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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9832 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                                H. R. 9832

To make improvements to Federal contracting practices for disadvantaged 
               small businesses, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 25, 2024

 Mr. Ivey (for himself, Mr. Horsford, and Mrs. Beatty) introduced the 
following bill; which was referred to the Committee on Small Business, 
and in addition to the Committee on Oversight and Accountability, 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 make improvements to Federal contracting practices for disadvantaged 
               small businesses, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Create 
Opportunities and Networks for Talented, Ready, and Able Contractors To 
Succeed Act of 2024'' or the ``CONTRACTS Act of 2024''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Database on contract awards to disadvantaged small businesses.
Sec. 4. Outreach and recruitment to expand participation of 
                            disadvantaged small businesses in Federal 
                            contracting.
Sec. 5. Determination of the date of commencement of participation in 
                            the 8(a) program.
Sec. 6. Inclusion of concerns owned by HBCU business entities in 
                            definition of socially and economically 
                            disadvantaged small business concern.
Sec. 7. Agency OSDBU technical assistance.
Sec. 8. Federal disadvantaged small business task force.
Sec. 9. Requirements relating to prompt payment, progress payments, and 
                            performance-based payments.
Sec. 10. Reports on subcontractor engagement.
Sec. 11. Modifications to subcontracting plans to enhance opportunities 
                            for small business concerns owned and 
                            controlled by socially and economically 
                            disadvantaged individuals.
Sec. 12. Diversity and inclusion reporting requirements for covered 
                            contractors.
Sec. 13. Chief Counsel for Advocacy report to Congress.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) 8(a) program.--The term ``8(a) Program'' means the 
        program described under section 8(a) of the Small Business Act 
        (15 U.S.C. 637(a)).
            (2) Administration; administrator.--The terms 
        ``Administration'' and ``Administrator'' mean the Small 
        Business Administration and the Administrator thereof, 
        respectively.
            (3) Agency OSDBU.--The term ``Agency OSDBU'' means the 
        Office of Small and Disadvantaged Business Utilization 
        (established pursuant to section 15(k) of the Small Business 
        Act (15 U.S.C. 644(k))) of a Federal agency.
            (4) Demographic classifications.--The term ``demographic 
        classifications'' means classifications by race, gender, 
        veteran status, or ethnicity.
            (5) Disadvantaged small business.--The term ``disadvantaged 
        small business'' means--
                    (A) a socially and economically disadvantaged small 
                business concern, as defined in section 8(a)(4)(A) of 
                the Small Business Act (15 U.S.C. 637(a)(4)(A));
                    (B) a small business concern owned and controlled 
                by socially and economically disadvantaged individuals, 
                as defined in section 8(d)(3)(C) of the Small Business 
                Act (15 U.S.C. 637(d)(3)(C)); or
                    (C) a small business concern owned and controlled 
                by a socially and economically disadvantaged individual 
                covered under section 47113 of title 49, United States 
                Code.
            (6) MBDA under secretary.--The term ``MBDA Under 
        Secretary'' means the Under Secretary of Commerce for Minority 
        Business Development of the Minority Business Development 
        Agency (established under section 100002 of the Minority 
        Business Development Act of 2021 (15 U.S.C. 9501)).
            (7) Small business concern.--The term ``small business 
        concern'' has the meaning given under section 3 of the Small 
        Business Act (15 U.S.C. 632).
            (8) Small business development center.--The term ``small 
        business development center'' has the meaning given in section 
        3 of the Small Business Act (15 U.S.C. 632).

SEC. 3. DATABASE ON CONTRACT AWARDS TO DISADVANTAGED SMALL BUSINESSES.

    (a) Database Required.--The head of each Agency OSDBU shall 
establish and maintain a public online database that identifies each 
contract awarded by the Federal agency under the 8(a) Program. Such 
database shall include the following:
            (1) The aggregate number and dollar value of contracts 
        awarded to socially and economically disadvantaged small 
        business concern (as defined in section 8(a)(4)(A) of the Small 
        Business Act (15 U.S.C. 637(a)(4)(A))) during the 3-year period 
        preceding the date of the enactment of Public Law 95-507, 
        disaggregated by race and ethnic group.
            (2) The aggregate number and dollar value of contracts 
        awarded to disadvantaged small businesses pursuant to Public 
        Law 95-507 during the 10-year period preceding the date of the 
        enactment of this Act, disaggregated by race and ethnic group.
            (3) Data on offers for Federal contracts submitted by a 
        disadvantaged small business which has previously been awarded 
        a Federal contract or subcontract with the assistance of an 
        Agency OSDBU during such 10-year period.
    (b) Factual and Historical Record of Instances of Discrimination 
Against Disadvantaged Small Businesses.--
            (1) Record required.--The Administrator shall establish a 
        program under which the Administrator shall direct Federal 
        departments and agencies, in coordination with institutions of 
        higher education and other research organizations, to develop 
        and periodically update a factual and historical record of 
        instances of discrimination against disadvantaged small 
        businesses desiring award of a Federal contract or subcontract 
        from such Federal department or agency.
            (2) Elements.--The record described in paragraph (1) shall 
        include the following:
                    (A) Operational barriers that disadvantaged small 
                businesses have historically experienced in Federal 
                contracting and subcontracting.
                    (B) Qualitative and quantitative trends in Federal 
                contracting with disadvantaged small businesses, 
                disaggregated by North American Industry Classification 
                System code.
                    (C) Recommendations for Governmentwide reforms to 
                increase participation by disadvantaged small 
                businesses in Federal contracts and the estimated 
                qualitative and quantitative effects of such 
                recommendations.
    (c) Uses of Database and Record.--The database required under 
subsection (a) or a record developed under subsection (b) may be used--
            (1) by the Administrator and heads of Federal departments 
        and agencies to develop procurement policies, practices, and 
        strategies that reduce discrimination, establish contracting 
        and subcontracting goals for disadvantaged small businesses, 
        enhance contract compliance monitoring, and increase 
        disadvantaged small business participation in Federal 
        contracting and subcontracting by mechanisms that may include 
        dividing large contracts into multiple smaller contracts, 
        establishing mentor-mentee relationships between businesses, 
        and pairing disadvantaged small businesses with larger 
        businesses for partnering in contract fulfillment;
            (2) by the head of a Federal department or agency to 
        substantiate an award of a contract under the 8(a) Program;
            (3) by the head of a Federal department or agency to 
        substantiate any contracting preference program for 
        disadvantaged small businesses administered by the Federal 
        agency;
            (4) by a disadvantaged small business that seeks an award 
        of a contract under the 8(a) Program to develop a narrative of 
        discrimination; and
            (5) by a disadvantaged small business that requires proof 
        of discrimination for purpose of a judicial or administrative 
        action or by a person assisting a disadvantaged small business 
        for that purpose.

SEC. 4. OUTREACH AND RECRUITMENT TO EXPAND PARTICIPATION OF 
              DISADVANTAGED SMALL BUSINESSES IN FEDERAL CONTRACTING.

    (a) Outreach and Recruitment.--The Administrator, in coordination 
with the MBDA Under Secretary, shall engage in outreach and education 
to expand participation of disadvantaged small businesses in Federal 
contracting. Such efforts may include the following:
            (1) Convening events to engage and inform disadvantaged 
        small businesses, including--
                    (A) business, professional, and industry-specific 
                conferences;
                    (B) informational fairs; and
                    (C) networking events.
            (2) Providing briefings and electronic or printed materials 
        to disadvantaged small businesses and to national and local 
        business associations and organizations that represent 
        disadvantaged small businesses about Federal contracting and 
        subcontracting opportunities and procedures, including 
        opportunities to participate in mentor-protegee programs of 
        Federal agencies.
            (3) Partnering with organizations that assist disadvantaged 
        small businesses, historically Black colleges and universities, 
        minority-serving institutions, alumni networks of such colleges 
        and universities and institutions, small business development 
        centers, and other organizations that have the ability to 
        facilitate relationships between prospective disadvantaged 
        small business subcontractors and prime contractors seeking 
        subcontractors.
            (4) Creating a publicly accessible online directory of 
        disadvantaged small businesses that are subcontractors or that 
        seek to become subcontractors, including details about the 
        North American Industry Classification System code of such 
        businesses, the goods and services provided by such businesses, 
        and past performance information of such subcontractors.
            (5) Creating a publicly accessible online directory of 
        available Federal contracting and subcontracting opportunities 
        that, in the determination of the Administrator, are 
        appropriate for disadvantaged small businesses based on factors 
        that may include the size or scope of the contract or 
        subcontract, the North American Industry Classification System 
        code of the business, or other relevant factors.
    (b) Agency OSDBUs.--Pursuant to guidelines established by the 
Administrator, the Director of each Agency OSDBU shall engage in 
outreach and education to expand participation of disadvantaged small 
businesses in contracts and subcontracts with the Federal agency. Such 
activities shall include the following:
            (1) Facilitating interactions between prospective 
        disadvantaged small business subcontractors and prime 
        contractors seeking subcontractors.
            (2) Establishing a system to facilitate matching prime 
        contractors seeking subcontractors with prospective 
        disadvantaged small business subcontractors, including through 
        the development of mentor-mentee relationships.
            (3) Advertising subcontracting opportunities through media 
        and business or trade association channels that are effective 
        in reaching prospective disadvantaged small business 
        subcontractors that provide the goods or services for which the 
        advertisement is placed.
            (4) Directing contracting officers to provide to prime 
        contractors seeking subcontractors a list of prospective 
        disadvantaged small business subcontractors that provide the 
        needed goods or services.
            (5) Creating a publicly accessible online directory of 
        disadvantaged small businesses that are eligible to participate 
        in Federal contracting and subcontracting opportunities that 
        includes the North American Industry Classification System 
        codes of such businesses.

SEC. 5. DETERMINATION OF THE DATE OF COMMENCEMENT OF PARTICIPATION IN 
              THE 8(A) PROGRAM.

    Section 7(j)(10)(C) of the Small Business Act (15 U.S.C. 
636(j)(10)(C)) is amended--
            (1) by redesignating clause (ii) as clause (iii); and
            (2) by inserting after clause (i) the following:
                    ``(ii) A small business concern that has commenced 
                participation in the Program established under this 
                paragraph on or after the date of the enactment of this 
                clause, shall be considered to have begun such 
                participation one year before the date on which such 
                concern has attained, in the determination of the 
                Administrator, the full benefits of participation in 
                the Program. Such determination may include 
                consideration of the date on which such concern was 
                first awarded a contract or subcontract because of 
                participation of such concern in the Program.''.

SEC. 6. INCLUSION OF CONCERNS OWNED BY HBCU BUSINESS ENTITIES IN 
              DEFINITION OF SOCIALLY AND ECONOMICALLY DISADVANTAGED 
              SMALL BUSINESS CONCERN.

    (a) HBCU Business Entity Defined.--Section 8(a) of the Small 
Business Act (15 U.S.C. 637(a)) is amended by adding at the end the 
following new paragraph:
            ``(21) HBCU business entity.--In this subsection, the term 
        `HBCU business entity' means an entity owned and operated by a 
        part B institution (as defined under section 322 of the Higher 
        Education Act of 1965 (20 U.S.C. 1061); commonly referred to as 
        a `historically Black college or university') for purposes of--
                    ``(A) participation in interstate commerce; or
                    ``(B) participation in the program described under 
                section 8(a).''.
    (b) Inclusion in Definition of Socially and Economically 
Disadvantaged Small Business Concern.--Section 8(a)(4) of the Small 
Business Act (15 U.S.C. 637(a)(4)) is amended--
            (1) in subparagraph (A)--
                    (A) in clause (i)--
                            (i) in subclause (I), by striking the comma 
                        at the end and inserting a semicolon;
                            (ii) in subclause (II), by striking ``, 
                        or'' and inserting a semicolon;
                            (iii) in subclause (III), by striking ``, 
                        or'' and inserting ``; or''; and
                            (iv) by adding at the end the following new 
                        subclause:
                                    ``(IV) a HBCU business entity; 
                                or''; and
                    (B) in clause (ii)--
                            (i) in subclause (I), by striking the comma 
                        at the end and inserting a semicolon;
                            (ii) in subclause (II), by striking ``, 
                        or'' and inserting a semicolon;
                            (iii) in subclause (III), by striking the 
                        period at the end and inserting ``; or''; and
                            (iv) by adding at the end the following new 
                        subclause:
                                    ``(IV) a HBCU business entity.''; 
                                and
            (2) in subparagraph (B)--
                    (A) in clause (i), by striking the comma at the end 
                and inserting a semicolon;
                    (B) in clause (ii), by striking ``, or'' and 
                inserting a semicolon;
                    (C) in clause (iii), by striking the period at the 
                end and inserting ``; or''; and
                    (D) by adding at the end the following new 
                subclause:
                                    ``(IV) a HBCU business entity 
                                described in subparagraph (A)(i)(IV) or 
                                subparagraph (A)(ii)(IV).''.
    (c) Inclusion in HUBZone Small Business Concern Definition.--
Section 31(b)(2) of the Small Business Act (15 U.S.C. 657a(b)(2))--
            (1) in subparagraph (E)(ii), by striking ``or'' at the end;
            (2) in subparagraph (F)(iii), by striking the period at the 
        end and inserting ``; or''; and
            (3) by adding at the end the following new subparagraph:
                    ``(G) a small business concern--
                            ``(i) that is wholly owned by one or more 
                        HBCU business entities (as defined in section 
                        8(a)(21)), or by a corporation that is wholly 
                        owned by one or more HBCU business entities; or
                            ``(ii) that is owned in part by one or more 
                        HBCU business entities, or by a corporation 
                        that is wholly owned by one or more HBCU 
                        business entities, if all other owners are 
                        either United States citizens or small business 
                        concerns.''.

SEC. 7. AGENCY OSDBU TECHNICAL ASSISTANCE.

    Section 15(k) of the Small Business Act (15 U.S.C. 644(k)) is 
amended--
            (1) in paragraph (16)--
                    (A) by redesignating subparagraphs (A) through (D) 
                as subparagraphs (B) through (E), respectively; and
                    (B) by inserting before subparagraph (B) (as so 
                redesignated) the following:
                    ``(A) the training provided by the Director under 
                paragraph (23) in the most recently completed fiscal 
                year;'';
            (2) in paragraph (21), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new paragraphs:
            ``(22) shall provide or contract with an entity (which may 
        include a small business development center) to provide, in 
        coordination with the Under Secretary of Commerce for Minority 
        Business Development of the Minority Business Development 
        Agency (established under section 100002 of the Minority 
        Business Development Act of 2021), technical assistance to 
        small business concerns owned and controlled by socially and 
        economically disadvantaged individuals (as defined under 
        section 8(d)(3)(C)) or socially and economically disadvantaged 
        small business concerns (as defined in section 8(a)(4)(A)) for 
        the development of individualized, specific narratives of 
        discrimination; and
            ``(23) shall provide or contract with an entity (which may 
        include a small business development center) to provide 
        training to prepare small business concerns owned and 
        controlled by socially and economically disadvantaged 
        individuals or socially and economically disadvantaged small 
        business concerns to become better situated to submit an offer 
        for a contract offered under section 8(a).''.

SEC. 8. FEDERAL DISADVANTAGED SMALL BUSINESS TASK FORCE.

    (a) Establishment.--Not later than 4 months after the date of the 
enactment of this Act, the President shall establish a task force (in 
this section referred to as the ``Task Force'') to--
            (1) make recommendations to increase opportunities for 
        disadvantaged small businesses in Federal contracting and 
        subcontracting;
            (2) coordinate and optimize participation by disadvantaged 
        small business in Federal contracting and subcontracting, 
        including by--
                    (A) attempting to eliminate any discrimination 
                against such businesses; and
                    (B) removing any barriers to participation such 
                participation;
            (3) encourage compliance by prime contractors with the 
        requirements of covered Executive orders;
            (4) expand outreach for Federal contracting and 
        subcontracting opportunities to disadvantaged small businesses;
            (5) enhance strategies to match disadvantaged small 
        businesses with prime contractors; and
            (6) recommend policies or revisions to policies relating to 
        Federal contracting and subcontracting for disadvantaged small 
        businesses.
    (b) Membership.--The members of the Task Force shall include:
            (1) The MBDA Under Secretary, who shall also serve as the 
        chair of the Task Force.
            (2) The Administrator of the Small Business Administration.
            (3) The Administrator of the Office of Federal Procurement 
        Policy within the Office of Management and Budget.
            (4) The Director of the Domestic Policy Council.
            (5) The Administrator of General Services.
            (6) The Secretary of Defense.
            (7) The Secretary of Transportation.
            (8) The Administrator of the National Aeronautics and Space 
        Administration.
            (9) The Secretary of the Treasury.
            (10) The Secretary of Labor.
            (11) The Secretary of Homeland Security.
            (12) The Secretary of Housing and Urban Development.
            (13) The Secretary of Agriculture.
            (14) The heads of such other Federal agencies or offices as 
        the President may designate.
    (c) Meetings.--The Task Force shall meet not later than 3 months 
after the date of establishment and not less frequently than once every 
3 months thereafter until the termination date. To the extent 
practicable, each meeting of the Task Force shall include a 
presentation by at least one representative from an institution of 
higher education (as defined in section 101 of the Higher Education Act 
of 1965 (20 U.S.C. 1001)) or other research organization with expertise 
in matters related to--
            (1) the duties of the Task Force;
            (2) the legal basis for the processes and findings of the 
        Task Force;
            (3) historical or current discrimination in Federal 
        contracting against disadvantaged small businesses; or
            (4) potential remedies to historical or current 
        discrimination in Federal contracting against disadvantaged 
        small businesses.
    (d) Duties.--The duties of the Task Force shall include determining 
the following:
            (1) Best practices among Federal agencies to promote 
        participation in Federal contracting and subcontracting for 
        disadvantaged small businesses, including practices described 
        in section 4.
            (2) The needs of disadvantaged small businesses that desire 
        to participate in the 8(a) Program and any contracting programs 
        for disadvantaged small businesses administered by a Federal 
        agency.
            (3) Methods and initiatives to expand the participation of 
        disadvantaged small businesses in Federal contracting and 
        subcontracting, including by unbundling large contracts into 
        separate smaller contracts, by increasing flexibility for such 
        businesses to demonstrate eligibility for Federal contracts and 
        subcontracts and to demonstrate past performance of a same or 
        similar contract, and by enforcing compliance by prime 
        contractors with the requirements of covered Executive orders.
            (4) Methods and initiatives to expand access to capital, 
        credit, surety bonds, loan guarantees, financial training, and 
        credit counseling for disadvantaged small businesses.
            (5) Strategies to improve the compliance of Federal 
        agencies with contracting and subcontracting objectives set 
        forth in the Executive Order 13985 titled ``Advancing Racial 
        Equity and Support for Underserved Communities Through the 
        Federal Government'' (86 Fed. Reg. 7009), including the 
        following:
                    (A) For Federal agencies that fail to meet such 
                objectives--
                            (i) opportunities for training of 
                        contracting officers on how to increase the 
                        number of contracts awarded to disadvantaged 
                        small businesses; and
                            (ii) commencing a study led by the 
                        Inspector General for such Federal agency to 
                        determine the causes of such failure, evaluate 
                        disadvantaged small business participation in 
                        prime contracts, and make recommendations for 
                        improvement.
                    (B) For Federal agencies that meet such objectives, 
                incentives to assist such Federal agencies to exceed 
                such objectives.
    (e) Reports.--
            (1) Activities and findings report.--Not later than 4 
        months after the first meeting date of the Task Force, and 
        biannually thereafter, the chair of the Task Force shall submit 
        to Congress a report on the activities and findings of the Task 
        Force and any recommendations to increase participation of 
        disadvantaged small businesses in Federal contracting and 
        subcontracting.
            (2) Disparity study report.--Not later than 12 months after 
        the first meeting date of the Task Force, the chair of the Task 
        Force shall submit to Congress a report on the results of a 
        study on disadvantaged small businesses that includes--
                    (A) a quantitative and qualitative analysis of the 
                disadvantaged small businesses that are eligible to 
                perform Federal contracts and subcontracts that were 
                offered during the 5-year period beginning on the date 
                of the establishment of the Task Force under this 
                section;
                    (B) the number and the North American Industry 
                Classification System code of each such business that 
                submitted an offer (or bid) for a contracting or 
                subcontracting opportunity during such period, 
                including information regarding contracts and 
                subcontracts that each such business was previously 
                awarded;
                    (C) the number of such businesses that were awarded 
                such Federal contracts and subcontracts; and
                    (D) any conclusions regarding the presence, 
                absence, or extent of discrimination against, or 
                underrepresentation of, disadvantaged small businesses 
                (disaggregated by demographic classification) in 
                Federal contracting and subcontracting.
    (f) Termination Date.--The Task Force established under this 
section shall terminate on the date that is 10 years after the first 
meeting date of the Task Force.
    (g) Covered Executive Order Defined.--In this section, the term 
``covered Executive Order'' means the following:
            (1) Executive Order 13985, titled ``Advancing Racial Equity 
        and Support for Underserved Communities Through the Federal 
        Government'' (January 20, 2021).
            (2) Executive Order 14035, titled ``Diversity, Equity, 
        Inclusion, and Accessibility in the Federal Workforce'' (June 
        25, 2021).
            (3) Executive Order 14091, titled ``Further Advancing 
        Racial Equity and Support for Underserved Communities Through 
        The Federal Government'' (February 16, 2023).

SEC. 9. REQUIREMENTS RELATING TO PROMPT PAYMENT, PROGRESS PAYMENTS, AND 
              PERFORMANCE-BASED PAYMENTS.

    (a) Disclosures for Payments on Certain Contracts.--
            (1) In general.--Chapter 39 of title 31, United States 
        Code, is amended by inserting after section 3905 the following:

``SEC. 3906. DISCLOSURES FOR PROMPT PAYMENTS ON CERTAIN CONTRACTS.

    ``(a) In General.--Each covered contract shall include a clause 
that requires the prime contractor to include in each subcontract 
entered into by the prime contractor and a subcontractor for the 
purpose of performing such covered contract--
            ``(1) a payment clause which obligates the prime contractor 
        to pay the subcontractor (at any tier) for satisfactory 
        performance under its subcontract within 14 calendar days of 
        receipt of payment from the agency; and
            ``(2) an interest penalty clause which obligates the prime 
        contractor to pay to the subcontractor (at any tier) an 
        interest penalty on amounts due in the case of each payment not 
        made in accordance with the payment clause described in 
        paragraph (1)--
                    ``(A) for the period beginning on the day after the 
                required payment date and ending on the date on which 
                payment of the amount due is made; and
                    ``(B) computed at the rate specified by section 
                3902(a) of this title.
    ``(b) Covered Contract Defined.--In this section, the term `covered 
contract' means a contract awarded by the head of an agency to a prime 
contractor that is not a disadvantaged small business (as defined in 
the CONTRACTS Act of 2024) with a proposed value greater than the 
simplified acquisition threshold.''.
            (2) Clerical amendment.--The table of contents for chapter 
        39 of title 31, United States Code, is amended by inserting 
        after the item relating to section 3905 the following:

``3906. Disclosures for payments on certain contracts.''.
    (b) Disclosures; Reports; Evaluations.--
            (1) Disclosure.--The head of a Federal agency shall include 
        in any contract terms, and in any modification to such 
        contract, a requirement that a prime contractor disclose to 
        each potential subcontractor that is a disadvantaged small 
        business--
                    (A) whether the prime contractor is receiving 
                progress payments or performance-based payments under 
                such contract; and
                    (B) whether the prime contractor will provide 
                progress payments to a subcontractor for such contract.
            (2) Acknowledgment.--The prime contractor shall ensure that 
        each potential subcontractor in receipt of a disclosure 
        described in paragraph (1) submits to such prime contractor a 
        signed acknowledgment of receipt of such disclosure.
            (3) Subcontracting reports.--A prime contractor for a 
        Federal contract shall include in any subcontracting reports 
        required to be submitted under Section 8(d)(6)(E) of the Small 
        Business Act (15 U.S.C. 637(d)(6)(E)) verification of the 
        timely remittance of any payments to each subcontractor of such 
        prime contractor.
            (4) Performance evaluations.--The head of a Federal agency 
        shall include in any contract performance evaluation of a prime 
        contractor for such contract an evaluation of the prime 
        contractor's compliance with the requirements of this 
        subsection and the requirements of section 3906 of title 31, 
        United States Code.
            (5) Subsequent contract ineligibility.--If a prime 
        contractor submits an offer for a subsequent contract to the 
        head of a Federal agency through a sealed bid or negotiated 
        acquisition proposal and such head determines such contractor 
        is not in compliance with paragraph (1), such head may not 
        award the subsequent contract to such contractor--
                    (A) until such contractor is in compliance with 
                paragraph (1), as determined by such head; and
                    (B) unless such head determines that such award is 
                in the national interest.

SEC. 10. REPORTS ON SUBCONTRACTOR ENGAGEMENT.

    (a) In General.--Section 8(d) of the Small Business Act (15 U.S.C. 
637(d)) is amended by adding at the end the following new paragraph:
            ``(18) Reports on subcontractor engagement.--
                    ``(A) In general.--Each prime contractor that is 
                not a disadvantaged small business that has been 
                awarded a major prime contract shall submit to the head 
                of the Federal agency that awarded such contract an 
                annual report on subcontracts awarded pursuant to such 
                contract, including--
                            ``(i) the total number of subcontracts 
                        awarded under the contract;
                            ``(ii) the number of subcontracts and a 
                        description of such subcontracts awarded to 
                        disadvantaged small businesses, disaggregated 
                        by demographic characteristics, including the 
                        North American Industry Classification System 
                        code for each such business;
                            ``(iii) the total dollar value of payments 
                        made to subcontractors; and
                            ``(iv) the total dollar value of payments 
                        made to disadvantaged small businesses, 
                        disaggregated by demographic characteristics.
                    ``(B) Definitions.--In this paragraph:
                            ``(i) CONTRACTS act of 2024 definitions.--
                        The terms `demographic characteristics' 
                        and`disadvantaged small business' have the 
                        meanings given, respectively, in the CONTRACTS 
                        Act of 2024.
                            ``(ii) Major prime contract.--The term 
                        `major prime contract' means--
                                    ``(I) the 50 highest dollar value 
                                prime contracts of a Federal agency; 
                                and
                                    ``(II) each contract of a Federal 
                                agency that has a total dollar value 
                                greater than or equal to 
                                $10,000,000.''.
    (b) Applicability.--This section and the amendments made by this 
section shall apply with respect to a major prime contract (as defined 
in section 8(d)(18) of the Small Business Act (15 U.S.C. 637(d))) 
entered into on or after the date of the enactment of this section.

SEC. 11. MODIFICATIONS TO SUBCONTRACTING PLANS TO ENHANCE OPPORTUNITIES 
              FOR SMALL BUSINESS CONCERNS OWNED AND CONTROLLED BY 
              SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.

    (a) In General.--Each covered person that is required to submit a 
subcontracting plan under paragraph (4) or (5) of section 8(d) of the 
Small Business Act (15 U.S.C. 637(d)) for a contract shall update such 
subcontracting plan to include the following:
            (1) The names, addresses, phone numbers, types of business, 
        and North American Industrial Classification System code of the 
        small business concerns owned and controlled by socially and 
        economically disadvantaged individuals, disaggregated by 
        demographic characteristics, that were considered or solicited 
        as subcontractors.
            (2) With respect to such concerns that were considered or 
        solicited but not included in the updated subcontracting plan, 
        the reasons for the decision not to include such concerns.
            (3) Information on the process and efforts of the covered 
        person in developing such subcontracting plan, including--
                    (A) the actions taken by the covered person to 
                identify, solicit, and provide outreach to small 
                business concerns owned and controlled by socially and 
                economically disadvantaged individuals for possible 
                inclusion in its subcontracting plan;
                    (B) the information provided by the covered person 
                to such concerns about subcontracting opportunities 
                under the contract;
                    (C) the means by which the subcontractors that were 
                included in the subcontracting plan were selected by 
                the covered person; and
                    (D) the directories or lists of small business 
                concerns owned and controlled by socially and 
                economically disadvantaged individuals, websites and 
                website search tools, business or professional 
                associations, industry databases, and other resources 
                that the covered person consulted or used to identify 
                such concerns for possible inclusion in the 
                subcontracting plan.
            (4) A description of the plans of the covered person to--
                    (A) increase the number of disadvantaged small 
                businesses in the subcontracting plan for subsequent 
                years of contract performance; and
                    (B) increase the dollar amount under the contract 
                allocated for goods and services provided by such 
                concerns.
    (b) Enforcement.--
            (1) Compliance with subcontracting plan.--A covered person 
        described in subsection (a) that is awarded a prime contract 
        and granted a modification of a contract by the head of a 
        Federal agency under such subsection shall remain in compliance 
        with the terms of the updated subcontracting plan during the 
        term of performance of the contract before receiving any 
        amounts related to such modification.
            (2) Subsequent contract ineligibility.--If a covered person 
        described in paragraph (1) submits an offer for a subsequent 
        contract to such head of a Federal agency through a sealed bid 
        or negotiated acquisition proposal and such head determines 
        such covered person is not in compliance with a subcontracting 
        plan described in subsection (a), such head may not award the 
        subsequent contract to such contractor--
                    (A) until such covered person is in compliance with 
                subsection (a), as determined by such head; and
                    (B) unless such head determines that such award is 
                in the national interest.
            (3) Subsequent contract offer scores.--
                    (A) Adjustment to score.--If a covered person 
                described in paragraph (1) submits an offer for a 
                subsequent contract to such head of a Federal agency 
                through a sealed bid or negotiated acquisition 
                proposal, the evaluation score of the contracting 
                officer given to such offer shall be adjusted as 
                follows:
                            (i) For a covered person that achieved 
                        subcontractor diversity in the performance of 
                        the prior contract, such score shall be 
                        increased by one point.
                            (ii) For a covered person that failed to 
                        achieve subcontractor diversity in the 
                        performance of the prior contract, such score 
                        shall be decreased by one point.
                    (B) Subcontractor diversity determination.--For 
                purposes of this paragraph, the contracting officer 
                that awarded the covered person a contract under 
                subsection (a) shall make a determination as to whether 
                the covered person achieved subcontractor diversity 
                using the information in the subcontracting plan of the 
                covered person and the standards used by such 
                contracting officer to evaluation subcontractor 
                diversity.
    (c) Accountability.--The appropriate head of a Federal agency shall 
consider the performance of a contracting officer of responsibilities 
under this section in any evaluation of the performance of the 
contracting officer, including such contracting officer's--
            (1) collection and analysis of prime contractor data to 
        assess subcontractor diversity (as described in subsection 
        (b)(3)(B));
            (2) failure to identify a covered person's failure to 
        achieve subcontractor diversity or to comply with an applicable 
        subcontracting plan; and
            (3) efforts for monitoring and determinations regarding the 
        receipt of payments by disadvantaged small business 
        subcontractors from prime contractors in accordance with 
        relevant contractual terms.
    (d) Applicability.--This section and the requirements of this 
section shall apply with respect to a subcontracting plan entered into 
on or after the date of the enactment of this section.
    (e) Definitions.--In this section:
            (1) The term ``small business concerns owned and controlled 
        by socially and economically disadvantaged individuals'' has 
        the meaning given under section 8(d)(3)(C) of the Small 
        Business Act (15 U.S.C. 637(d)(3)(C)).
            (2) The term ``covered person'' means an apparently 
        successful offeror, bidder for a contract, or contractor 
        seeking a modification of a contract.

SEC. 12. DIVERSITY AND INCLUSION REPORTING REQUIREMENTS FOR COVERED 
              CONTRACTORS.

    (a) Governmentwide Requirement.--Chapter 47 of division C of 
subtitle I of title 41, United States Code, is amended by inserting 
after section 4714 the following new section:
``Sec. 4715. Diversity and inclusion reporting requirements for covered 
              contractors
    ``(a) Covered Contractor Reports.--
            ``(1) In general.--The head of each executive agency shall 
        require each covered contractor awarded a major contract to 
        submit to such head by the last day of each full fiscal year 
        that occurs during the period of performance of any major 
        contract a report on diversity and inclusion.
            ``(2) Elements.--Each report under paragraph (1) shall 
        include, for the fiscal year covered by the report the 
        following:
                    ``(A) A description of each major contract with a 
                period of performance during the fiscal year covered by 
                the report, including the period of performance, 
                expected total value, and value to date of each major 
                contract.
                    ``(B) The total value of payments received under 
                all major contracts of each covered contractor during 
                such fiscal year.
                    ``(C) The total number of participants in the board 
                of directors of each covered contractor, nominees for 
                the board of directors of the covered contractor, and 
                the senior leaders of the covered contractor, 
                disaggregated by demographic classifications.
                    ``(D) With respect to employees of each covered 
                contractor--
                            ``(i) the total number of such employees; 
                        and
                            ``(ii) the number of such employees 
                        (expressed as a numeral and as a percentage of 
                        the total number), disaggregated by demographic 
                        classification and major occupational group.
                    ``(E) The value of first-tier subcontracts under 
                each major contract entered into during such fiscal 
                year.
                    ``(F) With respect to employees of each covered 
                subcontractor--
                            ``(i) the total number of such employees; 
                        and
                            ``(ii) the number of such employees 
                        (expressed as a numeral and as a percentage of 
                        the total number), disaggregated by demographic 
                        classification and major occupational group.
                    ``(G) Whether the board of directors of the covered 
                contractor has, as of the date on which the covered 
                contractor submits a report under this section, adopted 
                any policy, plan, or strategy to promote racial, 
                ethnic, and gender diversity among the members of the 
                board of directors of the covered contractor, nominees 
                for the board of directors of the covered contractor, 
                or the senior leaders of the covered contractor.
                    ``(H) A description of participation by the 
                contractor in diversity programs, to include the number 
                of hours spent implementing, funds expended in support 
                of, and the number of unique relationships established 
                by each such diversity program.
    ``(b) Annual Summary Report.--
            ``(1) Report required.--Not later than 60 days after the 
        first day of each fiscal year, the head of each executive 
        agency shall submit to each relevant committee of Congress a 
        report that summarizes the reports submitted pursuant to 
        subsection (a).
            ``(2) Elements.--Each report under paragraph (1) shall 
        include the following:
                    ``(A) An index of the reports submitted pursuant to 
                subsection (a).
                    ``(B) A compilation of the data described in such 
                subsection, disaggregated as described in such 
                subsection.
                    ``(C) An aggregation of the data provided in such 
                reports.
                    ``(D) A narrative that analyzes the information 
                disclosed in such reports and identifies any year-to-
                year trends in such information.
    ``(c) Public Availability.--Each report required under this 
subsection shall be posted on a single publicly available website of 
the relevant executive agency and made available in a machine-readable 
format that is downloadable, searchable, and sortable.
    ``(d) Executive Agency.--Notwithstanding section 3101(c)(1) of this 
title, this section applies to the Department of Defense, the Coast 
Guard, and the National Aeronautics and Space Administration.
    ``(e) Definitions.--In this section:
            ``(1) Covered contractor.--The term `covered contractor' 
        means a contractor awarded a major contract.
            ``(2) Covered subcontractor.--The term `covered 
        subcontractor' means a subcontractor performing a subcontract 
        that is one of the 10 highest aggregate value subcontracts 
        under a major contract and any subcontract that has a total 
        dollar value of $10,000,000 or more.
            ``(3) Demographic classifications.--The term `demographic 
        classifications' means classifications by race, gender, veteran 
        status, or ethnicity.
            ``(4) Diversity program.--The term `diversity program' 
        means--
                    ``(A) any contracting program of an executive 
                agency that awards contracts pursuant to section 8(a) 
                of the Small Business Act (15 U.S.C. 637(a)); and
                    ``(B) any contracting program for disadvantaged 
                small businesses (as defined in the CONTRACTS Act of 
                2024) administered by the executive agency.
            ``(5) Major contract.--The term `major contract' means--
                    ``(A) the largest 50 contracts (by total dollar 
                value) of each agency; and
                    ``(B) each contract that has a total dollar value 
                of $10,000,000 or more.
            ``(6) Major occupational group.--The term `major 
        occupational group' means a major occupational group as defined 
        by the Bureau of Labor Statistics.
            ``(7) Senior leader.--The term `senior leader' means--
                    ``(A) the president of a covered contractor;
                    ``(B) any vice president in charge of a principal 
                business unit, division, or function of a covered 
                contractor;
                    ``(C) any other officer of a covered contractor who 
                performs a policy-making function; or
                    ``(D) an individual responsible for the direct or 
                indirect management of more than 200 individuals.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 47 of division C of subtitle I of title 41, United States Code, 
is amended by inserting after the item for section 4714 the following 
new item:

        ``Sec. 4715. Diversity and inclusion reporting requirements for 
                            covered contractors.''.
    (c) Applicability.--The amendments made by this section shall apply 
with respect to contracts entered into on or after January 1, 2025.

SEC. 13. CHIEF COUNSEL FOR ADVOCACY REPORT TO CONGRESS.

    Not later than 1 year after the date of the enactment of this Act 
and annually thereafter, the Chief Counsel for Advocacy of the Office 
of Advocacy of the Small Business Administration shall submit to 
Congress a report evaluating the implementation of this Act and the 
amendments made by this Act and the effects on Federal contracting and 
subcontracting opportunities for disadvantaged small businesses.
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