I 

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. 

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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Create Opportunities and Networks for Talented, Ready, 

6 and Able Contractors To Succeed Act of 2024’’ or the 

7 ‘‘CONTRACTS Act of 2024’’. 


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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 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. 

3 SEC. 2. DEFINITIONS. 

4 In this Act: 

5 (1) 8(a) PROGRAM.—The term ‘‘8(a) Program’’ 

6 means the program described under section 8(a) of 

7 the Small Business Act (15 U.S.C. 637(a)). 

8 (2) ADMINISTRATION; ADMINISTRATOR.—The 

9 terms ‘‘Administration’’ and ‘‘Administrator’’ mean 

10 the Small Business Administration and the Adminis11 trator thereof, respectively. 

12 (3) AGENCY OSDBU.—The term ‘‘Agency 

13 OSDBU’’ means the Office of Small and Disadvan14 taged Business Utilization (established pursuant to 

15 section 15(k) of the Small Business Act (15 U.S.C. 

16 644(k))) of a Federal agency. 


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1 (4) DEMOGRAPHIC CLASSIFICATIONS.—The 

2 term ‘‘demographic classifications’’ means classifica3 tions by race, gender, veteran status, or ethnicity. 

4 (5) DISADVANTAGED SMALL BUSINESS.—The 

5 term ‘‘disadvantaged small business’’ means— 

6 (A) a socially and economically disadvan7 taged small business concern, as defined in sec8 tion 8(a)(4)(A) of the Small Business Act (15 

9 U.S.C. 637(a)(4)(A)); 

10 (B) a small business concern owned and 

11 controlled by socially and economically dis12 advantaged individuals, as defined in section 

13 8(d)(3)(C) of the Small Business Act (15 

14 U.S.C. 637(d)(3)(C)); or 

15 (C) a small business concern owned and 

16 controlled by a socially and economically dis17 advantaged individual covered under section 

18 47113 of title 49, United States Code. 

19 (6) MBDA UNDER SECRETARY.—The term 

20 ‘‘MBDA Under Secretary’’ means the Under Sec21 retary of Commerce for Minority Business Develop22 ment of the Minority Business Development Agency 

23 (established under section 100002 of the Minority 

24 Business Development Act of 2021 (15 U.S.C. 

25 9501)). 


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1 (7) SMALL BUSINESS CONCERN.—The term 

2 ‘‘small business concern’’ has the meaning given 

3 under section 3 of the Small Business Act (15 

4 U.S.C. 632). 

5 (8) SMALL BUSINESS DEVELOPMENT CEN6 TER.—The term ‘‘small business development cen7 ter’’ has the meaning given in section 3 of the Small 

8 Business Act (15 U.S.C. 632). 

9 SEC. 3. DATABASE ON CONTRACT AWARDS TO DISADVAN10 TAGED SMALL BUSINESSES. 

11 (a) DATABASE REQUIRED.—The head of each Agen12 cy OSDBU shall establish and maintain a public online 

13 database that identifies each contract awarded by the Fed14 eral agency under the 8(a) Program. Such database shall 

15 include the following: 

16 (1) The aggregate number and dollar value of 

17 contracts awarded to socially and economically dis18 advantaged small business concern (as defined in 

19 section 8(a)(4)(A) of the Small Business Act (15 

20 U.S.C. 637(a)(4)(A))) during the 3-year period pre21 ceding the date of the enactment of Public Law 95– 

22 507, disaggregated by race and ethnic group. 

23 (2) The aggregate number and dollar value of 

24 contracts awarded to disadvantaged small businesses 

25 pursuant to Public Law 95–507 during the 10-year 


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1 period preceding the date of the enactment of this 

2 Act, disaggregated by race and ethnic group. 

3 (3) Data on offers for Federal contracts sub4 mitted by a disadvantaged small business which has 

5 previously been awarded a Federal contract or sub6 contract with the assistance of an Agency OSDBU 

7 during such 10-year period. 

8 (b) FACTUAL AND HISTORICAL RECORD OF IN9 STANCES OF DISCRIMINATION AGAINST DISADVANTAGED

10 SMALL BUSINESSES.— 

11 (1) RECORD REQUIRED.—The Administrator 

12 shall establish a program under which the Adminis13 trator shall direct Federal departments and agen14 cies, in coordination with institutions of higher edu15 cation and other research organizations, to develop 

16 and periodically update a factual and historical 

17 record of instances of discrimination against dis18 advantaged small businesses desiring award of a 

19 Federal contract or subcontract from such Federal 

20 department or agency. 

21 (2) ELEMENTS.—The record described in para22 graph (1) shall include the following: 

23 (A) Operational barriers that disadvan24 taged small businesses have historically experiVerDate Sep 11 2014 02:43 Oct 12, 2024 Jkt 059200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H9832.IH H9832

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1 enced in Federal contracting and subcon2 tracting. 

3 (B) Qualitative and quantitative trends in 

4 Federal contracting with disadvantaged small 

5 businesses, disaggregated by North American 

6 Industry Classification System code. 

7 (C) Recommendations for Governmentwide 

8 reforms to increase participation by disadvan9 taged small businesses in Federal contracts and 

10 the estimated qualitative and quantitative ef11 fects of such recommendations. 

12 (c) USES OF DATABASE AND RECORD.—The data13 base required under subsection (a) or a record developed 

14 under subsection (b) may be used— 

15 (1) by the Administrator and heads of Federal 

16 departments and agencies to develop procurement 

17 policies, practices, and strategies that reduce dis18 crimination, establish contracting and subcon19 tracting goals for disadvantaged small businesses, 

20 enhance contract compliance monitoring, and in21 crease disadvantaged small business participation in 

22 Federal contracting and subcontracting by mecha23 nisms that may include dividing large contracts into 

24 multiple smaller contracts, establishing mentor25 mentee relationships between businesses, and pairing 


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1 disadvantaged small businesses with larger busi2 nesses for partnering in contract fulfillment; 

3 (2) by the head of a Federal department or 

4 agency to substantiate an award of a contract under 

5 the 8(a) Program; 

6 (3) by the head of a Federal department or 

7 agency to substantiate any contracting preference 

8 program for disadvantaged small businesses admin9 istered by the Federal agency; 

10 (4) by a disadvantaged small business that 

11 seeks an award of a contract under the 8(a) Pro12 gram to develop a narrative of discrimination; and 

13 (5) by a disadvantaged small business that re14 quires proof of discrimination for purpose of a judi15 cial or administrative action or by a person assisting 

16 a disadvantaged small business for that purpose. 

17 SEC. 4. OUTREACH AND RECRUITMENT TO EXPAND PAR18 TICIPATION OF DISADVANTAGED SMALL 

19 BUSINESSES IN FEDERAL CONTRACTING. 

20 (a) OUTREACH AND RECRUITMENT.—The Adminis21 trator, in coordination with the MBDA Under Secretary, 

22 shall engage in outreach and education to expand partici23 pation of disadvantaged small businesses in Federal con24 tracting. Such efforts may include the following: 


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1 (1) Convening events to engage and inform dis2 advantaged small businesses, including— 

3 (A) business, professional, and industry4 specific conferences; 

5 (B) informational fairs; and 

6 (C) networking events. 

7 (2) Providing briefings and electronic or printed 

8 materials to disadvantaged small businesses and to 

9 national and local business associations and organi10 zations that represent disadvantaged small busi11 nesses about Federal contracting and subcontracting 

12 opportunities and procedures, including opportuni13 ties to participate in mentor-protegee programs of 

14 Federal agencies. 

15 (3) Partnering with organizations that assist 

16 disadvantaged small businesses, historically Black 

17 colleges and universities, minority-serving institu18 tions, alumni networks of such colleges and univer19 sities and institutions, small business development 

20 centers, and other organizations that have the ability 

21 to facilitate relationships between prospective dis22 advantaged small business subcontractors and prime 

23 contractors seeking subcontractors. 

24 (4) Creating a publicly accessible online direc25 tory of disadvantaged small businesses that are subVerDate Sep 11 2014 02:43 Oct 12, 2024 Jkt 059200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H9832.IH H9832

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1 contractors or that seek to become subcontractors, 

2 including details about the North American Industry 

3 Classification System code of such businesses, the 

4 goods and services provided by such businesses, and 

5 past performance information of such subcontrac6 tors. 

7 (5) Creating a publicly accessible online direc8 tory of available Federal contracting and subcon9 tracting opportunities that, in the determination of 

10 the Administrator, are appropriate for disadvan11 taged small businesses based on factors that may in12 clude the size or scope of the contract or sub13 contract, the North American Industry Classification 

14 System code of the business, or other relevant fac15 tors. 

16 (b) AGENCY OSDBUS.—Pursuant to guidelines es17 tablished by the Administrator, the Director of each Agen18 cy OSDBU shall engage in outreach and education to ex19 pand participation of disadvantaged small businesses in 

20 contracts and subcontracts with the Federal agency. Such 

21 activities shall include the following: 

22 (1) Facilitating interactions between prospective 

23 disadvantaged small business subcontractors and 

24 prime contractors seeking subcontractors. 


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1 (2) Establishing a system to facilitate matching 

2 prime contractors seeking subcontractors with pro3 spective disadvantaged small business subcontrac4 tors, including through the development of mentor5 mentee relationships. 

6 (3) Advertising subcontracting opportunities 

7 through media and business or trade association 

8 channels that are effective in reaching prospective 

9 disadvantaged small business subcontractors that 

10 provide the goods or services for which the advertise11 ment is placed. 

12 (4) Directing contracting officers to provide to 

13 prime contractors seeking subcontractors a list of 

14 prospective disadvantaged small business sub15 contractors that provide the needed goods or serv16 ices. 

17 (5) Creating a publicly accessible online direc18 tory of disadvantaged small businesses that are eligi19 ble to participate in Federal contracting and subcon20 tracting opportunities that includes the North Amer21 ican Industry Classification System codes of such 

22 businesses. 


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1 SEC. 5. DETERMINATION OF THE DATE OF COMMENCE2 MENT OF PARTICIPATION IN THE 8(A) PRO3 GRAM. 

4 Section 7(j)(10)(C) of the Small Business Act (15 

5 U.S.C. 636(j)(10)(C)) is amended— 

6 (1) by redesignating clause (ii) as clause (iii); 

7 and 

8 (2) by inserting after clause (i) the following: 

9 ‘‘(ii) A small business concern that has 

10 commenced participation in the Program estab11 lished under this paragraph on or after the date 

12 of the enactment of this clause, shall be consid13 ered to have begun such participation one year 

14 before the date on which such concern has at15 tained, in the determination of the Adminis16 trator, the full benefits of participation in the 

17 Program. Such determination may include con18 sideration of the date on which such concern 

19 was first awarded a contract or subcontract be20 cause of participation of such concern in the 

21 Program.’’. 


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1 SEC. 6. INCLUSION OF CONCERNS OWNED BY HBCU BUSI2 NESS ENTITIES IN DEFINITION OF SOCIALLY 

3 AND ECONOMICALLY DISADVANTAGED 

4 SMALL BUSINESS CONCERN. 

5 (a) HBCU BUSINESS ENTITY DEFINED.—Section 

6 8(a) of the Small Business Act (15 U.S.C. 637(a)) is 

7 amended by adding at the end the following new para8 graph: 

9 ‘‘(21) HBCU BUSINESS ENTITY.—In this sub10 section, the term ‘HBCU business entity’ means an 

11 entity owned and operated by a part B institution 

12 (as defined under section 322 of the Higher Edu13 cation Act of 1965 (20 U.S.C. 1061); commonly re14 ferred to as a ‘historically Black college or univer15 sity’) for purposes of— 

16 ‘‘(A) participation in interstate commerce; 

17 or 

18 ‘‘(B) participation in the program de19 scribed under section 8(a).’’. 

20 (b) INCLUSION IN DEFINITION OF SOCIALLY AND

21 ECONOMICALLY DISADVANTAGED SMALL BUSINESS CON22 CERN.—Section 8(a)(4) of the Small Business Act (15 

23 U.S.C. 637(a)(4)) is amended— 

24 (1) in subparagraph (A)— 

25 (A) in clause (i)— 


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1 (i) in subclause (I), by striking the 

2 comma at the end and inserting a semi3 colon; 

4 (ii) in subclause (II), by striking ‘‘, 

5 or’’ and inserting a semicolon; 

6 (iii) in subclause (III), by striking ‘‘, 

7 or’’ and inserting ‘‘; or’’; and 

8 (iv) by adding at the end the following 

9 new subclause: 

10 ‘‘(IV) a HBCU business entity; 

11 or’’; and 

12 (B) in clause (ii)— 

13 (i) in subclause (I), by striking the 

14 comma at the end and inserting a semi15 colon; 

16 (ii) in subclause (II), by striking ‘‘, 

17 or’’ and inserting a semicolon; 

18 (iii) in subclause (III), by striking the 

19 period at the end and inserting ‘‘; or’’; and 

20 (iv) by adding at the end the following 

21 new subclause: 

22 ‘‘(IV) a HBCU business entity.’’; 

23 and 

24 (2) in subparagraph (B)— 


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1 (A) in clause (i), by striking the comma at 

2 the end and inserting a semicolon; 

3 (B) in clause (ii), by striking ‘‘, or’’ and 

4 inserting a semicolon; 

5 (C) in clause (iii), by striking the period at 

6 the end and inserting ‘‘; or’’; and 

7 (D) by adding at the end the following new 

8 subclause: 

9 ‘‘(IV) a HBCU business entity 

10 described in subparagraph (A)(i)(IV) 

11 or subparagraph (A)(ii)(IV).’’. 

12 (c) INCLUSION IN HUBZONE SMALL BUSINESS CON13 CERN DEFINITION.—Section 31(b)(2) of the Small Busi14 ness Act (15 U.S.C. 657a(b)(2))— 

15 (1) in subparagraph (E)(ii), by striking ‘‘or’’ at 

16 the end; 

17 (2) in subparagraph (F)(iii), by striking the pe18 riod at the end and inserting ‘‘; or’’; and 

19 (3) by adding at the end the following new sub20 paragraph: 

21 ‘‘(G) a small business concern— 

22 ‘‘(i) that is wholly owned by one or 

23 more HBCU business entities (as defined 

24 in section 8(a)(21)), or by a corporation 


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1 that is wholly owned by one or more 

2 HBCU business entities; or 

3 ‘‘(ii) that is owned in part by one or 

4 more HBCU business entities, or by a cor5 poration that is wholly owned by one or 

6 more HBCU business entities, if all other 

7 owners are either United States citizens or 

8 small business concerns.’’. 

9 SEC. 7. AGENCY OSDBU TECHNICAL ASSISTANCE. 

10 Section 15(k) of the Small Business Act (15 U.S.C. 

11 644(k)) is amended— 

12 (1) in paragraph (16)— 

13 (A) by redesignating subparagraphs (A) 

14 through (D) as subparagraphs (B) through (E), 

15 respectively; and 

16 (B) by inserting before subparagraph (B) 

17 (as so redesignated) the following: 

18 ‘‘(A) the training provided by the Director 

19 under paragraph (23) in the most recently com20 pleted fiscal year;’’; 

21 (2) in paragraph (21), by striking the period at 

22 the end and inserting ‘‘; and’’; and 

23 (3) by adding at the end the following new 

24 paragraphs: 


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1 ‘‘(22) shall provide or contract with an entity 

2 (which may include a small business development 

3 center) to provide, in coordination with the Under 

4 Secretary of Commerce for Minority Business Devel5 opment of the Minority Business Development Agen6 cy (established under section 100002 of the Minority 

7 Business Development Act of 2021), technical as8 sistance to small business concerns owned and con9 trolled by socially and economically disadvantaged 

10 individuals (as defined under section 8(d)(3)(C)) or 

11 socially and economically disadvantaged small busi12 ness concerns (as defined in section 8(a)(4)(A)) for 

13 the development of individualized, specific narratives 

14 of discrimination; and 

15 ‘‘(23) shall provide or contract with an entity 

16 (which may include a small business development 

17 center) to provide training to prepare small business 

18 concerns owned and controlled by socially and eco19 nomically disadvantaged individuals or socially and 

20 economically disadvantaged small business concerns 

21 to become better situated to submit an offer for a 

22 contract offered under section 8(a).’’. 


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1 SEC. 8. FEDERAL DISADVANTAGED SMALL BUSINESS TASK 

2 FORCE. 

3 (a) ESTABLISHMENT.—Not later than 4 months after 

4 the date of the enactment of this Act, the President shall 

5 establish a task force (in this section referred to as the 

6 ‘‘Task Force’’) to— 

7 (1) make recommendations to increase opportu8 nities for disadvantaged small businesses in Federal 

9 contracting and subcontracting; 

10 (2) coordinate and optimize participation by 

11 disadvantaged small business in Federal contracting 

12 and subcontracting, including by— 

13 (A) attempting to eliminate any discrimi14 nation against such businesses; and 

15 (B) removing any barriers to participation 

16 such participation; 

17 (3) encourage compliance by prime contractors 

18 with the requirements of covered Executive orders; 

19 (4) expand outreach for Federal contracting 

20 and subcontracting opportunities to disadvantaged 

21 small businesses; 

22 (5) enhance strategies to match disadvantaged 

23 small businesses with prime contractors; and 

24 (6) recommend policies or revisions to policies 

25 relating to Federal contracting and subcontracting 

26 for disadvantaged small businesses. 


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1 (b) MEMBERSHIP.—The members of the Task Force 

2 shall include: 

3 (1) The MBDA Under Secretary, who shall also 

4 serve as the chair of the Task Force. 

5 (2) The Administrator of the Small Business 

6 Administration. 

7 (3) The Administrator of the Office of Federal 

8 Procurement Policy within the Office of Manage9 ment and Budget. 

10 (4) The Director of the Domestic Policy Coun11 cil. 

12 (5) The Administrator of General Services. 

13 (6) The Secretary of Defense. 

14 (7) The Secretary of Transportation. 

15 (8) The Administrator of the National Aero16 nautics and Space Administration. 

17 (9) The Secretary of the Treasury. 

18 (10) The Secretary of Labor. 

19 (11) The Secretary of Homeland Security. 

20 (12) The Secretary of Housing and Urban De21 velopment. 

22 (13) The Secretary of Agriculture. 

23 (14) The heads of such other Federal agencies 

24 or offices as the President may designate. 


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1 (c) MEETINGS.—The Task Force shall meet not later 

2 than 3 months after the date of establishment and not 

3 less frequently than once every 3 months thereafter until 

4 the termination date. To the extent practicable, each meet5 ing of the Task Force shall include a presentation by at 

6 least one representative from an institution of higher edu7 cation (as defined in section 101 of the Higher Education 

8 Act of 1965 (20 U.S.C. 1001)) or other research organiza9 tion with expertise in matters related to— 

10 (1) the duties of the Task Force; 

11 (2) the legal basis for the processes and find12 ings of the Task Force; 

13 (3) historical or current discrimination in Fed14 eral contracting against disadvantaged small busi15 nesses; or 

16 (4) potential remedies to historical or current 

17 discrimination in Federal contracting against dis18 advantaged small businesses. 

19 (d) DUTIES.—The duties of the Task Force shall in20 clude determining the following: 

21 (1) Best practices among Federal agencies to 

22 promote participation in Federal contracting and 

23 subcontracting for disadvantaged small businesses, 

24 including practices described in section 4. 


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1 (2) The needs of disadvantaged small busi2 nesses that desire to participate in the 8(a) Program 

3 and any contracting programs for disadvantaged 

4 small businesses administered by a Federal agency. 

5 (3) Methods and initiatives to expand the par6 ticipation of disadvantaged small businesses in Fed7 eral contracting and subcontracting, including by 

8 unbundling large contracts into separate smaller 

9 contracts, by increasing flexibility for such busi10 nesses to demonstrate eligibility for Federal con11 tracts and subcontracts and to demonstrate past 

12 performance of a same or similar contract, and by 

13 enforcing compliance by prime contractors with the 

14 requirements of covered Executive orders. 

15 (4) Methods and initiatives to expand access to 

16 capital, credit, surety bonds, loan guarantees, finan17 cial training, and credit counseling for disadvan18 taged small businesses. 

19 (5) Strategies to improve the compliance of 

20 Federal agencies with contracting and subcon21 tracting objectives set forth in the Executive Order 

22 13985 titled ‘‘Advancing Racial Equity and Support 

23 for Underserved Communities Through the Federal 

24 Government’’ (86 Fed. Reg. 7009), including the fol25 lowing: 


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1 (A) For Federal agencies that fail to meet 

2 such objectives— 

3 (i) opportunities for training of con4 tracting officers on how to increase the 

5 number of contracts awarded to disadvan6 taged small businesses; and 

7 (ii) commencing a study led by the In8 spector General for such Federal agency to 

9 determine the causes of such failure, evalu10 ate disadvantaged small business participa11 tion in prime contracts, and make rec12 ommendations for improvement. 

13 (B) For Federal agencies that meet such 

14 objectives, incentives to assist such Federal 

15 agencies to exceed such objectives. 

16 (e) REPORTS.— 

17 (1) ACTIVITIES AND FINDINGS REPORT.—Not 

18 later than 4 months after the first meeting date of 

19 the Task Force, and biannually thereafter, the chair 

20 of the Task Force shall submit to Congress a report 

21 on the activities and findings of the Task Force and 

22 any recommendations to increase participation of 

23 disadvantaged small businesses in Federal con24 tracting and subcontracting. 


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1 (2) DISPARITY STUDY REPORT.—Not later than 

2 12 months after the first meeting date of the Task 

3 Force, the chair of the Task Force shall submit to 

4 Congress a report on the results of a study on dis5 advantaged small businesses that includes— 

6 (A) a quantitative and qualitative analysis 

7 of the disadvantaged small businesses that are 

8 eligible to perform Federal contracts and sub9 contracts that were offered during the 5-year 

10 period beginning on the date of the establish11 ment of the Task Force under this section; 

12 (B) the number and the North American 

13 Industry Classification System code of each 

14 such business that submitted an offer (or bid) 

15 for a contracting or subcontracting opportunity 

16 during such period, including information re17 garding contracts and subcontracts that each 

18 such business was previously awarded; 

19 (C) the number of such businesses that 

20 were awarded such Federal contracts and sub21 contracts; and 

22 (D) any conclusions regarding the pres23 ence, absence, or extent of discrimination 

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1 graphic classification) in Federal contracting 

2 and subcontracting. 

3 (f) TERMINATION DATE.—The Task Force estab4 lished under this section shall terminate on the date that 

5 is 10 years after the first meeting date of the Task Force. 

6 (g) COVERED EXECUTIVE ORDER DEFINED.—In this 

7 section, the term ‘‘covered Executive Order’’ means the 

8 following: 

9 (1) Executive Order 13985, titled ‘‘Advancing 

10 Racial Equity and Support for Underserved Commu11 nities Through the Federal Government’’ (January 

12 20, 2021). 

13 (2) Executive Order 14035, titled ‘‘Diversity, 

14 Equity, Inclusion, and Accessibility in the Federal 

15 Workforce’’ (June 25, 2021). 

16 (3) Executive Order 14091, titled ‘‘Further Ad17 vancing Racial Equity and Support for Underserved 

18 Communities Through The Federal Government’’ 

19 (February 16, 2023). 

20 SEC. 9. REQUIREMENTS RELATING TO PROMPT PAYMENT, 

21 PROGRESS PAYMENTS, AND PERFORMANCE22 BASED PAYMENTS. 

23 (a) DISCLOSURES FOR PAYMENTS ON CERTAIN CON24 TRACTS.— 


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1 (1) IN GENERAL.—Chapter 39 of title 31, 

2 United States Code, is amended by inserting after 

3 section 3905 the following: 

4 ‘‘SEC. 3906. DISCLOSURES FOR PROMPT PAYMENTS ON 

5 CERTAIN CONTRACTS. 

6 ‘‘(a) IN GENERAL.—Each covered contract shall in7 clude a clause that requires the prime contractor to in8 clude in each subcontract entered into by the prime con9 tractor and a subcontractor for the purpose of performing 

10 such covered contract— 

11 ‘‘(1) a payment clause which obligates the 

12 prime contractor to pay the subcontractor (at any 

13 tier) for satisfactory performance under its sub14 contract within 14 calendar days of receipt of pay15 ment from the agency; and 

16 ‘‘(2) an interest penalty clause which obligates 

17 the prime contractor to pay to the subcontractor (at 

18 any tier) an interest penalty on amounts due in the 

19 case of each payment not made in accordance with 

20 the payment clause described in paragraph (1)— 

21 ‘‘(A) for the period beginning on the day 

22 after the required payment date and ending on 

23 the date on which payment of the amount due 

24 is made; and 


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1 ‘‘(B) computed at the rate specified by sec2 tion 3902(a) of this title. 

3 ‘‘(b) COVERED CONTRACT DEFINED.—In this sec4 tion, the term ‘covered contract’ means a contract award5 ed by the head of an agency to a prime contractor that 

6 is not a disadvantaged small business (as defined in the 

7 CONTRACTS Act of 2024) with a proposed value greater 

8 than the simplified acquisition threshold.’’. 

9 (2) CLERICAL AMENDMENT.—The table of con10 tents for chapter 39 of title 31, United States Code, 

11 is amended by inserting after the item relating to 

12 section 3905 the following: 

‘‘3906. Disclosures for payments on certain contracts.’’. 

13 (b) DISCLOSURES; REPORTS; EVALUATIONS.— 

14 (1) DISCLOSURE.—The head of a Federal agen15 cy shall include in any contract terms, and in any 

16 modification to such contract, a requirement that a 

17 prime contractor disclose to each potential subcon18 tractor that is a disadvantaged small business— 

19 (A) whether the prime contractor is receiv20 ing progress payments or performance-based 

21 payments under such contract; and 

22 (B) whether the prime contractor will pro23 vide progress payments to a subcontractor for 

24 such contract. 


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1 (2) ACKNOWLEDGMENT.—The prime contractor 

2 shall ensure that each potential subcontractor in re3 ceipt of a disclosure described in paragraph (1) sub4 mits to such prime contractor a signed acknowledg5 ment of receipt of such disclosure. 

6 (3) SUBCONTRACTING REPORTS.—A prime con7 tractor for a Federal contract shall include in any 

8 subcontracting reports required to be submitted 

9 under Section 8(d)(6)(E) of the Small Business Act 

10 (15 U.S.C. 637(d)(6)(E)) verification of the timely 

11 remittance of any payments to each subcontractor of 

12 such prime contractor. 

13 (4) PERFORMANCE EVALUATIONS.—The head 

14 of a Federal agency shall include in any contract 

15 performance evaluation of a prime contractor for 

16 such contract an evaluation of the prime contractor’s 

17 compliance with the requirements of this subsection 

18 and the requirements of section 3906 of title 31, 

19 United States Code. 

20 (5) SUBSEQUENT CONTRACT INELIGIBILITY.— 

21 If a prime contractor submits an offer for a subse22 quent contract to the head of a Federal agency 

23 through a sealed bid or negotiated acquisition pro24 posal and such head determines such contractor is 

25 not in compliance with paragraph (1), such head 


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1 may not award the subsequent contract to such con2 tractor— 

3 (A) until such contractor is in compliance 

4 with paragraph (1), as determined by such 

5 head; and 

6 (B) unless such head determines that such 

7 award is in the national interest. 

8 SEC. 10. REPORTS ON SUBCONTRACTOR ENGAGEMENT. 

9 (a) IN GENERAL.—Section 8(d) of the Small Busi10 ness Act (15 U.S.C. 637(d)) is amended by adding at the 

11 end the following new paragraph: 

12 ‘‘(18) REPORTS ON SUBCONTRACTOR ENGAGE13 MENT.— 

14 ‘‘(A) IN GENERAL.—Each prime contractor 

15 that is not a disadvantaged small business that 

16 has been awarded a major prime contract shall 

17 submit to the head of the Federal agency that 

18 awarded such contract an annual report on sub19 contracts awarded pursuant to such contract, 

20 including— 

21 ‘‘(i) the total number of subcontracts 

22 awarded under the contract; 

23 ‘‘(ii) the number of subcontracts and 

24 a description of such subcontracts awarded 

25 to disadvantaged small businesses, 


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1 disaggregated by demographic characteris2 tics, including the North American Indus3 try Classification System code for each 

4 such business; 

5 ‘‘(iii) the total dollar value of pay6 ments made to subcontractors; and 

7 ‘‘(iv) the total dollar value of pay8 ments made to disadvantaged small busi9 nesses, disaggregated by demographic 

10 characteristics. 

11 ‘‘(B) DEFINITIONS.—In this paragraph: 

12 ‘‘(i) CONTRACTS ACT OF 2024 DEFI13 NITIONS.—The terms ‘demographic charac14 teristics’ and‘disadvantaged small business’ 

15 have the meanings given, respectively, in 

16 the CONTRACTS Act of 2024. 

17 ‘‘(ii) MAJOR PRIME CONTRACT.—The 

18 term ‘major prime contract’ means— 

19 ‘‘(I) the 50 highest dollar value 

20 prime contracts of a Federal agency; 

21 and 

22 ‘‘(II) each contract of a Federal 

23 agency that has a total dollar value 

24 greater than or equal to 

25 $10,000,000.’’. 


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1 (b) APPLICABILITY.—This section and the amend2 ments made by this section shall apply with respect to a 

3 major prime contract (as defined in section 8(d)(18) of 

4 the Small Business Act (15 U.S.C. 637(d))) entered into 

5 on or after the date of the enactment of this section. 

6 SEC. 11. MODIFICATIONS TO SUBCONTRACTING PLANS TO 

7 ENHANCE OPPORTUNITIES FOR SMALL BUSI8 NESS CONCERNS OWNED AND CONTROLLED 

9 BY SOCIALLY AND ECONOMICALLY DIS10 ADVANTAGED INDIVIDUALS. 

11 (a) IN GENERAL.—Each covered person that is re12 quired to submit a subcontracting plan under paragraph 

13 (4) or (5) of section 8(d) of the Small Business Act (15 

14 U.S.C. 637(d)) for a contract shall update such subcon15 tracting plan to include the following: 

16 (1) The names, addresses, phone numbers, 

17 types of business, and North American Industrial 

18 Classification System code of the small business con19 cerns owned and controlled by socially and economi20 cally disadvantaged individuals, disaggregated by de21 mographic characteristics, that were considered or 

22 solicited as subcontractors. 

23 (2) With respect to such concerns that were 

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1 dated subcontracting plan, the reasons for the deci2 sion not to include such concerns. 

3 (3) Information on the process and efforts of 

4 the covered person in developing such subcontracting 

5 plan, including— 

6 (A) the actions taken by the covered per7 son to identify, solicit, and provide outreach to 

8 small business concerns owned and controlled 

9 by socially and economically disadvantaged indi10 viduals for possible inclusion in its subcon11 tracting plan; 

12 (B) the information provided by the cov13 ered person to such concerns about subcon14 tracting opportunities under the contract; 

15 (C) the means by which the subcontractors 

16 that were included in the subcontracting plan 

17 were selected by the covered person; and 

18 (D) the directories or lists of small busi19 ness concerns owned and controlled by socially 

20 and economically disadvantaged individuals, 

21 websites and website search tools, business or 

22 professional associations, industry databases, 

23 and other resources that the covered person 

24 consulted or used to identify such concerns for 

25 possible inclusion in the subcontracting plan. 


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1 (4) A description of the plans of the covered 

2 person to— 

3 (A) increase the number of disadvantaged 

4 small businesses in the subcontracting plan for 

5 subsequent years of contract performance; and 

6 (B) increase the dollar amount under the 

7 contract allocated for goods and services pro8 vided by such concerns. 

9 (b) ENFORCEMENT.— 

10 (1) COMPLIANCE WITH SUBCONTRACTING

11 PLAN.—A covered person described in subsection (a) 

12 that is awarded a prime contract and granted a 

13 modification of a contract by the head of a Federal 

14 agency under such subsection shall remain in com15 pliance with the terms of the updated subcontracting 

16 plan during the term of performance of the contract 

17 before receiving any amounts related to such modi18 fication. 

19 (2) SUBSEQUENT CONTRACT INELIGIBILITY.— 

20 If a covered person described in paragraph (1) sub21 mits an offer for a subsequent contract to such head 

22 of a Federal agency through a sealed bid or nego23 tiated acquisition proposal and such head determines 

24 such covered person is not in compliance with a sub25 contracting plan described in subsection (a), such 


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1 head may not award the subsequent contract to such 

2 contractor— 

3 (A) until such covered person is in compli4 ance with subsection (a), as determined by such 

5 head; and 

6 (B) unless such head determines that such 

7 award is in the national interest. 

8 (3) SUBSEQUENT CONTRACT OFFER SCORES.— 

9 (A) ADJUSTMENT TO SCORE.—If a covered 

10 person described in paragraph (1) submits an 

11 offer for a subsequent contract to such head of 

12 a Federal agency through a sealed bid or nego13 tiated acquisition proposal, the evaluation score 

14 of the contracting officer given to such offer 

15 shall be adjusted as follows: 

16 (i) For a covered person that achieved 

17 subcontractor diversity in the performance 

18 of the prior contract, such score shall be 

19 increased by one point. 

20 (ii) For a covered person that failed 

21 to achieve subcontractor diversity in the 

22 performance of the prior contract, such 

23 score shall be decreased by one point. 

24 (B) SUBCONTRACTOR DIVERSITY DETER25 MINATION.—For purposes of this paragraph, 


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1 the contracting officer that awarded the covered 

2 person a contract under subsection (a) shall 

3 make a determination as to whether the covered 

4 person achieved subcontractor diversity using 

5 the information in the subcontracting plan of 

6 the covered person and the standards used by 

7 such contracting officer to evaluation subcon8 tractor diversity. 

9 (c) ACCOUNTABILITY.—The appropriate head of a 

10 Federal agency shall consider the performance of a con11 tracting officer of responsibilities under this section in any 

12 evaluation of the performance of the contracting officer, 

13 including such contracting officer’s— 

14 (1) collection and analysis of prime contractor 

15 data to assess subcontractor diversity (as described 

16 in subsection (b)(3)(B)); 

17 (2) failure to identify a covered person’s failure 

18 to achieve subcontractor diversity or to comply with 

19 an applicable subcontracting plan; and 

20 (3) efforts for monitoring and determinations 

21 regarding the receipt of payments by disadvantaged 

22 small business subcontractors from prime contrac23 tors in accordance with relevant contractual terms. 

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1 tracting plan entered into on or after the date of the en2 actment of this section. 

3 (e) DEFINITIONS.—In this section: 

4 (1) The term ‘‘small business concerns owned 

5 and controlled by socially and economically disadvan6 taged individuals’’ has the meaning given under sec7 tion 8(d)(3)(C) of the Small Business Act (15 

8 U.S.C. 637(d)(3)(C)). 

9 (2) The term ‘‘covered person’’ means an ap10 parently successful offeror, bidder for a contract, or 

11 contractor seeking a modification of a contract. 

12 SEC. 12. DIVERSITY AND INCLUSION REPORTING REQUIRE13 MENTS FOR COVERED CONTRACTORS. 

14 (a) GOVERNMENTWIDE REQUIREMENT.—Chapter 47 

15 of division C of subtitle I of title 41, United States Code, 

16 is amended by inserting after section 4714 the following 

17 new section: 

18 ‘‘§ 4715. Diversity and inclusion reporting require19 ments for covered contractors 

20 ‘‘(a) COVERED CONTRACTOR REPORTS.— 

21 ‘‘(1) IN GENERAL.—The head of each executive 

22 agency shall require each covered contractor award23 ed a major contract to submit to such head by the 

24 last day of each full fiscal year that occurs during 


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1 the period of performance of any major contract a 

2 report on diversity and inclusion. 

3 ‘‘(2) ELEMENTS.—Each report under para4 graph (1) shall include, for the fiscal year covered by 

5 the report the following: 

6 ‘‘(A) A description of each major contract 

7 with a period of performance during the fiscal 

8 year covered by the report, including the period 

9 of performance, expected total value, and value 

10 to date of each major contract. 

11 ‘‘(B) The total value of payments received 

12 under all major contracts of each covered con13 tractor during such fiscal year. 

14 ‘‘(C) The total number of participants in 

15 the board of directors of each covered con16 tractor, nominees for the board of directors of 

17 the covered contractor, and the senior leaders of 

18 the covered contractor, disaggregated by demo19 graphic classifications. 

20 ‘‘(D) With respect to employees of each 

21 covered contractor— 

22 ‘‘(i) the total number of such employ23 ees; and 

24 ‘‘(ii) the number of such employees 

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1 age of the total number), disaggregated by 

2 demographic classification and major occu3 pational group. 

4 ‘‘(E) The value of first-tier subcontracts 

5 under each major contract entered into during 

6 such fiscal year. 

7 ‘‘(F) With respect to employees of each 

8 covered subcontractor— 

9 ‘‘(i) the total number of such employ10 ees; and 

11 ‘‘(ii) the number of such employees 

12 (expressed as a numeral and as a percent13 age of the total number), disaggregated by 

14 demographic classification and major occu15 pational group. 

16 ‘‘(G) Whether the board of directors of the 

17 covered contractor has, as of the date on which 

18 the covered contractor submits a report under 

19 this section, adopted any policy, plan, or strat20 egy to promote racial, ethnic, and gender diver21 sity among the members of the board of direc22 tors of the covered contractor, nominees for the 

23 board of directors of the covered contractor, or 

24 the senior leaders of the covered contractor. 


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1 ‘‘(H) A description of participation by the 

2 contractor in diversity programs, to include the 

3 number of hours spent implementing, funds ex4 pended in support of, and the number of unique 

5 relationships established by each such diversity 

6 program. 

7 ‘‘(b) ANNUAL SUMMARY REPORT.— 

8 ‘‘(1) REPORT REQUIRED.—Not later than 60 

9 days after the first day of each fiscal year, the head 

10 of each executive agency shall submit to each rel11 evant committee of Congress a report that summa12 rizes the reports submitted pursuant to subsection 

13 (a). 

14 ‘‘(2) ELEMENTS.—Each report under para15 graph (1) shall include the following: 

16 ‘‘(A) An index of the reports submitted 

17 pursuant to subsection (a). 

18 ‘‘(B) A compilation of the data described 

19 in such subsection, disaggregated as described 

20 in such subsection. 

21 ‘‘(C) An aggregation of the data provided 

22 in such reports. 

23 ‘‘(D) A narrative that analyzes the infor24 mation disclosed in such reports and identifies 

25 any year-to-year trends in such information. 


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1 ‘‘(c) PUBLIC AVAILABILITY.—Each report required 

2 under this subsection shall be posted on a single publicly 

3 available website of the relevant executive agency and 

4 made available in a machine-readable format that is 

5 downloadable, searchable, and sortable. 

6 ‘‘(d) EXECUTIVE AGENCY.—Notwithstanding section 

7 3101(c)(1) of this title, this section applies to the Depart8 ment of Defense, the Coast Guard, and the National Aero9 nautics and Space Administration. 

10 ‘‘(e) DEFINITIONS.—In this section: 

11 ‘‘(1) COVERED CONTRACTOR.—The term ‘cov12 ered contractor’ means a contractor awarded a 

13 major contract. 

14 ‘‘(2) COVERED SUBCONTRACTOR.—The term 

15 ‘covered subcontractor’ means a subcontractor per16 forming a subcontract that is one of the 10 highest 

17 aggregate value subcontracts under a major contract 

18 and any subcontract that has a total dollar value of 

19 $10,000,000 or more. 

20 ‘‘(3) DEMOGRAPHIC CLASSIFICATIONS.—The 

21 term ‘demographic classifications’ means classifica22 tions by race, gender, veteran status, or ethnicity. 

23 ‘‘(4) DIVERSITY PROGRAM.—The term ‘diver24 sity program’ means— 


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1 ‘‘(A) any contracting program of an execu2 tive agency that awards contracts pursuant to 

3 section 8(a) of the Small Business Act (15 

4 U.S.C. 637(a)); and 

5 ‘‘(B) any contracting program for dis6 advantaged small businesses (as defined in the 

7 CONTRACTS Act of 2024) administered by 

8 the executive agency. 

9 ‘‘(5) MAJOR CONTRACT.—The term ‘major con10 tract’ means— 

11 ‘‘(A) the largest 50 contracts (by total dol12 lar value) of each agency; and 

13 ‘‘(B) each contract that has a total dollar 

14 value of $10,000,000 or more. 

15 ‘‘(6) MAJOR OCCUPATIONAL GROUP.—The term 

16 ‘major occupational group’ means a major occupa17 tional group as defined by the Bureau of Labor Sta18 tistics. 

19 ‘‘(7) SENIOR LEADER.—The term ‘senior lead20 er’ means— 

21 ‘‘(A) the president of a covered contractor; 

22 ‘‘(B) any vice president in charge of a 

23 principal business unit, division, or function of 

24 a covered contractor; 


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1 ‘‘(C) any other officer of a covered con2 tractor who performs a policy-making function; 

3 or 

4 ‘‘(D) an individual responsible for the di5 rect or indirect management of more than 200 

6 individuals.’’. 

7 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

8 The table of sections for chapter 47 of division C of sub9 title I of title 41, United States Code, is amended by in10 serting after the item for section 4714 the following new 

11 item: 

‘‘Sec. 4715. Diversity and inclusion reporting requirements for covered contractors.’’. 

12 (c) APPLICABILITY.—The amendments made by this 

13 section shall apply with respect to contracts entered into 

14 on or after January 1, 2025. 

15 SEC. 13. CHIEF COUNSEL FOR ADVOCACY REPORT TO CON16 GRESS. 

17 Not later than 1 year after the date of the enactment 

18 of this Act and annually thereafter, the Chief Counsel for 

19 Advocacy of the Office of Advocacy of the Small Business 

20 Administration shall submit to Congress a report evalu21 ating the implementation of this Act and the amendments 

22 made by this Act and the effects on Federal contracting 


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1 and subcontracting opportunities for disadvantaged small 

2 businesses. 

Æ 


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