantaged owners continue to be impaired in their ability 
to compete in the free enterprise system due to diminished 
capital and credit opportunities when compared to other 
concerns in the same business area, which are not socially 
disadvantaged.
  (ii) If the Administration determines, pursuant to such 
review, that a Program Participant and its disadvantaged owners 
are no longer economically disadvantaged for the purpose of 
receiving assistance under this subsection, the Program 
Participant shall be graduated pursuant to section 7(j)(10)(G) 
subject to the right to a hearing as provided for under 
paragraph (9).
  (D)(i) Whenever, on the basis of information provided by a 
Program Participant pursuant to subparagraph (B) or otherwise, 
the Administration has reason to believe that the amount of 
funds or other assets withdrawn from a Program Participant for 
the personal benefit of its disadvantaged owners or any person 
or entity affiliated with such owners may have been unduly 
excessive, the Administration shall conduct a review to 
determine whether such withdrawal of funds or other assets was 
detrimental to the achievement of the targets, objectives, and 
goals contained in such Program Participant's business plan.
  (ii) If the Administration determines, pursuant to such 
review, that funds or other assets have been withdrawn to the 
detriment of the Program Participant's business, the 
Administration shall--
          (I) initiate a proceeding to terminate the Program 
        Participant pursuant to section 7(j)(10)(F), subject to 
        the right to a hearing under paragraph (9); or
          (II) require an appropriate reinvestment of funds or 
        other assets and such other steps as the Administration 
        may deem necessary to ensure the protection of the 
        concern.
  (E) Whenever the Administration computes personal net worth 
for any purpose under this paragraph, it shall exclude from 
such computation--
          (i) the value of investments that disadvantaged 
        owners have in their concerns, except that such value 
        shall be taken into account under this paragraph when 
        comparing such concerns to other concerns in the same 
        business area that are owned by other than socially 
        disadvantaged persons;
          (ii) the equity that disadvantaged owners have in 
        their primary personal residences, except that any 
        portion of such equity that is attributable to unduly 
        excessive withdrawals from a Program Participant or a 
        concern applying for program participation shall be 
        taken into account.
  (7)(A) No small business concern shall be deemed eligible for 
any assistance pursuant to this subsection unless the 
Administration determines that with contract, financial, 
technical, and management support the small business concern 
will be able to perform contracts which may be awarded to such 
concern under paragraph (1)(C) and has reasonable prospects for 
success in competing in the private sector.
  (B) Limitations established by the Administration in its 
regulations and procedures restricting the award of contracts 
pursuant to this subsection to a limited number of standard 
industrial classification codes in an approved business plan 
shall not be applied in a manner that inhibits the logical 
business progression by a participating small business concern 
into areas of industrial endeavor where such concern has the 
potential for success.
  (8) All determinations made pursuant to paragraph (5) with 
respect to whether a group has been subjected to prejudice or 
bias shall be made by the Administrator after consultation with 
the Associate Administrator for Minority Small Business and 
Capital Ownership Development. All other determinations made 
pursuant to paragraphs (4), (5), (6), and (7) shall be made by 
the Associate Administrator for Minority Small Business and 
Capital Ownership Development under the supervision of, and 
responsible to, the Administrator.
  (9)(A) Subject to the provisions of subparagraph (E), the 
Administration, prior to taking any action described in 
subparagraph (B), shall provide the small business concern that 
is the subject of such action, an opportunity for a hearing on 
the record, in accordance with chapter 5 of title 5, United 
States Code.
  (B) The actions referred to in subparagraph (A) are--
          (i) denial of program admission based upon a negative 
        determination pursuant to paragraph (4), (5), or (6);
          (ii) a termination pursuant to section 7(j)(10)(F);
          (iii) a graduation pursuant to section 7(j)(10)(G); 
        and
          (iv) the denial of a request to issue a waiver 
        pursuant to paragraph (21)(B).
  (C) The Administration's proposed action, in any proceeding 
conducted under the authority of this paragraph, shall be 
sustained unless it is found to be arbitrary, capricious, or 
contrary to law.
  (D) A decision rendered pursuant to this paragraph shall be 
the final decision of the Administration and shall be binding 
upon the Administration and those within its employ.
  (E) The adjudicator selected to preside over a proceeding 
conducted under the authority of this paragraph shall decline 
to accept jurisdiction over any matter that--
          (i) does not, on its face, allege facts that, if 
        proven to be true, would warrant reversal or 
        modification of the Administration's position;
          (ii) is untimely filed;
          (iii) is not filed in accordance with the rules of 
        procedure governing such proceedings; or
          (iv) has been decided by or is the subject of an 
        adjudication before a court of competent jurisdiction 
        over such matters.
  (F) Proceedings conducted pursuant to the authority of this 
paragraph shall be completed and a decision rendered, insofar 
as practicable, within ninety days after a petition for a 
hearing is filed with the adjudicating office.
  (10) The Administration shall develop and implement an 
outreach program to inform and recruit small business concerns 
to apply for eligibility for assistance under this subsection. 
Such program shall make a sustained and substantial effort to 
solicit applications for certification from small business 
concerns located in areas of concentrated unemployment or 
underemployment or within labor surplus areas and within States 
having relatively few Program Participants and from small 
disadvantaged business concerns in industry categories that 
have not substantially participated in the award of contracts 
let under the authority of this subsection.
  (11) To the maximum extent practicable, construction 
subcontracts awarded by the Administration pursuant to this 
subsection shall be awarded within the county or State where 
the work is to be performed.
  (12)(A) The Administration shall require each concern 
eligible to receive subcontracts pursuant to this subsection to 
annually prepare and submit to the Administration a capability 
statement. Such statement shall briefly describe such concern's 
various contract performance capabilities and shall contain the 
name and telephone number of the Business Opportunity 
Specialist assigned such concern. The Administration shall 
separate such statements by those primarily dependent upon 
local contract support and those primarily requiring a national 
marketing effort. Statements primarily dependent upon local 
contract support shall be disseminated to appropriate buying 
activities in the marketing area of the concern. The remaining 
statements shall be disseminated to the Directors of Small and 
Disadvantaged Business Utilization for the appropriate agencies 
who shall further distribute such statements to buying 
activities with such agencies that may purchase the types of 
items or services described on the capability statements.
  (B) Contracting activities receiving capability statements 
shall, within 60 days after receipt, contact the relevant 
Business Opportunity Specialist to indicate the number, type, 
and approximate dollar value of contract opportunities that 
such activities may be awarding over the succeeding 12-month 
period and which may be appropriate to consider for award to 
those concerns for which it has received capability statements.
  (C) Each executive agency reporting to the Federal 
Procurement Data System contract actions with an aggregate 
value in excess of $50,000,000 in fiscal year 1988, or in any 
succeeding fiscal year, shall prepare a forecast of expected 
contract opportunities or classes of contract opportunities for 
the next and succeeding fiscal years that small business 
concerns, including those owned and controlled by socially and 
economically disadvantaged individuals, are capable of 
performing. Such forecast shall be periodically revised during 
such year. To the extent such information is available, the 
agency forecasts shall specify:
          (i) The approximate number of individual contract 
        opportunities (and the number of opportunities within a 
        class).
          (ii) The approximate dollar value, or range of dollar 
        values, for each contract opportunity or class of 
        contract opportunities.
          (iii) The anticipated time (by fiscal year quarter) 
        for the issuance of a procurement request.
          (iv) The activity responsible for the award and 
        administration of the contract.
  (D) The head of each executive agency subject to the 
provisions of subparagraph (C) shall within 10 days of 
completion furnish such forecasts to--
          (i) the Director of the Office of Small and 
        Disadvantaged Business Utilization established pursuant 
        to section 15(k) for such agency; and
          (ii) the Administrator.
  (E) The information reported pursuant to subparagraph (D) may 
be limited to classes of items and services for which there are 
substantial annual purchases.
  (F) Such forecasts shall be available to small business 
concerns.
  (13) For purposes of this subsection, the term ``Indian 
tribe'' means any Indian tribe, band, nation, or other 
organized group or community of Indians, including any Alaska 
Native village or regional or village corporation (within the 
meaning of the Alaska Native Claims Settlement Act) which--
          (A) is recognized as eligible for the special 
        programs and services provided by the United States to 
        Indians because of their status as Indians, or
          (B) is recognized as such by the State in which such 
        tribe, band, nation, group, or community resides.
          (14) Limitations on subcontracting.--A concern may 
        not be awarded a contract under this subsection as a 
        small business concern unless the concern agrees to 
        satisfy the requirements of section 46.
  (15) For purposes of this subsection, the term ``Native 
Hawaiian Organization'' means any community service 
organization serving Native Hawaiians in the State of Hawaii 
which--
          (A) is a nonprofit corporation that has filed 
        articles of incorporation with the director (or the 
        designee thereof) of the Hawaii Department of Commerce 
        and Consumer Affairs, or any successor agency,
          (B) is controlled by Native Hawaiians, and
          (C) whose business activities will principally 
        benefit such Native Hawaiians.
  (16)(A) The Administration shall award sole source contracts 
under this section to any small business concern recommended by 
the procuring agency offering the contract opportunity if--
          (i) the Program Participant is determined to be a 
        responsible contractor with respect to performance of 
        such contract opportunity;
          (ii) the award of such contract would be consistent 
        with the Program Participant's business plan; and
          (iii) the award of the contract would not result in 
        the Program Participant exceeding the requirements 
        established by section 7(j)(10)(I).
  (B) To the maximum extent practicable, the Administration 
shall promote the equitable geographic distribution of sole 
source contracts awarded pursuant to this subsection.
  (17)(A) An otherwise responsible business concern that is in 
compliance with the requirements of subparagraph (B) shall not 
be denied the opportunity to submit and have considered its 
offer for any procurement contract, which contract has as its 
principal purpose the supply of a product to be let pursuant to 
this subsection, subsection (m), section 15(a), section 31, or 
section 36, solely because such concern is other than the 
actual manufacturer or processor of the product to be supplied 
under the contract.
  (B) To be in compliance with the requirements referred to in 
subparagraph (A), such a business concern shall--
          (i) be primarily engaged in the wholesale or retail 
        trade;
          (ii) be a small business concern under the numerical 
        size standard for the Standard Industrial 
        Classification Code assigned to the contract 
        solicitation on which the offer is being made;
          (iii) be a regular dealer, as defined pursuant to 
        section 35(a) of title 41, United States Code 
        (popularly referred to as the Walsh-Healey Public 
        Contracts Act), in the product to be offered the 
        Government or be specifically exempted from such 
        section by section 7(j)(13)(C); and
          (iv) represent that it will supply the product of a 
        domestic small business manufacturer or processor, 
        unless a waiver of such requirement is granted--
                  (I) by the Administrator, after reviewing a 
                determination by the contracting officer that 
                no small business manufacturer or processor can 
                reasonably be expected to offer a product 
                meeting the specifications (including period 
                for performance) required of an offeror by the 
                solicitation; or
                  (II) by the Administrator for a product (or 
                class of products), after determining that no 
                small business manufacturer or processor is 
                available to participate in the Federal 
                procurement market.
          (C) Limitation.--This paragraph shall not apply to a 
        contract that has as its principal purpose the 
        acquisition of services or construction.
  (18)(A) No person within the employ of the Administration 
shall, during the term of such employment and for a period of 
two years after such employment has been terminated, engage in 
any activity or transaction specified in subparagraph (B) with 
respect to any Program Participant during such person's term of 
employment, if such person participated personally (either 
directly or indirectly) in decision-making responsibilities 
relating to such Program Participant or with respect to the 
administration of any assistance provided to Program 
Participants generally under this subsection, section 7(j)(10), 
or section 7(a)(20).
  (B) The activities and transactions prohibited by 
subparagraph (A) include--
          (i) the buying, selling, or receiving (except by 
        inheritance) of any legal or beneficial ownership of 
        stock or any other ownership interest or the right to 
        acquire any such interest;
          (ii) the entering into or execution of any written or 
        oral agreement (whether or not legally enforceable) to 
        purchase or otherwise obtain any right or interest 
        described in clause (i); or
          (iii) the receipt of any other benefit or right that 
        may be an incident of ownership.
  (C)(i) The employees designated in clause (ii) shall annually 
submit a written certification to the Administration regarding 
compliance with the requirements of this paragraph.
  (ii) The employees referred to in clause (i) are--
          (I) regional administrators;
          (II) district directors;
          (III) the Associate Administrator for Minority Small 
        Business and Capital Ownership Development;
          (IV) employees whose principal duties relate to the 
        award of contracts or the provision of other assistance 
        pursuant to this subsection or section 7(j)(10); and
          (V) such other employees as the Administrator may 
        deem appropriate.
  (iii) Any present or former employee of the Administration 
who violates this paragraph shall be subject to a civil 
penalty, assessed by the Attorney General, that shall not 
exceed 300 per centum of the maximum amount of gain such 
employee realized or could have realized as a result of 
engaging in those activities and transactions prescribed by 
subparagraph (B).
  (iv) In addition to any other remedy or sanction provided for 
under law or regulation, any person who falsely certifies 
pursuant to clause (i) shall be subject to a civil penalty 
under the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 
3801-3812).
  (19)(A) Any employee of the Administration who has authority 
to take, direct others to take, recommend, or approve any 
action with respect to any program or activity conducted 
pursuant to this subsection or section 7(j), shall not, with 
respect to any such action, exercise or threaten to exercise 
such authority on the basis of the political activity or 
affiliation of any party. Employees of the Administration shall 
expeditiously report to the Inspector General of the 
Administration any such action for which such employee's 
participation has been solicitated or directed.
  (B) Any employee who willfully and knowingly violates 
subparagraph (A) shall be subject to disciplinary action, which 
may consist of separation from service, reduction in grade, 
suspension, or reprimand.
  (C) Subparagraph (A) shall not apply to any action taken as a 
penalty or other enforcement of a violation of any law, rule, 
or regulation prohibiting or restricting political activity.
  (D) The prohibitions of subparagraph (A), and remedial 
measures provided for under subparagraphs (B) and (C) with 
regard to such prohibitions, shall be in addition to, and not 
in lieu of, any other prohibitions, measures or liabilities 
that may arise under any other provision of law.
  (20)(A) Small business concerns participating in the Program 
under section 7(j)(10) and eligible to receive contracts 
pursuant to this section shall semiannually report to their 
assigned Business Opportunity Specialist the following:
          (i) A listing of any agents, representatives, 
        attorneys, accountants, consultants, and other parties 
        (other than employees) receiving compensation to assist 
        in obtaining a Federal contract for such Program 
        Participant.
          (ii) The amount of compensation received by any 
        person listed under clause (i) during the relevant 
        reporting period and a description of the activities 
        performed in return for such compensation.
  (B) The Business Opportunity Specialist shall promptly review 
and forward such report to the Associate Administrator for 
Minority Small Business and Capital Ownership Development. Any 
report that raises a suspicion of improper activity shall be 
reported immediately to the Inspector General of the 
Administration.
  (C) The failure to submit a report pursuant to the 
requirements of this subsection and applicable regulations 
shall be considered ``good cause'' for the initiation of a 
termination proceeding pursuant to section 7(j)(10)(F).
  (21)(A) Subject to the provisions of subparagraph (B), a 
contract [(including options)] awarded pursuant to this 
subsection shall be performed by the concern that initially 
received such contract. Notwithstanding the provisions of the 
preceding sentence, if the owner or owners upon whom 
eligibility was based relinquish ownership or control of such 
concern, or enter into any agreement to relinquish such 
ownership or control, such contract or option shall be 
terminated for the convenience of the Government, except that 
no repurchase costs or other damages may be assessed against 
such concerns due solely to the provisions of this 
subparagraph.
  (B) The Administrator may, on a nondelegable basis, waive the 
requirements of subparagraph (A) only if one of the following 
conditions exist:
          (i) When it is necessary for the owners of the 
        concern to surrender partial control of such concern on 
        a temporary basis in order to obtain equity financing.
          (ii) The head of the contracting agency for which the 
        contract is being performed certifies that termination 
        of the contract would severely impair attainment of the 
        agency's program objectives or missions;
          (iii) Ownership and control of the concern that is 
        performing the contract will pass to another small 
        business concern that is a program participant, but 
        only if the acquiring firm would otherwise be eligible 
        to receive the award directly pursuant to subsection 
        (a);
          (iv) The individuals upon whom eligibility was based 
        are no longer able to exercise control of the concern 
        due to incapacity or death; or
          (v) When, in order to raise equity capital, it is 
        necessary for the disadvantaged owners of the concern 
        to relinquish ownership of a majority of the voting 
        stock of such concern, but only if--
                  (I) such concern has exited the Capital 
                Ownership Development Program;
                  (II) the disadvantaged owners will maintain 
                ownership of the largest single outstanding 
                block of voting stock (including stock held by 
                affiliated parties); and
                  (III) the disadvantaged owners will maintain 
                control of daily business operations.
          (C) The Administrator may waive the requirements of 
        subparagraph (A) if--
                  (i) in the case of subparagraph (B) (i), (ii) 
                and (iv), he is requested to do so prior to the 
                actual relinquishment of ownership or control; 
                and
                  (ii) in the case of subparagraph (B)(iii), he 
                is requested to do so as soon as possible after 
                the incapacity or death occurs.
  (D) Concerns performing contracts awarded pursuant to this 
subsection shall be required to notify the Administration 
immediately upon entering an agreement (either oral or in 
writing) to transfer all or part of its stock or other 
ownership interest to any other party.
  (E) Notwithstanding any other provision of law, for the 
purposes of determining ownership and control of a concern 
under this section, any potential ownership interests held by 
investment companies licensed under the Small Business 
Investment Act of 1958 shall be treated in the same manner as 
interests held by the individuals upon whom eligibility is 
based.
  (b) It shall also be the duty of the Administration and it is 
hereby empowered, whenever it determines such action is 
necessary--
          (1)(A) to provide--
                  (i) technical, managerial, and informational 
                aids to small business concerns--
                          (I) by advising and counseling on 
                        matters in connection with Government 
                        procurement and policies, principles, 
                        and practices of good management;
                          (II) by cooperating and advising 
                        with--
                                  (aa) voluntary business, 
                                professional, educational, and 
                                other nonprofit organizations, 
                                associations, and institutions 
                                (except that the Administration 
                                shall take such actions as it 
                                determines necessary to ensure 
                                that such cooperation does not 
                                constitute or imply an 
                                endorsement by the 
                                Administration of the 
                                organization or its products or 
                                services, and shall ensure that 
                                it receives appropriate 
                                recognition in all printed 
                                materials); and
                                  (bb) other Federal and State 
                                agencies;
                          (III) by maintaining a clearinghouse 
                        for information on managing, financing, 
                        and operating small business 
                        enterprises; and
                          (IV) by disseminating such 
                        information, including through 
                        recognition events, and by other 
                        activities that the Administration 
                        determines to be appropriate; and
                  (ii) through cooperation with a profit-making 
                concern (referred to in this paragraph as a 
                ``cosponsor''), training, information, and 
                education to small business concerns, except 
                that the Administration shall--
                          (I) take such actions as it 
                        determines to be appropriate to ensure 
                        that--
                                  (aa) the Administration 
                                receives appropriate 
                                recognition and publicity;
                                  (bb) the cooperation does not 
                                constitute or imply an 
                                endorsement by the 
                                Administration of any product 
                                or service of the cosponsor;
                                  (cc) unnecessary promotion of 
                                the products or services of the 
                                cosponsor is avoided; and
                                  (dd) utilization of any one 
                                cosponsor in a marketing area 
                                is minimized; and
                          (II) develop an agreement, executed 
                        on behalf of the Administration by an 
                        employee of the Administration in 
                        Washington, the District of Columbia, 
                        that provides, at a minimum, that--
                                  (aa) any printed material to 
                                announce the cosponsorship or 
                                to be distributed at the 
                                cosponsored activity, shall be 
                                approved in advance by the 
                                Administration;
                                  (bb) the terms and conditions 
                                of the cooperation shall be 
                                specified;
                                  (cc) only minimal charges may 
                                be imposed on any small 
                                business concern to cover the 
                                direct costs of providing the 
                                assistance;
                                  (dd) the Administration may 
                                provide to the cosponsorship 
                                mailing labels, but not lists 
                                of names and addresses of small 
                                business concerns compiled by 
                                the Administration;
                                  (ee) all printed materials 
                                containing the names of both 
                                the Administration and the 
                                cosponsor shall include a 
                                prominent disclaimer that the 
                                cooperation does not constitute 
                                or imply an endorsement by the 
                                Administration of any product 
                                or service of the cosponsor; 
                                and
                                  (ff) the Administration shall 
                                ensure that it receives 
                                appropriate recognition in all 
                                cosponsorship printed 
                                materials.
          (B) To establish, conduct, and publicize, and to 
        recruit, select, and train volunteers for (and to enter 
        into contracts, grants, or cooperative agreements 
        therefor), volunteer programs, including a Service 
        Corps of Retired Executives (SCORE) and an Active Corps 
        of Executive (ACE) for the purposes of section 
        8(b)(1)(A) of this Act. To facilitate the 
        implementation of such volunteer programs the 
        Administration shall maintain at its headquarters and 
        pay the salaries, benefits, and expenses of a volunteer 
        and professional staff to manage and oversee the 
        program. Any such payments made pursuant to this 
        subparagraph shall be effective only to such extent or 
        in such amounts as are provided in advance in 
        appropriation Acts. Notwithstanding any other provision 
        of law, SCORE may solicit cash and in-kind 
        contributions from the private sector to be used to 
        carry out its functions under this Act, and may use 
        payments made by the Administration pursuant to this 
        subparagraph for such solicitation and the management 
        of the contributions received.
          (C) To allow any individual or group of persons 
        participating with it in furtherance of the purposes of 
        subparagraphs (A) and (B) to use the Administration's 
        office facilities and related material and services as 
        the Administration deems appropriate, including 
        clerical and stenographic service:
                  (i) such volunteers, while carrying out 
                activities under section 8(b)(1) of this Act 
                shall be deemed Federal employees for the 
                purposes of the Federal tort claims provisions 
                in title 28, United States Code; and for the 
                purposes of subchapter I of chapter 81 of title 
                5, United States Code (relative to compensation 
                to Federal employees for work injuries) shall 
                be deemed civil employees of the United States 
                within the meaning of the term ``employee'' as 
                defined in section 8101 of title 5, United 
                States Code, and the provisions of that 
                subchapter shall apply except that in computing 
                compensation benefits for disability or death, 
                the monthly pay of a volunteer shall be deemed 
                that received under the entrance salary for a 
                grade GS-11 employee:
                  (ii) the Administrator is authorized to 
                reimburse such volunteers for all necessary 
                out-of-pocket expenses incident to their 
                provision of services under this Act, or in 
                connection with attendance at meetings 
                sponsored by the Administration, or for the 
                cost of malpractice insurance, as the 
                Administrator shall determine, in accordance 
                with regulations which he or she shall 
                prescribe, and, while they are carrying out 
                such activities away from their homes or 
                regular places of business, for travel expenses 
                (including per diem in lieu of subsistence) as 
                authorized by section 5703 of title 5, United 
                States Code, for individuals serving without 
                pay; and
                  (iii) such volunteers shall in no way provide 
                services to a client of such Administration 
                with a delinquent loan outstanding, except upon 
                a specific request signed by such client for 
                assistance in connection with such matter.
          (D) Notwithstanding any other provision of law, no 
        payment for supportive services or reimbursement of 
        out-of-pocket expenses made to persons serving pursuant 
        to section 8(b)(1) of this Act shall be subject to any 
        tax or charge or be treated as wages or compensation 
        for the purposes of unemployment, disability, 
        retirement, public assistance, or similar benefit 
        payments, or minimum wage laws.
          (E) In carrying out its functions under subparagraph 
        (A), to make grants (including contracts and 
        cooperative agreements) to any public or private 
        institution of higher education for the establishment 
        and operation of a small business institute, which 
        shall be used to provide business counseling and 
        assistance to small business concerns through the 
        activities of students enrolled at the institution, 
        which students shall be entitled to receive educational 
        credits for their activities.
          (F) Notwithstanding any other provision of law and 
        pursuant to regulations which the Administrator shall 
        provide, counsel may be employed and counsel fees, 
        court costs, bail, and other expenses incidental to the 
        defense of volunteers may be paid in judicial or 
        Administrative proceedings arising directly out of the 
        performance of activities pursuant to section 8(b)(1) 
        of this Act, as amended (15 U.S.C. 637(b)(1)) to which 
        volunteers have been made parties.
          (G) In carrying out its functions under this Act and 
        to carry out the activities authorized by title IV of 
        the Women's Business Ownership Act of 1988, the 
        Administration is authorized to accept, in the name of 
        the Administration, and employ or dispose of in 
        furtherance of the purposes of this Act, any money or 
        property, real, personal, or mixed, tangible, or 
        intangible, received by gift, devise, bequest, or 
        otherwise; and, further, to accept gratuitous services 
        and facilities.
          (2) to make a complete inventory of all productive 
        facilities of small-business concerns or to arrange for 
        such inventory to be made by any other governmental 
        agency which has the facilities. In making any such 
        inventory, the appropriate agencies in the several 
        States may be requested to furnish an inventory of the 
        productive facilities of small-business concerns in 
        each respective State if such an inventory is available 
        or in prospect;
          (3) to coordinate and to ascertain the means by which 
        the productive capacity of small-business concerns can 
        be most effectively utilized;
          (4) to consult and cooperative with officers of the 
        Government having procurement or property disposal 
        powers, in order to utilize the potential productive 
        capacity of plants operated by small-business concerns;
          (5) to obtain information as to methods and practices 
        which Government prime contractors utilize in letting 
        subcontracts and to take action to encourage the 
        letting of subcontracts by prime contractors to small-
        business concerns at prices and on conditions and terms 
        which are fair and equitable;
          (6) to determine within any industry the concerns, 
        firms, persons, corporations, partnerships, 
        cooperatives, or other business enterprises which are 
        to be designated ``small-business concerns'' for the 
        purpose of effectuating the provisions of this Act. To 
        carry out this purpose the Administrator, when 
        requested to do so, shall issue in response to each 
        such request an appropriate certificate certifying an 
        individual concern as a ``small-business concern'' in 
        accordance with the criteria expressed in this Act. Any 
        such certificate shall be subject to revocation when 
        the concern covered thereby ceases to be a ``small-
        business concern.'' Offices of the Government having 
        procurement or lending powers, or engaging in the 
        disposal of Federal property or allocating materials or 
        supplies, or promulgating regulations affecting the 
        distribution of materials or supplies, shall accept as 
        conclusive the Administration's determination as to 
        which enterprises are to be designated ``small-business 
        concerns'', as authorized and directed under this 
        paragraph;
          (7)(A) to certify to Government procurement officers, 
        and officers engaged in the sale and disposal of 
        Federal property, with respect to all elements of 
        responsibility, including, but not limited to, 
        capability, competency, capacity, credit, integrity, 
        perseverance, and tenacity, of any small business 
        concern or group of such concerns to receive and 
        perform a specific Government contract. A Government 
        procurement officer or an officer engaged in the sale 
        and disposal of Federal property may not, for any 
        reason specified in the preceding sentence, preclude 
        any small business concern or group of such concerns 
        from being awarded such contract without referring the 
        matter for a final disposition to the Administration.
          (B) if a Government procurement officer finds that an 
        otherwise qualified small business concern may be 
        ineligible due to the provisions of section 35(a) of 
        title 41, United States Code (the Walsh-Healey Public 
        Contracts Act), he shall notify the Administration in 
        writing of such finding. The Administration shall 
        review such finding and shall either dismiss it and 
        certify the small business concern to be an eligible 
        Government contractor for a specific Government 
        contract or if it concurs in the finding, forward the 
        matter to the Secretary of Labor for final disposition, 
        in which case the Administration may certify the small 
        business concern only if the Secretary of Labor finds 
        the small business concern not to be in violation.
          (C) in any case in which a small business concern or 
        group of such concerns has been certified by the 
        Administration pursuant to (A) or (B) to be a 
        responsible or eligible Government contractor as to a 
        specific Government contract, the officers of the 
        Government having procurement or property disposal 
        powers are directed to accept such certification as 
        conclusive, and shall let such Government contract to 
        such concern or group of concerns without requiring it 
        to meet any other requirement of responsibility or 
        eligibility. Notwithstanding the first sentence of this 
        subparagraph, the Administration may not establish an 
        exemption from referral or notification or refuse to 
        accept a referral or notification from a Government 
        procurement officer made pursuant to subparagraph (A) 
        or (B) of this paragraph, but nothing in this paragraph 
        shall require the processing of an application for 
        certification if the small business concern to which 
        the referral pertains declines to have the application 
        processed.
          (8) to obtain from any Federal department, 
        establishment, or agency engaged in procurement or in 
        the financing of procurement or production such reports 
        concerning the letting of contracts and subcontracts 
        and the making of loans to business concerns as it may 
        deem pertinent in carrying out its functions under this 
        Act;
          (9) to obtain from any Federal department, 
        establishment, or agency engaged in the disposal of 
        Federal property such reports concerning the 
        solicitation of bids, time of sale, or otherwise as it 
        may deem pertinent in carrying out its functions under 
        this Act;
          (10) to obtain from suppliers of materials 
        information pertaining to the method of filling orders 
        and the bases for allocating their supply, whenever it 
        appears that any small business is unable to obtain 
        materials from its normal sources;
          (11) to make studies and recommendations to the 
        appropriate Federal agencies to insure that a fair 
        proportion of the total purchases and contracts for 
        property and services for the Government be placed with 
        small-business enterprises, to insure that a fair 
        proportion of Government contacts for research and 
        development be placed with small-business concerns, to 
        insure that a fair proportion of the total sales of 
        Government property be made to small-business concerns, 
        and to insure a fair and equitable share of materials, 
        supplies, and equipment to small-business concerns;
          (12) to consult and cooperate with all Government 
        agencies for the purpose of insuring that small-
        business concerns shall receive fair and reasonable 
        treatment from such agencies;
          (13) to establish such advisory boards and committees 
        as may be necessary to achieve the purposes of this Act 
        and of the Small Business Investment Act of 1958; to 
        call meetings of such boards and committees from time 
        to time; to pay the transportation expenses and a per 
        diem allowance in accordance with section 5703 of title 
        5, United States Code, to the members of such boards 
        and committees for travel and subsistence expenses 
        incurred at the request of the Administration in 
        connection with travel to points more than fifty miles 
        distant from the homes of such members in attending the 
        meetings of such boards and committees; and to rent 
        temporarily, within the District of Columbia or 
        elsewhere, such hotel or other accommodations as are 
        needed to facilitate the conduct of such meetings;
          (14) to provide at the earliest practicable time such 
        information and assistance as may be appropriate, 
        including information concerning eligibility for loans 
        under section 7(b)(3), to local public agencies (as 
        defined in section 110(h) of the Housing Act of 1949) 
        and to small-business concerns to be displaced by 
        federally aided urban renewal projects in order to 
        assist such small-business concerns in reestablishing 
        their operations;
          (15) to disseminate, without regard to the provisions 
        of section 3204 of title 39, United States Code, data 
        and information, in such form as it shall deem 
        appropriate, to public agencies, private organizations, 
        and the general public;
          (16) to make studies of matters materially affecting 
        the competitive strength of small business, and of the 
        effect on small business of Federal laws, programs, and 
        regulations, and to make recommendations to the 
        appropriate Federal agency or agencies for the 
        adjustment of such programs and regulations to the 
        needs of small business; and
          (17) to make grants to, and enter into contracts and 
        cooperative agreements with, educational institutions, 
        private businesses, veterans' nonprofit community-based 
        organizations, and Federal, State, and local 
        departments and agencies for the establishment and 
        implementation of outreach programs for disabled 
        veterans (as defined in section 4211(3) of title 38, 
        United States Code), veterans, and members of a reserve 
        component of the Armed Forces.
  (c) [Reserved.]
  (d)(1) It is the policy of the United States that small 
business concerns, small business concerns owned and controlled 
by veterans, small business concerns owned and controlled by 
service-disabled veterans, qualified HUBZone small business 
concerns, small business concerns owned and controlled by 
socially and economically disadvantaged individuals, and small 
business concerns owned and controlled by women, shall have the 
maximum practicable opportunity to participate in the 
performance of contracts let by any Federal agency, including 
contracts and subcontracts for subsystems, assemblies, 
components, and related services for major systems. It is 
further the policy of the United States that its prime 
contractors establish procedures to ensure the timely payment 
of amounts due pursuant to the terms of their subcontracts with 
small business concerns, small business concerns owned and 
controlled by veterans, small business concerns owned and 
controlled by service-disabled veterans, qualified HUBZone 
small business concerns, small business concerns owned and 
controlled by socially and economically disadvantaged 
individuals, and small business concerns owned and controlled 
by women.
  (2) The clause stated in paragraph (3) shall be included in 
all contracts let by any Federal agency except any contract 
which--
          (A) does not exceed the simplified acquisition 
        threshold;
          (B) including all subcontracts under such contracts 
        will be performed entirely outside of any State, 
        territory, or possession of the United States, the 
        District of Columbia, or the Commonwealth of Puerto 
        Rico; or
          (C) is for services which are personal in nature.
  (3) The clause required by paragraph (2) shall be as follows:
          (A) It is the policy of the United States that small 
        business concerns, small business concerns owned and 
        controlled by veterans, small business concerns owned 
        and controlled by service-disabled veterans, qualified 
        HUBZone small business concerns, small business 
        concerns owned and controlled by socially and 
        economically disadvantaged individuals, and small 
        business concerns owned and controlled by women shall 
        have the maximum practicable opportunity to participate 
        in the performance of contracts let by any Federal 
        agency, including contracts and subcontracts for 
        subsystems, assemblies, components, and related 
        services for major systems. It is further the policy of 
        the United States that its prime contractors establish 
        procedures to ensure the timely payment of amounts due 
        pursuant to the terms of their subcontracts with small 
        business concerns, small business concerns owned and 
        controlled by veterans, small business concerns owned 
        and controlled by service-disabled veterans, qualified 
        HUBZone small business concerns, small business 
        concerns owned and controlled by socially and 
        economically disadvantaged individuals, and small 
        business concerns owned and controlled by women.
          (B) The contractor hereby agrees to carry out this 
        policy in the awarding of subcontracts to the fullest 
        extent consistent with the efficient performance of 
        this contract. The contractor further agrees to 
        cooperate in any studies or surveys as may be conducted 
        by the United States Small Business Administration or 
        the awarding agency of the United States as may be 
        necessary to determine the extent of the contractor's 
        compliance with this clause.
          (C) As used in this contract, the term ``small 
        business concern'' shall mean a small business as 
        defined pursuant to section 3 of the Small Business Act 
        and relevant regulations promulgated pursuant thereto. 
        The term ``small business concern owned and controlled 
        by socially and economically disadvantaged 
        individuals'' shall mean a small business concern--
                  (i) which is at least 51 per centum owned by 
                one or more socially and economically 
                disadvantaged individuals; or, in the case of 
                any publicly owned business, at least 51 per 
                centum of the stock of which is owned by one or 
                more socially and economically disadvantaged 
                individuals; and
                  (ii) whose management and daily business 
                operations are controlled by one or more of 
                such individuals.
        The contractor shall presume that socially and 
        economically disadvantaged individuals include Black 
        Americans, Hispanic Americans, Native Americans, Asian 
        Pacific Americans, and other minorities, or any other 
        individual found to be disadvantaged by the 
        Administration pursuant to section 8(a) of the Small 
        Business Act.
          (D) The term ``small business concern owned and 
        controlled by women'' shall mean a small business 
        concern--
                  (i) which is at least 51 per centum owned by 
                one or more women; or, in the case of any 
                publicly owned business, at least 51 per centum 
                of the stock of which is owned by one or more 
                women; and
                  (ii) whose management and daily business 
                operations are controlled by one or more women.
          (E) The term ``small business concern owned and 
        controlled by veterans'' shall mean a small business 
        concern--
                  (i) which is at least 51 per centum owned by 
                one or more eligible veterans; or, in the case 
                of any publicly owned business, at least 51 per 
                centum of the stock of which is owned by one or 
                more veterans; and
                  (ii) whose management and daily business 
                operations are controlled by such veterans. The 
                contractor shall treat as veterans all 
                individuals who are veterans within the meaning 
                of the term under section 3(q) of the Small 
                Business Act.
          (F) Contractors acting in good faith may rely on 
        written representations by their subcontractors 
        regarding their status as either a small business 
        concern, small business concern owned and controlled by 
        veterans, small business concern owned and controlled 
        by service-disabled veterans, a small business concern 
        owned and controlled by socially and economically 
        disadvantaged individuals, or a small business concern 
        owned and controlled by women.
          (G) In this contract, the term ``qualified HUBZone 
        small business concern'' has the meaning given that 
        term in section 3(p) of the Small Business Act.
  (4)(A) Each solicitation of an offer for a contract to be let 
by a Federal agency which is to be awarded pursuant to the 
negotiated method of procurement and which may exceed 
$1,000,000, in the case of a contract for the construction of 
any public facility, or $500,000, in the case of all other 
contracts, shall contain a clause notifying potential offering 
companies of the provisions of this subsection relating to 
contracts awarded pursuant to the negotiated method of 
procurement.
  (B) Before the award of any contract to be let, or any 
amendment or modification to any contract let, by any Federal 
agency which--
          (i) is to be awarded, or was let, pursuant to the 
        negotiated method of procurement,
          (ii) is required to include the clause stated in 
        paragraph (3),
          (iii) may exceed $1,000,000 in the case of a contract 
        for the construction of any public facility, or 
        $500,000 in the case of all other contracts, and
          (iv) which offers subcontracting possibilities,
the apparent successful offeror shall negotiate with the 
procurement authority a subcontracting plan which incorporates 
the information prescribed in paragraph (6). The subcontracting 
plan shall be included in and made a material part of the 
contract.
  (C) If, within the time limit prescribed in regulations of 
the Federal agency concerned, the apparent successful offeror 
fails to negotiate the subcontracting plan required by this 
paragraph, such offeror shall become ineligible to be awarded 
the contract. Prior compliance of the offeror with other such 
subcontracting plans shall be considered by the Federal agency 
in determining the responsibility of that offeror for the award 
of the contract.
  (D) No contract shall be awarded to any offeror unless the 
procurement authority determines that the plan to be negotiated 
by the offeror pursuant to this paragraph provides the maximum 
practicable opportunity for small business concerns, qualified 
HUBZone small business concerns, small business concerns owned 
and controlled by veterans, small business concerns owned and 
controlled by service-disabled veterans, small business 
concerns owned and controlled by socially and economically 
disadvantaged individuals, and small business concerns owned 
and controlled by women to participate in the performance of 
the contract.
  (E) Notwithstanding any other provisions of law, every 
Federal agency, in order to encourage subcontracting 
opportunities for small business concerns, small business 
concerns owned and controlled by veterans, small business 
concerns owned and controlled by service-disabled veterans, 
qualified HUBZone small business concerns, and small business 
concerns owned and controlled by the socially and economically 
disadvantaged individuals as defined in paragraph (3) of this 
subsection and for small business concerns owned and controlled 
by women, is hereby authorized to provide such incentives as 
such Federal agency may deem appropriate in order to encourage 
such subcontracting opportunities as may be commensurate with 
the efficient and economical performance of the contact: 
Provided, That, this subparagraph shall apply only to contracts 
let pursuant to the negotiated method of procurement.
  (F)(i) Each contract subject to the requirements of this 
paragraph or paragraph (5) shall contain a clause for the 
payment of liquidated damages upon a finding that a prime 
contractor has failed to make a good faith effort to comply 
with the requirements imposed on such contractor by this 
subsection.
  (ii) The contractor shall be afforded an opportunity to 
demonstrate a good faith effort regarding compliance prior to 
the contracting officer's final decision regarding the 
impositon of damages and the amount thereof. The final decision 
of a contracting officer regarding the contractor's obligation 
to pay such damages, or the amounts thereof, shall be subject 
to the Contract Disputes Act of 1978 (41 U.S.C. 601-613).
  (iii) Each agency shall ensure that the goals offered by the 
apparent successful bidder or offeror are attainable in 
relation to--
          (I) the subcontracting opportunities available to the 
        contractor, commensurate with the efficient and 
        economical performance of the contract;
          (II) the pool of eligible subcontractors available to 
        fulfill the subcontracting opportunities; and
          (III) the actual performance of such contractor in 
        fulfilling the subcontracting goals specified in prior 
        plans.
          (G) The following factors shall be designated by the 
        Federal agency as significant factors for purposes of 
        evaluating offers for a bundled contract where the head 
        of the agency determines that the contract offers a 
        significant opportunity for subcontracting:
                  (i) A factor that is based on the rate 
                provided under the subcontracting plan for 
                small business participation in the performance 
                of the contract.
                  (ii) For the evaluation of past performance 
                of an offeror, a factor that is based on the 
                extent to which the offeror attained applicable 
                goals for small business participation in the 
                performance of contracts.
  (5)(A) Each solicitation of a bid for any contract to be let, 
or any amendment or modification to any contract let, by any 
Federal agency which--
          (i) is to be awarded pursuant to the formal 
        advertising method of procurement,
          (ii) is required to contain the clause stated in 
        paragraph (3) of this subsection,
          (iii) may exceed $1,000,000 in the case of a contract 
        for the construction of any public facility, or 
        $500,000, in the case of all other contracts, and
          (iv) offers subcontracting possibilities,
shall contain a clause requiring any bidder who is selected to 
be awarded a contract to submit to the Federal agency concerned 
a subcontracting plan which incorporates the information 
prescribed in paragraph (6).
  (B) If, within the time limit prescribed in regulations of 
the Federal agency concerned, the bidder selected to be awarded 
the contract fails to submit the subcontracting plan required 
by this paragraph, such bidder shall become ineligible to be 
awarded the contract. Prior compliance of the bidder with other 
such subcontracting plans shall be considered by the Federal 
agency in determining the responsibility of such bidder for the 
award of the contract. The subcontracting plan of the bidder 
awarded the contract shall be included in and made a material 
part of the contract.
  (6) Each subcontracting plan required under paragraph (4) or 
(5) shall include--
          (A) percentage goals for the utilization as 
        subcontractors of small business concerns, small 
        business concerns owned and controlled by veterans, 
        small business concerns owned and controlled by 
        service-disabled veterans, qualified HUBZone small 
        business concerns, small business concerns owned and 
        controlled by socially and economically disadvantaged 
        individuals, and small business concerns owned and 
        controlled by women;
          (B) the name of an individual within the employ of 
        the offeror or bidder who will administer the 
        subcontracting program of the offeror or bidder and a 
        description of the duties of such individual;
          (C) a description of the efforts the offeror or 
        bidder will take to assure that small business 
        concerns, small business concerns owned and controlled 
        by veterans, small business concerns owned and 
        controlled by service-disabled veterans, qualified 
        HUBZone small business concerns, small business 
        concerns owned and controlled by socially and 
        economically disadvantaged individuals, and small 
        business concerns owned and controlled by women will 
        have an equitable opportunity to compete for 
        subcontracts;
          (D) assurances that the offeror or bidder will 
        include the clause required by paragraph (2) of this 
        subsection in all subcontracts which offer further 
        subcontracting opportunities, and that the offeror or 
        bidder will require all subcontractors (except small 
        business concerns) who receive subcontracts in excess 
        of $1,000,000 in the case of a contract for the 
        construction of any public facility, or in excess of 
        $500,000 in the case of all other contracts, to adopt a 
        plan similar to the plan required under paragraph (4) 
        or (5), and assurances at a minimum that the offeror or 
        bidder, and all subcontractors required to maintain 
        subcontracting plans pursuant to this paragraph, will--
                  (i) review and approve subcontracting plans 
                submitted by their subcontractors;
                  (ii) monitor subcontractor compliance with 
                their approved subcontracting plans;
                  (iii) ensure that subcontracting reports are 
                submitted by their subcontractors when 
                required;
                  (iv) acknowledge receipt of their 
                subcontractors' reports;
                  (v) compare the performance of their 
                subcontractors to subcontracting plans and 
                goals; and
                  (vi) discuss performance with subcontractors 
                when necessary to ensure their subcontractors 
                make a good faith effort to comply with their 
                subcontracting plans;
          (E) assurances that the offeror or bidder will submit 
        such periodic reports and cooperate in any studies or 
        surveys as may be required by the Federal agency or the 
        Administration in order to determine the extent of 
        compliance by the offeror or bidder with the 
        subcontracting plan;
          (F) a recitation of the types of records the 
        successful offeror or bidder will maintain to 
        demonstrate procedures which have been adopted to 
        comply with the requirements and goals set forth in 
        this plan, including the establishment of source lists 
        of small business concerns, small business concerns 
        owned and controlled by veterans, small business 
        concerns owned and controlled by service-disabled 
        veterans, qualified HUBZone small business concerns, 
        small business concerns owned and controlled by 
        socially and economically disadvantaged individuals, 
        and small business concerns owned and controlled by 
        women; and efforts to identify and award subcontracts 
        to such small business concerns;
          (G) a recitation of the types of records the 
        successful offeror or bidder will maintain to 
        demonstrate procedures which have been adopted to 
        ensure subcontractors at all tiers comply with the 
        requirements and goals set forth in the plan 
        established in accordance with subparagraph (D) of this 
        paragraph, including--
                  (i) the establishment of source lists of 
                small business concerns, small business 
                concerns owned and controlled by veterans, 
                small business concerns owned and controlled by 
                service-disabled veterans, qualified HUBZone 
                small business concerns, small business 
                concerns owned and controlled by socially and 
                economically disadvantaged individuals, and 
                small business concerns owned and controlled by 
                women; and
                  (ii) efforts to identify and award 
                subcontracts to such small business concerns; 
                and
          (H) a representation that the offeror or bidder 
        will--
                  (i) make a good faith effort to acquire 
                articles, equipment, supplies, services, or 
                materials, or obtain the performance of 
                construction work from the small business 
                concerns used in preparing and submitting to 
                the contracting agency the bid or proposal, in 
                the same amount and quality used in preparing 
                and submitting the bid or proposal; and
                  (ii) provide to the contracting officer a 
                written explanation if the offeror or bidder 
                fails to acquire articles, equipment, supplies, 
                services, or materials or obtain the 
                performance of construction work as described 
                in clause (i).
          (7) The head of the contracting agency shall ensure 
        that--
                  (A) the agency collects and reports data on 
                the extent to which contractors of the agency 
                meet the goals and objectives set forth in 
                subcontracting plans submitted pursuant to this 
                subsection; and
                  (B) the agency periodically reviews data 
                collected and reported pursuant to subparagraph 
                (A) for the purpose of ensuring that such 
                contractors comply in good faith with the 
                requirements of this subsection and 
                subcontracting plans submitted by the 
                contractors pursuant to this subsection.
  (8) The provisions of paragraphs (4), (5), and (6) shall not 
apply to offerors or bidders who are small business concerns.
          (9) Material breach.--The failure of any contractor 
        or subcontractor to comply in good faith with--
                  (A) the clause contained in paragraph (3) of 
                this subsection,
                  (B) any plan required of such contractor 
                pursuant to the authority of this subsection to 
                be included in its contract or subcontract, or
                  (C) assurances provided under paragraph 
                (6)(E),
        shall be a material breach of such contract or 
        subcontract and may be considered in any past 
        performance evaluation of the contractor.
  (10) Nothing contained in this subsection shall be construed 
to supersede the requirements of Defense Manpower Policy Number 
4A (32A CFR Chap. 1) or any successor policy.
  (11) In the case of contracts within the provisions of 
paragraphs (4), (5), and (6), the Administration is authorized 
to--
          (A) assist Federal agencies and businesses in 
        complying with their responsibilities under the 
        provisions of this subsection, including the 
        formulation of subcontracting plans pursuant to 
        paragraph (4);
          (B) review any solicitation for any contract to be 
        let pursuant to paragraphs (4) and (5) to determine the 
        maximum practicable opportunity for small business 
        concerns, small business concerns owned and controlled 
        by veterans, small business concerns owned and 
        controlled by service-disabled veterans, qualified 
        HUBZone small business concerns, small business 
        concerns owned and controlled by socially and 
        economically disadvantaged individuals, and small 
        business concerns owned and controlled by women to 
        participate as subcontractors in the performance of any 
        contract resulting from any solicitation, and to submit 
        its findings, which shall be advisory in nature, to the 
        appropriate Federal agency; and
          (C) evaluate compliance with subcontracting plans as 
        a supplement to evaluations performed by the 
        contracting agency, either on a contract-by-contract 
        basis or, in the case of contractors having multiple 
        contracts, on an aggregate basis.
  (12) For purposes of determining the attainment of a 
subcontract utilization goal under any subcontracting plan 
entered into with any executive agency pursuant to this 
subsection, a mentor firm providing development assistance to a 
protege firm under the pilot Mentor-Protege Program established 
pursuant to section 831 of the National Defense Authorization 
Act for Fiscal Year 1991 (Public Law 101-510; 10 U.S.C. 2301 
note) shall be granted credit for such assistance in accordance 
with subsection (g) of such section.
  (13) Payment of Subcontractors.--
          (A) Definition.--In this paragraph, the term 
        ``covered contract'' means a contract relating to which 
        a prime contractor is required to develop a 
        subcontracting plan under paragraph (4) or (5).
          (B) Notice.--
                  (i) In general.--A prime contractor for a 
                covered contract shall notify in writing the 
                contracting officer for the covered contract if 
                the prime contractor pays a reduced price to a 
                subcontractor for goods and services upon 
                completion of the responsibilities of the 
                subcontractor or the payment to a subcontractor 
                is more than 90 days past due for goods or 
                services provided for the covered contract for 
                which the Federal agency has paid the prime 
                contractor.
                  (ii) Contents.--A prime contractor shall 
                include the reason for the reduction in a 
                payment to or failure to pay a subcontractor in 
                any notice made under clause (i).
          (C) Performance.--A contracting officer for a covered 
        contract shall consider the unjustified failure by a 
        prime contractor to make a full or timely payment to a 
        subcontractor in evaluating the performance of the 
        prime contractor.
          (D) Control of funds.--If the contracting officer for 
        a covered contract determines that a prime contractor 
        has a history of unjustified, untimely payments to 
        contractors, the contracting officer shall record the 
        identity of the contractor in accordance with the 
        regulations promulgated under subparagraph (E).
          (E) Regulations.--Not later than 1 year after the 
        date of enactment of this paragraph, the Federal 
        Acquisition Regulatory Council established under 
        section 25(a) of the Office of Federal Procurement 
        Policy Act (41 U.S.C. 421(a)) shall amend the Federal 
        Acquisition Regulation issued under section 25 of such 
        Act to--
                  (i) describe the circumstances under which a 
                contractor may be determined to have a history 
                of unjustified, untimely payments to 
                subcontractors;
                  (ii) establish a process for contracting 
                officers to record the identity of a contractor 
                described in clause (i); and
                  (iii) require the identity of a contractor 
                described in clause (i) to be incorporated in, 
                and made publicly available through, the 
                Federal Awardee Performance and Integrity 
                Information System, or any successor thereto.
          (14) An offeror for a covered contract that intends 
        to identify a small business concern as a potential 
        subcontractor in a bid or proposal for the contract, or 
        in a plan submitted pursuant to this subsection in 
        connection with the contract, shall notify the small 
        business concern prior to making such identification.
          (15) The Administrator shall establish a reporting 
        mechanism that allows a subcontractor or potential 
        subcontractor to report fraudulent activity or bad 
        faith by a contractor with respect to a subcontracting 
        plan submitted pursuant to this subsection.
  (16) Credit for Certain Subcontractors.--
          (A) For purposes of determining whether or not a 
        prime contractor has attained the percentage goals 
        specified in paragraph (6)--
                  (i) if the subcontracting goals pertain only 
                to a single contract with the executive agency, 
                the prime contractor shall receive credit for 
                small business concerns performing as first 
                tier subcontractors or subcontractors at any 
                tier pursuant to the subcontracting plans 
                required under paragraph (6)(D) in an amount 
                equal to the dollar value of work awarded to 
                such small business concerns; and
                  (ii) if the subcontracting goals pertain to 
                more than one contract with one or more 
                executive agencies, or to one contract with 
                more than one executive agency, the prime 
                contractor may only count first tier 
                subcontractors that are small business 
                concerns.
          (B) Nothing in this paragraph shall abrogate the 
        responsibility of a prime contractor to make a good-
        faith effort to achieve the first tier small business 
        subcontracting goals negotiated under paragraph (6)(A), 
        or the requirement for subcontractors with further 
        opportunities for subcontracting to make a good-faith 
        effort to achieve the goals established under paragraph 
        (6)(D).
          (17) Pilot program providing past performance ratings 
        for other small business subcontractors.--
          (A) Establishment.--The Administrator shall establish 
        a pilot program for a small business concern without a 
        past performance rating as a prime contractor 
        performing as a first tier subcontractor for a covered 
        contract (as defined in paragraph (13)(A)) to request a 
        past performance rating in the system used by the 
        Federal Government to monitor or record contractor past 
        performance.
          (B) Application.--A small business concern described 
        in subparagraph (A) shall submit an application to the 
        appropriate official for a past performance rating no 
        later than 270 days after the small business concern 
        completed the work for which it seeks a past 
        performance rating or 180 days after the prime 
        contractor completes work on the covered contract, 
        whichever is earlier. Such application shall include 
        written evidence of the past performance factors for 
        which the small business concern seeks a rating and a 
        suggested rating.
          (C) Determination.--The appropriate official shall 
        submit the application from the small business concern 
        to the Office of Small and Disadvantaged Business 
        Utilization for the covered contract and to the prime 
        contractor for review. The Office of Small and 
        Disadvantaged Business Utilization and the prime 
        contractor shall, not later than 30 days after receipt 
        of the application, submit to the appropriate official 
        a response regarding the application.
                  (i) Agreement on rating.--If the Office of 
                Small and Disadvantaged Business Utilization 
                and the prime contractor agree on a past 
                performance rating, or if either the Office of 
                Small and Disadvantaged Business Utilization or 
                the prime contractor fail to respond and the 
                responding person agrees with the rating of the 
                applicant small business concern, the 
                appropriate official shall enter the agreed-
                upon past performance rating in the system 
                described in subparagraph (A).
                  (ii) Disagreement on rating.--If the Office 
                of Small and Disadvantaged Business Utilization 
                and the prime contractor fail to respond within 
                30 days or if they disagree about the rating, 
                or if either the Office of Small and 
                Disadvantaged Business Utilization or the prime 
                contractor fail to respond and the responding 
                person disagrees with the rating of the 
                applicant small business concern, the Office of 
                Small and Disadvantaged Business Utilization or 
                the prime contractor shall submit a notice 
                contesting the application to the appropriate 
                official. The appropriate official shall follow 
                the requirements of subparagraph (D).
          (D) Procedure for rating.--Not later than 14 calendar 
        days after receipt of a notice under subparagraph 
        (C)(ii), the appropriate official shall submit such 
        notice to the applicant small business concern. Such 
        concern may submit comments, rebuttals, or additional 
        information relating to the past performance of such 
        concern not later 14 calendar days after receipt of 
        such notice. The appropriate official shall enter into 
        the system described in subparagraph (A) a rating that 
        is neither favorable nor unfavorable along with the 
        initial application from such concern, any responses of 
        the Office of Small and Disadvantaged Business 
        Utilization and the prime contractor, and any 
        additional information provided by such concern. A copy 
        of the information submitted shall be provided to the 
        contracting officer (or designee of such officer) for 
        the covered contract.
          (E) Use of information.--A small business 
        subcontractor may use a past performance rating given 
        under this paragraph to establish its past performance 
        for a prime contract.
          (F) Duration.--The pilot program established under 
        this paragraph shall terminate 3 years after the date 
        on which the first applicant small business concern 
        receives a past performance rating for performance as a 
        first tier subcontractor.
          (G) Report.--The Comptroller General of the United 
        States shall begin an assessment of the pilot program 1 
        year after the establishment of such program. Not later 
        than 6 months after beginning such assessment, the 
        Comptroller General shall submit a report to the 
        Committee on Small Business and Entrepreneurship of the 
        Senate and the Committee on Small Business of the House 
        of Representatives, which shall include--
                  (i) the number of small business concerns 
                and, set forth separately, the number of small 
                business exporters, that have received past 
                performance ratings under the pilot program;
                  (ii) the number of applications, set forth 
                separately by applications from small business 
                concerns and from small business exporters, in 
                which the contracting officer (or designee) or 
                the prime contractor contested the application 
                of the small business concern;
                  (iii) any suggestions or recommendations the 
                Comptroller General or the small business 
                concerns participating in the program have to 
                address disputes between the small business 
                concern, the contracting officer (or designee), 
                and the prime contractor on past performance 
                ratings;
                  (iv) the number of small business concerns 
                awarded prime contracts after receiving a past 
                performance rating under this pilot program; 
                and
                  (v) any suggestions or recommendation the 
                Comptroller General has to improve the 
                operation of the pilot program.
          (H) Definitions.--In this paragraph--
                  (i) the term ``appropriate official'' means--
                          (I) a commercial market 
                        representative;
                          (II) another individual designated by 
                        the senior official appointed by the 
                        Administrator with responsibilities 
                        under sections 8, 15, 31, and 36; or
                          (III) the Office of Small and 
                        Disadvantaged Business Utilization of a 
                        Federal agency, if the head of the 
                        Federal agency and the Administrator 
                        agree;
                  (ii) the term ``defense item'' has the 
                meaning given that term in section 38(j)(4)(A) 
                of the Arms Export Control Act (22 U.S.C. 
                2778(j)(4)(A));
                  (iii) the term ``major non-NATO ally'' means 
                a country designated as a major non-NATO ally 
                under section 517 of the Foreign Assistance Act 
                of 1961 (22 U.S.C. 2321k);
                  (iv) the term ``past performance'' includes 
                performance of a contract for a sale of defense 
                items (under section 38 of the Arms Export 
                Control Act (22 U.S.C. 2778)) to the government 
                of a member nation of North Atlantic Treaty 
                Organization, the government of a major non-
                NATO ally, or the government of a country with 
                which the United States has a defense 
                cooperation agreement (as certified by the 
                Secretary of State); and
                  (v) the term ``small business exporter'' 
                means a small business concern that exports 
                defense items under section 38 of the Arms 
                Export Control Act (22 U.S.C. 2778) to the 
                government of a member nation of the North 
                Atlantic Treaty Organization, the government of 
                a major non-NATO ally, or the government of a 
                country with which the United States has a 
                defense cooperation agreement (as certified by 
                the Secretary of State).
  (e)(1) Except as provided in subsection (g)--
          (A) an executive agency intending to--
                  (i) solicit bids or proposals for a contract 
                for property or services for a price expected 
                to exceed $25,000; or
                  (ii) place an order, expected to exceed 
                $25,000, under a basic agreement, basis 
                ordering agreement, or similar arrangement,
        shall publish a notice described in subsection (f);
          (B) an executive agency intending to solicit bids or 
        proposals for a contract for property or services shall 
        post, for a period of not less than ten days, in a 
        public place at the contracting office issuing the 
        solicitation a notice of solicitation described in 
        subsection (f)--
                  (i) in the case of an executive agency other 
                than the Department of Defense, if the contract 
                is for a price expected to exceed $10,000, but 
                not to exceed $25,000; and
                  (ii) in the case of the Department of 
                Defense, if the contract is for a price 
                expected to exceed $5,000, but not to exceed 
                $25,000; and
          (C) an executive agency awarding a contract for 
        property or services for a price exceeding $100,000, or 
        placing an order referred to in clause (A)(ii) 
        exceeding $100,000, shall furnish for publication by 
        the Secretary of Commerce a notice announcing the award 
        or order if there is likely to be any subcontract under 
        such contract or order.
  (2)(A) A notice of solicitation required to be published 
under paragraph (1) may be published--
          (i) by electronic means that meet the accessibility 
        requirements under section 18(a)(7) of the Office of 
        Federal Procurement Policy Act (41 U.S.C. 416(a)(7)); 
        or
          (ii) by the Secretary of Commerce in the Commerce 
        Business Daily.
  (B) The Secretary of Commerce shall promptly publish in the 
Commerce Business Daily each notice or announcement received 
under this subsection for publication by that means.
  (3) Whenever an executive agency is required by paragraph 
(1)(A) to publish a notice of solicitation, such executive 
agency may not--
          (A) issue the solicitation earlier than 15 days after 
        the date on which the notice is published; or
          (B) in the case of a contract or order estimated to 
        be greater than the simplified acquisition threshold, 
        establish a deadline for the submission of all bids or 
        proposals in response to the notice required by 
        paragraph (1)(A) that--
                  (i) in the case of an order under a basic 
                agreement, basic ordering agreement, or similar 
                arrangement, is earlier than the date 30 days 
                after the date the notice required by paragraph 
                (1)(A)(ii) is published;
                  (ii) in the case of a solicitation for 
                research and development, is earlier than the 
                date 45 days after the date the notice required 
                by paragraph (1)(A)(i) is published; or
                  (iii) in any other case, is earlier than the 
                date 30 days after the date the solicitation is 
                issued.
  (f) Each notice of solicitation required by subparagraph (A) 
or (B) of subsection (e)(1) shall include--
          (1) an accurate description of the property or 
        services to be contracted for, which description (A) 
        shall not be unnecessarily restrictive of competition, 
        and (B) shall include, as appropriate, the agency 
        nomenclature, National Stock Number or other part 
        number, and a brief description of the item's form, 
        fit, or function, physical dimensions, predominant 
        material of manufacture, or similar information that 
        will assist a prospective contractor to make an 
        informed business judgment as to whether a copy of the 
        solicitation should be requested;
          (2) provisions that--
                  (A) state whether the technical data required 
                to respond to the solicitation will not be 
                furnished as part of such solicitation, and 
                identify the source in the Government, if any, 
                from which the technical data may be obtained; 
                and
                  (B) state whether an offeror, its product, or 
                service must meet a qualification requirement 
                in order to be eligible for award, and, if so, 
                identify the office from which a qualification 
                requirement may be obtained;
          (3) the name, business address, and telephone number 
        of the contracting officer;
          (4) a statement that all responsible sources may 
        submit a bid, proposal, or quotation (as appropriate) 
        which shall be considered by the agency;
          (5) in the case of a procurement using procedures 
        other than competitive procedures, a statement of the 
        reason justifying the use of such procedures and the 
        identity of the intended source; and
          (6) in the case of a contract in an amount estimated 
        to be greater than $25,000 but not greater than the 
        simplified acquisition threshold--
                  (A) a description of the procedures to be 
                used in awarding the contract; and
                  (B) a statement specifying the periods for 
                prospective offerors and the contracting 
                officer to take the necessary preaward and 
                award actions.
  (g)(1) A notice is not required under subsection (e)(1) if--
          (A) the proposed procurement is for an amount not 
        greater than the simplified acquisition threshold and 
        is to be conducted by--
                  (i) using widespread electronic public notice 
                of the solicitation in a form that allows 
                convenient and universal user access through a 
                single, Government-wide point of entry; and
                  (ii) permitting the public to respond to the 
                solicitation electronically.
          (B) the notice would disclose the executive agency's 
        needs and the disclosure of such needs would compromise 
        the national security;
          (C) the proposed procurement would result from 
        acceptance of--
                  (i) any unsolicited proposal that 
                demonstrates a unique and innovative research 
                concept and the publication of any notice of 
                such unsolicited research proposal would 
                disclose the originality of thought or 
                innovativeness of the proposal or would 
                disclose proprietary information associated 
                with the proposal; or
                  (ii) a proposal submitted under section 9 of 
                this Act;
          (D) the procurement is made against an order placed 
        under a requirements contract;
          (E) the procurement is made for perishable 
        subsistence supplies;
          (F) the procurement is for utility services, other 
        than telecommunication services, and only one source is 
        available; or
          (G) the procurement is for the services of an expert 
        for use in any litigation or dispute (including 
        preparation for any foreseeable litigation or dispute) 
        that involves or could involve the Federal Government 
        in any trial, hearing, or proceeding before any court, 
        administrative tribunal, or agency, or in any part of 
        an alternative dispute resolution process, whether or 
        not the expert is expected to testify.
  (2) The requirements of subsection (a)(1)(A) do not apply to 
any procurement under conditions described in paragraph (2), 
(3), (4), (5), or (7) of section 303(c) of the Federal Property 
and Administrative Services Act of 1949 (41 U.S.C. 253(c)) or 
paragraph (2), (3), (4), (5), and (7) of section 2304(c) of 
title 10, United States Code.
  (3) The requirements of subsection (a)(1)(A) shall not apply 
in the case of any procurement for which the head of the 
executive agency makes a determination in writing, after 
consultation with the Administrator for Federal Procurement 
Policy and the Administrator of the Small Business 
Administration, that it is not appropriate or reasonable to 
publish a notice before issuing a solicitation.
  (h)(1) An executive agency may not award a contract using 
procedures other than competitive procedures unless--
          (A) except as provided in paragraph (2), a written 
        justification for the use of such procedures has been 
        approved--
                  (i) in the case of a contract for an amount 
                exceeding $100,000 (but equal to or less than 
                $1,000,000), by the advocate for competition 
                for the procuring activity (without further 
                delegation);
                  (ii) in the case of a contract for an amount 
                exceeding $1,000,000 (but equal to or less than 
                $10,000,000), by the head of the procuring 
                activity or a delegate who, if a member of the 
                Armed Forces, is a general or flag officer, or, 
                if a civilian, is serving in a position in 
                grade GS-16 or above under the General Schedule 
                (or in a comparable or higher position under 
                another schedule); or
                  (iii) in the case of a contract for an amount 
                exceeding $10,000,000, by the senior 
                procurement executive of the agency designated 
                pursuant to section 16(3) of the Office of 
                Federal Procurement Policy Act (41 U.S.C. 
                414(3)) (without further delegation); and
          (B) all other requirements applicable to the use of 
        such procedures under title III of the Federal Property 
        and Administrative Services Act of 1949 (41 U.S.C. 251 
        et sq.) or chapter 137 of title 10, United States Code, 
        as appropriate, have been satisfied.
  (2) The same exceptions as are provided in section 303(f)(2) 
of the Federal Property and Administrative Services Act of 1949 
(41 U.S.C. 253(f)(2)) or section 2304(f)(2) of title 10, United 
States Code, shall apply with respect to the requirements of 
paragraph (1)(A) of this subsection in the same manner as such 
exceptions apply to the requirements of section 303(f)(1) of 
such Act or section 2304(f)(1) of such title, as appropriate.
  (i) An executive agency shall make available to any business 
concern, or the authorized representative of such concern, the 
complete solicitation package for any on-going procurement 
announced pursuant to a notice under subsection (e). An 
executive agency may require the payment of a fee, not 
exceeding the actual cost of duplication, for a copy of such 
package.
  (j) For purposes of this section, the term ``executive 
agency'' has the meaning provided such term in section 4(1) of 
the Office of Federal Procurement Policy Act (41 U.S.C. 
403(1)).
  (k) Notices of Subcontracting Opportunities.--
          (1) In general.--Notices of subcontracting 
        opportunities may be submitted for publication on the 
        appropriate Federal Web site (as determined by the 
        Administrator) by--
                  (A) a business concern awarded a contract by 
                an executive agency subject to subsection 
                (e)(1)(C); and
                  (B) a business concern that is a 
                subcontractor or supplier (at any tier) to such 
                contractor having a subcontracting opportunity 
                in excess of $10,000.
          (2) Content of notice.--The notice of a 
        subcontracting opportunity shall include--
                  (A) a description of the business opportunity 
                that is comparable to the description specified 
                in paragraphs (1), (2), (3), and (4) of 
                subsection (f); and
                  (B) the due date for receipt of offers.
  (l) Management Assistance for Small Businesses Affected by 
Military Operations.--The Administration shall utilize, as 
appropriate, its entrepreneurial development and management 
assistance programs, including programs involving State or 
private sector partners, to provide business counseling and 
training to any small business concern adversely affected by 
the deployment of units of the Armed Forces of the United 
States in support of a period of military conflict (as defined 
in section 7(n)(1)).
  (m) Procurement Program for Women-owned Small Business 
Concerns.--
          (1) Definitions.--In this subsection, the following 
        definitions apply:
                  (A) Contracting officer.--The term 
                ``contracting officer'' has the meaning given 
                such term in section 27(f)(5) of the Office of 
                Federal Procurement Policy Act (41 U.S.C. 
                423(f)(5)).
                  (B) Small business concern owned and 
                controlled by women.--The term ``small business 
                concern owned and controlled by women'' has the 
                meaning given such term in section 3(n), except 
                that ownership shall be determined without 
                regard to any community property law.
          (2) Authority to restrict competition.--In accordance 
        with this subsection, a contracting officer may 
        restrict competition for any contract for the 
        procurement of goods or services by the Federal 
        Government to small business concerns owned and 
        controlled by women, if--
                  (A) each of the concerns is not less than 51 
                percent owned by one or more women who are 
                economically disadvantaged (and such ownership 
                is determined without regard to any community 
                property law);
                  (B) the contracting officer has a reasonable 
                expectation that two or more small business 
                concerns owned and controlled by women will 
                submit offers for the contract;
                  (C) the contract is for the procurement of 
                goods or services with respect to an industry 
                identified by the Administrator pursuant to 
                paragraph (3);
                  (D) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price; and
                  (E) each of the concerns is certified by a 
                Federal agency, a State government, the 
                Administrator, or a national certifying entity 
                approved by the Administrator as a small 
                business concern owned and controlled by women.
          (3) Waiver.--With respect to a small business concern 
        owned and controlled by women, the Administrator may 
        waive subparagraph (2)(A) if the Administrator 
        determines that the concern is in an industry in which 
        small business concerns owned and controlled by women 
        are substantially underrepresented.
          (4) Identification of industries.--The Administrator 
        shall conduct a study to identify industries in which 
        small business concerns owned and controlled by women 
        are underrepresented with respect to Federal 
        procurement contracting.
          (5) Enforcement; penalties.--
                  (A) Verification of eligibility.--In carrying 
                out this subsection, the Administrator shall 
                establish procedures relating to--
                          (i) the filing, investigation, and 
                        disposition by the Administration of 
                        any challenge to the eligibility of a 
                        small business concern to receive 
                        assistance under this subsection 
                        (including a challenge, filed by an 
                        interested party, relating to the 
                        veracity of a certification made or 
                        information provided to the 
                        Administration by a small business 
                        concern under paragraph (2)(E)); and
                          (ii) verification by the 
                        Administrator of the accuracy of any 
                        certification made or information 
                        provided to the Administration by a 
                        small business concern under paragraph 
                        (2)(E).
                  (B) Examinations.--The procedures established 
                under subparagraph (A) may provide for program 
                examinations (including random program 
                examinations) by the Administrator of any small 
                business concern making a certification or 
                providing information to the Administrator 
                under paragraph (2)(E).
                  (C) Penalties.--In addition to the penalties 
                described in section 16(d), any small business 
                concern that is determined by the Administrator 
                to have misrepresented the status of that 
                concern as a small business concern owned and 
                controlled by women for purposes of this 
                subsection, shall be subject to--
                          (i) section 1001 of title 18, United 
                        States Code; and
                          (ii) sections 3729 through 3733 of 
                        title 31, United States Code.
          (6) Provision of data.--Upon the request of the 
        Administrator, the head of any Federal department or 
        agency shall promptly provide to the Administrator such 
        information as the Administrator determines to be 
        necessary to carry out this subsection.
          [(7) Authority for sole source contracts for 
        economically disadvantaged small business concerns 
        owned and controlled by women.--A contracting officer 
        may award a sole source contract under this subsection 
        to any small business concern owned and controlled by 
        women described in paragraph (2)(A) and certified under 
        paragraph (2)(E) if--
                  [(A) such concern is determined to be a 
                responsible contractor with respect to 
                performance of the contract opportunity and the 
                contracting officer does not have a reasonable 
                expectation that 2 or more businesses described 
                in paragraph (2)(A) will submit offers;
                  [(B) the anticipated award price of the 
                contract (including options) will not exceed--
                          [(i) $6,500,000, in the case of a 
                        contract opportunity assigned a 
                        standard industrial classification code 
                        for manufacturing; or
                          [(ii) $4,000,000, in the case of any 
                        other contract opportunity; and
                  [(C) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price.
          [(8) Authority for sole source contracts for small 
        business concerns owned and controlled by women in 
        substantially underrepresented industries.--A 
        contracting officer may award a sole source contract 
        under this subsection to any small business concern 
        owned and controlled by women certified under paragraph 
        (2)(E) that is in an industry in which small business 
        concerns owned and controlled by women are 
        substantially underrepresented (as determined by the 
        Administrator under paragraph (3)) if--
                  [(A) such concern is determined to be a 
                responsible contractor with respect to 
                performance of the contract opportunity and the 
                contracting officer does not have a reasonable 
                expectation that 2 or more businesses in an 
                industry that has received a waiver under 
                paragraph (3) will submit offers;
                  [(B) the anticipated award price of the 
                contract (including options) will not exceed--
                          [(i) $6,500,000, in the case of a 
                        contract opportunity assigned a 
                        standard industrial classification code 
                        for manufacturing; or
                          [(ii) $4,000,000, in the case of any 
                        other contract opportunity; and
                  [(C) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price.]
          (7) Authority for sole source contracts for 
        economically disadvantaged small business concerns 
        owned and controlled by women.--A contracting officer 
        may award a sole source contract under this subsection 
        to any small business concern owned and controlled by 
        women described in paragraph (2)(A) and certified under 
        paragraph (2)(E) if--
                  (A) such concern is determined to be a 
                responsible contractor with respect to 
                performance of the contract opportunity;
                  (B) the contracting officer does not have a 
                reasonable expectation that two or more 
                businesses described in paragraph (2)(A) will 
                submit offers;
                  (C) the anticipated award price of the 
                contract will not exceed--
                          (i) $7,000,000, in the case of a 
                        contract opportunity assigned a 
                        standard industrial classification code 
                        for manufacturing; or
                          (ii) $4,000,000, in the case of any 
                        other contract opportunity;
                  (D) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price;
                  (E) the contracting officer has notified the 
                Administration of the intent to make such award 
                and requested that the Administration determine 
                the concern's eligibility for award; and
                  (F) the Administration has determined that 
                such concern is eligible for award.
          (8) Authority for sole source contracts for small 
        business concerns owned and controlled by women in 
        substantially underrepresented industries.--A 
        contracting officer may award a sole source contract 
        under this subsection to any small business concern 
        owned and controlled by women certified under paragraph 
        (2)(E) that is in an industry in which small business 
        concerns owned and controlled by women are 
        substantially underrepresented (as determined by the 
        Administrator under paragraph (3)) if--
                  (A) such concern is determined to be a 
                responsible contractor with respect to 
                performance of the contract opportunity;
                  (B) the contracting officer does not have a 
                reasonable expectation that two or more 
                businesses in an industry that has received a 
                waiver under paragraph (3) will submit offers;
                  (C) the anticipated award price of the 
                contract will not exceed--
                          (i) $7,000,000, in the case of a 
                        contract opportunity assigned a 
                        standard industrial classification code 
                        for manufacturing; or
                          (ii) $4,000,000, in the case of any 
                        other contract opportunity;
                  (D) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price;
                  (E) the contracting officer has notified the 
                Administration of the intent to make such award 
                and requested that the Administration determine 
                the concern's eligibility for award; and
                  (F) the Administration has determined that 
                such concern is eligible for award.
  [Section 2(c) of H.R. 6369 (as reported) provides for 
amendments to amend paragraphs (7) and (8) of section 8(m) of 
the Small Business Act (shown above) to read as follows. 
Section 5(1) of H.R. 6369 provides for subsequent amendments to 
paragraphs (7) and (8) of such section 8(m) ``[e]ffective upon 
the notification described under section 3 [of such reported 
bill]''. The following reflects paragraphs (7) and (8) as 
amended by both sections 2(c) and 5(1) as follows:]
          (7) Authority for sole source contracts for 
        economically disadvantaged small business concerns 
        owned and controlled by women.--A contracting officer 
        may award a sole source contract under this subsection 
        to any small business concern owned and controlled by 
        women described in paragraph (2)(A) and certified under 
        paragraph (2)(E) if--
                  (A) such concern is determined to be a 
                responsible contractor with respect to 
                performance of the contract opportunity;
                  (B) the contracting officer does not have a 
                reasonable expectation that two or more 
                businesses described in paragraph (2)(A) will 
                submit offers;
                  (C) the anticipated award price of the 
                contract will not exceed--
                          (i) $7,000,000, in the case of a 
                        contract opportunity assigned a 
                        standard industrial classification code 
                        for manufacturing; or
                          (ii) $4,000,000, in the case of any 
                        other contract opportunity; and
                  (D) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price[;].
                  [(E) the contracting officer has notified the 
                Administration of the intent to make such award 
                and requested that the Administration determine 
                the concern's eligibility for award; and
                  [(F) the Administration has determined that 
                such concern is eligible for award.]
          (8) Authority for sole source contracts for small 
        business concerns owned and controlled by women in 
        substantially underrepresented industries.--A 
        contracting officer may award a sole source contract 
        under this subsection to any small business concern 
        owned and controlled by women certified under paragraph 
        (2)(E) that is in an industry in which small business 
        concerns owned and controlled by women are 
        substantially underrepresented (as determined by the 
        Administrator under paragraph (3)) if--
                  (A) such concern is determined to be a 
                responsible contractor with respect to 
                performance of the contract opportunity;
                  (B) the contracting officer does not have a 
                reasonable expectation that two or more 
                businesses in an industry that has received a 
                waiver under paragraph (3) will submit offers;
                  (C) the anticipated award price of the 
                contract will not exceed--
                          (i) $7,000,000, in the case of a 
                        contract opportunity assigned a 
                        standard industrial classification code 
                        for manufacturing; or
                          (ii) $4,000,000, in the case of any 
                        other contract opportunity; and
                  (D) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price[;].
                  [(E) the contracting officer has notified the 
                Administration of the intent to make such award 
                and requested that the Administration determine 
                the concern's eligibility for award; and
                  [(F) the Administration has determined that 
                such concern is eligible for award.]
  (n) Business Grants and Cooperative Agreements.--
          (1) In general.--In accordance with this subsection, 
        the Administrator may make grants to and enter into 
        cooperative agreements with any coalition of private 
        entities, public entities, or any combination of 
        private and public entities--
                  (A) to expand business-to-business 
                relationships between large and small 
                businesses; and
                  (B) to provide businesses, directly or 
                indirectly, with online information and a 
                database of companies that are interested in 
                mentor-protege programs or community-based, 
                statewide, or local business development 
                programs.
          (2) Matching requirement.--Subject to subparagraph 
        (B), the Administrator may make a grant to a coalition 
        under paragraph (1) only if the coalition provides for 
        activities described in paragraph (1)(A) or (1)(B) an 
        amount, either in kind or in cash, equal to the grant 
        amount.
          (3) Authorization of appropriations.--There is 
        authorized to be appropriated to carry out this 
        subsection $6,600,000, to remain available until 
        expended, for each of fiscal years 2001 through 2006.

           *       *       *       *       *       *       *


SEC. 31. HUBZONE PROGRAM.

  (a) In General.--There is established within the 
Administration a program to be carried out by the Administrator 
to provide for Federal contracting assistance to qualified 
HUBZone small business concerns in accordance with this 
section.
  (b) Eligible Contracts.--
          (1) Definitions.--In this subsection--
                  (A) the term ``contracting officer'' has the 
                meaning given that term in section 27(f)(5) of 
                the Office of Federal Procurement Policy Act 
                (41 U.S.C. 423(f)(5)); and
                  (B) the term ``full and open competition'' 
                has the meaning given that term in section 4 of 
                the Office of Federal Procurement Policy Act 
                (41 U.S.C. 403).
          (2) Authority of contracting officer.--
                  [(A) Sole source contracts.--A contracting 
                officer may award sole source contracts under 
                this section to any qualified HUBZone small 
                business concern, if--
                          [(i) the qualified HUBZone small 
                        business concern is determined to be a 
                        responsible contractor with respect to 
                        performance of such contract 
                        opportunity, and the contracting 
                        officer does not have a reasonable 
                        expectation that 2 or more qualified 
                        HUBZone small business concerns will 
                        submit offers for the contracting 
                        opportunity;
                          [(ii) the anticipated award price of 
                        the contract (including options) will 
                        not exceed--
                                  [(I) $5,000,000, in the case 
                                of a contract opportunity 
                                assigned a standard industrial 
                                classification code for 
                                manufacturing; or
                                  [(II) $3,000,000, in the case 
                                of all other contract 
                                opportunities; and
                          [(iii) in the estimation of the 
                        contracting officer, the contract award 
                        can be made at a fair and reasonable 
                        price.]
                  (A) Sole source contracts.--A contracting 
                officer may award sole source contracts under 
                this section to any qualified HUBZone small 
                business concern, if--
                          (i) the qualified HUBZone small 
                        business concern is determined to be a 
                        responsible contractor with respect to 
                        performance of such contract 
                        opportunity;
                          (ii) the contracting officer does not 
                        have a reasonable expectation that two 
                        or more qualified HUBZone small 
                        business concerns will submit offers 
                        for the contracting opportunity;
                          (iii) the anticipated award price of 
                        the contract will not exceed--
                                  (I) $7,000,000, in the case 
                                of a contract opportunity 
                                assigned a standard industrial 
                                classification code for 
                                manufacturing; or
                                  (II) $4,000,000, in the case 
                                of all other contract 
                                opportunities; and
                          (iv) in the estimation of the 
                        contracting officer, the contract award 
                        can be made at a fair and reasonable 
                        price.
                  (B) Restricted competition.--A contract 
                opportunity may be awarded pursuant to this 
                section on the basis of competition restricted 
                to qualified HUBZone small business concerns if 
                the contracting officer has a reasonable 
                expectation that not less than 2 qualified 
                HUBZone small business concerns will submit 
                offers and that the award can be made at a fair 
                market price.
                  (C) Appeals.--Not later than 5 days from the 
                date the Administration is notified of a 
                procurement officer's decision not to award a 
                contract opportunity under this section to a 
                qualified HUBZone small business concern, the 
                Administrator may notify the contracting 
                officer of the intent to appeal the contracting 
                officer's decision, and within 15 days of such 
                date the Administrator may file a written 
                request for reconsideration of the contracting 
                officer's decision with the Secretary of the 
                department or agency head.
          (3) Price evaluation preference in full and open 
        competitions.--
                  (A) In general.--Subject to subparagraph (B), 
                in any case in which a contract is to be 
                awarded on the basis of full and open 
                competition, the price offered by a qualified 
                HUBZone small business concern shall be deemed 
                as being lower than the price offered by 
                another offeror (other than another small 
                business concern), if the price offered by the 
                qualified HUBZone small business concern is not 
                more than 10 percent higher than the price 
                offered by the otherwise lowest, responsive, 
                and responsible offeror.
                  (B) Procurement of commodities.--For 
                purchases by the Secretary of Agriculture of 
                agricultural commodities, the price evaluation 
                preference shall be--
                          (i) 10 percent, for the portion of a 
                        contract to be awarded that is not 
                        greater than 25 percent of the total 
                        volume being procured for each 
                        commodity in a single invitation;
                          (ii) 5 percent, for the portion of a 
                        contract to be awarded that is greater 
                        than 25 percent, but not greater than 
                        40 percent, of the total volume being 
                        procured for each commodity in a single 
                        invitation; and
                          (iii) zero, for the portion of a 
                        contract to be awarded that is greater 
                        than 40 percent of the total volume 
                        being procured for each commodity in a 
                        single invitation.
                  (C) Procurement of commodities for 
                international food aid export operations.--The 
                price evaluation preference for purchases of 
                agricultural commodities by the Secretary of 
                Agriculture for export operations through 
                international food aid programs administered by 
                the Farm Service Agency shall be 5 percent on 
                the first portion of a contract to be awarded 
                that is not greater than 20 percent of the 
                total volume of each commodity being procured 
                in a single invitation.
                  (D) Treatment of preference.--A contract 
                awarded to a HUBZone small business concern 
                under a preference described in subparagraph 
                (B) shall not be counted toward the fulfillment 
                of any requirement partially set aside for 
                competition restricted to small business 
                concerns.
          (4) Relationship to other contracting preferences.--A 
        procurement may not be made from a source on the basis 
        of a preference provided in paragraph (2) or (3), if 
        the procurement would otherwise be made from a 
        different source under section 4124 or 4125 of title 
        18, United States Code, or the Javits-Wagner-O'Day Act 
        (41 U.S.C. 46 et seq.).
  (c) Enforcement; Penalties.--
          (1) Verification of eligibility.--In carrying out 
        this section, the Administrator shall establish 
        procedures relating to--
                  (A) the filing, investigation, and 
                disposition by the Administration of any 
                challenge to the eligibility of a small 
                business concern to receive assistance under 
                this section (including a challenge, filed by 
                an interested party, relating to the veracity 
                of a certification made or information provided 
                to the Administration by a small business 
                concern under section 3(p)(5)); and
                  (B) verification by the Administrator of the 
                accuracy of any certification made or 
                information provided to the Administration by a 
                small business concern under section 3(p)(5).
          (2) Examinations.--The procedures established under 
        paragraph (1) may provide for program examinations 
        (including random program examinations) by the 
        Administrator of any small business concern making a 
        certification or providing information to the 
        Administrator under section 3(p)(5).
          (3) Provision of data.--Upon the request of the 
        Administrator, the Secretary of Labor, the 
        Administrator of the Federal Emergency Management 
        Agency, the Secretary of Housing and Urban Development, 
        and the Secretary of the Interior (or the Assistant 
        Secretary for Indian Affairs), shall promptly provide 
        to the Administrator such information as the 
        Administrator determines to be necessary to carry out 
        this subsection.
          (4) Penalties.--In addition to the penalties 
        described in section 16(d), any small business concern 
        that is determined by the Administrator to have 
        misrepresented the status of that concern as a 
        ``HUBZone small business concern'' for purposes of this 
        section, shall be subject to--
                  (A) section 1001 of title 18, United States 
                Code; and
                  (B) sections 3729 through 3733 of title 31, 
                United States Code.
  (d) Authorization of Appropriations.--There is authorized to 
be appropriated to carry out the program established by this 
section $10,000,000 for each of fiscal years 2004 through 2006.

           *       *       *       *       *       *       *


SEC. 36. PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS OWNED AND 
                    CONTROLLED BY SERVICE-DISABLED VETERANS.

  [(a) Sole Source Contracts.--In accordance with this section, 
a contracting officer may award a sole source contract to any 
small business concern owned and controlled by service-disabled 
veterans if--
          [(1) such concern is determined to be a responsible 
        contractor with respect to performance of such contract 
        opportunity and the contracting officer does not have a 
        reasonable expectation that 2 or more small business 
        concerns owned and controlled by service-disabled 
        veterans will submit offers for the contracting 
        opportunity;
          [(2) the anticipated award price of the contract 
        (including options) will not exceed--
                  [(A) $5,000,000, in the case of a contract 
                opportunity assigned a standard industrial 
                classification code for manufacturing; or
                  [(B) $3,000,000, in the case of any other 
                contract opportunity; and
          [(3) in the estimation of the contracting officer, 
        the contract award can be made at a fair and reasonable 
        price.]
  (a) Sole Source Contracts.--In accordance with this section, 
a contracting officer may award a sole source contract to any 
small business concern owned and controlled by service-disabled 
veterans if--
          (1) such concern is determined to be a responsible 
        contractor with respect to performance of such contract 
        opportunity;
          (2) the contracting officer does not have a 
        reasonable expectation that two or more small business 
        concerns owned and controlled by service-disabled 
        veterans will submit offers for the contracting 
        opportunity;
          (3) the anticipated award price of the contract will 
        not exceed--
                  (A) $7,000,000, in the case of a contract 
                opportunity assigned a standard industrial 
                classification code for manufacturing; or
                  (B) $4,000,000, in the case of any other 
                contract opportunity;
          (4) in the estimation of the contracting officer, the 
        contract award can be made at a fair and reasonable 
        price;
          (5) the contracting officer has notified the 
        Administration of the intent to make such award and 
        requested that the Administration determine the 
        concern's eligibility for award; and
          (6) the Administration has determined that such 
        concern is eligible for award.
  [Section 2(b) of H.R. 6369 (as reported) provides for an 
amendment to amend subsection (a) of section 36 of the Small 
Business Act (shown above) to read as follows. Section 5(2) of 
H.R. 6369 provides for subsequent amendments to subsection (a) 
of such section 36 ``[e]ffective upon the notification 
described under section 3 [of such reported bill]''. The 
following reflects subsection (a) as amended by both sections 
2(b) and 5(2) as follows:]
  (a) Sole Source Contracts.--In accordance with this section, 
a contracting officer may award a sole source contract to any 
small business concern owned and controlled by service-disabled 
veterans if--
          (1) such concern is determined to be a responsible 
        contractor with respect to performance of such contract 
        opportunity;
          (2) the contracting officer does not have a 
        reasonable expectation that two or more small business 
        concerns owned and controlled by service-disabled 
        veterans will submit offers for the contracting 
        opportunity;
          (3) the anticipated award price of the contract will 
        not exceed--
                  (A) $7,000,000, in the case of a contract 
                opportunity assigned a standard industrial 
                classification code for manufacturing; or
                  (B) $4,000,000, in the case of any other 
                contract opportunity; and
          (4) in the estimation of the contracting officer, the 
        contract award can be made at a fair and reasonable 
        price[;].
          [(5) the contracting officer has notified the 
        Administration of the intent to make such award and 
        requested that the Administration determine the 
        concern's eligibility for award; and
          [(6) the Administration has determined that such 
        concern is eligible for award.]
  (b) Restricted Competition.--In accordance with this section, 
a contracting officer may award contracts on the basis of 
competition restricted to small business concerns owned and 
controlled by service-disabled veterans if the contracting 
officer has a reasonable expectation that not less than 2 small 
business concerns owned and controlled by service-disabled 
veterans will submit offers and that the award can be made at a 
fair market price.
  (c) Relationship to Other Contracting Preferences.--A 
procurement may not be made from a source on the basis of a 
preference provided under subsection (a) or (b) if the 
procurement would otherwise be made from a different source 
under section 4124 or 4125 of title 18, United States Code, or 
the Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.).
  (d) Enforcement; Penalties.--Rules similar to the rules of 
paragraphs (5) and (6) of section 8(m) shall apply for purposes 
of this section.
  (e) Contracting Officer.--For purposes of this section, the 
term ``contracting officer'' has the meaning given such term in 
section 27(f)(5) of the Office of Federal Procurement Policy 
Act (41 U.S.C. 423(f)(5)).

           *       *       *       *       *       *       *


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