I 

115TH CONGRESS 

2D SESSION H. R. 7169 

To transfer the responsibility of verifying small business concerns owned 

and controlled by veterans or service-disabled veterans to the Small 

Business Administration, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 27, 2018 

Mr. KELLY of Mississippi (for himself, Mr. CHABOT, Mr. CURTIS, Miss 

GONZA ́LEZ-COLO ́N of Puerto Rico, Mr. BALDERSON, Mrs. RADEWAGEN, 

Mr. FITZPATRICK, Mr. STIVERS, Mr. ROE of Tennessee, Mr. BERGMAN, 

Mr. DUNN, Mr. BANKS of Indiana, Ms. VELA ́ZQUEZ, Ms. CLARKE of New 

York, Mrs. MURPHY of Florida, Ms. KUSTER of New Hampshire, and 

Mr. PETERS) introduced the following bill; which was referred to the 

Committee on Small Business, and in addition to the Committee on Veterans’ Affairs, 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 transfer the responsibility of verifying small business concerns owned and controlled by veterans or service-disabled veterans to the Small Business Administration, 

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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Verification Alignment 

3 and Service-disabled Business Adjustment Act’’ or the 

4 ‘‘VA–SBA Act’’. 

5 SEC. 2. SMALL BUSINESS ACT REQUIREMENTS. 

6 (a) PROCUREMENT PROGRAM FOR SMALL BUSINESS

7 CONCERNS OWNED AND CONTROLLED BY SERVICE-DIS8 ABLED VETERANS.—Section 36 of the Small Business Act 

9 (15 U.S.C. 657f) is amended— 

10 (1) by striking subsections (d) and (e); 

11 (2) by redesignating subsections (a), (b), and 

12 (c) as subsections (c), (d), and (e) respectively; 

13 (3) by inserting before subsection (c), as so re14 designated, the following: 

15 ‘‘(a) CONTRACTING OFFICER DEFINED.—For pur16 poses of this section, the term ‘contracting officer’ has the 

17 meaning given such term in section 2101 of title 41, 

18 United States Code. 

19 ‘‘(b) CERTIFICATION OF SMALL BUSINESS CON20 CERNS OWNED AND CONTROLLED BY SERVICE-DISABLED

21 VETERANS.—With respect to a procurement program or 

22 preference established under this Act or any other Federal 

23 law applicable to small business concerns owned and con24 trolled by service-disabled veterans, the Administrator 

25 shall— 


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1 ‘‘(1) certify the status of the concern as a 

2 ‘small business concern owned and controlled by 

3 service-disabled veterans’; and 

4 ‘‘(2) require the periodic recertification of such 

5 status.’’; 

6 (4) in subsection (c), as so redesignated— 

7 (A) in paragraph (2)(B), by striking ‘‘and’’ 

8 at the end; 

9 (B) in paragraph (3), by striking the pe10 riod and inserting ‘‘; and’’; and 

11 (C) by adding at the end the following: 

12 ‘‘(4) the concern is certified by the Adminis13 trator as a small business concern owned and con14 trolled by service-disabled veterans.’’; 

15 (5) in subsection (d), as so redesignated, by 

16 striking ‘‘and that the award can be made at a fair 

17 market price’’ and inserting ‘‘, that the award can 

18 be made at a fair market price, and each concern is 

19 certified by the Administrator as a small business 

20 concern owned and controlled by service-disabled 

21 veterans’’; and 

22 (6) by adding at the end the following: 

23 ‘‘(f) ENFORCEMENT; PENALTIES.— 


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1 ‘‘(1) VERIFICATION OF ELIGIBILITY.—In car2 rying out this section, the Administrator shall estab3 lish procedures relating to— 

4 ‘‘(A) the filing, investigation, and disposi5 tion by the Administration of any challenge to 

6 the eligibility of a small business concern to re7 ceive assistance under this section (including a 

8 challenge, filed by an interested party, relating 

9 to the veracity of a certification made or infor10 mation provided to the Administration by a 

11 small business concern under subsection (b)); 

12 and 

13 ‘‘(B) verification by the Administrator of 

14 the accuracy of any certification made or infor15 mation provided to the Administration by a 

16 small business concern under subsection (b). 

17 ‘‘(2) EXAMINATIONS.— 

18 ‘‘(A) EXAMINATION OF APPLICANTS.—The 

19 procedures established under paragraph (1) 

20 shall provide for a program of examinations by 

21 the Administrator of any small business concern 

22 making a certification or providing information 

23 to the Administrator under subsection (b), to 

24 determine the veracity of any statements or inVerDate Sep 11 2014 03:09 Nov 29, 2018 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7169.IH H7169

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1 formation provided as part of such certification 

2 or otherwise provided under subsection (b). 

3 ‘‘(B) EXAMINATION OF CERTIFIED CON4 CERNS.—The procedures established under 

5 paragraph (1) shall provide for the examination 

6 of risk-based samples of small business con7 cerns certified under subsection (b), or of any 

8 small business concern that the Administrator 

9 believes poses a particular risk or with respect 

10 to which the Administrator receives specific and 

11 credible information alleging that the small 

12 business concern no longer meets eligibility re13 quirements to be certified as a small business 

14 concern owned and controlled by service-dis15 abled veterans. 

16 ‘‘(3) PENALTIES.—In addition to the penalties 

17 described in section 16(d) (15 U.S.C. 657f(d)), any 

18 small business concern that is determined by the Ad19 ministrator to have misrepresented the status of that 

20 concern as a small business concern owned and con21 trolled by service-disabled veterans for purposes of 

22 subsection (b), shall be subject to— 

23 ‘‘(A) section 1001 of title 18, United 

24 States Code; 


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1 ‘‘(B) sections 3729 through 3733 of title 

2 31, United States Code; and 

3 ‘‘(C) section 8127(g) of title 38, United 

4 States Code. 

5 ‘‘(g) PROVISION OF DATA.—Upon the request of the 

6 Administrator, the head of any Federal department or 

7 agency shall promptly provide to the Administrator such 

8 information as the Administrator determines to be nec9 essary to carry out subsection (b) or to be able to certify 

10 the status of the concern as a small business concern 

11 owned and controlled by veterans.’’. 

12 (b) PENALTIES FOR MISREPRESENTATION.—Section 

13 16 of the Small Business Act (15 U.S.C. 645) is amend14 ed— 

15 (1) in subsection (d)(1)— 

16 (A) by striking ‘‘,, a’’ and inserting ‘‘, a 

17 ‘small business concern owned and controlled by 

18 service-disabled veterans’, a’’; and 

19 (B) in paragraph (A), by striking ‘‘9, 15, 

20 or 31’’ and inserting ‘‘8, 9, 15, 31, or 36’’; and 

21 (2) in subsection (e), by striking ‘‘,, a’’ and in22 serting ‘‘, a ‘small business concern owned and con23 trolled by service-disabled veterans’, a’’. 


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1 SEC. 3. USE OF VETERAN-OWNED AND SERVICE-DISABLED 

2 VETERAN-OWNED BUSINESS DATABASE BY 

3 THE DEPARTMENT OF VETERANS AFFAIRS 

4 AND SMALL BUSINESS ADMINISTRATION. 

5 (a) IN GENERAL.—Effective on the transfer date, 

6 section 8127 of title 38, United States Code, is amended— 

7 (1) in subsection (e), by striking ‘‘the Sec8 retary’’ and inserting ‘‘the Administrator’’; 

9 (2) in subsection (f)— 

10 (A) by striking ‘‘the Secretary’’ each place 

11 such term appears and inserting ‘‘the Adminis12 trator’’; 

13 (B) in paragraph (2), by striking subpara14 graph (B) and inserting the following: 

15 ‘‘(B) For purposes of this subsection— 

16 ‘‘(i) the Secretary shall— 

17 ‘‘(I) verify an individual’s status as a 

18 veteran; and 

19 ‘‘(II) establish a system to permit the 

20 Administrator to access, but not alter, 

21 such verification; and 

22 ‘‘(ii) the Administrator shall verify a busi23 ness concern’s status as a small business con24 cern. 

25 ‘‘(C) If the Administrator receives an applica26 tion from an individual with respect to a business 


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1 concern for inclusion in the database, but the indi2 vidual’s status as a veteran cannot be verified under 

3 subparagraph (B) or the business concern’s status 

4 as a small business concern cannot be verified under 

5 subparagraph (B), the Administrator may not in6 clude the business concern in the database main7 tained by the Administrator.’’; and 

8 (C) in paragraph (8)— 

9 (i) in subparagraph (B)(ii)— 

10 (I) by amending subclause (I) to 

11 read as follows: 

12 ‘‘(I) the Secretary or the Administrator; 

13 or’’; and 

14 (II) in subclause (II), by striking 

15 ‘‘the contracting officer of the Depart16 ment’’ and inserting ‘‘the applicable 

17 contracting officer’’; and 

18 (ii) by striking subparagraph (C); 

19 (3) by redesignating subsection (k) as sub20 section (l); 

21 (4) by inserting after subsection (k) the fol22 lowing: 

23 ‘‘(k) ANNUAL TRANSFER FOR CERTIFICATION

24 COSTS.—For each fiscal year, the Secretary shall reim25 burse the Administrator in an amount necessary to cover 


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1 any cost incurred by the Administrator for certifying small 

2 business concerns owned and controlled by veterans that 

3 do not qualify as small business concerns owned and con4 trolled by service-disabled veterans for the Secretary for 

5 purposes of this section and section 8128. The Adminis6 trator is authorized to accept such reimbursement. The 

7 amount of any such reimbursement shall be determined 

8 jointly by the Secretary and the Administrator and shall 

9 be provided from fees collected by the Secretary under 

10 multiple-award schedule contracts. Any disagreement 

11 about the amount shall be resolved by the Director of the 

12 Office of Management and Budget.’’; and 

13 (5) in subsection (l), as so redesignated, by 

14 adding at the end the following: 

15 ‘‘(3) The term ‘Administrator’ means the Ad16 ministrator of the Small Business Administration.’’. 

17 (b) ADMINISTRATION ACCESS TO DATABASE BEFORE

18 THE TRANSFER DATE.—During the period between the 

19 date of enactment of this Act and the transfer date, the 

20 Secretary of Veterans Affairs shall provide the Adminis21 trator of the Small Business Administration with access 

22 to the database described under section 8127(f) of title 

23 38, United States Code. 

24 (c) RULE OF CONSTRUCTION.—Nothing in this Act 

25 or the amendments made by this Act may be construed 


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1 as prohibiting the Small Business Administration from 

2 combining the database described under section 8127(f) 

3 of title 38, United States Code, with other databases 

4 maintained by the Administration. 

5 SEC. 4. STATUS OF SELF-CERTIFIED SMALL BUSINESS CON6 CERNS OWNED AND CONTROLLED BY SERV7 ICE-DISABLED VETERANS AND VETERANS. 

8 (a) IN GENERAL.—Notwithstanding any other provi9 sion of law, any small business concern that self-certified 

10 as a small business concern owned and controlled by vet11 erans or a small business concern owned and controlled 

12 by service-disabled veterans shall— 

13 (1) if the concern files a certification applica14 tion with the Administrator before the end of the 1- 

15 year period beginning on the transfer date, maintain 

16 such self-certification until the Administrator makes 

17 a determination with respect to such certification; 

18 and 

19 (2) if the concern does not file such a certifi20 cation application before the end of the 1-year pe21 riod beginning on the transfer date, lose, at the end 

22 of such 1-year period, any self-certification of the 

23 concern as a small business concern owned and con24 trolled by service-disabled veterans. 


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1 (b) NON-APPLICABILITY TO DEPARTMENT OF VET2 ERANS AFFAIRS.—Subsection (a) shall not apply to par3 ticipation in contracts (including subcontracts) with the 

4 Department of Veterans Affairs. 

5 SEC. 5. TRANSFER OF THE CENTER FOR VERIFICATION 

6 AND EVALUATION OF THE DEPARTMENT OF 

7 VETERANS AFFAIRS TO THE SMALL BUSI8 NESS ADMINISTRATION. 

9 (a) ABOLISHMENT.—The Center for Verification and 

10 Evaluation of the Department defined under section 74.1 

11 of title 38, Code of Federal Regulations, is abolished effec12 tive on the transfer date. 

13 (b) TRANSFER OF FUNCTIONS.—All functions that, 

14 immediately before the effective date of this section, were 

15 functions of the Center for Verification and Evaluation 

16 shall— 

17 (1) on the date of enactment of this Act, be 

18 functions of both the Center for Verification and 

19 Evaluation and the Small Business Administration, 

20 except that the Small Business Administration shall 

21 not have any authority to carry out any certification 

22 functions; and 

23 (2) on the transfer date, be functions of the 

24 Small Business Administration. 


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1 (c) TRANSFER OF ASSETS.—So much of the per2 sonnel, property, records, and unexpended balances of ap3 propriations, allocations, and other funds employed, used, 

4 held, available, or to be made available in connection with 

5 a function transferred under this section shall be available 

6 to the Small Business Administration at such time or 

7 times as the President directs for use in connection with 

8 the functions transferred. 

9 (d) REFERENCES.—Any reference in any other Fed10 eral law, Executive order, rule, regulation, or delegation 

11 of authority, or any document of or pertaining to a func12 tion of the Center for Verification and Evaluation that is 

13 transferred under this section is deemed, after the transfer 

14 date, to refer to the Small Business Administration. 

15 SEC. 6. DOLLAR THRESHOLD FOR SOLE SOURCE AWARDS 

16 TO SMALL BUSINESS CONCERN OWNED AND 

17 CONTROLLED BY SERVICE-DISABLED VET18 ERANS. 

19 (a) SMALL BUSINESS ACT.—Effective on the transfer 

20 date, paragraph (2) of section 36(c) of the Small Business 

21 Act, as redesignated by section 2(a)(2), is amended to 

22 read as follows: 

23 ‘‘(2) the anticipated award price of the contract 

24 will not exceed— 


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1 ‘‘(A) $7,000,000, in the case of a contract 

2 opportunity assigned a standard industrial clas3 sification code for manufacturing; or 

4 ‘‘(B) $5,000,000, in the case of any other 

5 contract opportunity; and’’. 

6 (b) TITLE 38.—Effective on the transfer date, para7 graph (2) of section 8127(c)(2) of title 38, United States 

8 Code, is amended to read as follows: 

9 ‘‘(2) the anticipated award price of the contract 

10 will not exceed the amount described under section 

11 36(a)(2) of the Small Business Act; and’’. 

12 SEC. 7. REPORT. 

13 Not later than the end of the 1-year period beginning 

14 on the date of the enactment of this Act, and every 6 

15 months thereafter until the transfer date, the Adminis16 trator of the Small Business Administration and Secretary 

17 of Veterans Affairs shall, jointly, issue a report to the 

18 Committees on Appropriations, Small Business, and Vet19 eran’s Affairs of the House of Representatives and the 

20 Committees on Appropriations, Small Business and En21 trepreneurship, and Veteran’s Affairs of the Senate on the 

22 planning for the transfer of functions and property re23 quired under this Act and the amendments made by this 

24 Act on the transfer date. Such report shall include— 


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1 (1) whether and how the verification database 

2 and operations of the Center for Verification and 

3 Evaluation of the Department of Veterans Affairs 

4 will be incorporated into the Small Business Admin5 istration’s existing certification database; 

6 (2) projections for the numbers and timing, in 

7 terms of fiscal year, of— 

8 (A) already verified concerns that will 

9 come up for recertification; and 

10 (B) self-certified concerns that are ex11 pected to apply for certification; 

12 (3) an explanation of how outreach to veteran 

13 service organizations, the service-disabled veteran14 owned and veteran-owned small business community, 

15 and other stakeholders will be conducted; and 

16 (4) other pertinent information determined by 

17 the Administrator and the Secretary. 

18 SEC. 8. TRANSFER DATE. 

19 For purposes of this Act, the term ‘‘transfer date’’ 

20 means the date that is 2 years after the date of enactment 

21 of this Act, except that such date may be extended an un22 limited number of times by a period of not more than 6 

23 months if the Administrator of the Small Business Admin24 istration and Secretary of Veterans Affairs jointly certify 


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1 to Congress that such extension is necessary and notify 

2 Congress of the length of the extension. 

Æ 


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