Small Business Opportunity Preservation Act of 1996

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Small Business 
Opportunity Preservation Act of 1996''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Statement of policy.
Sec. 3. Definition of contract bundling.
Sec. 4. Assessing proposed contract bundling.
Sec. 5. Fostering contractor teaming.
Sec. 6. Reporting of bundled contract opportunities.
Sec. 7. Evaluating subcontract participation in awarding contracts.
Sec. 8. Improved notice of subcontracting opportunities.
Sec. 9. Deadlines for issuance of regulations.

SEC. 2. STATEMENT OF POLICY.

    (a) Sustaining Small Business Participation in Government 
Contracting Despite Contract Bundling.--Section 2 of the Small Business 
Act (15 U.S.C. 631) is amended by adding at the end the following new 
subsection:
    ``(j) In complying with the statement of congressional policy 
expressed in subsection (a)(2)(B), relating to fostering the 
participation of small business concerns in the contracting 
opportunities of the Government, each Federal agency, to the maximum 
practicable extent, shall--
            ``(1) comply with the provisions of this Act expressing 
        congressional intent to foster the participation of small 
        business concerns as prime contractors, especially section 15;
            ``(2) structure its contracting requirements to facilitate 
        competition by and among small business concerns, taking all 
        reasonable steps to eliminate obstacles to their participation;
            ``(3) avoid the bundling of contract requirements that 
        preclude small business participation as prime contractors; and
            ``(4) comply with the provisions of this Act expressing 
        congressional intent to foster the participation of small 
        business concerns as subcontractors (including suppliers), 
        especially section 8(d).''.
    (b) Conforming Amendment.--Section 2(a) of the Small Business Act 
(15 U.S.C. 631(a)) is amended--
            (1) in the first sentence, by striking ``The essence'' and 
        inserting ``(1) The essence''; and
            (2) by striking the fifth sentence and inserting the 
        following:
    ``(2) It is the declared policy of the Congress that the government 
should aid, counsel, assist, and protect, in so far as is possible, the 
interests of small business concerns in order to--
            ``(A) preserve free competitive enterprise;
            ``(B) insure that a fair proportion of the total purchases 
        for property or services (including construction) be placed 
        with small business concerns as prime contractors or 
        subcontractors (including suppliers);
            ``(C) insure that a fair proportion of the total sales of 
        Government property be made to small business concerns; and
            ``(D) maintain and strengthen the overall economy of the 
        Nation.''.

SEC. 3. DEFINITION OF CONTRACT BUNDLING.

    Section 3 of the Small Business Act (15 U.S.C. 632) is amended by 
adding at the end the following new subsection:
    ``(o) For the purposes of this Act, the terms `contract bundling', 
`bundled contract', and `bundling of contract requirements' mean the 
practice of consolidating two or more procurement requirements of a 
type that were previously solicited and awarded as separate smaller 
contracts into a single contract solicitation likely to be unsuitable 
for award to a small business concern because of--
            ``(1) the diversity and size of the elements of performance 
        specified;
            ``(2) the aggregate dollar value of the anticipated award;
            ``(3) the geographical dispersion of the contract 
        performance sites; or
            ``(4) any combination of the factors described in 
        paragraphs (1), (2), and (3).''.

SEC. 4. ASSESSING PROPOSED CONTRACT BUNDLING.

    (a) In General.--Section 15(b) of the Small Business Act (15 U.S.C. 
644(b)) is amended to read as follows:
    ``(b)(1)(A) To the maximum extent practicable, procurement 
strategies used by the various agencies having contracting authority 
shall facilitate the maximum participation of small business concerns 
as prime contractors.
    ``(B) Whenever a proposed procurement strategy reflects a bundling 
of contract requirements, such proposed procurement strategy shall--
            ``(i) identify specifically the benefits anticipated from 
        bundling the contract requirements;
            ``(ii) assess the specific impediments to participation by 
        small business concerns as prime contractors and specify 
        actions designed to maximize small business participation as 
        subcontractors (including suppliers) at various tiers; and
            ``(iii) include a specific determination that the 
        anticipated benefits of the proposed bundled contract justify 
        its use.
    ``(2)(A) The Administration, acting through one of its Procurement 
Center Representatives (or such other employee of the Administration as 
may be designated), is empowered to review for a period of 30 days a 
proposed solicitation for compliance with the requirements of this 
subsection and subsection (a). The 30-day review shall occur 
concurrently with other reviews required prior to the issuance of the 
solicitation.
    ``(B) Within 15 days after receipt from a procurement activity of a 
Federal agency of any proposed contract solicitation that in the 
opinion of the representative would constitute a bundling of contract 
requirements, the representative (or other designee of the 
Administration) shall--
            ``(i) request the head of the procurement activity to 
        furnish recommendations to modify the procurement strategy and 
        the proposed solicitation for the purpose of increasing the 
        probability of participation by small businesses as prime 
        contractors; or
            ``(ii) recommend to the procurement activity an alternative 
        procurement strategy that would increase the probability of 
        participation by small businesses as prime contractors.
    ``(C) Whenever the Procurement Center Representative and the head 
of the procurement activity fail to agree to a revision of the 
procurement strategy (or the proposed solicitation) under subparagraph 
(B), the matter may be submitted by the Administrator to the head of 
the agency in which the procurement activity is located for 
determination.
    ``(D) Any determination by an agency head to issue a contract 
solicitation with no revision of the procurement strategy (or the 
proposed solicitation) shall be supported by findings and an assessment 
addressing the matters described in subparagraph (E). Such 
determination and findings shall be submitted to the Administrator.
    ``(E) The findings accompanying a determination made pursuant to 
subparagraph (D) shall include--
            ``(i) the estimated benefits of the proposed bundling of 
        contract requirements, including improved performance of 
        programmatic objectives to be met by the contract, savings in 
        terms of acquisition costs and contract administration costs, 
        and how such estimated benefits were calculated;
            ``(ii) specific adverse impacts on the participation of 
        small business concerns as prime contractors, especially small 
        business concerns that are performing (or have previously 
        performed) contracts of the type that are proposed for 
        inclusion in the solicitation for the bundled contract;
            ``(iii) specific actions to foster the participation of 
        small businesses in the performance of the bundled contract as 
        subcontractors (including suppliers) at various tiers; and
            ``(iv) such other matters as the agency head considers 
        appropriate.
    ``(F) Unless otherwise authorized by the head of the agency for 
urgent and compelling reasons, the solicitation shall not be issued 
until the determination under subparagraph (D) has been made by such 
agency head and submitted to the Administrator.''.
    (b) Conforming Amendment.--Section 15(a) of the Small Business Act 
(15 U.S.C. 644(a)) is amended by striking the third, fourth, fifth, and 
sixth sentences.
    (c) Responsibilities of Agency Small Business Advocates.--Section 
15(k) of the Small Business Act (15 U.S.C. 644(k)) is amended--
            (1) by redesignating paragraphs (5), (6), (7), (8), and (9) 
        as paragraphs (6), (7), (8), (9), and (10), respectively; and
            (2) by adding after paragraph (4) the following new 
        paragraph (5):
            ``(5) identify and report on proposed solicitations that 
        represent bundling of contract requirements, and work with the 
        agency acquisition officials and the Administration to revise 
        the procurement strategies for such proposed solicitations to 
        increase the probability of participation by small businesses 
        as prime contractors, or to facilitate small business 
        participation as subcontractors and suppliers, if a 
        solicitation for a bundled contract is to be issued,''.

SEC. 5. FOSTERING CONTRACTOR TEAMING.

    Section 15(b) of the Small Business Act (15 U.S.C. 644(b)), as 
amended by section 2, is further amended by adding at the end the 
following new paragraph:
            ``(3)(A) A small business concern intending to submit an 
        offer for an anticipated bundled contract may propose to the 
        Administration for approval a team of subcontractors meeting 
        the requirements of subparagraph (B) without regard to the 
        requirements of subsection (o) or the regulations of the 
        Administration regarding findings of affiliation or control, 
        either direct or indirect.
            ``(B) A subcontracting team proposed under subparagraph (A) 
        may include--
                    ``(i) other small business concerns; and
                    ``(ii) business concerns other than small business 
                concerns, whose aggregate participation may not 
                represent more than 25 percent of the anticipated total 
                value of the contract.
            ``(C) Any subcontracting team proposed under subparagraph 
        (A) and approved by the Administrator shall be subject to such 
        alternative requirements regarding subcontracting and 
        affiliation or control as may be specified by the 
        Administrator.''.

SEC. 6. REPORTING OF BUNDLED CONTRACT OPPORTUNITIES.

    (a) Data Collection Required.--The Federal Procurement Data System 
described in section 6(d)(4)(A) of the Office of Federal Procurement 
Policy Act (41 U.S.C. 405(d)(4)(A)) shall be modified to collect data 
regarding contract bundling. The data shall reflect the determination 
made by the employee of the Small Business Administration exercising 
the responsibilities of section 15(b) of the Small Business Act (15 
U.S.C. 644(b)) (as amended by section 3) regarding whether a particular 
solicitation constitutes contract bundling.
    (b) Definitions.--For purposes of this section, the term ``contract 
bundling'' has the meaning given such term in section 3(o) of the Small 
Business Act (15 U.S.C. 632(o)) (as added by section 2).

SEC. 7. EVALUATING SUBCONTRACT PARTICIPATION IN AWARDING CONTRACTS.

    (a) In General.--Section 8(d)(4) of the Small Business Act (15 
U.S.C. 637(d)(4)) is amended by striking ``(4)(A)'' and all that 
follows through the end of subparagraph (D) and inserting the 
following:
    ``(4)(A) Each solicitation for the award of a contract (or 
subcontract) with an anticipated value of $1,000,000, in the case of a 
contract for construction (including repair, alteration, or demolition 
of existing construction) or $500,000, in the case of a contract for 
all other types of services or supplies, that can reasonably be 
expected to offer opportunities for subcontracting in the business 
judgment of the contracting officer, shall--
            ``(i) in the case of a contract to be awarded using 
        competitive procedures, include solicitation provisions 
        described in subparagraph (B);
            ``(ii) in the case of a contract to be awarded using 
        procedures other than competitive procedures, require 
        submission and acceptance of a subcontracting plan pursuant to 
        subparagraph (C); and
            ``(iii) in the case of a subcontract award, require 
        submission and acceptance of a subcontracting plan pursuant to 
        subparagraph (D).
    ``(B) With respect to subcontract participation by the various 
types of small business concerns listed in paragraph (1), the 
solicitation shall--
            ``(i) specify, whenever practicable, minimum percentages 
        for subcontract participation by the various types of small 
        business concerns listed in paragraph (1), determined in the 
        exercise of business judgment by the contracting officer 
        considering the matters described in subparagraph (F)(iii), 
        that must be met for an offer to be considered responsive;
            ``(ii) assign a weight of not less than the numerical 
        equivalent of 5 percent of the total of all evaluation factors 
        to a contract award evaluation factor that recognizes 
        incrementally higher subcontract participation rates in excess 
        of the minimum percentages, if any;
            ``(iii) require the successful offeror to submit a 
        subcontracting plan that incorporates the information 
        prescribed in paragraph (6); and
            ``(iv) assign a significant weight in the evaluation of 
        past performance by offerors in attaining subcontract 
        participation goals.
    ``(C)(i) The apparent successful offeror for a contract to be 
awarded using procedures other than competitive procedures shall 
negotiate with the contracting officer--
            ``(I) separate goals for subcontract participation by the 
        various types of small business concerns listed in paragraph 
        (1); and
            ``(II) a plan for the attainment of the goals that 
        incorporates the information prescribed in paragraph (6).
    ``(ii) The goals and plan shall reflect the maximum practicable 
opportunity for participation of small business concerns in the 
performance of the contract, considering the matters described in 
subparagraph (F)(iii). If, within the time limits prescribed in the 
Federal Acquisition Regulation, the apparent successful offeror fails 
to negotiate such goals and subcontracting plan, such offeror shall be 
ineligible for award of the contract.
    ``(D) An apparent subcontract awardee shall negotiate with the 
prime contractor (or higher-tier subcontractor) a goal for the 
participation of the various types of small business concerns listed in 
paragraph (1), and a plan for the attainment of those goals which 
incorporates the information prescribed in paragraph (6). Such goals 
and plan shall reflect the maximum practicable opportunity for the 
participation of such small business concerns in the performance of the 
contract, considering the matters described in subparagraph 
(F)(iii).''.
    (b) Conforming Amendments.--Section 8(d) of the Small Business Act 
(15 U.S.C. 637(d)) is amended as follows:
            (1) Paragraph (5) is amended to read as follows:
    ``(5) [Reserved.]''.
            (2) Paragraph (6) is amended--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``or (5)''; and
                    (B) in subparagraph (D), by striking ``or (5)''.
            (3) Paragraph (7) is amended by striking ``(4), (5),'' and 
        inserting ``(4)''.
            (4) Paragraph (10) is amended--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``(4), (5),'' and inserting ``(4)''; and
                    (B) in subparagraph (B), by striking ``paragraphs 
                (4) and (5)'' and inserting ``paragraph (4)''.

SEC. 8. IMPROVED NOTICE OF SUBCONTRACTING OPPORTUNITIES.

    (a) Use of the Commerce Business Daily Authorized.--Section 8 of 
the Small Business Act (15 U.S.C. 637) is amended by adding at the end 
the following new subsection:
    ``(k) Notices of Subcontracting Opportunities.--
            ``(1) In general.--Notices of subcontracting opportunities 
        may be submitted for publication in the Commerce Business Daily 
        by--
                    ``(A) a business concern awarded a contract by an 
                executive agency subject to subsection (e)(1)(C); and
                    ``(B) a business concern which is a subcontractor 
                or supplier (at any tier) to such contractor having a 
                subcontracting opportunity in excess of $10,000.
            ``(2) Contents 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.''.
    (b) Regulations Required.--The Federal Acquisition Regulation shall 
be amended to provide uniform implementation of the amendments made by 
this section.
    (c) Conforming Amendment.--Section 8(e)(1)(C) of the Small Business 
Act (15 U.S.C. 637(e)(1)(C)) is amended by striking ``$25,000'' each 
place it appears and inserting ``$100,000''.

SEC. 9. DEADLINES FOR ISSUANCE OF REGULATIONS.

    (a) Proposed Regulations.--Proposed amendments to the Federal 
Acquisition Regulation or proposed Small Business Administration 
regulations shall be published not later than 120 days after the date 
of enactment of this Act for the purpose of obtaining public comment 
pursuant to section 22 of the Office of Federal Procurement Policy Act 
(41 U.S.C. 418b) or chapter 5 of title 5, United States Code, as 
appropriate. The public shall be afforded not less than 60 days to 
submit comments.
    (b) Final Regulations.--Final regulations shall be published not 
later than 270 days after the date of enactment of this Act. The 
effective date for such regulations shall be at least 30 days after the 
date of publication.

Summary: Small Business Opportunity Preservation Act of 1996 - Amends the Small Business Act to state as a policy under such Act that each Federal agency: (1) foster the participation of small businesses as prime contractors. (2) structure its contracting requirements to facilitate competition by and among small businesses, (3) avoid contract bundling. And (4) comply with requirements intended to foster the participation of small businesses as subcontractors. Requires procurement strategies used by Federal agencies to facilitate the maximum participation of small businesses as prime contractors. Requires specific information to be included in any proposed procurement strategy that reflects a bundling of contract requirements, including impediments caused to small businesses as prime contractors. Authorizes the Small Business Administration (SBA) to review proposed contract solicitations for compliance with such requirements and to act within 15 days toward the modification of procurement strategies to increase the probability of participation by small businesses as prime contractors. Requires a determination not to modify a procurement strategy to be supported by specified findings and an assessment which addresses matters concerning contract bundling and its impacts on small businesses. Authorizes a small business intending to submit an offer for an anticipated bundled contract to propose to the SBA for approval a team of small business subcontractors to perform the contract. Requires the Federal Procurement Data System to be modified to collect data regarding contract bundling. Requires, in a solicitation for the award of construction contracts of $1 million or other types of contracts for $500,000, the inclusion of provisions which specify minimum percentages of participation by various types of small businesses in subcontracting under such contracts. Requires the successful offeror for such a contract to negotiate with the contracting officer in order to meet specified goals for subcontract participation by small businesses. Authorizes notice of subcontracting opportunities to be submitted for publication in the Commerce Business Daily by the appropriate prime contractors. Provides deadlines for the publication of proposed amendments made to the Federal Acquisition Regulation or to SBA regulations.