[House Report 118-381]
[From the U.S. Government Publishing Office]


118th Congress }                                             {     Report
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                              {   118-381

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



 
  TO AMEND THE SMALL BUSINESS ACT TO MODIFY THE APPLICATION OF PRICE 
EVALUATION PREFERENCE FOR QUALIFIED HUBZONE SMALL BUSINESS CONCERNS TO 
               CERTAIN CONTRACTS, AND FOR OTHER PURPOSES

                                _______
                                

 February 13, 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. 5450]

    The Committee on Small Business, to whom was referred the 
bill (H.R. 5450) to amend the Small Business Act to modify the 
application of price evaluation preference for qualified 
HUBZone small business concerns to certain contracts, 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.........................................2
   V. Committee Votes.................................................3
  VI. Section-by-Section of H.R. 5450.................................3
 VII. Congressional Budget Office Cost Estimate.......................3
VIII. New Budget Authority, Entitlement Authority, and Tax Expenditure3
  IX. Oversight Findings & Recommendations............................3
   X. Performance Goals and Objectives................................3
  XI. Statement of Duplication of Federal Programs....................4
 XII. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
      Benefits........................................................4
XIII. Federal Mandates Statement......................................4
 XIV. Federal Advisory Committee Statement............................4
  XV. Applicability to Legislative Branch.............................4
 XVI. Statement of Constitutional Authority...........................4
XVII. Changes in Existing Law Made by the Bill, as Reported...........4
XVIII.Minority Views.................................................16


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

SECTION 1. APPLICATION OF PRICE EVALUATION PREFERENCE FOR QUALIFIED 
                    HUBZONE SMALL BUSINESS CONCERNS TO CERTAIN 
                    CONTRACTS.

  (a) In General.--Section 31(c)(3) of the Small Business Act (15 
U.S.C. 657a(c)(3)) is amended by adding at the end the following new 
subparagraph:
                  ``(E) Application to certain contracts.--The 
                requirements of subparagraph (A) shall apply to an 
                unrestricted order issued under an unrestricted 
                multiple award contract or the unrestricted portion of 
                a contract that is partially set aside for competition 
                restricted to small business concerns.''.
  (b) Rulemaking.--Not later than 90 days after the date of the 
enactment of this section, the Administrator of the Small Business 
Administration shall revise any rules or guidance to implement the 
requirements of this section.
  (c) 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 September 13, 2023, Rep. Scholten, along with Rep. 
Salazar, introduced H.R. 5450. The purpose of H.R. 5450, the 
``Enhancing Competition in Contracting Orders Act,'' is to 
amend the Small Business Act to clarify when the Historically 
Underutilized Business Zone (HUBZone) price evaluation 
preference tool is required to be used.
    Firms in the HUBZone program receive a price preference 
when their bid is within 10 percent of a non-HUBZone firm. 
Under this legislation, the HUBZone firm's bid will be 
considered lower than a non-HUBZone firm if the cost proposal 
is within 10 percent of the other firm.

                        II. Need for Legislation

    The HUBZone price preference is already standard procedure 
for other contracts. However, statutory interpretation by the 
Executive Branch has led to the price preference not being used 
with task orders.

                             III. Hearings

    In the 118th Congress, the Committee held one hearing 
examining the issues covered in H.R. 5450. On May 11, 2023, the 
Committee held a hearing titled ``Leveling the Playing Field: 
The State of Small Business Contracting.'' Witnesses described 
the challenges associated with participating in federal 
contracting programs like the HUBZone program.

                      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. 
5450 reported favorably to the House of Representatives. During 
the markup an 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. 5450, as 
amended, to the House of Representatives at 10:04 a.m. by voice 
vote.

                  VI. Section-by-Section of H.R. 5450


Section 1--Application of price evaluation preference for qualified 
        HUBZone Small Business Concerns to certain contracts

    This section amends the Small Business Act to allow the 
HUBZone price preferences to be used in unrestricted orders 
under unrestricted multiple award contracts or the unrestricted 
portion of a partially set aside contract.
    It also requires the Administrator of the SBA to revise the 
relevant rules and regulations within 90 days.

             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. 5450 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. 5450 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, there are no 
additional performance goals and objectives required by H.R. 
5450.

            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. 5450 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 
of Representatives, 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. 31. HUBZONE PROGRAM.

  (a) In General.--There is established within the 
Administration a program (to be known as the HUBZone program) 
to be carried out by the Administrator to provide for Federal 
contracting assistance, including promoting economic 
development in economically distressed areas (as defined in 
section 7(m)(11)), to qualified HUBZone small business concerns 
in accordance with this section.
  (b) Definitions Relating to HUBZones.--In this section:
          (1) Historically underutilized business zone.--The 
        terms ``historically underutilized business zone'' or 
        ``HUBZone'' mean any area located within 1 or more--
                  (A) qualified census tracts;
                  (B) qualified nonmetropolitan counties;
                  (C) lands within the external boundaries of 
                an Indian reservation;
                  (D) redesignated areas;
                  (E) base closure areas;
                  (F) qualified disaster areas; or
                  (G) a Governor-designated covered area.
          (2) Hubzone small business concern.--The term 
        ``HUBZone small business concern'' means--
                  (A) a small business concern that is at least 
                51 percent owned and controlled by United 
                States citizens;
                  (B) a small business concern that is--
                          (i) an Alaska Native Corporation 
                        owned and controlled by Natives (as 
                        determined pursuant to section 29(e)(1) 
                        of the Alaska Native Claims Settlement 
                        Act (43 U.S.C. 1626(e)(1))); or
                          (ii) a direct or indirect subsidiary 
                        corporation, joint venture, or 
                        partnership of an Alaska Native 
                        Corporation qualifying pursuant to 
                        section 29(e)(1) of the Alaska Native 
                        Claims Settlement Act (43 U.S.C. 
                        1626(e)(1)), if that subsidiary, joint 
                        venture, or partnership is owned and 
                        controlled by Natives (as determined 
                        pursuant to section 29(e)(2)) of the 
                        Alaska Native Claims Settlement Act (43 
                        U.S.C. 1626(e)(2)));
                  (C) a small business concern--
                          (i) that is wholly owned by one or 
                        more Indian tribal governments, or by a 
                        corporation that is wholly owned by one 
                        or more Indian tribal governments; or
                          (ii) that is owned in part by one or 
                        more Indian tribal governments, or by a 
                        corporation that is wholly owned by one 
                        or more Indian tribal governments, if 
                        all other owners are either United 
                        States citizens or small business 
                        concerns;
                  (D) a small business concern--
                          (i) that is wholly owned by one or 
                        more Native Hawaiian Organizations (as 
                        defined in section 8(a)(15)), or by a 
                        corporation that is wholly owned by one 
                        or more Native Hawaiian Organizations; 
                        or
                          (ii) that is owned in part by one or 
                        more Native Hawaiian Organizations, or 
                        by a corporation that is wholly owned 
                        by one or more Native Hawaiian 
                        Organizations, if all other owners are 
                        either United States citizens or small 
                        business concerns;
                  (E) a small business concern that is--
                          (i) wholly owned by a community 
                        development corporation that has 
                        received financial assistance under 
                        part 1 of subchapter A of the Community 
                        Economic Development Act of 1981 (42 
                        U.S.C. 9805 et seq.); or
                          (ii) owned in part by one or more 
                        community development corporations, if 
                        all other owners are either United 
                        States citizens or small business 
                        concerns; or
                  (F) a small business concern that is--
                          (i) a small agricultural cooperative 
                        organized or incorporated in the United 
                        States;
                          (ii) wholly owned by 1 or more small 
                        agricultural cooperatives organized or 
                        incorporated in the United States; or
                          (iii) owned in part by 1 or more 
                        small agricultural cooperatives 
                        organized or incorporated in the United 
                        States, if all owners are small 
                        business concerns or United States 
                        citizens.
          (3) Qualified areas.--
                  (A) Qualified census tract.--
                          (i) In general.--The term ``qualified 
                        census tract'' means a census tract 
                        that is covered by the definition of 
                        ``qualified census tract'' in section 
                        42(d)(5)(B)(ii) of the Internal Revenue 
                        Code of 1986 and that is reflected in 
                        an online tool prepared by the 
                        Administrator described under 
                        subsection (d)(7).
                          (ii) Exception.--For any metropolitan 
                        statistical area in the Commonwealth of 
                        Puerto Rico, the term ``qualified 
                        census tract'' has the meaning given 
                        that term in section 42(d)(5)(B)(ii) of 
                        the Internal Revenue Code of 1986 as 
                        applied without regard to subclause 
                        (II) of such section and that is 
                        reflected in the online tool described 
                        under clause (i), except that this 
                        clause shall only apply--
                                  (I) 10 years after the date 
                                that the Administrator 
                                implements this clause, or
                                  (II) the date on which the 
                                Financial Oversight and 
                                Management Board for the 
                                Commonwealth of Puerto Rico 
                                created by the Puerto Rico 
                                Oversight, Management, and 
                                Economic Stability Act ceases 
                                to exist,
                        whichever event occurs first.
                  (B) Qualified nonmetropolitan county.--The 
                term ``qualified nonmetropolitan county'' means 
                any county that is reflected in the online tool 
                described under subparagraph (A)(i) and--
                          (i) that was not located in a 
                        metropolitan statistical area (as 
                        defined in section 143(k)(2)(B) of the 
                        Internal Revenue Code of 1986) at the 
                        time of the most recent census taken 
                        for purposes of selecting qualified 
                        census tracts under section 
                        42(d)(5)(B)(ii) of the Internal Revenue 
                        Code of 1986; and
                          (ii) in which--
                                  (I) the median household 
                                income is less than 80 percent 
                                of the State median household 
                                income, based on a 5-year 
                                average of the available data 
                                from the Bureau of the Census 
                                of the Department of Commerce;
                                  (II) the unemployment rate is 
                                not less than 140 percent of 
                                the average unemployment rate 
                                for the United States or for 
                                the State in which such county 
                                is located, whichever is less, 
                                based on a 5-year average of 
                                the available data from the 
                                Secretary of Labor; or
                                  (III) there is located a 
                                difficult development area, as 
                                designated by the Secretary of 
                                Housing and Urban Development 
                                in accordance with section 
                                42(d)(5)(B)(iii) of the 
                                Internal Revenue Code of 1986, 
                                within Alaska, Hawaii, or any 
                                territory or possession of the 
                                United States outside the 48 
                                contiguous States.
                  (C) Redesignated area.--The term 
                ``redesignated area'' means any census tract 
                that ceases to be qualified under subparagraph 
                (A) and any nonmetropolitan county that ceases 
                to be qualified under subparagraph (B) for a 
                period of 3 years after the date on which the 
                census tract or nonmetropolitan county ceased 
                to be so qualified.
                  (D) Base closure area.--
                          (i) In general.--Subject to clause 
                        (ii), the term ``base closure area'' 
                        means--
                                  (I) lands within the external 
                                boundaries of a military 
                                installation that were closed 
                                through a privatization process 
                                under the authority of--
                                          (aa) the Defense Base 
                                        Closure and Realignment 
                                        Act of 1990 (part A of 
                                        title XXIX of division 
                                        B of Public Law 101-
                                        510; 10 U.S.C. 2687 
                                        note);
                                          (bb) title II of the 
                                        Defense Authorization 
                                        Amendments and Base 
                                        Closure and Realignment 
                                        Act (Public Law 100-
                                        526; 10 U.S.C. 2687 
                                        note);
                                          (cc) section 2687 of 
                                        title 10, United States 
                                        Code; or
                                          (dd) any other 
                                        provision of law 
                                        authorizing or 
                                        directing the Secretary 
                                        of Defense or the 
                                        Secretary of a military 
                                        department to dispose 
                                        of real property at the 
                                        military installation 
                                        for purposes relating 
                                        to base closures of 
                                        redevelopment, while 
                                        retaining the authority 
                                        to enter into a 
                                        leaseback of all or a 
                                        portion of the property 
                                        for military use;
                                  (II) the census tract or 
                                nonmetropolitan county in which 
                                the lands described in 
                                subclause (I) are wholly 
                                contained;
                                  (III) a census tract or 
                                nonmetropolitan county the 
                                boundaries of which intersect 
                                the area described in subclause 
                                (I); and
                                  (IV) a census tract or 
                                nonmetropolitan county the 
                                boundaries of which are 
                                contiguous to the area 
                                described in subclause (II) or 
                                subclause (III).
                          (ii) Limitation.--A census tract or 
                        nonmetropolitan county described in 
                        clause (i) shall be considered to be a 
                        base closure area for a period 
                        beginning on the date on which the 
                        Administrator designates such census 
                        tract or nonmetropolitan county as a 
                        base closure area and ending on the 
                        date on which the base closure area 
                        ceases to be a qualified census tract 
                        under subparagraph (A) or a qualified 
                        nonmetropolitan county under 
                        subparagraph (B) in accordance with the 
                        online tool prepared by the 
                        Administrator described under 
                        subsection (d)(7), except that such 
                        period may not be less than 8 years.
                          (iii) Definitions.--In this 
                        subparagraph:
                                  (I) Census tract.--The term 
                                ``census tract'' means a census 
                                tract delineated by the United 
                                States Bureau of the Census in 
                                the most recent decennial 
                                census that is not located in a 
                                nonmetropolitan county and does 
                                not otherwise qualify as a 
                                qualified census tract.
                                  (II) Nonmetropolitan 
                                county.--The term 
                                ``nonmetropolitan county'' 
                                means a county that was not 
                                located in a metropolitan 
                                statistical area (as defined in 
                                section 143(k)(2)(B) of the 
                                Internal Revenue Code of 1986) 
                                at the time of the most recent 
                                census taken for purposes of 
                                selecting qualified census 
                                tracts and does not otherwise 
                                qualify as a qualified 
                                nonmetropolitan county.
                  (E) Qualified disaster area.--
                          (i) In general.--Subject to clause 
                        (ii), the term ``qualified disaster 
                        area'' means any census tract or 
                        nonmetropolitan county located in an 
                        area where a major disaster has 
                        occurred or an area in which a 
                        catastrophic incident has occurred if 
                        such census tract or nonmetropolitan 
                        county ceased to be qualified under 
                        subparagraph (A) or (B), as applicable, 
                        during the period beginning 5 years 
                        before the date on which the President 
                        declared the major disaster or the 
                        catastrophic incident occurred.
                          (ii) Duration.--A census tract or 
                        nonmetropolitan county shall be 
                        considered to be a qualified disaster 
                        area under clause (i) only for the 
                        period of time ending on the date the 
                        area ceases to be a qualified census 
                        tract under subparagraph (A) or a 
                        qualified nonmetropolitan county under 
                        subparagraph (B), in accordance with 
                        the online tool prepared by the 
                        Administrator described under 
                        subsection (d)(7) and beginning--
                                  (I) in the case of a major 
                                disaster, on the date on which 
                                the President declared the 
                                major disaster for the area in 
                                which the census tract or 
                                nonmetropolitan county, as 
                                applicable, is located; or
                                  (II) in the case of a 
                                catastrophic incident, on the 
                                date on which the catastrophic 
                                incident occurred in the area 
                                in which the census tract or 
                                nonmetropolitan county, as 
                                applicable, is located.
                          (iii) Definitions.--In this 
                        subparagraph:
                                  (I) Major disaster.--The term 
                                ``major disaster'' means a 
                                major disaster declared by the 
                                President under section 401 of 
                                the Robert T. Stafford Disaster 
                                Relief and Emergency Assistance 
                                Act (42 U.S.C. 5170).
                                  (II) Other definitions.--The 
                                terms ``census tract'' and 
                                ``nonmetropolitan county'' have 
                                the meanings given such terms 
                                in subparagraph (D)(iii).
                  (F) Governor-designated covered area.--
                          (i) In general.--A ``Governor-
                        designated covered area'' means a 
                        covered area that the Administrator has 
                        designated by approving a petition 
                        described under clause (ii).
                          (ii) Petition.--For a covered area to 
                        receive a designation as a Governor-
                        designated covered area, the Governor 
                        of the State in which the covered area 
                        is wholly contained shall include such 
                        covered area in a petition to the 
                        Administrator requesting such a 
                        designation. In reviewing a request for 
                        designation included in such a 
                        petition, the Administrator may 
                        consider--
                                  (I) the potential for job 
                                creation and investment in the 
                                covered area;
                                  (II) the demonstrated 
                                interest of small business 
                                concerns in the covered area to 
                                be designated as a Governor-
                                designated covered area;
                                  (III) how State and local 
                                government officials have 
                                incorporated the covered area 
                                into an economic development 
                                strategy; and
                                  (IV) if the covered area was 
                                a HUBZone before becoming the 
                                subject of the petition, the 
                                impact on the covered area if 
                                the Administrator did not 
                                approve the petition.
                          (iii) Limitations.--Each calendar 
                        year, a Governor may submit not more 
                        than 1 petition described under clause 
                        (ii). Such petition shall include all 
                        covered areas in a State for which the 
                        Governor seeks designation as a 
                        Governor-designated covered area, 
                        except that the total number of covered 
                        areas included in such petition may not 
                        exceed 10 percent of the total number 
                        of covered areas in the State.
                          (iv) Certification.--If the 
                        Administrator grants a petition 
                        described under clause (ii), the 
                        Governor of the Governor-designated 
                        covered area shall, not less frequently 
                        than annually, submit data to the 
                        Administrator certifying that each 
                        Governor-designated covered area 
                        continues to meet the requirements of 
                        clause (v)(I).
                          (v) Definitions.--In this 
                        subparagraph:
                                  (I) Covered area.--The term 
                                ``covered area'' means an area 
                                in a State--
                                          (aa) that is located 
                                        outside of an urbanized 
                                        area, as determined by 
                                        the Bureau of the 
                                        Census;
                                          (bb) with a 
                                        population of not more 
                                        than 50,000; and
                                          (cc) for which the 
                                        average unemployment 
                                        rate is not less than 
                                        120 percent of the 
                                        average unemployment 
                                        rate of the United 
                                        States or of the State 
                                        in which the covered 
                                        area is located, 
                                        whichever is less, 
                                        based on the most 
                                        recent data available 
                                        from the American 
                                        Community Survey 
                                        conducted by the Bureau 
                                        of the Census.
                                  (II) Governor.--The term 
                                ``Governor'' means the chief 
                                executive of a State.
                                  (III) State.--The term 
                                ``State'' means each of the 
                                several States, the District of 
                                Columbia, the Commonwealth of 
                                Puerto Rico, the United States 
                                Virgin Islands, Guam, the 
                                Commonwealth of the Northern 
                                Mariana Islands, and American 
                                Samoa.
          (4) Qualified HUBZone small business concern.--The 
        term ``qualified HUBZone small business concern'' means 
        a HUBZone small business concern that has been 
        certified by the Administrator in accordance with the 
        procedures described in this section.
          (5) Native american small business concerns.--
                  (A) Alaska native corporation.--The term 
                ``Alaska Native Corporation'' has the same 
                meaning as the term ``Native Corporation'' in 
                section 3 of the Alaska Native Claims 
                Settlement Act (43 U.S.C. 1602).
                  (B) Alaska native village.--The term ``Alaska 
                Native Village'' has the same meaning as the 
                term ``Native village'' in section 3 of the 
                Alaska Native Claims Settlement Act (43 U.S.C. 
                1602).
                  (C) Indian reservation.--The term ``Indian 
                reservation''--
                          (i) has the same meaning as the term 
                        ``Indian country'' in section 1151 of 
                        title 18, United States Code, except 
                        that such term does not include--
                                  (I) any lands that are 
                                located within a State in which 
                                a tribe did not exercise 
                                governmental jurisdiction on 
                                the date of the enactment of 
                                this paragraph, unless that 
                                tribe is recognized after that 
                                date of the enactment by either 
                                an Act of Congress or pursuant 
                                to regulations of the Secretary 
                                of the Interior for the 
                                administrative recognition that 
                                an Indian group exists as an 
                                Indian tribe (part 83 of title 
                                25, Code of Federal 
                                Regulations); and
                                  (II) lands taken into trust 
                                or acquired by an Indian tribe 
                                after the date of the enactment 
                                of this paragraph if such lands 
                                are not located within the 
                                external boundaries of an 
                                Indian reservation or former 
                                reservation or are not 
                                contiguous to the lands held in 
                                trust or restricted status on 
                                that date of the enactment; and
                          (ii) in the State of Oklahoma, means 
                        lands that--
                                  (I) are within the 
                                jurisdictional areas of an 
                                Oklahoma Indian tribe (as 
                                determined by the Secretary of 
                                the Interior); and
                                  (II) are recognized by the 
                                Secretary of the Interior as 
                                eligible for trust land status 
                                under part 151 of title 25, 
                                Code of Federal Regulations (as 
                                in effect on the date of the 
                                enactment of this paragraph).
          (6) Agricultural commodity.--The term ``agricultural 
        commodity'' has the same meaning as in section 102 of 
        the Agricultural Trade Act of 1978 (7 U.S.C. 5602).
  (c) Eligible Contracts.--
          (1) Definitions.--In this subsection--
                  (A) the term ``contracting officer'' has the 
                meaning given that term in section 27(f)(5) of 
                the Office of Federal Procurement Policy Act 
                (41 U.S.C. 423(f)(5)); and
                  (B) the term ``full and open competition'' 
                has the meaning given that term in section 4 of 
                the Office of Federal Procurement Policy Act 
                (41 U.S.C. 403).
          (2) Authority of contracting officer.--
                  (A) Sole source contracts.--A contracting 
                officer may award sole source contracts under 
                this section to any qualified HUBZone small 
                business concern, if--
                          (i) the qualified HUBZone small 
                        business concern is determined to be a 
                        responsible contractor with respect to 
                        performance of such contract 
                        opportunity, and the contracting 
                        officer does not have a reasonable 
                        expectation that 2 or more qualified 
                        HUBZone small business concerns will 
                        submit offers for the contracting 
                        opportunity;
                          (ii) the anticipated award price of 
                        the contract (including options) will 
                        not exceed--
                                  (I) $7,000,000, in the case 
                                of a contract opportunity 
                                assigned a standard industrial 
                                classification code for 
                                manufacturing; or
                                  (II) $3,000,000, in the case 
                                of all other contract 
                                opportunities; and
                          (iii) in the estimation of the 
                        contracting officer, the contract award 
                        can be made at a fair and reasonable 
                        price.
                  (B) Restricted competition.--A contract 
                opportunity may be awarded pursuant to this 
                section on the basis of competition restricted 
                to qualified HUBZone small business concerns if 
                the contracting officer has a reasonable 
                expectation that not less than 2 qualified 
                HUBZone small business concerns will submit 
                offers and that the award can be made at a fair 
                market price.
                  (C) Appeals.--Not later than 5 days from the 
                date the Administration is notified of a 
                procurement officer's decision not to award a 
                contract opportunity under this section to a 
                qualified HUBZone small business concern, the 
                Administrator may notify the contracting 
                officer of the intent to appeal the contracting 
                officer's decision, and within 15 days of such 
                date the Administrator may file a written 
                request for reconsideration of the contracting 
                officer's decision with the Secretary of the 
                department or agency head.
          (3) Price evaluation preference in full and open 
        competitions.--
                  (A) In general.--Subject to subparagraph (B), 
                in any case in which a contract is to be 
                awarded on the basis of full and open 
                competition, the price offered by a qualified 
                HUBZone small business concern shall be deemed 
                as being lower than the price offered by 
                another offeror (other than another small 
                business concern), if the price offered by the 
                qualified HUBZone small business concern is not 
                more than 10 percent higher than the price 
                offered by the otherwise lowest, responsive, 
                and responsible offeror.
                  (B) Procurement of commodities.--For 
                purchases by the Secretary of Agriculture of 
                agricultural commodities, the price evaluation 
                preference shall be--
                          (i) 10 percent, for the portion of a 
                        contract to be awarded that is not 
                        greater than 25 percent of the total 
                        volume being procured for each 
                        commodity in a single invitation;
                          (ii) 5 percent, for the portion of a 
                        contract to be awarded that is greater 
                        than 25 percent, but not greater than 
                        40 percent, of the total volume being 
                        procured for each commodity in a single 
                        invitation; and
                          (iii) zero, for the portion of a 
                        contract to be awarded that is greater 
                        than 40 percent of the total volume 
                        being procured for each commodity in a 
                        single invitation.
                  (C) Procurement of commodities for 
                international food aid export operations.--The 
                price evaluation preference for purchases of 
                agricultural commodities by the Secretary of 
                Agriculture for export operations through 
                international food aid programs administered by 
                the Farm Service Agency shall be 5 percent on 
                the first portion of a contract to be awarded 
                that is not greater than 20 percent of the 
                total volume of each commodity being procured 
                in a single invitation.
                  (D) Treatment of preference.--A contract 
                awarded to a HUBZone small business concern 
                under a preference described in subparagraph 
                (B) shall not be counted toward the fulfillment 
                of any requirement partially set aside for 
                competition restricted to small business 
                concerns.
                  (E) Application to certain contracts.--The 
                requirements of subparagraph (A) shall apply to 
                an unrestricted order issued under an 
                unrestricted multiple award contract or the 
                unrestricted portion of a contract that is 
                partially set aside for competition restricted 
                to small business concerns.
          (4) Relationship to other contracting preferences.--A 
        procurement may not be made from a source on the basis 
        of a preference provided in paragraph (2) or (3), if 
        the procurement would otherwise be made from a 
        different source under section 4124 or 4125 of title 
        18, United States Code, or the Javits-Wagner-O'Day Act 
        (41 U.S.C. 46 et seq.).
  (d) Eligibility Requirements; Enforcement.--
          (1) Certification.--In order to be eligible for 
        certification by the Administrator as a qualified 
        HUBZone small business concern, a HUBZone small 
        business concern shall submit documentation to the 
        Administrator stating that--
                  (A) at the time of certification and at each 
                examination conducted pursuant to paragraph 
                (4), the principal office of the concern is 
                located in a HUBZone and not fewer than 35 
                percent of its employees reside in a HUBZone;
                  (B) the concern will attempt to maintain the 
                applicable employment percentage under 
                subparagraph (A) during the performance of any 
                contract awarded to such concern on the basis 
                of a preference provided under subsection (c); 
                and
                  (C) the concern will ensure that the 
                requirements of section 46 are satisfied with 
                respect to any subcontract entered into by such 
                concern pursuant to a contract awarded under 
                this section.
          (2) Verification.--In carrying out this section, the 
        Administrator shall establish procedures relating to--
                  (A) the filing, investigation, and 
                disposition by the Administration of any 
                challenge to the eligibility of a HUBZone small 
                business concern to receive assistance under 
                this section (including a challenge, filed by 
                an interested party, relating to the veracity 
                of documentation provided to the Administration 
                by such a concern under paragraph (1)); and
                  (B) verification by the Administrator of the 
                accuracy of any documentation provided by a 
                HUBZone small business concern under paragraph 
                (1).
          (3) Timing.--The Administrator shall verify the 
        eligibility of a HUBZone small business concern using 
        the procedures described in paragraph (2) within a 
        reasonable time and not later than 60 days after the 
        date on which the Administrator receives sufficient and 
        complete documentation from a HUBZone small business 
        concern under paragraph (1).
          (4) Recertification.--Not later than 3 years after 
        the date that such HUBZone small business concern was 
        certified as a qualified HUBZone small business 
        concern, and every 3 years thereafter, the 
        Administrator shall verify the accuracy of any 
        documentation provided by a HUBZone small business 
        concern under paragraph (1) to determine if such 
        HUBZone small business concern remains a qualified 
        HUBZone small business concern.
          (5) Examinations.--The Administrator shall conduct 
        program examinations of qualified HUBZone small 
        business concerns, using a risk-based analysis to 
        select which concerns are examined, to ensure that any 
        concern examined meets the requirements of paragraph 
        (1).
          (6) Loss of certification.--A HUBZone small business 
        concern that, based on the results of an examination 
        conducted pursuant to paragraph (5) no longer meets the 
        requirements of paragraph (1), shall have 30 days to 
        submit documentation to the Administrator to be 
        eligible to be certified as a qualified HUBZone small 
        business concern. During the 30-day period, such 
        concern may not compete for or be awarded a contract 
        under this section. If such concern fails to meet the 
        requirements of paragraph (1) by the last day of the 
        30-day period, the Administrator shall not certify such 
        concern as a qualified HUBZone small business concern.
          (7) Hubzone online tool.--
                  (A) In general.--The Administrator shall 
                develop a publicly accessible online tool that 
                depicts HUBZones. Such online tool shall be 
                updated--
                          (i) with respect to HUBZones 
                        described under subparagraphs (A) and 
                        (B) of subsection (b)(3), beginning on 
                        January 1, 2020, and every 5 years 
                        thereafter;
                          (ii) with respect to a HUBZone 
                        described under subsection (b)(3)(C), 
                        immediately after the area becomes, or 
                        ceases to be, a redesignated area; and
                          (iii) with respect to HUBZones 
                        described under subparagraphs (D), (E), 
                        and (F) of subsection (b)(3), 
                        immediately after an area is designated 
                        as a base closure area, qualified 
                        disaster area, or Governor-designated 
                        covered area, respectively.
                  (B) Data.--The online tool required under 
                subparagraph (A) shall clearly and 
                conspicuously provide access to the data used 
                by the Administrator to determine whether or 
                not an area is a HUBZone in the year in which 
                the online tool was prepared.
                  (C) Notification of update.--The 
                Administrator shall include in the online tool 
                a notification of the date on which the online 
                tool, and the data used to create the online 
                tool, will be updated.
          (8) List of qualified hubzone small business 
        concerns.--The Administrator shall establish and 
        publicly maintain on the internet a list of qualified 
        HUBZone small business concerns that shall--
                  (A) to the extent practicable, include the 
                name, address, and type of business with 
                respect to such concern;
                  (B) be updated by the Administrator not less 
                than annually; and
                  (C) be provided upon request to any Federal 
                agency or other entity.
          (9) Provision of data.--Upon the request of the 
        Administrator, the Secretary of Labor, the 
        Administrator of the Federal Emergency Management 
        Agency, the Secretary of Housing and Urban Development, 
        and the Secretary of the Interior (or the Assistant 
        Secretary for Indian Affairs), shall promptly provide 
        to the Administrator such information as the 
        Administrator determines to be necessary to carry out 
        this subsection.
          (10) 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 
        ``qualified HUBZone small business concern'' for 
        purposes of this section shall be subject to liability 
        for fraud, including section 1001 of title 18, United 
        States Code, and sections 3729 through 3733 of title 
        31, United States Code.
  (e) Performance Metrics.--
          (1) In general.--Not later than 1 year after the date 
        of the enactment of this subsection, the Administrator 
        shall publish performance metrics designed to measure 
        the success of the HUBZone program established under 
        this section in meeting the program's objective of 
        promoting economic development in economically 
        distressed areas (as defined in section 7(m)(11)).
          (2) Collecting and managing hubzone data.--The 
        Administrator shall develop processes to incentivize 
        each regional office of the Administration to collect 
        and manage data on HUBZones within the geographic area 
        served by such regional office.
          (3) Report.--Not later than 90 days after the last 
        day of each fiscal year, the Administrator shall submit 
        to the Committee on Small Business and Entrepreneurship 
        of the Senate and the Committee on Small Business of 
        the House of Representatives a report analyzing the 
        data from the performance metrics established under 
        this subsection and including--
                  (A) the number of HUBZone small business 
                concerns that lost certification as a qualified 
                HUBZone small business concern because of the 
                results of an examination performed under 
                subsection (d)(5); and
                  (B) the number of those concerns that did not 
                submit documentation to be recertified under 
                subsection (d)(6).
  (f) Authorization of Appropriations.--There is authorized to 
be appropriated to carry out the program established by this 
section $10,000,000 for each of fiscal years 2020 through 2025.

           *       *       *       *       *       *       *


                         XVIII. MINORITY VIEWS

    The Small Business Administration's (SBA) Historically 
Underutilized Business Zone (HUBZone) program is one of four 
small business federal contracting programs, and the only one 
that assists small businesses based on their geographic 
location. When the government invests in small businesses, 
small businesses invest in their communities. They create local 
jobs and buy local products. That is a driving force behind the 
HUBZone program.
    The program works to ``promote job growth, capital 
investment, and economic development to historically 
underutilized business zones . . . to small businesses located 
in these economically distressed communities.''\1\
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    \1\Small Business Administration, Office of the HUBZone Program: 
https://www.sba.gov/about-sba/sba-locations/headquarters-offices/
office-hubzone-program.
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    To level the playing field for small business competing in 
the federal market, Congress has established an annual 3% goal 
for contract dollars to HUBZone small businesses. 
Unfortunately, most federal agencies fall short of meeting the 
HUBZone goals. In FY 22, the federal government sent 2.6% of 
spend to HUBZone small businesses, and saw a reduction in the 
number of HUBZone smalls participating in the federal 
market.\2\ The HUBZone prime contracting goal has never been 
met government-wide.
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    \2\FY2022 Small Business Procurement Scorecard: https://
www.sba.gov/agency-scorecards/scorecard.html?agency=GW&year=2022.
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    There are three contracting authorities that federal 
agencies can use on certified HUBZone small businesses: (a) set 
aside the contract exclusively for HUBZone competition; (b) 
sole source the contract directly to a qualified HUBZone when 
certain conditions are met; and (c) provide a price preference 
to HUBZone firms who have bid on work in full-and-open 
competitions. The preference is applied when a qualified 
HUBZone small business bids on a contract. The firms bid is 
then ``deemed as being lower than the price offered by another 
offeror (other than another small business concern), if the 
price offered by the qualified HUBZone small business concern 
is not more than 10% higher than the price offered by the 
otherwise lowest, responsive, and responsible offeror.''
    This bill will provide additional clarification to federal 
agencies on how and when to apply the preference. Currently, 
the HUBZone price evaluation preference is not widely used 
because some agencies have incorrectly interpreted that the 
preference does not apply to orders, only standalone contracts.
    As the Federal Government increasingly drives its spending 
through these vehicles, significant opportunities for HUBZone 
small businesses are being lost because the HUBZone price 
evaluation is not being applied in the award of task orders--as 
Congress originally intended.
            Sincerely,
                                        Nydia M. Velazquez,
                                                    Ranking Member.