I

103D CONGRESS

2D SESSION H. R. 4263

To promote the participation of small business enterprises, including minority

small businesses, in Federal procurement and Government contracts,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

APRIL 20, 1994

Mr. LAFALCE introduced the following bill; which was referred to the

Committee on Small Business

A BILL

To promote the participation of small business enterprises,

including minority small businesses, in Federal procurement and Government contracts, 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 That this Act may be cited as the ‘‘Small Business and

4 Minority Small Business Procurement Opportunities Act

5 of 1994’’.

6 SEC. 2. FUNCTIONS OF SMALL BUSINESS ADMINISTRATION.

7 The Small Business Act is amended by adding the

8 following new section:
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1 ‘‘SEC. 29. The Administrator of the Small Business

2 Administration, in coordination with other Federal agen3 cies, shall—

4 ‘‘(1) develop plans to coordinate and promote

5 the use of the Federal Acquisition Computer Net6 work by small businesses that incorporate outreach

7 efforts by the Administration, agency Offices of

8 Small and Disadvantaged Business Utilization,

9 Small Business Development Centers, and other ap10 propriate organizations; and

11 ‘‘(2) inform and provide consistent and com12 prehensive training on the Network for small busi13 nesses.’’.

14 SEC. 3. SMALL BUSINESS RESERVATION.

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

16 644(j)) is amended to read as follows:

17 ‘‘(j)(1) Each contract for the procurement of goods

18 and services that has an anticipated value not in excess

19 of $100,000 shall be reserved exclusively for small busi20 ness concerns unless the contracting officer is unable to

21 obtain offers from two or more small business concerns

22 that (A) are competitive with market prices, and (B) are

23 competitive with regard to the quality and delivery of the

24 goods or services being procured.
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1 ‘‘(2) In carrying out paragraph (1), a contracting of2 ficer shall consider any offer that is responsive and that

3 is received in a timely manner from an eligible small busi4 ness offeror.

5 ‘‘(3) Nothing in paragraph (1) shall be construed as

6 precluding an award of a contract with a value not in ex7 cess of $100,000 under the authority of—

8 ‘‘(A) section 8(a) of this Act;

9 ‘‘(B) section 2323 of title 10, United States

10 Code;

11 ‘‘(C) section 316 of the Federal Property and

12 Administrative Services Act of 1949; or

13 ‘‘(D) section 12 of the Business Opportunity

14 Development Reform Act of 1988 (Public Law 100–

15 656; U.S.C. 644 note).

16 ‘‘(4) In the case of contracts referred to in paragraph

17 (1) that are entered into with small business concerns,

18 contracting officers shall, wherever circumstances permit,

19 provide for the use of fast payment terms and the dis20 bursement of payment through electronic fund transfer.

21 ‘‘(5) A purchase by an executive agency with an an22 ticipated value of the micro-purchase threshold or less

23 shall not be subject to the small business reserve require24 ments of paragraph (1) of this subsection.’’.
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1 SEC. 4. TECHNICAL AND CONFORMING CHANGES.

2 (a) Section 3(m) of the Small Business Act (15

3 U.S.C. 632(m)) is amended to read as follows:

4 ‘‘(m) For purposes of this Act, the term ‘simplified

5 acquisition threshold’ has the meaning given such term in

6 section 4A of the Office of Federal Procurement Policy

7 Act (41 U.S.C. 403A) and the term ‘micro-purchase

8 threshold’ has the meaning given such term in section

9 4B(e) of the Office of Federal Procurement Policy Act (41

10 U.S.C. 401 et seq.).’’.

11 (b) Section 8(d)(2)(A) of the Small Business Act (15

12 U.S.C. 637(d)(2)(A)) is amended by striking out ‘‘does

13 not exceed the small purchase threshold’’ and inserting in

14 lieu thereof ‘‘is for an amount not in excess of the sim15 plified acquisition threshold’’.

16 SEC. 5. CONTRACT GOALS FOR SMALL BUSINESSES OWNED

17 BY ECONOMICALLY AND SOCIALLY DIS18 ADVANTAGED INDIVIDUALS AND FOR CER19 TAIN INSTITUTIONS OF HIGHER EDUCATION.

20 Section 8(g) of the Small Business Act is amended

21 to read as follows:

22 ‘‘(g)(1) The President annually shall establish Gov23 ernment-wide goals for procurement contracts awarded to

24 small business concerns and small business concerns

25 owned and controlled by socially and economically dis26 advantaged individuals. The Government-wide goal for
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1 participation by small business concerns shall be estab2 lished at not less than 20 percent of the total value of

3 all prime contract awards for each fiscal year. The Gov4 ernment-wide goal for participation by small business con5 cerns owned and controlled by socially and economically

6 disadvantaged individuals shall be established at not less

7 than 5 percent of the total value of all prime contract and

8 subcontract awards for each fiscal year.

9 ‘‘(2) A goal of 5 percent of the amount described in

10 paragraph (5) shall be the objective of an executive agency

11 in each of fiscal years 1994 through 2000 for the total

12 combined amount obligated for contracts and subcontracts

13 entered into with—

14 ‘‘(A) small business concerns, including mass

15 media and advertising firms, owned and controlled

16 by socially and economically disadvantaged individ17 uals, the majority of the earnings of which directly

18 accrue to such individuals;

19 ‘‘(B) historically Black colleges and universities,

20 including any nonprofit research institution that was

21 an integral part of such a college or university be22 fore November 14, 1986; and

23 ‘‘(C) minority institutions (as defined in section

24 1046(3) of the Higher Education Act of 1965 (20

25 U.S.C. 1135d–5(3)), which, for the purposes of this
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1 section, shall include Hispanic-serving institutions

2 (as defined in section 316(b)(1) of such Act (20

3 U.S.C. 1059c(b)(1)).

4 ‘‘(3) The head of the agency shall establish a specific

5 goal within the overall 5 percent goal for the award of

6 prime contracts and subcontracts to historically Black col7 leges and universities and minority institutions in order

8 to increase the participation of such colleges and univer9 sities in the program provided for by this subsection.

10 ‘‘(4) The administration, in consultation with the Ad11 ministrator of the Office of Federal Procurement Policy,

12 shall provide procedures or guidelines for contracting offi13 cers to set goals which executive agency prime contractors

14 that are required to submit subcontracting plans under

15 subsection (d) in furtherance of the agency’s program to

16 meet the 5 percent goal specified in paragraph (2) should

17 meet in awarding subcontracts, including subcontracts to

18 minority-owned media, to entities described in that para19 graph.

20 ‘‘(5) The requirements of paragraphs (2) through (4)

21 for any fiscal year apply to the total value of all prime

22 contract awards entered into by the executive agency for

23 such fiscal year.

24 ‘‘(6) (A) To attain the goal specified in paragraph

25 (2), the head of the agency shall provide technical assist-
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1 ance to the entities referred to in that subsection and, in

2 the case of historically Black colleges and universities and

3 minority institutions, shall also provide infrastructure as4 sistance.

5 ‘‘(B) Technical assistance provided under this section

6 shall include information about the program, advice about

7 the agency’s procurement procedures, instruction in prep8 aration of proposals, and other such assistance as the

9 agency head considers appropriate. If the resources of the

10 executive agency are inadequate to provide such assist11 ance, the agency head may enter into contracts with mi12 nority private sector entities with experience and expertise

13 in the design, development, and delivery of technical as14 sistance services to eligible individuals, business firms and

15 institutions, acquisition agencies, and prime contractors.

16 Agency contracts with such entities shall be awarded an17 nually, based upon, among other things, the number of

18 minority small business concerns, historically Black col19 leges and universities, and minority institutions that each

20 such entity brings into the program.

21 ‘‘(C) The agency head shall, to the maximum extent

22 practical, carry out programs under this section at col23 leges, universities, and institutions that agree to bear a

24 substantial portion of the cost associated with the pro25 grams.
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1 ‘‘(7) To attain the goal of paragraph (2),

2 ‘‘(A) The head of the agency shall—

3 ‘‘(i) ensure that substantial progress is

4 made in increasing awards of agency contracts

5 to entities described in paragraph (2);

6 ‘‘(ii) exercise his utmost authority, re7 sourcefulness, and diligence; and

8 ‘‘(iii) actively monitor and assess the

9 progress of prime contractors of the agency in

10 attaining such goal.

11 ‘‘(B) In making the assessment under subpara12 graph (A)(iii), the agency head shall evaluate the ex13 tent to which use of the authority provided in para14 graphs (C) and (D) and compliance with the re15 quirement in paragraph (E) is effective for facilitat16 ing the attainment of the goal.

17 ‘‘(C) To the extent practicable and when nec18 essary to facilitate achievement of the 5 percent goal

19 described in paragraph (2), the agency head shall

20 make advance payments under section 305 of title

21 III of the Federal Property and Administrative Serv22 ices Act of 1949 (41 U.S.C. 251 et seq.) to contrac23 tors described in paragraph (2). The Federal Acqui24 sition Regulation shall provide guidance to contract-
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1 ing officers for making advance payments to entities

2 described in subsection (a)(1) under such section.

3 ‘‘(D) To the extent practicable and when nec4 essary to facilitate achievement of the 5 percent goal

5 described in paragraph (2), the agency head may

6 enter into contracts using less than full and open

7 competitive procedures (including awards under sub8 section (a) of this section) and partial set asides for

9 entities described in paragraph (2), but shall pay a

10 price not exceeding fair market cost by more than

11 10 percent in payment per contract to contractors or

12 subcontractors described in paragraph (2). The

13 agency head shall adjust the percentage specified in

14 the preceding sentence for any industry category if

15 available information clearly indicates that

16 nondisadvantaged small business concerns in such

17 industry category are generally being denied a rea18 sonable opportunity to compete for contracts because

19 of the use of that percentage in the application of

20 this paragraph.

21 ‘‘(E) To the extent practicable, the agency head

22 shall maximize the number of minority small busi23 ness concerns, historically Black colleges and univer24 sities, and minority institutions participating in the

25 program.
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1 ‘‘(F) The administration, in consultation with

2 the Administrator of the Office of Federal Procure3 ment Policy, shall prescribe regulations which pro4 vide for the following:

5 ‘‘(i) Procedures or guidance for contracting

6 officers to provide incentives for prime contrac7 tors described in paragraph (2) to increase sub8 contractor awards to entities described in such

9 paragraph.

10 ‘‘(ii) A requirement that contracting offi11 cers emphasize the award of contracts to enti12 ties described in paragraph (2) in all industry

13 categories, including those categories in which

14 such entities have not traditionally dominated.

15 ‘‘(iii) Guidance to executive agency person16 nel on the relationship among the following pro17 grams:

18 ‘‘(I) The program implementing this

19 subsection.

20 ‘‘(II) The program established under

21 subsection (a).

22 ‘‘(III) The small business set-aside

23 program established under section 15(a) of

24 this Act (15 U.S.C. 644(a)).
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1 ‘‘(iv) With respect to an agency procure2 ment which is reasonably likely to be set aside

3 for entities described in paragraph (2), a re4 quirement that (to the maximum extent prac5 ticable) the procurement be designated as such

6 a set-aside before the solicitation for the pro7 curement is issued.

8 ‘‘(v) Policies and procedures which, to the

9 maximum extent practicable, will ensure that

10 current levels in the number or dollar value of

11 contracts awarded under the program estab12 lished under subsection (a) (15 U.S.C. 637(a))

13 and under the small business set-aside program

14 established under section 15(a) of this Act (15

15 U.S.C. 644(a)) are maintained and that every

16 effort is made to provide new opportunities for

17 contract awards to eligible entities, in order to

18 meet the goal of paragraph (2).

19 ‘‘(vi) Implementation of this section in a

20 manner which will not alter the procurement

21 process under the program established under

22 subsection (a) of this Act (15 U.S.C. 637(a)).

23 ‘‘(vii) A requirement that one factor used

24 in evaluating the performance of a contracting

25 officer be the ability of the officer to increase
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1 contract awards to entities described in para2 graph (2).

3 ‘‘(viii) Increased technical assistance to en4 tities described in paragraph (2).

5 ‘‘(8)(A) Whoever for the purpose of securing a con6 tract or subcontract under paragraph (2), misrepresents

7 the status of any concern or person as a small business

8 concern owned and controlled by a minority (as described

9 in paragraph (2), shall be punished by imprisonment for

10 not more than one year or a fine of not less than $10,000,

11 or both.

12 ‘‘(B) The Federal Acquisition Regulation shall pro13 hibit awarding a contract under this section to an entity

14 described in paragraph (2) unless the entity agrees to

15 comply with the requirements of section 15(o)(1) of this

16 Act (15 U.S.C. 644(o)(1)).

17 ‘‘(9)(A) To the maximum extent practicable, the head

18 of the agency shall—

19 ‘‘(i) ensure that no particular industry category

20 bears a disproportionate share of the contracts

21 awarded to attain the goal established by paragraph

22 (2); and

23 ‘‘(ii) ensure that contracts awarded to attain

24 the goal established by paragraph (2) are made
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1 across the broadest possible range of industry cat2 egories.

3 ‘‘(B) Under procedures prescribed by the head of the

4 agency and approved by the administration, a person may

5 request the agency head to determine whether the use of

6 small disadvantaged business set asides by a contracting

7 activity of the agency has caused a particular industry cat8 egory to bear a disproportionate share of the contracts

9 awarded to attain the goal established for that contracting

10 activity for the purposes of this subsection. Upon making

11 a determination that a particular industry category is

12 bearing a disproportionate share, the agency head shall

13 take appropriate actions to limit the contracting activity’s

14 use of set asides in awarding contracts in that particular

15 industry category.

16 ‘‘(10)(A) The administration shall issue regulations

17 to ensure that potential contractors submitting sealed bids

18 or competitive proposals to the executive agency for pro19 curement contracts to be awarded under the program pro20 vided for by this subsection are complying with applicable

21 subcontracting plan requirements of subsection (d) of this

22 Act (15 U.S.C. 637(d)).

23 ‘‘(B) The regulations required by paragraph (A) shall

24 ensure that, with respect to a sealed bid or competitive

25 proposal for which the bidder or offeror is required to ne-
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1 gotiate or submit a subcontracting plan under subsection

2 (d) of this Act (15 U.S.C. 637(d)), the subcontracting

3 plan shall be a factor in evaluating the bid or proposal.

4 ‘‘(11)(A) Not later than December 15 of each year,

5 the administration shall submit to Congress a report on

6 the progress of each executive agency toward attaining the

7 goal of paragraph (2) during the preceding fiscal year.

8 ‘‘(B) The report required under paragraph (A) shall

9 include a description of—

10 ‘‘(i) the degree of participation by small busi11 nesses owned and controlled by socially and economi12 cally disadvantaged individuals in procurements con13 ducted by each executive agency; and

14 ‘‘(ii) the extent of compliance by executive

15 agencies with the goals for participation by such

16 businesses required by paragraph (1), relating to

17 Government-wide small business and small disadvan18 taged business goals for procurement contracts.

19 ‘‘(12) This subsection shall not be construed as modi20 fying or superseding any other provision of law establish21 ing a goal or requirement for an agency to obligate 5

22 percent or more of the total value of all prime contract

23 awards entered into by the agency for a fiscal year with

24 any entity described in paragraph (2).
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1 ‘‘(13) The Coast Guard and the National Aeronautics

2 and Space Administration (notwithstanding section

3 302(a)(1)) of the Federal Property and Administrative

4 Services Act of 1949 (41 U.S.C. 251 et seq.) shall each

5 be considered to be an executive agency for the purposes

6 of this subsection.

7 ‘‘(14) This subsection applies to each of fiscal years

8 1994 through 2000.’’.

9 SEC. 6. TEST OF INNOVATIVE AND ALTERNATIVE PRO10 CUREMENT PROCEDURES.

11 Section 8(g) of the Small Business Act (15 U.S.C.

12 637(g)) (as amended by section 5 of this Act) is further

13 amended by inserting the following:

14 ‘‘(15) The requirements of subsections (e) and

15 (f) of this section may be waived by the Adminis16 trator of the Office of Federal Procurement Policy

17 after consultation with the Administrator of the

18 Small Business Administration in conducting inno19 vative and alternative procurement test programs

20 under section 9001 of the Federal Acquisition Im21 provement Act of 1994.’’.

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