[House Report 118-202]
[From the U.S. Government Publishing Office]


118th Congress    }                                     {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {     118-202

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



 
      SERVICE-DISABLED VETERAN OPPORTUNITIES IN SMALL BUSINESS ACT

                                _______
                                

 September 19, 2023.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Williams of Texas, from the Committee on Small Business, submitted 
                             the following

                              R E P O R T

                        [To accompany H.R. 3511]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 3511) to amend the Small Business Act to require 
training on increasing contract awards to small business 
concerns owned and controlled by service-disabled veterans, and 
for other purposes, having considered the same, reports 
favorably thereon without amendment and recommends that the 
bill do pass.

                                CONTENTS

                                                                   Page
   I. Purpose and Bill Summary........................................2
  II. Need for Legislation............................................2
 III. Hearings........................................................2
  IV. Committee Consideration.........................................2
   V. Committee Votes.................................................2
  VI. Section-by-Section of H.R. 3511.................................5
 VII. Congressional Budget Office Cost Estimate.......................5
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditure6
  IX. Oversight Findings & Recommendations............................6
   X. Performance Goals and Objectives................................6
  XI. Statement of Duplication of Federal Programs....................6
 XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
      Benefits........................................................7
XIII. Federal Mandates Statement......................................7
 XIV. Federal Advisory Committee Statement............................7
  XV. Applicability to Legislative Branch.............................7
 XVI. Statement of Constitutional Authority...........................7
XVII. Changes in Existing Law, Made by the Bill, As Reported..........7

                        Purpose and Bill Summary

    The purpose of H.R. 3511, the ``Service-Disabled Veteran 
Opportunities in Small Business Act'' is to require training on 
increasing contract awards to small business concerns owned and 
controlled by service-disabled veterans.
    H.R. 3511 amends the Small Business Act to require the 
Small Business Administration (SBA) to provide training to 
federal agencies who fail to meet the contracting goal for 
Service-Disabled Veteran Owned Small Businesses on how to 
increase awards to those firms.

                        II. Need for Legislation

    Veterans bring unique skills to federal procurement which 
can benefit procurement agencies. Skills such as leadership, 
teamwork, and perseverance can help agencies meet their 
missions.
    The Small Business Act (15 U.S.C. 644 (g)(1)(A)(ii)) sets a 
goal for federal agencies to spend three percent of their 
procurement with Service-Disabled Veteran Owned Small 
Businesses (SDVOSBs). According to the SBA's FY21 Government-
Wide Procurement Scorecard, not every federal agency has met 
this required goal. In fact, in FY21 six agencies failed at 
awarding three percent of their awards to SDVOSBs and the 
entire federal government failed to meet its three percent 
subcontracting goal for SDVOSBs.
    Agencies failing to meet the statutorily mandated goals 
prevent those who protected America from thriving in the 
procurement space. This legislation will educate agencies on 
how to best reach SDVOSBs and ensure they have adequate 
opportunities to compete for government contracts.

                             III. Hearings

    In the 118th Congress, the Committee held one hearing 
examining the issues covered in H.R. 3511 on May 11, 2023, at 
2:00 p.m. The Subcommittee on Contracting and Infrastructure 
held a hearing examining small business contracting and heard 
from a Service-Disabled Veteran Owned Small Business.

                      IV. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on May 23, 2023, and ordered H.R. 3511 
favorably reported to the House of Representatives. During the 
markup no amendments were offered.

                           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 to favorably report H.R. 3511 to 
the House of Representatives at 2:54 p.m.

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                  VI. Section-by-Section of H.R. 3511


Section 1. Short title

    This section designates the bill as the ``Service-Disabled 
Veteran Opportunities in Small Business Act.''

Section 2. Training on increasing contract awards to small business 
        concerns owned and controlled by Service-Disabled Veterans

    This section amends the Small Business Act to require the 
SBA to provide training to agencies who fail to meet the 
statutorily mandated Service-Disabled Veteran Owned Small 
Business (SDVOSB) contracting goals. The Small Business Act 
currently sets a government wide goal for agencies to award 3 
percent of all contracts to SDVOSB firms.
    Subsection (1) In General. The SBA Administrator and the 
SBA Office of Veterans Business Development will provide 
training to agency officials at agencies that fail to meet the 
SDVOSB goal on how to increase the contracts awarded to 
SDVOSBs.
    Subsection (2) Guidance. No later than 180 days the SBA 
shall provide agencies guidance and best practices on how to 
increase awards to small business owned by SDVOSB.
    Subsection (3) Report. No later than 1 year and annually 
after, SBA shall provide a fiscal year report that lists 
agencies that failed to meet the SDVOSB goal, number of 
trainings SBA provided, and overview of training content.

             VII. Congressional Budget Office Cost Estimate

    Pursuant to 3(c)(3) of rule XIII of the Rules of the House 
of Representatives, the Committee adopts as its as its own the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    H.R. 3511 would require the Small Business Administration 
(SBA) to issue guidance to federal agencies on how to increase 
the number of contracts awarded to service-disabled veteran-
owned small businesses (SDVOSBs). Under current law, the SDVOSB 
Procurement Program, administered by the SBA, assists federal 
agencies in awarding at least 3 percent of the total value of 
prime contract and subcontract dollars to such small 
businesses. The bill would direct the SBA to provide training 
to the agencies that have not met that statutory goal and 
report annually to the Congress.
    Agency contracting goals are set in coordination with the 
SBA and only a small number of agencies do not meet their 
individual contracting goals each year. Using information from 
the SBA, CBO expects it would need one employee over the 2024-
2028 period, at a cost of $170,000 annually, to train agencies 
that do not meet their goals and fulfill the reporting 
requirements. On that basis, CBO estimates that implementing 
H.R. 3511 would cost $1 million over the 2024-2028 period; any 
spending would be subject to the availability of appropriated 
funds.
    The CBO staff contact for this estimate is David Hughes. 
The estimate was reviewed by H. Samuel Papenfuss, Deputy 
Director of Budget Analysis.
                                         Phillip L. Swagel,
                             Director, Congressional Budget Office.

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

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives and section 308(a)(I) of the 
Congressional Budget Act of 1974, the Committee provides the 
following opinion and estimate with respect to new budget 
authority, entitlement authority, and tax expenditures. The 
Committee does not believe that there will be any additional 
costs attributable to this legislation. H.R. 3511 does not 
direct new spending, but instead reallocates funding 
independently authorized and appropriated.

                IX. Oversight Findings & Recommendations

    In accordance with clause 3(c)(1) of rule XIII and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the oversight findings and recommendations of the Committee on 
Small Business with respect to the subject matter contained in 
the H.R. 3511 are incorporated into the descriptive portions of 
this report.

                  X. Performance Goals and Objectives

    With respect to the requirements of clause 3(c)(1) of rule 
XIII of the Rules of the House of Representatives, the 
performance goals and objectives of H.R. 3511 is to require an 
annual report from SBA to Congress with a list of federal 
agencies who failed to meet their SDVOSB goal, the number of 
trainings SBA provided to each agency, and an overview of 
training content.

            XI. Statement of Duplication of Federal Programs

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, no provision of H.R. 3511 is known to 
be duplicative of another Federal program, including any 
program that was included in a report to Congress pursuant to 
section 21 of Public Law 111-139 or the most recent Catalog of 
Federal Domestic Assistance.

 XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee finds that the bill 
does not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits as defined in clause 9(e), 
9(f), or 9(g) of rule XXI of the Rules of the House of 
Representatives.

                    XIII. Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

               XIV. Federal Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                XV. Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

               XVI. Statement of Constitutional Authority

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

      XVII. 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 italics, 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 (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

                           SMALL BUSINESS ACT



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

  (a) Contracting Officer Defined.--For purposes of this 
section, the term ``contracting officer'' has the meaning given 
such term in section 2101 of title 41, United States Code.
  (b) Certification of Small Business Concerns Owned and 
Controlled by Service-Disabled Veterans.--With respect to a 
procurement program or preference established under this Act 
that applies to prime contractors, the Administrator shall--
          (1) certify the status of a concern as a small 
        business concern owned and controlled by service-
        disabled veterans; and
          (2) require the periodic recertification of such 
        status.
  (c) 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) $7,000,000, 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.
  (d) 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 certified under 
subsection (b) 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.
  (e) 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.).
  (f) Database of Veteran-Owned Businesses.--(1) Subject to 
paragraphs (2) through (6), the Administrator shall maintain a 
database of small business concerns owned and controlled by 
veterans, small business concerns owned and controlled by 
service-disabled veterans, and the veteran owners of such 
business concerns.
  (2)(A) To be eligible for inclusion in the database, such a 
veteran shall submit to the Administrator such information as 
the Administrator may require with respect to the small 
business concern or the veteran. Application for inclusion in 
the database shall constitute permission under section 552a of 
title 5, United States Code, (commonly referred to as the 
Privacy Act) for the Administrator to obtain from the Secretary 
of Veterans Affairs such personal information maintained by the 
Secretary as may be necessary to verify the information 
contained in the application.
  (B) For purposes of this subsection--
          (i) the Secretary of Veterans Affairs shall--
                  (I) verify an individual's status as a 
                veteran or a service-disabled veteran; and
                  (II) establish a system to permit the 
                Administrator to access, but not alter, the 
                verification of such status; and
          (ii) the Administrator shall verify--
                  (I) the status of a business concern as a 
                small business concern; and
                  (II) the ownership and control of such 
                business concern.
  (C) The Administrator may not certify a concern under 
subsection (b) or section 36A if the Secretary of Veterans 
Affairs cannot provide the verification described under 
subparagraph (B)(i)(I).
  (3) Information maintained in the database shall be submitted 
on a voluntary basis by a veteran described in paragraph (1).
  (4) the Administrator shall make the database available to 
all Federal departments and agencies and shall notify each such 
department and agency of the availability of the database.
  (5) If the Administrator determines that the public 
dissemination of certain types of information maintained in the 
database is inappropriate, the Administrator shall take such 
steps as are necessary to maintain such types of information in 
a secure and confidential manner.
  (6)(A) If a small business concern is not included in the 
database because the Administrator does not certify the status 
of the concern as a small business concern owned and controlled 
by veterans (under section 36A) or a small business concern 
owned and controlled by service-disabled veterans (under 
subsection (g) of this section), the concern may appeal the 
denial of certification to the Office of Hearings and Appeals 
of the Administration (as established under section 5(i)). The 
decision of the Office of Hearings and Appeals shall be 
considered a final agency action.
  (B)(i) If an interested party challenges the inclusion in the 
database of a small business concern owned and controlled by 
veterans or a small business concern owned and controlled by 
service-disabled veterans based on the status of the concern as 
a small business concern or the ownership or control of the 
concern, the challenge shall be heard by the Office of Hearings 
and Appeals as described in subparagraph (A). The decision of 
the Office of Hearings and Appeals shall be considered final 
agency action.
          (ii) In this subparagraph, the term ``interested 
        party'' means--
                  (I) the Secretary of Veterans Affairs or the 
                Administrator; or
                  (II) in the case of a small business concern 
                that is awarded a contract, the applicable 
                contracting officer or another small business 
                concern that submitted an offer for the 
                contract that was awarded to the small business 
                concern that is the subject of a challenge made 
                under clause (i).
  (g) Certification Requirement.--Notwithstanding subsection 
(c), a contracting officer may only award a sole source 
contract to a small business concern owned and controlled by 
service-disabled veterans or a contract on the basis of 
competition restricted to small business concerns owned and 
controlled by service-disabled veterans if such a concern is 
certified by the Administrator as a small business concern 
owned and controlled by service-disabled veterans.
  (h) 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 subsection (b)); 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 subsection (b).
          (2) Examinations.--The procedures established under 
        paragraph (1) shall provide for a program of 
        examinations by the Administrator of any small business 
        concern making a certification or providing information 
        to the Administrator under subsection (b), to determine 
        the veracity of any statements or information provided 
        as part of such certification or otherwise provided 
        under subsection (b).
          (3) Enforcement; penalties.--Rules similar to the 
        rules of paragraphs (5) and (6) of section 8(m) shall 
        apply for purposes of this section and section 36A.
  (i) 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 
subsection (b) or to be able to certify the status of the 
concern as a small business concern owned and controlled by 
veterans under section 36A.
  (j) Training on Increasing Contract Awards to Small Business 
Concerns Owned and Controlled by Service-Disabled Veterans.--
          (1) In general.--The Administrator, in consultation 
        with the Office of Veterans Business Development, shall 
        provide to covered employees at each Federal agency 
        that has not met the goal established under section 
        15(g)(1)(A)(ii) training on how to increase the number 
        of contracts awarded to small business concerns owned 
        and controlled by service-disabled veterans.
          (2) Guidance.--Not later than 180 days after the date 
        of the enactment of this Act, the Administrator, in 
        consultation with the Office of Veterans Business 
        Development, shall issue guidance and best practices on 
        increasing the number of contracts awarded to small 
        businesses owned and controlled by service disabled 
        veterans for Federal agencies to which the goal 
        established under section 15(g)(1)(A)(ii) applies.
          (3) Report.--Not later than 1 year after the date of 
        enactment of this Act, and annually thereafter, the 
        Administration shall submit to Congress a report 
        detailing, for the fiscal year covered by the report--
                  (A) a list of each Federal agency that failed 
                to meet the goal established under section 
                15(g)(1)(A)(ii);
                  (B) the number of trainings provided to each 
                Federal agency described in paragraph (1); and
                  (C) an overview of the content included in 
                such training sessions.

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