[House Report 118-379]
[From the U.S. Government Publishing Office]


118th Congress }                                              {    Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                              {  118-379

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



 
                        ENCOURAGING SUCCESS ACT

                                _______
                                

February 9, 2024.--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

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 6591]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 6591) to amend section 8(a) of the Small Business 
Act to require the Administrator of the Small Business 
Administration to regularly reassess the asset and net worth 
thresholds for qualifying as an economically disadvantaged 
individual, and for other purposes, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Bill Summary.........................................2
 II. Need for Legislation.............................................2
III. Hearings.........................................................2
 IV. Committee Consideration..........................................3
  V. Committee Votes..................................................3
 VI. Section-by-Section of H.R. 6591..................................6
VII. Congressional Budget Office Cost Estimate........................6
VIII.New Budget Authority, Entitlement Authority, and Tax Expenditures6

 IX. Oversight Findings & Recommendations.............................6
  X. Performance Goals and Objectives.................................6
 XI. Statement of Duplication of Federal Programs.....................7
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
XVIII.Minority Views.................................................41


    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 ``Encouraging Success Act''.

SEC. 2. REGULAR REASSESSMENT OF THE THRESHOLDS FOR ECONOMICALLY 
                    DISADVANTAGED INDIVIDUALS.

  (a) In General.--Section 8(a)(6) of the Small Business Act (15 U.S.C. 
637(a)(6)) is amended by adding at the end the following new 
subparagraph:
  ``(F)(i) Not later than one year after the date of the enactment of 
this subparagraph, and not less frequently than every four years 
thereafter, the Administrator shall assess and, if appropriate, revise 
the maximum value of asset and the maximum net worth an individual may 
have to qualify as an economically disadvantaged individual under 
subparagraph (A) to account for changes in the economy, including 
inflation and other factors as determined appropriate by the 
Administrator.
  ``(ii) The Administrator shall make each covered revision by issuing 
a rule after an opportunity for public notice and comment.
  ``(iii) To the extent practicable, the Administrator shall coordinate 
the activities carried out under clause (i) with the activities 
required under section 1344(a)(2) of the Small Business Jobs Act of 
2010 (15 U.S.C. 632 note).
  ``(iv) In this subparagraph, the term `covered revision' means a 
revision described in clause (i) that the Administrator determines is 
appropriate pursuant to an assessment under such clause.''.
  (b) Compliance With Cutgo.--No additional amounts are authorized to 
be appropriated to carry out this Act or the amendments made by this 
Act.

                      I. Purpose and Bill Summary

    On December 5, 2023, Rep. Ellzey introduced H.R. 6591. The 
purpose of H.R. 6591, the ``Encouraging Success Act,'' is to 
amend section 8(a)(6) of the Small Business Act to require the 
Small Business Administration (SBA) to revise the asset 
threshold for the 8(a) program at least every four years. The 
8(a) program offers disadvantaged small businesses assistance 
and allows these businesses to compete for set-aside, sole-
source contracts within the federal government.

                        II. Need for Legislation

    When the 8(a) program was established in 1978, the asset 
threshold was set at $4 million and was not updated until 2020 
when the Trump Administration increased it to $6 million. 
Today, the asset threshold sits at $6.5 million and any small 
businesses owner with assets in excess of that amount are 
graduated from the program. The Encouraging Success Act will 
require the SBA to ensure the asset threshold conforms to 
economic realities.
    The SBA's reluctance to assess the 8(a) asset threshold in 
line with market realities could potentially limit the program 
and the growth opportunities of its participants.

                             III. Hearings

    In the 118th Congress, the Committee held one hearing 
examining the issues covered in H.R. 6591. On May 11, 2023, the 
Committee held a hearing titled ``Leveling the Playing Field: 
The State of Small Business Contracting.'' Witnesses discussed 
challenges entrepreneurs face navigating federal contracting 
opportunities like the 8(a) program. This bill seeks to address 
the growth limitations that current 8(a) thresholds impose.

                      IV. Committee Consideration

    The Committee on Small Business met in open session, with a 
quorum being present, on January 31, 2024, and ordered H.R. 
6591 reported favorably to the House of Representatives. During 
the markup one amendment in the nature of a substitute was 
offered and adopted by voice vote.

                           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. 6591, as 
amended, to the House of Representatives at 11:50 a.m.


                  VI. Section-by-Section of H.R. 6591


Section 1. Short title

    This section cites the bill as the Encouraging Success Act.

Section 2. Regular reassessment of the thresholds for economically 
        disadvantaged individuals

    This section amends section 8(a)(6) of the Small Business 
Act to require the SBA to revise the 8(a) asset threshold 
within one year of the bill's enactment and at least every four 
years thereafter. This section also includes language to ensure 
that no additional funds are authorized to be appropriated to 
carry out the bill.

             VII. Congressional Budget Office Cost Estimate

    Pursuant to clause 3(d)(1) of House rule XIII, the 
Committee adopts 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. The Committee has 
requested but not received from the Director of the 
Congressional Budget Office a cost estimate for the Committee's 
provisions. Once available, the cost estimate will be published 
in the Congressional Record.

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. 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. 6591 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. 6591 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. 6591 are to require 
the SBA to reassess the 8(a) asset threshold every four years 
and submit through for public comment a rule proposing each 
change.

            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. 6591 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




           *       *       *       *       *       *       *
  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 
                $7,000,000 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.
  (F)(i) Not later than one year after the date of the 
enactment of this subparagraph, and not less frequently than 
every four years thereafter, the Administrator shall assess 
and, if appropriate, revise the maximum value of asset and the 
maximum net worth an individual may have to qualify as an 
economically disadvantaged individual under subparagraph (A) to 
account for changes in the economy, including inflation and 
other factors as determined appropriate by the Administrator.
  (ii) The Administrator shall make each covered revision by 
issuing a rule after an opportunity for public notice and 
comment.
  (iii) To the extent practicable, the Administrator shall 
coordinate the activities carried out under clause (i) with the 
activities required under section 1344(a)(2) of the Small 
Business Jobs Act of 2010 (15 U.S.C. 632 note).
  (iv) In this subparagraph, the term ``covered revision'' 
means a revision described in clause (i) that the Administrator 
determines is appropriate pursuant to an assessment under such 
clause.
  (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 31(b).
          (H) In this contract, the term ``small business 
        concern owned and controlled by service-disabled 
        veterans'' has the meaning given that term in section 
        3(q).
  (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 that procedures have been adopted to 
        substantiate the credit the successful offeror or 
        bidder will elect to receive under paragraph (16)(A);
          (H) 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
          (I) 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 Mentor-Protege Program established under 
section 4902 of title 10, United States Code, shall be granted 
credit for such assistance in accordance with subsection (f) 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 30 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--
                  (i) 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; and
                  (ii) may enter or modify past performance 
                information of the prime contractor in 
                connection with the unjustified failure to make 
                a full or timely payment to a subcontractor 
                subject to this paragraph before or after 
                close-out of the covered contract.
          (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 (F).
          (E) Cooperation.--
                  (i) In general.--Once a contracting officer 
                determines, with respect to the past 
                performance of a prime contractor, that there 
                was an unjustified failure by the prime 
                contractor on a covered contract to make a full 
                or timely payment to a subcontractor covered by 
                subparagraph (B) or (C), the prime contractor 
                is required to cooperate with the contracting 
                officer, who shall consult with the Director of 
                Small Business Programs or the Director of 
                Small and Disadvantaged Business Utilization 
                acting pursuant to section 15(k)(6) and other 
                representatives of the Government, regarding 
                correcting and mitigating the unjustified 
                failure to make a full or timely payment to a 
                subcontractor.
                  (ii) Duration.--The duty of cooperation under 
                this subparagraph for a prime contractor 
                described in clause (i) continues until the 
                subcontractor is made whole or the 
                determination of the contracting officer 
                determination is no longer effective, and 
                regardless of performance or close-out status 
                of the covered contract.
          (F) 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 small business concern 
        subcontractors.--
                  (A) In general.--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 
                        a Federal agency, the prime contractor 
                        may elect to 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 total dollar value of any 
                        subcontracts awarded to such small 
                        business concerns; and
                          (ii) if the subcontracting goals 
                        pertain to more than one contract with 
                        one or more Federal agencies, or to one 
                        contract with more than one Federal 
                        agency, the prime contractor may only 
                        receive credit for first tier 
                        subcontractors that are small business 
                        concerns.
                  (B) Collection and review of data on 
                subcontracting plans.--The head of each 
                contracting agency shall ensure that the 
                agency--
                          (i) collects and reports data on the 
                        extent to which prime contractors of 
                        the agency meet the goals and 
                        objectives set forth in subcontracting 
                        plans submitted pursuant to this 
                        subsection; and
                          (ii) periodically reviews data 
                        collected and reported pursuant to 
                        clause (i) for the purpose of ensuring 
                        that such contractors comply in good 
                        faith with the requirements of this 
                        subsection.
                  (C) Rule of construction.--Nothing in this 
                paragraph shall be construed to allow a Federal 
                agency to establish a goal for an number of 
                subcontracts with a subcontractor at any tier 
                for a prime contractor otherwise eligible to 
                receive credit under this paragraph.
          (17) Past performance ratings for certain small 
        business subcontractors.--Upon request by a small 
        business concern that performed as a first tier 
        subcontractor on a covered contract (as defined in 
        paragraph (13)(A)), the prime contractor for such 
        covered contract shall submit to such small business 
        concern a record of past performance for such small 
        business concern with respect to such covered contract. 
        If a small business concern elects to use such record 
        of past performance, a contracting officer shall 
        consider such record of past performance when 
        evaluating an offer for a prime contract made by such 
        small business concern.
  (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 3204(a) 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 sections 3201 through 3205 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 paragraphs (3) and (4) of section 
3204(e) 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 paragraphs (3) 
and (4) of section 3204(e) 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.--
          (1) In general.--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.
          (2) Definition of period of military conflict.--In 
        this subsection, the term ``period of military 
        conflict'' means--
                  (A) a period of war declared by the Congress;
                  (B) a period of national emergency declared 
                by the Congress or by the President; or
                  (C) a period of a contingency operation, as 
                defined in section 101(a) of title 10, United 
                States Code.
  (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) $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
                  (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) $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
                  (C) in the estimation of the contracting 
                officer, the contract award can be made at a 
                fair and reasonable price.
  (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.

           *       *       *       *       *       *       *


                         XVIII. MINORITY VIEWS

    The Small Business Administration's (SBA) 8(a) Program was 
created to promote the competitive viability of small 
businesses owned by socially and economically disadvantaged 
individuals. The program works to provide assistance intended 
to compensate for the impacts of discrimination against 
minority business owners and help to level the playing field in 
the federal marketplace. One of the hallmarks of the program is 
that it provides contracting opportunities through which small 
businesses increase their footprint in Federal marketplace, 
thereby preparing small firms to compete in the American 
economy.
    The 8(a) program is a nine-year program that helps small 
businesses owned by socially and economically disadvantaged 
individuals participate in federal contracting. It allows 
federal agencies to use streamlined contracting authorities for 
program participants.
    8(a) participants must meet a number of criteria to enter 
the program, including that they are: (a) socially and 
economically disadvantaged; (b) US citizens, who have good 
character and potential for success; (c) meet ownership and 
control requirements; and (d) a small business.
    To determine economic disadvantage, SBA reviews an 
applicant's net worth, income, and total assets when they apply 
for the 8(a) program and then annually thereafter. In July 
2020, SBA changed the 8(a) financial thresholds for determining 
whether an individual qualifies as economically disadvantaged.
    Currently, SBA assesses the thresholds regularly for the 
impact of inflation but does not regularly conduct a review of 
general economic factors and business environment, as they did 
in 2020. Some have argued that the lack of a reassessment or 
readjustment has penalized small businesses for growth, and 
that a regular assessment would ensure that the thresholds are 
keeping pace with changing economic environments.\1\
---------------------------------------------------------------------------
    \1\Government Accountability Office report: ``Small Business 
Administration: Recent Changes to the 8(a) Program's Financial 
Thresholds Need Evaluation.'' 9.29.22. https://www.gao.gov/
products/gao-22-104512.
---------------------------------------------------------------------------
    The committee believes a regular review of these thresholds 
will keep the 8(a) program relevant and current. It is a 
productive step that will help ensure that minority-business 
owners can succeed and thrive in the 8(a) program and the 
federal marketplace.
            Sincerely,
                                        Nydia M. Velazquez,
                                                    Ranking Member.