I 

112TH CONGRESS 

2D SESSION H. R. 3850 

To amend the Small Business Act with respect to goals for procurement 

contracts awarded to small business concerns, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 31, 2012 

Mr. GRAVES of Missouri (for himself, Mr. OWENS, and Mr. SCHILLING) introduced the following bill; which was referred to the Committee on Small 

Business, and in addition to the Committee on Oversight and Government Reform, for a period to be subsequently determined by the Speaker, 

in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Small Business Act with respect to goals 

for procurement contracts awarded to small business concerns, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Government Efficiency 

5 through Small Business Contracting Act of 2012’’. 


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1 SEC. 2. GOALS FOR PROCUREMENT CONTRACTS AWARDED 

2 TO SMALL BUSINESS CONCERNS. 

3 (a) IN GENERAL.—Section 15(g) of the Small Busi4 ness Act (15 U.S.C. 644(g)) is amended by striking the 

5 subsection enumerator and inserting the following: 

6 ‘‘(g) GOALS FOR PROCUREMENT CONTRACTS

7 AWARDED TO SMALL BUSINESS CONCERNS.—’’. 

8 (b) GOVERNMENTWIDE GOALS.—Paragraph (1) of 

9 section 15(g) of such Act (15 U.S.C. 644(g)) is amended 

10 to read as follows: 

11 ‘‘(1) GOVERNMENTWIDE GOALS.—The Presi12 dent shall annually establish Governmentwide goals 

13 for procurement contracts awarded to small business 

14 concerns, small business concerns owned and con15 trolled by service-disabled veterans, qualified 

16 HUBZone small business concerns, small business 

17 concerns owned and controlled by socially and eco18 nomically disadvantaged individuals, and small busi19 ness concerns owned and controlled by women in ac20 cordance with the following: 

21 ‘‘(A) The Governmentwide goal for partici22 pation by small business concerns shall be es23 tablished at not less than 25 percent of the 

24 total value of all prime contract awards for each 

25 fiscal year and 40 percent of the total value of 

26 all subcontract awards for each fiscal year. 


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1 ‘‘(B) The Governmentwide goal for partici2 pation by small business concerns owned and 

3 controlled by service-disabled veterans shall be 

4 established at not less than 3 percent of the 

5 total value of all prime contract and at not less 

6 than 3 percent of the total value of all sub7 contract awards for each fiscal year. 

8 ‘‘(C) The Governmentwide goal for partici9 pation by qualified HUBZone small business 

10 concerns shall be established at not less than 3 

11 percent of the total value of all prime contract 

12 and at not less than 3 percent of the total value 

13 of all subcontract awards for each fiscal year. 

14 ‘‘(D) The Governmentwide goal for partici15 pation by small business concerns owned and 

16 controlled by socially and economically dis17 advantaged individuals shall be established at 

18 not less than 5 percent of the total value of all 

19 prime contract and at not less than 5 percent 

20 of the total value of all subcontract awards for 

21 each fiscal year. 

22 ‘‘(E) The Governmentwide goal for partici23 pation by small business concerns owned and 

24 controlled by women shall be established at not 

25 less than 5 percent of the total value of all 


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1 prime contract and at not less than 5 percent 

2 of the total value of all subcontract awards for 

3 each fiscal year.’’. 

4 (c) AGENCY GOALS.—Paragraph (2) of section 15(g) 

5 of such Act (15 U.S.C. 644(g)) is amended to read as fol6 lows: 

7 ‘‘(2) AGENCY GOALS.— 

8 ‘‘(A) ESTABLISHMENT.—The head of each 

9 Federal agency shall annually establish, for the 

10 agency that individual heads, goals for procure11 ment contracts awarded to small business con12 cerns, small business concerns owned and con13 trolled by service-disabled veterans, qualified 

14 HUBZone small business concerns, small busi15 ness concerns owned and controlled by socially 

16 and economically disadvantaged individuals, and 

17 small business concerns owned and controlled 

18 by women. 

19 ‘‘(B) RELATIONSHIP TO GOVERNMENT20 WIDE GOALS.— 

21 ‘‘(i) SCOPE.—The goals established by 

22 the head of a Federal agency under sub23 paragraph (A) shall be in the same format 

24 as the goals established by the President 

25 under paragraph (1) and shall address 


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1 both prime contract and subcontract 

2 awards. 

3 ‘‘(ii) REQUIREMENT TO MEET OR EX4 CEED GOVERNMENTWIDE GOALS.—With 

5 respect to each goal for a fiscal year estab6 lished under subparagraph (A) for a cat7 egory of small business concern, the par8 ticipation percentage applicable to such 

9 goal may not be less than the participation 

10 percentage applicable to the Government11 wide goal for such fiscal year established 

12 under paragraph (1) for such category. 

13 ‘‘(C) CONSULTATION REQUIRED.— 

14 ‘‘(i) IN GENERAL.—In establishing 

15 goals under subparagraph (A), the head of 

16 each Federal agency shall consult with the 

17 Administrator. 

18 ‘‘(ii) DISAGREEMENTS.—If the Ad19 ministrator and the head of a Federal 

20 agency fail to agree on a goal established 

21 under subparagraph (A), the disagreement 

22 shall be submitted to the Administrator for 

23 Federal Procurement Policy for final deter24 mination. 


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1 ‘‘(D) PLAN FOR ACHIEVING GOALS.—After 

2 establishing goals under subparagraph (A) for a 

3 fiscal year, the head of each Federal agency 

4 shall develop a plan for achieving such goals, 

5 which shall apportion responsibilities among the 

6 employees of such agency having procurement 

7 powers. 

8 ‘‘(E) EXPANDED PARTICIPATION.—In es9 tablishing goals under subparagraph (A), the 

10 head of each Federal agency shall make a con11 sistent effort to annually expand participation 

12 by small business concerns from each industry 

13 category in procurement contracts of such agen14 cy, including participation by small business 

15 concerns owned and controlled by service-dis16 abled veterans, qualified HUBZone small busi17 ness concerns, small business concerns owned 

18 and controlled by socially and economically dis19 advantaged individuals, and small business con20 cerns owned and controlled by women. 

21 ‘‘(F) CONSIDERATION.—The head of each 

22 Federal agency, in attempting to attain ex23 panded participation under subparagraph (E), 

24 shall consider— 


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1 ‘‘(i) contracts awarded as the result of 

2 unrestricted competition; and 

3 ‘‘(ii) contracts awarded after competi4 tion restricted to eligible small business 

5 concerns under this section and under the 

6 program established under section 8(a). 

7 ‘‘(G) COMMUNICATION REGARDING

8 GOALS.— 

9 ‘‘(i) IMPORTANCE OF ACHIEVING

10 GOALS.—Each procurement employee or 

11 program manager described in clause (ii) 

12 shall communicate to the subordinates of 

13 the procurement employee or program 

14 manager the importance of achieving goals 

15 established under subparagraph (A). 

16 ‘‘(ii) PROCUREMENT EMPLOYEES OR

17 PROGRAM MANAGERS DESCRIBED.—A pro18 curement employee or program manager 

19 described in this clause is a senior procure20 ment executive, senior program manager, 

21 or Director of Small and Disadvantaged 

22 Business Utilization of a Federal agency 

23 having contracting authority.’’. 

24 (d) ENFORCEMENT; DETERMINATIONS OF THE

25 TOTAL VALUE OF CONTRACT AWARDS.—Section 15(g) of 


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1 the Small Business Act (15 U.S.C. 644(g)), as amended 

2 by this Act, is further amended by adding at the end the 

3 following: 

4 ‘‘(3) ENFORCEMENT.—If the Administrator 

5 does not issue the report required in paragraph (2) 

6 on or before the date that is 120 days after the end 

7 of the prior fiscal year, the Administrator may not 

8 carry out or establish any pilot program until the 

9 date on which the Administrator issues the report. 

10 ‘‘(4) DETERMINATIONS OF THE TOTAL VALUE

11 OF CONTRACT AWARDS.—For purposes of the goals 

12 established under paragraphs (1) and (2), the total 

13 value of contract awards for a fiscal year may not 

14 be determined in a manner that excludes the value 

15 of a contract based on— 

16 ‘‘(A) where the contract is awarded; 

17 ‘‘(B) where the contract is performed; 

18 ‘‘(C) whether the contract is mandated by 

19 Federal law to be performed by an entity other 

20 than a small business concern; 

21 ‘‘(D) whether funding for the contract is 

22 made available in an appropriations Act, if the 

23 contract is subject to competition in the Con24 tract Act; or 


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1 ‘‘(E) whether the contract is subject to the 

2 Federal Acquisition Regulation.’’. 

3 SEC. 3. REPORTING ON GOALS FOR PROCUREMENT CON4 TRACTS AWARDED TO SMALL BUSINESS CON5 CERNS. 

6 Subsection (h) of section 15 of the Small Business 

7 Act (15 U.S.C. 644) is amended to read as follows: 

8 ‘‘(h) REPORTING ON GOALS FOR PROCUREMENT

9 CONTRACTS AWARDED TO SMALL BUSINESS CON10 CERNS.— 

11 ‘‘(1) AGENCY REPORTS.—At the conclusion of 

12 each fiscal year, the head of each Federal agency 

13 shall submit to the Administrator a report describ14 ing— 

15 ‘‘(A) the extent of the participation by 

16 small business concerns, small business con17 cerns owned and controlled by veterans (includ18 ing service-disabled veterans), qualified 

19 HUBZone small business concerns, small busi20 ness concerns owned and controlled by socially 

21 and economically disadvantaged individuals, and 

22 small business concerns owned and controlled 

23 by women in the procurement contracts of such 

24 agency during such fiscal year; 


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1 ‘‘(B) whether the agency achieved the 

2 goals established for the agency under sub3 section (g)(2)(A) with respect to such fiscal 

4 year; and 

5 ‘‘(C) any justifications for a failure to 

6 achieve such goals. 

7 ‘‘(2) REPORTS BY ADMINISTRATOR.—Not later 

8 than 60 days after receiving a report from each Fed9 eral agency under paragraph (1) with respect to a 

10 fiscal year, the Administrator shall submit to the 

11 President and Congress a report that includes— 

12 ‘‘(A) a copy of each report submitted to 

13 the Administrator under paragraph (1); 

14 ‘‘(B) a determination of whether each goal 

15 established by the President under subsection 

16 (g)(1) for such fiscal year was achieved; 

17 ‘‘(C) a determination of whether each goal 

18 established by the head of a Federal agency 

19 under subsection (g)(2)(A) for such fiscal year 

20 was achieved; 

21 ‘‘(D) the reasons for any failure to achieve 

22 a goal established under paragraph (1) or 

23 (2)(A) of subsection (g) for such fiscal year and 

24 a description of actions planned by the applica25 ble agency to address such failure, except that 


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1 the Administrator must concur with each reme2 diation plan; 

3 ‘‘(E) for the Federal Government and each 

4 Federal agency, an analysis of the number and 

5 dollar amount of prime contracts awarded dur6 ing such fiscal year to— 

7 ‘‘(i) small business concerns— 

8 ‘‘(I) in the aggregate; 

9 ‘‘(II) through sole source con10 tracts; 

11 ‘‘(III) through competitions re12 stricted to small business concerns; 

13 and 

14 ‘‘(IV) through unrestricted com15 petition; 

16 ‘‘(ii) small business concerns owned 

17 and controlled by service-disabled vet18 erans— 

19 ‘‘(I) in the aggregate; 

20 ‘‘(II) through sole source con21 tracts; 

22 ‘‘(III) through competitions re23 stricted to small business concerns; 

24 ‘‘(IV) through competitions re25 stricted to small business concerns 


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1 owned and controlled by service-dis2 abled veterans; and 

3 ‘‘(V) through unrestricted com4 petition; 

5 ‘‘(iii) qualified HUBZone small busi6 ness concerns— 

7 ‘‘(I) in the aggregate; 

8 ‘‘(II) through sole source con9 tracts; 

10 ‘‘(III) through competitions re11 stricted to small business concerns; 

12 ‘‘(IV) through competitions re13 stricted to qualified HUBZone small 

14 business concerns; 

15 ‘‘(V) through unrestricted com16 petition where a price evaluation pref17 erence was used; and 

18 ‘‘(VI) through unrestricted com19 petition where a price evaluation pref20 erence was not used; 

21 ‘‘(iv) small business concerns owned 

22 and controlled by socially and economically 

23 disadvantaged individuals— 

24 ‘‘(I) in the aggregate; 


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1 ‘‘(II) through sole source con2 tracts; 

3 ‘‘(III) through competitions re4 stricted to small business concerns; 

5 ‘‘(IV) through competitions re6 stricted to small business concerns 

7 owned and controlled by socially and 

8 economically disadvantaged individ9 uals; and 

10 ‘‘(V) through unrestricted com11 petition; 

12 ‘‘(v) small business concerns owned by 

13 an Alaska Native Corporation— 

14 ‘‘(I) in the aggregate; 

15 ‘‘(II) through sole source con16 tracts; 

17 ‘‘(III) through competitions re18 stricted to small business concerns; 

19 ‘‘(IV) through competitions re20 stricted to small business concerns 

21 owned and controlled by socially and 

22 economically disadvantaged individ23 uals; and 

24 ‘‘(V) through unrestricted com25 petition; and 


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1 ‘‘(vi) small business concerns owned 

2 and controlled by women— 

3 ‘‘(I) in the aggregate; 

4 ‘‘(II) through competitions re5 stricted to small business concerns; 

6 ‘‘(III) through competitions re7 stricted using the authority under sec8 tion 8(m)(2); 

9 ‘‘(IV) through competitions re10 stricted using the authority under sec11 tion 8(m)(2) and in which the waiver 

12 authority under section 8(m)(3) was 

13 used; and 

14 ‘‘(V) through unrestricted com15 petition; and 

16 ‘‘(F) for the Federal Government and each 

17 Federal agency, the number, dollar amount, 

18 and distribution with respect to the North 

19 American Industry Classification System of 

20 subcontracts awarded during such fiscal year to 

21 small business concerns, small business con22 cerns owned and controlled by service-disabled 

23 veterans, qualified HUBZone small business 

24 concerns, small business concerns owned and 

25 controlled by socially and economically disVerDate Mar 15 2010 04:05 Feb 01, 2012 Jkt 019200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H3850.IH H3850

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1 advantaged individuals, and small business con2 cerns owned and controlled by women.’’. 

3 SEC. 4. SENIOR EXECUTIVES. 

4 (a) TRAINING.—Programs established for the devel5 opment of senior executives under section 3396(a) of title 

6 5, United States Code, shall include training with respect 

7 to Federal procurement requirements, including con8 tracting requirements under the Small Business Act (15 

9 U.S.C. 631 et seq.). 

10 (b) SABBATICALS.—If a Federal agency does not 

11 achieve, with respect to a fiscal year, a goal established 

12 by the head of such agency under section 15(g)(2)(A) of 

13 the Small Business Act (15 U.S.C. 644(g)(2)(A)), a senior 

14 executive within that agency may not be granted, during 

15 the succeeding fiscal year, a sabbatical under section 

16 3396(c) of title 5, United States Code. 

17 (c) INCENTIVE AWARDS.—If a Federal agency does 

18 not achieve, with respect to a fiscal year, a goal established 

19 by the head of such agency under section 15(g)(2)(A) of 

20 the Small Business Act (15 U.S.C. 644(g)(2)(A)), a senior 

21 executive within that agency may not receive, during the 

22 succeeding fiscal year, any incentive award under sub23 chapter I of chapter 45 of title 5, United States Code. 


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1 (d) SENIOR EXECUTIVE DEFINED.—In this section, 

2 the term ‘‘senior executive’’ has the meaning given that 

3 term in section 3132(a) of title 5, United States Code. 

Æ 


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